Carbon-capture technologies were supposed to help the battered U.S. coal industry turn around. Instead, they're causing more problems than solutions.

Months after a landmark carbon capture project in Illinois was scrapped after losing government funding, the builder of America's first commercial-scale clean coal project in Kemper County, Mississippi is facing financial troubles due to soaring costs and long construction delays.

Last week, state regulators approved an emergency rate increase for Mississippi Power in order to keep the company afloat as it completes the increasingly-expensive Kemper plant. Mississippi Power customers will see a temporary rate increase of 18 percent -- a change that could become permanent.

The 582-megawatt Kemper plant was hailed as an important step for the clean-coal industry in 2008, after receiving $270 million in government grants and eventual approval from the public service commission to build the facility. The integrated combined-cycle power plant is designed to create and burn synthesis gas made from lignite coal, while also pumping carbon dioxide through a pipeline for use in enhanced oil recovery operations.

Building the first-of-a-kind commercial plant has been challenging for Mississippi Power and its parent, Southern Company. Kemper is two years behind schedule and $4.4 billion more expensive than the original estimate. That has forced Mississippi Power to "the brink of bankruptcy," explained an attorney for the commission during this month's rate case. 

A spokesman for Southern Company explained that the original cost estimates for the plant "did not contemplate the mine, CO2 pipeline, 65 percent carbon capture and other current project components."

The mounting costs caused the South Mississippi Electric Power Association, which planned to purchase 15 percent of electricity from the plant, to abandon its support of the facility in May.

In an a recent piece detailing the Kemper saga, Politico's Darren Samuelsohn explained why the plant has pushed Mississippi Power to the financial brink, which has subsequently caused problems for Southern Company:

Progress since then has been anything but smooth. Southern Company, which in its earliest iteration in 2006 envisioned a $1.8 billion project, (excluding costs for the adjacent mine and carbon dioxide pipeline) has had a litany of missed deadlines and budget overruns. It had to repay more than $130 million in federal tax credits after missing its May 2014 deadline to start producing power -- a delay that company officials blamed in a 2013 filing with the Securities and Exchange Commission on "abnormally wet weather and lower-than-planned construction labor productivity." Critical pieces of the plant’s infrastructure have been built, torn up and rebuilt again. For every month of delay, Southern Company has said in its financial disclosures to the SEC that the plant’s price tag goes up between $25 million to $30 million.

Those construction delays and rising costs last week even prompted a group of Mississippi electric power cooperatives to cancel plans to buy a 15 percent share of the Kemper plant, exposing Southern Company and Mississippi Power to more questions about their finances. On Friday, Fitch Ratings warned of “mounting pressure” on Mississippi Power’s financial rating and predicted a one- or two-notch downgrade because of continued uncertainty over the power plant. For its part, Mississippi Power said it was “disappointed” that South Mississippi Electric Power Association was backing out of the Kemper project and promised it would refund $275 million in deposits, plus interest, while also exploring its future financing options.

A day after regulators approved the rate increase to support Kemper, the rating agency Moody's downgraded Mississippi Power out of concern that the utility does not have a permanent solution to recover its growing costs.

"The downgrade of Mississippi Power's ratings reflects the lack of permanent cost recovery provisions in place for the Kemper IGCC plant since the Mississippi Supreme Court invalidated the utility's 2013 rate plan earlier this year," said Michael G. Haggarty, the associate managing director at Moody's, in a statement. "The downgrade also considers the increased concentration risk, financial exposure and liquidity pressure on the utility following the exit of its electric cooperative utility partner from a planned 15% ownership in the Kemper plant."

The problem with Kemper and the failed 200-megawatt FutureGen project isn't that the technology doesn't work. Rather, it's the unprecedented size of the projects -- making it difficult to source equipment and rendering testing more complicated.

Despite these troubles, the White House says it will continue to support clean coal. Since 2009, the Obama administration has set aside $6 billion to fund lab research and commercial deployment. Last week, on the day Mississippi officials approved the Kemper rate increase, the Department of Energy announced nearly $30 million in funding for lab-scale research of carbon-capture methods.

For more on the coal industry's financial troubles, listen to the Energy Gang interview with SNL coal reporter Taylor Kuykendall: