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Miss. Power increases cost estimate for Kemper plant

Mississippi Power Co.’s Kemper County coal plant will cost $3.42 billion to build, the utility announced Tuesday afternoon.

That’s just under $600 million more than the $2.88 billion figure that has been the maximum estimate for several months. In a press release, CEO Ed Day said the utility will not seek to recover the additional costs from ratepayers.

Doing so would have been difficult. A recent settlement that allowed Mississippi Power to ask for cost recovery stipulated that the plant’s rate base – or what costs the utility could recover from its 190,000 ratepayers – be limited to $2.4 billion. The settlement was reached after Mississippi Public Service commissioners denied last summer a cost recovery request pending the outcome of litigation that has circled the facility since before construction started.

“While we are disappointed that costs have increased, we believe we have done the right thing by remaining accountable to our customers,” Day said in the company press release.

The Sierra Club, which opposes the plant, still has litigation active against it. A Hattiesburg resident has also challenged the Baseload Act, the 2008 law that allows utilities to recover constructions costs associated with new facilities as they are being built. The Mississippi Supreme Court heard oral argument related to the Baseload challenge earlier this year, but has not yet ruled.

The palnt is scheduled to begin commercial operation in May 2014.

  1. Julia O’Neal
    April 24th, 2013 at 13:05 | #1

    Why are they disappointed that costs have increased? They get 12% of every penny they spend. They’re going to look at that billion dollar bond bill our legislature was so eager to pass and our faithful governor so eager to sign (the Enron-type off-balance sheet issue) as a license to print money to waste. MS Power ratepayers be looking at a $20 per meter per month surcharge to pay for the extra 600 mil., coming soon.

  2. Ed Clynch
    April 24th, 2013 at 14:09 | #2

    It is too bad the state fell for this scheme. With natural gas production exploding coal is likely to decline as an energy sources, particularly given environmental problems

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