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What changed in SOUTHERN CO's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of SOUTHERN CO's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+832 added−823 removedSource: 10-K (2024-02-15) vs 10-K (2023-02-16)

Top changes in SOUTHERN CO's 2023 10-K

832 paragraphs added · 823 removed · 648 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

81 edited+8 added−10 removed122 unchanged
Biggest changeOn August 3, 2022, the NRC published its 103(g) finding that the acceptance criteria in the COL for Unit 3 had been met, which allowed nuclear fuel to be loaded and start-up testing to begin. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for additional information.
Biggest changeThe NRC licenses for Plant Vogtle Units 1, 2, 3, and 4 expire in 2047, 2049, 2062, and 2063, respectively. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for additional information on Plant Vogtle Units 3 and 4, including the projected in-service date for Unit 4.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "General" and – RESULTS OF OPERATIONS – "Southern Company Gas – Seasonality of Results" in Item 7 herein for information regarding trends in market demand for electricity and natural gas and the impact of seasonality on Southern Company Gas' business, respectively.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "General" and – RESULTS OF OPERATIONS – "Southern Company Gas" in Item 7 herein for information regarding trends in market demand for electricity and natural gas and the impact of seasonality on Southern Company Gas' business, respectively.
In December 2021, OPC, as an agent for co-licensees of the project, filed a notice of intent with the FERC to relicense the project. An application to relicense the project is expected to be filed with the FERC by December 31, 2024. See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein for additional information.
In 2021, OPC, as an agent for co-licensees of the project, filed a notice of intent with the FERC to relicense the project. An application to relicense the project is expected to be filed with the FERC by December 31, 2024. See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein for additional information.
Court of Appeals for the District of Columbia Circuit vacated the order and remanded the proceeding to the FERC. Alabama Power continues to operate the Coosa River developments under annual licenses issued by the FERC. In November 2021, Alabama Power filed an application with the FERC to relicense the Harris Dam project on the Tallapoosa River.
Court of Appeals for the District of Columbia Circuit vacated the order and remanded the proceeding to the FERC. Alabama Power continues to operate the Coosa River developments under annual licenses issued by the FERC. In 2021, Alabama Power filed an application with the FERC to relicense the Harris Dam project on the Tallapoosa River.
(d) Does not include approximately $0.5 billion for planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy. (e) Includes costs for ongoing capital projects associated with infrastructure improvement programs for certain natural gas distribution utilities that have been previously approved by their applicable state regulatory agencies.
(d) Does not include approximately $0.8 billion for planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy. (e) Includes costs for ongoing capital projects associated with infrastructure improvement programs for certain natural gas distribution utilities that have been previously approved by their applicable state regulatory agencies.
The traditional electric operating companies have agreements in place from which they expect to receive substantially all of their 2023 coal burn requirements. These agreements have terms ranging between one and three years. Fuel procurement specifications, emission allowances, environmental control systems, and fuel changes have allowed the traditional electric operating companies to remain within limits set by applicable environmental regulations.
The traditional electric operating companies have agreements in place from which they expect to receive substantially all of their 2024 coal burn requirements. These agreements have terms ranging between one and three years. Fuel procurement specifications, emission allowances, environmental control systems, and fuel changes have allowed the traditional electric operating companies to remain within limits set by applicable environmental regulations.
In this territory there are non-affiliated electric distribution systems that obtain some or all of their power requirements either directly or indirectly from the traditional electric operating companies. As of December 31, 2022, the territory had an area of approximately 116,000 square miles and an estimated population of approximately 17 million.
In this territory there are non-affiliated electric distribution systems that obtain some or all of their power requirements either directly or indirectly from the traditional electric operating companies. As of December 31, 2023, the territory had an area of approximately 116,000 square miles and an estimated population of approximately 17 million.
Gas distribution operations, the largest segment of Southern Company Gas' business, operates, constructs, and maintains 77,591 miles of natural gas pipelines and 14 storage facilities, with total capacity of 157 Bcf, to provide natural gas to residential, commercial, and industrial customers. Gas distribution operations serves approximately 4.4 million customers across four states.
Gas distribution operations, the largest segment of Southern Company Gas' business, operates, constructs, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities, with total capacity of 157 Bcf, to provide natural gas to residential, commercial, and industrial customers. Gas distribution operations serves approximately 4.4 million customers across four states.
The traditional electric operating companies have joined with other utilities in the Southeast to form the SERC to augment further the reliability and adequacy of bulk power supply. Through the SERC, the traditional electric operating companies are represented at the North American Electric Reliability Corporation. On November 9, 2022, the Southeast Energy Exchange Market (SEEM) began service.
The traditional electric operating companies have joined with other utilities in the Southeast to form the SERC to augment further the reliability and adequacy of bulk power supply. Through the SERC, the traditional electric operating companies are represented at the North American Electric Reliability Corporation. In November 2022, the Southeast Energy Exchange Market (SEEM) began service.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION – "Southern Company – Electricity Business – Fuel and Purchased Power Expenses" and MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION under "Fuel and Purchased Power Expenses" for each of the traditional electric operating companies in Item 7 herein for information regarding the electricity generated and the average cost of fuel in cents per net KWH generated for the years 2021 and 2022.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION – "Southern Company – Electricity Business – Fuel and Purchased Power Expenses" and MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION under "Fuel and Purchased Power Expenses" for each of the traditional electric operating companies in Item 7 herein for information regarding the electricity generated and the average cost of fuel in cents per net KWH generated for the years 2022 and 2023.
As of December 31, 2022, among the hydroelectric projects subject to licensing by the FERC are 14 existing Alabama Power generating stations having an aggregate installed capacity of 1.7 million KWs and 17 existing Georgia Power generating stations and one generating station partially owned by Georgia Power, with a combined aggregate installed capacity of 1.1 million KWs.
As of December 31, 2023, among the hydroelectric projects subject to licensing by the FERC are 14 existing Alabama Power generating stations having an aggregate installed capacity of 1.7 million KWs and 17 existing Georgia Power generating stations and one generating station partially owned by Georgia Power, with a combined aggregate installed capacity of 1.1 million KWs.
Gas marketing services is comprised of SouthStar, which serves approximately 622,000 natural gas commodity customers, markets gas to residential, commercial, and industrial customers and offers energy-related products that provide natural gas price stability and utility bill management in competitive markets or markets that provide for customer choice.
Gas marketing services is comprised of SouthStar, which serves approximately 665,000 natural gas commodity customers, markets gas to residential, commercial, and industrial customers and offers energy-related products that provide natural gas price stability and utility bill management in competitive markets or markets that provide for customer choice.
As of December 31, 2022, there were 72 municipally-owned electric distribution systems operating in the territory in which the traditional electric operating companies provide electric service at retail or wholesale. As of December 31, 2022, 48 municipally-owned electric distribution systems and one county-owned system received their requirements through MEAG Power.
As of December 31, 2023, there were 72 municipally-owned electric distribution systems operating in the territory in which the traditional electric operating companies provide electric service at retail or wholesale. As of December 31, 2023, 48 municipally-owned electric distribution systems and one county-owned system received their requirements through MEAG Power.
The IRP filing is not intended to supplant or replace the Mississippi PSC's existing regulatory processes for petition and approval of CPCNs for new generating resources. Mississippi Power's most recent IRP was filed in 2021 and the next IRP is scheduled to be filed in April 2024.
The IRP filing is not intended to supplant or replace the Mississippi PSC's existing regulatory processes for petition and approval of CPCNs for new generating resources. Mississippi Power's most recent IRP was filed in 2021 and the next IRP is expected to be filed in April 2024.
As of December 31, 2022, Mississippi Power had a cogeneration agreement in effect with one of its industrial customers. Under the terms of this contract, Mississippi Power purchases any excess generation. During 2022, Mississippi Power did not make any such purchases.
As of December 31, 2023, Mississippi Power had a cogeneration agreement in effect with one of its industrial customers. Under the terms of this contract, Mississippi Power purchases any excess generation. During 2023, Mississippi Power did not make any such purchases.
As of December 31, 2022, PowerSouth owned generating units with more than 1,600 MWs of nameplate capacity, including an undivided 8.16% ownership interest in Alabama Power's Plant Miller Units 1 and 2.
As of December 31, 2023, PowerSouth owned generating units with more than 1,600 MWs of nameplate capacity, including an undivided 8.16% ownership interest in Alabama Power's Plant Miller Units 1 and 2.
In 2023, the Southern Company system's construction program is expected to be apportioned approximately as follows: Southern Company system (a)(b) Alabama Power Georgia Power (a) Mississippi Power (a) (in billions) New generation $ 1.2 $ 0.1 $ 1.1 $ — Environmental compliance (c) 0.1 0.1 0.1 — Generation maintenance 1.2 0.5 0.6 0.1 Transmission 1.5 0.4 1.1 0.1 Distribution 1.6 0.4 1.1 0.1 Nuclear fuel 0.3 0.1 0.2 — General plant 1.0 0.4 0.5 0.1 6.9 2.0 4.6 0.3 Southern Power (d) 0.1 Southern Company Gas (e) 1.8 Other subsidiaries 0.2 Total (a) $ 9.1 $ 2.0 $ 4.6 $ 0.3 (a) Totals may not add due to rounding.
In 2024, the Southern Company system's construction program is expected to be apportioned approximately as follows: Southern Company system (a)(b) Alabama Power Georgia Power Mississippi Power (in billions) New generation $ 1.1 $ — $ 1.0 $ — Environmental compliance (c) 0.1 — 0.1 — Generation maintenance 1.3 0.5 0.7 0.1 Transmission 1.7 0.3 1.4 — Distribution 1.7 0.5 1.1 0.1 Nuclear fuel 0.3 0.1 0.2 — General plant 1.6 0.7 0.9 0.1 7.8 2.1 5.4 0.3 Southern Power (d) 0.3 Southern Company Gas (e) 1.8 Other subsidiaries 0.1 Total (a) $ 10.0 $ 2.1 $ 5.4 $ 0.3 (a) Totals may not add due to rounding.
These estimated expenditures do not include any potential compliance costs associated with any future regulation of CO 2 emissions from fossil fuel-fired electric generating units or costs associated with closure and monitoring of ash ponds and landfills in accordance with the CCR Rule and the related state rules.
These estimated expenditures do not include potential compliance costs associated with any future regulation of CO 2 emissions from fossil fuel-fired electric generating units or the proposed ELG Supplemental Rule, or costs associated with closure and monitoring of ash ponds and landfills in accordance with the CCR Rule and the related state rules.
Procurement plans for natural gas supply and transportation to serve regulated utility customers are reviewed and approved by the regulatory agencies in the states where Southern Company Gas operates.
Southern Company Gas' procurement plans for natural gas supply and transportation to serve regulated utility customers are reviewed and approved by the regulatory agencies in the states where it operates.
Turnover rate, calculated as the percent of employees that terminated employment with the Southern Company system, including voluntary and involuntary terminations and retirements, divided by total employees, was 8.9%.
Turnover rate, calculated as the percent of employees that terminated employment with the Southern Company system, including voluntary and involuntary terminations and retirements, divided by total employees, was 8.3%.
Alabama Power and Georgia Power each have agreements with Southern Nuclear to operate the Southern Company system's existing nuclear plants, Plants Farley, Hatch, and Vogtle. In addition, Georgia Power has an agreement with Southern Nuclear to develop, license, construct, and operate Plant Vogtle Units 3 and 4. See "Regulation – Nuclear Regulation" herein for additional information.
Alabama Power and Georgia Power each have agreements with Southern Nuclear to operate the Southern Company system's existing nuclear plants, Plants Farley, Hatch, and Vogtle (Units 1, 2, and 3). In addition, Georgia Power has an agreement with Southern Nuclear to develop, license, construct, and operate Plant Vogtle Unit 4. See "Regulation – Nuclear Regulation" herein for additional information.
Also see Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for additional information on the Georgia Nuclear Energy Financing Act and the Georgia PSC certification of Plant Vogtle Units 3 and 4, which allow Georgia Power to recover certain financing costs for construction of Plant Vogtle Units 3 and 4.
Also see Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for additional information on the Georgia Nuclear Energy Financing Act and the Georgia PSC certification of Plant Vogtle Units 3 and 4, which have allowed Georgia Power to recover certain financing costs for construction of Plant Vogtle Units 3 and 4.
Southern Company system management supports employee resource groups, diversity councils, mentoring programs, and inclusion teams to provide formal networks of colleagues that can help promote belonging, improve employee retention, and support development. At December 31, 2022, people of color and women represented 30% and 26%, respectively, of the Southern Company system's workforce.
Southern Company system management supports employee resource groups, diversity councils, mentoring programs, and inclusion teams to provide formal networks of colleagues that can help promote belonging, improve employee retention, and support development. At December 31, 2023, people of color and women represented 30% and 25%, respectively, of the Southern Company system's workforce.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information, including estimated expenditures for construction, environmental compliance, and closure and monitoring of ash ponds and landfills for the years 2024 through 2027.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information, including estimated expenditures for construction, environmental compliance, and closure and monitoring of ash ponds and landfills for the years 2025 through 2028.
On July 21, 2022, the Georgia PSC approved Georgia Power's 2022 IRP, as modified by a stipulated agreement among Georgia Power, the staff of the Georgia PSC, and certain intervenors and as further modified by the Georgia PSC.
In July 2022, the Georgia PSC approved Georgia Power's 2022 IRP, as modified by a stipulated agreement among Georgia Power, the staff of the Georgia PSC, and certain intervenors and as further modified by the Georgia PSC.
SEEM, whose members include the traditional electric operating companies and many of the other electric service providers in the Southeast, is an extension of the existing bilateral market where participants use an automated, intra-hour energy exchange to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission.
SEEM, whose members include the traditional electric operating companies and many of the other electric service providers in the Southeast, is an extension of the existing bilateral market where participants use an automated, intra-hour energy exchange to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission. On July 14, 2023, the U.S.
At December 31, 2022, Southern Power's generation fleet, which is owned in part with various partners, totaled 12,501 MWs of nameplate capacity in commercial operation (including 5,121 MWs of nameplate capacity owned by its subsidiaries). See "Traditional Electric Operating Companies" herein for additional information on the Southern Company power pool.
At December 31, 2023, Southern Power's generation fleet, which is owned in part with various partners, totaled 12,498 MWs of nameplate capacity in commercial operation (including 5,118 MWs of nameplate capacity owned by its subsidiaries). See "Traditional Electric Operating Companies" herein for additional information on the Southern Company power pool.
Mississippi Power must also file an annual report on energy delivery improvements, the latest of which was filed on December 1, 2022. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plan" in Item 8 herein for additional information.
Mississippi Power must also file an annual report on energy delivery improvements, the latest of which was filed in November 2023. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plan" in Item 8 herein for additional information.
SCS, acting on behalf of the traditional electric operating companies, also has a contract with SEPA providing for the use of the traditional electric operating companies' facilities at government expense to deliver to certain cooperatives and municipalities, entitled by federal statute to preference in the purchase of power from SEPA, quantities of power equivalent to the amounts of power allocated to them by SEPA from certain U.S. government hydroelectric projects.
I-7 Table of Contents Index to Financial Statements SCS, acting on behalf of the traditional electric operating companies, also has a contract with SEPA providing for the use of the traditional electric operating companies' facilities at government expense to deliver to certain cooperatives and municipalities, entitled by federal statute to preference in the purchase of power from SEPA, quantities of power equivalent to the amounts of power allocated to them by SEPA from certain U.S. government hydroelectric projects.
The Southern Company system had approximately 27,700 employees on its payroll at December 31, 2022 comprised of the following: At December 31, 2022 (*) Alabama Power 6,100 Georgia Power 6,600 Mississippi Power 1,000 Southern Power 500 Southern Company Gas 4,600 SCS 4,000 Southern Nuclear 3,800 PowerSecure and other 1,100 Total Southern Company system 27,700 (*) Numbers are rounded to 100s.
The Southern Company system had approximately 28,100 employees on its payroll at December 31, 2023 comprised of the following: At December 31, 2023 (*) Alabama Power 6,200 Georgia Power 6,600 Mississippi Power 1,000 Southern Power 500 Southern Company Gas 4,800 SCS 4,200 Southern Nuclear 3,800 PowerSecure and other 1,000 Total Southern Company system 28,100 (*) Numbers are rounded to 100s.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs, which are subject to regulation by the FERC. The contracts with these wholesale customers represented 12.4% of Mississippi Power's total operating revenues in 2022.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs, which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023.
See Note 2 to the financial statements under "Alabama Power – Certificates of Convenience and Necessity" in Item 8 herein for additional information. Georgia Power Triennially, Georgia Power must file an IRP with the Georgia PSC that specifies how it intends to meet the future electric service needs of its customers through a combination of demand-side and supply-side resources.
See Note 2 to the financial statements under "Alabama Power – Rate CNP New Plant" in Item 8 herein for additional information. Georgia Power Triennially, Georgia Power must file an IRP with the Georgia PSC that specifies how it intends to meet the future electric service needs of its customers through a combination of demand-side and supply-side resources.
Alabama Power and Georgia Power have multiple contracts covering their nuclear fuel needs for uranium, conversion services, enrichment services, and fuel fabrication with remaining terms ranging from one to 12 years. Management believes suppliers have sufficient nuclear fuel production capability to permit normal operation of the Southern Company system's nuclear generating units.
Alabama Power and Georgia Power have multiple contracts covering their nuclear fuel needs for uranium, conversion services, enrichment services, and fuel fabrication with remaining terms up to 11 years. Management believes suppliers have sufficient nuclear fuel production capability to permit normal operation of the Southern Company system's nuclear generating units.
The FERC must approve certain financings and allows an "at cost standard" for services rendered by system service companies such as SCS and Southern Nuclear. The I-9 Table of Contents Index to Financial Statements FERC is also authorized to establish regional reliability organizations which enforce reliability standards, address impediments to the construction of transmission, and prohibit manipulative energy trading practices.
The FERC must approve certain financings and allows an "at cost standard" for services rendered by system service companies such as SCS and Southern Nuclear. The FERC is also authorized to establish regional reliability organizations which enforce reliability standards, address impediments to the construction of transmission, and prohibit manipulative energy trading practices.
In addition to natural gas supply, SCS has contracts in place for both firm natural gas transportation and storage. Management believes these contracts provide sufficient natural gas supplies, transportation, and storage to ensure normal operations of the Southern Company system's natural gas generating units.
In addition to natural gas supply, SCS has contracts in place for both firm natural gas transportation and storage. Management believes these contracts provide sufficient natural gas supplies, transportation, and storage to ensure normal operations of the Southern Company system's natural gas generating units. See "Natural Gas" herein for information on the natural gas market.
Southern Nuclear operates and provides services to the Southern Company system's nuclear power plants and is currently managing construction of and developing Plant Vogtle Units 3 and 4, which are co-owned by Georgia Power. PowerSecure develops distributed energy and resilience solutions and deploys microgrids for commercial, industrial, governmental, and utility customers. See "The Southern Company System" herein for additional information.
Southern Nuclear operates and provides services to the Southern Company system's nuclear power plants and is currently managing construction and start-up of Plant Vogtle Unit 4, which is co-owned by Georgia Power. PowerSecure develops distributed energy and resilience solutions and deploys microgrids for commercial, industrial, governmental, and utility customers. See "The Southern Company System" herein for additional information.
Federal Power Act The traditional electric operating companies, Southern Power Company and certain of its generation subsidiaries, and SEGCO are all public utilities engaged in wholesale sales of energy in interstate commerce and, therefore, are subject to the rate, financial, and accounting jurisdiction of the FERC under the Federal Power Act.
I-9 Table of Contents Index to Financial Statements Federal Power Act The traditional electric operating companies, Southern Power Company and certain of its generation subsidiaries, and SEGCO are all public utilities engaged in wholesale sales of energy in interstate commerce and, therefore, are subject to the rate, financial, and accounting jurisdiction of the FERC under the Federal Power Act.
