SEC Probes Southern Company's $6.6 Billion "Clean Coal" Bellyflop; Credit Downgrade, Lawsuit On Way
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Conceived as a first-of-a-kind plant, it currently looks to be the last of its kind in the U.S., though China and other nations have expressed interest in the technology. Kemper costs have swelled to $6.6 billion, far above the $3 billion forecast in 2010. Southern spokesman Tim Leljedal said the company remains convinced that the Kemper plant "is the right project for Mississippi."
The SEC declined to confirm or deny its investigation. Southern said it believes the probe is focused on " accounting matters, disclosure controls and procedures, and internal controls over financial reporting." The company said it is fully cooperating with the inquiry.
A former Kemper project manager said he was let go after complaining to top company officials that public estimates for the project's completion were unrealistic and misleading. Brett Wingo, who was a project manager for the gasification portion of the plant, said he thinks the company put a positive spin on construction so it wouldn't have to acknowledge to investors it was likely to lose federal subsidies due to delays. To date, Southern has paid back $368 million in federal tax credits for missing deadlines, but believes it will be able to keep $407 million in grants from the Energy Department.
"I think they fired me because I wouldn't quit raising ethics issues," said Mr. Wingo, who was put on paid administrative leave in August 2014 and was let go this past February. Southern's Mr. Leljedal said the company wouldn't comment on Mr. Wingo's termination. But he said the company has fully investigated and concluded "his concerns were unsubstantiated and not otherwise supported by the facts." The state lawsuit by ratepayers, including a casino resort operator and a shrimp processor, contends that customers and investors weren't told important information about project's problems and are being harmed by rate increases to pay for the plant. It seeks unspecified damages.
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http://www.nasdaq.com/article/southern-cos-cleancoal-power-project-woes-mount-20160514-00017
