Defeated, but with increased shareholder support this year, two shareholder transparency resolutions have been introduced year after year at Southern Company (SO), one on coal ash and the other on political spending. Here’s video of the political spending resolution being presented at the meeting, and here’s the text of the resolution. This year as usual the SO board opposed both resolutions, and as you can hear SO CEO Thomas A. Fanning announce in this video, both were voted down, with these percentages:

• 26% for Coal combustion byproducts environmental; higher than the 21% in 2010.
• 11% for Lobbying contributions and expenditures report

The reasons the board gave for opposing the political spending transparency resolution include that SO claims it is already disclosing everything it needs to. Much of that disclosure started in 2006 due to shareholder and outside pressure to do so. Center for Political Accountability press release 5 April 2006,

McDonald’s (NYSE: MCD) and Southern Co. (NYSE:SO) agreed to disclose and have their directors oversee soft money political contributions made with corporate funds, shareholder activists announced today. The groups, Washington-based Center for Political Accountability (CPA), socially responsible investment firm Trillium Asset Management Corp., and the Central Laborers’ Pension Fund, are part of a nationwide campaign to bring transparency and accountability to company political spending.

In its own 2012 statement of opposition, the SO board noted shareholder pressure is having an effect on transparency:

Additionally, since the receipt of the proponent’s resolution, the Company has undertaken to enhance its lobbying-related activities standards, procedures, and documents and also has enhanced its website disclosures to address concerns raised by the resolution.

The SO board didn’t mention that SO sued to keep these same resolutions off the shareholder ballot in 2011, but the SEC said SO didn’t have enough transparency and couldn’t prevent shareholders from voting on these resolutions.

Speaking of political spending transparency, is SO still a member of ALEC?

Here’s a video playlist:

Coal ash and political spending transparency shareholder resolutions defeated
Shareholder Meeting, Southern Company (SO),
Callaway Gardens, Pine Mountain, Georgia, 23 May 2012.
Video by John S. Quarterman for Lowndes Area Knowledge Exchange (LAKE).

Here are the shareholder resolutions about coal ash and political spending transparency, including the SO board recommendations on each.

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ITEM NO. 4 — STOCKHOLDER PROPOSAL ON A COAL COMBUSTION BYPRODUCTS ENVIRONMENTAL REPORT

The Company has been advised that Green Century Capital Management, Inc., 114 State Street, Suite 200, Boston, Massachusetts 02109, holder of 120 shares of Common Stock, and Catholic Health East, 3805 West Chester Pike, Suite 100, Newtown Square, Pennsylvania 19073, holder of 154,040 shares of Common Stock, propose to submit the following resolution at the 2012 Annual Meeting of Stockholders.

“Whereas: Coal combustion waste (CCW or coal ash) is a by-product of burning coal that contains potentially high concentrations of arsenic, mercury, heavy metals and other toxins filtered out of smokestacks by pollution control equipment. CCW is often stored in landfills, impoundment ponds or abandoned mines. Over 130 million tons of CCW are generated each year in the U.S.

“Coal combustion comprised a significant portion (58%) of Southern Company’s generation capacity in 2010.

“The toxins in CCW have been linked to cancer, organ failure, and other serious health problems. In October 2009, the U.S. Environmental Protection Agency (EPA) published a report finding that ‘Pollutants in coal combustion wastewater are of particular concern because they can occur in large quantities (i.e., total pounds) and at high concentrations…in discharges and leachate to groundwater and surface waters.’

“The EPA has found evidence at over 60 sites in the U.S. that CCW has polluted ground and surface waters, including at least one site belonging to Southern Company. In some of these cases, companies have paid substantial fines and have suffered reputational consequences as a result of the contamination.

“Reports by the New York Times and others have drawn attention to CCW’s impact on waterways, as a result of leaking CCW storage sites or direct discharge into surrounding rivers and streams.

“The Tennessee Valley Authority’s (TVA) 1.1 billion gallon CCW spill in December 2008 that covered over 300 acres in eastern Tennessee with coal ash sludge highlights the serious environmental risks associated with CCW. TVA estimates a total cleanup cost of $1.2 billion. This figure does not include the legal claims that have arisen in the spill’s aftermath.

