Business Alabama: PowerSouth lights the way from Prattville to the Florida Panhandle

In the 1960s, PowerSouth Energy Cooperative’s electrical generation was regulated by two clocks: one mechanical, the other electric. The mechanical device displayed perfect time and served as the setpoint for the electric clock. If the electric clock ran fast, operators reduced power generation, slowing it down until its time matched the mechanical device. If the electric unit ran slow, operators increased power generation until both clocks matched.

Humans watched both clocks, making adjustments accordingly. Today the clocks are mostly for show. The electric grid is managed primarily by computers that monitor and make corrections on a continuous basis.

“We still have those clocks in a control room,” says Gary Smith, PowerSouth’s president and CEO. “We keep them for demonstrations. They are part of our history.”

Headquartered in Andalusia, the company was formed in 1941. Its mission then is the same as now — to generate and provide reliable and affordable electricity to its members.

Today, the company’s 500-plus employees accomplish its goals via 2,100 miles of high-voltage transmission lines running through South Alabama and the Florida Panhandle. Andalusia’s electricity powerhouse distributes energy to cooperative and municipal members who serve end-users in 39 Alabama and 10 Florida counties.

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But the company started with humble beginnings.

“In the early days, electrification was urban,” adds Smith, who joined PowerSouth in 1989. “In the 1940s, Andalusia, Troy, Evergreen, Opp and other towns had some semblance of electricity, but not much. Power was often produced by in-town generators that ran power to small downtown grids.”

Smith also notes that in the 1920s the Horseshoe Lumber Company built two dams on the Conecuh River. “It is a small insignificant river, but it was big enough to run two hydro projects to generate power in our area. After the lumber company cut down most of the trees, it sold power to small nearby municipalities.”

He continues, “Those municipalities became the nexus for the Alabama Electric Cooperative in 1941.”

Those two dams built by the lumber company, about five miles north of Andalusia, became the catalyst for PowerSouth.

Back then, the duo of dams produced about 9 megawatts of power. Today the company’s new natural gas combined cycle power plant alone produces 693 megawatts.

PowerSouth has grown into an electric cooperative serving the wholesale power needs of 20 distribution members, including 16 electric cooperatives and four municipal electric systems in Alabama and Northwest Florida.

“We are a wholesaler, not a retailer,” notes the company president. “We sell our product to our members who in turn, sell it to their members and customers. We are a true cooperative. We do not have shareholders, like investor-owned utilities. We are owned by the same people/cooperatives we serve.”

The entities served in Alabama include: Baldwin EMC in Summerdale, Central Alabama Electric Cooperative in Prattville, Clarke-Washington EMC in Jackson, Coosa Valley Electric Cooperative in Talladega, Dixie Electric Cooperative in Montgomery, Pea River Electric Cooperative in Ozark, Pioneer Electric Cooperative in Greenville, South Alabama Electric Cooperative in Troy, Southern Pine Electric Cooperative in Brewton, Tallapoosa River Electric Cooperative in Tallapoosa and Wiregrass Electric Cooperative in Hartford.

Other Alabama distribution members include Utilities Board of the City of Andalusia, City of Brundidge, Water Works & Electric Board of the City of Elba, and Utilities Board of the City of Opp.

Florida members are CHELCO in DeFuniak Springs, Gulf Coast Electric Cooperative in Wewahitchka, Escambia River Electric Cooperative in Jay and West Florida Electric Cooperative in Graceville.

PowerSouth COO Damon Morgan (left), Gary Smith and other employees at Lowman Coal Plant, which is being converted to the natural gas-fired Lowman Energy Center.

Meeting the power needs of a diverse cooperative group has its challenges. Many of these trials stem from nature, government regulations and, most importantly, fuel costs.

“When a hurricane threatens, we deploy our line crews to prepare to restore the system,” says Smith. “Linemen are stationed in safe strategic locations that we believe can reach damaged areas in the quickest time.” But he adds, “Hurricanes are of course, always unpredictable, and when the storm strikes, I like to quote Mike Tyson: ‘Everybody has a plan until you get hit in the mouth.’”

Smith recalls, “The worse storm I have seen was Hurricane Michael (October 2018). We lost 264 high voltage transmission structures. Our areas around Panama City, Florida, and south were completely destroyed.”

In addition to natural disasters, there are the man-made hurricanes of government regulations. “It is a challenge, building a plant and the government comes in saying, ‘You need to shut this down in 13 years for environmental reasons.’ There is no way we can pay off the investment in that plant. If the plant is taken out of operation our members are left with a stranded investment.”

Federal regulations are becoming stringent for anything fueled by coal or fossil fuels — from power plants to cars to natural gas stoves. “The only coal generation we have now is our 8% interest in Alabama Power Co.’s Miller Units, near Birmingham,” says Smith. “I hope that plant site is not phased out. It is a very efficient unit. The costs are very good. A lot of investment has been made in environmental controls.”

Smith notes, “At one time we were completely a coal utility. Now we are almost completely a natural gas utility.” With change comes challenges.

PowerSouth emphasizes that operations are much more automated now than they were 20 years ago. Systems are more computerized and less labor-intensive. “Not too long ago, when the power failed, we sent a team out to patrol the line until they found the problem,” says Smith. “Today when we have an outage, the electronic systems identify the location of the outage.”

But he adds, “What really keeps you awake at night is worrying about fuel costs. Last winter natural gas was about $8 to $10 per million BTUs. Today (May 15, 2023) it is just over $2.35 per million BTUS. Last week it was $2.05.

“With so much variation day by day, trying to balance and manage natural gas costs is troublesome. It makes our costs to members difficult to predict,” Smith says.

As for the future, PowerSouth is faced with the challenge of building and operating a new electrical generation plant while complying with environmental rules. Some question Power South’s operations.

“Yes, we run coal plants and we burn fossil fuels,” Smith adds. “But we are trying to save the world in a different way. We are saving the world with affordable and reliable electricity for people who are economically challenged. If we can provide them a better and a more affordable way of life, we have done our job.”

This article appears in the July 2023 issue of Business Alabama.