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Southern Co. absorbs $2.8 billion on Kemper plant

Associated Press

Mississippi Power customers won’t be paying for the gasification portion of the Kemper County power plant.

Customers are only paying for the energy they’ve been receiving from the natural gas portion of the plant.

Atlanta-based Southern Co. on Wednesday announced it would absorb an additional $2.8 billion in losses from the Kemper County power plant’s lignite coal operation — bringing the total to nearly $6 billion in losses.

Meanwhile, Mississippi Power Co., a unit of Southern, is still in negotiations with regulators after the Mississippi Public Service Commission’s order to suspend the plant’s lignite coal gasification operation.

Mississippi Power’s June monthly report to the Mississippi Public Service Commission for the Kemper County energy facility reflects the June 28, 2017, announced suspension of the project. The company continues operating the combined cycle portion of the plant using natural gas to serve customers.

Through May 2017, Mississippi Power and Southern recorded charges of $3.07 billion as a result of changes in the cost estimate above the Commission’s established cost cap for the project.

As a result of the commission’s stated intent of no further rate increase for the Kemper County energy facility, the company does not expect that the gasification portions of the project are probable of rate recovery. Therefore, Mississippi Power and Southern Company recorded an additional $2.8 billion charge in June 2017, which includes estimated costs associated with the gasification portions of the plant and lignite mine.

In total, Mississippi Power and Southern Company have recorded charges for $6 billion of the project’s costs through June 30, 2017. In the event the gasification portions of the project are ultimately canceled, additional costs estimated at approximately $100 million to $200 million are expected to be incurred. Customers will pay none of these costs.

Kemper’s natural gas power plant has been serving Mississippi Power’s customers for the past three years with reliable, affordable electricity. Mississippi Power has requested that current rates related to Kemper remain stable. The company will continue to fully participate in ongoing settlement discussions. The ultimate outcome will be determined by the Commission in the Kemper settlement proceedings.”


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