Mississippi Power Co., a wholly owned subsidiary of electric utility firm Southern Company (SO), has closed Plant Eaton – the first power generating unit built by Mississippi Power in March 1945, at a time when electricity was primarily used for lights, radios and refrigeration. The plant was built on the Leaf River, in Mississippi, and was named after Barney E. Eaton Sr. – the company’s first president.
Eaton is a three unit coal-fired power plant, each of which produces 22.5 megawatts (MW) of electricity making the total generation capacity of 67.5 MW. The plant has been serving customers reliably for nearly 70 long years.
Per management, initially when the unit began operations, Mississippi Power served roughly 40,000 customers. But the electricity consumption pattern has undergone a sea change since the 1940s, with the increase in the company’s customers by more than four times to around 186,000. In order to keep pace with the ever-increasing demand for electricity, management has decided to replace the Eaton facility by the Kemper plant. The new plant is now under construction in Kemper Country energy facility and is likely to start its operation by May, 2014.
Mississippi Power – one of the four electric utilities that make up Southern Company – is engaged in providing retail and wholesale electric services to approximately 200,000 customers in 23 counties from the Gulf Coast to Meridian. It owns or has major ownership interests in six generating facilities with net dependable generating capacity of 3,166 MW.
Headquartered in Atlanta, Georgia, Southern Company is one of the largest generators of electricity in the nation, along with the likes of Exelon Corporation (EXC) and Duke Energy Corporation (DUK) – which serves both regulated and competitive markets across the Southeastern U.S.
Weather conditions impair Southern Company’s operating results, which vary on a seasonal and quarterly basis. Electric power supply is usually a seasonal business. In several regions of the country, demand for power peaks during the summer months, along with market prices, however, in other areas power demand reaches its zenith during winter. Consequently, the future operating results of Southern Company may fluctuate substantially on a seasonal basis.
Southern Company currently carries a Zacks Rank #4 (Sell), implying that it is expected to underperform the broader U.S. equity market over the next one to three months.
In the electric utility space Ameren Corporation (AEE) displays better fundamentals and currently holds a Zacks Rank #1 (Strong buy).
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