Southern's Clean-Coal Power Plant Costs Balloon to $6.49 Billion

  • Expenses up $62 million in October due to start-up costs
  • Clean-coal power plant has been delayed by more than 2 years

Southern Co.’s clean-coal power plant, a project long plagued by delays and cost overruns, just got $62 million more expensive.

The cost of the complex in Kemper County, Mississippi, has swelled to $6.49 billion because of resources necessary in testing and starting up the equipment, the utility-owner said in a filing Tuesday with the U.S. Securities and Exchange Commission. Customers won’t have to pay for the additional costs, Southern said.

Southern has spent the last five years working to finish the first large-scale power plant in the U.S. to turn coal into gas to generate power, while also capturing carbon dioxide and pumping it underground. The coal industry has been banking on plants like Kemper to pave the way toward cleaner-burning technologies. The project’s costs have ballooned to almost three times original estimates and is more than two years behind schedule.

Kemper’s delays and cost “make it unlikely that any other utilities will build coal-to-gas plants,” Bloomberg Intelligence analysts Kit Konolige and Nikki Hsu said in a research note.

Mississippi regulators will consider this month whether to approve Southern’s request to recover another $126 million from customers to pay for the parts of Kemper that are now operating, including natural-gas fueled generators.

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