“Southern Company operates 22 CCW storage facilities but does not disclose whether each of these ponds has liners, caps, groundwater monitoring, or leachate collection systems beyond compliance with current regulations. This information is critical for investors to understand the potential impact of our company’s ash ponds on the environment and possible related risks.

“Our company also re-uses a significant portion of its CCW. Some forms of reusing dry CCW can pose public health and environmental risks in the dry form by leaching into water.

“RESOLVED: Shareholders request that the Board prepare a report on the company’s efforts, above and beyond current compliance, to reduce environmental and health hazards associated with coal combustion waste contaminating water (including the implementation of caps, liners, groundwater monitoring, and/or leachate collection systems), and how those efforts may reduce legal, reputational and other risks to the company’s finances and operations. This report should be available to shareholders by August 2012, be prepared at reasonable cost, and omit confidential information such as proprietary data or legal strategy.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” ITEM NO. 4 FOR THE FOLLOWING REASONS:

The Company has already prepared a coal combustion byproducts report (CCB Report) addressing the issues raised in the proponents’ proposal. The CCB Report has been posted on the Company’s website since March 2010 and is updated periodically. The CCB Report includes relevant information on the Company’s affiliates’ operations related to coal combustion byproducts (CCBs), as well as the broad range of steps (including steps beyond current compliance) taken to ensure that the priorities of public safety and the security of the Company’s affiliates’ plants are met. The efforts identified in the CCB Report include procedures for safe handling, the beneficial use market, and technology research efforts. The Company’s commitment to extensive environmental compliance procedures is a key element of the Company’s management of legal, reputational, and other risks.

As detailed in the CCB Report, each of the Company’s affiliates has an extensive system in place to meet or exceed all regulations governing CCB management and help ensure safe operation. In addition, a significant amount of CCBs from the Company’s affiliates’ coal-based power generation plants, including coal ash and gypsum, is recycled for safe and beneficial uses such as concrete production and road building. The beneficial use programs of the Company’s affiliates have succeeded in reducing landfill obligations by more than

1.5 million tons annually and have many associated environmental benefits, including reductions in energy consumption, greenhouse gases, need for additional landfill space, and raw material consumption. The characteristics of CCBs enable beneficial uses and management of such CCBs to be undertaken safely. The concentration of metals in CCBs that occurs naturally in coal in trace amounts is much lower than the levels found in other substances that are required to be regulated as hazardous. The CCB Report further discusses the Company’s history of safe management of CCBs. While the Company’s affiliates have focused recent efforts on the beneficial use of CCBs, they have safely managed the remaining CCBs at their respective plants for decades. Each of the Company’s affiliates has a robust program in place to ensure the safety and integrity of dams and dikes at on-site surface impoundments. They are inspected at least every week by trained plant personnel and inspected at least every year by professional dam safety engineers.

Additionally, the CCB Report provides links to public disclosures regarding the Company’s affiliates’ plants that manage CCBs. In particular, a link to the extensive, detailed information about the Company’s affiliates’ management of CCBs that was provided to the U.S. Environmental Protection Agency (EPA) is included. The EPA issued information collection requests to facilities throughout the country that manage surface impoundments containing CCBs. The information provided to the EPA by the Company, along with the results of onsite inspections of the Company’s affiliates’ facilities, is available through a link to the EPA website (http://www.epa.gov/waste/nonhaz/industrial/special/fossil/surveys/index.htm), which link is also included in the CCB Report. The CCB Report also identifies the rules proposed by the EPA to regulate CCBs and provides a link to the Company’s comments to these proposed rules.

The CCB Report provides details on the Company’s research and development efforts with respect to CCB management, identifying initiatives to develop new and improved beneficial use of CCBs. As noted in the CCB Report, the Company has managed nearly $500 million in research and development over the past decade, including several projects to find new and innovative ways to beneficially use CCBs.

The Company also posts on its website a comprehensive report, the Corporate Responsibility Report, which was created in 2006 and is updated routinely as new information becomes available, relating to various topics. The Corporate Responsibility Report includes a section relating to environmental matters and includes information on the management and beneficial use of CCBs.

