February 3, 2017 Read More →

On the Blogs: Three Lawsuits Question Forthrightness of Kemper Project Developers

Steve Wilson for Mississippi Watchdog:

The Kemper Project clean coal power plant has been generating electricity using natural gas since 2014, but now the facility is generating something else for its owner — lawsuits.

The Southern Company is embroiled in three lawsuits active in courts in Georgia and Mississippi over alleged fraud in the protracted construction and testing of the Kemper Project, which is more than two years behind schedule and more than $5 billion over budget.

The utility announced in March that the U.S. Securities and Exchange Commission is also investigating the company over financial reporting for Kemper.

Treetop Midstream Services v. Southern Company

A lawsuit filed in June by a Mississippi-based oil recovery firm is active in the State Court of Gwinnett, in Georgia, with the most recent filing on Jan. 27. Kemper was designed to remove 65 percent of the carbon dioxide for off-site sale, with Treetop Midstream Services as one of the customers.

Treetop was to receive 30 percent of the CO2 produced by Kemper, with Texas-based Denbury Onshore receiving the rest. The two companies were to pump the CO2 into older oil fields to gain access to oil supplies that were previously economically unfeasible to reach. Treetop terminated its contract with the Southern Company and Denbury has agreed to take on 100 percent.

The biggest problem is the lack of CO2 production, since the facility’s gasifiers and associated gas cleanup systems remove carbon dioxide, sulfuric acid and other byproducts for off-site sale.

The lawsuit alleges that the Atlanta-based utilty “intentionally misrepresented and concealed construction delays at the facility in order to remain eligible for hundreds of millions of dollars in federal tax credits and to prematurely and unjustifiably increase the rates they were charging customers.”

Treetop is seeking the return of the $100 million it spent to build a CO2 pipeline from Kemper to its oil fields, plus damages and legal fees.

Biloxi Freezing and Processing Inc., Gulfside Casino Partnership and John Carlton Dean v. Mississippi Power and the Southern Company

Another lawsuit, filed in April in Harrison County Circuit Court, alleges that Mississippi Power, in building the “goliath” Kemper Project, damaged its estimated 186,000 ratepayers by avoiding accountability for “fraud and mismanagement while fleecing the public in the interest of profits.”

Monroe County Employees System vs. Southern Company

A third lawsuit filed in the U.S. District Court of the Northern District of Georgia last week alleges that stock from the Atlanta-based utility giant traded at an artificially higher price because the company “made false and misleading statements” and failed to disclose adverse information about delays with Kemper.

The class action suit covers the period between April 25, 2012, and Oct. 29, 2013. The plaintiffs, represented by Robbins Geller Rudman & Dowd LLP, are seeking damages for all Southern Company stockholders during that period. The named plaintiff is the Monroe County, Michigan, Employees’ Retirement System, which was the first investor to join the suit.

Full item: Three lawsuits dog Southern Company over Kemper Project

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