Alabama Power received FERC approval for the acquisition of Tenaska Alabama Partners, L.P., including the 855-MW Lindsay Hill Generating Station. Mississippi Power completed the acquisition of FP&L's 50% ownership interest in Plant Daniel Units 1 and 2, receiving approximately $36 million from FP&L as part of the deal.

Georgia Power requested certification for a 200 MW battery energy storage facility (COD 2027) and initiated an RFP for up to 8,500 MWs of various resources, including 2,762 MWs of battery energy storage and 350 MWs of solar with battery storage. Southern Power continued construction on the 512-MW Millers Branch solar facility and repowering projects for Kay Wind, Grant Plains, Grant Wind, and Wake Wind facilities, totaling over 700 MWs.

Georgia Power's 2025 IRP was approved, extending the operation of Plant Scherer Unit 3 through 2035 and Plant Gaston Units 1-4 through 2034. The plan also includes installation of environmental controls and natural gas co-firing at Plant Bowen units, and upgrades to Plant McIntosh and Plant Vogtle units to add incremental capacity.

Georgia Power's 2022 ARP was extended through 2028, maintaining a retail ROE set point of 10.50% and equity ratio of 56%, providing a stable regulatory framework. Mississippi Power's annual retail PEP filing for 2025 was approved, increasing revenues by approximately $41 million, and its ECO Plan filing resulted in a $6 million annual revenue increase.

Other operations and maintenance expenses for Southern Company increased by $297 million (21.4%) in Q2 2025 YoY, and $445 million (15.6%) YTD. This was primarily driven by planned and non-outage generation maintenance expenses, as well as increases in technology infrastructure and application production costs.

Southern Company and its subsidiaries continue to efficiently monetize tax credits through third-party transfer agreements, receiving $44 million, $28 million, and $13 million from transferred ITCs and PTCs during the first six months of 2025. This strategy helps utilize federal PTC and ITC carryforwards expected to be fully used by 2030.

Southern Company faces a purported class action alleging a conspiracy to fix and suppress employee compensation in the nuclear power industry, which could have a material financial impact. Additionally, Alabama Power is involved in citizen suits regarding CCR Rule compliance for Plant Barry and Plant Gadsden surface impoundments, with potential for material financial impact.

Litigation regarding the 2024 ELG Rule, 2024 Legacy Rule, and 2024 GHG Rules remains in abeyance, with the EPA indicating intent to reconsider or repeal certain provisions. The ultimate impact of these evolving environmental regulations and associated legal matters cannot be determined but may result in significant compliance costs.

Certain contracts could require collateral in the event of a credit rating downgrade to BBB and/or Baa2 or below. Southern Company's maximum potential collateral requirements totaled $3,626 million at BB+ and/or Ba1 or below. A downgrade could also impact the ability to access capital markets and increase borrowing costs.

Weather-adjusted commercial KWH sales increased 3.5% in Q2 2025 and 2.0% YTD, primarily due to increased customer usage, notably driven by data centers. Industrial KWH sales also increased 2.8% in Q2 2025 and 1.7% YTD, indicating robust demand in key sectors.

Traditional electric operating companies and natural gas distribution utilities have regulatory provisions to adjust billings for fluctuations in fuel costs. This ensures that fuel and purchased power expenses are generally offset by corresponding revenues, minimizing their impact on net income.

Wholesale electric revenues increased by $54 million (8.6%) in Q2 2025 and $227 million (18.9%) YTD, primarily due to higher energy revenues from fuel and purchased power price increases and increased market demand. Non-PPA revenues also saw a 15.0% increase in Q2 2025 due to market price of energy.

Depreciation and amortization expenses increased by $141 million (11.9%) in Q2 2025 and $281 million (12.1%) YTD. This rise is primarily due to additional plant in service, accelerated depreciation from wind repowering projects ($42 million in Q2 2025), and amortization of regulatory assets related to CCR AROs.

Cost of natural gas increased by $106 million (71.1%) in Q2 2025 and $175 million (23.2%) YTD, primarily due to higher gas cost recovery as a result of increases of 82% and 72% in natural gas prices, respectively. While generally offset by revenues, this reflects higher commodity prices.

Increases in other operations and maintenance expenses were partly due to higher technology infrastructure and application production costs ($22 million in Q2 2025, $32 million YTD for Southern Company, and $19 million in Q2 2025, $23 million YTD for Georgia Power), and transmission and distribution expenses related to line maintenance.

Georgia Power is requesting certification for a 200 MW battery energy storage facility and has identified 2,762 MWs of new battery energy storage facilities and 350 MWs of solar with battery storage in its RFP. Southern Power continues construction on the 512-MW Millers Branch solar facility and repowering wind projects (Kay Wind, Grant Plains, Grant Wind, Wake Wind), totaling over 700 MWs.

Southern Company Gas is engaged in various infrastructure improvement programs to update or expand natural gas distribution systems, aiming to improve reliability, resiliency, and reduce emissions. These investments are recovered through regulated rates.

Increases in other operations and maintenance expenses include $22 million in Q2 2025 and $32 million YTD for technology infrastructure and application production costs at Southern Company. This indicates ongoing investment in digital transformation and operational technology.

Total property additions for Southern Company were $5,237 million for the six months ended June 30, 2025, a significant increase from $3,895 million in the prior year. This reflects ongoing construction of generation, transmission, and distribution facilities across subsidiaries, including Plant Yates Units 8, 9, and 10 for Georgia Power.

Southern Company issued $1.65 billion in Convertible Senior Notes in May 2025, using proceeds to repurchase $781.6 million of Series 2023A notes and $328.1 million of Series 2024A notes. This activity, alongside other long-term debt issuances totaling $6,319 million, indicates active debt management.

Southern Company paid common stock dividends of $1,494 million for the six months ended June 30, 2025, a slight increase from $1,487 million in the prior year. The Q2 2025 dividend per share was $0.74, up from $0.72 in Q2 2024, demonstrating a continued commitment to shareholder returns.

The company continues to update cost estimates and ARO liabilities for CCR units, with Alabama Power recording a $257 million net decrease and Mississippi Power a $13 million net decrease in AROs due to changes in estimates, including lower future inflation rates and higher discount rates.

The 2025 IRP for Georgia Power includes the installation of environmental controls and natural gas co-firing at Plant Bowen Units 1-4 for compliance with ELG and GHG rules. Southern Power's ongoing wind repowering projects also contribute to renewable energy generation.

Southern Company's net periodic pension income was a loss of $157 million for the six months ended June 30, 2025, compared to a loss of $141 million in the prior year. This is primarily due to expected return on plan assets of $(640) million, indicating the financial impact of employee benefit obligations.

The company acknowledges that global and U.S. economic conditions, including impacts from geopolitical conflicts, recession, inflation, interest rate fluctuations, and financial market conditions, can affect customer demand, access to capital, and cost of doing business. This uncertainty is highlighted as a factor influencing future earnings potential.

New federal rules from the EPA, including the 2024 ELG Rule, 2024 GHG Rules, and 2024 Legacy Rule, are subject to ongoing litigation and potential reconsideration. These regulations, if implemented as originally proposed, could result in significant compliance costs for the traditional electric operating companies.

Commercial KWH sales increased 3.5% in Q2 2025 and 2.0% YTD, primarily due to increased customer usage, with data centers specifically cited as a key driver. This trend indicates a robust and growing demand segment within the company's service territory.