Mississippi Power offers ideas for Kemper power plant's future

Commissioners have said customers shouldn't pay for the gasifier

Jul 6th, 2017
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JACKSON, Miss. (AP) — The man in charge of negotiating a settlement to wind down Mississippi Power Co.'s experimental coal-fired power plant project says the company has already made proposals.

Public Utilities Staff Executive Director Virden Jones said Thursday that he believes the unit of Atlanta-based Southern Co. wants to settle on terms set by Mississippi's Public Service Commission. The staff and commission are separate agencies.

The three elected commissioners said two weeks ago that the Kemper County power plant should run on natural gas and not gasified lignite coal, that rates should stay level or fall, and that customers shouldn't pay for the gasifier. Last week, Mississippi Power said it was suspending efforts to complete the gasifier, which is three years behind schedule. The plant is more than $4.5 billion over budget.

Southern could have to absorb another $3.4 billion in losses on the $7.5 billion plant, after already losing $3.1 billion, if the gasifier isn't used.

If Mississippi Power doesn't settle, commissioners say they will require the company to show why the license for the entire Kemper facility shouldn't be revoked. That could mean the company wouldn't collect even the $800 million-plus already placed in rates for the part of the plant that has been burning natural gas since 2014.

"They want a settlement in this and I think that now that the gasifier is off the table, there's a lot better prospect that will happen," Jones said.

Cindy Duvall, a spokeswoman for Mississippi Power, said the company is examining the order and will respond later.

Commissioners formalized an order Thursday saying the gasifier should be abandoned because of high costs and other problems. It instructs Mississippi Power and staff to negotiate a settlement within 45 days. The commission says it will take public comments and then vote within another 45 days.

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