Tag Archives: Economy

If Southern Company’s nukes are a good deal, why so many insider stock sales?

If the Southern Company’s slick nuclear financing deal and its ongoing operation of three of the country’s dirtiest coal plants (two of them in Georgia) is such a good deal, why are so many insiders selling so much stock?

Maybe SO CEO Thomas A. Fanning needed that $12.4 million he got back in January by selling 275,617 shares at $45.0693 per share for a new yacht, or a new wing on his house, or something. A brief scan of nearby energy companies (Duke and Progress) indicates it’s not unusual for an energy company CEO to sell shares, although mostly not for this much dollar amount. $12.4 million is more than twice Fanning’s 2010 salary of $6.02 million, and well more than his 62% raised 2011 salary of $9.75 million that Georgia Power customers get to help pay for through Construction Work in Progress (CWIP) charges for the new nukes at Plant Vogtle that won’t be built for years, if ever.

But what’s with two SO subsidiary company CEOs, Mark A. Crosswhite, President and CEO of Gulf Power ( #206 on the Forbes Global 2000 in 2010) and Edward Day VI, President and CEO of Mississippi Power Company ( former engineering group supervisor at the Hatch Nuclear Project) selling a bunch of stock in April? Also there have been only a couple of puny little purchases, each of less than $30,000, in the past year. Why so much selling and so little buying by insiders?

Maybe new nukes are an increasingly bad business risk for Southern Company and Georgia Power. Perhaps some economic expert can help with this question; how about Moody’s? Maybe Georgia Power customers and Georgia and U.S. taxpayers and voters have an opinion?

I wonder what will happen to SO’s insider trading patterns when SO’s illusion of certainty of profit from nuclear and coal eventually becomes obvious even to their board and shareholders as actually a big risk, and when SO realizes Cobb EMC made the right choice for profit by ditching coal plant plans and building solar plants instead; when SO finally suddenly switches to solar like Cobb EMC and Austin Energy already did. Will insiders decide SO’s stock has become a good buy when SO builds solar and wind plants?

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Nuclear’s “bet-the-farm” risk —Moody’s

Wonder why Southern Company couldn’t get private financing for its new nukes at Plant Vogtle? Because back in June 2009 bond-rater Moody’s said this:

But from a credit perspective, the risks of building new nuclear generation are hard to ignore, entailing significantly higher business and operating risk profiles, with construction risk, huge capital costs, and continual shifts in national energy policy.

In case that wasn’t clear enough, they spelled it out further.

Nuclear’s “bet-the-farm” risk

The NRC says about 14 companies to date have submitted COL applications, proposing numerous new nuclear reactors for power generation. The first of these COL’s is expected to be approved beginning in mid-2011. Many of the COL license applications include partners, but the next table lists the primary holding company entity behind each project, and our view of the activity level associated with the endeavor.

From a credit perspective, companies that pursue new nuclear generation will take on a higher business and operating risk profile, pressuring credit ratings over the intermediate- to long-term.

Moody’s wraps up with some reassuring words for financiers, but maybe not so reassuring to we the taxpayers:

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New nukes increasingly bad business bet for Southern Company and Georgia Power

Harvey Wasserman wrote for HuffPost 9 April 2012, America’s 2 New Nukes Are on the Brink of Death,

The only two U.S. reactor projects now technically under construction are on the brink of death for financial reasons.

If they go under, there will almost certainly be no new reactors built here.

The much mythologized “nuclear renaissance” will be officially buried, and the U.S. can take a definitive leap toward a green-powered future that will actually work and that won’t threaten the continent with radioactive contamination.

Those are the stakes. And in that high-stakes poker game, it seems Southern Company is doing a little bluffing.

In Southern Company’s (SO) Q1 2012 Earnings Call 25 April 2012, its CEO Thomas Fanning revealed another little flaw in the project:

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Fixing the illusion of certainty in Georgia Power’s decision-making

Why is it so hard to get a company like Georgia Power or The Southern Company to get on with solar and wind power for clean energy, for national energy independence, and, most importantly to such corporations, for their own profit? Why instead do they keep investing in coal and natural gas and wasting our tax and customer dollars on nuclear financial boondoggles? Why did Cobb EMC back new coal plants until they had their nose rubbed in national shame about corruption and do nothing about solar until their shareholders revolted and changed a majority of their board? We don’t even need to wait for that forensic audit the new Cobb EMC board wants to get the big picture. Such companies consider what they’re used to to be low risk, and anything new to be risky. Why are they so stodgy, and how do we change that?

These companies have many decades of experience with coal and natural gas, so they consider them less financially risky. (Details like neighbors dying disproportionately from cancer cost a little bit to buy up property, but that’s nothing compared to readily predictable profits.) Even nuclear such companies consider not risky to them, since they’ve got the federal government and their own customers guaranteeing all the financial risk through Construction Work in Progress charges on their bills for power they’re not even receiving from the new nukes and agreement from Georgia PSC that cost overruns like those caused by concrete sinking into the dirt can be passed on to the customers.

Neal Stephenson wrote for World Policy Journal September 2011, Innovation Starvation,

The illusion of eliminating uncertainty from corporate decision-making is not merely a question of management style or personal preference. In the legal environment that has developed around publicly traded corporations, managers are strongly discouraged from shouldering any risks that they know about—or, in the opinion of some future jury, should have known about—even if they have a hunch that the gamble might pay off in the long run. There is no such thing as “long run” in industries driven by the next quarterly report. The possibility of some innovation making money is just that—a mere possibility that will not have time to materialize before the subpoenas from minority shareholder lawsuits begin to roll in.

But if the old ways turn out to be suddenly risky, change can come. Funny how Cobb EMC changed its tune after subpeonas started raining down for its former CEO Dwight Brown. Sure, he got off on a technicality, but it turns out Cobb EMC shareholders didn’t like Continue reading →

Valdosta confused about water uses

Is there an outdoor water restriction in Valdosta, or isn’t there? The city and the newspaper seem confused about that. Also remember much of Lowndes County gets its water indirectly from Valdosta through the county’s utility system. And that with groundwater levels at all-time lows, we need to be conserving all the time anyway, and thinking about how much and what kind of growth we want.

The City of Valdosta front page says:

In the Spotlight

The City of Valdosta has issued an outdoor water restriction suspending all outdoor water uses for 72-hours, or until further notice. Click here for more.

Yet if you click there, you get this error page:

Error The page you have requested does not exist. Please click here to go back to the home page.

Similarly, there was a VDT article on that subject, but that link also goes nowhere now.

Stephen Abel wrote for WALB yesterday, Temporary water restrictions in effect for Valdosta,

Folks in Valdosta need to think twice about washing their cars, or doing anything else that uses much water, this weekend.

“The city of Valdosta is urging all citizens to immediately cease outdoor irrigation use and all other nonessential uses of water. Now and throughout the weekend,” said Public Information Officer Sementha Mathews.

Severe vibrations in the water pumps is what put them out of commission. “The city’s water treatment plant experienced some mechanical issues this week with two of its raw water well pumps which caused the low levels in water,” said Mathews.

So, did the city fix its pumps? Or is it just confused about what to do?

WCTV posted this update, and seemed to indicate the water restrictions were still in place:

The City of Valdosta sincerely thanks the citizens who responded quickly to its request today to cease all outdoor irrigation and non-essential use of water. Currently, there are no water quality issues in the system, and the water provided by the city is safe for all purposes.

People should be conserving all the time anyway. These suggestions from the city are pretty good for a start:

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Coal ash at Plant Scherer considered harmful for your health

Penny-wise, pound foolish, that's coal and coal ash, we're all discovering.

S. Heather Duncan wrote for the Macon Telegraph 14 April 2012, Plant Scherer ash pond worries neighbors as Georgia Power buys, levels homes,

The home among the trees was supposed to be Mark Goolsby's inheritance. His 78-year-old mother now lives in the large, white, wood farmhouse that his family built before the Civil War.

But Goolsby says he'll never live there now.

That's because across the street and through those trees is one of the largest coal ash ponds in the country. It belongs to Plant Scherer, a coal-fired plant that came to the neighborhood considerably later than the Goolsby family. In the mid-1970s, Goolsby said, “when (Georgia Power) bought 350 acres from my dad, they told him we'd never know they were there.”

Those acres are now part of an unlined pond where Georgia Power deposits about 1,000 pounds of toxic coal ash a day. Neither federal nor Georgia rules require groundwater monitoring around the pond. The federal Toxic Release Inventory shows that in 2010 alone, the pond received ash containing thousands of pounds of heavy metals and radioactive compounds including arsenic, vanadium, and chromium.

The U.S. Environmental Protection Agency estimates that up to 1 in 50 residents nationally who live near ash ponds could get cancer from the arsenic leaking into wells. The EPA also predicts that unlined ash ponds can increase other health risks, such as damage to the liver, kidneys and central nervous system, from contaminants such as lead.

A massive 2008 spill from a Tennessee coal ash pond led to greater scrutiny of the dams that hold these ponds in place, and the EPA promised new rules for storing coal ash. The process led to broader awareness of a more long-term health threat: groundwater contamination from the ponds.

So what's Georgia Power's solution?

Monroe County property records show Georgia Power has spent about $1.1 million buying property near Plant Scherer between 2008 and the end of 2010. But the true number may be higher.

