(AP) — One of the nation’s largest utilities, faced with an ultimatum from Mississippi regulators, said Wednesday that it will suspend efforts to complete a first-of-its-kind coal-fueled power plant.

The move is a blow in efforts to develop coal plants that emit less carbon dioxide, which could be key to improving the health of the nation’s coal industry.

Mississippi Power Co., a unit of Southern Co., announced it was stopping efforts at its plant in Kemper County, near the Alabama state line. The Atlanta-based utility giant said Wednesday that it could lose another $3.4 billion from the Kemper County plant if it can’t reach a more favorable settlement with regulators. Shareholders have already lost $3.1 billion on the $7.5 billion plant.

Mississippi Power said it will keep making electricity in part of the plant burning natural gas, as it has since 2014. The Mississippi Public Service Commission allowed the company to raise rates by 15 percent in 2015 on its 189,000 customers to recover $840 million.

“We believe this decision is in the best interests of our employees, customers, investors and all other stakeholders,” Southern Company Chairman and CEO Thomas Fanning said in a statement.

Spokesman Jeff Shepard said the company on Wednesday issued notices of possible layoffs within 60 days to about 250 employees at the site.

The closely-watched plant was seen as a model for coal’s future, designed to emit only as much climate-warming carbon dioxide as a natural gas plant. However, its price ballooned from $2.9 billion originally and it’s more than three years behind schedule.

Sandy Buchanan, executive director of the Institute for Energy Economics and Financial Analysis, said her group and others had repeatedly warned that the plant could be a “debacle.”

“There have been billions of dollars now spent and none of it has resulted in the so-called clean coal,” said Buchanan, whose group favors renewable energy and opposes the use of coal. “It’s time for us to recognize this is a myth. It is absolutely clear that coal is a thing of the past for electricity generation.”

Wednesday, the company acknowledged that Kemper might never be economically competitive with power generated from cheap natural gas.