Kelley Williams, Chair Bigger Pie Forum, February 27, 2015.
Late last year the CEO of Mississippi Power announced the hiring of a new project manager to quarterback the completion of construction and startup of its troubled Kemper County Lignite Plant’s experimental gasifier. The announcement didn’t say anything about the old quarterback (Brett Wingo) or what happened to him. Apparently he was sacked and is now looking for a job. His resume has been posted on a job seeking site. It is very detailed and revealing about his experiences with the complex first of a kind gasifier and its problems. One of the problems it revealed may be fatal – literally.
Company asks court to muzzle old quarterback. It seems the company doesn’t want the old quarterback to talk about any of this. The Jefferson County, Alabama, Circuit Court recently granted the company’s request for a temporary restraining order to keep him from talking after negotiations over a severance package broke down. It’s probably safe to assume the severance package bound him to secrecy and included payments for his cooperation and silence. That seems to be how the company rolls. Mississippi Power’s ex CEO, who was relieved following Kemper’s early cost overruns and construction delays, has been mum about his experiences. He got a consulting agreement – presumably to advise what not to do. Maybe the sound of silence is getting more golden as the plant’s problems and cost mounts.
The old quarterback could talk about what happened in 2012 when they discovered unexpected gasifier refractory failures at the fabrication site. The refractory (ceramic brick) is supposed to insulate and protect the steel reactor shell from the red hot burning lignite and its high pressure combustion gasses. If the refractory doesn’t do its job, it is not a trivial problem. It’s a potential disaster. If the refractory fails, the steel reactor can melt and release hot ash and toxic gasses at high pressure. In other words, it explodes. Refractory failures go to the reactor heart of the proprietary process that was developed, tested, and supposedly proved at the company’s pilot plant. What went wrong between the tiny pilot plant and the huge (supposedly) commercial plant? Scale up too great? Who knows? Things almost always go wrong. There is always the unexpected. That’s why it’s prudent to take it step by step and go from pilot plant to semi works plant to commercial plant. But there wasn’t time. There were tax credits with short strings.
Hasty fix a problem? According to the old quarterback’s resume, they decided to try to fix the refractory problem on the fly and keep building the plant to avoid further delays. They put testing and production on a parallel track. That’s not easy to manage. It looks good on his resume. Question is: will the refractory hold up when the plant starts up? What’s plan B? Are subsequent delays due to a too hasty fix of this problem? Expected gasifier completion is now over two years late, and its cost is over $5.2 billion. Are further delays and more cost increases coming? Are there safety issues? Are they talking about pulling the plug?
Some other questions: Why was the old quarterback sacked? Was he supposed to be the fall guy? Who takes the fall if he doesn’t? Who made the decision to put testing and production on a parallel track? The old quarterback said he consulted with and got buy in from leadership. Was the CEO of Mississippi Power involved? Was the CEO of its parent Southern Company involved? Did he inform the SEC about this problem with the company’s highly touted proprietary technology? Did he tell stockholders? Was the Public Service Commission informed? This was about the time the Mississippi Supreme Court remanded Kemper’s certification of need to build the plant back to the PSC following legal challenges. The PSC famously took 45 seconds to re-certify Kemper. Did it act in ignorance of the problem with the technology? Did it care?
Temporary muzzle. A court hearing on the company’s efforts to muzzle the old quarterback was held today. The company asked the court to enforce what it said was an agreement in principle with the old quarterback even though it is not final. Interestingly, it provided that the old quarterback could talk to the SEC, but no one else. Sounds like the old quarterback may become a whistle blower. Sounds like the sound of silence may get even more golden. The company says the old quarterback could cause the company irreparable injury by talking. The court ruled the old quarterback can’t talk for four weeks. Meantime the old quarterback and the company can try to reach agreement.
What is the company afraid the old quarterback might say? That he advised the company to pull the plug on Kemper’s gasifier because of safety concerns? Did He? That advice might actually save the company from irreparable injury. Did he say that the gasifier may never operate? Or operate economically? Or that it’s too complicated to be reliable?
Questions for the PSC to ask. The PSC might invite the old quarterback in for some questions: Is Kemper safe? If not, why not? What can be done about it? What did the company know about cost increases due to the refractory problem when the plant was re-certified that it didn’t reveal until later? Why didn’t it tell the PSC at the time?
And, oh yes, the PSC might ask Mississippi Power if its customers are paying the hush money.