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What changed in Southern Company's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Southern Company's 2024 and 2025 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 2025 report.

+902 added−869 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in Southern Company's 2025 10-K

902 paragraphs added · 869 removed · 704 edited across 9 sections

Item 1. Business

Business — how the company describes what it does

104 edited+28 added−15 removed99 unchanged
Biggest changeUnfortunately, the Southern Company system had two fatalities in 2024. 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.
Biggest changeSerious 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. In 2025, the Southern Company system had a serious injury rate of 0.03 and no fatal injuries. The Southern Company system also has longstanding relationships with labor unions.
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.
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 the 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.
For information on the state of Georgia's integrated transmission system, see "Territory Served by the Southern Company System – Traditional Electric Operating Companies and Southern Power" herein. Agreements in effect with principal neighboring utility systems provide for capacity and energy transactions that may be entered into for reasons related to reliability or economics.
For information on the state of Georgia's integrated transmission system, see "Territory and Customers Served by the Southern Company System – Traditional Electric Operating Companies and Southern Power" herein. Agreements in effect with principal neighboring utility systems provide for capacity and energy transactions that may be entered into for reasons related to reliability or economics.
Territory Served by the Southern Company System Traditional Electric Operating Companies and Southern Power The territory in which the traditional electric operating companies provide retail electric service comprises most of the states of Alabama and Georgia, together with southeastern Mississippi.
Territory and Customers Served by the Southern Company System Traditional Electric Operating Companies and Southern Power The territory in which the traditional electric operating companies provide retail electric service comprises most of the states of Alabama and Georgia, together with southeastern Mississippi.
(g) 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. See Note 2 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information. Also includes gas pipeline investment of approximately $0.1 billion.
(g) 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. See Note 2 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information. Also includes gas pipeline investment of approximately $0.3 billion.
At December 31, 2024, Southern Power's generation fleet, which is owned in part with various partners, totaled 12,648 MWs of nameplate capacity in commercial operation (including 5,268 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, 2025, Southern Power's generation fleet, which is owned in part with various partners, totaled 12,648 MWs of nameplate capacity in commercial operation (including 5,268 MWs of nameplate capacity owned by its subsidiaries). See "Traditional Electric Operating Companies" herein for additional information on the Southern Company power pool.
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, 2024, 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, 2025, the territory had an area of approximately 116,000 square miles and an estimated population of approximately 17 million.
As of December 31, 2024, 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, 2025, 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.
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, 2024, 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. As of December 31, 2025, Alabama Power had cogeneration contracts in effect with seven industrial customers.
Under State of Alabama law, a CCN must be obtained from the Alabama PSC before Alabama Power constructs any new generating facility, unless such construction is an ordinary extension of an existing system in the usual course of business. Alabama Power provided its most recent IRP to the Alabama PSC during 2022.
Under State of Alabama law, a CCN must be obtained from the Alabama PSC before Alabama Power constructs any new generating facility, unless such construction is an ordinary extension of an existing system in the usual course of business. Alabama Power provided its most recent IRP to the Alabama PSC during 2025.
The original Harris Dam project license expired on November 30, 2023, and, in December 2023, the FERC issued an annual license for the continued operation of the Harris Dam project. The Harris Dam project will operate under annual licenses until a new long-term license is issued, which is expected by the fourth quarter 2025.
The original Harris Dam project license expired on November 30, 2023, and, in December 2023, the FERC issued an annual license for the continued operation of the Harris Dam project. The Harris Dam project will operate under annual licenses until a new long-term license is issued, which is expected by the fourth quarter 2026.
As of December 31, 2024, 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, 2024, 48 municipally-owned electric distribution systems and one county-owned system received their requirements through MEAG Power.
As of December 31, 2025, 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, 2025, 48 municipally-owned electric distribution systems and one county-owned system received their requirements through MEAG Power.
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.
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 jurisdiction of the FERC under the Federal Power Act.
Does not include approximately $0.7 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. See Note 15 to the financial statements under "Southern Power" in Item 8 herein for additional information regarding the Millers Branch solar project and the Kay Wind repowering project.
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. See Note 15 to the financial statements under "Southern Power" in Item 8 herein for additional information regarding the Millers Branch solar project and the wind repowering projects.
As of December 31, 2024, 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 2024, Mississippi Power did not make any such purchases.
As of December 31, 2025, 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 2025, Mississippi Power did not make any such purchases.
As of December 31, 2024, PowerSouth owned generating units with more than 2,300 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, 2025, PowerSouth owned generating units with more than 2,300 MWs of nameplate capacity, including an undivided 8.16% ownership interest in Alabama Power's Plant Miller Units 1 and 2.
See "Territory Served by the Southern Company System" and "Rate Matters" herein for additional information.
See "Territory and Customers Served by the Southern Company System" and "Rate Matters" herein for additional information.
Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. • Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas in four states – Illinois, Georgia, Virginia, and Tennessee – through the natural gas distribution utilities.
Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates in the wholesale market. • Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas in four states – Illinois, Georgia, Virginia, and Tennessee – through the natural gas distribution utilities.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" in Item 8 herein for additional information. (e) Reflects cost estimates for environmental laws and regulations.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" and " – Other Construction" in Item 8 herein for additional information. (e) Reflects cost estimates for environmental laws and regulations.
Competition Electric The electric utility industry in the United States is continuing to evolve as a result of regulatory and competitive factors. The competition for retail energy sales among competing suppliers of energy is influenced by various factors, including price, availability, technological advancements, service, and reliability.
Competition Electric The electric utility industry in the United States is continuing to evolve as a result of regulatory, projected demand requirements, and competitive factors. The competition for retail energy sales among competing suppliers of energy is influenced by various factors, including price, availability, technological advancements, service, and reliability.
The traditional electric operating companies have agreements in place from which they expect to receive substantially all of their 2025 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 2026 coal burn requirements. These agreements have terms ranging between one and five 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.
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. In July 2023, the U.S.
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.
BUSINESS Southern Company is a holding company that owns all of the outstanding common stock of three traditional electric operating companies, Southern Power Company, and Southern Company Gas. • The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are each operating public utility companies providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. • Southern Power Company is also an operating public utility company.
BUSINESS Southern Company is a holding company that owns all of the outstanding common stock of three traditional electric operating companies, Southern Power Company, and Southern Company Gas. • The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are each vertically integrated utilities providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. • Southern Power Company is an operating public utility company.
See PROPERTIES in Item 2 herein for additional detail regarding Southern Power's partnership arrangements and Note 15 to the financial statements under "Southern Power" in Item 8 herein for additional information regarding Southern Power's acquisitions, dispositions, construction, and development projects.
See PROPERTIES – "Electric" in Item 2 herein for additional detail regarding Southern Power's generating facilities and partnership arrangements and Note 15 to the financial statements under "Southern Power" in Item 8 herein for additional information regarding Southern Power's acquisitions, dispositions, construction, and development projects.
Under the terms of these contracts, Alabama Power purchases excess energy generated by such companies. During 2024, Alabama Power purchased approximately 120 million KWHs from such companies. The related costs were immaterial. As of December 31, 2024, Georgia Power had contracts in effect to purchase alternative energy generation from 40 IPPs within the state of Georgia.
Under the terms of these contracts, Alabama Power purchases excess energy generated by such companies. During 2025, Alabama Power purchased approximately 83 million KWHs from such companies. The related costs were immaterial. As of December 31, 2025, Georgia Power had contracts in effect to purchase alternative energy generation from 40 IPPs within the state of Georgia.
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 2023 and 2024.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS – "Southern Company – Electricity Business – Fuel and Purchased Power Expenses" and MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS 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 2024 and 2025.
As of December 31, 2024, 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, 2025, 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 15 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.
I-4 Table of Contents Index to Financial Statements Also see MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein for additional information with respect to certain existing and proposed environmental requirements and PROPERTIES – "Electric – Jointly-Owned Facilities" and – "Natural Gas – Jointly-Owned Properties" in Item 2 herein and Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information concerning the Registrants' joint ownership of certain facilities.
Also see MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein for additional information with respect to certain existing and proposed environmental requirements and PROPERTIES – "Electric – Jointly-Owned Facilities" and – "Natural Gas – Jointly-Owned Properties" in Item 2 herein and Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information concerning the Registrants' joint ownership of certain facilities.
Southern Power Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates (under authority from the FERC) in the wholesale market.
Southern Power Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates (under authority from the FERC) in the wholesale market.
In 2025, the Southern Company system's construction program is expected to be apportioned approximately as follows: Southern Company system (a)(b)(c)(d) Alabama Power (c) Georgia Power (d) Mississippi Power (in billions) New generation $ 3.7 $ 0.7 $ 3.0 $ — Environmental compliance (e) 0.2 0.1 0.2 — Generation maintenance 1.3 0.4 0.8 0.1 Transmission 2.6 0.5 2.1 — Distribution 1.9 0.4 1.4 0.1 Nuclear fuel 0.3 0.1 0.2 — General plant 1.7 0.7 1.0 0.1 11.8 2.9 8.6 0.3 Southern Power (f) 0.9 Southern Company Gas (g) 2.0 Other subsidiaries 0.1 Total (a) $ 14.8 $ 2.9 $ 8.6 $ 0.3 (a) Totals may not add due to rounding.
In 2026, the Southern Company system's construction program is expected to be apportioned approximately as follows: Southern Company system (a)(b)(c)(d) Alabama Power (c) Georgia Power (d) Mississippi Power (a) (in billions) New generation $ 3.7 $ 0.1 $ 3.6 $ — Environmental compliance (e) 0.2 0.1 0.1 — Generation maintenance 1.4 0.3 1.0 0.1 Transmission 3.2 0.4 2.6 0.2 Distribution 2.0 0.5 1.4 0.1 Nuclear fuel 0.3 0.1 0.2 — General plant 1.8 0.5 1.2 0.1 12.6 2.0 10.1 0.4 Southern Power (f) 0.9 Southern Company Gas (g) 2.2 Other subsidiaries 0.2 Total (a) $ 15.9 $ 2.0 $ 10.1 $ 0.4 (a) Totals may not add due to rounding.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" and " – Rate Plans" in Item 8 herein for additional information. I-12 Table of Contents Index to Financial Statements Mississippi Power Triennially, Mississippi Power must file an IRP with the Mississippi PSC, as well as an update at approximately the mid-point of the three-year cycle.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans" and " – Rate Plans" in Item 8 herein for additional information. Mississippi Power Triennially, Mississippi Power must file an IRP with the Mississippi PSC, as well as an update at approximately the mid-point of the three-year cycle.
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 surface impoundments and landfills for the years 2026 through 2029.
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 surface impoundments and landfills for the years 2027 through 2030.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" and FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information. No material capital expenditures are expected for non-environmental government regulations. (f) Includes $0.4 billion related to the Millers Branch solar project and $0.3 billion related to the Kay Wind repowering project.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" and – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information. No material capital expenditures are expected for non-environmental government regulations. (f) Includes $40 million and $0.7 billion related to the Millers Branch solar project and wind repowering projects, respectively.
I-8 Table of Contents Index to Financial Statements Generally, the traditional electric operating companies have experienced, and expect to continue to experience, competition in their respective retail service territories in varying degrees from the development and deployment of alternative energy sources such as self-generation (as described below) and distributed generation technologies, as well as other factors.
Generally, the traditional electric operating companies have experienced, and expect to continue to experience, competition in their respective retail service territories in varying degrees from the development and deployment of alternative energy sources such as self-generation (as described below) and distributed generation technologies, as well as other factors.
For the year ended December 31, 2024, approximately 46% of contracted MWs were with AAA to A- or equivalent rated counterparties, 46% were with BBB+ to BBB- or equivalent rated counterparties, and 6% were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.
For the year ended December 31, 2025, approximately 63% of contracted MWs were with AAA to A- or equivalent rated counterparties, 31% were with BBB+ to BBB- or equivalent rated counterparties, and 4% were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.
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 2025, SCS has contracted for 627 Bcf of natural gas supply under agreements with remaining terms up to 10 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 2026, SCS has contracted for 644 Bcf of natural gas supply under agreements with remaining terms up to nine years.
Additionally, the traditional electric operating companies have entered into various reliability agreements with certain neighboring utilities, each of which provides for the establishment and periodic review of principles and procedures for planning and operation of generation and transmission facilities, maintenance I-1 Table of Contents Index to Financial Statements schedules, load retention programs, emergency operations, and other matters affecting the reliability of bulk power supply.
Additionally, the traditional electric operating companies have entered into various reliability agreements with certain neighboring utilities, each of which provides for the establishment and periodic review of principles and procedures for planning and operation of generation and transmission facilities, maintenance schedules, load retention programs, emergency operations, and other matters affecting the reliability of bulk power supply.
Southern Company Gas has natural gas-related programs that generally emphasize natural gas as the fuel of choice for customers and seek to expand the use of natural gas through a variety of promotional activities. In addition, Southern Company Gas partners with third-party entities to market the benefits of natural gas appliances.
I-9 Table of Contents Index to Financial Statements Southern Company Gas has natural gas-related programs that generally emphasize natural gas as the fuel of choice for customers and seek to expand the use of natural gas through a variety of promotional activities. In addition, Southern Company Gas partners with third-party entities to market the benefits of natural gas appliances.
OPC is an EMC owned by its 38 retail electric distribution cooperatives, which provide retail electric service to customers in Georgia. OPC provides wholesale electric power to its members through its generation assets, some of which are jointly owned with Georgia Power, and power purchased from other suppliers.
OPC is an EMC owned by its 38 retail electric distribution cooperatives, which provide retail electric service to customers in Georgia. OPC provides wholesale electric power to its members through its generation assets, some of which are jointly owned I-7 Table of Contents Index to Financial Statements with Georgia Power, and power purchased from other suppliers.
The FERC may grant relicenses subject to certain requirements that could result in additional costs. The ultimate outcome of these matters cannot be determined at this time. I-10 Table of Contents Index to Financial Statements Nuclear Regulation Alabama Power, Georgia Power, and Southern Nuclear are subject to regulation by the NRC.
The FERC may grant relicenses subject to certain requirements that could result in additional costs. The ultimate outcome of these matters cannot be determined at this time. Nuclear Regulation Alabama Power, Georgia Power, and Southern Nuclear are subject to regulation by the NRC.
On April 26, 2024, Mississippi Power filed its 2024 IRP with the Mississippi PSC. The Mississippi PSC did not note any deficiencies within the prescribed 120-day review period; therefore, the filing is concluded.
In April 2024, Mississippi Power filed its 2024 IRP with the Mississippi PSC. The Mississippi PSC did not note any deficiencies within the prescribed 120-day review period; therefore, the filing was concluded.
The Southern Company system had approximately 28,600 employees on its payroll at December 31, 2024 comprised of the following: At December 31, 2024 (*) Alabama Power 6,200 Georgia Power 6,800 Mississippi Power 1,000 Southern Power 500 Southern Company Gas 4,900 SCS 4,400 Southern Nuclear 3,700 PowerSecure and other 1,100 Total Southern Company system 28,600 (*) Numbers are rounded to 100s.
The Southern Company system had approximately 29,800 employees on its payroll at December 31, 2025 comprised of the following: At December 31, 2025 (*) Alabama Power 6,100 Georgia Power 7,700 Mississippi Power 1,100 Southern Power 500 Southern Company Gas 5,000 SCS 4,800 Southern Nuclear 3,700 PowerSecure and other 900 Total Southern Company system 29,800 (*) 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 13.9% of Mississippi Power's total operating revenues in 2024.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi which are subject to regulation by the FERC. The contracts with these wholesale customers represented 12.9% of Mississippi Power's total operating revenues in 2025.
I-3 Table of Contents Index to Financial Statements Gas marketing services is comprised of SouthStar, which serves approximately 668,000 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 677,000 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.
Southern Linc provides digital wireless communications for use by Southern Company and its subsidiary companies and also markets these services to the public and provides fiber optics services through its subsidiary, Southern Telecom, Inc. Southern Linc's system covers approximately 122,000 square miles in the Southeast. Southern Holdings is an intermediate holding company subsidiary, which invests in various projects.
Southern Linc provides digital wireless communications for use by Southern Company and its subsidiary companies and also markets these services to the public and provides fiber optics services through its subsidiary, Southern Telecom, Inc. Southern Linc's system covers approximately 122,000 square miles in the Southeast.
I-11 Table of Contents Index to Financial Statements Natural Gas Southern Company Gas' natural gas distribution utilities are subject to regulation and oversight by their respective state regulatory agencies. Rates charged to customers vary according to customer class (residential, commercial, or industrial) and rate jurisdiction.
Natural Gas Southern Company Gas' natural gas distribution utilities are subject to regulation and oversight by their respective state regulatory agencies. Rates charged to customers vary according to customer class (residential, commercial, or industrial) and rate jurisdiction.
These factors are, in turn, affected by, among other influences, regulatory, political, and environmental considerations, taxation, and supply. The retail service rights of all electric suppliers in the state of Georgia are regulated by the Territorial Electric Service Act of 1973.
These factors are, in turn, affected by, among other influences, regulatory, political, and environmental considerations, taxation, and supply. I-8 Table of Contents Index to Financial Statements The retail service rights of all electric suppliers in the state of Georgia are regulated by the Territorial Electric Service Act of 1973.
Gas distribution operations, the largest segment of Southern Company Gas' business, operates, constructs, and maintains approximately 78,500 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 Illinois, Georgia, Virginia, and Tennessee.
I-9 Table of Contents Index to Financial Statements Regulation States The traditional electric operating companies and the natural gas distribution utilities are subject to the jurisdiction of their respective state PSCs or applicable state regulatory agencies.
Regulation States The traditional electric operating companies and the natural gas distribution utilities are subject to the jurisdiction of their respective state PSCs or applicable state regulatory agencies.
In most of the areas Southern Company Gas serves, natural gas demand peaks during the winter. As a result, the overall operating results of the Registrants in the future may fluctuate substantially on a seasonal basis. In addition, the Subsidiary Registrants have historically sold less power and natural gas when weather conditions are milder.
As a result, the overall operating results of the Registrants in the future may fluctuate substantially on a seasonal basis. In addition, the Subsidiary Registrants have historically sold less power and natural gas when weather conditions are milder.
Approved compliance, storm damage, and certain other costs are recovered at Alabama Power and Mississippi Power through specific cost recovery mechanisms approved by their respective PSCs. Certain similar costs at Georgia Power are recovered through various base rate tariffs as approved by the Georgia PSC.
Approved compliance, storm damage, and certain other costs are recovered at Alabama Power and Mississippi Power through specific cost recovery mechanisms approved by their respective PSCs. Certain similar costs at Georgia Power I-11 Table of Contents Index to Financial Statements are recovered through various base rate tariffs as approved by the Georgia PSC.
At December 31, 2024, 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, 2025, Southern Power had seven 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%.
Details of the natural gas distribution utilities at December 31, 2024 are as follows: Utility State Number of customers Approximate miles of pipe (in thousands) Nicor Gas Illinois 2,284 34.7 Atlanta Gas Light Georgia 1,717 36.1 Virginia Natural Gas Virginia 314 5.9 Chattanooga Gas Tennessee 72 1.8 Total 4,387 78.5 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, 2025 are as follows: Utility State Number of customers Approximate miles of pipe (in thousands) Nicor Gas Illinois 2,294 33.8 Atlanta Gas Light Georgia 1,733 36.4 Virginia Natural Gas Virginia 316 5.9 Chattanooga Gas Tennessee 73 1.8 Total 4,416 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.
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, 2024 was 96% through 2029 and 87% through 2034, 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, 2025 was 97% through 2030 and 89% through 2035, with an average remaining contract duration of approximately 12 years.
Seasonality and Demand The demand for electric power and natural gas supply is affected by seasonal differences in the weather. While the electric power sales of some electric utilities peak in the summer, others peak in the winter. In the aggregate, during normal weather conditions, the Southern Company system's electric power sales peak during both the summer and winter.
Seasonality and Demand The demand for electric power and natural gas supply is affected by seasonal differences in the weather. During normal weather conditions, the Southern Company system's electric power sales peak during both the summer and winter. In most of the areas Southern Company Gas serves, natural gas demand peaks during the winter.
During 2024, Georgia Power purchased 6.9 billion KWHs from such companies at a cost of $320 million. Georgia Power also has PPAs for electricity at cogeneration facilities with six industrial customers. Payments are subject to reductions for failure to meet minimum capacity output. During 2024, Georgia Power purchased 767 million KWHs at a cost of $72 million from these facilities.
During 2025, Georgia Power purchased 8.2 billion KWHs from such companies at a cost of $363 million. Georgia Power also has PPAs for electricity at cogeneration facilities with six industrial customers. Payments are subject to reductions for failure to meet minimum capacity output. During 2025, Georgia Power purchased 533 million KWHs at a cost of $50 million from these facilities.
Southern Power seeks opportunities to execute its strategy to create value through various transactions including acquisitions, dispositions, and sales of partnership interests, development and construction of new generating facilities, and entry into PPAs, including contracts for differences that provide the owner of a renewable facility a certain fixed price for electricity sold to the grid, primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
Southern Power seeks opportunities to execute its strategy to create value through various transactions including acquisitions, dispositions, sales and purchases of partnership interests, development and construction of new generating facilities, and entry into PPAs, primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
In 2022, the Georgia PSC approved Georgia Power's 2022 IRP, as modified by a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors and as further modified by the Georgia PSC.
On July 15, 2025, the Georgia PSC approved Georgia Power's 2025 IRP, as modified by a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors.
The NRC licenses for Plant Vogtle Units 1, 2, 3, and 4 expire in 2047, 2049, 2062, and 2063, respectively. See Notes 3 and 6 to the financial statements under "Nuclear Insurance" and "Nuclear Decommissioning," respectively, in Item 8 herein for additional information.
The subsequent license renewal application is projected to be submitted by the second quarter 2027. The NRC licenses for Georgia Power's Plant Vogtle Units 1, 2, 3, and 4 expire in 2047, 2049, 2062, and 2063, respectively. See Notes 3 and 6 to the financial statements under "Nuclear Insurance" and "Nuclear Decommissioning," respectively, in Item 8 herein for additional information.
Southern Power has rights to purchase power provided by the requirements customers' resources when economically viable. Capacity charges that form part of the PPA payments are designed to recover fixed and variable operations and maintenance costs based on dollars-per-kilowatt year and to provide a return on investment.
Capacity charges that form part of the PPA payments are designed to recover fixed and variable operations and maintenance costs based on dollars-per-kilowatt year and to provide a return on investment.
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 2022, the Southeast Energy Exchange Market (SEEM) began service.
The I-1 Table of Contents Index to Financial Statements traditional electric operating companies have joined with other utilities in the Southeast to form the SERC Reliability Corporation (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.
Southern Power typically has the ability to serve the unit or block sale customer from an alternate resource. The second type, referred to as requirements service, provides that Southern Power serves the customer's capacity and energy requirements from a combination of the customer's own generating units and from Southern Power resources not dedicated to serve unit or block sales.
The second type, referred to as requirements service, provides that Southern Power serves the customer's capacity and energy requirements from a combination of the customer's own generating units and from Southern Power resources not dedicated to serve unit or block sales. Southern Power has rights to purchase power provided by the requirements customers' resources when economically viable.
Once certified, the lesser of actual or certified construction costs and purchased power costs is recoverable through rates. Certified costs may be excluded from recovery only on the basis of fraud, concealment, failure to disclose a material fact, imprudence, or criminal misconduct.
Certified costs may be excluded from recovery only on the basis of fraud, concealment, failure to disclose a material fact, imprudence, or criminal misconduct.
Southern Power's natural gas PPAs generally provide that the counterparty is responsible for substantially all of the cost of fuel. I-5 Table of Contents Index to Financial Statements Natural Gas Natural gas remains a volatile commodity. Slight supply and demand imbalances can quickly result in significant price moves both up and down.
Southern Power's natural gas PPAs generally provide that the counterparty is responsible for substantially all of the cost of fuel. Natural Gas Natural gas remains a volatile commodity. Slight supply and demand imbalances can quickly result in significant price moves both up and down. These price movements may be short-lived, but the impacts can be pronounced.
Southern Company and the traditional electric operating companies will continue to evaluate the need to purchase additional emissions allowances, the timing of capital expenditures for environmental control equipment, and potential unit retirements and replacements.
Southern Company and the traditional electric operating companies I-5 Table of Contents Index to Financial Statements will continue to evaluate the need to purchase additional emissions allowances, the timing of capital expenditures for environmental control equipment, and potential unit retirements and replacements or extension of retirement dates of certain fossil fuel plants.
Alabama Power is engaged, within the state of Alabama, in the generation, transmission, distribution, and purchase of electricity and the sale of electric service, at retail in approximately 400 cities and towns (including Anniston, Birmingham, Gadsden, Mobile, Montgomery, and Tuscaloosa), as well as in rural areas, and at wholesale to 11 municipally-owned electric distribution systems, all of which are served indirectly through sales to AMEA, and two rural distributing cooperative associations.
I-6 Table of Contents Index to Financial Statements Alabama Power is engaged, within the state of Alabama, in the generation, transmission, distribution, and purchase of electricity and the sale of electric service, at retail in approximately 400 cities and towns (including Anniston, Birmingham, Gadsden, Mobile, Montgomery, and Tuscaloosa), as well as in rural areas, and at wholesale to three rural distributing municipal and cooperative associations.
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 7.2%.
At December 31, 2025, the average age of the Southern Company system employees was 44 and the average tenure with the Southern Company system was 13 years. 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 6.3%.
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. The Georgia PSC, under state law, must certify any new demand-side or supply-side resources for Georgia Power to receive cost recovery.
I-12 Table of Contents Index to Financial Statements 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.
At December 31, 2024, approximately 32% of Southern Company system employees were covered by agreements with unions, with agreements expiring between 2025 and 2029. 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, 2025, approximately 32% of Southern Company system employees were covered by agreements with unions, with agreements expiring between 2026 and 2030. I-14 Table of Contents Index to Financial Statements
Southern Power's business activities are not subject to traditional state regulation like the traditional electric operating companies, but the majority of its business activities are subject to regulation by the FERC. For additional information on Southern Power's business activities, see MANAGEMENT'S DISCUSSION AND ANALYSIS – OVERVIEW – "Business Activities" in Item 7 herein.
Southern Power's business activities are not subject to traditional state regulation like the traditional electric operating companies, but the majority of its business activities are subject to regulation by the FERC.
Estimated costs for 2025 total $729 million for Southern Company, primarily consisting of $364 million for Alabama Power, $309 million for Georgia Power, and $30 million for Mississippi Power.
Estimated costs for 2026 total $653 million for Southern Company, primarily consisting of $256 million for Alabama Power, $360 million for Georgia Power, and $18 million for Mississippi Power.
Southern Company management leads the Southern Company system's intentional inclusion initiatives and employee recruitment, retention, and development efforts. The Board, principally through its Compensation and Talent Development Committee, oversees these efforts.
The Southern Company Board of Directors and management believe that diverse perspectives and experiences are important to help inform management of risk, business strategy, and innovation. Southern Company management leads the Southern Company system's intentional inclusion initiatives and employee recruitment, retention, and development efforts. The Board, principally through its Compensation and Talent Development Committee, oversees these efforts.
With the exception of Atlanta Gas Light, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are largely a function of weather conditions and price levels for natural gas. The natural gas distribution utilities have weather or revenue normalization mechanisms that mitigate revenue fluctuations from customer consumption changes.
With the exception of Atlanta Gas Light, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are largely a function of price levels for natural gas and general economic conditions that may impact customers' ability to pay for natural gas consumed.
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. See "Regulation – Nuclear Regulation" herein for additional information.
Southern Power and Southern Linc have secured from the traditional electric operating companies certain services which are furnished in compliance with FERC regulations. Alabama Power and Georgia Power each have agreements with Southern Nuclear to operate the Southern Company system's nuclear plants, Plants Farley, Hatch, and Vogtle. See "Regulation – Nuclear Regulation" herein for additional information.
The electricity from the natural gas generating facilities owned by Southern Power is primarily sold under long-term, fixed-price capacity PPAs both with unaffiliated wholesale purchasers as well as with the traditional electric operating companies.
Southern Power's electricity sales from natural gas generating facilities are primarily through long-term, fixed-price capacity PPAs with unaffiliated wholesale purchasers as well as with the traditional electric operating companies and consist of two types of agreements.
Southern Company system management recognizes the importance of attracting and retaining an appropriately qualified workforce. Southern Company system management uses a variety of strategies to attract and retain talent, including working with high schools, technical schools, universities, and military installations to fill many entry-level positions.
Southern Company system management uses a variety of strategies to attract and retain talent, including working with high schools, technical schools, universities, and military installations to fill many entry-level positions. The recruiting strategy also includes partnerships with professional associations and local communities to recruit mid-career talent.
Licenses for all projects, excluding those discussed above, expire in the years 2034-2066 for Alabama Power's projects and in the years 2034-2060 for Georgia Power's projects.
See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein for additional information. Licenses for all projects, excluding those discussed above, expire in the years 2034-2066 for Alabama Power's projects and in the years 2034-2064 for Georgia Power's projects.
I-6 Table of Contents Index to Financial Statements The following table provides the number of retail customers served by customer classification for the traditional electric operating companies at December 31, 2024: Alabama Power Georgia Power Mississippi Power (a) Total (b) (in thousands) Residential 1,337 2,452 158 3,947 Commercial 208 332 35 574 Industrial 6 11 — 17 Other 1 9 — 10 Total (b) 1,552 2,804 193 4,549 (a) Includes 423 industrial retail customers and 105 other retail customers.
The following table provides the number of retail customers served by customer classification for the traditional electric operating companies at December 31, 2025: Alabama Power Georgia Power Mississippi Power (a) Total (b) (in thousands) Residential 1,347 2,480 158 3,986 Commercial 209 333 34 576 Industrial 6 11 — 17 Other 1 10 — 10 Total (b) 1,563 2,834 193 4,590 (a) Includes 421 industrial retail customers and 104 other retail customers.
In addition, each year the Southern Company system engages in a scenario planning process, developing scenarios which look out over a 30-year horizon. In 2024, 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.
In addition, each year the Southern Company system engages in a scenario planning process, developing scenarios which look out over a 30-year horizon. For 2025, scenarios considered a range of views regarding pressure on CO 2 emissions, load growth, supply options, and fuel prices.
Southern Nuclear has notified the NRC of its intent to seek to renew the plant's licenses for an additional 20 years (through 2057 and 2061 for Units 1 and 2, respectively), with a license renewal application projected to be submitted by the fourth quarter 2026.
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 to seek to renew the plant's licenses for an additional 20 years (through 2057 and 2061 for Units 1 and 2, respectively).

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeFurther, if a traditional electric operating company is not selected through a PSC-approved request for proposal process to construct for itself additional capacity needs, such traditional electric operating company may not be able to recover through customer rates all registration, prepayment, cancellation, or other fees incurred in such process.
Biggest changeIf any of these projects are canceled for any reason, including if a traditional electric operating company is not selected through a PSC-approved RFP process or due to failure to receive other necessary regulatory approvals and/or siting or environmental permits, significant cancellation penalties under the equipment purchase orders and construction contracts could occur and such traditional electric operating company may not be able to recover through customer rates all such penalties or registration, prepayment, or other fees incurred in such process.
The profitability of the traditional electric operating companies' and the natural gas distribution utilities' businesses is largely dependent on their ability, through the rates that they are permitted to charge, to recover their costs and earn a reasonable rate of return on invested capital.
The profitability of the traditional electric operating companies' and the natural gas distribution utilities' businesses is largely dependent on their ability, through the rates that they are permitted to charge, to recover their costs and earn a reasonable rate of return on their invested capital.
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.
The Southern Company system's costs of compliance with environmental laws and regulations 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.
The majority of this demand is driven by the power needs and projected power needs of data centers to serve an increasingly digital economy and to support artificial intelligence. Other demands are coming from new industrial facilities with advanced manufacturing processes for such products as electric vehicles and batteries.
The majority of this demand is driven by the power needs and projected power needs of data centers to serve an increasingly digital economy and to support artificial intelligence. Other demands are coming from new industrial facilities with advanced manufacturing processes for products such as electric vehicles and batteries.
Specifically, Southern Power continually seeks opportunities to execute its strategy to create value through various transactions, including acquisitions, dispositions, and sales of partnership interests, development and construction of new generating facilities, and entry into PPAs primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
Specifically, Southern Power continually seeks opportunities to execute its strategy to create value through various transactions, including acquisitions, dispositions, and sales and purchases of partnership interests, development and construction of new generating facilities, and entry into PPAs primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
Certain market disruptions, whether in the United States or globally, including an economic downturn or uncertainty, 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 fiscal, monetary, or 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, impacts of any 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.
Certain market disruptions, whether in the United States or globally, including an economic downturn or uncertainty, 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 fiscal, monetary, trade, or 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, impacts of any future 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.
Inherent risk exists in predicting demand as future loads are dependent on many uncertain factors, including economic conditions, customer usage patterns, efficiency programs, and customer technology adoption. The traditional electric operating companies are experiencing projected demand that exceeds recent experience, creating the need for new power generating resources and transmission facilities.
Inherent risk exists in predicting demand as future loads are dependent on many uncertain factors, including economic conditions, customer usage patterns, efficiency programs, and customer technology adoption. The traditional electric operating companies are experiencing projected demand that significantly exceeds recent experience, creating the need for new power generating resources and transmission facilities.
UTILITY REGULATORY, LEGISLATIVE, AND LITIGATION RISKS Southern Company and its subsidiaries are subject to substantial federal, state, and local governmental regulation, including with respect to rates. Compliance with current and future regulatory requirements and procurement of necessary approvals, permits, and certificates may result in substantial costs to Southern Company and its subsidiaries.
UTILITY REGULATORY, LEGISLATIVE, AND LITIGATION RISKS Southern Company and its subsidiaries are subject to substantial federal, state, and local governmental regulation, including with respect to rates. Compliance with current and future legal and regulatory requirements and procurement of necessary approvals, permits, and certificates may result in substantial costs to Southern Company and its subsidiaries.
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, which could exceed the amount of insurance coverage.
Additionally, electric generation, transmission, and distribution infrastructure and natural gas pipelines, storage facilities, and other infrastructure are subject to various state and other regulatory requirements. Failure to comply with these requirements could result in substantial monetary penalties, which could exceed the amount of insurance coverage.
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.
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 and/or earnings.
The impact of any future revision or changes in interpretations of existing regulations or the adoption of new laws and regulations applicable to Southern Company or any of its subsidiaries is uncertain.
The impact of any future revision or changes in interpretations or application of existing laws and regulations or the adoption of new laws and regulations applicable to Southern Company or any of its subsidiaries is uncertain.
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% CAMT on adjusted financial statement income, as defined in the law, and is subject to the issuance of additional guidance by the U.S.
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% CAMT on adjusted financial statement income, as defined in the law, and is subject to the issuance of additional guidance by the U.S. Treasury and the IRS.
If impairment testing indicates that the carrying amount of reporting units exceeds the respective fair value, an impairment charge would be recognized. If goodwill were to become impaired, the results of operations could be materially and adversely affected. At December 31, 2024, goodwill was $5.2 billion and $5.0 billion for Southern Company and Southern Company Gas, respectively.
If impairment testing indicates that the carrying amount of reporting units exceeds the respective fair value, an impairment charge would be recognized. If goodwill were to become impaired, the results of operations could be materially and adversely affected. At December 31, 2025, goodwill was $5.2 billion and $5.0 billion for Southern Company and Southern Company Gas, respectively.
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.
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, business risk, the ability to cover liquidity requirements, other commitments for capital, and certain other controllable and uncontrollable events.
The strategy to achieve these goals also relies on continuing to economically transition the Southern Company system's generating fleet through a diverse portfolio of resources including low-carbon and carbon-free resources; making the necessary related investments in transmission and distribution systems; continuing to implement effective energy efficiency and demand response programs; customer demand for carbon-free energy; implementing initiatives to reduce natural gas distribution emissions; continuing research and development with a 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 economically transition the Southern Company system's generating fleet through a diverse portfolio of resources including low-carbon and carbon-free resources; making the necessary related investments in transmission and distribution systems; continuing to implement effective energy efficiency and demand response programs; implementing initiatives to reduce natural gas distribution emissions; continuing research and development with a focus on technologies that lower GHG emissions; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.
Treasury Department and the IRS. Any rate recovery by the traditional electric operating companies or the natural gas distribution utilities subject to the CAMT will be determined pursuant to the regulatory processes of the FERC, state PSCs, or other applicable state regulatory agencies. There is no assurance, however, that such tax will be recoverable through the applicable regulatory process.
Any rate recovery by the traditional electric operating companies or the natural gas distribution utilities subject to the CAMT will be determined pursuant to the regulatory processes of the FERC, state PSCs, or other applicable state regulatory agencies. There is no assurance, however, that such tax will be recoverable through the applicable regulatory process.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans – 2022 IRP" in Item 8 herein for additional information. In addition, partnership and joint ownership agreements may provide partners or co-owners with certain decision-making authority in connection with projects under construction.
See Note 2 to the financial statements under "Georgia Power – Integrated Resource Plans – 2025 IRP" and " – Certification Requests" in Item 8 herein for additional information. In addition, partnership and joint ownership agreements may provide partners or co-owners with certain decision-making authority in connection with projects under construction.
Such actions cannot be assured to be completed or beneficial to Southern Company or its subsidiaries. Southern Company and its subsidiaries continually seek opportunities to create value through various transactions, including acquisitions or sales of assets.
Such actions cannot be assured to be completed or beneficial to Southern Company or its subsidiaries. Southern Company and its subsidiaries continually seek opportunities to create value through various transactions, including acquisitions or sales of assets or businesses (or interests therein).
Changes in regulation, the imposition of additional regulations, changes in application of existing regulations and in enforcement practices of regulators, as well as associated litigation, 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.
Changes in laws and regulations, the imposition of additional legal or regulatory requirements, changes in application of existing laws and regulations and in enforcement practices of regulators, as well as associated litigation, 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.
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, elimination of government energy assistance programs, government shutdowns, 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.
Ensuring that incremental revenues from these projected new demands cover incremental costs and risks will be critical to continuing the traditional electric operating companies' value proposition to customers.
Ensuring that incremental revenues from these projected new demands cover incremental costs and risks is critical to continuing the traditional electric operating companies' value proposition to customers.
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.
The traditional electric operating companies and Southern Company Gas from time to time have experienced and may continue to experience under recovered fuel and purchased power and/or purchased gas cost balances.
Supply chain disruptions, inflation, elevated interest rates, tariffs, and other economic factors 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.
Supply chain disruptions, inflation, elevated interest rates, trade policies (including tariffs and other trade measures), and other economic factors 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.
Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately 24% of Southern Power's total revenues for the year ended December 31, 2024.
Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately 25% of Southern Power's total revenues for the year ended December 31, 2025.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates – Pension and Other Postretirement Benefits" in Item 7 herein and Note 11 to the financial statements in Item 8 herein for additional information regarding the defined benefit pension and other postretirement plans.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates – Pension and Other Postretirement Benefits" in Item 7 herein and Note 11 to the financial statements in Item 8 herein for additional information regarding the defined benefit pension and other I-27 Table of Contents Index to Financial Statements postretirement plans.
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.
Furthermore, the outcome of any rate proceeding could be impacted by a variety of factors, including the level of opposition from intervenors, potential impacts to customers, including affordability concerns, and past or future changes in the political, regulatory, economic, or legislative environment.
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 I-25 Table of Contents Index to Financial Statements incurrence of costs of purchased or constructed capacity and the traditional electric operating companies' recovery through regulated rates.
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 through regulated rates.
Operation of nuclear facilities involves inherent risks, including environmental, safety, health, regulatory, natural disasters, cyber intrusions, physical attacks, and financial risks, that could result in fines or the closure of the nuclear units owned by Alabama Power or Georgia Power and which may present potential exposures in excess of insurance coverage.
I-17 Table of Contents Index to Financial Statements Operation of nuclear facilities involves inherent risks, including environmental, safety, health, regulatory, natural disasters, cyber intrusions, physical attacks, and financial risks, that could result in fines or the closure of the nuclear units owned by Alabama Power or Georgia Power and which may present potential exposures in excess of insurance coverage.
While there have been immaterial incidents of phishing, unauthorized access to technology systems, financial fraud, and disruption of remote access across the Southern Company system, there has been no material impact on the Registrants or I-18 Table of Contents Index to Financial Statements their operations from these attacks.
While there have been immaterial incidents of phishing, unauthorized access to technology systems, financial fraud, and disruption of remote access across the Southern Company system, there has been no material impact on the Registrants or their operations from these attacks.
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; potential impact of newly-levied tariffs; 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 I-21 Table of Contents Index to Financial Statements 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 changes in 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 and trade policies (including tariffs and other trade measures) of the United States and other countries; 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 future epidemic or 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.
A key premise of these business models is that generating power at power plants achieves economies of scale and produces power at a competitive cost. Customers and stakeholders are increasingly focused on the Registrants' ability to meet rapidly changing demands for new and varied products, services, and offerings.
A I-20 Table of Contents Index to Financial Statements key premise of these business models is that generating power at power plants achieves economies of scale and produces power at a competitive cost. Customers and stakeholders are increasingly focused on the Registrants' ability to meet rapidly changing demands for new and varied products, services, and offerings.
The generation, energy marketing, and natural gas operations of the Southern Company system are subject to changes in energy prices and fuel costs, which could increase the cost of producing power, decrease the amount received from the sale of energy, I-22 Table of Contents Index to Financial Statements and/or make electric generating facilities and natural gas distribution systems less competitive.
The generation, energy marketing, and natural gas operations of the Southern Company system are subject to changes in energy prices and fuel costs, which could increase the cost of producing power, decrease the amount received from the sale of energy, and/or make electric generating facilities and natural gas distribution systems less competitive.
The Registrants and Nicor Gas rely on access to both short-term and longer-term capital markets as a significant source of liquidity to meet capital requirements not satisfied by the cash flow from their respective operations.
The Registrants and Nicor Gas rely on access to both short-term and longer-term capital markets as a significant source of liquidity to meet capital requirements not satisfied by the cash flow from their respective operations, including capital expenditures to meet projected electric demand growth.
In addition, future GHG constraints, including those related to methane emissions, designed to minimize emissions from natural I-16 Table of Contents Index to Financial Statements 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.
The businesses of the Registrants require substantial expenditures for investments in new facilities as well as capital improvements, including transmission, distribution, and generation facilities for the traditional electric operating companies, generation facilities for Southern Power, and capital improvements to natural gas distribution facilities for Southern Company Gas, to, among other things, maintain reliability.
The businesses of the Registrants require substantial expenditures for investments in new facilities as well as capital improvements, including transmission, distribution, generation, and battery energy storage facilities for the traditional electric operating companies, generation and battery energy storage facilities for Southern Power, and capital improvements to natural gas distribution facilities for Southern Company Gas, to, among other things, maintain reliability and meet projected electric demand growth.
Southern Company's stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks, and uncertainties of any shareholder activism. I-26 Table of Contents Index to Financial Statements The Registrants are subject to risks associated with their ability to obtain adequate insurance at acceptable costs.
Southern Company's stock price could be subject to significant fluctuation or otherwise be adversely affected by the events, risks, and uncertainties of any shareholder activism. The Registrants are subject to risks associated with their ability to obtain adequate insurance at acceptable costs.
Future pandemic health events or continued international tensions, including the ramifications of regional conflicts and any strained relationships between the United States and other countries related to such conflicts, such as those in Ukraine and the Middle East, and the impact of tariffs, could further exacerbate global supply chain disruptions. These disruptions and shortages could adversely impact business operations.
Future pandemic health events or continued international tensions, including the ramifications of regional or international conflicts, such as those in Ukraine and the Middle East, and any strained relationships between the United States and other countries related to such conflicts, and the impact of trade policies (including tariffs and other trade measures) of the United States and other countries, could further exacerbate global supply chain disruptions.
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 impact reliability and 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, environmental regulations affecting fuel suppliers, constraints on existing natural gas pipeline capacity or on construction of new natural gas pipelines, or changing economic conditions could limit the ability of the traditional electric operating companies and Southern Power to operate certain facilities, which could impact reliability and result in higher fuel and operating costs, and the ability of Southern Company Gas to serve its natural gas customers.
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.
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.
This daily supply is complemented by natural gas supplies stored in both company-owned and third-party storage locations. To deliver this daily supply and stored natural gas, the Southern Company system has firm transportation capacity contracted with third-party interstate pipelines while Southern Company Gas utilizes its own pipeline network.
Natural gas is delivered daily from different regions of the country. This daily supply is complemented by natural gas supplies stored in both company-owned and third-party storage locations. To deliver this daily supply and stored natural gas, the Southern Company system has firm transportation capacity contracted with third-party interstate pipelines and Southern Company Gas also utilizes its own pipeline network.
A downgrade in the credit ratings of any of the Registrants, Southern Company Gas Capital, or Nicor Gas could negatively affect their ability to access capital at reasonable costs and/or could require posting of collateral or replacing certain indebtedness.
