{"id":24740,"date":"2021-01-14T13:00:51","date_gmt":"2021-01-14T13:00:51","guid":{"rendered":"https:\/\/www.ceo-na.com\/?p=24740"},"modified":"2021-01-14T19:21:19","modified_gmt":"2021-01-14T19:21:19","slug":"more-than-a-utility-company","status":"publish","type":"post","link":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/business\/management-leadership\/more-than-a-utility-company\/","title":{"rendered":"More than a utility company"},"content":{"rendered":"
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Despite becoming the second largest utility firm in the US, CEO Tom Fanning believes\u00a0Southern Company has achieved much more.<\/p>\n<\/div>\n<\/div>\n<\/div>\n

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Significant change has swept through Southern Company, the US\u2019s second largest utility company, since Tom Fanning took the helm in 2010.<\/p>\n

Among its recent projects and achievements, the Atlanta-based firm has increased its investments in nuclear, renewables, and natural gas, built a generation fleet roughly the size of Australia in terms of energy production, and transformed itself into a low-to-no carbon enterprise by reducing its energy derived from coal from around 70% when Fanning took the helm to 22% today.<\/p>\n

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\u201cThe most important thing in the last few years was that we had to sit down and think about the success we had experienced,\u201d Fanning told CEO Magazine in an exclusive interview.<\/strong> \u201cOne of the greatest harbingers of future failure is past success. On the one hand, you want to maintain this terrific, iconic company and its performance, and on the other, be able to attack that model and think about how to position the company so that it\u2019s resilient in terms of its service to the communities, customers, employees, and shareholders of the future.\u201d<\/p><\/blockquote>\n

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Southern Company is an American gas and electric utility holding company based in the southern United States. It is headquartered in Atlanta, Georgia. The company is currently the second largest utility company in the US in terms of customer base. Through its subsidiaries, it serves 9 million gas and electric utility customers in six states with 44,000 megawatts of electric generating capacity and 1,500 billion cubic feet of combined natural gas consumption and throughput volume.<\/p>\n

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\u201cI think we\u2019re as well positioned as we\u2019ve been in decades,\u201d Fanning stressed when asked about the company\u2019s current fortunes.<\/strong> \u201cWhen you consider that we\u2019ve been the No. 1 total shareholder return company over the past year, I think that Wall Street is starting to see the fruits of our efforts. Likewise, this is the best year we\u2019ve had in generation and transmission performance. I also think we\u2019ve been a really effective voice in energy policy and moving the nation forward from an environmental stakeholder standpoint.\u201d<\/p><\/blockquote>\n

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A changing\u00a0 business model<\/h1>\n
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While Fanning insists that Southern Company\u2019s principal responsibility is to continue serving its customers as well as always, he is all too aware that in a rapidly evolving industry the old business models that America has depended upon over the past century may not be suited to a changing future. As such, Southern Company is keenly embracing new technology, from solar energy to the concept of microgrids.<\/p>\n

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\u201cIf you think about the way the electricity industry works, it is essentially about making, moving, and selling energy,\u201d Fanning highlighted.<\/strong> \u201cTraditionally, it\u2019s been done largely through central stations, or generating plants, and cross country transmission lines. Yet we\u2019re starting to see an evolution of that model and the emergence of something I call distributed infrastructure. That\u2019s to say, we will take the central station model, miniaturize it, and put that continuum of infrastructure on customer premises. Maybe that\u2019s Home Depot, maybe it\u2019s the Department of Defense, but it\u2019s mostly centered on commercial and industrial applications for the near term. It\u2019s a very exciting future.\u201d<\/p><\/blockquote>\n<\/div>\n

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\u201cOur company has developed a position of market share of microgrids in the US of about 85%. When you think about miniaturizing this model, that seems to compete with the businesses that we\u2019ve known and loved for over a hundred years. But I think you can look at this change as inevitable. What I always like to say is, \u2018You can\u2019t keep the waves off the beach.\u2019 You can either play defense or you can try to influence, help to invent that future. My sense is that our businesses are always better when we can play offense. Our people get energized from that.\u201d<\/p><\/blockquote>\n

The bigger picture<\/h1>\n
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Tom Fanning believes that a number of factors have conspired to turn Southern Company into much more than simply a hugely successful utilities company. From collaborating with the US Department of Defense on issues such as cyber and national security to joining forces with JPMorgan Chase and AT&T as a member of the Tri-Sector Executive Working Group\u2014a public-private partnership that facilitates and integrates a collaborative approach to risk management through prioritization, planning, and response across the financial services, communications, and electricity sectors\u2014the company has always kept one eye on the broader economy and both the national and global picture.<\/p>\n<\/div>\n

