The Southern CompanySO, driven by the growing energy demand, is reconsidering the extension of the coal-fired power plant’s life in Georgia. The recent boom in artificial intelligence and cloud computing has led to a rapid expansion of data centers, creating a growing demand for energy and the utility company’s reevaluation of their energy strategies.

SO’s Earlier Plans and New Redesigned Strategies

Per its 2022 Integrated Resource Plan, the company had planned to shut down its coal-powered plants by 2028 and exit coal power generation completely by 2035. However, with the growing demand and as part of its new strategy, the company will extend the life of the four units, 3,450 MW Plant Bowen coal-powered facilities in Georgia. Although the plant does not have any particular retirement age, the company had considered closing units one and two by the end of 2028.

The CEO of the company said that their decision to extend the life of the coal-powered plant was also driven by relaxed emission norms under the Trump administration. He also noted that the units at Bowen may further get extended by a decade subject to approval by the regulators.

However, the company said that its new strategy would not impact its plan to reach net-zero emissions by 2050.

Interest of Other Companies in Natural Gas Power

Many data center companies support natural gas alternatives to show their support for clean energy. In order to reflect their support for natural gas, companies like Sharon AI have partnered with New Era Helium to power up their data centers. Dominion Virginia also forecasted an increase in electricity usage over the next 15 years, to which carbon-free sourceswould mainly contribute.

SO’s Zacks Rank and Key Picks

The Southern Company deals with the generation, transmission and distribution of electricity and serves approximately nine million customers through its seven electric and natural gas distribution units. Currently, SO has a Zacks Rank #3 (Hold).

Investors interested in the utility sector might look at some better-ranked stocks like Engie SA ENGIY, Ameren Corporation AEE and DTE Energy Company DTE. Engie,  Ameren Corporation and DTE Energy each carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

France-based Engie SA is engaged in the power, natural gas and energy services businesses. It operates through Renewables, Networks, Energy Solutions, FlexGen, Retail, Nuclear and Others segments. The Zacks Consensus Estimate for ENGIY's 2024 earnings indicates 153.19% year-over-year growth.

Ameren Corporationis a utility company that generates and distributes electricity and natural gas in Missouri and Illinois. The Zacks Consensus Estimate for AEE's 2024 earnings indicates 5.25% year-over-year growth.

Detroit, MI-based DTE Energy Company is a diversified energy company that develops and manages energy-related businesses and services nationwide. DTE’s expected EPS growth rate for three to five years is currently 8% per share, which compares favorably with the industry's growth rate of 7%.

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