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What changed in SOUTHERN CO's 10-K — 2023 vs 2024

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Paragraph-level year-over-year comparison of SOUTHERN CO's 2023 and 2024 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 2024 report.

+852 added−868 removedSource: 10-K (2025-02-20) vs 10-K (2024-02-15)

Top changes in SOUTHERN CO's 2024 10-K

852 paragraphs added · 868 removed · 679 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

92 edited+18 added−11 removed108 unchanged
Biggest change(d) Does not include approximately $0.8 billion for planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy. (e) Includes costs for ongoing capital projects associated with infrastructure improvement programs for certain natural gas distribution utilities that have been previously approved by their applicable state regulatory agencies.
Biggest change(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.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein and Note 2 to the financial statements under "Alabama Power – Environmental Accounting Order," "Georgia Power – Integrated Resource Plans," and "Mississippi Power – Integrated Resource Plan" in Item 8 herein for additional information, including the Southern Company system's electric generating mix and plans to retire or convert to natural gas certain coal-fired generating capacity.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein and Note 2 to the financial statements under "Alabama Power – Environmental Accounting Order," "Georgia Power – Integrated Resource Plans," and "Mississippi Power – Integrated Resource Plans" in Item 8 herein for additional information, including the Southern Company system's electric generating mix and plans to retire or convert to natural gas certain coal-fired generating capacity.
Southern Power develops, constructs, acquires, owns, 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 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.
The traditional electric operating companies have joined with other utilities in the Southeast to form the SERC to augment further the reliability and adequacy of bulk power supply. Through the SERC, the traditional electric operating companies are represented at the North American Electric Reliability Corporation. In November 2022, the Southeast Energy Exchange Market (SEEM) began service.
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.
Southern Power Southern Power develops, constructs, acquires, owns, 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 renewable energy projects, and sells electricity at market-based rates (under authority from the FERC) in the wholesale market.
The traditional electric operating companies have agreements in place from which they expect to receive substantially all of their 2024 coal burn requirements. These agreements have terms ranging between one and three years. Fuel procurement specifications, emission allowances, environmental control systems, and fuel changes have allowed the traditional electric operating companies to remain within limits set by applicable environmental regulations.
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.
SEEM, whose members include the traditional electric operating companies and many of the other electric service providers in the Southeast, is an extension of the existing bilateral market where participants use an automated, intra-hour energy exchange to buy and sell power close to the time the energy is consumed, utilizing available unreserved transmission. On July 14, 2023, the U.S.
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.
In this territory there are non-affiliated electric distribution systems that obtain some or all of their power requirements either directly or indirectly from the traditional electric operating companies. As of December 31, 2023, the territory had an area of approximately 116,000 square miles and an estimated population of approximately 17 million.
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.
As of December 31, 2023, there were 62 electric cooperative distribution systems operating in the territories in which the traditional electric operating companies provide electric service at retail or wholesale. PowerSouth is a generating and transmitting cooperative selling power to several distributing cooperatives, municipal systems, and other customers in south Alabama.
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.
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 2023, 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. 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.
Alabama Power and Georgia Power have multiple contracts covering their nuclear fuel needs for uranium, conversion services, enrichment services, and fuel fabrication with remaining terms up to 11 years. Management believes suppliers have sufficient nuclear fuel production capability to permit normal operation of the Southern Company system's nuclear generating units.
Alabama Power and Georgia Power have multiple contracts covering their nuclear fuel needs for uranium, conversion services, enrichment services, and fuel fabrication with remaining terms up to 10 years. Management believes suppliers have sufficient nuclear fuel production capability to permit normal operation of the Southern Company system's nuclear generating units.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION – "Southern Company – Electricity Business – Fuel and Purchased Power Expenses" and MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION under "Fuel and Purchased Power Expenses" for each of the traditional electric operating companies in Item 7 herein for information regarding the electricity generated and the average cost of fuel in cents per net KWH generated for the years 2022 and 2023.
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.
As of December 31, 2023, among the hydroelectric projects subject to licensing by the FERC are 14 existing Alabama Power generating stations having an aggregate installed capacity of 1.7 million KWs and 17 existing Georgia Power generating stations and one generating station partially owned by Georgia Power, with a combined aggregate installed capacity of 1.1 million KWs.
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.
The recruiting strategy also includes partnerships with professional associations and local communities to recruit mid-career talent. The addition of external hires augments the existing workforce to meet changing business needs, address any critical skill gaps, and supplement and diversify the Southern Company system's talent pipeline.
The recruiting strategy also includes partnerships with professional associations and local communities to recruit mid-career talent. The addition of external hires augments the existing workforce to meet changing business needs, address any critical skill gaps, and supplement and enhance the Southern Company system's talent pipeline.
As of December 31, 2023, there were 72 municipally-owned electric distribution systems operating in the territory in which the traditional electric operating companies provide electric service at retail or wholesale. As of December 31, 2023, 48 municipally-owned electric distribution systems and one county-owned system received their requirements through MEAG Power.
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, 2023, Mississippi Power had a cogeneration agreement in effect with one of its industrial customers. Under the terms of this contract, Mississippi Power purchases any excess generation. During 2023, Mississippi Power did not make any such purchases.
As of December 31, 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.
Forward curves project prices will remain in the range of mid-to high- $3 per mmBtu, approaching $4 per mmBtu, 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 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 as well as government policies related to natural gas and energy, including infrastructure development, production, and exports.
Gas distribution operations, the largest segment of Southern Company Gas' business, operates, constructs, and maintains approximately 77,900 miles of natural gas pipelines and 14 storage facilities, with total capacity of 157 Bcf, to provide natural gas to residential, commercial, and industrial customers. Gas distribution operations serves approximately 4.4 million customers across four states.
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.
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.
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.
SCS, acting on behalf of the traditional electric operating companies and Southern Power Company, has agreements in place for the natural gas burn requirements of the Southern Company system. For 2024, SCS has contracted for 620 Bcf of natural gas supply under agreements with remaining terms up to 10 years.
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.
Competition Electric The electric utility industry in the U.S. 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 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 Southern Company system had approximately 28,100 employees on its payroll at December 31, 2023 comprised of the following: At December 31, 2023 (*) Alabama Power 6,200 Georgia Power 6,600 Mississippi Power 1,000 Southern Power 500 Southern Company Gas 4,800 SCS 4,200 Southern Nuclear 3,800 PowerSecure and other 1,000 Total Southern Company system 28,100 (*) Numbers are rounded to 100s.
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.
In 2024, the Southern Company system's construction program is expected to be apportioned approximately as follows: Southern Company system (a)(b) Alabama Power Georgia Power Mississippi Power (in billions) New generation $ 1.1 $ — $ 1.0 $ — Environmental compliance (c) 0.1 — 0.1 — Generation maintenance 1.3 0.5 0.7 0.1 Transmission 1.7 0.3 1.4 — Distribution 1.7 0.5 1.1 0.1 Nuclear fuel 0.3 0.1 0.2 — General plant 1.6 0.7 0.9 0.1 7.8 2.1 5.4 0.3 Southern Power (d) 0.3 Southern Company Gas (e) 1.8 Other subsidiaries 0.1 Total (a) $ 10.0 $ 2.1 $ 5.4 $ 0.3 (a) Totals may not add due to rounding.
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.
The traditional electric operating companies also anticipate continued expenditures associated with closure and monitoring of ash ponds and landfills in accordance with the CCR Rule and the related state rules, which are reflected in the applicable Registrants' ARO liabilities.
The traditional electric operating companies also anticipate continued expenditures associated with closure and monitoring of surface impoundments and landfills in accordance with the CCR Rule and the related state rules, which are reflected in the applicable Registrants' ARO liabilities.
As of December 31, 2023, PowerSouth owned generating units with more than 1,600 MWs of nameplate capacity, including an undivided 8.16% ownership interest in Alabama Power's Plant Miller Units 1 and 2.
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.
At December 31, 2023, Southern Power's generation fleet, which is owned in part with various partners, totaled 12,498 MWs of nameplate capacity in commercial operation (including 5,118 MWs of nameplate capacity owned by its subsidiaries). See "Traditional Electric Operating Companies" herein for additional information on the Southern Company power pool.
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.
I-7 Table of Contents Index to Financial Statements SCS, acting on behalf of the traditional electric operating companies, also has a contract with SEPA providing for the use of the traditional electric operating companies' facilities at government expense to deliver to certain cooperatives and municipalities, entitled by federal statute to preference in the purchase of power from SEPA, quantities of power equivalent to the amounts of power allocated to them by SEPA from certain U.S. government hydroelectric projects.
SCS, acting on behalf of the traditional electric operating companies, also has a contract with SEPA providing for the use of the traditional electric operating companies' facilities at government expense to deliver to certain cooperatives and municipalities, entitled by federal statute to preference in the purchase of power from SEPA, quantities of power equivalent to the amounts of power allocated to them by SEPA from certain U.S. government hydroelectric projects.
All Southern Company system employees are located within the United States. Part-time employees represent less than 1% of total employees. Southern Company system management values a diverse, equitable, and inclusive workforce. Southern Company's subsidiaries have policies, programs, and processes to help ensure that all groups are represented, included, and fairly treated across all job levels.
All Southern Company system employees are located within the United States. Part-time employees represent less than 1% of total employees. Southern Company system management values an inclusive and innovative workforce. Southern Company's subsidiaries have policies, programs, and processes to help ensure that all groups are included and fairly treated across all job levels.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs, which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 13.9% of Mississippi Power's total operating revenues in 2024.
Court of Appeals for the District of Columbia Circuit vacated certain FERC orders related to SEEM and remanded the proceeding to the FERC. The ultimate outcome of this matter cannot be determined at this time.
Court of Appeals for the D.C. Circuit vacated certain FERC orders related to SEEM and remanded the proceeding to the FERC. The ultimate outcome of this matter cannot be determined at this time.
Turnover rate, calculated as the percent of employees that terminated employment with the Southern Company system, including voluntary and involuntary terminations and retirements, divided by total employees, was 8.3%.
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%.
I-9 Table of Contents Index to Financial Statements Federal Power Act The traditional electric operating companies, Southern Power Company and certain of its generation subsidiaries, and SEGCO are all public utilities engaged in wholesale sales of energy in interstate commerce and, therefore, are subject to the rate, financial, and accounting jurisdiction of the FERC under the Federal Power Act.
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.
The original Harris Dam project license expired on November 30, 2023 and, on December 13, 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 first half of 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.
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.
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.
The Southern Company system supports the well-being of its employees through a comprehensive total rewards strategy with three measurable categories: physical, financial, and emotional well-being. The Southern Company system provides competitive salaries, annual incentive awards for nearly all employees, and health, welfare, and retirement benefits.
I-13 Table of Contents Index to Financial Statements The Southern Company system supports the well-being of its employees through a comprehensive total rewards strategy with three measurable categories: physical, financial, and emotional well-being. The Southern Company system provides competitive salaries, annual incentive awards for nearly all employees, and health, welfare, and retirement benefits.
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.
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.
These responsibilities also include protecting public health and safety, protecting the environment, protecting and safeguarding nuclear materials and nuclear power plants in the interest of national security, and assuring conformity with antitrust laws. I-10 Table of Contents Index to Financial Statements The NRC licenses for Georgia Power's Plant Hatch Units 1 and 2 expire in 2034 and 2038, respectively.
These responsibilities also include protecting public health and safety, protecting the environment, protecting and safeguarding nuclear materials and nuclear power plants in the interest of national security, and assuring conformity with antitrust laws. The NRC licenses for Georgia Power's Plant Hatch Units 1 and 2 expire in 2034 and 2038, respectively.
I-11 Table of Contents Index to Financial Statements In addition to natural gas cost recovery mechanisms, other cost recovery mechanisms and regulatory riders, which vary by utility, allow recovery of certain costs, such as those related to infrastructure replacement programs as well as environmental remediation, energy efficiency plans, and bad debts.
In addition to natural gas cost recovery mechanisms, other cost recovery mechanisms and regulatory riders, which vary by utility, allow recovery of certain costs, such as those related to infrastructure replacement programs as well as environmental remediation, energy efficiency plans, and bad debts.
In July 2022, the Georgia PSC approved Georgia Power's 2022 IRP, as modified by a stipulated agreement among Georgia Power, the staff of the Georgia PSC, and certain intervenors and as further modified by the Georgia PSC.
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.
Mississippi Power must also file an annual report on energy delivery improvements, the latest of which was filed in November 2023. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plan" in Item 8 herein for additional information.
Mississippi Power must also file an annual report on energy delivery improvements, the latest of which was filed in November 2024. See Note 2 to the financial statements under "Mississippi Power – Integrated Resource Plans" and " – Plant Daniel" in Item 8 herein for additional information.
For the year ended December 31, 2023, approximately 41% of contracted MWs were with AAA to A- or equivalent rated counterparties, 47% were with BBB+ to BBB- or equivalent rated counterparties, and 10% were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.
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.
