{"id":18846,"date":"2017-08-09T12:18:29","date_gmt":"2017-08-09T16:18:29","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=18846"},"modified":"2017-08-09T12:18:29","modified_gmt":"2017-08-09T16:18:29","slug":"big-bets-keep-getting-worse-for-southern-company","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2017\/08\/big-bets-keep-getting-worse-for-southern-company.html","title":{"rendered":"Big Bets keep getting worse for Southern Company"},"content":{"rendered":"

\r\nOSHA certified a “continuing pattern of retaliatory treatment”\r\nat Kemper “clean” Coal<\/a> after an employee\r\nalerted Southern Company of alleged fraud: SO fired him, refused to hire him back and now he’s suing.\r\nPlant “new nukes” Vogtle<\/a> also had\r\nimpossible projections from the start and is even later and more overbudget,\r\nwhile anybody from GA-PSC to Georgia EMCs to the Florida PSC<\/a>\r\nor even PowerSouth in Alabama could bring it down.\r\nSomebody put Plant Vogtle out of its misery so we can get on with solar power\r\nin Mississippi, Alabama, Georgia, Florida, and everywhere else.\r\n

\r\n\r\n\"Plant<\/a>\r\n
\r\nTwo new cooling towers and construction cranes mark the work sites for nuclear reactors 3 and 4 at Plant Vogtle in east Georgia. The project is currently $3.6 billion over budget and almost four years behind the original schedule. JOHNNY EDWARDS \/ JREDWARDS@AJC.COM, in\r\nPlant Vogtle: Georgia’s nuclear ‘renaissance’ now a financial quagmire<\/a> by Russell Grantham and Johnny Edwards, Atlanta Journal-Constitution, 19 May 2017.\r\n<\/p>\r\n

Kemper “clean” Coal<\/a><\/H4>\r\n

\r\nDoyle LLP, PRNewswire, 8 August 2017,\r\n\r\nWhistleblower in Kemper Project Sues Southern Company and CEO:\r\nOSHA ruled former company engineer faced “continuing pattern of\r\nretaliatory treatment”<\/a>\r\n\r\n\r\n<\/p>\r\n

\r\n

\r\nBIRMINGHAM, Ala., Aug. 8, 2017 \/PRNewswire\/ — A former\r\nSouthern Company engineer that reported safety concerns and\r\nfalsification of operational reports at the company’s troubled\r\n“clean coal” Kemper Project filed a federal whistleblower lawsuit\r\nagainst the company and its chief executive officer, lawyers at\r\nDoyle LLP and Heninger Garrison Davis LLC said today.\r\n<\/p>\r\n

\r\nThe legal team for Brett Wingo, a resident of Alabama, filed the\r\nlawsuit in federal court in Birmingham, Ala., alleging that company\r\nofficials, including Southern Company chief executive officer Thomas\r\nA. Fanning, repeatedly misled investors and the public about the\r\n“commercial operations date” (COD) of the plant in Kemper County,\r\nMiss.\r\n<\/p>\r\n

\r\nMr. Wingo, who worked for the company from 2007 to 2016, alleges\r\nviolations of the federal Sarbanes-Oxley Act, the federal Dodd-Frank\r\nAct, and Mississippi state law by Southern Company after he\r\nrepeatedly alerted company management in 2013 and 2014 about\r\nconcerns, including several warnings that the reported COD was\r\nunjustifiably optimistic.\r\n<\/p>\r\n

\r\nAccording to the complaint, “In a continuing effort to capture\r\nhundreds of millions of dollars of taxpayer subsidies; inflate\r\nshort-term stock prices; ensure continued payment of unjustifiable\r\nexecutive compensation packages; and impose billions of dollars for\r\ndecades to come in higher electricity costs for captive consumers in\r\ntheir monopoly utility market, Southern Company management again and\r\nagain offered false promises about the feasibility, schedule, and\r\nsafety” of the Kemper Project.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nBrett Wingo’s revelations were on the front page of the New York Times,\r\n\r\nPiles of Dirty Secrets Behind\r\na Model ‘Clean Coal’ Project<\/a>,\r\nby Ian Urbina, 5 July 2016.\r\n

