The state of our company is really what I want to chat about right now. I want to do it in three segments. I think you'll find this pretty interesting. The first segment is shareholder performance. You'll see the information you normally see at meetings of this nature. Given the performance of Southern Company during 2011, particularly, we've included some information that I think shows just what kind of elite, unique kind of company and performance Southern Company has been during this wonderful year. I think you'll find that interesting. Second point will be the strategic priorities. I established five of those last year. I'll give you a brief update on those. One of the things I want to highlight this year is the progress that we're making on the historic project, really important as a national priority, Plant Vogtle 3 and 4.
I'll ask my friend, W. Paul Bowers, CEO of Georgia Power Company, to come up and give a little emphasis on that project. Finally, as you probably got from the trailer as I came up to speak this morning, on January 5th, 1912, the first holding company that ultimately resulted in the company that we are today was formed in Alabama. Therefore, this year represents the Southern centennial year. We have a series of celebrations throughout this year to really highlight the wonderful foundation that has been laid before us and puts us in such a good position today that will carry us, I think, well into the future. I'll talk a little bit about the Southern centennial. First, let's get to shareholder performance. As you all know, it's been a great year for Southern Company.
We had total shareholder return last year of about 27% well exceeding most other type of investments that you could have made. The utility average had a great year at 19%. The S&P 500 was about 2%, you can see Southern clearly outperformed them. That's our one-year performance. If you look over 10 years, Southern Company has continued a track record of just stellar performance. If you look at this kind of compound annual return that is represented, Southern Company's about 11.4% compound annual return over the last decade. The utility average would be about 8%. The S&P 500 would be about 3%. We've done awfully well for a long period of time.
When we think about total shareholder return, we want to be very clear, and this will become very important later when I talk a little bit about national energy policy and the fiscal issues that are related to that the lion's share of our returns to shareholders during this spectacular decade that we've been on, the lion's share of it, 57%, has come from dividends. Let's always remember how important dividends are to the success of our company and you as shareholders. Now, of course, during this time frame, recall, over the last decade, the U.S. has seen certainly its share of challenges in terms of the economy and all kinds of worldwide events that impacts the capital markets. During that time, Southern Company has had capital gains, price appreciation of 43%.
If you look particularly at last year, we set 24 all-time highs during that year, starting the year at a price a little bit above $38 and ending the year well over $46 a share. Think about the last half of this year, in the August forward time frame, where Southern really performed well. If you recall last year's economic environment, that's where we started seeing questions about potential meltdowns in Europe, continued malaise in the United States. When investors, thinking about value as a function of risk and return, saw that risk was ever more important in today's environment, they rushed to buy shares of Southern Company. You can see how well we did. It isn't just about the stock price. I mentioned before that Southern Company produces the lion's share of its return with dividends.
We're one of a handful of companies that has been able to increase its dividends now 11 years in a row. It isn't just over the last decade or the last 11 years. Really, since 1948. 48 marks the year in which Southern Company was formed, the most recent version of our holding company structures. Through the worst times in America, various recessions, oil embargoes, everything else, we remain committed to the dividend. This company has never cut its dividend. As a matter of corporate principle, representing you, our shareholders, and providing the right kind of financial philosophy to carry this company forward into the future, we remain resolute in our support of the dividend.
We could say one year, we could say 10 years, but if you look at almost any time frame, five years, 30 years, Southern Company has been a wonderful investment to own. Total shareholder return, capital appreciation, plus dividends, you can see that versus the S&P 500 or the other utilities you could have invested in, this has been a dynamite place to be in ownership. That's the normal stuff you see. I think you'll find this interesting. The number of companies that has been able to demonstrate this kind of performance are really an elite group. What we wanted to do was just take different cuts of how unique our performance has been over the last decade, looking at dividends, looking at risk profile, and finally looking at the total return posture, and compare that to who our peers may be in the S&P 500.
I hope you find this interesting. First, the dividend. We start with all of the S&P 500 companies. Those of you that read the disclosure statement can read this perfectly. What we do is we start with the 500 companies. We start making cuts. Here's the first cut. We eliminated companies in the S&P 500 that either, over the last decade, don't pay a dividend or have cut their dividend. All that remains is 217 out of the 500. These are companies that grew their dividend over the past decade. We make another cut to say how many companies out of those 500 grew their dividend every year. You can see this is a rather exclusive club. If you look at how many grew their dividend as much as Southern, it's even more exclusive.
Then you say, how many companies, because some of these companies have very small dividends, how many companies have, as part of their total shareholder proposal to investors, have a dividend yield of 4% or more, where it's really important in terms of the TSR profile? There's only three: Avon, AT&T, and Southern Company. That's the dividend story. Let's go to risk. Start with the same 500 companies. Now let's look at bond ratings. Bond ratings are a way of measuring the safety of your debt securities. It's a good measure of risk in corporate America. Recall that there are several strata of bond ratings. The highest level would be triple A, then it goes to double A, then single A, which is where Southern Company is, then triple B.
Below triple B, so it'd be double B plus or below, is what they call non-investment grade or junk bonds. Okay? You got to be triple B minus or better to be investment grade. Only about half of the S&P 500 have credit ratings triple B plus or better. When you look at Southern Company's rating, single A, only about 20%, or 105 companies, have that kind of bond rating. It isn't just about bond ratings. That kind of covers how people evaluate the safety of your debt. Let's think about the safety or the volatility of your equity return. There is a statistic called beta. Let me explain that. If you own every share in the S&P 500, your beta, your measure of systematic risk, is equal to one. It's like an index.
If you own every stock in the market, it's a beta of one. Southern Company has a beta of 0.55. During this time, it had the second lowest level of equity volatility in the S&P 500, and the only one that had a lower level of risk, as measured by volatility here, was Hormel Foods, the home of Spam. Now let's go to return. Start with the same 500 companies. This is interesting. Bloomberg and Value Line put forth a list of evaluations of volatility and stock price stability. This notion of very stable is a designation that is accorded to companies by Value Line that have a stock price volatility rating of 95 or better. That means you're in the very top 5% of what they consider to be stable returns and stock prices, and this is according to Value Line.
Out of the S&P 500, there were only 83 that were deemed to be very stable. That's interesting. Very stable doesn't mean that they are positive returns or negative returns. It just means that they're stable. Let's look at how many companies had total shareholder returns over the decade of 5% or more. Only 56 out of the S&P 500. When you consider the kind of profile that Southern Company has, remember our number was 11.4%, only 25 had TSRs better than 10% out of the S&P 500. One last statistic that I think you'll find interesting. If you take risk into account, you can make this kind of assessment in a lot of different ways. What we did here was take TSR, total shareholder return, and divide it by the amount of risk. We do a risk-adjusted return. There are only seven companies.
