Matt Kasper In addition to the detailed New York Times investigation that revealed poor company management and potential fraud within Southern Company that was published earlier this month, Ian Urbina has also published “The Kemper Coal Files Timeline.”
This timeline helps people understand the history of the Kemper project through the documents reviewed by Urbina, and there is even a selection of the recorded phone conversations between engineers from the Kemper power plant. The timeline website will also serve as a host for the possibility that thousands of pages of documents may be revealed due to pending open-records requests to federal and state agencies. (People can subscribe on the website to be notified when new documents get uploaded.)
Here are just a few documents from the hundreds in the timeline that arguably are the most critical for public officials and even Southern Company customers to review.
Mississippi Governor Haley Barbour, through BRG Holdings, the lobbying firm that he founded before becoming governor, notifies Department of Energy officials that he wants to talk to them about shifting federal support for Southern’s Orlando project to the Kemper County plant.
Southern Company CEO David Ratcliffe and Mississippi Governor Haley Barbour requested a meeting with the Department of Energy to discuss shifting federal support from the Orlando project to the Kemper County plant.
A memo dated April 22, 2008, reveals early concerns from the Department of Energy about Southern Company’s Kemper power plant. The memo reveals officials were well aware that the Kemper project will be a more ambitious engineering project and potentially more expensive than the Orlando project, which had been canceled.
Mississippi Attorney General James Hood in a April 14, 2009 filing questioned whether the state Public Service Commission was fulfilling its duty to act in the public interest.
Craig Roach, on behalf of Boston Pacific Company, Inc., the independent evaluator hired by the state Public Service Commission, submitted testimony on December 7, 2009. Roach raised questions about the credibility of information provided in support of the Kemper project. He voiced skepticism whether there is even a need for a new plant but he says that, if the Kemper plant is to proceed, the PSC should impose a cost cap and other measures to protect consumers from the risk of the plant underperforming and running over budget. Roach also brought up the historical reference of the failures that occurred in the 1970s and 1980s regarding construction-work-in-progress (CWIP) laws. “No state, including Mississippi, wants to repeat that experience. Explicit risk protection (risk mitigation) is essential.” (Recent CWIP failures can be reviewed here.)
Sierra Club filed a petition that asked the state Public Service Commission to reject the construction and operation of the Kemper power plant. Sierra Club noted that the plant will likely go over budget, by as much as 40 percent of its then $2.4 billion cost projection.
Later in 2010, Mississippi Power said the risk of cost overruns are “insignificant” while at the same time advocates notified the Department of Energy and accused Mississippi Power of skewing natural gas cost projections in statements to the Mississippi Public Service Commission- they called the project a “boondoggle.” The PSC sets a CWIP cost at $2.4 billion to be charged to ratepayers, however, Department of Energy Secretary Chu and Governor Barber lobby the PSC to raise the cap – which it does by 20%, up to $2.88 billion in the spring of 2010.
In February 2014, Joshua Keller, a scheduling contractor with PM Alliance, warns Southern Company against misleading information in a published schedule that could ultimately be used by investors and regulators.
Tom Stevens, the president of scheduling firm PM Alliance, sends an email to Brett Wingo saying that PMAlliance is resigning from the Kemper project. Stevens said that despite being warned, Mississippi Power used misleading information in a published schedule that is provided to investors and regulators.
Brett Wingo writes an email to John Huggins of Mississippi Power, warning them that the company has been providing the regulators, investors, and the public with misleading scheduling information in violation of federal Sarbanes-Oxley law.
Days after PM Alliance exited Kemper contract, a meeting takes place where Mr. Keller scrawls down a quote by Bill Boyd, a Southern Company official, who says that the schedule had been changed in the past to “protect ourselves.”
David Schlissel, a consultant who testified to the state Public Service Commission on behalf of the Sierra Club about the Kemper project said that the $2.1 billion cost increase since the PSC first approved Kemper was “inevitable, foreseeable and, in fact, foreseen.” He said commissioners ignored the “canary in a coal mine,” a clean coal plant in Indiana called Edwardsport that was facing cost overruns at the time Kemper was approved. (More about Edwardsport and the risk Duke Energy placed on their ratepayers in Indiana can be read here.)
On June 27, 2014, Brett Wingo emailed Helen Nalley and copied Timothy Self, both in the Compliance Department at Southern Company. Wingo expressed concerns over safety issues and referenced documentation he believes is incomplete, inconsistent, incorrect, or missing. He said that he believes Southern officials are retroactively filing inspection reports so that the plant can be put into operation.
In August 2014, Brett Wingo was placed on administrative leave. In September 2015, Troutman Sanders, representing Southern Company, writes to the Occupation Safety and Health Administration (OSHA) explaining why Wingo cannot return to work. “It would be very difficult to bring Mr. Wingo back to work in light of his allegations of unethical behavior and criminal misconduct on behalf of the company.” Several months later, Southern Company writes to OSHA saying Wingo cannot return to work because the company is “not confident of his skills, knowledge, and abilities to perform as a capable employee for Southern Company Services.”
In March 2016, OSHA made a determination that Southern Company violated the Sarbanes-Oxley Act and the company’s treatment of Wingo is a violation of the law and it failed to offer “credible evidence” that would justify his dismissal.
And in May 2016, Southern Company announced in a Securities and Exchange Commission (SEC) filing that the SEC has opened an investigation into the estimated costs and schedules of the Kemper power plant.
