Tuesday, July 05, 2016

Piles of Dirty Secrets Behind a Model ‘Clean Coal’ Project - The New York Times

Brett Wingo, an engineer who was once an advocate for the Kemper project, became a whistle-blower who alleged mismanagement and fraud. (Credit: Josh Haner/The New York Times) Click to Enlarge.
The fortress of steel and concrete towering above the pine forest here is a first-of-its-kind power plant that was supposed to prove that “clean coal” was not an oxymoron — that it was possible to produce electricity from coal in a way that emits far less pollution, and to turn a profit while doing so.

The plant was not only a central piece of the Obama administration’s climate plan, it was also supposed to be a model for future power plants to help slow the dangerous effects of global warming.  The project was hailed as a way to bring thousands of jobs to Mississippi, the nation’s poorest state, and to extend a lifeline to the dying coal industry.

The sense of hope is fading fast, however.  The Kemper coal plant is more than two years behind schedule and more than $4 billion over its initial budget, $2.4 billion, and it is still not operational.

The plant and its owner, Southern Company, are the focus of a Securities and Exchange Commission investigation, and ratepayers, alleging fraud, are suing the company.  Members of Congress have described the project as more boondoggle than boon.  The mismanagement is particularly egregious, they say, given the urgent need to rein in the largest source of dangerous emissions around the world:  coal plants.

The plant’s backers, including federal energy officials, have defended their work in recent years by saying that delays and cost overruns are inevitable with innovative projects of this scale.  In this case, they say, the difficulties stem largely from unforeseen factors — or “unknown unknowns,” as Tom Fanning, the chief executive of Southern Company, has often called them — like bad weather, labor shortages and design uncertainties.

Many problems plaguing the project were broadly known and had been occurring for years. But a review by The New York Times of thousands of pages of public records, previously undisclosed internal documents and emails, and 200 hours of secretly though legally recorded conversations among more than a dozen colleagues at the plant offers a detailed look at what went wrong and why.

Those documents and recordings, provided to The Times by a whistle-blower, an engineer named Brett Wingo, and interviews with more than 30 current or former regulators, contractors, consultants or engineers who worked on the project, show that the plant’s owners drastically understated the project’s cost and timetable, and repeatedly tried to conceal problems as they emerged.

The system of checks and balances that are supposed to keep such projects on track was outweighed by a shared and powerful incentive:  The company and regulators were eager to qualify for hundreds of millions of dollars in federal subsidies for the plant, which was also aggressively promoted by Haley Barbour, who was Southern’s chief lobbyist before becoming the governor of Mississippi.  Once in office, Mr. Barbour signed a law in 2008 that allowed much of the cost of building any new power plants to be passed on to ratepayers before they are built.
In the end, the Kemper project is a story of how a monopoly utility, with political help from the Mississippi governor and from federal energy officials who pressured state regulators in letters to support the project, shifted the burden of one of the most expensive power plants ever built onto the shoulders of unwitting investors and some of the lowest-income ratepayers in the country.

Kemper’s rising price tag and other problems will probably affect the Environmental Protection Agency’s proposed rules on new power plants, and also play into broader discussions about the best way to counter climate change.  E.P.A. regulations in effect require new coal plants to have carbon capture technology but are being held up in federal court partly by arguments that the technology is not cost-effective.

The importance of this technology grows, as well, after President Obama said last week that the United States would join Canada and Mexico in pledging to reach a shared goal of generating 50 percent of North America’s electricity from zero-carbon sources by 2025, up from 37 percent today, with a power mix that includes wind, solar, hydropower, nuclear energy and coal or gas power paired with carbon capture technology.

Read more at Piles of Dirty Secrets Behind a Model ‘Clean Coal’ Project

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