I-3 Table of Contents Index to Financial Statements Construction Programs The subsidiary companies of Southern Company are engaged in continuous construction programs, including capital expenditures to accommodate existing and estimated future loads on their respective systems and to comply with environmental laws and regulations, as applicable.
Construction Programs The subsidiary companies of Southern Company are engaged in continuous construction programs, including capital expenditures to accommodate existing and estimated future loads on their respective systems and to comply with environmental laws and regulations, as applicable.
See Note 11 to the financial statements for additional information. At December 31, 2023, the average age of the Southern Company system employees was 44 and the average tenure with the Southern Company system was 14 years.
See Note 11 to the financial statements in Item 8 herein for additional information. At December 31, 2024, the average age of the Southern Company system employees was 44 and the average tenure with the Southern Company system was 14 years.
At December 31, 2023, Southern Power had eight tax equity partnership arrangements where the tax equity investors receive substantially all of the tax benefits from the facilities, including ITCs and PTCs. In addition, Southern Power holds controlling interests in non-tax equity partnerships with its ownership interests primarily ranging from 51% to 66%.
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%.
Southern Power's success in wholesale energy sales is influenced by various factors including reliability and availability of Southern Power's plants, availability of transmission to serve the demand, price, and Southern Power's ability to contain costs. I-8 Table of Contents Index to Financial Statements As of December 31, 2023, Alabama Power had cogeneration contracts in effect with seven industrial customers.
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.
In 2016, the FERC issued an order granting in part and denying in part Alabama Power's rehearing request. American Rivers and Alabama Rivers Alliance also filed multiple appeals of the FERC's 2013 order for the new 30-year license and, in 2018, the U.S.
In 2016, the FERC issued an order granting in part and denying in part Alabama Power's rehearing request. American Rivers and Alabama Rivers Alliance also filed multiple appeals of the FERC's 2013 order for the new 30-year license, and, in 2018, the U.S. Court of Appeals for the D.C. Circuit vacated the order and remanded the proceeding to the FERC.
Gas marketing services is comprised of SouthStar, which serves approximately 665,000 natural gas commodity customers, markets gas to residential, commercial, and industrial customers and offers energy-related products that provide natural gas price stability and utility bill management in competitive markets or markets that provide for customer choice.
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.
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.
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.
A majority of Southern Power's partnerships in renewable facilities allow for the sharing of cash distributions and tax benefits at differing percentages, with Southern Power being the controlling partner and thus consolidating the assets and operations of I-2 Table of Contents Index to Financial Statements the partnerships.
A majority of Southern Power's partnerships in renewable facilities allow for the sharing of cash distributions and tax benefits at differing percentages, with Southern Power being the controlling partner and thus consolidating the assets and operations of the partnerships.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information, including estimated expenditures for construction, environmental compliance, and closure and monitoring of ash ponds and landfills for the years 2025 through 2028.
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.
Under the terms of these contracts, Alabama Power purchases excess energy generated by such companies. During 2023, Alabama Power purchased approximately 113 million KWHs from such companies. The related costs were immaterial. As of December 31, 2023, Georgia Power had contracts in effect to purchase generation from 36 small IPPs.
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.
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.
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.
A serious injury is one that is life-threatening or life-changing (temporary or permanent) for the employee. Serious injury examples, as defined by applicable safety regulators, include fatalities, amputations, trauma to organs, certain bone fractures, certain soft tissue injuries, severe burns, and eye injuries. The Southern Company system also has longstanding relationships with labor unions.
Unfortunately, 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.
With the inclusion of investments associated with facilities under construction, as well as other capacity and energy contracts, Southern Power's average investment coverage ratio at December 31, 2023 was 97% through 2028 and 89% through 2033, with an average remaining contract duration of approximately 12 years.
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.
I-4 Table of Contents Index to Financial Statements Fuel Supply Electric The traditional electric operating companies' and SEGCO's supply of electricity is primarily fueled by natural gas and coal, as well as nuclear for Alabama Power and Georgia Power. Southern Power's supply of electricity is primarily fueled by natural gas.
Fuel Supply Electric The traditional electric operating companies' and SEGCO's supply of electricity is primarily fueled by natural gas and coal, as well as nuclear for Alabama Power and Georgia Power. Southern Power's supply of electricity is primarily fueled by natural gas.
Details of the natural gas distribution utilities at December 31, 2023 are as follows: Utility State Number of customers Approximate miles of pipe (in thousands) Nicor Gas Illinois 2,276 34.7 Atlanta Gas Light Georgia 1,714 35.6 Virginia Natural Gas Virginia 313 5.9 Chattanooga Gas Tennessee 71 1.7 Total 4,374 77.9 For information relating to the sources of revenue for Southern Company Gas, see Item 7 herein and Note 1 to the financial statements under "Revenues – Southern Company Gas" and Note 4 to the financial statements in Item 8 herein.
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.
In 2021, OPC, as an agent for co-licensees of the project, filed a notice of intent with the FERC to relicense the project. An application to relicense the project is expected to be filed with the FERC by December 31, 2024. See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein for additional information.
On December 6, 2024, OPC, as an agent for co-licensees of the project, filed an application with the FERC to relicense the project. See PROPERTIES – "Electric – Jointly-Owned Facilities" in Item 2 herein for additional information.
Government, by act of Congress, may take over the project or the FERC may relicense the project either to the original licensee or to a new licensee.
Upon or after the expiration of each license, the U.S. government, by act of Congress, may take over the project or the FERC may relicense the project either to the original licensee or to a new licensee.
Southern Company system management supports employee resource groups, diversity councils, mentoring programs, and inclusion teams to provide formal networks of colleagues that can help promote belonging, improve employee retention, and support development. At December 31, 2023, people of color and women represented 30% and 25%, respectively, of the Southern Company system's workforce.
Southern Company system management supports various employee-led groups and facilitates mentoring programs to provide formal and informal networks of colleagues that can help promote belonging, improve employee retention, and support development. At December 31, 2024, people of color and women represented 31% and 26%, respectively, of the Southern Company system's workforce.
Southern Company system management believes the safety of employees and customers is paramount. The Southern Company system seeks to meet or exceed applicable laws and regulations while continually improving its safety technologies and processes.
Additionally, Southern Company system management strives to deliver consistent needs-based training and solutions as workplace needs evolve. Southern Company system management believes the safety of employees and customers is paramount. The Southern Company system seeks to meet or exceed applicable laws and regulations while continually improving its safety technologies and processes.
During 2023, Georgia Power purchased 5.9 billion KWHs from such companies at a cost of $303 million. Georgia Power also has PPAs for electricity with seven cogeneration facilities. Payments are subject to reductions for failure to meet minimum capacity output. During 2023, Georgia Power purchased 349 million KWHs at a cost of $31 million from these facilities.
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.
Southern Company Gas purchases natural gas supplies in the open market by contracting with producers and marketers and, for Atlanta Gas Light and Chattanooga Gas, under asset management agreements approved by the applicable state regulatory agency.
Southern Company Gas purchases natural gas supplies in the open market by contracting with producers and marketers and, for Atlanta Gas Light and Chattanooga Gas, under asset management agreements approved by the applicable state regulatory agency. Southern Company Gas also contracts for transportation and storage services from interstate pipelines that are regulated by the FERC.
Court of Appeals for the District of Columbia Circuit vacated the order and remanded the proceeding to the FERC. Alabama Power continues to operate the Coosa River developments under annual licenses issued by the FERC. In 2021, Alabama Power filed an application with the FERC to relicense the Harris Dam project on the Tallapoosa River.
Alabama Power continues to operate the Coosa River developments under annual licenses issued by the FERC. In 2021, Alabama Power filed an application with the FERC to relicense the Harris Dam project on the Tallapoosa River.
These programs include continuous process improvements to put critical controls in place to prevent serious injuries, promote learning, and implement appropriate corrective actions.
These programs include continuous process improvements to put critical controls in place to prevent serious injuries, promote learning, and implement appropriate corrective actions. Southern Company's safety metrics include the serious injury rate and the number of fatalities.
Certified costs may be excluded from recovery only on the basis of fraud, concealment, failure to disclose a material fact, imprudence, or criminal misconduct.
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.
The NRC licenses for Plant Vogtle Units 1, 2, 3, and 4 expire in 2047, 2049, 2062, and 2063, respectively. See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for additional information on Plant Vogtle Units 3 and 4, including the projected in-service date for Unit 4.
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.
Southern Company system management is committed to developing talent and helping employees succeed by providing development opportunities along with purposeful people moves as part of individual development plans and succession planning processes.
Southern Company system management is committed to developing talent and helping employees succeed by providing development opportunities along with purposeful people moves as part of individual development plans and succession planning processes. The Southern Company system has multiple development programs, including programs targeted toward all employees, high potential employees, first-level managers, managers of managers, and executives.
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. Upon or after the expiration of each license, the U.S.
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.
The Southern Company system also partners with the IBEW to provide training programs to develop technical skills and career opportunities. At December 31, 2023, approximately 32% of Southern Company system employees were covered by agreements with unions, with agreements expiring between 2024 and 2029. I-14 Table of Contents Index to Financial Statements
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
I-12 Table of Contents Index to Financial Statements Human Capital Southern Company system management is committed to attracting, developing, and retaining a sustainable workforce and aims to foster a diverse, equitable, inclusive, and innovative culture. The Southern Company system's values – safety first, intentional inclusion, act with integrity, and superior performance – guide behavior.
Human Capital Southern Company system management is committed to attracting, developing, and retaining a sustainable workforce and aims to foster a culture of belonging where all employees feel valued. The Southern Company system's values – safety first, intentional inclusion, act with integrity, and superior performance – guide behavior.
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.
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.
In 2023, the Southern Company system had zero fatalities and a serious injury rate of 0.06, which represents the number of incidents per 100 employees (calculated by taking the number of serious injuries multiplied by 200,000 workhours and divided by the total employee workhours during the year).
The serious injury rate represents the number of incidents per 100 employees and is calculated by taking the number of serious injuries multiplied by 200,000 workhours and dividing by the total employee workhours during the year. In 2024, the Southern Company system had a serious injury rate of 0.05, among its lowest rate in the past five years.
I-6 Table of Contents Index to Financial Statements For information relating to KWH sales by customer classification for the traditional electric operating companies, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS in Item 7 herein.
(b) Totals may not add due to rounding. For information relating to KWH sales by customer classification for the traditional electric operating companies, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS in Item 7 herein.
Southern Nuclear has notified the NRC of its intent in the third quarter 2025 to seek to renew the plant's licenses for an additional 20 years (through 2054 and 2058 for Units 1 and 2, respectively). The NRC licenses for Alabama Power's Plant Farley Units 1 and 2 expire in 2037 and 2041, respectively.
Southern Nuclear has notified the NRC of its intent to seek to renew the plant's licenses for an additional 20 years (through 2054 and 2058 for Units 1 and 2, respectively), with a license renewal application projected to be submitted by the third quarter 2025.
Alabama Power and Georgia Power each have agreements with Southern Nuclear to operate the Southern Company system's existing nuclear plants, Plants Farley, Hatch, and Vogtle (Units 1, 2, and 3). In addition, Georgia Power has an agreement with Southern Nuclear to develop, license, construct, and operate Plant Vogtle Unit 4. See "Regulation – Nuclear Regulation" herein for additional information.
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.
See Note 2 to the financial statements under "Alabama Power – Rate CNP New Plant" in Item 8 herein for additional information. Georgia Power Triennially, Georgia Power must file an IRP with the Georgia PSC that specifies how it intends to meet the future electric service needs of its customers through a combination of demand-side and supply-side resources.
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.
Estimated costs for 2024 total $728 million for Southern Company, primarily consisting of $346 million for Alabama Power, $338 million for Georgia Power, and $24 million for Mississippi Power.
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.
Alabama Power and Georgia Power also have contracts with the United States, acting through the DOE, that provide for the permanent disposal of spent nuclear fuel.
Alabama Power and Georgia Power also have contracts with the United States, acting through the DOE, that provide for the permanent disposal of spent nuclear fuel. The DOE failed to begin disposing of spent fuel in 1998, as required by the contracts, and Alabama Power and Georgia Power have pursued legal remedies against the government for breach of contract.
See Note 2 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information. The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Construction Programs" in Item 7 herein for information regarding this project. The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors.
These estimated expenditures do not include potential compliance costs associated with any future regulation of CO 2 emissions from fossil fuel-fired electric generating units or the proposed ELG Supplemental Rule, or costs associated with closure and monitoring of ash ponds and landfills in accordance with the CCR Rule and the related state rules.
These estimated expenditures do not include compliance costs associated with the regulation of GHG emissions or costs associated with closure and monitoring of surface impoundments and landfills in accordance with the CCR Rule and the related state rules.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeGoodwill is not amortized, but is evaluated for impairment at least annually or more frequently if impairment indicators are present that would more likely than not reduce the fair value of a reporting unit below its carrying amount and long-lived assets are tested for impairment whenever events or circumstances indicate that an asset group's carrying amount may not be recoverable.