\r\nWell, Plant Vogtle must be completely different, right?\r\n

\r\n

\r\nIn January 2017, the U.S. Occupational Safety and Health\r\nAdministration (OSHA) concluded after investigating Mr. Wingo’s\r\nallegations that he had been subjected to a “continuing pattern of\r\nretaliatory treatment” by Southern Company after he alerted\r\nmanagers, executives and compliance officers to Kemper Project\r\nproblems. The company was found to have violated the federal\r\nSarbanes-Oxley Act. OSHA ordered Southern Company to reinstate Mr.\r\nWingo and pay him backpay and damages because of its “callous and\r\nreckless disregard” for his rights, and its “irresponsible disregard\r\nto the whistleblower protections enforced by OSHA.” It ordered that\r\nSouthern Company reinstate him immediately. To date, the company has\r\nrefused to do so.\r\n<\/p>\r\n

\r\nThe Kemper project was purported to be a first-of-a-kind power plant\r\nthat promised to deliver cleaner, more affordable electricity while\r\nusing proprietary “clean coal” and integrated gasification combined\r\ncycle (IGCC) technology, the lawsuit asserts. Southern Company\r\nrecently reported that shareholder losses from the Kemper Project\r\nexceed $6 billion.\r\n<\/p>\r\n

\r\nThe defendants in the case are Southern Company, Southern Company\r\nServices Inc., and Mr. Fanning.\r\n<\/p>\r\n

\r\nThe case is “Brett Wingo v. The Southern Company, et al.,” Case No.\r\n2:17-cv-01328-MHH in the U.S. District Court for the Northern\r\nDistrict of Alabama, Southern Division.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThat case will be interesting to follow.\r\n

\r\nAnd it’s not the only one:\r\nSharon Kelly, DeSmogBlog, 8 August 2017,\r\n\r\nNew Fraud Allegations Emerge at Troubled ‘Clean Coal’ Project As Southern Co. Records Multi-Billion Loss<\/a>,\r\n

\r\n

\r\nA second less-noticed legal filing with Mississippi state regulators\r\naccuses Southern of misrepresenting Kemper’s prospects right from\r\nthe outset, before construction even began. Those claims center on\r\nSouthern’s projections for what it would cost to operate and\r\nmaintain the plant once it was up and running, which the filing\r\nasserts were so low they were “indefensible”.\r\n<\/p>\r\n

\r\nIn an email to DeSmog, Wingo seconds those claims, saying that he\r\nbelieves management knew back in 2012 that its “operation and\r\nmaintenance” (O&M) projections were off — but kept the\r\naccurate numbers under wraps for years.\r\n<\/p>\r\n

\r\n“By hiding the true O&M costs for so long, apparently since\r\n2012 and likely longer, Fanning basically ensured shareholders would\r\nbe forced to absorb $6 billion in losses,” Wingo told DeSmog.\r\n<\/p>\r\n

\r\n“In 2012, sunk costs on Kemper were only around $1 billion and\r\nthe natural gas part of the plant substantially complete. It would\r\nhave been a perfect time to stop a runaway train from running off\r\nthe end of the tracks,” he added. “But history shows,\r\nthat’s not what Fanning and Southern Company chose to do.”\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThat DeSmogBlog article quotes SO CEO Tom Fanning:\r\n

\r\n

\r\n“We built the plant, but in the meantime, natural gas prices\r\nfell. At the time we started building the plant, natural gas prices\r\nwere around $10 per million BTU [British thermal units]. Today\r\nthey’re around $3 per million BTU,” he explained. “As a\r\nresult, the roject became uneconomic and our regulator in\r\nMississippi issued some guidance that basically said that they would\r\nnot allow recovery of those costs.”\r\n<\/p>\r\n

\r\nWhat Fanning failed to mention was that when Kemper was first on the\r\ndrawing board, it was supposed to cost $1.8 billion to build —\r\nbut after years of missed deadlines and budget overruns, the price\r\ntag for building Kemper had climbed more than $5 billion, to $7.5\r\nbillion, making Kemper the most expensive fossil fuel power plant\r\never built in the U.S.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nStill not nearly as expensive as SO’s two new nuclear units Plant Vogtle.\r\n

