The future of clean coal suffered a setback June 28 as Southern Company and its Mississippi Power utility pulled the plug on the troubled Kemper County integrated gasification combined cycle plant.
In a statement, the companies said they were suspending start-up and operations activities involving the lignite gasification portion of the IGCC.
Kemper County IGCCThe combined cycle power plant that is part of the facility has been generating electricity for almost three years and will continue to operate using natural gas as a fuel pending the Mississippi Public Service Commission’s decision on future operations.
(Read "Kemper County and the Perils of Clean Coal Technology.")
In a filing with the Securities and Exchange Commission, Southern said that around $3.4 billion in Kemper IGCC costs were not reflected in Mississippi Power’s retail and wholesale rates. Southern warned that if it is unable to recover those costs through rates it could be take a second quarter charge to income.
The $3.4 billion includes some $2.5 billion related to gasifiers and gas clean-up facilities, including allowance for funds used during construction; $400 million for lignite mine and carbon dioxide pipeline facilities; $300 million for combined cycle and common facilities; and $200 million in unidentified costs.
IGCC technology turns coal into synthesis gas, a combination of hydrogen and carbon monoxide. The syngas can then be cleaned of impurities, and burned to drive a turbine. Excess heat goes to power a steam turbine.
Kemper is years behind schedule and well over the $2.2-billion cost estimate given in 2010 when construction began. Regulators capped the amount that can be recovered from Mississippi Power customers at just under $3 billion.
At a June 21 meeting, the Mississippi PSC unanimously passed a motion instructing its legal staff to prepare an order for consideration regarding rate recovery for the Kemper IGCC.
In a statement, Southern and Mississippi Power said they believe "this is the appropriate step to manage costs given the economics of the project and the Commission’s intent to establish a settlement docket to address Kemper-related matters," including the gasifier portion of the project.
The company says it will take part in the settlement talks with the Commission beginning on July 6.
To contact the author of this article, email david.wagman@ieeeglobalspec.com
