Well, good morning, everyone. Boy, that is fantastic stuff. I'm always amazed at the production quality of the folks that work behind the scenes. I mean, it's kind of screened and that kind of effort. It's just terrific.
So thank you to them. But thank you to these folks here, Steve Tyler and Andy Short, please stand. These are the folks featured in the video. Great job, fellas. And David, thank you for the work that you do for year in year out, helping people have great values and making sure the community is better off because you're there.
And Andy, I'm so proud of your leadership and I know you'll be the first to say that it's not just you, it's your team and it's the broader team of Alabama Power and it's the broader team of Southern Company. I guarantee you and you'll see this throughout today that part of the fabric of who we are really deals with the notion that the four corners of our job responsibility, whether it's making, moving or selling electricity, is far broader than that, that we really are charged by the idea that we have to make the communities better off because we're there. We have to be citizens wherever we serve. And so during times of hardship, it's very clear. We roll the trucks in and we get the lines back on and we do it in a safe way and we go beyond kind of the normal job description to make people not only be better, but feel better.
So good for you. But the other thing that I'm really proud of is that we do this all the time. This isn't just an example of behavior during a disaster. This is something that we engage in day in and day out. So I'm really astounded at some of the work.
I hope you saw coming in, there was a lot of examples of work done by the STEM efforts, that's science, technology, engineering and math of Harris County Schools. It's elementary, middle schools and high schools. And if those folks, we have the students here, parents here, teachers here, if you all would stand up, please, and be recognized. Harris County, here we go. And Penny, if you would just come up here for a minute.
Penny? Yes, thank you. Penny Redick is the Instructional Coordinator for Harris County Schools and helps kind of coordinate all this STEM activity. Yes, come on off stage, where everybody can see you. You ready for your speech?
But what's great about this is the company, in fact, Paul Bowers has hired a lot of principals, former principals of the school system, on his staff to help assure that the message of this notion that energy as a positive force in America is reflected appropriately in our education system. And it's so important for America to maintain leadership in the STEM programs. And so we try to support that everywhere we can. And Penny, what I'm proud to say to you today is both Georgia Power and Southern Company are contributing directly to the STEM program for Harris County Schools in the form of $10,000 Penny. And it goes beyond that because we have a bunch of leaders here.
You can see the crowds are a wee bit bigger than normal. This annual meeting that we do is such a positive event. We really love listening to you and we really love telling our story that we thought we wanted to leverage it more, let more people experience it in a really kind of organic in person way. And so what we've done is invited. We have high potential programs for all of our employees and we've invited, I don't know, I think they're multiplying since last night, but I want to say, was it 108, 109 people here that are what I would call mid career level people and all of our subsidiaries are here to see and listen and learn.
And there will be continuing education programs even after this meeting is adjourned. Would our high potential folks please stand? These are great folks. So these are not the only ones. There's a lot of folks back home that are keeping the lights on and making sure that we have electrons to cool this place on this wonderfully warm day.
But here's the point. When I look at the kind of support we give to these emerging leaders at Harris County, when I look at the mid level people that will be carrying this great iconic company forward way after I'm gone. I'm so proud of the fabric of leadership that we have here today and that we will continue for years to come. Last thing I just want to recognize, we're getting near Memorial Day, and I always want to recognize the veterans in the audience. If you're a veteran, please stand.
Military service, way to go, folks. You have no idea how much we appreciate your service. And you'll see in the accolades section of my chat today that Sutter Company once again was named one of the nation's leaders, number 1 by GI Jobs, etcetera, in the nation in support of employment of military personnel. The commitment that you've made to this country, your commitment to mission, your notion of teamwork and service is unparalleled and you do a great job. You are all patriots.
Thank you all for your service. All right. So now let's get going. If I could get Chris Womack, he's the President of our External Affairs Organization, to give us a safety message. Chris, would you please?
Thanks, Tom, and welcome everybody to our 2019 Annual Shareholders Meeting. We start every meeting with a safety briefing because safety is the first element of our values, because we want to make sure that we're speaking to and making sure employees know how important they are to us as well as our communities. So we do a safety briefing, but also sometimes we do safety tips. And I'm sure today the safety tip is to hydrate because of the temperatures outside and the temperatures that are coming. So make sure that you stay hydrated.
Today, if there's an emergency, we'll dial 911. We do have fire extinguishers outside the double doors. If we have to exit, we'll go through the double doors and out on the patio. If we have to congregate, we're going to go out the double doors, down the hall to the right and gather in the lobby. If there's a weather event, we're going to gather in the Loblawley conference room.
And Tom, that's your safety briefing for the 2019 Annual Shareholders Meeting.
Awesome. Thank you, Chris. Chris is, I think, unique in our industry. He runs this wonderful external affairs organization. I remember when I first got the job, I moved Chris' office right next to mine.
He was completely chagrined by that. But he is brilliant and unique and a great guy. Thank you, Chris. You'll notice on that put that safety thing up again, if you would. We highlighted the word safe.
Well, somewhere. Yes, there we go. We highlighted the word safe. So often, I think we translate that as industrial safety. That is, listen, when you make move and sell electricity, you know you're handling a very kind of special complex dangerous commodity, natural gas as well.
And so we're very conscious of making sure that our employees leave the work site the same condition in which they came to the work site. But it really goes to safety in the communities, as Chris rightly pointed out. And so there was an event here last year that just reinforces this notion that we've just got to be relentlessly committed, not only to ourselves, but to our communities. I can remember there was a 3rd party directional drilling operation that grazed 1 of our gas lines that also got into a sewer line. And some of the natural gas migrated into the sewer.
The natural gas traveled down the sewer and finally found its way into a small business and there was an explosion and people were hurt. And our heart goes out to those folks. I guess what I'm trying to commit by telling you that story is that this is something that's real. This is not some vision. It's not some altruistic kind of notion.
This is something that matters to all of us. And we always talk about safety as a value beyond what we do at work. It goes to the value at home and it goes to the value of your brothers and sisters, your relatives, anybody in your community. And we really take that seriously. All right.
Well, thanks for that. Let's now move into the business part of the section of the meeting. Please be aware that this meeting will be conducted as set forth in the agenda and order of business in accordance with the rules and procedures posted at the check-in desk and made available to each of you at your seats. Our theme for this year is energy for life. You'll hear a lot of this morning about building the future of energy and rightfully so.
We're proud of our great legacy of innovation and how Southern Company continues to lead the way in evolving our energy landscape. Through it all, however, customers are always at the center of everything we do. We're building the future of energy for their benefit, energy to improve the lives of customers and communities and the people that we're privileged to serve, energy for life. Of course, as with every year, we will discuss our efforts and achievements in 2018 and provide a business update for 2019. First, however, I would like to recognize the members of our management team who are with us here today.
Would the officers of Southern Company and our subsidiary companies please stand and let our shareholders recognize you? I guarantee you, these folks are the best in the industry and I'm proud to be part of their team. The order of the meeting will be as follows. First, we will conduct a formal business portion of the meeting in which we will vote on certain matters. Then I will provide a business overview that I mentioned earlier.
We will conclude with my favorite, the general question and answer period. Now we're webcasting our meeting live on the Internet, and you'll also be able to find a replay of this meeting on our websites tomorrow. Therefore, we respectfully request that no cameras, sound or video recording equipment be used during this meeting. So now we'll move to the formal business portion of our meeting. Deloitte and Touche has been appointed by the Audit Committee as the company's independent registered public accounting firm for 2019.
John Black where are you, John? Right there, of Deloitte Touche is present here today. John, if you'd like to make a statement, you may take this opportunity to do so. All right. Thank you, John.
The board has appointed Broadridge Financial Solutions, Inc. To serve as our independent inspector of the election for the annual meeting. Belinda Massafra is present on behalf of Broadridge. Belinda, glad to have you here and is acting as inspector for this meeting. Belinda's got her cheering section here.
Thank you for being here and thank you for your help. Myra Biera, Corporate Secretary of the company. Myra, where are you? Right, where are you, Myra? There you go.
Has confirmed that shares representing about 86% of the issued and outstanding common stock are represented in person or by proxy at this meeting. So we have a quorum necessary to conduct business. So there are 4 items that we are voting for today, and they were included in the proxy statement. The first item is the election of 15 directors. I'll now present those individuals who have been nominated to serve as a director.
So folks, as I call your name, please stand, face the audience and remain standing until everyone has been introduced. One of our newest directors, Doctor. Janaki Akela, Digital Transformation Leader of Google Juanita Powell Barranco, Executive Vice President and Chief Operating Officer of Barranco Automotive Group John Boscia, Founder, Retired President of Boardroom Advisors and Retired President of Sun Life Financial Hal Clark, retired Senior Advisor of Evercore Tony Early, another of our newest members retired Chairman, President and Chief Executive Officer of Pacific Gas and Electric Company David Grain, Founder, Chief Executive Officer and Managing Director of Grain Management Don James, retired Chairman of the Board and Chief Executive Officer of Vulcan Materials Company Johnnie Johns, Executive Chairman of Protective Life Corporation Doctor. Dale Klein, Associate Vice Chancellor of Research at the University of Texas System and former Commissioner and Chairman of the United States Nuclear Regulatory Commission. Doctor.
Ernie Moniz, Cecil Oneida Green Professor of Physics and Engineering Systems Emeritus, Special Advisor to the MIT President and former United States Secretary of Energy Bill Smith, Chairman of the Board, President and Chief Executive Officer of Capital City Bank Group Doctor. Steve Specker, our Lead Independent Director, retired Chief Executive Officer of TAE Technologies and former President and Chief Executive Officer of the Electric Power Research Institute Larry Thompson, Counsel at Fitch McCraney LLP and retired Executive Vice President, General Counsel and Corporate Secretary of PepsiCo. And last but not least, Jenner Wood, retired Corporate Executive Vice President, Wholesale Banking of SunTrust Banks. These individuals and I have been nominated for election to the Board of Directors. Please give them a round of applause and we'll let them sit down.
Thanks, folks. As disclosed in our proxy statement, after more than 10 years of service, Ronnie Hagen is retiring from our Board of Directors. You know that Ronnie has been such an admired and respected Director, having served as Lead Independent Director, Chair of the Compensation and Management Succession Committee, Chair of the Nominating Governance and Corporate Responsibility Committee. She remains a friend and is an invaluable resource to us. Ronni wanted to join us today, but was unable to do so because of her schedule.
Even though she can't be here in person, I want to take a moment to recognize Roni and sincerely thank her for her leadership, her expertise provided to Southern and to me personally. Ronnie, thank you very much. Please give her a round of applause. So the second item is an advisory vote on executive officer compensation, often called say on pay. The 3rd item is the appointment of Deloitte and Touche LLP as the company's independent registered public accounting firm for 2019.
And the 4th item is an amendment to the company's certificate of incorporation to reduce the super majority vote requirement to a majority vote requirement. Okay. Questions during this business portion of the meeting are limited to the items up for vote. Are there any questions on these four items? Okay.
Thank you. We will now proceed with the balloting. If you have already voted, there's nothing else you need to do at this time. However, if you have not voted or if you want to change your vote, please raise your hand and a representative in the back will provide you with a ballot. Is there anyone that wants to vote for the first time or change their vote?
Right here, there, there, over here got that one over there. We need to run faster. I'm an old football coach. Did you get yours? Right there.
There we go. Okay, bonus to the person that gets there first. There we go. GG1. Well done.
Thank you. So please take a moment and mark your ballot, sign it and then raise your hand again once you've done that, and we'll collect your ballots. Let's just take a moment here. Coffee is a wonderful thing. Caffeine makes you smarter and more charming.
So when you're
done with your ballot, please raise your hand, and we'll have somebody collect it. There we go. Have we got everybody? Right there? Got you right here.
All good. Is everybody have all the bats been collected? Still have one here? Okay. We're still working on one here?
Yes? Okay. You're good? Awesome. Anybody else?
Anybody else? Very good. Well, I certainly appreciate that. Okay. So the polls are now officially closed.
I can provide a preliminary voting report based on the vote that we received reelected with each director having received at least 97% of the votes in favor. Yes, they're terrific. Give them a hand. Item 2, the say on pay vote, has been approved, having received 94% of the votes in favor. My wife would applaud.
Item 3, the appointment of Deloitte and Touche as the company's independent registered public accounting firm for 2019 has been ratified, Big John receiving 99% of the votes in favor. And item 4, the amendment to the certificate of incorporation to reduce the super majority vote requirement to a majority vote requirement has not been approved, receiving 61% of the issued and outstanding shares in favor. I think we needed 66.2 thirds there. Southern does support that proposal and the votes that the shares that were voted were overwhelmingly positive, 98% for. However, not enough votes were cast on this item to reach the 66.2% threshold.
So the shares represented by the valid ballots collecting during this meeting will be included in the final voting report, which will be filed with the SEC in the next few days. So this ends the formal business portion of the meeting. And now I'm going to offer some comments on the state of our company, and then we'll have our wonderful question and answer period. But first, I would like to declare that the formal business portion of our 2019 Annual Stakeholders Meeting is hereby adjourned. Now let me caution you that we will be making forward looking statements in addition to talking about historical information.
Now I always love making a joke about this slide because that is our cautionary statement. Go one more. This year, I decided to translate that into English. Next slide, please. I guess I'll do it.
There we go. In other words, I'm going to talk about the future. And the future may not come to pass as I describe it. And we describe lots of events that could cause that to change. If you look in our financial statements, it's not just the income statement and the balance sheet and the cash flow, it's all of the information we provide around those statements that is material to current and prospective investors.
I encourage you to read those statements thoroughly. So they would be disclosed in all of our filings, 10 ks, SEC, 8 ks, you name it, 10 Qs. Okay. So let's now go to kind of where are we today. I'm so pleased to talk about the performance of your shares of stock.
But before I talk about stock price, I think it's so important to talk about dividends. People invest in Southern Company because it is a safe, reasonable return kind of investment that they can hold on to for a long time. When you think about certainly my tenure and going back 20 years or whatever is shown here, I guess this is 17, 18 years, we've been able to maintain and increase our dividends per share every year through Plant Ratcliffe, Kemper County, through the challenges with Plant Vogtle. We've been able to maintain the confidence in our financial posture to be able to deliver to you a very promising, in my opinion, kind of investment. And really, when you think about it, Southern Company has had the kind of posture.
Since 1948, we have either maintained or increased our dividend every year. We have never reduced our dividend. So this is great performance. And why is that important? When you buy and hold an investment, the compounding effect of the dividends every year is enormous.
Over 70% of your total shareholder return over 20 years comes from the dividend. Now, I'm delighted to talk about this latest spike, especially you see in the blue price appreciation. Southern Company has been the highest performing stock in our industry year to date. But even over 20 years, we've been killing it. Look at us as the red line relative to the blue line, the Philadelphia Utilities Index relative to the S and P 500.
Over the last 20 years, if you had invested in Southern Company, you'd be a delighted shareholder. And we continue, I think, to have the kind of pace to make that true into the future. And this is the part this year that I'm particularly proud of. Remember last year, I talked to you about what we call the Flamingo transaction, But essentially, it was the sale of a lot of our well, all of our Florida assets to NextEra. We did that at such an attractive price, an equivalent share price of about $90 a share.
So it really helped us. Since we closed that deal at the end of the year, we have been zooming. Now the other thing that's really been helpful, I think, to our share price appreciation has been our performance on Plant Vogtle. I'll talk to you about that here in a minute. There's still a lot of work to do though.
But boy, oh, boy, isn't it great to sit here today? Yesterday, I want to say, during the day we hit an all time high, We closed just at $0.03 below $54, $53.97 But Southern Company has been the best performer in our average. But it's not just about returns and I try to be relentless about that. I've always made jokes about from one time or another, we were about the 2nd lowest beta, this measure of systematic volatility compared to the market. I remember 1 year we were second to spam.
We're still really low in the S and P 500. So the benefit that you get here is really good returns this year with really low risk. If you can have decent returns and reasonable risk, you create value. Our case this year, I can stand here and say this year's price performance, dividend performance and low risk posture makes this one of the best value creators of hardly well, among all companies in America, this has got to be one of the great value careers. Let me just say it that way.
I got my lawyer sitting here. I got to be careful. I mentioned that a lot of their performance is due to Vogtle. Now I know that's foremost on a lot of people's mind when they invest in Southern. Vogel III and IV is the last project standing, building new nuclear in America and a generation of Americans.
And I'm delighted to say that we just completed a very important process we call a rebaseline, where in a very rigorous way, Steve Kucinski, where are you? Steve, right there, leads our nuclear effort. We went into the project and we just tore it apart soup to nuts, trying to evaluate, given everything that we know now that we've taken over the project from Westinghouse, who you remember went bankrupt, we stepped into that process. Could we complete it on the schedule that we promised the commission? Could we complete it on the budget that we promised the commission?
And in fact, the point of the rebaselining effort is to say, we recommit to November 'twenty one for Vogtle Unit 3 and November 'twenty two for Vogtle Unit 4. And we commit to the budget that we put in place, no increase. Now there is a whole lot of work to be done between now and then. And I can't promise that. We are working like crazy.
So I wanted to give you some benchmarks. How can I evaluate, are we on track? If we work about 100,000 productive hours on those two projects every week, We believe that is a track that will get us to a November 'twenty one, November 'twenty two in service date, 100,000 hours per week. Year to date, so from January 1 to today, we're averaging about 130,000 hours. So every week that we deliver performance above 100,000, we build margin to a November in service date.
And obviously, that has a significant implication to budget as well. What we're aiming towards is that what we want to do is take this 100,000 hours and move to 130 and now move to 160. So given our success in increasing the productivity on the site, we've challenged ourselves to increase the productivity yet again. And so what I will hopefully report next year is that we are ramping up from this 130,000 hours where we are today and maybe by late summer, early fall, September timeframe, something like that, we will ramp up to about 160,000 hours. If we're able to do that, we believe we will build enough margin so that we have about 6 months of buffer to achieving the November 'twenty one, November 'twenty two commitment.
So that is what we are all about right now. It's hard to kind of get your head around how many 100000 hours you're going to work per week. And so we work very hard with the investment community to describe our performance by significant milestones. So far, I'm very happy to report and in fact, at my last earnings call, which was May 1, we achieved our 1st milestone right on the money, Initial energization, that means that we were able to deliver electricity from the grid to the project without using supplemental means of electricity. That's a big deal.
The other thing that's fun is we have set the Unit 3 containment vessel top head. So if you in fact, let me see let me go back a little bit. This is the containment vessel before we put the top on it. That's significant, that picture is, because through the roof, we offered up prayers every day to make sure that we were able to successfully complete this project. Then, as we were going to set the top head, we thought it was important to celebrate that milestone with Rick Perry.
He's the Secretary of Energy. You see him there. And what was so fascinating now, if you notice, there it is, there's the top head, it's the roof to the containment building. And there are enormous cranes that pick this enormous structure up and put it in place. The winds have to be just right.
You can't I forget what the tolerance for inches is like a 16th of an inch tolerance to set it in place, a 16th of an inch for that great big thing. Believe it or not, as luck would have it, and those prayers were answered, at least in this regard, we were able to put that top head on the roof just as Secretary Perry was visiting. And so as we went through a ceremony and he was extolling the value of Southern Company Georgia Power being the last person standing on new nuclear development for America, a real national security issue for this nation. We put that top on and it fit within a 16th of an inch. How about that?
Great news. So now the overall project is 77% complete. We expect Unit 3 to be 90% complete by the end of this year, if we're able to hit our milestones. And what we will do then is kind of finish construction on Unit 3 and then we will move to all the work necessary to go to hot fuel load by the end of next year sometime. We'll see, okay?
But we are making great progress. But please hear me, please hear me, a lot of hard work to go. And we will be if we finish a day before November of 2021, November of 2022, there should be ticker tape parades. This is hard work, but these people are working hard and they're doing everything they can to make it successful. Okay, let me turn.
There's a very interesting issue going on in America today in our industry. This industry is based on a long history of what they call engineering economics that are based on a notion of reliability. And what that means is, how does your system behave, whether you're making, moving or selling energy under normal conditions. And we all know that when you turn equipment on, it doesn't always work. And you all know that sometimes lines fall down, or you all know that transformers pop in your neighborhood and it just happens, equipment fails and stuff like that happens.
And we develop an economic cost measure that defines the best level of what they call reliability. What I'm here to tell you today is that there is an emerging issue that I think Southern Company is championing among any other utility in America and it's the notion of resilience. If reliability is how your system works under normal conditions, resilience is how your system works even despite abnormal conditions, whether they are hurricanes or snowstorms or cyber attacks or physical attacks or people that require ultra high levels of reliability. I would say as you move into this digital age, the Apples, Googles, Microsofts, others, they all require ultra high levels. That's where work like power secure, micro grids and all that stuff comes to play.
So I want to describe our performance in the context of not reliability, but resilience. Let's talk about that. First, we've already talked about the hurricane response. Category 5 storm, landfall, Panama City, wiped out that part of Florida. I mean, just put it on its back.
And that storm was powerful enough, it set another record. We've never had a storm cross Florida into Georgia and remain a Category 3. And it did, first time ever. Now, I'm delighted to say what we could restore, we restored in 3 days. Outstanding performance.
And I always want to say, I've said this on CNBC before when these storms come through and everything else, the heroes of our system. And frankly, the heroes of the Southeast are our covered workers. These folks that are part of your crews, they get out there during the worst of times and bring the best of times back to the communities. They restore more than electricity, these folks restore hope. And they do a great job.
Now there was a whole lot here that went beyond just restoring power. You may remember Panama City, Lynn Haven was on its back. Stuff was destroyed. We were able to rebuild compared to Puerto Rico, maybe, maybe that's unfair. We were able to rebuild in 13 days, rebuild amazing performance by this company.
Now it wasn't just us, it was and I know we highlighted Alabama Power, Georgia Power was there, Gulf, Mississippi, we had partners from all over the industry come and help. We had extraordinary support by the federal government, you see Donald Trump there. Paul and I, Paul Bowers right there, President George Power and I are talking to him as he came to visit to survey the damage. I'll say also that that was on a Thursday, I believe, the very next Friday, the next day, Vice President Pence came down and toward some of the agricultural hits. Just tragically, we have a lot of pecan farms, right, in that part of Georgia.
And it takes 10 years for a tree to produce pecans in a mature way. And when those trees go down, those folks are on their backs for 10 years. So, Pence and the government Vice President Pence and the government, we're very sensitive in trying to figure out ways to help restore that part of agriculture. And it goes way beyond those farms. It goes to the silo operators.
It goes to the workers that help. It goes to the banks that lend. These are big issues. And we really understand the notion of how communities are impacted way beyond electricity. And we want to be central to helping provide a future that is hopeful and prosperous for these people.
But it ain't just hurricanes, winter storms. Boy, in 2019, we had one of the most significant polar vortexes come across Illinois. Well, we have a terrific subsidiary there, Nincor, it's one of the AGL resource companies. Kim Green here is the CEO of Southern Company Gas. And Nicor has 2,000,000 customers in Illinois.
How about that? Well, they had one of the biggest winter storms they've ever had. And I want to highlight something for you. See this picture? These guys are out in this storm wearing masks.
You know why that is? It's 23 below 0. The wind chill was over 50 below 0. And they needed to wear protective gear just to operate in that environment. And so every week, I send a note to my Board.
And it's really brief bullets, concise, hey, this is what I'm doing, this is what I'm thinking, these are the kind of things to watch out for. I really try to keep it this long. And sometimes I ask, hey, Kim, we know the vortex is coming and let's make sure we send a note to the board and Kim sent this note and I looked at it and sent it on to the board. Only then I looked at it again after I sent it. And the note said something like this, we expect temperatures in Illinois to be beyond our design basis.
And I went, oh my, what does that mean? Turns out, we didn't lose in any material way any gas customers. Our system even though the weather was beyond our design basis, our system held up great. And we were able to keep people warm during the worst of times. That was not true across America.
There were other utilities, gas companies that ran out of gas, lost gas pressure, lost whatever, and we're not able to do that. And that creates a real hardship for people during this time, obviously. So I'm very proud of how our gas people performed during this very severe weather event. The next one is this thing about national security. You guys I think know that I help lead our industry as investor owned utilities, cooperative utilities and municipal utilities for all things that represent the existential threat of a cyber or physical attack.
And we have now we do that under the structure of the Electricity Sub Sector Coordinating Council. We have music to accompany me. So we do that. We have also initiated leadership among and between now our most critical infrastructures in America, not only just electricity, but finance and telecom. And I'm working with Jamie Dimon or JPMorgan, Brian Moynihan BOA, Financial Sector.
And on the Telecom Sector, Randall Stephenson, his top Lieutenant, John Donovan, to try and bring together a merger of interest between electricity, finance and telecom. We have now a joint threat matrix, so we can evaluate the significance and consequence by likelihood of cyber and physical attacks. And we can therefore allocate rationally resources to protect America, to stop the existential threat, because we do know that bad guys are out there every day trying to get in and disrupt our way of life. And so we are working relentlessly on that. And it's a challenging issue.
I've used this in the past, this metaphor. It's like you and I standing on the shore and we're watching a submarine battle. You can't see anything unless something disastrous happens. Cyber attacks are going on every day, relentlessly. 1,000,000 and 1,000,000 of lethal activities are happening.
You can't see it. And we're stopping the worst consequences. But it's something that requires enormous effort. And so we are also working now. I've been appointed by leader Mitch McConnell of the Senate as a civilian to participate in what they call the Solarium Commission.