I-25 Table of Contents Index to Financial Statements A downgrade in the credit ratings of any of the Registrants, Southern Company Gas Capital, or Nicor Gas could negatively affect their ability to access capital at reasonable costs and/or could require posting of collateral or replacing certain indebtedness.
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.
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.
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 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 I-16 Table of Contents Index to Financial Statements operating companies operate.
The incremental restoration costs related to this hurricane totaled approximately $870 million, of which approximately $750 million was deferred in the regulatory asset for storm damage, approximately $90 million was capitalized to property, plant, and equipment, and approximately $30 million was deferred as future billings to open access transmission tariff customers.
The incremental restoration costs related to this hurricane totaled approximately $880 million, of which approximately $780 million was deferred in the regulatory asset for storm damage, approximately $75 million was capitalized to property, plant, and equipment, and approximately $25 million was deferred as future billings to open access transmission tariff customers.
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 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, including wildfires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, wars, 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 or joint venture arrangements, failure of performance by counterparties, 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 add generation, transmission, and related infrastructure to meet projected electric demand growth, 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, including wildfires, land movement, earthquakes, explosions, floods, high winds, tornadoes, hurricanes and other storms, solar flares, droughts, future pandemic health events, wars, political unrest, or other similar occurrences.
The eight units are operated by Southern Nuclear and represented approximately 25% and 34% of the total KWHs generated by Alabama Power and Georgia Power, respectively, in the year ended December 31, 2024.
The eight units are operated by Southern Nuclear and represented approximately 22% and 36% of the total KWHs generated by Alabama Power and Georgia Power, respectively, in the year ended December 31, 2025.
An information security incident, including a cybersecurity breach, or the failure of, or inability to remotely access, one or more key technology systems, networks, or processes could impact the ability of the Registrants to operate.
I-18 Table of Contents Index to Financial Statements An information security incident, including a cybersecurity breach, or the failure of, or inability to remotely access, one or more key technology systems, networks, or processes could impact the ability of the Registrants to operate.
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.
While the traditional electric operating companies and Southern Company Gas are generally authorized to recover fuel and purchased power and/or I-23 Table of Contents Index to Financial Statements purchased gas costs through cost recovery clauses, recovery may be delayed or may be denied if costs are deemed to be imprudently incurred.
Prior to I-24 Table of Contents Index to Financial Statements funding Southern Company, Southern Company Gas, or Southern Power, the respective subsidiaries have financial obligations and, with respect to Southern Company and Southern Company Gas, regulatory restrictions that must be satisfied, including among others, debt service.
Prior to funding Southern Company, Southern Company Gas, or Southern Power, the respective subsidiaries have financial obligations and, with respect to Southern Company and Southern Company Gas, regulatory restrictions that must be satisfied, including among others, debt service.
Southern Company Gas' pipeline development projects involve joint owners or other joint venture participants that control management of the projects and Southern Power participates in partnership agreements with respect to a majority of its renewable energy projects. See Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information regarding other jointly-owned facilities.
Southern Company Gas' current pipeline development project involves a joint owner that controls management of the project, and Southern Power participates in partnership agreements with respect to a majority of its renewable energy projects. See Note 5 to the financial statements under "Joint Ownership Agreements" in Item 8 herein for additional information regarding other jointly-owned facilities.
Additionally, the rates charged to wholesale customers by the traditional electric operating companies and Southern Power and the rates charged to natural gas transportation customers by Southern Company Gas' pipeline investments must be approved by the FERC.
Additionally, the rates charged to wholesale customers by the traditional electric operating companies and Southern Power and the rates charged to natural gas transportation customers by Southern Company Gas' pipeline investments are subject to review by the FERC.
If the traditional electric operating companies are unable to obtain their contracted coal requirements, they may be required to purchase additional coal at higher prices or limit coal generation, and these increased costs may not be recoverable through rates if deemed to be imprudently incurred.
If the traditional electric operating companies are unable to obtain their contracted coal requirements, they may be required to purchase additional coal at higher prices or limit coal generation, and these increased costs may not be recoverable through rates if deemed to be imprudently incurred. The pace of retirement of coal-fired generating facilities can affect the demand for coal.
In addition, Southern Company Gas is required to fulfill capital obligations related to other pipelines in which Southern Company Gas has an ownership interest or, as necessary, guarantee the obligations related thereto.
In addition, Southern Company Gas is required to fulfill capital obligations related to other pipelines in which Southern Company Gas has an ownership interest or, as necessary, guarantee the obligations related thereto, and Southern Company Gas may participate in other pipeline development projects in the future.
Achievement of these goals is dependent on various factors, many of which the Southern Company system does not control, including load growth across the Southern Company system's service territory, energy policy and regulations, natural gas prices, and the pace and extent of development and deployment of low- to no-GHG energy technologies and negative carbon concepts.
Achievement of these goals is dependent on various factors, many of which the Southern Company system does not control, including load growth across the Southern Company system's service territory, including projected load growth from large load customers, energy policy and regulations, natural gas prices, customer demand for carbon-free energy, and the development and deployment of low- to no-GHG energy technologies.
The Registrants are unable to predict changes in laws or regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may result from the change in presidential administrations.
The Registrants are unable to predict changes in laws or regulations, regulatory guidance, legal interpretations, policy positions, and implementation actions that may occur in the future.
Forward curves project prices will remain in the mid- to high-$3 per mmBtu range through 2030; however, short-term price volatility is expected and future prices could be materially impacted by various factors, including unexpected geopolitical events as well as government policies related to natural gas and energy, including infrastructure development, production, and exports.
Forward curves project prices will remain in the mid- to high-$3 per mmBtu range through 2030; however, short-term price volatility is expected and future prices could be materially impacted by various factors, including unexpected geopolitical events, increased demand for natural gas, including to fuel electric generation to serve data centers and other large load customers, and government policies related to natural gas and energy, including infrastructure development, production, and exports.
Compliance with existing environmental requirements involves significant capital and operating costs including the settlement of AROs, a major portion of which is expected to be recovered through retail and wholesale rates. There is no assurance, I-15 Table of Contents Index to Financial Statements however, that all such costs will be recovered.
Compliance with existing environmental requirements involves significant capital and operating costs including the settlement of AROs, a major portion of which is expected to be recovered through retail and wholesale rates. There is no assurance, however, that all such costs will be recovered. The Registrants expect future compliance expenditures will continue to be significant.
The Subsidiary Registrants have significant investments in the Atlantic and Gulf Coast regions and Southern Power and Southern Company Gas have investments in various states that could be subject to severe weather and I-23 Table of Contents Index to Financial Statements natural disasters, including hurricanes and wildfires.
The Subsidiary Registrants have significant investments in the Atlantic and Gulf Coast regions and Southern Power and Southern Company Gas have investments in various states that could be subject to severe weather and natural disasters, including hurricanes, wildfires, and extreme temperatures.
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.
If these facilities are retired in the future, the demand for coal may decline. As a result, railroads may commit fewer resources to coal transportation, which could increase these risks.
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 expected. The traditional electric operating companies are currently obligated to supply power to retail customers, as well as 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 expected.
SCS, on behalf of the traditional electric operating companies and Southern Power, purchases fuel for the Southern Company system's generation fleet from a diverse set of suppliers. Southern Company Gas' primary business is the distribution of natural gas through the natural gas distribution utilities. Natural gas is delivered daily from different regions of the country.
SCS, on behalf of the traditional electric operating companies and Southern Power, purchases fuel for the Southern Company system's generation fleet from a diverse set of suppliers. Southern Company Gas' primary business is the distribution of natural I-19 Table of Contents Index to Financial Statements gas through the natural gas distribution utilities.
Southern Company Gas, through SNG, has approved a significant investment in a pipeline development project. The pipeline development project will be constructed and operated by a third party. If the third party fails to perform in a proper manner, the book value of the investment could be impaired and Southern Company Gas could lose part or all of its investment.
If the third party fails to perform in a proper manner, the book value of the investment could be impaired and Southern Company Gas could lose part or all of its investment.
For example, throughout 2024 Nicor Gas' regulator, the Illinois Commission, conducted "future of natural gas" proceedings to explore the recommendations involved with decarbonization of the gas distribution system in Illinois.
For example, beginning in 2024, Nicor Gas' regulator, the Illinois Commission, has conducted "future of natural gas" proceedings to explore the recommendations involved with decarbonization of the gas distribution system in Illinois. The Illinois Commission's final report is expected by the end of 2026.
Such regulators, in a rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed or modify the current authorized rate of return; rate refunds may also be required.
Such regulators, in a rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed or modify the current authorized rate of return; rate refunds may also be required. The current period of rising costs and increased projected capital expenditures could result in increased resistance to authorizing cost recovery.
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.
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.
Generation, transmission, and distribution of electricity and transportation and storage of natural gas involve risks that may result in accidents and other operating risks and costs and that may present potential exposures in excess of insurance coverage.
In addition, actual or potential threats of cyber intrusions or physical attacks could result in increased nuclear licensing or compliance costs. Generation, transmission, and distribution of electricity and transportation and storage of natural gas involve risks that may result in accidents and other operating risks and costs and that may present potential exposures in excess of insurance coverage.
If any of the Registrants or Nicor Gas is not able to access capital at competitive rates or on favorable terms, its ability to implement its business plan will be limited due to weakened capacity to fund capital investments or acquisitions that it may otherwise rely on to achieve future earnings and cash flows.
If any of the Registrants or Nicor Gas is not able to access capital at competitive rates or on favorable terms, its ability to implement its business plan will be limited due to weakened capacity to fund capital investments or acquisitions that it may otherwise rely on to achieve future earnings and cash flows and affordability concerns from increased borrowing costs could require the Registrants and Nicor Gas, unilaterally or at the direction of their regulators, to significantly scale back infrastructure investment, which could lead to additional risks related to safety and reliability.
Market or competitive forces may require that the traditional electric operating companies purchase capacity in the open market or build additional generation and transmission facilities and that Southern Power purchase energy or capacity in the open market.
At peak times, the demand for power required to meet obligations could exceed the Southern Company system's available generation capacity. Market or competitive forces may require that the traditional electric operating companies purchase capacity in the open market or build additional generation and transmission facilities and that Southern Power purchase energy or capacity in the open market.
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.
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.
The Registrants expect future compliance expenditures will continue to be significant. 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 has adopted and is implementing regulations governing air and GHG emissions under the Clean Air Act and water quality under the Clean Water Act.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Construction Programs" in Item 7 herein for additional information. 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.
In addition, construction delays and contractor performance shortfalls can result in the loss of revenues. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Construction Programs" in Item 7 herein for additional information. Once facilities become operational, ongoing capital expenditures are required to maintain safe and reliable levels of operation.
The traditional electric operating companies also are in the process of closing surface impoundments to comply with the CCR Rule and, where applicable, state CCR rules.
Moreover, the pace and extent of the traditional electric operating companies' planned construction program have increased as a response to projected electric demand growth. The traditional electric operating companies also are in the process of closing surface impoundments to comply with the CCR Rule and, where applicable, state CCR rules.
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.
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.
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. In addition, construction delays and contractor performance shortfalls can result in the loss of revenues.
I-22 Table of Contents Index to Financial Statements Even if a construction project (including a joint venture construction project) is completed, the total costs may be higher than estimated or certified or may be deemed imprudent, disallowed, or otherwise not recoverable through regulated rates, if applicable.
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.
Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements. 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 new nature of these industries, additional capital spending needs, and uncertainties on the actual capacity required to satisfy the projected new demands of these new industries may impact the traditional electric operating companies.
These additional capital spending needs, the increased concentration of business within a single industry based on emerging technologies, and uncertainties on the actual capacity required to satisfy the projected new demands of these new industries creates risks for the traditional electric operating companies.
Georgia Power's loan guarantee agreement with the DOE contains additional covenants, events of default, and mandatory prepayment events relating to the ongoing operation 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 of Plant Vogtle Units 3 and 4. Future debt and credit agreements may contain additional or different covenants, events of default, and mandatory prepayment events.
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.
I-19 Table of Contents Index to Financial Statements In addition to fuel supply and suitable weather conditions, 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.
Wind conditions or solar irradiance that are unfavorable or below the Southern Company system's estimates can cause electricity production to be substantially below expectations. In addition to fuel supply and suitable weather conditions, 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.
Older equipment, even if maintained in accordance with good engineering practices, may require significant expenditures to maintain efficiency, to comply with environmental requirements, to provide safe and reliable operations, and/or to meet related retirement obligations. Southern Company Gas' significant investment in pipeline development projects involves financial and execution risks.
Significant portions of the traditional electric operating companies' existing facilities were constructed many years ago. Older equipment, even if maintained in accordance with good engineering practices, may require significant expenditures to maintain efficiency, to comply with environmental requirements, to provide safe and reliable operations, and/or to meet related retirement obligations.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeThe BSRC meets at every regular Board meeting and when needed in I-27 Table of Contents Index to Financial Statements the event of a specific threat or emerging issue. The Chair of the BSRC regularly reports to the Board in connection with key matters the BSRC considered.
Biggest changeThe BSRC includes directors with an understanding of cyber issues, including former federal officials with high levels of security clearances. The BSRC meets at every regular Board meeting and when needed in the event of a specific threat or emerging issue. The Chair of the BSRC regularly reports to the Board in connection with key matters the BSRC considered.
The CISO meets regularly with the CIO and the Chief Executive Officer and reports regularly to committees of the Board to discuss risk management measures implemented to identify and mitigate data protection and cybersecurity risks. Security and resiliency are emphasized through business assurance, enterprise risk management, and incident response plans designed to identify, evaluate, and remediate incidents when they occur.
The CISO meets regularly with the CITO and the Chief Executive Officer and reports regularly to committees of the Board to discuss risk management measures implemented to identify and mitigate data protection and cybersecurity risks. Security and resiliency are emphasized through business assurance, enterprise risk management, and incident response plans designed to identify, evaluate, and remediate incidents when they occur.
The BSRC routinely receives presentations on a range of topics, including the threat environment and vulnerabilities and risks, policies, practices, technology trends, and regulatory developments, from the Chief Information Security Officer (CISO) and the legal organization and, as needed, the Chief Information Officer (CIO). The CISO reports to the BSRC at each regular committee meeting.
The BSRC routinely receives presentations on a range of topics, including the threat environment and vulnerabilities and risks, policies, practices, technology trends, and regulatory developments, from the Chief Information Security Officer (CISO) and the legal organization and, as needed, the Chief Information Technology Officer (CITO). The CISO reports to the BSRC at each regular committee meeting.
The Southern Company system also relies on a Data Privacy and Protection team in the compliance organization, as well as the internal audit organization, to work with the TSO on data protection policies and practices.
The Southern Company system also relies on a Data Privacy and Protection team in the compliance organization, as well as the internal audit organization, to work with the Cybersecurity Organization on data protection policies and practices.
Internal Cybersecurity Team The TSO, led by the CISO, is responsible for the implementation, monitoring, and maintenance of the cybersecurity and data protection practices across the Southern Company system.
Internal Cybersecurity Team The Cybersecurity Organization, led by the CISO, is responsible for the implementation, monitoring, and maintenance of the cybersecurity and data protection practices across the Southern Company system.
Overall network efforts are led by the CISO and the Technology Security Organization (TSO), the organization responsible for implementing, monitoring, and maintaining cybersecurity practices across the Southern Company system, and aided by the Executive Vice President of Operations and the Energy Management System and Generation organization.