Plant “new nukes” Vogtle<\/a><\/H4>\r\n

\r\nBy this description, Plant Vogtle sounds a lot like Kemper Coal:\r\nimpossible projections from the start, way late, and way overbudget.\r\nJay Bookman, AJC, 8 August 2017,\r\n\r\nOpinion: Ga. Power, Southern Co. have nuked a lot of credibility<\/a>,\r\n

\r\n

\r\nRight from the start, experts had warned the Georgia Public Service\r\nCommission about the dangers inherent in restarting the American\r\nnuclear industry almost from scratch, using new and untested\r\ntechnology in a field in which the margin of error is tiny because\r\nthe cost of failure is so huge. From the start, Georgia Power and\r\nits partners confidently and aggressively dismissed those warnings,\r\nbasically steamrolling all opposition.\r\n<\/p>\r\n

\r\nYet even as it issued those assurances, Georgia Power also made sure\r\nthat its own corporate interests would be protected in case its\r\ncritics proved correct. Using its considerable influence at the PSC\r\nand in the Legislature, the utility rewrote state law and state\r\npolicy to ensure that all of the financial risks inherent in such a\r\nventure would be placed on the backs of the ratepayers, and none on\r\nits own shareholders.\r\n<\/p>\r\n

\r\nThen it began. As reports of delays and overruns began to filter\r\nout, the company would deny or downplay them. When those problems\r\nbecame too obvious to deny, the company often claimed that they had\r\nbeen anticipated all along. And time and again, when it issued new\r\ncost projections and completion dates, those estimates would prove\r\nwildly optimistic.\r\n<\/p>\r\n

\r\nFor example, under the original schedule, both new units at Vogtle\r\nshould already be on line and producing power. Those estimates have\r\nbeen repeatedly pushed back to the point that in early 2015, the\r\ncompany was forced to admit that completion was still five years in\r\nthe future.\r\n<\/p>\r\n

\r\nNow that schedule has once again been pushed back, with completion\r\nstill another four to six years away. Put another way, more than two\r\nyears have passed and hundreds of millions if not billions have been\r\nspent, and by the company’s own admission we are no closer to those\r\nunits producing power than we were in 2015.\r\n<\/p>\r\n

\r\nMaybe that perpetually sliding timetable reflects a lack of\r\ncorporate honesty. Maybe it’s a repeated failure by Georgia Power\r\nand its parent Southern Co. to fully grasp their undertaking.\r\nProbably, it’s a bit of both. Whatever the cause, that long record\r\nof inaccurate projections and timelines makes it impossible to build\r\npolicy on any new projections that the company produces.\r\n<\/p>\r\n

\r\nYet later this month, Southern Co. officials will recommend whether\r\nto continue dumping billions of dollars into its nuclear expansion\r\nat Vogtle. If their recommendation is yes, they will be asking the\r\nratepayers of Georgia to make an enormous multi-billion-dollar leap\r\nof faith, even after previous such leaps of faith have fallen short.\r\n<\/p>\r\n

\r\nWell, this time, the ratepayers will require company in that leap.\r\nThis time, the PSC must do its job of protecting the public by\r\nensuring that if Vogtle moves forward, Southern Co. will share\r\nsignificantly in the financial risk of doing so.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nMatt Kempner, AJC, 6 August 2017,\r\n\r\nKempner: Georgia Power’s nuclear tower teeters; EMCs ‘concerned’<\/a>,\r\n

\r\n

\r\nWith costs piling up and no end in sight,\r\ntwo South Carolina\r\nutilities recently announced they will abandon a nuclear\r\nconstruction project<\/a> almost identical to the one Georgia has\r\nunderway at Vogtle.\r\n<\/p>\r\n

\r\nAfter years of problems, ballooning costs and the bankruptcy of the\r\nmain contractor, one of the two co-owners on the Plant V.C. Summer\r\nexpansion got cold feet and fled. Which immediately caused the\r\nproject’s main owner, SCANA Corp. to announce it wants to call it\r\nquits, too….\r\n<\/p>\r\n

