Saturday, October 5, 2013

Southern Company loses $133 million tax break

Penn Energy reported on its website:

Southern Company (NYSE: SO) has said it will not finish building its coal-fueled integrated gasification combined-cycle (IGCC) power plant in Kemper County, Miss., by May, 2014. The delay in construction means the power company will have to repay $133 million in tax incentives it received in 2009 under the condition of completing the project within five years.

Mississippi Power, the smallest utility unit of Southern Co., is building the plant.

"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 company said in a filing with the Securities and Exchange Commission.

The new Kemper plant is being equipped with TRIG™ technology, an IGCC process that will turn Mississippi lignite into a cleaner burning synthetic gas or “syngas” to fire turbines for power generation. The TRIG™ technology will serve to reduce carbon dioxide emissions by 65 percent - making CO2 emissions from Kemper equivalent to a similarly sized natural gas-fired combined-cycle power plant.

To meet its initial deadline on the advanced coal plant, Southern Co. even increased the number of workers on the project to more than 6,000. Yet, rainy weather and low productivity on the project have led to delays. Mississippi Power President Ed Holland said while the company increased the number of workers onsite, the effort may have actually resulted in too much congetion, contributing to low productivity.

Although this is the first time the project timeline has been revised, costs for the project have seen a significant increase. In April, Mississippi Power revised its cost estimate from $2.88 billion to approximately $3.42 billion. However, the $540 million cost difference will not be passed on to rate-payers. As part of a settlement agreement with the Mississippi Public Service Commission, the total rate base for the plant has been limited to $2.4 billion. Article

6 comments:

Anonymous said...

Kemper, not Kember ... in Headline

Anonymous said...

It's okay . The ratepayers will cover the. Ost. No loss here.

Anonymous said...

" limited to $2.4 billion"
The Mississippi Public Service Commission does not seem to understand that their job description isn't to act as financiers for utility companies so that excess power can be sold to other states.
Their job is to make sure that the utility company can deliver needed services to MISSISSIPPIANS efficiently for the lowest cost possible.
Our entire population is smaller than Los Angeles and just a little larger than Chicago, neither of which need a nuclear plant AND two coal plants!
To make matters worse, Southern is so incompetent that they've never heard of a critical path in construction! If they had, " congestion" at the site would have been predictable!
Under what theory of capitalism do taxpayers and rate payers become uncompensated investors and the law of supply and demand is thrown out the window?

Anonymous said...

The Southern Company must be managed by dunces. The PSC in most part is no better. The newly appointed PSC commissioner that took Bentz's place stated the other day that it is not unusual for large projects to have these type of problems. He is going to be very pro Southern Company. Sure appears the only critical path they are on is to devalue their stock and to see just how far they can push the ratepayer. Time to stop the insanity and convert this mad scientist experiment to natural gas. This is just the most visable problem they have. Much more will surface in coming weeks as the people rise up against this scam that Southern Company knew was going to cost $4 billion before they started. They have been less than honest with the public. An organized move is underway to force an end to the disaster called Kemper and retool it for they know will work. Stay tuned.

Pugnacious said...

There are consequences when people rise up against this scam that Southern Company knew was going....

SCOTUS ruled that RICO does not apply to the Southern Company.

Anonymous said...

http://www.sunherald.com/2013/10/05/5006835/wyatt-emmerich-shareholders-not.html This article shows just how outrageous this monster called Kemper is. Like Godzilla it must be stopped or at a minimum become the total financial responsibility of the Southern Company shareholders.



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