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Released March 06, 2024 | SUGAR LAND
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Written by John Egan for Industrial Info Resources (Sugar Land, Texas)--Southern Company (NYSE:SO) (Atlanta, Georgia) boosted its five-year capital-expenditure (capex) program by $5 billion to $48 billion over the 2024-2028 period, company officials told investors in an earnings call February 15.
That planned capital spend does not include any further capital outlays for the all-but-finished Unit 4 new nuclear unit at the Alvin W. Vogtle Nuclear Power Station in Waynesboro, Georgia. Unit 3 entered commercial operations July 31, 2023. Unit 4 is in the process of startup testing, with an expected commercial date of operations during the second quarter of 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more from a detailed project report and plant profile.
Southern Company's three electric utilities--Georgia Power, Alabama Power and Mississippi Power--serve a total 4.4 million customers. Georgia Power is the largest of the three, serving about 2.7 million customers. Southern also operates natural gas utilities in Illinois, Georgia, Virginia and Tennessee. Overall, those four utilities serve about 4.4 million customers.
Industrial Info is tracking about 60 capital projects involving Southern's subsidiaries that are valued collectively at more than $42 billion. The largest of these projects is the Vogtle unit additions, valued at approximately $32 billion. Subscribers can click here to obtain a list of detailed reports for projects planned by Southern's subsidiaries.
Aside from Vogtle, the other planned capital projects include:
Click on the image at right to see how Southern Company's planned five-year capital spending plans have grown in recent years.
Excluding whatever final investments may be needed for Vogtle Unit 4, executives told analysts February 15 that the lion's share--about $39 billion--of Southern's $48 billion planned capital program will go to its three electric utility units.
Click on the image at right to see a breakdown of Southern Company's planned capital investments in its three electric utility units over the 2024-2028 period.
About $9.2 billion of that scheduled electric capital spend over the 2024-2028 period is expected to go to meet the needs of a growing customer base. Another $7.3 billion will be used to improve the utilities' resilience. About $13.5 billion in capital dollars is slated for maintenance activities, while roughly $4.1 billion will be directed to compliance activities. About $4.5 billion is scheduled to go to "other" electric projects.
On the February 15 earnings call, Southern officials discussed the strong growth the company's electric utilities have experienced. Officials said 200,000 residential customers across three service territories were added over 2020-2023, the highest four-year total in decades. Even stronger growth was notched by the commercial customer segment.
Looking forward, company officials said systemwide retail electric sales are expected to grow between 1% and 2% annually for 2024 and 2025, which aligns with the industry average. But electric sales growth is expected to shoot up to about 6% annually in the years after that. About 24% of Southern's planned capital spend over the next five years will be to meet growth-related needs.
Southern's Georgia Power unit is in the process of finalizing its planned outlays for renewable electric generation as part of its updated 2023 integrated resource plan (IRP). A final decision on the IRP is expected next month from Georgia Public Service Commission (Atlanta, Georgia). For more on that plan, see October 30-2023, article - Georgia Power Updates Integrated Resource Plan.
In last year's updated IRP, Georgia Power asked for regulatory approval to add about 10,000 megawatts (MW) of renewable energy by 2035, a significant update on the 6,000 MW anticipated in the 2022 IRP. The company also plans for more buildout of battery energy storage systems (BESS), particularly those co-located with solar power.
Southern executives told investors they expect growth will drive up winter peak electric demand significantly through 2031.
Click on the image at right to see Southern Company's projection of a surge in winter peak electric demand that will be met by its updated 2023 IRP.
Turning to Southern's four gas utilities, officials said they planned to invest about $9 billion in those operating utilities over the next five years. One-third of that planned outlay will be used to improve those utilities' resilience, while compliance activities will draw about $2.1 billion in funding. Growth-related spending is expected to get about $1.3 billion in funding, while maintenance activities will be funded with about $600 million over five years. About $1.5 billion is designated as "other."
Click on the image at right to see the breakdown of capital spending for Southern Company's four gas utilities.
Regarding full-year 2023 earnings, the company earned slightly less than $4 billion on revenue of $25.3 billion in 2023. By comparison, full-year earnings in 2022 were about $3.5 billion; in 2021, Southern earned $2.4 billion. All figures are according to generally accepted accounting principles (GAAP). The biggest year-to-year variables in the company's operating costs were outlays for fuel for electricity, purchased power and natural gas.
Commenting on earnings, Southern's Chairman, President and Chief Executive Christopher C. Womack said: "Last year was an exceptional year for Southern Company. In 2023, we once again demonstrated that we can accomplish extraordinary things. In addition to delivering strong financial results in the face of unprecedented headwinds, we completed Plant Vogtle Unit 3--the first newly constructed nuclear unit in the United States in over three decades."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
That planned capital spend does not include any further capital outlays for the all-but-finished Unit 4 new nuclear unit at the Alvin W. Vogtle Nuclear Power Station in Waynesboro, Georgia. Unit 3 entered commercial operations July 31, 2023. Unit 4 is in the process of startup testing, with an expected commercial date of operations during the second quarter of 2024. Subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project and Plant databases can learn more from a detailed project report and plant profile.