Biggest changeIn addition, Southern Company and its subsidiaries have long-lived assets recorded on their balance sheets. Long-lived assets are assessed for impairment whenever events or changes in circumstances indicate that the asset's carrying amount may not be recoverable. If impairment testing indicates that the carrying amount of the long-lived assets exceeds the respective fair value, an impairment charge would be recognized.
If a Subsidiary Registrant is unable to complete the development or construction of a project or decides to delay or cancel construction of a project, it may not be able to recover its investment in that project and may incur substantial cancellation payments under equipment purchase orders or construction contracts, as well as other costs associated with the closure and/or abandonment of the construction project.
If a Subsidiary Registrant is unable to complete the development or construction of a project or decides to delay or cancel construction of a project, it may not be able to recover its investment in that project and may incur substantial cancellation payments under equipment purchase orders or construction contracts, as well as other costs associated with the closure and/or abandonment of the project.
Both federal and state programs exist to influence how customers use energy, and several of the traditional electric operating companies and natural gas distribution utilities have state PSC or other applicable state regulatory agency mandates to promote energy efficiency.
Both federal and state programs exist to influence how customers use energy, and several of the traditional electric operating companies and the natural gas distribution utilities have state PSC or other applicable state regulatory agency mandates to promote energy efficiency.
The costs of providing pension and other postretirement benefit plans are dependent on a number of factors, such as the rates of return on plan assets, discount rates, the level of interest rates used to measure the required minimum funding levels of the plan, changes in actuarial assumptions, government regulations, and/or life expectancy, and the frequency and amount of the Southern Company system's required or voluntary contributions made to the plans.
The costs of providing pension and other postretirement benefit plans are dependent on a number of factors, such as the rates of return on plan assets, discount rates, the level of interest rates used to measure the required minimum funding levels of the plans, changes in actuarial assumptions, government regulations, and/or life expectancy, and the frequency and amount of the Southern Company system's required or voluntary contributions made to the plans.
There are many risks that could affect these matters, including operator error or failure of equipment or processes, accidents, operating limitations that may be imposed by environmental or other regulatory requirements or in connection with joint owner arrangements, labor disputes, physical attacks, fuel or material supply interruptions and/or shortages, transmission disruption or capacity constraints, including with respect to the Southern Company system's and third parties' transmission, storage, and transportation facilities, inability to maintain reliability consistent with customer expectations as the traditional electric operating companies and Southern Power transition their generating fleets in support of the Southern Company system's net zero goal, compliance with mandatory reliability standards, including mandatory cyber security standards, implementation of new technologies, technology system failures, cyber intrusions, environmental events, such as spills or releases, supply chain disruptions, inflation, and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, wars, political unrest, or other similar occurrences.
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.
Compliance costs may result from the installation of additional environmental controls, closure and monitoring of CCR facilities, unit retirements, operational changes, or changing fuel sources for certain existing units, as well as related upgrades to the Southern Company system's transmission and distribution (electric and natural gas) systems.
Compliance costs may result from the installation of additional environmental controls, closure and monitoring of CCR facilities, unit retirements and replacements, operational changes, or changing fuel sources for certain existing units, as well as related upgrades to the Southern Company system's transmission and distribution (electric and natural gas) systems.
Georgia Power's loan guarantee agreement with the DOE contains additional covenants, events of default, and mandatory prepayment events relating to the ongoing operation and/or construction of Plant Vogtle Units 3 and 4. Failure to meet those covenants beyond applicable grace periods could result in accelerated due dates and/or termination of the agreements.
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.
Further inflation, a continued elevated interest rate environment, or other economic factors may negatively affect operations and the timely recovery of costs. CONSTRUCTION RISKS The Registrants have incurred and may incur additional costs or delays in the construction of new plants or other facilities and may not be able to recover their investments.
Further inflation, a continued elevated interest rate environment, tariffs, or other economic factors may negatively affect operations and the timely recovery of costs. CONSTRUCTION RISKS The Registrants have incurred and may incur additional costs or delays in the construction of new plants or other facilities and may not be able to recover their investments.
The Registrants are subject to risks associated with a changing economic environment, customer behaviors, including increased energy conservation, and adoption patterns of technologies by the customers of the Subsidiary Registrants. The consumption and use of energy are linked to economic activity. This relationship is affected over time by changes in the economy, customer behaviors, and technologies.
The Registrants are subject to risks associated with a changing economic environment, customer behaviors, including increased energy conservation, and adoption patterns of technologies by customers. The consumption and use of energy are linked to economic activity. This relationship is affected over time by changes in the economy, customer behaviors, and technologies.
Damages, decommissioning, or other costs could exceed the amount of decommissioning trusts or external insurance coverage, including statutorily required nuclear incident insurance. The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear facilities.
Damages, decommissioning, or other costs could exceed the amount of decommissioning trusts or insurance coverage, including statutorily required nuclear incident insurance. The NRC has broad authority under federal law to impose licensing and safety-related requirements for the operation of nuclear facilities.
Such regulators, in a future 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.
Disruption in the supply and/or delivery of fuel as a result of matters such as transportation delays, weather, labor relations, natural disasters, cyber or physical attacks, other force majeure events, or environmental regulations affecting fuel suppliers could limit the ability of the traditional electric operating companies and Southern Power to operate certain facilities, which could result in higher fuel and operating costs, and the ability of Southern Company Gas to serve its natural gas customers.
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.
Nuclear facilities are subject to environmental, safety, health, operational, and financial risks such as: the potential harmful effects on the environment and human health and safety resulting from a release of radioactive materials; uncertainties with respect to the ability to dispose of spent nuclear fuel and the need for longer term on-site storage; uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of licensed lives and the ability to maintain and anticipate adequate capital reserves for decommissioning; limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations; and significant capital expenditures relating to maintenance, operation, security, and repair of these facilities.
Nuclear facilities are subject to environmental, safety, health, operational, and financial risks such as: the potential harmful effects on the environment and human health and safety resulting from a release of radioactive materials; uncertainties with respect to the ability to dispose of spent nuclear fuel and the need for longer term on-site storage; uncertainties with respect to the technological and financial aspects of decommissioning nuclear plants at the end of licensed lives or license extensions and the ability to maintain and anticipate adequate capital reserves for decommissioning; limitations on the amounts and types of insurance commercially available to cover losses that might arise in connection with nuclear operations; and significant capital expenditures relating to maintenance, operation, security, and repair of these facilities.
Broader use of distributed generation by retail energy customers may also result from customers' changing perceptions of the merits of utilizing existing generation technology or tax or other economic incentives.
Broader use of distributed generation by energy customers may also result from customers' changing perceptions of the merits of utilizing existing generation technology or tax or other economic incentives.
Because regulators may not permit the traditional electric operating companies or the natural gas distribution utilities to adjust rates to recover the costs of new generation and associated transmission assets and/or new pipelines and related infrastructure in a timely manner or at all, these subsidiaries may not be able to fully recover these costs or may have exposure to regulatory lag associated with the time between the incurrence of costs and the recovery in customers' rates.
Because regulators may not permit the traditional electric operating companies or the natural gas distribution utilities to adjust rates to recover the costs of new generation and associated transmission assets and/or new pipelines and related infrastructure in a timely manner or at all, these subsidiaries may not be able to fully recover these costs or may have exposure to regulatory lag associated with the time between the incurrence of costs and the recovery in regulated rates.
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, 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 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 and/or the traditional electric operating companies may not be able to extend or replace existing PPAs upon expiration, or they may be forced to market these assets at prices lower than originally intended. The traditional electric operating companies are currently obligated to supply power to retail customers, as well as wholesale customers under long-term PPAs.
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.
Various regulators have increasingly stressed that these attacks, including ransomware attacks, and attacks targeting utility systems and other critical infrastructure, are increasing in sophistication, magnitude, and frequency. In particular, certain actors, such as nation-state and state-sponsored actors, can deploy significant resources and employ sophisticated methods to plan and carry out attacks.
Various regulators have increasingly stressed that these attacks, including ransomware attacks, and attacks targeting utility systems and other critical infrastructure, are growing in sophistication, magnitude, and frequency. In particular, certain actors, such as nation-state and state-sponsored actors, can deploy significant resources and employ sophisticated methods to plan and carry out attacks.
Certain market disruptions, whether in the United States or globally, including an economic downturn or uncertainty, continued increases in interest rates, bankruptcy or financial distress at an unrelated utility company, financial institution, or sovereign entity, capital markets volatility and disruption, either nationally or internationally, changes in tax policy, volatility in market prices for electricity and natural gas, actual or threatened cyber or physical attacks on facilities within the Southern Company system or owned by unrelated utility companies, future impacts of pandemic health events, geopolitical instability, war or threat of war, or the overall health of the utility and financial institution industries, may increase the cost of borrowing or adversely affect the ability to raise capital through the issuance of securities or other borrowing arrangements or the ability to secure committed bank lending agreements used as back-up sources of capital.
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.
These transactions also involve risks, including that they may not result in an increase in income or provide adequate or expected cash flows or return on capital or other anticipated benefits; they may result in Southern Company or its subsidiaries entering into new or additional lines of business, which may have new or different business or operational risks; they may not be successfully integrated into the acquiring company's operations, internal control processes, and/or accounting systems; the due diligence conducted prior to a transaction may not uncover situations that could result in financial or legal exposure or may not appropriately evaluate the likelihood or quantify the exposure from identified risks; they may result in impairment or decreased earnings, revenues, or cash flow; they may result in credit rating downgrades for Southern Company or its subsidiaries; they may involve retained obligations in connection with transitional agreements or deferred payments related to dispositions that subject Southern Company or its subsidiaries to additional risk; Southern Company or the applicable subsidiary may not be able to achieve the expected financial benefits from the use of funds generated by any dispositions; expected benefits of a transaction may be dependent on the cooperation, performance, or credit risk of a counterparty; minority investments in growth companies may not result in a positive return on investment; or, for the traditional electric operating I-23 Table of Contents Index to Financial Statements companies and Southern Company Gas, costs associated with such investments that were expected to be recovered through regulated rates may not be recoverable.
These transactions also involve risks, including that they may not result in an increase in income or provide adequate or projected cash flows or return on capital or other anticipated benefits; they may result in Southern Company or its subsidiaries entering into new or additional lines of business, which may have new or different business or operational risks; they may not be successfully integrated into the acquiring company's operations, internal control processes, and/or accounting systems; the due diligence conducted prior to a transaction may not uncover situations that could result in financial or legal exposure or may not appropriately evaluate the likelihood or quantify the exposure from identified risks; they may result in impairment or decreased earnings, revenues, or cash flow; they may result in credit rating downgrades for Southern Company or its subsidiaries; they may involve retained obligations in connection with transitional agreements or deferred payments related to dispositions that subject Southern Company or its subsidiaries to additional risk; Southern Company or the applicable subsidiary may not be able to achieve the projected financial benefits from the use of funds generated by any dispositions; expected benefits of a transaction may be dependent on the cooperation, performance, or credit risk of a counterparty; minority investments in growth companies may not result in a positive return on investment; or, for the traditional electric operating companies and Southern Company Gas, costs associated with such investments that were expected to be recovered through regulated rates may not be recoverable.
The Southern Company system intends to continue its strategy of developing and constructing new electric generating facilities, expanding and improving the electric transmission and electric and natural gas distribution systems, and undertaking projects to comply with environmental laws and regulations.
The Southern Company system intends to continue its strategy of developing and constructing new electric generating facilities, expanding and improving the electric transmission and electric and natural gas distribution systems, and undertaking projects to maintain reliability and to comply with environmental laws and regulations.
However, the Registrants cannot guarantee that security efforts will have the maturity to detect or prevent breaches, operational incidents, or other breakdowns of technology systems and network infrastructure. This is especially true in the event the Registrants are targeted by a sophisticated attacker with significant resources, such as a nation-state or state-sponsored actor.
However, the Registrants cannot guarantee that security efforts will have the maturity to detect or prevent breaches, operational incidents, or other breakdowns of technology systems and network infrastructure, especially in the event the Registrants are targeted by a sophisticated attacker with significant resources, such as a nation-state or state-sponsored actor.
Forward curves project prices will remain in the range of mid-to high- $3 per mmBtu, approaching $4 per mmBtu, 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 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 as well as government policies related to natural gas and energy, including infrastructure development, production, and exports.
There can be no guarantee that the Southern Company system will achieve these goals. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Laws and Regulations – Greenhouse Gases" in Item 7 herein for additional information.
There is no guarantee that the Southern Company system will achieve these goals. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Laws and Regulations – Greenhouse Gases" in Item 7 herein for additional information.
If one or more rating agencies downgrade any Registrant, Southern Company Gas Capital, or Nicor Gas, borrowing costs likely would increase, including potential automatic increases in interest rates or fees under applicable term loans and credit facilities, the pool of investors and funding sources would likely decrease, and, particularly for any downgrade to below investment grade, significant collateral requirements may be triggered in a number of contracts.
