{"id":4594,"date":"2013-07-08T11:44:33","date_gmt":"2013-07-08T15:44:33","guid":{"rendered":"http:\/\/www.l-a-k-e.org\/blog\/?p=4594"},"modified":"2013-07-08T12:12:04","modified_gmt":"2013-07-08T16:12:04","slug":"sos-plan-to-make-the-southeast-a-net-exporter-of-the-energy-from-solar-and-wind-john-s-quarterman-so-2013-05-22","status":"publish","type":"post","link":"http:\/\/www.l-a-k-e.org\/blog\/2013\/07\/sos-plan-to-make-the-southeast-a-net-exporter-of-the-energy-from-solar-and-wind-john-s-quarterman-so-2013-05-22.html","title":{"rendered":"SO’s plan to make the Southeast a net exporter of the energy from solar and wind? –John S. Quarterman @ SO 2013-05-22"},"content":{"rendered":"

\nSO CEO Tom Fanning didn’t budge from nuclear and coal,
\nbut he did announce a tiger team to get on top of
\ndistributed solar and wind through a smart grid,
\nheaded by SO’s COO,
\nat the
\n
\n22 May 2013 Southern Company Stockholder Meeting<\/a>.\n<\/p>\n

\n

\n
\n\"Next<\/a><\/p>\n

Mr. John S. Quarterman from Lowndes County, Georgia, and he holds
\n220 shares of Southern Company.\n<\/p>\n

\nTF: Hello, John. Good to see you again this year.\n<\/p>\n

\n
\n\"jsq<\/a>
\njsq: Hi. I’ve come to compliment Tom Fanning and Paul Bowers. Last
\nyear, Tom Fanning was so persuasive I ran out and bought $10,000
\nworth of stock.\n<\/p>\n

\nTF: Bless you.
\n[Applause]\n<\/p>\n<\/blockquote>\n

\nHowever,
\napparently because of
\n
\nSO’s admission a few minutes before in that same meeting<\/a>
\nthat it was going to have to eat Kemper Coal cost overruns,
\n
\n<\/a>
\n
\nSO stock tanked that same day<\/a>,
\ncausing my stock to stop out,
\nand Standard & Poor’s downgraded SO the following day
\nbecause of Kemper Coal, noting that if the same thing happened
\nwith SO’s nuclear project at Plant Vogtle, S&P’s would probably
\ndowngrade SO again.
\nI have bought SO stock back since then,
\nfiguring it had bottomed out after
\n
\ntwo analysts downgraded it in June<\/a>, also because of Kemper Coal
\nand Plant Vogtle, plus one of them explicitly said also because of
\nSO’s “lack of meaningful contribution from renewable energy”<\/p>\n

\n

\nIn the current age of growing emphasis on ‘environment friendly or
\ngreen’ energy, the company may be forced to divert cash flow to
\nensure regulatory compliance, which can adversely impact
\nprofitability.\n<\/p>\n<\/blockquote>\n

\nDon’t get the wrong impression: I want SO stock to go up.
\nI want it to go up because SO changes direction and gets
\nserious about renewable energy.\n<\/p>\n

\n

\njsq: Very good. And I like reliable, predictable and sustainable. That
\nstock in the last six months has — well, it’s getting about a
\n4 percent dividend a yield, not too shabby, and it’s gone up by
\nabout 7 percent, that’s excellent.\n<\/p>\n<\/blockquote>\n

\nAfter all the downgrades, SO stock lost that 7% and more.
\nNot so reliable after all.
\nOr regular, as in the mantra Tom Fanning had repeated earlier in the
\nmeeting:<\/p>\n

\n

\n…the way this company is built — regular, predictable, and
\nsustainable financial results is our objective and we do it with one
\nof the lowest risk profiles achievable.\n<\/p>\n<\/blockquote>\n

\nHe had also remarked a few minutes before
\n
\nto Stephanie Coffin<\/a>
\nthat:\n<\/p>\n

\n

\n
\n<\/a>
\nOne of the reasons that you as stockholders — I’m glad you own
\nSouthern Company stock or you wouldn’t be here — but I bet you
\nown other stocks. You don’t put all your eggs in one basket.\n<\/p>\n<\/blockquote>\n

