NGI The Weekly Gas Market Report
Southern Company launched a new subsidiary, Southern Power Co., last week that will own, manage and finance wholesale generating assets in the Southeast. The subsidiary will market to wholesale customers in the fastest-growing wholesale electricity market in the country, the company said.
“We expect that this will allow us to move faster and more aggressively in seizing wholesale opportunities throughout the South,” said Charles McCrary, Southern Co.’s chief production officer. “We also believe this innovative approach to providing market- based wholesale generating assets continues to move our region toward competitive energy markets in a staged, orderly fashion. Our goal is to play a major role in serving the region’s growth and to continue to expand our presence outside of our traditional core service territory.” McCrary also was appointed president of the new subsidiary.
Southern Power hopes to grow income by 15% annually over the next five years so that Southern Co.’s earnings from wholesale market sales will more than double. The company estimates that by 2005, the subsidiary will have developed or acquired more than 7,500 MW of power dedicated to the competitive wholesale business. Southern Power has also set the goal of owning more than 15,000 MW in the next 10 years.
Spokesman Mike Tyndall said the idea for the Southern Power subsidiary was developed late last year. He added that with the SEC approval, Southern Power is now a registered operating subsidiary of the parent company.
Tyndall said the development of this most recent unit has no relation to the company’s previously announced plans to spin-off Southern Energy into its own investor-owned company. The spin-off, which was first announced in April 2000, is still on track for separation in the beginning of April this year, said the spokesman (see NGI, April 24, 2000; Dec. 4, 2000).
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