More cost overruns at Southern Company’s Kemper Coal in Mississippi

Why all these overruns? All sorts of excuses about everything but bad management and it was a bad idea in the first place. Does anybody believe this coal plant will be completed anywhere near on time? Why not stop wasting money on it and invest in solar and wind instead?

Only a few months after the last cost overruns, Jeff Amy wrote for AP 2 July 2013, Miss. Power: More overruns at Kemper power plant: $4.45B price tag latest estimate,

The unit of Atlanta-based Southern Co. told stockholders on Monday that an ongoing review of costs at the coal-fired plant initially has identified at least another $160 million in cost increases.

Mississippi Power spokeswoman Amoi Geter said Southern Co. shareholders would absorb any cost increases. The parent company was hit with $540 million in charges in April, although the after-tax cost to shareholders was lower. In a January settlement with Mississippi regulators, the company agreed to shield customers from further cost increases.

The overruns could push the cost of the plant, adjoining lignite mine and associated pipelines to $4.45 billion. That’s more than $1.1 billion above original estimates.

It’s only supposed to produce 582 megawatts if ever completed. SO could have already built far more solar and wind power for that $4.45 billion, on time and on budget.

Why is Plant Ratcliffe Kemper IGCC so late and so expensive?

In a report to the Mississippi Public Service Commission, Mississippi Power wrote that among the “cost pressures” were problems with the productivity of construction labor, supplies that the company is ordering to have on hand during the plant’s start-up phase, and projected costs for fuel that the plant will burn during start-up.

And they’re now up to two MS PSC members publicly criticizing the plant. Who knows? Mississippi’s PSC could grow a spine and cancel the thing. Hm, and GA PSC could cancel Southern Company’s other big boondoggle at Plant Vogtle.

Or we could peer into the future if this goes on. Eileen O’Grady wrote for Reuters 1 July 2013, Costs rise for Southern Co’s coal gasification plant,

Duke Energy completed another IGCC plant last month in Indiana, about one year late. The 618-MW Edwardsport plant, which was not built to capture carbon emissions, cost $3.5 billion, up 75 percent from early estimates.

So, who’s going to downgrade SO next?

-jsq