Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
FORM 10-Q
þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2017
OR
¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from            to             

Commission
File Number
 
Registrant, State of Incorporation,
Address and Telephone Number
 
I.R.S. Employer
Identification No.
1-3526
 
The Southern Company
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
 
58-0690070
 
 
 
 
 
1-3164
 
Alabama Power Company
(An Alabama Corporation)
600 North 18 th  Street
Birmingham, Alabama 35203
(205) 257-1000
 
63-0004250
 
 
 
 
 
1-6468
 
Georgia Power Company
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
(404) 506-6526
 
58-0257110
 
 
 
 
 
001-31737
 
Gulf Power Company
(A Florida Corporation)
One Energy Place
Pensacola, Florida 32520
(850) 444-6111
 
59-0276810
 
 
 
 
 
001-11229
 
Mississippi Power Company
(A Mississippi Corporation)
2992 West Beach Boulevard
Gulfport, Mississippi 39501
(228) 864-1211
 
64-0205820
 
 
 
 
 
001-37803
 
Southern Power Company
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
 
58-2598670
 
 
 
 
 
1-14174
 
Southern Company Gas
(A Georgia Corporation)
Ten Peachtree Place, N.E.
Atlanta, Georgia 30309
(404) 584-4000
 
58-2210952



Table of Contents

Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes  þ No  ¨
Indicate by check mark whether the registrants have submitted electronically and posted on their corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit and post such files). Yes  þ No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):
Registrant
 
Large
Accelerated
Filer
 
Accelerated
Filer
 
Non-
accelerated
Filer
 
Smaller
Reporting
Company
 
Emerging
Growth
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
 
 
 
 
Southern Company Gas
 
 
 
 
 
X
 
 
 
 
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No  þ (Response applicable to all registrants.)
 
Registrant
 
Description of
Common Stock
 
Shares Outstanding at June 30, 2017

The Southern Company
 
Par Value $5 Per Share
 
999,474,028

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
 
7,392,717

Mississippi Power Company
 
Without Par Value
 
1,121,000

Southern Power Company
 
Par Value $0.01 Per Share
 
1,000

Southern Company Gas
 
Par Value $0.01 Per Share
 
100

This combined Form 10-Q is separately filed by The Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Power Company, and Southern Company Gas. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.

2

INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 2017


 
 
Page
Number
 
 
 
 
 
 
 
PART I—FINANCIAL INFORMATION
 
Item 1.
Financial Statements (Unaudited)
 
Item 2.
Management's Discussion and Analysis of Financial Condition and Results of Operations
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

3

INDEX TO QUARTERLY REPORT ON FORM 10-Q
June 30, 2017


 
 
Page
Number
 
PART I—FINANCIAL INFORMATION (CONTINUED)
 
 
 
 
 
 
 
 
 
Item 3.
Item 4.
 
 
 
 
PART II—OTHER INFORMATION
 
Item 1.
Item 1A.
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
Inapplicable
Item 3.
Defaults Upon Senior Securities
Inapplicable
Item 4.
Mine Safety Disclosures
Inapplicable
Item 5.
Other Information
Inapplicable
Item 6.
 

4

Table of Contents

DEFINITIONS
Term
Meaning
 
 
2012 MPSC CPCN Order
A detailed order issued by the Mississippi PSC in April 2012 confirming the CPCN originally approved by the Mississippi PSC in 2010 authorizing the acquisition, construction, and operation of the Kemper IGCC
2013 ARP
Alternative Rate Plan approved by the Georgia PSC in 2013 for Georgia Power for the years 2014 through 2016 and subsequently extended through 2019
AFUDC
Allowance for funds used during construction
Alabama Power
Alabama Power Company
ASC
Accounting Standards Codification
ASU
Accounting Standards Update
Atlanta Gas Light
Atlanta Gas Light Company, a wholly-owned subsidiary of Southern Company Gas
Baseload Act
State of Mississippi legislation designed to enhance the Mississippi PSC's authority to facilitate development and construction of baseload generation in the State of Mississippi
CCR
Coal combustion residuals
Clean Power Plan
Final action published by the EPA in 2015 that established guidelines for states to develop plans to meet EPA-mandated CO 2  emission rates or emission reduction goals for existing electric generating units
CO 2
Carbon dioxide
COD
Commercial operation date
Contractor Settlement Agreement
The December 31, 2015 agreement between Westinghouse and the Vogtle Owners resolving disputes between the Vogtle Owners and the EPC Contractor under the Vogtle 3 and 4 Agreement
CPCN
Certificate of public convenience and necessity
CWIP
Construction work in progress
Dalton Pipeline
A 50% undivided ownership interest of Southern Company Gas in a pipeline facility in Georgia
DOE
U.S. Department of Energy
ECO Plan
Mississippi Power's Environmental Compliance Overview Plan
Eligible Project Costs
Certain costs of construction relating to Plant Vogtle Units 3 and 4 that are eligible for financing under the Title XVII Loan Guarantee Program
EPA
U.S. Environmental Protection Agency
EPC Contractor
Westinghouse and its affiliate, WECTEC (formerly known as CB&I Stone & Webster, Inc.), formerly a subsidiary of The Shaw Group Inc. and Chicago Bridge & Iron Company N.V.; the former engineering, procurement, and construction contractor for Plant Vogtle Units 3 and 4
FASB
Financial Accounting Standards Board
FERC
Federal Energy Regulatory Commission
FFB
Federal Financing Bank
Fitch
Fitch Ratings, Inc.
Form 10-K
Annual Report on Form 10-K of Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Southern Power, and Southern Company Gas for the year ended December 31, 2016, as applicable
GAAP
U.S. generally accepted accounting principles
Georgia Power
Georgia Power Company
Gulf Power
Gulf Power Company
Heating Degree Days
A measure of weather, calculated when the average daily temperatures are less than 65 degrees Fahrenheit
Horizon Pipeline
Horizon Pipeline Company, LLC
IGCC
Integrated coal gasification combined cycle
IIC
Intercompany interchange contract
Illinois Commission
Illinois Commerce Commission, the state regulatory agency for Nicor Gas
IRC
Internal Revenue Code of 1986, as amended

5

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DEFINITIONS
(continued)
Term
Meaning
 
 
IRS
Internal Revenue Service
ITC
Investment tax credit
Kemper IGCC
Mississippi Power's IGCC project in Kemper County, Mississippi
KWH
Kilowatt-hour
LIBOR
London Interbank Offered Rate
LIFO
Last-in, first-out
LNG
Liquefied natural gas
LOCOM
Lower of weighted average cost or current market price
LTSA
Long-term service agreement
MATS rule
Mercury and Air Toxics Standards rule
Merger
The merger, effective July 1, 2016, of a wholly-owned, direct subsidiary of Southern Company with and into Southern Company Gas, with Southern Company Gas continuing as the surviving corporation
Mirror CWIP
A regulatory liability used by Mississippi Power to record customer refunds resulting from a 2015 Mississippi PSC order
Mississippi Power
Mississippi Power Company
mmBtu
Million British thermal units
Moody's
Moody's Investors Service, Inc.
MRA
Municipal and Rural Associations
MW
Megawatt
natural gas distribution utilities
Southern Company Gas' seven natural gas distribution utilities (Nicor Gas, Atlanta Gas Light, Virginia Natural Gas, Elizabethtown Gas, Florida City Gas, Chattanooga Gas Company, and Elkton Gas)
NCCR
Georgia Power's Nuclear Construction Cost Recovery
New Jersey BPU
New Jersey Board of Public Utilities, the state regulatory agency for Elizabethtown Gas
Nicor Gas
Northern Illinois Gas Company, a wholly-owned subsidiary of Southern Company Gas
NRC
U.S. Nuclear Regulatory Commission
NYMEX
New York Mercantile Exchange, Inc.
OCI
Other comprehensive income
PennEast Pipeline
PennEast Pipeline Company, LLC
PEP
Mississippi Power's Performance Evaluation Plan
Piedmont
Piedmont Natural Gas Company, Inc.
Pivotal Utility Holdings
Pivotal Utility Holdings, Inc., a wholly-owned subsidiary of Southern Company Gas, doing business as Elizabethtown Gas, Elkton Gas, and Florida City Gas
Plant Vogtle Units 3 and 4
Two new nuclear generating units under construction at Georgia Power's Plant Vogtle
PowerSecure
PowerSecure, Inc.
power pool
The operating arrangement whereby the integrated generating resources of the traditional electric operating companies and Southern Power (excluding subsidiaries) are subject to joint commitment and dispatch in order to serve their combined load obligations
PPA
Power purchase agreements, as well as, for Southern Power, contracts for differences that provide the owner of a renewable facility a certain fixed price for the electricity sold to the grid
PSC
Public Service Commission
PTC
Production tax credit
Rate CNP
Alabama Power's Rate Certificated New Plant
Rate CNP Compliance
Alabama Power's Rate Certificated New Plant Compliance

6

Table of Contents

DEFINITIONS
(continued)
Term
Meaning
 
 
Rate CNP PPA
Alabama Power's Rate Certificated New Plant Power Purchase Agreement
Rate ECR
Alabama Power's Rate Energy Cost Recovery
Rate NDR
Alabama Power's Rate Natural Disaster Reserve
Rate RSE
Alabama Power's Rate Stabilization and Equalization plan
registrants
Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Southern Power Company, and Southern Company Gas
ROE
Return on equity
S&P
S&P Global Ratings, a division of S&P Global Inc.
scrubber
Flue gas desulfurization system
SCS
Southern Company Services, Inc. (the Southern Company system service company)
SEC
U.S. Securities and Exchange Commission
SMEPA
South Mississippi Electric Power Association (now known as Cooperative Energy)
SNG
Southern Natural Gas Company, L.L.C.
Southern Company
The Southern Company
Southern Company Gas
Southern Company Gas and its subsidiaries
Southern Company Gas Capital
Southern Company Gas Capital Corporation, a 100%-owned subsidiary of Southern Company Gas
Southern Company system
Southern Company, the traditional electric operating companies, Southern Power, Southern Company Gas (as of July 1, 2016), Southern Electric Generating Company, Southern Nuclear, SCS, Southern Communications Services, Inc., PowerSecure (as of May 9, 2016), and other subsidiaries
Southern Nuclear
Southern Nuclear Operating Company, Inc.
Southern Power
Southern Power Company and its subsidiaries
SouthStar
SouthStar Energy Services, LLC
STRIDE
Atlanta Gas Light's Strategic Infrastructure Development and Enhancement program
Toshiba
Toshiba Corporation, parent company of Westinghouse
Toshiba Guarantee
Certain payment obligations of the EPC Contractor guaranteed by Toshiba
traditional electric operating companies
Alabama Power, Georgia Power, Gulf Power, and Mississippi Power
Triton
Triton Container Investments, LLC
Virginia Commission
Virginia State Corporation Commission, the state regulatory agency for Virginia Natural Gas
Virginia Natural Gas
Virginia Natural Gas, Inc., a wholly-owned subsidiary of Southern Company Gas
Vogtle 3 and 4 Agreement
Agreement entered into with the EPC Contractor in 2008 by Georgia Power, acting for itself and as agent for the Vogtle Owners, pursuant to which the EPC Contractor agreed to design, engineer, procure, construct, and test Plant Vogtle Units 3 and 4
Vogtle Owners
Georgia Power, Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia, and the City of Dalton, Georgia, an incorporated municipality in the State of Georgia acting by and through its Board of Water, Light, and Sinking Fund Commissioners
WACOG
Weighted average cost of gas
WECTEC
WECTEC Global Project Services Inc.
Westinghouse
Westinghouse Electric Company LLC

