Company officials said the latest write-off was the result of an ongoing review of the spending necessary to finish the coal-fired power plant. Southern Co. subsidiary Mississippi Power said it may experience additional construction costs or schedule delays, according to a federal disclosure report. Mississippi Power also cautioned there were additional risks building a plant with first-of-its-kind technology.
Southern Co. officials have struggled to contain building costs, which have grown to more than $4.7 billion when the power plant, a lignite mine, carbon dioxide pipeline and other expenses are included, according to company filings.
In a settlement with Mississippi utility regulators, the company agreed to only charge its customers for $2.4 billion in plant construction costs. Customers will also have to pay off as much as $1 billion in bonds needed to finance the project, though Southern Co. will not make a profit off that borrowed money.
When finished, Plant Ratcliffe is supposed to capture much of the carbon dioxide that is produced while burning coal to make electricity. Carbon dioxide is a greenhouse gas blamed for causing global warming. The captured gas will then be sold to companies that use it to extract oil from the ground. If successful, company executives have hoped the project will demonstrate that the United States can still rely on coal even if the country limits greenhouse gas emissions.
Southern Co. subsidiary Georgia Power is also having trouble keeping another building project under control. The firm has asked regulators to raise its construction budget on a nuclear plant in eastern Georgia by $737 million to roughly $6.85 billion. The company has cautioned those costs may also rise.