U.S.-based The Southern Company (SO) has ignited a momentous achievement: Unit 4 at its Vogtle Nuclear plant has reached initial criticality, marking a pivotal step in the start-up testing sequence. The company assures the public that this crucial stage was reached safely, signaling the commencement of the nuclear reaction inside the reactor. This historic milestone heralds the dawn of atom-splitting to generate the fervent heat, fuelling the promise of steam production in the near future.
The Journey to Power
Following this landmark achievement, Vogtle Unit 4 has seamlessly transitioned into dedicated startup testing. These rigorous tests are designed to ascertain the seamless integration of the primary coolant system and steam supply system, ensuring optimal performance under demanding conditions of design temperature and pressure, all while housing the essential fuel inside the reactor. This meticulous process acts as the vanguard, meticulously validating operating procedures and verifying the harmonious interplay of all systems.
Regrettably, the project has not been devoid of setbacks. The endeavor has been marred by delays, causing the project to lag behind schedule. Moreover, the budget for this venture has been exceeded by billions, casting a shadow over what should have been a triumphant achievement.
Despite these challenges, the Unit 4 reactor is primed to ascend the power ladder, gradually amping up its potency to synchronize the generator with the electric grid, heralding the inception of electricity generation. Operators will incrementally elevate the power in multiple calibrated steps, ultimately bestowing the reactor with the capability to reach a formidable 100% power output.
Historical Context
Unit 4 is a linchpin in the two-unit expansion projects erected near Waynesboro, GA, and is anticipated to come online during the second quarter of 2024. The initial projection for the Vogtle 4 in-service date revolved around the culmination of 2023. However, a revelation of a motor fault in the reactor coolant pump necessitated a revision in this timeline, causing a delay in the grand unveiling of this engineering marvel. Southern Company’s other newest reactor, Unit 3, commenced commercial operation in July last year, underscoring the indomitable spirit of SO’s pursuit of technological excellence.
In a partnership of power, the company is vested with the operation of these units on behalf of co-owners — Georgia Power, Oglethorpe Power, MEAG Power, and Dalton Utilities.
Georgia Power, the primus inter pares of SO’s electric subsidiaries, asserts that the new Vogtle units are quintessential to its overarching commitment to provide clean, secure, reliable, and affordable energy for its clienteles. These cutting-edge units possess the potential to generate a mammoth amount of electricity, capable of powering 500,000 homes and businesses, a feat of colossal proportions.
Zacks Rank and Key Picks
As of now, SO carries a Zacks Rank #3 (Hold). For investors eyeing potential opportunities within the same industry, it might be prudent to consider better-ranked stocks such as Duke Energy Corporation (DUK), Xcel Energy Inc. (XEL), and NiSource Inc. (NI). Each of these stocks currently boasts a Zacks Rank #2 (Buy), presenting an intriguing prospect for savvy investors seeking a promising portfolio addition.
Duke Energy, a juggernaut in the energy landscape, has unfurled an ambitious $73 billion five-year capital plan slated for completion in 2024. This momentous undertaking steadfastly bolsters DUK’s energy transition goals and underlines its unwavering commitment to robust growth within its jurisdictions. A projected earnings growth of 5-7% through 2028 conveys the company’s resolute confidence in the might of its regulated utilities and burgeoning capital profile.
Xcel Energy, a stalwart in the American utility domain, furnishes a comprehensive array of energy-related products and services to legions of customers through its regulated operating entities. It envisages delivering enhanced shareholder returns via an intricate blend of earnings growth and dividend yield. The company aspires to bestow long-term annual EPS growth of 5-7% and annual dividend increments of 5-7%, a testament to the company’s sanguine outlook on its future earnings potential and operational prowess.
NiSource, a titan in the domain of natural gas utilities in the United States, operates under a staunch 100% regulated utility business model. The company’s growth strategy orbits around the modernization and replacement of its utility infrastructure in concurrence with complementary system expansions. NiSource anticipates an annual rate base expansion of 8-10% during 2023-2028, fueled by its strategic capital expenditures.
Despite these heartening prospects, investors are urged to perform their own due diligence before making any investment decisions.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
