| HOUSTON, April 2
HOUSTON, April 2 Southern Co's
Mississippi Power unit said it has identified more labor and
construction problems at its $5 billion coal-gasification power
project in Kemper County, Mississippi, the company said in a
filing with regulators on Wednesday.
Mississippi Power said it was reviewing additional cost
overruns related to lower construction productivity at the
582-megawatt Kemper County plant, one of only two integrated
gasification combined-cycle (IGCC) plants in the country.
The productivity problems were "due in large part to adverse
weather, unexpected excessive craft labor turnover and
unanticipated installation inefficiencies," the utility said in
Mississippi Power said it has identified at least $177
million in likely cost increases, including $152 million in
construction costs and $25 million in start-up costs.
Such added costs would push the estimated price tag for the
delayed Kemper plant to $5.22 billion, well above the $2.88
billion construction cap approved by the Mississippi Public
Completion of the Kemper plant has been delayed by about six
months to the fourth quarter.
Southern has previously taken $704 million in charges
related to rising costs at Kemper which has been cited as a
model for future coal-plant design by the U.S. Environmental
Protection Agency as it works to limit carbon pollution from
Southern Co officials have asked the EPA not to use Kemper
as a standard for the industry. U.S. Secretary
of Energy Ernest Moniz toured the site in November.
Mississippi Power, Southern's smallest utility, owns the
plant and can only recover up to $3.8 billion for the Kemper
costs through customer rates and the sale of securitized bonds.
Customers began paying higher rates for Kemper last year after a
lengthy regulatory battle.
At the time the plant was proposed, it was expected to cost
about $2 billion.
(Editing by G Crosse)