SCS, acting on behalf of the traditional electric operating companies and Southern Power Company, has agreements in place for the natural gas burn requirements of the Southern Company system. For 2023, SCS has contracted for 659 Bcf of natural gas supply under agreements with remaining terms up to 11 years.
SCS, acting on behalf of the traditional electric operating companies and Southern Power Company, has agreements in place for the natural gas burn requirements of the Southern Company system. For 2024, SCS has contracted for 620 Bcf of natural gas supply under agreements with remaining terms up to 10 years.
Details of the natural gas distribution utilities at December 31, 2022 are as follows: Utility State Number of customers Approximate miles of pipe (in thousands) Nicor Gas Illinois 2,268 34.7 Atlanta Gas Light Georgia 1,707 35.3 Virginia Natural Gas Virginia 312 5.9 Chattanooga Gas Tennessee 71 1.7 Total 4,358 77.6 For information relating to the sources of revenue for Southern Company Gas, see Item 7 herein and Note 1 to the financial statements under "Revenues – Southern Company Gas" and Note 4 to the financial statements in Item 8 herein.
Details of the natural gas distribution utilities at December 31, 2023 are as follows: Utility State Number of customers Approximate miles of pipe (in thousands) Nicor Gas Illinois 2,276 34.7 Atlanta Gas Light Georgia 1,714 35.6 Virginia Natural Gas Virginia 313 5.9 Chattanooga Gas Tennessee 71 1.7 Total 4,374 77.9 For information relating to the sources of revenue for Southern Company Gas, see Item 7 herein and Note 1 to the financial statements under "Revenues – Southern Company Gas" and Note 4 to the financial statements in Item 8 herein.
I-11 Table of Contents Index to Financial Statements See Note 2 to the financial statements under "Southern Company Gas" in Item 8 herein for a discussion of rate matters and certain cost recovery mechanisms.
See Note 2 to the financial statements under "Southern Company Gas" in Item 8 herein for a discussion of rate matters and certain cost recovery mechanisms.
These responsibilities also include protecting public health and safety, protecting the environment, protecting and safeguarding nuclear materials and nuclear power plants in the interest of national security, and assuring conformity with antitrust laws. The NRC licenses for Georgia Power's Plant Hatch Units 1 and 2 expire in 2034 and 2038, respectively.
These responsibilities also include protecting public health and safety, protecting the environment, protecting and safeguarding nuclear materials and nuclear power plants in the interest of national security, and assuring conformity with antitrust laws. I-10 Table of Contents Index to Financial Statements The NRC licenses for Georgia Power's Plant Hatch Units 1 and 2 expire in 2034 and 2038, respectively.
On August 31, 2022, Southern Nuclear notified the NRC of its intent in 2025 to seek to renew the plant's licenses for an additional 20 years (through 2054 and 2058 for Units 1 and 2, respectively). The NRC licenses for Alabama Power's Plant Farley Units 1 and 2 expire in 2037 and 2041, respectively.
Southern Nuclear has notified the NRC of its intent in the third quarter 2025 to seek to renew the plant's licenses for an additional 20 years (through 2054 and 2058 for Units 1 and 2, respectively). The NRC licenses for Alabama Power's Plant Farley Units 1 and 2 expire in 2037 and 2041, respectively.
In addition to natural gas cost recovery mechanisms, other cost recovery mechanisms and regulatory riders, which vary by utility, allow recovery of certain costs, such as those related to infrastructure replacement programs as well as environmental remediation, energy efficiency plans, and bad debts.
I-11 Table of Contents Index to Financial Statements In addition to natural gas cost recovery mechanisms, other cost recovery mechanisms and regulatory riders, which vary by utility, allow recovery of certain costs, such as those related to infrastructure replacement programs as well as environmental remediation, energy efficiency plans, and bad debts.
Construction Programs The subsidiary companies of Southern Company are engaged in continuous construction programs, including capital expenditures to accommodate existing and estimated future loads on their respective systems and to comply with environmental laws and regulations, as applicable.
I-3 Table of Contents Index to Financial Statements Construction Programs The subsidiary companies of Southern Company are engaged in continuous construction programs, including capital expenditures to accommodate existing and estimated future loads on their respective systems and to comply with environmental laws and regulations, as applicable.
I-6 Table of Contents Index to Financial Statements As of December 31, 2022, there were 62 electric cooperative distribution systems operating in the territories in which the traditional electric operating companies provide electric service at retail or wholesale. PowerSouth is a generating and transmitting cooperative selling power to several distributing cooperatives, municipal systems, and other customers in south Alabama.
As of December 31, 2023, there were 62 electric cooperative distribution systems operating in the territories in which the traditional electric operating companies provide electric service at retail or wholesale. PowerSouth is a generating and transmitting cooperative selling power to several distributing cooperatives, municipal systems, and other customers in south Alabama.
At December 31, 2022, Southern Power had eight tax equity partnership arrangements where the tax equity I-2 Table of Contents Index to Financial Statements investors receive substantially all of the tax benefits from the facilities, including ITCs and PTCs. In addition, Southern Power holds controlling interests in non-tax equity partnerships with its ownership interests primarily ranging from 51% to 66%.
At December 31, 2023, Southern Power had eight tax equity partnership arrangements where the tax equity investors receive substantially all of the tax benefits from the facilities, including ITCs and PTCs. In addition, Southern Power holds controlling interests in non-tax equity partnerships with its ownership interests primarily ranging from 51% to 66%.
Southern Power's success in wholesale energy sales is influenced by various factors including reliability and availability of Southern Power's plants, availability of transmission to serve the demand, price, and Southern Power's ability to contain costs. As of December 31, 2022, Alabama Power had cogeneration contracts in effect with seven industrial customers.
Southern Power's success in wholesale energy sales is influenced by various factors including reliability and availability of Southern Power's plants, availability of transmission to serve the demand, price, and Southern Power's ability to contain costs. I-8 Table of Contents Index to Financial Statements As of December 31, 2023, Alabama Power had cogeneration contracts in effect with seven industrial customers.
I-12 Table of Contents Index to Financial Statements Human Capital Southern Company system management is committed to attracting, developing, and retaining a sustainable workforce and aims to foster a diverse, equitable, inclusive, and innovative culture. The Southern Company system's values – safety first, unquestionable trust, superior performance, and total commitment – guide behavior.
I-12 Table of Contents Index to Financial Statements Human Capital Southern Company system management is committed to attracting, developing, and retaining a sustainable workforce and aims to foster a diverse, equitable, inclusive, and innovative culture. The Southern Company system's values – safety first, intentional inclusion, act with integrity, and superior performance – guide behavior.
For the year ended December 31, 2022, approximately 44% of contracted MWs were with AAA to A- or equivalent rated counterparties, 43% were with BBB+ to BBB- or equivalent rated counterparties, and 11% were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.
For the year ended December 31, 2023, approximately 41% of contracted MWs were with AAA to A- or equivalent rated counterparties, 47% were with BBB+ to BBB- or equivalent rated counterparties, and 10% were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.
See Note 11 to the financial statements for additional information. At December 31, 2022, the average age of the Southern Company system employees was 45 and the average tenure with the Southern Company system was 15 years.
See Note 11 to the financial statements for additional information. At December 31, 2023, the average age of the Southern Company system employees was 44 and the average tenure with the Southern Company system was 14 years.
A majority of Southern Power's partnerships in renewable facilities allow for the sharing of cash distributions and tax benefits at differing percentages, with Southern Power being the controlling partner and thus consolidating the assets and operations of the partnerships.
A majority of Southern Power's partnerships in renewable facilities allow for the sharing of cash distributions and tax benefits at differing percentages, with Southern Power being the controlling partner and thus consolidating the assets and operations of I-2 Table of Contents Index to Financial Statements the partnerships.
For information relating to KWH sales by customer classification for the traditional electric operating companies, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS in Item 7 herein.
I-6 Table of Contents Index to Financial Statements For information relating to KWH sales by customer classification for the traditional electric operating companies, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS in Item 7 herein.
I-4 Table of Contents Index to Financial Statements Financing Programs See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY in Item 7 herein and Note 8 to the financial statements in Item 8 herein for information concerning financing programs.
Financing Programs See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY in Item 7 herein and Note 8 to the financial statements in Item 8 herein for information concerning financing programs.
I-10 Table of Contents Index to Financial Statements See Notes 3 and 6 to the financial statements under "Nuclear Insurance" and "Nuclear Decommissioning," respectively, in Item 8 herein for additional information.
See Notes 3 and 6 to the financial statements under "Nuclear Insurance" and "Nuclear Decommissioning," respectively, in Item 8 herein for additional information.
With the inclusion of investments associated with facilities under construction, as well as other capacity and energy contracts, Southern Power's average investment coverage ratio at December 31, 2022 was 96% through 2027 and 90% through 2032, with an average remaining contract duration of approximately 12 years.
With the inclusion of investments associated with facilities under construction, as well as other capacity and energy contracts, Southern Power's average investment coverage ratio at December 31, 2023 was 97% through 2028 and 89% through 2033, with an average remaining contract duration of approximately 12 years.
Fuel Supply Electric The traditional electric operating companies' and SEGCO's supply of electricity is primarily fueled by natural gas and coal, as well as nuclear for Alabama Power and Georgia Power. Southern Power's supply of electricity is primarily fueled by natural gas.
I-4 Table of Contents Index to Financial Statements Fuel Supply Electric The traditional electric operating companies' and SEGCO's supply of electricity is primarily fueled by natural gas and coal, as well as nuclear for Alabama Power and Georgia Power. Southern Power's supply of electricity is primarily fueled by natural gas.
Southern Company Gas I-5 Table of Contents Index to Financial Statements purchases natural gas supplies in the open market by contracting with producers and marketers and, for Atlanta Gas Light and Chattanooga Gas, under asset management agreements approved by the applicable state regulatory agency.
Southern Company Gas purchases natural gas supplies in the open market by contracting with producers and marketers and, for Atlanta Gas Light and Chattanooga Gas, under asset management agreements approved by the applicable state regulatory agency.
In 2022, the Southern Company system had zero fatalities and a serious injury rate of 0.05, which represents the number of incidents per 100 employees (calculated by taking the number of serious injuries multiplied by 200,000 workhours and divided by the total employee workhours during the year). A serious injury is one that is life-threatening or life-changing for the employee.
In 2023, the Southern Company system had zero fatalities and a serious injury rate of 0.06, which represents the number of incidents per 100 employees (calculated by taking the number of serious injuries multiplied by 200,000 workhours and divided by the total employee workhours during the year).
Under the terms of these contracts, Alabama Power purchases excess energy generated by such companies. During 2022, Alabama Power purchased approximately 68 million KWHs from such companies. The related costs were immaterial. I-8 Table of Contents Index to Financial Statements As of December 31, 2022, Georgia Power had contracts in effect to purchase generation from 39 small IPPs.
Under the terms of these contracts, Alabama Power purchases excess energy generated by such companies. During 2023, Alabama Power purchased approximately 113 million KWHs from such companies. The related costs were immaterial. As of December 31, 2023, Georgia Power had contracts in effect to purchase generation from 36 small IPPs.
Rates charged to customers vary according to customer class (residential, commercial, or industrial) and rate jurisdiction. These agencies approve rates designed to provide the opportunity to generate revenues to recover all prudently-incurred costs, including a return on rate base sufficient to pay interest on debt and provide a reasonable ROE.
These agencies approve rates designed to provide the opportunity to generate revenues to recover all prudently-incurred costs, including a return on rate base sufficient to pay interest on debt and provide a reasonable ROE.
I-7 Table of Contents Index to Financial Statements Southern Company Gas Southern Company Gas is engaged in the distribution of natural gas in four states through the natural gas distribution utilities. The natural gas distribution utilities construct, manage, and maintain intrastate natural gas pipelines and distribution facilities.
Southern Company Gas Southern Company Gas is engaged in the distribution of natural gas in four states through the natural gas distribution utilities. The natural gas distribution utilities construct, manage, and maintain intrastate natural gas pipelines and distribution facilities.
The following table provides the number of retail customers served by customer classification for the traditional electric operating companies at December 31, 2022: Alabama Power Georgia Power Mississippi Power Total (*) (in thousands) Residential 1,320 2,367 157 3,844 Commercial 206 326 34 566 Industrial 6 11 — 17 Other 1 9 — 10 Total (*) 1,533 2,713 192 4,437 (*) Totals may not add due to rounding.
The following table provides the number of retail customers served by customer classification for the traditional electric operating companies at December 31, 2023: Alabama Power Georgia Power Mississippi Power Total (*) (in thousands) Residential 1,328 2,406 157 3,890 Commercial 207 329 34 570 Industrial 6 11 — 17 Other 1 9 — 10 Total (*) 1,541 2,754 192 4,487 (*) Totals may not add due to rounding.
Under the agreement, Alabama Power has the right to participate in a portion of PowerSouth's future incremental load growth. Alabama Power also has a separate agreement with PowerSouth involving interconnection between their systems.
Projected revenues are expected to offset any increased administrative costs incurred by Alabama Power. Under the agreement, Alabama Power has the right to participate in a portion of PowerSouth's future incremental load growth. Alabama Power also has a separate agreement with PowerSouth involving interconnection between their systems.
During 2022, Georgia Power purchased 6.1 billion KWHs from such companies at a cost of $298 million. Georgia Power also has PPAs for electricity with five cogeneration facilities. Payments are subject to reductions for failure to meet minimum capacity output. During 2022, Georgia Power purchased 399 million KWHs at a cost of $37 million from these facilities.
During 2023, Georgia Power purchased 5.9 billion KWHs from such companies at a cost of $303 million. Georgia Power also has PPAs for electricity with seven cogeneration facilities. Payments are subject to reductions for failure to meet minimum capacity output. During 2023, Georgia Power purchased 349 million KWHs at a cost of $31 million from these facilities.
SNG, the largest natural gas pipeline investment, is the owner of a 7,000-mile pipeline connecting natural gas supply basins in Texas, Louisiana, Mississippi, and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee. Gas pipeline investments also includes a 20% ownership interest in the PennEast Pipeline project, which was cancelled in September 2021.
SNG, the largest natural gas pipeline investment, is the owner of a 7,000-mile pipeline connecting natural gas supply basins in Texas, Louisiana, Mississippi, and Alabama to markets in Louisiana, Mississippi, Alabama, Florida, Georgia, South Carolina, and Tennessee.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" and " – Rate Plans" in Item 8 herein for additional information.
The ultimate outcome of this matter cannot be determined at this time. See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" and " – Rate Plans" in Item 8 herein for additional information.
Southern Company Gas also contracts for transportation and storage services from interstate pipelines that are regulated by the FERC.
Southern Company Gas also contracts I-5 Table of Contents Index to Financial Statements for transportation and storage services from interstate pipelines that are regulated by the FERC.
Peak-use requirements are met through utilization of company-owned storage facilities, pipeline transportation capacity, purchased storage services, peaking facilities, and other supply sources, arranged by either transportation customers or Southern Company Gas. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information on the sale of Sequent.
Peak-use requirements are met through utilization of company-owned storage facilities, pipeline transportation capacity, purchased storage services, peaking facilities, and other supply sources, arranged by either transportation customers or Southern Company Gas.
At December 31, 2022, approximately 31% of Southern Company system employees were covered by agreements with unions, with agreements expiring between 2024 and 2026. I-14 Table of Contents Index to Financial Statements
The Southern Company system also partners with the IBEW to provide training programs to develop technical skills and career opportunities. At December 31, 2023, approximately 32% of Southern Company system employees were covered by agreements with unions, with agreements expiring between 2024 and 2029. I-14 Table of Contents Index to Financial Statements
Estimated costs for 2023 total $672 million for Southern Company, primarily consisting of $330 million for Alabama Power, $295 million for Georgia Power, and $21 million for Mississippi Power.
Estimated costs for 2024 total $728 million for Southern Company, primarily consisting of $346 million for Alabama Power, $338 million for Georgia Power, and $24 million for Mississippi Power.
In December 2021, Georgia Power filed an application with the FERC to relicense the Lloyd Shoals project on the Ocmulgee River. The current Lloyd Shoals project license will expire on December 31, 2023. Georgia Power and OPC also have a license, expiring in 2026, for the Rocky Mountain project, a pure pumped storage facility of 903,000 KW installed capacity.
Subsequent to December 31, 2023, the FERC authorized Georgia Power to continue operation of the Lloyd Shoals project under the terms and conditions of the prior license until the issuance of a subsequent license. Georgia Power and OPC also have a license, expiring in 2026, for the Rocky Mountain project, a pure pumped storage facility of 903,000 KW installed capacity.
The Southern Company system also has longstanding relationships with labor unions. The traditional electric operating companies, Southern Nuclear, and the natural gas distribution utilities have separate agreements with local unions of the IBEW, which generally apply to operating, maintenance, and construction employees.
The traditional electric operating companies, Southern Nuclear, and the natural gas distribution utilities have separate agreements with local unions of the IBEW, which generally apply to operating, maintenance, and construction employees. These agreements cover wages, benefits, terms of the pension plans, working conditions, and procedures for handling grievances and arbitration.
Activities under the IIC are administered by SCS, which acts as agent for the traditional electric operating companies and Southern Power Company. The fundamental purpose of the Southern Company power pool is to provide for the coordinated operation of the electric facilities in an effort to achieve the maximum possible economies consistent with the highest practicable reliability of service.
The fundamental purpose of the Southern Company power pool is to provide for the coordinated operation of the electric facilities in an effort to achieve the maximum possible economies consistent with the highest practicable reliability of service. Subject to service requirements and other operating limitations, system resources are committed and controlled through the application of centralized economic dispatch.
The agreement includes combined operations (including joint commitment and dispatch) and real-time energy sales and purchases and is expected to create energy cost savings and enhanced system reliability for both parties. Projected revenues are expected to offset any increased administrative costs incurred by Alabama Power.
In 2021, Alabama Power and PowerSouth began operations under a coordinated planning and operations agreement, with a minimum term of 10 years. The agreement includes combined operations (including joint commitment and dispatch) and real-time energy sales and purchases and is expected to create energy cost savings and enhanced system reliability for both parties.
For additional I-3 Table of Contents Index to Financial Statements information on Southern Company Gas's pipeline investments, see Note 7 to the financial statements under "Southern Company Gas" in Item 8 herein.
See Note 2 to the financial statements under "Southern Company Gas – Natural Gas Cost Recovery" in Item 8 herein for additional information.
See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein and Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information.
See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein and Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information. In accordance with an agreement executed in 2021, Alabama Power began providing approximately 100 MWs of year-round capacity service to PowerSouth on February 1, 2024.
The FERC's orders related to SEEM have been appealed. The ultimate outcome of this matter cannot be determined at this time. The utility assets of the traditional electric operating companies and certain utility assets of Southern Power Company are operated as a single integrated electric system, or Southern Company power pool, pursuant to the IIC.
The utility assets of the traditional electric operating companies and certain utility assets of Southern Power Company are operated as a single integrated electric system, or Southern Company power pool, pursuant to the IIC. Activities under the IIC are administered by SCS, which acts as agent for the traditional electric operating companies and Southern Power Company.
Serious injury examples, as defined by applicable safety regulators, include fatalities, amputations, trauma to organs, certain bone fractures, severe burns, and eye injuries. The Southern Company system continues to provide essential services to customers while adapting to the impacts of the COVID-19 pandemic.
A serious injury is one that is life-threatening or life-changing (temporary or permanent) for the employee. Serious injury examples, as defined by applicable safety regulators, include fatalities, amputations, trauma to organs, certain bone fractures, certain soft tissue injuries, severe burns, and eye injuries. The Southern Company system also has longstanding relationships with labor unions.
