{"id":17049,"date":"2016-07-11T09:17:16","date_gmt":"2016-07-11T13:17:16","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=17049"},"modified":"2016-07-11T09:32:25","modified_gmt":"2016-07-11T13:32:25","slug":"southern-company-buying-half-of-sonat-from-kmi","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2016\/07\/southern-company-buying-half-of-sonat-from-kmi.html","title":{"rendered":"Southern Company buying half of SONAT from KMI"},"content":{"rendered":"

\r\nSO is buying 50% of SONAT from KMI,\r\nas multiple people have pointed out,\r\nincluding someone from Southern Company.\r\n\r\n\"SO:<\/a>\r\nUnfortunately SO is not just investing in existing pipelines:\r\nthis purchase is about\r\n“specific growth opportunities”,\r\nand yes, it’s tied to\r\n\r\nSO’s recent purchase of AGL<\/a>.\r\nSouthern Company needs to stop plugging dying 20th century fossil fuels\r\nand get on with what it’s already started with solar power (and offshore wind).\r\n

\r\nSouthern Company PR 10 July 2016,\r\n\r\nSouthern Company, Kinder Morgan enter Southern Natural Gas pipeline strategic venture<\/a>,\r\n\r\n\r\n

\r\n

\r\nSouthern Company and Kinder Morgan, Inc. today announced a natural\r\ngas pipeline venture designed to advance both companies’ leadership\r\nin energy infrastructure development through Southern Company’s\r\nacquisition of a 50 percent equity interest in the Southern Natural\r\nGas (SNG) pipeline system. Kinder Morgan will continue to operate\r\nthe system. In addition, the agreement commits the companies to\r\ncooperatively pursue specific growth opportunities to develop\r\nnatural gas infrastructure for the strategic venture.\r\n<\/p>\r\n

\r\n\r\n\"SO:<\/a>\r\n<\/p>\r\n

\r\nSNG is a 7,600-mile pipeline system connecting natural gas supply\r\nbasins in Texas, Louisiana, Mississippi, Alabama and the Gulf of\r\nMexico to markets in Louisiana, Mississippi, Alabama, Florida,\r\nGeorgia, South Carolina and Tennessee. SNG is a principal\r\ntransporter of natural gas to Alabama, Georgia and South Carolina,\r\nwhich are part of one of the fastest-growing natural gas demand\r\nregions in the United States.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\n\r\n<\/a>\r\nYeah, I’ve got two SONAT pipelines on my property,\r\nincluding the valve KMI used to shut off the next county\r\n\r\nafter a ditch puller broke its pipeline in November 2014<\/a>.\r\nFortunately there was no spark, or that 300-foot plume of dust would\r\nhave been a fireball, and neighbors I’ve known all my life would have\r\nhad no homes to go back to after they were evacuated,\r\nif they could have been evacuated.\r\n

\r\n\r\nI prefer the\r\n\r\n15KW of solar panels on my farm workshop roof<\/a>, which\r\ndon’t leak or explode.\r\n

\r\n\r\n<\/a>\r\n
\r\nGretchen Quarterman and John S. Quarterman on the new panels on the roof of the farm workshop at Okra Paradise Farms, Lowndes County, Georgia, 29 January 2012, with the older panels from 2009 visible over the peak of the roof.\r\n
\r\nPhoto CC BY-ND<\/a> John S. Quarterman<\/a>\r\n<\/p>\r\n\r\n

\r\n

\r\nSouthern Company, one of the nation’s largest natural gas consumers\r\nand distributors, and Kinder Morgan, a recognized leader in natural\r\ngas pipeline development and operations, will work together to\r\nadvance both companies’ efforts to develop infrastructure important\r\nto America’s energy future.\r\n<\/p>\r\n

