Kemper Plant Project Costs and Rates

As costs continue to rise for Mississippi Power’s Kemper plant, customers grow concerned about how and if it will affect the cost of monthly bills.
Tonight on part two of our series, News 25’s Kristen Durand takes us on a tour of the plant with leaders of Mississippi Power who give us a closer look at project costs and what they say it means for customer rates.
As the estimated cost of Mississippi Power’s Kemper project continues to increase and the fully operational date is a moving target, there is a lot of confusion around what portion of these costs will fall to customers. President and CEO of Mississippi Power Company Anthony Wilson said, “The combined cycle that went in two years ago and has been making electricity ever since then, that portion was actually put into rates at the end of last year. That’s been the only rate increase associated with the plant. As a matter of fact, if you look at total bills today, they’re about what they were in the end of ’09. Our rates are actually flat since ’09 even including the portion of in-service assets that we put in at the end of last year.”
The facility takes several components from power plants operating around the nation and combines them in one clean coal operating facility that is the first of its kind in the world. Mississippi Power says that alone makes it hard to project the time needed to complete construction. “It’s so complex,” said Wilson, “We have to work though each step in succession and you can’t go to the next one until this one is working exactly like it should. We have to design and build the answer as we go here.”
The Public Service Commission set a cost cap of $2.8 billion for the plant, but says that figure does not include all aspects of the project. “Then there’s ancillary parts of the plant that are not under that cap, that’s like the mine itself, the CO2 line, the other lateral components, will actually make that combined amount about $4.1 billion. Everything above the $4.1 billion up to the $6.6 billion that it is today is actually not ever going to the rate payer. That part will go to the shareholders of Southern Company,” said Wilson.
Meanwhile, company leaders tell News 25 the project provides economic benefits to the state including the 550 local companies they’ve employed through this project, as well as creating significant tax benefits for Mississippi. VP of Public Relations Johnny Atherton said, “I think on an ongoing basis, the kind of tax impact that will result from this plant will be somewhere in the neighborhood of $40 million a year.”

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