If any rating agency downgrades any Registrant, Southern Company Gas Capital, or Nicor Gas, borrowing costs likely would increase, including potential automatic increases in interest rates or fees under applicable term loans and credit facilities, the pool of investors and funding sources would likely decrease, and, particularly for any downgrade to below investment grade, significant collateral requirements may be triggered in a number of contracts.
These disruptions and shortages could adversely impact business operations. The constraints in the supply chain also could restrict availability and delay construction, maintenance, or repair of items needed to support normal operations or to continue planned capital investments. Supply chain disruptions have contributed to higher prices of components, materials, equipment, and other needed commodities, and these inflationary increases may continue.
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.
Also, existing facilities of the Subsidiary Registrants require ongoing expenditures, including those to meet AROs and other environmental standards and goals.
Also, existing facilities of the Subsidiary Registrants require ongoing expenditures, including those to maintain reliability and meet AROs and other environmental standards and goals.
Additionally, Southern Company Gas has made significant investments in existing pipelines, most of which are operated by third parties. If one of these agents fails to perform in a proper manner, the value of the investment could decline and Southern Company Gas could lose part or all of its investment.
Additionally, Southern Company Gas continues to make significant investments in existing pipelines, most of which are operated by third parties. If one of these agents fails to perform in a proper manner, the value of the investment could decline and Southern Company Gas could lose part or all of its investment.
Southern Power is currently obligated to supply power to wholesale customers under long-term PPAs. At peak times, the demand for power required to meet this obligation could exceed the Southern Company system's available generation capacity.
Southern Power is currently obligated to supply power to wholesale customers under long-term PPAs. At peak times, the demand for power required to meet obligations could exceed the Southern Company system's available generation capacity.
Completion of these types of projects without delays or significant cost overruns is subject to substantial risks that have occurred or may occur, including labor costs, availability, and productivity; challenges with the management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; the impacts of inflation; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems or any remediation related thereto; design and other licensing-based compliance matters; challenges with start-up activities, including major equipment failure, or system integration; and/or operational performance; challenges related to pandemic health events; continued public and policymaker support for projects; environmental and geological conditions; delays or increased costs to interconnect facilities to transmission grids; and increased financing costs as a result of changes in interest rates or as a result of project delays.
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.
Changes in regulation, the imposition of additional regulations, changes in application of existing regulations and in enforcement practices of regulators, or penalties imposed for noncompliance with existing laws or regulations could influence the operating environment of the Southern Company system and may result in substantial costs.
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.
If a Registrant is unable to replace expiring PPAs with an acceptable new revenue contract, it may be required to sell the power produced by the facility at wholesale prices and be exposed to market fluctuations and risks, or the affected site may temporarily or permanently cease operations.
If a Registrant is unable to replace expiring PPAs with an acceptable new revenue contract, it may be required to sell the power produced by the facility at wholesale prices and be exposed to market fluctuations and risks, or the affected site may temporarily or permanently cease operations, which may result in impairment charges.
Because regulators may not permit the traditional electric operating companies I-24 Table of Contents Index to Financial Statements to pass all of these purchase or construction costs on to their customers, the traditional electric operating companies may not be able to recover some or all of these costs or may have exposure to regulatory lag associated with the time between the incurrence of costs of purchased or constructed capacity and the traditional electric operating companies' recovery in customers' rates.
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.
In addition, the failure to hire and adequately obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect Southern Company and its subsidiaries' ability to manage and operate their businesses.
In addition, the failure to hire and adequately obtain replacement employees, including the ability to transfer significant internal historical knowledge and expertise to the new employees, or the future availability and cost of contract labor may adversely affect the Southern Company system's ability to manage and operate its business.
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.
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.
Customers could also voluntarily reduce their consumption of energy in response to decreases in their disposable income, increases in energy prices, or individual conservation efforts. I-22 Table of Contents Index to Financial Statements In addition, the adoption of technology by customers can have both positive and negative impacts on sales. Many new technologies utilize less energy than in the past.
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.
See Notes 1, 7, 9, and 15 to the financial statements in Item 8 herein for information regarding certain impairment charges at Southern Company and Southern Company Gas.
See Notes 1 and 15 to the financial statements in Item 8 herein for information regarding certain impairment charges at Southern Company, Alabama Power, and Southern Company Gas.
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 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.
Alabama Power owns, and contracts for the operation of, two nuclear units and Georgia Power holds undivided interests in, and contracts for the operation of, five existing nuclear units.
Alabama Power owns, and contracts for the operation of, two nuclear units and Georgia Power holds undivided interests in, and contracts for the operation of, six nuclear units.
Any rate recovery by the traditional electric operating companies or the natural gas distribution utilities 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 expense will be recoverable through the applicable regulatory process.
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.
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.
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.
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.
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.
Accordingly, the Registrants cannot provide any assurance that information security incidents will not have a material adverse effect in the future. I-18 Table of Contents Index to Financial Statements In addition, in the ordinary course of business, Southern Company and its subsidiaries collect and retain sensitive information, including personally identifiable information about customers, employees, and stockholders, and other confidential information.
Accordingly, the Registrants cannot provide any assurance that information security incidents will not have a material adverse effect in the future. In addition, in the ordinary course of business, Southern Company and its subsidiaries collect and retain sensitive information, including personally identifiable information about customers, employees, and stockholders, and other confidential information.
The traditional electric operating companies also are in the process of closing ash ponds to comply with the CCR Rule and, where applicable, state CCR rules.
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.
Despite the implementation of robust security measures, all assets are potentially vulnerable to disability, failures, or unauthorized access due to human error, natural disasters, technological failure, or internal or external physical attacks.
Despite the implementation of robust security measures, all assets are potentially vulnerable to disability, failure, or unauthorized access due to human error, natural disaster, technological failure, or internal or external physical attack.
The Registrants do not fully assess the security maturity of all third-party service providers and such third-party service providers could fail to establish adequate risk management and information security measures with respect to their systems and/or could fail to timely notify the Registrants of an information security incident.
The Registrants cannot fully assess the security maturity of all third-party vendors and such vendors could fail to establish adequate risk management and information security measures with respect to their systems and/or could fail to timely notify the Registrants of an information security incident.
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.
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, a state PSC or legislature may modify certain aspects of the traditional electric operating companies' business as a result of these advances in technology, which may provide for further competition from these alternative sources of generation.
Additionally, state PSCs or legislatures may modify certain aspects of the traditional electric operating companies' businesses as a result of these advances in technology, which may provide for further competition from these alternative sources of generation.
These price movements may be short-lived, but the impacts can be pronounced. Natural gas supplies, primarily from the Permian and Haynesville regions, have continued to grow; however, this growth has been accompanied by LNG export growth.
These price movements may be short-lived, but the impacts can be pronounced. Natural gas supplies have continued to grow; however, this growth has been accompanied by LNG export growth.
Any credit rating downgrades could require altering the mix of debt financing currently used and could require the issuance of secured indebtedness and/or indebtedness with additional restrictive covenants binding the applicable company. Uncertainty in demand for energy can result in lower earnings or higher costs.
Any credit rating downgrade could require altering the mix of debt financing currently used and could require the issuance of secured indebtedness (which would rank senior to unsecured indebtedness) and/or indebtedness with additional restrictive covenants binding the applicable company. Uncertainty in demand for energy can result in lower earnings or higher costs.
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.
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.
The ultimate impact will depend on various factors, such as state adoption and implementation of requirements, natural gas prices, the development, deployment, and advancement of relevant energy technologies, the ability to recover costs through existing ratemaking provisions, and the outcome of pending and/or future legal challenges. The SEC has proposed new rules relating to the disclosure of climate-related matters.
The ultimate impact will depend on various factors, such as state adoption and implementation of requirements, natural gas prices, the development, deployment, and advancement of relevant energy technologies, the ability to recover costs through existing ratemaking provisions, and the outcome of pending and/or future legal challenges.
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 business or 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 I-18 Table of Contents Index to Financial Statements their operations from these attacks.
The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio including I-16 Table of Contents Index to Financial Statements low-carbon and carbon-free resources and energy efficiency resources; customer demand for carbon-free energy; continuing to transition the Southern Company system's generating fleet and making the necessary related investments in transmission and distribution systems; continuing research and development with a particular focus on technologies that lower GHG emissions, including methods of removing carbon from the atmosphere; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.
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.
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.
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.
Transmission planning and the resulting grid improvements could be impacted by FERC policy changes as well as North American Electric Reliability Corporation planning standard changes. The IRA, among other items, imposes a 15% corporate minimum tax on book income and is subject to the issuance of additional guidance by the U.S. Treasury Department and the IRS.
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.
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.
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.
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.
Acquisitions, dispositions, or other strategic ventures or investments may not result in anticipated benefits and may present risks, including risks not originally contemplated. Southern Company and its subsidiaries have made significant acquisitions, dispositions, and investments in the past and may continue to do so. Such actions cannot be assured to be completed or beneficial to Southern Company or its subsidiaries.
Acquisitions, dispositions, or other strategic ventures or investments may not result in anticipated benefits and may present risks, including risks not originally contemplated. Southern Company and its subsidiaries have made significant acquisitions, dispositions, and investments in the past and may continue to do so, including through SNG's pipeline development projects.
For example, Nicor Gas' regulator, the Illinois Commission, has ordered a "future of natural gas" proceeding to explore the recommendations involved with decarbonization of the gas distribution system in Illinois.
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.
See Notes 13 and 14 to the financial statements in Item 8 herein for additional information. Future impairments of goodwill or long-lived assets could have a material adverse effect on the Registrants' results of operations.
See Notes 13 and 14 to the financial statements in Item 8 herein for additional information. Future impairments of goodwill or long-lived assets could have a material adverse effect on the Registrants' results of operations. Goodwill is evaluated for impairment annually or on an interim basis if changes in circumstances or the occurrence of events suggest impairment exists.
These expenditures also include those to settle AROs and meet environmental standards and goals. The traditional electric operating companies and Southern Power are in the process of constructing new generating facilities and/or adding environmental and other modifications to certain existing generating facilities and Southern Company Gas is replacing certain pipe in its natural gas distribution system.
The traditional electric operating companies and Southern Power are in the process of constructing new generating facilities and/or adding environmental and other modifications to certain existing generating facilities and Southern Company Gas is replacing certain pipe in its natural gas distribution system and is involved in new gas pipeline construction projects.
Additionally, electric generation, transmission, and distribution infrastructure and natural gas pipelines and underground natural gas storage facilities are subject to various state and other regulatory requirements. Failure to comply with these requirements could result in substantial monetary penalties. Physical attacks, both threatened and actual, could impact the ability of the Subsidiary Registrants to operate.
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.
Furthermore, construction delays associated with renewable projects could result in the loss of otherwise available tax credits and incentives. Even if a construction project (including a joint venture construction project) is completed, the total costs may be higher than estimated or deemed imprudent and may be disallowed or otherwise not recoverable through regulated rates, if applicable.
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.
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.
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.
The use of derivative contracts by Southern Company and its subsidiaries in the normal course of business could result in financial losses that negatively impact the net income of the Registrants or in reported net income volatility.
Further, the insurance policies may not cover all of the potential exposures or the actual amount of loss incurred. The use of derivative contracts by Southern Company and its subsidiaries in the normal course of business could result in financial losses that negatively impact the net income of the Registrants or in reported net income volatility.
Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately 19% of Southern Power's total revenues for the year ended December 31, 2023. The traditional electric operating companies have entered into PPAs with non-affiliated parties for the sale of generating capacity.
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.
Because of the critical nature of the infrastructure and the technology systems' inherent vulnerability to disability or failures due to hacking, viruses, denial of service, ransomware, acts of war or terrorism, or other types of data security breaches, the Registrants face a heightened risk of cyberattack. Remote working arrangements also increase the Registrants' data security risks.
Because of the critical nature of the infrastructure and the technology systems' inherent vulnerability to disability or failure due to hacking, virus, denial of service, ransomware, act of war or terrorism, or other type of data security breach, the Registrants face a heightened risk of cyberattack.
Achievement of these goals is dependent on many factors, including 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, 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.
Any cyber breach or theft, damage, or improper disclosure of sensitive electronic data may also subject the affected Registrant to penalties and claims from regulators or other third parties. Insurance may not be adequate to cover any associated losses.
Any cyber breach or theft, damage, or improper disclosure of sensitive electronic data may also subject the affected Registrant to penalties and claims from regulators or other third parties. Any violations of applicable laws and regulations could lead to material losses, both financial and reputational.
I-20 Table of Contents Index to Financial Statements Supply chain disruptions and inflation could negatively impact operations. The Southern Company system's operations and business plans depend on the global supply chain to procure equipment, materials, and other resources.
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.
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 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.
These volatile weather events may result in unexpected increases in customer load, requiring procurement of additional power at wholesale prices, or create other grid reliability issues.