\r\n“This transaction is consistent with the infrastructure development\r\nstrategy we have discussed for well over a year. The company’s\r\nstrategic venture with Kinder Morgan, combined with our recent\r\nadditions, AGL Resources and PowerSecure, underscore Southern\r\nCompany’s leadership position in electricity and natural gas and our\r\ncommitment to developing America’s energy infrastructure,” said\r\nSouthern Company Chairman, President and CEO Thomas A. Fanning. “Our\r\nnew ownership stake in SNG will position Southern Company for future\r\ngrowth opportunities and enhanced access to natural gas, which are\r\nexpected to benefit customers and investors alike.”\r\n<\/p>\r\n

\r\n“Southern Company has been a valued customer of SNG for many years\r\nand this agreement draws on the strengths of both companies,” said\r\nNorman G. Holmes, president of Kinder Morgan South Region Pipelines.\r\n“We are very pleased to deepen our relationship with them and\r\nexcited about the growth opportunities this strategic relationship\r\nwill provide.”\r\n<\/p>\r\n

\r\nSteve Kean, Kinder Morgan president and chief executive officer,\r\nadded, “We plan to use all of the proceeds from this transaction to\r\nreduce debt at KMI. This is another step towards achieving our\r\nstated goals of strengthening our balance sheet and positioning the\r\ncompany for long-term value creation.”\r\n<\/p>\r\n

\r\nInclusive of existing SNG debt, the transaction equates to an SNG\r\ntotal enterprise value of approximately $4.15 billion which implies\r\na value of $1.47 billion for Southern Company’s 50 percent share of\r\nthe equity interest. Southern Company expects to finance the initial\r\npurchase, as well as any related future growth opportunities in a\r\ncredit-supportive manner.\r\n<\/p>\r\n

\r\nThe transaction is subject to the notification and clearance and\r\nreporting requirements under the Hart-Scott-Rodino Antitrust\r\nImprovements Act of 1976. The companies expect to complete the\r\ntransaction in the third quarter or early in the fourth quarter of\r\n2016.\r\n<\/p>\r\n

\r\nJones Day, Gibson Dunn & Crutcher LLP, Troutman Sanders LLP and\r\nBalch & Bingham LLP are serving as legal counsel to Southern\r\nCompany, and Bracewell LLP and Weil, Gotshal & Manges LLP are\r\nserving as legal counsel to Kinder Morgan.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThe PR has a link to a \r\n\r\nStrategic Venture Fact Sheet<\/a>,\r\nwhich says the same thing plus the map shown above.\r\n

\r\nThat fact sheet has no details about the\r\n“specific growth opportunities”,\r\nbut see\r\nDominion PR, 2 September 2014,\r\n\r\nDominion, Duke Energy, Piedmont Natural Gas and AGL Resources Form Joint Venture to Own Proposed Atlantic Coast Pipeline<\/a>,\r\n

\r\n

\r\nThe joint venture ownership stakes are: Dominion, 45 percent; Duke\r\nEnergy, 40 percent; Piedmont, 10 percent; and AGL Resources, 5\r\npercent. Subsidiaries and affiliates of all four joint venture\r\npartners plan to be customers of the pipeline under 20-year\r\ncontracts, pending regulatory approvals. PSNC Energy also plans to\r\nbe a customer of the pipeline under a 20-year contract, pending\r\nregulatory approvals.\r\n<\/p>\r\n<\/blockquote>\r\n

\r\nThis is the same Atlantic Coast Pipeline, then known as “the Carolina project”, that Spectra Energy planned to bid on,\r\nbut\r\n\r\nbacked out of in August 2014<\/a>\r\nafter multiple local resolutions against it.\r\n

\r\nAnd that’s the same Spectra Energy that’s still trying to ram its\r\nSabal Trail fracked methane boondoggle under Georgia rivers,\r\nincluding our own Withlacoochee River, after\r\nthe\r\n\r\nhistoric 128 to 34 Georgia House vote against that<\/a>,\r\nthen under the Suwannee River and through the Florida springs heartland\r\nto connect to\r\n\r\nmultiple liquid natural gas (LNG) export operations<\/a>,\r\nin addition to numerous “natural” gas power plants in Florida.\r\n

