The plant was once held up as an example of promising technologies that could help fight climate change. In 2014, then-Energy Secretary Ernest Moniz flew to see the plant and declared, “I consider seeing this plant a look at the future.”
Instead, Kemper has imposed financial burdens on tax payers and local households.
Thanks to legislation passed by the Mississippi legislature, Southern has been able to pass along about $800 million of those costs to ratepayers, the company said.
In addition, the Kemper plant has received $382 million in federal Energy Department grants, according to the company.
The news complicates the Trump administration message during the week they’ve dubbed “energy week” to promote the president’s plans, which include giving a boost to waning coal production.
Worried over the potential cost to ratepayers, the Mississippi Public Service Commission said last week that it would begin procedures to force the company to come up with an alternative plan or just continue relying on natural gas indefinitely.
The commission next meets July 6. Southern and its Mississippi Power subsidiary said Wednesday that they were “immediately suspending start-up and operations activities” involving the gasification of coal from a nearby lignite mine.
The plant will continue to run on natural gas.
The company has stumbled over equipment designed to cool synthetic gas from about 1,800 to 900 degrees before it strips out byproducts, including carbon dioxide. The plant has operated on coal for more than 200 days, but the problem has not been solved, company officials have said.
“The cost overruns and operational challenges at Kemper reflect the difficulties of scaling up a new coal gasification technology, and are not caused by the plant’s carbon capture equipment,” said John Thompson, director of the fossil transition project at the Clean Air Task Force.
“The specific carbon capture equipment at Kemper is a mature technology that’s been used at hundreds of chemical plants and industrial plants, since the 1960s. It’s a very mature technology.”
Suspending work was “the appropriate step to manage costs given the economics of the project and the Commission’s intent to establish a settlement docket to address Kemper-related matters including the future operation of the gasifier portion of the project,” a company statement said.
Mississippi Power has already written off $2.9 billion of the project cost, according to a June 23 Standard and Poor’s credit analysis. Further large write-offs might been necessary, it said.
Chris Mooney contributed to this article.