Solarium was first created by President Eisenhower post World War II to redefine military doctrine in a post World War II environment. How do we think about the plains of Europe? Should we create NATO? How do we think about tank battles? And how do we work with other people, other allies to make sure World War II doesn't happen again?
And we've kind of evolved that a bit. The new Solarium Commission is a very interesting problem. And it says, how should we array the military? How should we rethink military doctrine in a cyber and digital world? There are no borders.
The weapons are different. The attack surfaces are different. How do we think about if Southern Company works under Homeland Security to prepare for and respond to, how in the middle do we hold accountable the bad guys, Department of Defense, FBI, National Security Agency, U. S. Cyber Command.
What you see in this picture is an event really sponsored by Kirstjen Nielsen. She was the former Secretary of Homeland Security. And I can tell you with respect to these matters, she was outstanding. I'm sorry to see her leave. She is terrific.
She is a patriot. The other guy in this picture is General Paul Naccassoni. He is the head of NSA and the head of US Cyber Command, our offensive cyber force in the world. And we are working together to build a stronger America. The Solarium Commission will produce its results probably early next year.
But you can see there is a whole lot going on. And when I think about the potential disruption that cyber and physical attacks can have, it goes back to resilience. A lot of this work goes to your human body. There's a lot about your human body that is designed to take bad stuff and keep it out. There's a lot about your body that deals with bad stuff when it gets in, white blood cells.
And so we think about our protection this way. How can we make the critical infrastructure of America more resilient? Now I just want to transfer into this last goal I talked about last year. Very interesting stuff. Last year, we were the 1st utility to come out in a major way and say, we commit to a low to no carbon future.
And I think now given our leadership, other people have followed and said certain things. Even a company that says we commit to no carbon in the future, we're in exactly the same place they are. They will admit they need technology advancement to get to know. That's why we say low to know. We're just acknowledging the need to have new technology brought to bear.
But the other interesting thing is this intermediate point here. In 2,030, we committed to reduce our carbon emissions by 50%. Well, as a matter of fact, we've already reduced our carbon emissions somewhere around 35% since 2007. And while we put the 50% goal out there last year, my sense is we really didn't know how we were going to get there. We kind of thought we could get there, so we committed to the goal.
As I learn more, we have important processes going on in Georgia right now, Alabama is doing a lot of thinking, Mississippi is doing thinking. There is a whole lot we can do, I think, to improve this posture. As I sit here today, I think I will report to you that I'm more confident than ever we'll hit this intermediate goal. Now they may hit that goal well after I'm gone, easy for me to say, but I really think we'll hit that goal and maybe we should increase it in years ahead. And I think for the good of the nation, clean, safe, reliable, affordable, we can get to a low to no future and we can do it in a way that benefits our economy, that grows jobs, grows personal incomes and make all of our lives better.
Very pleased with that. And now let me finish with our Bragg session, superlatives. There's a whole lot behind this. I think you have material at your seats and I think we provided material all around this wonderful setting at Callaway Gardens. But I do want to highlight some of these.
This would be the tops of the pyramids here. I want to start. I created when I was CFO this notion of what we call the circle of life, customers in the middle of everything we do. We define our effect on customers by providing low cost, reliable electricity, best service on the planet. And as a result, this company has led customer satisfaction numbers in RSV for years.
Well, here again, highest customer satisfaction, residential electric service in the South, Georgia Power ranked number 1, but look, other years it's been Alabama, other years it's been Mississippi. We really do well in customer service And we put that in the middle of everything we do, as I have done here. I'll fly through the rest of these top 50 companies for diversity. It's our 4th consecutive year. I think we're really modernizing our culture.
In the past, Southern I think has been really homogeneous. And I think we're opening up ourselves to the notion that if we're going to bring people into this company that will in fact invent this nation's energy future, we need diversity of thought, diversity of judgment and skill and experience. And that requires a whole different palette of people that need to be able to succeed in this company. And I think we put a huge emphasis on that and we are being recognized for that. In fact, we are number 1 in the industry, I think it's by diversity, Myra, where are you or whatever, of is some nurturing statistic.
It's once we get people in, we bring them along and help them succeed over time. We're Sloan. There you are, is that what it is? Yes. Number 1 in the America at that.
It's one of the ways we do it. Best Large Employees. Boy, this is a new one this year and I'm really proud of it. Great Place to Work, number 14 in America. You know, everybody says, Oh, the great place to work is all these high-tech places.
Some dumb old utility, it can't be a great place to work. Oh, no, we're 14th in the nation, number 1 in Atlanta, number 1 in Georgia, number we're terrific. I think people feel good about their contribution to creating energy as an unassailable advantage of this economy and then this connection back to communities. Industrial safety, we continue to do well there. Sustainability, our gas business in Illinois, this is beyond kind of storm response, it goes to technology advancements and using gas in a way that benefits customers.
Military, number one energy company in America, we typically win that. And I forget how many years we've been in the top 10 or whatever. We really do well and we revere military service. I think I pointed that out. And our board has been recognized as one of the top 2 boards in our industry, top board in terms of diversity.
They do a great job. But it ain't just those things and I will not kill you with going through every bullet here except to say, we get all kinds of accolades on customer satisfaction on all kinds of different fronts. Leadership, we really have this notion, we are not joiners, we are leaders. And whether it's EEI, whether it's AGA, whether it's any organization, we really try to project our force to make sure that that organization is doing what's best for our customers and best for America. And you can see under almost any measure, we do really well there.
In our industry, we promote not only great safety, but we also promote leadership in the technical aspects. We revere people that know how to make, move and sell energy and we are recognized for that. And there's more. Economic development, I should say, all of our companies do great in economic development. And all of our companies like Georgia Power represents Georgia, Alabama Power, which always does well in economic development, represents Alabama, Mississippi, the gas companies.
And I can remember when I first when we first announced the acquisition of AGL Resources, now Southern Company Gas, I went up to Illinois to meet with the politicians up there. And they were fascinated by our efforts and success in economic development and wanted us to bring economic development to the great state of Illinois. That's been a real selling point for our system. Environmental, we continually get recognized, but we do way more than just kind of get recognition. Leadership of all the major ones that we can kind of successfully get in a room, all the different organizations and we listen.
You know, the important part I think in the past our industry could be criticized for fighting environmental initiatives. My posture has always been, listen first. People are more likely to raise their voice when they feel like they're not being listened to. So listen first. And then explain what our posture is with respect to these very important issues and then try and find the point of intersection of interest where we can work together in a constructive way to move the ball.
And I will complement the environmental stakeholders of this nation, whether it's Union Concerned Scientists, Sierra Club, Environmental Defense, the whole group, they have moved the ball and created a discussion that is good for America. And we have to work with those fine people to make sure we advance the ball in a way that works well for everybody. I'm going to finish these superlatives with culture. I've talked about diversity and I've talked about military and all that. Let me just back it up here real quick.
There we go. This is so foundational. I think you're able to accomplish everything else, serving customers, running a good system, being a good steward of the environment, if you have good culture. And so we spend a ton of time making sure that culture works for us, not against us. There we go.
And you can see culture transcends all different layers, different petals of the flower of the way to advance wait a minute, this thing of the way to advance the ball for Southern. So this whole notion of culture and we get recognition for it everywhere is really important. Now let me just finish with whoops, we should have one more oh, well. There was a slide here on our values. Can you throw that up, Jennifer?
Do we have it? Put that up here. Because all this culminates in our values. And what we mean by that is this notion of providing the best safety environment, total commitment, total trust to make sure that everything has a foundation upon which to rest. And these values are really important.
We used to call it Southern style and now we simply call it our values. And so this, I think, underpins everything we do and is so important going forward. Thanks for that, pal. Okay. Those are the end of my prepared remarks.
What I'd like to do now is move into Q and A. So if anybody has a question, please raise your hand. I think we have people with panels, right? Yes. And we'll get you first right here.
Thank you, sir, for coming.
Well, you're welcome. I'm Ken Kaplan from Seminole, Florida. It's a trick for me to come up here every couple of years. And I'd like to ask you about the fact that you appeared to have sold off everything you have in Florida the next era.
That's right.
Pulled out. About 10 years ago, I asked the question, when are you coming to Florida? And you said, well, we're going to come as a wholesaler, right? You personally didn't say it. So, but so perhaps you were there as a wholesaler.
We didn't recognize you because you didn't deal with us directly, we consumers. We have the most corrupt public service commission probably in the United States. And the worst news possible is that you pulled out of Florida. Now I don't blame you for not wanting to deal with those SOBs. But
we need Annual meetings are great.
But we need help. I really thought that Southern Company was our last chance possibly to get back to where we were 50 years ago when we had a woman named Paula Hawkins running the Public Service Commission. And she was honest, our last honest Public Service Commissioner. So is there any chance that you'll ever come back to help us out?
Well, yes. So thanks for that. Really appreciate it. I think what I said before is, the legal term is I'm a fiduciary, so are the boards, we have to represent shareholder interest. And for a variety of reasons, NextEra felt that the value, their value for Gulf Power to generating units and Florida City Gas in Florida was worth $90 a share.
At the time we did the transaction, we were trading at $45 a share. Let me just give you another data point. We were carrying the carrying value for those assets was around $3,500,000,000 for us. We sold it for $6,500,000,000 And when you think about all the financial underpinnings of that, it was a slam dunk, and you can see our stock price performance since then. We still have a at least, I think, a 5 year relationship, certainly with Gulf Power through an operating agreement to support them.
You just don't remove that system and not support it. And so for 5 years, we will give NextEra our support to make sure that electricity flows in an efficient way into the Panhandle. With respect to the employees there, I want to be very clear that we just didn't abandon them nor did we in the community. We as part of the deal struck an agreement with NextEra to give our employees, retirees and actives, unprecedented benefits for a period of time and to remain committed to the communities that we were privileged to serve there. So it was way beyond just the financials.
We made sure that as we left, the community would be spoken for. Now with respect to the politics, that's very interesting. Southern has a national presence. And I think the only way I can respond to your question at this point is to say this. We promote national energy policy that is effective for everybody.
That national energy policy, by fact, gets translated locally. In fact, that's how we run our business. Southern Company is a holding company, Alabama, Georgia, Mississippi, Atlanta Gas, Nicor, Virginia Natural Gas and others, Southern Power and all that. They all run their businesses and we work to make sure that they run as well as they can in unison. But all politics are local.
We now are not in the state. Will we return one day? We'll see. But for now, we're not there. Thank you, sir.
Appreciate it. Yes. Then we'll come over here.
Tom, I have John Quartertsman from Lowndes County. He holds 825 shares.
Big John. Okay, now show the video or the thing. Big John, you'll love this. Look at this. This is John Quarterman.
We now have Quarterman Road. So this came from engagement, John, I guess we had last year. And you've been working with our people. There was kind of a couple of issues. One was this there's that's actually in the background is kind of a I'm going to simplify it, a gas pumping station that was on your property and was making a noise, and we hopefully reduced the noise to an acceptable level.
So we responded there. The second thing that I think came from conversation with you was that you were worried that it wasn't showing up on a GPS map effectively or if there was a problem that there wouldn't be as timely and effective a response. And so now we have it GPSed and we have it marked as Quarterman Road. And John, you should be happy to know that we took your idea and spread it across the Southeast. So where we had these kinds of pumping stations, they now have GPS identities, and we've marked them better for emergency response.
So actually, you're responsible for that. So thanks for that. Anyway John, you're a great friend. You come every year. I'll shut up and let you talk.
Yes. Which the reason for the sign was it took usually 15 minutes whenever I had to call in a leak report. Now, of course, I hope you don't have any more leaks.
Me too.
Right. So as usual, I brought you some YOLO squash.
Awesome. Thanks.
And, Gretchen pat this. Potatoes. Do you like potatoes?
Terrific. Oh, yeah. I'm in. I'm Irish, man. Yeah.
And,
supposed to be in here.
I want to see the okra, babe.
Yeah, here you go. Here you go. Pickled okra.
There we go.
All right.
Awesome. Give them a hand. That's okra in the plant.
Ronnie Just has agreed to receive the goods. For now. I have for you only one question. It will take me a few moments to work up to it. You have the floor.
Thank you. Thank you. That was my first item. And because of the work done on my property there, I do have to clarify, actually Southern Company does not own Southern own Quarterman Road. No, it's
not. We
live there do. A lot of 7 Company personnel have nonetheless been there since last September. And I don't want to try to name them all. I would forget somebody. I want to pick out, however, Southern Company Gas Chairman, CEO and President Kimberly S.
Green.
Right there, Kim, raise your hand. There you are, right there.
There she is. I warned her I was going to compliment her. On May 10th, she came out to inspect the work that they had completed, which I first asked for 2 years ago, and suddenly things started moving in September after she took a hand in it. So thank you for getting that done. So thanks to all the upcoming company people who helped, and I look forward to the sound survey at the edge of the easement, not at the subdivision half a mile away, at the edge of the easement promised by Atlanta Gas Light.
