SECURITIES AND EXCHANGE COMMISSION
OF THE SECURITIES EXCHANGE ACT OF 1934
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission
Registrant, State of Incorporation,
I.R.S. Employer
File Number
Address and Telephone Number
Identification No.
The Southern Company
58-0690070
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
Alabama Power Company
63-0004250
(An Alabama Corporation)
600 North 18
th
Street
Birmingham, Alabama 35203
(205) 257-1000
Georgia Power Company
58-0257110
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
(404) 506-6526
Gulf Power Company
59-0276810
(A Florida Corporation)
One Energy Place
Pensacola, Florida 32520
(850) 444-6111
Mississippi Power Company
64-0205820
(A Mississippi Corporation)
2992 West Beach
Gulfport, Mississippi 39501
(228) 864-1211
Southern Power Company
58-2598670
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
Large | Smaller | |||||||||||||||
Accelerated | Accelerated | Non-accelerated | Reporting | |||||||||||||
Registrant | Filer | Filer | Filer | Company | ||||||||||||
The Southern Company
|
X | |||||||||||||||
Alabama Power Company
|
X | |||||||||||||||
Georgia Power Company
|
X | |||||||||||||||
Gulf Power Company
|
X | |||||||||||||||
Mississippi Power Company
|
X | |||||||||||||||
Southern Power Company
|
X |
Description of | Shares Outstanding | |||||
Registrant | Common Stock | at March 31, 2011 | ||||
The Southern Company
|
Par Value $5 Per Share | 849,122,723 | ||||
Alabama Power Company
|
Par Value $40 Per Share | 30,537,500 | ||||
Georgia Power Company
|
Without Par Value | 9,261,500 | ||||
Gulf Power Company
|
Without Par Value | 4,142,717 | ||||
Mississippi Power Company
|
Without Par Value | 1,121,000 | ||||
Southern Power Company
|
Par Value $0.01 Per Share | 1,000 |
2
Page | ||||||
Number | ||||||
DEFINITIONS | 5 | |||||
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION | 7 | |||||
|
||||||
PART I FINANCIAL INFORMATION
|
||||||
|
||||||
Item 1. |
Financial Statements (Unaudited)
|
|||||
Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations
|
|||||
9 | ||||||
10 | ||||||
11 | ||||||
13 | ||||||
14 | ||||||
32 | ||||||
32 | ||||||
33 | ||||||
34 | ||||||
36 | ||||||
49 | ||||||
49 | ||||||
50 | ||||||
51 | ||||||
53 | ||||||
68 | ||||||
68 | ||||||
69 | ||||||
70 | ||||||
72 | ||||||
85 | ||||||
85 | ||||||
86 | ||||||
87 | ||||||
89 | ||||||
106 | ||||||
106 | ||||||
107 | ||||||
108 | ||||||
110 | ||||||
119 | ||||||
Item 3. | 30 | |||||
Item 4. | 30 |
3
Page | ||||||
Number | ||||||
PART II OTHER INFORMATION
|
||||||
|
||||||
Item 1. | 145 | |||||
Item 1A. | 145 | |||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds
|
Inapplicable | ||||
Item 3. |
Defaults Upon Senior Securities.
|
Inapplicable | ||||
Item 5. |
Other Information
|
Inapplicable | ||||
Item 6. | 146 | |||||
150 |
4
Term | Meaning | |
2007 Retail Rate Plan
|
Georgia Powers retail rate plan for the years 2008 through 2010 | |
2010 ARP
|
Alternate Rate Plan approved by the Georgia PSC for Georgia Power which became effective January 1, 2011 and will continue through December 31, 2013 | |
AFUDC
|
Allowance for funds used during construction | |
Alabama Power
|
Alabama Power Company | |
Clean Air Act
|
Clean Air Act Amendments of 1990 | |
DOE
|
U.S. Department of Energy | |
Duke Energy
|
Duke Energy Corporation | |
ECO Plan
|
Mississippi Powers Environmental Compliance Overview Plan | |
EPA
|
U.S. Environmental Protection Agency | |
FERC
|
Federal Energy Regulatory Commission | |
Fitch
|
Fitch Ratings, Inc. | |
Form 10-K
|
Combined Annual Report on Form 10-K of Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, and Southern Power for the year ended December 31, 2010 | |
GAAP
|
Generally Accepted Accounting Principles | |
Georgia Power
|
Georgia Power Company | |
Gulf Power
|
Gulf Power Company | |
IGCC
|
Integrated coal gasification combined cycle | |
IIC
|
Intercompany Interchange Contract | |
Internal Revenue Code
|
Internal Revenue Code of 1986, as amended | |
IRS
|
Internal Revenue Service | |
KWH
|
Kilowatt-hour | |
LIBOR
|
London Interbank Offered Rate | |
Mirant
|
Mirant Corporation | |
Mississippi Power
|
Mississippi Power Company | |
mmBtu
|
Million British thermal unit | |
Moodys
|
Moodys Investors Service | |
MW
|
Megawatt | |
MWH
|
Megawatt-hour | |
NCCR
|
Georgia Powers Nuclear Construction Cost Recovery | |
NDR
|
Alabama Powers natural disaster reserve | |
NRC
|
Nuclear Regulatory Commission | |
NSR
|
New Source Review | |
OCI
|
Other Comprehensive Income | |
PEP
|
Mississippi Powers Performance Evaluation Plan | |
Plant Vogtle Units 3 and 4
|
Two new nuclear generating units under construction at Plant Vogtle | |
Power Pool
|
The operating arrangement whereby the integrated generating resources of the traditional operating companies and Southern Power are subject to joint commitment and dispatch in order to serve their combined load obligations | |
PPA
|
Power Purchase Agreement | |
PSC
|
Public Service Commission | |
Rate CNP Environmental
|
Alabama Powers rate certificated new plant environmental | |
Rate ECR
|
Alabama Powers energy cost recovery rate mechanism | |
registrants
|
Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, and Southern Power |
5
Term | Meaning | |
SCR
|
Selective catalytic reduction | |
SCS
|
Southern Company Services, Inc. | |
SEC
|
Securities and Exchange Commission | |
Southern Company
|
The Southern Company | |
Southern Company system
|
Southern Company, the traditional operating companies, Southern Power, and other subsidiaries | |
SouthernLINC Wireless
|
Southern Communications Services, Inc. | |
Southern Nuclear
|
Southern Nuclear Operating Company, Inc. | |
Southern Power
|
Southern Power Company | |
S&P
|
Standard and Poors Ratings Services, a division of The McGraw Hill Companies, Inc. | |
traditional operating companies
|
Alabama Power, Georgia Power, Gulf Power, and Mississippi Power | |
Westinghouse
|
Westinghouse Electric Company LLC | |
wholesale revenues
|
revenues generated from sales for resale |
6
| the impact of recent and future federal and state regulatory changes, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, implementation of the Energy Policy Act of 2005, environmental laws including regulation of water quality, coal combustion byproducts, and emissions of sulfur, nitrogen, carbon, soot, particulate matter, hazardous air pollutants, including mercury, and other substances, financial reform legislation, and also changes in tax and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; | |
| current and future litigation, regulatory investigations, proceedings, or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, FERC matters, and IRS audits; | |
| the effects, extent, and timing of the entry of additional competition in the markets in which Southern Companys subsidiaries operate; | |
| variations in demand for electricity, including those relating to weather, the general economy and recovery from the recent recession, population and business growth (and declines), and the effects of energy conservation measures; | |
| available sources and costs of fuels; | |
| effects of inflation; | |
| ability to control costs and avoid cost overruns during the development and construction of facilities; | |
| investment performance of Southern Companys employee benefit plans and nuclear decommissioning trust funds; | |
| advances in technology; | |
| state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and other cost recovery mechanisms; | |
| regulatory approvals and actions related to the Plant Vogtle expansion, including Georgia PSC and NRC approvals and potential DOE loan guarantees; | |
| regulatory approvals and actions related to the Kemper IGCC, including Mississippi PSC approvals and potential DOE loan guarantees; | |
| the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; | |
| internal restructuring or other restructuring options that may be pursued; | |
| potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; | |
| the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due and to perform as required; | |
| the ability to obtain new short- and long-term contracts with wholesale customers; | |
| the direct or indirect effect on Southern Companys business resulting from terrorist incidents and the threat of terrorist incidents; | |
| interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Companys and its subsidiaries credit ratings; | |
| the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; | |
| catastrophic events such as fires, earthquakes, explosions, floods, hurricanes, droughts, pandemic health events such as influenzas, or other similar occurrences; | |
| the direct or indirect effects on Southern Companys business resulting from incidents affecting the U.S. electric grid or operation of generating resources; | |
| the effect of accounting pronouncements issued periodically by standard setting bodies; and | |
| other factors discussed elsewhere herein and in other reports filed by the registrants from time to time with the SEC. |
7
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
3,396
$
3,459
449
542
150
135
17
21
4,012
4,157
1,476
1,645
100
127
944
908
418
343
220
212
3,158
3,235
854
922
35
49
(222
)
(222
)
2
(2
)
(185
)
(175
)
669
747
231
236
438
511
16
16
$
422
$
495
$
0.50
$
0.60
$
0.49
$
0.60
848
823
854
825
$
0.4550
$
0.4375
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
438
$
511
501
422
174
107
(2
)
(20
)
(35
)
(49
)
(11
)
5
21
19
(19
)
(14
)
(37
)
276
43
(42
)
133
(77
)
(94
)
(108
)
(100
)
131
(73
)
(277
)
(112
)
23
2
998
738
(1,086
)
(1,054
)
(3
)
61
8
(928
)
(238
)
924
189
14
(15
)
(28
)
136
28
13
7
(884
)
(1,088
)
(54
)
132
937
350
193
147
(824
)
(256
)
(385
)
(359
)
(16
)
(16
)
(2
)
1
(151
)
(1
)
(37
)
(351
)
447
690
$
410
$
339
$
197
$
182
(357
)
6
531
373
Table of Contents
At March 31,
At December 31,
Assets
2011
2010
(in millions)
$
410
$
447
7
68
1,024
1,140
341
420
220
209
249
285
(26
)
(25
)
1,350
1,308
828
827
150
151
435
784
199
210
53
59
5,240
5,883
57,408
56,731
20,384
20,174
37,024
36,557
67
738
670
4,872
4,775
42,701
42,002
1,369
1,370
630
624
267
277
2,266
2,271
1,263
1,280
104
88
178
178
269
274
133
218
2,432
2,402
433
436
4,812
4,876
$
55,019
$
55,032
Table of Contents
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholders Equity
2011
2010
(in millions)
$
1,435
$
1,301
1,243
1,297
1,315
1,275
333
332
13
8
183
187
192
440
259
225
190
194
165
438
133
152
83
88
493
535
6,037
6,472
18,133
18,154
7,673
7,554
233
235
525
509
1,575
1,580
1,283
1,257
1,170
1,158
335
312
508
517
13,302
13,122
37,472
37,748
375
375
4,248
4,219
3,894
3,702
(15
)
(15
)
8,404
8,366
(66
)
(70
)
16,465
16,202
707
707
17,172
16,909
$
55,019
$
55,032
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
438
$
511
3
1
3
6
(1
)
2
(1
)
4
9
(16
)
(16
)
$
426
$
504
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(change in millions)
(% change)
$(73)
(14.6)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(63)
(1.8)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
(in millions)
(% change)
$
3,459
166
4.8
(5
)
(0.1
)
(90
)
(2.6
)
(134
)
(3.9
)
$
3,396
(1.8
)%
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(93)
(17.2)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(change in millions)
(% change)
$15
11.1
(change in millions)
(% change)
$(4)
(20.3)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
(169
)
(10.3
)
(27
)
(20.8
)
$
(196
)
*
Fuel includes fuel purchased by the Southern Company system for tolling
agreements where power is generated by
the provider and is included in purchased power when determining the average cost of
purchased power.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
First Quarter
Percent
Average Cost
2011
2010
Change
(cents per net KWH)
3.25
3.60
(9.7
)
9.25
7.37
25.5
(change in millions)
(% change)
$36
3.8
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$75
21.9
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$8
3.9
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(14)
(28.6)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(5)
(1.8)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Scherer 3
July 1, 2011
Branch 1
December 31, 2013
Branch 2
October 1, 2013
Branch 3
October 1, 2015
Branch 4
December 31, 2015
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(196
)
38
$
(158
)
(a)
Current period changes also include the changes in fair value of new contracts entered into
during the period, if any.
