Categories
Business

Comparison between Utility Companies

This study focuses on two US companies American Electric power and the Southern Company, which use non-renewable energy resources to produce power. American Electric power, whose headquarters are located in Columbus, Ohio, is one of the renowned electricity producers in the U.S, boasting of well over 5 million customers. The company owns about 38000 MW of generation power in the United States, having the biggest transmission line in the country, being about 63000 kilometers (Edenhofer, et al., 2011). The company also boasts of various subsidiaries, namely AEP Ohio, AEP Texas, Kentucky Power, Indiana Michigan Power and Appalachian power.

Some of the non-renewable energy resources used by this company include coal, which takes about 66 percent of its generation portfolio and nuclear power, which accounts for about 6 percent. The company also uses green technologies such as hybrid technology, solar and wind energy.

The Southern Company is another electricity generating company in the United States, which has about 4.4 million customers. The company owns about 46000 MW generating capacity. It is located in Atlanta and supplies electricity in the entire Southeast region by the help of its subsidiaries. The company is one of the leading Fortune 500 companies producing clean, affordable and safe electricity which is reliable by all means (Edenhofer, et al., 2011). The company has various electric utilities in about four states, and in addition offers fiber optics and wireless communications. The brands related to the company are renowned for their remarkable levels of innovation, superb customer service and their general low cost of retail electric prices, in addition to the fact that they are reliable.

Southern Company and its subsidiaries are on the forefront of bringing about the rebirth of nuclear energy, and they happened to be the first to build the inaugural nuclear units in one generation of America. Through this, the company brings out its commitment in energy innovation by coming up with a top of the range coal gasification plant. The company’s major sources of energy include coal (which accounts for about 57%); nuclear (23%) and natural gas (16%). The company also makes use of renewable energy sources, which include hydroelectric power, which accounts for about 4%. The vision for the Southern company regarding power production is to consolidate a unified team having a common focus of being the world’s best. The company is also confident that it is working towards generating growth for its future, the key aspects being operating power plants better than anyone else, consequently being responsible with the environment.

AEP, on the other hand, has the sustainability vision of being and energy leader, by means of various programs and technologies aimed at protecting people and properly dealing with its effect on the environment and enhancing energy control. The company strives to ensure customer control in terms of usage of electricity and seeks to venture into renewable energy and other green technologies. All this is in a bid to heighten the positive socio-economic and environmental effects of its operations.

In addition to its usage in generation of thermal electricity, coal also finds other uses in the manufacture of products such as naphthalene and Saccharin among others. Several effects are associated with its usage in all these areas (Zycher, 2011). Firstly, coal leads to a significant damage to its immediate environment and the landscape in the surrounding region. During the process of mining, which is mainly open mining, a lot of dust is emitted, which results to general environmental pollution, and may lead to lung diseases among human beings. At the same time, when coal is being mined, there is always emission of harmful gases like Carbon (IV) oxide and Carbon (II) oxide, which result in air pollution.

Other harmful effects of coal include the acidification of water in rivers and streams, making them unsuitable for human consumption while at the same time interfering with the natural ecosystem in such places (Harman, 2005). During usage of coal, its complete combustion, as is the case with other fossil fuels, results in the production of Carbon (II) oxide, Sulphur (IV) oxide, fly ash, smoke and dust among other materials, which eventually are harmful to both water and soil, in addition to air. Mercury is also another product that is formed and is very harmful to the neural system in men as well as general development. Several human beings are killed each year during the process of mining coal.

Nuclear energy is another source of electricity that produces steam, which is used to drive turbines. The major component used in this case is Uranium 23, which is able to yield unlimited energy (Zycher, 2011). Much as the plants that use nuclear energy do not result in air pollution and other greenhouse gas emissions, issues arise with the mining of the Uranium ore and using it. The nuclear waste, which is radio active in nature, is harmful to men for very many years (Harman, 2005). Presently, no suitable means of storing such waste energy has been determined. These waste products can, therefore, not be dumped just anywhere in the environment as they are hazardous. On some instances, these nuclear power plants may go through significant failures that lead to ruinous meltdowns such as that of Chernobyl, and such accidents may cause environmental obstacles.

Natural gas is found in the crust of the earth together with oil and is made up of methane, ethane, and other carbon oxides. The gas contributes to air pollution, and is one of the emitters of greenhouse gases, which usually lead to global warming. The air pollutants released by natural gas may be few, but methane, which happens to be its main component, is a powerful greenhouse gas that contributes to 3 percent of greenhouse emission in America. Just as when drilling and oil, when natural gas is extracted, it causes substantial disturbance to vegetation and the soil alike, and this has a negative impact on wildlife.

There are times when fracking is considered an option in the removal of natural gas from areas that are difficult to access. Since so many toxic chemicals are used, the process leads to the contamination of underground water, which eventually leads to devastating health problems on human beings and wildlife (Harman, 2005). Both companies face a major challenge given the fact that a large percentage of their electric power is sourced from non-renewable sources. At the same time, these company need to continue maintaining their competitive advantage even as they put their focus in minimizing usage of non-renewable energy sources due to their effect on the environment and the health of human beings and wildlife. It is quite evident that to achieve a level of acceptable environmental standards will need them to channel many financial resources in that direction, and this poses a significant challenge.

Based on the comparisons made regarding the two company profiles, it can be concluded that, despite the fact that both of them are committed towards ensuring positive impacts on the environment, AEP is leading in the use of green technologies. The Southern company is also doing its best to minimize usage of non-renewable energy, which is a commendable effort. In terms of management, both companies being key competitors will require keen observance and managerial skills to ensure their survival in the industry, consequently maintaining their commitment towards ensuring their operations are environmentally friendly.

References

Edenhofer, O., Pichs-Madruga, R., Sokona, Y., Seyboth, K., Kadner, S., Zwickel, T., et al. (2011). Renewable Energy Sources and Climate Change Mitigation: Special Report of the Intergovernmental Panel on Climate Change. Cambridge: Cambridge University Press.

Harman, R. (2005). The Earth’s Resources: Renewable and Non-Renewable (Earth’s Processes) . New York: Heinemann-Raintree.

Zycher, B. (2011). Renewable Electricity Generation: Economic Analysis and Outlook. New York: AEI Press.