\r\nThat same March 23rd 2016, the Georgia House passed an 18-month\r\nmoratorium on petroleum products pipelines, causing KMI the next week\r\n\r\nto “suspend” its proposed Palmetto pipeline across the Georgia coast and all coastal rivers to Jacksonville, FL<\/a>.\r\nSome investors\r\n\r\nrationalized that as a good thing for KMI<\/a>:\r\n“That gives it some extra financial flexibility at a time when it’s at a premium,” said Motley Fool.\r\nIt’s true KMI had already in January\r\nbeen trying to sell off part of that Palmetto Pipeline and part of its Elba Island LNG export project<\/a>.\r\nWhy?\r\nMary Landers, SavannaNow, 28 February 2016,\r\n

\r\n

\r\n“The company has struggled over the last year, its stock price plummeting from more than $40 a share this time last year to about $15 a share Thursday. In November it slashed its dividend 75 percent. It’s cutting its spending as its cost of capital increases, [KMI CFO Kim] Dang said.”\r\n<\/blockquote>\r\n

\r\nSo Southern Company has likely gotten a fire sale price on another KMI subsidiary:\r\nSouthern Natural Gas.\r\nBut is buying into a failing industry the kind of big bet SO should be making?\r\n

\r\nFlorida\r\nhas not changed its laws to legalize third party power purchase\r\nagreements for solar power, unlike\r\n\r\nthe law Georgia passed last year<\/a>\r\nwith\r\n\r\nthe assistance of SO subsidiary Georgia Power<\/a>.\r\nOn the one hand\r\n\r\nSO and Duke Energy are backing solar power in Florida<\/a>,\r\non the other hand they’re both sabotaging solar Florida by pushing fracked gas pipelines: remember in May 2015 Duke bought 7.5% of Sabal Trail<\/a>.\r\n

\r\nAs I said to SO CEO Tom Fanning at the SO stockholder meeting in May,\r\nnatural gas is a bridge to nowhere, and Southern Company stockholders\r\nwill profit more from solar and wind power.\r\n

\r\nThe party line at that May meeting from Fanning and Georgia Power CEO Paul Bowers was “if we can’t do coal, we have to have pipelines”.\r\n

\r\n\r\n<\/a>\r\n
\r\nJohn S. Quarterman, SO CEO Tom Fanning, PowerShare CEO Sidney Hinton\r\n
\r\nPhoto by John S. Quarterman for LAKE at Southern Company Stockholder Meeting, 25 May 2016, CC BY-ND LAKE<\/a>\r\n<\/p>\r\n

\r\nWell, no, as Southern Company brags the stockholder meeting every year,\r\nSO has the largest private utility R&D operation in the country,\r\nand it is very well-positioned to get along with smart grid for solar power.\r\nSO’s February 2016 purchase of PowerSecure<\/a>\r\ncould be leveraged for solar power, as we all discussed at the May meeting.\r\n

\r\nTom Fanning and Southern Company: we are all looking to you to lead\r\nthe southeast, the U.S., and the world into the future of clean, distributed,\r\nrenewable solar and wind power.\r\nDoubling down on dying fossil fuels is not the way forward.\r\n

\r\nSouthern Company is moving along with solar power, with recent purchases\r\nof the\r\n\r\n102 MW Henrietta Solar Project in Kings County, California<\/a>,\r\nthe\r\n\r\n102 MW Lamesa Solar Facility in Dawson County, Texas<\/a>,\r\nand\r\nthe\r\n\r\n74 MW Rutherford Farm solar project in North Carolina<\/a>.\r\nThat last is apparently different from the\r\n\r\n61 MW solar farm the same Cypress Creek Renewables is building for google through Duke’s Green Source Rider in Rutherford County, NC<\/a>.\r\n

\r\nSO has even bought a 43 MW wind power project in Penobscot County, Maine<\/a>.\r\n

