SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 21, 2003
-----------------------------
SOUTHERN POWER COMPANY
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 333-98553 58-2598670
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
270 Peachtree Street, N.W., Atlanta, Georgia 30303
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 506-5000
-----------------------------
N/A
- -------------------------------------------------------------------------
(Former name or former address, if changed since last report.)
Item 5. Other Events and Regulation FD Disclosure.
Reference is made to "Management's Discussion and Analysis of Results
of Operations and Financial Condition - Future Earnings Potential - General" and
to Note 5 to the "Notes to Financial Statements" in the Annual Report on Form
10-K for the year ended December 31, 2002 for Southern Power Company ("Southern
Power") for information regarding power purchase agreements ("PPAs") between
subsidiaries of Dynegy, Inc. ("Dynegy") and Southern Power and related letters
of credit. The Dynegy letter of credit in favor of Southern Power related to
Plant Dahlberg was extended to June 20, 2003 and those related to Plant Franklin
were extended to April 28, 2004.
On April 21, 2003, Southern Power and one of its affiliates entered
into a letter agreement with Dynegy (the "Letter Agreement") to resolve all
outstanding matters related to Dynegy and the PPAs. Under the terms of the
Letter Agreement, (1) Dynegy would make a one-time cash payment of $80 million
to Southern Power upon the execution of a definitive agreement and related
documentation (the "Closing"); (2) the PPAs between Southern Power and Dynegy
relating to Plant Dahlberg and Plant Franklin would be terminated upon the
Closing, with no party to have any remaining obligations under such PPAs after
the Closing; and (3) at the Closing, upon receipt of the cash payment from
Dynegy, Southern Power would return the existing letters of credit in favor of
Southern Power in support of Dynegy's obligations under the PPAs relating to
Plant Dahlberg and Plant Franklin. The parties agree to use their best efforts
to complete and execute definitive documentation reflecting the terms of the
Letter Agreement by May 30, 2003. The termination payment from Dynegy would
result in a one-time gain upon the Closing to Southern Power of $50 million
after tax.
Because of the proposed termination of these PPAs, Southern Power is
exploring several options for its existing capacity and is also evaluating its
construction schedule for Plant Franklin Unit 3 and may determine to defer
further development based on forecasted capacity needs.
The final outcome of these matters cannot now be determined.
Cautionary Statement Regarding Forward-Looking Information:
All of the information in this Current Report on Form 8-K is
forward-looking information based on current expectations and plans that involve
risks and uncertainties. Southern Power cautions that there are certain factors
that can cause actual results to differ materially from the forward-looking
information that has been provided. The reader is cautioned not to put undue
reliance on this forward-looking information, which is not a guarantee of future
performance and is subject to a number of uncertainties and other factors, many
of which are outside the control of Southern Power; accordingly, there can be no
assurance that such indicated results will be realized.
The following factors, in addition to those discussed in Annual Report
on Form 10-K for the year ended December 31, 2002 of Southern Power, and
subsequent securities filings, could cause results to differ materially from
management expectations as suggested by such forward-looking information: the
effects, extent and timing of the entry of additional competition in the markets
in which Southern Power operates; the impact of fluctuations in commodity
prices, interest rates and customer demand; political, legal and economic
conditions and developments in the United States; the ability of counterparties
of Southern Power to make payments as and when due; the effects of, and changes
in, economic conditions
in the areas in which Southern Power operates, including the current soft
economy; the direct or indirect effects on Southern Power's business resulting
from the terrorist incidents on September 11, 2001, or any similar such
incidents or responses to such incidents; financial market conditions and the
results of financing efforts; the ability of Southern Power to obtain additional
generating capacity at competitive prices; and weather and other natural
phenomena.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned hereunto duly authorized.
Date: April 22, 2003 SOUTHERN POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary