Southern Company's Power Plan Gets a Nod to Meet Surging AI Demand

The Southern Company SO recently announced that its Georgia Power subsidiary received approval from the Georgia Public Service Commission (“PSC”) for its 2025 Integrated Resource Plan (“IRP”). The 2025 IRP is the company’s blueprint that charts out how the utility giant will meet skyrocketing power demand over the next decade, estimated at a rise of 8,500 megawatts (“MW”) in load and a 2,600 MW jump in peak demand by 2030. The AI-driven data centers and industrial growth across Georgia spark the need for a major transformation in the state’s energy infrastructure.

The 2025 IRP approval marks the latest milestone in an ongoing, collaborative regulatory process. It builds on key prior actions, including the 2023 IRP Update, newly revised and PSC-approved rules, and a recently introduced plan to freeze Georgia Power’s base rates through 2028.

More Power, More Flexibility

This IRP approval comes after months of deliberations and stakeholder input. Georgia Power plans to keep pace with the state's fast-expanding energy needs through a mix of investments in existing infrastructure, renewable procurement and new transmission lines. Importantly, it also includes regular reporting mechanisms to monitor economic development and load growth, ensuring flexibility and transparency in future decision-making.

Strengthening Georgia’s Generation Backbone

One of the IRP’s major pillars is boosting capacity by extending the life of existing power plants. Nuclear upgrades at Vogtle Units 1 and 2 will add 54 MW of emission-free energy, while preliminary steps for further uprates at Hatch Units are in motion. Natural gas also remains key, with a 268 MW addition at Plant McIntosh and extended coal unit operations at Plants Bowen and Scherer. These units will integrate natural gas co-firing to stay compliant with environmental regulations while maintaining reliability.

Hydropower is getting a long-overdue refresh. Plants like Tallulah and Bartlett’s Ferry will undergo modernization to extend their lifespans by another 40 years, preserving these vital carbon-free resources.

Clean Energy Goals Get a Push

The IRP also sets the stage for a meaningful expansion in renewable energy. Georgia Power plans to procure up to 4,000 MW of new renewable resources by 2035, starting with an initial 1,100 MW through competitive bidding. Battery Energy Storage Systems are another strategic focus, with more than 1,500 MW in the pipeline to help store intermittent solar and wind energy.

Grid Upgrades for a Resilient Future

A reliable grid is as important as generation. That is why the plan includes a 10-year transmission build-out covering more than 1,000 miles. These upgrades will not only enhance daily reliability but also improve response to severe weather events. Georgia Power will also evaluate emerging grid-enhancing technologies to increase capacity and improve solar integration.

Smarter, Customer-Driven Solutions

Beyond infrastructure, the IRP invests in customer-facing programs like energy efficiency incentives and demand response tools. These are designed to empower consumers to manage usage, reduce costs and align with sustainability goals.

As Georgia enters a new era of digital and economic expansion, this approved plan reflects a balanced, strategic and forward-looking approach to meeting energy demand, one that blends traditional generation with innovation, customer focus and clean energy commitment.

SO’s Zacks Rank & 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 National Grid plc NGG, Engie SA ENGIY and CenterPoint Energy, Inc. CNP. While National Grid and Engie currently sport a Zacks Rank #1 (Strong Buy) each, CenterPoint Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

National Grid is an international energy delivery business whose principal activities are in the regulated electricity and gas industries. The Zacks Consensus Estimate for NGG's 2025 earnings indicates 47.06% year-over-year growth.

Engieengages 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 2025 earnings indicates 24.58% year-over-year growth.

Houston, TX-based CenterPoint Energy is a domestic energy delivery company that provides electric transmission and distribution, power generation and natural gas distribution operations. The Zacks Consensus Estimate for CNP's 2025 earnings indicates 8.02% year-over-year growth.

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This article originally published on Zacks Investment Research (zacks.com).

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