Utility Big Southern Infrastructure Projects: Clean Coal Plants and Nukes

First Published on 2/8/17

Doesn't this look like the Vogtle plants in George. Why are these utilities having so much difficulties with these huge construction projects. You get it, basically the conservative republican dominating the political scene. Regulated utilities and crooked republicans and graft. A guaranty the plant's cost would get passed onto the rate payers no matter how over budget the project becomes. Remember the high cost producers set the price of electricity for everyone else and boost corporate profits.  

I wouldn't let this guys on the rate base...

Really, this indicates something dysfunction is going on with the electric utilities and the construction industry. I see Intel is building a $8 billion dollar giant computer factory in Arizona. It will be the third one built there. Why aren't they having gigantic problems with cost overruns and constant delays in construction. like Vogtle. 

I think it's the least cost bidding that causes this...

Dive Insight:

Moody’s cut Mississippi Power’s rating to near junk status in 2015. Since then, the utility has announced several more delays to its beleaguered Kemper integrated gasification combined-cycle project, most recently in early February when it delayed the expected online date for the project by one more month. 

The 582 MW project is designed to convert coal into a synthetic gas to burn in a combined cycle generator, and is now slated to begin operation by the end of February. Updated costs are just over $7 billion, more than double the original, $2.9 billion cost estimate. 

In all, Mississippi Power has extended the project’s online date nine times. Each delay can add tens of millions of dollars to the project’s cost. The most recent delay added $51 million to the cost estimate. 

Moody’s says the rising costs increase the risk that Mississippi Power will not receive full regulatory recovery of $2.88 billion of plant costs subject to a cost cap established by the Mississippi Public Service Commission, $1.5 billion of costs not subject to the cap, and higher operating costs once the plant is placed into service.
Moody’s also noted that Mississippi Power and Southern have said that their 2017 fuel system costs completed last year reflect significantly lower natural gas costs than previously estimated. Those lower costs will factor into the economic viability analysis the utility is now conducting on the project. 

That analysis may affect the prospects of the project’s ability to recovery costs and the “standalone financial condition” of the plant when it is fully operational, including whether the plant “will exhibit financial metrics consistent with an investment grade rating.” 

While Moody’s did not take action on Southern Co., Mississippi Power's parent, the rating agency said Southern’s rating could be negatively affected if, among other things, there are additional, material debt financed acquisitions at the parent company or further delays or cost increases at Georgia Power's Vogtle nuclear construction project.