They're going to have to keep doing that until they buy up a lot more property, I predict.

Wouldn't it be cheaper for the future bottom line of Georgia Power and its parent the Southern Company to invest in solar and wind power?

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Southern Company CEO got 62% raise in 2011

What did Southern Company (SO) do to justify a 62% raise for its CEO last year? Could it be lots of special financing for the proposed new nukes at Plant Vogtle on the Savannah River?

Bill Murphy wrote for citybizlist Atlanta 16 April 2012, The Southern Company CEO Thomas Fanning Got 62% Raise in 2011 – cbl

The Southern Company (NYSE: SO) Chairman, President and CEO Thomas Fanning got a 62 percent jump to $9.75 million last year, according to an SEC filing. He got $6.02 million in 2010.

Fanning, who has led the Atlanta-based energy company since December 2010, received a base annual salary of $1.06 million, shares worth $2.25 million, stock options worth $1.50 million, $2.46 million in non-equity incentive and $2.42 million representing a change in pension value and nonqualified deferred compensation.

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ALEC, bills to ditch renewable energy, and the Southern Company

Got caught promoting laws that encourage people to kill people? Double down on laws to kill people through pollution! That’s what ALEC is doing. And look who’s apparently a member of ALEC: the Southern Company, parent of Georgia Power, and proprieter of several of the largest and dirtiest coal plants in the country.

Brian Merchant wrote for Treehugger Tuesday, Two ALEC Campaigns Exposed: One Kills Renewables, One Boosts Fracking,

After major corporations like Pepsi, Kraft, Proctor & Gamble, and Coke all ditched the rightwing group, ALEC announced that it would Plant Scherer abandon its drive to enact gun and voter ID laws. The group’s decision came after a couple high profile campaigns were launched decrying ALEC’s involvement in passing the ‘stand your ground’ laws.

But the group is actually stepping up its efforts in other arenas, as I noted last week. And two new reports, one from ProPublica, the other from DeSmogBlog, outline its new aims: dismantle legislation that incentivizes renewable energy generation, and preserve loopholes that allow natural gas companies to keep the chemical cocktails in their fracking fluids secret from the public.

This is the same ALEC that promotes laws like Georgia’s HB 87 that lock up more people to benefit private prison companies like CCA, which wanted to build a private prison on Lowndes County, Georgia. Traficking in human beings is not too sordid for ALEC, so poisoning people through polution doesn’t seem surprising.

Hm, let’s look at the corporate membership of ALEC, as collected by Sourcewatch’s ALEC Exposed. Why there’s The Southern Company, parent of Georgia Power! I’m frankly a little surprised Continue reading →

ALEC “covers the spectrum in terms of bad policy for people” –FL news

ALEC will no doubt try to tar WCTV as “liberal media.” That will be amusing!

Troy Kinsey wrote for WCTV Monday, themselves as members of ALEC. Damien filer with ‘progress florida’ says its time for them to break their ties with a group that’s taking national heat over ‘Stand Your Ground’.

“This is not just about ‘shoot first’ laws; this is about everything from the so-called ‘parent trigger’ law that we saw during the last legislative session, the prison privatization schemes that we’ve seen crop up. It really covers the spectrum in terms of bad policy for people, and policy that’s really aimed at padding the pockets of the corporations that fund this organization.”

Hm, I wonder who in the Georgia statehouse are ALEC members?

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If someone wants to build offices there’s plenty of room downtown.

Meanwhile, just across the Florida line, Leon County Commission and the Tallahassee City Comissioners don't seem to want sprawl.

James Buechele wrote for WCTV yesterday, Neighborhood Has Zoning Concerns: County commissioners met to talk about nine amendments for a comprehensive plan to tackle developments.

Leon County commissioners and Tallahassee City Commissioners met Tuesday evening to talk about nine proposed amendments to the comprehensive plan.

One of the issues dealt with the Haute Headz salon off of Thomasville and Gadsden roads in Mid-Town.

Property owner Marshall Cassedy wants to see the area in this section of Mid-Town changed from a residential preservation zone to one that would allow offices.

Right now, it's home to the salon, but because of the residential preservation zone, if something should happen to the business a home would have to take it's place instead of another business.

That's something Cassedy wants to change because he says the busy location is not ideal for a home.

But opponents say that if someone wants to build offices there's plenty of room downtown.

"We already have about a million and a half square-feet of vacant office space in the city and the county," said Tallahassee resident Darwin Gamble. "Help building more offices won't create more jobs."

This issue was tabled at the meeting and will come up again June 26th. Until then both sides will continue to negotiate.

That's almost strategic:

"Help building more offices won't create more jobs."

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