7

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking statements include, among other things, statements concerning regulated rates, the strategic goals for the wholesale business, customer and sales growth, economic conditions, fuel and environmental cost recovery and other rate actions, current and proposed environmental regulations and related compliance plans and estimated expenditures, pending or potential litigation matters, access to sources of capital, financing activities, completion dates of construction projects, filings with state and federal regulatory authorities, federal income tax benefits, estimated sales and purchases under power sale and purchase agreements, and estimated construction and other plans and expenditures. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "should," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential," or "continue" or the negative of these terms or other similar terminology. There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include:

the impact of recent and future federal and state regulatory changes, including environmental laws regulating emissions, discharges, and disposal to air, water, and land, and also changes in tax and other laws and regulations to which Southern Company and its subsidiaries are subject, including potential tax reform legislation, as well as changes in application of existing laws and regulations;
current and future litigation, regulatory investigations, proceedings, or inquiries;
the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company's subsidiaries operate;
variations in demand for electricity and natural gas, including those relating to weather, the general economy and recovery from the last recession, population and business growth (and declines), the effects of energy conservation and efficiency measures, including from the development and deployment of alternative energy sources such as self-generation and distributed generation technologies, and any potential economic impacts resulting from federal fiscal decisions;
available sources and costs of natural gas and other fuels;
limits on pipeline capacity;
effects of inflation;
the ability to control costs and avoid cost overruns during the development, construction, and operation of facilities, which include the development and construction of generating facilities with designs that have not been finalized or previously constructed, including changes in labor costs and productivity, adverse weather conditions, shortages and inconsistent quality of equipment, materials, and labor, contractor or supplier delay, non-performance under construction, operating, or other agreements, operational readiness, including specialized operator training and required site safety programs, unforeseen engineering or design problems, start-up activities (including major equipment failure and system integration), and/or operational performance (including additional costs to satisfy any operational parameters ultimately adopted by any PSC);
the impact of any inability or other failure of Toshiba to perform its obligations under the Toshiba Guarantee, including any effect on the construction of Plant Vogtle Units 3 and 4;
the ability to construct facilities in accordance with the requirements of permits and licenses, to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction;
investment performance of the Southern Company system's employee and retiree benefit plans and nuclear decommissioning trust funds;
advances in technology;
ongoing renewable energy partnerships and development agreements;
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;
legal proceedings and regulatory approvals and actions related to Plant Vogtle Units 3 and 4, including Georgia PSC approvals and NRC actions;




8

Table of Contents

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
(continued)
actions related to cost recovery for the Kemper IGCC, including ongoing settlement discussions, Mississippi PSC review of the prudence of Kemper IGCC costs and approval of further permanent rate recovery plans, and related legal or regulatory proceedings;
the ability to successfully operate the electric utilities' generating, transmission, and distribution facilities and Southern Company Gas' natural gas distribution and storage facilities and the successful performance of necessary corporate functions;
the inherent risks involved in operating and constructing nuclear generating facilities, including environmental, health, regulatory, natural disaster, terrorism, and financial risks;
the inherent risks involved in transporting and storing natural gas;
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 possibility that the anticipated benefits from the Merger cannot be fully realized or may take longer to realize than expected, the possibility that costs related to the integration of Southern Company and Southern Company Gas will be greater than expected, the ability to retain and hire key personnel and maintain relationships with customers, suppliers, or other business partners, and the diversion of management time on integration-related issues;
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 the Southern Company system's business resulting from cyber intrusion or terrorist incidents and the threat of terrorist incidents;
interest rate fluctuations and financial market conditions and the results of financing efforts;
changes in Southern Company's and any of its subsidiaries' credit ratings, including impacts on interest rates, access to capital markets, and collateral requirements;
the impacts of any sovereign financial issues, including impacts on interest rates, access to capital markets, impacts on foreign currency exchange rates, counterparty performance, and the economy in general, as well as potential impacts on the benefits of the DOE loan guarantees;
the ability of Southern Company's electric utilities to obtain additional generating capacity (or sell excess generating capacity) at competitive prices;
catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events such as influenzas, or other similar occurrences;
the direct or indirect effects on the Southern Company system's business resulting from incidents affecting the U.S. electric grid, natural gas pipeline infrastructure, or operation of generating or storage resources;
the effect of accounting pronouncements issued periodically by standard-setting bodies; and
other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the registrants from time to time with the SEC.
The registrants expressly disclaim any obligation to update any forward-looking statements.


9

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THE SOUTHERN COMPANY
AND SUBSIDIARY COMPANIES

10

Table of Contents

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Retail electric revenues
$
3,777

 
$
3,748

 
$
7,171

 
$
7,124

Wholesale electric revenues
618

 
446

 
1,149

 
842

Other electric revenues
167

 
166

 
342

 
348

Natural gas revenues
684

 

 
2,214

 

Other revenues
184

 
99

 
326

 
137

Total operating revenues
5,430

 
4,459

 
11,202

 
8,451

Operating Expenses:
 
 
 
 
 
 
 
Fuel
1,092

 
1,023

 
2,088

 
1,934

Purchased power
211

 
189

 
390

 
354

Cost of natural gas
232

 

 
951

 

Cost of other sales
114

 
58

 
203

 
77

Other operations and maintenance
1,301

 
1,099

 
2,631

 
2,206

Depreciation and amortization
754

 
569

 
1,469

 
1,110

Taxes other than income taxes
308

 
255

 
638

 
511

Estimated loss on Kemper IGCC
3,012

 
81

 
3,120

 
134

Total operating expenses
7,024

 
3,274

 
11,490

 
6,326

Operating Income (Loss)
(1,594
)
 
1,185

 
(288
)
 
2,125

Other Income and (Expense):
 
 
 
 
 
 
 
Allowance for equity funds used during construction
58

 
45

 
115

 
98

Earnings (loss) from equity method investments
28

 
(1
)
 
67

 
(1
)
Interest expense, net of amounts capitalized
(424
)
 
(293
)
 
(840
)
 
(539
)
Other income (expense), net
(3
)
 
(28
)
 
(11
)
 
(56
)
Total other income and (expense)
(341
)
 
(277
)
 
(669
)
 
(498
)
Earnings (Loss) Before Income Taxes
(1,935
)
 
908

 
(957
)
 
1,627

Income taxes (benefit)
(587
)
 
261

 
(273
)
 
479

Consolidated Net Income (Loss)
(1,348
)
 
647

 
(684
)
 
1,148

Less:
 
 
 
 
 
 
 
Dividends on preferred and preference stock of subsidiaries
11

 
12

 
22

 
23

Net income attributable to noncontrolling interests
22

 
12

 
17

 
13

Consolidated Net Income (Loss) Attributable to
   Southern Company
$
(1,381
)
 
$
623

 
$
(723
)
 
$
1,112

Common Stock Data:
 
 
 
 
 
 
 
Earnings (loss) per share —
 
 
 
 
 
 
 
Basic
$
(1.38
)
 
$
0.67

 
$
(0.73
)
 
$
1.20

Diluted
$
(1.37
)
 
$
0.66

 
$
(0.72
)
 
$
1.20

Average number of shares of common stock outstanding (in millions)
 
 
 
 
 
 
 
Basic
998

 
934

 
996

 
925

Diluted
1,005

 
940

 
1,003

 
931

Cash dividends paid per share of common stock
$
0.5800

 
$
0.5600

 
$
1.1400

 
$
1.1025

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.


11

Table of Contents

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Consolidated Net Income (Loss)
$
(1,348
)
 
$
647

 
$
(684
)
 
$
1,148

Other comprehensive income (loss):
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
Changes in fair value, net of tax of
$23, $(13), $17, and $(85), respectively
38

 
(20
)
 
29

 
(137
)
Reclassification adjustment for amounts included in net income,
net of tax of $(25), $10, $(26), and $11, respectively
(41
)
 
16

 
(42
)
 
18

Pension and other postretirement benefit plans:
 
 
 
 
 
 
 
Reclassification adjustment for amounts included in net income,
net of tax of $1, $-, $1, and $1, respectively
1

 
1

 
2

 
2

Total other comprehensive income (loss)
(2
)
 
(3
)
 
(11
)
 
(117
)
Comprehensive Income (Loss)
(1,350
)
 
644

 
(695
)
 
1,031

Less:
 
 
 
 
 
 
 
Dividends on preferred and preference stock of subsidiaries
11

 
12

 
22

 
23

Comprehensive income attributable to noncontrolling interests
22

 
12

 
17

 
13

Consolidated Comprehensive Income (Loss) Attributable to
   Southern Company
$
(1,383
)
 
$
620

 
$
(734
)
 
$
995

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.


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Table of Contents

THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Consolidated net income (loss)
$
(684
)
 
$
1,148

Adjustments to reconcile consolidated net income (loss) to net cash provided from operating activities  
 
 
 
Depreciation and amortization, total
1,683

 
1,306

Deferred income taxes
(270
)
 
279

Allowance for equity funds used during construction
(115
)
 
(98
)
Pension, postretirement, and other employee benefits
(83
)
 
(56
)
Settlement of asset retirement obligations
(87
)
 
(66
)
Stock based compensation expense
73

 
69

Hedge settlements
1

 
(201
)
Estimated loss on Kemper IGCC
3,120

 
134

Income taxes receivable, non-current
(58
)
 

Other, net
(63
)
 
63

Changes in certain current assets and liabilities —
 
 
 
-Receivables
110

 
(197
)
-Prepayments
(61
)
 
(28
)
-Fossil fuel for generation
6

 
70

-Natural gas for sale, net of temporary LIFO liquidation
223

 

-Other current assets
(36
)
 
(25
)
-Accounts payable
(353
)
 
(71
)
-Accrued taxes
(132
)
 
74

-Accrued compensation
(331
)
 
(222
)
-Retail fuel cost over recovery
(187
)
 
(54
)
-Other current liabilities
(14
)
 
15

Net cash provided from operating activities
2,742

 
2,140

Investing Activities:
 
 
 
Business acquisitions, net of cash acquired
(1,062
)
 
(897
)
Property additions
(3,398
)
 
(3,486
)
Investment in restricted cash
(16
)
 
(8,608
)
Distribution of restricted cash
27

 
649

Nuclear decommissioning trust fund purchases
(388
)
 
(585
)
Nuclear decommissioning trust fund sales
383

 
580

Cost of removal, net of salvage
(128
)
 
(99
)
Change in construction payables, net
(117
)
 
(260
)
Investment in unconsolidated subsidiaries
(116
)
 

Payments pursuant to LTSAs
(132
)
 
(82
)
Other investing activities
58

 
113

Net cash used for investing activities
(4,889
)
 
(12,675
)
Financing Activities:
 
 
 
Increase in notes payable, net
30

 
471

Proceeds —
 
 
 
Long-term debt
2,958

 
12,038

Common stock
417

 
1,383

Short-term borrowings
1,004

 

Redemptions and repurchases —
 
 
 
Long-term debt
(1,478
)
 
(1,272
)
Preference stock
(150
)
 

Short-term borrowings

 
(475
)
Distributions to noncontrolling interests
(40
)
 
(11
)
Capital contributions from noncontrolling interests
73

 
179

Purchase of membership interests from noncontrolling interests

 
(129
)
Payment of common stock dividends
(1,134
)
 
(1,023
)
Other financing activities
(75
)
 
(133
)
Net cash provided from financing activities
1,605

 
11,028

Net Change in Cash and Cash Equivalents
(542
)
 
493

Cash and Cash Equivalents at Beginning of Period
1,975

 
1,404

Cash and Cash Equivalents at End of Period
$
1,433

 
$
1,897

Supplemental Cash Flow Information:
 
 
 
Cash paid (received) during the period for —
 
 
 
Interest (net of $55 and $61 capitalized for 2017 and 2016, respectively)
$
833

 
$
458

Income taxes, net
1

 
(138
)
Noncash transactions — Accrued property additions at end of period
629

 
549

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
1,433

 
$
1,975

Receivables —
 
 
 
 
Customer accounts receivable
 
1,600

 
1,565

Energy marketing receivables
 
482

 
623

Unbilled revenues
 
593

 
706

Under recovered regulatory clause revenues
 
26

 
18

Income taxes receivable, current
 
544

 
544

Other accounts and notes receivable
 
513

 
377

Accumulated provision for uncollectible accounts
 
(52
)
 
(43
)
Materials and supplies
 
1,461

 
1,462

Fossil fuel for generation
 
624

 
689

Natural gas for sale
 
477

 
631

Prepaid expenses
 
361

 
364

Other regulatory assets, current
 
569

 
581

Other current assets
 
206

 
230

Total current assets
 
8,837

 
9,722

Property, Plant, and Equipment:
 
 
 
 
In service
 
101,021

 
98,416

Less: Accumulated depreciation
 
30,667

 
29,852

Plant in service, net of depreciation
 
70,354

 
68,564

Nuclear fuel, at amortized cost
 
892

 
905

Construction work in progress
 
7,440

 
8,977

Total property, plant, and equipment
 
78,686

 
78,446

Other Property and Investments:
 
 
 
 
Goodwill
 
6,271

 
6,251

Equity investments in unconsolidated subsidiaries
 
1,632

 
1,549

Other intangible assets, net of amortization of $126 and $62
at June 30, 2017 and December 31, 2016, respectively
 
929

 
970

Nuclear decommissioning trusts, at fair value
 
1,722

 
1,606

Leveraged leases
 
782

 
774

Miscellaneous property and investments
 
230

 
270

Total other property and investments
 
11,566

 
11,420

Deferred Charges and Other Assets:
 
 
 
 
Deferred charges related to income taxes
 
1,325

 
1,629

Unamortized loss on reacquired debt
 
215

 
223

Other regulatory assets, deferred
 
6,668

 
6,851

Other deferred charges and assets
 
1,387

 
1,406

Total deferred charges and other assets
 
9,595

 
10,109

Total Assets
 
$
108,684

 
$
109,697

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.


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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholders' Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
3,031

 
$
2,587

Notes payable
 
3,274

 
2,241

Energy marketing trade payables
 
534

 
597

Accounts payable
 
1,920

 
2,228

Customer deposits
 
546

 
558

Accrued taxes —
 
 
 
 
Accrued income taxes
 
125

 
193

Unrecognized tax benefits
 
400

 
385

Other accrued taxes
 
490

 
667

Accrued interest
 
508

 
518

Accrued compensation
 
584

 
915

Asset retirement obligations, current
 
300

 
378

Liabilities from risk management activities, net of collateral
 
71

 
107

Acquisitions payable
 

 
489

Other regulatory liabilities, current
 
169

 
236

Other current liabilities
 
799

 
818

Total current liabilities
 
12,751

 
12,917

Long-term Debt
 
43,885

 
42,629

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
13,529

 
14,092

Deferred credits related to income taxes
 
212

 
219

Accumulated deferred ITCs
 
2,301

 
2,228

Employee benefit obligations
 
2,156

 
2,299

Asset retirement obligations, deferred
 
4,297

 
4,136

Accrued environmental remediation
 
399

 
397

Other cost of removal obligations
 
2,706

 
2,748

Other regulatory liabilities, deferred
 
233

 
258

Other deferred credits and liabilities
 
805

 
880

Total deferred credits and other liabilities
 
26,638

 
27,257

Total Liabilities
 
83,274

 
82,803

Redeemable Preferred Stock of Subsidiaries
 
118

 
118

Redeemable Noncontrolling Interests
 
51

 
164

Stockholders' Equity:
 
 
 
 
Common Stockholders' Equity:
 
 
 
 
Common stock, par value $5 per share —
 
 
 
 
Authorized — 1.5 billion shares
 
 
 
 
Issued — June 30, 2017: 1.0 billion shares
 
 
 
 
— December 31, 2016: 991 million shares
 
 
 
 
Treasury — June 30, 2017: 0.9 million shares
 
 
 
 
    — December 31, 2016: 0.8 million shares
 
 
 
 
Par value
 
4,997

 
4,952

Paid-in capital
 
10,106

 
9,661

Treasury, at cost
 
(34
)
 
(31
)
Retained earnings
 
8,494

 
10,356

Accumulated other comprehensive loss
 
(191
)
 
(180
)
Total Common Stockholders' Equity
 
23,372

 
24,758

Preferred and Preference Stock of Subsidiaries
 
462

 
609

Noncontrolling Interests
 
1,407

 
1,245

Total Stockholders' Equity
 
25,241

 
26,612

Total Liabilities and Stockholders' Equity
 
$
108,684

 
$
109,697

The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Southern Company is a holding company that owns all of the common stock of the traditional electric operating companies and the parent entities of Southern Power and Southern Company Gas and owns other direct and indirect subsidiaries. Discussion of the results of operations is focused on the Southern Company system's primary businesses of electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The four traditional electric operating companies are vertically integrated utilities providing electric service in four Southeastern states. Southern Power constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through natural gas distribution utilities in seven states and is involved in several other complementary businesses including gas marketing services, wholesale gas services, and gas midstream operations. Southern Company's other business activities include providing energy technologies and services to electric utilities and large industrial, commercial, institutional, and municipal customers. Customer solutions include distributed generation systems, utility infrastructure solutions, and energy efficiency products and services. Other business activities also include investments in telecommunications, leveraged lease projects, and gas storage facilities. For additional information, see BUSINESS – "The Southern Company System – Traditional Electric Operating Companies," " – Southern Power," " – Southern Company Gas," and " – Other Businesses" in Item 1 of the Form 10-K.
Southern Company continues to focus on several key performance indicators. These indicators include customer satisfaction, plant availability, electric and natural gas system reliability, execution of major construction projects, and earnings per share.
Construction Program
See RESULTS OF OPERATIONS – " Estimated Loss on Kemper IGCC ," FUTURE EARNINGS POTENTIAL – " Construction Program ," and Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " and " Integrated Coal Gasification Combined Cycle " herein for additional information regarding the construction program. For information about Southern Power's acquisitions and construction of renewable energy facilities, see Note (I) to the Condensed Financial Statements under " Southern Power " herein.
Kemper IGCC
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC (Kemper Settlement Order). The Kemper Settlement Order established a new docket for the purposes of pursuing a global settlement of costs of the Kemper IGCC (Kemper IGCC Settlement Docket). The Mississippi PSC requested any such proposed settlement agreement reflect: (i) at a minimum, no rate increase to Mississippi Power customers (with a rate reduction focused on residential customers encouraged); (ii) removal of all cost risk to customers associated with the Kemper IGCC gasifier and related assets; and (iii) modification or amendment of the CPCN for the Kemper IGCC to allow only for ownership and operation of a natural gas facility.
Although the ability to achieve a negotiated settlement is uncertain, Mississippi Power intends to pursue any available settlement alternatives. In addition, the Kemper Settlement Order provides that, in the event a settlement agreement is not reached, the Mississippi PSC reserves its right to take any appropriate steps, including issuing an order to show cause as to why the CPCN for the Kemper IGCC should not be revoked.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.
At the time of project suspension, the total cost estimate for the Kemper IGCC was approximately $7.38 billion, including approximately $5.95 billion of costs subject to the construction cost cap, and was net of the $137 million in additional grants from the DOE received on April 8, 2016 (Additional DOE Grants). Mississippi Power recorded pre-tax charges to income for revisions to the cost estimate subject to the construction cost cap totaling $196 million ($121 million after tax) in the second quarter through May 31, 2017 and a total of $305 million ($188 million after tax) for year-to-date through May 31, 2017. In the aggregate, Mississippi Power incurred charges of $3.07 billion ($1.89 billion after tax) as a result of changes in the cost estimate above the cost cap for the Kemper IGCC through May 31, 2017. The May 31, 2017 cost estimate included approximately $175 million of estimated costs to be incurred beyond the then-estimated in-service date of June 30, 2017 that were expected to be subject to the $2.88 billion cost cap.
At June 30, 2017, approximately $3.3 billion in actual Kemper IGCC costs were not reflected in Mississippi Power's retail and wholesale rates, of which $0.5 billion was related to the combined cycle and associated facilities and $2.8 billion was related to the gasification portions of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ($2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
Total pre-tax charges to income for the estimated probable losses on the Kemper IGCC were $3.0 billion ($2.1 billion after tax) for the second quarter 2017 and $3.1 billion ($2.2 billion after tax) for the six months ended June 30, 2017. In the aggregate, since the Kemper IGCC project started, Mississippi Power has incurred charges of $6.0 billion ($3.9 billion after tax) through June 30, 2017.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
For additional information on the Kemper IGCC, including information on the project economic viability analysis, pending lawsuits, and an ongoing SEC investigation, see Note 3 to the financial statements of Southern Company under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle " and "Other Matters" and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein.
Nuclear Construction
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into an interim assessment agreement with the EPC Contractor (Interim Assessment Agreement), which the bankruptcy court approved on March 30, 2017. On June 9, 2017, Georgia Power

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

and the other Vogtle Owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (Guarantee Settlement Agreement). Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (Guarantee Obligations), of which Georgia Power's proportionate share is approximately $1.7 billion, and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into a services agreement (Services Agreement), which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 27, 2017, the Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE and the Interim Assessment Agreement expired pursuant to its terms. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth Vogtle Construction Monitoring (VCM) report to be filed with the Georgia PSC in late August 2017.
An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Southern Company's financial statements. The ultimate outcome of these matters also is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time. See FUTURE EARNINGS POTENTIAL – " Construction Program – Nuclear Construction" herein for additional information on Plant Vogtle Units 3 and 4, including Georgia Power's preliminary cost-to-complete and cancellation cost assessments for Plant Vogtle Units 3 and 4.
RESULTS OF OPERATIONS
Net Income (Loss)
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(2,004)
 
N/M
 
$(1,835)
 
N/M
N/M - Not meaningful
Consolidated net loss attributable to Southern Company was $(1.4) billion ( $(1.38) per share) for the second quarter 2017 compared to net income of $623 million ( $0.67 per share) for the corresponding period in 2016 . The decrease was primarily due to charges of $3.0 billion and $81 million in the second quarter 2017 and 2016 , respectively, related to the Kemper IGCC at Mississippi Power. Also contributing to the change were increases in renewable energy sales at Southern Power, higher retail electric revenues resulting from increases in base rates, and $49 million in net income from Southern Company Gas, which was acquired on July 1, 2016, partially offset by higher interest expense.
Consolidated net loss attributable to Southern Company was $(723) million ( $(0.73) per share) for year-to-date 2017 compared to net income of $1.1 billion ( $1.20 per share) for the corresponding period in 2016 . The decrease was primarily due to charges of $3.1 billion and $134 million for year-to-date 2017 and 2016 , respectively, related to the Kemper IGCC at Mississippi Power. Also contributing to the change was $288 million in net income from Southern Company Gas, increases in renewable energy sales at Southern Power, and higher retail electric revenues

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

resulting from increases in base rates, partially offset by higher interest expense and a decrease in retail electric revenues resulting from milder weather for year-to-date 2017 compared to the corresponding period in 2016.
See Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information regarding the Kemper IGCC and Note (I) to the Condensed Financial Statements under " Southern Company " herein for additional information on the Merger.
Retail Electric Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$29
 
0.8
 
$47
 
0.7
In the second quarter 2017 , retail electric revenues were $3.8 billion compared to $3.7 billion for the corresponding period in 2016 . For year-to-date 2017 , retail revenues were $7.2 billion compared to $7.1 billion for the corresponding period in 2016.
Details of the changes in retail electric revenues were as follows:
 
 
Second Quarter 2017
 
Year-to-Date 2017
 
 
(in millions)
 
(% change)
 
(in millions)
 
(% change)
Retail electric – prior year
 
$
3,748

 
 
 
$
7,124

 
 
Estimated change resulting from –
 
 
 
 
 
 
 
 
Rates and pricing
 
81

 
2.2

 
200

 
2.8

Sales decline
 
(12
)
 
(0.3
)
 
(22
)
 
(0.3
)
Weather
 
(51
)
 
(1.4
)
 
(189
)
 
(2.6
)
Fuel and other cost recovery
 
11

 
0.3

 
58

 
0.8

Retail electric – current year
 
$
3,777

 
0.8
 %
 
$
7,171

 
0.7
 %
Revenues associated with changes in rates and pricing increased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 primarily due to a Rate RSE increase at Alabama Power effective January 1, 2017, the recovery of Plant Vogtle Units 3 and 4 construction financing costs under the NCCR tariff at Georgia Power, and an ECO Plan rate increase at Mississippi Power implemented in the third quarter 2016. Additionally, the second quarter 2017 increase was partially offset by the rate pricing effect of decreased customer usage and lower contributions from commercial and industrial customers under a rate plan for variable demand-driven pricing at Georgia Power.
See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Alabama Power" and " Georgia Power Rate Plans" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements herein for additional information.
Revenues attributable to changes in sales decreased in the second quarter 2017 w hen compared to the corresponding period in 2016 . Industrial KWH sales decreased 0.8% in the second quarter 2017 primarily in the paper, primary metals, and transportation sectors, partially offset by increased sales in the chemicals sector. Despite a more stable dollar and improving global economy, the industrial sector remains constrained by economic policy uncertainty. Weather-adjusted residential KWH sales decreased 0.4% in the second quarter 2017 primarily due to decreased customer usage primarily resulting from increased efficiency improvements in residential appliances and lighting, partially offset by customer growth. Weather-adjusted commercial KWH sales were flat in the second quarter 2017 primarily due to decreased customer usage resulting from an increase in electronic commerce transactions and energy saving initiatives, offset by customer growth.
Revenues attributable to changes in sales decreased for year-to-date 2017 when compared to the corresponding period in 2016 . Industrial KWH sales decreased 1.5% for year-to-date 2017 primarily in the paper, stone, clay, and

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

glass, and transportation sectors. Despite a more stable dollar and improving global economy, the industrial sector remains constrained by economic policy uncertainty. Weather-adjusted commercial KWH sales decreased 0.9% for year-to-date 2017 primarily due to decreased customer usage resulting from an increase in electronic commerce transactions and energy saving initiatives, partially offset by customer growth. Weather-adjusted residential KWH sales increased 0.2% for year-to-date 2017 primarily due to customer growth, partially offset by decreased customer usage primarily resulting from efficiency improvements in residential appliances and lighting.
Fuel and other cost recovery revenues increased $11 million and $58 million in the second quarter and year-to-date 2017 , respectively, when compared to the corresponding periods in 2016 primarily due to an increase in natural gas prices. Electric rates for the traditional electric operating companies include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, includi ng the energy component of PPA costs, and do not affect net income. The traditional electric operating companies each have one or more regulatory mechanisms to recover other costs such as environmental and other compliance costs, storm damage, new plants, and PPA capacity costs.
Wholesale Electric Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$172
 