Through the development of the reports discussed above, the Company has effectively addressed the proponents’ proposal.

The Company-produced reports are available either through the Company’s external website at www.southerncompany.com or by contacting Melissa K. Caen, Assistant Corporate Secretary, Southern Company, 30 Ivan Allen Jr. Boulevard NW, Atlanta, Georgia 30308 and requesting a copy.

The vote needed to pass the proponents’ resolution is the affirmative vote of a majority of the votes cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” ITEM NO. 4.

ITEM NO. 5 — STOCKHOLDER PROPOSAL ON A LOBBYING CONTRIBUTIONS AND EXPENDITURES REPORT

The Company has been advised that the Comptroller of the State of New York, as the sole Trustee of the New York State Common Retirement Fund, 633 Third Avenue 31st Floor, New York, New York 10017, holder of 2,838,582 shares of Common Stock, proposes to submit the following resolution at the 2012 Annual Meeting of Stockholders.

“Whereas, businesses have a recognized legal right to express opinions to legislators and regulators on public policy matters, it is important that our company’s lobbying positions, as well as processes to influence public policy are transparent. Public opinion is skeptical of corporate influence on Congress and public policy and questionable lobbying activity may pose risks to our company’s reputation when controversial positions are embraced. Hence, we believe full disclosure of Southern’s policies, procedures and oversight mechanisms is warranted.

“Resolved, the stockholders of The Southern Company (‘Southern’) request the Board authorize the preparation of a report, updated annually, disclosing:

1. Company policy and procedures governing the lobbying of legislators and regulators, including that done on our company’s behalf by trade associations. The disclosure should include both direct and indirect lobbying and grassroots lobbying communications. 2. A listing of payments (both direct and indirect, including payments to trade associations) used for direct lobbying as well as grassroots lobbying communications, including the amount of the payment and the recipient. 3. Membership in and payments to any tax-exempt organization that writes and endorses model legislation. 4. Description of the decision making process and oversight by the management and Board for a. direct and indirect lobbying contribution or expenditure; and b. payment for grassroots lobbying expenditure. “For purposes of this proposal, a ‘grassroots lobbying communication’ is a communication directed to the general public that (a) refers to specific legislation, (b) reflects a view on the legislation and (c) encourages the recipient of the communication to take action with respect to the legislation.

“Both ‘direct and indirect lobbying’ and ‘grassroots lobbying communications’ include efforts at the local, state and federal levels.

“The report shall be presented to the Audit Committee of the Board or other relevant oversight committees of the Board and posted on the company’s website.

“Supporting Statement

“As stockholders, we encourage transparency and accountability on the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly as well as grassroots lobbying initiatives. We believe such disclosure is in the stockholder’s best interests. Absent a system of accountability, company assets could be used for policy objectives contrary to a company’s long-term interests posing risks to the company and stockholders.

“Southern spent approximately $26.67 million in 2009 and 2010 on direct federal lobbying activities, according to disclosure reports (U.S. Senate Office of Public Records). This figure may not include grassroots lobbying to directly influence legislation by mobilizing public support or opposition. Also, not all states require disclosure of lobbying expenditures to influence legislation or regulation.

“Such expenditures and contributions can potentially involve the company in controversies posing reputational risks.

“We encourage our Board to require comprehensive disclosure related to direct, indirect and grassroots lobbying.”

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” ITEM NO. 5 FOR THE FOLLOWING REASONS:

The Board believes that the Company has a legitimate interest in participating in the legislative and regulatory process at the federal, state, and local levels of government when such participation is in the best interest of the Company and its stockholders. The Company is committed to transparency, accountability, and continuous improvement, including in the area of lobbying-related activities. The Company complies with all federal and state lobbying registration and disclosure requirements. Additionally, since the receipt of the proponent’s resolution, the Company has undertaken to enhance its lobbying-related activities standards, procedures, and documents and also has enhanced its website disclosures to address concerns raised by the resolution. The Company believes that these enhancements, together with the Company’s existing policies, practices, and procedures, satisfy the main purpose of the proponent’s resolution.