Asset (Liability) Derivatives
March 31, 2011
December 31, 2010
(in millions)
$
(156
)
$
(193
)
(1
)
(2
)
(2
)
$
(158
)
$
(196
)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(158
)
(125
)
(33
)
$
(158
)
$
(125
)
$
(33
)
$
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
30
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
Table of Contents
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
1,126
$
1,176
68
172
75
98
51
49
1,320
1,495
395
489
11
18
46
52
297
310
157
145
85
82
991
1,096
329
399
5
13
4
4
(74
)
(75
)
(6
)
(6
)
(71
)
(64
)
258
335
96
122
162
213
10
10
$
152
$
203
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
152
$
203
2
1
2
1
$
154
$
204
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
162
$
213
185
168
59
47
(5
)
(13
)
(11
)
(8
)
3
3
4
1
2
(4
)
4
51
11
3
13
10
(3
)
(69
)
(78
)
(153
)
(75
)
160
69
(67
)
(41
)
(2
)
(38
)
327
274
(213
)
(255
)
11
5
(97
)
(39
)
97
39
(8
)
(5
)
(2
)
(26
)
(12
)
(17
)
(224
)
(298
)
5
6
250
(200
)
(10
)
(10
)
(138
)
(136
)
(5
)
(1
)
(98
)
(141
)
5
(165
)
154
368
$
159
$
203
$
72
$
59
(110
)
19
26
48
Table of Contents
At March 31,
At December 31,
Assets
2011
2010
(in millions)
$
159
$
154
7
18
321
362
110
153
10
5
33
35
89
57
(10
)
(10
)
388
391
336
346
56
55
140
208
32
38
7
10
1,678
1,822
20,218
19,966
7,038
6,931
13,180
13,035
317
283
428
547
13,925
13,865
63
64
578
552
71
71
712
687
456
488
267
257
5
4
673
675
209
196
1,610
1,620
$
17,925
$
17,994
Table of Contents
CONDENSED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholders Equity
2011
2010
(in millions)
$
$
200
158
210
170
273
86
86
4
2
51
32
62
63
45
45
34
99
24
31
23
22
39
41
696
1,104
6,235
5,987
2,774
2,747
86
85
155
157
309
311
528
520
712
701
236
217
90
87
4,890
4,825
11,821
11,916
342
342
343
343
1,222
1,222
2,166
2,156
2,036
2,022
(5
)
(7
)
5,419
5,393
$
17,925
$
17,994
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(51)
(25.1)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(50)
(4.3)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
(in millions)
(% change)
$
1,176
26
2.2
(3
)
(0.2
)
(45
)
(3.9
)
(28
)
(2.4
)
$
1,126
(4.3
)%
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(104)
(60.5)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(23)
(23.5)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
(94
)
(19.2
)
(7
)
(38.9
)
(6
)
(11.5
)
$
(107
)
*
Fuel includes fuel purchased by Alabama Power for tolling agreements where power is
generated by the provider
and is included in purchased power when determining the average cost of purchased
power.
First Quarter
First Quarter
Percent
Average Cost
2011
2010
Change
(cents per net KWH)
2.62
2.80
(6.4
)
5.26
7.08
(25.7
)
*
KWHs generated by hydro are excluded from the average cost of fuel.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(13)
(4.2)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$12
8.3
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(8)
(61.5)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(26)
(21.3)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(38
)
11
$
(27
)
(a)
Current period changes also include the changes in fair value of new contracts entered into
during the period, if any.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(27
)
(23
)
(4
)
$
(27
)
$
(23
)
$
(4
)
$
Table of Contents
Table of Contents
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
1,815
$
1,792
83
110
11
14
80
68
1,989
1,984
677
758
74
82
163
162
422
389
173
114
87
80
1,596
1,585
393
399
25
35
(96
)
(93
)
(1
)
(6
)
(72
)
(64
)
321
335
111
93
210
242
4
4
$
206
$
238
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
206
$
238
1
3
$
207
$
241
Table of Contents
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months
Ended March 31,
2011
2010
(in millions)
$
210
$
242
210
154
56
59
2
(18
)
33
25
(25
)
(35
)
(7
)
(4
)
4
3
5
5
(52
)
(26
)
122
(9
)
(30
)
81
(9
)
1
80
23
(4
)
(8
)
(50
)
(17
)
(194
)
(185
)
(65
)
(7
)
64
43
350
327
(513
)
(625
)
(830
)
(199
)
827
150
1
(14
)
93
41
(6
)
51
(428
)
(596
)
(62
)
(81
)
171
460
137
300
350
250
(84
)
(101
)
(250
)
(300
)
(4
)
(4
)
(224
)
(205
)
(2
)
(2
)
81
268
3
(1
)
8
14
$
11
$
13
$65
$
62
(77
)
(6
)
350
275
Table of Contents
CONDENSED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Assets
2011
2010
(in millions)
$
11
$
8
540
580
160
172
188
184
54
60
52
67
21
21
(13
)
(11
)
654
624
380
371
77
78
6
99
107
105
66
80
2,303
2,438
26,681
26,397
10,008
9,966
16,673
16,431
67
421
386
3,304
3,287
20,465
20,104
69
70
791
818
40
42
900
930
731
723
101
91
128
214
1,224
1,207
191
207
2,375
2,442
$
26,043
$
25,914
Table of Contents
CONDENSED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholders Equity
2011
2010
(in millions)
$
379
$
415
514
576
200
243
644
574
198
198
34
1
180
187
95
328
142
94
56
58
46
109
70
77
31
31
100
144
162
134
2,851
3,169
8,169
7,931
3,773
3,718
127
129
227
229
685
684
721
705
128
131
196
211
5,857
5,807
16,877
16,907
45
45
221
221
398
398
5,467
5,291
3,045
3,063
(10
)
(11
)
8,900
8,741
$
26,043
$
25,914
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
(13.4)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$23
1.3
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
(in millions)
(% change)
$
1,792
141
7.9
(7
)
(0.4
)
(31
)
(1.8
)
(80
)
(4.4
)
$
1,815
1.3
%
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
(24.5)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$12
17.6
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
(81
)
(10.7
)
(8
)
(9.8
)
1
0.6
$
(88
)
*
Fuel includes fuel purchased by Georgia Power for tolling agreements where power
is generated by the provider and is
included in purchased power when determining the average cost of purchased power.
First Quarter
First Quarter
Percent
Average Cost
2011
2010
Change
(cents per net KWH)
3.73
3.78
(1.3
)
5.57
6.36
(12.4
)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
8.5
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$59
51.8
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$7
8.8
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(10)
(28.6)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$18
19.4
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
July 1, 2011
December 31, 2013
October 1, 2013
October 1, 2015
December 31, 2015
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(100
)
17
(1
)
$
(84
)
(a)
Current period changes also include the changes in fair value of new contracts entered into
during the period, if any.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(84
)
(70
)
(14
)
$
(84
)
$
(70
)
$
(14
)
$
Table of Contents
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
274,826
$
304,750
31,019
27,914
4,135
9,518
14,628
14,530
324,608
356,712
131,782
152,712
7,003
7,435
16,618
20,413
80,509
70,418
31,756
28,071
24,896
25,233
292,564
304,282
32,044
52,430
2,135
1,385
14
17
(13,629
)
(11,385
)
(563
)
(533
)
(12,043
)
(10,516
)
20,001
41,914
6,759
15,063
13,242
26,851
1,551
1,551
$
11,691
$
25,300
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
11,691
$
25,300
(1,518
)
143
166
143
(1,352
)
$
11,834
$
23,948
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
13,242
$
26,851
33,294
29,659
6,249
2,917
(2,135
)
(1,385
)
(1,256
)
550
518
623
(3,793
)
(520
)
35,336
6,150
1,156
983
(14,941
)
17,419
(726
)
(1,170
)
28,889
4,530
11
7
12
(8,863
)
(4,443
)
4,053
15,539
(10,000
)
(3,462
)
6,127
6,304
87,157
100,568
(94,239
)
(81,225
)
2,340
(5,314
)
(5,759
)
3,171
(11,846
)
(2,198
)
(699
)
68
(190
)
(98,512
)
(97,379
)
(6,620
)
(6,599
)
50,000
50,000
809
1,128
(125
)
(85
)
(1,551
)
(1,551
)
(27,500
)
(26,075
)
110
605
15,123
17,423
3,768
20,612
16,434
8,677
$
20,202
$
29,289
$
8,284
$
9,461
(29,557
)
(4,383
)
17,882
32,308
Table of Contents
At March 31,
At December 31,
Assets
2011
2010
(in thousands)
$
20,202
$
16,434
58,954
74,377
44,970
64,697
22,077
19,690
10,253
9,867
4,923
7,859
(1,518
)
(2,014
)
182,096
167,155
45,455
44,729
16,849
20,278
25,937
58,412
3,259
3,585
433,457
485,069
3,738,908
3,634,255
1,087,442
1,069,006
2,651,466
2,565,249
200,079
209,808
2,851,545
2,775,057
16,284
16,352
49,920
46,357
7,998
7,291
237,448
219,877
29,288
34,936
324,654
308,461
$
3,625,940
$
3,584,939
Table of Contents
CONDENSED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholder's Equity
2011
2010
(in thousands)
$
110,000
$
110,000
86,563
93,183
39,567
46,342
67,856
68,840
35,914
35,600
4,613
3,835
11,754
7,944
18,530
13,393
6,234
14,459
22,860
27,060
7,167
9,415
18,863
19,766
429,921
449,837
1,114,406
1,114,398
396,377
382,876
7,771
8,109
75,472
76,654
205,373
204,408
42,378
42,915
145,382
132,708
872,753
847,670
2,417,080
2,411,905
97,998
97,998
353,060
303,060
539,867
538,375
220,519
236,328
(2,584
)
(2,727
)
1,110,862
1,075,036
$
3,625,940
$
3,584,939
Table of Contents
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
(53.8)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(29.9)
(9.8)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
(in millions)
(% change)
$
304.7
(2.0
)
(0.7
)
1.2
0.4
(9.5
)
(3.1
)
(19.6
)
(6.4
)
$
274.8
(9.8
)%
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
11.1
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(5.4)
(56.6)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
(21.0
)
(13.7
)
(0.4
)
(5.8
)
(3.8
)
(18.6
)
$
(25.2
)
*
Fuel includes fuel purchased by Gulf Power for tolling agreements where power is
generated by the provider and
is included in purchased power when determining the average cost of purchased
power.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
First Quarter
Percent
Average Cost
2011
2010
Change
(cents per net KWH)
4.69
5.11
(8.22
)
5.37
5.56
(3.42
)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
14.3
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$3.7
13.1
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$0.7
54.2
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$2.2
19.7
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(8.3)
(55.1)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(11
)
2
1
$
(8
)
(a)
Current period changes also include the changes in fair value of new contracts entered into
during the period, if any.
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(8
)
(5
)
(3
)
$
(8
)
$
(5
)
$
(3
)
$
Table of Contents
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
180,474
$
186,587
69,851
78,889
9,300
14,675
3,651
3,487
263,276
283,638
121,054
130,797
1,010
3,621
8,350
14,721
70,367
67,338
19,863
18,675
17,481
18,460
238,125
253,612
25,151
30,026
3,131
18
342
33
(6,013
)
(6,179
)
(403
)
1,531
(2,943
)
(4,597
)
22,208
25,429
7,158
9,743
15,050
15,686
433
433
$
14,617
$
15,253
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
14,617
$
15,253
(2
)
20
$
14,615
$
15,273
Table of Contents
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
15,050
$
15,686
21,442
20,118
10,015
(8,080
)
9,750
(3,131
)
(18
)
1,037
1,822
813
757
73
24
(18,832
)
(1,436
)
1,138
11,592
7,715
(538
)
17,761
(317
)
(885
)
15,976
1,649
(8,262
)
17,538
970
(31,213
)
(12,109
)
(9,556
)
(7,719
)
7,756
7,596
(149
)
(708
)
66,351
16,974
(148,917
)
(19,054
)
(2,830
)
(3,375
)
33,291
2,812
16,912
50,000
(834
)
(5,316
)
(52,378
)
(24,933
)
50,610
752
106
75
(349
)
(323
)
(130,000
)
(433
)
(433
)
(18,875
)
(17,150
)
(418
)
(1
)
(99,359
)
(17,080
)
(85,386
)
(25,039
)
160,779
65,025
$
75,393
$
39,986
$
6,135
$
7,028
(32,294
)
(3,821
)
72,114
6,501
Table of Contents
At March 31,
At December 31,
Assets
2011
2010
(in thousands)
$
75,393
$
160,779
50,000
31,355
37,532
25,992
31,010
9,345
11,220
30,905
17,837
(467
)
(638
)
112,777
112,240
28,988
28,671
60,440
63,896
46,458
59,596
21,482
19,057
442,668
591,200
2,416,242
2,392,477
980,896
971,559
1,435,346
1,420,918
383,619
274,585
1,818,965
1,695,503
6,111
5,900
21,521
18,065
128,379
132,420
20,357
33,233
170,257
183,718
$
2,438,001
$
2,476,321
Table of Contents
CONDENSED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholders Equity
2011
2010
(in thousands)
$
126,465
$
256,437
48,146
51,887
116,911
59,295
13,181
12,543
8,753
4,356
16,147
51,709
5,132
5,933
6,521
16,076
5,730
6,177
84,802
77,046
24,825
27,525
20,454
20,115
477,067
589,099
461,696
462,032
298,724
281,967
12,096
11,792
43,098
33,678
114,369
113,964
115,192
111,614
60,452
58,814
37,865
43,213
681,796
655,042
1,620,559
1,706,173
32,780
32,780
37,691
37,691
444,344
392,790
302,627
306,885
2
784,662
737,368
$
2,438,001
$
2,476,321
Table of Contents
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(0.7)
(4.2)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(6.1)
(3.3)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
(in millions)
(% change)
$
186.6
1.0
0.5
3.5
1.9
(4.0
)
(2.2
)
(6.6
)
(3.5
)
$
180.5
(3.3
)%
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(9.0)
(11.5)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(5.4)
(36.6)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
(9.7
)
(7.4
)
(2.6
)
(72.1
)
(6.4
)
(43.3
)
$
(18.7
)
First Quarter
First Quarter
Percent
Average Cost
2011
2010
Change
(cents per net KWH)
3.92
4.23
(7.3
)
3.08
3.76
(18.1
)
Table of Contents
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$3.1
4.5
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$1.2
6.4
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(1.0)
(5.3)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$3.1
N/M
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(0.2)
(2.7)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
($1.9)
N/M
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(2.5)
(26.5)
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(44
)
7
$
(37
)
(a)
Current period changes also include the changes in fair value of new contracts
entered into during the period, if any.
