By Mark Chediak

May 6, 2016 - Southern said in a filing Thursday it believes the Securities and Exchange Commission inquiry is focused primarily on “accounting matters, disclosure controls and procedures, and internal controls over financial reporting.” Shares dropped by as much as 3.4 percent on Friday, the most on an intraday basis since November, and were at $49.06 as of 9:50 a.m. in New York.

“Although an SEC investigation is almost never a positive, it’s hard to say what the ultimate significance of it is, given the limited information in the disclosure,” said Paul Patterson, a New York-based analyst for Glenrock Associates. “Kemper has been a troubled project for some time.”

Southern has spent the past six years working to build the first large-scale power plant in the U.S. to gasify coal and capture carbon before it is released into the atmosphere. The U.S. Department of Energy provided $245 million in a grants for the project, which the coal industry had been banking on as a potential way toward developing cleaner-burning technologies as pollution limits take hold.

Southern doesn’t “expect the investigation to have a material impact on the financial statements of either Southern Company or Mississippi Power,” spokesman Tim Leljedal said in a statement.

The company said last year it would have to return about $234 million in U.S. tax credits if it failed to start Kemper by April 19. The company missed that deadline. It has taken $1.5 billion in charges related to cost overruns as of March 31, according to a Thursday filing.

Southern Chief Executive Officer Tom Fanning said last week that the Kemper County complex will use coal for the first time this summer after more than two years of delays. The plant, which has been burning natural gas to produce electricity, will fully convert to coal in the third quarter, he said.

Mississippi regulators have capped the amount of construction costs that Southern can collect from customers for Kemper at $2.88 billion.

Separately, Southern said Thursday it expected to raise about $900 million through the sale of 18.3 million shares, to help pay for the acquisition of AGL Resources Inc.