The current Harris Dam project license will expire on November 30, 2023. In 2018, Georgia Power filed applications to surrender the Langdale and Riverview hydroelectric projects on the Chattahoochee River upon their license expirations on December 31, 2023. Both projects together represent 1,520 KWs of Georgia Power's hydro fleet capacity.
In 2018, Georgia Power filed applications to surrender the Langdale and Riverview hydroelectric projects on the Chattahoochee River upon their license expirations on December 31, 2023. Although the projects are not operational, the closure of the projects is subject to the closure requirements to be enforced in accordance with future FERC surrender orders.
See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for information regarding Southern Company Gas' recent dispositions, including the sale of Sequent and the sale and pending sale of the remaining facilities within the storage operations business.
Southern Company Gas also has an "all other" non-reportable segment that includes segments below the quantitative threshold for separate disclosure. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for information regarding Southern Company Gas' recent dispositions.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeIn addition, new demand, in particular exports to Mexico and those from LNG facilities, has grown significantly and is having greater impact on the traditional electric operating companies' and Southern Power's natural gas markets. The traditional electric operating companies are also dependent on coal, and related coal supply contracts, for a portion of their electric generating capacity.
Biggest changeThe traditional electric operating companies are also dependent on coal, and related coal supply contracts, for a portion of their electric generating capacity. The counterparties to coal supply contracts may not fulfill their obligations to supply coal because of financial or technical problems.
Both federal and state programs exist to influence how customers use energy, and several of the traditional electric operating companies and natural gas distribution utilities have PSC or other applicable state regulatory agency mandates to promote energy efficiency.
Both federal and state programs exist to influence how customers use energy, and several of the traditional electric operating companies and natural gas distribution utilities have state PSC or other applicable state regulatory agency mandates to promote energy efficiency.
There are many risks that could affect these matters, including operator error or failure of equipment or processes, accidents, operating limitations that may be imposed by environmental or other regulatory requirements or in connection with joint owner arrangements, labor disputes, physical attacks, fuel or material supply interruptions and/or shortages, transmission disruption or capacity constraints, including with respect to the Southern Company system's and third parties' transmission, storage, and transportation facilities, inability to maintain reliability consistent with customer expectations as the traditional electric operating companies and Southern Power transition their generating fleets in support of the Southern Company system's net zero goal, compliance with mandatory reliability standards, including mandatory cyber security standards, implementation of new technologies, technology system failures, cyber intrusions, environmental events, such as spills or releases, supply chain disruptions, inflation, and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest, or other similar occurrences.
There are many risks that could affect these matters, including operator error or failure of equipment or processes, accidents, operating limitations that may be imposed by environmental or other regulatory requirements or in connection with joint owner arrangements, labor disputes, physical attacks, fuel or material supply interruptions and/or shortages, transmission disruption or capacity constraints, including with respect to the Southern Company system's and third parties' transmission, storage, and transportation facilities, inability to maintain reliability consistent with customer expectations as the traditional electric operating companies and Southern Power transition their generating fleets in support of the Southern Company system's net zero goal, compliance with mandatory reliability standards, including mandatory cyber security standards, implementation of new technologies, technology system failures, cyber intrusions, environmental events, such as spills or releases, supply chain disruptions, inflation, and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, wars, political unrest, or other similar occurrences.
Events such as an aging workforce without appropriate replacements, increased cost or reduced supply of labor, mismatch of skill sets to future needs, or unavailability of contract resources may lead to operating challenges such as lack of resources, loss of knowledge, and a lengthy time period associated with skill development, including workforce needs associated with major construction projects and ongoing operations.
Events such as an aging workforce without appropriate replacements, increased cost or reduced supply of labor, mismatch of skill sets to future needs, or unavailability of contract resources may lead to operating challenges such as lack of resources, loss of knowledge, and a lengthy time period associated with skill development, including workforce needs associated with construction projects and ongoing operations.
Future GHG constraints, including those related to methane emissions, designed to minimize emissions from natural gas could likewise result in increased costs to the Southern Company system and affect the demand for natural gas as well as the prices charged to customers and the competitive position of natural gas.
In addition, future GHG constraints, including those related to methane emissions, designed to minimize emissions from natural gas could likewise result in increased costs to the Southern Company system and affect the demand for natural gas as well as the prices charged to customers and the competitive position of natural gas.
Southern Company and its subsidiaries use derivative instruments, such as swaps, options, futures, and forwards, to manage their commodity and interest rate exposures and, to a lesser extent, manage foreign currency exchange rate exposure and engage in limited trading activities.
Southern Company and its subsidiaries use derivative instruments, such as swaps, options, futures, and forwards, to manage their commodity and interest rate exposures and, to a lesser extent, manage weather and foreign currency exchange rate exposure and engage in limited trading activities.
While the traditional electric operating companies and Southern Company Gas are generally authorized to recover fuel and/or purchased gas costs through cost recovery clauses, recovery may be delayed or may be denied if costs are deemed to be imprudently incurred.
While the traditional electric operating companies and Southern Company Gas are generally authorized to recover fuel and purchased power and/or purchased gas costs through cost recovery clauses, recovery may be delayed or may be denied if costs are deemed to be imprudently incurred.
Volatility in the securities markets, interest rates, and other factors could substantially increase defined benefit pension and other postretirement plan costs and the funding available for nuclear decommissioning.
Volatility in the securities markets, interest rates, and other factors could substantially increase defined benefit pension and other postretirement plan costs and affect the funding available for nuclear decommissioning.
The traditional electric operating companies and Southern Company Gas from time to time have experienced and may continue to experience underrecovered fuel and/or purchased gas cost balances.
The traditional electric operating companies and Southern Company Gas from time to time have experienced and may continue to experience underrecovered fuel and purchased power and/or purchased gas cost balances.
Southern Power and/or the traditional electric operating companies may not be able to extend or replace existing PPAs upon expiration, or they may be forced to market these assets at prices lower than originally intended. The traditional electric operating companies are currently obligated to supply power to retail customers and wholesale customers under long-term PPAs.
Southern Power and/or the traditional electric operating companies may not be able to extend or replace existing PPAs upon expiration, or they may be forced to market these assets at prices lower than originally intended. The traditional electric operating companies are currently obligated to supply power to retail customers, as well as wholesale customers under long-term PPAs.
Georgia Power's loan guarantee agreement with the DOE contains additional covenants, events of default, and mandatory prepayment events relating to the construction of Plant Vogtle Units 3 and 4. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements.
Georgia Power's loan guarantee agreement with the DOE contains additional covenants, events of default, and mandatory prepayment events relating to the ongoing operation and/or construction of Plant Vogtle Units 3 and 4. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements.
NRC orders or regulations related to increased security measures and any future NRC safety requirements could require Alabama Power and Georgia Power to make substantial operating and capital expenditures at their nuclear plants. In addition, if a serious nuclear incident were to occur, it could result in substantial costs to Alabama Power or Georgia Power and Southern Company.
NRC orders or regulations related to increased security measures and any future NRC safety requirements could require Alabama Power and Georgia Power to make substantial operating and capital expenditures at their nuclear plants. In addition, if a major nuclear incident were to occur, it could result in substantial costs to Alabama Power or Georgia Power and Southern Company.
Outside of economic disruptions, changes in customer behaviors in response to energy efficiency programs, changing conditions and preferences, legislation, or changes in the adoption of technologies could affect the relationship of economic activity to the consumption of energy. For example, some cities in the United States have banned the use of natural gas in new construction.
Outside of economic disruptions, changes in customer behaviors in response to energy efficiency programs, changing conditions and preferences, legislation, or changes in the adoption of technologies could affect the relationship of economic activity to the consumption of energy. For example, some jurisdictions in the United States have banned the use of natural gas in new construction.
Laws and regulations govern the terms and conditions of the services the Southern Company system offers, protection of critical electric infrastructure assets, transmission planning, reliability, pipeline safety, interaction with wholesale markets, and relationships with affiliates, among other matters.
Laws and regulations govern the terms and conditions of the services the Southern Company system offers, protection of critical electric infrastructure assets, transmission planning, reliability, pipeline safety, interaction with wholesale markets and retail customers, and relationships with affiliates, among other matters.
Additionally, these technology and customer-induced changes to the electric generation business models could change the risk profile of the Southern Company system's historical capital investments. Southern Company Gas' market share could be reduced if Southern Company Gas cannot remain price competitive in its unregulated markets. The Subsidiary Registrants are subject to workforce factors that could affect operations.
Additionally, these technology and customer-induced changes to the Subsidiary Registrants' business models could change the risk profile of the Southern Company system's historical capital investments. Southern Company Gas' market share could be reduced if Southern Company Gas cannot remain price competitive in its unregulated markets. The Subsidiary Registrants are subject to workforce factors that could affect operations.
Any failure by a partner or co-owner to perform its obligations under the applicable agreements could have a material negative impact on the applicable project under construction. Southern Power participates in partnership agreements with respect to a majority of its renewable energy projects and Georgia Power jointly owns Plant Vogtle Units 3 and 4 with other co-owners.
Any failure by a partner or co-owner to perform its obligations under the applicable agreements could have a material negative impact on the applicable project under construction. Southern Power participates in partnership agreements with respect to a majority of its renewable energy projects and Georgia Power jointly owns Plant Vogtle Unit 4 with other co-owners.
At December 31, 2022, goodwill was $5.2 billion and $5.0 billion for Southern Company and Southern Company Gas, respectively. In addition, Southern Company and its subsidiaries have long-lived assets recorded on their balance sheets.
At December 31, 2023, goodwill was $5.2 billion and $5.0 billion for Southern Company and Southern Company Gas, respectively. In addition, Southern Company and its subsidiaries have long-lived assets recorded on their balance sheets.
These transactions also involve risks, including that they may not result in an increase in income or provide adequate or expected funds or return on capital or other anticipated benefits; they may result in Southern Company or its subsidiaries entering into new or additional lines of business, which may have new or different business or operational risks; they may not be successfully integrated into the acquiring company's operations, internal control processes, and/or accounting systems; the due diligence conducted prior to a transaction may not uncover situations that could result in financial or legal exposure or may not appropriately evaluate the likelihood or quantify the exposure from identified risks; they may result in decreased earnings, revenues, or cash flow; they may involve retained obligations in connection with transitional agreements or deferred payments related to dispositions that subject Southern Company or its subsidiaries to additional risk; Southern Company or the applicable subsidiary may not be able to achieve the expected financial benefits from the use of funds generated by any dispositions; expected benefits of a transaction may be dependent on the cooperation, performance, or credit risk of a counterparty; minority investments in growth companies may not result in a positive return on investment; or, for the traditional electric operating companies and Southern Company Gas, costs associated with such investments that were expected to be recovered through regulated rates may not be recoverable.
These transactions also involve risks, including that they may not result in an increase in income or provide adequate or expected cash flows or return on capital or other anticipated benefits; they may result in Southern Company or its subsidiaries entering into new or additional lines of business, which may have new or different business or operational risks; they may not be successfully integrated into the acquiring company's operations, internal control processes, and/or accounting systems; the due diligence conducted prior to a transaction may not uncover situations that could result in financial or legal exposure or may not appropriately evaluate the likelihood or quantify the exposure from identified risks; they may result in impairment or decreased earnings, revenues, or cash flow; they may result in credit rating downgrades for Southern Company or its subsidiaries; they may involve retained obligations in connection with transitional agreements or deferred payments related to dispositions that subject Southern Company or its subsidiaries to additional risk; Southern Company or the applicable subsidiary may not be able to achieve the expected financial benefits from the use of funds generated by any dispositions; expected benefits of a transaction may be dependent on the cooperation, performance, or credit risk of a counterparty; minority investments in growth companies may not result in a positive return on investment; or, for the traditional electric operating I-23 Table of Contents Index to Financial Statements companies and Southern Company Gas, costs associated with such investments that were expected to be recovered through regulated rates may not be recoverable.
There are numerous factors that rating agencies evaluate to arrive at credit ratings for the Registrants, Southern Company Gas Capital, and Nicor Gas, including capital structure, regulatory environment, the ability to cover liquidity requirements, other commitments for capital, and certain other controllable and uncontrollable events.
There are numerous factors that rating agencies evaluate to determine credit ratings for the Registrants, Southern Company Gas Capital, and Nicor Gas, including capital structure, regulatory environment, the ability to cover liquidity requirements, other commitments for capital, and certain other controllable and uncontrollable events.
Certain market disruptions, including an economic downturn or uncertainty, continued increases in interest rates, bankruptcy or financial distress at an unrelated utility company, financial institution, or sovereign entity, capital markets volatility and disruption, either nationally or internationally, changes in tax policy, volatility in market prices for electricity and natural gas, actual or threatened cyber or physical attacks on facilities within the Southern Company system or owned by unrelated utility companies, future impacts of the COVID-19 pandemic or other pandemic health events, war or threat of war, or the overall health of the utility and financial institution industries, may increase the cost of borrowing or adversely affect the ability to raise capital through the issuance of securities or other borrowing arrangements or the ability to secure committed bank lending agreements used as back-up sources of capital.
Certain market disruptions, whether in the United States or globally, including an economic downturn or uncertainty, continued increases in interest rates, bankruptcy or financial distress at an unrelated utility company, financial institution, or sovereign entity, capital markets volatility and disruption, either nationally or internationally, changes in tax policy, volatility in market prices for electricity and natural gas, actual or threatened cyber or physical attacks on facilities within the Southern Company system or owned by unrelated utility companies, future impacts of pandemic health events, geopolitical instability, war or threat of war, or the overall health of the utility and financial institution industries, may increase the cost of borrowing or adversely affect the ability to raise capital through the issuance of securities or other borrowing arrangements or the ability to secure committed bank lending agreements used as back-up sources of capital.
The Southern Company system may be subject to workforce trends occurring in the United States triggered by decisions of employees to leave the workforce and/or their employer at higher rates as compared to prior years and challenges competing with other employers offering more flexible or fully-remote work options.
The Southern Company system may be subject to continuing workforce trends occurring in the United States triggered by decisions of employees to leave the workforce and/or their employer in higher rates during recent years as compared to prior years and challenges competing with other employers offering more flexible or fully-remote work options.
Furthermore, construction delays associated with renewable projects could result in the loss of otherwise available tax credits and incentives. Even if a construction project (including a joint venture construction project) is completed, the total costs may be higher than estimated and may not be recoverable through regulated rates, if applicable.
Furthermore, construction delays associated with renewable projects could result in the loss of otherwise available tax credits and incentives. Even if a construction project (including a joint venture construction project) is completed, the total costs may be higher than estimated or deemed imprudent and may be disallowed or otherwise not recoverable through regulated rates, if applicable.
Disruption in the supply and/or delivery of fuel as a result of matters such as transportation delays, weather, labor relations, force majeure events, or environmental regulations affecting fuel suppliers could limit the ability of the traditional electric operating companies and Southern Power to operate certain facilities, which could result in higher fuel and operating costs, and the ability of Southern Company Gas to serve its natural gas customers.
Disruption in the supply and/or delivery of fuel as a result of matters such as transportation delays, weather, labor relations, natural disasters, cyber or physical attacks, other force majeure events, or environmental regulations affecting fuel suppliers could limit the ability of the traditional electric operating companies and Southern Power to operate certain facilities, which could result in higher fuel and operating costs, and the ability of Southern Company Gas to serve its natural gas customers.
Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately 22% of Southern Power's total revenues for the year ended December 31, 2022. The traditional electric operating companies have entered into PPAs with non-affiliated parties for the sale of generating capacity.
Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately 19% of Southern Power's total revenues for the year ended December 31, 2023. The traditional electric operating companies have entered into PPAs with non-affiliated parties for the sale of generating capacity.
Alabama Power owns, and contracts for the operation of, two nuclear units and Georgia Power holds undivided interests in, and contracts for the operation of, four existing nuclear units.
Alabama Power owns, and contracts for the operation of, two nuclear units and Georgia Power holds undivided interests in, and contracts for the operation of, five existing nuclear units.
In addition, partnership and joint ownership agreements may provide partners or co-owners with certain decision-making authority in connection with projects under construction, including rights to change ownership allocations and/or cause the cancellation of a construction project under certain circumstances.
In addition, partnership and joint ownership agreements may provide partners or co-owners with certain decision-making authority in connection with projects under construction, including the right to cause the cancellation of a construction project under certain circumstances.
The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio including low-carbon and carbon-free resources and energy efficiency resources; continuing to transition the Southern Company system's generating fleet and making the necessary related investments in transmission and distribution systems; continuing research and development with a particular focus on technologies that lower GHG emissions, including methods of removing carbon from the atmosphere; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.
The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio including I-16 Table of Contents Index to Financial Statements low-carbon and carbon-free resources and energy efficiency resources; customer demand for carbon-free energy; continuing to transition the Southern Company system's generating fleet and making the necessary related investments in transmission and distribution systems; continuing research and development with a particular focus on technologies that lower GHG emissions, including methods of removing carbon from the atmosphere; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.
If one of these Registrants is unable to replace expiring PPAs with an acceptable new revenue contract, it may be required to sell the power produced by the facility at wholesale prices and be exposed to market fluctuations and risks, or the affected site may temporarily or permanently cease operations.
If a Registrant is unable to replace expiring PPAs with an acceptable new revenue contract, it may be required to sell the power produced by the facility at wholesale prices and be exposed to market fluctuations and risks, or the affected site may temporarily or permanently cease operations.
Because regulators may not permit the traditional electric operating companies to pass all of these purchase or construction costs on to their customers, the traditional electric operating companies may not be able to recover some or all of these costs or may have exposure to regulatory lag associated with the time between the incurrence of costs of purchased or constructed capacity and the traditional electric operating companies' recovery in customers' rates.
Because regulators may not permit the traditional electric operating companies I-24 Table of Contents Index to Financial Statements to pass all of these purchase or construction costs on to their customers, the traditional electric operating companies may not be able to recover some or all of these costs or may have exposure to regulatory lag associated with the time between the incurrence of costs of purchased or constructed capacity and the traditional electric operating companies' recovery in customers' rates.
Under Southern Power's long-term fixed price PPAs, Southern Power may not be able to recover all of these costs. I-24 Table of Contents Index to Financial Statements The businesses of the Registrants and Nicor Gas are dependent on their ability to successfully access capital through capital markets and financial institutions.
Under Southern Power's long-term fixed price PPAs, Southern Power may not be able to recover all of these costs. The businesses of the Registrants and Nicor Gas are dependent on their ability to successfully access capital through capital markets and financial institutions.
In addition, Southern Company, Southern Company Gas, and Southern Power may provide capital I-23 Table of Contents Index to Financial Statements contributions or debt financing to subsidiaries under certain circumstances, which would reduce the funds available to meet their respective financial obligations, including making interest and principal payments on outstanding indebtedness, and to pay dividends on Southern Company's common stock.
In addition, Southern Company, Southern Company Gas, and Southern Power may provide capital contributions or debt financing to subsidiaries under certain circumstances, which would reduce the funds available to meet their respective financial obligations, including making interest and principal payments on outstanding indebtedness, and to pay dividends on Southern Company's common stock.
Customers could also voluntarily reduce their consumption of energy in response to decreases in their disposable income, increases in energy prices, or individual conservation efforts. In addition, the adoption of technology by customers can have both positive and negative impacts on sales. Many new technologies utilize less energy than in the past.
Customers could also voluntarily reduce their consumption of energy in response to decreases in their disposable income, increases in energy prices, or individual conservation efforts. I-22 Table of Contents Index to Financial Statements In addition, the adoption of technology by customers can have both positive and negative impacts on sales. Many new technologies utilize less energy than in the past.
The Southern Company system uses best available methods and experience to incorporate the effects of changes in customer behavior, state and federal programs, PSC or other applicable state regulatory agency mandates, and technology, but the Southern Company system's planning processes may not accurately estimate and incorporate these effects.
