What happened Shares of utility stock Southern Company (NYSE: SO) declined 10.3% in the month of March, according to data provided by S&P Global Market Intelligence. The usual investor mindset is that defensive stocks like utilities should be stable regardless of the condition of the overall stock market, but it's tough for any company to escape the wrath of an unprecedented event like the COVID-19 pandemic. The stock, however, has swiftly reversed course and gained almost 12% in April so far, as of this writing. So what Southern Company isn't immune from the COVID-19 pandemic effect. The biggest threat is the widespread lockdown of large power consumers, or commercial and industrial establishments like shops, malls, and offices. A prolonged slowdown in manufacturing activity can hit demand for electricity and gas. Image source: Getty Images. That's undeniably the primary reason why the stock lost weight last month. Because utility stocks also typically carry high levels of debt, any reduction in demand and cash flow also raises concerns about debt repayment and dividend capabilities. Investors have also been worried about any potential impact of the pandemic on Southern Company's Vogtle nuclear construction project. The stock, however, got a lift later in March when the government announced a $2 trillion coronavirus stimulus package, lifting investor hopes of minimal damage to key sectors. Now what Southern's April 1 regulatory filing, though, might disappoint investors, as management said the COVID-19 effect "could disrupt or delay construction, testing, supervisory and support activities at Plant Vogtle Units 3 and 4," which could mean project time and cost overruns for the utility. On a positive note, Southern Company's electric utility subsidiary Georgia Power has applied for a reduction in its fuel rates by 16% beginning June 1 with the regulatory body Georgia Public Service Commission. That means Georgia Power's natural gas costs are declining as it's making better use of cleaner and renewable energy sources like solar, wind, and nuclear. Georgia Power was the largest contributor to Southern Company's total operating revenue and operating income in 2019. The stock's rally in April so far, though, suggests investors are more than willing to buy such traditionally "recession-proof stocks," given the rising global coronavirus uncertainty. 10 stocks we like better than Southern CompanyWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.* David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Southern Company wasn't one of them! That's right -- they think these 10 stocks are even better buys. See the 10 stocks *Stock Advisor returns as of March 18, 2020 Neha Chamaria has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.Source