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Fanning himself sits on the US Cyberspace Solarium Commission, a group launched by the US government in May 2019 with 14 members, including four executive branch leaders and a bipartisan mix of four House and Senate law-makers, with a view to determining what role the public and private sectors should play in securing the nation\u2019s information infrastructure, how the DoD should address cyberattacks from foreign nations, and how America and its allies should promote and enforce government norms in cyberspace.<\/p>\n

\u201cWhen you think about the major economic sectors in our country, pulling together the interests of electricity, finance, and telecoms has been particularly important, as well as how we create new models of collaboration between the private sector and the federal government,\u201d Fanning elaborated. \u201cAll these are big issues that Southern Company is leading on.\u201d<\/p>\n<\/div>\n<\/div>\n<\/div>\n

The importance of collaboration<\/h1>\n
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With franchises businesses across the US Southeast and elsewhere in the country, independent power assets from the Carolinas to California, a major natural gas pipeline, and its burgeoning microgrid business across the nation, Fanning believes in bringing together diverse voices from across the company to participate in decision making.<\/p>\n

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\u201cFor all the brilliant ideas any individual will have, we\u2019re always better for our system of collaboration,\u201d Fanning told CEO Magazine.<\/strong> \u201cYou never define success through yourself. You must define success for the enterprise as being bigger than yourself. It isn\u2019t yourself, it\u2019s your family. It isn\u2019t yourself, it\u2019s the community. It\u2019s not our business, it\u2019s our industry. It\u2019s not our industry, it\u2019s the United States and the global economy.\u201d<\/p>\n

\u201cIn terms of my personal performance, I think you can see that philosophy in three spheres,\u201d he elaborated.<\/strong> \u201cOne, I\u2019ve really endeavored to be a leading voice in energy policy. Two, I\u2019ve always had an interest in the broader economy. I was at the Atlanta Fed for six years and Chair for three. I\u2019ve also chaired the advisory group to the Big Fed in DC for a year. The third sphere is the idea of national security. I think I\u2019m the only CEO in our industry who was previously a CIO. That background has helped me think through the national security issues and the existential threats that affect America today.\u201d<\/p><\/blockquote>\n

A one of a kind company<\/h1>\n
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As previously stated, Southern Company has long moved beyond traditional electricity production and distribution into the fields of natural gas and renewable energy, notably solar, and invests heavily in its own R&D area to work on delivering innovative energy solutions for decades to come. The lead director of Southern Company\u2019s R&D department is currently a former CEO of the non-profit Electric Power Research Institute (EPRI), the US\u2019s leading research body into the generation, delivery, and use of electricity.<\/p>\n

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\u201cWe\u2019ve always felt that exposure to natural gas is particularly important,\u201d Fanning said.<\/strong> \u201cIn 2015-16, we became, through some acquisitions, the largest consumer of natural gas in the US. I used to say that natural gas was a bridge to 2050. I now believe that we can reach a low-to-no carbon future through the development of carbon capture technology and storage much sooner. We still believe nuclear will be a dominant solution. Furthermore, Southern Company had virtually zero renewables before I became CEO. Now, about 11% of our energy mix is due to renewables. At one point during my tenure, we were the biggest owner of solar in America.\u201d<\/p><\/blockquote>\n

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With a string of key acquisitions adding to this integration process\u2014such as that of AGL Resources, the largest local natural gas distribution company in the US, in 2016, and a 50% stake in the Southern and Natural Gas Pipeline (SONAT), as well as long-term service agreements with GE and many other major equipment suppliers\u2014Fanning was far from reticent on what continues to set Southern Company apart in the utility field.<\/p>\n

\u201cI think we are the best example of risk-adjusted return in the US,\u201d he insisted<\/strong>. \u201cWe offer reasonable returns and very low volatility. When you think about the demographics of America as we get older, when there are so many risky asset portfolios, a company like Southern Company is greatly needed. When you think about the makeup of America, that kind of investment is right in people\u2019s strike zones.\u201d<\/p><\/blockquote>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Despite becoming the second largest utility firm in the US, […]<\/p>\n","protected":false},"author":22,"featured_media":24747,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[52,43],"tags":[99,1385,2402,1079,2019,3227,3225,3226],"class_list":["post-24740","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-executive-interviews","category-management-leadership","tag-ceo","tag-ceo-northam","tag-energy","tag-executive-interview","tag-print-issue","tag-renewables","tag-southern-company","tag-tom-fanning"],"_links":{"self":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/24740","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/users\/22"}],"replies":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/comments?post=24740"}],"version-history":[{"count":3,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/24740\/revisions"}],"predecessor-version":[{"id":24923,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/posts\/24740\/revisions\/24923"}],"wp:featuredmedia":[{"embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media\/24747"}],"wp:attachment":[{"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/media?parent=24740"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/categories?post=24740"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/servidor-mxigen1.com\/ceona-antiguo\/wp-json\/wp\/v2\/tags?post=24740"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}