2022 CC Transition Report Spreads Flat Final - Flipbook - Page 11
Effective governance
Southern Company’s Board of Directors is engaged in
overseeing our business strategies and related risks
and opportunities, which include environmental, social
and governance (ESG) topics such as Just Transition.
For example, the Operations, Environment and Safety
Committee has primary oversight of strategies to
reduce carbon emissions and for fleet transition, system
reliability and safety. In addition, each of our operating
companies maintains a Board of Directors comprised
of the CEO of the operating company and independent
leaders who possess knowledge and experience specific
to the geographic location of each company. These
subsidiary Board members are keenly aware of state
Retail Electric Service Territory
Stakeholder engagement and transparent communication
and local issues and priorities and play an instrumental
role in guiding our fleet-transition efforts.
From a management perspective, Southern Company’s
executive vice president of Operations and the senior
production officers for each electric operating company
hold primary responsibility for implementing our Just
Transition Principles. These officers work closely with their
executive peers and leaders at our operating companies in
areas such as economic development, finance and human
resources, along with those in local regions to oversee the
implementation of our Just Transition Principles.
We always have prioritized the interests of our communities and employees. We know we must partner with the full
range of stakeholders – from labor partners to community and local business leaders – to successfully achieve a Just
Transition. We remain committed to considering the interests of these groups as we make decisions that help ensure
we improve the millions of lives we touch. Importantly, our state regulators also oversee our fleet transition and future
resource planning.
Illustrative plant retirement planning steps
As part of our robust system planning process
(see below), we continually evaluate our mix of
generation resources and fuel types to help ensure
we are providing our customers with clean, safe,
reliable and affordable power.
Along with this system planning, illustrative steps
related to proposed retirements typically include:
> Notifying regulatory bodies like our Public
Service Commissions of our intentions as soon
as possible and adhering to appropriate state
processes such those related to Integrated
Resource Plan (IRP) filings
> Engaging employees and union leadership to help
them understand our plans and prepare
> Holding dialogue with local, county and state
leaders to help communities prepare for the future
> Evaluating, in concert with a variety of
development partners and stakeholders,
potential future uses of former power plant
sites in ways that can support economic
vibrancy and community well-being
A core element underpinning Southern Company’s decarbonization strategy for our electric utilities is our scenariobased integrated resource planning process and related regulatory reviews. At varying frequencies and under a
variety of circumstances, our electric operating companies file with their respective Public Service Commissions
economic analyses of recommendations or decisions using the scenario planning process. This process helps to
ensure that the right resources are deployed at the right time to maintain safety, reliability and affordability for
customers. Stakeholder inputs are considered as part of our assessments, and public comments are typically accepted
in the regulatory review process for integrated resource filings made by our electric utilities. Through public filings,
communications with employees and local community leaders and, where appropriate, state regulators, we typically
indicate potential challenges with various generating plants well in advance of making retirement decisions or
recommendations to our state commissions.
Transparency in communications on retiring and repowering recommendations
In 2020 and 2021, the company’s planning processes
were used to evaluate the U.S. Environmental
Protection Agency’s Effluent Limitations Guidelines
(ELG) Reconsideration rule related to national
standards for water discharges from new and
existing steam electric-generating units. As a result
of the evaluation, we determined that the rule and
a range of additional factors would likely impact
most of the coal-fired generating units in the
Southern Company system. In Southern Company’s
subsequent filings with the Securities and Exchange
Commission, we indicated that coal units would likely
require additional capital expenditures and increased
operational cost. These increases in cost could further
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Just Transition Report
economically challenge coal units. Notifications were
filed with state environmental agencies in October
2021 indicating our intent to repower two coal units
with natural gas and retire 10 coal-fired generating
units on or before Dec. 31, 2028, in accordance
with compliance alternatives provided in the ELG
Reconsideration rule. Formal requests for retirement
or natural-gas repowering related to these plans
are under review by state utility regulators. As final
decisions are made, our senior production officers will
carry out the process of developing transition plans
tailored to meet the needs of stakeholders at each
impacted unit.
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