That's interesting. Then I want to do one more for you. In these uncertain economic times, sometimes you will just have a bad year. There is the notion of capital preservation. Over the last decade, you will have good days, and you will have bad days. Southern Company led the S&P 500 in capital preservation. During the worst of times, Southern Company performed the best. When you take all three of these things into account, performance on dividends, evaluation of risk, and performance in terms of total return to shareholders on a variety of methods, Southern Company is truly an elite company and in very rare territory. I hope you found that interesting. It isn't just those statistics. If you look at Fortune magazine, they do an evaluation every year. Southern Company's been rated number one in financial soundness for the past three years.
There's lots of other accolades we could talk about. The one I just want to highlight, kind of summarizing it all, given the performance, and I'll go through the priorities, but given the performance of this company over the last year or so. We were named the Power Company of the Year by Platts Global Energy Awards. It's a very prestigious magazine and a prestigious award in the electric utility industry. Now let me turn to my five priorities. As I came to you before my first annual meeting, I established these five strategic priorities to really set the tone and set kind of a benchmark of performance for this company for the years ahead. It shouldn't surprise anybody that the strategic priorities haven't really changed.
I think these things, and we'll consider changes along the way, but these things I think will be steadfast in the years to come. Let me move through these rather quickly. First, stick to the fundamentals, our business model. Remember, it puts customers in the middle of everything we do. We define our effect on customers by providing the best reliability at the lowest prices with the best customer satisfaction that we can deliver. Clean, safe, affordable, reliable electricity is our mission in life. We've performed beautifully. Let me start with safety of our employees. 2011 tied this company's best performance ever in industrial safety. That is near and dear to our hearts. It remains one of the highest priorities we can possibly have. We performed as well as we ever have. Further, in terms of reliability, our generation fleet has done beautifully.
We have this statistic called equivalent forced outage rate. You want that number to be as small as you can. When you call on the plants to run, how often are they not able to run? With an industry average of about 6.5%, Southern Company had a terrific, again, industry-leading performance of 1.3%. The generating fleet is running beautifully. The wires part of our business, transmission to distribution, likewise, is doing great. We're on a 10-year trajectory of improved performance in terms of reliability, and as invariably we will have outages, how fast do we get them back on? We're doing great there. In terms of the fundamentals of our business, in terms of our operation, make, move, and sell electricity, safety of our employees, we had a terrific year. Let me turn now to the second strategic priority, achieve success with our major projects.
What I typically call out here is Vogtle 3 and 4 and Plant Ratcliffe at Kemper County. Remember, that is the 21st century coal plant that we developed in our own research and development facilities here in the U.S. Recall that we're the only company doing proprietary research and development in our industry today. Both of these projects are on target, and the targets are achievable with respect to schedule and ultimate cost to customers. We're doing well. Those are the flagship projects of this company. There's obviously a lot of other things we can do, but we've got to be successful on these very visible, nationally important projects. What I'd like to do right now is call upon Paul Bowers, CEO of Georgia Power, to give us a highlight on Vogtle 3 and 4.
Being the first company out with a construction operating license in more than 30 years is big news. As your company, The Southern Company, and Georgia Power, we're proud to make that first step. Also, when you think about being the first in more than 30 years, it's a statement for America. It's a statement that we're going to have reliable energy for the future. Having nuclear part of that energy portfolio is critical. Critical for our future. We think about what Tom just said, part of that strategic priorities. Excellence and execution is critical because we're focused on safety every minute of every day. We're focused on execution around the construction project itself and adherence to the nuclear regulatory standards that have been set for this plant. When you look at the process, this process started in 2006.
The process started with a filing that said we would like to have an early site permit. That permit was approved in 2009, along with a limited work authority, which gave us the ability to start construction on non-nuclear related activities at the site. The big news was February 10th of this year when we received the construction and operating license, which meant that we can start construction on the nuclear-related activities at the plant. The other most important piece, too, is our accreditation for the first training class in more than 25 years in America for training operators by the Institute of Nuclear Power Operations, a big step forward. In conjunction with the federal activities, we also had parallel activities within the state of Georgia itself.
The Public Service Commission started their process in 2007 with an integrated resource planning process that looked at all the options. In 2009, they said the Vogtle Nuclear Plant was the best economic choice for our customers. The General Assembly in the state of Georgia also passed the Nuclear Energy Financing Act, which is going to allow our customers to save over $300 million in financing costs. Along the way, the Georgia Public Service Commission is exercising their oversight duties with 6 different construction and cost hearings to look at the prudency of the plant and prudency of the costs. None of this could have been happening within this state without a constructive regulatory environment and a constructive legislative environment where all our customers across this state have been supportive of having Vogtle 3 and 4 built in Augusta, Georgia.
When you put all that together, you have to think about the jobs it's creating, the tax base, both on a state and local basis, also the net benefits that's going to be created. We have looked at the opportunity to potentially achieve over $2 billion of net benefits for our customers along the way. Those things like production tax credits or looking at lower interest costs in getting this plant online. When you look at all of that, it's going to be a clean, safe, reliable, affordable plant for 60 years. Let me take a moment just to walk you through the plant and some site photos that we have. Remember, this is a 2,200-megawatt plant. We are the largest owner, with owning 1,000 megawatts.
Our partners, Oglethorpe Power Corporation, MEAG, Municipal Electric Authority of Georgia, and the City of Dalton also own the other 1,200 megawatts, disproportionately spread among those three partners. This is a recent site photo of the plant. It is a $14 billion project. We have spent approximately $4.4 billion so far. Construction activity is underway, both non-nuclear related construction as well as nuclear related construction. Let me highlight one piece in this picture. Look at the blue item right in the center of the picture. That is, and it's highlighted, as a heavy lift derrick, or in other words, it's a crane. This is the world's largest crane. Remember, the AP1000 or the Advanced Passive 1000 design is a modular design, and that crane is going to be able to place components into those nuclear islands along the way.
That's a critical piece of the picture that you see in March of 2012. To give you scale, this is a 1,300-ton bottom of the nuclear reactor. Remember that blue item that we seen in that last photo? That crane is going to pick this piece up and put it into the nuclear island itself. 1,300 tons. That crane will be able to pick up 1,500 tons on the max lift that we'll have on the site. The counterweight on that crane is 6,500 tons, so it's very large. Not only are we having activities around the nuclear island itself, also the turbine building. Think about this as where electricity is going to be produced. It's going to take the steam created by the nuclear island and turn a turbine, and that's where the electricity is going to come out. This is underway at this site.
The modular assembly facility. Go back to the AP1000. It's a modular design, so components are brought to the site, already built, then assembled in this building and taken and lifted into the site itself. We're underway with the biggest project in the state of Georgia. We are going to have the safest, most reliable, most affordable energy in this state for 60 years. I'd like to take a moment to recognize the team that has excelled in getting us this far. Mr. Buzz Miller, if you would stand. Buzz is our Executive Vice President of Nuclear Development. He's in charge of the project. He's over the activities at the site. He's been over the activities around the license. Pete Ivy, our executive over the license process, has gotten us to the COL.
