Southern Wins Approval on Big Spending Plan as AI Demands New Power

A transmission line in Fayetteville, Georgia. Photo by Elijah Nouvelage /Bloomberg

Article content

(Bloomberg) — Georgia regulators approved a plan that opens the door for Southern Co. to boost spending by as much as $15 billion to deliver a projected surge of electricity for data centers, new factories and electric vehicles.

Article content

Southern’s Georgia Power unit proposed a resource plan in January that would delay coal plant retirements and build some clean energy in order to meet more than eight gigawatts of additional load the company projects will arrive over the next six years. The Georgia Public Service Commission voted on the proposal during a hearing on Tuesday and approved it unanimously, according to PSC representative Tom Krause. 

Article content

Article content

Article content

The decision comes as US electricity consumption booms after years of stagnant growth, putting stress on the power grid and creating opportunities for infrastructure investment. Since utilities like Georgia Power make a regulated rate of return on their spending, growth is good for the bottom line and the S&P utilities index is up more than 40% since late 2023.  

Article content

Article content

In a note earlier this month that rated Southern shares a buy, Jefferies analysts wrote that approval of Georgia Power’s resource plan would create “a clear pathway to deploy $10 billion to $15 billion of upside capital while adding incremental opportunities not previously contemplated.” Southern’s existing investment plan calls for spending $63 billion through 2030. 

Article content

Environmental groups including the National Resources Defense Council and the Sierra Club have criticized Georgia Power’s plan for overestimating load growth, keeping online expensive coal plants and not procuring enough solar and energy storage. 

Article content