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Tom Fanning, CEO Southern Company, in his address to the Annual Meeting of Shareholders discusses Smart Energy. Click to play

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Corporate Responsibility CEO Viewpoint

Tom Fanning

It's in three segments, the way we think about smart energy.

The first segment deals with the production of electricity, kind of conventional, traditional generation, renewables, and perhaps in the future more distributed generation. So we call that smart power.

The second segment is what we call smart grid. That deals with the wires part of the business. So, the big wires would be transmission, the little wires you see in your neighborhood would be distribution, culminating in a meter. I mean, I know this, that Southern Company is one of the leaders in the installation of smart meters in America. And in fact, we have already installed about 3.3 million smart meters in the Southeast. We will have completed the delivery of smart meters to all of our customers, so about four and a half million, by the end of next year. So, this is a very important part of our infrastructure. That we've already been able to justify by removing people from the field and trucks from the road.

The third segment of this smart energy business really deals with something we call "smart choices." So it's everything beyond the meter. And it's a very interesting question that we're attempting to address in this segment. You know, my kids have an iPhone. Five years ago, they didn't know they couldn't live without their iPhone, and the question I'm asking is, what is that analog to our business? What is it that five years from now our customers will say, "man, I can't believe I lived without that," in five years. And it really answers the question, how will our customers think differently about, and consume differently, our product?

I don't know the answers to all those questions right now, but I do know that there's a lot of activity. We, likewise, are pursuing a lot of these interesting options, and I'll show some of them to you later. But instead of making great big bets, given the conservative posture of this company, which will continue going forward for years to come, what we're essentially doing is sprinkling seeds on the market landscape, and we're going to see what value chains emerge, and I think we'll be able to identify where Southern should play.

Close

I am mindful daily of the important role we play in providing electricity for millions across the southeastern U.S. and of the privilege I have of leading a company that can make a difference in people's lives.

We deal with an increasingly wide circle of stakeholders who bring to bear new realities that go beyond our commitment to reliable service and affordable prices. Today, more than ever, we're responsible for economic growth, community support, a clean environment and a plan to sustain resources for generations to come.

While, as a publicly held company, we must continue to meet earnings goals, we also need to meet goals that go beyond the numbers. I believe that is taking place at Southern Company more now than ever before. Consider:

• We'll be the first utility to build new nuclear generation in the U.S. in some 30 years and have the largest nuclear plant in North America.
• In Mississippi, we will capture 65 percent of the carbon dioxide from the new Kemper County integrated gas combined cycle plant. It will be the first plant built to capture carbon dioxide from the day it opens.
• We co-own one of the largest operating solar plants in the U.S. — paving the way for newer, bigger plants across the nation.
• In Texas, we'll soon complete the largest biomass plant in the U.S., capable of producing electricity for decades on forest waste products unused today.
• We manage and operate the U.S. Department of Energy's National Carbon Capture Center in Alabama, a one-of-a-kind research facility that develops technologies to reduce greenhouse gas emissions.
• We'll soon have more than 4 million smart meters installed to improve communication with our customers and advance the smart grid in the Southeast. With energy efficiency gains from programs we promote, we're lowering demand for fossil fuels, thus reducing overall emissions.

On the home front, we continue to make the safety of our employees a priority through our Target Zero program. In addition, new hires and promotions reflect progress in matching the diversity of the communities we serve.

Our economic development efforts have led to thousands of jobs in the Southeast. Community programs like Project SHARE have helped families strapped by economic times pay utility bills. Our wildlife and habitat stewardship supports notable programs, including one to bring back the whooping crane, another to restore the longleaf pine forest and one to renew rivers in the Southeast. Southern Company employees volunteer over 200,000 hours and our charities give over $21 million dollars annually.

I stand on the accomplishments of some of the brightest employees in our industry, as well as a legacy of successful leadership. Together we will remain engaged, act with urgency and commit to do more.

Thank you for your interest in our work. Your thoughts and comments are welcome. Please visit our contact page.

Tom Fanning
CEO Southern Company