ATLANTA -- Southern Company has received final approval from the Securities and Exchange Commission to form a new subsidiary that will own, manage and finance wholesale generating assets in the Southeast. The new subsidiary will market to wholesale customers in the fastest-growing wholesale electricity market in the nation.
We expect that this will allow us to move faster and more aggressively in seizing wholesale opportunities throughout the South, said Charles McCrary, Southern Company chief production officer and president of Southern Company Generation. We also believe this innovative approach to providing market-based wholesale generating assets continues to move our region toward competitive energy markets in a staged, orderly fashion. Our goal is to play a major role in serving the region`s growth and to continue to expand our presence outside of our traditional core service territory."
The new subsidiary, which will carry the legal name of Southern Power Company, will be the primary growth engine for Southern Companys market-based energy business. Energy from its assets will be marketed to wholesale customers under the Southern Company name.
The current goal is to grow income from the new subsidiary by 15 percent annually so that in five years Southern Company earnings from wholesale market sales will more than double.
By 2005, plans call for the new subsidiary to have developed or acquired more than 7,500 megawatts dedicated to the competitive wholesale business. Within 10 years, the new wholesale generating company is expected to own more than 15,000 megawatts.
But this is about more than growing our business, said McCrary. Its also about doing it in a manner where we can minimize the environmental impact of our operations by using the most environmentally advanced generation technology available as we build and add new facilities. Its also about maintaining our reputation of high customer satisfaction.
McCrary will be the president of the new wholesale generation subsidiary with senior officers across the Southern Company system named to serve on the companys board of directors.
Late last year, as part of Southern Companys wholesale strategy in the region, the company announced plans to construct, operate and maintain a 632-megawatt combined cycle unit near Orlando as part of a joint venture among Southern Company, Orlando Utilities Commission, Kissimmee Utility Authority, and Florida Municipal Power Agency. Southern Company will own 65 percent of the unit.
Southern Company (NYSE: SO) is an international energy company that operates more than 48,000 megawatts of electric generating capacity worldwide. Through its Southern Energy Inc. subsidiary, Southern Company has operations in 12 countries on five continents. Based in Atlanta, Southern Company is the parent firm of Alabama Power, Georgia Power, Gulf Power, Mississippi Power and Savannah Electric. Southern Company also provides energy-related marketing trading and technical services in the United States and Europe and offers Southern LINC wireless telecommunications.
Note: Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning income projections, growth goals and environmental impact for the new unit. Although Southern Company believes that this forward-looking information is accurate, its business is dependent on various regulatory issues, general economic conditions and future trends, and these factors can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company.
The following factors, in addition to those discussed in Southern Companys Annual Report on Form 10-K for the year ended December 31, 1999, and subsequent securities filings, could cause results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry and also changes in environmental and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing such laws; current and future litigation, including the EPA civil action against Georgia Power and potentially other subsidiaries of Southern Company and the diversity litigation against certain subsidiaries of Southern Company; the effects of increased competition in the markets in which Southern Companys subsidiaries operate; the impact of fluctuations in commodity prices, interest rates and customer demand; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the effects of, and changes in, economic conditions in the areas in which Southern Companys subsidiaries operate; financial market conditions and the results of financing efforts; the timing and acceptance of Southern Companys new product and service offerings; the ability of Southern Company to obtain additional generating capacity at competitive prices; weather and other natural phenomena; and the ability of Southern Company to meet the conditions for the spin off of Southern Energy, which include regulatory and other approvals.