Mississippi Power signs settlement on $7.5B Kemper County plant

Mississippi Power has signed a settlement agreement for the remaining costs associated with the $7.5 billion Kemper County energy facility with the Mississippi Public Utilities staff, Chevron and federal agencies.

The agreement is subject to approval by the Mississippi Public Service Commission (PSC), Kallanish Energy learns.

“This agreement represents significant compromise from all parties involved, but is an important step to settle all costs remaining on the Kemper project,” said Mississippi Power president and CEO Anthony Wilson.

“Putting the gasifier portion of Kemper that did not meet our expectations behind us is in the best interest of our customers, company and the state. We are pleased to continue operating an efficient natural gas facility at Kemper which has been serving our customers for more than three years.”

After losing $6 billion on the 582-megawatt Kemper power plant, Mississippi Power suspended work to complete a unit which was designed to gasify soft lignite coal.

The coal-fired plant, located north of Meridian, Miss., was planned as the second carbon-capturing power plant in the U.S. The plant was to be the first clean-coal plant of its kind in the country. It was the model for carbon capture and sequestration (CCS) technology.

It was designed to turn lignite, a low-grade coal from an adjoining mine, into synthesis gas, or syngas, stripping out 65% of carbon dioxide in the process. The syngas was then to be burned for electricity and the carbon dioxide was to be shipped 60 miles via pipeline to an oilfield to aid in recovering additional oil.

Because of technology problems, delays and additional costs, the plant has stopped burning coal months ago and is burning natural gas.