Overall network efforts are led by the CISO and the Cybersecurity Organization, the organization responsible for implementing, monitoring, and maintaining cybersecurity practices across the Southern Company system, and aided by the Executive Vice President of Operations and the Energy Management System and Generation organization.
Risk Management and Strategy Although many of the networks are segmented, overall network security is a centralized shared service across the Southern Company system, led by the TSO and the CISO.
Risk Management and Strategy Although many of the networks are segmented, overall network security is a centralized shared service across the Southern Company system, led by the Cybersecurity Organization and the CISO.
The Southern Company system has implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in material adverse effects on the Southern Company system's ability to fulfill critical business functions, including energy delivery service failures, and on the confidentiality, integrity, and availability of the Southern Company system's information systems.
The Southern Company system has implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in material adverse effects on the Southern Company system's ability to fulfill critical business functions, including energy I-28 Table of Contents Index to Financial Statements delivery service failures, and on the confidentiality, integrity, and availability of the Southern Company system's information systems.
Having a committee like the BSRC, focused on and dedicated to security, is a strong governance practice. Comprised solely of independent members of the Board, the BSRC is charged with oversight of risks related to cybersecurity, physical security, and operational resiliency. The BSRC includes directors with an understanding of cyber issues.
Having a committee like the BSRC, focused on and dedicated to security, is a strong governance practice. Comprised solely of independent members of the Board, the BSRC is charged with oversight of risks related to cybersecurity, physical security, and operational resiliency.
A full tabletop exercise is performed at least annually, including stakeholders from business units beyond technology security, such as power delivery, legal, compliance, risk management, and corporate communications. In addition, the Southern Company system participates in sector-level and cross-sector exercises led by industry or the U.S. government.
A full tabletop exercise is performed at least annually, including stakeholders from business units beyond technology security, such as power delivery, legal, compliance, risk management, and corporate communications. In addition, the Southern Company system participates in sector-level and cross-sector exercises led by I-30 Table of Contents Index to Financial Statements industry or the U.S. government.
In addition, a security awareness program for the Southern I-28 Table of Contents Index to Financial Statements Company system's employees has also been implemented, which is designed to educate and train employees at least annually, or more often as needed, about risks inherent to human interaction with information and operational technology.
In addition, a security awareness program for the Southern Company system's employees has also been implemented, which is designed to educate and train employees at least annually, or more often as needed, about risks inherent to human interaction with information and operational technology.
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I-31 Table of Contents Index to Financial Statements
In addition to these internal cybersecurity capabilities, external auditors and security companies are regularly engaged to assist with assessing, testing, identifying, and managing cybersecurity, including through penetration testing, vulnerability testing, and other technical evaluations.
In addition to these internal cybersecurity capabilities, external I-29 Table of Contents Index to Financial Statements auditors and security companies are regularly engaged to assist with assessing, testing, identifying, and managing cybersecurity, including through penetration testing, vulnerability testing, and other technical evaluations.
The CISO has extensive cybersecurity knowledge and skills gained from over 30 years of work experience within the Southern Company system. The CISO receives reports on cybersecurity threats from a variety of sources both internally and externally on an ongoing basis and regularly reviews risk management measures implemented to identify and mitigate cybersecurity risks.
The CISO has extensive cybersecurity knowledge and skills gained from over 25 years of cybersecurity experience and over a decade securing critical infrastructure. The CISO receives reports on cybersecurity threats from a variety of sources both internally and externally on an ongoing basis and regularly reviews risk management measures implemented to identify and mitigate cybersecurity risks.

Item 2. Properties

Properties — owned and leased real estate

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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-30 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 4 (45.7%) Augusta, GA 2,167,094 Total Nuclear 3,066,706 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-31 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 59,250 Wallace Dam Eatonton, GA 321,300 Yonah Toccoa, GA 22,500 Total Hydro 1,126,412 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 McIntosh Effingham County, GA 10,000 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 368,106 Battery Storage Mossy Branch Talbot County, GA 65,000 Total Georgia Power Generating Capacity 14,789,068 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-32 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-33 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 South Cheyenne Laramie County, WY 150,000 Spectrum Clark County, NV 30,240 Tranquillity Fresno County, CA 205,300 Total Solar 2,545,460 (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 12,647,880 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 4,786,706 Hydro 2,794,491 Solar 2,933,006 Wind 2,534,580 Cogeneration 611,938 Battery Storage 225,000 Fuel Cell 27,500 Total Southern Company System Generating Capacity 44,916,879 (a) Represents the primary fuel source.
Biggest changeCompany/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Alabama Power Natural Gas Combined Cycle: Barry Units 6 through 8 Mobile, AL 1,706,424 Central Alabama Generating Station Autauga County, AL 885,000 Lindsay Hill Generating Station Autauga County, AL 879,700 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 5,839,124 Coal Barry Unit 5 Mobile, AL 700,000 Gaston Unit 5 Wilsonville, AL 880,000 Miller (91.8% of Units 1 and 2 and 100% of Units 3 and 4) Birmingham, AL 2,532,288 Total Coal 4,112,288 Nuclear Farley Dothan, AL 1,720,000 Solar Anniston Army Depot Calhoun County, AL 7,380 Fort Rucker Dale County, AL 10,560 Total Solar 17,940 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 I-32 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Thurlow Tallassee, AL 81,000 Weiss Leesburg, AL 87,750 Yates Tallassee, AL 47,000 Total Hydro 1,668,079 Cogeneration Lowndes County Burkeville, AL 104,800 Theodore Theodore, AL 236,418 Washington County Washington County, AL 123,428 Total Cogeneration 464,646 Total Alabama Power Generating Capacity 13,822,077 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 (45.7%) Augusta, GA 2,167,094 Total Nuclear 3,066,706 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 McIntosh Effingham County, GA 10,000 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 368,106 I-33 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) 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 Tallulah Falls Clayton, GA 72,000 Terrora Clayton, GA 20,800 Tugalo Clayton, GA 59,250 Wallace Dam Eatonton, GA 321,300 Yonah Toccoa, GA 22,500 Total Hydro 1,126,412 Battery Energy Storage Mossy Branch Talbot County, GA 65,000 Total Georgia Power Generating Capacity 14,789,068 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 Pascagoula, MS 1,000,000 Solar Walnut Grove Walnut Grove, MS 1,500 Cogeneration Chevron Cogenerating Station Pascagoula, MS 147,292 (c) Total Mississippi Power Generating Capacity 4,017,874 I-34 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 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 South Cheyenne Laramie County, WY 150,000 Spectrum Clark County, NV 30,240 Tranquillity Fresno County, CA 205,300 Total Solar 2,545,460 (d) 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 I-35 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Grant Plains Grant County, OK 147,200 Grant Grant County, OK 151,800 Kay 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 Crosby & Floyd Counties, TX 257,250 Wildhorse Pushmataha County, OK 100,000 Total Wind 2,534,580 (e) Battery Energy Storage Garland Kern County, CA 88,000 (f) Tranquillity Fresno County, CA 72,000 (f) Total Battery Energy Storage 160,000 Fuel Cell Red Lion and Brookside New Castle and Newark, DE 27,500 (g) Total Southern Power Generating Capacity 12,647,880 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 23,360,146 Coal 9,023,212 Nuclear 4,786,706 Solar 2,933,006 Hydro 2,794,491 Wind 2,534,580 Cogeneration 611,938 Battery Energy Storage 225,000 Fuel Cell 27,500 Total Southern Company System Generating Capacity 46,296,579 (a) Represents the primary fuel source.
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.
(g) 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.
It is the opinion of management of each such company that its operating properties are adequately maintained and are substantially in good operating condition, and suitable for their intended purpose. Mississippi Power owns a lignite mine that was intended to provide fuel for the Kemper IGCC.
It is the opinion of management of each such company that its operating properties are adequately maintained, substantially in good operating condition, and suitable for their intended purpose. Mississippi Power owns a lignite mine that was intended to provide fuel for the Kemper IGCC.
Liberty Fuels Company, LLC, the operator of the mine, has a legal obligation to perform mine reclamation and Mississippi Power has a contractual obligation to fund all reclamation activities. As a result of the abandonment of the Kemper IGCC, final mine reclamation began in 2018 and was substantially completed in 2020, with monitoring expected to continue through 2028.
Liberty Fuels Company, LLC, the operator of the mine, has a legal obligation to perform mine reclamation and Mississippi Power has a contractual obligation to fund all reclamation activities. As a result of the abandonment of the Kemper IGCC, final mine reclamation began in 2018 and was substantially completed in 2020, with monitoring expected to continue through 2027.
Titles to Property The traditional electric operating companies', Southern Power's, and SEGCO's interests in the principal plants and other important units of the respective companies are owned in fee by such companies, subject to the following major encumbrances: (1) a leasehold interest granted by Mississippi Power's largest retail customer, Chevron Products Company (Chevron), at the Chevron refinery, where five combustion turbines owned by Mississippi Power are located and used for co-generation, as well as liens on these assets pursuant to the related co-generation agreements and (2) liens associated with Georgia Power's reimbursement obligations to the DOE under its loan guarantee, which are secured by a first priority lien on (a) Georgia Power's undivided ownership interest in Plant Vogtle Units 3 and 4 and (b) Georgia Power's rights and obligations under the principal contracts relating to Plant Vogtle Units 3 and 4.
I-37 Table of Contents Index to Financial Statements Titles to Property The traditional electric operating companies', Southern Power's, and SEGCO's interests in the principal plants and other important units of the respective companies are owned in fee by such companies, subject to the following major encumbrances: (1) a leasehold interest granted by Mississippi Power's largest retail customer, Chevron Products Company (Chevron), at the Chevron refinery, where five combustion turbines owned by Mississippi Power are located and used for co-generation, as well as liens on these assets pursuant to the related co-generation agreements and (2) liens associated with Georgia Power's reimbursement obligations to the DOE under its loan guarantee relating to Plant Vogtle Units 3 and 4, which are secured by a first priority lien on (a) Georgia Power's undivided ownership interest in the units and (b) Georgia Power's rights and obligations under the principal contracts relating to the units.
In addition, Georgia Power has commitments, in the form of capacity purchases totaling $35 million at December 31, 2024, 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 $34 million at December 31, 2025, 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.
These systems consist primarily of distribution and transmission mains, compressor stations, peak shaving/storage plants, service lines, meters, and regulators. At December 31, 2024, Southern Company Gas' gas distribution operations segment owned approximately 78,500 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, 2025, 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 percentages of ownership of the total plant or facility are as follows: Percentage Ownership Facility 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 4 4,742 — — 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-35 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 Facility Total Capacity Alabama Power Power South Georgia 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 4 4,742 — — 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 — — — Alabama Power and Georgia 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.
Item 2. PROPERTIES Electric At December 31, 2024, 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, 2025, the traditional electric operating companies, Southern Power, and SEGCO owned and/or operated the generating and battery energy storage facilities listed in the table below. The traditional electric operating companies have certain jointly-owned generating stations.
I-34 Table of Contents Index to Financial Statements (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, Roserock, and South Cheyenne solar facilities).
(d) 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, Roserock, and South Cheyenne solar facilities).
These amounts exclude demand served by capacity retained by MEAG Power, OPC, and SEPA. The reserve margin for the traditional electric operating companies, Southern Power Company, and SEGCO in 2024 was 16%. Jointly-Owned Facilities Alabama Power, Georgia Power, and Mississippi Power at December 31, 2024 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 2025 was 20%. Jointly-Owned Facilities Alabama Power and Georgia Power at December 31, 2025 had undivided interests in certain generating plants and other related facilities with non-affiliated parties.
Storage Assets Gas Distribution Operations Southern Company Gas owns and operates eight underground natural gas storage fields in Illinois with a total working capacity of approximately 150 Bcf, approximately 135 Bcf of which is usually cycled on an annual basis.
Storage Assets Southern Company Gas owns and operates eight underground natural gas storage fields in Illinois with a total working capacity of approximately 150 Bcf, approximately 135 Bcf of which is usually cycled on an annual basis. This system is designed to meet about 50% of the estimated peak-day deliveries and approximately 40% of the normal winter deliveries in Illinois.
SP Wind is the 90.1% majority owner of Wake Wind and owns 100% of the other SP Wind facilities. 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 also owns 100% of Glass Sands and 100% of SP Wind (a holding company which owns the remaining eight Southern Power wind facilities). 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.
(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.
(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.
The LNG plants and propane storage facilities are used by Southern Company Gas' gas distribution operations segment to supplement natural gas supply during peak usage periods. 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.
In addition, Southern Company Gas owns two propane storage facilities in Virginia, each with storage capacity of approximately 0.3 Bcf. The LNG plants and propane storage facilities are used by Southern Company Gas' gas distribution operations segment to supplement natural gas supply during peak usage periods.
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.
(h) 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.
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).
I-36 Table of Contents Index to Financial Statements (e) Southern Power is the controlling partner in a non-tax equity partnership for Beech Ridge II and is the controlling partner in tax equity partnerships owning Cactus Flats, Deuel Harvest, Reading, Skookumchuck, and Wildhorse. For Deuel Harvest and Skookumchuck, another partner holds a noncontrolling interest in Southern Power's remaining equity.
(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.
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. 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.
This system is designed to meet about 50% of the estimated peak-day deliveries and approximately 40% of the normal winter deliveries in Illinois. This level of storage capability provides Nicor Gas with supply flexibility, improves the reliability of deliveries, and helps mitigate the risk associated with seasonal price movements.
This level of storage capability provides Nicor Gas with supply flexibility, improves the reliability of deliveries, and helps mitigate the risk associated with seasonal price movements. Southern Company Gas also has four LNG plants located in Georgia and Tennessee with total LNG storage capacity of approximately 7.0 Bcf.
See Note 2 under "Mississippi Power – Integrated Resource Plans" and " – Plant Daniel" in Item 8 herein for additional information on Plant Daniel. In 2024, the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was 38,194,000 KWs and occurred on January 17, 2024, which also represents the all-time maximum demand.
In 2025, the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was 37,006,000 KWs and occurred on January 22, 2025. The all-time maximum demand of 38,194,000 KWs occurred on January 17, 2024. These amounts exclude demand served by capacity retained by MEAG Power, OPC, and SEPA.
The sale of the Texas facility was completed in November 2022 and the sale of the California I-36 Table of Contents Index to Financial Statements facility was completed in September 2023. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information.
See Note 7 to the financial statements under "SEGCO" in Item 8 herein for additional information.
Mississippi Power did not exercise an option to purchase its co-owner's ownership interest for $1 on January 15, 2024. On November 8, 2024, Mississippi Power entered into an agreement with FP&L to acquire FP&L's 50% ownership interest in Plant Daniel Units 1 and 2.
On July 30, 2025, Mississippi Power completed its acquisition of FP&L's 50% ownership interest in Plant Daniel Units 1 and 2. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plans" and " – Plant Daniel" and Note 15 to the financial statements under "Mississippi Power" in Item 8 herein for additional information on Plant Daniel.
Removed
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.
Added
See Note 7 to the financial statements under "Southern Power – Variable Interest Entities – SP Solar" in Item 8 herein for additional information.
