Southern Co. is seeking a Securities and Exchange Commissionwaiver of Public Utility Holding Company Act rules so it can doubleits already massive investment program in nonregulated powergeneration assets primarily in North America over the next fewyears.

The 1935 act prohibits Southern and 18 other interstateutilities from investing more than 50% of their retained earningsin unregulated ventures. In 1996, Southern was the first to seekand receive a waiver from the SEC, allowing it to invest 100% ofits annual earnings in non-regulated ventures. Last year thecompany spent $3.57 billion, or 92% of its consolidated retainedearnings, on such ventures, including power plants in Britain,China, the Philippines, Brazil, Chile, Argentina, Germany and theU.S. It currently is attempting to close generation asset purchaseswith Pacific Gas & Electric and Orange & Rockland.

The Atlanta-based company is seeking a second waiver so it caninvest 175% of its earnings, or about $4 billion, in unregulatedbusinesses by December 2005.

“The reason we are doing this is tied directly to our growthgoals. We feel that having this authority will help us meet ourlong-term growth goals and increase shareholder value,” saidSouthern spokeswoman Janni Benson. “Unlike many other energycompanies we are restricted because of PUHCA.”

Southern anticipates using the majority of the additional fundsto invest in domestic projects, which “have become increasinglyattractive and important to Southern’s operations as a result ofindustry restructuring encouraged by [FERC], the implementation ofthe Energy Policy Act of 1992, state legislatures, and stateregulatory authorities,” the company told the SEC.

Last week, Southern said it would leave its dividend unchangedfor the first time since 1991. It also said it would reduce thepayout ratio overtime to retain cash for new investments.

©Copyright 1999 Intelligence Press Inc. All rights reserved. Thepreceding news report may not be republished or redistributed, inwhole or in part, in any form, without prior written consent ofIntelligence Press, Inc.