Southern Company’s profits in the second quarter of 2023 fell by nearly a quarter compared to the same period a year ago, the company announced Thursday.
Atlanta-based Southern, the parent of Georgia Power, reported net earnings of $838 million, down from the $1.1 billion in profits it raked in during the second quarter of 2022. Second quarter revenues were also down about 20% percent compared to last year, falling to $5.7 billion.
Utility earnings are closely linked to the weather and climate. Cold winters tend to drive up earnings, as customers spend more to heat homes and businesses. Hot summers often do the same, as air conditioning units hum and ratepayers use more electricity to stay cool.
This year, Georgia and the rest of Southern’s service territory had an exceptionally hot winter. The months from January to March were the hottest on record in Georgia, and among the top-5 hottest such periods for both Alabama and Mississippi. That limited the customer demand for heating.
“During the first half of the year, we experienced the mildest weather on record for our electric service territories,” Southern President and CEO Chris Womack, who assumed the company’s top job earlier this year, said in a statement. “As we focus on delivering on our financial objectives, we remain committed to providing outstanding service to our customers and the growing economies we serve.”
This summer has been one of the hottest ever for much of the Northern Hemisphere, and Georgia and much of the Southeast have been baking since July. But much of Southern’s territory had a cooler than normal May and June. That decreased demand for air conditioning in the last two months of the second quarter led to lower electricity use and earnings by the utility.
During a Thursday afternoon briefing with analysts and journalists, Southern CFO Daniel Tucker called the weather so far in 2023 a “significant headwind,” but acknowledged the sweltering heat that has returned in July, which could benefit earnings in the third quarter.
Profits across the first six months of this year dropped to $1.7 billion, 19% less than a year ago.
Southern said its profits were also affected by debt obligations, plus changes in interest rates and expenses.
Womack and the company celebrated the completion of the first of two new nuclear reactors built at Plant Vogtle near Augusta. After years of delays and billions in cost overruns, Vogtle Unit 3 officially entered commercial service on Monday.
Now that Unit 3 is online, Georgia Power ratepayers will begin paying more for electricity. Staff for the Georgia Public Service Commission has estimated that the average residential customer will see an increase of $5.40 on their monthly bills starting in the August usage period.
Plant Vogtle’s second new reactor, Unit 4, is also nearing the finish line and could load fuel any day now. When it does, a series of hearings will begin to determine which additional Vogtle expansion costs Georgia Power can collect from customers.
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