Atlanta-based Southern Company’s third-quarter profits were down almost 7% compared to the same period a year ago, the utility giant said Thursday.
The company’s net earnings for the months of July through September were $1.4 billion compared to $1.5 billion in the third quarter of 2022. Southern’s profits during the first nine months of 2023 fell from $3.6 billion in 2022 to $3.1 billion in 2023, nearly 14% off last year’s pace.
Third-quarter revenues were $7 billion, a drop of 17% from 2022 levels.
The company said its debt and interest obligations drove the dip in earnings, while warmer-than-normal temperatures during late summer and early fall helped to offset the decrease.
Utility profits are closely tied to the weather and climate. Cold winters tend to boost earnings, as customers spend more to heat homes and businesses. Hot summers can do the same, as air conditioning units work overtime and use more electricity to keep indoor spaces cool.
The months from July through September were the 18th-warmest on record in Georgia, according to the National Oceanic and Atmospheric Administration. In Alabama and Mississippi, the other two states in Southern’s service territory, late summer and early fall were even hotter: Alabama had its 11th-hottest July through September since 1895, while the period in Mississippi was the state’s 3rd-hottest.
Looking ahead, Southern’s President and CEO Chris Womack said in a release that the company will be seeking to expand its electricity generation fleet to meet “a projected growth in electricity usage that is significantly larger than historic levels.”
Southern’s largest subsidiary — Georgia Power — and its other regulated utilities can boost their own profits by increasing spending on power plants and other assets. And just last week, Georgia Power asked state regulators to approve the addition of at least 3,300 megawatts of new electricity capacity, citing an increase in energy demand as a flood of new businesses head to the state.
Georgia Power says its projections show a need for more electricity by the winter of 2025, years earlier than it had anticipated as recently as last year. The company want to add some new solar and large battery storage systems, but plans to meet most of the new demand by building new gas-burning units and buying electricity from out-of-state fossil-fueled facilities.
The company’s plan has been criticized by environmental groups, who say its request to burn more fossil fuels is at odds with Southern Company’s own goal of reaching net zero greenhouse gas emissions by 2050. It is also counter to the calls of scientists and federal officials, who have said for years that humans must rapidly transition to clean energy sources to avoid even more dangerous climate change impacts.
Last week, Aaron Mitchell — Georgia Power’s vice president of pricing and planning — said the new investments it’s planning in fossil fuels will not “deter the company from continuing to stay committed to the energy transition of our fleet.”
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