US power provider Southern Co raises capital investment plan by 30%

Recasts to focus on capex and data center demand

Feb 20 (Reuters) - Southern Co SO.N boosted its base capital investment forecast through the end of the decade to $63 billion, or about 30% more than the previous plan, executives with the major U.S. power provider said on Thursday.

Transmission projects make up the largest portion of the proposed spending increase.

Growing demand from artificial intelligence data centers and population surges in the U.S. South have driven up Southern Co's electricity demand, and pushed broader electricity consumption to record highs, company executives said on an earnings call.

Southern serves nearly 9 million customers in Alabama, Georgia, Illinois, Mississippi, Tennessee and Virginia.

Southern's pipeline of data center customers, and other very large electricity users, is more than 50 gigawatts, with subsidiary Georgia Power's share sitting at about 40 gigawatts.

About 10 gigawatts of that pipeline are committed projects.

The expansion of technologies like generative AI, which need giant data centers, has helped to drive U.S. power demand to record highs in 2024.

Shares of Southern Co rose about 2% at mid-afternoon.

Despite rising demand, Southern narrowly missed Wall Street expectations for fourth-quarter profit on Thursday, as it took a hit from higher U.S. interest rates.

Southern Co's interest costs for the October-December quarter rose to $693 million from $634 million last year.

Total operating expenses rose 9% to $5.28 billion, with operating and maintenance costs climbing 14.6% to $1.99 billion.