Apparently $1.88 billion wasn’t enough for Southern Company to charge the ratepayers of Mississippi Power enough for their “clean coal” plant. “Escalating costs”: kind of like SO’s new nukes at Plant Vogtle? Southern Company CEO Fanning says “I know people will try and link those, but they are not at all even similar.” What do you think?
Kristi Swartz wrote for the AJC 24 April 2103, Miss. power plant costs hurt Southern Co. profit,
Escalating costs at a new power plant in Mississippi cut into Atlanta-based Southern Co.’s first-quarter profits, the utility company reported Wednesday.
Southern earned $81 million, or 9 cents a share, during the first quarter, versus $368 million, or 42 cents a share, during the same period a year ago.
Cost increases at Plant Ratcliffe in Kemper County, Miss., reduced Southern’s quarterly earnings by $333 million. Another one-time charge lowered profits by an additional $16 million.
Without those items, Southern’s earnings would have been $430 million, or .49 cents a share.
Southern’s Mississippi utility, Mississippi Power, is building a new-generation power plant that converts coal to natural gas. The company said in a filing Tuesday that the cost of the project has increased 19 percent to $3.42 billion. The amount of money Mississippi Power can recoup from consumers is capped at $2.88 billion because of a settlement the company reached with state utility regulators.
At least Mississippi had the good sense to cap their Construction Work in Progress (CWIP), unlike the Georgia legislature, which did not approve HB 267, which would have capped Plant Vogtle overrun charges to ratepayers. The possibility that that might happen seems to worry SO CEO Thomas A. Fanning.
Southern’s decision to absorb some of Plant Ratcliffe’s cost overruns comes one month after the company announced $740 million in cost increases at Georgia Power’s Plant Vogtle nuclear expansion project. Consumer advocates fear that Georgia Power customers eventually will pay for Vogtle’s cost increases.
Fanning warned against making any connection between Mississippi Power’s decision and what Georgia Power could do.
“Vogtle is completely different than Kemper,” Fanning said. Vogtle’s cost increases are tied to scheduling delays, while Kemper’s increases are because Mississippi Power underestimated the amount of piping needed, he said.
And Vogtle had concrete pouring errors and apparently couldn’t even manage to get one of its reactor vessels from Savannah to the site.
I agree with Sierra Club. Reuters reported 24 April 2013, More workers, pipe needed to finish Southern Co coal project,
Environmental group Sierra Club, which is challenging Kemper’s construction, called on the Mississippi Public Service Commission to immediately review the prudency of the utility’s investment in the costly project.
“The Sierra Club and our experts have been warning of this for years,” said Louie Miller, state director of the group. “It’s time to pull the plug on this dirty, expensive, and unnecessary boondoggle.”
And that other boondoggle at Plant Vogtle: pull the plug. Remember, Georgia Power can charge customers for it even if it’s cancelled, so pull the plug sooner, rather than later after it runs up even more charges.