Why industrial sales make Southern a strong power company

The industrial sector picked up in Southern Company’s (SO) operated regions. Southern Company had growth in industrial electricity sales in the last seven quarters in a row. In the industrial sector, electricity sales grew 3.3% in 2014. Meanwhile, industrial electricity sales in the US grew at a snail’s pace of 0.09% during the same period.

This keeps Southern Company in a better position than other power companies operating in the US.

The Residential, Commercial, and Industrial segments are the major sectors that consume electricity. In 4Q14, Southern Company’s residential and commercial electricity sales were down by 0.2% and 0.8% year-over-year, or YoY, respectively.

In 4Q14, only the Industrial segment saw growth in sales on a YoY basis for Southern Company. Industrial electricity sales grew by 2.3% in 4Q14—compared to 4Q13. Southern Company’s total retail sales grew by 0.5% YoY in 4Q14.

In the US, Southern Company has the third largest electricity sales in the industrial sector—after Exelon Corporation (EXC) and American Electric Power Company (AEP). First Energy (FE) and Duke Energy (DUK) also have significant exposure to industrial sales of electricity within the Utilities Select Sector SPDR (XLU).

Southern Company’s top ten industrial segments registered positive consumption growth in 4Q14 and year-to-date, or YTD. Among them, the Primary Metals and Transportation segments had the highest consumption growth in 2014.