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) May 21, 2003
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SOUTHERN POWER COMPANY
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(Exact name of registrant as specified in its charter)
Delaware 333-98553 58-2598670
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
270 Peachtree Street, N.W., Atlanta, Georgia 30303
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (404) 506-5000
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N/A
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(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 Conditions - Future Earnings Potential" and to Note
J to the "Notes to Financial Statements" in the Quarterly Report on Form 10-Q
for the quarter ended March 31, 2003 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.
On May 21, 2003, Southern Power entered into an agreement with Dynegy
(the "Agreement") to resolve all outstanding matters related to Dynegy, the
PPAs, and the related letters of credit. Under the terms of the Agreement, (1)
Dynegy made a cash payment of $80 million to Southern Power; (2) the PPAs
between Southern Power and Dynegy were terminated effective as of 12:01 A.M.,
May 21, 2003, with no party having any remaining obligations under such PPAs
thereafter; (3) Dynegy paid all amounts for which it was obligated under the PPA
related to Plant Dahlberg up to the time of its termination; and (4) Southern
Power returned the existing letters of credit in support of Dynegy's obligations
under the PPAs.
The termination payment from Dynegy will result in a one-time gain to
Southern Power of $50 million after tax.
Because of the termination of these PPAs, Southern Power is exploring
several options for its existing capacity and evaluating its construction
schedule for Plant Franklin Unit 3 and may determine to defer or cancel further
construction based on forecasted capacity needs or the absence of other
wholesale opportunities. The ultimate outcome of these matters cannot now be
determined.
Cautionary Statement Regarding Forward-Looking Information:
Some 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
if 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 the Annual
Report on Form 10-K for the year ended December 31, 2002 and the quarterly
report on Form 10-Q for the quarter ended March 31, 2003 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 and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: May 22, 2003 SOUTHERN POWER COMPANY
By /s/Wayne Boston
Wayne Boston
Assistant Secretary