With over 42,000 Megawatts of generation capacity, Southern Company (NYSE: SO) is the second largest electric utility by market cap in the United States, supplying electricity to 4.4 million customers in the Southeast. Southern's customer base is located primarily in Alabama, Georgia, Florida, Mississippi, and the Carolinas.^[1]

Southern Company, like other electric utilities, benefits from being a natural monopoly in that community resistance and the huge cost of building new power plants provide significant barriers to entry for competitors. Additionally, customers have little choice when it comes to who they buy electricity from since their choices are limited by geographical proximity to power companies. However utilities' pricing power is limited as rate hikes are checked by government regulation, which makes Southern vulnerable to energy policy changes. Weather also plays an important role in Southern's business. Other risks to Southern are specific to its geographic region - extremely hot seasons can put strain on an already aging grid while severe weather like hurricanes can wreak havoc on generation facilities as well as transmission services.

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