And I also look forward to Southern Natural Gas doing their part to renew the notorious from their station.
Those of you who may know, just to clarify, we own 50% of the Southern Natural Gas Pipeline that is run by Kinder Morgan. So that's where that comes from.
That's right. So you have some influence there. Of course, he has influence everywhere, but especially there. Okay. So as President Green described it, we now have a a state of the art AGL pipeline on my property, which is better than the non state of the art that it was.
However, that's rather like a gold plated horse buggy in 1919 after the Model T came out. Assuming, of course, the gold blade plated horse buggy carried nitroglycerin to a coal mine. Now earlier, you alluded to a certain problem in Homerville, Georgia. I don't think you named the place, but that's the place. Pipeline that had that problem is this pipeline.
It starts on my property. And when it blew up the coffee shop, it sent 3 women to the hospital with 3rd degree burns. It took the Georgia Public Service Commission about 5 months to come out with a report. They finally did. They're recommending $2,300,000 in fines, which I don't know if you follow this kind of thing, but the previous fine for AGL was $10,000 So $2,500,000 is a huge fine.
Why so large? Well, they had little bitty things like failure to accurately say where the pipeline was, but the big one had to do with failed to follow their investigation procedures, I'm quoting, investigating and documenting 3rd party damages. In other words, they didn't investigate following their own procedures even after the explosion according to the PSC staff, which leads to open questions. This is actually not my concluding question, but inquiring minds want to know whatever failures to follow procedures have there been? And what really is most important, profits or safety, property rights and the environment?
And why should shareholders be suggested subjected to this kind of risk? That pipeline goes all the way across from Lowndes County to Clinch County, and there's a bunch of others like it. Anyway, now let me, if I can manage to do this, put on my Simwanee Riverkeeper hat. Yes, I actually have a hat for this purpose. That entire AGL pipeline is in the Simwanee River Basin.
Now according to the annual report, part of our esteemed CEO's compensation is now supposed to be for reaching a low carbon future of low to no greenhouse gas emissions, okay? Yet since 2007, 7 companies almost tripled the energy mix percentage of natural gas while reducing the total of natural gas and coal only from 85% to 74%. Now the difference of about 11% in the mix is almost entirely due to solar and wind power. It's certainly not plant Vogtle, which isn't even operational. And as you alluded to earlier, if you actually want resilience, distributed solar and microgrids are the way to go.
Vogtle is not the way to get there. Also, for national security, resilience with microgrids would get us there quicker. Yet right now, the Public Service Commission is considering Georgia Power's 20 19 Integrated Resource Plan, pick this thing up so I don't have to bend over all the time, which includes only 1,000 megawatts of solar power over the next 20 years, which is less than was requested by customers in the past 2 years alone. PSC staff asked why that low number, Georgia Power's response was there are no analyses. Okay.
So instead, Georgia Power is asking the PSC for a huge reserve margin, which would lead to still more use of fossil fuels. You may have heard of the Swedish schoolgirl Greta Thunberg. I'd like to quote something she said to the U. K. Parliament.
The fact that we are still speaking of lowering instead of stopping emissions is perhaps the greatest force behind the continuing business as usual. She also said, This ongoing irresponsible behavior will no doubt be remembered in history as one of the greatest failures of mankind. A year or 2, I asked our esteemed CEO here what he wanted his legacy to be. Now I ask the Board and the stockholders, why should we believe the same path that purchased AGL and its stranded asset pipelines and that produced the IRP with no analyses and only 1,000 megawatts of solar power over 20 years, why should we believe that path will get Southern Company to low to no greenhouse gas emissions? And perhaps more importantly, for water property rights and for living without explosions, oh, and for profit, for we the shareholders, why is low even still being considered as a goal?
So my question to Tom Fanning and the 7 company stockholders and Board is, will you lead the way into the real future of clean renewable energy? Or do you prefer the company to be a footnote in future history books for building gold plated horse buggies in an electric car age?
John, it's always great having you here, man. Thank you. Seriously, you're a great friend, and I appreciate your engagement. Hey, look, with respect to the fine, the fine is under review. And I think it's been a normal course that a fine has proposed and then we work through the issue.
It is currently under discussion and we'll see. The damage was caused by a 3rd party directional drilling contractor. So we'll see how all that turns out. So let's just be clear on the fine. With respect to this evolution of energy in natural gas.
So what you did was added up coal and gas. You should know that natural gas has half the carbon effluent, half the carbon impact per unit of energy than coal does. So gas is a wonderful substitute for coal. It is pretty clear to me given a whole lot of environmental issues that coal is diminishing as an energy resource in the future, okay? So what fills the gap in the near term is natural gas.
Just to remind us of all the data, I think I've said this in other meetings. Before I became Chairman, 70% of Southern Companies Energy were about the size of the nation of Australia, we're really big, came from coal. Today, that number is like 26%. Before I became Chair, we were single digits on gas. And now we're about 50%, maybe a shade under.
Renewables were essentially 0 and now this thing that's about the size of the nation of Australia, it's about 11, and it's going to grow. The issue with respect to the 1,000 megawatts of solar in the IRP at Georgia, look, that's under consideration. I know there's been a lot of testimony and we never want to get in front of a regulatory proceeding. Ultimately, the company and the commission, along with the input of all kinds of stakeholder groups, will reach, I think, a constructive solution. So let's let that process play out and see what happens, okay?
The other thing is, and let's just I always want to be very clear. Let me say something that I think this group may find unusual, but I believe it. Green New Deal. Believe it or not, I think that's helpful. Now some of us say, Oh my gosh, what's he saying?
There is a better idea, though. That moved the discussion and put it front and center in the dialogue of America. There is a better idea, though. And in fact, one of the folks that helped coin that better idea is right here, Doctor. Ernie Moniz.
He came forward and I guess you had a co author, but came forward with the idea of the Green Real Deal. And what that does, John, I think, and in fact, another company is the model for this, is create a reasonable pathway forward to achieve this low to no. Now we could say no, but in order to get to no, we've got to have technology advancement. And that really is going to come in 2 areas. 1, we have to find a way to effectively deal with the carbon atom, carbon effluents from any hydrocarbon resource of energy.
2, we have to figure out a way to better handle technical storage of electricity. If we can get there, then I think we can get to know. Southern Company, you should know. Everybody gives you rhetoric around here. Oh, we can do this stuff.
Oh, we can do that stuff. Who are the companies that are really spending money to develop solutions? In our industry, it's us. I'll stop. We are the only company in our industry with robust proprietary research and development on a host of issues, including these important issues.
We are also the biggest funder to EPRI, Electric Power Research Institute, Stephen Specker, former CEO, now our Lead Director, I think that shows you the level of importance we believe in the value of EPRI in working across the whole industry to help develop these solutions. Believe me, we are on it like nobody's business. We run the nation's Carbon Capture Research Center. We run the International Carbon Capture Research Center. And there's other issues than just air.
We've talked in the past about water, we've talked in the past about land use. Southern Company is working across all these fronts in a way like no other to solve these problems to get to that future. So I would argue, look, we can all do better. We're going to work like crazy, work like dogs to make that future happen. But just saying it doesn't make it so.
We are going to have to spend real hours, real dollars, real people power getting there, and we're doing it.
I don't want to drag this out. I will mention that NextEra is building the world's largest battery and closing down 2 gas powered plants in Florida. So it seems like they're doing it rather than just rhetoric.
Well, they're building a battery. They're not doing research on that. They're using somebody else's technology. And here's my sense about batteries. Look, I have Tesla Powerwalls at my house.
I have solar panels on my rooftop, right? Lithium ion battery storage is not the answer. It's good. It reaches us up to a point, but it is not the answer. We need to have material science advances, technology advances to improve storage and battery capability.
And let's not forget the earth as a battery, whether it's pumped storage, hydro, Ks, compressed air energy systems, there's other things we can do. The fact that they're But it is not the answer. It won't get you to where you want to go.
You seem to be wanting an answer. Well, okay.
No, I don't want an answer. I'm just happy you're here, man.
Well, you have a point. The distributed solar would deal with being back online after hurricanes right now.
Yes, if you could find them. Here's the thing. We you know, you talk about micro grids. I love micro grids. There was yes, I was up here.
The statistic you should take home or write it on your refrigerator at home. This is good stuff. 80 this is according to this magazine, this site we had. 85% of the micro grids deployed in America are deployed by Southern Company, 85%.
Good start.
That's a I know. And we need to do more. It's 85% of a small number. We need to grow that big. And the notion of resilience, so let's think about Hurricane Sandy.
Solar power wouldn't have helped you there. During winter peaks, solar doesn't help because the winter peaks happen in the early morning hours where there is no solar energy being developed. It's got to either come from another resource or from storage of former solar capability. So look, when we think about the answer for a no carbon future, stay with the idea of the portfolio. It's not just renewables, even though renewables are going to be incredibly important.
We've got to bring to bear all the arrows in the quiver to make that reality happen.
You know I don't agree with that philosophy. However, I do want to reciprocate and say, you don't often see a CEO like Tom Fanning willing to stand up there and do this kind of interaction. And I know most of the other people who stand up here and ask this kind of question. We wouldn't be wasting our time if we didn't think Southern Company does have that biggest, largest private R and D operation and the scope and the ability, should it choose to, to get us to a real zero carbon future.
John, thank you for coming. It's always great, Sam. You're a great friend. Thank you. Let me get over here.
Yeah. We got somebody over here? Yeah. Right here.
Tom, this is Gordon James from Dallas, Texas. And he owns 2,511 shares.
And, Mac Gordon this morning from Dallas, Texas, pleased to have you here. It's great to be here as
a shareowner since 1981.
So I
want to get it off my bucket list to attend
a
shareholders meeting.
We'll come back next
year. I think we will.
Good.
My question is, in the annual report, it says that fuel expense also includes the amortization of the cost of nuclear fuel. And my question is, does that amortization include the cost of the disposal of nuclear fuel in the future? Is that an unfunded liability that we will incur?
No, it's we have regulatory provisions at each of our companies, Alabama and Georgia, that recover the cost of used fuel. And let me be very clear, this is another policy point I just want to make while you raise it. This isn't nuclear waste by any stretch of the imagination. It's not even spent fuel, which is what people used to say. When we remove fuel from the site, it's about well, remove fuel from production.
It's got about 70% of energy remaining as a point of policy. This is used fuel and the United States ought to pursue means to regenerate energy out of used fuel. France does it, why can't we?
Great.
Thank you, sir. Back here.
Tom, I'd like to introduce Mr. Charles Waits. He's from Newnan, Georgia. And he holds 4,000 plus shares. And he wants to talk about Plant Vogel and Kemper.
Charles, come on, man. My brother lives in Newnan.
It's a great town. You should move there.
Yes, I know.
Plus to retire.
Yes.
I'm a little bit rattled from the time I checked in this morning at the desk and the time I got to this room, I lost my cell phone. So hopefully some good person has got that cell phone and will return it to me. If you need to know the number, I'll give that to you. That would drive us crazy. But it's somewhere in the hallway or at the desk.
I don't know where.
Well, everybody, please help.
Thanks. I appreciate that. And I appreciate the opportunity talking to you and asking a few questions here. And I've got a few things I want to say, but when it gets down to the bottom, it's really only 2 questions for you. But back 2 years ago now, it's the first time I heard about the Kemper operation Mississippi, and I was surprised to hear about that.
And then as we know now, the whole Kemper deal seemed to fall apart and forced to close down or change your operation there by the PSC. And I applaud the Mississippi PSC because we don't have that kind of power out of the Georgia PSC. And the PSC is Florida has been mentioned already, and they don't seem to be doing a good job there. So maybe they're them and the Georgia PSC is sort of working together. But that's not part of what I really wanted to say.
That just happened to come up. But as the Plant Vogel operation started, first time I heard about how it was, too, was year before last when you mentioned that 1,000,000,000 of dollars had already been spent over there. And I made the statement then that from what you said, it sounds like we were chasing the dead horse. And I believe that more today than I did then, that we're chasing a dead horse.
What, by building new nuclear?
Well, let me finish.
I just
got 2 questions.
I just want to understand the context of the comment.
The context is we're wasting 1,000,000,000 of dollars.
Okay. On nuclear?
On Vogtle.
Okay. Great. Thanks.
1,000,000,000. When I talk about 1,000,000,000, we're talking about 1,000,000,000 now. And it gets worse. But anyway, I've been a shareholder for Southern California for 40 years, and I don't know if anybody else in this room, hopefully, there are a lot more in this room that's been a shareholder for 40 years. And so if raise your hand.
Who's been with shareholder more than 40 years? Not too many of you, okay? So you might not remember this episode here. We've been down this golden opportunity path before, and we were led by a Chief Executive Officer called Bill Dallberg. Who remembers Bill Dallberg?
