Utility company Mississippi Power is building a plant that will convert coal to carbon dioxide gas, which will then be sold to oil companies that will pump the gas into the ground to replace oil coming up out of the ground, thereby sequestering the CO2 that resulted from the coal conversion.
What is it about creating more carbon dioxide emissions so that they can be sequestered that seems illogical?
Couldn’t air be pumped into the ground just as easily, and a lot more cheaply? The converted coal, of course, helps our good friends, the coal mining companies, and we keep greenhouse gas emissions out of the air we breathe (always assuming the coal would have been mined, anyway). The oil, needless to mention, will go on to sully the environment in the usual manner.
It turns out that this project is costing big bucks, more big bucks than originally proposed. As a result, parent company Southern Company is sticking its shareholders with a bill for $450 million in losses incurred while building the coal-to-gas power plant in Kemper County, Mississippi. The total write-offs “generated” by the construction project come to nearly $1 billion, so far. More losses are anticipated.
Would now be a good time to mention that a state regulator has accused the former president of Southern Company, Ed Day, of withholding documents relating to cost overruns?
Shareholders aren’t the only ones taking a hit. Utility customers will also help cover the larger-than-expected costs. (Keep in mind, as you read this, that Mississippi is the poorest state in the country.) In fact, when the entire project’s costs are taken into consideration, they total more than $4.7 billion. Here’s the “good” news: as a result of a settlement reached between state utility regulators and Southern Company, customers will “only” be charged $2.4 billion for construction costs. The good news doesn’t end there, however; customers will also have to pay off as much as an additional $1 billion in bonds needed to finance the project. Can you spell corruption?
It gets even better! Southern Company subsidiary Mississippi Power says there may be further cost overruns and/or schedule delays, according to a federal disclosure report.
For some odd reason, it has also just occurred to Mississippi Power to mention that there are more-than-the-average number of risks associated with building a plant using first-of-its-kind technology. While that sounds like a basic assumption to me, shouldn’t it have been pointed out long ago? Perhaps if they had done that, it wouldn’t have sounded so much like a convenient excuse as it does now.
Good money after bad
On the other hand, it’s always a good idea to have an excuse at the ready. Southern Company subsidiary Georgia Power (GP) has a building project of its own running over budget. How much over budget? Well, GP has asked state regulators to approve a new budget for the nuclear power plant it’s building in eastern Georgia. The new budget is $737 million bigger than the original one. GP has cautioned that this amount may be insufficient, as well.
It’s hard for the state to back out when hundreds of millions of dollars have already been spent. You don’t suppose Georgia Power was counting on that all along, do you?
— Vicki Lipski, Transition Voice