The leader of the Southern Nuclear Group, Mr. Steve Kuczynski, Steve, would you please stand, who is overseeing all operations of our nuclear fleet and the construction at this site as well. If you would, all three of y'all stand up. I would like for the shareholders to give you a round of applause. With that, Tom, I'll turn it back over to you.
Thanks, Paul. Georgia Power represents about half of the value of Southern Company. When you think about a project of this magnitude, 10 years to build, $14 billion in total, couldn't think of a better team to undertake such a nationally, perhaps internationally, important project. Paul and I go back over 25 years. We've grown up in this company together. He is a great friend of mine. He's one of the most talented executives in the state of Georgia, and frankly, in the electric utility industry. Paul, I can't think of a better guy to ride down this road with than you. Thanks very much. Please give him a hand. Thanks for that. Let's now move on to national energy policy. Southern Company has been a lot more strident in this perspective, probably than what you're used to, at least in years past.
It's because we have to, on behalf of our customers, I think, argue for a sensible national energy policy. We've done it with really two principles. One is build out the full portfolio. The words we have used is all the arrows in the quiver. By that, we mean nuclear, 21st century coal, natural gas, renewables, and energy efficiency. Interestingly, President Obama, in his latest State of the Union address, used the phrase all of the above. We think essentially those are equivalent concepts. We're the only company in the U.S. today that's building out this full portfolio. We've committed over $20 billion, and in the process, it's been estimated we're creating over a quarter of a million jobs in America's economy to making that portfolio a reality for our citizens here in the Southeast.
The second principle of national energy policy, I think, is really important. It's this notion of promoting more energy innovation in the U.S. economy. I said before, Southern Company remains the only company doing proprietary research and development in a very robust way. Obviously, we do other activities. In fact, Dr. Steven Specker, was former CEO of EPRI, Electric Power Research Institute, that all electric utilities, almost all, participate in. We're the only ones doing proprietary research and development. I think it is really important for us to consider how important it is to have that depth of capability inside this company. When I think about the benefits to the economy that we've seen in the information technology arena, Google, Microsoft, Facebook, Apple, a variety of other things, why can't we do that in the energy space here?
What I want to argue for is more energy innovation as a national priority. The other thing that I just want to touch on here is an emerging important topic to you all, to us all. Recall when I said that we're building out this 21st century generation portfolio and that we have real skin in the game. Over $20 billion of investment committed to making that full portfolio a reality. Clean, safe, reliable, affordable electricity for the future of the American economy. It is absolutely important that the United States now takes advantage of an opportunity to get its fiscal house in order. There's really three points that I've been stressing here lately, and I will continue to stress for the rest of the year, and these are important to you as shareholders. Number one, we've got to rein in overreaching regulation.
Please understand that we fully support at Southern Company and all of our operating companies, sensible, cost-effective regulation. My worry now is that some of the regulation being proposed overreaches that bound, that the cost-benefit ratios don't particularly make sense and don't serve our customers' long-term interests. I'm afraid that in some cases, national energy policy is being set at the regulator level, who is accountable to no electorate. In my opinion, that job is the job of Congress. The second point here is restore our national financial integrity. We've all heard about the growing national deficit and what we've got to do to get that under control. If we don't, the longer we delay, it is clear that we will see higher interest rates and we will see higher taxes, and that will burden our economy and our ability to grow and create jobs in the future.
This third point, and I talked to some of you about this this morning, really goes to the notion of there are some certain tax proposals being put forth this year that directly impact our value as an investment in the market. It really goes to the tax treatment on dividends and capital gains. I really have two points to make here. Number one, tax policy should not favor one form of investing, dividend-oriented, versus another, capital gains-oriented. We should let that choice be in the hands of investors who are reacting to market conditions. Dividend investing typically is lower risk than capital gains investing. What they should do therefore is link together tax rates on dividends and capital gains. Keep them the same, and in order to encourage capital formation, keep those rates as low as possible. Don't tax capital formation.
The higher you make tax rates on capital formation, dividends and capital gains, the more you inhibit our ability to grow via capital expenditures as an industry, and therefore our ability to create jobs and grow personal incomes. This is critically important, I think, to our value proposition in the markets for the future. The fourth strategic priority really goes to promoting smart energy. We talked a little bit about that last year. There's been an interesting kind of transition here. Last year, there was this notion that there may be some revolution in how technology may be overlaid on our industry, and the idea, I think I used the word of disintermediation, of people coming in between the relationship we have with our customers. My sense is that potential revolution is really kind of changing into more of a stable evolution.
We are playing along the way and we're going to look forward with vision and with courage to try and anticipate changing market conditions. I think this one is moving a little bit slower. One of the things that we are leading the U.S. in is our deployment of smart technologies in generation, in transmission distribution, but particularly in smart meters. By the end of this year, we will have deployed over 4.5 million smart meters. Let me be very clear about our posture here. The smart meters that we are deploying rest upon a business case that makes sense. That is because of the wireless technology, we will be able to remove people from the field and trucks from the road. Good for the environment, good for our bottom line, good for the reliability qualities of our electrical system in the Southeast.
We are not giving our conservative posture, turning on this so-called gateway into smart homes. Not yet. At one time in my career, I was a chief information officer, and one of the things that I remain particularly concerned about today is the notion of cybersecurity. I will not expose our customers' data, nor will I expose the electric networks in the Southeast to potential cyber threats until we are absolutely secure in that respect. We're going to take a conservative posture going forward here. The fifth strategic priority really goes to value in developing our people. Southern Company, as you can see from Paul and his team. We have the deepest bench in the industry.
If you look at any analyst report, they give us credit for that. We continue to work really hard, not only to develop the CEOs and leaders of the future, but also this company reveres people that run the business, that keep the plants going, that keep the lights in the air, that serve customers every day, the thousands of people that make thousands of good decisions every day. We value those people. We are committed to maintaining development of that workforce base to take this company and move it into the future. One of the keys in moving it into the future, I think, is a passion of mine, that is this notion of valuing diversity. Diversity always gets measured, I think, by its dimensions.
In other words, we always think about it in terms of gender and race and sexual orientation and religion and age and national origin and all sorts of other dimensions. That's not really what we're after, even though varieties there do tend to indicate you're gaining in diversity. The diversity that I'm really seeking is diversity in experience, in judgment, in skill sets, people that will look more like our customers in the future, so that as we think about this wonderful centennial year that we are in. I've adopted the phrase, "Honor the past and build for the future." We've got to make sure that we have the employees at Southern Company that will, in fact, honor the past, preserve this rock-solid foundation that we have, but in fact, improve it and make it sustainable well into the future.