38.6
 
$307
 
36.5
Wholesale electric revenues consist of PPAs primarily with investor-owned utilities and electric cooperatives and short-term opportunity sales. Wholesale electric revenues from PPAs (other than solar and wind PPAs) have both capacity and energy components. Capacity revenues generally represent the greatest contribution to net income and are designed to provide recovery of fixed costs plus a return on investment. Energy revenues will vary depending on fuel prices, the market prices of wholesale energy compared to the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Electricity sales from solar and wind PPAs do not have a capacity charge and customers either purchase the energy output of a dedicated renewable facility through an energy charge or through a fixed price for electricity. As a result, Southern Company's ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, and other factors. Wholesale electric revenues at Mississippi Power include FERC-regulated municipal and rural association sales as well as market-based sales. Short-term opportunity sales are made at market-based rates that generally provide a margin above the Southern Company system's variable cost to produce the energy.
In the second quarter 2017 , wholesale electric revenues were $618 million compared to $446 million for the corresponding period in 2016 . This increase was primarily related to a $158 million increase in energy revenues and a $14 million increase in capacity revenues. For year-to-date 2017 , wholesale electric revenues were $1.1 billion compared to $842 million for the corresponding period in 2016 . This increase was primarily related to a $276 million increase in energy revenues and a $31 million increase in capacity revenues. The increases in energy revenues primarily related to Southern Power increases in renewable energy sales arising from new solar and wind facilities, sales from new natural gas PPAs, and non-PPA revenues from short-term sales. The increases in capacity revenues primarily resulted from PPAs related to new natural gas facilities and additional customer load requirements at Southern Power.
Natural Gas Revenues
Natural gas revenues represent sales from the natural gas distribution utilities and certain non-regulated operations of Southern Company Gas. Following the Merger, $684 million and $2.2 billion of natural gas revenues are included in the consolidated statements of income for the second quarter and year-to-date 2017 , respectively.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

See Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
Other Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$85
 
85.9
 
$189
 
N/M
N/M - Not meaningful
In the second quarter 2017 , other revenues were $184 million compared to $99 million for the corresponding period in 2016 . For year-to-date 2017 , other revenues were $326 million compared to $137 million for the corresponding period in 2016 . These increases were primarily due to increases of $60 million and $130 million for the second quarter and year-to-date 2017 , respectively, from products and services at PowerSecure, which was acquired on May 9, 2016, and $32 million and $62 million for the second quarter and year-to-date 2017 , respectively, of revenues from gas marketing products and services at Southern Company Gas following the Merger.
See Note (I) to the Condensed Financial Statements under " Southern Company " herein for additional information on the Merger and the acquisition of PowerSecure.
Fuel and Purchased Power Expenses
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
Fuel
$
69

 
6.7
 
$
154

 
8.0
Purchased power
22

 
11.6
 
36

 
10.2
Total fuel and purchased power expenses
$
91

 
 
 
$
190

 
 
In the second quarter 2017 , total fuel and purchased power expenses were $1.3 billion compared to $1.2 billion for the corresponding period in 2016 . The increase was primarily the result of a $154 million increase in the average cost of fuel and purchased power primarily due to higher natural gas prices, partially offset by a $63 million decrease primarily due to the volume of KWHs purchased.
For year-to-date 2017 , total fuel and purchased power expenses were $2.5 billion compared to $2.3 billion for the corresponding period in 2016 . The increase was primarily the result of a $277 million increase in the average cost of fuel and purchased power primarily due to higher natural gas prices, partially offset by an $87 million decrease primarily due to the volume of KWHs purchased.
Fuel and purchased power energy transactions at the traditional electric operating companies are generally offset by fuel revenues and do not have a significant impact on net income. See FUTURE EARNINGS POTENTIAL – " Regulatory Matters Fuel Cost Recovery " herein for additional information. Fuel expenses incurred under Southern Power's PPAs are generally the responsibility of the counterparties and do not significantly impact net income.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Details of the Southern Company system's generation and purchased power were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017
 
Year-to-Date 2016
Total generation (in billions of KWHs)
49
 
45
 
93
 
89
Total purchased power (in billions of KWHs)
3
 
4
 
7
 
8
Sources of generation (percent)  —
 
 
 
 
 
 
 
Coal
31
 
32
 
30
 
30
Nuclear
16
 
16
 
16
 
17
Gas
43
 
48
 
45
 
47
Hydro
3
 
2
 
3
 
4
Other
7
 
2
 
6
 
2
Cost of fuel, generated (in cents per net KWH)  
 
 
 
 
 
 
 
Coal
2.77
 
3.20
 
2.82
 
3.22
Nuclear
0.80
 
0.82
 
0.80
 
0.82
Gas
2.94
 
2.24
 
2.93
 
2.20
Average cost of fuel, generated (in cents per net KWH)
2.49
 
2.33
 
2.49
 
2.28
Average cost of purchased power (in cents per net KWH) (*)
7.70
 
5.03
 
6.85
 
5.14
(*)
Average cost of purchased power includes fuel purchased by the Southern Company system for tolling agreements where power is generated by the provider.
Fuel
In the second quarter 2017 , fuel expense was $1.1 billion compared to $1.0 billion for the corresponding period in 2016 . The increase was primarily due to a 31.3% increase in the average cost of natural gas per KWH generated and a 3.0% increase in the volume of KWHs generated by coal, partially offset by a 13.4% decrease in the average cost of coal per KWH generated and a 4.8% decrease in the volume of KWHs generated by natural gas.
For year-to-date 2017 , fuel expense was $2.1 billion compared to $1.9 billion for the corresponding period in 2016 . The increase was primarily due to a 33.2% increase in the average cost of natural gas per KWH generated and a 4.1% increase in the volume of KWHs generated by coal, partially offset by a 12.4% decrease in the average cost of coal per KWH generated and a 6.6% decrease in the volume of KWHs generated by natural gas.
Purchased Power
In the second quarter 2017 , purchased power expense was $211 million compared to $189 million for the corresponding period in 2016 . The increase was primarily due to a 53.1% increase in the average cost per KWH purchased, primarily as a result of higher natural gas prices, partially offset by a 28.0% decrease in the volume of KWHs purchased.
For year-to-date 2017 , purchased power expense was $390 million compared to $354 million for the corresponding period in 2016 . The increase was primarily due to a 33.3% increase in the average cost per KWH purchased, primarily as a result of higher natural gas prices, partially offset by a 16.8% decrease in the volume of KWHs purchased.
Energy purchases will vary depending on demand for energy within the Southern Company system's electric service territory, the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, and the availability of the Southern Company system's generation.

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Cost of Natural Gas
Cost of natural gas represents the cost of natural gas sold by the natural gas distribution utilities and certain non-regulated operations of Southern Company Gas. Following the Merger, $232 million and $951 million of natural gas costs were included in the consolidated statements of income for the second quarter and year-to-date 2017 , respectively.
See Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
Cost of Other Sales
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$56
 
96.6%
 
$126
 
N/M
N/M - Not meaningful
In the second quarter 2017 , cost of other sales was $114 million compared to $58 million for the corresponding period in 2016 . For year-to-date 2017 , cost of other sales was $203 million compared to $77 million for the corresponding period in 2016 . These increases were primarily due to costs related to sales of products and services by PowerSecure, which was acquired on May 9, 2016, and costs related to gas marketing products and services at Southern Company Gas following the Merger. See Note (I) to the Condensed Financial Statements under " Southern Company " herein for additional information.
Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$202
 
18.4
 
$425
 
19.3
In the second quarter 2017 , other operations and maintenance expenses were $1.3 billion compared to $1.1 billion for the corresponding period in 2016 . The increase was primarily due to $213 million in operations and maintenance expenses at Southern Company Gas following the Merger, a $19 million increase associated with new solar, wind, and gas facilities at Southern Power, and a $15 million increase in operations and maintenance expenses at PowerSecure, which was acquired on May 9, 2016. These increases were partially offset by a $24 million decrease in acquisition-related expenses and a $7 million decrease in scheduled outage and maintenance costs at generation facilities.
For year-to-date 2017 , other operations and maintenance expenses were $2.6 billion compared to $2.2 billion for the corresponding period in 2016 . The increase was primarily due to increases of $467 million and $36 million in operations and maintenance expenses from Southern Company Gas and PowerSecure, respectively, a $35 million increase associated with new solar, wind, and gas facilities at Southern Power, and $32.5 million resulting from the write-down of Gulf Power's ownership of Plant Scherer Unit 3 in accordance with a settlement agreement approved by the Florida PSC on April 4, 2017 (2017 Rate Case Settlement Agreement). These increases were partially offset by a $46 million decrease in scheduled outage and maintenance costs at generation facilities, a $26 million decrease in acquisition-related expenses, a $19 million increase in gains from sales of integrated transmission system assets at Georgia Power, a $16 million decrease in customer accounts, service, and sales costs primarily associated with demand-side management costs related to the timing of new programs at Georgia Power, and a $14 million decrease in employee compensation and benefits including pension costs.
See Note (B) to the Condensed Financial Statements under " Regulatory Matters Gulf Power Retail Base Rate Cases " herein for additional information regarding the 2017 Rate Case Settlement Agreement and Note (I) to the

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Condensed Financial Statements under " Southern Company " herein for additional information related to the Merger and the acquisition of PowerSecure.
Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$185
 
32.5
 
$359
 
32.3
In the second quarter 2017 , depreciation and amortization was $754 million compared to $569 million for the corresponding period in 2016 . Following the Merger, $125 million in depreciation and amortization for Southern Company Gas is included in the consolidated statements of income for the second quarter 2017 . Additionally, the increase reflects $61 million related to additional plant in service at the traditional electric operating companies and Southern Power, partially offset by $8 million more of a reduction in depreciation in the second quarter 2017 compared to the corresponding period in 2016 at Gulf Power, as authorized in its 2013 rate case settlement approved by the Florida PSC.
For year-to-date 2017 , depreciation and amortization was $1.5 billion compared to $1.1 billion for the corresponding period in 2016 . Following the Merger, $244 million in depreciation and amortization for Southern Company Gas is included in the consolidated statements of income for year-to-date 2017 . Additionally, the increase reflects $122 million related to additional plant in service at the traditional electric operating companies and Southern Power, partially offset by $28 million more of a reduction in depreciation for year-to-date 2017 compared to the corresponding period in 2016 at Gulf Power, as authorized in its 2013 rate case settlement approved by the Florida PSC.
See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Gulf Power – Retail Base Rate Cases" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Gulf Power Retail Base Rate Cases " herein for additional information. Also see Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
Taxes Other Than Income Taxes
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$53
 
20.8
 
$127
 
24.9
In the second quarter 2017 , taxes other than income taxes were $308 million compared to $255 million for the corresponding period in 2016 . For year-to-date 2017 , taxes other than income taxes were $638 million compared to $511 million for the corresponding period in 2016 . These increases were primarily related to $44 million and $114 million in the second quarter and year-to-date 2017 , respectively, in taxes other than income taxes associated with Southern Company Gas following the Merger.
See Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.

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Estimated Loss on Kemper IGCC
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$2,931
 
N/M
 
$2,986
 
N/M
N/M - Not meaningful
Prior to the project suspension on June 28, 2017, estimated probable losses on the Kemper IGCC of $196 million and $305 million were recorded at Mississippi Power in the second quarter and year-to-date 2017, respectively, compared to $81 million and $134 million in the second quarter and year-to-date 2016 , respectively. These losses reflected revisions of estimated costs expected to be incurred on Mississippi Power's construction of the Kemper IGCC prior to project suspension in excess of the $2.88 billion cost cap established by the Mississippi PSC, net of $245 million of grants awarded to the project by the DOE under the Clean Coal Power Initiative Round 2 (Initial DOE Grants) and excluding the cost of the lignite mine and equipment, the cost of the CO 2 pipeline facilities, AFUDC, and certain general exceptions, including change of law, force majeure, and beneficial capital (which exists when Mississippi Power demonstrates that the purpose and effect of the construction cost increase is to produce efficiencies that will result in a neutral or favorable effect on customers relative to the original proposal for the CPCN) (Cost Cap Exceptions).
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion, which includes estimated costs associated with the gasification portions of the plant and lignite mine.
See FUTURE EARNINGS POTENTIAL – " Construction Program Integrated Coal Gasification Combined Cycle " and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.
Allowance for Equity Funds Used During Construction
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$13
 
28.9
 
$17
 
17.3
In the second quarter 2017 , AFUDC equity was $58 million compared to $45 million in the corresponding period in 2016 . For year-to-date 2017 , AFUDC equity was $115 million compared to $98 million in the corresponding period in 2016 . These increases primarily resulted from a higher AFUDC rate and an increase in Kemper IGCC CWIP subject to AFUDC prior to project suspension at Mississippi Power.
See FUTURE EARNINGS POTENTIAL – " Construction Program Integrated Coal Gasification Combined Cycle " and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.

