A class action lawsuit was filed this week against Southern Co. over Mississippi Power Co.’s construction of its Kemper County energy facility.
The complaint says that Mississippi Power Co.’s parent, Southern Company, and its officers and directors violated the Securities Exchange Act of 1934.
Robbins Geller Rudman & Dowd LLP filed the suit on Jan. 20 in the U S. District Court for the Northern District of Georgia on behalf of purchasers of Southern Co. stock between April 25, 2012, and Oct. 29, 2013. Southern Co. headquarters are in Atlanta.
The complaint alleges that during that time period, Southern Co. “made false and misleading statements and/or failed to disclose adverse information regarding the progress of the Kemper Plant, assuring investors that the project would be completed by its May 2014 deadline, even when cost overruns and other delays began to materialize.”
“As a result of defendants’ false statements and/or omissions, Southern Company common stock traded at artificially inflated prices during the Class Period,” Robbins Geller Rudman & Dowd LLP said in a statement.
On Oct. 30, 2013, Southern Co. announced its third quarter 2013 financial results, disclosing an after-tax charge of $93 million “related to increased cost estimates for the construction” of the Kemper plant. The company also disclosed in an earnings conference call on the same day that the in-service date for the Kemper plant would be delayed until year-end 2014. The price of Southern Co. common stock declined significantly afterward.
Southern Co. and Mississippi Power Co. announced plans for a “clean coal” plant in 2006. The project had a funding package of almost $1 billion in grants from the U.S. Department of Energy and tax credits from the Internal Revenue Service when Southern Co. broke ground in 2010, according to the lawsuit.
The financing was contingent on completing construction of the plant by May 2014.
After various delays, Mississippi Power Co.’s $7 billion-plus Kemper County energy facility is scheduled to be fully operational on lignite coal by Jan. 31, the utility said earlier this month in a U.S. Securities and Exchange Commission filing.
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