Wednesday, July 3, 2013
"They said they could do it for $2.4 billion, and they need to do it for $2.4 billion."
—Mississippi Public Service Southern District Commissioner Leonard Bentz, citing the original cost of the Kemper County power plant after Southern Company's July 1 announcement that the plant expects to see additional cost overruns.
Why it stinks: The estimated costs of Southern Company's largely experimental coal gasification plant in Mississippi seems to have no ceiling. Including the associated pipeline and the mine for the low-grade lignite coal that the plant will burn, the plant's costs are now in the stratospheric range of $4.5 billion, nearly double the cost of the plant alone, and $1.1 billion more than the estimate for the whole project.
Bentz, a Republican whose district includes Kemper County, has been a strong proponent of the plant since its inception. Much of the development costs fall to Mississippi Power ratepayers (Southern is MP's parent company), which is substantially increasing their electric bills long before the plant is finished.
Plans for the plant barreled along despite environmental concerns and potential issues with the as-yet-untested technology. Spending $4.5 billion on a shiny new coal plant in the 21st century is difficult, at best, to justify in light of the myriad of sustainable clean-energy options available. We can imagine a world where such astronomical amounts of money could work to power the entire country instead of one little corner of Mississippi.
Comments
RonniMott 10 years, 9 months ago
Mississippi Power responded:
In this week's Stinker Quote of the Week Award, you presented a very inaccurate view of Mississippi Power's Kemper County energy facility. The plant is a technological marvel of which all Mississippians should be proud.
The amount our customers will pay for this environmentally responsible facility is far below the total cost of the project and not the unlimited ceiling that that you suggested. While you are entitled to your own opinions, you are not entitled to your own facts.
We please ask that you consider publishing these five key points about this project:
Mississippi Power is investing in innovation for the future of Mississippi and America. By using the nation's most abundant fuel source in an environmentally responsible process, the facility will produce the electricity essential to create jobs and help families thrive.
Kemper's innovative clean-coal technology, price stability, and fuel diversity are better for the future of Mississippi than building another natural gas plant. The Kemper facility will use inexpensive lignite coal located right beneath our feet here in Mississippi in an innovative process that converts the lignite to gas to produce electricity. Use of this abundant resource should give Mississippi families and businesses the assurance that fluctuations in the cost of fuel or fuel availability are not expected to affect their electricity supply for decades.
Mississippi's economy is benefiting today and should benefit for decades to come because of the Kemper County energy facility. In addition to providing what we expect to be affordable energy for our customers for decades, the project is creating thousands of jobs, employing more than 400 Mississippi companies, and providing millions of tax dollars to state and local governments.
Mississippi Power customers will not pay one penny of cost above the limit agreed to by the Public Service Commission and the Legislature. The shareholders of Southern Company will pay for every penny above this limit for the company's investment in innovation and advancement in America's energy security, and Mississippi Power customers will benefit from it for decades to come. This technology represents coal’s future in energy production and our commitment to a diverse fuel mix.
Customer bills are going up less than projected to pay for Kemper construction. When the construction certificate was approved, Mississippi Power projected customer bills would increase by more than 30 percent. Today, we are projecting the increase to be approximately 22 percent for the average retail customer. This increase is well below the outlandish 60 percent predictions made by project opponents, which is an outright misrepresentation of the facts.
Amoi S. Geter Manager, Media Relations Mississippi Power
Sign in to comment
Or login with:
OpenID