That's why I'm really excited to celebrate Southern's centennial, to really recognize all the wonderful contributions of the folks that came before us that gave us the blessing of having the best company in the electric utility industry today. To celebrate that, we actually kicked off a variety of celebrations on January fifth of this year. That's Art Beattie right in the middle. Art is our CFO. We rang the opening bell at the New York Stock Exchange commemorating the centennial of Southern Company. Of course, he's surrounded by other very capable Southern Company executives here. While he's doing that in New York, I was in Atlanta, and we had a day-long celebration. The folks with me on the stage there, you probably recognize. Those are my predecessors. Those are all the living chairman of the board of Southern Company.
What we did is basically went through a program where each one of them got to come back to the dais and talk about their times and their challenges and the learnings that they want to impart on us as we move forward as leaders in this industry for the years ahead. It was a wonderful day. See, that's why I'm so excited about "Big Bets" the book. Last year, you got the book. Now we have, and I think you can pick these up on your way out if you haven't picked some of them up already. We've transferred "Big Bets" onto CD, so you can listen to it in your cars as you drive home. It's really well done. Beyond that, we will now, July 16, and you just saw the trailer as this program started this morning.
July 16, Fox Theater, we will promote the debut of "Big Bets" the movie. It's a Ken Burns-like production, lasts about an hour. It really tells, in a very powerful way, the wonderful story that is Southern Company, a company that is so important and is a leader in the electric utility industry. When you think about that importance, when you think about the issues of the day, as you listen in this election year, energy policy and the position of electricity in driving this challenged economy is going to be so important. The people that you deal with here at Southern are leaders in that respect, and we adopt that obligation with honor. Thanks very much. Now what I want to do is turn to the question and answer portion of the program.
The folks here have asked me to make these requests of you as we go through the Q&A. First of all, let's keep the questions to three minutes or less, just to be respectful of anybody else that wants to ask questions. Make sure that we filled out a speaker card and hand it to the attendant. The attendant will introduce you, then we'll ask your question, and I can't wait to get your questions. Let's now begin the Q&A session. Number three.
I have Mark Woodall from Woodlands with 116 shares.
Hey, Mark.
Good morning, Mr. Fanning. I certainly want to salute you and The Southern Company from diversifying away from coal burning. It's never seemed a good thing for the people of Georgia to send $2 billion a year out of state for coal. That seems a good thing. I was delighted to hear you say you were bullish on solar last year.
Absolutely.
I think there are over 6,000 solar energy jobs in Georgia now, two major manufacturing plants, one in Dublin and one in Gwinnett County. As a homeowner, I would like to install solar panels on my house, but I'm a little hesitant to write that check for $30,000 or $40,000, as you can imagine. I'm excited about third parties coming in and installing those panels, so I was very disappointed to see Georgia Power fight so hard against Senate Bill 401 that would have opened up Georgia to more renewables and would have meant many more thousands of jobs for Georgia.
I realize this is a regulated state. There are some issues. This is moving forward in a lot of states. It seems like it's our private property. There ought to be some way to work this out for the good of homeowners and The Southern Company.
Mark, thank you for that. I really appreciate that. We remain very bullish on solar. When we think about renewables, I think renewables are exceedingly important in this nation's energy future. My sense is, until we see significant technology innovation, and my sense is this is probably going to be very late in this decade or beyond that, we still are going to get, by far, the lion's share of our electricity from central station resources. I think renewables will be important. I don't think they're going to displace, in any significant way, the big central station units. Let's talk about solar for a minute. Why am I bullish on solar? I really think that, particularly when I say solar, I'm particularly bullish on the thin-film photovoltaic applications. They are not big consumers of water.
I think with what I believe are continuing innovations in the production cost curves, that is, thin film is getting more and more economic to produce, and with further innovations in terms of the translation of sunlight into electricity, I think one day thin-film technologies will be pretty important here in the Southeast. Of course, we have pretty good solar intensity. We're seeing more solar elsewhere in the U.S., particularly in California, the desert Southwest, where there's really good solar resources, and the Northeast a little bit, strangely enough. Interestingly, solar is really expensive compared to the energy we produce. You tend to see more penetration of solar where there are higher prices. Our low price position here makes it a little uneconomic right now. Interestingly, you talk about Georgia Power.
The issue I think that you related really goes more not to whether we're bullish or not on solar, but rather goes to this franchise law that we need to protect. That's the law under which Georgia Power operates and makes retail sales here in the state. Let's deal with that issue separately. Georgia Power, on its own, is in the process, I guess, of receiving 50 MW of solicitations for solar projects. We also have other solar R&D going on, both at Georgia Power, Alabama Power. We have solar installations on distribution poles. We're looking at a variety of things. Taken together, what Georgia Power is doing on its own, it represents the 13th largest penetration of solar in the U.S. Pretty good stuff, pretty good track record. I think in the years ahead, it'll become more and more important. Next question. Number four.
Yes, we have Mr. Sam Booher from Augusta, and he owns 2,379 shares.
Hello, Sam. Thanks for coming.
Thank you, sir. I appreciate you talking with me before we started.
You bet.
I'd like to thank Mr. Fanning, The Southern Company Board for your decision to close 2 coal-burning power plants and to convert 2 more to natural gas. They are both wise decisions financially as well as public relations-wise. Thank you also for your decision to partner with Santee Cooper in the development of offshore wind projects offshore South Carolina. I hope next year, in years to come, as shareholders, we can hear of more old coal-burning power plants being closed, more conversions to natural gas, and a wind power project, possibly offshore Georgia. My last comment is to ask you what you have learned from your solar panel studies on top of our Atlanta office building. I know you're not aware that last Friday it rained in Savannah. A friend of mine had solar panels on his house.
While being rained on, his panels were producing at 60% capacity in the rain. I am pleased to hear you are buying 50 megawatts from a solar panel farm in Georgia. I hope next year, in the future, to hear that you're expanding this effort. Maybe someday you will make another big bet and sell or lease to me so I can have solar panels on my home. We need to be the leading company in the nation in solar. We need to make the big bet on growing Southeast solar industries, and we need to set the nation's standard on solar energy. Thank you.
Thank you. Mr. Booher is a great friend and a regular attendee at these meetings, and we always welcome your engagement, so thanks for that. There's a lot of layers to your comment. Let me just hit a few things. When I talk about renewables, we really are one of the leaders in the U.S. in renewables. Let's just go through just a little bit of a laundry list. I think currently it's still the second largest solar installation in operation that we operate in Cimarron, New Mexico, in a joint venture with the Turner folks. In terms of wind, Alabama Power has just procured over 200 megawatts of wind energy being sourced out of Oklahoma. When that makes sense for our customers, we certainly will procure wind.