The Southern Company system seeks to incorporate the effects of changes in customer behavior, state and federal programs, state PSC or other applicable state regulatory agency mandates, and technology, but the Southern Company system's planning processes may not accurately estimate and incorporate these effects.
Additionally, the risk of global climate change continues to shape customers' and stakeholders' sustainability goals and energy needs. I-19 Table of Contents Index to Financial Statements New technologies such as distributed energy resources and microgrids and increased customer and stakeholder demand for sustainable assets could change the type of assets constructed and/or the methods for cost recovery.
Additionally, the risk of global climate change continues to shape customers' and stakeholders' sustainability goals and energy needs. New technologies such as distributed energy resources and microgrids and increased customer and stakeholder demand for sustainable assets could change the type of assets constructed and/or the methods for cost recovery.
This litigation has included, but is not I-15 Table of Contents Index to Financial Statements limited to, claims for damages alleged to have been caused by CO 2 and other emissions, CCR, releases of regulated substances, alleged exposure to regulated substances, and/or requests for injunctive relief in connection with such matters.
This litigation has included, but is not limited to, claims for damages alleged to have been caused by CO 2 and other emissions, CCR, releases of regulated substances, alleged exposure to regulated substances, and/or requests for injunctive relief in connection with such matters.
Volatile or significant weather events could result in substantial damage to the transmission and distribution lines of the traditional electric operating companies, the generating facilities of the traditional electric operating companies and Southern I-22 Table of Contents Index to Financial Statements Power, and the natural gas distribution and underground storage facilities of Southern Company Gas, which is likely to negatively impact revenue.
Volatile or significant weather events could result in substantial damage to the transmission and distribution lines of the traditional electric operating companies, the generating facilities of the traditional electric operating companies and Southern Power, and the natural gas distribution and underground storage facilities of Southern Company Gas, which is likely to negatively impact revenue.
Completion of these types of projects without delays or significant cost overruns is subject to substantial risks that have occurred or may occur, including labor costs, availability, and productivity; challenges with the management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; the impacts of inflation; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems or any remediation related thereto; design and other licensing-based compliance matters including, for Plant Vogtle Unit 4, inspections and the timely submittal by Southern Nuclear of the ITAAC documentation and the related investigations, reviews, and approvals by the NRC necessary to support NRC authorization to load fuel; challenges with start-up activities, including major equipment failure, or system integration; and/or operational performance; continued challenges related to the COVID-19 pandemic or future pandemic health events; continued public and policymaker support for projects; environmental and geological conditions; delays or increased costs to interconnect facilities to transmission grids; and increased financing costs as a result of changes in interest rates or as a result of project delays.
Completion of these types of projects without delays or significant cost overruns is subject to substantial risks that have occurred or may occur, including labor costs, availability, and productivity; challenges with the management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; the impacts of inflation; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems or any remediation related thereto; design and other licensing-based compliance matters; challenges with start-up activities, including major equipment failure, or system integration; and/or operational performance; challenges related to pandemic health events; continued public and policymaker support for projects; environmental and geological conditions; delays or increased costs to interconnect facilities to transmission grids; and increased financing costs as a result of changes in interest rates or as a result of project delays.
I-16 Table of Contents Index to Financial Statements OPERATIONAL RISKS The financial performance of Southern Company and its subsidiaries may be adversely affected if the subsidiaries are unable to successfully operate their facilities or perform certain corporate functions.
OPERATIONAL RISKS The financial performance of Southern Company and its subsidiaries may be adversely affected if the subsidiaries are unable to successfully operate their facilities or perform certain corporate functions.
The Southern Company system's operations are regulated by state and federal environmental agencies through a variety of laws and regulations governing air, GHGs, water, land, avian and other wildlife and habitat protection, and other natural resources.
The Southern Company system's costs of compliance with environmental laws and satisfying related AROs are significant. The Southern Company system's operations are regulated by state and federal environmental agencies through a variety of laws and regulations governing air, GHGs, water, land, avian and other wildlife and habitat protection, and other natural resources.
However, such demand may be tempered by legislation limiting the use of natural gas in certain situations, such as new construction. Additionally, efforts to electrify the transportation and building sectors may result in higher electric demand and negatively impact natural gas demand.
However, such demand may be tempered by legislation limiting the use of natural gas in certain circumstances, including use in new construction and certain household appliances. Additionally, efforts to electrify the transportation, building, and other sectors may result in higher electric demand and negatively impact natural gas demand.
Any economic downturn could negatively impact customer growth and usage per customer. Additionally, any economic downturn or disruption of financial markets, both nationally and internationally, could negatively affect the financial stability of customers and counterparties of the Subsidiary Registrants.
Additionally, any economic downturn or disruption of financial markets, both nationally and internationally, could negatively affect the financial stability of customers and counterparties of the Subsidiary Registrants.
Changes to Southern Power's and the traditional electric operating companies' ability to conduct business pursuant to FERC market-based rate authority could affect wholesale rates. Also, while a small percentage of transmission revenues are collected through wholesale electric tariffs, the majority are collected through retail rates. Transmission planning could be impacted by FERC policy changes.
Changes to Southern Power's and the traditional electric operating companies' ability to conduct business pursuant to FERC market-based rate authority could affect wholesale rates. Also, while a small percentage of transmission costs are recovered through wholesale electric tariffs, the majority are recovered through retail rates.
Failure to hire and adequately obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect Southern Company and its subsidiaries' ability to manage and operate their businesses. Supply chain disruptions and inflation could negatively impact operations.
In addition, the failure to hire and adequately obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect Southern Company and its subsidiaries' ability to manage and operate their businesses.
However, the ultimate impact will depend on various factors, such as state adoption and implementation of requirements, natural gas prices, the development, deployment, and advancement of relevant energy technologies, the ability to recover costs through existing ratemaking provisions, and the outcome of pending and/or future legal challenges.
The ultimate impact will depend on various factors, such as state adoption and implementation of requirements, natural gas prices, the development, deployment, and advancement of relevant energy technologies, the ability to recover costs through existing ratemaking provisions, and the outcome of pending and/or future legal challenges. The SEC has proposed new rules relating to the disclosure of climate-related matters.
Changes in regulation, the imposition of additional regulations, changes in enforcement practices of regulators, or penalties imposed for noncompliance with existing laws or regulations could influence the operating environment of the Southern Company system and may result in substantial costs. The Southern Company system's costs of compliance with environmental laws and satisfying related AROs are significant.
Changes in regulation, the imposition of additional regulations, changes in application of existing regulations and in enforcement practices of regulators, or penalties imposed for noncompliance with existing laws or regulations could influence the operating environment of the Southern Company system and may result in substantial costs.
The counterparties to coal supply contracts may not fulfill their obligations to supply coal because of financial or technical problems. In addition, the suppliers and/or railroads may be delayed in supplying or delivering or may not be required to supply or deliver coal under certain circumstances, such as in the event of a natural disaster.
In addition, the suppliers and/or railroads may be delayed in supplying or delivering or may not be required to supply or deliver coal under certain circumstances, such as in the event of a natural disaster.
Southern Company and Georgia Power recorded total pre-tax charges to income of $3.3 billion ($2.4 billion after tax) through December 31, 2022 to reflect Georgia Power's revised estimate to complete I-21 Table of Contents Index to Financial Statements construction and start-up of Plant Vogtle Units 3 and 4.
Southern Company and Georgia Power recorded cumulative pre-tax charges to income of $3.2 billion ($2.4 billion after tax) through December 31, 2023 to reflect Georgia Power's revised estimate to complete construction and start-up of Plant Vogtle Units 3 and 4.
Because of the critical nature of the infrastructure and the technology systems' inherent vulnerability to disability or failures due to hacking, viruses, denial of service, ransomware, acts of war or terrorism, or other types of data security breaches, the Southern Company system faces a heightened risk of cyberattack.
Because of the critical nature of the infrastructure and the technology systems' inherent vulnerability to disability or failures due to hacking, viruses, denial of service, ransomware, acts of war or terrorism, or other types of data security breaches, the Registrants face a heightened risk of cyberattack. Remote working arrangements also increase the Registrants' data security risks.
Concern and activism about climate change continue to increase and, as a result, demand for energy conservation and sustainable assets could further increase. Additionally, costs associated with GHG legislation, regulation, and emission reduction goals could be significant.
Concern and activism about climate change continue to increase and, as a result, demand for energy conservation and sustainable assets could further increase. Additionally, costs associated with GHG legislation, regulation, and emission reduction goals could be significant and there is no assurance such costs would be fully recovered through regulated rates or PPAs.
In addition, construction delays and contractor performance shortfalls can result in the loss of revenues. The largest construction project currently underway in the Southern Company system is Plant Vogtle Units 3 and 4.
In I-21 Table of Contents Index to Financial Statements addition, construction delays and contractor performance shortfalls can result in the loss of revenues. The largest construction project currently underway in the Southern Company system is Plant Vogtle Unit 4.
Furthermore, some financial institutions may be limited in their ability to provide capital to the Registrants as a result of such financial institution's investment criteria, including criteria related to GHG.
Furthermore, some financial institutions may be limited in their ability to provide capital to the Registrants as a result of such financial institution's investment criteria, including criteria related to GHG. If sources of capital for the Registrants or Nicor Gas are reduced, capital costs could increase materially.
The revenues related to PPAs are dependent on the continued performance by the purchasers of their obligations.
I-19 Table of Contents Index to Financial Statements The revenues related to PPAs are dependent on the continued performance by the purchasers of their obligations.
The Southern Company system has robust processes for identifying, assessing, and responding to climate-related risks, including a scenario planning process that is used to inform resource planning decisions in the states in which the traditional electric operating companies operate. This process relies on information from internal and external sources, which may or may not be accurate in predicting future outcomes.
The Southern Company system has processes for identifying, assessing, and responding to climate-related risks, including a scenario planning process that is used to inform resource planning decisions in the states in which the traditional electric operating companies operate.
The cost estimates for AROs related to the disposal of CCR are based on information using various assumptions related to closure and post-closure costs, timing of future cash outlays, inflation and discount rates, and the potential compliance methods. The traditional electric operating companies will continue to periodically update their ARO cost estimates.
The cost estimates for AROs related to the disposal of CCR are based on information using various assumptions I-15 Table of Contents Index to Financial Statements related to closure and post-closure costs, timing of future cash outlays, inflation and discount rates, and the potential compliance methods.
In addition to fuel supply, the traditional electric operating companies and Southern Power also need adequate access to water, which is drawn from nearby sources, to aid in the production of electricity.
Over the last few years, related cost increases and supply chain challenges have become more common and may increase the risk of reliability challenges. In addition to fuel supply, the traditional electric operating companies and Southern Power also need adequate access to water, which is drawn from nearby sources, to aid in the production of electricity.
The EPA has adopted and is implementing regulations governing air and GHG emissions under the Clean Air Act and water quality under the Clean Water Act. The EPA and certain states have also adopted and continue to propose regulations governing the disposal and management of CCR at power plant sites.
The EPA and certain states have also adopted and continue to propose regulations governing the disposal and management of CCR at power plant sites under the Resource Conservation and Recovery Act and applicable state laws.
International tensions, including the ramifications of regional conflict, could further exacerbate global supply chain disruptions. These disruptions and shortages could adversely impact business operations. The constraints in the supply chain also could restrict availability and delay construction, maintenance, or repair of items needed to support normal operations or to continue planned capital investments.
These disruptions and shortages could adversely impact business operations. The constraints in the supply chain also could restrict availability and delay construction, maintenance, or repair of items needed to support normal operations or to continue planned capital investments. Supply chain disruptions have contributed to higher prices of components, materials, equipment, and other needed commodities, and these inflationary increases may continue.
Internal or external cyber attacks may inhibit the affected Registrant's ability to fulfill critical business functions, including energy delivery service failures, compromise sensitive and other data, violate privacy laws, and lead to customer dissatisfaction.
Internal or external cyberattacks may have wide-reaching impacts due to incomplete segmentation among network assets and/or reliance of segmented networks on a disrupted network, inhibit the affected Registrant's ability to fulfill critical business functions, including energy delivery service failures, compromise sensitive and other data, violate privacy laws, and lead to customer dissatisfaction.
Moreover, a major incident at any nuclear facility in the United States, including facilities owned and operated by third parties, could require Alabama Power and Georgia Power to make material contributory payments. In addition, actual or potential threats of cyber intrusions or physical attacks could result in increased nuclear licensing or compliance costs.
A major incident at a nuclear facility anywhere in the world could cause the NRC to require additional safety measures. Moreover, a major incident at any nuclear facility in the United States, including facilities owned and operated by third parties, could require Alabama Power and Georgia Power to make material contributory payments.
The Southern Company system's costs, including costs for contractors to replace employees, productivity costs, and safety costs, may rise.
The Southern Company system's costs, including costs for contractors to replace employees, productivity costs, and safety costs, may rise. The Southern Company system is also subject to risks associated with the failure to adequately manage contract resources.
The six existing units are operated by Southern Nuclear and represented approximately 22% and 27% of the total KWHs generated by Alabama Power and Georgia Power, respectively, in the year ended December 31, 2022.
The seven existing units are operated by Southern Nuclear and represented approximately 27% and 29% of the total KWHs generated by Alabama Power and Georgia Power, respectively, in the year ended December 31, 2023. In addition, Southern Nuclear, on behalf of Georgia Power and the other Vogtle Owners, is managing the construction and start-up of Plant Vogtle Unit 4.
These risks may escalate during periods of heightened geopolitical tensions. In addition, physical attacks against third-party providers could have a similar effect on the Southern Company system. Despite the implementation of robust security measures, all assets are potentially vulnerable to disability, failures, or unauthorized access due to human error, natural disasters, technological failure, or internal or external physical attacks.
Despite the implementation of robust security measures, all assets are potentially vulnerable to disability, failures, or unauthorized access due to human error, natural disasters, technological failure, or internal or external physical attacks.
Once facilities become operational, ongoing capital expenditures are required to maintain reliable levels of operation. Significant portions of the traditional electric operating companies' existing facilities were constructed many years ago.
See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for information regarding Plant Vogtle Units 3 and 4. Once facilities become operational, ongoing capital expenditures are required to maintain safe and reliable levels of operation. Significant portions of the traditional electric operating companies' existing facilities were constructed many years ago.
The location of pipelines and underground natural gas storage facilities near populated areas could increase the level of damage resulting from these risks. Additionally, pipelines and underground natural gas storage facilities are subject to various state and other regulatory requirements. Failure to comply with these requirements could result in substantial monetary penalties.
Additionally, electric generation, transmission, and distribution infrastructure and natural gas pipelines and underground natural gas storage facilities are subject to various state and other regulatory requirements. Failure to comply with these requirements could result in substantial monetary penalties. Physical attacks, both threatened and actual, could impact the ability of the Subsidiary Registrants to operate.
CONSTRUCTION RISKS The Registrants have incurred and may incur additional costs or delays in the construction of new plants or other facilities and may not be able to recover their investments. Also, existing facilities of the Subsidiary Registrants require ongoing expenditures, including those to meet AROs and other environmental standards and goals.
Also, existing facilities of the Subsidiary Registrants require ongoing expenditures, including those to meet AROs and other environmental standards and goals.
However, the Registrants cannot guarantee that security efforts will detect or prevent breaches, operational incidents, or other breakdowns of technology systems and network infrastructure and cannot provide any assurance that such incidents will not have a material adverse effect in the future.
However, the Registrants cannot guarantee that security efforts will have the maturity to detect or prevent breaches, operational incidents, or other breakdowns of technology systems and network infrastructure. This is especially true in the event the Registrants are targeted by a sophisticated attacker with significant resources, such as a nation-state or state-sponsored actor.
The Southern Company system's operations and business plans depend on the global supply chain to procure equipment, materials, and other resources. The delivery of components, materials, equipment, and other resources that are critical to the Southern Company system's operations has been impacted by ongoing domestic and global supply chain disruptions.
I-20 Table of Contents Index to Financial Statements Supply chain disruptions and inflation could negatively impact operations. The Southern Company system's operations and business plans depend on the global supply chain to procure equipment, materials, and other resources.
Additional GHG policies, including legislation, may emerge requiring the United States to accelerate its transition to a lower GHG emitting economy.
This process relies on information and assumptions from internal and external sources, which may or may not be accurate in predicting future outcomes. Additional GHG policies, including legislation, may emerge requiring the United States to accelerate its transition to a lower GHG emitting economy.
Whereas fuel oil directly provides only a small portion of the Southern Company system's annual generation, its importance to the reliability of the Southern Company system's generation portfolio continues to grow. Over the last few years, related cost increases and supply chain challenges have become more common and may increase the risk of reliability challenges.
As a result, railroads may commit fewer resources to coal transportation, which could increase these risks. Whereas fuel oil directly provides only a small portion of the Southern Company system's annual generation, its importance to the reliability of the Southern Company system's generation portfolio continues to grow.
Malicious actors may target these providers to disrupt the services they provide to the Registrants, or to use those third parties to attack the Registrants. The Registrants' third-party service providers could fail to establish adequate risk management and information security measures with respect to their systems.
In some cases, administration of certain functions may be outsourced to third-party service providers. Malicious actors may target these providers to disrupt the services they provide to the Registrants, or to use those third parties to attack the Registrants.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – Global Climate Issues" in Item 7 herein for additional information.
There can be no guarantee that the Southern Company system will achieve these goals. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Laws and Regulations – Greenhouse Gases" in Item 7 herein for additional information.
The railroad industry has been experiencing labor shortages, which has led to delays in coal deliveries. As coal-fired generating facilities are retired, the demand for coal is expected to continue to decline. As a result, railroads may commit fewer resources to coal transportation, which could increase these risks.
Coal deliveries continued to be delayed early in 2023, which has largely been attributed to labor shortages in the railroad industry. Service levels improved over the course of 2023 and deliveries returned to normal levels by the end of 2023. As coal-fired generating facilities are retired, the demand for coal is expected to continue to decline.
In addition, in the ordinary course of business, Southern Company and its subsidiaries collect and retain sensitive information, including personally identifiable information about customers, employees, and stockholders, and other confidential information. In some cases, administration of certain functions may be outsourced to third-party service providers.
Accordingly, the Registrants cannot provide any assurance that information security incidents will not have a material adverse effect in the future. I-18 Table of Contents Index to Financial Statements In addition, in the ordinary course of business, Southern Company and its subsidiaries collect and retain sensitive information, including personally identifiable information about customers, employees, and stockholders, and other confidential information.
Southern Company Gas' natural gas distribution and storage activities involve a variety of inherent hazards and operating risks, such as leaks, accidents, explosions, and mechanical problems, which could result in serious injury, loss of life, significant damage to property, environmental pollution, and impairment of its operations.
The Southern Company system's electric generation, transmission, and distribution and natural gas distribution and storage activities involve a variety of inherent hazards and operating risks, such as accidents, explosions, fires, mechanical problems, discharges or releases of toxic or hazardous substances or gases, and other environmental risks.
Cyber actors, including those associated with foreign governments, have attacked and threatened to attack energy infrastructure. Various regulators have increasingly stressed that these attacks, including ransomware attacks, and attacks targeting utility systems and other critical infrastructure, are increasing in sophistication, magnitude, and frequency. Additionally, these risks may escalate during periods of heightened geopolitical tensions.
Various regulators have increasingly stressed that these attacks, including ransomware attacks, and attacks targeting utility systems and other critical infrastructure, are increasing in sophistication, magnitude, and frequency. In particular, certain actors, such as nation-state and state-sponsored actors, can deploy significant resources and employ sophisticated methods to plan and carry out attacks.
I-18 Table of Contents Index to Financial Statements The Southern Company system is dependent upon natural gas as a fuel source for its power generation needs, which has the potential to impact, among other things, the traditional electric operating companies' and Southern Power's costs of generation.
