Georgia Power – the largest affiliate of electric utility Southern Company (SO - Free Report) – has added 53.5 megawatts (MW) of biomass capacity to its generation portfolio. This additional capacity comes on the back of a 20-year purchase power agreement with renewable energy company Rollcast Energy Inc.
Per the agreement, Georgia Power will receive all generated yield of Rollcast’s recently constructed Piedmont Green Power plant, located in Barnesville, Ga. This plant started operations on Apr 19 and is expected to provide power to over 35,000 homes.
The plant will generate energy by using forestry byproducts found in places like logging areas and land clearings. The Piedmont Green Power plant will process about 500,000 tons of woody biomass yearly.
Management at Georgia Power believes that this deal will expand its generation portfolio through renewable sources, which will be lucrative for its customers. Recently, the company also disclosed its plan to purchase energy from 2 wind farms in Oklahoma with a total capacity of about 250 MW.
Headquartered in Atlanta, Ga., Southern Company is one of the largest electric utility holding companies in the U.S., and the premier energy firm serving the attractive Southeast market.
Southern Company currently carries a Zacks Rank #3 (Hold).
Southern Company continues to earn returns that are among the highest in the industry, while it maintains its position as a low-cost provider of electricity with superior customer satisfaction levels.
However, operating results of Southern Company are affected by weather conditions and may vary on a seasonal and quarterly basis. Electric power supply is usually a seasonal business. In several regions of the country, demand for power peaks during the summer months, along with market prices. In other areas, power demand reaches its maximum during the winter. Consequently, the future operating results of Southern Company may fluctuate substantially on a seasonal basis.
Meanwhile, certain other electric utility stocks like ALLETE Inc. (ALE - Free Report) , American Electric Power Inc. (AEP - Free Report) and El Paso Electric Co. (EE - Free Report) offer value and are worth buying now. All these companies sport a Zacks Rank #2 (Buy).