In terms of biomass, we are building the nation's largest biomass facility for the benefit of the citizens of Austin, Texas, in Nacogdoches. We have a lot of other R&D going on along the way. Wind energy, you mentioned off the coastline. We've been engaged with Georgia Tech in evaluating offshore wind there. We did just sign, in fact, here's the letter, May 14th, 2012, letter of commitment for the DOE U.S. Offshore Wind Project for Santee Cooper. We do support these things. Here's the issue, I think, with renewables that we all just have to be real with each other about, and we just need to figure out ways to get to yes. It's this. You mentioned 60% even during a rainstorm, which is great. What we've got to do is plan a reliable system.
Because those resources tend to be intermittent, what we have to do is be able to handle the swings on the electric network when in fact they're not at 100. Okay. If it swings from 100 to 60, we've got to be able to respond with something else. That requires backup generation, and typically that backup generation looks like gas. The other issue is, I think solar has a future here in the Southeast. Wind, the climatology of the Southeast really doesn't lend itself so much to wind except perhaps offshore wind, and we're evaluating that. Where there are significant solar and wind resources right now, desert Southwest, upper Midwest, we need to build long-term transmission systems in order to get the energy from where it is to where it needs to be.
That's why, particularly in the future sometime, distributed generation, rooftop solar, may be a much better application. You won't have to rely on those long-term transmission lines. If we learned anything from the blackouts in the Midwest and the Northeast of some time ago, it is to locate the generation near the load center. One of the other issues that we'll just have to recognize going forward is the state of the nation's economy and our own national financial integrity. How long can the United States continue to offer big tax credits which support this industry? It's something that we'll just have to address along the way. I hope that spoke to most of your question. I think the other thing I just want to mention, Sam, that you raised was the transition that this company is making away from coal to natural gas.
One of the things that we always are committed to doing is delivering to our customers the cheapest, most reliable forms of energy. Today, with the revolution we have seen in the shale gas industry, that tends to be natural gas. What we are doing is transitioning away from coal towards natural gas, combined with new environmental regulations that we will comply with. Here's the math. Let me give you two cuts at it, one energy and the other one capacity. From an energy standpoint, Southern Company is a little bit smaller, but similar to the energy production profile of the nation of Australia. We are a great big company from an energy production standpoint. Some years ago, we produced 70% or 80% of our energy from coal. In 2012, we believe that energy production will be more like 35%. We will have cut it in half.
Natural gas, some years ago, was 16% of our energy. This year, 47% is what we project. We have great flexibility in the future because we know the fuel markets will move over time. In fact, we can vary our delivery of energy by fuel type with a great deal of flexibility, arguably as much as there is in the electric utility industry today. That really goes back to some great decisions other people at Southern made, even during the 1990s. The other thing I want to talk about is capacity as a result of some of these new regulations. We had a little over 20,000 megawatts of coal. As a result of accommodating these new regulations, we will probably by 2015 preserve of the 20, about 12,000 megawatts. Of the eight, we will probably shut down about 4,000 megawatts, just shut them down, retire the plants.
Of the remaining four, we'll likely transfer the majority of that from being coal-fired to natural gas-fired. That is a transition that we are making in the future. Thanks for that. Next question. Number three.
Next we have Thomas Griffin from Tyrone with 4,184 shares.
Hello, Thomas. Thanks for being here.
Thank you, Mr. Chairman. I have a statement and then a question from that statement.
Yes, sir.
If a foreign entity were to detonate a nuclear device above 25 miles or higher above the United States, it would cause an electromagnetic pulse, which would in fact take out not only the electric grid, but trains, all cars with computers, all radio, TV stations, the telephone company, and we would really be in bad shape because everything that runs on electricity, which is virtually all businesses, would be down. My question to you is, does Southern Company have backup shielded hardware and software to bring a control station back up, shielded from this so that they could replace it and bring a grid back online?
Yes, sir. I can't speak to the details of how we protect ourselves. This is an item of national security. Rest assured that we pay a lot of attention to preserving the sanctity of the electric networks in the Southeast, including things like EMP. Okay? In terms of a lot of the details there, we prefer not to say too much publicly about that. That just invites problems in my view. The other thing I think you should recognize, if somebody's detonating a nuclear bomb that emits an EMP force above the United States, we're in deeper problems already. We hear you, and we actually have plans in place to accommodate those kinds of issues.
Thank you very much.
Yes, sir. Thank you for being here. We appreciate it. Number four.
Mr. John Quarterman from Lowndes County, Georgia, owns one share. He's representing Lynn Chang.
Welcome.
Hi there. Yes, that's sort of a symbolic share. I grew pine trees in Lowndes County. That's about a couple of hours from Plant Hatch and about twice that far from Plant Vogtle. I said it right that time.
Vogtle, yeah. Right.
Yeah.
We chatted earlier this morning.
Lynn Chang is from New Hampshire, home of Seabrook, which was the last nuclear plant permitted before the new units at Plant Vogtle. I'd like to congratulate you, CEO Fanning, on your recent compensation package, including your 62% raise of last year. Georgia Power customers got a raise as well, that was in their rates. They got a rate hike that was part of the Georgia Nuclear Energy Financing Act of 2009 to pay for Plant Vogtle. Why is that? Well, I'm a fan of Big Bets. I like that book. Moody's bond rater, you know Moody's, referred to nuclear energy as a bet the farm risk. I mean, there's bets and then there's bet the farm risk. Since Seabrook and Three Mile Island, Wall Street has consistently refused to make investments in new nuclear facilities. It's really hard to get private investment.
That's why the expansion of Plant Vogtle is only possible through that rate hike to Georgia customers and through an $8.33 billion government loan guarantee, which socializes Southern Company's financial risks. It's good to hear that you and Southern Company are against regulation by public utility corporations because the Georgia PSC, if I'm not mistaken, also said that Georgia Power gets to keep its 11% profit even as cost overruns rise. The cost overruns will be passed through as well to Georgia Power customers. That would be some PSC regulation you might want to help do away with. Now, Japan bet the farm on nuclear, and we all know what they got, Fukushima, one of the world's worst nuclear disasters.
Japan has since shut down all 50 of its reactors, with one result that the owner of those reactors, TEPCO, has taken an $8.7 billion loss and have accepted a $12.5 billion bailout from the government of Japan. Now, in Germany, since Fukushima, I think it's eight plants closed already and more to come, forcing Germany's biggest power company, E.ON, I'll call it E.ON, to lay off up to 11,000 staff, to take its first quarterly loss in a decade, and to cut its shareholder dividend. We all know how important shareholder dividends are. Even Bulgaria canceled its Belene nuclear plant this March and has started installing solar power instead. Yet Georgia and Southern Company continue betting the farm on Plant Vogtle. That bad business bet risks bankrupting Southern Company like Seabrook bankrupted Public Service of New Hampshire, I'm sure you know that history.
