Southern Company

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The Southern Company
Public
Traded asNYSESO
DJUA component
S&P 100 Component
S&P 500 Component
IndustryEnergy, Telecom
Founded1945 (1945)
Headquarters,
Area served
18 U.S. States [1]
Key people
RevenueIncrease US$ 19.90 billion[2] (2016)
Increase US$ 4.63 billion[2] (2016)
Increase US$ 2.53 billion[2] (2016)
Total assetsIncrease US$ 109.70 billion[2] (2016)
Total equityIncrease US$ 26.61 billion[2] (2016)
Number of employees
32,015[2] (2016)
SubsidiariesSouthern Company Gas
Alabama Power
Georgia Power
Gulf Power
Mississippi Power
Southern Company Services
Southern Linc
Southern Nuclear
Southern Company Generation
Southern Power
Southern Telecom
PowerSecure
Websitewww.southerncompany.com

Southern Company is an American gas and electric utility holding company based in the southern United States. It is headquartered in Atlanta, Georgia, with executive offices also located in Birmingham, Alabama. The company is currently the second largest utility company in the U.S., in terms of customer base. Through its subsidiaries it serves 9 million gas and electric utility customers in nine states. Southern Company's regulated regional electric utilities serve a 120,000-square-mile (310,000 km2) territory with 27,000 miles (43,000 km) of distribution lines.[3]

Overview[edit]

Southern Company is one of the largest energy providers in the United States and is ranked 126th on the Fortune 500 listing of the largest U. S. corporations.[4] The company has approximately 31,300 employees.[5] It has more than 500,000 shareholders (NYSE: SO) and has been traded since September 30, 1949.

Southern Company subsidiaries are operating or developing renewable: solar, wind, and biomass facilities across the U.S., as well as the first new nuclear units in the U.S. in 30 years at Plant Vogtle near Augusta, Georgia.

Four retail electric companies, Alabama Power, Georgia Power, Gulf Power, and Mississippi Power, serve 120,000 square miles (310,000 km2) in four states. Southern Power serves wholesale electricity customers across the U.S. Southern Company Gas serves utility customers in seven states.

Southern Company owns the following companies:

History[edit]

Southern Company previous logo

Southern Company can be traced back to 1924, when Southeastern Power & Light was formed as a holding company for Alabama Traction, Light and Power (formed 1906), the immediate forerunner of Alabama Power. Later that year, it formed Mississippi Power as a subsidiary, with Gulf Power following in 1925. In 1926, it merged with Georgia Power (formed 1902). In 1930, Southeastern Power & Light merged into the Commonwealth & Southern Corporation. The new system included five Northern companies and six Southern companies. However, in the late 1940s Commonwealth & Southern was dissolved to meet the Public Utility Holding Company Act of 1935. Four of Commonwealth & Southern's Deep South operating companies—Alabama Power, Georgia Power, Gulf Power, and Mississippi Power—were deemed to be an integrated system and thus were allowed to remain under common ownership. A new holding company, Southern Company, was incorporated in Delaware on November 9, 1945. It commenced operation in 1949, and moved to Georgia in 1950. In 1954–55, the company was involved in the Dixon-Yates contract with the Atomic Energy Commission, and the associated political controversy.[6]

In 1981, Southern Company became the first electric utility holding company in 46 years to diversify its operations by forming an unregulated subsidiary. In January 1982, Southern Energy, Inc., began official operations as a global energy company, growing to serve 10 countries on four continents. On April 2, 2001, Southern Company completed the spinoff of Southern Energy as Mirant Corporation.

Another Southern Company subsidiary—Southern Nuclear—began providing services in 1991 to the system's nuclear power plants.

In 1996, Southern Communications Services began providing digital wireless communications services to Southern Company's subsidiaries and also began marketing these services to the public within the Southeast as Southern Linc. Southern Telecom, a telecommunications subsidiary of Southern Company, was founded in 1997. Southern Telecom provides colocation and dark fiber optic lines to network businesses.[7]

On January 9, 2001, Southern Company received final approval from the Securities and Exchange Commission to form Southern Power, a subsidiary to own, manage and finance wholesale generating assets in the Southeast. The new subsidiary targets wholesale customers.

On July 19, 2002, Southern Company Gas received certification from the Georgia Public Service Commission to enter the retail gas market. After nearly four years of operations, the company was sold and customers transferred to Cobb EMC's newly formed affiliate, Gas South.

In 2016, Southern Company acquired PowerSecure, a distributed energy infrastructure technologies company, and AGL Resources (which was renamed Southern Company Gas). As a result of the AGL Resources merger, Southern Company doubled its customer base, expanded its footprint and broadened the scope of its business by increasing its natural gas presence.[8]

Plant Vogtle[edit]

Plant Vogtle in Georgia. Southern Company and its partners are constructing two new units on this site by 2022.

