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Energizing Through Innovation


This article is sponsored by Southern Company.

For the energy consumer, electricity is an instantaneous phenomenon. The light turns on with the flip of a switch, and the air conditioner clicks into action when the thermostat reads 78 degrees. But while consumers demand immediate responsiveness from the power grid, energy companies plan decades in advance to ensure the power will be there.

As chief operating officer and executive vice president at Southern Company, Kim Greene understands the weight of this responsibility. “We believe electricity is something people cannot live without, and it's our obligation to provide that product to them safely, reliably and affordably,” she says. “One of the hallmarks of Southern Company is that we have always looked ahead to plan for what our supply mix and what our business may look like 10, 20, 30 years from now.”

For example, about 20 years ago, Southern Company began collaborating with the U.S. Department of Energy and KBR (a construction and engineering firm) to develop the clean coal technology subsidiary Mississippi Power is deploying at one of the most advanced power plants in the world. When the Kemper County energy facility enters service, it is expected to produce electricity from an affordable, abundant resource–Mississippi lignite–while capturing 65 percent of carbon emissions and eliminating all liquid waste. “We were thinking 20 years ago about ensuring we can maintain the full portfolio of energy resources,” Greene says. “We make significant investments in power plants that can serve customers for up to 60 years, so we need to be thinking about the future today.”

The federal government acknowledged the importance of energy resource planning in 1971 when President Richard Nixon delivered the first energy message to Congress. An article in The New Republic demonstrates the pessimistic public attitude of the day. The writer decries the “lack of planning and control as America pursued the goal of low-cost power” and predicts the end of an era of low-cost energy. He foresees an “impending crisis.” Although petroleum prices rose sharply in the decade that followed the article, the author would be surprised to learn of the advances in coal plant efficiency and the discoveries of huge domestic reserves of natural gas that would follow. In fact, energy consumption in the U.S. rose 44 percent between 1970 and 2013.

He might have been surprised further to learn that Southern Company had already begun to plan for the future as he penned his article. The company had an appetite for innovation; its subsidiaries helped electrify the rural South throughout the early 20th century, an impressive logistical feat. In 1969, the company proved it was game for the challenge of increasing fuel efficiency while decreasing environmental impact by establishing a research department. A year later, when Congress passed the Clean Air Act and established the Environmental Protection Agency, Southern Company was poised to become an industry leader. In 1974, it opened a pilot plant in Wilsonville, Alabama, to research clean coal technology. The project was so successful, the U.S. Energy Research and Development Association awarded Southern Company $8.5 million to continue to study clean coal (about $43 million in today’s money).

Proactive strategies remain an important part of Southern Company’s mission today. “We meet the challenges of the times through our innovative solutions and continue to provide clean, safe, reliable, affordable power to our customers,” Greene explains. “When Southern Company’s research and development programs were established in the 1960s and ‘70s, we had very forward-thinking leaders who believed that this was part of our obligation. Developing technology was very meaningful to them, and we continue to work to find solutions to America’s—and the world’s—energy challenges.”

The company has to operate responsibly and sustainably to provide stable energy prices to consumers even as supplies and regulations change. Southern Company reduces cost volatility through investing in a diverse portfolio of energy resources, including coal, natural gas, nuclear, energy efficiency, hydro and other renewables. “When natural gas prices spiked last winter, we operated our coal units more and our gas units less, saving customers $100 million by leveraging the flexibility of our generating fleet,” Greene explains. “Our diverse energy mix is designed to mitigate the impact of volatile fossil fuel prices and deliver customer value in changing market conditions.”

The idea of an energy mix is not a new concept. Both President Nixon and the author of The New Republic’s 1971 article advocated closely monitoring the proportion of resources used to those available. A company achieves this mix when it diversifies its supply chain so it doesn’t have to depend wholly on any one resource. In 2013, Southern Company derived approximately 42 percent of its electricity from natural gas, 38 percent from coal, 16 percent from nuclear and 4 percent from hydro. But in keeping with its history of innovation, the company has plans for greater diversification. Subsidiary Georgia Power is constructing Plant Vogtle Units 3 and 4, the first new nuclear power units built in the United States since the 1970s, near Waynesboro, Georgia. The success of Vogtle is important to Greene in particular, who trained as an engineer and worked in nuclear facilities before her current tenure at Southern Company.

Greene understands the American public’s complicated relationship with nuclear. In the 1971 article, The New Republic writer noted that nuclear reactor research was “under attack by environmentalists who fear that the facility will be far from clean.” Today, Greene says those attitudes are beginning to change, but she believes Southern Company has a responsibility to share information about nuclear. “The more people learn about nuclear power and how safe it is, the more comfortable they generally become,” she says. “In the Southeast, where many are familiar with the benefits of nuclear, its favorability polls relatively high. I believe the electric utility industry’s ability to communicate the facts about nuclear in layman’s terms is important to continue growing public support for nuclear.”

Increasingly, “layman’s terms” are becoming part of Southern Company’s broad approach to innovate and reduce waste. Greene wants consumers to know what their power company does for them and how using electricity wisely can impact their wallet. It might sound like a bad business strategy for a company that wants to sell electricity to teach its customers to use less, but that’s exactly what Southern Company is doing by investing in robust energy efficiency programs. “It’s important for our customers to be wise consumers of electricity, and we want to help them realize the value of energy efficiency improvements in their homes,” Greene explains.

The author of The New Republic article was skeptical about big business’ ability to produce the low-waste, clean energy for which he longed. In many ways, Southern Company’s efforts to create more efficient homes, transmission structures and plants facilitate what he saw as impossible: a “high-energy society” fueled by low-cost, responsible energy. As Greene acknowledges, Southern Company is motivated by the same dream as the writer. “We keep our business sustainable, so we can be that good corporate citizen,” Greene says. “Corporate responsibility is part of our DNA.”