Southern Power and the traditional electric operating companies purchase natural gas as a fuel source for their power generation needs and the natural gas distribution utilities purchase natural gas for sale to their customers.
Removed
Each year, the Southern Company system develops scenarios which look out over a 30-year horizon. In 2022, scenarios included a wide range of fuel prices, load growth, and CO 2 prices starting between $0 and $50 per metric ton of CO 2 emitted and escalating over the 30-year horizon.
Added
The outcome of any such proceeding could be impacted by a variety of factors, including the level of opposition from intervenors, potential impacts to customers, and past or future changes in the political, regulatory, economic, or legislative environment.
Removed
In addition, Southern Nuclear, on behalf of Georgia Power and the other Vogtle Owners, is managing the construction and start-up of Plant Vogtle Units 3 and 4.
Added
Transmission planning and the resulting grid improvements could be impacted by FERC policy changes as well as North American Electric Reliability Corporation planning standard changes. The IRA, among other items, imposes a 15% corporate minimum tax on book income and is subject to the issuance of additional guidance by the U.S. Treasury Department and the IRS.

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Item 2. Properties

Properties — owned and leased real estate

21 edited+0 added−5 removed20 unchanged
Biggest changeCompany/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Alabama Power (b) Coal Barry Unit 5 Mobile, AL 700,000 Gaston Unit 5 Wilsonville, AL 880,000 Miller (95.92%) Birmingham, AL 2,532,288 Total Coal 4,112,288 Natural Gas Combined Cycle: Barry Units 6 and 7 Mobile, AL 1,070,424 Central Alabama Generating Station Autauga County, AL 885,000 Combustion Turbine: Calhoun Generating Station Calhoun County, AL 748,000 Greene County Demopolis, AL 720,000 Steam: Barry Units 1, 2, and 4 Mobile, AL 600,000 Greene County Units 1 and 2 (60%) Demopolis, AL 300,000 Total Natural Gas 4,323,424 Nuclear Farley Dothan, AL 1,720,000 Hydro Bankhead Holt, AL 53,985 Bouldin Wetumpka, AL 225,000 Harris Wedowee, AL 132,000 Henry Ohatchee, AL 72,900 Holt Holt, AL 46,944 Jordan Wetumpka, AL 100,000 Lay Clanton, AL 177,000 Lewis Smith Jasper, AL 157,500 Logan Martin Vincent, AL 135,000 Martin Dadeville, AL 182,000 Mitchell Verbena, AL 170,000 Thurlow Tallassee, AL 81,000 Weiss Leesburg, AL 87,750 Yates Tallassee, AL 47,000 Total Hydro 1,668,079 I-27 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Cogeneration Lowndes County Burkeville, AL 104,800 Theodore Theodore, AL 236,418 Washington County Washington County, AL 123,428 Total Cogeneration 464,646 Solar Anniston Army Depot Dale County, AL 7,380 Fort Rucker Calhoun County, AL 10,560 Total Solar 17,940 Total Alabama Power Generating Capacity 12,306,377 Georgia Power Natural Gas Combined Cycle: McDonough-Atkinson Units 4 through 6 Atlanta, GA 2,520,000 McIntosh Units 10 and 11 Effingham County, GA 1,318,920 Combustion Turbine: McDonough Unit 3 Atlanta, GA 78,800 McIntosh Units 1 through 8 Effingham County, GA 640,000 McManus Brunswick, GA 481,700 Robins Warner Robins, GA 158,400 Wilson Augusta, GA 354,100 Steam: Yates Newnan, GA 700,000 Total Natural Gas 6,251,920 Coal Bowen Cartersville, GA 3,160,000 Scherer (8.4% of Units 1 and 2 and 75% of Unit 3) Macon, GA 750,924 Total Coal 3,910,924 Nuclear Hatch (50.1%) Baxley, GA 899,612 Vogtle Units 1 and 2 (45.7%) Augusta, GA 1,060,240 Total Nuclear 1,959,852 Hydro Bartletts Ferry Columbus, GA 173,000 Burton Clayton, GA 8,100 Flint River Albany, GA 5,400 Goat Rock Columbus, GA 40,500 Lloyd Shoals Jackson, GA 18,000 Morgan Falls Atlanta, GA 16,800 Nacoochee Lakemont, GA 4,800 North Highlands Columbus, GA 29,600 Oliver Dam Columbus, GA 60,000 Rocky Mountain (25.4%) Rome, GA 229,362 (c) Sinclair Dam Milledgeville, GA 45,000 I-28 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Tallulah Falls Clayton, GA 72,000 Terrora Clayton, GA 20,800 Tugalo Clayton, GA 45,000 Wallace Dam Eatonton, GA 321,300 Yonah Toccoa, GA 22,500 Total Hydro 1,112,162 Solar Fort Benning Columbus, GA 30,005 Fort Gordon Augusta, GA 30,000 Fort Stewart Fort Stewart, GA 30,000 Fort Valley Fort Valley, GA 10,800 Kings Bay Camden County, GA 30,161 Marine Corps Logistics Base Albany, GA 31,161 Moody Air Force Base Valdosta, GA 49,500 Robins Air Force Base Warner Robins, GA 128,000 8 Other Plants Various Georgia locations 18,479 Total Solar 358,106 Total Georgia Power Generating Capacity 13,592,964 Mississippi Power Natural Gas Combined Cycle: Daniel Pascagoula, MS 1,070,424 Ratcliffe Kemper County, MS 769,898 Combustion Turbine: Sweatt Meridian, MS 39,400 Watson Gulfport, MS 39,360 Steam: Greene County Units 1 and 2 (40%) Demopolis, AL 200,000 Watson Gulfport, MS 750,000 Total Natural Gas 2,869,082 Coal Daniel (50%) Pascagoula, MS 500,000 Cogeneration Chevron Cogenerating Station Pascagoula, MS 147,292 (d) Total Mississippi Power Generating Capacity 3,516,374 Southern Power Natural Gas Combined Cycle: Franklin Smiths, AL 1,857,820 Harris Autaugaville, AL 1,318,920 Rowan Unit 4 Salisbury, NC 530,550 Wansley Units 6 and 7 Carrollton, GA 1,073,000 I-29 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Combustion Turbine: Addison Thomaston, GA 668,800 Cleveland Cleveland County, NC 720,000 Dahlberg Jackson County, GA 756,000 Rowan Units 1 through 3 Salisbury, NC 455,250 Total Natural Gas 7,380,340 Wind Beech Ridge II Greenbrier County, WV 56,200 Bethel Castro County, TX 276,000 Cactus Flats Concho County, TX 148,350 Deuel Harvest Deuel County, SD 301,100 Glass Sands Murray County, OK 118,300 Grant Plains Grant County, OK 147,200 Grant Wind Grant County, OK 151,800 Kay Wind Kay County, OK 299,000 Passadumkeag Penobscot County, ME 42,900 Reading Osage & Lyon Counties, KS 200,100 Salt Fork Donley & Gray Counties, TX 174,000 Skookumchuck Lewis & Thurston Counties, WA 136,800 Tyler Bluff Cooke County, TX 125,580 Wake Wind Crosby & Floyd Counties, TX 257,250 Wildhorse Mountain Pushmataha County, OK 100,000 Total Wind 2,534,580 (e) Solar Adobe Kern County, CA 20,000 Apex North Las Vegas, NV 20,000 Boulder I Clark County, NV 100,000 Butler Taylor County, GA 104,000 Butler Solar Farm Taylor County, GA 22,000 Calipatria Imperial County, CA 20,000 Campo Verde Imperial County, CA 147,420 Cimarron Colfax County, NM 30,640 Decatur County Decatur County, GA 20,000 Decatur Parkway Decatur County, GA 84,000 Desert Stateline San Bernadino County, CA 299,990 East Pecos Pecos County, TX 120,000 Garland Kern County, CA 205,290 Gaskell West I Kern County, CA 20,000 Granville Granville County, NC 2,500 Henrietta Kings County, CA 102,000 Imperial Valley Imperial County, CA 163,200 Lamesa Dawson County, TX 102,000 Lost Hills-Blackwell Kern County, CA 32,000 Macho Springs Luna County, NM 55,000 Morelos del Sol Kern County, CA 15,000 North Star Fresno County, CA 61,600 Pawpaw Taylor County, GA 30,480 Roserock Pecos County, TX 160,000 Rutherford Rutherford County, NC 74,800 Sandhills Taylor County, GA 148,000 I-30 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Spectrum Clark County, NV 30,240 Tranquillity Fresno County, CA 205,300 Total Solar 2,395,460 (f) Battery Storage Garland Kern County, CA 88,000 (g) Millikan Orange County, CA 2,000 (h) Tranquillity Fresno County, CA 72,000 (g) Wildcat Palm Springs, CA 1,500 (h) Total Battery Storage 163,500 Fuel Cell Red Lion and Brookside New Castle and Newark, DE 27,500 (i) Total Southern Power Generating Capacity 12,501,380 SEGCO Gaston Units 1 through 4 (Natural Gas-Steam) Wilsonville, AL 1,000,000 Gaston (Natural Gas-Combustion Turbine) Wilsonville, AL 19,680 Total SEGCO Generating Capacity 1,019,680 (j) Southern Company System Natural Gas 21,844,446 Coal 8,523,212 Nuclear 3,679,852 Hydro 2,780,241 Solar 2,771,506 Wind 2,534,580 Cogeneration 611,938 Battery Storage 163,500 Fuel Cell 27,500 Total Southern Company System Generating Capacity 42,936,775 (a) Represents the primary fuel source.
Biggest changeCompany/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Alabama Power Coal Barry Unit 5 Mobile, AL 700,000 Gaston Unit 5 Wilsonville, AL 880,000 Miller (95.92%) Birmingham, AL 2,532,288 Total Coal 4,112,288 Natural Gas Combined Cycle: Barry Units 6 through 8 Mobile, AL 1,706,424 Central Alabama Generating Station Autauga County, AL 885,000 Combustion Turbine: Calhoun Generating Station Calhoun County, AL 748,000 Greene County Demopolis, AL 720,000 Steam: Barry Units 1, 2, and 4 Mobile, AL 600,000 Greene County Units 1 and 2 (60%) Demopolis, AL 300,000 Total Natural Gas 4,959,424 Nuclear Farley Dothan, AL 1,720,000 Hydro Bankhead Holt, AL 53,985 Bouldin Wetumpka, AL 225,000 Harris Wedowee, AL 132,000 Henry Ohatchee, AL 72,900 Holt Holt, AL 46,944 Jordan Wetumpka, AL 100,000 Lay Clanton, AL 177,000 Lewis Smith Jasper, AL 157,500 Logan Martin Vincent, AL 135,000 Martin Dadeville, AL 182,000 Mitchell Verbena, AL 170,000 Thurlow Tallassee, AL 81,000 Weiss Leesburg, AL 87,750 Yates Tallassee, AL 47,000 Total Hydro 1,668,079 I-29 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Cogeneration Lowndes County Burkeville, AL 104,800 Theodore Theodore, AL 236,418 Washington County Washington County, AL 123,428 Total Cogeneration 464,646 Solar Anniston Army Depot Dale County, AL 7,380 Fort Rucker Calhoun County, AL 10,560 Total Solar 17,940 Total Alabama Power Generating Capacity 12,942,377 Georgia Power Natural Gas Combined Cycle: McDonough-Atkinson Units 4 through 6 Atlanta, GA 2,520,000 McIntosh Units 10 and 11 Effingham County, GA 1,318,920 Combustion Turbine: McDonough Unit 3 Atlanta, GA 78,800 McIntosh Units 1 through 8 Effingham County, GA 640,000 McManus Brunswick, GA 481,700 Robins Warner Robins, GA 158,400 Wilson Augusta, GA 354,100 Steam: Yates Newnan, GA 700,000 Total Natural Gas 6,251,920 Coal Bowen Cartersville, GA 3,160,000 Scherer (8.4% of Units 1 and 2 and 75% of Unit 3) Macon, GA 750,924 Total Coal 3,910,924 Nuclear Hatch (50.1%) Baxley, GA 899,612 Vogtle Units 1 through 3 (45.7%) Augusta, GA 1,613,667 Total Nuclear 2,513,279 Hydro Bartletts Ferry Columbus, GA 173,000 Burton Clayton, GA 8,100 Flint River Albany, GA 5,400 Goat Rock Columbus, GA 40,500 Lloyd Shoals Jackson, GA 18,000 Morgan Falls Atlanta, GA 16,800 Nacoochee Lakemont, GA 4,800 North Highlands Columbus, GA 29,600 Oliver Dam Columbus, GA 60,000 Rocky Mountain (25.4%) Rome, GA 229,362 (b) Sinclair Dam Milledgeville, GA 45,000 I-30 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Tallulah Falls Clayton, GA 72,000 Terrora Clayton, GA 20,800 Tugalo Clayton, GA 45,000 Wallace Dam Eatonton, GA 321,300 Yonah Toccoa, GA 22,500 Total Hydro 1,112,162 Solar Fort Benning Columbus, GA 30,005 Fort Gordon Augusta, GA 30,000 Fort Stewart Fort Stewart, GA 30,000 Fort Valley Fort Valley, GA 10,800 Kings Bay Camden County, GA 30,161 Marine Corps Logistics Base Albany, GA 31,161 Moody Air Force Base Valdosta, GA 49,500 Robins Air Force Base Warner Robins, GA 128,000 8 Other Plants Various Georgia locations 18,479 Total Solar 358,106 Total Georgia Power Generating Capacity 14,146,391 Mississippi Power Natural Gas Combined Cycle: Daniel Pascagoula, MS 1,070,424 Ratcliffe Kemper County, MS 769,898 Combustion Turbine: Sweatt Meridian, MS 39,400 Watson Gulfport, MS 39,360 Steam: Greene County Units 1 and 2 (40%) Demopolis, AL 200,000 Watson Gulfport, MS 750,000 Total Natural Gas 2,869,082 Coal Daniel (50%) Pascagoula, MS 500,000 Cogeneration Chevron Cogenerating Station Pascagoula, MS 147,292 (c) Solar Walnut Grove Walnut Grove, MS 1,500 Total Mississippi Power Generating Capacity 3,517,874 I-31 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Southern Power Natural Gas Combined Cycle: Franklin Smiths, AL 1,857,820 Harris Autaugaville, AL 1,318,920 Rowan Unit 4 Salisbury, NC 530,550 Wansley Units 6 and 7 Carrollton, GA 1,073,000 Combustion Turbine: Addison Thomaston, GA 668,800 Cleveland Cleveland County, NC 720,000 Dahlberg Jackson County, GA 756,000 Rowan Units 1 through 3 Salisbury, NC 455,250 Total Natural Gas 7,380,340 Wind Beech Ridge II Greenbrier County, WV 56,200 Bethel Castro County, TX 276,000 Cactus Flats Concho County, TX 148,350 Deuel Harvest Deuel County, SD 301,100 Glass Sands Murray County, OK 118,300 Grant Plains Grant County, OK 147,200 Grant Wind Grant County, OK 151,800 Kay Wind Kay County, OK 299,000 Passadumkeag Penobscot County, ME 42,900 Reading Osage & Lyon Counties, KS 200,100 Salt Fork Donley & Gray Counties, TX 174,000 Skookumchuck Lewis & Thurston Counties, WA 136,800 Tyler Bluff Cooke County, TX 125,580 Wake Wind Crosby & Floyd Counties, TX 257,250 Wildhorse Mountain Pushmataha County, OK 100,000 Total Wind 2,534,580 (d) Solar Adobe Kern County, CA 20,000 Apex North Las Vegas, NV 20,000 Boulder I Clark County, NV 100,000 Butler Taylor County, GA 104,000 Butler Solar Farm Taylor County, GA 22,000 Calipatria Imperial County, CA 20,000 Campo Verde Imperial County, CA 147,420 Cimarron Colfax County, NM 30,640 Decatur County Decatur County, GA 20,000 Decatur Parkway Decatur County, GA 84,000 Desert Stateline San Bernadino County, CA 299,990 East Pecos Pecos County, TX 120,000 Garland Kern County, CA 205,290 Gaskell West I Kern County, CA 20,000 Granville Granville County, NC 2,500 Henrietta Kings County, CA 102,000 Imperial Valley Imperial County, CA 163,200 Lamesa Dawson County, TX 102,000 Lost Hills-Blackwell Kern County, CA 32,000 I-32 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Macho Springs Luna County, NM 55,000 Morelos del Sol Kern County, CA 15,000 North Star Fresno County, CA 61,600 Pawpaw Taylor County, GA 30,480 Roserock Pecos County, TX 160,000 Rutherford Rutherford County, NC 74,800 Sandhills Taylor County, GA 148,000 Spectrum Clark County, NV 30,240 Tranquillity Fresno County, CA 205,300 Total Solar 2,395,460 (e) Battery Storage Garland Kern County, CA 88,000 (f) Tranquillity Fresno County, CA 72,000 (f) Total Battery Storage 160,000 Fuel Cell Red Lion and Brookside New Castle and Newark, DE 27,500 (g) Total Southern Power Generating Capacity 12,497,880 SEGCO Gaston Units 1 through 4 (Natural Gas-Steam) Wilsonville, AL 1,000,000 Gaston (Natural Gas-Combustion Turbine) Wilsonville, AL 19,680 Total SEGCO Generating Capacity 1,019,680 (h) Southern Company System Natural Gas 22,480,446 Coal 8,523,212 Nuclear 4,233,279 Hydro 2,780,241 Solar 2,773,006 Wind 2,534,580 Cogeneration 611,938 Battery Storage 160,000 Fuel Cell 27,500 Total Southern Company System Generating Capacity 44,124,202 (a) Represents the primary fuel source.
Southern Power is the controlling partner in tax equity partnerships owning Cactus Flats, Wildhorse Mountain, Reading, Skookumchuck, and Deuel Harvest (additionally for Skookumchuck and Deuel Harvest, a noncontrolling interest in Southern Power's remaining equity is owned by another partner). Southern Power is the controlling partner in SP Wind (a tax equity partnership owning the remaining eight Southern Power wind facilities).
Southern Power is the controlling partner in tax equity partnerships owning Cactus Flats, Deuel Harvest, Reading, Skookumchuck, and Wildhorse Mountain (additionally for Deuel Harvest and Skookumchuck, a noncontrolling interest in Southern Power's remaining equity is owned by another partner). Southern Power is the controlling partner in SP Wind (a tax equity partnership owning the remaining eight Southern Power wind facilities).
Southern Power owns 100% of Roserock and is also the controlling partner in a tax equity partnership owning Gaskell West I. All of these entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility.
Southern Power is the controlling partner in a tax equity partnership owning Gaskell West I and also owns 100% of Roserock. All of these entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility.
In addition, Georgia Power has commitments, in the form of capacity purchases totaling $41 million, regarding a portion of a 5% interest in the original cost of Plant Vogtle Units 1 and 2 owned by MEAG Power that are in effect until the later of the retirement of the plant or the latest stated maturity date of MEAG Power's bonds issued to finance such ownership interest.
In addition, Georgia Power has commitments, in the form of capacity purchases totaling $39 million, regarding a portion of a 5% interest in the original cost of Plant Vogtle Units 1 and 2 owned by MEAG Power that are in effect until the later of the retirement of the plant or the latest stated maturity date of MEAG Power's bonds issued to finance such ownership interest.
On July 12, 2022, the co-owners executed a revised operating agreement. The dispatch procedures in the revised operating agreement for the two jointly-owned coal units at Plant Daniel resulted in Mississippi Power designating one of the two units as primary and the other as secondary in lieu of each company separately owning 100% of a single generating unit.
In July 2022, the co-owners executed a revised operating agreement. The dispatch procedures in the revised operating agreement for the two jointly-owned coal units at Plant Daniel resulted in Mississippi Power designating one of the two units as primary and the other as secondary in lieu of each company separately owning 100% of a single generating unit.