\nAnd I had already given him and Paul Bowers a heads-up before the meeting
\nthat SolarCity stock was of interest to me, as it was to them.\n<\/p>\n

\n

\n
\n\"jsq<\/a>
\njsq: As you mentioned, I do own other stock. For example, SolarCity stock.\n<\/p>\n

\nTF: Yeah.\n<\/p>\n

\njsq:
\nYes. Which in the last six months has gone up by — I’ve lost
\ntrack, about 200 percent.\n<\/p>\n

\nTF:
\nYeah, it’s been on a run.\n<\/p>\n<\/blockquote>\n

\nSolarCity (SCTY) stock went on up to about 300% above its IPO price,
\nthen dropped to around 200%.
\nI stopped out of SCTY, too, but have since bought it back, too.
\nIt will go up more, I expect.\n<\/p>\n

\n

\njsq:
\nRight. Now, nobody expects a company with the economy the size of
\nAustralia to — for its stock price to move that quickly.\n<\/p>\n<\/blockquote>\n

\nLast year
\n
\nTom Fanning remarked to Sam Booher<\/a>:\n<\/p>\n

\n

\n
\n<\/a>
\nFrom an energy standpoint, Southern Company is a little bit smaller,
\nbut similar to, the energy production profile of the nation of
\nAustralia. We are a great, big company from an energy production
\nstandpoint.\n<\/p>\n<\/blockquote>\n

\n
\n<\/a>
\nIn
\nOctober I pointed out that
\n
\n\u201cGreat, big\u201d SO is 1\/10 Australia for solar farm deployment in Georgia<\/a>.
\nAnd the main point here is that Southern Company really is a very large
\ncompany that can’t be expected to have stock price rocketing like a
\ntiny upstart such as SolarCity.
\nHowever, that sheer size means SO is capable of a lot more than it is doing.\n<\/p>\n

\n

\n
\n<\/a>
\nHowever, I want to compliment Southern Company for
\n
\n\"jsq<\/a><\/p>\n


\njsq: this baby step<\/a> of
\ngetting into solar and Campo Verde.\n<\/p>\n<\/blockquote>\n

\n
\n\"Campo<\/a>
\nI was holding up
\n
\nthis Campo Verde flyer<\/a>
\nfrom the meeting materials.\n<\/p>\n

\nTom Fanning had a few minutes earlier
\n
\ntold Gloria Tatum<\/a>\n<\/p>\n

\n

\n
\n<\/a>
\nAs you correctly mentioned, a lot of people in Europe tended to, I
\nthink, run scared from nuclear. I think that is poor policy and I’m
\nnot sure, you know, for the benefit of America, I don’t want to use
\nEurope as any of my models.\n<\/p>\n<\/blockquote>\n

\n
\n\"jsq<\/a>
\nSo I called his bluff and made him laugh:\n<\/p>\n

\n

jsq: Now, 139 megawatts doesn’t sound
\nlike a baby step, but I don’t like using New Jersey as a model,
\nbut —<\/p>\n

\nTF: [Laughter]<\/p>\n

\n
\n<\/a>
\n
\n\"Board<\/a>
\njsq:
\nas I’m sure the board of Southern Company is aware, New
\nJersey already has 1,000 megawatts deployed — not just
\nplanning,
\n
\nalready deployed — a whole gigawatt.<\/a><\/p>\n

\nAnd,
\nwhat does that compare to? One of the two planned reactors at Plant
\nVogtle is about 1.2 gigawatts, and I’m sure I’ll be corrected if I
\nget these numbers wrong. And that gigawatt in New Jersey was put in
\nwithout any need for
\n
\nan $8.3 billion loan guarantee from the Feds<\/a>
\n[as for Plant Vogtle] or
\nany
\n
\nstate-guaranteed bonds<\/a> [as for Kemper Coal] or
\nconstruction-work-in-progress [as for both].<\/p>\n

