New Independent Monitor Report Confirms Cost Escalations, Delays at MS Power’s Kemper Plant

Sierra Club Press Release



November 28, 2012


Louie Miller, (601) 624-3503

New Independent Monitor Report Confirms Cost Escalations, Delays at MS Power’s Kemper Plant

JACKSON, MS – In a new independent report filed on Monday, November 26, Mississippi Power’s experimental Kemper County coal plant is expected to cost at least $3 billion and the plant’s completion may be as much as eight months behind schedule or delayed even further. This new report follows on the heels of the Institute for Energy Economics and Financial Analysis (IEEFA) report issued recently in partnership with Sierra Club, which demonstrated the same cost overruns and schedule delays.

“It’s plain as the nose on my face – Mississippi Power’s Kemper plant is significantly behind schedule and now the price tag has topped the $3 Billion threshold. The company has continued to try to whitewash this boondoggle but that dog won’t hunt,” said Louie Miller, State Director of the Mississippi Sierra Club. “The Burns and Roe Engineering analysis suggests that the start of commercial operations could be as much as six or seven months later than Mississippi Power admits. By failing to use basic project management practices, Mississippi Power is ignoring the most important tools to track and control costs. Why?”

The Burns and Roe (BREI) report was prepared for the Mississippi Public Service Commission Staff, which operates separately from the elected Commissioners. Notable, the BREI report provides no evidence to support Mississippi Power’s claim that the plant is 70% complete and supports IEEFA’s assessment that the plant is likely less than half complete.

“Mississippi Power can no longer credibly claim that the Kemper plant is in good shape,” added Miller. “They need to stop putting lipstick on this pig and come clean about the true state of the plant’s finances and construction, and the Public Service Commission needs to step in and pull the plug before customers are made to foot the bill for Mississippi Power’s $3 Billion dollar mistake.”

Duke Energy’s Edwardsport plant is the only project comparable to the Kemper County coal plant currently under construction in the United States. According to the IEEFA report, the Edwardsport plant is more than one billion dollars over budget and is delayed by nearly a year. The Mississippi Business Journal predicted the Kemper plant would raise customers’ electricity rates by more than 45% before the project experienced cost overruns and delays.

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