- Southern Co. is trying to increase its cash on hand in order to deal with increased debt levels, added costs to complete the Vogtle nuclear project and financial troubles at its Mississippi Power subsidiary, according to Bloomberg.
- Last month, the company announced Pivotal Utility Holdings, a subsidiary of Southern Co. Gas, had agreed to sell Elizabethtown Gas and Elkton Gas to South Jersey Industries in an all-cash deal valued at $1.7 billion.
- Southern is also trying to monetize its Toshiba Corp. nuclear settlement related to Vogtle, and is searching for a buyer for about a third of its 1.7 GW solar business.
Southern Company subsidiary Georgia Power will continue with development of the Vogtle nuclear facility, but in an earnings call with analysts this week Southern CEO Thomas Fanning said costs would rise about $1.4 billion.
Fanning said its Georgia utility expects Vogtle Unit 3 to be in service by November 2021 and Unit 4 to be in service by November 2022. Georgia Power faces a total cost for both units of $8.8 billion.
"Factoring in expected payments under the Toshiba parent guarantee, the new total net cost of the project is estimated to be $7.1 billion, which is an increase of $1.4 billion over their previous estimate," Fanning said.
In June, Toshiba agreed to pay the Vogtle owners $3.68 billion whether the plant is completed or not. Its subsidiary, Westinghouse, was a main contractor and went bankrupt earlier this year amid delays and cost overruns. In addition to Southern, three municipal utilities own shares in Vogtle: Oglethorpe Power (30%), MEAG Power (22.7%) and Dalton Utilities (1.6%).
According to Bloomberg, Citigroup will handle the sale of a chunk of Southern Company subsidiary Southern Power's solar portfolio. The company is not disclosing a possible value on the deal; the process to find a buyer is expected to launch this quarter.
The sale of two gas utilities is expected to close in the third quarter of 2018, Fanning told analysts.
The total proceeds of $1.7 billion "will be used to reduce external financing needs for both Southern Company Gas and Southern Company, and we expect the transaction to support our EPS growth and credit metric objectives," Fanning said, calling the deal "a value-maximizing transaction for all parties involved."