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(37
)
(24
)
(13
)
$
(37
)
$
(24
)
$
(13
)
$
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
197,166
$
153,337
83,274
101,757
1,347
1,394
281,787
256,488
102,715
97,514
8,942
18,542
15,099
23,411
42,754
39,010
30,167
29,109
4,763
5,106
204,440
212,692
77,347
43,796
(18,829
)
(20,054
)
59
418
(18,770
)
(19,636
)
58,577
24,160
20,834
9,436
$
37,743
$
14,724
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
37,743
$
14,724
643
2,677
1,630
1,567
2,273
4,244
$
40,016
$
18,968
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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Three Months
Ended March 31,
2011
2010
(in thousands)
$
37,743
$
14,724
33,580
32,355
8,601
13,388
38,068
(21,476
)
(20,993
)
(63
)
762
1,752
930
20,759
16,566
625
3,815
253
4,721
15,744
(9,248
)
(137
)
1,020
(21,645
)
(15,111
)
4,888
3,433
(12,281
)
(12,028
)
(519
)
297
105,892
34,631
(113,518
)
(68,179
)
43,259
15,489
(11,320
)
(8,145
)
(3,165
)
(245
)
(84,744
)
(61,080
)
(20,360
)
48,006
17,179
1,632
(3,066
)
(22,800
)
(26,775
)
38
95
(29,009
)
22,958
(7,861
)
(3,491
)
14,204
7,152
$
6,343
$
3,661
$
26,993
$
28,900
(44,721
)
1,532
78,567
30,963
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Assets
2011
2010
(in thousands)
$
6,343
$
14,204
65,359
77,033
2,388
1,979
10,473
19,673
13,209
13,663
34,356
33,934
33,272
41,627
10,343
53,860
4,297
4,161
2,811
2,160
19
182,851
262,313
3,149,499
3,143,919
562,973
536,107
2,586,526
2,607,812
538,067
427,788
3,124,593
3,035,600
1,839
1,839
48,231
48,426
50,070
50,265
80,134
69,740
3,213
3,275
20,214
16,541
103,561
89,556
$
3,461,075
$
3,437,734
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CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
At March 31,
At December 31,
Liabilities and Stockholders Equity
2011
2010
(in thousands)
$
253
$
65,883
249,427
203,904
46,536
69,783
89,075
45,985
2,390
812
6,005
2,775
17,696
29,977
5,553
5,773
3,512
3,923
420,447
428,815
1,299,364
1,302,619
317,738
307,989
90,965
80,401
9,763
30,533
4,376
4,635
17,450
16,203
440,292
439,761
2,160,103
2,171,195
3,357
3,319
918,148
900,969
391,213
376,270
(11,746
)
(14,019
)
1,297,615
1,263,220
$
3,461,075
$
3,437,734
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
156.3
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$43.9
28.6
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(18.5)
(18.2)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$
5.2
5.3
(9.6
)
(51.8
)
(8.3
)
(35.5
)
$
(12.7
)
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
9.6
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$(1.2)
(6.1)
First Quarter 2011 vs. First Quarter 2010
(change in millions)
(% change)
$11.4
120.8
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
First Quarter
2011
Changes
Fair Value
(in millions)
$
(3.5
)
0.7
0.5
$
(2.3
)
(a)
Current period changes also include the changes in fair value of new contracts
entered into during the period, if any.
March 31, 2011
December 31, 2010
0.8
0.9
$
(3.20
)
$
(2.33
)
13.5
13.0
$
0.01
$
0.11
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MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Asset (Liability) Derivatives
March 31, 2011
December 31, 2010
(in millions)
$
0.1
$
(1.0
)
(2.4
)
(2.5
)
$
(2.3
)
$
(3.5
)
March 31, 2011
Fair Value Measurements
Total
Maturity
Fair Value
Year 1
Years 2&3
Years 4&5
(in millions)
$
$
$
$
(2.3
)
(2.7
)
0.4
$
(2.3
)
$
(2.7
)
$
$
0.4
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FINANCIAL STATEMENTS BY REGISTRANT
Registrant
Applicable Notes
A, B, C, D, E, F, G, H, I
A, B, C, E, F, G, H
A, B, C, E, F, G, H
A, B, C, E, F, G, H
A, B, C, E, F, G, H
A, B, C, E, G, H
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ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
GULF POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
(A)
INTRODUCTION
The condensed quarterly financial statements of each registrant included herein have been prepared
by such registrant, without audit, pursuant to the rules and regulations of the SEC. The Condensed
Balance Sheets as of December 31, 2010 have been derived from the audited financial statements of
each registrant. In the opinion of each registrants management, the information regarding such
registrant furnished herein reflects all adjustments, which, except as otherwise disclosed, are of
a normal recurring nature, necessary to present fairly the results of operations for the periods
ended March 31, 2011 and 2010. Certain information and footnote disclosures normally included in
annual financial statements prepared in accordance with GAAP have been condensed or omitted
pursuant to such rules and regulations, although each registrant believes that the disclosures
regarding such registrant are adequate to make the information presented not misleading.
Disclosures which would substantially duplicate the disclosures in the Form 10-K and details which
have not changed significantly in amount or composition since the filing of the Form 10-K are
generally omitted from this Quarterly Report on Form 10-Q. Therefore, these Condensed Financial
Statements should be read in conjunction with the financial statements and the notes thereto
included in the Form 10-K. Due to the seasonal variations in the demand for energy, operating
results for the periods presented are not necessarily indicative of the operating results to be
expected for the full year.
Effective March 15, 2011, Southern Company transferred its ownership in its wholly-owned
subsidiary, Southern Renewable Energy, Inc. (SRE), to Southern Power.
SRE was formed to construct, acquire, own, and manage renewable generation assets and sell electricity at market-based prices in the wholesale market.
As a transfer of net assets
among entities under common control, the assets and liabilities of SRE were transferred at
historical cost. The consolidated financial statements of Southern Power have been revised to
include the financial condition and the results of operations of SRE since its inception in January
2010.
Southern Company has made separate guarantees to two counterparties regarding performance of
contractual commitments by SRE. The total original notional amount of the guarantees was $120
million, approximately $12 million of which was outstanding at March 31, 2011. Of this amount,
approximately $3 million is expected to expire in August 2011, and approximately $9 million is
expected to expire in 2037.
Certain prior years data presented in the financial statements have been reclassified to conform
to the current year presentation.
(B)
CONTINGENCIES AND REGULATORY MATTERS
See Note 3 to the financial statements of the registrants in Item 8 of the Form 10-K for
information relating to various lawsuits, other contingencies, and regulatory matters.
General Litigation Matters
Each registrant is subject to certain claims and legal actions arising in the ordinary course of
business. In addition, each registrants business activities are subject to extensive governmental
regulation related to public health and the environment, such as regulation of air emissions and
water discharges. Litigation over environmental issues and claims of various types, including
property damage, personal injury, common law nuisance, and citizen enforcement of environmental
requirements such as opacity and air and water quality standards, has increased generally
throughout the U.S. In particular, personal injury and other claims for damages caused by alleged
exposure to hazardous materials, and common law nuisance claims for injunctive relief and property
damage allegedly caused by greenhouse gas and other emissions, have become more frequent. The
ultimate outcome of such pending or potential litigation against each registrant and any of its
subsidiaries cannot be predicted at this time; however, for current proceedings not specifically
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reported herein or in Note 3 to the financial statements of each registrant in Item 8 of the Form
10-K, management does not anticipate that the liabilities, if any, arising from such current
proceedings would have a material adverse effect on such registrants financial statements.
Environmental Matters
New Source Review Actions
In November 1999, the EPA brought a civil action in the U.S. District Court for the Northern
District of Georgia against certain Southern Company subsidiaries, including Alabama Power and
Georgia Power, alleging that these subsidiaries had violated NSR provisions of the Clean Air Act
and related state laws at certain coal-fired generating facilities. After Alabama Power was
dismissed from the original action, the EPA filed a separate action in January 2001 against Alabama
Power in the U.S. District Court for the Northern District of Alabama. In these lawsuits, the EPA
alleges that NSR violations occurred at eight coal-fired generating facilities operated by Alabama
Power and Georgia Power, including facilities co-owned by Mississippi Power and Gulf Power. The
civil actions request penalties and injunctive relief, including an order requiring installation of
the best available control technology at the affected units. The EPA concurrently issued notices
of violation to Gulf Power and Mississippi Power relating to Gulf Powers Plant Crist and
Mississippi Powers Plant Watson. In early 2000, the EPA filed a motion to amend its complaint to
add Gulf Power and Mississippi Power as defendants based on the allegations in the notices of
violation. However, in March 2001, the court denied the motion based on lack of jurisdiction, and
the EPA has not re-filed. The action against Georgia Power has been administratively closed since
the spring of 2001, and the case has not been reopened. The separate action against Alabama Power
is ongoing.
In June 2006, the U.S. District Court for the Northern District of Alabama entered a consent decree
between Alabama Power and the EPA, resolving a portion of the Alabama Power lawsuit relating to the
alleged NSR violations at Plant Miller. In July 2008, the U.S. District Court for the Northern
District of Alabama granted partial summary judgment in favor of Alabama Power with respect to its
other affected units regarding the proper legal test for determining whether projects are routine
maintenance, repair, and replacement and therefore are excluded from NSR permitting.
In September 2010, the EPA dismissed five of its eight remaining claims against Alabama Power,
leaving only three claims for summary disposition or trial, including the claim relating to a
facility co-owned by Mississippi Power. The parties each filed motions for summary judgment in
September 2010.
On March 14, 2011, the U.S. District Court for the Northern District of Alabama granted Alabama
Powers motion for summary judgment on all remaining claims and dismissed the case with prejudice.
The EPA has the right to appeal within 60 days of the order.
Southern Company believes that the traditional operating companies complied with applicable laws
and the EPA regulations and interpretations in effect at the time the work in question took place.
The Clean Air Act authorizes maximum civil penalties of $25,000 to $37,500 per day, per violation
at each generating unit, depending on the date of the alleged violation. An adverse outcome could
require substantial capital expenditures or affect the timing of currently budgeted capital
expenditures that cannot be determined at this time and could possibly require payment of
substantial penalties. Such expenditures could affect future results of operations, cash flows,
and financial condition if such costs are not recovered through regulated rates. The ultimate
outcome of these matters cannot be determined at this time.
Carbon Dioxide Litigation
New York Case
In July 2004, three environmental groups and attorneys general from several states, each outside of
Southern Companys service territory, and the corporation counsel for New York City filed
complaints in the U.S. District Court for the Southern District of New York against Southern
Company and four other electric power companies. The complaints
allege that the companies emissions of carbon dioxide, a greenhouse gas, contribute to global
warming, which the plaintiffs assert is a public nuisance. Under common law public and private
nuisance theories, the plaintiffs seek a
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judicial order (1) holding each defendant jointly and severally liable for creating, contributing
to, and/or maintaining global warming and (2) requiring each of the defendants to cap its emissions
of carbon dioxide and then reduce those emissions by a specified percentage each year for at least
a decade. The plaintiffs have not, however, requested that damages be awarded in connection with
their claims. Southern Company believes these claims are without merit and
notes that the complaint cites no statutory or regulatory basis for the claims. In September 2005,
the U.S. District Court for the Southern District of New York granted Southern Companys and the
other defendants motions to dismiss these cases. The plaintiffs filed an appeal to the U.S. Court
of Appeals for the Second Circuit in October 2005 and, in September 2009, the U.S. Court of Appeals
for the Second Circuit reversed the district courts ruling, vacating the dismissal of the
plaintiffs claim, and remanding the case to the district court. In December 2010, the U.S.
Supreme Court granted the defendants petition for writ of certiorari. On April 19, 2011, the U.S.
Supreme Court heard oral argument in this case, and a decision is expected before year-end. The
ultimate outcome of these matters cannot be determined at this time.
Kivalina Case
In February 2008, the Native Village of Kivalina and the City of Kivalina filed a suit in the U.S.
District Court for the Northern District of California against several electric utilities
(including Southern Company), several oil companies, and a coal company. The plaintiffs are the
governing bodies of an Inupiat village in Alaska. The plaintiffs contend that the village is being
destroyed by erosion allegedly caused by global warming that the plaintiffs attribute to emissions
of greenhouse gases by the defendants. The plaintiffs assert claims for public and private
nuisance and contend that some of the defendants have acted in concert and are therefore jointly
and severally liable for the plaintiffs damages. The suit seeks damages for lost property values
and for the cost of relocating the village, which is alleged to be $95 million to $400 million.
Southern Company believes that these claims are without merit and notes that the complaint cites no
statutory or regulatory basis for the claims. In September 2009, the U.S. District Court for the
Northern District of California granted the defendants motions to dismiss the case based on lack
of jurisdiction and ruled the claims were barred by the political question doctrine and by the
plaintiffs failure to establish the standard for determining that the defendants conduct caused
the injury alleged. In November 2009, the plaintiffs filed an appeal with the U.S. Court of
Appeals for the Ninth Circuit challenging the district courts order dismissing the case. On
January 24, 2011, the defendants filed a motion with the U.S. Court of Appeals for the Ninth
Circuit to defer scheduling the case pending the decision of the U.S. Supreme Court in the New York
case discussed above. On February 23, 2011, the U.S. Court of Appeals for the Ninth Circuit issued
an order staying the case until June 15, 2011. The ultimate outcome of this matter cannot be
determined at this time.