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Earnings from Equity Method Investments
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$29
 
N/M
 
$68
 
N/M
N/M - Not meaningful
In the second quarter and year-to-date 2017 , earnings from equity method investments were $28 million and $67 million , respectively, primarily related to earnings from Southern Company Gas' equity method investment in SNG effective September 2016.
See Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
Interest Expense, Net of Amounts Capitalized
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$131
 
44.7
 
$301
 
55.8
In the second quarter 2017 , interest expense, net of amounts capitalized was $424 million compared to $293 million in the corresponding period in 2016 . For year-to-date 2017 , interest expense, net of amounts capitalized was $840 million compared to $539 million in the corresponding period in 2016 . These increases were primarily due to an increase in average outstanding long-term debt primarily related to the Merger and the funding of Southern Power's acquisitions and construction projects. In addition, following the Merger, $48 million and $94 million in interest expense of Southern Company Gas was included in the consolidated statements of income for the second quarter and year-to-date 2017 , respectively.
See Note (E) to the Condensed Financial Statements herein and Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
Other Income (Expense), Net
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$25
 
89.3
 
$45
 
80.4
In the second quarter 2017 , other income (expense), net was $(3) million compared to $(28) million for the corresponding period in 2016 . For year-to-date 2017 , other income (expense), net was $(11) million compared to $(56) million for the corresponding period in 2016 . These changes were primarily due to expenses incurred in 2016 associated with bridge financing for the Merger. These changes also include increases of $99 million and $116 million in currency losses arising from a translation of euro-denominated fixed-rate notes into U.S. dollars for the second quarter and year-to-date 2017, respectively, fully offset by an equal change in gains on the foreign currency hedges that were reclassified from accumulated OCI into earnings at Southern Power.
See Note (H) to the Condensed Financial Statements under " Foreign Currency Derivatives " herein for additional information.

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Income Taxes (Benefit)
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(848)
 
N/M
 
$(752)
 
N/M
N/M - Not meaningful
In the second quarter 2017 , income tax benefit was $587 million compared to income tax expense of $261 million for the corresponding period in 2016 . The decrease was primarily due to $865 million in tax benefits related to the estimated probable losses on the Kemper IGCC at Mississippi Power, partially offset by $31 million in taxes at Southern Company Gas following the Merger.
For year-to-date 2017 , income tax benefit was $273 million compared to income tax expense of $479 million for the corresponding period in 2016 , primarily due to $886 million in tax benefits related to the estimated probable losses on the Kemper IGCC at Mississippi Power. In addition, the change reflects $180 million in taxes at Southern Company Gas following the Merger, partially offset by a net increase in tax benefits of $16 million from renewable tax credits at Southern Power.
See Note (G) to the Condensed Financial Statements herein and Note (I) to the Condensed Financial Statements under " Southern Company Merger with Southern Company Gas " herein for additional information.
FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Southern Company's future earnings potential. The level of Southern Company's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of the Southern Company system's primary businesses of selling electricity and distributing natural gas. These factors include the traditional electric operating companies' and the natural gas distribution utilities' ability to maintain a constructive regulatory environment that allows for the timely recovery of prudently-incurred costs during a time of increasing costs and limited projected demand growth over the next several years. Completion of cost assessments and the determination of future actions related to Plant Vogtle Units 3 and 4 construction and rate recovery and the ability to recover costs for the remainder of the Kemper County energy facility not included in current rates are also major factors. In addition, the profitability of Southern Power's competitive wholesale business and successful additional investments in renewable and other energy projects are also major factors.
Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals, including any potential changes to the availability or realizability of ITCs and PTCs, is dependent on the final form of any legislation enacted and the related transition rules and cannot be determined at this time, but could have a material impact on Southern Company's financial statements.
Future earnings for the electricity and natural gas businesses will be driven primarily by customer growth. Earnings in the electricity business will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies, increasing volumes of electronic commerce transactions, and higher multi-family home construction. Earnings for both the electricity and natural gas businesses are subject to a variety of other factors. These factors include weather, competition, new energy contracts with other utilities and other wholesale customers, energy conservation practiced by customers, the use of alternative energy sources by customers, the prices of electricity and natural gas, the price elasticity of demand, and the rate of economic growth or decline in the service territory. In addition, the level of future earnings for the wholesale electric business also depends on numerous factors including regulatory matters, creditworthiness of customers, total electric generating capacity available and related costs, future acquisitions and construction of electric generating facilities, the impact of tax credits from renewable energy projects, and the successful remarketing of capacity as current contracts expire. Demand for electricity and natural gas is primarily driven by economic growth. The pace of economic growth and electricity and natural gas demand may be affected by changes

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in regional and global economic conditions, which may impact future earnings. In addition, the volatility of natural gas prices has a significant impact on the natural gas distribution utilities' customer rates, long-term competitive position against other energy sources, and the ability of Southern Company Gas' gas marketing services and wholesale gas services businesses to capture value from locational and seasonal spreads. Additionally, changes in commodity prices subject a significant portion of Southern Company Gas' operations to earnings variability.
As part of its ongoing effort to adapt to changing market conditions, Southern Company continues to evaluate and consider a wide array of potential business strategies. These strategies may include business combinations, partnerships, and acquisitions involving other utility or non-utility businesses or properties, disposition of certain assets or businesses, internal restructuring, or some combination thereof. Furthermore, Southern Company may engage in new business ventures that arise from competitive and regulatory changes in the utility industry. Pursuit of any of the above strategies, or any combination thereof, may significantly affect the business operations, risks, and financial condition of Southern Company.
For additional information relating to these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL of Southern Company in Item 7 of the Form 10-K and RISK FACTORS in Item 1A herein.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in rates on a timely basis for the traditional electric operating companies and the natural gas distribution utilities or through long-term wholesale agreements for the traditional electric operating companies and Southern Power. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Further, higher costs that are recovered through regulated rates could contribute to reduced demand for electricity and natural gas, which could negatively affect results of operations, cash flows, and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters" of Southern Company in Item 7 and Note 3 to the financial statements of Southern Company under "Environmental Matters" in Item 8 of the Form 10-K for additional information.
Environmental Statutes and Regulations
Air Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Air Quality" of Southern Company in Item 7 of the Form 10-K for additional information regarding the EPA's eight-hour ozone National Ambient Air Quality Standard (NAAQS).
On June 2, 2017, the EPA published a final rule redesignating a 15-county area within metropolitan Atlanta to attainment for the 2008 eight-hour ozone NAAQS.
On June 18, 2017, the EPA published a notice delaying attainment designations for the 2015 eight-hour ozone NAAQS by one year, setting a revised deadline of October 1, 2018. The ultimate outcome of this matter cannot be determined at this time.
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Southern Company in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule and the final rule revising the regulatory definition of waters of the U.S. for all Clean Water Act (CWA) programs.

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On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed to rescind the final rule that revised the regulatory definition of waters of the U.S. for all CWA programs. The final rule has been stayed since October 2015 by the U.S. Court of Appeals for the Sixth Circuit.
The ultimate outcome of these matters cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Southern Company in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.
FERC Matters
Market-Based Rate Authority
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters Market-Based Rate Authority" of Southern Company in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Southern Company Gas
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters Southern Company Gas" of Southern Company in Item 7 and Note 4 to the financial statements of Southern Company in Item 8 of the Form 10-K for additional information regarding Southern Company Gas' pipeline projects.
On August 1, 2017, the Dalton Pipeline was placed in service as authorized by the FERC and transportation service for customers commenced.
Regulatory Matters
Fuel Cost Recovery
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Regulatory Matters Fuel Cost Recovery" of Southern Company in Item 7 and Note 3 to the financial statements of Southern Company under "Regulatory Matters – Alabama Power – Rate ECR" and "Regulatory Matters – Georgia Power –

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Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information regarding fuel cost recovery for the traditional electric operating companies.
The traditional electric operating companies each have established fuel cost recovery rates approved by their respective state PSCs. Fuel cost recovery revenues are adjusted for differences in actual recoverable fuel costs and amounts billed in current regulated rates. Accordingly, changes in the billing factor will not have a significant effect on Southern Company's revenues or net income, but will affect cash flow. The traditional electric operating companies continuously monitor their under or over recovered fuel cost balances and make appropriate filings with their state PSCs to adjust fuel cost recovery rates as necessary.
Renewables
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Regulatory Matters Renewables" of Southern Company in Item 7 of the Form 10-K for additional information regarding the Southern Company system's renewables activity.
On May 16, 2017, the Georgia PSC approved Georgia Power's request to build, own, and operate a 139-MW solar generation facility at a U.S. Air Force base that is expected to be placed in service by the end of 2019.
During the six months ended June 30, 2017, Georgia Power continued construction of a 31-MW solar generation facility at a U.S. Marine Corps base that is expected to be placed in service in the fourth quarter 2017.
Mississippi Power placed in service two solar projects in January 2017 and June 2017. A third solar project is expected to be placed in service in the third quarter 2017. Mississippi Power may retire the renewable energy credits (REC) generated on behalf of its customers or sell the RECs, separately or bundled with energy, to third parties.
On June 9, 2017, Mississippi Power submitted a CPCN to the Mississippi PSC for the approval of construction, operation, and maintenance of a 52.5-MW solar energy generating facility, which, if approved, is expected to be placed in service by January 2020.
The ultimate outcome of these matters cannot be determined at this time.
Alabama Power
Alabama Power's revenues from regulated retail operations are collected through various rate mechanisms subject to the oversight of the Alabama PSC. Alabama Power currently recovers its costs from the regulated retail business primarily through Rate RSE, Rate CNP, Rate ECR, and Rate NDR. In addition, the Alabama PSC issues accounting orders to address current events impacting Alabama Power. See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Alabama Power" in Item 8 of the Form 10-K for additional information regarding Alabama Power's rate mechanisms and accounting orders. The recovery balance of each regulatory clause for Alabama Power is reported in Note (B) to the Condensed Financial Statements herein.
Georgia Power
Georgia Power's revenues from regulated retail operations are collected through various rate mechanisms subject to the oversight of the Georgia PSC. Georgia Power currently recovers its costs from the regulated retail business through the 2013 ARP, which includes traditional base tariff rates, Demand-Side Management tariffs, Environmental Compliance Cost Recovery tariffs, and Municipal Franchise Fee tariffs. In addition, financing costs related to the construction of Plant Vogtle Units 3 and 4 are being collected through the NCCR tariff and fuel costs are collected through a separate fuel cost recovery tariff. See Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " herein and Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Nuclear Construction" in Item 8 of the Form 10-K for additional information regarding Georgia Power's NCCR tariff. Also see Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Fuel Cost Recovery " herein for additional information regarding Georgia Power's fuel cost recovery.