Removed
In conjunction with Southern Company's 2019 sale of Gulf Power, Mississippi Power and NextEra Energy, Inc. agreed to negotiate a mutually acceptable revised operating agreement for Plant Daniel. In 2022, the co-owners executed a revised operating agreement.
Added
See Note 7 to the financial statements under "Southern Power – Variable Interest Entities – SP Wind" in Item 8 herein for additional information. (f) Southern Power is the controlling partner in a tax equity partnership owning the Garland and Tranquillity battery energy storage facilities.
Removed
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.
Removed
Southern Company Gas also has four LNG plants located in Georgia and Tennessee with total LNG storage capacity of approximately 7.0 Bcf. In addition, Southern Company Gas owns two propane storage facilities in Virginia, each with storage capacity of approximately 0.3 Bcf.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. LEGAL PROCEEDINGS See Note 3 to the financial statements in Item 8 herein for descriptions of legal and administrative proceedings discussed therein. The Registrants' threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.
Biggest changeItem 3. LEGAL PROCEEDINGS See Note 3 to the financial statements in Item 8 herein for descriptions of legal and administrative proceedings discussed therein. The Registrants' threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million. I-38 Table of Contents Index to Financial Statements

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changePreviously served as Senior Vice President of SCS from February 2019 to March 2023 and Senior Vice President of Georgia Power from August 2018 to March 2023. Kimberly S. Greene Chairman, President, and Chief Executive Officer of Georgia Power Age 58 First elected in 2013. Chairman, President, and Chief Executive Officer of Georgia Power since April 2023.
Biggest changeDrake Executive Vice President and Chief Human Resources Officer Age 49 First elected in 2024. Executive Vice President and Chief Human Resources Officer of Southern Company and SCS since March 2023. Previously served as Senior Vice President of SCS from February 2019 to March 2023 and Senior Vice President of Georgia Power from August 2018 to March 2023. Kimberly S.
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.
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, and Senior Vice President and General Counsel – East of SCS from July 2020 to March 2023.
Item 4. MINE SAFETY DISCLOSURES Not applicable. I-37 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, 2024. Christopher C.
Item 4. MINE SAFETY DISCLOSURES Not applicable. I-39 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, 2025. Christopher C.
Peter P. Sena III Chairman, President, and Chief Executive Officer of Southern Nuclear Age 61 First elected in 2024. Chairman and Chief Executive Officer of Southern Nuclear since June 2024. President of Southern Nuclear since March 2023. Previously served as Executive Vice President and Chief Nuclear Officer of Southern Nuclear from July 2019 to March 2023. Sterling A.
Sena III Chairman, President, and Chief Executive Officer of Southern Nuclear Age 62 First elected in 2024. Chairman and Chief Executive Officer of Southern Nuclear since June 2024. President of Southern Nuclear since March 2023. Previously served as Executive Vice President and Chief Nuclear Officer of Southern Nuclear from July 2019 to March 2023. Sterling A.
Spainhour Executive Vice President and Chief Legal Officer Age 56 First elected in 2023. Executive Vice President and Chief Legal Officer since April 2023.
Spainhour Executive Vice President and Chief Legal Officer Age 57 First elected in 2023. Executive Vice President and Chief Legal Officer since April 2023.
I-39 Table of Contents Index to Financial Statements PART II
I-41 Table of Contents Index to Financial Statements PART II
Previously served as Chairman, President, and Chief Executive Officer of Southern Company Gas from June 2018 to March 2023. I-38 Table of Contents Index to Financial Statements James Y. Kerr II Chairman, President, and Chief Executive Officer of Southern Company Gas Age 60 First elected in 2014. Chairman, President, and Chief Executive Officer of Southern Company Gas since April 2023.
Greene Chairman, President, and Chief Executive Officer of Georgia Power Age 59 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. I-40 Table of Contents Index to Financial Statements James Y.
Chief Operating Officer since January 2025. Executive Vice President since April 2021 and Executive Vice President of SCS since January 2025. Previously served as Chairman, President, and Chief Executive Officer of SCS from April 2021 to January 2025 and Executive Vice President for Operations of SCS from June 2018 to April 2021.
Executive Vice President since April 2021 and Executive Vice President of SCS since January 2025. Previously served as Chairman, President, and Chief Executive Officer of SCS from April 2021 to January 2025 and Executive Vice President for Operations of SCS from June 2018 to April 2021. Christopher Cummiskey Executive Vice President Age 51 First elected in 2021.
Previously served as Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Southern Company from March 2014 to March 2023. J. Jeffrey Peoples Chairman, President, and Chief Executive Officer of Alabama Power Age 65 First elected in 2023. Chairman, President, and Chief Executive Officer of Alabama Power since January 2023.
Kerr II Chairman, President, and Chief Executive Officer of Southern Company Gas Age 61 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. J.
Christopher Cummiskey Executive Vice President Age 50 First elected in 2021. 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.
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. Chairman, President, and Chief Executive Officer of SCS since January 2025. Sloane N.
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 58 First elected in 2020.
Previously served as Comptroller from March 2023 to July 2025, Senior Vice President and Chief Accounting Officer of SCS from March 2023 to July 2025, and Executive Vice President, Chief Financial Officer, Chief Risk Officer, and Treasurer of Southern Company Gas from January 2021 to February 2023. Bryan D. Anderson Executive Vice President Age 59 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 November 2014 to November 2020. Stanley W. Connally, Jr. Executive Vice President and Chief Operating Officer Age 55 First elected in 2012.
Previously served as Executive Vice President of Southern Company Gas and President and Chief Executive Officer of Atlanta Gas Light and Chattanooga Gas from August 2020 to March 2025. Stanley W. Connally, Jr. Executive Vice President and Chief Operating Officer Age 56 First elected in 2012. Chief Operating Officer since January 2025.
Tucker Executive Vice President, Chief Financial Officer, and Treasurer Age 54 First elected in 2021. Executive Vice President and Chief Financial Officer since September 2021. Treasurer since October 2024.
Poroch Executive Vice President and Chief Financial Officer Age 56 First elected in 2025. Executive Vice President and Chief Financial Officer since July 2025.
Womack Chairman, President, and Chief Executive Officer Age 66 First elected in 2008. President since March 2023, Chief Executive Officer since May 2023, and Chairman since December 2023.
Womack Chairman, President, and Chief Executive Officer Age 67 First elected in 2008. President since March 2023, Chief Executive Officer since May 2023, and Chairman since December 2023. Previously served as Chairman and Chief Executive Officer of Georgia Power from June 2021 to March 2023 and President of Georgia Power from November 2020 to March 2023. David P.
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.
Jeffrey Peoples Chairman, President, and Chief Executive Officer of Alabama Power Age 66 First elected in 2023. Chairman, President, and Chief Executive Officer of Alabama Power since January 2023. Previously served as Executive Vice President of Customer and Employee Services of Alabama Power from June 2020 to January 2023. Peter P.
Chairman, President, and Chief Executive Officer of SCS since January 2025. Previously served as Executive Vice President, External Affairs of Georgia Power from May 2015 to June 2020. Martin B. Davis Executive Vice President and Chief Information Officer Age 61 First elected in 2021. Executive Vice President since April 2021.
Executive Vice President and President of External Affairs since January 2021. Executive Vice President of SCS since November 2020. Pedro P. Cherry Chairman, President, and Chief Executive Officer of Mississippi Power Age 54 First elected in 2025. Chairman and Chief Executive Officer of Mississippi Power since August 2025. President of Mississippi Power since March 2025.
Removed
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.
Removed
Chief Information Officer and Executive Vice President of SCS since July 2015. Previously served as Vice President from July 2015 to April 2021. Sloane N. Drake Executive Vice President and Chief Human Resources Officer Age 48 First elected in 2024. Executive Vice President and Chief Human Resources Officer of Southern Company and SCS since March 2023.
Removed
Anthony L. Wilson Chairman, President, and Chief Executive Officer of Mississippi Power Age 60 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.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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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, 2025: 91,209 Southern Company has paid dividends on its common stock since 1948. Dividends paid per share of common stock were $2.86 in 2024 and $2.78 in 2023.
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, 2026: 87,056 Southern Company has paid dividends on its common stock since 1948. Dividends paid per share of common stock were $2.94 in 2025 and $2.86 in 2024.
In January 2025, Southern Company declared a quarterly dividend of 72 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 2026, Southern Company declared a quarterly dividend of 74 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- 16 Georgia Power II- 20 Mississippi Power II- 25 Southern Power II- 28 Southern Company Gas II- 31 Future Earnings Potential II- 36 Accounting Policies II- 46 Financial Condition and Liquidity II- 51 This section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
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- 8 Southern Company II- 8 Alabama Power II- 16 Georgia Power II- 20 Mississippi Power II- 24 Southern Power II- 28 Southern Company Gas II- 30 Future Earnings Potential II- 35 Accounting Policies II- 46 Financial Condition and Liquidity II- 51 This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 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, 2023, which was filed with the SEC on February 14, 2024.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 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, 2024, which was filed with the SEC on February 19, 2025.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeThe increase was primarily due to increases of $170 million in generation expenses primarily associated with Plant Vogtle Units 3 and 4 being placed in service at Georgia Power, maintenance and scheduled outage expenses, and Rate CNP Compliance-related expenses at Alabama Power, $166 million in transmission and distribution expenses primarily related to line maintenance and billing adjustments with integrated transmission system owners at Georgia Power, $41 million in customer service and sales expenses including bad debt, $36 million related to an impairment loss associated with Alabama Power discontinuing the development of a multi-use commercial facility, $21 million associated with an additional Rate NDR accrual at Alabama Power, $20 million associated with reliability reserve accruals and reliability-related expenses at Alabama Power and Mississippi Power, $16 million associated with a gain on the sale of spare parts in 2023 at Southern Power, $11 million associated with an arbitration award received in 2023 at Southern Power related to losses previously incurred, and $10 million in amortization of deferred cloud implementation costs, partially offset by a $91 million increase in gains from sales of integrated transmission system assets at Georgia Power and a $31 million decrease in technology infrastructure and application production expenses.
Biggest changeThe increase was primarily due to a $132 million increase in generation expenses primarily due to non-outage maintenance expenses largely resulting from Plant Vogtle Unit 4 being placed in service in April 2024 at Georgia Power, as well as planned outages at Alabama Power and Mississippi Power, a $114 million gain in 2024 from the sale of integrated transmission system assets at Georgia Power, and increases of $65 million associated with reliability reserve accruals and reliability-related expenses at Alabama Power, $62 million associated with NDR accruals at Alabama Power, $60 million in certain employee compensation and benefit expenses, $57 million in certain technology infrastructure and application production costs, and $28 million related to injuries and damages primarily at Georgia Power, partially offset by a decrease of $98 million in transmission and distribution costs primarily associated with line maintenance and billings adjustments with integrated transmission system owners at Georgia Power, an increase of $39 million in credits to income related to the estimated probable loss on Plant Vogtle Units 3 and 4 at Georgia Power, and a $36 million impairment loss in 2024 associated with Alabama Power discontinuing the development of a multi-use commercial facility.
Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income.
Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income.
Pursuit of any of the above strategies, or any combination thereof, may significantly affect the business operations, risks, and financial condition of Southern Company. In addition, Southern Power and Southern Company Gas regularly consider and evaluate joint development arrangements as well as acquisitions and dispositions of businesses and assets as part of their business strategies.
Pursuit of any of the above strategies, or any combination thereof, may significantly affect the business operations, risks, and financial condition of Southern Company. In addition, Southern Power and Southern Company Gas regularly consider and evaluate joint development arrangements as well as acquisitions and/or dispositions of businesses and assets as part of their business strategies.
These factors include: changes in business conditions; changes in load projections; changes in environmental laws and regulations; the outcome of any legal challenges to environmental rules; changes in electric generating plants, including unit retirements and replacements and adding or changing fuel sources at existing electric generating units, to meet regulatory requirements; changes in FERC rules and regulations; state regulatory agency approvals; changes in the expected environmental compliance program; changes in legislation, regulation, and/or tariff policy; the cost, availability, and efficiency of construction labor, equipment, and materials; project scope and design changes; abnormal weather; delays in construction due to judicial or regulatory action; storm impacts; and the cost of capital.
These factors include: changes in business conditions; changes in load projections; changes in environmental laws and regulations; changes in technology; the outcome of any legal challenges to environmental rules; changes in electric generating plants, including unit retirements and replacements and adding or changing fuel sources at existing electric generating units, to meet regulatory requirements; changes in FERC rules and regulations; state regulatory agency approvals; changes in the expected environmental compliance program; changes in legislation, regulation, and/or tariff policy; the cost, availability, and efficiency of construction labor, equipment, and materials; project scope and design changes; abnormal weather; delays in construction due to judicial or regulatory action; storm impacts; and the cost of capital.
With the exception of Atlanta Gas Light, Southern Company Gas' second largest utility that operates in a deregulated natural gas market and has a straight-fixed-variable rate design that minimizes the variability of its revenues based on consumption, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are a function of weather conditions, price levels for natural gas, and general economic conditions that may impact customers' ability to pay for natural gas consumed.
With the exception of Atlanta Gas Light, Southern Company Gas' second largest utility that operates in a deregulated natural gas market and has a straight-fixed-variable rate design that minimizes the variability of its revenues based on consumption, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are a function of price levels for natural gas and general economic conditions that may impact customers' ability to pay for natural gas consumed.
Earnings in the electricity business will also depend upon maintaining and growing sales and pricing of large customers such that incremental costs are met with adequate incremental revenues, considering, among other things, recent trends driving projected growth in electricity consumption including the increasing digitization of the economy and growth in data centers, an increase in industrial activity in the Southern Company system's electric service territory, and continued electrification of transportation.
Earnings in the electricity business will also depend upon maintaining and growing sales and pricing of large load customers such that incremental costs are met with adequate incremental revenues, considering, among other things, recent trends driving projected growth in electricity consumption including the increasing digitization of the economy and growth in data centers, an increase in industrial activity in the Southern Company system's electric service territory, and continued electrification of transportation.
Southern Power continually seeks opportunities to execute its strategy to create value through various transactions including acquisitions, dispositions, and sales of partnership interests, development and construction of new generating facilities, and entry into PPAs primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
Southern Power continually seeks opportunities to execute its strategy to create value through various transactions including acquisitions, dispositions, and sales and purchases of partnership interests, development and construction of new generating facilities, and entry into PPAs primarily with investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers.
Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services, which includes SouthStar, a Marketer and provider of energy-related products and services to natural gas markets – and one non-reportable segment, all other. See Notes 7, 15, and 16 to the financial statements for additional information.
Southern Company Gas manages its business through three reportable segments – gas distribution operations, gas pipeline investments, and gas marketing services, which includes SouthStar, a Marketer and provider of energy-related products and services to natural gas choice markets – and one non-reportable segment, all other. See Notes 7, 15, and 16 to the financial statements for additional information.
The Subsidiary Registrants plan to obtain the funds to meet their future capital needs from sources similar to those they used in the past, which were primarily from operating cash flows, external securities issuances, borrowings from financial institutions, and equity contributions from Southern Company. Operating cash flows provide a substantial portion of the Registrants' cash needs.
