clear
Saturday February 13th, 2016 5:58AM

Shareholders take hit as Southern Co. announces huge losses

By The Associated Press
ATLANTA (AP) - Southern Co. shareholders will absorb $450 million in losses incurred while building a new coal-fired power plant in Mississippi, raising the total write-offs on the construction project to nearly $1 billion, utility officials said Tuesday.

The utility announced the pre-tax write-off on its massive project in Mississippi's Kemper County before releasing its second-quarter earnings Wednesday. Company officials had earlier estimated the most recent charge would be around $160 million or more, significantly less than the losses announced late Tuesday. After taxes, the loss is estimated at $278 million.

Those losses on Plant Ratcliffe may not be the last.

``I cannot guarantee, will not guarantee, that there won't be further increases, but, again, feel good about the process that we are going through to forecast, estimate what we have left to spend to complete the project,'' Mississippi Power CEO Ed Holland told The Associated Press in an interview.

Project costs have stung the company, its owners and its customers. Southern Co. earlier absorbed a $540 million pre-tax loss on the plant, which Southern Co. CEO Tom Fanning described in May as a ``bitter pill for us to swallow.'' That month, the firm abruptly named Holland as its president of the Mississippi subsidiary. A state regulator has publicly accused the subsidiary's former president, Ed Day, of withholding documents from regulators relating to cost increases.

Opponents of the project have long criticized the company's use of coal and its costs.

``I think if I were a Southern Co. shareholder, I'd be very concerned,'' said Jenna Garland, a spokeswoman for the Sierra Club's Beyond Coal Campaign. ``And if I were a Mississippi Power ratepayer, I'd be even more concerned about how much my power bills are going to go up.''

Company officials said the latest write-off was the result of an ongoing review of the spending necessary to finish the coal-fired power plant. Southern Co. subsidiary Mississippi Power said it may experience additional construction costs or schedule delays, according to a federal disclosure report. Mississippi Power also cautioned there were additional risks building a plant with first-of-its-kind technology.

Southern Co. officials have struggled to contain building costs, which have grown to more than $4.7 billion when the power plant, a lignite mine, carbon dioxide pipeline and other expenses are included, according to company filings.

In a settlement with Mississippi utility regulators, the company agreed to only charge its customers for $2.4 billion in plant construction costs. Customers will also have to pay off as much as $1 billion in bonds needed to finance the project, though Southern Co. will not make a profit off that borrowed money.

When finished, Plant Ratcliffe is supposed to capture much of the carbon dioxide that is produced while burning coal to make electricity. Carbon dioxide is a greenhouse gas blamed for causing global warming. The captured gas will then be sold to companies that use it to extract oil from the ground. If successful, company executives have hoped the project will demonstrate that the United States can still rely on coal even if the country limits greenhouse gas emissions.

Southern Co. subsidiary Georgia Power is also having trouble keeping another building project under control. The firm has asked regulators to raise its construction budget on a nuclear plant in eastern Georgia by $737 million to roughly $6.85 billion. The company has cautioned those costs may also rise.

© Copyright 2016 AccessWDUN.com
All rights reserved. This material may not be published, broadcast, rewritten, or redistributed without permission.
S&P 500 index has its best year since 1997
The stock market closed out a record year with more all-time highs on Tuesday, giving U.S. indexes their biggest annual gains in almost two decades.
6:56PM ( 2 years ago )
Colorado readies for 'Green Wednesday' pot sales
Police were adding extra patrols around pot shops in eight Colorado towns that plan to allow recreational sales to anyone over 21 on Jan. 1.
1:52PM ( 2 years ago )
Kerry seeks framework for Mideast peace talks
A senior State Department official says Secretary of State John Kerry will try this week to get Israel and the Palestinians to agree on a framework for negotiating a final peace agreement, yet cautions against raising expectations for Kerry's latest round of shuttle diplomacy.
1:35PM ( 2 years ago )
U.S. News
Ethics laws set to take effect Jan. 1 in Georgia
After dominating much of the legislative session, a set of major ethics reforms is scheduled to take effect Jan. 1.
7:04PM ( 2 years ago )
Sex offender held in Hall County for failing to register
A 47-year-old man was booked into the Hall County Jail Tuesday, being held without bond for allegedly failing to register as a sex offender, his second such arrest.
6:09PM ( 2 years ago )
Pharmacy robberies may involve same suspect
Oakwood Police Tuesday afternoon released details in a pharmacy robbery they're investigating, similar to one that happened in the Hall County Tuesday morning.
5:46PM ( 2 years ago )
Local/State News
U.S, Cuba to resume commercial flights for 1st time in 50 years
The United States and Cuba will sign an agreement next week to resume commercial air traffic for the first time in five decades, starting the clock on dozens of new flights operating daily by next fall, U.S. officials said Friday.
By The Associated Press
9:35PM ( 8 hours ago )
New details about the possible effects of the Zika virus on the fetal brain are emerging
WASHINGTON (AP) — New details about the possible effects of the Zika virus on the fetal brain emerged Wednesday as U.S. health officials say mosquito eradication here and abroad is key to protect preg...
6:22PM ( 2 days ago )
President Barack Obama is asking Congress for more than $1.8 billion in emergency funding to help fight the Zika virus
WASHINGTON (AP) — President Barack Obama is asking Congress for more than $1.8 billion in emergency funding to fight the Zika virus and the mosquitoes that spread it here and abroad, but says "there s...
10:40PM ( 4 days ago )
Search for Missouri couple wanted for crimes across the South, including Ga., ends with one suspect dead and the other wounded
A weeklong search for a Missouri couple wanted in a series of robberies and abductions across the South ended with one suspect dead and the other wounded Friday, after authorities say they chased the pair across the highway and through a rural neighborhood and exchanged gunfire with them in Florida's Panhandle.
By The Associated Press
9:57PM ( 1 week ago )
Cheap oil will be sticking around for a while, buoying consumers, frustrating oil producers
Cheap oil will be sticking around for a while.That reality is wreaking havoc and causing uncertainty for some governments and businesses, while creating financial windfalls for others. Less expensive...
6:18PM ( 1 week ago )