You are on page 1of 6

Southern Co.

Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 1 of 6

Archives (

Business & Technology for the Global Generation Industry Since 1882

Jobs (

Subscribe (
Advertise (

Search POWER
Official Publication of:

Home (

Follow Us:

Coal (

Gas (
Nuclear (
Renewables (
International (
Business (
O&M (
Find all of your industry-related resources in one spot. Visit the POWER STORE (HTTP://STORE.POWERMAG.COM/?LIMIT=24) now.

Home ( /
Business ( /
Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

DecisionBriefs | OSIsoft

Southern Co. Kemper IGCC Delays, Cost

Surges Are Under SEC Scrutiny
Video: How Connected Services Fits the
Needs of a Large Scale Energy Storage

05/09/2016 | Sonal Patel

Save to myPOWER

UniEnergy Technologies, a clean tech large scale

energy storage company, needed data from all of
their customer sites so they could continue to
make improvements to their batteries and
maintain t...
View More

The U.S. Securities and Exchange Commission (SEC) is conducting a formal investigation
concerning costs and delays plaguing Mississippi Powers Kemper integrated gasification
combined cycle (IGCC) plant.
Southern Co., Mississippi Powers parent company, revealed the investigation in a recent 10-Q
financial filing
The company said that while it is fully cooperating with the SEC, it believes the investigation is
focused primarily on periods subsequent to 2010 and on accounting matters, disclosure 5/12/2016

Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 2 of 6

controls and procedures, and internal controls over financial reporting associated with the
Kemper IGCC. The ultimate outcome of the investigation cannot be determined at this
time; however, it is not expected to have a material impact on the financial statements of
Southern Company, it said.
According to the filing, Southern Co. estimates probable losses from the Kemper IGCC of $53
million in the first quarter of 2016 and $9 million for 2015 stemming from costs it expects to

Email Alert Sign-up

POWERnews is a weekly e-newsletter that keeps you
informed about the latest developments in the
electric power industry. Get the next POWERnews
delivered to your inbox.

Email Address

incur in excess of the $2.88 billioncost cap established by the Mississippi Public Service


Commission. Material changes, including unforeseen engineering or design problems and

issues concerning startup activities, at the first-of-its-kind plant may still continue to increase
costs, the company noted.

More Jobs

Mississippi Powers current total cost estimate for the project is about $6.58 billion, which
includes about $5.35 billion of costs subject to the construction cost cap. Compared to the $2.2
billion originally estimated in 2004, total costs for the projectwhich uses Southern Co.s
proprietary TRIG coal gasification technology and is expected to capture about 65% of carbon

Business Development Manager, GTS Bolttech Mannings, Inc. - North

Versailles, PA

dioxide emissionshave now trebled. In the aggregate, Southern Company has incurred
charges of $2.47 billion ($1.52 billion after tax) as a result of changes in the cost estimate

Communications Intern - Exelon

above the cost cap for the Kemper IGCC through March 31, 2016, the filing says.

Corporation - Chicago, IL

Meanwhile, the utility is also being sued by a handful of local businesses, which allege that the
company violated a Mississippi trade practices law by concealing and falsely representing
important facts concerning the cost and schedule of the Kemper plant. This interfered with

Foreman - Mechanical/Maintenance Exelon Corporation - Wharton, TX

and destroyed business opportunities between the local businesses and current and
prospective business associates, they allege.
Search Jobs

Refractory Rat Holes Delay Operation

The 582-MW plant, under construction in Kemper County, Miss., is now more than two years
behind schedule. The in-service date for the entire facility is now expected in the third quarter

Post a Job
Post a Resume

of 2016 (
Delays are largely due to a revised schedule for Gasifer A, one of two gasifiers at the plant,
Southern Co. President and CEO Thomas Fanning told investors, according to the transcript of
an April 27 conference call. However, the project is making good progress on modifications
and improvements to the refractory lining of both gasifiers, as well as on addressing issues
identified during the initial fluidization and refractory cure-out on Gasifier A.
Fanning explained that while original fluidization tests went beautifully, the company found
that a lack of seals between the refractory and a set of nozzles (used to blow air into the riser)
allowed material to lodge between the refractory and the hard face and cause what are called
rat holes. It forced the company to tear the refractory off and replace it. What has taken a
lot of time is its a confined space and has just been time intensive. And the more weve
looked around the refractory, we found more of these rat holes, we had to tear more of it off
and put more back on, he said.

Most Read ()

Workers are now in the process of remediating issues with the lignite feed and drying

Most Shared ()

Most Commented ()

systems as we approach testing of the gasifier using lignite. In March, the company
completed refractory cure-out of Gasifier B, reaching full operating temperatures while
successfully operating the gasifier in pre-lignite feed mode. Over the next couple of months,

Most Read
Is EOR a Dead End for Carbon Capture

utilizing Gasifier B, we expect to achieve first syngas production, and later this summer, initial

and Storage?

power production using syngas, Fanning said.


A Plan for the First-of-its-Kind Facility

FERC Blocks Ohio Power Plant Subsidy

Deal (
Areva Admits to Irregularities in
Hundreds of Nuclear Plant Components, 5/12/2016

Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 3 of 6

The companys plan is to do the best construction job it can, and then essentially demonstrate

Possible Falsified Documents

a reasonable history of reliable commercial operations, before it files a rate case, he added.


