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Duke Energy Renewables to Install 200-MW Wind Project in Texas

LCG, April 12, 2019--Duke Energy Renewables, a commercial business unit of Duke Energy, yesterday announced it will build, own and operate the MesteƱo Wind Project, located in southern Texas. The power generated by the 200-MW project will be sold into the ERCOT market, and Duke Energy Renewables will enter into a long-term hedge agreement covering the majority of the expected wind energy production. Construction has commenced, and the project is scheduled for completion by year-end.

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FPL Announces Plans for 409-MW Battery Storage System

LCG, April 3, 2019--Florida Power & Light Company (FPL) recently announced a plan to build the world's largest solar-powered battery system, the Manatee Energy Storage Center, as part of a modernization plan to accelerate the retirement of two, 1970s-era natural gas generating units at FPL's neighboring Manatee Power Plant.

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Industry News

Southern's Kemper County IGCC Project Now Targets Completion in Second Quarter of 2016

LCG, September 30, 2015--Southern Company subsidiary Mississippi Power yesterday filed its monthly Kemper County energy facility project status report for August with the Mississippi Public Service Commission. After reviewing remaining start-up, commissioning and operational readiness activities, Mississippi Power now expects the entire project to be placed in service in the second quarter of next year.

The Kemper County project is designed as a integrated gasification combined-cycle (IGCC) facility intended to showcase new technologies for gasifying coal, together with carbon capture capabilities to reduce greenhouse gas emissions. Like a traditional combined-cycle facility, the plant combines two combustion turbines with one steam turbine - three engines that turn generators to produce electric power. The project has been operating since August of last year fueled by natural gas, as the coal gasifiers are not ready to be placed into service. Once the facility's two lignite gasifiers begin operation, the combustion turbines will use syngas derived from gasified lignite, a low-rank coal found abundantly throughout East Mississippi.

Mississippi Power has also revised its cost estimate subject to the cost cap for the Kemper project to include approximately $15 million in cost increases primarily related to additional resources in support of startup and commissioning activities, as well as operational readiness, and the company states that customers will not pay for this increase. The company's current cost estimate for the Kemper project includes costs through March 31, 2016. As previously disclosed, any extension of the projected in-service date past March is estimated to result in approximately $25-$30 million per month above the project's cost cap. Again, customers will not pay for costs above the cost cap.

In addition, Mississippi Power estimates approximately $13 million per month in financing costs and $7 million per month for items such as operating expenses and carrying costs are expected to be incurred, and these costs are not capped and are eligible for rate recovery, if approved by the Public Service Commission (PSC).

Mississippi Power's President and CEO stated, "The power plant portion of the project is already in service and has been providing safe, reliable electricity for our customers for more than a year. Our November rate hearing before the PSC is only asking for cost recovery for this portion. As we've said many times before, the review of the project's schedule and cost estimates will be ongoing. Customers will not pay a penny more for the cost of the project than what is approved by the PSC."

Regarding the project schedule, the entire project is anticipated to be placed into service after April 19. However, an in-service date beyond April 19 would require the company to return to the Internal Revenue Service (IRS) approximately $234 million of Phase II investment tax credits which were received for the Kemper project. Southern Company is expected to support Mississippi Power's cash needs in returning the funds to the IRS. Specific updates to the projected in-service date and related cost estimates are expected to be included in next month's PSC report to be filed by the end of October.
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