Southern Company (SO) Forges Ahead By Cutting 52% Emissions in 2020

The Southern Company SO announced that it had a 52% reduction in greenhouse gas (“GHG”) emissions in 2020 compared to the 2007 level. Notably, the utility surpassed its goal of cutting GHG emissions by about 50% by 2030.

Although the reduction in emissions intensity might fluctuate around 50% over the next few years based on certain factors; Southern Company intends to sustainably achieve a reduction in the amount of GHG emissions by 50% or greater by 2025.

The significant reduction in GHG emissions indicates the minimal use of the utility’s coal-power fleet, which is partly affected by low demand, resulting from mild weather and the pandemic. In 2020, coal contributed 17% of the utility’s annual energy supply, whereas renewable increased to 15%. Notably, this reflects a significant decline from the 2007 levels, wherein 69% coal and 1% renewable were used.

Southern Company's reduced emissions represent the utility’s nearly reached goal of transiting to a decarbonized energy system. In the future, it will continue with the transition from coal, the utilization of natural gas to enable fleet transition, increase the system's portfolio of zero-carbon resources, enhance energy-efficiency initiatives and increase investment in clean-energy technologies.

Southern Company has made significant progress in reducing emissions from the system’s electric-generation fleet and commits to working toward a net-zero future, while addressing the needs of customers and investors. Importantly, the utility plans to achieve carbon neutrality for its operations by 2050.

Company Profile & Price Performance

Headquartered in Atlanta, GA, Southern Company is one of the largest utility companies in the United States.

Shares of this utility have outperformed the industry in the past six months. Its stock has gained 6.9% compared with the industry’s 3.5% growth.

Zacks Rank & Stocks to Consider

Southern Company currently carries a Zack Rank #3 (Hold).

Some better-ranked players in the utility space are Otter Tail Corporation OTTR, NewJersey Resources Corporation NJR and Veolia Environnement SA VEOEY, each currently carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Otter Tail’s earnings for 2021 are expected to rise 5.7% year over year.

NewJersey Resources’ earnings for 2021 are expected to grow 30.1% year over year.

Veolia’s earnings for 2021 are expected to rise 17.1% year over year.

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