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Southern Energy CEO Exits After Banner Quarter

Southern Energy CEO Exits After Banner Quarter

Southern Energy Inc. (SEI), one of Southern Co.'s main subsidiaries, named S. Marce Fuller its new CEO last week. Under the leadership of the former CEO, Tom Boren, SEI reported $69 million in second-quarter 1999 earnings, compared with $25 million for the same period last year. Now it is up to Fuller to continue his success.

"[Boren] brought Southern Energy along from its infancy to where it is today, one of the world's largest independent power producers with assets of nearly $14 billion. With Tom's aggressive guidance, he helped make Southern Company an international energy company," said Bill Dahlberg, Southern Co. CEO.

Boren announced he was resigning recently in order to pursue other opportunities.

Fuller, 39, has been serving as executive vice president of Southern Energy and president and CEO of Southern Company Energy Marketing (SCEM), a joint venture of Southern Energy and Vastar Resources. In her new role, Fuller will direct Southern Energy's worldwide operations, which include electric power production, delivery or trading facilities in the United States and abroad.

Overall, Southern Co. earned $314 million or 45 cents/share in the second quarter of 1999, compared with $270 million or 39 cents/share for the comparable period a year earlier. Dahlberg said SEI was the main cog in the parent company's success.

"Our strategy has been to expand our growth in the competitive energy supply business, and Southern Energy continues to help us do that successfully and profitably," Dahlberg said.

After adjusting for interest on inter-company debt, Southern Energy reported $77 million in earnings, compared with $35 million for the second quarter of 1998.

Meanwhile, at Fuller's old shop, SCEM, second quarter electricity sales jumped 21% to 48.2 million MWh from last year's second quarter. Natural gas sales, however declined by 8% to 4.3 Bcf/d.

SCEM attributed the decline in second-quarter gas sales to a decline in market liquidity, along with expected temporary interruptions in trading while merging its Houston trading floor into its Atlanta trading floor. For the first half of the year, however, the company is 12% ahead of the 1998 pace with 5.5 Bcf/d of sales on average, compared to 4.9 Bcf/d in the first half of last year.

Power sales rose 13% for the first half of the year to 91.5 MWh. The company was the third largest seller of electricity in the first quarter of 1999, selling over 41 million MWh. If SCEM maintains this pace, it will be in line with its full year 1998 results of 185.1 million MWh, which earned second place for the year behind Enron.

"Southern Energy's newly acquired electricity generation and the output available to our energy traders had a direct impact on electricity sales," Fuller said. "This is another sign that our strategy to associate assets with our trading operation is working."

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