Southern Company subsidiaries operate hydroelectric, gas, coal, and nuclear generation sources to generate approximately 200 terawatt-hours of electricity. In 2009, coal represented 57 percent of the company's output, followed by nuclear (23%) and natural gas (16%). Renewable hydroelectric power represented 4 percent of Southern's generation. Coal-based generation dropped significantly in 2009 from an average of 70% between 2005 and 2008.[9] As of 2017 Coal-based generation had dropped to 30%.[10]

In June 2010, the United States Department of Energy awarded an $8.3 billion loan guarantee to facilitate the construction of two new nuclear reactors at Plant Vogtle, near Augusta, Georgia. A Southern Company subsidiary, Georgia Power, owns 45.7% of the current 2,430 MW facility, with co-owners Oglethorpe Power (30%) Municipal Electric Authority of Georgia (22.7%) and the City of Dalton (1.6%). The plant is operated by Georgia Power. The $14 billion construction project is scheduled to be completed by 2022 and would double the plant's capacity.[11]

The construction of two 1,154 MW reactors has been hailed by Energy Secretary Steven Chu as "the first new nuclear power plant to break ground in decades". It is expected to create up to 3,500 jobs during the construction phase, and 800 once operational.[12] However in March 2017 Westinghouse Electric Company, who are building the plant, filed for Chapter 11 bankruptcy because of $9 billion of losses from its two U.S. nuclear construction projects.[13] The U.S. government had given $8.3 billion of loan guarantees on the financing of the four nuclear reactors being built in the U.S., and it is expected a way forward to completing the plant can be agreed.[14]

Plant Ratcliffe[edit]

In September 2013 the EPA introduced new provisions regarding output of carbon emissions in new power facilities. The proposed emission limit for new energy sources will be 1,100lbs of carbon dioxide per megawatt hour of electricity.[15] Preemptively recognizing the need for these changes, Southern Company broke ground on its 21st-century clean coal facility in June 2010.[16] Southern's subsidiary, Mississippi Power will operate the plant. The Kemper County Energy Facility, or Kemper Project, takes advantage of the abundant lignite, or poor quality coal, available in Mississippi.[17] Additionally, it employs Transport Gasifier (TRIG) technology. TRIG technology is built on the idea of dry-feed, non-slag gasifiers, which operate at lower temperatures than other coal gasifiers. This dry-feed is crushed, heated, and circulated in the gasifier, producing a flammable synthetic gas, syngas. Syngas can generate electricity with fewer emissions. Of course, other byproducts are produced, like ammonia and sulphuric acid. These particular products are sold for commercial use.[18]

The EPA considers the Kemper Coal Project and other planned facilities like it, to be a lifeline for the coal industry in the wake of the new climate change plan. Between 2010 and 2014, approximately 150 coal plants were shut down.[19]

As of April 2014, the US Department of Energy had invested $270m in this project. Southern Company, and its subsidiary, Mississippi Power anticipate that the Kemper Coal Plant will generate enough energy to serve more than 187,000 customers. Upon opening, the Kemper Coal Project is expected to be capable of stripping out at least 65% of the carbon dioxide, significantly exceeding the EPA's proposed requirement of 40%.[20]

Partnerships[edit]

Southern Company works closely with the US Department of Energy on a variety of projects including transmission and distribution of infrastructure and smart grid initiatives, environmental research programs, and nuclear generation. One of the more significant joint efforts, the DOE's National Carbon Capture Center, is managed by Southern Company and represents national efforts to reduce greenhouse gas emissions from coal-based power generation. At this location, Southern Company has been working with scientists and technology developers from government, industry, and universities who are creating the next generation of carbon capture technologies.[21]

Along with the DOE, Southern Company has been working with KBR, another technology partner, to perfect its TRIG advanced coal gasification technology.[22] This process of breaking down "dirty coal", or lignite, into its chemical components is not only cleaner, but it's also less expensive and more reliable.[23] This technology is currently being implemented at Southern Company's Kemper County power plant, one of the few new coal facilities working to keep the US coal industry alive. This new facility will be built on a lignite seam, is expected to strip out two-thirds of carbon dioxide emissions, leaving emissions at about the same level as natural gas. The Kemper Coal Plant is expected to fall well under new regulations implemented by the EPA, which limits coal plants to 1,100lbs of carbon dioxide emissions per megawatt hour of electricity.[19]

In an effort to make this technology more attainable, Southern Company has partnered with China's Shenhua Group to collaborate on further research, development, and deployment of clean coal technologies in the US, China, and around the world.[24] This partnership with Shenhua, who is currently expected to add more than 400,000 megawatts of coal-fired capacity by 2035, could lead to wide deployment of TRIG-equipped power plants across Asia. TRIG technology has the potential to not only assist China with their growing carbon issue, but also enable the country to tap into their own low quality coal.[25]

Kemper Project Controversies[edit]

In February 2015, the Mississippi Supreme Court ruled Southern Company's subsidiary Mississippi Power must refund 186,000 South Mississippi ratepayers for rate increases related to the Kemper Project.[26] These fees are derived from Mississippi's Baseload Act, allowing Mississippi Power to charge ratepayers for powerplants under construction.