Environmental Remediation
The registrants must comply with environmental laws and regulations that cover the handling and
disposal of waste and releases of hazardous substances. Under these various laws and regulations,
the subsidiaries may also incur substantial costs to clean up properties. The traditional
operating companies have each received authority from their respective state PSCs to recover
approved environmental compliance costs through regulatory mechanisms. Within limits approved by
the state PSCs, these rates are adjusted annually or as necessary.
Georgia Powers environmental remediation liability as of March 31, 2011 was $13.2 million.
Georgia Power has been designated or identified as a potentially responsible party (PRP) at sites
governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive
Environmental Response, Compensation, and Liability Act (CERCLA), including a large site in
Brunswick, Georgia on the CERCLA National Priorities List (NPL). The parties have completed the
removal of wastes from the Brunswick site as ordered by the EPA. Additional claims for recovery of
natural resource damages at this site or for the assessment and potential cleanup of other sites on
the Georgia Hazardous Sites Inventory and CERCLA NPL are anticipated; however, they are not
expected to have a material impact on Georgia Powers or Southern Companys financial statements.
In September 2008, the EPA advised Georgia Power that it has been designated as a PRP at the Ward
Transformer Superfund site located in Raleigh, North Carolina. Numerous other entities have also
received notices regarding this site
from the EPA. Georgia Power, along with other named PRPs, is negotiating with the EPA to address
cleanup of the site and reimbursement for past expenditures related to work performed at the site.
In addition, in April 2009, two PRPs filed
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separate actions in the U.S. District Court for the Eastern District of North Carolina against
numerous other PRPs, including Georgia Power, seeking contribution from the defendants for expenses
incurred by the plaintiffs related to work performed at a portion of the site. The ultimate
outcome of these matters will depend upon further environmental assessment and the ultimate number
of PRPs and cannot be determined at this time; however, it is not expected to have a material
impact on Southern Companys and Georgia Powers financial statements.
Gulf Powers environmental remediation liability includes estimated costs of environmental
remediation projects of approximately $63.5 million as of March 31, 2011. These estimated costs
relate to site closure criteria by the Florida Department of Environmental Protection (FDEP) for
potential impacts to soil and groundwater from herbicide applications at Gulf Power substations.
The schedule for completion of the remediation projects will be subject to FDEP approval. The
projects have been approved by the Florida PSC for recovery through Gulf Powers environmental cost
recovery clause; therefore, there was no impact on net income as a result of these estimates.
In 2003, the Texas Commission on Environmental Quality (TCEQ) designated Mississippi Power as a PRP
at a site in Texas. The site was owned by an electric transformer company that handled Mississippi
Powers transformers as well as those of many other entities. The site owner is bankrupt and the
State of Texas has entered into an agreement with Mississippi Power and several other utilities to
investigate and remediate the site. Amounts expensed during the first quarters of 2010 and 2011
related to this work were not material. Hundreds of entities have received notices from the TCEQ
requesting their participation in the anticipated site remediation. The final impact of this
matter will depend upon further environmental assessment and the ultimate number of PRPs. The
remediation expenses incurred by Mississippi Power are expected to be recovered through the ECO
Plan.
The final outcome of these matters cannot now be determined. However, based on the currently known
conditions at these sites and the nature and extent of activities relating to these sites, Southern
Company, Georgia Power, Gulf Power, and Mississippi Power do not believe that additional
liabilities, if any, at these sites would be material to their respective financial statements.
Right of Way Litigation
Southern Company and certain of its subsidiaries, including Mississippi Power, have been named as
defendants in numerous lawsuits brought by landowners since 2001. The plaintiffs lawsuits claim
that defendants may not use, or sublease to third parties, some or all of the fiber optic
communications lines on the rights of way that cross the plaintiffs properties and that such
actions exceed the easements or other property rights held by defendants. The plaintiffs assert
claims for, among other things, trespass and unjust enrichment and seek compensatory and punitive
damages and injunctive relief. Management of Southern Company and Mississippi Power believe they
have complied with applicable laws and that the plaintiffs claims are without merit.
Mississippi Power has entered into agreements with plaintiffs in approximately 95% of the actions
pending against Mississippi Power to clarify its easement rights in the State of Mississippi.
These agreements have been approved by the Circuit Courts of Harrison County and Jasper County,
Mississippi (First Judicial Circuit), and the related cases have been dismissed. These agreements
have not resulted in any material effects on Southern Companys or Mississippi Powers financial
statements.
In addition, in late 2001, certain subsidiaries of Southern Company, including Mississippi Power,
were named as defendants in a lawsuit brought in Troup County, Georgia, Superior Court by
Interstate Fiber Network Inc. a subsidiary of telecommunications company ITC DeltaCom, Inc. that
uses certain of the defendants rights of way. This lawsuit alleges, among other things, that the
defendants are contractually obligated to indemnify, defend, and hold harmless the
telecommunications company from any liability that may be assessed against it in pending and future
right of way litigation. Southern Company and Mississippi Power believe that the plaintiffs
claims are without merit. In the fall of 2004, the trial court stayed the case until resolution of
the underlying landowner litigation discussed above. In January 2005, the Georgia Court of Appeals
dismissed the telecommunications companys appeal of the trial courts order for lack of
jurisdiction. In August 2010, the defendants filed a motion to dismiss the suit for lack of
prosecution. The court denied
the defendants motion to dismiss the claim. On March 25, 2011, the plaintiffs filed an amended
complaint asserting claims for breach of contract for failing to make the defendants facilities
fully available to the plaintiffs and for failing to
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indemnify the plaintiffs in defending the underlying landowner litigation. An adverse outcome in
this matter, combined with an adverse outcome against the telecommunications company in one or more
of the right of way lawsuits, could result in substantial judgments; however, the final outcome of
these matters cannot now be determined.
Nuclear Fuel Disposal Cost Litigation
See Note 3 to the financial statements of Southern Company, Alabama Power, and Georgia Power under
Nuclear Fuel Disposal Costs in Item 8 of the Form 10-K for information regarding the litigation
brought by Alabama Power and Georgia Power against the government for breach of contracts related
to the disposal of spent nuclear fuel.
In July 2007, the U.S. Court of Federal Claims awarded Georgia Power approximately $30 million,
based on its ownership interests, and awarded Alabama Power approximately $17 million, representing
substantially all of the direct costs of the expansion of spent nuclear fuel storage facilities at
Plants Farley, Hatch, and Vogtle from 1998 through 2004. In November 2007, the governments motion
for reconsideration was denied. In January 2008, the government filed an appeal and, in February
2008, filed a motion to stay the appeal, which the U.S. Court of Appeals for the Federal Circuit
granted in April 2008. In May 2010, the U.S. Court of Appeals for the Federal Circuit lifted the
stay.
On March 11, 2011, the U.S. Court of Appeals for the Federal Circuit issued an order in which it
affirmed the damage award to Alabama Power, but remanded the Georgia Power portion of the
proceeding back to the U.S. Court of Federal Claims for reconsideration of the damages amount in
light of the spent nuclear fuel acceptance rates adopted in a separate proceeding by the U.S. Court
of Appeals for the Federal Circuit.
In April 2008, a second claim against the government was filed for damages incurred after December
31, 2004 (the court-mandated cut-off in the original claim), due to the governments alleged
continuing breach of contract. The complaint does not contain any specific dollar amount for
recovery of damages. Damages will continue to accumulate until the issue is resolved or the
storage is provided. No amounts have been recognized in the financial statements as of March 31,
2011 for either claim. The final outcome of these matters cannot be determined at this time, but
no material impact on net income is expected as any damage amounts collected from the government
are expected to be returned to customers.
Sufficient pool storage capacity for spent fuel is available at Plant Vogtle to maintain full-core
discharge capability for both units into 2014. Construction of an on-site dry storage facility at
Plant Vogtle is expected to begin in sufficient time to maintain pool full-core discharge
capability. At Plants Hatch and Farley, on-site dry spent fuel storage facilities are operational
and can be expanded to accommodate spent fuel through the expected life of each plant.
Income Tax Matters
Georgia State Income Tax Credits
Georgia Powers 2005 through 2009 income tax filings for the State of Georgia include state income
tax credits for increased activity through Georgia ports. Georgia Power also filed similar claims
for the years 2002 through 2004. The Georgia Department of Revenue (DOR) has not responded to
these claims. In July 2007, Georgia Power filed a complaint in the Superior Court of Fulton County
to recover the credits claimed for the years 2002 through 2004. In March 2010, the Superior Court
of Fulton County ruled in favor of Georgia Powers motion for summary judgment. The Georgia DOR
has appealed to the Georgia Court of Appeals and a decision is expected later this year. Any
decision may be subject to further appeal to the Georgia Supreme Court. An unrecognized tax
benefit has been recorded related to these credits. If Georgia Power prevails, no material impact
on Southern Companys or Georgia Powers net income is expected as a significant portion of any tax
benefit is expected to be returned to retail customers in accordance with the 2010 ARP. If Georgia
Power is not successful, payment of the related state tax for previously utilized credits would
have a negative effect on Southern Companys and Georgia Powers cash flow. See Note 5 to the
financial statements of Southern Company and Georgia Power in Item 8 of the Form 10-K under
Unrecognized Tax Benefits and Note (G) herein for additional information. The ultimate outcome
of this matter cannot now be determined.
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State PSC Matters
Alabama Power
Natural Disaster Reserve
See Note 3 to the financial statements of Southern Company under PSC Matters Alabama Power
Natural Disaster Reserve and Note 3 to the financial statements of Alabama Power under Retail
Regulatory Matters Natural Disaster Reserve in Item 8 of the Form 10-K for additional
information. At March 31, 2011, the NDR had an accumulated balance of $127 million, which is
included in the Condensed Balance Sheets herein under other regulatory liabilities, deferred. The
accruals are reflected as operations and maintenance expenses in the Condensed Statements of Income
herein.
On April 27, 2011, devastating storms swept through the central part of Alabama causing significant damage
in parts of Alabama Powers service territory. Over 400,000 of Alabama Powers 1.4 million customers were without
electrical service immediately after the storms, resulting from significant damage to Alabama Powers transmission
and distribution facilities. The preliminary estimated cost associated with repairing the damage to facilities and
restoring electrical service to customers is between $40 million and $55 million for operations and maintenance expenses
and between $180 million and $225 million for capital expenditures. Alabama Power maintains a reserve for operations
and maintenance expenses to cover the cost of damages from major storms to Alabama Powers transmission and distribution facilities.
Georgia Power
Fuel Cost Recovery
See Note 3 to the financial statements of Southern Company and Georgia Power under Retail
Regulatory Matters Georgia Power Fuel Cost Recovery and Retail Regulatory Matters Fuel
Cost Recovery, respectively, in Item 8 of the Form 10-K for additional information. On March 1,
2011, Georgia Power filed a request with the Georgia PSC to decrease fuel rates by 0.61%. The
decrease would reduce Georgia Powers annual billings by approximately $43 million. The decrease
in fuel costs is driven primarily by lower natural gas prices than those included in current rates
as a result of increases in natural gas supplies from the production of shale gas and lower
industrial demand. If approved, the new rates will go into effect June 1, 2011. The ultimate
outcome of this matter cannot be determined at this time.
Nuclear Construction
See Note 3 to the financial statements of Southern Company and Georgia Power under Retail
Regulatory Matters Georgia Power Nuclear Construction and Construction Nuclear,
respectively, in Item 8 of the Form 10-K for additional information regarding Georgia Powers
construction of Plant Vogtle Units 3 and 4.
In December 2010, Westinghouse submitted an AP1000 Design Certification Amendment (DCA) to the NRC.
On February 10, 2011, the NRC announced that it was seeking public comment on a proposed rule to
approve the DCA and amend the certified AP1000 reactor design for use in the U.S. The Advisory
Committee on Reactor Safeguards also issued a letter on January 24, 2011 endorsing the issuance of
the Construction and Operating License (COL) for Plant Vogtle Units 3 and 4. In addition, on March
25, 2011, the NRC submitted to the EPA the final environmental impact statement for Plant Vogtle
Units 3 and 4. Georgia Power currently expects to receive the COL for Plant Vogtle Units 3 and 4
from the NRC in late 2011 based on the NRCs February 16, 2011 release of its COL schedule
framework.
On February 21, 2011, the Georgia PSC voted to approve Georgia Powers third semi-annual
construction monitoring report including total costs of $1.048 billion for Plant Vogtle Units 3 and
4 incurred through June 30, 2010. In connection with its certification of Plant Vogtle Units 3 and
4, the Georgia PSC ordered Georgia Power and the PSC Staff to work together to develop a risk
sharing or incentive mechanism that would provide some level of protection to ratepayers in the
event of significant cost overruns, but also not penalize Georgia Powers earnings if and when
overruns are due to mandates from governing agencies. Such discussions have continued through the
third semi-annual construction monitoring proceedings; however, the Georgia PSC has deferred a
decision with respect to any related risk-sharing or incentive mechanism. A Georgia PSC hearing on
this matter is scheduled on July 6, 2011 and a decision is expected on August 2, 2011. Georgia
Power will continue to file construction monitoring reports by February 28 and August 31 of each
year during the construction period.