Further, severe drought conditions can reduce the availability of water and restrict or prevent the operation of certain generating facilities. These volatile weather events may result in unexpected increases in customer load, requiring procurement of additional power at wholesale prices, or create other grid reliability issues.
The Registrants are subject to risks associated with their ability to obtain adequate insurance at acceptable costs. The financial condition of some insurance companies, actual or threatened physical or cyber attacks, natural disasters, and an increased focus on climate issues, among other things, could have disruptive effects on insurance markets.
The financial condition of some insurance companies, actual or threatened physical or cyber attacks, natural disasters, and an increased focus on climate issues, among other things, could have disruptive effects on insurance markets. The availability of insurance may decrease, and the insurance that the Registrants are able to obtain may have higher deductibles, higher premiums, and more restrictive policy terms.
See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein for information regarding Plant Vogtle Units 3 and 4. Once facilities become operational, ongoing capital expenditures are required to maintain safe and reliable levels of operation. Significant portions of the traditional electric operating companies' existing facilities were constructed many years ago.
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.
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 and wildfires. Further, severe drought conditions can reduce the availability of water and restrict or prevent the operation of certain generating facilities.
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 cost estimates for AROs related to the disposal of CCR are based on information using various assumptions I-15 Table of Contents Index to Financial Statements related to closure and post-closure costs, timing of future cash outlays, inflation and discount rates, and the potential compliance methods.
The cost estimates for AROs related to the disposal of CCR are based on information using various assumptions related to closure and post-closure costs, timing of future cash outlays, inflation and discount rates, and the potential compliance methods. The traditional electric operating companies will continue to periodically update their ARO cost estimates and those updates could be material.
Additionally, the cost and operational consequences of implementing, maintaining, and enhancing system protection measures are significant, and they could materially increase to address ever changing intense, complex, and sophisticated cyber risks.
Insurance may not be adequate to cover any associated losses, and there is no assurance that such losses would be recovered through customer rates. Additionally, the cost and operational consequences of implementing, maintaining, and enhancing system protection measures are significant, and they could materially increase to address ever changing intense, complex, and sophisticated cyber risks.
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.
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.
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.
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.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeHaving 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 I-26 Table of Contents Index to Financial Statements includes directors with an understanding of cyber issues.
Biggest changeHaving 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.
In addition, a security awareness program for the Southern I-27 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 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.
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 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.
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I-29 Table of Contents Index to Financial Statements

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-29 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Cogeneration Lowndes County Burkeville, AL 104,800 Theodore Theodore, AL 236,418 Washington County Washington County, AL 123,428 Total Cogeneration 464,646 Solar Anniston Army Depot Dale County, AL 7,380 Fort Rucker Calhoun County, AL 10,560 Total Solar 17,940 Total Alabama Power Generating Capacity 12,942,377 Georgia Power Natural Gas Combined Cycle: McDonough-Atkinson Units 4 through 6 Atlanta, GA 2,520,000 McIntosh Units 10 and 11 Effingham County, GA 1,318,920 Combustion Turbine: McDonough Unit 3 Atlanta, GA 78,800 McIntosh Units 1 through 8 Effingham County, GA 640,000 McManus Brunswick, GA 481,700 Robins Warner Robins, GA 158,400 Wilson Augusta, GA 354,100 Steam: Yates Newnan, GA 700,000 Total Natural Gas 6,251,920 Coal Bowen Cartersville, GA 3,160,000 Scherer (8.4% of Units 1 and 2 and 75% of Unit 3) Macon, GA 750,924 Total Coal 3,910,924 Nuclear Hatch (50.1%) Baxley, GA 899,612 Vogtle Units 1 through 3 (45.7%) Augusta, GA 1,613,667 Total Nuclear 2,513,279 Hydro Bartletts Ferry Columbus, GA 173,000 Burton Clayton, GA 8,100 Flint River Albany, GA 5,400 Goat Rock Columbus, GA 40,500 Lloyd Shoals Jackson, GA 18,000 Morgan Falls Atlanta, GA 16,800 Nacoochee Lakemont, GA 4,800 North Highlands Columbus, GA 29,600 Oliver Dam Columbus, GA 60,000 Rocky Mountain (25.4%) Rome, GA 229,362 (b) Sinclair Dam Milledgeville, GA 45,000 I-30 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Tallulah Falls Clayton, GA 72,000 Terrora Clayton, GA 20,800 Tugalo Clayton, GA 45,000 Wallace Dam Eatonton, GA 321,300 Yonah Toccoa, GA 22,500 Total Hydro 1,112,162 Solar Fort Benning Columbus, GA 30,005 Fort Gordon Augusta, GA 30,000 Fort Stewart Fort Stewart, GA 30,000 Fort Valley Fort Valley, GA 10,800 Kings Bay Camden County, GA 30,161 Marine Corps Logistics Base Albany, GA 31,161 Moody Air Force Base Valdosta, GA 49,500 Robins Air Force Base Warner Robins, GA 128,000 8 Other Plants Various Georgia locations 18,479 Total Solar 358,106 Total Georgia Power Generating Capacity 14,146,391 Mississippi Power Natural Gas Combined Cycle: Daniel Pascagoula, MS 1,070,424 Ratcliffe Kemper County, MS 769,898 Combustion Turbine: Sweatt Meridian, MS 39,400 Watson Gulfport, MS 39,360 Steam: Greene County Units 1 and 2 (40%) Demopolis, AL 200,000 Watson Gulfport, MS 750,000 Total Natural Gas 2,869,082 Coal Daniel (50%) Pascagoula, MS 500,000 Cogeneration Chevron Cogenerating Station Pascagoula, MS 147,292 (c) Solar Walnut Grove Walnut Grove, MS 1,500 Total Mississippi Power Generating Capacity 3,517,874 I-31 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Southern Power Natural Gas Combined Cycle: Franklin Smiths, AL 1,857,820 Harris Autaugaville, AL 1,318,920 Rowan Unit 4 Salisbury, NC 530,550 Wansley Units 6 and 7 Carrollton, GA 1,073,000 Combustion Turbine: Addison Thomaston, GA 668,800 Cleveland Cleveland County, NC 720,000 Dahlberg Jackson County, GA 756,000 Rowan Units 1 through 3 Salisbury, NC 455,250 Total Natural Gas 7,380,340 Wind Beech Ridge II Greenbrier County, WV 56,200 Bethel Castro County, TX 276,000 Cactus Flats Concho County, TX 148,350 Deuel Harvest Deuel County, SD 301,100 Glass Sands Murray County, OK 118,300 Grant Plains Grant County, OK 147,200 Grant Wind Grant County, OK 151,800 Kay Wind Kay County, OK 299,000 Passadumkeag Penobscot County, ME 42,900 Reading Osage & Lyon Counties, KS 200,100 Salt Fork Donley & Gray Counties, TX 174,000 Skookumchuck Lewis & Thurston Counties, WA 136,800 Tyler Bluff Cooke County, TX 125,580 Wake Wind Crosby & Floyd Counties, TX 257,250 Wildhorse Mountain Pushmataha County, OK 100,000 Total Wind 2,534,580 (d) Solar Adobe Kern County, CA 20,000 Apex North Las Vegas, NV 20,000 Boulder I Clark County, NV 100,000 Butler Taylor County, GA 104,000 Butler Solar Farm Taylor County, GA 22,000 Calipatria Imperial County, CA 20,000 Campo Verde Imperial County, CA 147,420 Cimarron Colfax County, NM 30,640 Decatur County Decatur County, GA 20,000 Decatur Parkway Decatur County, GA 84,000 Desert Stateline San Bernadino County, CA 299,990 East Pecos Pecos County, TX 120,000 Garland Kern County, CA 205,290 Gaskell West I Kern County, CA 20,000 Granville Granville County, NC 2,500 Henrietta Kings County, CA 102,000 Imperial Valley Imperial County, CA 163,200 Lamesa Dawson County, TX 102,000 Lost Hills-Blackwell Kern County, CA 32,000 I-32 Table of Contents Index to Financial Statements Company/Facility Type (a) /Facility Name/ Ownership Percentage Location Nameplate Capacity (KWs) Macho Springs Luna County, NM 55,000 Morelos del Sol Kern County, CA 15,000 North Star Fresno County, CA 61,600 Pawpaw Taylor County, GA 30,480 Roserock Pecos County, TX 160,000 Rutherford Rutherford County, NC 74,800 Sandhills Taylor County, GA 148,000 Spectrum Clark County, NV 30,240 Tranquillity Fresno County, CA 205,300 Total Solar 2,395,460 (e) Battery Storage Garland Kern County, CA 88,000 (f) Tranquillity Fresno County, CA 72,000 (f) Total Battery Storage 160,000 Fuel Cell Red Lion and Brookside New Castle and Newark, DE 27,500 (g) Total Southern Power Generating Capacity 12,497,880 SEGCO Gaston Units 1 through 4 (Natural Gas-Steam) Wilsonville, AL 1,000,000 Gaston (Natural Gas-Combustion Turbine) Wilsonville, AL 19,680 Total SEGCO Generating Capacity 1,019,680 (h) Southern Company System Natural Gas 22,480,446 Coal 8,523,212 Nuclear 4,233,279 Hydro 2,780,241 Solar 2,773,006 Wind 2,534,580 Cogeneration 611,938 Battery Storage 160,000 Fuel Cell 27,500 Total Southern Company System Generating Capacity 44,124,202 (a) Represents the primary fuel source.
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.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein and Note 2 to the financial statements under "Alabama Power – Environmental Accounting Order," "Georgia Power – Integrated Resource Plans," and "Mississippi Power – Integrated Resource Plan" in Item 8 herein for information regarding plans to retire or convert to natural gas certain coal-fired generating capacity included in the table above.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 herein and Note 2 to the financial statements under "Alabama Power – Environmental Accounting Order," "Georgia Power – Integrated Resource Plans," and "Mississippi Power – Integrated Resource Plans" in Item 8 herein for information regarding plans to retire or convert to natural gas certain coal-fired generating capacity included in the table above.
The percentages of ownership of the total plant or facility are as follows: Percentage Ownership Total Capacity Alabama Power Power South Georgia Power Mississippi Power OPC MEAG Power Dalton FP&L (MWs) Plant Miller Units 1 and 2 1,320 91.8 % 8.2 % — % — % — % — % — % — % Plant Hatch 1,796 — — 50.1 — 30.0 17.7 2.2 — Plant Vogtle Units 1 through 3 3,531 — — 45.7 — 30.0 22.7 1.6 — Plant Scherer Units 1 and 2 1,636 — — 8.4 — 60.0 30.2 1.4 — Plant Scherer Unit 3 818 — — 75.0 — — — — 25.0 Rocky Mountain 903 — — 25.4 — 74.6 — — — Plant Daniel Units 1 and 2 1,000 — — — 50.0 — — — 50.0 I-34 Table of Contents Index to Financial Statements Alabama Power, Georgia Power, and Mississippi Power have contracted to operate and maintain the respective units in which each has an interest (other than Rocky Mountain) as agent for the joint owners.
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.
Southern Power is the controlling partner in a tax equity partnership owning Gaskell West I and also owns 100% of Roserock. All of these entities are consolidated subsidiaries of Southern Power and the capacity shown in the table is 100% of the nameplate capacity for the respective facility.
Southern Power is the controlling partner in a tax equity partnership owning Gaskell West I and also owns 100% of Roserock and South Cheyenne. 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.
Item 2. PROPERTIES Electric At December 31, 2023, the traditional electric operating companies, Southern Power, and SEGCO owned and/or operated the generating facilities listed in the table below. The traditional electric operating companies have certain jointly-owned generating stations.
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.
In addition, Georgia Power has commitments, in the form of capacity purchases totaling $39 million, regarding a portion of a 5% interest in the original cost of Plant Vogtle Units 1 and 2 owned by MEAG Power that are in effect until the later of the retirement of the plant or the latest stated maturity date of MEAG Power's bonds issued to finance such ownership interest.
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.
These systems consist primarily of distribution and transmission mains, compressor stations, peak shaving/storage plants, service lines, meters, and regulators. At December 31, 2023, Southern Company Gas' gas distribution operations segment owned approximately 77,900 miles of underground distribution and transmission mains, which are located on easements or rights-of-way that generally provide for perpetual use.
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.
In July 2022, the co-owners executed a revised operating agreement. The dispatch procedures in the revised operating agreement for the two jointly-owned coal units at Plant Daniel resulted in Mississippi Power designating one of the two units as primary and the other as secondary in lieu of each company separately owning 100% of a single generating unit.
The dispatch procedures in the revised operating agreement for the two jointly-owned coal units at Plant Daniel resulted in Mississippi Power designating one of the two units as primary and the other as secondary in lieu of each company separately owning 100% of a single generating unit.
The LNG plants and propane storage facility are used by Southern Company Gas' gas distribution operations segment to supplement natural gas supply during peak usage periods. I-35 Table of Contents Index to Financial Statements All Other In September 2022, certain affiliates of Southern Company Gas entered into agreements to sell two natural gas storage facilities located in California and Texas.