\n
\n<\/a>
\nOkay, so
\n— and there’s a lot of economic advantages to Campo Verde. In
\n
\n\"jsq<\/a>
\n
\nthis longer version of the press release<\/a>, and I’m talking about
\nbuilding the economy, 239 million over the next 30 years to the
\nlocal county, $17.5 million in local tax revenue, 250 construction
\njobs. Unfortunately, that’s in California.<\/p>\n

\n
\n<\/a>
\nHowever,
\n
\nwe can have that right here in the Southeast<\/a>,
\nwhich is where I want to compliment
\nPaul Bowers at Georgia Power because Georgia Power is helping
\nconnect
\n
\ntwo megawatts of solar power coming into Valdosta, Georgia<\/a>,
\nin the near future and perhaps some more. And Georgia Power is
\nhelping connect
\n
\n<\/a>
\n
\nthe megawatt on the roof of Dublin High School<\/a> in
\nDublin, Georgia. Which, by the way, is going to use
\n
\nMAGE solar
\npanels; that’s a German company but it’s manufacturing in Dublin,
\nGeorgia<\/a>. And I believe some of those panels going in in Valdosta are
\n
\nSuniva panels, manufactured in Norcross, Georgia<\/a>.\n<\/p>\n

\nTF:
\nA Georgia Tech guy developed those.\n<\/p>\n

\n
\n<\/a>
\njsq:
\nVery good. Excellent. So that is going along an excellent direction
\nand I’m glad you mentioned Edison Electric Institute, and I’m sure
\nyou’ve read
\n
\ntheir recent report<\/a>,\n<\/p>\n<\/blockquote>\n

\nTom Fanning nodded his head to indicate he had read it.\n<\/p>\n

\n

\njsq: which is the — leads to the
\nquestion I want to raise.
\n
\nEdison Electric Institute pointed out<\/a> that
\nthe sustainability of the big baseload utility model — big
\nplants like Plant Vogtle, like Kemper coal, like Plant Scherer, and
\neven like Campo Verde — big plants like that may not be the
\nway to the future. Why is that?<\/p>\n

\n
\n\"jsq<\/a>
\nI’m glad you mentioned the Internet.
\nFor the
\nsame reason that most of us have a supercomputer, connected to the
\nInternet in our pocket, bigger than IBM could build a few decades
\nago. It’s — the price of solar power is decreasing along the
\nsame kind of path. I know you know what Moore’s Law is;\n<\/p>\n<\/blockquote>\n

\nI knew this because
\n
\ndetailed biographies<\/a> say
\nTom Fanning was
\n
\nChief Information Officer<\/a>
\nfor SO at one point.
\nThat position is responsible for information technology,
\nincluding Internet access, and it would be very difficult
\nto do that job withough knowing about
\n
\nMoore’s Law<\/a>.
\nHe nodded his again to indicate he did know about it.<\/p>\n

\n

\njsq: I won’t
\nexplain here. So according to the Edison Electric Institute, the
\nsustainability of the current business model of Southern Company
\n
\nis
\nbeing disrupted probably in the very near future — that’s what
\nthey predict — by solar power<\/a>. Now, Southern Company is in a
\nposition
\n
\nto get out in front and lead<\/a> that instead of being
\ndisrupted by it.\n<\/p><\/blockquote>\n

\nOur host was shifting from foot to foot at this point.
\nHe’s very aware of this disruptive distributed solar power issue.\n<\/p>\n

\n

\njsq: One thing that Southern Company can do that
\nSolarCity cannot do — that Google cannot do — is it can
\ndo a reliable, sustainable, adaptable grid. It was very refreshing
\nthat presentation about distributed solar and offshore wind.
\nSouthern Company is the very company that could do that. It has the
\nfinancial resources; it has the biggest R&D operation, if I’ve heard
\nyou correctly,\n<\/p>\n

\nTF: Right.<\/p>\n

\njsq: of any private company in the U.S.\n<\/p><\/blockquote>\n

\nThe
\n
\nflip side<\/a>
\nof that Campo Verde flyer from the handouts notes:<\/p>\n

\n

ENERGY INNOVATION<\/H3>
\n
\n\"Energy<\/a>
\n
\n
\nIndustry leader in researching and developing better energy technologies
\n<\/strong>
\n<\/em><\/p>\n