Oversight

The Company’s legislative and regulatory activities are overseen, and participation in coalitions, or the engagement of individuals and/or entities which perform any lobbying activities on behalf of the Company, are approved by the Company’s Executive Vice President — External Affairs and the Company’s Compliance Officer, and any federal lobbying engagement is reported at the time of approval to the Company’s Vice President — Governmental Relations (Washington Office). For each subsidiary of the Company, these activities must be approved by the applicable subsidiary’s senior External Affairs Officer and Compliance Officer if the engagement is through or also on behalf of such company. Additionally, management provides regular updates on lobbyists and lobbying activities to the Chief Executive Officer of the Company or of the applicable subsidiary of the Company involved, the Board of Directors of the Company, and the Company’s management council.

Reporting

The Company provides its stockholders with useful information about its lobbying-related activities, including by posting its Overview of Southern Company Policies and Practices for Lobbying-Related Activities, as well as annually posting a listing of all trade associations to which it makes yearly payments of $50,000 or more, on its website at http://investor.southerncompany.com/political_contributions.cfm.

The Company and its subsidiaries fully comply with all federal and state lobbying registration and disclosure requirements, which include filing all required reports with Congress and with the applicable state ethics agencies. These reports on federal lobbying activities are readily available for public review on the websites of the U.S. House (www.house.gov) and the U.S. Senate (www.senate.gov) and provide information on activities associated with influencing legislation through communication with any member or employee of Congress or with any covered executive branch official. The federal reports also provide disclosure on expenditures for the applicable quarter, describe the specific pieces of legislation that were the topic of communications, and identify the individuals who lobbied on behalf of the Company or any of its subsidiaries. Subsidiaries of the Company and their registered lobbyists file similar publicly-available reports at the state level that are available for review from the applicable state ethics agencies.

Memberships

The Company is a member of a number of trade associations and industry groups at the local, state, and national level. All trade associations to which the Company makes yearly payments of $50,000 or more are disclosed on the Company’s website. The Company believes that it is in the best interest of the Company and its stockholders to participate in trade associations specific to the Company’s industry as trade associations allow the Company to collaborate with industry peers and, as a result, have a stronger impact than the Company might otherwise have individually. From time to time, some of these trade associations and industry groups communicate the position of its membership on public policy issues to government officials and the public. Although these trade association and industry groups are not primarily lobbying entities, a portion of the dues that the Company and other participants pay to such trade associations and industry groups may be part of the funds they use, in their sole discretion, to engage in lobbying activities. Because the Company does not direct how these funds are used and the Company may not agree with all positions such dues are used to support, disclosure of the Company’s dues to each of these organizations could misrepresent the Company’s position on legislative issues and would not provide stockholders with any meaningful information.

The Company is also a member of a number of tax-exempt organizations that, from time to time, write or endorse legislation (model or otherwise). This legislation may be unrelated to the Company and may be written or endorsed without the input of the Company. Because the Company may not agree with all positions taken by these tax-exempt organizations, disclosure of the Company’s membership in such tax-exempt organizations could misrepresent the Company’s position on legislative issues and would not provide stockholders with any meaningful information.

Conclusion

Based on the above, the Board believes that publicly-available information on the Company’s lobbying activities, including information made available on the Company’s website in response to the proponent’s resolution, is understandable and, together with the oversight of the Company’s legislative and regulatory activities by the Board and management discussed above, satisfy the main purpose of the proponent’s resolution. The additional information requested by the proponent would be burdensome and would not materially alter the Company’s current disclosure of its legislative and regulatory activities.

The vote needed to pass the proponent’s resolution is the affirmative vote of a majority of the votes cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” ITEM NO. 5. FOR THE FOLLOWING REASONS:

The Board believes that the Company has a legitimate interest in participating in the legislative and regulatory process at the federal, state, and local levels of government when such participation is in the best interest of the Company and its stockholders. The Company is committed to transparency, accountability, and continuous improvement, including in the area of lobbying-related activities. The Company complies with all federal and state lobbying registration and disclosure requirements. Additionally, since the receipt of the proponent’s resolution, the Company has undertaken to enhance its lobbying-related activities standards, procedures, and documents and also has enhanced its website disclosures to address concerns raised by the resolution. The Company believes that these enhancements, together with the Company’s existing policies, practices, and procedures, satisfy the main purpose of the proponent’s resolution.