Like Fukushima is bankrupting E.ON and TEPCO. TEPCO, which is surviving on government bailouts. This bet the farm risk has Georgia Power customers paying extra to keep Georgia still farther behind in wind and solar energy as places like California, North Carolina, and even New Jersey move ahead of us. Solar and wind, for which there are private investors like Google doing the Atlantic Wind Connection because the costs are known and the installation times are quick, unlike nuclear. I'm also pleased to hear that Southern Company is doing private research. The Southern Company sounds like just the company to research on smart grid to balance the power. There's a study out of North Carolina that I'm sure you're familiar with that may help with that.
With Plant Vogtle already slipping schedule and cost overruns already starting, I think it's almost $1 billion up from the original estimate at this point, and 32 pending permit amendments, which will cause further delays and cost rises. What is Southern Company's exit strategy for when this big bet goes really bad?
What a question. Thanks very much for that. I appreciate it. There's a lot of things that I could chat about there. I really do appreciate the engagement here because I think we have a wonderful story to tell. Let me just start with the whole notion of the philosophy around nuclear. When I talk about safe, clean, reliable, affordable energy that drives this nation's economy and serves the benefit of our customers, nuclear, in my view, is a dominant solution for the future. The United States runs a premier nuclear power business. When we think about our posture with respect to safety, that is paramount. We get up in the morning thinking about safety. We go to bed at night thinking about safety. You just wouldn't believe how pervasive that is as a foundational principle in how we run our business.
We are absolutely committed to a safe operation of the nuclear fleet. If you look at our performance, we absolutely meet the standards that our customers expect and frankly, deserve. Let me start there. Now let's go to Fukushima and our decision to move forward with Plant Vogtle. Fukushima was a tragic event. The United States nuclear power industry offered assistance. We have learned everything we can learn about the unfortunate circumstances that occurred there, and we are applying those learnings here as we apply learnings from anywhere that we think we can improve our own performance. That is a characteristic of the nuclear industry in the United States. Not only are we applying the learnings now, we'll apply them next year and whatever learnings we have in the decades ahead to making the United States nuclear industry the best in the world.
When I think about, you kept using Big Bets and then bet the farm. Very interesting kind of comment. Bet the farm. When I think about the kind of companies that should move forward with new nuclear, I've always mentioned them having three characteristics which really go to the heart of your question. Number one, when you consider Plant Vogtle 3 and 4, it's a $14 billion deal, 10 years to build. We own 45.7% of it. It is a big investment. You've got to have scale. Southern Company is the largest electric utility in America. The investment at Georgia Power is $6.1 billion. Our market cap is around $40 billion. We have the scale necessary to go forward. Secondly, you've got to have the highest level of financial integrity. That's why I spent some time, frankly, talking about risk and how important that is.
Remember, as investors, value is a function of risk and return. Risk is as important as return in determining value. Southern Company has the highest level of financial integrity of any company of size in our industry, that's important because we know when you undertake a 10-year construction program, you can never take a day off. You must be committed, in fact, we are. In fact, I can tell you this, bet the farm. Wall Street believes that we're going to be successful. Our stock has performed beautifully. Our ratings remain high. We just underwent ratings reviews by Standard & Poor's, Moody's, and Fitch. We're evaluated being one of the best utilities in America from a financial integrity standpoint. That's great. If you just look at the data, the market bets with us as well. Forget what the rating agencies say.
This year, Georgia Power has issued $1.5 billion of debt securities, having an average life of about 25 years and an interest rate of about 3.9%. I think that is extraordinary and reflects the market's confidence in our ability to execute. The third point, the third characteristic of companies that should pursue nuclear are those which already have credibility of operation. This is no business for beginners. We run one of the best nuclear programs in the U.S. Let's go to the technology that we're talking about and why Plant Vogtle, I think, makes sense. Recall, as apart from Fukushima, Plant Vogtle is not on a coastline. It's some 130 miles inland, 220 feet above sea level. It is not in a seismic sensitive area. The technology that we're employing, the Westinghouse AP1000, is the newest, safest technology on the planet.
In fact, the design of the AP1000 would have obviated a lot of the problems that occurred at Fukushima. Now, we don't rest on our laurels. We work diligently every day to execute that project. What I'm able to say is that all targets are achievable with respect to schedule and ultimately cost to customers. One of the things I'm proud to say is since certification, we have generated, we believe, potentially up to $2 billion of incremental value for Georgia's customers. We're very confident of our ability to execute. Thanks very much for that. Next question, number 4.
Yes, we have David Martin from Atlanta, and he owns 300 shares.
David, how are you?
Good. How are you, sir? Thank you very much for your very informative remarks and presentation this morning.
Thanks.
I had a question about your supplier diversity outreach efforts, if you could talk a little bit about that. It looked like under your performance metric of culture in your annual report, that that was an area in which you were the lowest in improving the company's performance.
Frankly, supplier diversity is a point that we get paid on. It's part of our compensation program, as you pointed out. It's critically important for us to encourage, in the supply chain, diverse providers of equipment or material that we can use to run our business in the Southeast. One of the challenges we always have to think about is when you think about building a nuclear plant, you're procuring great, big, huge scale equipment. The minority suppliers really don't lend themselves to, say, a gigantic steam turbine or a reactor vessel. Where we can use diverse suppliers in our supply chain efforts, we absolutely do undertake to make sure that they have an opportunity to compete for the business, and that we can coach them along to make sure that they're ultimately successful. I think we've got pretty good metrics along the way.
We continue to make that a point of emphasis. It's something we talk about at Management Council. Every company, Alabama, Georgia, Mississippi, Gulf, all of them, Southern Power included, all of them have their own metrics that they are responsible for. It's a point of emphasis for us.
Thank you very much.
Yes, sir. Thank you. Number 3.
Next, we have Seth Gunning from Atlanta. He is representing the Sierra Club with 97 shares.
Hey, Seth. How are you?
Doing great.
We just met this morning.
Yeah, we did. Nice to meet you.
I got to tell you, I've had, I think, a really good relationship with Sierra Club lately. Colleen Kiernan is here. Where is Colleen? She is the executive director of Georgia of the Sierra Club, and she does a great job, and we have a very constructive engagement with her. The other guy that I've been interfacing with your group is Bruce Nilles. Now, he has led, I guess, the national effort for Beyond Coal, and now I guess there's this effort on Beyond Gas. We have a constructive dialogue with these folks, and we appreciate you being here.