In May 2016, Southern Company and its subsidiary Mississippi Power announced they were being investigated by the Securities and Exchange Commission related to overruns at the Kemper Project.[27] The project had been repeatedly delayed and costs increased from $2.88 billion to $6.58 billion.[28]

In June 2016, Mississippi Power was sued by Treetop Midstream Services over cancelation of a contract to receive carbon dioxide from the Kemper Project as part of the carbon capture and storage design.[29] Treetop had contracted to buy carbon dioxide from the Kemper plant and had built a pipeline in preparation to receive the gas. Treetop alleged Mississippi Power had fraudulently and "intentionally misrepresenting and concealing the start date" for the Kemper Project, though Mississippi Power stated the suit was without merit.

The company was also found to have unlawfully fired a whistle-blower who had criticized alleged false statements by company management.[30]

Financial data[edit]

Financial data in $ millions[31]
Year 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Revenue 13,554 14,356 15,353 17,127 15,743 17,456 17,657 16,537 17,087 18,467 17,489 19,896 23,031
Net Income 1,591 1,573 1,734 1,742 1,643 1,975 2,203 2,350 1,644 1,963 2,367 2,448 842
Assets 39,877 42,858 45,789 48,347 52,046 55,032 59,267 63,149 64,546 70,233 78,318 109,697 111,005
Employees 26,300 26,369 26,703 32,015 31,344

Environmental concerns[edit]

As a coal-burning energy company, greenhouse gas emissions are a primary environmental concern. In response to growing public and financial community interest the company has enacted both corrective and palliative environmental measures.

Corrective measures[edit]

The company recently opened the Plant Crist Test Center[32] in Pensacola, Florida, where they hope to discover new ways to reduce mercury emissions.[33]

Additionally, the company has developed TRIG advanced coal gasification technology which turns coal into gas that can be used to generate electricity with less emissions than traditional coal-fired power plants. Southern Company's Kemper Project in Mississippi will be the only Integrated gasification combined cycle (IGCC) plant in the U.S. that will capture and store carbon dioxide emissions from commercial operations starting in 2014.[34]

Palliative measures[edit]

Southern Company is building one of the largest all-biomass plants in the nation.[35] The company expects the 100-megawatt Nacogdoches Generating Facility to serve the city of Austin for 20 years.

In partnership with Turner Renewable Energy, the company is building one of the largest solar photovoltaic plants in the U.S. near Cimarron, New Mexico.[36] The 30-megawatt project will supply power to approximately 9,000 homes.

The company manages and operates the National Carbon Capture Center, a focal point of U.S. Department of Energy's efforts to develop carbon capture and greenhouse gas reduction technologies,[37] under which various projects to test geologic sequestration are in progress at Plant Gorgas in Alabama, Plant Daniel in Mississippi and other company sites.

Southern Company participates in Renew Our Rivers, a volunteer program to remove debris from rivers and other waterways throughout the Southeast, which claims[38] over 11 million pounds of trash removed or recycled in Renew Our Rivers events.

Political donations[edit]

In May 2018, it was reported that Southern Company had donated $1 million to America First Policies, a pro-Trump advocacy group that has been accused of Islamophobic remarks and Nazi sympathies.[39][40][41]

See also[edit]

Notes[edit]

