Executives of Georgia Power Co. - the largest subsidiary of electric utility firm Southern Company (SO) - will request Georgia Public Service Commission (PSC) for approval to close some coal and oil-fired generating units at four plants. The units that Georgia Power wants to shut down are 15 coal- and oil-fired generating units having total capacity of 2,061 megawatts (MW).
Georgia Power management expects that this move will help the company to comply its operating cost with environmental regulations. Other factors that forced management to think of seeking state approval for the closure of the units are the present and forecasted future economic conditions along with low natural gas prices. As per management, this planned shutdown is about to affect nearly 480 Georgia Power employees.
The 15 units, which are to be shut down are located in Putnam, Coweta, Glynn, and Chatham counties. The PSC is expected to vote for the shut down request by the summer of 2013.
Moreover, Georgia Power will also request for the decertification of Savannah-based Boulevard 2 and 3 combustion turbine generating units. The request is subjected to the approval of the Integrated Resource Plan (IRP).
Georgia Power is the largest of four electric utilities that make up Southern Company. It is an investor-owned, tax-paying utility that serves 2.3 million customers in all but four of Georgia's 159 counties. It has been providing electricity to Georgia for more than a century at rates well below the national average.
Headquartered in Atlanta, Georgia, Southern Company is one of the largest generators of electricity in the nation, along with the likes of Exelon Corporation (EXC) and Duke Energy Corporation (DUK) - which serves both regulated and competitive markets across the Southeastern U.S.
Southern Company is a holding company for four regulated Southern electric utilities that serve about 4.4 million customers - Georgia Power, Alabama Power, Gulf Power, and Mississippi Power. The company participates in all phases of the electric utility business with more than 42,000 megawatts (MW) of electric generating capacity, and an extensive grid of transmission and distribution lines. The company also engages in the construction, acquisition, and management of generation assets, provision of digital wireless communications services, and the provision of fiber optic solutions to the telecommunication providers.
Southern Company currently retains a Zacks #4 Rank (short-term Sell rating). We are also maintaining our long-term Neutral recommendation on the stock.