The Subsidiary Registrants plan to obtain the funds to meet their future capital needs from sources similar to those they used in the past, which were primarily from operating cash flows, external securities issuances, borrowings from financial institutions and other sources, and equity contributions from Southern Company. Operating cash flows provide a substantial portion of the Registrants' cash needs.
These strategies may include business combinations, partnerships, and acquisitions involving other utility or non-utility businesses or properties, disposition of, or the sale of interests in, certain assets or businesses, internal restructuring, or some combination thereof. Furthermore, Southern Company may engage in new business ventures that arise from competitive and regulatory changes in the utility industry.
These strategies may include business combinations, partnerships, joint ventures, and acquisitions involving other utility or non-utility businesses or properties, disposition of, or the sale of interests in, certain assets or businesses, internal restructuring, or some combination thereof. Furthermore, Southern Company may engage in new business ventures that arise from competitive and regulatory changes in the utility industry.
A high degree of judgment is required in developing estimates related to these evaluations, which are based on projections of various factors, some of which have been quite volatile in recent years. See Notes 1 and 15 to the financial statements for additional information, including recent asset impairments.
A high degree of judgment is required in developing estimates related to these evaluations, which are based on projections of various factors, some of which have been quite volatile in recent years. See Notes 1 and 15 to the financial statements for additional information, including any recent asset impairments.
Energy purchases from affiliates will vary depending on the demand 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, all as approved by the FERC.
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, all as approved by the FERC.
Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas.
Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the distribution of natural gas and other complementary products and services by Southern Company Gas.
Tax Credits Southern Company receives ITCs and PTCs in connection with investments in solar, wind, fuel cell, advanced nuclear, hydroelectric, and battery energy storage facilities primarily at Southern Power, Georgia Power, and Alabama Power.
Tax Credits Southern Company receives ITCs and PTCs in connection with investments in solar, wind, fuel cell, nuclear, hydroelectric, and battery energy storage facilities primarily at Southern Power, Georgia Power, and Alabama Power.
In addition, the Southern Company system's capacity mix consists of over 12,500 MWs of renewable and storage facilities through ownership (including 100% of the nameplate capacity of Southern Power's facilities owned with partners) and long-term PPAs. See "Environmental Laws and Regulations – Water Quality" herein for information on plans to retire or convert to natural gas additional coal-fired generating capacity.
In addition, the Southern Company system's capacity mix consists of over 12,700 MWs of renewable and storage facilities through ownership (including 100% of the nameplate capacity of Southern Power's facilities owned with partners) and long-term PPAs. See "Environmental Laws and Regulations – Water Quality" herein for information on plans to retire or convert to natural gas additional coal-fired generating capacity.
Seasonality also affects the comparison of certain balance sheet items across quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. Thus, Southern Company Gas' II-31 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS operating results can vary significantly from quarter to quarter as a result of seasonality.
Seasonality also affects the comparison of certain balance sheet items across II-30 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. Thus, Southern Company Gas' operating results can vary significantly from quarter to quarter as a result of seasonality.
II-42 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Regulatory Matters See OVERVIEW – "Recent Developments" herein and Note 2 to the financial statements for a discussion of regulatory matters related to Alabama Power, Georgia Power, Mississippi Power, and Southern Company Gas, including items that could impact the applicable Registrants' future earnings, cash flows, and/or financial condition.
II-41 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Regulatory Matters See OVERVIEW – "Recent Developments" herein and Note 2 to the financial statements for a discussion of regulatory matters related to Alabama Power, Georgia Power, Mississippi Power, and Southern Company Gas, including items that could impact the applicable Registrants' future earnings, cash flows, and/or financial condition.
Southern Company Gas has various regulatory and other mechanisms, such as weather and revenue normalization mechanisms and weather derivative instruments, that limit its exposure to changes in customer consumption, including weather changes within typical ranges in its natural gas distribution utilities' service territories. See Note 2 to the financial statements under "Southern Company Gas" for additional information.
Southern Company Gas has various regulatory and other mechanisms, such as weather and revenue normalization mechanisms, that limit its exposure to changes in customer consumption, including weather changes within typical ranges in its natural gas distribution utilities' service territories. See Note 2 to the financial statements under " Southern Company Gas " for additional information.
Under the II-39 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Environmental Accounting Order, the regulatory asset would be amortized and recovered over an affected unit's remaining useful life, as established prior to the decision regarding early retirement, through Rate CNP Compliance.
Under the Environmental Accounting Order, the regulatory asset would be amortized and recovered over an affected unit's remaining useful II-38 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS life, as established prior to the decision regarding early retirement, through Rate CNP Compliance.
In most cases, these contracts contain provisions for price escalation, minimum purchase levels, and other financial commitments. 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, 2024.
In most cases, these contracts contain provisions for price escalation, minimum purchase levels, and other financial commitments. 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, 2025.
The amount, type, and timing of any financings in 2025, 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 2026, 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-66 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-67 Table of Contents Index to Financial Statements
Market Price Risk The Registrants had no material change in market risk exposure for the year ended December 31, 2024 when compared to the year ended December 31, 2023. See Note 14 to the financial statements for an in-depth discussion of the Registrants' derivatives, as well as Note 1 to the financial statements under "Financial Instruments" for additional information.
Market Price Risk The Registrants had no material change in market risk exposure for the year ended December 31, 2025 when compared to the year ended December 31, 2024. See Note 14 to the financial statements for an in-depth discussion of the Registrants' derivatives, as well as Note 1 to the financial statements under "Financial Instruments" for additional information.
Total estimated costs for fuel and purchased power commitments at December 31, 2024 for the applicable Registrants are provided in the table below. Fuel costs include purchases of coal (for the traditional electric operating companies) and natural gas (for the traditional electric operating companies and Southern Power), as well as the related transportation and storage.
Total estimated costs for fuel and purchased power commitments at December 31, 2025 for the applicable Registrants are provided in the table below. Fuel costs include purchases of coal (for the traditional electric operating companies) and natural gas (for the traditional electric operating companies and Southern Power), as well as the related transportation and storage.
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, 2024.
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, 2025.
Southern Company and Southern Power had foreign currency denominated debt at December 31, 2024 and have each mitigated exposure to foreign currency exchange rate risk through the use of foreign currency swaps. See Note 14 to the financial statements under "Foreign Currency Derivatives" for additional information.
Southern Company and Southern Power had foreign currency denominated debt at December 31, 2025 and have each mitigated exposure to foreign currency exchange rate risk through the use of foreign currency swaps. See Note 14 to the financial statements under "Foreign Currency Derivatives" for additional information.
(c) Excludes cash collateral of $17 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 $33 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 Note 16 to the financial statements for additional information. • The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are vertically integrated utilities providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. • Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market.
See Note 16 to the financial statements for additional information. • The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are vertically integrated utilities providing electric service to retail customers in three Southeastern states in addition to wholesale customers in the Southeast. • Southern Power develops, constructs, acquires, owns, operates, and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates in the wholesale market.
Southern Company Gas also utilizes weather hedges to limit the negative income impacts in the event of warmer-than-normal weather in Illinois for gas distribution operations and in Illinois and Georgia for gas marketing services. Therefore, weather typically does not have a significant net income impact.
Southern Company Gas also utilizes weather hedges to limit the negative income impacts in the event of warmer-than-normal weather in Illinois and Georgia for gas marketing services. Therefore, weather typically does not have a significant net income impact.
See Note 11 to the financial statements under "Pension Plans" for information on the Registrants' investments in their qualified pension plans. No mandatory contributions to the qualified pension plans are anticipated during 2025. See Note 6 to the financial statements under "Nuclear Decommissioning" for information on Alabama Power's and Georgia Power's investments in their respective nuclear decommissioning trust funds.
See Note 11 to the financial statements under "Pension Plans" for information on the Registrants' investments in their qualified pension plans. No mandatory contributions to the qualified pension plans are anticipated during 2026. See Note 6 to the financial statements under "Nuclear Decommissioning" for information on Alabama Power's and Georgia Power's investments in their respective nuclear decommissioning trust funds.
See Note 6 to the financial statements and FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Laws and Regulations – Coal Combustion Residuals" herein for additional information, including updates to AROs related to surface impoundments recorded during 2024 by certain Registrants.
See Note 6 to the financial statements and FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Laws and Regulations – Coal Combustion Residuals" herein for additional information, including updates to AROs related to surface impoundments recorded during 2025 by certain Registrants.
See Note 8 to the financial statements for information regarding the Registrants' long-term debt at December 31, 2024, 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, 2025, 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, 2024 and 2023, 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, 2025 and 2024, 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.
Beginning in January 2022, the EPA issued numerous Part A determinations that state its current positions on a variety of CCR Rule compliance requirements, such as criteria for groundwater corrective action and CCR unit closure. The traditional electric operating companies are working with state regulatory agencies to determine whether the EPA's current positions may impact closure and groundwater monitoring plans.
Beginning in January 2022, the EPA issued numerous determinations that stated its positions on a variety of CCR Rule compliance requirements, such as criteria for groundwater corrective action and CCR unit closure. The traditional electric operating companies are working with state regulatory agencies to determine whether the EPA's determinations may impact closure and groundwater monitoring plans.
On January 3, 2024, the Illinois Commission denied a request by Nicor Gas for rehearing on the base rate case disallowances associated with capital investment, as well as on other issues determined in the Illinois Commission's November 2023 base rate case decision.
In January 2024, the Illinois Commission denied a request by Nicor Gas for rehearing on the base rate case disallowances associated with capital investment, as well as on other issues determined in the Illinois Commission's 2023 base rate case decision.
Fuel and Purchased Power Expenses The mix of fuel sources for generation of electricity is determined primarily by demand, the unit cost of fuel consumed, and the availability of generating units. Additionally, Mississippi Power purchases a portion of its electricity needs from the wholesale market.
The mix of fuel sources for the generation of electricity is determined primarily by demand, the unit cost of fuel consumed, and the availability of generating units. Additionally, Mississippi Power purchases a portion of its electricity needs from the wholesale market.
Based on requirements for closure and monitoring of landfills and surface impoundments pursuant to the CCR Rule and applicable state rules, the traditional electric operating companies have periodically updated, and expect to continue periodically updating, their related cost estimates and ARO liabilities for each CCR unit as additional information related to compliance monitoring, closure methodologies and strategies, schedules, and/or costs becomes available.
Based on compliance requirements for closure and monitoring of landfills and surface impoundments pursuant to state and federal CCR rules, the traditional electric operating companies have periodically updated, and expect to continue periodically updating, their related cost estimates and ARO liabilities for each CCR unit as additional information related to compliance monitoring, closure methodologies and strategies, schedules, and/or costs becomes available.
The net cash used for financing activities in 2024 was primarily related to common stock dividend payments, partially offset by capital contributions from Southern Company and net issuances of senior notes. 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 2024 was primarily related to common stock dividend payments, partially offset by capital contributions from Southern Company and net issuances of senior notes.
Each Subsidiary Registrant plans to finance its future cash needs in excess of its operating cash flows primarily through external securities issuances, borrowings from financial institutions, and equity contributions from Southern Company.
Each Subsidiary Registrant plans to finance its future cash needs in excess of its operating cash flows primarily through external securities issuances, borrowings from financial institutions and other sources, and equity contributions from Southern Company.
The rule requires legacy surface impoundments and CCRMUs to meet certain existing regulatory requirements, including a requirement to initiate closure within 42 months after the effective date of the final rule for legacy surface impoundments and within 54 months after the effective date of the final rule for CCRMUs.
The 2024 Legacy Rule requires legacy surface impoundments and CCRMUs to meet certain existing regulatory requirements, including a requirement to initiate closure within 42 months after the effective date of the 2024 Legacy Rule for legacy surface impoundments and within 54 months after the effective date of the 2024 Legacy Rule for CCRMUs.
Alabama Power's $207 million of fixed rate revenue bonds are classified as securities due within one year on its balance sheet as they are not covered by long-term committed credit.
Alabama Power's $280 million of fixed rate revenue bonds are classified as securities due within one year on its balance sheet as they are not covered by long-term committed credit.
In February 2023, the EPA published a final rule disapproving 19 state implementation plans (SIPs), including SIPs submitted by the States of Alabama and Mississippi, under the interstate transport (good neighbor) provisions of the Clean Air Act for the 2015 Ozone National Ambient Air Quality Standards (NAAQS).
Environmental Laws and Regulations Air Quality In February 2023, the EPA published a final rule disapproving 19 state implementation plans (SIPs), including SIPs submitted by the States of Alabama and Mississippi, under the interstate transport (good neighbor) provisions of the Clean Air Act for the 2015 Ozone National Ambient Air Quality Standards (NAAQS).
These factors include weather; competition; developing new and maintaining existing energy contracts and associated load requirements with wholesale customers; demand growth in data centers; customer energy conservation practices; the use of alternative energy sources by customers; government incentives to reduce overall energy usage; fuel, labor, and material prices in an environment of heightened inflation and material and labor supply chain disruptions; and the price elasticity of demand.
These factors include weather; competition; developing new and maintaining existing energy contracts and associated load requirements with wholesale customers; demand growth from data centers and other large load customers and associated load and operating requirements; customer energy conservation practices; the use of alternative energy sources by customers; government incentives to reduce overall energy usage; fuel, labor, and material prices in an environment of heightened inflation and material and labor supply chain disruptions; and the price elasticity of demand.
As a result, the 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. Wholesale electric revenues at Mississippi Power include FERC-regulated MRA sales under cost-based tariffs as well as market-based sales.
As a result, the 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. Wholesale electric revenues at Mississippi Power include FERC-regulated MRA sales and market-based sales.
Excludes approximately $0.7 billion per year for 2025 and 2026 and $0.8 billion per year for 2027 through 2029 for Southern Power's planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy.
Excludes approximately $0.8 billion per year for 2026 through 2029 and $0.7 billion for 2030 for Southern Power's planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy.
The State of Mississippi has not developed a state CCR permit program. On June 7, 2024, the EPA published a final determination to deny the ADEM's CCR permit program. Alabama Power's permits to close its CCR facilities remain valid under state law.
The State of Mississippi has not developed a state CCR permit program. In June 2024, the EPA published a final determination to deny the ADEM's CCR permit program. Alabama Power's permits to close its CCR facilities remain valid under state law.
See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" for additional information. (b) Includes repayment by SEGCO of $20 million of its $100 million principal amount long-term bank loan due November 15, 2025, which is guaranteed by Alabama Power. See Note 3 to the financial statements under "Guarantees" for additional information.
See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" for additional information. (b) Includes repayment by SEGCO of $10 million of its $100 million principal amount long-term bank loan due November 15, 2026, which is guaranteed by Alabama Power. See Note 3 to the financial statements under "Guarantees" for additional information.
On May 9, 2024, the EPA published the final rule revising the Steam Effluent Guidelines (2024 ELG Rule), which establishes more stringent limits for flue gas desulfurization wastewater, bottom ash transport water, and combustion residual leachate to be met no later than December 31, 2029.
Water Quality In May 2024, the EPA published the final rule revising the Steam Effluent Guidelines (2024 ELG Rule), which establishes more stringent limits for flue gas desulfurization wastewater, bottom ash transport water , and combustion residual leachate to be met no later than December 31, 2029.
