/Mississippi Power sued for Kemper Plant delays

Mississippi Power sued for Kemper Plant delays

Treetop Midstream Services is a Mississippi-based oil and gas company. It filed a lawsuit against Mississippi Power Co., Southern Company, and others June 9 regarding the $100 million it spent on a pipeline. Treetop alleges fraudulent misrepresentation and concealment by power companies, as well as civil conspiracy, breach of contract, and other damages. Treetop claims that the power companies fraudulently misrepresented and concealed delays in construction in order to be eligible for hundreds of million of dollars in federal tax credits. They also wanted to increase their rates to customers prematurely and unjustifiably. Attorney George W. Finkbohner III, of Mobile law firm Cunningham Bounds LLC is representing Treetop. He said that the pipeline Treetop built under a contract with Mississippi Power, is still in place. Finkbohner stated that they complied with all terms of the contract. “We did everything that we were required to. It was based on a series lies. The truth was not revealed to us. We were not told the truth. The pipeline was intended to extend the plant, which was due to begin generating coal power in May 2014. According to the Associated Press Mississippi Power Co. recently pushed back completion of the entire project’s completion date to Sept. 30, according to the Associated Press. Shepard stated that the natural gas section of the plant was operational since 2014, but the extension was delayed by harsh weather and other delays. The plant also had difficulties operating several rotary valves/airlocks that were used to unload coal, and gasifier refractory problems at high temperatures. Treetop agreed to buy 30 percent of the Kemper facility’s carbon dioxide in 2011, according to the lawsuit. Denbury Onshore, an oil producer, was to buy 70 percent of the carbon dioxide taken at the Kemper facility. According to the lawsuit, the carbon dioxide was to be used in enhanced oil recovery in Denbury’s and Treetop’s oilfields. Treetop agreed to pay for the construction and transportation of the facility’s carbon dioxide. Treetop claimed in its lawsuit that it had negotiated several parameters to ensure that the facility was “on schedule, substantially complete, and capable of delivering C02” to Treetop. Treetop was required to give Mississippi Power Co. monthly estimates of the facility’s start date. Treetop was to finish construction six months prior to the facility’s launch date. Treetop was free to terminate the agreement if Mississippi Power Co. fails to deliver carbon dioxide by May 11, 2015. The lawsuit states that Treetop had the ability to terminate its agreement without having to spend any capital if construction or development of Kemper IGCC Facility is delayed substantially or if it proves impossible. It states that Treetop’s right to exercise this right depended on honest disclosures by Mississippi Power Co., Southern Company regarding the plant’s progress and date. Southern Company allegedly concealed construction delays, causing Treetop to spend almost $100 million unnecessarily on its pipeline and other equipment. Treetop then terminated its agreement. Treetop claims that Southern Company violated their agreement termination rights. Shepard claims that Mississippi Power cancelled its June 3 contract with Treetop Midstream Services, which would have allowed Treetop the opportunity to purchase a 30% portion of the Kemper County energy facility’s carbon dioxide. Shepard announced Monday that Denbury Resources Inc. has been awarded a contract to buy 100 percent of the Kemper carbon dioxide. To support this important work, you can make a regular donation to Denbury Resources Inc. today as part of the Spring Member Drive. Our reporters give a human face to policy’s impact on everyday Mississippians by listening more closely and understanding their communities. To ensure that our work is aligned with the priorities and needs of all Mississippians, we are listening to you. Click the button below to let us know what you think.