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.
I-33 Table of Contents Index to Financial Statements (f) Southern Power is the controlling partner in a tax equity partnership owning the Garland and Tranquillity battery energy storage facilities. Additionally, the noncontrolling interests in Southern Power's remaining equity are owned by two other partners and the facilities are indirect subsidiaries of SP Solar.
(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.
The sale of the Texas facility was completed in November 2022 and the sale of the California facility was completed on September 22, 2023. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for additional information.
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.
(e) Southern Power owns a 67% equity interest in SP Solar (a limited partnership indirectly owning all of Southern Power's solar facilities, except the Gaskell West I and Roserock solar facilities).
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).
The reserve margin for the traditional electric operating companies, Southern Power Company, and SEGCO in 2023 was 19%. Jointly-Owned Facilities Alabama Power, Georgia Power, and Mississippi Power at December 31, 2023 had undivided interests in certain generating plants and other related facilities with non-affiliated parties.
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.
See Note 3 to the financial statements under "Other Matters – Mississippi Power – Kemper County Energy Facility" in Item 8 herein for additional information. In conjunction with Southern Company's 2019 sale of Gulf Power, Mississippi Power and NextEra Energy agreed to negotiate a mutually acceptable revised operating agreement for Plant Daniel.
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.
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 79-mile length of 500-kilovolt transmission line which is leased to Entergy Gulf States Louisiana, LLC. The line extends from Plant Daniel to the Louisiana state line.
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.
See Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein.
See Note 3 to the financial statements under "Commitments" 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. See Notes 2 and 3 under "Mississippi Power – Integrated Resource Plan" and "Other Matters – Mississippi Power – Plant Daniel," respectively, in Item 8 herein for additional information on Plant Daniel.
Mississippi Power did not exercise an option to purchase its co-owner's ownership interest for $1 on January 15, 2024. 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.
Removed
Entergy Gulf States Louisiana, LLC is paying a use fee covering all expenses and the amortization of the capitalized costs through the expiration of the agreement between the parties on May 31, 2024. At December 31, 2023, the unamortized portion was approximately $1 million. Mississippi Power owns a lignite mine that was intended to provide fuel for the Kemper IGCC.
Added
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.
Removed
In 2023, the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was 36,919,000 KWs and occurred on August 14, 2023. The all-time maximum demand of 37,035,000 KWs occurred on June 15, 2022. These amounts exclude demand served by capacity retained by MEAG Power, OPC, and SEPA.
Removed
See Note 3 to the financial statements under "Commitments" in Item 8 herein for additional information. Construction continues on Plant Vogtle Units 3 and 4, which are jointly owned by the Vogtle Owners (with each owner currently holding the same undivided ownership interest as shown in the table above with respect to Plant Vogtle Units 1 and 2).

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

16 edited+1 added−0 removed3 unchanged
Biggest changeChairman of Southern Power since February 2021 and Executive Vice President of SCS, Chief Executive Officer of Southern Power, and President and Chief Executive Officer of Southern PowerSecure Holdings, Inc. and Southern Holdings since July 2020. Previously served as Executive Vice President, External Affairs of Georgia Power from May 2015 to June 2020. Martin B.
Biggest changeChairman, 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.
Previously served as Executive Vice President, Chief Financial Officer, and Treasurer of Georgia Power from January 2021 to September 2021, and Executive Vice President and Chief Financial Officer of Southern Company Gas from January 2019 to January 2021. Bryan D. Anderson Executive Vice President Age 57 First elected in 2020.
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.
Anthony L. Wilson Chairman, President, and Chief Executive Officer of Mississippi Power Age 59 First elected in 2015. President of Mississippi Power since October 2015 and Chief Executive Officer and Director since January 2016. Chairman of Mississippi Power's Board of Directors since August 2016.
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 4. MINE SAFETY DISCLOSURES Not applicable. I-36 Table of Contents Index to Financial Statements INFORMATION ABOUT OUR EXECUTIVE OFFICERS – SOUTHERN COMPANY (Identification of executive officers of Southern Company is inserted in Part I in accordance with Regulation S-K, Item 401) The ages of the officers set forth below are as of December 31, 2023. Christopher C.
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.
Womack Chairman, President, and Chief Executive Officer Age 65 First elected in 2008. President since March 2023, Chief Executive Officer since May 2023, and Chairman since December 2023.
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.
I-38 Table of Contents Index to Financial Statements PART II
I-39 Table of Contents Index to Financial Statements PART II
Executive Vice President and President of External Affairs since January 2021. Executive Vice President of SCS since November 2020. Previously served as Senior Vice President of SCS with responsibility for governmental affairs from January 2015 to November 2020. Stanley W. Connally, Jr. Executive Vice President Age 54 First elected in 2012. Executive Vice President since April 2021.
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.
Sterling A. Spainhour Executive Vice President and Chief Legal Officer Age 55 First elected in 2023. Executive Vice President and Chief Legal Officer since April 2023.
Spainhour Executive Vice President and Chief Legal Officer Age 56 First elected in 2023. Executive Vice President and Chief Legal Officer since April 2023.
Tucker Executive Vice President and Chief Financial Officer Age 53 First elected in 2021. Executive Vice President and Chief Financial Officer since September 2021.
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.
Chairman, President, and Chief Executive Officer of SCS since April 2021. Previously served as Executive Vice President for Operations of SCS from June 2018 to April 2021. Christopher Cummiskey Executive Vice President Age 49 First elected in 2021. Executive Vice President since January 2021.
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.
Kerr II Chairman, President, and Chief Executive Officer of Southern Company Gas Age 59 First elected in 2014. Chairman, President, and Chief Executive Officer of Southern Company Gas since April 2023. Previously served as Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Southern Company from March 2014 to March 2023.
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.
Greene Chairman, President, and Chief Executive Officer of Georgia Power Age 57 First elected in 2013. Chairman, President, and Chief Executive Officer of Georgia Power since April 2023. Previously served as Chairman, President, and Chief Executive Officer of Southern Company Gas from June 2018 to March 2023. James Y.
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.
Each officer listed above was elected at the annual meeting (or by written consent in lieu of the annual meeting) of the board of directors of the applicable company, to serve until the next such annual meeting or until his or her successor is elected and qualified, except for Mr. Womack who was elected as Chairman on December 11, 2023.
Each officer listed above was initially elected at the time or times stated above by the board of directors of the applicable company and is currently serving until the next annual meeting (or written consent in lieu of the annual meeting) or until his or her successor is elected and qualified.
Davis Executive Vice President and Chief Information Officer Age 60 First elected in 2021. Executive Vice President since April 2021. Chief Information Officer and Executive Vice President of SCS since July 2015. Previously served as Vice President from July 2015 through April 2021. Kimberly S.
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.
I-37 Table of Contents Index to Financial Statements Stephen E. Kuczynski Chairman and Chief Executive Officer of Southern Nuclear Age 61 First elected in 2011. Chairman and Chief Executive Officer of Southern Nuclear since July 2011. Previously served as President of Southern Nuclear from July 2011 through March 2023. J.
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.
Jeffrey Peoples Chairman, President, and Chief Executive Officer of Alabama Power Age 64 First elected in 2023. Chairman, President, and Chief Executive Officer of Alabama Power since January 2023.
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.
Added
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. 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.

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, 2024: 95,412 Southern Company has paid dividends on its common stock since 1948. Dividends paid per share of common stock were $2.78 in 2023 and $2.70 in 2022.
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.
In January 2024, Southern Company declared a quarterly dividend of 70 cents per share. Dividends on Southern Company's common stock are payable at the discretion of Southern Company's Board of Directors and depend upon earnings, financial condition, and other factors. See Note 8 to the financial statements under "Dividend Restrictions" in Item 8 herein for additional information.
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.
Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a)(1) The common stock of Southern Company is listed and traded on the NYSE under the ticker symbol SO. The common stock is also traded on regional exchanges across the U.S.
Item 5. MARKET FOR REGISTRANTS' COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES (a)(1) The common stock of Southern Company is listed and traded on the NYSE under the ticker symbol SO. The common stock is also traded on regional exchanges across the United States.

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- 9 Southern Company II- 9 Alabama Power II- 19 Georgia Power II- 23 Mississippi Power II- 28 Southern Power II- 32 Southern Company Gas II- 34 Future Earnings Potential II- 39 Accounting Policies II- 48 Financial Condition and Liquidity II- 55 This section generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022.
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.
Discussions of 2021 items and year-to-year comparisons between 2022 and 2021 that are not included in this Annual Report on Form 10-K can be found in Item 7 of each Registrant's Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on February 15, 2023.
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.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeGeorgia Power Significant balance sheet changes in 2023 for Georgia Power included: • an increase of $3.5 billion in total property, plant, and equipment primarily related to the construction of generation, transmission, and distribution facilities, including $1.2 billion for Plant Vogtle Units 3 and 4; • an increase of $2.5 billion in common stockholder's equity primarily due to capital contributions from Southern Company and net income, partially offset by dividends paid to Southern Company; • an increase of $1.8 billion in long-term debt (including securities due within one year) primarily due to net issuances of senior notes; • decreases of $0.4 billion in AROs and $0.3 billion in regulatory assets associated with AROs primarily due to cost estimate updates for ash pond closures; • a decrease of $0.4 billion in cash and cash equivalents, as discussed further under "Analysis of Cash Flows – Georgia Power" herein; • an increase of $0.3 billion in accumulated deferred income taxes primarily due to an increase in property-related timing differences; and • a decrease of $0.3 billion in notes payable primarily due to net repayments of short-term bank debt, largely offset by an increase in commercial paper borrowings.
Biggest changeGeorgia Power Significant balance sheet changes in 2024 for Georgia Power included: • an increase of $3.0 billion in total property, plant, and equipment primarily related to the construction of generation, transmission, and distribution facilities, including costs associated with Plant Yates Units 8 through 10 and Plant Vogtle Unit 4; • an increase of $2.3 billion in common stockholder's equity primarily due to net income and capital contributions from Southern Company, partially offset by dividends paid to Southern Company; II-59 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS • an increase of $1.7 billion in long-term debt (including securities due within one year) primarily due to net issuances of senior notes; • a decrease of $1.1 billion in notes payable primarily due to net repayments of short-term bank debt; • increases of $0.9 billion and $0.7 billion in other regulatory assets, deferred and other accounts payable, respectively, primarily related to storm restoration costs; • a decrease of $0.7 billion in under recovered retail fuel clause revenues primarily resulting from increased recovery of deferred fuel expense as ordered in Georgia Power's 2023 fuel cost recovery case; • increases of $0.5 billion and $0.4 billion in total operating lease obligations and operating lease right-of-use assets, net of amortization, respectively, related to new affiliate PPAs; • an increase of $0.4 billion in accumulated deferred income taxes primarily related to an increase in property-related and storm damage timing differences; and • a decrease of $0.3 billion in AROs primarily due to updates related to nuclear decommissioning AROs.
The significant factors driving this change are shown in the preceding table.
The significant factors driving this change are shown in the preceding table.
Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
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.
Southern Company Gas 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.
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.
Retail rates and earnings are reviewed through various regulatory mechanisms and/or processes and may be adjusted periodically within certain limitations. Effectively operating pursuant to these regulatory mechanisms and/or processes and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge the traditional electric operating companies and natural gas distribution utilities for the foreseeable future.
Retail rates and earnings are reviewed through various regulatory mechanisms and/or processes and may be adjusted periodically within certain limitations. Effectively operating pursuant to these regulatory mechanisms and/or processes and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge the traditional electric operating companies and the natural gas distribution utilities for the foreseeable future.
Water Quality In 2020, the EPA published the final steam electric ELG reconsideration rule (ELG Reconsideration Rule), a reconsideration of the 2015 ELG rule's limits on bottom ash transport water and flue gas desulfurization wastewater that extended the latest applicability date for both discharges to December 31, 2025.
Water Quality In 2020, the EPA published the final steam electric ELG reconsideration rule (2020 ELG Rule), a reconsideration of the 2015 ELG rule's limits on bottom ash transport water and flue gas desulfurization wastewater that extended the latest applicability date for both discharges to December 31, 2025.
Southern Power's ITCs relate to its investment in new solar facilities and battery energy storage facilities (co-located with existing solar facilities) that are acquired or constructed and its PTCs relate to the first 10 years of energy production from its wind facilities, which have had, and may continue to have, a material impact on Southern Power's cash flows and net income.
Southern Power's ITCs relate to its investment in new solar facilities and battery energy storage facilities (co-located with existing solar facilities) that are acquired or constructed and its PTCs relate to the first 10 years of energy production from its wind and solar facilities, which have had, and may continue to have, a material impact on Southern Power's cash flows and net income.
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, 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 renewable energy projects, and sells electricity at market-based rates in the wholesale market.