In December 2010, the Georgia PSC approved Georgia Powers NCCR tariff, which became effective
January 1, 2011. The NCCR tariff was established to recover financing costs for nuclear
construction projects by including the related
construction work in progress accounts in rate base during the construction period in accordance
with the Georgia Nuclear Energy Financing Act. With respect to Plant Vogtle Units 3 and 4, this
legislation allows Georgia Power to recover
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Scherer 3
July 1, 2011
Branch 1
December 31, 2013
Branch 2
October 1, 2013
Branch 3
October 1, 2015
Branch 4
December 31, 2015
The Multi-Pollutant Rule is designed to reduce emissions of mercury, sulfur dioxide, and nitrogen
oxides statewide. The Utility Maximum Achievable Control Technology rule will also regulate
emissions of mercury, in addition to other air pollutants. All required controls, including SCR,
scrubber, and baghouse, are expected to be operational at Plant Scherer Unit 3 by the required
compliance date. As a result of these proposed rules, Georgia Powers management expects to
request that the Georgia PSC approve de-certification of its Plant Branch Units 1 and 2, totaling
569 MWs of capacity, as of the effective dates for controls under the Multi-Pollutant Rule as
revised. Georgia Power continues to analyze the potential costs and benefits of installing the
required controls on its remaining coal-fired units, including Plant Branch Units 3 and 4, in light
of the proposed air quality rules, as well as additional potential federal regulations related to
water quality and coal combustion byproducts. Georgia Power may determine that retiring and
replacing certain of its existing units with new generating resources or purchased power is more
economically efficient than installing the required controls.
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See Note 3 under Retail Regulatory Matters Rate Plans to the financial statements of Southern
Company and Georgia Power in Item 8 of the Form 10-K for information regarding the 2010 ARP. Under
the terms of the 2010 ARP, any costs associated with changes to Georgia Powers approved
environmental operating or capital budgets resulting from new or revised environmental regulations
through 2013 that are approved by the Georgia PSC in connection with an updated integrated resource
plan will be deferred as a regulatory asset to be recovered over a time period deemed appropriate
by the Georgia PSC. Georgia Power currently expects to file an update to its integrated resource
plan in late summer 2011, which would include the Plant Branch Units 1 and 2 de-certification
request. In connection with this filing, Georgia Power expects to request the Georgia PSC to
approve the deferral and related amortization of the retail portion of the related costs associated
with the de-certification request. Georgia Power moved the retail portion of the net carrying
value of Plant Branch Units 1 and 2 from plant in service, net of depreciation, to other utility
plant, net of depreciation. Consistent with current ratemaking treatment, Georgia Power will
continue to depreciate these units using the composite straight-line rates approved by the Georgia
PSC, and upon actual retirement, expects to include the units remaining net carrying value in rate
base. However, the recovery periods for these units may change in connection with Georgia Powers
updated integrated resource plan. As a result of this regulatory treatment, the de-certification
of Plant Branch Units 1 and 2 is not expected to have a significant impact on Southern Companys or
Georgia Powers financial statements.
The ultimate outcome of these matters cannot be determined at this time.
Gulf Power
Energy Conservation Cost Recovery
Every five years, the Florida PSC establishes new numeric
conservation goals covering a 10-year period
for utilities to reduce annual energy and seasonal peak demand using demand-side management (DSM) programs. After
the goals are established, utilities develop plans and programs to meet the approved goals. The costs for these
programs are recovered through rates established annually in the Energy Conservation Cost Recovery clause.
The most recent goal setting process established new DSM goals for the period 2010-2019. The new goals are significantly
larger than the goals established in the previous five-year cycle due to a change in the cost-effectiveness test on which the
Florida PSC relies to set the goals. Throughout 2010, Gulf Power
engaged in a process at the Florida PSC to develop plans and
programs to meet the new DSM goals. The DSM program standards were approved in April 2011, which allow Gulf Power to implement
its DSM programs designed to meet the new goals. Higher cost recovery rates and achievement of the new DSM goals may result in
reduced sales of electricity which could negatively impact results of operations, cash flows, and financial condition if base
rates cannot be adjusted on a timely basis.
Mississippi Power
Certificated New Plant
On April 27, 2011, Mississippi Power submitted to the Mississippi PSC a proposed rate schedule
detailing Certificated New Plant-A (CNP-A), a new proposed cost recovery mechanism designed
specifically to recover financing costs during the construction phase of the Kemper IGCC. Annual
CNP-A rate filings would be made with the first filing occurring in November 2011. If approved by
the Mississippi PSC, recovery through CNP-A will remain in place thereafter until the end of the
calendar year that the Kemper IGCC is placed into commercial service, which is projected to be
2014. Certificated New Plant-B, which will be filed at a later date, would propose to govern rates
effective from the first calendar year after the Kemper IGCC is placed into commercial service
through the first seven full calendar years of its operation. The ultimate outcome of this matter
cannot be determined at this time.
Integrated Coal Gasification Combined Cycle
See Note 3 to the financial statements of Southern Company under Retail Regulatory Matters
Mississippi Power Integrated Coal Gasification Combined Cycle and of Mississippi Power under
Integrated Coal Gasification Combined Cycle in Item 8 of the Form 10-K for information
regarding Mississippi Powers construction of the Kemper IGCC.
In June 2010, the Mississippi Chapter of the Sierra Club (Sierra Club) filed an appeal of the
Mississippi PSCs June 3, 2010 decision to grant the Certificate of Public Convenience and
Necessity for the Kemper IGCC with the Chancery Court of Harrison County, Mississippi (Chancery
Court). Subsequently, in July 2010, the Sierra Club also filed an appeal directly with the
Mississippi Supreme Court. In October 2010, the Mississippi Supreme Court dismissed the Sierra
Clubs direct appeal. On February 28, 2011, the Chancery Court issued a judgment affirming the
Mississippi PSCs order authorizing the construction of the Kemper IGCC. On March 1, 2011, the
Sierra Club appealed the Chancery Courts decision to the Mississippi Supreme Court.
In May 2009, Mississippi Power received notification from the IRS formally certifying the IRS
allocated Internal Revenue Code Section 48A tax credits (Phase I) of $133 million to Mississippi
Power. On April 19, 2011, Mississippi Power received notification from the IRS formally certifying that
the IRS allocated $279 million of Internal Revenue Code Section 48A tax credits (Phase II) to
Mississippi Power. The utilization of Phase I and Phase II credits is dependent upon meeting the
IRS certification requirements, including an in-service date no later than May 11, 2014 for the
Phase I credits
and April 19, 2016 for the Phase II credits. In order to remain eligible for the Phase II tax
credits, Mississippi Power plans to capture and sequester (via enhanced oil recovery) at least 65%
of the carbon dioxide (CO
2
) produced by the plant
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during operations in accordance with the recapture rules for Section 48A investment tax credits.
Through March 31, 2011, Mississippi Power received and accrued tax benefits totaling $31.9 million
for these tax credits, which will be amortized as a reduction to depreciation and amortization over
the life of the Kemper IGCC.
In February 2008, Mississippi Power requested that the DOE transfer the remaining funds
previously granted under the Clean Coal Power Initiative Round 2 (CCPI2) from a cancelled IGCC
project of one of Southern Companys subsidiaries that would have been located in Orlando,
Florida. In December 2008, an agreement was reached to assign the remaining funds ($270
million) to the Kemper IGCC. Mississippi Power will receive grant funds of $245 million during
the construction of the plant and $25 million during the initial operation of the plant.
Through March 31, 2011, Mississippi Power has received $40 million and requested an additional
$20.1 million associated with this grant.
On March 10, 2011, the Sierra Club filed a lawsuit in the U.S. District Court for the District
of Columbia against the DOE regarding the National Environmental Policy Act review process
asking for a stay on the issuance of CCPI2 funds and a stay to any related construction
activities. On May 5, 2011, Mississippi Power filed a motion to intervene in this lawsuit.
In March 2010, the Mississippi Department of Environmental Quality (MDEQ) issued the Prevention
of Significant Deterioration (PSD) air permit modification for the plant, which modifies the
original PSD air permit issued in October 2008. The Sierra Club requested a formal evidentiary
hearing regarding the issuance of the modified permit. On April 4, 2011, the MDEQ Permit Board
held an evidentiary hearing wherein the permit board unanimously affirmed the PSD air permit.
On March 4, 2011, Mississippi Power and Denbury Onshore (Denbury), a subsidiary of Denbury
Resources Inc., entered into a contract in which Denbury will purchase 70% of the CO
2
captured from the Kemper IGCC.
On April 27, 2011, Mississippi Power submitted to the Mississippi PSC a proposed rate schedule
detailing CNP-A, a new proposed cost recovery mechanism designed specifically to recover
financing cost during the construction phase of the Kemper IGCC. See Certificated New Plant herein for additional information.
As of March 31, 2011, Mississippi Power had spent a total of $352.8 million on the Kemper IGCC,
including regulatory filing costs. Of this total, $277 million was included in CWIP (net of
$60.1 million of CCPI2 grant funds), $13.2 million was recorded in other regulatory assets, $1.5
million was recorded in other deferred charges and assets, and $1.0 million was previously
expensed.
The ultimate outcome of these matters cannot be determined at this time.
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(C)
FAIR VALUE MEASUREMENTS
As of March 31, 2011, assets and liabilities measured at fair value on a recurring basis during
the period, together with the level of the fair value hierarchy in which they fall, were as
follows:
Fair Value Measurements Using
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
As of March 31, 2011:
(Level 1)
(Level 2)
(Level 3)
Total
(in millions)
$
$
14
$
$
14
9
9
6
6
631
738
1,369
262
262
12
49
12
73
$
905
$
816
$
12
$
1,733
$
$
172
$
$
172
1
1
$
$
173
$
$
173
$
$
2
$
$
2
328
61
389
7
7
14
19
8
27
83
83
29
29
28
8
36
71
71
$
453
$
198
$
$
651
$
$
29
$
$
29
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Fair Value Measurements Using
Quoted Prices
in Active
Significant
Markets for
Other
Significant
Identical
Observable
Unobservable
Assets
Inputs
Inputs
As of March 31, 2011:
(Level 1)
(Level 2)
(Level 3)
Total
(in millions)
$
$
2
$
$
2
249
1
250
87
87
60
60
211
211
115
115
68
68
$
249
$
544
$
$
793
$
$
86
$
$
86
$
$
3
$
$
3
14
14
$
14
$
3
$
$
17
$
$
11
$
$
11
$
$
3
$
$
3
6
6
68
68
$
68
$
9
$
$
77
$
$
40
$
$
40
$
$
4
$
$
4
$
$
6
$
$
6
(a)
For additional detail, see the nuclear decommissioning trusts sections for Alabama
Power and Georgia Power in this table.
(b)
Excludes receivables related to investment income, pending investment sales,
and payables related to pending investment purchases.
(c)
Includes the investment securities pledged to creditors and cash collateral
received, and excludes receivables related to investment income, pending investment
sales, and payables related to pending investment purchases and the securities
lending program. As of March 31, 2011, approximately $99 million of the fair market
value of Georgia Powers nuclear decommissioning trust funds securities were on loan
and pledged to creditors under the funds managers securities lending program.
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Valuation Methodologies
The energy-related derivatives primarily consist of over-the-counter financial products for
natural gas and physical power products including, from time to time, basis swaps. These are
standard products used within the energy industry and are valued using the market approach. The
inputs used are mainly from observable market sources, such as forward natural gas prices, power
prices, implied volatility, and LIBOR interest rates. Interest rate and foreign currency
derivatives are also standard over-the-counter financial products valued using the market
approach. Inputs for interest rate derivatives include LIBOR interest rates, interest rate
futures contracts, and occasionally implied volatility of interest rate options. Inputs for
foreign currency derivatives are from observable market sources. See Note (H) herein for
additional information on how these derivatives are used.
Other investments include investments in funds that are valued using the market approach and
income approach. Securities that are traded in the open market are valued at the closing price
on their principal exchange as of the measurement date. Discounts are applied in accordance
with GAAP when certain trading restrictions exist. For investments that are not traded in the
open market, the price paid will have been determined based on market factors including
comparable multiples and the expectations regarding cash flows and business plan execution. As
the investments mature or if market conditions change materially, further analysis of the fair
market value of the investment is performed. This analysis is typically based on a metric, such
as multiple of earnings, revenues, earnings before interest and income taxes, or earnings
adjusted for certain cash changes. These multiples are based on comparable multiples for
publicly traded companies or other relevant prior transactions.
For fair value measurements of investments within the nuclear decommissioning trusts and rabbi
trust funds, specifically the fixed income assets using significant other observable inputs and
unobservable inputs, the primary valuation technique used is the market approach. External
pricing vendors are designated for each of the asset classes in the nuclear decommissioning
trusts and rabbi trust funds with each security discriminately assigned a primary pricing
source, based on similar characteristics.
A market price secured from the primary source vendor is then used in the valuation of the
assets within the trusts. As a general approach, market pricing vendors gather market data
(including indices and market research reports) and integrate relative credit information,
observed market movements, and sector news into proprietary pricing models, pricing systems, and
mathematical tools. Dealer quotes and other market information including live trading levels
and pricing analysts judgment are also obtained when available.
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As of March 31, 2011, the fair value measurements of investments calculated at net asset value
per share (or its equivalent), as well as the nature and risks of those investments, were as
follows:
Fair
Unfunded
Redemption
Redemption
As of March 31, 2011:
Value
Commitments
Frequency
Notice Period
(in millions)
$
100
None
Daily
1 to 3 days
68
None
Daily
Not applicable
89
None
Daily
15 days
262
None
Daily
Not applicable
2
None
Daily
Not applicable
$
89
None
Daily
15 days
71
None
Daily
Not applicable
$
100
None
Daily
1 to 3 days
68
None
Daily
Not applicable
$
14
None
Daily
Not applicable
$
68
None
Daily
Not applicable
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The NRC requires licensees of commercial nuclear power reactors to establish a plan for
providing reasonable assurance of funds for future decommissioning. Alabama Power and Georgia
Power have external trust funds (the Funds) to comply with the NRCs regulations. The
commingled funds in the nuclear decommissioning trusts are invested primarily in a diversified
portfolio of high grade money market instruments, including, but not limited to, commercial
paper, notes, repurchase agreements, and other evidences of indebtedness with a maturity not
exceeding 13 months from the date of purchase. The commingled funds will, however, maintain a
dollar-weighted average portfolio maturity of 90 days or less. The assets may be longer term
investment grade fixed income obligations having a maximum five-year final maturity with put
features or floating rates with a reset rate date of 13 months or less. The primary objective
for the commingled funds is a high level of current income consistent with stability of
principal and liquidity. The corporate bonds commingled funds represent the investment of
cash collateral received under the Funds managers securities lending program that can only be
sold upon the return of the loaned securities. See Note 1 to the financial statements of
Southern Company and Georgia Power under Nuclear Decommissioning in Item 8 of the Form 10-K
for additional information.
