Southern Co. CEO Sees Power Sales Rebounding as Lockdowns Ease

(Bloomberg) -- Electricity demand has approached near-normal levels in the U.S. Southeast in recent weeks as several states pushed to reopen their economies, according to Southern Co., a bellwether for industrial activity.

The company owns utilities in Georgia, Alabama and Mississippi, and has seen a rebound in sales in July after stay-at-home orders dragged down demand 10% in the second quarter, according to Chief Executive Officer Tom Fanning.

While Fanning said the company’s numbers in July were “pretty good,” it’s unclear what will happen over the next few months. Virus cases in the U.S. have surged, with several hotspots in places that have lifted restrictions including Southern’s home state of Georgia. That’s casting doubt on the pace of economic recovery in the U.S. The world’s largest economy shrank a record 32.9% in second quarter.

“We’re in the second phase of the coronavirus, but sales are not at all as bad as they were during the shutdowns,” Fanning said in an interview. “We don’t know what it means for the rest of the year, but at least it does suggest America is learning to adapt to a coronavirus environment.”

Southern reported a second-quarter profit that beat analysts’ average estimate as reduced costs helped offset the impact of coronavirus on sales. Shares fell 1.3% to $54.69 at 11:19 a.m. in New York.

Fanning tested positive for coronavirus, though said he has been asymptomatic.

Southern’s long-troubled Vogtle nuclear project in Georgia has also been affected by the virus, but Fanning said it’s still on schedule.

In April, the company and its partners were forced to slash the workforce at the site by 20% after dozens of crew members fell ill with the coronavirus.. Earlier, Southern reported a charge of $152 million as the virus is expected to increase costs. The project, which began in 2009, had already doubled in price before the pandemic and is running more than five years behind schedule.

Fanning said the two Vogtle reactors, the only ones left being built in the U.S., are still on track to meet November 2021 and November 2022 deadlines approved by the Georgia Public Service Commission. He refuted a June monitor’s report concluding that it’s “highly unlikely” the project would meet approved in-service dates.

“We just disagree,” Fanning said. “It’s going to be obvious to everybody.”

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