Summary
This 8-K filing from Southern Company (SO) primarily concerns updates on the Kemper County Integrated Coal Gasification Combined Cycle (IGCC) Project, specifically through July 2016. Mississippi Power submitted its monthly status report to the Mississippi Public Service Commission (PSC), detailing project progress and challenges. The report highlights a schedule extension and a related cost increase of approximately $43 million subject to the existing $2.88 billion cost cap. While one gasifier ('B') experienced operational issues and was taken offline for repairs, the other ('A') is proceeding with startup. Critical upcoming milestones include achieving sustained electricity production from gasifier 'A' by the end of September, followed by the repair and restart of gasifier 'B' by the same date. Failure to meet these milestones could necessitate further revisions to the expected October 31, 2016, in-service date and associated cost estimates.
Key Highlights
- 1Mississippi Power submitted its July 2016 Monthly Status Report for the Kemper IGCC Project to the Mississippi PSC.
- 2The project experienced a schedule extension and an approximate $43 million cost increase, subject to the $2.88 billion cost cap.
- 3Gasifier 'B' operated on lignite for over 60% of the reporting period but was taken offline for repairs.
- 4Gasifier 'A' is proceeding with startup and is expected to support electricity production by the end of September 2016.
- 5Successful repair and restart of gasifier 'B' is also scheduled for completion by the end of September 2016.
- 6Failure to meet these September milestones could lead to further revisions of the October 31, 2016, in-service date and cost estimates.
- 7Monthly costs for extending the in-service date beyond October 31, 2016, are estimated between $25 million and $35 million, excluding certain 'Cost Cap Exceptions'.