\r\nAnd Georgia Power is building solar power in Georgia,\r\nmost recently\r\n\r\n30 MW each at Fort Gordon near Augusta and Fort Benning near Columbus<\/a>.\r\nJust last month\r\nagreed with the GA PSC to add 1,200 MW of renewable power over the next five years<\/a>.\r\nThat’s a good start, but not enough to catch up with the solar power exponential growth curve that still has New Jersey ahead of Georgia (and Florida).\r\nAnd so far Georgia Power has done\r\n\r\nnothing but study<\/a> offshore wind,\r\nwith proposed leases offshore from Tybee Island<\/a>,\r\nand four wind turbines on Skidaway Island<\/a>.\r\n

\r\nBoth SO and Duke need to get on with these sorts of 21st century solar and wind projects\r\nand stop pushing “all of the above” 20th century failing fossil fuel fracking pipeline projects (and ratepayer-CWIP-gobbling Plant Vogtle nukes<\/a> and bond-rating-destroying Kemper “Clean” Coal<\/a>).\r\nIf SO and Duke won’t, somebody else will, and they’ll get leapfrogged into oblivion,\r\njust like AT&T Longlines got bypassed by the Internet revolution.\r\n

\r\n\r\n<\/a>\r\nTom Fanning knows this history, as a former CIO, and as\r\nnew president of the Edison Electric Institute<\/a>,\r\nwhich way back in January 2013 spelled out that parallel, and\r\n\r\nwarned that solar power was already eating electric utilities’ lunch<\/a>.\r\n

\r\nSouthern Company’s history book is entitled “Big Bets”.\r\nAre Tom Fanning and SO willing to make the biggest and most profitable\r\nbets yet, on solar power onshore and wind offshore?\r\n

\r\n -jsq\r\n<\/p>\r\n

Investigative reporting costs money, for open records requests, copying, web hosting, gaoline, and cameras, and with sufficient funds we can pay students to do further research. You can donate to LAKE today<\/a>!<\/p>","protected":false},"excerpt":{"rendered":"SO is buying 50% of SONAT from KMI, as multiple people have pointed out, including someone from Southern Company. Unfortunately SO is not just investing in existing pipelines: this purchase is about “specific growth opportunities”, and yes, it’s tied to SO’s recent purchase of AGL. Southern Company needs to stop plugging dying 20th century fossil […]","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"_links_to":"","_links_to_target":""},"categories":[14,18,20,570,6124,24,36],"tags":[143,8704,8234,8701,8708,9349,7622,9154,8702,12,7,562,8381,8379,1024,9350,6597,8731,1523,8714,8010,108,8009,6966,6339,8716],"class_list":["post-17049","post","type-post","status-publish","format-standard","hentry","category-economy","category-georgia-power","category-law","category-military","category-natural-gas-2","category-solar","category-wind","tag-duke-energy","tag-economy","tag-elba-island-lng","tag-georgia","tag-georgia-power","tag-kim-dang","tag-kinder-morgan","tag-kmi","tag-lake","tag-lowndes-area-knowledge-exchange","tag-lowndes-county","tag-natural-gas","tag-palmetto-pipeline","tag-palmetto-project","tag-paul-bowers","tag-petroleum-products-pipeline","tag-sabal-trail-transmission","tag-safety","tag-so","tag-solar","tag-sonat","tag-southern-company","tag-southern-natural-gas","tag-spectra-energy","tag-tom-fanning","tag-wind"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"","jetpack_shortlink":"https:\/\/wp.me\/p585fK-4qZ","jetpack_sharing_enabled":true,"jetpack-related-posts":[],"_links":{"self":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/17049","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/comments?post=17049"}],"version-history":[{"count":7,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/17049\/revisions"}],"predecessor-version":[{"id":17056,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/posts\/17049\/revisions\/17056"}],"wp:attachment":[{"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/media?parent=17049"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/categories?post=17049"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/www.l-a-k-e.org\/blog\/wp-json\/wp\/v2\/tags?post=17049"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}