\r\nSome elected members of the Georgia Public Service Commission rushed\r\nto put distance between South Carolina’s project and the Vogtle one\r\nthey green lighted and showered with love.\r\n<\/p>\r\n

\r\n“It’s like apples and oranges,” Commissioner Doug\r\nEverett said,\r\n\r\naccording to my colleague Russell Grantham<\/a>.\r\n<\/p>\r\n

\r\nPSC chairman Stan Wise pounded out a statement highlighting\r\n“the dissimilarities of these projects.”\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nCommissioner Doug Everett’s District 1 covers all of south Georgia.\r\nCommissioner Stan Wise has seldom disliked any proposal by Georgia Power.\r\n

\r\n

\r\nThis is ironic, because just last year, Georgia Power stressed to\r\nthe PSC just how similar the two projects are. (That served Georgia\r\nPower’s interests at the time because\r\n\r\nit wanted the regulators to\r\ngive the company essentially the same sweetheart deal that South\r\nCarolina regulators had given SCANA.<\/a>)\r\n<\/p>\r\n

\r\nA consultant for the Vogtle team concluded the project is\r\n“sufficiently similar to Summer Units 2 and 3 so that one\r\ncould reasonably compare construction outcomes. This is proven by\r\nthe fact that there are many similarities in the EPC contracts,\r\ngenerally the same primary plant equipment suppliers, similarities\r\nin construction milestone dates, similarities in construction\r\ncontractors, and evidence that GPC and SCE&G have been and continue\r\nto collaborate on the design, construction, and training on these\r\nprojects.”\r\n<\/p>\r\n

\r\nHere’s a few more similarities: Both projects suffer soaring costs\r\nand stretched timetables. Also last week, Southern disclosed figures\r\nsuggesting the total price of Vogtle may be close to double the\r\noriginal forecast. And the first juice won’t flow from a new reactor\r\nbefore February 2021 at the earliest, it said, more than a year\r\nlater than the previous target.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nWhich all sounds very like Kemper Coal.\r\n

\r\nHere’s another similarity to that Mississippi project, about which Tom Fanning said:\r\n“the project became uneconomic and our regulator in\r\nMississippi issued some guidance that basically said that they would\r\nnot allow recovery of those costs.”\r\nAt the Southern Company stockholder meeting in May, Fanning said\r\nwhat the Georgia Public Service Commission said would in August factor into\r\nthe SO \r\n“board’s decision on whether to recommend going forward, or not.”<\/a>\r\n

\r\nKempner points out GA-PSC isn’t the only group that could pull the plug on Vogtle.\r\n

\r\n

\r\nGeorgia Power is managing partner on Vogtle, with just under 50\r\npercent of an ownership stake in the expansion. But also in the mix\r\nwith almost a third of the ownership is Oglethorpe Power, which\r\nrepresents dozens of community electric membership corporations in\r\nGeorgia. Most are at risk on this project, too.\r\n<\/p>\r\n

\r\nThe Municipal Electric Authority of Georgia, owned by bunches of\r\nsmall city power systems across the state, has nearly a quarter of\r\nthe Vogtle ownership. And the city of Dalton has a small piece of\r\nthe project.\r\n<\/p>\r\n

\r\nEvery one of those players has a different comfort (or fear) level\r\non sticking with Vogtle. I suspect leaders of EMCs may be among the\r\nmost nervous.\r\n<\/p>\r\n

\r\n“They are very concerned and prepared to urge a pause,”\r\nI was told by Gary Miller.\r\n<\/p>\r\n

\r\nHe’s president of GreyStone Power Corp, one of the largest EMCs in\r\nGeorgia, with nearly 113,000 customers in several counties including\r\nPaulding, Douglas and South Fulton.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nKempner doesn’t mention that four Georgia EMCs, including mine, Colquitt Electric, never bought into those new nukes to start with, because they didn’t think\r\nit was a good business deal.\r\nMaybe their colleagues in other EMCs and MEAG should listen to them.\r\n