You might not want to remember him. He came up with an idea himself about an opportunity here for us to prosper and through a company that he thought was going to be great. And at the meeting that we had in Atlanta, at the meeting now, I think
it was Excuse me, sir. I think that's your phone. Go ahead and get it to me.
Good. Thank you. Good picture on the front, being my grandson.
They're the best. I got a granddaughter first time. All right.
Let me get my notes together again here. I'm feeling better now. But anyway, this is back in the mid-80s when Dahlberg came up with this. And the meeting, best I can remember, I think, was downtown Atlanta at the Georgia Pacific building, I believe. And so we're sitting around waiting for the meeting to start.
And we heard a Harley Davidson crank up, and here comes Bill Dahlberg riding in a white jumpsuit on a Harley Davidson, and we knew we were in trouble then. But anyway, he talked us into going for a company, which ultimately came mirror. MIR was a trade name on the New York Stock Exchange. And anyway, like I said, if there's films of that, you will see me standing up telling you that was a bad idea, but nobody listened to me. And in 2,005, that company declared Chapter 11 reorganization.
Dahlberg walked away with $3,200,000 Marci Fuller, his trusted associate, walked away with $4,200,000 and her friend, close friend that she brought over from Delta walked away with $8,200,000 And that's here. I still got the newspaper, Atlanta Journal. All my information comes from Atlanta Journal. So what I'm trying to say is we've been down that path, and we don't want to go down that path again, or I don't anyway as a shareholder. A few years later, the Merit holders of stock, if you still held your stock, it became another company that spun off.
So we had Southern Company stock, we had Mira stock. If you held that stock, then after these other people walked away with 1,000,000, you got a piece of paper said you had nothing. You had no value. And that's not good for shareholders today or any time. So anyway, Atlanta Journal, ninetwenty three of 'eighteen.
2,009, Vogtle was expected to cost $14,000,000,000 and be finished by 2017. Now the project is expected to be completed by 2022 at a cost of 27,000,000,000 dollars 200% almost increased. That's a lot. That's missing it a long ways. And ladies and gentlemen is going to help me here.
Not just that one there. Here we go. This one is 222 of 'nineteen. As you know, some of the people after the Westin House went bankrupt, some of the organization that were supporting this project backed out, and the latest one, which was a big supporter, was Jacksonville, Florida. They want to get out.
They've had enough of this. They want to get out. I think there's some legal involvement that probably might not let them get out right now, but Chief might be able to come in on that and update us a little better. Threetwenty three of 'nineteen, the government is now wanting to give us loan guarantees of 3,700,000,000 dollars And 3,700,000,000 guarantee from the government is good, but Georgia Power and other other companies, they're going to eventually have to pick up that debt there. It's 1,000,000,000 of dollars over budget and with no clear path out as it appears.
Here again, Atlanta Journal. And last but not least, May 3, 2019, the Department of Justice is now looking at what you all did excuse me, I'm sorry. Department of Justice now is looking at what happened in Mississippi. They had government grants. They didn't have loan guarantees, and now those are being investigated.
And the thing that caught my eye as I read this recent article because I was not familiar with this either, but the utility, and I'm assuming they're talking about Southern Company, could be talking about Pacific Power. They visioned Kemper as a national showcase of how to turn coal into gas, ultimately generating power while also capturing carbon. So it was just a dream and a dream that turned to be a nightmare as it goes. So anyway, get down to the bottom for the 2 questions. Hopefully, the Department of Justice is on the side of the shareholders of the citizens.
As we know, the PSC and Georgias, they're not on our side. And the group that's sitting in front of me, as it turned out, they're not on our side either. They're protecting themselves. But anyway, the questions that I have is, number 1, if the Plant Vogtle expansion is such a great idea, why is it that we're the only utility company in all U. S.
A. That's doing it? And you said that made reference to that a while ago, and I didn't know you were going to say that. And also, if plant Vogtle is so important, then why can't it be funded by the U. S.
Government like the A bomb was in the early '40s? That was something that took a lot of money and a lot of time, changed the world as maybe your plant would change the world, but the government paid for it. The individual shareholders and your customers are not having to pay for it. And this way, we're having to pay for it, and we're going to be stuck with these long guarantees from the government also. That's my 2 questions.
Awesome. Thank you. Appreciate that. Look, let me give you just a wee bit of advice. Broaden your sources of information from the Atlanta Journal Constitution.
I would love to.
What you never hear reported, what other people will report is that when Plant Vogtle was originally ordered by the Georgia Public Service Commission, we thought it would be about a 12% price increase to the citizens of Georgia. As a matter of fact, our current projections show that the price increase will not be 12%, it will be around 10%. It will be less than what was originally considered by the commission. Now how can that be with changes in schedule and changes in cost? Well, we know that we entered into a commercial arrangement with people like originally Shaw, Chicago Bridge and Iron, Westinghouse, Toshiba, others, that as cost overruns took place, they took those costs.
And I must say that the federal government, even the Obama administration and the Trump administration, have been extraordinarily supportive. We got the support of government. And as a result of Westinghouse going bankrupt, Toshiba owed us $3,700,000,000 With the support of the United States government and a lot of hard work by people here at Southern Company and Georgia Power, we recovered $100 on the dollar, okay? That was pretty extraordinary. Not only did Westinghouse go bankrupt, their parent Toshiba was teetering on insolvency And we got paid 100%.
Further, we got support from Congress in extending production tax credits beyond what was an original date to an indeterminate kind of date once we go in service. That's worth a lot. Loan guarantees, we had extended. All the benefits of the guarantee payment by Toshiba, all the benefits of production tax credits, all the benefits alone guarantees go 100% to Georgia Power Company customers. That keeps the price low.
Further, other people absorbed those cost increases. I can't say because I'm not party to the inside information inside Westinghouse. They eventually went bankrupt. We know they absorbed a great big chunk of it. We also absorbed $1,000,000,000 accounting write off associated with an increased expected cost to complete last July.
For the benefit of customers, we took that and were able to preserve this notion that for customers sharing customer share of the cost of Vogtle, that it will be held below what we believe was originally ordered by the Georgia Public Service Commission for all these reasons. So you're not going to pay more. You're not sharing in this increasing cost. The paper will always say ballooning cost, but they never tell you that in fact customers will share less in the cost increase than what was originally contemplated. So let's be very clear about that.
Other people in this room, media is here, will report on that, I think, even handedly. Me do one more thing, national security interests of the United States and nuclear. If we ever really want to achieve a no carbon future, and I talk about the portfolio, the United States must have nuclear as part of the solution. For the amount of baseload generation, for the amount of small land mass, for the amount of energy intensity with no carbon effluent, nuclear must be part of the solution. It must be.
We are the only company or the most important company in terms of magnitude, supporting research and development on the next generation of nuclear. Beyond Plant Bogle, there will be another generation of nukes, probably in the '30s and the '40s, the so called Gen 4 reactors, molten chloride, salts, a variety of other technologies that we are working hand in glove with the Department of Energy to create real solutions to make that happen. So I think throughout this period, the company has taken an extraordinary amount of care to protect the customers of Georgia from any of these increases and scheduled delays. And we didn't know Westinghouse is going to go bankrupt. But when they did, we had the courage and vision to step in and finish it.
And since we have done that, I think we've demonstrated our capability to finish this work and to complete the milestones on schedule, on time within budget. That's what that rebaselining work that I talked about this morning concluded. Now let me caution again, given our track record, boy oh boy, this is hard work. And boy oh boy, I can't tell you that we're going to get there the way I hope we will, But we're working like dogs to make sure it happens. All right?
Did you have anything else?
Well, I didn't. Is it on? Yes. But I do now after what you said. I'm speaking in terms of shareholders.
You're speaking in term of the U. S. Government and other things like that. Shareholder benefit is we've been stuck in the $50 range, give or take, for 5 years. It's been a dead horse.
Whereas a company who's not doing the things that you all are doing, Duke Energy, they're $90 a share. And there's got to be a big difference there or big reason there for it to beat that kind of spread. Duke Energy is just is the only biggest one north of us that I know of.
Yes, sir. And thank you for that. I'll invite any comparison with Duke Energy you want to do. We have far more shares issued, and therefore, our share price is less than theirs, just based on the number of shares. Now they're a bigger company than we are.
I forget what the market caps are right now. We're about, I'm going to guess, dollars 55,000,000,000 $56,000,000,000 in market cap, and they may be around 60 to low 60s, something like that. When they merged, when Duke merged with Progress Energy, they became bigger, okay? But you shouldn't do a share price comparison of Southern at $54 versus Duke at $90 or $89 or whatever they are. There's a whole lot that goes into the difference other than just the share price.
So what you should do, in my view, is go back and look and we'll give you the information if we want to, Southern Company trading performance certainly recently. Let me just also correct one other piece of information, but that's okay. Southern just recently got into the 50s. We have been the number one performer in our industry this year. $54 I think we set an all time share price intraday yesterday and we closed at $53.97 or something like that.
We have been in the 40s. I think when I took over it was in the 30s. Southern Company hasn't been stuck anywhere. We've actually even despite all these very hard lifts we've had with Kemper County Plant Ratcliffe or with Plant Vogtle, especially when you look at dividends and everything else that we're delivering today, not only have we done pretty darn well, I think we have a pretty good foundation for the future. I appreciate you being a shareholder.
Thank you, sir. Yes, let me go over here. You got all kinds of us. You got Joyce over here. You got somebody else.
How are you doing?
Tom, this is Dave Vickers from Atlanta. He owns 4,000 shares and wants to talk about clean coal.
Terrific. Hey, Dave. How are you?
I think in retrospect, we had a project going on in Mississippi for clean coal. And several years ago, you mentioned China was interested in this. What were our lessons learned there? And were we able to monetize any of this to sell it to somebody else?
Yes. As it turns out, thanks for that. China was interested. We had a lot of people interested in the site. Let me just explain, remind everybody what happened.
We were the lesson learned effectively was we committed to a process in Mississippi. We committed to a fixed price construction of a brand new technology that we had invented ourselves. Unfortunately, only 10% of the engineering as we upscale the plant was complete at the time we entered into a fixed price agreement with the Mississippi Public Service Commission. And on that basis, they gave us an order to build. And so we had to build under that order.
And as we found out, the cost went way high. So that was a bet not well taken, I think. But we did learn a lot. The science in fact worked. The real issue that happened, I think, with Plant Ratcliffe at Kemper County was the idea that when we initiated that project, gas prices were really high.
And what we were able to do is take a native Mississippi resource, lignite, run it through a process that's proprietary to us, gasification, and in a circulating fluidized bed technology, and in fact it worked, we would take that synthesis gas, we would remove ammonia, remove carbon dioxide, put it into a pipeline, use the CO2 to push out more oil in the ground. That was called enhanced oil recovery. With the remaining synthesis gas, we've run that into a specially designed gas turbine to create electricity. That would have produced around round numbers, 500 megawatts of electricity. Where we ended up with the Mississippi Public Service Commission, we have removed the coal and the gasifier from the process And now we just produce a natural gas fired electricity generating facility.
It produces wildly successful, high reliability, about a third of the kilowatt hours consumed at Mississippi Power. So it's working today. And I want to say it's 780 Megawatts, 800 Megawatts, somewhere around there. So it actually produces more electricity. So it's actually working really well.
We took our lumps on the gasifier and the carbon capture back then. What was the other part of your question, I'm sorry? That was it. Okay. Cool.
Thank you. Over here.
Okay. I have Ms. Briante McCorkle from Atlanta. Not sure how many shares she owns, but she wants to talk about Georgia Power IRP and low carbon targets.
Priyante, an old friend, how are you?
I'm doing great. Good to see you.
Good to see you.
I'm in a new role now. Yes. You are. Yes. Yes, I'm the Director of Georgia Conservation Voters.
I'm also a shareholder. It's not thousands of shares, it's just a share, but I think that matters. I just wanted to say that I'm excited to see you again, but I'm also very excited about the commitment that you all have made to slash carbon emissions by 2,030. That's really exciting. It's exciting for me.
It's exciting for my 3 year old. It helps ease my anxiety about her future and that of many other children as well. So my question really comes down to Georgia Power. And I'm concerned about the upcoming integrated resource plan. Right now, John mentioned earlier that there are only 1,000 megawatts of proposed solar in that plan.
And we've heard testimony that suggests that if Georgia Power would increase that investment, that it'd be good for the company, it would be good for consumers, it's good for the environment and it's good for rural communities that need the jobs and the property taxes. That and also Florida Power and Light announced that they were going to add 11,000 megawatts. So I'm concerned that that means that Georgia is going to fall behind North Carolina and Florida when it comes to the amount of solar we have installed. So my question really comes down to sort of the $1,000 in the plan. I know you said you want to sort of wait for that process to play out and see how that works.