Alabama Powers nuclear decommissioning trust includes investments in Trust-Owned Life Insurance
(TOLI). The taxable nuclear decommissioning trust invests in the TOLI in order to minimize the
impact of taxes on the portfolio and can draw on the value of the TOLI through death proceeds,
loans against the cash surrender value, and/or the cash surrender value, subject to legal
restrictions. The amounts reported in the table above reflect the fair value of investments the
insurer has made in relation to the TOLI agreements. The nuclear decommissioning trust does not
own the underlying investments, but the fair value of the investments approximates the cash
surrender value of the TOLI policies. The investments made by the insurer are in commingled
funds. The commingled funds primarily include investments in domestic and international equity
securities and predominantly high-quality fixed income securities. These fixed income
securities include U.S. Treasury and government agency fixed income securities, non-U.S.
government and agency fixed income securities, domestic and foreign corporate fixed income
securities, and, to some degree, mortgage and asset backed securities. The passively managed
funds seek to replicate the performance of a related index. The actively managed funds seek to
exceed the performance of a related index through security analysis and selection.
Southern Company, Alabama Power, and Georgia Power continue to elect the option to fair value
investment securities held in the nuclear decommissioning trust funds. For the three months ended
March 31, 2011, the increase in fair value of the funds, which includes reinvested interest and
dividends, is recorded in the regulatory liability and was $27.3 million for Alabama Power, $14.6
million for Georgia Power, and $41.9 million for Southern Company.
The money market funds are short-term investments of excess funds in various money market mutual
funds, which are portfolios of short-term debt securities. The money market funds are regulated
by the SEC and typically receive the highest rating from credit rating agencies. Regulatory and
rating agency requirements for money market funds include minimum credit ratings and maximum
maturities for individual securities and a maximum weighted average portfolio maturity.
Redemptions are available on a same day basis up to the full amount of the investment in the
money market funds.
Changes in the fair value measurement of the Level 3 items using significant unobservable inputs
for Southern Company at March 31, 2011 were as follows:
Level 3
Other
(in millions)
$
19
1
(5
)
(3
)
$
12
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Carrying Amount
Fair Value
(in millions)
$
19,418
$
20,100
$
6,235
$
6,538
$
8,437
$
8,641
$
1,224
$
1,259
$
586
$
608
$
1,299
$
1,382
The fair values were based on closing market prices (Level 1) or closing prices of comparable
instruments (Level 2).
(D)
STOCKHOLDERS EQUITY
Earnings per Share
For Southern Company, the only difference in computing basic and diluted earnings per share is
attributable to awards outstanding under the stock option and performance share plans. See Note 8
to the financial statements of Southern Company in Item 8 of the Form 10-K for further information
on the stock option and performance share plans. The effects of both stock options and performance
share award units were determined using the treasury stock method. Shares used to compute diluted
earnings per share were as follows:
Three Months
Three Months
Ended
Ended
March 31, 2011
March 31, 2010
(in thousands)
847,510
822,526
6,429
2,261
853,939
824,787
Stock options that were not included in the diluted earnings per share calculation because they
were anti-dilutive were 7 million and 25 million for the three months ended March 31, 2011 and
March 31, 2010, respectively. Assuming an average stock price of $38.01 (the highest exercise
price of the anti-dilutive options outstanding), the effect of options would have been immaterial
for the three months ended March 31, 2011 and would have increased by 2 million shares for the
three months ended March 31, 2010.
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Changes in Stockholders Equity
The following table presents year-to-date changes in stockholders equity of Southern Company:
Preferred and
Number of
Common
Preference
Total
Common Shares
Stockholders
Stock of
Stockholders
Issued
Treasury
Equity
Subsidiaries
Equity
(in thousands)
(in millions)
843,814
(474
)
$
16,202
$
707
$
16,909
422
422
4
4
5,784
222
222
(385
)
(385
)
(1
)
849,598
(475
)
$
16,465
$
707
$
17,172
820,152
(505
)
$
14,878
$
707
$
15,585
495
495
9
9
4,872
171
171
(359
)
(359
)
17
1
1
825,024
(488
)
$
15,195
$
707
$
15,902
(E)
FINANCING
Bank Credit Arrangements
Bank credit arrangements provide liquidity support to the registrants commercial paper borrowings
and the traditional operating companies variable rate pollution control revenue bonds. See Note 6
to the financial statements of each registrant under Bank Credit Arrangements in Item 8 of the
Form 10-K for additional information.
The following table outlines the credit arrangements by company as of March 31, 2011:
Executable
Expires Within One
Term-Loans
Expires
Year
(a)
No
One
Two
Term
Term
Company
Total
Unused
Year
Years
2011
2012
2013
Out
Out
(in millions)
$
950
$
950
$
$
$
$
950
$
$
$
1,271
1,271
372
506
765
372
134
1,715
1,703
220
40
595
1,120
260
335
240
240
210
240
210
30
186
186
90
41
161
25
131
55
400
400
400
60
60
60
60
60
$
4,822
$
4,810
$
952
$
81
$
1,562
$
3,260
$
$
1,033
$
554
(a)
Reflects facilities expiring on or before March 31, 2012.
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(F)
RETIREMENT BENEFITS
Southern Company has a defined benefit, trusteed, pension plan covering substantially all
employees. The qualified pension plan is funded in accordance with requirements of the Employee
Retirement Income Security Act of 1974, as amended (ERISA). No contributions to the qualified
pension plan are expected for the year ending December 31, 2011. Southern Company also provides
certain defined benefit pension plans for a selected group of management and highly compensated
employees. Benefits under these non-qualified pension plans are funded on a cash basis. In
addition, Southern Company provides certain medical care and life insurance benefits for retired
employees through other postretirement benefit plans. The traditional operating companies fund
related other postretirement trusts to the extent required by their respective regulatory
commissions.
See Note 2 to the financial statements of Southern Company, Alabama Power, Georgia Power, Gulf
Power, and Mississippi Power in Item 8 of the Form 10-K for additional information.
Components of the net periodic benefit costs for the three months ended March 31, 2011 and 2010
were as follows:
Southern
Alabama
Georgia
Gulf
Mississippi
PENSION PLANS
Company
Power
Power
Power
Power
(in millions)
$
46
$
11
$
14
$
2
$
2
98
24
36
4
4
(152
)
(43
)
(59
)
(7
)
(6
)
13
3
5
1
1
$
5
$
(5
)
$
(4
)
$
$
1
$
43
$
10
$
14
$
2
$
2
98
24
36
4
4
(138
)
(42
)
(55
)
(6
)
(5
)
11
3
4
1
1
$
14
$
(5
)
$
(1
)
$
1
$
2
Southern
Alabama
Georgia
Gulf
Mississippi
POSTRETIREMENT BENEFITS
Company
Power
Power
Power
Power
(in millions)
$
5
$
1
$
2
$
$
23
6
10
1
1
(16
)
(6
)
(8
)
5
2
3
$
17
$
3
$
7
$
1
$
1
$
6
$
2
$
2
$
$
25
6
11
1
1
(16
)
(6
)
(8
)
5
2
3
$
20
$
4
$
8
$
1
$
1
Table of Contents
(G)
EFFECTIVE TAX RATE AND UNRECOGNIZED TAX BENEFITS
Southern
Alabama
Georgia
Gulf
Mississippi
Southern
Company
Power
Power
Power
Power
Power
(in millions)
$
296
$
43
$
237
$
4
$
4
$
2
8
2
5
1
$
304
$
45
$
242
$
4
$
5
$
2
The tax positions from current periods relate primarily to the tax accounting method change for
repairs and other miscellaneous uncertain tax positions.
The impact on the effective tax rate, if recognized, is as follows:
As of
December 31,
As of March 31, 2011
2010
Georgia
Other
Southern
Southern
Power
Registrants
Company
Company
(in millions)
$
205
$
11
$
221
$
217
37
45
83
79
$
242
$
56
$
304
$
296
The tax positions impacting the effective tax rate primarily relate to Georgia state tax credit
litigation at Georgia Power and the production activities deduction tax position. However, if
Georgia Power is successful in its claim against the Georgia DOR, a significant portion of the tax
benefit is expected to be deferred and returned to retail customers and therefore no material
impact to net income is expected. The tax positions not impacting the effective tax rate relate to
the timing difference associated with the tax accounting method change for repairs. These amounts
are presented on a gross basis without considering the related federal or state income tax impact.
See Note (B) under Income Tax Matters Georgia State Income Tax Credits herein for additional
information.
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Accrued interest for unrecognized tax benefits was as follows:
Georgia
Other
Southern
Power
Registrants
Company
( in millions)
$
27
$
2
$
29
2
1
3
$
29
$
3
$
32
All of the registrants classify interest on tax uncertainties as interest expense. The net amount
of interest accrued during 2011 was primarily associated with the Georgia state tax credit
litigation.
None of the registrants accrued any penalties on uncertain tax positions.
It is reasonably possible that the amount of the unrecognized tax benefits associated with a
majority of Southern Companys and Georgia Powers unrecognized tax positions will significantly
increase or decrease within the next 12 months. The resolution of the Georgia state tax credit
litigation would substantially reduce the balances. The conclusion or settlement of state audits
could also impact the balances significantly. At this time, an estimate of the range of reasonably
possible outcomes cannot be determined.
Tax Method of Accounting for Repairs
Southern Company submitted a change in the tax accounting method for repair costs associated with
its subsidiaries generation, transmission, and distribution systems with the filing of the 2009
federal income tax return in September 2010. The new tax method resulted in net positive cash flow
in 2010 of approximately $141 million for Alabama Power, $133 million for Georgia Power, $8 million
for Gulf Power, $5 million for Mississippi Power, $6 million for Southern Power, and $297 million
for Southern Company on a consolidated basis. Although IRS approval of this change is considered
automatic, the amount claimed is subject to review because the IRS will be issuing final guidance
on this matter. Currently, the IRS is working with the utility industry in an effort to resolve
this matter in a consistent manner for all utilities. Due to uncertainty concerning the ultimate
resolution of this matter, an unrecognized tax benefit has been recorded for the change in the tax
accounting method for repair costs. The ultimate outcome of this matter cannot be determined at
this time.
(H)
DERIVATIVES
Southern Company, the traditional operating companies, and Southern Power are exposed to market
risks, primarily commodity price risk, interest rate risk, and occasionally foreign currency risk.
To manage the volatility attributable to these exposures, each company nets its exposures, where
possible, to take advantage of natural offsets and enters into various derivative transactions for
the remaining exposures pursuant to each companys policies in areas such as counterparty exposure
and risk management practices. Each companys policy is that derivatives are to be used primarily
for hedging purposes and mandates strict adherence to all applicable risk management policies.
Derivative positions are monitored using techniques including, but not limited to, market
valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are
recognized at fair value in the balance sheets as either assets or liabilities.
Energy-Related Derivatives
The traditional operating companies and Southern Power enter into energy-related derivatives to
hedge exposures to electricity, gas, and other fuel price changes. However, due to cost-based rate
regulations and other various cost recovery mechanisms, the traditional operating companies have
limited exposure to market volatility in commodity fuel prices and prices of electricity. Each of
the traditional operating companies manages fuel-hedging programs, implemented per the guidelines
of their respective state PSCs, through the use of financial derivative contracts which is expected
to continue to mitigate price volatility. Southern Power has limited exposure to market volatility
in commodity fuel prices and prices of electricity because its long-term sales contracts shift
Table of Contents
substantially all fuel cost responsibility to the purchaser. However, Southern Power has been and
may continue to be exposed to market volatility in energy-related commodity prices as a result of
sales of uncontracted generating capacity.
To mitigate residual risks relative to movements in electricity prices, the electric utilities may
enter into physical fixed-price or heat rate contracts for the purchase and sale of electricity
through the wholesale electricity market. To mitigate residual risks relative to movements in gas
prices, the electric utilities may enter into fixed-price contracts for natural gas purchases;
however, a significant portion of contracts are priced at market.
Energy-related derivative contracts are accounted for in one of three methods:
Regulatory Hedges
Energy-related derivative contracts which are designated as regulatory
hedges relate primarily to the traditional operating companies fuel hedging programs, where
gains and losses are initially recorded as regulatory liabilities and assets, respectively,
and then are included in fuel expense as the underlying fuel is used in operations and
ultimately recovered through the respective fuel cost recovery clauses.
Cash Flow Hedges
Gains and losses on energy-related derivatives designated as cash flow
hedges, which are mainly used to hedge anticipated purchases and sales, and are initially
deferred in OCI before being recognized in the statements of income in the same period as the
hedged transactions are reflected in earnings.
Not Designated
Gains and losses on energy-related derivative contracts that are not
designated or fail to qualify as hedges are recognized in the statements of income as
incurred.
Some energy-related derivative contracts require physical delivery as opposed to financial
settlement, and this type of derivative is both common and prevalent within the electric industry.