The percentages of ownership of the total plant or facility are as follows: Percentage Ownership Total Capacity Alabama Power Power South Georgia Power Mississippi Power OPC MEAG Power Dalton FP&L (MWs) Plant Miller Units 1 and 2 1,320 91.8 % 8.2 % — % — % — % — % — % — % Plant Hatch 1,796 — — 50.1 — 30.0 17.7 2.2 — Plant Vogtle Units 1 and 2 2,320 — — 45.7 — 30.0 22.7 1.6 — Plant Scherer Units 1 and 2 1,636 — — 8.4 — 60.0 30.2 1.4 — Plant Scherer Unit 3 818 — — 75.0 — — — — 25.0 Rocky Mountain 903 — — 25.4 — 74.6 — — — Plant Daniel Units 1 and 2 1,000 — — — 50.0 — — — 50.0 I-32 Table of Contents Index to Financial Statements Alabama Power, Georgia Power, and Mississippi Power have contracted to operate and maintain the respective units in which each has an interest (other than Rocky Mountain) as agent for the joint owners.
The percentages of ownership of the total plant or facility are as follows: Percentage Ownership Total Capacity Alabama Power Power South Georgia Power Mississippi Power OPC MEAG Power Dalton FP&L (MWs) Plant Miller Units 1 and 2 1,320 91.8 % 8.2 % — % — % — % — % — % — % Plant Hatch 1,796 — — 50.1 — 30.0 17.7 2.2 — Plant Vogtle Units 1 through 3 3,531 — — 45.7 — 30.0 22.7 1.6 — Plant Scherer Units 1 and 2 1,636 — — 8.4 — 60.0 30.2 1.4 — Plant Scherer Unit 3 818 — — 75.0 — — — — 25.0 Rocky Mountain 903 — — 25.4 — 74.6 — — — Plant Daniel Units 1 and 2 1,000 — — — 50.0 — — — 50.0 I-34 Table of Contents Index to Financial Statements Alabama Power, Georgia Power, and Mississippi Power have contracted to operate and maintain the respective units in which each has an interest (other than Rocky Mountain) as agent for the joint owners.
(i) Southern Power has two noncontrolling interest partners that own approximately 10 MWs of the facility. These entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility.
These entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility. (g) Southern Power has two noncontrolling interest partners that own approximately 10 MWs of the facility.
Item 2. PROPERTIES Electric At December 31, 2022, the traditional electric operating companies, Southern Power, and SEGCO owned and/or operated the generating facilities listed in the table below. The traditional electric operating companies have certain jointly-owned generating stations.
Item 2. PROPERTIES Electric At December 31, 2023, the traditional electric operating companies, Southern Power, and SEGCO owned and/or operated the generating facilities listed in the table below. The traditional electric operating companies have certain jointly-owned generating stations.
(f) Southern Power owns a 67% equity interest in SP Solar (a limited partnership indirectly owning all of Southern Power's solar facilities, except the Roserock and Gaskell West I solar facilities).
(e) Southern Power owns a 67% equity interest in SP Solar (a limited partnership indirectly owning all of Southern Power's solar facilities, except the Gaskell West I and Roserock solar facilities).
These systems consist primarily of distribution and transmission mains, compressor stations, peak shaving/storage plants, service lines, meters, and regulators. At December 31, 2022, Southern Company Gas' gas distribution operations segment owned 77,591 miles of underground distribution and transmission mains, which are located on easements or rights-of-way that generally provide for perpetual use.
These systems consist primarily of distribution and transmission mains, compressor stations, peak shaving/storage plants, service lines, meters, and regulators. At December 31, 2023, Southern Company Gas' gas distribution operations segment owned approximately 77,900 miles of underground distribution and transmission mains, which are located on easements or rights-of-way that generally provide for perpetual use.
The reserve margin for the traditional electric operating companies, Southern Power Company, and SEGCO in 2022 was 20%. Jointly-Owned Facilities Alabama Power, Georgia Power, and Mississippi Power at December 31, 2022 had undivided interests in certain generating plants and other related facilities with non-affiliated parties.
The reserve margin for the traditional electric operating companies, Southern Power Company, and SEGCO in 2023 was 19%. Jointly-Owned Facilities Alabama Power, Georgia Power, and Mississippi Power at December 31, 2023 had undivided interests in certain generating plants and other related facilities with non-affiliated parties.
(g) Southern Power is the controlling partner in a tax equity partnership owning the Garland and Tranquillity battery energy storage facilities. Additionally, the noncontrolling interests in Southern Power's remaining equity are owned by two other partners and the facilities are indirect subsidiaries of SP Solar.
I-33 Table of Contents Index to Financial Statements (f) Southern Power is the controlling partner in a tax equity partnership owning the Garland and Tranquillity battery energy storage facilities. Additionally, the noncontrolling interests in Southern Power's remaining equity are owned by two other partners and the facilities are indirect subsidiaries of SP Solar.
Entergy Gulf States Louisiana, LLC is paying a use fee through 2024 covering all expenses and the amortization of the original cost. At December 31, 2022, the unamortized portion was approximately $1 million. Mississippi Power owns a lignite mine that was intended to provide fuel for the Kemper IGCC.
Entergy Gulf States Louisiana, LLC is paying a use fee covering all expenses and the amortization of the capitalized costs through the expiration of the agreement between the parties on May 31, 2024. At December 31, 2023, the unamortized portion was approximately $1 million. Mississippi Power owns a lignite mine that was intended to provide fuel for the Kemper IGCC.
In 2022, the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was 37,035,000 KWs and occurred on June 15, 2022, which was also the maximum all-time demand. This amount excludes demand served by capacity retained by MEAG Power, OPC, and SEPA.
In 2023, the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was 36,919,000 KWs and occurred on August 14, 2023. The all-time maximum demand of 37,035,000 KWs occurred on June 15, 2022. These amounts exclude demand served by capacity retained by MEAG Power, OPC, and SEPA.
The sale of the Texas facility was completed on November 18, 2022 and completion of the sale of the California facility is expected later in 2023. The ultimate outcome of this matter cannot be determined at this time. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information.
The sale of the Texas facility was completed in November 2022 and the sale of the California facility was completed on September 22, 2023. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information.
Jointly-Owned Properties Southern Company Gas' gas pipeline investments segment has a 50% undivided ownership interest in a 115-mile pipeline facility in northwest Georgia that was placed in service in 2017. Southern Company Gas also has an agreement to lease its 50% undivided ownership in the pipeline facility.
Jointly-Owned Properties Southern Company Gas' gas pipeline investments segment has a 50% undivided ownership interest in a 115-mile pipeline facility in northwest Georgia. Southern Company Gas also has an agreement to lease its 50% undivided ownership in the pipeline facility. See Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information.
See Notes 2 and 3 under "Mississippi Power – Integrated Resource Plan" and "Other Matters – Mississippi Power – Plant Daniel," respectively, in Item 8 herein for additional information on Plant Daniel.
Mississippi Power did not exercise an option to purchase its co-owner's ownership interest for $1 on January 15, 2024. See Notes 2 and 3 under "Mississippi Power – Integrated Resource Plan" and "Other Matters – Mississippi Power – Plant Daniel," respectively, in Item 8 herein for additional information on Plant Daniel.
I-33 Table of Contents Index to Financial Statements All Other On September 7, 2022, certain affiliates of Southern Company Gas entered into agreements to sell two natural gas storage facilities located in California and Texas.
The LNG plants and propane storage facility are used by Southern Company Gas' gas distribution operations segment to supplement natural gas supply during peak usage periods. I-35 Table of Contents Index to Financial Statements All Other In September 2022, certain affiliates of Southern Company Gas entered into agreements to sell two natural gas storage facilities located in California and Texas.
(j) Alabama Power and Georgia Power each own 50% of the outstanding common stock of SEGCO, an operating public utility company. Alabama Power and Georgia Power are each entitled to one-half of SEGCO's capacity and energy. Alabama Power acts as SEGCO's agent in the operation of SEGCO's units and furnishes fuel to SEGCO for its units.
Alabama Power and Georgia Power are each entitled to one-half of SEGCO's capacity and energy. Alabama Power acts as SEGCO's agent in the operation of SEGCO's units and furnishes fuel to SEGCO for its units. See Note 7 to the financial statements under "SEGCO" in Item 8 herein for additional information.
(b) Plant Gadsden, a 120-MW natural gas steam plant, was retired on December 31, 2022. (c) Operated by OPC. (d) Generation is dedicated to a single industrial customer. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Credit Rating Risk" in Item 7 herein.
(b) Operated by OPC. (c) Generation is dedicated to a single industrial customer. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Credit Rating Risk" in Item 7 herein. (d) Southern Power is the controlling partner in a non-tax equity partnership for Beech Ridge II and also owns 100% of Glass Sands.
These entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility. I-31 Table of Contents Index to Financial Statements (h) Subsequent to December 31, 2022, Southern Power, as the Class A member, sold its equity method investment in the facility.
These entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility. (h) Alabama Power and Georgia Power each own 50% of the outstanding common stock of SEGCO, an operating public utility company.
Removed
(e) Southern Power owns 100% of Glass Sands and is also the controlling partner in a non-tax equity partnership for Beech Ridge II.
Removed
See Note 7 to the financial statements under "SEGCO" in Item 8 herein for additional information.
Removed
Mississippi Power has the option to purchase its co-owner's ownership interest for $1 on January 15, 2024, provided that Mississippi Power exercises the option no later than 120 days prior to that date.
Removed
The LNG plants and propane storage facility are used by Southern Company Gas' gas distribution operations segment to supplement natural gas supply during peak usage periods.
Removed
See Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

18 edited+1 added−4 removed0 unchanged
Biggest changeKerr has been named Chairman of the Board of Directors, Chief Executive Officer, and President of Southern Company Gas, and effective April 1, 2023, Mr. Spainhour has been named Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Southern Company. (2) Mr. Kuczynski has resigned, effective March 31, 2023, from his position as President of Southern Nuclear. Mr.
Biggest changeKerr II Chairman, President, and Chief Executive Officer of Southern Company Gas Age 59 First elected in 2014. Chairman, President, and Chief Executive Officer of Southern Company Gas since April 2023. Previously served as Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Southern Company from March 2014 to March 2023.
Executive Vice President since January 2021. Chairman of Southern Power since February 2021 and Executive Vice President of SCS, Chief Executive Officer of Southern Power, and President and Chief Executive Officer of Southern PowerSecure Holdings, Inc. and Southern Holdings since July 2020. Previously served as Executive Vice President, External Affairs of Georgia Power from May 2015 to June 2020.
Chairman of Southern Power since February 2021 and Executive Vice President of SCS, Chief Executive Officer of Southern Power, and President and Chief Executive Officer of Southern PowerSecure Holdings, Inc. and Southern Holdings since July 2020. Previously served as Executive Vice President, External Affairs of Georgia Power from May 2015 to June 2020. Martin B.
Previously served as Executive Vice President of Customer and Employee Services of Alabama Power from June 2020 to January 2023, Senior Vice President of Employee Services and Labor Relations of Alabama Power from June 2018 to June 2020, Executive Vice President and Chief Administrative Officer of Southern Company Gas and President of AGL Services Company from September 2018 to June 2020, and Vice President of Human Resources of Alabama Power from December 2015 to June 2018.
Previously served as Executive Vice President of Customer and Employee Services of Alabama Power from June 2020 to January 2023, Senior Vice President of Employee Services and Labor Relations of Alabama Power from June 2018 to June 2020, and Executive Vice President and Chief Administrative Officer of Southern Company Gas and President of AGL Services Company from September 2018 to June 2020.
Martin B. Davis Executive Vice President and Chief Information Officer Age 59 First elected in 2021. Executive Vice President since April 2021. Chief Information Officer and Executive Vice President of SCS since July 2015. Previously served as Vice President from July 2015 through April 2021. Kimberly S.
Davis Executive Vice President and Chief Information Officer Age 60 First elected in 2021. Executive Vice President since April 2021. Chief Information Officer and Executive Vice President of SCS since July 2015. Previously served as Vice President from July 2015 through April 2021. Kimberly S.
Anderson Executive Vice President Age 56 First elected in 2020. Executive Vice President and President of External Affairs since January 2021. Executive Vice President of SCS since November 2020. Previously served as Senior Vice President of SCS with responsibility for governmental affairs from January 2015 to November 2020. Stanley W. Connally, Jr.
Executive Vice President and President of External Affairs since January 2021. Executive Vice President of SCS since November 2020. Previously served as Senior Vice President of SCS with responsibility for governmental affairs from January 2015 to November 2020. Stanley W. Connally, Jr. Executive Vice President Age 54 First elected in 2012. Executive Vice President since April 2021.
Item 4. MINE SAFETY DISCLOSURES Not applicable. I-34 Table of Contents Index to Financial Statements INFORMATION ABOUT OUR EXECUTIVE OFFICERS – SOUTHERN COMPANY (Identification of executive officers of Southern Company is inserted in Part I in accordance with Regulation S-K, Item 401) The ages of the officers set forth below are as of December 31, 2022. Thomas A.
Item 4. MINE SAFETY DISCLOSURES Not applicable. I-36 Table of Contents Index to Financial Statements INFORMATION ABOUT OUR EXECUTIVE OFFICERS – SOUTHERN COMPANY (Identification of executive officers of Southern Company is inserted in Part I in accordance with Regulation S-K, Item 401) The ages of the officers set forth below are as of December 31, 2023. Christopher C.
Each officer listed above was elected at the annual meeting (or by written consent in lieu of the annual meeting) of the board of directors of the applicable company, to serve until the next such annual meeting or until his or her successor is elected and qualified, except for Mr. Peoples who was elected on January 4, 2023 and Mr.
Each officer listed above was elected at the annual meeting (or by written consent in lieu of the annual meeting) of the board of directors of the applicable company, to serve until the next such annual meeting or until his or her successor is elected and qualified, except for Mr. Womack who was elected as Chairman on December 11, 2023.
Previously served as Executive Vice President, Chief Financial Officer, and Treasurer of Georgia Power from January 2021 to September 2021, Executive Vice President and Chief Financial Officer of Southern Company Gas from January 2019 to January 2021, and Treasurer of Southern Company and Senior Vice President and Treasurer of SCS from October 2015 to January 2019. Bryan D.
Previously served as Executive Vice President, Chief Financial Officer, and Treasurer of Georgia Power from January 2021 to September 2021, and Executive Vice President and Chief Financial Officer of Southern Company Gas from January 2019 to January 2021. Bryan D. Anderson Executive Vice President Age 57 First elected in 2020.
Kuczynski (2) Chairman, President, and Chief Executive Officer of Southern Nuclear Age 60 First elected in 2011. Chairman, President, and Chief Executive Officer of Southern Nuclear since July 2011. J. Jeffrey Peoples Chairman, President, and Chief Executive Officer of Alabama Power Age 63 First elected in 2023. Chairman, President, and Chief Executive Officer of Alabama Power since January 2023.
Jeffrey Peoples Chairman, President, and Chief Executive Officer of Alabama Power Age 64 First elected in 2023. Chairman, President, and Chief Executive Officer of Alabama Power since January 2023.
Previously served as Executive Vice President for Operations of SCS from June 2018 to April 2021, President, Chief Executive Officer, and Director of Gulf Power from July 2012 through December 2018, and Chairman of Gulf Power's Board of Directors from July 2015 through December 2018. Christopher Cummiskey Executive Vice President Age 48 First elected in 2021.
Chairman, President, and Chief Executive Officer of SCS since April 2021. Previously served as Executive Vice President for Operations of SCS from June 2018 to April 2021. Christopher Cummiskey Executive Vice President Age 49 First elected in 2021. Executive Vice President since January 2021.
Greene (1) Chairman, President, and Chief Executive Officer of Southern Company Gas Age 56 First elected in 2013. Chairman, President, and Chief Executive Officer of Southern Company Gas since June 2018. Director of Southern Company Gas since July 2016. Previously served as Executive Vice President and Chief Operating Officer of Southern Company from March 2014 through June 2018. James Y.
Greene Chairman, President, and Chief Executive Officer of Georgia Power Age 57 First elected in 2013. Chairman, President, and Chief Executive Officer of Georgia Power since April 2023. Previously served as Chairman, President, and Chief Executive Officer of Southern Company Gas from June 2018 to March 2023. James Y.
Executive Vice President Age 53 First elected in 2012. Executive Vice President since April 2021. Chairman, President, and Chief Executive Officer of SCS since April 2021.
Tucker Executive Vice President and Chief Financial Officer Age 53 First elected in 2021. Executive Vice President and Chief Financial Officer since September 2021.
Previously served as Senior Vice President and General Counsel of SCS from December 2016 to July 2020. Anthony L. Wilson Chairman, President, and Chief Executive Officer of Mississippi Power Age 58 First elected in 2015. President of Mississippi Power since October 2015 and Chief Executive Officer and Director since January 2016.
Anthony L. Wilson Chairman, President, and Chief Executive Officer of Mississippi Power Age 59 First elected in 2015. President of Mississippi Power since October 2015 and Chief Executive Officer and Director since January 2016. Chairman of Mississippi Power's Board of Directors since August 2016.
Spainhour who was elected on February 6, 2023. I-36 Table of Contents Index to Financial Statements PART II
I-38 Table of Contents Index to Financial Statements PART II
Sterling A. Spainhour (1) Executive Vice President, Chief Legal Officer, and Chief Compliance Officer (effective April 1, 2023) Age 54 First elected effective April 1, 2023. Currently serving as Senior Vice President, General Counsel, Corporate Secretary, and Chief Compliance Officer of Georgia Power since June 2020 and Senior Vice President and General Counsel – East of SCS since July 2020.
Previously served as Chief Compliance Officer of Southern Company from April 2023 to January 2024, Senior Vice President, General Counsel, Corporate Secretary, and Chief Compliance Officer of Georgia Power from June 2020 to March 2023, Senior Vice President and General Counsel – East of SCS from July 2020 to March 2023, and Senior Vice President and General Counsel of SCS from December 2016 to July 2020.
Kerr II (1) Executive Vice President, Chief Legal Officer, and Chief Compliance Officer Age 58 First elected in 2014. Executive Vice President, Chief Legal Officer (formerly known as General Counsel), and Chief Compliance Officer since March 2014. I-35 Table of Contents Index to Financial Statements Stephen E.
I-37 Table of Contents Index to Financial Statements Stephen E. Kuczynski Chairman and Chief Executive Officer of Southern Nuclear Age 61 First elected in 2011. Chairman and Chief Executive Officer of Southern Nuclear since July 2011. Previously served as President of Southern Nuclear from July 2011 through March 2023. J.
Previously served as Executive Vice President and President of External Affairs of Southern Company from January 2009 to October 2020. (1) Mr. Womack has been appointed President of Southern Company and elected as a member of the Board of Directors of Southern Company, each effective March 31, 2023. Mr.
Previously served as Chairman and Chief Executive Officer of Georgia Power from June 2021 to March 2023, President of Georgia Power from November 2020 to March 2023, and Executive Vice President and President of External Affairs of Southern Company from January 2009 to October 2020. Daniel S.
Fanning (1) Chairman, President, and Chief Executive Officer Age 65 First elected in 2003. Chairman and Chief Executive Officer since December 2010 and President since August 2010. Daniel S. Tucker Executive Vice President and Chief Financial Officer Age 52 First elected in 2021. Executive Vice President and Chief Financial Officer since September 2021.
Womack Chairman, President, and Chief Executive Officer Age 65 First elected in 2008. President since March 2023, Chief Executive Officer since May 2023, and Chairman since December 2023.
Removed
Chairman of Mississippi Power's Board of Directors since August 2016. Christopher C. Womack (1) Chairman, President, and Chief Executive Officer of Georgia Power Age 64 First elected in 2008. Chairman and Chief Executive Officer of Georgia Power since June 2021 and President of Georgia Power since November 2020.
