HOUSTON Oct 2 Southern Co's $5 billion
project to build one of the first coal-fired power plants that
captures carbon dioxide emissions will be delayed beyond May and
so will miss out on $133 million in tax incentives, the company
said in a filing.
Rainy weather in the summer and low labor productivity will
delay completion of the plant in Kemper County, Mississippi,
until later in the year, Southern said on Wednesday, despite
raising the project's budget in July to meet the May deadline.
Southern's smallest utility unit, Mississippi Power, is
building the 582-megawatt integrated gasification combined-cycle
(IGCC) plant near oil fields, meaning it can capture and inject
underground the majority of carbon dioxide it emits to increase
oil field production.
The plant's unique location, however, led Southern last
month to caution regulators not to use it as a standard for
future coal-fired plants.
"The expected extension of the schedule beyond May 2014
reflects Southern Company's and Mississippi Power's current
analysis of the time needed to complete the construction and
start-up activities of the Kemper IGCC," the companies said in a
filing with the Securities and Exchange Commission.
The delay means Mississippi Power will not be eligible for
$133 million in investment tax credits and potential future tax
A revised construction schedule and any resulting changes to
cost will be detailed later this month, Southern said.
Cost overruns have increased the plant's price tag twice
this year to nearly $5 billion, more than twice the initial
estimate. As a consequence, two executives involved with the
project have been replaced.
Southern can recover $3.8 billion in related costs from
Mississippi Power's 185,000 customers. It said it anticipates no
change to customer rates proposed under a plan approved earlier
this year by the Mississippi Public Service Commission.
In July, Southern increased the project's budget by $450
million to keep it on schedule. Before that, it raised the
budget by $540 million for additional piping systems critical to
transfer fuel from the coal gasifier to the turbines that
In early August, Mississippi Power began testing the plant's
auxiliary boiler which will turn water into steam. In late
August and early September, workers began test-firing the