October 20, 2016 Read More →

On the Blogs: Operating Costs for Kemper Plant Going Up by 288 Percent

By Steve Wilson for MississippiWatchdog.org:

When talking about the Kemper Project clean coal power plant, it’s easy to get hung up on the plant’s capital costs, now up to nearly $6.9 billion.

Like an iceberg, there is a cost category lurking below the surface that could add up to even higher utility bills for Mississippi Power’s 186,000 customers in south Mississippi. The utility admitted in a filing with regulators that its Kemper Project clean coal power plant could cost much more to operate and maintain than it originally estimated, up to $1 billion over the first five years the plant is in operation.

That represents a 288 percent increase over the utility’s original projections for the integrated gasification combined cycle plant. Also, if the utility decides to run the plant primarily on synthesis gas made from lignite coal rather than natural gas, customers will get less generation capacity — 582 megawatts versus 732 megawatts — for a much higher operations and maintenance price tag.

The company estimated the operations and maintenance costs for Kemper at about $258 million over five years when it originally sought authorization in 2010 from the Mississippi Public Service Commission to build the plant.

Maintenance and operations costs for Kemper, now two years behind schedule and billions over budget, have been on a steady uptick. The utility told the PSC in 2013 that it would cost $515 million to maintain the plant for the first five years of operation.

That might not be the end of the cost increases required to keep Kemper operational on syngas. In testimony, plant manager Samuel Sumner Jr. told the PSC that further evaluations of the plant’s operations and maintenance costs might be required as more is learned during sustained use.

Full article:  Utility admits Kemper Project could be costlier to operate than originally estimated

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