Many of Southern Power's PPAs have provisions that require Southern Power or the counterparty to post collateral or an acceptable substitute guarantee if (i) S&P or Moody's downgrades the credit ratings of the respective company to an unacceptable credit rating, (ii) the counterparty is not rated, or (iii) the counterparty fails to maintain a minimum coverage ratio.
Many of Southern Power's PPAs have provisions that require Southern Power or the counterparty to post collateral or an acceptable substitute guarantee if (i) S&P, Fitch, or Moody's downgrades the credit ratings of the respective company to an unacceptable credit rating, (ii) the counterparty is not rated, or (iii) the counterparty fails to maintain a minimum coverage ratio.
Inflation Reduction Act In August 2022, the IRA was signed into law. The IRA extends, expands, and increases ITCs and PTCs for clean energy projects, allows PTCs for solar projects, adds ITCs for stand-alone energy storage projects with an option to elect out of the tax normalization requirement, and allows for the transferability of the tax credits.
Inflation Reduction Act In 2022, the IRA was signed into law. The IRA extends, expands, and increases ITCs and PTCs for clean energy projects, allows PTCs for solar projects, adds ITCs for stand-alone energy storage projects with an option to elect out of the tax normalization requirement, and allows for the transferability of the tax credits.
See Note 7 to the financial statements under "Southern Company Gas" for additional information. Gas Marketing Services Gas marketing services provides energy-related products and services to natural gas markets and participants in customer choice programs that were approved in various states to increase competition.
See Note 7 to the financial statements under "Southern Company Gas" for additional information. Gas Marketing Services The gas marketing services segment provides energy-related products and services to natural gas markets and participants in customer choice programs that were approved in various states to increase competition.
The net cash used for investing activities in 2023 was primarily related to the acquisitions of the South Cheyenne and Millers Branch solar facilities and ongoing construction activities. The net cash used for investing activities in 2022 was primarily related to ongoing construction activities. See Note 15 to the financial statements under "Southern Power" for additional information.
The net cash used for investing activities in 2023 was primarily related to the acquisitions of the South Cheyenne and Millers Branch solar facilities and ongoing construction activities. See Note 15 to the financial statements under "Southern Power" for additional information.
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 and/or regulation; 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; 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.
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 16, 2023 base rate case decision.
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.
Coal Combustion Residuals In 2015, the EPA finalized non-hazardous solid waste regulations for the management and disposal of CCR, including coal ash and gypsum, in landfills and surface impoundments (ash ponds) at active electric generating power plants.
Coal Combustion Residuals In 2015, the EPA finalized non-hazardous solid waste regulations for the management and disposal of CCR, including coal ash and gypsum, in landfills and surface impoundments at active electric generating power plants.
The request includes investments of $70 million in each year from 2025 through 2029, with a potential variance of up to $5 million allowed for the program, for a maximum total investment over the five-year extension (2025 through 2029) of $355 million.
The extension of the program includes investments of $70 million in each year from 2025 through 2029, with a potential variance of up to $5 million allowed for the program, for a maximum total investment over the five-year extension (2025 through 2029) of $355 million.
Impairment (Southern Company, Southern Power, and Southern Company Gas) Goodwill (Southern Company and Southern Company Gas) The acquisition method of accounting for business combinations requires the assets acquired and liabilities assumed to be recorded at the date of acquisition at their respective estimated fair values.
Impairment (Southern Company, Alabama Power, Southern Power, and Southern Company Gas) Goodwill (Southern Company and Southern Company Gas) The acquisition method of accounting for business combinations requires the assets acquired and liabilities assumed to be recorded at the date of acquisition at their respective estimated fair values.
See FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements," Notes 2 and 3 to the financial statements under "Georgia Power – Rate Plans" and "General Litigation Matters – Alabama Power," respectively, and Note 6 to the financial statements for additional information.
See FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" herein, Notes 2 and 3 to the financial statements under "Georgia Power – Rate Plans" and "General Litigation Matters – Alabama Power," respectively, and Note 6 to the financial statements for additional information.
The traditional electric operating companies stopped sending CCR and non-CCR wastes to their unlined impoundments prior to April 11, 2021 and, therefore, did not submit requests for extensions.
The traditional electric operating companies stopped sending CCR and non-CCR wastes to their unlined surface impoundments prior to April 11, 2021 and, therefore, did not submit requests for extensions.
The decrease in operating expenses also includes costs passed through directly to customers, primarily related to bad debt expenses, energy efficiency programs, and revenue taxes.
The decrease in operating expenses also includes costs passed through directly to customers, primarily related to bad debt expense, energy efficiency programs, and revenue taxes.
The variable rate demand revenue bonds and fixed rate revenue bonds required to be remarketed within the next 12 months are classified as long-term debt on the balance sheets as a result of available long-term committed credit. See Note 8 to the financial statements under "Bank Credit Arrangements" for additional information.
All other variable rate demand revenue bonds and fixed rate revenue bonds required to be remarketed within the next 12 months are classified as long-term debt on the balance sheets as a result of available long-term committed credit. See Note 8 to the financial statements under "Bank Credit Arrangements" for additional information.
See FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" herein and Note 6 to the financial statements for additional information. Environmental Laws and Regulations Air Quality Since 1990, the Southern Company system reduced SO 2 and NO X air emissions by 99% and 92%, respectively, through 2022. Since 2005, the Southern Company system reduced mercury air emissions by 97% through 2022.
See FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" herein and Note 6 to the financial statements for additional information. Environmental Laws and Regulations Air Quality Since 1990, the Southern Company system reduced SO 2 and NO X air emissions by 99% and 92%, respectively, through 2023. Since 2005, the Southern Company system reduced mercury air emissions by 97% through 2023.
The amount, type, and timing of any financings in 2024, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals (for certain of the Subsidiary Registrants), and other factors. See "Cash Requirements" herein for additional information.
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.
See "Financing Activities – Georgia Power" herein and Notes 2, 5, 6, 8, and 10 to the financial statements for additional information.
See "Financing Activities – Georgia Power" herein and Notes 2, 5, 6, 8, 9, and 10 to the financial statements 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-71 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-66 Table of Contents Index to Financial Statements
II-30 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clauses.
II-27 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clauses.
On June 5, 2023, the EPA published the 2015 Ozone NAAQS Good Neighbor federal implementation plan (FIP), which requires reductions in NO X emissions from sources in 23 states, including Alabama and Mississippi, to assure those states satisfy their Clean Air Act good neighbor obligations for the 2015 Ozone NAAQS.
In June 2023, the EPA published the 2015 Ozone NAAQS Good Neighbor federal implementation plan (FIP), which requires reductions in NO X emissions from sources in 23 states, including Alabama and Mississippi, to assure those states satisfy their Clean Air Act good neighbor obligations for the 2015 Ozone NAAQS.
As required by the ELG Reconsideration Rule, in 2021, Alabama Power and Georgia Power each submitted initial notices of planned participation (NOPP) for applicable units seeking to qualify for these cessation of coal combustion or VIP subcategories that require compliance by December 31, 2028.
As required by the 2020 ELG Rule, in 2021, Alabama Power and Georgia Power each submitted initial notices of planned participation (NOPP) for applicable units seeking to qualify for these cessation of coal combustion or VIP subcategories that require compliance by December 31, 2028.
Market Price Risk The Registrants had no material change in market risk exposure for the year ended December 31, 2023 when compared to the year ended December 31, 2022. 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, 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.
The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $106 million of cash collateral posted related to PPA requirements at December 31, 2023.
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.
These factors include the natural gas distribution utilities' ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs, including those related to projected long-term demand growth, safety, system reliability and resiliency, natural gas, and capital expenditures, including expanding and improving the natural gas distribution systems; the completion and subsequent operation of ongoing infrastructure and other construction projects; customer creditworthiness; and certain policies to limit the use of natural gas, such as the potential in Illinois and across certain other parts of the U.S. for state or municipal bans on the use of natural gas or policies designed to promote electrification.
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.
Southern Company and Southern Power had foreign currency denominated debt at December 31, 2023 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, 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.
(c) Excludes cash collateral of $62 million as well as immaterial premium and associated intrinsic value associated with weather derivatives. The Registrants are exposed to risk in the event of nonperformance by counterparties to energy-related and interest rate derivative contracts, as applicable.
(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.
Southern Company Gas On June 15, 2023, the Illinois Commission concluded its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP rider, also referred to as Investing in Illinois program.
Southern Company Gas Nicor Gas In June 2023, the Illinois Commission concluded its review of the Qualifying Infrastructure Plant (QIP) capital investments by Nicor Gas for calendar year 2019 under the QIP rider, also referred to as Investing in Illinois program.
See Note 8 to the financial statements for information regarding the Registrants' long-term debt at December 31, 2023, the weighted average interest rate applicable to each long-term debt category, and a schedule of long-term debt maturities over the next five years.
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.
At December 31, 2023 and 2022, substantially all of the traditional electric operating companies' and certain of the natural gas distribution utilities' energy-related derivative contracts were designated as regulatory hedges and were related to the applicable company's fuel-hedging program.
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.
These factors include weather; competition; developing new and maintaining existing energy contracts and associated load requirements with wholesale customers; 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 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.
Goodwill for Southern Company and Southern Company Gas was $5.2 billion and $5.0 billion, respectively, at December 31, 2023. During 2022, Southern Company recorded a $119 million impairment loss as a result of its annual goodwill impairment test for PowerSecure.
Goodwill for Southern Company and Southern Company Gas was $5.2 billion and $5.0 billion, respectively, at December 31, 2024. During 2022, Southern Company recorded a $119 million impairment loss as a result of its annual goodwill impairment test for PowerSecure.
Variable Interest Entities (Southern Power) Southern Power enters into partnerships with varying ownership structures. Upon entering into these arrangements, membership interests and other variable interests are evaluated to determine if the legal entity is a VIE.
Variable Interest Entities (Southern Power) Southern Power has partnerships with varying ownership structures. Upon entering into these arrangements, membership interests and other variable interests are evaluated to determine if the legal entity is a VIE.
II-11 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
II-26 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS Energy Sales Changes in revenues are influenced heavily by the change in the volume of energy sold from year to year.
Southern Power's Power Sales Agreements General Southern Power has PPAs with some of the traditional electric operating companies, other investor-owned utilities, IPPs, municipalities, and other load-serving entities, as well as commercial and industrial customers. The PPAs are expected to provide Southern Power with a stable source of revenue during their respective terms.
Southern Power's Power Sales Agreements General Southern Power has PPAs with certain of the traditional electric operating companies, other investor-owned utilities, IPPs, municipalities, electric cooperatives, and other load-serving entities, as well as commercial and industrial customers. The PPAs are expected to provide Southern Power with a stable source of revenue during their respective terms.
Credit Rating Risk At December 31, 2023, the Registrants did not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade.
Credit Rating Risk At December 31, 2024, the Registrants did not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade.
Capital expenditures and other investing activities for the traditional electric operating companies include investments to build new generation facilities to meet projected long-term demand requirements and to replace units being retired as part of the generation fleet transition, to maintain existing generation facilities, to comply with environmental regulations including adding environmental modifications to certain existing generating units and closures of ash ponds, to expand and improve transmission and distribution facilities, and for restoration following major storms.
Capital expenditures and other investing activities for the traditional electric operating companies include investments to build new generation facilities to meet projected long-term demand requirements and to replace units being retired as part of the generation fleet transition, to maintain existing generation facilities, to comply with environmental regulations including adding environmental modifications to certain existing generating units and closures of surface impoundments, to expand and improve transmission and distribution facilities, and for restoration following major storms.
See Note 15 to the financial statements for additional information. Environmental Matters The Southern Company system's operations are regulated by state and federal environmental agencies through a variety of laws and regulations governing air, water, land, avian and other wildlife and habitat protection, and other natural resources.
See Note 15 to the financial statements and "Construction Programs" herein for additional information. Environmental Matters The Southern Company system's operations are regulated by state and federal environmental agencies through a variety of laws and regulations governing air, water, land, avian and other wildlife and habitat protection, and other natural resources.
Cost of Natural Gas Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, the natural gas distribution utilities rates include provisions to adjust billings for fluctuations in natural gas costs.
Cost of Natural Gas Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, the natural gas distribution utilities' rates include provisions to adjust billings for fluctuations in natural gas costs.
During the Heating Season, natural gas usage and operating revenues are generally higher as more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. Southern Company Gas' base operating expenses, excluding cost of natural gas and bad debt expense, are incurred relatively evenly throughout the year.
During the Heating Season, more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. Southern Company Gas' base operating expenses, excluding cost of natural gas and bad debt expense, are incurred relatively evenly throughout the year.
The HLBV method calculates each partner's share of income based on the change in net equity the partner can legally claim in a HLBV at the end of the period compared to the beginning of the period.
The HLBV method calculates each partner's share of income based on the change in net equity the partner can legally claim in an HLBV at the end of the period compared to the beginning of the period.
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 these assumptions becomes available. Some of these updates have been, and future updates may be, material. The cost estimates for Alabama Power are based on closure-in-place for all ash ponds.