Added
Sterling A. Spainhour Executive Vice President and Chief Legal Officer Age 55 First elected in 2023. Executive Vice President and Chief Legal Officer since April 2023.
Removed
Womack also has been appointed Chief Executive Officer of Southern Company effective immediately following the conclusion of Southern Company's 2023 Annual Meeting of Stockholders. Mr. Fanning will relinquish the role of President upon Mr. Womack's assumption of the role on March 31, 2023 and assume the role of Executive Chairman of Southern Company upon Mr.
Removed
Womack's assumption of the role of Chief Executive Officer. In addition, effective March 31, 2023, Ms. Greene has been named Chair of the Board of Directors, Chief Executive Officer, and President of Georgia Power and Mr.
Removed
Kuczynski will remain Chairman and Chief Executive Officer of Southern Nuclear.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed2 unchanged
Biggest changeThere is no market for the other Registrants' common stock, all of which is owned by Southern Company. (a)(2) Number of Southern Company's common stockholders of record at January 31, 2023: 99,521 Southern Company has paid dividends on its common stock since 1948. Dividends paid per share of common stock were $2.70 in 2022 and $2.62 in 2021.
Biggest changeThere is no market for the other Registrants' common stock, all of which is owned by Southern Company. (a)(2) Number of Southern Company's common stockholders of record at January 31, 2024: 95,412 Southern Company has paid dividends on its common stock since 1948. Dividends paid per share of common stock were $2.78 in 2023 and $2.70 in 2022.
In January 2023, Southern Company declared a quarterly dividend of 68 cents per share. Dividends on Southern Company's common stock are payable at the discretion of Southern Company's Board of Directors and depend upon earnings, financial condition, and other factors. See Note 8 to the financial statements under "Dividend Restrictions" in Item 8 herein for additional information.
In January 2024, Southern Company declared a quarterly dividend of 70 cents per share. Dividends on Southern Company's common stock are payable at the discretion of Southern Company's Board of Directors and depend upon earnings, financial condition, and other factors. See Note 8 to the financial statements under "Dividend Restrictions" in Item 8 herein for additional information.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Combined Management's Discussion and Analysis of Financial Condition and Results of Operations Overview II- 3 Results of Operations II- 7 Southern Company II- 7 Alabama Power II- 17 Georgia Power II- 21 Mississippi Power II- 26 Southern Power II- 30 Southern Company Gas II- 32 Future Earnings Potential II- 38 Accounting Policies II- 46 Financial Condition and Liquidity II- 53 This section generally discusses 2022 and 2021 items and year-to-year comparisons between 2022 and 2021.
Biggest changeMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Page Combined Management's Discussion and Analysis of Financial Condition and Results of Operations Overview II- 3 Results of Operations II- 9 Southern Company II- 9 Alabama Power II- 19 Georgia Power II- 23 Mississippi Power II- 28 Southern Power II- 32 Southern Company Gas II- 34 Future Earnings Potential II- 39 Accounting Policies II- 48 Financial Condition and Liquidity II- 55 This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
Discussions of 2020 items and year-to-year comparisons between 2021 and 2020 that are not included in this Annual Report on Form 10-K can be found in Item 7 of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2021, which was filed with the SEC on February 16, 2022.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in Item 7 of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 15, 2023.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeSignificant Balance Sheet Changes Southern Company Significant balance sheet changes in 2022 for Southern Company included: • an increase of $3.5 billion in total property, plant, and equipment primarily related to the Subsidiary Registrants' construction programs, net of the reclassification of $0.6 billion to other regulatory assets and $0.4 billion to regulatory assets associated with AROs upon Georgia Power's retirement of Plant Wansley Units 1 and 2; • an increase of $2.7 billion in long-term debt (including securities due within one year) related to new issuances; • an increase of $2.5 billion in total common stockholders' equity primarily related to net income and the issuance of common stock to settle the purchase contracts entered into as part of the Equity Units (as discussed in Note 8 to the financial statements under "Equity Units"), partially offset by common stock dividend payments; • an increase of $1.6 billion in deferred under recovered fuel clause revenues due to higher fuel and purchased power costs at Georgia Power; • an increase of $1.4 billion in accounts payable primarily related to the timing of vendor payments; II-61 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS • an increase of $1.2 billion in accumulated deferred income taxes primarily related to the increase in under recovered fuel clause revenues, an increase in property-related timing differences, and continued flowback of excess deferred income taxes; • an increase of $1.2 billion in notes payable due to an increase in short-term bank debt; • a decrease of $0.8 billion in AROs primarily related to cost estimate updates for ash pond closures at Georgia Power; and • an increase of $0.6 billion in prepaid pension costs primarily related to actuarial gains resulting from increases in the assumed discount rates, partially offset by actual losses on plan assets.
Biggest changeSignificant Balance Sheet Changes Southern Company Significant balance sheet changes in 2023 for Southern Company included: • an increase of $5.3 billion in total property, plant, and equipment primarily related to the Subsidiary Registrants' construction programs; • an increase of $4.7 billion in long-term debt (including securities due within one year) related to new issuances; • a decrease of $1.2 billion in cash and cash equivalents, as discussed further under "Analysis of Cash Flows – Southern Company" herein; • an increase of $1.0 billion in total common stockholders' equity primarily related to net income, partially offset by common stock dividend payments; • an increase of $1.0 billion in accumulated deferred income taxes primarily related to an increase in property-related timing differences and the expected utilization of ITCs; • a decrease of $0.6 billion in accounts payable primarily related to the timing of vendor payments; II-62 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS • a decrease of $0.6 billion in deferred credits related to income taxes primarily due to the flowback of excess deferred income taxes; and • a decrease of $0.5 billion in AROs primarily due to cost estimate updates at Georgia Power for ash pond closures.
Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.
As a result, Southern Power's ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors.
As a result, Southern Power's ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors.
Since 2018, Southern Power has been utilizing tax equity partnerships for wind, solar, and battery energy storage projects, where the tax partner takes significantly all of the respective federal tax benefits. These tax equity partnerships are consolidated in Southern Company's and Southern Power's financial statements using the HLBV methodology to allocate partnership gains and losses.
Since 2018, Southern Power has been utilizing tax equity partnerships for wind, solar, and battery energy storage projects, where the tax equity partner takes significantly all of the respective federal tax benefits. These tax equity partnerships are consolidated in Southern Company's and Southern Power's financial statements using the HLBV methodology to allocate partnership gains and losses.
Under the terms of the agreement, among other items, (i) MEAG Power will not exercise its tender option and will retain its full ownership interest in Plant Vogtle Units 3 and 4; (ii) Georgia Power will reimburse a portion of MEAG Power's costs of construction for Plant Vogtle Units 3 and 4 as such costs are incurred and with no further adjustment for force majeure costs, which payments will total approximately $92 million based on the current project capital cost forecast; and (iii) Georgia Power will reimburse 20% of MEAG Power's costs of construction with respect to any amounts over the current project capital cost forecast, with no further adjustment for force majeure costs.
Under the terms of the agreement, among other items, (i) MEAG Power will not exercise its tender option and will retain its full ownership interest in Plant Vogtle Units 3 and 4; (ii) Georgia Power will reimburse a portion of MEAG Power's costs of construction for Plant Vogtle Units 3 and 4 as such costs are incurred and with no further adjustment for force majeure costs, which payments will total approximately $92 million based on the current project capital cost forecast; and (iii) Georgia Power will reimburse 20% of MEAG Power's costs of construction with respect to any amounts over the current project capital cost forecast, with no further adjustment for force majeure costs.
The costs required to comply with environmental laws and regulations and to achieve stated goals, including capital expenditures, operations and maintenance costs, and costs reflected in ARO liabilities, may impact future electric generating unit retirement and replacement decisions (which are subject to approval from the traditional electric operating companies' respective state PSCs), results of operations, cash flows, and/or financial condition.
The costs required to comply with environmental laws and regulations and to achieve stated goals, including capital expenditures, operations and maintenance costs, and costs reflected in ARO liabilities, may impact future electric generating unit retirement and replacement decisions (which are generally subject to approval from the traditional electric operating companies' respective state PSCs), results of operations, cash flows, and/or financial condition.
Environmental, natural resource, and land use concerns, including the applicability of air quality limitations, the potential presence of wetlands or threatened and endangered species, the availability of water withdrawal rights, uncertainties regarding impacts such as increased light or noise, and concerns about potential adverse health impacts can, however, increase the cost of siting and operating any type of future facility.
Environmental, natural resource, and land use concerns, including the applicability of air quality limitations, the potential presence of wetlands or threatened and endangered species, the availability of water withdrawal rights, uncertainties regarding impacts such as increased light or noise, and concerns about potential adverse health impacts can, however, increase the cost of siting and/or operating any type of existing or future facility.
Southern Company Gas is engaged in various infrastructure improvement programs designed to update or expand the natural gas distribution systems of the natural gas distribution utilities to improve reliability, reduce emissions, and meet operational flexibility and growth. The natural gas distribution utilities recover their investment and a return associated with these infrastructure programs through their regulated rates.
Southern Company Gas is engaged in various infrastructure improvement programs designed to update or expand the natural gas distribution systems of the natural gas distribution utilities to improve reliability and resiliency, reduce emissions, and meet operational flexibility and growth. The natural gas distribution utilities recover their investment and a return associated with these infrastructure programs through their regulated rates.
In connection therewith, the Registrants, Nicor Gas, and SEGCO may extend the maturity dates and/or increase or decrease the lending commitments thereunder. A portion of the unused credit with banks is allocated to provide liquidity support to the revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO.
In connection therewith, the Registrants, Nicor Gas, and SEGCO may extend the maturity dates and/or increase or decrease the lending commitments thereunder. A portion of the unused credit with banks is allocated to provide liquidity support to certain revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO.
In April 2021, President Biden announced a new target for the United States to achieve a 50% to 52% reduction in economy-wide GHG emissions from 2005 levels by 2030. The target was accepted by the United Nations as the United States' nationally determined emissions reduction contribution under the Paris Agreement.
In 2021, President Biden announced a new target for the United States to achieve a 50% to 52% reduction in economy-wide GHG emissions from 2005 levels by 2030. The target was accepted by the United Nations as the United States' nationally determined emissions reduction contribution under the Paris Agreement.
Key Performance Indicators In striving to achieve attractive risk-adjusted returns while providing cost-effective energy to approximately 8.8 million electric and gas utility customers collectively, the traditional electric operating companies and Southern Company Gas continue to focus on several key performance indicators.
Key Performance Indicators In striving to achieve attractive risk-adjusted returns while providing cost-effective energy to approximately 8.9 million electric and gas utility customers collectively, the traditional electric operating companies and Southern Company Gas continue to focus on several key performance indicators.
These factors include the natural gas distribution utilities' ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs, including those related to projected long-term demand growth, safety, system reliability and resiliency, natural gas, and capital expenditures, including expanding and improving the natural gas distribution systems; the completion and subsequent operation of ongoing infrastructure and other construction projects; customer creditworthiness; and certain policies to limit the use of natural gas, such as the potential across certain parts of the U.S. for state or municipal bans on the use of natural gas or policies designed to promote electrification.
These factors include the natural gas distribution utilities' ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs, including those related to projected long-term demand growth, safety, system reliability and resiliency, natural gas, and capital expenditures, including expanding and improving the natural gas distribution systems; the completion and subsequent operation of ongoing infrastructure and other construction projects; customer creditworthiness; and certain policies to limit the use of natural gas, such as the potential in Illinois and across certain other parts of the U.S. for state or municipal bans on the use of natural gas or policies designed to promote electrification.
The ultimate impact of environmental laws and regulations and the GHG goals discussed herein cannot be determined at this time and will depend on various factors, such as state adoption and implementation of requirements, the availability and cost of any deployed technology, fuel prices, the outcome of pending and/or future legal challenges, and the ability to continue recovering the related costs, through rates for the traditional electric operating companies and the natural gas distribution utilities and/or through long-term wholesale agreements for the traditional electric operating companies and Southern Power.
The ultimate impact of environmental laws and regulations and the GHG goals discussed herein cannot be determined at this time and will depend on various factors, such as state adoption and implementation of requirements, the availability and cost of any deployed technology, fuel prices, the outcome of pending and/or future legal challenges and regulatory matters, and the ability to continue recovering the related costs, through rates for the traditional electric operating companies and the natural gas distribution utilities and/or through long-term wholesale agreements for the traditional electric operating companies and Southern Power.
Asset Impairment (Southern Company, Southern Power, and Southern Company Gas) Goodwill (Southern Company and Southern Company Gas) The acquisition method of accounting for business combinations requires the assets acquired and liabilities assumed to be recorded at the date of acquisition at their respective estimated fair values.
Impairment (Southern Company, Southern Power, and Southern Company Gas) Goodwill (Southern Company and Southern Company Gas) The acquisition method of accounting for business combinations requires the assets acquired and liabilities assumed to be recorded at the date of acquisition at their respective estimated fair values.
If an indicator exists, the asset is tested for recoverability by comparing the asset carrying amount to the sum of the undiscounted expected future cash flows directly attributable to the asset's use and eventual disposition.
If an impairment indicator exists, the asset is tested for recoverability by comparing the asset carrying amount to the sum of the undiscounted expected future cash flows directly attributable to the asset's use and eventual disposition.
II-20 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.
II-22 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.
II-58 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Short-term Borrowings The Registrants, Nicor Gas, and SEGCO make short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Southern Power's subsidiaries are not issuers or obligors under its commercial paper program.
II-59 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Short-term Borrowings The Registrants, Nicor Gas, and SEGCO make short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Southern Power's subsidiaries are not issuers or obligors under its commercial paper program.
II-68 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS The Registrants use over-the-counter contracts that are not exchange traded but are fair valued using prices which are market observable, and thus fall into Level 2 of the fair value hierarchy. In addition, Southern Company Gas uses exchange-traded market-observable contracts, which are categorized as Level 1.
II-69 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS The Registrants use over-the-counter contracts that are not exchange traded but are fair valued using prices which are market observable, and thus fall into Level 2 of the fair value hierarchy. In addition, Southern Company Gas uses exchange-traded market-observable contracts, which are categorized as Level 1.
This transition has been supported in part by the Southern Company system retiring over 6,700 MWs of coal-fired generating capacity since 2010 and converting 3,700 MWs of generating capacity from coal to natural gas since 2015. In addition, the Southern Company system's capacity mix consists of over 11,500 MWs of renewable and storage facilities through ownership and long-term PPAs.
This transition has been supported in part by the Southern Company system retiring over 6,700 MWs of coal-fired generating capacity since 2010 and converting 3,700 MWs of generating capacity from coal to natural gas since 2015. In addition, the Southern Company system's capacity mix consists of over 11,600 MWs of renewable and storage facilities through ownership and long-term PPAs.
The net cash used for investing activities in 2022 and 2021 was primarily related to construction of transportation and distribution assets recovered through base rates and infrastructure investment recovered through replacement programs at gas distribution operations, partially offset by proceeds from dispositions. See Note 15 to the financial statements for additional information.
The net cash used for investing activities in 2023 and 2022 was primarily related to construction of transportation and distribution assets recovered through base rates and infrastructure investment recovered through replacement programs at gas distribution operations, partially offset by proceeds from dispositions. See Note 15 to the financial statements for additional information.
Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities. (b) Includes $798 million and $950 million at Southern Company Gas Capital and Nicor Gas, respectively. Subject to applicable market conditions, the Registrants, Nicor Gas, and SEGCO expect to renew or replace their bank credit arrangements as needed, prior to expiration.
Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities. (b) Includes $798 million and $800 million at Southern Company Gas Capital and Nicor Gas, respectively. Subject to applicable market conditions, the Registrants, Nicor Gas, and SEGCO expect to renew or replace their bank credit arrangements as needed, prior to expiration.
The amount, type, and timing of any financings in 2023, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals (for certain of the Subsidiary Registrants), and other factors. See "Cash Requirements" herein for additional information.
The amount, type, and timing of any financings in 2024, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals (for certain of the Subsidiary Registrants), and other factors. See "Cash Requirements" herein for additional information.
Prior to entering into a physical transaction, Southern Company Gas also assigns physical wholesale counterparties an internal credit rating and credit limit based on the counterparties' Moody's, S&P, and Fitch ratings, commercially available credit reports, and audited financial statements. II-70 Table of Contents Index to Financial Statements
Prior to entering into a physical transaction, Southern Company Gas also assigns physical wholesale counterparties an internal credit rating and credit limit based on the counterparties' Moody's, S&P, and Fitch ratings, commercially available credit reports, and audited financial statements. II-71 Table of Contents Index to Financial Statements
II-28 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clauses.
II-30 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clauses.
See Note 3 to the financial statements under "Commitments" for information on Southern Company Gas' commitments for pipeline charges, storage capacity, and gas supply. Total estimated costs for fuel and purchased power commitments at December 31, 2022 for the applicable Registrants are provided in the table below.
See Note 3 to the financial statements under "Commitments" for information on Southern Company Gas' commitments for pipeline charges, storage capacity, and gas supply. Total estimated costs for fuel and purchased power commitments at December 31, 2023 for the applicable Registrants are provided in the table below.
See "Financing Activities" herein and Notes 2, 5, 6, 8, 10, and 11 to the financial statements for additional information.
See "Financing Activities" herein and Notes 2, 5, 6, 8, and 10 to the financial statements for additional information.
See "Financing Activities – Alabama Power" herein and Notes 2, 5, 8, and 15 to the financial statements for additional information.
See "Financing Activities – Alabama Power" herein and Notes 2, 5, and 8 to the financial statements for additional information.
The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $106 million of cash collateral posted related to PPA requirements at December 31, 2022.
The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $106 million of cash collateral posted related to PPA requirements at December 31, 2023.
(c) Excludes cash collateral of $41 million as well as immaterial premium and associated intrinsic value associated with weather derivatives. The Registrants are exposed to risk in the event of nonperformance by counterparties to energy-related and interest rate derivative contracts, as applicable.
(c) Excludes cash collateral of $62 million as well as immaterial premium and associated intrinsic value associated with weather derivatives. The Registrants are exposed to risk in the event of nonperformance by counterparties to energy-related and interest rate derivative contracts, as applicable.
See "Financing Activities – Southern Power" herein and Notes 5 and 8 to the financial statements for additional information.
See "Financing Activities – Southern Power" herein and Notes 5, 8, and 15 to the financial statements for additional information.
Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. Senior management has reviewed and discussed the following critical accounting policies and estimates with the Audit Committee of Southern Company's Board of Directors.
Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. Senior management has reviewed and discussed these critical accounting policies and estimates with the Audit Committee of Southern Company's Board of Directors.
See Note 8 to the financial statements for information regarding the Registrants' long-term debt at December 31, 2022, the weighted average interest rate applicable to each long-term debt category, and a schedule of long-term debt maturities over the next five years.
See Note 8 to the financial statements for information regarding the Registrants' long-term debt at December 31, 2023, the weighted average interest rate applicable to each long-term debt category, and a schedule of long-term debt maturities over the next five years.
At December 31, 2022 and 2021, substantially all of the traditional electric operating companies' and certain of the natural gas distribution utilities' energy-related derivative contracts were designated as regulatory hedges and were related to the applicable company's fuel-hedging program.
At December 31, 2023 and 2022, substantially all of the traditional electric operating companies' and certain of the natural gas distribution utilities' energy-related derivative contracts were designated as regulatory hedges and were related to the applicable company's fuel-hedging program.
See Note 2 to the financial statements under "Alabama Power – Rate ECR," " – Rate RSE," and " – Rate CNP Compliance" for additional information. See "Energy Sales" herein for a discussion of changes in the volume of energy sold, including changes related to sales growth and weather.