But I really wonder how Southern Company is going to be able to meet its commitments for a low carbon future, if not through the work of its subsidiaries. And my secondary sort of part of this question is about leadership. And I know that Southern Company is leading in the research and development front. But in my time working on clean energy, there's been lots of research and development and not a lot of execution and implementation on clean energy when we know that there are solutions and options on the table that keep being left on the table. So I want to know outside of research and development, how Southern Company is planning to lead the industry in this area?
You bet. Thank you. And again, let me just repeat, the Georgia process, we have 1,000 out there for solar. Let the process work out. I just ask your patience there.
Watch and see what happens and let the process work, right, Paul? In terms of other things we're doing, good heavens, we probably didn't tout it, it was in the film. But we're doing all sorts of this whole thing of changing this venerable 100 year old make, move and sell model to distributed infrastructure. And that's more than solar panels on your rooftop. That goes to on-site generation in whatever form makes sense, whether it's micro turbines or solar or fuel cells or whatever, included with micro grids and proprietary switchgear and a variety of other things.
I really think that could be a game changer as time goes by. In other words, as this model starts to change because technology enables it, because customers require it, I think we're the leader right now, although it's very small. I view it as an option to be able to fill that void as it emerges and really supplement kind of what may be a diminishing, what I call, age of big iron. When we think about 85% of the market share of micro grids, nobody else has that number. We're doing that.
When you think about some of the new stuff we're doing, we're working right now with Bloom Technologies to evaluate carbon capture on fuel cells. That way, somebody said, we could use natural gas and still be no carbon. There's a lot of interesting things going on that we are leading right now. And I'm telling you, I'll put up, put us up against anybody in terms of not only looking at the bench research, the commercialization curve, but also putting into play real solutions for the future. Good stuff, okay?
Thank you. Hey, there was one other thing over here that I didn't answer and I now remembered it. You asked about the Chinese.
Yes, the Chinese.
Yes, let me make sure. We looked at all kinds of people for could we sell that gasifier and all that technology. We found economically we were better off taking the tax deduction for writing it off. The tax deduction was worth more than the commercial value. We still evaluate different things to do on-site and we're still thinking with people like DOE and others about what may happen.
But anyway, I want to hit that Chinese thing. You did raise that. I want to answer it. Yes, and then we'll come over to you.
Tom, this is Joyce Lanning, Birmingham, Alabama. She owns 155 shares and wants to talk about transparency in decision making.
Fantastic. Joyce, dear friend, always glad having you.
You know, Tom, I met Tony early, and he said he's on the Ford Board and that they have a virtual meeting. And I want to thank you for your hospitality and your ability to field questions like the ones you've gotten. And I'd like to give a round of applause to Southern for this kind of treatment of your shareholders and staff.
Well, we learn a lot too. We enjoy it. Thank you.
I would just say this is a whole lot more fun than doing it digitally.
But
I think so too.
Anyway, thanks as always for your remarks. I got several observations followed by a question.
Yes, ma'am.
And hearing all this discussion about public service commissions and especially about Georgia Power's integrated resource plan and the stakeholders and the input and the discussion and the information that's out there about what is planning for 20 years in the future. Guess what? Any of you from Alabama? Not a whole lot of us. But in Alabama, you can't the IRP is being developed now, but you can't see it.
You can't get near it. You don't know what's in it. You don't know about the assumptions. And fortunately, we've gotten a little bit bigger after the fact summary, but that's as close as we get. That is, in my idea, it's a little bit of a problem.
And I'll say a little bit more about that later. Uh-oh, you know what, it just went away. Anyway, I'd also like to thank you for that goal that we've talked about, the aspirational goals for 2,030 and 2,050. I would like to say that, I'm not sure that your operating companies are quite fully apprised of what that means for them because one thing I saw is in Georgia Power, they are on record as saying the addition of renewable resources as proposed in the 2019 IOP may contribute toward Southern Company's carbon goals. However, these goals did not change Georgia Power's IRP planning process and did not influence the target amount of renewables proposed.
And Alabama Power also, they don't have anything like this where you can actually, interact like that. But at the one meeting a year where they do speak, they did say that their planning did not take into account those things. So there will be a trickle down effect, I take it. But there probably needs to be some way of communicating how important that is to you and a what you're making of it. So and I do want to brag well, sort of brag about Algonquin Power a little bit.
I will say that it has, as you know, very high where's Mark Crossright? Very high customer satisfaction, And it's got low outage rates and has been a consistent earner. It hasn't contributed to parent company debt as have maybe its sister operating companies. And it may even be an outsized source of strength for Southern Company. At over 13% return on equity, the rest of the country is under 10% usually.
Maybe Georgia Power is a little bit higher. But it's had that for years, and it's done so without the bother and expense of a rate case. They haven't had a rate case since 1982. And so our PSC is a little bit different from those. And since 2013, it's had one of the highest surcharges for solar or any self generated electricity If you're still going to be connected to the grid.
And think, oh, if you have a 25 kilowatt array on your house, it's going to cost you $25 a month for this standby connection charge. Y'all, this is a huge issue all over the country. It's been hotly debated in public. Guess what happened in Alabama? It was asked for online December 20, 2012.
It was voted on with no discussion at all on January 8, 2013, over the Christmas holidays and New Year's. So this issue of transparency is one that is really important to me, and you know that from what I've been doing in the past. But your point has been made that your operating companies are free to respond to their legislative and regulatory environment. But consider that, at least in Alabama, it may go the other way around. And the company may be influencing the regulatory and legislative environment.
And so as they have been the powerhouse in economic development from the get go. And that kind of power has repercussions in our state. So I would say that I agree with you wholeheartedly, and thank you very, very much for the research and development commitment. You stand alone, I think.
We do.
Yes. And keeps going away, y'all. And so but you are facing, as you know, a very turbulent environment with many changes in the business model coming down. And so my question is this for Alabama, at least. I wonder if the closed decision process in Alabama, which is very closed, may backfire as the paying public is required to adapt to these changes with no avenue of participation.
So my question for you, can you comment on the value of transparency and a more open process for addressing the future generation mix and distributed generation options in Alabama? Hey, look, every
one of our states has a different process. Hey, look, every one of our states has a different process. You know, we like to say all politics are local, we believe that and we believe that's the way to get the best results. At the end of the day, what I look at is best results. Look at the results of Alabama Power, highest level of customer satisfaction, lowest rates, best reliability.
It's hard to argue they're not doing the right thing. The Commission has been exceedingly constructive in solving very complex long term issues, as has Georgia, as has Mississippi, etcetera. Now here is the other thing that I want to brag on our commissions a little bit also. As apart from the parts of the United States that have quote unquote deregulated and they have created what they call organized markets. They are the most disorganized things that I can imagine for our industry.
They do not permit planning on an integrated basis among and between transmission and generation, and they don't permit long term perspectives in solving these very complex energy supply problems. We do. And I would brag on our political structure, I would brag on our integrated, I mean, vertical business units. They do a great job, the commissions do a great job. They do them differently.
Joyce, I can only look at the results. Alabama does wind, they were one of the early people in importing wind. And so they're doing the right things. I think Georgia is too. So look, Mississippi as well.
I mean, so we work hard and I know they look different, I know that frustrates some people and I know you're frustrated with that. But it's a process that at the end of the day works. And I think Joyce is we have these dialogues, as we have this open line of communication. One of the other things I just want to mention, this kind of idea that, oh, man, well, I can pick out a quote by somebody or some testimony says, oh, well, this didn't have any influence. Look, I can assure you we have a Southern Company Management Council.
And believe it or not, Mark Crossway is a prominent member, so is Paul Bauer, so is Anthony Wilson, so is Kim Green, Mark Landrup, Chris Womack, I mean, the whole team here, Kaczynski, I mean, everybody is. We have set a goal, low to no carbon. Everybody knows that's the goal. Everybody works that strategy long term. The reality that you're seeing and I think what shows up in these excerpts from testimony are recognitions of the tactics that is, I've got to deal with today and I've got to deal with this commission and I've got to figure out ways to advance the ball.
It's the difference between strategy and tactics, and that's okay. Allow them the flexibility to get their work done with their commissions in the best interest of their customers. We'll get it done. Thank you. Appreciate it.
Over here and then we'll come over. Well, yes, and then we'll come over there. Yes.
Tom, up next Doctor. Scott Preston of Lawrenceville, Georgia. Doctor. Preston holds 10,312 shares. He'd like to discuss Mercy Investments in offshore wind power.
Fantastic. Scott, I wish you owned 11,000. Thank you for that.
Well, I don't own them. I'm here on behalf of Mercy Investments.
Fantastic. Thank you. You're welcome. Thank you.
I appreciate the opportunity to ask you a question.
Yes, sir.
I appreciate Southern Company's plan for low to no carbon by 2,050. Based on recent reports and events, however, I would like to see Southern Company try to accelerate its efforts. In particular, I hope to see offshore wind added to the energy portfolio. It's used extensively in Europe And there's a new generation of very tall turbines coming to market that may be a solution applicable for Georgia's coast or perhaps in partnership with nearby states. This would give more flexibility, reliability and resilience to the energy portfolio.
So I wondered what are the plans to include offshore wind in the future? Thank you.
Thank you. That's a great question. So I think day 1 when I started holding is I took job and started engaging the shareholders. I've always expressed that I've been much more bullish on solar than wind. My issue with wind is, where the great wind resources are, you think about the Desert Southwest or the Upper Plains or wherever, there are no people.
And so what you got to do is use, generally speaking, significant transmission, long haul transmission systems to move the energy resource from where the energy originates to where the load is, where the people are. And that inherently is bad electricity design. You'd rather just in an optimal sense, have the electricity generation right near the load center. Solar lends itself to that so well. But I do say all the time, wind is exceedingly important for America.
It is a wonderful resource of energy and we've got to take advantage of The Southeast is not as applicable to wind as, say, the Midwest, Texas and other places, just because we don't have much wind flow. In fact, the deals we've done in Georgia and in Alabama, I want to say we import the wind from both Kansas and Oklahoma. So think about that infrastructure. And that infrastructure is not particularly green. Let's be clear.
So I'm all for it. Even before, gosh, I got any management position, I was still very young with the company. We've been looking at offshore wind in Georgia, off Savannah. And we continue to look at it. The challenge of offshore wind is again compounded by this idea of transmission back to the load centers and in the Southeast anyway, resilience against hurricanes.
I agree with you 100%. And I agree wait a minute, let me be very clear. I agree with your general thrust of question. And I hope we can accelerate it too. And I hope we can find ways to make wind more viable in the Southeast.
We just don't have the wind flows. But if we can, great. I agree with you also on technology developments. They are now doing ultra high, ultra long wingspan wind turbines. I get that and we're looking at it.
We have research and development people that are evaluating that. I guarantee you, if it makes sense for us, we will do it. Thank you. Thank you, sir. We're going to go back here.
I'd like to introduce Ken Kaplan from Seminole, Florida. He owns 2,100 Shares and wants to talk again about Florida Utilities and Southern Company.
All right, Ken.
Well, it's been
a long time, Tom.
But hopefully a really enjoyable time.
I have. I don't think that I'd like to be up where you are. Oh, no, no, no.
This is fun. Good stuff.
I have heard during this meeting a fair amount about 2 different Florida utilities, Duke Energy and NextEra. I am a holder of shares in both of those. I really believe that both well, I believe that NextEra is a fine company. I'm a customer of Duke Energy. The little town where I live is in the Tampa Bay area.
Most people who don't live in Florida can't place it. But that's where it is. And we are in the heart of what used to be Florida Power's domain. The Duke Energy is number 1, probably in the nation in one what is becoming a very significant area of power generation. It is unfortunate that I cannot detail that significant venue of Duke Energy because my son, the lawyer tells me that if I did, I would be liable for slander.
But they are definitely number 1 in that area. And 5 years ago, I decided that even though I didn't like them, that they were ensuring their own success for the next 20, 30, 50 years and that I had better join them. So I did. Now I don't think Southern should go this route. I'm very proud to say that I believe that you're one of the most ethical, if not the most ethical among all power generators in the country.
And I like that. NextEra is also a company that I like. It is largely a renewable energy type of utility. And I'd be very interested to know the details, well, not all of them, but some of the details of your sale of assets to NextEra to know does Southern Company own any part of Nextera now? And if so, what percent do you own?
No. We don't own any of Nextera.
That's tough because they look like a going concern.
They're just very different than us. As you said, something like I'm probably going to get this wrong, you should ask NextEra, but somewhere around half of their earnings come from their renewable portfolio. We are much more centered on integrated regulated state franchises, whether they're electric or gas. 95% of our earnings come from those kinds of businesses. It's very different.
And I think NextEra valued that in Gulf Power particularly, which is why they were willing to pay so high a price.
Okay. I have a second question. When you were talking about Vogtle 34, The at the end of that, you made an impassioned statement concerning the future of nuclear in this country.
