This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

Southern Co. Taking $450M Charge For Miss. Plant

By RAY HENRY

ATLANTA (AP) â¿¿ 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 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.

1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 18,080.14 +21.45 0.12%
S&P 500 2,117.69 +4.76 0.23%
NASDAQ 5,092.0850 +36.0220 0.71%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs