Southern Company, one of the largest electricity producers in America with more than 46,000 MW of generating capacity and 4.4 million customers, and North Carolina-based PowerSecure International, Inc., a company specializing in distributed energy resources and related technology, last week announced approval of a definitive merger agreement through which Southern will acquire PowerSecure for approximately $431 million (an 80% premium over the company’s prior-day close).
What makes this transaction particularly interesting is that the companies’ own announcement acknowledges that PowerSecure’s key technologies related to distributed energy resources “typically receive highest demand largely in markets outside of the Southeast [Southern’s sole market], where distributed infrastructure investments tend to provide greater customer value.” While there are multiple reasons this is the case, nonetheless the company’s CEO, Tom Fanning, is on record expressing enthusiasm in responding to certain customer interests, saying “If somebody wants to buy distributed generation, I want to sell it to ’em. I’m completely happy to do that.”
PowerSecure’s smart grid products and services relate to interactive distributed generation, energy efficiency, and utility infrastructure; customers include electric utilities as well as industrial, institutional, and commercial end-users. Specific capabilities PowerSecure’s technology enable include the ability to:
- Forecast electricity demand and electronically deploy the systems to deliver more efficient and environmentally friendly power at peak power times;
- Provide utilities with dedicated electric power generation capacity to utilize for demand response purposes; and
- Provide customers with dependable standby power.
PowerSecure’s distributed generation technology helps utilities manage various types of resources, including solar power, and the company also provides other services ranging from LED lighting to transmission and distribution infrastructure maintenance and construction services, as well as engineering and regulatory consulting services.