You bet.
10 years ago, I would have agreed with that completely. 5 years ago, I would have wavered. But right now, I am wondering and I have not seen any figures. You must know them by heart as to what is the cost of building any of the renewable energy generators as opposed to building a nuclear generator.
You bet. Thank you, sir. You want me to hit that?
Yes. Go right ahead. And I, like all of the others here, have been really thrilled at being at this meeting. You've done a wonderful job.
Oh, no. Thank you. Thank you. Appreciate it. Steve, raise your hand real quick.
Steve, you may want to chat with Steve Kaczynski. He runs our nuclear program. A terrific guy. He's brilliant. I think he's the best nuclear guy in the industry.
Here kind of is the simple answer to a very complex question. In the future, the next generation of nuclear may be able to be built where you minimize or don't have the risk of a meltdown. If you don't have the risk of a meltdown, then you may not have to add all this containment structure and all this other stuff that goes into making the capacity cost of nuclear so expensive. The other reason that I think nuclear is so sensible is, as a part of a portfolio, even though renewable costs have come down, I can remember saying, gosh, when I first got here, I was talking about solar. I said, oh, by the end of the decade, solar may be competitive.
Well, you know what, I was wrong. It accelerated and sure enough, it's competitive today. But it doesn't run when the sun doesn't shine. Wind doesn't work when the wind doesn't blow. And wind has a profile that really works in the shoulder parts of the day, afternoon, evening and night, not particularly during the hottest part of the day.
What you need is the whole portfolio. Plant Vogtle 3 and 4 from an energy standpoint, when it produces energy, will produce energy at about a $0.01 per kilowatt hour, okay? That means it's going to run and it beats every renewable from an energy standpoint. Its capacity cost is very high. But because of that, because of its resilience in all kinds of weather, nuclear will be a dominant solution in the portfolios for the future.
And it's up to America to find a technology pathway to make that a reality. I am a big believer in nuclear for the future. And we got to do things necessary to keep nuclear alive today in the different markets around the United States. I really think it's important. Do we have anything over here?
Okay. One more. Yes, let's do over here and then we'll come back to you.
Tom, I have Eleanor Hand of Atlantis. She holds 405 shares and would like to discuss PACE, Pay As You Save.
Eleanor, great to see you again.
Thank you. It's great to be here.
Thank you.
I have found these meetings so interesting and informative and awesome. And I thank you for taking all of our questions.
Oh, absolutely. Delighted to do it. Thank you.
So I have a dream. I have a dream for my grandchildren and my grandchildren's children. This is a dream for them to raise families in a regenerative, environmentally sustainable, socially just and fulfilling world. I think we probably all share that dream. I would like to encourage Southern Company to dream, to be creative and innovative, and to produce and deliver electricity in a renewable, non polluting, environmentally sustainable and socially just manner.
And I too applaud our company for reducing for committing to reduce CO2 emissions in 2020 to half of what they were in 2,007. And I applaud the pledge to a low or no carbon emissions by 2,050. I was going to ask you why you couldn't pledge to the no carbon, but I think you've given that question a lot of answers. Energy efficiency is the most cost effective $0.02 to $0.04 per kilowatt hour way to cut CO2 emissions without building new infrastructure, without wondering whether the sun is going to shine or the wind is going to blow. And energy efficiency programs will help our company manage peak demand loads.
Energy efficiency is non polluting and renewable. Energy efficient programs will contribute to the dream of being a socially just company. Southern Alliance for Clean Energy released the 2018 Energy and Efficiency in the Southeast report. This report found that in 2017, utility administered efficiency programs cut CO2 emissions by 1,000,000 tons. However, only one major utility in the Southeast exceeded the national average for annual efficiency savings.
This company was not Southern Company or any of its subsidiaries. There is a creative and innovative way to encourage energy efficiency and thus bring Southern Company and its subsidiaries above the national average in energy savings and CO2 emission reductions. This program is called PACE, pay as you save. Renters and low income households have faced financial financing barriers to making energy upgrades to their properties. Pays clears the biggest barriers to financing because it does not require loan or long term leases or liens on the property.
With pays, the utility invests in cost effective energy upgrades at customer sites. The customer pays nothing upfront because the utility pays the installer. Using a tariff, the utility puts a fixed tariff on the customer's bill. That is less than the estimated savings on the energy bill. Until the utility's investment is recovered, the tariff stays on the bill and transfers to future customers at that site.
It is possible that a major utility could rate base the administrative costs. Poor people pay a lot more for energy than the rest of us because low income housing is very leaky. If they rent, neither the landlord nor the tenant has an incentive to make the house tight even if they own access to extra money even if they own, access to extra money is tight. To be able to finance upgrades on their bill while reducing their bill makes great sense. Do we really want to be selling a product we know our customers will not use because it leaks right out of their homes?
An efficient home is healthier too. When people lack the right equipment, they may be heating with an oven, using drop cords to portable heaters and such. We can help. I understand a pilot PACE program is being considered by Georgia Power and the Georgia PSC. I want this pilot to succeed because if it does, then it could scale up across the Southern Company territory.
Georgia Power Company and thus Southern Company would be among the 1st investor owned utilities in the nation to do this unbilled funding of efficiency. Many of the co ops have been trying this already. C, we can be innovative. It seems the administrative costs that have been requested from the PSC are excessive for the number of properties in the pilot. Thank you and your subsidiaries for addressing these concerns to establish a PACE program that is consistent with other PACE programs in the nation.
There are EMCs in Georgia designing PACE programs, and many are watching these exciting pilots to see if it alleviates the energy burden to our customers. Next year, when I enjoy your compelling video, I hope to see a photo for energy efficiency among the slides, maybe showing you installing insulation in a home in a lower income neighborhood. Awesome. Will you offer pilot programs in other Southern Company subsidiaries? Will you and the Board pledge to make this pilot successful?
Will you assure that it's successful enough to become a strong part of our company's subsidiaries' energy efficiency programs? And it will be a great way to help your customers be better and feel better.
You bet. Thank you. That's wonderful stuff. And I agree just about with everything you've said. Look, I we are pursuing this pilot.
I guess it's at Georgia Power, right? And, boy, anything that makes sense, we will. I have said I haven't said at this meeting, but you all have heard the litany before of 47% or so of our customers make less than $40,000 a year. And you are 100% right. Look, I agree with what you said.
When you think about of their household disposable income, energy share is a big deal because of all the inefficiencies you mentioned and because we tend to have extreme heat and therefore people want air conditioning. And so that bill is important. The cleanest kilowatt hour is also the one you never consume. And so therefore, all this stuff you say is right. I'm with you.
If we can figure out ways to effectively do energy efficiency as part of the portfolio mix, What I'd like to say is, it's nuclear, it's 21st century coal, it's natural gas, it's renewables and it's energy efficiency. I agree. And in fact, Jeff Burleson is here. Where's Jeff? Raise your hand.
There he goes. This guy does our system planning. When I was COO, we included as part of our portfolio, a space, a segment for energy efficiency in terms of negative capacity. So it's very important stuff. Let me add one more thing in support of what you say.
When we bought AGL Resources, Drew Evans here is now our CFO, but he was the CEO. And before he became CEO, you were the CFO, so you're back again. But he was the CFO of AGL, then CEO and now CFO of Southern, this guy. He championed across AGL, I think they saw at some time in your corporate life reducing sales of therms. And they changed their rate structure to be a much more fixed versus variable kind of rate structure that the utilities lived under.
And I think it benefited both customers and the company. So there are rate solutions that make sense for us as well. I know those have been pitched in the past at various times, but we have to work with regulators to make sure that everybody likes what we're doing going forward. Boy, I'm with you. It's an important issue.
And I forget the phrase people use now, but energy justice or something like that. As we think about solutions for the future, please understand, we are very mindful of the impact to communities and individuals as we go forward. That has got to be part of the equation. It is not some spreadsheet. This is a very organic community driven issue that we deal with.
So thank you very much. Anything else? Got one back here and one right here. Go ahead.
I'd like to introduce Alice Duncan Raritan from Palatin, Tennessee. Not sure of number of shares, but she wants to talk about Vogtle Waste.
Terrific.
Actually, that was Gallatin, Tennessee. Gallatin. It's about 35 miles northeast of Nashville.
Awesome. Well, thank you.
And Gallatin is not far from a very, very small town called Hartsville, Tennessee. In Hartsville, Tennessee, there is a nuclear power where TVA started their nuclear power plant production and it fell to pieces, it is there. Hartsville, Tennessee now is probably the most depressed little town that you can see. I was there just recently and went to find a restaurant and the leading restaurant is McDonald's. So that's it's really bad.
It's really bad there. In saying that, I must say, I am in favor of nuclear power. I'm sorry TVA fell apart with that. But thinking of the nuclear power, you were saying something about the generated energy that is passed and it's not there's still energy and not waste of what is sent off.
That's right.
What are you all doing with the waste that this is going to produce? The use
of steel. Is there
someone yes. What is is there going to be research into what are we going to do with this waste?
Yes, ma'am.
Because we have to think about that when we are doing nuclear power.
You bet.
That is my question.
You bet. All of our power plants in the Southeast have sufficient on-site storage, okay? So basically, they are stored right now in these gigantic concrete casks on-site. And so for the foreseeable future, we have on-site capability to store. Now the longer term solution would be things like the storage facility, Yucca Mountain out in Nevada and a variety of other things.
I think politics has gotten in the way there. And I think some of the scientific study requirements have been kind of over the top, like we got to make sure that they'll survive 100000 years. Lord knows where you and I will be in 100000 years or our children or our grandchildren. But look, I think there are lots of interesting solutions here. Doctor.
Ernie Moniz, when he's been a real proponent of this kind of technology, when he was Energy Secretary, he spent a lot of time thinking about what do we do with used fuel. I think there's a lot we can do and I think there's a lot that really benefits America in this regard. We continue to work on the research and development. Right now, we have to get legal and regulatory barriers removed in order to pursue this.
But we do have someone looking
Oh, absolutely. Oh, yes, sir. Yes, ma'am. We sure do. Thank you.
Had somebody over yes, yes, sir.
Tom, I didn't fill out a call ahead of time, but
can I
still ask your question? Oh, absolutely.
I'm Terry White from Smyrna, Georgia.
And thanks for your service. Thank you.
I'm commenting on something that was in last weekend's Wall Street Journal. You may have seen the article. The article equivocates between not knowing whether they're reporting on flimflam or a breakthrough in science that will be colossal. And it has to do with energy.
Magnets? Magnets.
A man in the Midwest, who I think they said was from Wyoming, has invented some sort of a machine that can capture a surplus of energy. And I don't know the science, but because Southern Company is forward looking and the emphasis today has been on the future, if there is something to this, I would hope that Southern Company would be on it right from the outset. And I'm confident that you would be. Having said that, what's my question? I don't really know the question, but I can wait a year or 2 for the answer because by then we'll either know if this is flimflam or rotating and spinning magnets in conjunction with a flywheel can actually capture a net surplus of energy.
If it does, we're on to something new, and I would hope that Southern Company would build it into its energy portfolio.
Thank you. Thank you so much. I got to tell you, it's fascinating you raised that question, a great friend of mine. Southern Company is the energy sponsor to the Aspen Ideas Festival. And so you may know, there's the right side of the equation and left side of the equation.
Aspen is a very interesting event that we help sponsor. It is certainly away from our echo chamber. And I've gotten to make friends with a guy named Robert Potter. And sure enough, he sent me that article just last week and said, hey, have you seen this? What about it?
Land trip, I think I sent it to you. And we've got our R and D people looking at it. Look, the technical people are so far smarter than I am. They're incredible with their knowledge and their capability. We are evaluating that.
My sense is, it is a flywheel type concept, where you store energy and hopefully get it out. Whether you create energy or not would seem to defy the laws of physics. So let's see. Let's keep an open mind. We have our research folks on it and we'll get back to you on it.
If you want more information in the future, Landryp, raise your hand. There he is. And we have he can point you to the guy and we'll connect you. Lantrip, raise your hand again. There he is right there.
Connect you with him. He'll put you in touch with the research guys that are working on exactly this idea. We are on it, already have been on it. And give Robert Potter a call. I hope he's listening anyway.
I'll see him in Aspen again this summer. Anyone else? Oh, we got another.
Tom, I have Nikki Luke of Athens, Georgia. She's here representing Mercy Investments and has a question about the no carbon energy commitment.
Mickey, welcome.
Thank you very much for having me and thank you everyone for your attention this afternoon. I think we've ticked into afternoon at this point. But I had the chance to meet you this morning, and thank you for that opportunity and the opportunity to be here. I'm Nikki Luke. I'm a doctoral candidate at the University of Georgia.
