Atlanta-based Southern Company disclosed it is under investigation by the U.S. Department of Justice over a power plant that already has caused the company years of heartburn and billions of dollars.
Southern said it learned of the probe by the DOJ’s Civil Division on Monday and that it involved the Kemper County plant owned by the utility’s Mississippi Power subsidiary.
Southern, which is also the parent of Georgia Power, reported in a quarterly filing that it could not determine the outcome of the investigation but that it ultimately might prove significant enough to materially affect the parent company’s financial disclosures to investors.
A Southern spokesman emailed The Atlanta Journal-Constitution Thursday that, “As this is an ongoing investigation, we cannot comment beyond what we provided in our filing.”
A DOJ spokesperson emailed that the department “does not confirm, deny, or comment on investigations.”
The utility envisioned Kemper as a national showcase for how to turn coal into gas, ultimately generating power while also capturing carbon believed to affect climate change. But costs quickly soared, Southern repeatedly revised its projections and the plant took far longer to build than predicted. Kemper’s pricetag eventually hit $7.5 billion.
Mississippi utility regulators put protections in place up front to limit overruns that could be passed on to Mississippi Power customers.
The company eventually lost $6.4 billion on the project, according to the Associated Press. The stinging blow to Southern shareholders fueled lawsuits and years of turmoil.
Kemper started producing power using natural gas in 2014, but it doesn’t use coal or related technology to pipe CO2 for reuse. Start-up activities on the gasification portion of the plant were halted in 2017.
Southern said it learned of the federal probe while Mississippi Power was in talks with the U.S. Department of Energy about $387 million in federal grants already provided to the project.
The company said it may be required to pay DOE for a portion of property that will be retained by Mississippi Power.
Kemper has attracted attention from federal investigators before. The Securities and Exchange Commission investigated Southern and Mississippi Power related to the project's estimated costs and timeline. The probe ended in 2017 with no recommended enforcement action, according to a company filing.
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