Southern Co says Kemper coal plant costs still climbing
HOUSTON Jan 28 (Reuters) - Southern Co will take a $25 million charge in the 2013 fourth quarter as the cost for its coal-gasification power plant in Kemper County, Mississippi, climbs to more than $5 billion, the company said in a filing with regulators on Tuesday.
Southern Co, based in Atlanta, is scheduled to release fourth-quarter earnings on Wednesday.
Southern has previously taken $704 million in charges related to $1 billion in cost overruns at the 582-megawatt Kemper County plant, one of only two integrated gasification combined-cycle (IGCC) plants in the nation.
The power industry is closely watching progress at the Kemper plant. Because it will be able to capture carbon dioxide emissions, the Kemper plant has been cited as a model for future coal design by the U.S. Environmental Protection Agency which has proposed strict limits on carbon pollution from coal-fired power plants.
Southern said the latest cost increase "reflects an increase in the contingency for risks associated with start-up activities."
Mississippi Power, Southern's smallest utility, owns the plant and can only recover up to $3.8 billion of the Kemper costs through customer rates and the sale of securitized bonds. Customers began paying higher rates related to the plant last year after a lengthy regulatory battle.
At the time the plant was proposed, it was expected to cost about $2 billion.
Completion of the Kemper plant has been delayed by about six months to the fourth quarter of 2014.
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