I think one of the things that is distinguished by our operation at [the] Mississippi Kemper


County plant, sometimes painfully, is that getting it done right the first time is really important


to us. Were not going to rush and try and slam this thing in.

Malaysia Commissions 1-GW

Ultrasupercritical Coal Plant

Fanning lauded workers at the site for demonstrating the plants ability to run on natural gas.


It provided, I dont know, 40% of the energy to the customers of Mississippi, and did so in


an extremely economic way. So as you think about the ability for that plant to provide not only

EPA Motions Court for Weighty Changes

electricity from syngas, but in a dual fuel sort of way to provide a really high level of reliability

to Final Coal Ash Rule

by supplementing any outages or whatever with natural gas-fired electricity, its exceedingly


attractive, and in my opinion, more than meets the obligations were setting forth when this


plant was originally ordered.


Sonal Patel, associate editor (@POWERmagazine, @sonalcpatel)



my dashboard

Tweets by @POWERmagazine



EIA International Outlook to 2040

Foresees Decoupling of Power
Demand and Economic Growth

[SLIDESHOW] Highlights from the

EIA's International Energy Outlook

The world's frenzied economic growth through

2040 won't be matched by electricity demand
growth, the

Read More 

See "EIA International Outlook to 2040 Foresees

Decoupling of Power Demand and Economic
Growth," (May

Read More 






Tom Overton
Fuel Cells Could Be a "Game-Changer" for
Carbon Capture

POWER magazine Retweeted

Sonal Patel
In new #IEO2016 international outlook,
@EIAgov expects softened power demand
despite economic growth worldwide.


GE Power Picks Up Doosans HRSG

Business Unit

POWER magazine Retweeted

View on Twitter

4F: How Our Response to

Failure Contributes to
Reliability (?mypower)
Learn More (?mypower)

GEs shopping spree in the power sector

continued on May 10 as GE Power signed

Read More 


Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 4 of 6

Learn how to make the best use of drones
and robots at the Drone Workshop at
Has our April cover story on using drones and
robots for power plant O&M
( left you wanting to learn
more? Did you watch our video on an actual
wind turbine inspection
See what all the buzz is about during ELECTRIC
( first-ever
Drone Workshop! Attendees will learn how
drones can help power professionals assess
safety conditions at plant sites, inspect
equipment deep inside hard to reach areas,
evaluate temperature distribution through aerial
thermal imaging cameras, and more. The
workshop will also offer a hands-on flight
experience for anyone interested. Get more
details on ELECTRIC POWERs drone workshop
here: View video (

Visit our video archive (/power-videoarchive/)

May 11, 2016

Annual passenger travel tends to

increase with income

Source: EIA, International Energy Outlook, Bureau of Transportation

Statistics, National Transportation Statistics


Nuclear Power in the United Kingdom,

Market Outlook to 2030, Update 2016 Capacity, Generation, Investment Trends,
Strategies, Industry Verticals & Forecasts
( 5/12/2016

Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 5 of 6

Get your 5-cent natural gas, right here in


Hawaii solar and energy storage projects

may deliver returns for EnSync

NM breezes into wind-energy gigawatt club


Canadian natural gas prices hit lowest level

on record as Fort McMurray fires curtail

GE Power Expands Offerings and Capability
by Acquiring Doosan Engineering &
Construction Heat Recovery Steam
Generator Business
Solano County landfill gas-to-energy project
providing clean power to homes
DNV GL-led project gives green light for
wind-powered oil recovery
AMSC Announces D-VAR System Orders for
the Electric Grid in Australia
Energy Companies Launch Critical
Transmission Equipment Sparing Company
More (

O&M and Lifecycle Management Strategies
for CCGT Power Plants, 05/17 - 05/19
Gas Power, 06/07 - 06/08 ( 5/12/2016

Southern Co. Kemper IGCC Delays, Cost Surges Are Under SEC Scrutiny

Page 6 of 6

GEA Baseload Renewable Energy Summit,

06/07 - 06/08 (
ACI's 3rd National Capitalizing on Grid-Scale
Energy Storage, 06/08 - 06/10
APPA National Conference, 06/10 - 06/15
EEI Annual Convention, 06/12 - 06/15
Power Experts, 06/15 - 06/16
ASME Power & Energy Conference &
Exhibition, 06/26 - 06/30
59th ISA POWID/EPRI Symposium, 06/27 06/30 (
World Nuclear Exhibition, 06/28 - 06/30
Power Plant Pollutant Control and Carbon
Management "MEGA" Symposium, 08/16 08/19 (
45th Turbomachinery & 32nd Pump
Symposia, 09/12 - 09/15
EUCG Fall Conference & Workshop, 09/18 09/21
Energy Storage North America, 10/04 - 10/06
MAGAZINE 19TH ANNUAL, 04/10 - 04/13

Follow Us:

About (

Contact (

Subscribe (

Advertise (

Contribute (
More ()
2016 Access Intelligence, LLC All Rights Reserved. 5/12/2016