Thank you. I appreciate your comments this morning. The Georgia Sierra Club represents over 10,000 members in Georgia. We have over 115,000 supporters. Many of our members and supporters are Georgia Power customers. They also live in communities affected by the air and water pollution emitted from Georgia Power's coal and fossil fuel-fired power plants. According to the Clean Air Task Force, the emissions from these power plants contribute to over 1,000 hospitalizations, over 1,000 asthma attacks, and nearly 600 premature deaths in Georgia every year. The way I see it, The Southern Company sits at a crossroads. Down one path, The Southern Company continues to drag its feet on the development of renewable energy economies in the Southeast. The other path, The Southern Company becomes a leader in creating jobs and economic development in clean energy in the South.
I want to thank you for The Southern Company's recent agreement to partner with Santee Cooper on the Palmetto Wind Energy Project in South Carolina. I hope that The Southern Company dipping its toes into the Atlantic waters for the first time leads to bigger, bolder bets on the Southeastern offshore wind industry. Like South Carolina, and you're likely aware of this with your research with Georgia Tech, Georgia has significant potential for offshore wind development. The state of Georgia has the fourth highest accessible potential for offshore wind development on the entire Atlantic coast. The research that I've seen, some of which coming from The Southern Company, shows that the levelized cost of offshore wind is near market parity to nuclear power, and all indications show that with the beginning and increase of installation in offshore wind, those costs are going to go down.
Georgia particularly has the second lowest estimated cost of construction for offshore wind projects. As a state, the state of Georgia is the only Atlantic state not currently working with the Department of Interior to streamline the permitting and leasing processes for offshore wind development. In addition to encouraging Southern Company to make big, bold bets for the Southeast renewable energy economy, I am curious if Southern Company would advocate for the state of Georgia joining the Department of Energy's Atlantic Offshore Wind Consortium to help streamline the permitting and leasing process for those resources.
Super. Thank you. Appreciate it. One of the things that I started since I became Chairman of Southern is an outreach to stakeholder groups all across the U.S. In fact, we started that last year and had another one recently. These kinds of issues come up. Our philosophy is really clear. Clean, safe, reliable, affordable energy for the benefit of our customers, driving the economy in the Southeast, creating jobs, and growing personal incomes. Being a good corporate citizen wherever we serve. Our employees are relentlessly committed to that, and we will remain committed to that. We are open to any energy alternative that makes sense in that vein. Years ago, we started this R&D effort with Georgia Tech on offshore wind.
One of the things we found just with respect to that issue was we needed more technology development, particularly in the space of low-speed wind turbines. We need to see some more technology innovation there. Look, if those things make sense, we are going to be front and center, engaged in bringing that value to our customers. Next question. All right. Is there a question? Okay, number 1.
We have Stephanie Coffin from Atlanta, and she owns 17,792 shares.
17 shares.
Oh, 17 shares. I'm sorry.
Gosh, you own 17,000.
17.7924.
Big lungs, right?
Stephanie, thank you for being here. We appreciate it.
It's a pleasure to be here. I don't represent the Sierra Club, really, and I don't represent anyone except for myself, except that I think what I do represent is the 99%. The 99%, I'm sure you're hearing more and more about the 99% as people make their voices known across the country. The 99%, I think, have three nagging problems with The Southern Company and very positive presentation. I, like hundreds of people, thousands of people in this country, watch the Frontline shows on TV about Fukushima. We watch the latest program about Chernobyl and the nuclear disasters, just shudder to think about The Southern Company building two nuclear power plants. That is a really nagging thing that we all share.
The second thing that I think that people have problems with is the water usage that these nuclear power plants are going to use up. I understand that in one day, they're going to use more water in cooling than the city of Atlanta. If you live in Georgia, you know that we have incredible water problems that are probably just going to continue to increase. Reservoirs, problems with reservoirs, problems with sewage. Water is a huge problem, these Vogtle plants are going to use up a lot of water. The third question that I think that many people are asking themselves, I know that you laid out some baby steps in terms of renewable energy, people who read the paper every day read that 19% of our energy could be supplied by solar. Then they know that offshore wind is very possible.
This kind of barrage of, yes, renewable is possible in Georgia just does not come through in your presentation, and it doesn't come through in your performance. My question is, really, from the standpoint of the 99%, those of us who want renewable, clean energy, how is The Southern Company going to address these questions that I think that are maybe not represented in the people up in the front rows, my next-door neighbor will have the same question. The people down the street, the people that I meet every day have these questions, I think that you haven't addressed them, not only here in this meeting, but also in your performance.
Well, ma'am, thank you very much for your question. Three points. The first one was about nukes. I think I pretty well covered that issue. We have scale. We have the best financial integrity. We have excellent operations. I think the technology that we're using is the cleanest, safest technology on the planet today. I think we have the demonstrated capability to be able to execute that big project. The second thing that you mentioned is water. I think that is a wonderful topic, and in fact, we covered that at our stakeholder meeting. Chris Hobson and I, Chris Hobson is our Chief Environmental Officer. I think Chris is here. Where are you, Chris? You're somewhere. There he is, way in the back. I think, frankly, water, more than air even, is the issue of the future.
One of the things you should be very proud about Southern Company is that we are a company that is engaged in offering solutions, not just rhetoric. We remain the only company engaged in proprietary research and development. We're the only company in America today that has a 1,600-person engineering and construction services group. We have the credibility to be able to deliver what our words say, and we do that relentlessly as well as anybody in the United States. In our research programs, we are the only company in the United States really now currently engaged in deep carbon capture research. We run the nation's, the DOE's National Carbon Capture Center in Wilsonville, Alabama. We're doing evaluations of scale of carbon capture, both on a pre-combustion basis at our Kemper County facility. Remember, we're going to gasify coal. We're going to strip out 65% of the CO2.
It will have the environmental footprint equal to or better than natural gas. We'll take the CO2 not as a waste. We'll use enhanced oil recovery and push out more domestic oil. Imagine that, using a resource in Mississippi that is otherwise lying fallow, producing more domestic oil, producing more domestic electricity at a very economic profile. It has an economic profile of a nuclear plant. Relatively high capital cost, but very cheap energy for the project in Mississippi. We're evaluating at scale carbon capture on a post-combustion basis at Plant Barry in Alabama. We just don't stop at evaluations of carbon. Going to water, we're the only company in the United States today that has dedicated research and development facilities to evaluating, minimizing the use of water at our generating facilities.
We have a research and development facility we've just opened up at Plant Bowen in northern Georgia to that end. Likewise, we're the only company in the United States today that has research and development facilities dedicated to mercury and have for some years in Florida. For all these reasons, look, I agree that water is a big issue. Let me make sure we get our metrics right. When you look at Southern Company's water consumption, we return at the same or better condition to the environment 95% of the water we use in our generation processes. The other 5% is evaporated. It gets returned in the form of rainfall. It's just evaporated in the atmosphere and comes back.
