Uncategorized

Southern seeks to add customers, power plants

By MATTHEW C. QUINN

Oct. 25, 2000 (The Atlanta Constitution) — Southern Co. Chief Executive A.W. “Bill” Dahlberg assured financial analysts Tuesday that the utility holding company will be anything but boring following the spinoff of its global energy unit.

In a conference call with Wall Street analysts, Dahlberg talked up Southern’s role as a utility serving the “super Southeast” even after Southern Energy Inc. becomes a separate publicly traded firm in six to 12 months.

Dahlberg outlined four objectives for Southern, which will continue as parent of five utilities in four Southeastern states:

  • To double earnings from unregulated wholesale power sales over the next five years through a crash program to build new power plants across the region;
  • To expand its base of almost 4 million customers;
  • To add $50 million in income from new products and services, such as telecommunications, within five years;
  • To evaluate acquisitions.

Southern reported Monday that year-to-date earnings through Sept. 30 were $1.20 billion, or $1.85 a share, compared with $1.15 billion, or $1.67 per share, for the same period of last year.

Southern projects 5 percent annual growth over the next five years. Excluding Southern Energy, Southern projects earnings per share of $1.52 for 2000 and $1.60 in 2001.

Dahlberg said Southern will add 5,500 megawatts of generating capacity to its wholesale power unit, which now earns $100 million a year and operates plants with 3,300 megawatts of capacity.

Southern will retain Plant Dahlberg, a new natural gas-fired plant in Jackson County named for the chief executive. It had been slated to be part of Southern Energy.

Dahlberg said an acquisition of a Southeastern natural gas distribution company “might be attractive” if it would allow Southern to sell more services to customers.

He did not identify any potential acquisition targets. But Atlanta Gas Light Co. is viewed by many industry observers as a good fit for Southern as regulators relax objections to such gas-and-electric combinations.

Atlanta Gas Light’s 1.5 million customers overlap with Georgia Power Co.’s 1.6 million customers, and its parent recently added a Virginia gas distributor with 230,000 customers.

Donato Eassey, an analyst with Merrill Lynch Global Securities, said AGL Resources, parent of the gas utility, has a market value of about $1.6 billion. The company also has $1.3 billion in debt that any purchaser would have to assume.

“We’re all about growth and increasing the size and scope of our business,” said Nick Gold, spokesman for AGL Resources. “We realize we could be acquired as well.”

Copyright 2000 The Atlanta Journal-Constitution