And I want to thank you for all of your work, but also second the concerns of Ms. McCorkle and Mr. Quarterman and Ms. Hand, who already spoke this morning, about the low to no carbon commitment and how I would love to see it be a no carbon commitment in thinking about the future of the Southern Company. I was really excited to see and I've learned so much in your presentation so far this morning, excited to see your emphasis on the work that the workers of Alabama Power and Georgia Power did last fall when the horrible disaster of Hurricane Michael hit.
And I really second thanking them and thinking about the work that they continue to do on the ground. The year before, we had Hurricane Irma, which put the University of Georgia out of school for 2 and half days and affected the UGA Marine Institute on the coast, flooded the community of Hog Hammock. And these are disasters that we see again and again and again, whether it be the polar vortex, hurricanes, etcetera. I'm 27 years old, and I know that this is something that will carry forward for the rest of my life and is a very important issue for my generation. And thinking about that and the community where I'm coming from today, Athens, Georgia, which has an average population of 26 years old, home of UGA.
I had a late last night late night last night because our city council unanimously adopted a 100 percent renewable energy resolution to run all municipal operations on 100% clean and renewable energy by 2,035. And the sustainability manager for our city, Andrew Saunders, spoke before the Georgia Public Service Commission, last week, I guess, maybe 2 weeks ago, and said that Athens is already putting money behind that. There's a $15,000,000 initiative that's in this last proposal for this year. They've implemented distributed generation, and they've been lucky so far to have the support of Georgia Power. But the IRP, which has been touched on already today, they don't know if that will continue.
And there are things that they want to partner with in the energy company with distributed generation, with energy efficiency, as Ms. Hand mentioned, and other ways in which we can build a clean energy future together. And so I guess in thinking about the steps that Athens just took that Augusta, Atlanta and Clarkston, Georgia have already taken and the rest of the Southern Company territory. How will Southern Company be a partner to municipalities and counties that want to move faster and further in working towards that carbon free commitment.
Oh, sure.
Good to have you. Thanks for
your time.
Yes. Oh, absolutely. And thank you for being here. Appreciate it. You're doing important work.
Look, all of our companies have commitments to their communities. We have local people that work with folks like you in the different municipalities and the counties and however the government structures are in the states that we serve to advance these ideas. And I guarantee you, we'll be supportive of everything that makes sense. And so what we want to do is have a constructive dialogue to say, look, if you want to go 100% renewable for the city of Athens, Georgia, we will work with you and we'll figure out ways to try and make that a reality. What we have to do is, at the end of the day, for the Southeast and for the United States, look at a full energy portfolio that makes sense.
I think we also will invest in technology solutions that will change what the portfolio may look like, okay? I still believe, as I've said before, in order to get to no carbon futures, okay, You could put Athens on 100 percent renewables. But please understand, there is carbon underlying some of your renewables, transmission lines associated with wind or the metal fabrication associated with supporting solar or whatever, okay? We have to think long supply chains, what matters. And if let's just say and I know you're not saying this, but let's just say, Athens says, oh, well, I want to go 100% solar.
Therefore, I'm 100% renewable. What do you do when the sun goes down? Well, okay, so maybe you rely on batteries, all right? Well, let's think about the adequacy of that or what is my storage solution or do we rely on the rest of the grid? What we have to do at Southern Company and Alabama Power and Georgia Power and Mississippi is look at the whole solution and the whole portfolio for the Southeast.
We're glad to accommodate whatever needs and desires any of our municipalities have in terms of advancing different parts of that portfolio. We're all in, we want to help. And we're all for solutions that make sense in the future. And if we can advance the idea of achieving low to no carbon in the future, My goodness, we will. I'm just telling you, green real deal.
I think you can't find a better company to work with in advancing practical solutions for the future. We're all for you, we support you and we will support you. But we also have to do it in the context of everybody in the Southeast, okay?
Thank you very much.
Thank you. And we appreciate your work. Yes.
Tom, we have Jeff Schoenberg from Atlanta. He holds 800 shares and wants to talk about PACE.
Hey, Jeff. Sierra Club, right?
Yes, I am the Board Chair of Sierra Club for Georgia.
You know what? I can't speak enough of Sierra Club at Georgia. You guys do a great job.
Speak more.
It's been fun. No, I'm serious. I'm serious. In the old days, I could tell you before I had this job, people thought that we should give the Sierra Club the Heisman. My sense is working with the Sierra Club, you guys have been really constructive and helpful.
And so thank you.
I appreciate you saying that. And I cannot thank you enough for the attitude you display here over and over with us. You have a group of people who are obviously interested and concerned in a positive way, looking for positive change. And the reason I wanted to ask a question is because I think there is one thing that was said here today that is an opportunity for positive change that's timely, that is available right now. I cite you back to Eleanor Hand's comments and her request, which was really to raise the PACE programs profile to you and to the Board, so that that program becomes a real priority, an immediate priority for what you guys are doing now.
It is not a question of finding a new technology. It is not a question of finding a solution that's a little bit hard to understand secondary and tertiary consequences. We know that the cheapest energy is the kilowatt that isn't burned and this is a fantastic way to combine efficiency and environmental justice, power justice to do equity and fairness that's good for the company, that's good for your shareholders, that's good for your clients. And I would ask you to take today to commit please to bring that subject into the forefront of your discussion with your subsidiary companies. Look for a chance to say yes at the IRP to a bigger PACE program, to a more and a more directed PACE program, the one that's proposed is fine.
It's really expensive the way you guys have priced it and that could be fixed. But the thing that it isn't, it's not directed to a place that has a really high energy burden. You should go looking for places in Athens is a really good place. There's some
Well, I'm a Georgia Tech guy,
man. Okay.
There are districts, there are places in the city of Atlanta where the energy burden, the average energy burden, including the place where the Public Service Commission meets, where the average is way above the national average. So people are paying 9%, 10%, 12% of their income on energy.
You bet.
And that would be a really good place to do a PACE program.
And listen, we realize the importance of making sure that energy is affordable everybody we serve. And that's why we have rate structures. You already have our commitment. Gee whiz, we're going forward, Paul. Paul Bowers, raise your hand.
There's the CEO of Georgia Power Company. We're already going forward. Listen, we will do any program that makes sense and is fair, okay? We're going forward with PACE. And I think we're starting down the road.
Please understand too that when we start a program, it's not just us. We can promote it and pilot it and everything else. We have to do it in concert with all the constituents and the agreement of the Georgia Public Service Commission, all of our Public Service Commissions across the United States. So, hey, we're in, we get it. And I think probably I don't know, I don't hear my peers talk about it as much as we have, the 47% making less than 40,000.
That is a real issue and really drives a lot of our thinking on clean, safe, reliable and affordable energy for all.
One of the reasons you get along so well with us is that, that drives us too. And we believe that you are trying to find solutions.
You bet. Thank you, sir. I'll throw you somebody else in that boat. We couldn't be here this meeting. Sister Barbara, Sister Pat generally are always here, wonderful, wonderful friends of ours.
They're always one that will remark on the need to watch out for folks on the lower end of the income spectrum. So thank you for that. Anyone else? Oh, gosh, we got 2 more. Wait, let me do you, and then we'll keep going.
This is like an S session.
Tom, next is Richard Alexander of Perry, Georgia. He holds over 100 shares.
Richard, welcome.
Well, thank you for letting me come back.
Thank you for letting me come back.
Oh, well, it's my pleasure to be here to hear one of the greatest speakers that I ever hear only once a year and that's right here and that's you.
Thank you
very much, Tom. And I also would like to thank all the employees for being so hospitable and respectful to us as stockholders, not just guests, and that we have a responsibility to know more about what we've invested in and what's going on. So thank them for their help. And I'd also like to comment personally that I am pleased with my expectations being exceeded for the performance that Southern Company has continued, especially with this battle in the nuclear building project. One of 3 little things I really needed to have a question about and it just keeps getting on my mind.
Earlier you mentioned repeatedly that it's more economical and feasible to have a power supply near the load instead of being transported all the way across the country.
That's the best electrical design.
Yes. So one of my question really is, if that's true, why are we building big power plants instead of smaller, less, conspicuous, less noticeable and more suitable to the security of our country. Why aren't we seeing or hearing more about smaller projects around the country?
You bet. Hey, in fact, if you want to watch it, it's out there on the Internet. I did an interview with The Atlantic in DC last December. It was picked up by Seaspan and I understand it's been replayed many, many, many times. In its conversation I'm having, where I describe how this age of big iron central station units, as you point out, may be eroding over time.
And in its place, maybe what I call distributed infrastructure, which is essentially miniaturizing, as you say, making, moving and selling energy. And I think what we're seeing right now, because technology is now enabling it, so it's speeding up and because customers are requiring it, particularly in this digital age, they want to have more control and some people want to have ultra high reliability that we're seeing this happen, particularly in commercial and industrial customers, not yet in residential, although we see some rooftop solar, like I said, I have it, Sam Buer, a buddy of mine has had it, some others. So I think this is a thing of the future. Our investment in PowerSecure back in 2015 2016 was a step to that reality, creating an option for us to win where the old days of Central Station may be going away. That won't go away completely.
Like I said, I always believe in nuclear. But I think this miniaturization will continue to evolve and grow. I think it will be important.
So it is in the thought process and thinking? Absolutely.
It was in thought process in 2015. It's one of those things, one of the hardest things you have running a company like this. You got to be able to do the duality of living in the here and now and in the future. I do a funny expression. You guys have heard this, you may groan when I do it.
But there's 3 kinds of companies in the world. There's birds of prey, moving prey and roadkill. And what that deals with is your ability to succeed in both the short and the long run. Birds of prey are able to prioritize long run and make short run work as a second priority. Roadkill, people like Enron, people talked about ethics here and thanks for the kind things you say about Southern Company ethics, but that's where you see it.
They can't make anything work and they fall apart. The people in the middle, moving prey, are people that are fascinating to me. These are people that chase next quarter's earnings, next year's earnings without regard for long term viability. I think Southern Company as well as any company I'm aware of balances long term issues with short term results. And we try and do the best we can.
Thank you. Thank you, sir. Anyone else? Yes, back here.
Tom, I'd like to introduce Sam Collier from Atlanta, Georgia. He owns 86 shares, and he wants to talk about a stable climate.
Sam Collier is one of the greatest living Americans.
You're so kind. So many people have been thankful, but I just also want to reiterate how great it is for you to welcome this debate and this probably beyond our capacity to pay attention.
Well, and Sam actually took the time and money to travel to D. C. And attend our stakeholder group.
And I think everyone needs to know that you engage with national level environmental organizations. So everyone is aware of what you're doing and given and you're listening to the national groups who are giving information from across the spectrum on how they're dealing.
I mean, it's a great very
fruitful dialogue. I just want to make 2 real quick points and it's kind of in furtherance of what we talked about early May in D. C. And that is, I have great confidence in you all's look at innovative technology, but 2 other innovations I want to mention and one of them is innovation around rate design and things. We have a big iron rate design in most cases and modeling is pretty much big iron.
It's like comparing which of the types of big plants you'll have. And so that what you just mentioned was perfect preface to my statement. Going forward, there will be everything will be decentralized a good bit. We're like Ma Bell before the cell phones. So how do we how does the company move into that era?
And I think we'll all, I think from the environmental side, we will relook at all our conceptions about what we oppose and what we like to meet the carbon challenge. So one is to make to do that kind of innovation around internal policies and rate designs and modeling and things like that. 2nd is, that the carbon challenges many sectors. I have the most confidence actually that under your leadership, the electric sector will do well in decarbonization. And I think as you lose load with efficiency, you'll gain load with electrification of vehicle fleet and we'll start to decarbonize through the electric utilities.
I think we'll decarbonize the transportation sector and hopefully a good bit of the industrial sector, because we've got to get to 0. The climate doesn't care where it comes from.
That's right.
And so I just want to kind of invite those two forms of innovation to be on par with technological innovation as you look forward to how to meet this challenge and help the rest of the world decarbonize outside of the electric sector.
Amen, brother. Thank you. Appreciate it. Appreciate you being here. Anyone else?
Fabulous. I think the Board is applauding more than anybody. Hey, listen, you can never say thank you enough in life. We never accomplish anything on our own. I think all the folks here that raised the good points and the points where we need improvement, I appreciate it all.
Everything is a gift, and we try to listen carefully. We try to improve. We try to be better. One of the things I try to instill in our own officer corps and in the thousands of people who make thousands of good decisions every day is this notion that past success is very often the harbinger for future failure. You get complacent, you just kind of develop inertia.
I think one of the things that we have to do as human beings, as leaders of an enterprise, like Southern Company, as citizens of the United States, whether we're dealing with earnings or the environment or safety or whatever it is, is have this burning desire, and it's got to be a burning desire. It's not a want to. It's got to be a sense of urgency to make today better than yesterday and tomorrow better than today. And I hope what you understand is that we are committed to that. We are not perfect.
We are darn good. We can be better. And we will work hard on your behalf to be better tomorrow and next year. I look forward to seeing you then. Take care.