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Report warns of possible tax subsidy for Kemper plant

A report released Tuesday warns Congress against tax changes that could subsidize Mississippi Power Co.’s Kemper County power plant by an additional $700 million to $4.5 billion.

Environmental group Friends of the Earth and anti-subsidy group Taxpayers for Common Sense say members of Congress could try to enact changes before year’s end as part of a larger tax bill. Lukas Ross of Friends of the Earth said such legislation could also happen next year, when a Republican-controlled Congress will be able to send bills to President Donald Trump.

There has been bipartisan support in Congress for increasing or extending subsidies for coal plants, like Kemper, that would capture some carbon dioxide instead of emitting it like a traditional coal plant.

The $7 billion plant has already received $400 million in federal aid. However, Atlanta-based parent Southern Co. repaid $400 million in tax credits after the plant missed startup deadlines. New federal subsidies, though, could factor into any discussions by Mississippi regulators of how the plant gets paid for. Customers could be asked to pay for as much as $4.3 billion.

Ross’ group opposes the use of coal to generate power, saying that even plants like Kemper, which capture carbon dioxide and either store it underground or sell it to oil companies, are of “dubious” environmental benefit.

“Carbon capture and storage is a false solution to the climate crisis and a waste of our tax dollars,” Ross said.

Mississippi Power declined to comment.

Among legislative sponsors are U.S. Sen. Heidi Heitkamp, D-N.D., U.S. Sen. Sheldon Whitehouse, D-R.I., and U.S. Rep. Mike Conaway, R-Texas. Their bills are supported by coal and oil companies, but also by some environmental groups.

“Carbon capture cannot take off unless there is federal support to encourage investment and implementation of the technology through tax credits and other mechanisms, which this bill would provide,” Heitkamp said when she and Whitehouse introduced their bill this summer.

The report projects that Kemper will capture $103 million more in existing federal subsidies, but says those costs could increase by $690 million or $1 billion if subsidies are extended and $4.5 billion if they’re made permanent for the life of the plant.

Per unit of energy, Kemper is one of the most expensive power plants ever built. The plant and associated coal mine were originally supposed to cost $2.9 billion at most, and earliest estimates were lower.

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