When an energy-related derivative contract is settled physically, any cumulative unrealized gain or
loss is reversed and the contract price is recognized in the respective line item representing the
actual price of the underlying goods being delivered.
At March 31, 2011, the net volume of energy-related derivative contracts for power and natural gas
positions for the registrants, together with the longest hedge date over which the respective
entity is hedging its exposure to the variability in future cash flows for forecasted transactions
and the longest date for derivatives not designated as hedges, were as follows:
Power
Gas
Longest
Longest
Net
Longest
Longest
Net Sold
Hedge
Non-Hedge
Purchased
Hedge
Non-Hedge
MWHs
Date
Date
mmBtu
Date
Date
(in millions)
(in millions)
0.8
2011
2011
154
2015
2015
2011
2011
31
2015
2011
2011
65
2015
2011
2011
20
2015
2011
2011
24
2015
0.8
2011
2011
14
2012
2015
In addition to the volumes discussed in the above table, the traditional operating companies and
Southern Power enter into physical natural gas supply contracts that provide the option to sell
back excess gas due to operational constraints. The maximum expected volume of natural gas subject
to such a feature is 4 million mmbtu for Southern Company, 4 million mmbtu for Georgia Power, and
was immaterial for the other registrants.
For cash flow hedges, the amounts expected to be reclassified from OCI to revenue and fuel expense
for the next 12-month period ending March 31, 2012 are immaterial for all registrants.
Interest Rate Derivatives
Southern Company and certain subsidiaries also enter into interest rate derivatives to hedge
exposure to changes in interest rates. The derivatives employed as hedging instruments are
structured to minimize ineffectiveness. Derivatives related to existing variable rate securities
or forecasted transactions are accounted for as cash flow hedges where the
Table of Contents
effective portion of the derivatives fair value gains or losses is recorded in OCI and is
reclassified into earnings at the same time the hedged transactions affect earnings with any
ineffectiveness recorded directly to earnings. Derivatives related to existing fixed rate
securities are accounted for as fair value hedges, where the derivatives fair value gains or
losses and hedged items fair value gains or losses are both recorded directly to earnings,
providing an offset with any difference representing ineffectiveness.
At March 31, 2011, the following interest rate derivatives were outstanding:
Fair Value
Hedge
Gain (Loss)
Notional
Interest Rate
Interest Rate
Maturity
March 31,
Amount
Received
Paid
Date
2011
(in millions)
(in millions)
$
300
3-month LIBOR +
0.40% spread
1.24
%*
October 2011
$
(1
)
350
4.15%
3-month LIBOR +
1.96%* spread
May 2014
9
$
650
$
8
*
Weighted Average
The following table reflects the estimated pre-tax gains (losses) that will be reclassified from
OCI to interest expense for the next 12-month period ending March 31, 2012, together with the
longest date that total deferred gains and losses are expected to be amortized into earnings.
Estimated Gain (Loss) to
be Reclassified for the
Total Deferred
12 Months Ending
Gains (Losses)
Registrant
March 31, 2012
Amortized Through
(in millions)
$
(16
)
2037
1
2035
(3
)
2037
(1
)
2020
(12
)
2016
Foreign Currency Derivatives
Southern Company and certain subsidiaries may enter into foreign currency derivatives to hedge
exposure to changes in foreign currency exchange rates arising from purchases of equipment
denominated in a currency other than U.S. dollars. Derivatives related to a firm commitment in a
foreign currency transaction are accounted for as a fair value hedge where the derivatives fair
value gains or losses and the hedged items fair value gains or losses are both recorded directly
to earnings. Derivatives related to a forecasted transaction are accounted for as a cash flow
hedge where the effective portion of the derivatives fair value gains or losses is recorded in OCI
and is reclassified into earnings at the same time the hedged transactions affect earnings. Any
ineffectiveness is recorded directly to earnings. The derivatives employed as hedging instruments
are structured to minimize ineffectiveness.
Table of Contents
Fair Value
Gain (Loss)
Notional
Hedge
March 31,
Amount
Forward Rate
Maturity Date
2011
(in millions)
(in millions)
YEN10
85.23 Yen per
Dollar*
May 2011
$
EUR38.9
1.253 Dollars
per Euro*
Various through July 2012
6
$
6
*Weighted Average
Derivative Financial Statement Presentation and Amounts
At March 31, 2011, the fair value of energy-related derivatives, interest rate derivatives, and
foreign currency derivatives was reflected in the balance sheets as follows:
Asset Derivatives at March 31, 2011
Fair Value
Derivative Category and Balance Sheet
Southern
Alabama
Georgia
Gulf
Mississippi
Southern
Location
Company
Power
Power
Power
Power
Power
(in millions)
$
4
$
1
$
$
2
$
1
6
1
2
1
2
$
10
$
2
$
2
$
3
$
3
N/A
$
6
$
$
$
$
$
3
5
5
1
1
$
15
$
$
$
$
6
$
$
3
$
$
$
$
$
3
1
1
$
4
$
$
$
$
$
4
$
29
$
2
$
2
$
3
$
9
$
4
*Southern Company includes Assets from risk management activities in Other current assets
where applicable.
Table of Contents
Liability Derivatives at March 31, 2011
Fair Value
Derivative Category and Balance Sheet
Southern
Alabama
Georgia
Gulf
Mississippi
Southern
Location
Company
Power
Power
Power
Power
Power
(in millions)
$
126
$
24
$
70
$
7
$
25
40
5
16
4
15
$
166
$
29
$
86
$
11
$
40
N/A
$
1
$
$
$
$
$
$
6
$
$
$
$
$
6
$
173
$
29
$
86
$
11
$
40
$
6
All derivative instruments are measured at fair value. See Note (C) herein for additional
information.
At March 31, 2011, the pre-tax effect of unrealized derivative gains (losses) arising from
energy-related derivative instruments designated as regulatory hedging instruments and deferred on
the balance sheet was as follows:
Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet
Derivative Category and Balance Sheet
Southern
Alabama
Georgia
Gulf
Mississippi
Location
Company
Power
Power
Power
Power
(in millions)
$
(126
)
$
(24
)
$
(70
)
$
(7
)
$
(25
)
(40
)
(5
)
(16
)
(4
)
(15
)
4
2
1
1
6
1
1
2
2
$
(156
)
$
(27
)
$
(84
)
$
(8
)
$
(37
)
*Alabama Power includes Other regulatory liabilities, current in Other current
liabilities.
**Georgia Power includes Other regulatory liabilities, deferred in Other deferred credits
and liabilities.
For the three months ended March 31, 2011 and March 31, 2010, the pre-tax gains from interest rate
derivatives designated as fair value hedging instruments on Southern Companys statements of income
were immaterial.
For the three months ended March 31, 2011, the pre-tax gains from foreign currency derivatives
designated as fair value hedging instruments on Southern Companys and Mississippi Powers
statements of income were $3 million. This amount was offset with changes in the fair value of the
purchase commitment related to equipment purchases; therefore, there is no impact on Southern
Companys or Mississippi Powers statements of income.
Table of Contents
For the three months ended March 31, 2011 and March 31, 2010, the pre-tax effect of derivatives
designated as cash flow hedging instruments on the statements of income were as follows:
Gain (Loss)
Recognized in OCI
Gain (Loss) Reclassified from Accumulated OCI
Derivatives in Cash Flow
on Derivative
into Income (Effective Portion)
Hedging Relationships
(Effective Portion)
Statements of Income Location
Amount
2011
2010
2011
2010
(in millions)
(in millions)
$
1
$
5
Fuel
$
$
4
(3
)
Interest expense, net of amounts capitalized
(5
)
(9
)
$
5
$
2
$
(5
)
$
(9
)
$
4
$
Interest expense, net of amounts capitalized
$
$
(2
)
$
$
Interest expense, net of amounts capitalized
$
(1
)
$
(5
)
$
$
(2
)
Interest expense, net of amounts capitalized
$
$
$
1
$
4
Fuel
$
$
Interest expense, net of amounts capitalized
(3
)
(3
)
$
1
$
4
$
(3
)
$
(3
)
There was no material ineffectiveness recorded in earnings for any registrant for any period
presented.
For the three months ended March 31, 2011 and March 31, 2010, the pre-tax effect of energy-related
derivatives not designated as hedging instruments on the statements of income were immaterial for
Southern Company and Southern Power.
Contingent Features
The registrants do not have any credit arrangements that would require material changes in payment
schedules or terminations as a result of a credit rating downgrade. There are certain derivatives
that could require collateral, but not accelerated payment, in the event of various credit rating
changes of certain Southern Company subsidiaries. At March 31, 2011, the fair value of derivative
liabilities with contingent features, by registrant, was as follows:
Southern
Alabama
Georgia
Gulf
Mississippi
Southern
Company
Power
Power
Power
Power
Power
(in millions)
$
32
$
5
$
20
$
$
4
$
3
At March 31, 2011, the registrants had no collateral posted with their derivative counterparties;
however, because of the joint and several liability features underlying these derivatives, the
maximum potential collateral requirements arising from the credit-risk-related contingent features,
at a rating below BBB- and/or Baa3, is $32 million for each registrant.
Currently, each of the registrants has investment grade credit ratings from the major rating
agencies with respect to debt, preferred securities, preferred stock, and/or preference stock.
Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash.
For the traditional operating companies and Southern Power, included in these amounts are certain
agreements that could require collateral in the event that one or more Power Pool participants has
a credit rating change to below investment grade.
Table of Contents
(I)
SEGMENT AND RELATED INFORMATION
Southern Companys reportable business segments are the sale of electricity in the Southeast by the
four traditional operating companies and Southern Power. Revenues from sales by Southern Power to
the traditional operating companies were $83 million and $102 million for the three months ended
March 31, 2011 and March 31, 2010, respectively. The All Other column includes parent Southern
Company, which does not allocate operating expenses to business segments. Also, this category
includes segments below the quantitative threshold for separate disclosure. These segments include
investments in telecommunications, and leveraged lease projects. All other intersegment revenues
are not material. Financial data for business segments and products and services was as follows:
Electric Utilities
Traditional
Operating
Southern
All
Companies
Power
Eliminations
Total
Other
Eliminations
Consolidated
(
in millions
)
March 31, 2011:
$
3,810
$
282
$
(98
)
$
3,994
$
38
$
(20
)
$
4,012
385
38
423
1
(2
)
422
$
51,138
$
3,461
$
(74
)
$
54,525
$
1,059
$
(565
)
$
55,019
March 31, 2010:
$
4,005
$
256
$
(125
)
$
4,136
$
41
$
(20
)
$
4,157
481
15
496
(1
)
495
$
51,144
$
3,438
$
(128
)
$
54,454
$
1,178
$
(600
)
$
55,032
*After dividends on preferred and preference stock of subsidiaries
Products and Services
Electric Utilities Revenues
Retail
Wholesale
Other
Total
(
in millions
)
$
3,396
$
449
$
149
$
3,994
$
3,459
$
542
$
135
$
4,136
Table of Contents
Item 1.
Legal Proceedings.
Item 1A.
Risk Factors.
Table of Contents
Item 6.
Exhibits.
(b)1
-
By-laws of Alabama Power as amended effective April 22, 2011 and presently in effect. (Designated in Form 8-K
dated April 22, 2011, File No. 1-3164 as Exhibit 3.1.)
(b)1
-
Forty-Fifth Supplemental Indenture to Senior Note Indenture dated as of March 10, 2011, providing for the issuance
of the Series 2011A 5.50% Senior Notes due March 15, 2041. (Designated in Form 8-K dated March 3, 2011, File No.
1-3164, as Exhibit 4.2.)
(c)1
-
Forty-Fifth Supplemental Indenture to Senior Note Indenture dated as of April 19, 2011, providing for the issuance
of the Series 2011B 3.00% Senior Notes due April 15, 2016. (Designated in Form 8-K dated April 12, 2011, File No.
1-6468, as Exhibit 4.2.)
(a)1
-
Termination of Amended and Restated Change in Control Agreement effective February 22, 2011 between Southern
Company, SCS and G. Edison Holland, Jr.
(a)2
-
Amended Deferred Compensation Agreement, effective December 31, 2008 between Southern Company, SCS, Georgia Power,
Gulf Power and G. Edison Holland, Jr.
(a)3
-
Form of Stock Option Award Agreement for Executive Officers of Southern Company, under the Southern Company
Omnibus Incentive Compensation Plan.
(a)4
-
Base Salaries of Named Executive Officers.
(a)5
-
Summary of Non-Employee Director Compensation Arrangements.
(c)1
-
Retention Agreement between Georgia Power and Michael A. Brown, effective January 1, 2011.
(a)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
1-3526 as Exhibit 24(a) and incorporated herein by reference.)
(b)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
1-3164 as Exhibit 24(b) and incorporated herein by reference.)
Table of Contents
(c)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
1-6468 as Exhibit 24(c) and incorporated herein by reference.)
(d)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
001-31737 as Exhibit 24(d)1 and incorporated herein by reference.)
(d)2
-
Power of Attorney Mark A. Crosswhite. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
001-31737 as Exhibit 24(d)2 and incorporated herein by reference.)
(e)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
001-11229 as Exhibit 24(e) and incorporated herein by reference.)
(f)1
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2010, File No.
333-98553 as Exhibit 24(f) and incorporated herein by reference.)
(a)1
-
Certificate of Southern Companys Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of
2002.
(a)2
-
Certificate of Southern Companys Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of
2002.
(b)1
-
Certificate of Alabama Powers Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(b)2
-
Certificate of Alabama Powers Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(c)1
-
Certificate of Georgia Powers Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(c)2
-
Certificate of Georgia Powers Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
Table of Contents
(d)1
-
Certificate of Gulf Powers Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of
2002.
