Each month, utility expert David Dittman, editor of Utility Forecaster, selects a favorite income and a favorite growth situation as his Spotlight Stocks; here's a look at his latest featured buy in the growth category.

A series of cost overruns and delays at two significant capacity expansion projects for major regulated affiliates in its Southeast service territory have weighed on Southern Company (SO) for the past couple years.

But recent developments are encouraging. The Georgia Public Service Commission (GPSC) unanimously approved $389 million in spending for two AP100 nuclear reactors at Southern subsidiary Georgia Power’s Plant Vogtle in 2013.

The GPSC also accepted management’s current schedule for the project, which has the first of the two new reactors online in late 2017.

Meanwhile, Mississippi Power’s $5.5 billion Kemper County integrated gasification combined cycle (IGCC) project achieved a significant milestone, with three power-generating turbines put into commercial operation burning natural gas as work toward completing the part of the plant that will turn lignite coal into synthetic gas continues.

The coal-fired power plant, which will capture 65% of the carbon dioxide (CO2) emissions from a 582 megawatt facility, is on track for a May 31, 2015, operation date. The gasifier will begin capturing CO2 at the gasification plant this fall.

It’s the first of its kind in the US, and it could provide a template for future projects by other power producers.

Meanwhile, second-quarter adjusted earnings per share were up 3% to $0.68 on higher electricity usage due to favorable weather as well as robust industrial activity. Revenue for the period was up 5.2% year-over-year.

Total retail sales increased by 2.1%, driven by a 3% increase in industrial sales. Industrial sales account for approximately a third of total revenue.

Southern’s industrial sales growth is a solid indicator of the potential for a broader economic recovery across the Southeast. Southern Company, which is yielding 4.8%, is a buy under $44.

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