See "Financing Activities – Georgia Power" herein and Notes 2, 5, 6, 8, 9, and 10 to the financial statements for additional information.
See "Financing Activities –Georgia Power" herein and Notes 2, 5, 8, and 10 to the financial statements for additional information.
Southern Company Gas also continues to focus on several operating metrics, including Heating Degree Days, customer count, and volumes of natural gas sold. See RESULTS OF OPERATIONS – "Southern Company Gas" herein for additional information on Southern Company Gas' operating metrics.
Southern Company Gas also continues to focus on several operating metrics, including customer count and volumes of natural gas sold. See RESULTS OF OPERATIONS – "Southern Company Gas" herein for additional information on Southern Company Gas' operating metrics.
The demand for natural gas may increase, which may cause natural gas prices to rise and drive higher volatility in the natural gas markets on a longer-term basis. Alternatively, a significant drop in oil and natural gas prices could lead to a consolidation of natural gas producers or reduced levels of natural gas production.
The demand for natural gas may increase, including from large customers, which may cause natural gas prices to rise and drive higher volatility in the natural gas markets on a longer-term basis. Alternatively, a significant drop in oil and natural gas prices could lead to a consolidation of natural gas producers or reduced levels of natural gas production.
In the absence of an EPA-approved state permit program, CCR facilities in Alabama will remain subject to both the federal and state CCR rules. The ultimate impact of this action cannot be determined at this time; however, it may result in significant compliance costs.
In the absence of an EPA-approved state permit program, CCR facilities in Alabama will remain subject to both the federal and state CCR rules. The ultimate impact of the EPA's denial of ADEM's CCR permit program cannot be determined at this time; however, it may result in significant compliance costs.
By regulation, Nicor Gas is restricted, up to its retained earnings balance, in the amount it can dividend or loan to affiliates and is not permitted to make money pool loans to affiliates. At December 31, 2024, the amount of subsidiary retained earnings restricted to dividend totaled $1.6 billion.
By regulation, Nicor Gas is restricted, up to its retained earnings balance, in the amount it can dividend or loan to affiliates and is not permitted to make money pool loans to affiliates. At December 31, 2025, the amount of subsidiary retained earnings restricted to dividend totaled $1.8 billion.
For the three-year period from 2025 through 2027, each Registrant's projected stock dividends, capital expenditures, and debt maturities, as well as distributions to noncontrolling interests for Southern Power, are expected to exceed its operating cash flows.
For the three-year period from 2026 through 2028, each Registrant's projected stock dividends, capital expenditures, and debt maturities, as well as distributions to noncontrolling interests for Southern Power, are expected to exceed its operating cash flows.
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.
On May 8, 2024, the EPA published the final legacy CCR surface impoundments rule which regulates two new categories of federally regulated CCR, legacy surface impoundments and CCR management units (CCRMUs).
In May 2024, the EPA published the final legacy CCR surface impoundments rule (2024 Legacy Rule) which regulates two new categories of federally regulated CCR, legacy surface impoundments and CCR management units (CCRMUs).
Southern Company system management plans to continue to economically transition the Southern Company system's generating fleet through a diverse portfolio of resources including low-carbon and carbon-free resources; making the necessary related investments in transmission and distribution systems; continuing to implement effective energy efficiency and demand response programs; customer demand for carbon-free energy; implementing initiatives to reduce natural gas distribution emissions; continuing research and development with a 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.
Southern Company system management expects to continue to economically transition the generating fleet through a diverse portfolio of resources including low-carbon and carbon-free resources; making the necessary related investments in transmission and distribution systems; continuing to implement effective energy efficiency and demand response programs; implementing initiatives to reduce natural gas distribution emissions; continuing research and development with a focus on technologies that lower GHG emissions; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.
Natural Gas Safe Harbor Method In April 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor tax method of accounting that taxpayers may use to determine whether certain expenditures to maintain, repair, replace, or improve natural gas transmission and distribution property must be capitalized or allowed as repair deductions.
Natural Gas Safe Harbor Method In 2023, the IRS issued Revenue Procedure 2023-15, which provides a safe harbor tax method of accounting that taxpayers may use to determine whether certain expenditures to maintain, repair, replace, or improve natural gas transmission and distribution property must be capitalized or allowed as repair deductions. The revenue procedure allows multiple alternatives for implementation.
In March 2023, the State of Mississippi and Mississippi Power challenged the EPA's disapproval of the Mississippi SIP in the U.S. Court of Appeals for the Fifth Circuit. In June 2023, the U.S. Court of Appeals for the Fifth Circuit stayed the EPA's disapproval of the Mississippi SIP, pending appeal.
In March 2023, the State of Mississippi and Mississippi Power challenged the EPA's disapproval of the Mississippi SIP in the U.S. Court of Appeals for the Fifth Circuit. In June 2023, the U.S.
Also see "Financing Activities" herein for information on financing activities that occurred subsequent to December 31, 2024.
Also see "Financing Activities" herein for information on financing activities that occurred subsequent to December 31, 2025.
Generally, increased Heating Degree Days result in higher demand for natural gas on Southern Company Gas' distribution system. Southern Company Gas has various regulatory mechanisms, such as weather and revenue normalization and straight-fixed-variable rate design, which limit its exposure to weather changes within typical ranges in each of its utility's respective service territory.
Generally, increased Heating Degree Days result in higher demand for natural gas on Southern Company Gas' distribution system. However, Southern Company Gas has various regulatory mechanisms, such as weather and revenue normalization and straight-fixed-variable rate design, which limit positive or negative impacts to income from exposure to weather changes within typical ranges in each of its utility's respective service territory.
For 2024, the four largest Marketers based on customer count, which includes SouthStar, accounted for 20% of Southern Company Gas' operating revenues and 23% of operating revenues for Southern Company Gas' gas distribution operations segment. Several factors are designed to mitigate So uthern Company Gas' risks from the increased concentration of credit that has resulted from deregulation.
For 2025, the four largest Marketers based on customer count, which includes SouthStar, accounted for 19% of Southern Company Gas' operating revenues and 22% of operating revenues for Southern Company Gas' gas distribution operations segment. Several factors are designed to mitigate So uthern Company Gas' risks from the increased concentration of credit that has resulted from deregulation.
Gas supply commitments include amounts for gas commodity purchases associated with Nicor Gas and SouthStar of 39 million mmBtu at floating gas prices calculated using forward natural gas prices at December 31, 2024 and valued at $136 million.
Gas supply commitments include amounts for gas commodity purchases associated with Nicor Gas and SouthStar of 39 million mmBtu at floating gas prices calculated using forward natural gas prices at December 31, 2025 and valued at $151 million.
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 United States for state or municipal bans on the use of natural gas or policies designed to promote electrification.
These factors include II-35 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS 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 United States 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 II-37 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS 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.
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.
See Note 2 to the financial statements under "Southern Company Gas – Natural Gas Cost Recovery " for additional information. Cost of natural gas at gas distribution operations r epr esented 80.3% of the total cost of natural g as for 2024. Gas marketing services customers are charged for actual and estimated natural gas consumed.
See Note 2 to the financial statements under "Southern Company Gas – Natural Gas Cost Recovery " for additional information. Cost of natural gas at gas distribution operations r epr esented 81.7% of the total cost of natural g as for 2025. Gas marketing services customers are charged for actual and estimated natural gas consumed.
The ultimate outcome of such pending or potential litigation against each Registrant and any subsidiaries or regulatory and other matters cannot be determined at this time; however, for current proceedings and/or matters not specifically reported herein or in Notes 2 and 3 to the financial statements, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings and/or matters would have a material effect on such Registrant's financial statements.
The ultimate outcome of such pending or potential litigation against each Registrant and any subsidiaries or regulatory and other matters cannot be determined at this time; however, for current proceedings and/or matters not specifically reported herein or in Notes 2 and 3 to the financial statements, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings and/or matters would have a material effect on II-45 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS such Registrant's financial statements.
For the Southern Company system, the weighted average swap contract cost per mmBtu was approximately $0.15 per mmBtu below market prices at December 31, 2024 and was approximately $0.76 per mmBtu below market prices at December 31, 2023.
For the Southern Company system, the weighted average swap contract cost per mmBtu was approximately $0.11 per mmBtu below market prices at December 31, 2025 and was approximately $0.15 per mmBtu below market prices at December 31, 2024.
The net cash used for investing activities in 2024 and 2023 was primarily related to the Subsidiary Registrants' construction programs. The net cash used for financing activities in 2024 was primarily related to common stock dividend payments, a reduction in commercial paper borrowings, and a net decrease in short-term borrowings, partially offset by net issuances of long-term debt.
The net cash used for financing activities in 2024 was primarily related to common stock dividend payments, a reduction in commercial paper borrowings, and a net decrease in short-term borrowings, partially offset by net issuances of long-term debt.
The natural gas distribution utilities recover their investment and a return associated with these infrastructure programs through their regulated rates. See Note 2 to the financial statements under "Southern Company Gas – Infrastructure Replacement Programs and Capital Projects" for additional information on Southern Company Gas' construction program.
The natural gas distribution utilities recover their approved investment and a return on investment associated with these infrastructure programs through their regulated rates, as approved by their applicable state regulatory agency. See Note 2 to the financial statements under "Southern Company Gas – Infrastructure Replacement Programs and Capital Projects" for additional information on Southern Company Gas' construction program.
Cost of natural gas at the natural gas distribution utilities represented 80.3% of the total cost of natural gas for 2024. Gas marketing services customers are charged for actual and estimated natural gas consumed. Cost of natural gas includes the cost of fuel and associated transportation costs, lost and unaccounted for gas, and gains and losses associated with certain derivatives.
Cost of natural gas at the natural gas distribution utilities represented 81.7% of the total cost of natural gas for 2025. Gas marketing services customers are charged for actual and estimated natural gas consumed. Cost of natural gas includes the cost of fuel and associated transportation costs, lost and unaccounted for gas, and gains and losses associated with certain derivatives.
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 $944 million (excluding capitalized asset retirement costs which are recovered through Rate CNP Compliance) at December 31, 2024.
The remaining assets for which Alabama Power has indicated retirement, due to repowering of the unit to natural gas, have net book values totaling approximately $464 million (excluding capitalized asset retirement costs which are recovered through Rate CNP Compliance) at December 31, 2025.
The following table provides the number of customers served by Southern Company Gas at December 31, 2024 and 2023: 2024 2023 (in thousands, except market share percent) Gas distribution operations 4,387 4,374 Gas marketing services Energy customers 668 665 Market share of energy customers in Georgia 29.8 % 30.0 % Southern Company Gas anticipates customer growth and uses a variety of targeted marketing programs to attract new customers and to retain existing customers.
The following table provides the number of customers served by Southern Company Gas at December 31, 2025 and 2024: 2025 2024 (in thousands, except market share percent) Gas distribution operations 4,416 4,387 Gas marketing services Energy customers 677 668 Market share of energy customers in Georgia 29.9 % 29.8 % Southern Company Gas anticipates customer growth and uses a variety of targeted marketing programs to attract new customers and to retain existing customers.
The agreements grant Chevron a security interest in the co-generation assets owned by Mississippi Power located at the refinery that is exercisable upon the occurrence of (i) certain bankruptcy events or (ii) other events of default coupled with specific reductions in steam output at the facility and a downgrade of Mississippi Power's credit rating to below investment grade by two of the three rating agencies.
The agreements grant Chevron a security interest in the co-generation assets owned by Mississippi Power located at the refinery that is II-63 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS exercisable upon the occurrence of (i) certain bankruptcy events or (ii) other events of default coupled with specific reductions in steam output at the facility and a downgrade of Mississippi Power's credit rating to below investment grade by two of the three rating agencies.
Revenues related to regulated utility operations as a percentage of total operating revenues in 2024 for the applicable Registrants were as follows: 89% for Southern Company, 98% for Alabama Power, 95% for Georgia Power, 99% for Mississippi Power, and 87% for Southern Company Gas.
Revenues related to regulated utility operations as a percentage of total operating revenues in 2025 for the applicable Registrants were as follows: 90% for Southern Company, 98% for Alabama Power, 95% for Georgia Power, 99% for Mississippi Power, and 88% for Southern Company Gas.
Acquisitions that meet the definition of a business are accounted for under the acquisition method, whereby the identifiable assets acquired, liabilities assumed, and any noncontrolling interests (including any intangible assets, primarily related to acquired PPAs) are recognized and measured at fair value.
Acquisitions that meet the definition of a business are accounted for under the acquisition method, whereby the identifiable assets acquired, liabilities assumed, and any noncontrolling interests (including any intangible assets, primarily related to acquired PPAs) are recognized and measured at fair value and any goodwill is recognized as a residual over the fair values of the identifiable net assets acquired.
In addition, at December 31, 2024, Alabama Power and Georgia Power had approximately $207 million and $157 million, respectively, of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months.
In addition, at December 31, 2025, Alabama Power and Georgia Power had approximately $280 million and $384 million, respectively, of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months.
Southern Company (a) Southern Company Gas (a) (in millions) Contracts outstanding at December 31, 2022, assets (liabilities), net $ (11) $ (37) Contracts realized or settled 207 33 Current period changes (b) (500) (45) Contracts outstanding at December 31, 2023, assets (liabilities), net (304) (49) Contracts realized or settled 211 7 Current period changes (b) 54 52 Contracts outstanding at December 31, 2024, assets (liabilities), net $ (39) $ 10 (a) Excludes cash collateral held on deposit in broker margin accounts of $17 million, $62 million, and $41 million at December 31, 2024, 2023, and 2022, respectively, and immaterial premium and intrinsic value associated with weather derivatives for all periods presented.
Southern Company (a) Southern Company Gas (a) (in millions) Contracts outstanding at December 31, 2023, assets (liabilities), net $ (304) $ (49) Contracts realized or settled 211 7 Current period changes (b) 54 52 Contracts outstanding at December 31, 2024, assets (liabilities), net (39) 10 Contracts realized or settled 9 (13) Current period changes (b) (18) (7) Contracts outstanding at December 31, 2025, assets (liabilities), net $ (48) $ (10) (a) Excludes cash collateral held on deposit in broker margin accounts of $33 million, $17 million, and $62 million at December 31, 2025, 2024, and 2023, respectively, and immaterial premium and intrinsic value associated with weather derivatives for all periods presented.
Southern Power Net cash provided from operating activities decreased $388 million in 2024 as compared to 2023 primarily due to the utilization of federal tax credit carryforwards and the timing of customer receivable collections, partially offset by the timing of vendor payments. The net cash used for investing activities in 2024 was primarily related to ongoing construction activities.
Southern Power Net cash provided from operating activities decreased $38 million in 2025 as compared to 2024 primarily due to a change in the utilization of federal tax credit carryforwards, partially offset by the timing of customer receivable collections. The net cash used for investing activities in 2025 and 2024 was primarily related to ongoing construction activities.
The traditional electric operating companies are engaged in continuous construction programs to accommodate existing and estimated future loads on their respective systems. Major generation construction projects are subject to state PSC approval in order to be included in retail rates.
The traditional electric operating companies are engaged in continuous construction programs to accommodate existing and estimated future loads on their respective systems. Major generation construction projects are subject to state PSC approval in order to be included in retail rates, through which the traditional electric operating companies recover their approved investment and a return on investment.

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