Southern Co. said warm weather and costs from its deal to buy natural gas utility AGL Resources helped push down both its first-quarter profit and revenue by roughly five percent.
The Atlanta-based electric company said cost overruns at its troubled “clean coal” power plant being built in Mississippi — where regulators are requiring the company to absorb cost overruns — was another culprit behind its lower bottom line.
The extra expenses from the Kemper plant in Mississippi chipped off $39 million from Southern’s bottom line. Southern said it also had $14 million in acquisition expenses from deals to buy Atlanta-based AGL Resources and another firm, PowerSecure International.
Including such expenses, Southern said its profit was $485 million in the first quarter, down 4.5 percent from its net income of $508 million a year ago.
Southern said its revenue for the first quarter was just under $4 billion, down 5.2 percent from year-earlier revenue of $4.2 billion. Southern said the drop was mostly due to lower fuel costs. Mild weather also dampened energy sales, the company said.
Southern’s per-share profit beat analysts’ estimates, while its revenue fell short, according to Thomson Reuters.
Despite the downward numbers, Southern executives said the company benefited from a strong economy and a boost in renewable energy sales through its wholesale energy unit, Southern Power.
"We saw positive customer growth, along with strong residential and commercial sales and a robust economic development pipeline," Southern CEO Thomas A. Fanning said in a statement. "Our franchise operations and our competitive generation subsidiary, Southern Power, continue to perform at a high level."
Southern has had a lot on its plate lately. Its Atlanta-based subsidiary, Georgia Power, recently agreed to freeze customers' base electricity rates for three years as part of a settlement with state regulators approving the AGL merger.
As part of the settlement, Southern also agreed to absorb merger-related costs and to pass on cost savings from the merger to customers after a few years.
The Georgia Public Service Commission is also reviewing cost overruns at the Vogtle nuclear plant expansion near Augusta, where Georgia Power is the lead partner, to determine what the company will have to shoulder and what ultimately will be passed on to customers.
The PSC is also examining Georgia Power's recently submitted long-term plans, which include initial work toward possibly building a second nuclear plant south of Columbus.
