AreHigherPricestheFutureofEnergy?SouthernCompanyisagiantU.S.utility.Likemostotherelectricplayers,it'sbeenshiftingtowardnaturalgasinrecentyears.However,thatdoesn'tmeanit'sgivenuponoldreliable:coal.Rightnowit'sbuilding,atgreatexpense,themodelforacoalfuture.Itisn'tgoingaswellasplanned.NoquittershereSouthernisn'ttheonlycompanytobuildanewcoal-firedpowerplantinrecentyears.Forexample,competitorDukeEnergyjustgotitsEdwardsportcoalplantupandrunning,thoughit'snotuptofullspeedjustyet.Dukegotabout40%ofitspowerontheregulatedfrontfromcoalin2013.That'sanotablesum,andaddingEdwardsportshowsacommitmenttokeepingcoalinthemix.Duke'snewplantusesthelatestcoaltechnology,includinggasification.Asis,thecostoftheplantnearlydoubledfrominitialcostestimates.WhatDukedidn'twanttotakeonwascapturingtheplant'scarbonemissions.That'sthetechnologycausingsuchafussatSouthern'sKemperplant.Infact,U.S.EnergySecretaryErnestMonizcalledKemper"aplantofthefuture"becauseofcarboncapture.That'showimportantthetechnologyis.Infact,hewentsofarastosay,"We'regoingtoneednot10maybe100moreoftheseplantsacrossthecountryinthefuture."That'swhyeveryoneiswatchingSouthern'sKemperplant,andfewgotexcitedaboutDukebuildinganewcoalplant.What'sunfortunateisthatDuke'sdecisiontostickwithproventechnologyislookingprettygoodrightnow.ExpensiveforeveryoneThat'sbecauseSouthernstartedoffexpectingabillofaround$2billionfortheplant,butcostshavenowmorethandoubled.Infact,2013earningswerelowerby$0.83asharebecauseofwrite-offs.Sofar2014isn'tstartingoffwell,either,withanother$0.27asharewrite-offinthefirstquarter.Andthefacilitystillisn'tupandrunning.Thegoalistohaveitonhandtohelpwiththesummerpeakseason.Coalissupposedtobeamongthecheapestenergyalternatives,butoncecompletedKemperwillcostmorepermegawatttobuildthananuclearplant—amongthemostexpensivetobuild.Thatdoesn'tsoundlikesuchagooddealanymore.Itmeansthatcustomerswillbepayingmore,thewrite-offsmeanthatit'scostingshareholdersmore,and,withgoodreason,nooneappearstobelininguptobuildthesecondgenerationofcarboncapt...