See Note 2 to the financial statements under "Alabama Power – Rate ECR," " – Rate RSE," and " – Rate CNP Compliance" for additional information. See "Energy Sales" herein for a discussion of changes in the volume of energy sold, including estimated changes related to sales and weather.
Wholesale revenues from sales to affiliates will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost.
Wholesale revenues from sales to affiliates will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. The energy portion of these transactions does not have a significant impact on earnings since this energy is generally sold at marginal cost.
II-69 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Atlanta Gas Light also faces potential credit risk in connection with assignments of interstate pipeline transportation and storage capacity to Marketers.
II-70 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Atlanta Gas Light also faces potential credit risk in connection with assignments of interstate pipeline transportation and storage capacity to Marketers.
The net cash used for investing activities in 2022 and 2021 was primarily related to gross property additions, including approximately $1.0 billion and $1.3 billion, respectively, related to the construction of Plant Vogtle Units 3 and 4.
The net cash used for investing activities in 2023 and 2022 was primarily related to gross property additions, including approximately $1.1 billion and $1.0 billion, respectively, related to the construction of Plant Vogtle Units 3 and 4.
Southern Company Gas Gas Distribution Operations Concentration of credit risk occurs at Atlanta Gas Light for amounts billed for services and other costs to its customers, which consist of the 14 Marketers in Georgia.
Southern Company Gas Gas Distribution Operations Concentration of credit risk occurs at Atlanta Gas Light for amounts billed for services and other costs to its customers, which consist of the 13 Marketers in Georgia.
II-18 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
II-11 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
II-27 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
II-29 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
II-30 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS See FUTURE EARNINGS POTENTIAL – "Southern Power's Power Sales Agreements" herein for additional information regarding Southern Power's PPAs.
II-32 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS See FUTURE EARNINGS POTENTIAL – "Southern Power's Power Sales Agreements" herein for additional information regarding Southern Power's PPAs.
After considering the significant level of uncertainty that exists regarding the future recoverability of these costs since the ultimate outcome of these matters is subject to the outcome of future assessments by management, as well as Georgia PSC decisions in these future regulatory proceedings, Georgia Power recorded total pre-tax charges to income of $1.1 billion ($0.8 billion after tax) in 2018; $149 million ($111 million after tax) and $176 million ($131 million after tax) in the second quarter and the fourth quarter 2020, respectively; $48 million ($36 million after tax), $460 million ($343 million after tax), $264 million ($197 million after tax), and $480 million ($358 million after tax) in the first quarter 2021, the second quarter 2021, the third quarter 2021, and the fourth quarter 2021, respectively; and $36 million ($27 million after tax), $32 million ($24 million after tax), and $148 million ($110 million after tax) in the second quarter 2022, the third quarter 2022, and the fourth quarter 2022, respectively.
After considering the significant level of uncertainty that existed regarding the future recoverability of these costs since the ultimate outcome of these matters was subject to the outcome of assessments by management, as well as Georgia PSC decisions in the related regulatory proceedings, Georgia Power recorded total pre-tax charges to income of $1.1 billion ($0.8 billion after tax) in 2018; $149 million ($111 million after tax) and $176 million ($131 million after tax) in the second quarter and the fourth quarter 2020, respectively; $48 million ($36 million after tax), $460 million ($343 million after tax), $264 million ($197 million after tax), and $480 million ($358 million after tax) in the first quarter 2021, the second quarter 2021, the third quarter 2021, and the fourth quarter 2021, respectively; and $36 million ($27 million after tax), $32 million ($24 million after tax), and $148 million ($110 million after tax) in the second quarter 2022, the third quarter 2022, and the fourth quarter 2022, respectively.
Credit Rating Risk At December 31, 2022, the Registrants did not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade.
Credit Rating Risk At December 31, 2023, the Registrants did not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade.
The charges to income in each year were recorded to reflect revisions to the total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
The charges (credits) to income in each year were recorded to reflect revisions to the total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4 and the related cost recovery. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
Additionally, changes in commodity prices, primarily driven by tight gas supplies, geopolitical events, and diminished gas production, subject a portion of Southern Company Gas' operations to earnings variability and have resulted in higher natural gas prices. Additional economic factors may contribute to this environment.
Additionally, changes in commodity prices, primarily driven by tight gas supplies, geopolitical events, and diminished gas production, subject a portion of Southern Company Gas' operations to earnings variability and may result in higher natural gas prices. Additional economic factors may contribute to this environment.
Significant accounting policies are described in the notes to the financial statements. In the application of these policies, certain estimates are made that may have a material impact on the results of operations and related disclosures of the applicable Registrants (as indicated in the section descriptions herein).
Significant accounting policies are described in the notes to the financial statements. Detailed further herein are certain estimates made in the application of these policies that may have a material impact on the results of operations, financial condition, and related disclosures of the applicable Registrants (as indicated in the section descriptions herein).
See "Financing Activities" herein for additional information. The Registrants may enter into interest rate derivatives designated as hedges, which are intended to mitigate interest rate volatility related to forecasted debt financings and existing fixed and floating rate obligations. See Note 14 to the financial statements under "Interest Rate Derivatives" for additional information.
The Registrants may enter into interest rate derivatives designated as hedges, which are intended to mitigate interest rate volatility related to forecasted debt financings and existing fixed and floating rate obligations. See Note 14 to the financial statements under "Interest Rate Derivatives" for additional information.
For the traditional electric operating companies, major generation construction projects are subject to state PSC approval in order to be included in retail rates. The largest construction project currently underway in the Southern Company system is Plant Vogtle Units 3 and 4. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
For the traditional electric operating companies, major generation construction projects are subject to state PSC approval in order to be included in retail rates. The largest construction project currently underway in the Southern Company system is Plant Vogtle Unit 4. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
For Southern Power, examples of impairment indicators could include significant changes in construction schedules, current period losses combined with a history of losses or a projection of continuing losses, a significant decrease in market prices, changes in tax legislation, the inability to remarket generating capacity for an extended period, the unplanned termination of a customer contract, or the inability of a customer to perform under the terms of the contract.
For Southern Power, examples of impairment indicators could include, but are not limited to, significant changes in construction schedules, current period losses combined with a history of losses or a projection of continuing losses, a significant decrease in market prices, changes in tax legislation, the inability to remarket generating capacity for an extended period, the unplanned termination of a customer contract, or the inability of a customer to perform under the terms of the contract.
Natural gas purchase commitments are based on various indices at the time of delivery; the amounts reflected below have been estimated based on the NYMEX future prices at December 31, 2022. As discussed under "Capital Expenditures" herein, estimated expenditures for nuclear fuel are included in the applicable Registrants' construction programs for the years 2023 through 2027.
Natural gas purchase commitments are based on various indices at the time of delivery; the amounts reflected below have been estimated based on the NYMEX future prices at December 31, 2023. As discussed under "Capital Expenditures" herein, estimated expenditures for nuclear fuel are included in the applicable Registrants' construction programs for the years 2024 through 2028.
The remaining assets for which Alabama Power has indicated retirement, due to early closure or repowering of the unit to natural gas, have net book values totaling approximately $1.4 billion (excluding capitalized asset retirement costs which are recovered through Rate CNP Compliance) at December 31, 2022.
The remaining assets for which Alabama Power has indicated retirement, due to early closure or repowering of the unit to natural gas, have net book values totaling approximately $1.2 billion (excluding capitalized asset retirement costs which are recovered through Rate CNP Compliance) at December 31, 2023.
See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for information regarding Plant Vogtle Units 3 and 4 and additional factors that may impact construction expenditures. See FUTURE EARNINGS POTENTIAL – "Construction Programs" herein for additional information.
See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for information regarding Plant Vogtle Unit 4 and additional factors that may impact construction expenditures. See FUTURE EARNINGS POTENTIAL – "Construction Programs" herein for additional information.
The net cash used for financing activities in 2022 was primarily related to common stock dividend payments, partially offset by capital contributions from Southern Company and the issuance of revenue bonds.
The net cash used for financing activities in 2023 was primarily related to common stock dividend payments, partially offset by the issuance of senior notes. The net cash used for financing activities in 2022 was primarily related to common stock dividend payments, partially offset by capital contributions from Southern Company and the issuance of revenue bonds.
See Notes 2 and 3 to the financial statements for a discussion of various contingencies, including matters being litigated, regulatory matters, and other matters which may affect future earnings potential. ACCOUNTING POLICIES Application of Critical Accounting Policies and Estimates The Registrants prepare their financial statements in accordance with GAAP.
See Notes 2 and 3 to the financial statements for a discussion of various contingencies, including matters being litigated, regulatory matters, and other matters which may affect future earnings potential. ACCOUNTING POLICIES Application of Critical Accounting Policies and Estimates The Registrants prepare their financial statements in accordance with GAAP, which requires the use of estimates, judgments, and assumptions.
Estimated Cost, Schedule, and Rate Recovery for the Construction of Plant Vogtle Units 3 and 4 (Southern Company and Georgia Power) In 2016, the Georgia PSC approved the Vogtle Cost Settlement Agreement, which resolved certain prudency matters in connection with Georgia Power's fifteenth VCM report.
Estimated Cost, Schedule, and Rate Recovery for the Construction of Plant Vogtle Units 3 and 4 (Southern Company and Georgia Power) In 2016, the Georgia PSC approved a settlement agreement (Vogtle Cost Settlement Agreement) resolving certain prudency matters in connection with Georgia Power's fifteenth VCM report.
The Registrants' investments in their qualified pension plans and Alabama Power's and Georgia Power's investments in their nuclear decommissioning trust funds decreased in value at December 31, 2022 as compared to December 31, 2021. No contributions to the qualified pension plan were made during 2022 and no mandatory contributions to the qualified pension plans are anticipated during 2023.
The Registrants' investments in their qualified pension plans and Alabama Power's and Georgia Power's investments in their nuclear decommissioning trust funds increased in value at December 31, 2023 as compared to December 31, 2022. No contributions to the qualified pension plan were made during 2023 and no mandatory contributions to the qualified pension plans are anticipated during 2024.
If any license amendment requests or other licensing-based compliance issues, including inspections and ITAACs for Unit 4, are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs. The ultimate outcome of these matters cannot be determined at this time.
If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be delays in the Unit 4 project schedule that could result in increased costs. The ultimate outcome of these matters cannot be determined at this time.
In addition, Alabama Power and Georgia Power have retirement obligations related to the decommissioning of nuclear facilities (Alabama Power's Plant Farley and Georgia Power's ownership interests in Plant Hatch and Plant Vogtle Units 1 and 2).
In addition, Alabama Power and Georgia Power have retirement obligations related to the decommissioning of nuclear facilities (Alabama Power's Plant Farley and Georgia Power's ownership interests in Plant Hatch and Plant Vogtle Units 1 through 3).
As of December 31, 2022, Georgia Power revised its total project capital cost forecast to $10.6 billion (net of $1.7 billion received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds).
As of December 31, 2023, Georgia Power revised its total project capital cost forecast to $10.8 billion (net of $1.7 billion received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds).
The net cash used for investing activities in 2022 and 2021 was primarily related to gross property additions, including approximately $211 million and $240 million, respectively, related to the construction of Plant Barry Unit 8 and, for 2022, $171 million related to the acquisition of the Calhoun Generating Station.
The net cash used for investing activities in 2023 and 2022 was primarily related to gross property additions, including approximately $79 million and $211 million, respectively, related to the construction of Plant Barry Unit 8 and, for 2022, $171 million related to the acquisition of the Calhoun Generating Station.
The construction program of Georgia Power includes Plant Vogtle Units 3 and 4, which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale and which may be subject to additional revised cost estimates during construction.
The construction program of Georgia Power includes Plant Vogtle Unit 4, which includes components based on new technology that only within the last several years began initial operation in the global nuclear industry at this scale and which may be subject to additional revised cost estimates during construction.
See Note 9 to the financial statements for additional information. Non-Derivative and Normal Sale Derivative Transactions If the power sales contract is not classified as a lease, Southern Power further considers whether the contract meets the definition of a derivative.
See Note 9 to the financial statements for additional information. Normal Sale Derivative Transactions and Contracts with Customers If the power sales contract is not classified as a lease, Southern Power further considers whether the contract meets the definition of a derivative.
The charges to income in each year were recorded to reflect Georgia Power's revised total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
The charges (credits) to income in each year were recorded to reflect Georgia Power's revisions to the total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4 and the related cost recovery. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" for additional information.
A reporting unit is the operating segment, or a business one level below the operating segment (a component), if discrete financial information is prepared and regularly reviewed by management. Components are aggregated if they have similar economic characteristics.
Goodwill is recorded at the reporting unit level, which is the operating segment or a business one level below the operating segment (a component), if discrete financial information is prepared and regularly reviewed by management. Components are aggregated if they have similar economic characteristics.
Southern Company Gas maintains commercial paper programs at Southern Company Gas Capital and Nicor Gas. Nicor Gas' commercial paper program supports its working capital needs as Nicor Gas is not permitted to make money pool loans to affiliates. All of the other Southern Company Gas subsidiaries benefit from Southern Company Gas Capital's commercial paper program.
Nicor Gas' commercial paper program supports its working capital needs as Nicor Gas is not permitted to make money pool loans to affiliates. All of the other Southern Company Gas subsidiaries benefit from Southern Company Gas Capital's commercial paper program.
Goodwill for Southern Company and Southern Company Gas was $5.2 billion and $5.0 billion, respectively, at December 31, 2022. During the fourth quarter 2022, Southern Company recorded a $119 million impairment loss as a result of its annual goodwill impairment test for PowerSecure.
Goodwill for Southern Company and Southern Company Gas was $5.2 billion and $5.0 billion, respectively, at December 31, 2023. During 2022, Southern Company recorded a $119 million impairment loss as a result of its annual goodwill impairment test for PowerSecure.
Contracts that do not meet the definition of a derivative or are designated as normal sales are accounted for as executory contracts. For contracts that have a capacity charge, the revenue is generally recognized in the period that it becomes billable.
Contracts that do not meet the definition of a derivative or are designated as normal sales are accounted for as revenue from contracts with customers. For contracts that have a capacity charge, the revenue is generally recognized in the period that it becomes billable.
Revenue Recognition (Southern Power) Southern Power's power sale transactions, which include PPAs, are classified in one of four general categories: leases, non-derivatives or normal sale derivatives, derivatives designated as cash flow hedges, and derivatives not designated as hedges.
Revenue Recognition (Southern Power) Southern Power's power sale transactions, which include PPAs, are classified in one of four general categories: leases, normal sale derivatives or contracts with customers, derivatives designated as cash flow hedges, and derivatives not designated as hedges.
EPS for 2022 and 2021 was negatively impacted by $0.04 and $0.01 per share, respectively, as a result of increases in the average shares outstanding. See Note 8 to the financial statements under "Outstanding Classes of Capital Stock – Southern Company" for additional information. Dividends paid per share of common stock were $2.70 in 2022 and $2.62 in 2021.
EPS for 2023 and 2022 was negatively impacted by $0.06 and $0.04 per share, respectively, as a result of increases in the average shares outstanding. See Note 8 to the financial statements under "Outstanding Classes of Capital Stock – Southern Company" for additional information. Dividends paid per share of common stock were $2.78 in 2023 and $2.70 in 2022.
The level of future earnings for Southern Power's competitive wholesale electric business depends on numerous factors including the parameters of the wholesale market and the efficient operation of its wholesale generating assets; Southern Power's ability to execute its growth strategy through the development or acquisition of renewable facilities and other energy projects while containing costs; regulatory matters; customer creditworthiness; total electric generating capacity available in Southern Power's market areas; Southern Power's ability to successfully remarket capacity as current contracts expire; renewable portfolio standards; continued availability of federal and state ITCs and PTCs, which could be impacted by future tax legislation; transmission constraints; cost of generation from units within the Southern Company power pool; and operational limitations.
II-39 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS The level of future earnings for Southern Power's competitive wholesale electric business depends on numerous factors including the parameters of the wholesale market and the efficient operation of its wholesale generating assets; Southern Power's ability to execute its growth strategy through the development, construction, or acquisition of renewable facilities and other energy projects while containing costs; regulatory matters; customer creditworthiness; total electric generating capacity available in Southern Power's market areas; Southern Power's ability to successfully remarket capacity as current contracts expire; renewable portfolio standards; continued availability of federal and state ITCs and PTCs, which could be impacted by future tax legislation; transmission constraints; cost of generation from units within the Southern Company power pool; and operational limitations.
In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 12.4% of Mississippi Power's total operating revenues in 2022 .
In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023 .
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 12.4% of Mississippi Power's total operating revenues in 2022.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023.
During 2022, Southern Power utilized tax credits, which provided $49 million in operating cash flows. For the three-year period from 2023 through 2025, projected stock dividends, capital expenditures, and debt maturities are expected to exceed operating cash flows for each of Southern Company, the traditional electric operating companies, and Southern Company Gas.
During 2023, Southern Power utilized tax credits, which provided $332 million in operating cash flows. For the three-year period from 2024 through 2026, projected stock dividends, capital expenditures, and debt maturities are expected to exceed operating cash flows for each of Southern Company, the traditional electric operating companies, and Southern Company Gas.
During 2022, Southern Power obtained tax equity funding for existing tax equity partnerships totaling $51 million. See Notes 1 and 15 to the financial statements under "General" and "Southern Power," respectively, for additional information.
During 2023, Southern Power obtained tax equity funding for existing tax equity partnerships totaling $21 million. See Notes 1 and 15 to the financial statements under "General" and "Southern Power," respectively, for additional information.
For 2022, the four largest Marketers based on customer count, which includes SouthStar, accounted for 13% of Southern Company Gas' operating revenues and 15% of operating revenues for Southern Company Gas' gas distribution operations segment. Several factors are designed to mitigate Southern Company Gas' risks from the increased concentration of credit that has resulted from deregulation.
For 2023, the four largest Marketers based on customer count, which includes SouthStar, accounted for 18% of Southern Company Gas' operating revenues and 20% of operating revenues for Southern Company Gas' gas distribution operations segment. Several factors are designed to mitigate Southern Company Gas' risks from the increased concentration of credit that has resulted from deregulation.
See Note 2 to the financial statements under "Alabama Power – Rate RSE" and "Mississippi Power – Performance Evaluation Plan" for additional information on Alabama Power's Rate RSE and Mississippi Power's PEP rate plan, respectively, both of which contain mechanisms that directly tie customer service indicators to the allowed equity return.
Reliability indicators are also used to evaluate results. See Note 2 to the financial statements under "Alabama Power – Rate RSE" and "Mississippi Power – Performance Evaluation Plan" for additional information on Alabama Power's Rate RSE and Mississippi Power's PEP rate plan, respectively, both of which contain mechanisms that directly tie customer service indicators to the allowed equity return.
Also see "Energy Sales" herein for a discussion of changes in the volume of energy sold, including changes related to sales growth (decline) and weather.
Also see "Energy Sales" herein for a discussion of changes in the volume of energy sold, including estimated changes related to sales and weather.
For the Southern Company system, the weighted average swap contract cost per mmBtu was approximately $0.08 per mmBtu above market prices at December 31, 2022 and was approximately $0.74 per mmBtu below market prices at December 31, 2021.
For the Southern Company system, the weighted average swap contract cost per mmBtu was approximately $0.76 per mmBtu below market prices at December 31, 2023 and was approximately $0.08 per mmBtu above market prices at December 31, 2022.
Short-term opportunity sales are made at market-based rates that generally provide a margin above the Southern Company system's variable cost to produce the energy. Other Electric Revenues Other electric revenues increased $29 million, or 4.0%, in 2022 as compared to 2021.
Short-term opportunity sales are made at market-based rates that generally provide a margin above the Southern Company system's variable cost to produce the energy. Other Electric Revenues Other electric revenues increased $45 million, or 6.0%, in 2023 as compared to 2022.

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