The total costs of Mississippi Power’s Kemper County integrated gasification combined cycle (IGCC) plant—the nation’s only large-scale integrated carbon capture and sequestration project (CCS) under construction—have now almost doubled to $4.02 billion.
A review of the Kemper facility’s construction schedule and costs completed this month by Mississippi Power management prompted the company to push back its scheduled in-service date from a May 2014 startup deadline to the fourth quarter of 2014. The delay resulted from “lower-than-planned installation levels for piping as well as abnormally wet weather,” the Southern Co. subsidiary said in a 8-K filing to the Securities and Exchange Commission on Tuesday.
The company also revised its cost estimate for the project to about $4.02 billion, a figure that nets $245 million in grants awarded to the project by the Department of Energy, the cost of the associated lignite mine and equipment, and the cost of the carbon dioxide pipeline facilities.
“The revised cost estimate primarily reflects costs related to the schedule extension, including contingency,” the company said. It added, however, that it would not seek “any joint owner contributions or rate recovery for any costs” related to the construction of the project that exceed a $2.88 billion cost cap set by state regulators in January.
The company had originally estimated in 2004 that the plant would cost $2.2 billion. On Tuesday, it cautioned that the project could see more schedule extensions or cost increases stemming from labor costs and productivity, adverse weather conditions, shortages, and inconsistent quality of equipment or materials. Because the project was a “first-of-a-kind” technology, schedule extensions were also possible associated with start up activities, the company said.
—Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)