Water, I think, is a critical issue, but I think you're talking to a company that more than any other company in America is a leader in conserving water and thinking about it as a strategic issue for the future. The last thing you mentioned were renewables. I think I've said before, renewables are important, but what we've got to deliver, clean, safe, reliable, affordable. Renewables right now are a lot more expensive than other forms of energy. We think in the future, particularly for thin-film solar, as I mentioned before, sometime in the future, there may be a crossover point that may make sense. That's why we're experimenting and looking and investing right now in some of these other issues. Recall, roughly 48% of our customer base makes less than $40,000 a year.
To those people, every dollar matters, and therefore, we've got to look after them to deliver the most economic, most reliable sources of energy now. We are committed to delivering the best profile of energy mix in the future. We've demonstrated that in our move away from coal towards natural gas. We've reduced rates in Georgia, for example. Our fuel rate recently went down 19%. The total bill to customers went down 6%. These are the things we're doing, not rhetoric. Thanks for that. Number two.
Our next question comes from Colleen Kiernan of Atlanta, Georgia, and she represents 1.3 million shares of stock.
1.3.
Okay.
Colleen's a great friend. Welcome, Colleen.
Hi, Tom. Great to see you this morning. Thanks for your great presentation. There are a million things that I could talk about, but the last time we were together a couple weeks ago with the rest of the environmental stakeholders, you passed out a speech that you had recently given to the U.S. Chamber of Commerce. I read that speech with interest, and I was really encouraged by the beginning of it. I want to just let everybody else know some of the parts that are in it that I found really encouraging. You spoke to the group beyond self-interest to focus on what's good for America, and you were talking about restoring America's economy, creating jobs and energy policy. You noted that none of these things are challenges for the left or the right. They're American challenges.
Meeting these challenges requires us to work together, not apart, to work towards common sense solutions and serve a common and collective good. After all, progress can never be partisan. I feel really strongly about that, and I think that we've had a good dialogue. Since we were last here in Callaway Gardens a year ago, from where I sit, just in Georgia, I witnessed Southern Company and Georgia Power fighting uncompromisingly in a very partisan way, progress on common sense solutions. For example, Georgia Power successfully encouraged and influenced our Attorney General, Sam Olens, to sign on to a challenge to the Cross-State Air Pollution Rule.
He also signed on at your request to a petition to delay the Mercury and Air Toxics Standards, which, by the way, would have been a cost benefit to the American people, or will be, since the rule is going forward anyway, of $140 billion a year, whereas it's only going to cost the utilities I'm sorry, the net benefit is $160 billion a year, whereas it costs the utilities about $20 billion in compliance costs to upgrade the plants or retire them. Then most disappointingly, as several other commenters have already said, Georgia could be allowed to have third parties come in and put solar panels on our roof to enter into a long-range contract with them. I myself would love to take advantage of that program since I'm a small user.
My power bill at the end of the day is $0.15 a kilowatt hour, which is not among the lowest anywhere. In fact, it's quite expensive, and I think I could probably get a better deal if I signed up for solar somewhere. Anyway, my question is, understanding that we need to find common ground to advance our solutions, what is your compromise, and what would a renewable portfolio standard look like that you, as the CEO of Southern Company, would advocate for?
Well, that's very interesting. The question really goes to renewable portfolio standard that we would support. Okay. Got it. Thank you. We always have good conversations, and quick background comment, Colleen, and she and I talk about this stuff a lot. You should know that I view it as our obligation to engage in any sort of law, regulation, what have you, all in the interest of our customers in order to promote clean, safe, reliable, affordable energy. I view that as an obligation. Okay? With respect to renewable portfolio standards, very interesting question. In fact, that was, say, 2 years ago, I guess, a very hot topic around the U.S., and maybe it will come around again. I do spend a lot of time in Washington talking with policymakers about that.
Here is where we were, and I think probably where we are on renewable portfolio standards. There were lots of proposals put forth in the past. Bingaman put forth a proposal. They called for a renewable portfolio standard. My view on that is a national approach, one size fits all, does not serve our customers' interests and effectively represents an indirect tax on the energy consumers here in the Southeast. Why? Well, when you consider the different parts of the U.S. and where there are great potentials for renewables, particularly the desert Southwest and the upper Midwest, those people would make out very well under a renewable portfolio standard.
Here in the Southeast, where we don't have the wind flows that supports widespread wind, except perhaps offshore, or the solar intensity, because of cloud cover and a variety of other things, isn't what it is in the desert Southwest, we would have to pay for renewable credits, and that would just raise taxes essentially through your energy bill. I don't think that's the right approach for America right now. We've got to get this economy going. Raising taxes will only slow our economic recovery rate. I don't think that serves our interests well. Now, Dr. Steven Specker, when he was CEO of EPRI did some groundbreaking work in evaluating the different energy options in America in order to accommodate proposed legislation. In the case of PRISM, it was Waxman-Markey was a proposal. PRISM imagine what a prism looks like.
As the light goes into it fractures into the full spectrum of colors. Every color represented a different element of energy production. Okay? Some is nuclear, some is coal, some is conventional coal, some is this 21st century coal, natural gas, looking at carbon capture sequestration technologies, all sorts of renewable technologies. Energy efficiency is important here. Prism looked at what we might do nationally in order to meet some of the standards under legislation that was then proposed. The legislation didn't pass. It went away, and Prism kind of stayed where it was. The fallacy of Prism, or the weakness of Prism, I should say, was it proposed a single solution for America. The follow-up to Prism, they call it Prism 2.0, I think is a rather brilliant approach. Colleen, I think it goes to where we might have an intersection of interest.
One of the things we always talk about is where can we find common interest and how can we agree and move the ball that way? Prism 2.0 is a fascinating study. It takes into account the regional differences with respect to renewables. You can look this up, Google it or whatever. If you look at the Prism 2.0 work, it looks at, well, what makes sense from a clean energy standard, if you will, for the Desert Southwest, and what about the Upper Midwest and the West Coast and the Northeast and for the South? What you get for the South, under Prism 2.0, and this is work done by EPRI, not us, is that nuclear is a dominant solution. That we should go forward more and more with nuclear. It is the only emissionless technology that we have.
I think with the advances we have in technology, it is clean, safe, reliable, and affordable. There are, I think, some areas in which we can advance here, but I think they must take into account regional differences. Thanks for that. Any other questions? Well, listen, I so appreciate you all being here, and I so appreciate the folks that wanted to ask questions and engage in a discussion here. One of the things I want to leave you with is that the matters related to national energy policy and Southern Company's performance in respect of executing that national energy policy here in the Southeast is critically important for us to succeed. We are dedicated to making that future a success. We are dedicated to making not rhetoric, but solutions come forward to serve this nation's economy.
Thank you for your investment in Southern, thank you for your attendance here today. We appreciate it.