There’s more trouble for carbon capture and more trouble for Southern Company, the big Atlanta-based utility holding company: South Mississippi Electric Power Association backed out of its plan to pump $600 million into the Kemper County Carbon Dioxide Capture and Storage Project in Mississippi for a 15 percent stake.

Fitch reacted quickly.

Fitch will review the ratings and Outlook for Mississippi Power and Southern Company (Southern) in the coming days. A one-notch downgrade for Mississippi Power is likely. However, a two-notch downgrade cannot be ruled out at this time. Fitch will also review Southern’s rating and Outlook in conjunction with Mississippi Power’s potential rating change. – Fitch Ratings in a news release

Kemper, using integrated gasification combined-cycle technology, was supposed to open last year, joining the Canadian project Boundary Dam (which opened in October) as significant steps forward for carbon capture, which the International Energy Agency, for once, thinks is key to turning back the tide on carbon emissions.

The latest estimate is that Kemper will open sometime next year, and instead of costing a bit under $3 billion, as initially planned, it’s headed north of $6 billion. How it will be paid for is, uh, rather up in the air. As Fitch noted, earlier this year the “Mississippi Supreme Court overturned Mississippi Public Service Commission’s order that allowed Mississippi Power to increase rates to recover approximately $156 million annually and ordered the increase be refunded to ratepayers.”

Southern has informed Mississippi regulators that Mississippi Power customers might have to see a rate increase of 41% on average to pay for the project, the Wall Street Journal reported.

All in all, chilling signals regarding the future of power-plant carbon capture. No surprise we’re seeing stories suggesting the EPA could be dropping carbon capture from its new power plant rules.