Originally created 07/24/01

Southern Co. profits wilt



ATLANTA - A cooler summer is slowing earnings for Southern Co., the nation's largest investor-owned utility and parent company of Georgia Power and Savannah Electric.

Earnings per share are likely to be lower for the July-September period as a result, executives warned Monday during a conference call to announce second-quarter profits. On that news, the price of Southern Co. stock declined 22 cents Monday to $22.83.

"We produced solid results in the second quarter, even though the mild weather depressed the normal demand for electricity, especially compared with the high temperatures we had at this time last year," Southern Chairman Allen Franklin said.

Earnings per share for the conglomerate rose to 40 cents in the second quarter from 39 cents in the same period last year. For the first six months of the year, earnings rose to 66 cents per share from 62 cents in the first half of 2000.

Retail customer usage in the four states where the company operates - Georgia, Florida, Alabama and Mississippi - declined 1.2 percent from January through June compared with the same months of last year. Residential and commercial use rose 2 percent and 3.1 percent, respectively, but industrial power usage dropped 6.9 percent.

Mr. Franklin blamed a general slowdown in the manufacturing economy for the industrial slide.

But the company boosted profits by increasing sales to other utilities, including those in the Southeast and in California. Observers say the company has stepped up the construction and operation of its unregulated, competitively sold generation plants, which have more flexibility than regulated Savannah Electric and Georgia Power.

The Georgia Public Service Commission is considering a request from Georgia Power to raise rates an estimated 50 cents per month per residential customer and to allow it to pocket more profits. Some commissioners have hinted that they are inclined to order a rate reduction instead.

Several large industrial users are objecting to the rate request, including those in the Georgia Industrial Group.

"Every time Georgia Power has made a request to the Public Service Commission, you can bet they were thinking of the best interest of Southern Company, not the ratepayers," said Randall Quintrell, attorney for the group.

Hearings on that rate request will begin next month.