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Integrated Resource Plan
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Regulatory Matters – Georgia Power – Integrated Resource Plan" of Southern Company in Item 7 of the Form 10-K for additional information regarding Georgia Power's triennial Integrated Resource Plan.
On March 7, 2017, the Georgia PSC approved Georgia Power's decision to suspend work at a future generation site in Stewart County, Georgia, due to changing economics, including load forecasts and lower fuel costs. The timing of recovery for costs incurred of approximately $50 million will be determined by the Georgia PSC in a future base rate case. The ultimate outcome of this matter cannot be determined at this time.
Gulf Power
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Regulatory Matters – Gulf Power" of Southern Company in Item 7 of the Form 10-K for additional information regarding Gulf Power's October 2016 request to the Florida PSC to increase retail base rates and Gulf Power's ownership of Plant Scherer Unit 3.
On April 4, 2017, the Florida PSC approved the 2017 Rate Case Settlement Agreement among Gulf Power and three intervenors with respect to Gulf Power's request to increase retail base rates. Under the terms of the 2017 Rate Case Settlement Agreement, Gulf Power increased rates effective with the first billing cycle in July 2017 to provide an annual overall net customer impact of approximately $54.3 million. The net customer impact consists of a $62.0 million increase in annual base revenues less an annual equivalent credit of approximately $7.7 million for 2017 for certain wholesale revenues to be provided through December 2019 through the purchased power capacity cost recovery clause. In addition, Gulf Power continued its authorized retail ROE midpoint (10.25%) and range (9.25% to 11.25%) and is deemed to have an equity ratio of 52.5% for all retail regulatory purposes. Gulf Power will also begin amortizing the regulatory asset associated with the investment balances remaining after the retirement of Plant Smith Units 1 and 2 (357 MWs) over 15 years effective January 1, 2018 and will implement new depreciation rates effective January 1, 2018. The 2017 Rate Case Settlement Agreement also resulted in a $32.5 million write-down of Gulf Power's ownership of Plant Scherer Unit 3 (205 MWs), which was recorded in the first quarter 2017. The remaining issues related to the inclusion of Gulf Power's investment in Plant Scherer Unit 3 in retail rates have been resolved as a result of the 2017 Rate Case Settlement Agreement, including recoverability of certain costs associated with the ongoing ownership and operation of the unit through the environmental cost recovery clause rate approved by the Florida PSC in November 2016.
Southern Company Gas
Natural Gas Cost Recovery
Southern Company Gas has established natural gas cost recovery rates approved by the relevant state regulatory agencies in the states in which it serves. Natural gas cost recovery revenues are adjusted for differences in actual recoverable natural gas costs and amounts billed in current regulated rates. Changes in the billing factor will not have a significant effect on Southern Company's revenues or net income, but will affect cash flows.
Base Rate Cases
On March 10, 2017, Nicor Gas filed a general base rate case with the Illinois Commission requesting a $208 million increase in annual base rate revenues. The requested increase is based on a 2018 projected test year and a ROE of 10.7%. The Illinois Commission is expected to rule on the requested increase within the 11-month statutory time limit, after which rate adjustments will be effective. The ultimate outcome of this matter cannot be determined at this time.

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Construction Program
Overview
The subsidiary companies of Southern Company are engaged in continuous construction programs to accommodate existing and estimated future loads on their respective systems. The Southern Company system intends to continue its strategy of developing and constructing new electric generating facilities, adding environmental modifications to certain existing units, expanding the electric transmission and distribution systems, and updating and expanding the natural gas distribution systems. For the traditional electric operating companies, major generation construction projects are subject to state PSC approval in order to be included in retail rates. While Southern Power generally constructs and acquires generation assets covered by long-term PPAs, any uncontracted capacity could negatively affect future earnings. Southern Company Gas is engaged in various infrastructure improvement programs designed to update or expand the natural gas distribution systems of the natural gas distribution utilities to improve reliability and meet operational flexibility and growth. The natural gas distribution utilities recover their investment and a return associated with these infrastructure programs through their regulated rates.
The largest construction project currently underway in the Southern Company system is Plant Vogtle Units 3 and 4 (45.7% ownership interest by Georgia Power in the two units, each with approximately 1,100 MWs). Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth VCM report to be filed with the Georgia PSC in late August 2017. On June 21, 2017, the Mississippi PSC directed Mississippi Power to pursue a settlement under which the Kemper IGCC would be operated as a natural gas plant rather than an IGCC plant and, on June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the plant. See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Nuclear Construction" and "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " and " Integrated Coal Gasification Combined Cycle " herein for additional information. For additional information about costs relating to Southern Power's acquisitions that involve construction of renewable energy facilities, see Note 12 to the financial statements of Southern Company under "Southern Power – Construction Projects" in Item 8 of the Form 10-K and Note (I) to the Condensed Financial Statements under " Southern Power " herein. See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Southern Company Gas – Regulatory Infrastructure Programs" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Southern Company Gas Regulatory Infrastructure Programs " herein for information regarding infrastructure improvement programs at the natural gas distribution utilities.
Also see FINANCIAL CONDITION AND LIQUIDITY – " Capital Requirements and Contractual Obligations " herein for additional information regarding Southern Company's capital requirements for its subsidiaries' construction programs.
Integrated Coal Gasification Combined Cycle
The Kemper IGCC was approved by the Mississippi PSC in the 2010 CPCN proceedings, subject to a construction cost cap of $2.88 billion, net of $245 million of Initial DOE Grants and excluding the Cost Cap Exceptions. The combined cycle and associated common facilities portion of the Kemper IGCC were placed in service in August 2014.
In December 2015, the Mississippi PSC issued an order (In-Service Asset Rate Order), based on a stipulation between Mississippi Power and the Mississippi Public Utilities Staff, authorizing rates that provide for the recovery of approximately $126 million annually related to the combined cycle and associated common facilities portion of Kemper IGCC assets previously placed in service. As required by the In-Service Asset Rate Order, on June 5, 2017,

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Mississippi Power made a rate filing requesting to adjust the amortization schedules of the regulatory assets reviewed and determined prudent in a manner that would not change customer rates or annual revenues. On June 28, 2017, the Mississippi PSC suspended this filing. On July 6, 2017, the Mississippi PSC issued an order requiring Mississippi Power to establish a regulatory liability account to maintain current rates related to the Kemper IGCC following the July 2017 completion of the amortization period for certain regulatory assets approved in the In-Service Asset Rate Order that would allow for subsequent refund if the Mississippi PSC deems the rates unjust and unreasonable.
The remainder of the plant includes the gasifiers and the gas clean-up facilities. The initial production of syngas began on July 14, 2016 for gasifier "B" and on September 13, 2016 for gasifier "A." Mississippi Power achieved integrated operation of both gasifiers on January 29, 2017, including the production of electricity from syngas in both combustion turbines. During testing, the plant produced and captured CO 2 , and produced sulfuric acid and ammonia, each of acceptable quality under the related off-take agreements. However, Mississippi Power experienced numerous challenges during the extended start-up process to achieve integrated operation of the gasifiers on a sustained basis. Most recently, in May 2017, after achieving these milestones, Mississippi Power determined that a critical system component, the syngas coolers, would need replacement sooner than originally planned, which would require significant lead time and significant cost. In addition, the long-term natural gas price forecast has decreased significantly and the estimated cost of operating and maintaining the facility during the first five full years of operations increased significantly since certification.
On June 21, 2017, the Mississippi PSC stated its intent to issue the Kemper Settlement Order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC. The Kemper Settlement Order established the Kemper IGCC Settlement Docket for the purposes of pursuing a global settlement of costs of the Kemper IGCC. The Mississippi PSC requested any such proposed settlement agreement reflect: (i) at a minimum, no rate increase to Mississippi Power customers (with a rate reduction focused on residential customers encouraged); (ii) removal of all cost risk to customers associated with the Kemper IGCC gasifier and related assets; and (iii) modification or amendment of the CPCN for the Kemper IGCC to allow only for ownership and operation of a natural gas facility. The Kemper Settlement Order provides that any related settlement agreement be filed within 45 days from the effective date of the Kemper Settlement Order. If a settlement agreement is filed, a hearing will be set 45 days from the date of the settlement's filing, and the appropriate scheduling order will be established.
Although the ability to achieve a negotiated settlement is uncertain, Mississippi Power intends to pursue any available settlement alternatives. In addition, the Kemper Settlement Order provides that, in the event a settlement agreement is not reached, the Mississippi PSC reserves its right to take any appropriate steps, including issuing an order to show cause as to why the CPCN for the Kemper IGCC should not be revoked.
On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.
At the time of project suspension, the total cost estimate for the Kemper IGCC was approximately $7.38 billion, including approximately $5.95 billion of costs subject to the construction cost cap, and was net of the $137 million in Additional DOE Grants. Mississippi Power recorded pre-tax charges to income for revisions to the cost estimate subject to the construction cost cap totaling $196 million ($121 million after tax) in the second quarter through May 31, 2017 and a total of $305 million ($188 million after tax) for year-to-date through May 31, 2017. In the aggregate, Mississippi Power incurred charges of $3.07 billion ($1.89 billion after tax) as a result of changes in the cost estimate above the cost cap for the Kemper IGCC through May 31, 2017. The May 31, 2017 cost estimate included approximately $175 million of estimated costs to be incurred beyond the then-estimated in-service date of June 30, 2017 that were expected to be subject to the $2.88 billion cost cap.

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At June 30, 2017, approximately $3.3 billion in actual Kemper IGCC costs were not reflected in Mississippi Power's retail and wholesale rates, of which $0.5 billion was related to the combined cycle and associated facilities and $2.8 billion was related to the gasification portions of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ($2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
Total pre-tax charges to income for the estimated probable losses on the Kemper IGCC were $3.0 billion ($2.1 billion after tax) for the second quarter 2017 and $3.1 billion ($2.2 billion after tax) for the six months ended June 30, 2017. In the aggregate, since the Kemper IGCC project started, Mississippi Power has incurred charges of $6.0 billion ($3.9 billion after tax) through June 30, 2017.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
For additional information on the Kemper IGCC, including information on the project economic viability analysis, pending lawsuits, and an ongoing SEC investigation, see Note 3 to the financial statements of Southern Company under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle " and "Other Matters" and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein. Also see "Litigation" herein.
Litigation
On April 26, 2016, a complaint against Mississippi Power was filed in Harrison County Circuit Court (Circuit Court) by Biloxi Freezing & Processing Inc., Gulfside Casino Partnership, and John Carlton Dean, which was amended and refiled on July 11, 2016 to include, among other things, Southern Company as a defendant. The individual plaintiff alleges that Mississippi Power and Southern Company violated the Mississippi Unfair Trade Practices Act. All plaintiffs have alleged that Mississippi Power and Southern Company concealed, falsely represented, and failed to fully disclose important facts concerning the cost and schedule of the Kemper IGCC and that these alleged breaches have unjustly enriched Mississippi Power and Southern Company. The plaintiffs seek unspecified actual damages and punitive damages; ask the Circuit Court to appoint a receiver to oversee, operate, manage, and otherwise control all affairs relating to the Kemper IGCC; ask the Circuit Court to revoke any licenses or certificates authorizing Mississippi Power or Southern Company to engage in any business related to the Kemper IGCC in Mississippi; and seek attorney's fees, costs, and interest. The plaintiffs also seek an injunction to prevent any Kemper IGCC costs from being charged to customers through electric rates. On June 23, 2017, the Circuit Court ruled in favor of motions by Southern Company and Mississippi Power and dismissed the case. On July 7, 2017, the plaintiffs filed notice to appeal to the Mississippi Supreme Court.
On June 9, 2016, Treetop Midstream Services, LLC (Treetop) and other related parties filed a complaint against Mississippi Power, Southern Company, and SCS in the state court in Gwinnett County, Georgia. The complaint relates to the cancelled CO 2 contract with Treetop and alleges fraudulent misrepresentation, fraudulent concealment, civil conspiracy, and breach of contract on the part of Mississippi Power, Southern Company, and SCS and seeks

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compensatory damages of $100 million, as well as unspecified punitive damages. Southern Company, Mississippi Power, and SCS have moved to compel arbitration pursuant to the terms of the CO 2 contract, which the court granted on May 4, 2017. On June 28, 2017, Treetop and other related parties filed a claim for arbitration requesting $500 million in damages.
Southern Company believes these legal challenges have no merit; however, an adverse outcome in these proceedings could have a material impact on Southern Company's results of operations, financial condition, and liquidity. Southern Company will vigorously defend itself in these matters, and the ultimate outcome of these matters cannot be determined at this time.
Nuclear Construction
See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Nuclear Construction" in Item 8 of the Form 10-K for additional information regarding the construction of Plant Vogtle Units 3 and 4, VCM reports, the NCCR tariff, and the Contractor Settlement Agreement.
Vogtle 3 and 4 Agreement and EPC Contractor Bankruptcy
In 2008, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into the Vogtle 3 and 4 Agreement, pursuant to which the EPC Contractor agreed to design, engineer, procure, construct, and test Plant Vogtle Units 3 and 4. Under the terms of the Vogtle 3 and 4 Agreement, the Vogtle Owners agreed to pay a purchase price subject to certain price escalations and adjustments, including fixed escalation amounts and index-based adjustments, as well as adjustments for change orders, and performance bonuses for early completion and unit performance. Georgia Power's proportionate share of Plant Vogtle Units 3 and 4 is 45.7%.
The Vogtle 3 and 4 Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million (approximately $420 million based on Georgia Power's ownership interest). Under the Toshiba Guarantee, Toshiba guaranteed certain payment obligations of the EPC Contractor, including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Vogtle Owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the Vogtle 3 and 4 Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020 and require 60 days' written notice to Georgia Power in the event the Westinghouse Letters of Credit will not be renewed.
Under the terms of the Vogtle 3 and 4 Agreement, the EPC Contractor did not have the right to terminate the Vogtle 3 and 4 Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the Vogtle 3 and 4 Agreement was 40% of the contract price (approximately $1.7 billion based on Georgia Power's ownership interest).
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into the Interim Assessment Agreement, which the bankruptcy court approved on March 30, 2017.
The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Vogtle Owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were paid directly to Fluor; (ii) the EPC Contractor provided certain engineering, procurement, and management services for Plant Vogtle Units 3 and 4, to the same extent as contemplated by the Vogtle 3 and 4 Agreement, and Georgia Power, on behalf of the Vogtle Owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Vogtle Owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor used commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the

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completion status of Plant Vogtle Units 3 and 4; (v) the EPC Contractor rejected or accepted the Vogtle 3 and 4 Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power did not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the Vogtle 3 and 4 Agreement and all related security and collateral under applicable law.
The Interim Assessment Agreement, as amended, expired on July 27, 2017. Georgia Power's aggregate liability for the Vogtle Owners under the Interim Assessment Agreement totaled approximately $650 million , of which $552 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $297 million .
Subsequent to the EPC Contractor bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Plant Vogtle Units 3 and 4. Georgia Power, acting for itself and as agent for the Vogtle Owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Vogtle Owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million , of which $354 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $183 million .
On June 9, 2017, Georgia Power and the other Vogtle Owners and Toshiba entered the Guarantee Settlement Agreement. Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion , of which Georgia Power's proportionate share is approximately $1.7 billion, and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Vogtle Owners and promptly pay them as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Vogtle Owners will forbear from exercising certain remedies, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Vogtle Owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Vogtle Owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.
On June 23, 2017, Toshiba released a revised outlook for fiscal year 2016, which reflected a negative shareholders' equity balance of approximately $5 billion as of March 31, 2017, and announced that its independent audit process was continuing. Toshiba has also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Vogtle Owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Southern Company's financial statements.
Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into the Services Agreement, which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Vogtle Owners certain project-related contracts, (iii) join the Vogtle Owners as counterparties to certain assumed project-related contracts, and (iv) reject the Vogtle 3 and 4 Agreement.

