Profits at Southern Company — the parent of Georgia Power — rose to $1.2 billion in the second quarter of 2024, an increase of more than 43% compared to last year, as the company benefitted from a series of electricity rate increases, high temperatures and an influx of data centers to its service territories.
The company reported on Thursday that its earnings across the first half of the year are also up more than 35% compared to 2023, climbing from $1.7 billion to $2.3 billion. Operating revenues in the first six months of 2024 were $13.1 billion, an increase of more than 7% compared to the year prior.
In a statement, Southern Company’s president and CEO Chris Womack said he was pleased with the businesses’ “fundamentals,” adding that it continues to see “customer growth and robust economic development” in its service territories.
By far the company’s most profitable division in the second quarter was Georgia Power, which raked in $762 million in profits between April and June.
Georgia Power spokesman Jacob Hawkins attributed the performance mainly to higher temperatures and customer growth.
Warmer-than-normal temperatures have baked much of Georgia Power and Southern’s territory this year, especially in June. Atlanta experienced its fifth-hottest June on record, according to the National Oceanic and Atmospheric Administration, with temperatures more than 3 degrees above the 30-year average.
But since late 2022, Georgia Power has also benefitted from a series of electricity rate increases approved by the Republican-controlled Georgia Public Service Commission (PSC), which regulates the utility. Most were approved unanimously.
Those include hikes to cover billions in cost overruns incurred in the Plant Vogtle nuclear power plant’s expansion, and to pay for transmission upgrades the company has said it needs. A separate increase to pay for fuel expenses was passed on to ratepayers last year, too, though Georgia Power does not earn profits on those costs.
Since early 2023, the rate increases have combined to send the monthly bill up roughly $38 for an average residential customer who uses 1,000 kilowatt hours of electricity a month. Another rate hike is set to kick in at the start of 2025, which could add another $7 to customers’ monthly power costs, according to the Southern Environmental Law Center.
Credit: Arvin Temkar/AJC
Credit: Arvin Temkar/AJC
As extreme heat adds to Southern Company’s profits, it is heaping pain on ratepayers.
Higher temperatures force energy-intensive appliances like air conditioners to work overtime to cool homes, increasing electricity consumption. At the same time, Georgia Power charges more for each electron during the months of June to September.
The combination of higher rates and temperatures are putting a major dent in customers’ budgets. In dozens of posts on Nextdoor and Facebook, Georgia Power customers have expressed shock at the steep rise in their June bills, with some reporting their bills are hundreds of dollars more than they were at the same time a year ago.
Hawkins said Georgia Power is concerned about affordability.
“We’ve been focused on delivering affordability today and doing everything we can to put downward pressure on rates, while also delivering reliable energy,” Hawkins said.
Southern also cited the increased energy use by data centers, which are on different rate plans from residential customers, as a key driver behind its higher profits. Electricity sales to data centers were up 17% for the quarter compared to 2023, the company said.
Data centers — which form the backbone of the modern digital economy — use enormous amounts of energy and have been flocking to Georgia and other Southern states. In April, the PSC approved Georgia Power’s request to bolster its system by building new oil- and gas-fired plants, adding battery storage and buying more electricity from out of state. Georgia Power executives have said the additions are mostly needed to meet the energy demands of data centers.
On its quarterly earnings call Thursday, Southern Company executives told investors they continue to see data centers proliferate across their territory. Dan Tucker, Southern’s chief financial officer, said since last fall when Georgia Power filed a request to expand its electricity generation capacity, the company’s pipeline of potential “large load” customers — which includes data centers — has grown by roughly 40%.
Back in May, Gov. Brian Kemp vetoed a bill that would have suspended a state tax break offered to new data centers in Georgia.
Editor’s note: This story has been updated to correct a paragraph about the Georgia Public Service Commission’s approvals of rate hikes since late 2022. Republican Commissioner Lauren “Bubba” McDonald voted against one of those hikes in late 2022.
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