Southern Co. flags potential $100B five-year capital plan

Southern Co. told investors its five-year capital plan could reach $100 billion, versus an $81 billion base set in February that it has since raised by about $4 billion, Utility Dive reported.

The additions include 400 MW of uprates at existing natural gas plants and an expansion of the Southeast Connector gas pipeline. Georgia Power, Southern's utility subsidiary, also received approval during the quarter for an agreement with Google to expand nuclear capacity through uprates over the next several years, CFO David Poroch said.

For allocators, Southern's large-load contracts contain minimum bills covering at least 100% of the cost entering the system, so recovery does not depend on a customer reaching its expected growth rate. "Before the kilowatt moves over the meter, we are recovering our costs embedded in those minimum bills," CFO David Poroch said. About $15 billion separates the $85 billion implied by the February base plus the third-quarter additions from the $100 billion figure. That slice is the additional generation, and it depends on winning new-build bids and on regulators authorizing the plants.

The capital plan lands after a midterm election that changed the regulatory map in Georgia and Washington. Anger over electricity bills helped Democrats take control of Congress and win Georgia's governor's office and a majority on the Public Service Commission, Utility Dive reported, and Democrats won two Georgia PSC seats, as Private Wealth Daily previously reported. CEO Chris Womack said he has not heard talk of retroactive data center freezes or of looking back at signed contracts. "I feel pretty confident about what we have in place," he said.

Womack also listed large loads that are not data centers as continued drivers of growth in the South, including projects from Airbus, Mitsubishi Power and Audi. Mitsubishi Power plans a major expansion of its gas turbine manufacturing plant in Savannah, Georgia, which he said will help meet rising generation needs.

Southern is competing for new generation contracts in Alabama and Georgia with company-owned resources. Those awards, followed by authorization from the respective regulators, determine how much of the $100 billion is actually built.