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The Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE on July 27, 2017. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
The ultimate outcome of these matters cannot be determined at this time.
Regulatory Matters
In 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4 with a certified capital cost of $4.418 billion . In addition, in 2009 the Georgia PSC approved inclusion of the Plant Vogtle Units 3 and 4 related CWIP accounts in rate base, and the State of Georgia enacted the Georgia Nuclear Energy Financing Act, which allows Georgia Power to recover financing costs for nuclear construction projects certified by the Georgia PSC. Financing costs are recovered on all applicable certified costs through annual adjustments to the NCCR tariff by including the related CWIP accounts in rate base during the construction period. As of June 30, 2017 , Georgia Power had recovered approximately $1.4 billion of financing costs.
On December 20, 2016, the Georgia PSC voted to approve a settlement agreement (Vogtle Cost Settlement Agreement) resolving the following prudence matters: (i) none of the $3.3 billion of costs incurred through December 31, 2015 and reflected in the fourteenth VCM report will be disallowed from rate base on the basis of imprudence; (ii) the Contractor Settlement Agreement is reasonable and prudent and none of the amounts paid or to be paid pursuant to the Contractor Settlement Agreement should be disallowed from rate base on the basis of imprudence; (iii) financing costs on verified and approved capital costs will be deemed prudent provided they are incurred prior to December 31, 2019 and December 31, 2020 for Plant Vogtle Units 3 and 4, respectively; and (iv) (a) the in-service capital cost forecast will be adjusted to $5.680 billion (Revised Forecast), which includes a contingency of $240 million above Georgia Power's then current forecast of $5.440 billion , (b) capital costs incurred up to the Revised Forecast will be presumed to be reasonable and prudent with the burden of proof on any party challenging such costs, and (c) Georgia Power would have the burden to show that any capital costs above the Revised Forecast are reasonable and prudent. Under the terms of the Vogtle Cost Settlement Agreement, the certified in-service capital cost for purposes of calculating the NCCR tariff will remain at $4.418 billion . Construction capital costs above $4.418 billion will accrue AFUDC through the date each unit is placed in service. The ROE used to calculate the NCCR tariff was reduced from 10.95% (the ROE rate setting point authorized by the Georgia PSC in the 2013 ARP) to 10.00% effective January 1, 2016. For purposes of the AFUDC calculation, the ROE on costs between $4.418 billion and $5.440 billion will also be 10.00% and the ROE on any amounts above $5.440 billion would be Georgia Power's average cost of long-term debt. If the Georgia PSC adjusts Georgia Power's ROE rate setting point in a rate case prior to Plant Vogtle Units 3 and 4 being placed into retail rate base, then the ROE for purposes of calculating both the NCCR tariff and AFUDC will likewise be 95 basis points lower than the revised ROE rate setting point. If Plant Vogtle Units 3 and 4 are not placed in service by December 31, 2020, then (i) the ROE for purposes of calculating the NCCR tariff will be reduced an additional 300 basis points, or $8 million per month, and may, at the Georgia PSC's discretion, be accrued to be used for the benefit of customers, until such time as the units are placed in service and (ii) the ROE used to calculate AFUDC will be Georgia Power's average cost of long-term debt.
Under the terms of the Vogtle Cost Settlement Agreement, the Georgia PSC will determine, for retail ratemaking purposes, the process of transitioning Plant Vogtle Units 3 and 4 from a construction project to an operating plant no later than Georgia Power's base rate case required to be filed by July 1, 2019.
The Georgia PSC has approved fifteen VCM reports covering the periods through June 30, 2016, including construction capital costs incurred, which through that date totaled $3.7 billion . Georgia Power filed its sixteenth VCM report, covering the period from July 1 through December 31, 2016, requesting approval of $222 million of construction capital costs incurred during that period, with the Georgia PSC on February 27, 2017.
The ultimate outcome of these matters cannot be determined at this time.

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Revised Cost and Schedule
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power's preliminary assessment results indicate that its proportionate share of the remaining estimated cost to complete Plant Vogtle Units 3 and 4 ranges as follows:
Preliminary in-service dates
 
 
 
Unit 3
February 2021
March 2022
Unit 4
February 2022
March 2023
 
(in billions)
Preliminary estimated cost to complete
$
3.9

$
4.6

CWIP as of June 30, 2017
4.5

 
4.5

Guarantee Obligations
(1.7
)
 
(1.7
)
Estimated capital costs
$
6.7

$
7.4

Vogtle Cost Settlement Agreement Revised Forecast
(5.7
)
 
(5.7
)
Estimated net additional capital costs
$
1.0

$
1.7

Georgia Power's estimates for cost to complete and schedule are based on preliminary analysis and remain subject to further refinement of labor productivity and consumable and commodity quantities and costs.
Georgia Power's estimated financing costs during the construction period total approximately $3.1 billion to $3.5 billion , of which approximately $1.4 billion had been incurred through June 30, 2017.
Georgia Power's preliminary cancellation cost estimate results indicate that its proportionate share of the estimated cancellation costs is approximately $400 million . As a result, as of June 30, 2017, total estimated costs subject to evaluation by Georgia Power and the Georgia PSC in the event of a cancellation decision are as follows:
 
Preliminary Cancellation Cost Estimate
 
(in billions)
CWIP as of June 30, 2017
$
4.5

Financing costs collected, net of tax
1.4

Cancellation costs (*)
0.4

Total
$
6.3

(*)
The estimate for cancellation costs includes, but is not limited to, costs to terminate contracts for construction and other services, as well as costs to secure the Plant Vogtle Units 3 and 4 construction site.
The Guarantee Obligations continue to exist in the event of cancellation. In addition, under Georgia law, prudently incurred costs related to certificated projects cancelled by the Georgia PSC are allowed recovery, including carrying costs, in future retail rates. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth VCM report to be filed with the Georgia PSC in late August 2017.
The ultimate outcome of these matters is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time.

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Other Matters
As of June 30, 2017, Georgia Power had borrowed $2.6 billion related to Plant Vogtle Units 3 and 4 costs through a loan guarantee agreement between Georgia Power and the DOE and a multi-advance credit facility among Georgia Power, the DOE, and the FFB. See Note 6 to the financial statements of Southern Company under "DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " DOE Loan Guarantee Borrowings " herein for additional information, including applicable covenants, events of default, mandatory prepayment events, and conditions to borrowing.
The IRS has allocated PTCs to Plant Vogtle Units 3 and 4 which require that the applicable unit be placed in service prior to 2021. The net present value of Georgia Power's PTCs is estimated at approximately $400 million per unit.
There have been technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4 at the federal and state level and additional challenges may arise if construction proceeds. Processes are in place that are designed to assure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the NRC that occur throughout construction. As a result of such compliance processes, certain license amendment requests have been filed and approved or are pending before the NRC. Various design and other licensing-based compliance matters, including the timely resolution of Inspections, Tests, Analyses, and Acceptance Criteria and the related approvals by the NRC, may arise if construction proceeds, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs.
If construction continues, the risk remains that challenges with labor productivity, fabrication, delivery, assembly, and installation of plant systems, structures, and components, or other issues could arise and may further impact project schedule and cost.
The ultimate outcome of these matters cannot be determined at this time.
See RISK FACTORS of Southern Company in Item 1A of the Form 10-K for a discussion of certain risks associated with the licensing, construction, and operation of nuclear generating units, including potential impacts that could result from a major incident at a nuclear facility anywhere in the world. See additional risks in Item 1A herein regarding the EPC Contractor's bankruptcy.
Income Tax Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Income Tax Matters" of Southern Company in Item 7 of the Form 10-K and Note (G) to the Condensed Financial Statements herein for additional information.
Bonus Depreciation
Approximately $1.2 billion of positive cash flows is expected to result from bonus depreciation for the 2017 tax year, but may not all be realized in 2017 due to net operating loss projections for the 2017 tax year. Approximately $370 million of the 2017 benefit is dependent upon placing the remainder of the Kemper IGCC in service by December 31, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount previously estimated as bonus depreciation would be claimed as a deduction under IRC Section 165. As of June 30, 2017, $82 million has been received through quarterly income tax refunds for bonus depreciation related to the Kemper IGCC, which may be subject to repayment. See Note (B) to the Condensed Financial Statements under "Integrated Coal Gasification Combined Cycle" herein and Note (G) to the Condensed Financial Statements herein for additional information. The ultimate outcome of this matter cannot be determined at this time.
Section 174 Research and Experimental Deduction
Southern Company has reflected deductions for research and experimental (R&E) expenditures related to the Kemper IGCC in its federal income tax calculations since 2013 and filed amended federal income tax returns for

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2008 through 2013 to also include such deductions. In December 2016, Southern Company and the IRS reached a proposed settlement, subject to approval of the U.S. Congress Joint Committee on Taxation, resolving a methodology for these deductions. Due to the uncertainty related to this tax position, Southern Company had unrecognized tax benefits associated with these R&E deductions totaling approximately $464 million as of June 30, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount not allowed under IRC Section 174 would be claimed as a deduction under IRC Section 165, and would result in a reversal of the related unrecognized tax benefits, excluding interest. See Notes (B) and (G) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " and "Section 174 Research and Experimental Deduction," respectively, herein for additional information. This matter is expected to be resolved in the next 12 months; however, the ultimate outcome of this matter cannot be determined at this time.
Other Matters
Southern Company and its subsidiaries are involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Southern Company and its subsidiaries are subject to certain claims and legal actions arising in the ordinary course of business. The business activities of Southern Company's subsidiaries 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions , CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Southern Company and its subsidiaries cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Southern Company's financial statements. See Note (B) to the Condensed Financial Statements herein for a discussion of various other contingencies, regulatory matters, and other matters being litigated which may affect future earnings potential.
On January 20, 2017, a purported securities class action complaint was filed against Southern Company, certain of its officers, and certain former Mississippi Power officers in the U.S. District Court for the Northern District of Georgia, Atlanta Division, by Monroe County Employees' Retirement System on behalf of all persons who purchased shares of Southern Company's common stock between April 25, 2012 and October 29, 2013. The complaint alleges that Southern Company, certain of its officers, and certain former Mississippi Power officers made materially false and misleading statements regarding the Kemper IGCC in violation of certain provisions under the Securities Exchange Act of 1934, as amended. The complaint seeks, among other things, compensatory damages and litigation costs and attorneys' fees. On June 12, 2017, the plaintiffs filed an amended complaint that provided additional detail about their claims, increased the purported class period by one day, and added certain other former Mississippi Power officers as defendants. On July 27, 2017, the defendants filed a motion to dismiss the plaintiffs' amended complaint with prejudice.
On February 27, 2017, Jean Vineyard filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia that names as defendants Southern Company, certain of its directors, certain of its officers, and certain former Mississippi Power officers. The complaint alleges that the defendants caused Southern Company to make false or misleading statements regarding the Kemper IGCC cost and schedule. Further, the complaint alleges that the defendants were unjustly enriched and caused the waste of corporate assets. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages and, on her own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiff also seeks certain changes to Southern Company's corporate governance and internal processes. On March 27, 2017, the court deferred this lawsuit until 30 days after certain further action in the purported securities class action complaint discussed above.
On May 15, 2017, Helen E. Piper Survivor's Trust filed a shareholder derivative lawsuit in the Superior Court of Gwinnett County, State of Georgia, that names as defendants Southern Company, certain of its directors, certain of

