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Kemper power plant could face more delays

By   /   January 7, 2016  /   News  /   No Comments

Photo by Mississippi Power

OVERHEAD VIEW: The Kemper Project’s multi-billion dollar cost continues to rise.

 

More delays could loom for the oft-delayed Kemper Project “clean coal” power plant and two intervenors are asking the Mississippi Public Service Commission for a do-over on a Mississippi Power rate increase to help fund the plant’s construction.

The plant, which converts lignite coal into a gas to fuel the facility’s electricity-generating turbines,  might not go online in the first half of this year. The utility said in an 8-K statement filed with the U.S. Securities and Exchange Commission on Tuesday it’s re-evaluating the startup schedule for Kemper after “challenges” required repair and modification to the refractory linings in the gasifier.

The refractory linings are composed of a heat-resistant material that protects the gasifier’s outer steel shell from the 1,800-degree temperature of the synthesis gas produced by the coal gasification process. A failure of these linings could present a serious safety hazard.

Mississippi Power suffered issues with the refractory linings in 2012, as attested by the resume of Brett Wingo, former director of the gasification island. Wingo was silenced by a lawsuit brought against him in Alabama court that was later dropped last March.

Mississippi Power spokesman Bill Synder said the company will update Kemper’s status with the next monthly report for Kemper, due in early February.

Intervenors Thomas Blanton and Greenleaf CO2, an oil exploration firm, have filed separate requests with the Mississippi Public Service Commission to get a new hearing on a 15 percent rate increase approved by the PSC in December. That increase is intended to cover costs on the combined cycle plant, which includes the electricity-generating turbines and has been operational since August 2014 on natural gas.

Both filings take the PSC to task on due process issues concerning the December hearings and Kemper’s certificate of operation, which was for a clean coal plant and not a natural gas one. The PSC has two new members, Southern District commissioner Sam Britton and Central District commissioner Cecil Brown.

“The Public Utilities Staff (a separate regulatory agency from the PSC) and the Public Service Commission are not doing their mandated job,” Blanton told Mississippi Watchdog. “They’ve already been reamed out by the (Mississippi) Supreme Court for failure to discharge their duties.”

Blanton, who filed a lawsuit that resulted in the Mississippi Supreme Court ordering the company to refund $350 million in rate increases to help fund Kemper construction, said regulators haven’t thoroughly investigated the operating costs of Kemper’s water supply from Meridian’s sewer system. The plant has voracious needs for cooling water, especially for the gasifier, and the utility has spent more than $121 million — covered by the 15 percent rate hike — to build a 24-mile pipeline and other infrastructure to bring water to the plant.

“It’s never been addressed by anyone,” Blanton said.

Mississippi Power also announced an $11 million cost increase related to continuing construction of the plant, according to the 8-K filing. The November report filed Tuesday marked the fourth consecutive month with a cost increase.

Related: Ten reasons the Kemper Project is bad for consumers

The total cost of the plant is up to $6.49 billion. The company says it won’t seek, in the form of further rate increases, to collect all costs in excess of the $2.88 billion cap, part of an agreement reached with the PSC designed to limit further rate increases on the utility’s 187,000 customers in south Mississippi.

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Steve Wilson is a writer and a journalist whose work has appeared on Fox News, the Huffington Post and the Daily Signal. He serves as the Mississippi Bureau Chief for Watchdog.org. Beginning his career as a sports writer, he has worked for the Mobile Press-Register (Ala.), the LaGrange Daily News (Ga.), Highlands Today (Fla.), McComb Enterprise-Journal (Miss.), the Biloxi Sun Herald (Miss.) and the Vicksburg Post (Miss.) His bachelors degree is in journalism with a minor in political science from the University of Alabama. He served four-plus years in the United States Coast Guard after his high school graduation and is a native of Mobile, Ala.