\r\nAnd let’s not forget Florida and Alabama are in on this boondoggle:\r\n

\r\n

\r\nMEAG, the body representing city utilities, sold rights (and cost\r\nresponsibilities) for two-thirds of the project’s first 20 years of\r\npower to PowerSouth in Alabama and JEA in Jacksonville, Fla. That’s\r\naccording to Marietta’s mayor, Steve “Thunder” (fun,\r\nright?) Tumlin, who is on MEAG’s board.\r\n<\/p>\r\n<\/blockquote>\r\n

FPL’s Turkey Point nuclear project<\/a><\/H4>\r\n

\r\nMeanwhile in Florida:\r\nSusan Salisbury, Palm Beach Post, 9 August 2017,\r\n\r\nFPL wants more nuclear units; customers say prove they make sense<\/a>,\r\n

\r\n

\r\nJust weeks after this summer’s announcement that two unfinished\r\nnuclear reactors in South Carolina are being abandoned, Florida\r\nregulators are poised to once again consider Florida Power & Light’s\r\npursuit of two new reactors. However, hundreds of FPL customers say\r\nthey want the utility to prove the reactors would be worth the\r\ncosts. In an email campaign organized by the Southern Alliance for\r\nClean Energy, they’re asking the commission to reject FPL’s\r\n“heavy-handed and unprecedented request” for a deferral\r\nof a required annual feasibility study for the two proposed Turkey\r\nPoint reactors.\r\n<\/p>\r\n

\r\nThe feasibility study is meant to answer the question of whether a\r\nproject makes economic sense for customers.\r\n<\/p>\r\n

\r\nThe hearing before the Florida Public Service Commission begins Tuesday at 1:30 p.m. in Tallahassee, and can be viewed at Floridapsc.com\r\n<\/blockquote>\r\n

\r\nAnd if the Florida PSC should turn down FPL’s Turkey Point,\r\nPlant Vogtle would be the last new nuke project standing in the U.S.\r\n

\r\nGeorgia PSC,\r\n\r\nwe don’t need any more nuclear buggy whips in an electric car world<\/a>.\r\nDo your duty: end the failed Big Bet at Plant Vogtle.\r\n

\r\n -jsq\r\n<\/p>\r\n

Investigative reporting costs money, for open records requests, copying, web hosting, gasoline, and cameras, and with sufficient funds we can pay students to do further research. You can donate to LAKE today<\/a>!<\/p>\r\n","protected":false},"excerpt":{"rendered":"OSHA certified a “continuing pattern of retaliatory treatment” at Kemper “clean” Coal after an employee alerted Southern Company of alleged fraud: SO fired him, refused to hire him back and now he’s suing. Plant “new nukes” Vogtle also had impossible projections from the start and is even later and more overbudget, while anybody from GA-PSC […]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[216,18,104,24,36],"tags":[1011,8759,5741,9898,8753,1087,8751,1763,8701,8708,1268,2014,171,8702,12,7,217,219,8737,9899,107,9901,9838,8714,108,9794,1322,9900,6339,1408,6,8716],"class_list":["post-18846","post","type-post","status-publish","format-standard","hentry","category-coal","category-georgia-power","category-nuclear","category-solar","category-wind","tag-ajc","tag-alabama","tag-atlanta-journal-constitution","tag-brett-wingo","tag-coal","tag-doug-everett","tag-florida","tag-fpl","tag-georgia","tag-georgia-power","tag-jacksonville","tag-jea","tag-kemper-coal","tag-lake","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-mississippi","tag-mississippi-power","tag-nuclear","tag-osha","tag-plant-vogtle","tag-powersouth","tag-quagmire","tag-solar","tag-southern-company","tag-southern-nuclear","tag-stan-wise","tag-suwan-salisbury","tag-tom-fanning","tag-turkey-point","tag-valdosta","tag-wind"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-4TY","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/18846","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=18846"}],"version-history":[{"count":3,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/18846\/revisions"}],"predecessor-version":[{"id":18850,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/18846\/revisions\/18850"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=18846"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=18846"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=18846"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}