Southern Company's three electric utilities--Georgia Power, Alabama Power and Mississippi Power--serve a total 4.4 million customers. Georgia Power is the largest of the three, serving about 2.7 million customers. Southern also operates natural gas utilities in Illinois, Georgia, Virginia and Tennessee. Overall, those four utilities serve about 4.4 million customers.
Industrial Info is tracking about 60 capital projects involving Southern's subsidiaries that are valued collectively at more than $42 billion. The largest of these projects is the Vogtle unit additions, valued at approximately $32 billion. Subscribers can click here to obtain a list of detailed reports for projects planned by Southern's subsidiaries.
Aside from Vogtle, the other planned capital projects include:
- Building renewable electric generation and battery energy storage systems (BEES)
- Remediating coal plants to comply with federal law
- Constructing new natural gas-fired generation
- Performing in-plant capital upgrades
- Converting coal-burning units to burn natural gas
- Dismantling and demolishing shuttered coal units
- Building new electric infrastructure
- Rebuilding existing infrastructure
Click on the image at right to see how Southern Company's planned five-year capital spending plans have grown in recent years.Excluding whatever final investments may be needed for Vogtle Unit 4, executives told analysts February 15 that the lion's share--about $39 billion--of Southern's $48 billion planned capital program will go to its three electric utility units.
Click on the image at right to see a breakdown of Southern Company's planned capital investments in its three electric utility units over the 2024-2028 period.About $9.2 billion of that scheduled electric capital spend over the 2024-2028 period is expected to go to meet the needs of a growing customer base. Another $7.3 billion will be used to improve the utilities' resilience. About $13.5 billion in capital dollars is slated for maintenance activities, while roughly $4.1 billion will be directed to compliance activities. About $4.5 billion is scheduled to go to "other" electric projects.
On the February 15 earnings call, Southern officials discussed the strong growth the company's electric utilities have experienced. Officials said 200,000 residential customers across three service territories were added over 2020-2023, the highest four-year total in decades. Even stronger growth was notched by the commercial customer segment.
Looking forward, company officials said systemwide retail electric sales are expected to grow between 1% and 2% annually for 2024 and 2025, which aligns with the industry average. But electric sales growth is expected to shoot up to about 6% annually in the years after that. About 24% of Southern's planned capital spend over the next five years will be to meet growth-related needs.
Southern's Georgia Power unit is in the process of finalizing its planned outlays for renewable electric generation as part of its updated 2023 integrated resource plan (IRP). A final decision on the IRP is expected next month from Georgia Public Service Commission (Atlanta, Georgia). For more on that plan, see October 30-2023, article - Georgia Power Updates Integrated Resource Plan.
In last year's updated IRP, Georgia Power asked for regulatory approval to add about 10,000 megawatts (MW) of renewable energy by 2035, a significant update on the 6,000 MW anticipated in the 2022 IRP. The company also plans for more buildout of battery energy storage systems (BESS), particularly those co-located with solar power.
Southern executives told investors they expect growth will drive up winter peak electric demand significantly through 2031.
Click on the image at right to see Southern Company's projection of a surge in winter peak electric demand that will be met by its updated 2023 IRP. Turning to Southern's four gas utilities, officials said they planned to invest about $9 billion in those operating utilities over the next five years. One-third of that planned outlay will be used to improve those utilities' resilience, while compliance activities will draw about $2.1 billion in funding. Growth-related spending is expected to get about $1.3 billion in funding, while maintenance activities will be funded with about $600 million over five years. About $1.5 billion is designated as "other."
Click on the image at right to see the breakdown of capital spending for Southern Company's four gas utilities.Regarding full-year 2023 earnings, the company earned slightly less than $4 billion on revenue of $25.3 billion in 2023. By comparison, full-year earnings in 2022 were about $3.5 billion; in 2021, Southern earned $2.4 billion. All figures are according to generally accepted accounting principles (GAAP). The biggest year-to-year variables in the company's operating costs were outlays for fuel for electricity, purchased power and natural gas.
Commenting on earnings, Southern's Chairman, President and Chief Executive Christopher C. Womack said: "Last year was an exceptional year for Southern Company. In 2023, we once again demonstrated that we can accomplish extraordinary things. In addition to delivering strong financial results in the face of unprecedented headwinds, we completed Plant Vogtle Unit 3--the first newly constructed nuclear unit in the United States in over three decades."
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) platform helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 trillion (USD).