(d)2
-
Certificate of Gulf Powers Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of
2002.
(e)1
-
Certificate of Mississippi Powers Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(e)2
-
Certificate of Mississippi Powers Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(f)1
-
Certificate of Southern Powers Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(f)2
-
Certificate of Southern Powers Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
(a)
-
Certificate of Southern Companys Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
(b)
-
Certificate of Alabama Powers Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
(c)
-
Certificate of Georgia Powers Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
(d)
-
Certificate of Gulf Powers Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
(e)
-
Certificate of Mississippi Powers Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of
2002.
Table of Contents
(f)
-
Certificate of Southern Powers Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
(101)
XBRL Related Documents
XBRL Instance Document
XBRL Taxonomy Extension Schema Document
XBRL Taxonomy Calculation Linkbase Document
XBRL Definition Linkbase Document
XBRL Taxonomy Label Linkbase Document
XBRL Taxonomy Presentation Linkbase Document
Table of Contents
Thomas A. Fanning
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
Art P. Beattie
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Melissa K. Caen
Table of Contents
Charles D. McCrary
President and Chief Executive Officer
(Principal Executive Officer)
Philip C. Raymond
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
/s/ Melissa K. Caen
Table of Contents
GEORGIA POWER COMPANY
W. Paul Bowers
President and Chief Executive Officer
(Principal Executive Officer)
Ronnie R. Labrato
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
/s/ Melissa K. Caen
Table of Contents
GULF POWER COMPANY
Mark A. Crosswhite
President and Chief Executive Officer
(Principal Executive Officer)
Richard S. Teel
Vice President and Chief Financial Officer
(Principal Financial Officer)
/s/ Melissa K. Caen
Table of Contents
MISSISSIPPI POWER COMPANY
Edward Day, VI
President and Chief Executive Officer
(Principal Executive Officer)
Moses H. Feagin
Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
/s/ Melissa K. Caen
Table of Contents
SOUTHERN POWER COMPANY
Oscar C. Harper, IV
President and Chief Executive Officer
(Principal Executive Officer)
Michael W. Southern
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
/s/ Melissa K. Caen
THE SOUTHERN COMPANY
By:
/s/Patricia L. Roberts
Its:
Assistant Secretary
|
|
SOUTHERN COMPANY SERVICES, INC.
By:
/s/Patricia L. Roberts
Its:
Vice President
|
|
G. EDISON HOLLAND, JR. | |
/s/G. Edison Holland, Jr. |
If to Employee:
|
If to the Company:
|
|
G. Edison Holland, Jr.
850 Buckhead Trace
Atlanta, GA 30342
|
Patricia L. Roberts
V. P. & Associate General Counsel
30 Ivan Allen Jr. Blvd
Atlanta, GA 30308
|
"SOUTHERN"
THE SOUTHERN COMPANY
By:
/s/Patricia L. Roberts
Its:
Assistant Secretary
|
|
"COMPANY"
SOUTHERN COMPANY SERVICES, INC.
By:
/s/Patricia L. Roberts
Its:
Vice President & Ass. Gen. Counsel
|
|
"GEORGIA"
GEORGIA POWER COMPANY
By:
/s/Wayne Boston
Its:
Assistant Secretary
|
|
"GULF"
GULF POWER COMPANY
By:
/s/Wayne Boston
Its:
Assistant Secretary
|
|
"EMPLOYEE"
G. Edison Holland, Jr.
/s/G. Edison Holland, Jr.
|
ASSIGNOR
S
O
UTHERN SERVICES COMPANY, INC.
By:
Its:
Date:
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ASSIGNEE
COMPANY
By:
Its:
Date:
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SOUTHERN COMPANY
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OMNIBUS INCENTIVE COMPENSATION PLAN
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______
STOCK OPTION AWARD AGREEMENT
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For
________________
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Your Options are subject to the following terms and conditions:
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1.
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Grant:
The Southern Company (the “Company”) Compensation and Management Succession Committee (the “Committee”) has granted you nonqualified stock options (the “Options”) to purchase shares of Southern Company common stock (“Common Stock”). This award is governed by the ____ Southern Company Omnibus Incentive Compensation Plan, as amended from time to time (the “Plan”).
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2.
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Terms:
Terms used in this Award Agreement that are defined in the Plan will have the meanings ascribed to them in the Plan. If there is any inconsistency between the terms of this Award Agreement and the terms of the Plan, the Plan’s terms will supersede and replace the conflicting terms of this Award Agreement.
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3.
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Grant Date, Number of Shares and Grant Price:
The Grant Date of your Options is ________, the number of shares granted to you under your Options is _________ and the Grant Price (also referred to as the Exercise Price per share) is $______. This information is also set forth on the UBS Financial Services Inc. website at https://onesource.ubs.com/so. The Grant Price is equal to the closing price of a share of Common Stock on the Grant Date.
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4.
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Option Term
: The Options have been granted for a period of 10 years from the Grant Date (the “Option Term”).
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5.
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Vesting and Exercise
: Options do not provide you with any rights or interests until they vest (become exercisable). One-third of the shares granted under the Options shall vest on each one year anniversary of the Grant Date.
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6.
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How to Exercise
: You may exercise an Option by entering and executing an exercise order with UBS Financial Services Inc. and obtaining an exercise confirmation. UBS Financial Services Inc. may be reached by telephone at __________________ or _____________________(_________________) or on the UBS Financial Services Inc. website at https://onesource.ubs.com/so.
Payment for shares you elect to purchase may be made in cash or in any other form of payment allowed by the Company. Should you decide to purchase Common Stock pursuant to the exercise of an Option with previously purchased Common Stock (if allowed), any such Common Stock used as payment will be valued at its Fair Market Value as of the date of exercise of the Option.
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7.
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Impact of Termination of Employment
The vesting and term of any Options will change if you terminate employment, according to the following table:
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Termination of Employment Event
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Impact
on Unvested Options
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Exercise Period for Vested Options (But in No Event Beyond the Original Option Term )
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Disability
1
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Vest fully
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3 years
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Retirement
2
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See below
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5 years
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Death
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Vest fully
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3 years
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Any other type of termination not for cause
3
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Forfeited
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90 days
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Any termination for cause
3/4
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Forfeited
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Forfeited
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8.
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Transferability
: Options are not transferable except by will or the laws of descent and distribution and may be exercised during your life only by you or, following your death or disability if any Options are still exercisable, by your duly appointed guardian or other legal representative.
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Notwithstanding the above, if you are a designated “executive officer”, as that term is defined in Rule 3b-7 of the Securities Exchange Act of 1934, of Southern Company (but not of a Southern Company subsidiary) at the time of transfer (or, if your employment has terminated at the time of transfer, at the time of your termination), Options may be transferred to your immediate family (spouse, children or grandchildren), a trust for the benefit of your immediate family or a partnership or limited liability company whose only partners or members are you or your immediate family (any such recipient to be referred to as a “Transferee”), provided such transfer is not a transfer for value for federal income tax purposes. Subsequent transfer or assignment by a Transferee is prohibited and any such attempt will be disregarded as void. Please provide
prior
notice of any transfer to the Vice President, Human Resources. Transfers incident to a divorce are not allowed.
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9.
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Other Terms and Conditions.
The Design Details, an administrative document adopted by the Committee which is set forth on the UBS Financial Services Inc. website at https://onesource.ubs.com/so, contain additional provisions that apply to the Options. Additionally, the Options are subject to all of the terms and conditions set forth in the Plan and any other administrative documents adopted by the Committee. By exercising any portion of the Options, you agree to be subject to all of the terms and conditions of this Award Agreement. Additionally, you agree to be subject to all of the terms and conditions of the Plan, the Design Details and any other administrative documents, as amended from time to time.
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10.
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Additional Information:
Please refer any questions you may have regarding these Options to UBS Financial Services Inc. at ________________ or _________________ or HR Direct at ______________________.
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____________________________________
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____________________________________
Date
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David M. Ratcliffe*
Chairman and Chief Executive Officer
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$1,163,351
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W. Paul Bowers**
Executive Vice President and Chief Financial Officer
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$721,928
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Thomas A. Fanning***
Chairman, President and Chief Executive Officer
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$1,070,000
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G. Edison Holland, Jr.
Executive Vice President and General Counsel
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$620,724
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Charles D. McCrary
Executive Vice President of the Company,
President and Chief Executive Officer of Alabama Power Company
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$758,611
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Michael D. Garrett****
Executive Vice President of the Company,
President and Chief Executive Officer of Georgia Power Company
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$695,402
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Art P. Beattie*****
Executive Vice President and Chief Financial Officer
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$556,400
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*
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Retired December 1, 2010
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**
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Through August 12, 2010
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***
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Effective December 1, 2010
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****
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Retired December 31, 2010
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*****
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From August 13, 2010
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·
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Annual Cash Retainer Fee:
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$100,000
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·
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Committee Chair Annual Retainer:
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$12,500
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·
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Presiding Director Annual Retainer:
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$12,500
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·
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Annual Stock Retainer Fee:
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$105,000 payable in deferred common stock units until Board membership ends
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·
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Board Meeting Fees:
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Meeting fees are not paid for participation in the initial eight meetings of the Board in a calendar year. If more than eight meetings of the Board are held in a calendar year, $2,500 will be paid for participation in each meeting of the Board beginning with the ninth meeting.
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Retention Payment Amount | Employment Vesting Date | |||
$373,895.00 | December 31 2011 |
(1)
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Failure to Discharge Duties
. Employee willfully neglects or refuses to discharge his duties hereunder or refuses to comply with any lawful or reasonable instructions given to him by the Company without reasonable excuse;
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(2)
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Breach
. Employee commits any material breach or repeats or continues (after written warning) any breach of his obligations hereunder;
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(3)
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Gross Misconduct
. The Employee is guilty of gross misconduct. For the purposes of this Agreement, the following acts shall constitute gross misconduct as solely determined by the Company:
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(ii)
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The carrying out of any activity or the making of any statement which would prejudice and/or reduce the good name and standing of the Company, Southern Company or any of its affiliates or would bring any one of these into contempt, ridicule or would reasonably shock or offend any community in which these entities are located;
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(iv)
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Assault or other act of violence against any employee of the Company or other person during the course of his employment; or
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(v)
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Conviction of any felony or misdemeanor involving moral turpitude.
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“COMPANY”
GEORGIA POWER COMPANY
By:
/s/W. Paul Bowers
Its:
President & CEO
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“
EMPLOYEE
”
MICHAEL A. BROWN
/s/M. A. Brown
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1.
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I have reviewed this quarterly report on Form 10-Q of The Southern Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of The Southern Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Alabama Power Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
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(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Alabama Power Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Georgia Power Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Georgia Power Company;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gulf Power Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Gulf Power Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Mississippi Power Company;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
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Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
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All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Mississippi Power Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
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Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
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Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
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Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
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The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
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(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
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(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
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I have reviewed this quarterly report on Form 10-Q of Southern Power Company;
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2.
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Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
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The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
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(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
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(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
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(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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1.
|
I have reviewed this quarterly report on Form 10-Q of Southern Power Company;
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2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
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3.
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Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
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4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
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5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
(b)
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Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
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(1)
|
such Quarterly Report on Form 10-Q of The Southern Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in such Quarterly Report on Form 10-Q of The Southern Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of The Southern Company.
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/s/Thomas A. Fanning
Thomas A. Fanning
Chairman, President and
Chief Executive Officer
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/s/Art P. Beattie
Art P. Beattie
Executive Vice President and
Chief Financial Officer
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(1)
|
such Quarterly Report on Form 10-Q of Alabama Power Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in such Quarterly Report on Form 10-Q of Alabama Power Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of Alabama Power Company.
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/s/Charles D. McCrary
Charles D. McCrary
President and Chief Executive Officer
|
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/s/Philip C. Raymond
Philip C. Raymond
Executive Vice President,
Chief Financial Officer and Treasurer
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(1)
|
such Quarterly Report on Form 10-Q of Georgia Power Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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the information contained in such Quarterly Report on Form 10-Q of Georgia Power Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of Georgia Power Company.
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/s/W. Paul Bowers
W. Paul Bowers
President and Chief Executive Officer
|
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/s/Ronnie R. Labrato
Ronnie R. Labrato
Executive Vice President,
Chief Financial Officer and Treasurer
|
(1)
|
such Quarterly Report on Form 10-Q of Gulf Power Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
|
the information contained in such Quarterly Report on Form 10-Q of Gulf Power Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of Gulf Power Company.
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/s/Mark A. Crosswhite
Mark A. Crosswhite
President and Chief Executive Officer
|
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/s/Richard S. Teel
Richard S. Teel
Vice President and Chief Financial Officer
|
(1)
|
such Quarterly Report on Form 10-Q of Mississippi Power Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in such Quarterly Report on Form 10-Q of Mississippi Power Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of Mississippi Power Company.
|
/s/Edward Day, VI
Edward Day, VI
President and Chief Executive Officer
|
|
/s/Moses H. Feagin
Moses H. Feagin
Vice President, Treasurer and
Chief Financial Officer
|
(1)
|
such Quarterly Report on Form 10-Q of Southern Power Company for the quarter ended March 31, 2011, which this statement accompanies, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
the information contained in such Quarterly Report on Form 10-Q of Southern Power Company for the quarter ended March 31, 2011, fairly presents, in all material respects, the financial condition and results of operations of Southern Power Company.
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/s/Oscar C. Harper IV
Oscar C. Harper IV
President and Chief Executive Officer
|
|
/s/Michael W. Southern
Michael W. Southern
Senior Vice President, Treasurer and
Chief Financial Officer
|