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 these assumptions becomes available. Some of these updates have been, and future updates may be, material. The cost estimates for Alabama Power are based on closure-in-place for all surface impoundments.
In accordance with IRS regulations, each company is jointly and severally liable for the federal tax liability. Certain deductions and credits can be limited or utilized at the consolidated or combined level resulting in tax credit and/or state NOL carryforwards that would not otherwise result on a stand-alone basis.
In accordance with IRS regulations, each company is jointly and severally liable for the federal tax liability. Certain deductions and credits can be limited or utilized at the consolidated or combined level resulting in tax credit and/or state net operating loss carryforwards that would not otherwise result on a stand-alone basis.
Since 2018, Southern Power has been utilizing tax equity partnerships for wind, solar, and battery energy storage projects, where the tax equity partner takes significantly all of the respective federal tax benefits. These tax equity partnerships are consolidated in Southern Company's and Southern Power's financial statements using the HLBV methodology to allocate partnership gains and losses.
Since 2018, Southern Power has utilized tax equity partnerships for certain wind, solar, and battery energy storage projects, where the tax equity partner takes significantly all of the respective federal tax benefits. These tax equity partnerships are consolidated in Southern Company's and Southern Power's financial statements using the HLBV methodology to allocate partnership gains and losses.
Estimates of the timing and amounts of future cash outlays are based on projections of when and how the assets will be retired and the cost of future removal activities. The ARO liabilities for the traditional electric operating companies primarily relate to facilities that are subject to the CCR Rule and the related state rules, principally ash ponds.
Estimates of the timing and amounts of future cash outlays are based on projections of when and how the assets will be retired and the cost of future removal activities. The ARO liabilities for the traditional electric operating companies primarily relate to facilities that are subject to the CCR Rule and the related state rules, principally surface impoundments.
See RESULTS OF OPERATIONS herein for information on energy sales in the Southern Company system's service territory during 2023.
See RESULTS OF OPERATIONS herein for information on energy sales in the Southern Company system's service territory during 2024.
Georgia and North Carolina have approved interstate transport SIPs addressing the 2015 Ozone NAAQS and are not subject to this rule. On June 16, 2023 and June 27, 2023, the State of Mississippi and Mississippi Power, respectively, challenged the FIP for Mississippi in the U.S. Court of Appeals for the Fifth Circuit.
Georgia and North Carolina have approved interstate transport SIPs addressing the 2015 Ozone NAAQS and are not subject to this rule. In June 2023, the State of Mississippi and Mississippi Power challenged the FIP for Mississippi in the U.S. Court of Appeals for the Fifth Circuit.
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, 2023, the amount of subsidiary retained earnings restricted to dividend totaled $1.7 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, 2024, the amount of subsidiary retained earnings restricted to dividend totaled $1.6 billion.
See "Financing Activities – Southern Company Gas" herein and Notes 2, 5, and 8 to the financial statements for additional information.
See "Financing Activities – Southern Company Gas" herein and Notes 5, 8, and 10 to the financial statements for additional information.
On August 4, 2023, the State of Alabama, Alabama Power, and PowerSouth Energy Cooperative challenged the FIP for Alabama in the U.S. Court of Appeals for the Eleventh Circuit. Both cases are being held in abeyance pending resolution of the Mississippi SIP disapproval and Alabama SIP disapproval cases, respectively.
In August 2023, the State of Alabama, Alabama Power, and PowerSouth Energy Cooperative challenged the FIP for Alabama in the U.S. Court of Appeals for the Eleventh Circuit. Both cases are being held in abeyance pending resolution of the Mississippi SIP disapproval and Alabama SIP disapproval cases, respectively. On June 27, 2024, the U.S.
See "Financing Activities" herein and Notes 2, 5, 6, 8, and 10 to the financial statements for additional information.
See "Financing Activities" herein and Notes 1, 2, 5, 8, and 10 to the financial statements for additional information.
Southern Company plans to finance future cash needs in excess of its operating cash flows through one or more of the following: accessing borrowings from financial institutions, issuing debt and hybrid securities in the capital markets, and/or through its stock plans.
Southern Company plans to finance future cash needs in excess of its operating cash flows through one or more of the following: accessing borrowings from financial institutions, issuing debt, equity, and/or hybrid securities in the capital markets, and/or through its stock plans and its continuous equity offering program.
At December 31, 2023, outstanding variable rate demand revenue bonds of the traditional electric operating companies with allocated liquidity support totaled approximately $1.7 billion (comprised of approximately $818 million at Alabama Power, $819 million at Georgia Power, and $69 million at Mississippi Power).
At December 31, 2024, outstanding variable rate demand revenue bonds of the traditional electric operating companies with allocated liquidity support totaled approximately $1.7 billion (comprised of approximately $796 million at Alabama Power, $819 million at Georgia Power, and $69 million at Mississippi Power).
See FINANCIAL CONDITION AND LIQUIDITY – "Credit Rating Risk" herein for additional information. Southern Power works to maintain and expand its share of the wholesale market. During 2023, Southern Power continued to be successful in remarketing up to 438 MWs of annual natural gas generation capacity to load-serving entities through several PPAs extending over the next 16 years.
See FINANCIAL CONDITION AND LIQUIDITY – "Credit Rating Risk" herein for additional information. Southern Power works to maintain and expand its share of the wholesale market. During 2024, Southern Power continued to be successful in remarketing up to 1,014 MWs of annual natural gas and solar generation capacity to load-serving entities through several PPAs extending over the next 16 years.
The cost estimates for Georgia Power and Mississippi Power are based on a combination of closure-in-place for some ash ponds and closure by removal for others. Additionally, the closure designs and plans in the States of Alabama and Georgia are subject to approval by environmental regulatory agencies.
The cost estimates for Georgia Power and Mississippi Power are based on a combination of closure-in-place for some surface impoundments and closure by removal for others. Additionally, the closure designs and plans in the States of Alabama and Georgia are subject to approval by environmental regulatory agencies.
The CCR Rule requires landfills and ash ponds to be evaluated against a set of performance criteria and potentially closed if certain criteria are not met. Closure of existing landfills and ash ponds requires installation of equipment and infrastructure to manage CCR in accordance with the CCR Rule.
The CCR Rule requires landfills and surface impoundments to be evaluated against a set of performance criteria and potentially closed if certain criteria are not met. Closure of existing landfills and surface impoundments requires installation of equipment and infrastructure to manage CCR in accordance with the CCR Rule.
The IRA extends and increases the tax credits for carbon capture and sequestration projects and adds tax credits for clean hydrogen and nuclear projects. Additional ITC and PTC amounts are available if the projects meet domestic content requirements or are located in low-income or energy communities.
The IRA extends and increases the tax credits for CCS projects and adds tax credits for clean hydrogen and nuclear projects. Additional ITC and PTC amounts are available if the projects meet domestic content requirements or are located in low-income or energy communities.
Revenues related to regulated utility operations as a percentage of total operating revenues in 2023 for the applicable Registrants were as follows: 89% for Southern Company, 98% for Alabama Power, 96% 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 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.
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.
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.
II-39 Table of Contents Index to Financial Statements COMBINED MANAGEMENT'S DISCUSSION AND ANALYSIS The level of future earnings for Southern Power's competitive wholesale electric business depends on numerous factors including the parameters of the wholesale market and the efficient operation of its wholesale generating assets; Southern Power's ability to execute its growth strategy through the development, construction, or acquisition of renewable facilities and other energy projects while containing costs; regulatory matters; customer creditworthiness; total electric generating capacity available in Southern Power's market areas; Southern Power's ability to successfully remarket capacity as current contracts expire; renewable portfolio standards; continued availability of federal and state ITCs and PTCs, which could be impacted by future tax legislation; transmission constraints; cost of generation from units within the Southern Company power pool; and operational limitations.
The level of future earnings for Southern Power's competitive wholesale electric business depends on numerous factors including the parameters of the wholesale market and the efficient operation of its wholesale generating assets; Southern Power's ability to execute its growth strategy through the development, construction, or acquisition of renewable facilities and other energy projects while containing costs; regulatory matters; customer creditworthiness; total electric generating capacity available in Southern Power's market areas; Southern Power's ability to successfully remarket capacity as current contracts expire; renewable portfolio standards; continued availability of federal and state ITCs and PTCs, which could be impacted by future tax legislation; transmission constraints; cost of generation from units within the Southern Company power pool; and operational limitations.
Fuel and purchased power energy transactions do not have a significant impact on earnings since these fuel expenses are generally offset by fuel revenues through Georgia Power's fuel cost recovery mechanism. See Note 2 to the financial statements under "Georgia Power – Fuel Cost Recovery" for additional information.
See Note 3 to the financial statements under "Nuclear Fuel Disposal Costs" for additional information. Fuel and purchased power energy transactions do not have a significant impact on earnings since these fuel expenses are generally offset by fuel revenues through Georgia Power's fuel cost recovery mechanism.
The net cash used for investing activities in 2023 and 2022 was primarily related to gross property additions, including approximately $1.1 billion and $1.0 billion, respectively, related to the construction of Plant Vogtle Units 3 and 4.
The net cash used for investing activities in 2024 and 2023 was primarily related to gross property additions, including approximately $0.2 billion and $1.1 billion, respectively, related to the construction and completion of Plant Vogtle Units 3 and 4.
On February 13, 2023, the EPA published a final rule disapproving 19 state implementation plans (SIPs), including 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).
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).
Based on requirements for closure and monitoring of landfills and ash ponds 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 closure methodologies, schedules, and/or costs becomes available.
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.
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. Assets acquired that do not meet the definition of a business are accounted for as an asset acquisition.
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.
Also see "Financing Activities" herein for information on financing activities that occurred subsequent to December 31, 2023.
Also see "Financing Activities" herein for information on financing activities that occurred subsequent to December 31, 2024.
In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023 .
In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 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 under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 14.0% of Mississippi Power's total operating revenues in 2023.
Mississippi Power provides service under long-term contracts with rural electric cooperative associations and a municipality located in southeastern Mississippi under requirements cost-based electric tariffs which are subject to regulation by the FERC. The contracts with these wholesale customers represented 13.9% of Mississippi Power's total operating revenues in 2024.
For 2023, the four largest Marketers based on customer count, which includes SouthStar, accounted for 18% of Southern Company Gas' operating revenues and 20% of operating revenues for Southern Company Gas' gas distribution operations segment. Several factors are designed to mitigate Southern Company Gas' risks from the increased concentration of credit that has resulted from deregulation.
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 the traditional electric operating companies, these factors include the ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs during a time of increasing costs, including those related to projected long-term demand growth, stringent environmental standards, including CCR rules, safety, system reliability and resiliency, fuel, restoration following major storms, and capital expenditures, including constructing new electric generating plants and expanding and improving the transmission and distribution systems; continued customer growth; and the trends of higher inflation and reduced electricity usage per customer, especially in residential and commercial markets.
For the traditional electric operating companies, these factors include the ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs during a time of increasing costs, including those related to projected long-term demand growth, stringent environmental standards, including CCR rules, safety, system reliability and resiliency, fuel, restoration following major storms, and capital expenditures, including constructing new electric generating plants, extending the retirement dates of certain fossil fuel plants, and expanding and improving the transmission and distribution systems; continued customer growth; and the trends of an uncertain inflationary environment and reduced electricity usage per customer, especially in residential and commercial markets.
See "Environmental Laws and Regulations – Greenhouse Gases" and " – Water Quality" herein for additional information. The Southern Company system also anticipates substantial expenditures associated with ash pond closure and groundwater monitoring under the CCR Rule and related state rules, which are reflected in the applicable Registrants' ARO liabilities.
See "Environmental Laws and Regulations – Greenhouse Gases" herein for additional information. The Southern Company system also anticipates substantial expenditures associated with surface impoundment closure and groundwater monitoring under the CCR Rule and related state rules, which are reflected in the applicable Registrants' ARO liabilities.
In April 2022, the Utilities Solid Waste Activities Group and a group of generating facility operators filed petitions for review in the U.S. Court of Appeals for the D.C. Circuit challenging whether the EPA's January 2022 actions establish new legislative rules that should have gone through notice-and-comment rulemaking. A decision by the court is expected in 2024.
In April 2022, the Utilities Solid Waste Activities Group and a group of generating facility operators filed petitions for review in the U.S. Court of Appeals for the D.C. Circuit challenging whether the EPA's January 2022 actions establish new legislative rules that should have gone through notice-and-comment rulemaking. On June 28, 2024, the U.S. Court of Appeals for the D.C.
Georgia Power also submitted a NOPP indicating plans to pursue compliance with the ELG Reconsideration Rule for Plant Scherer Units 1 and 2 (137 MWs based on 8.4% ownership) through the voluntary incentive program by no later than December 31, 2028.
Georgia Power also submitted a NOPP indicating plans to pursue compliance with the 2020 ELG Rule for Plant Scherer Units 1 and 2 (137 MWs based on 8.4% ownership) through the VIP by no later than December 31, 2028.

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