Tuesday, June 01, 2010

Mississippi Business Journal » Blog Archive » Breaking: Mississippi Power will build $2.4B Kemper plant

Breaking: Mississippi Power will build $2.4B Kemper plant

by Amy McCullough

Published: May 27,2010

On May 27, one day after the Mississippi Public Service Commission issued a new order conditionally approving the $2.4 billion Kemper County clean coal plant, Mississippi Power Company announced it would accept the conditions and build the plant.

The Commission passed an order easing the financial restrictions outlined in its April 29 order, namely raising the cost cap to $2.88 billion and agreeing to allow the company to use CWIP — or charge customers for plant financing costs before the facility provides electricity.“After a comprehensive review of (the) order, we have determined the stringent conditions that the commission imposed will still allow us to move forward to finance and construct the plant,” said Tommy Anderson, MPC vice president of generation development, in a statement. “While this was not what was requested, we view this order as one we can accept, and it will allow us to be able to unlock the tremendous value the Kemper County IGCC Project brings to our customers.”

The company had originally asked for a price cap of $3.2 billion and requested that they be able to raise customer rates starting this year. However, CWIP, or Construction Work in Progress, won’t be permitted in rate base until 2012. The plant is scheduled to be operational by 2014.

MPC had also requested that the Commission limit itself to quarterly prudency reviews, which would prevent the Commission from reviewing the project as a whole for cost disallowances after its completion. The Commission said quarterly reviews “would be contrary to the public interest. To determine prudence, the Commission must have sufficient perspective concerning the reasons for particular costs.” The Commission said the prudency review schedule would be determined at a later time.

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