Southern Company’s 4Q earnings exceed as yearlong earnings take a dive

The Southern Company headquarters in Atlanta. JOHN SPINK / JSPINK@AJC.COM
The Southern Company headquarters in Atlanta. JOHN SPINK / JSPINK@AJC.COM

Citing mild weather, reduced customer demand and legal expenses related to one of its power plants, Atlanta-based Southern Company posted weaker earnings in 2017 compared to the year before.

The company made $842 million in 2017, down from $2.4 billion in 2016.

Southern Company's earnings for the fourth quarter of 2017 were $496 million, compared to $197 million in 2016. Shares were also up 29 cents within that period from 20 cents per share in 2016 to 49 cents per share in 2017.

According to the company, the earnings increases were driven by high retail revenue, lower operational and maintenance costs at its electric subsidiaries and the results from a subsidiary, Southern Company gas which the company acquired in 2016.

"2017 was an eventful year for Southern Company, highlighted by the continued operational excellence of our premier state-regulated electric and gas utilities," said Thomas Fanning, the company's CEO.

One of the company’s subsidiaries, Georgia Power, had a turbulent year with its nuclear plant currently under construction in Waynesboro, which is years behind schedule and billions over budget.

Vogtle, located south of Augusta in Burke County, is one of Georgia's two nuclear power plants. In March 2017, Vogtle’s lead contractor, Westinghouse Electric, filed for bankruptcy. The project was already three years behind schedule and more than $3 billion over budget. Georgia Power’s Paul Bowers argues the project presents “long-term benefits to customers.” Critics have fought against Vogtle's expansion for years, citing cost and safety concerns. In December 2017, the Georgia Public Service C

The expansion of the project almost came to a stop at the end of the year, as debate soared over the economic viability of the project. The cost of the project, now in its ninth year, is almost double the initial estimate of $14.3 billion.

Fanning told investors several risk mitigating milestones were reached in 2017, including overcoming the Westinghouse Bankruptcy, securing Department Of Energy loans, the payment of the full Toshiba guaranty, the unanimous approval of the revised schedule and cost of the project by the PSC in December and the extension of the nuclear tax credits.

“We are grateful to the current administration and congress for recognizing the importance of new nuclear generation and demonstrating renewed federal support for Vogtle 3&4,” he said.

Fanning also reported increased productivity at the Vogtle site since the management change to Southern Nuclear and Bechtel, adding that construction is approximately eight months ahead of the estimated in service completion dates of November 2021 and November 2022.

“Of course there is a long way to go, but these early results are encouraging,” said Fanning.

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