SEC Launches Inquiry into Kemper Cost Overruns
The U.S. Securities and Exchange Commission has begun investigation an of Southern Company and its subsidiary Mississippi Power over costs and delays at the Kemper Project “clean coal” power plant, according to a May 10 report from Watchdog.org.
Kemper County power plant – a state-of-the-art project initiated by Mississippi Power that was supposed to demonstrate carbon capture at a coal-fired facility – is now more than two years behind on its construction schedule and costs at the site have escalated to $6.7 billion, or triple the original estimate.
The company, itself, revealed that it was under scrutiny on May 5 in a 10-K filing, said Watchdog – which is a project of the Alexandria, Virginia-based Franklin Center for Government & Public Integrity, a nonprofit organization that promotes a well-informed electorate and a more transparent government.
In the filing, Southern said that the investigation is being focused on the pre-2010 timeframe and centers on “accounting matters, disclosure controls and procedures, and internal controls over financial reporting associated with the Kemper IGCC [integrated gasification combined cycle].”
As of March 31, the project has accrued $1.5 billion in cost overruns, according to the filing.
Last month, the company revealed another $60 million cost increase and further delays that will push the plant’s online date to at least September, according to an SEC filing.
The company also says that it will cost between $25 million and $35 million for each month the plant is not in operation. The plant has been generating power with natural gas since 2014.
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