Oversight

The Company’s legislative and regulatory activities are overseen, and participation in coalitions, or the engagement of individuals and/or entities which perform any lobbying activities on behalf of the Company, are approved by the Company’s Executive Vice President — External Affairs and the Company’s Compliance Officer, and any federal lobbying engagement is reported at the time of approval to the Company’s Vice President — Governmental Relations (Washington Office). For each subsidiary of the Company, these activities must be approved by the applicable subsidiary’s senior External Affairs Officer and Compliance Officer if the engagement is through or also on behalf of such company. Additionally, management provides regular updates on lobbyists and lobbying activities to the Chief Executive Officer of the Company or of the applicable subsidiary of the Company involved, the Board of Directors of the Company, and the Company’s management council.

Reporting

The Company provides its stockholders with useful information about its lobbying-related activities, including by posting its Overview of Southern Company Policies and Practices for Lobbying-Related Activities, as well as annually posting a listing of all trade associations to which it makes yearly payments of $50,000 or more, on its website at http://investor.southerncompany.com/political_contributions.cfm.

The Company and its subsidiaries fully comply with all federal and state lobbying registration and disclosure requirements, which include filing all required reports with Congress and with the applicable state ethics agencies. These reports on federal lobbying activities are readily available for public review on the websites of the U.S. House (www.house.gov) and the U.S. Senate (www.senate.gov) and provide information on activities associated with influencing legislation through communication with any member or employee of Congress or with any covered executive branch official. The federal reports also provide disclosure on expenditures for the applicable quarter, describe the specific pieces of legislation that were the topic of communications, and identify the individuals who lobbied on behalf of the Company or any of its subsidiaries. Subsidiaries of the Company and their registered lobbyists file similar publicly-available reports at the state level that are available for review from the applicable state ethics agencies.

Memberships

The Company is a member of a number of trade associations and industry groups at the local, state, and national level. All trade associations to which the Company makes yearly payments of $50,000 or more are disclosed on the Company’s website. The Company believes that it is in the best interest of the Company and its stockholders to participate in trade associations specific to the Company’s industry as trade associations allow the Company to collaborate with industry peers and, as a result, have a stronger impact than the Company might otherwise have individually. From time to time, some of these trade associations and industry groups communicate the position of its membership on public policy issues to government officials and the public. Although these trade association and industry groups are not primarily lobbying entities, a portion of the dues that the Company and other participants pay to such trade associations and industry groups may be part of the funds they use, in their sole discretion, to engage in lobbying activities. Because the Company does not direct how these funds are used and the Company may not agree with all positions such dues are used to support, disclosure of the Company’s dues to each of these organizations could misrepresent the Company’s position on legislative issues and would not provide stockholders with any meaningful information. The Company is also a member of a number of tax-exempt organizations that, from time to time, write or endorse legislation (model or otherwise). This legislation may be unrelated to the Company and may be written or endorsed without the input of the Company. Because the Company may not agree with all positions taken by these tax-exempt organizations, disclosure of the Company’s membership in such tax-exempt organizations could misrepresent the Company’s position on legislative issues and would not provide stockholders with any meaningful information.

Conclusion

Based on the above, the Board believes that publicly-available information on the Company’s lobbying activities, including information made available on the Company’s website in response to the proponent’s resolution, is understandable and, together with the oversight of the Company’s legislative and regulatory activities by the Board and management discussed above, satisfy the main purpose of the proponent’s resolution. The additional information requested by the proponent would be burdensome and would not materially alter the Company’s current disclosure of its legislative and regulatory activities.

The vote needed to pass the proponent’s resolution is the affirmative vote of a majority of the votes cast.

THE BOARD OF DIRECTORS RECOMMENDS A VOTE “AGAINST” ITEM NO. 5.

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