What's on tap this month that executives won't want to miss

David Ratcliffe is facing his greatest challenges since he became chairman and CEO of giant utility Southern Co. in 2004. Southern, which serves customers in Alabama, Georgia, Mississippi and Florida, is one of the top coal energy producers and greenhouse gas emitters. And the South has few clean-energy resources. Yet, President Obama wants to take on global warming and force utilities to use more clean energy.

Q: Obama favors a national standard that would require utilities to get 25% of their electricity from renewable sources by 2025. Do you support that?

A: I'm not in favor of a mandated portfolio standard, primarily because it does not allow much flexibility. In the Southeast, when you look at what's available, it's fairly limited to biomass, some solar and a little bit of wind. Beyond that, it falls off quite a lot.

Q: Obama wants to lower greenhouse gas emissions to 1990 levels by 2020, forcing utilities to buy permits to emit CO{-2}. Your thoughts?

A: It's going to be extremely expensive in a difficult economy. We've got to get to the point where we begin to change out existing technology. That will take clean coal (plants that capture and store CO{-2} emissions) and new nuclear and renewables at some scale. So, right now, I can't tell you that we have the technology to do that (by 2020).

Q: The economic stimulus package places a big emphasis on energy efficiency and conservation. Are utilities like Southern likely to invest in programs that result in less electricity consumption and lower revenue?

A: What we've suggested is that you ought to create the same kinds of (earnings) incentives for investment in efficiency that I have to invest in hard assets.

Q: You're proposing two new nuclear reactors near Waynesboro, Ga., by 2016, but nuclear plants are very expensive. Has the sharp drop in steel and other commodity costs made the project more affordable?

A: No question that will help the economics, but nobody can predict the stability of those prices. It's unrealistic for me to expect a fixed price. I can get one, but it wouldn't be one I can afford because (equipment vendors) would be taking all that risk.

Q: Is even a large utility like Southern affected by the credit crisis as you spend billions to build new power plants and transmission lines?

A: We've been impacted just like everybody else. We've been impacted less because we have a very strong credit rating.

By Paul Davidson

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