Southern Company Sees 28% Profit Jump Amid Nuclear Plant Expansion

• Southern Company Sees 28% Profit Jump Amid Nuclear Plant Expansion

Southern Company, the parent of Georgia Power, boasted a notable 28% increase in profits in the first quarter of 2024 compared to the same period last year, the utility giant announced Thursday. This financial upswing comes hot on the heels of the recent completion of the long-awaited expansion of the nuclear power station at Plant Vogtle.

During the months of January through March, Southern reeled in a substantial $1.1 billion in profits, a considerable leap from the $862 million it earned during the same timeframe in 2023. The company’s first quarter revenues also showed growth, climbing approximately 2% to $6.6 billion compared to the prior year.

The surge in earnings was largely propelled by slightly cooler temperatures seen across Southern’s service area – which includes Georgia, Alabama, and Mississippi – at the beginning of the year. However, increased interest obligations and asset depreciation did temper these gains, according to Southern officials.

The fluctuations in utility profits are closely tied to regional weather patterns. A colder winter, for example, can prompt heightened energy use from customers seeking to combat the chill, thus boosting electricity and natural gas consumption. Conversely, milder temperatures can have the opposite effect on energy sales.

Despite the global trend of rising temperatures due to climate change, this winter in Georgia still showed slightly above-average warmth. Statewide temperatures from January to March were recorded as 2.4 degrees higher than the 20th-century average, marking it as the 24th hottest such period in history. Notably, the beginning of 2023 was hailed as Georgia’s warmest ever recorded.

Southern Company highlighted that its profits were also given a considerable bump from increased electricity sales to data centers, a sector that has been flocking to Georgia and other Southeastern states, bringing along substantial electricity demands. The utility reported a 12% sales increase to data centers for the quarter.

Chris Womack, President and CEO of Southern, attributed the strong start to 2024 to robust local economies and heightened usage from existing data center clients. This sentiment was echoed by the recent decision from the Georgia Public Service Commission (PSC) to greenlight Georgia Power’s construction of new oil and gas-burning units and significant battery storage additions to its system, primarily to cater to data center demands.

The completion of the Vogtle nuclear plant expansion, though significantly delayed and over budget, is slated to bring about rate hikes for Georgia Power customers but also promises a financial upside for Southern. Following the PSC’s decision to pass on a large portion of Vogtle’s construction costs to ratepayers, the average residential customer using 1,000 kilowatt-hours of electricity monthly can expect to see an incremental $14.38 increase in their bills, with $9 of that increase taking effect starting in May.

During an investor call on Thursday, Womack discussed the challenges faced during the Vogtle project’s construction, but emphasized that the completion of the two new reactors signifies the viability of new nuclear projects in the U.S. With no additional commercial nuclear plants currently in the works in the country, Womack highlighted the essential role he sees nuclear energy playing in meeting future energy needs as demands for carbon-free energy solutions continue to rise.

“We believe our country will need more nuclear energy, so the importance of this project for Georgia, and our nation cannot be understated,” Womack remarked.