Southern Company Warns of Coal Plant Cost Overruns

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April 30 (Bloomberg) -- Thomas Fanning, chairman, president and CEO at Southern Company, talks with Betty Liu about his company’s first-quarter results and the financial impact of delays at their Mississippi coal plant on Bloomberg Television’s “In The Loop.”

Happened yet so -- tell me first what happened again?

Even with recent tornado activity, we lost productivity at the site.

We had an aggressive schedule anyway and made a judgment that along with the loss of productivity, there was just too much risk building up on the schedule.

We will still try to complete it this year, but we made the conservative judgment to extend out a potential delay into may 31, 2015. qwest ok.

How confident are you you will be able to stick to that new date?

That is our best judgment right now.

These will add up to a billion dollars for southern company's? how we you be able to offset those costs?

The technology we developed, you may recall from our private conversation, it is the only company that does robust research and development.

This is a technology we developed that uses low ranked coal, low grade coal, here.

We will gasify it.

We will create synthesis gas.

We will capture carbon dioxide.

In this case, we will use it for enhanced oil recovery.

We will produce out of this plant somewhere around 2 million barrels of oil every year.

We will produce electricity.

Imagine once we get this complete, we will be able to preserve, we think, a way forward with a technology that should make it more environmentally friendly than natural gas.

There is tremendous international interest.

I return from china.

They compare it to the united states, four dollars and $.50. poland has tremendous interest.

Being at the end, they have a lot of low rank coal.

I think this is important for mississippi and southern company's and america.

Internationally, this is the kind of technology people need to develop and deploy.

Qwest there is no doubt this is the new technology.

It is what is being pioneered by seven companies and others are aware, as you are, of what is going on with limiting carbine -- carbon emissions.

With this plant, it is now costing up to $4.5 billion to build the plant.

How will you offset the higher bill?

You can only pass on so much to consumers.

The original deal we struck in mississippi for the plan was around 2009. good news bad news.

The good news is the mississippi customers there no -- no the increasing costs.

They have gone to the southern company and no one is particularly happy with that but we think it is an important development.

We think other markets where they will be able to gain revenues and there may be other technology developments we will promise down the road.

We have got to continue to innovate as a country.

In this case, it has been painful.

Qwest tom, on another front, the epa and their limits on carbon emissions in the supreme court backing of the tougher rules.

You have been opposed, as well as your fellow utility ceo's is, have been opposed to the new limits.

How crushing will the regulations before a company like yours?

The most important regulation coming out of the environmental protection agency was something that has caused us to close down or convert 7000 of our 20,000 megawatts.

That has been the biggest deal.

I do not think going forward in terms of carbon will have that much impact on our operations.

It makes something like the plant we just discussed more attractive.

Once it is in service, we think that will meet all the new initiatives we see going forward.

Let me offer this up and it is something i talk about a lot.

The ceo, one of the most important companies in the united states, i am responsible for providing to my customers clean and safe and reliable and affordable energy.

The only other entity in america that could make those kinds of policy adjustments are congress.

I look to congress to set energy policy, not regulators.

Are you happy with what congress is doing or does congress need to step up?

Class i would love to see them step up.

I coach year at the business roundtable.

I frankly think we could get bipartisan support to move energy policy forward for america.

I think america could be energy secure by 2020. by 2020 five, we can at four percent to gdp, 3 million jobs, $1.6 trillion in new revenues to offset federal deficits.

We could create an unassailable advantage in manufacturing and create jobs to make american lives better.

One of the companies in america providing not rhetoric.

Qwest on energy, we are still

This text has been automatically generated. It may not be 100% accurate.


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