  1. ^ Southern Company. "Service Territory". Retrieved 2016-08-19.
  2. ^ a b c d e f g h "US SEC: Form 10-K The Southern Company". United States Securities and Exchange Commission. Retrieved January 12, 2018.
  3. ^ Southern Company. "Megawatts and Markets". Archived from the original on July 5, 2008. Retrieved 2010-09-21.
  4. ^ "Southern". Fortune. Retrieved 2018-11-15.
  5. ^ "Southern". Fortune. Retrieved 2018-11-15.
  6. ^ "The Southern Company History". Funding Universe. Retrieved 19 May 2014.
  7. ^ "About Us". Southern Company. Retrieved 19 May 2014.
  8. ^ "Southern Company unveils new brand". www.southerncompany.com. Retrieved 2018-11-21.
  9. ^ Southern Company (2010). "Corporate Responsibility Report Data Summary". Archived from the original on 2010-09-12. Retrieved 2010-09-27.
  10. ^ "Southern Company 2017 Annual Report" (PDF).
  11. ^ Markiewicz, David (2010-02-10). "Vogtle nuclear plant near Augusta gets federal loan guarantee". The Atlanta Journal-Constitution. Archived from the original on 2010-06-09. Retrieved 2010-08-08.
  12. ^ Pavey, Rob (2010-02-16). "Feds back two new reactors at Plant Vogtle". Augusta Chronicle. Augusta, GA. Retrieved 2010-09-27.
  13. ^ Fuse, Taro (24 March 2017). "Toshiba decides on Westinghouse bankruptcy, sees $9 billion in charges: sources". Reuters. Retrieved 25 March 2017.
  14. ^ Tom Hals, Makiko Yamazaki, Tim Kelly (30 March 2017). "Huge nuclear cost overruns push Toshiba's Westinghouse into bankruptcy". Reuters. Retrieved 31 March 2017.
  15. ^ "Standards of Performance for Greenhouse Gas Emissions from New Stationary Sources: Electric Utility Generating Units". Federal Register. Retrieved 19 May 2014.
  16. ^ "Kemper County IGCC Fact Sheet: Carbon Dioxide Capture and Storage Project". MIT. Retrieved 19 May 2014.
  17. ^ "Kemper FAQ". NBCC. Archived from the original on 13 April 2014. Retrieved 19 May 2014.
  18. ^ "Mississippi Plant to Test if Coal Can Be Clean". Bloomberg. Retrieved 19 May 2014.
  19. ^ a b "Can Kemper become the first US power plant to use 'clean coal'?". The Guardian. Retrieved 19 May 2014.
  20. ^ "In Mississippi, a power plant is designed to shape the future of coal". LA Times. Retrieved 19 May 2014.
  21. ^ "Southern Company & Department of Energy Partnerships". Southern Company. Retrieved 19 May 2014.
  22. ^ "What is TRIG?". NBCC. Retrieved 19 May 2014.
  23. ^ "Gasification and TRIG". Mississippi Power. Retrieved 19 May 2014.
  24. ^ "Southern Teaming with Shenhua Group on Clean Coal Technology". NBCC. Retrieved 19 May 2014.
  25. ^ "Southern teaming with Shenhua group on clean coal technology". The Energy Daily. Retrieved 19 May 2014.
  26. ^ Chandler, Clay (13 February 2015). "Court strikes down Kemper rate increases, orders refunds". Clarion-Ledger. Retrieved 5 July 2016.
  27. ^ Perez, Mary; Hamilton, Paul (5 May 2016). "Update: SEC launches probe of Mississippi Power over Kemper plant". Sun Herald. Retrieved 5 July 2016.
  28. ^ "Mississippi Power: SEC investigating Kemper project". Clarion-Ledger. Gannett Company. Associated Press. 6 May 2016. Retrieved 5 July 2016.
  29. ^ Amy, Jeff (5 July 2016). "Mississippi Power faces suit over Kemper power plant". Clarion-Ledger. Retrieved 5 July 2016.
  30. ^ Urbina, Ian (5 July 2016). "A Model for 'Clean Coal' Runs Off the Tracks". New York Times. Retrieved 5 July 2016.
  31. ^ "Southern Revenue 2006-2018 | SO". www.macrotrends.net. Retrieved 2018-11-06.
  32. ^ "Gulf Power". Gulf Power Company. Retrieved 14 April 2018.
  33. ^ "Mercury Research Center (pdf)" (PDF). mercuryresearchcenter.com. Archived from the original (PDF) on 26 April 2012. Retrieved 14 April 2018.
  34. ^ Star, Jennifer Jacob Brown / jbrown@themeridianstar.comThe Meridian. "Mississippi Power breaks ground on Kemper County IGCC Power Plant". meridianstar.com. Retrieved 14 April 2018.
  35. ^ "Mother Nature Network". mnn.com. Archived from the original on 10 October 2011. Retrieved 14 April 2018.
  36. ^ "Solar Industries Industry Association report (pdf)" (PDF). seia.org. Archived from the original (PDF) on 10 July 2009. Retrieved 14 April 2018.
  37. ^ "Error". www.netl.doe.gov. Retrieved 14 April 2018.
  38. ^ "Renew Our Rivers website". renewourrivers.com. Retrieved 14 April 2018.
  39. ^ "Corporate donors funding Trump dark money group tied to racist views". 31 May 2018.
  40. ^ "Southern Co., CVS, Dow Chemical Funding Trump Dark Money Group Tied to Racist, Anti-Semitic Views". maplight.org. Retrieved 2018-06-02.
  41. ^ CNN, Andrew Kaczynski, Chris Massie and Nathan McDermott,. "CVS Health and Dow Chemical will no longer donate to pro-Trump advocacy group". CNN. Retrieved 2018-06-02.

External links[edit]