Press release·10/30/2025 10:12:27

Overview

Southern Company is a major utility holding company that owns electric and natural gas distribution companies across the Southeast. The company’s primary businesses are the sale of electricity by its traditional electric operating companies (Alabama Power, Georgia Power, and Mississippi Power) and Southern Power, as well as the distribution of natural gas by Southern Company Gas.

Southern Company continues to focus on key performance indicators like customer satisfaction, plant availability, system reliability, and execution of major construction projects. The company also tracks earnings per share and net income as key financial metrics.

Recent Developments

Alabama Power received approval to implement changes to its cost allocation methodology and acquire a natural gas plant. The company also received approval to establish a regulatory liability for nuclear production tax credits.

Georgia Power extended its 2022 rate plan for an additional three years and received approval for new generation and storage projects. The company also received approval for its 2025 Integrated Resource Plan.

Mississippi Power completed the acquisition of a natural gas plant and received approval for a retail rate increase.

Southern Power continued development of wind repowering projects and plans to purchase the remaining interest in a tax equity partnership.

Southern Company Gas subsidiaries in Virginia and Illinois reached rate case settlements.

Results of Operations

Southern Company’s net income increased 1.5% year-to-date in 2025 compared to the prior year, driven by higher retail electric and natural gas revenues. Retail electric revenues were up 9.2% due to rate increases, sales growth, and higher fuel cost recovery. Wholesale electric revenues increased 17.6% on higher volumes and prices. Natural gas revenues rose 10.3% on rate increases and higher gas costs.

Fuel and purchased power expenses increased 18.2% and 14.9% for electricity and natural gas, respectively, due to higher commodity prices and volumes. Other operations and maintenance expenses were up 9.4% due to higher employee costs, technology investments, and generation maintenance. Depreciation and amortization rose 13.9% from additional plant in service and accelerated wind project depreciation.

The traditional electric operating companies all saw increases in net income, led by 12.4% growth at Alabama Power and 9.0% at Georgia Power. The increases were driven by higher retail revenues, partially offset by higher expenses.

Southern Power’s net income declined 46.6% due to accelerated depreciation on wind repowering projects. Southern Company Gas’ net income was relatively flat, with increases at the gas distribution and marketing segments offset by declines in pipeline investments and the “all other” category.

Segment Performance

Electric Operations

• Alabama Power’s net income rose 12.4% on higher retail revenues from rate increases and sales growth, partially offset by higher expenses.
• Georgia Power’s net income increased 9.0% due to higher retail revenues from rate changes and sales growth, partially offset by higher expenses.
• Mississippi Power’s net income grew 6.5% on higher retail revenues from rate increases.
• Southern Power’s net income declined 46.6% due to accelerated depreciation on wind repowering projects.

Natural Gas Operations

• Southern Company Gas’ gas distribution operations segment saw a 3.5% increase in net income, driven by higher revenues from rate increases and gas cost recovery, partially offset by higher expenses.
• The gas pipeline investments segment had a 19.5% decline in net income due to lower rates at the SNG pipeline.
• The gas marketing services segment had a 6.9% increase in net income on higher retail margins.

Outlook and Risks

Southern Company faces several key factors that could impact future earnings potential:

• Ability to maintain constructive regulatory environments and timely cost recovery
• Trends in electricity and natural gas demand, including the impact of energy efficiency, electrification, and economic conditions
• Successful execution of major construction projects like power plant upgrades and expansions
• Volatility in commodity prices, inflation, and supply chain disruptions
• Competition, customer conservation, and the growth of alternative energy sources
• Changes in government policies and incentives related to energy usage and emissions

The company continues to evaluate a range of strategic options, including potential business combinations, partnerships, and new ventures, to adapt to the evolving utility industry landscape. Overall, Southern Company’s diversified electric and gas operations provide a relatively stable earnings profile, though the company remains exposed to regulatory, operational, and market risks that could affect future performance.