SOUTHERN CO (SO)

Southern Company is a holding company that owns all of the common stock of three traditional electric operating companies (Alabama Power, Georgia Power and Mississippi Power), Southern Power Company, and Southern Company Gas. It also owns SCS, Southern Linc, Southern Holdings, Southern Nuclear, PowerSecure and other subsidiaries. The traditional electric operating companies are vertically integrated utilities that own generation, transmission and distribution facilities. Southern Power develops, constructs, acquires, owns, operates and manages power generation assets, including battery energy storage projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas is an energy services holding company whose primary business is natural gas distribution.

Southern Company Gas' largest segment, gas distribution operations, runs approximately 77,900 miles of pipeline and 14 storage facilities with 157 Bcf of capacity. Its other businesses include gas pipeline investments, such as a 50% interest in SNG (a 7,000-mile pipeline) and a 50% interest in the Dalton Pipeline, and gas marketing services through SouthStar. Subsidiary roles: SCS is the system service company providing executive, engineering, accounting, legal, IT and other services at cost. Southern Linc provides digital wireless and fiber optic communications across about 122,000 square miles. Southern Holdings invests in projects and insures risk exposures. Southern Nuclear operates the system's nuclear plants (Farley, Hatch and Vogtle). PowerSecure develops distributed energy and resilience solutions and microgrids. At December 31, 2025, Southern Power's fleet totaled 12,648 MWs of nameplate capacity in commercial operation.

The electric operating companies serve retail customers in three Southeastern states and wholesale customers in the Southeast. They project a significant increase in demand, largely from data centers and other large load customers, and have contracted for about nine GWs of new large-load service since 2023. Southern Power sells mainly under long-term PPAs to investor-owned utilities, IPPs, municipalities, electric cooperatives, other load-serving entities, and commercial and industrial customers. Its investment coverage ratio was 97% through 2030, with an average remaining contract duration of about 12 years. Southern Company Gas serves about 4.4 million customers in Illinois, Georgia, Virginia and Tennessee, and SouthStar serves about 677,000 natural gas commodity customers. PowerSecure serves commercial, industrial, governmental and utility customers.

The electric utilities and Southern Power operate much of their assets as a single integrated system, the Southern Company power pool, under the IIC, with centralized economic dispatch. SCS administers the pool. Supply is fueled primarily by natural gas and coal, plus nuclear for Alabama Power and Georgia Power; Southern Power relies primarily on natural gas. For 2026, SCS has contracted for 644 Bcf of natural gas supply along with firm transportation and storage. Coal is bought under one- to five-year agreements, and nuclear fuel under multiple contracts with terms up to 10 years. The utilities are members of SERC Reliability Corporation and the Southeast Energy Exchange Market. Southern Power's business is largely regulated by the FERC. The 2026 construction program is expected to total about $15.9 billion, with most of it at Georgia Power.