Southern Sees $6.7 Billion Kemper Plant Using Coal This Summer

  • Long-delayed clean coal plant to be online by third quarter
  • Plant will convert coal to gas and capture carbon dioxide

Southern Co. said its low-emission, $6.7 billion power plant in Mississippi will use coal for the first time this summer after more than two years of delays and cost overruns.

The facility in Kemper County will begin to convert coal into a gas for power generation in the third quarter, Chief Executive Officer Tom Fanning said Wednesday in a phone interview. Carbon dioxide emissions blamed for global warming will then be captured and used to boost the recovery of oil from underground reservoirs. 

Southern has spent the past six years working to build the first large-scale power plant in the U.S. to gasify coal and capture carbon before it is released into the atmosphere. The coal industry has been banking on plants like Kemper to pave the way toward cleaner-burning technologies as pollution limits take hold.

The company is using natural gas at the plant while it prepares the switch to coal, which will be completed in the third quarter.

Southern took a $33 million charge to its first-quarter earnings for expenses related to delays and equipment repairs at the Kemper plant, the Atlanta-based company said Tuesday in a filing. Southern sees additional costs of at least $25 million to $35 million a month if it cannot get the facility in service by Sept. 30. The company said last year it would have to return about $234 million in U.S. tax credits if it failed to start up Kemper by April 19.

"One of the things that I think that is distinguished by our operations in Mississippi at the Kemper County plant, sometimes painfully, is that getting it done right the first time is really important to us," Fanning said Wednesday during an investor call. "We’re not going to rush and slam this in."

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