Mississippi Power Co. says its Kemper County power plant won't be finished by the original May 2014 deadline.
The unit of Atlanta-based Southern Co. said Wednesday the plant would start service sometime later in 2014.
The company will have to repay $133 million in federal tax credits it received with the condition of meeting the May deadline.
The company had warned of possible delays recently.
In a stock filing, Mississippi Power says there could be further cost overruns at the $4.7 billion plant.
Southern Co. has already written off $990 million in costs, but says tax credit changes won't cause a direct charge against profits.
The company says it could seek to recover additional interest costs from ratepayers, but such recovery would face approval by the Mississippi Public Service Commission.