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its officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper IGCC. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper IGCC schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages and disgorgement of profits and, on its behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiff also seeks certain unspecified changes to Southern Company's corporate governance and internal processes.
On June 1, 2017, Judy Mesirov filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia, that names as defendants Southern Company, certain of its current and former directors, certain of its officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper IGCC. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper IGCC schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages, disgorgement of profits, and equitable relief and, on her own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiff also seeks certain unspecified changes to Southern Company's corporate governance and internal processes.
Southern Company believes these legal challenges have no merit; however, an adverse outcome in any of these proceedings could have an impact on Southern Company's results of operations, financial condition, and liquidity. Southern Company will vigorously defend itself in these matters, the ultimate outcome of which cannot be determined at this time.
The SEC is conducting a formal investigation of Southern Company and Mississippi Power concerning the estimated costs and expected in-service date of the Kemper IGCC. Southern Company believes the investigation is focused primarily on periods subsequent to 2010 and on accounting matters, disclosure controls and procedures, and internal controls over financial reporting associated with the Kemper IGCC. See ACCOUNTING POLICIES – " Application of Critical Accounting Policies and Estimates " herein for additional information on the Kemper IGCC. The ultimate outcome of this matter cannot be determined at this time; however, it is not expected to have a material impact on the financial statements of Southern Company.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Southern Company prepares its consolidated financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Southern Company in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Southern Company's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Southern Company in Item 7 of the Form 10-K for a complete discussion of Southern Company's critical accounting policies and estimates related to Utility Regulation, Asset Retirement Obligations, Pension and Other Postretirement Benefits, Goodwill and Other Intangible Assets, Derivatives and Hedging Activities, and Contingent Obligations.
Kemper IGCC Rate Recovery
For periods prior to the second quarter 2017, significant accounting estimates included Kemper IGCC estimated construction costs, project completion date, and rate recovery. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Kemper IGCC Estimated Construction Costs, Project Completion Date, and Rate Recovery" of Southern Company in Item 7 of the Form 10-K for additional information. Mississippi

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Power recorded total pre-tax charges to income related to the Kemper IGCC of $428 million ($264 million after tax) in 2016, $365 million ($226 million after tax) in 2015, $868 million ($536 million after tax) in 2014, and $1.2 billion ($729 million after tax) in prior years.
As a result of the Mississippi PSC's June 21, 2017 stated intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant rather than an IGCC plant, as well as Mississippi Power's June 28, 2017 suspension of the operation and start-up of the gasifier portion of the Kemper IGCC, the estimated construction costs and project completion date are no longer considered significant accounting estimates. Significant accounting estimates for the June 30, 2017 financial statements presented herein include the overall assessment of rate recovery for the Kemper County energy facility and the estimated costs for the potential cancellation of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ($2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
In the aggregate, since the Kemper IGCC project started, Mississippi Power has incurred charges of $5.96 billion ($3.94 billion after tax) through June 30, 2017. Mississippi Power recorded total pre-tax charges to income for the estimated probable losses on the Kemper IGCC of $3.0 billion ($2.1 billion after tax) and $81 million ($50 million after tax) in the second quarter 2017 and the second quarter 2016, respectively, and total pre-tax charges of $3.1 billion ($2.2 billion after tax) and $134 million ($83 million after tax) year-to-date in 2017 and 2016, respectively.
Given the significant judgment involved in estimating the costs to cancel the gasifier portion of the Kemper IGCC, the ultimate rate recovery for the Kemper IGCC, including the $0.5 billion of combined cycle-related costs not yet in rates, and the impact on Southern Company's results of operations, Southern Company considers these items to be critical accounting estimates. See Note 3 to the financial statements of Southern Company under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under "Integrated Coal Gasification Combined Cycle" herein for additional information.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Southern Company expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Southern Company's revenue, including energy provided to customers, is from tariff offerings that provide electricity or natural gas without a defined

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contractual term, as well as longer-term contractual commitments , including PPAs and non-derivative natural gas asset management and optimization arrangements . Southern Company expect s the adoption of ASC 606 will not result in a significant shift from the current timing of revenue recognition for such transactions .
Southern Company's ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements, such as certain PPAs , energy-related derivatives , and alternative revenue programs, are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Southern Company's financial statements. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Southern Company expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Southern Company intend s to use the modified retrospective method of adoption effective January 1, 2018. Southern Company has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Southern Company 's financial statements, Southern Company will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On January 26, 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with the carrying amount as part of Step 2 of the goodwill impairment test. Under the new standard, the goodwill impairment loss will be measured as the excess of a reporting unit's carrying amount over its fair value, not exceeding the total amount of goodwill allocated to that reporting unit, which may increase the frequency of goodwill impairment charges if a future goodwill impairment test does not pass the Step 1 evaluation. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Southern Company is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Southern Company's operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Southern Company's financial statements.

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FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY "Overview" of Southern Company in Item 7 of the Form 10-K for additional information. Southern Company's financial condition remained stable at June 30, 2017 . Southern Company intends to continue to monitor its access to short-term and long-term capital markets as well as bank credit agreements to meet future capital and liquidity needs. See " Capital Requirements and Contractual Obligations ," " Sources of Capital ," and " Financing Activities " herein for additional information.
Net cash provided from operating activities totaled $2.7 billion for the first six months of 2017 , an increase of $0.6 billion from the corresponding period in 2016 . The increase in net cash provided from operating activities was primarily due to $1.2 billion of net cash provided from operating activities of Southern Company Gas, which was acquired on July 1, 2016, partially offset by the timing of vendor payments and an increase in under-recovered fuel costs. Net cash used for investing activities totaled $4.9 billion for the first six months of 2017 primarily due to the traditional electric operating companies' installation of equipment to comply with environmental standards and construction of electric generation, transmission, and distribution facilities, capital expenditures for Southern Company Gas' infrastructure replacement programs, and Southern Power's payments for renewable acquisitions. Net cash provided from financing activities totaled $1.6 billion for the first six months of 2017 primarily due to issuances of long-term and short-term debt, partially offset by redemptions of long-term debt and common stock dividend payments. Cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 include an increase of $1.8 billion in property, plant, and equipment in service, net of depreciation primarily related to the traditional electric operating companies' installation of equipment to comply with environmental standards and construction of electric generation, transmission, and distribution facilities, Southern Company Gas' infrastructure replacement programs, and Southern Power's renewable acquisitions; a decrease of $1.5 billion in CWIP primarily related to the estimated probable losses on the Kemper IGCC; a decrease of $0.5 billion in cash and cash equivalents primarily related to acquisition payments at Southern Power; a decrease of $1.4 billion in total common stockholder's equity primarily related to the estimated probable losses on the Kemper IGCC, partially offset by the issuance of additional shares of common stock; an increase of $1.3 billion in long-term debt (excluding amounts due within a year) to fund the Southern Company system's continuous construction programs and for general corporate purposes; and an increase of $1.0 billion in notes payable primarily due to issuances of short-term bank debt for general corporate purposes.
At the end of the second quarter 2017 , the market price of Southern Company's common stock was $47.88 per share (based on the closing price as reported on the New York Stock Exchange) and the book value was $23.38 per share, representing a market-to-book ratio of 205% , compared to $49.19, $25.00, and 197%, respectively, at the end of 2016 . Southern Company's common stock dividend for the second quarter 2017 was $0.58 per share compared to $0.56 per share in the second quarter 2016 .
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND LIQUIDITY "Capital Requirements and Contractual Obligations" of Southern Company in Item 7 of the Form 10-K for a description of Southern Company's capital requirements for the construction programs of the Southern Company system, including estimated capital expenditures for new electric generating facilities and to comply with existing environmental statutes and regulations, scheduled maturities of long-term debt, as well as related interest, derivative obligations, preferred and preference stock dividends, leases, purchase commitments, pipeline charges, storage capacity, and gas supply, asset management agreements, standby letters of credit and performance/surety bonds, trust funding requirements, and unrecognized tax benefits. Approximately $3.0 billion will be required through June 30, 2018 to fund maturities of long-term debt. See " Sources of Capital " herein for additional information.

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The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental statutes and regulations; the outcome of any legal challenges to the environmental rules; changes in electric generating plants, including unit retirements and replacements and adding or changing fuel sources at existing electric generating units, to meet regulatory requirements; changes in FERC rules and regulations; state regulatory agency approvals; changes in the expected environmental compliance program; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; storm impacts; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered. Additionally, planned expenditures for plant acquisitions may vary due to market opportunities and Southern Power's ability to execute its growth strategy. See Note 12 to the financial statements of Southern Company under "Southern Power" in Item 8 of the Form 10-K and Note (I) to the Condensed Financial Statements under " Southern Power " herein for additional information regarding Southern Power's plant acquisitions. See Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Nuclear Construction" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " herein for information regarding additional factors that may impact construction expenditures, including Georgia Power's preliminary cost-to-complete and cancellation cost assessments for Plant Vogtle Units 3 and 4.
Sources of Capital
Southern Company intends to meet its future capital needs through operating cash flows, short-term debt, term loans, and external security issuances. Equity capital can be provided from any combination of Southern Company's stock plans, private placements, or public offerings. The amount and timing of additional equity capital and debt issuances in 2017 , as well as in subsequent years, will be contingent on Southern Company's investment opportunities and the Southern Company system's capital requirements and will depend upon prevailing market conditions and other factors. See " Capital Requirements and Contractual Obligations " herein for additional information.
Except as described herein, the traditional electric operating companies, Southern Power, and Southern Company Gas plan to obtain the funds required for construction and other purposes from operating cash flows, external security issuances, term loans, short-term borrowings, and equity contributions or loans from Southern Company. However, the amount, type, and timing of any future financings, if needed, will depend upon prevailing market conditions, regulatory approval, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS FINANCIAL CONDITION AND LIQUIDITY "Sources of Capital" of Southern Company in Item 7 of the Form 10-K for additional information.
In addition, Georgia Power has entered into a loan guarantee agreement (Loan Guarantee Agreement) with the DOE, under which the proceeds of borrowings may be used to reimburse Georgia Power for Eligible Project Costs incurred in connection with its construction of Plant Vogtle Units 3 and 4. Under the Loan Guarantee Agreement, the DOE agreed to guarantee borrowings of up to $3.46 billion (not to exceed 70% of Eligible Project Costs) to be made by Georgia Power under a multi-advance credit facility (FFB Credit Facility) among Georgia Power, the DOE, and the FFB. Eligible Project Costs incurred through June 30, 2017 would allow for borrowings of up to $3.1 billion under the FFB Credit Facility, of which Georgia Power has borrowed $2.6 billion ; however, on July 27, 2017, Georgia Power entered into an amendment to the Loan Guarantee Agreement (LGA Amendment) to clarify the operation of the Loan Guarantee Agreement pending Georgia Power's completion of its comprehensive schedule, cost-to-complete, and cancellation cost assessments (Cost Assessments) for Plant Vogtle Units 3 and 4. Under the terms of the LGA Amendment, Georgia Power will not request any advances under the Loan Guarantee Agreement unless and until such time as Georgia Power has completed the Cost Assessments and made a determination to continue construction of Plant Vogtle Units 3 and 4 and satisfied certain other conditions related to continuing construction. See Note 6 to the financial statements of Southern Company under "DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " DOE Loan Guarantee Borrowings " herein for additional information regarding the Loan Guarantee Agreement, including applicable covenants, events of default, mandatory prepayment events, and additional conditions to borrowing. Also

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see Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " herein for additional information regarding Plant Vogtle Units 3 and 4.
As of June 30, 2017 , Southern Company's current liabilities exceeded current assets by $3.9 billion due to notes payable of $3.3 billion (comprised of approximately $0.9 billion at the parent company, $1.2 billion at Georgia Power, $0.1 billion at Gulf Power, $0.4 billion at Southern Power, and $0.6 billion at Southern Company Gas) and long-term debt that is due within one year of $3.0 billion (comprised of approximately $0.4 billion at the parent company, $0.4 billion at Alabama Power, $0.3 billion at Georgia Power, $1.0 billion at Mississippi Power, and $0.9 billion at Southern Power). To meet short-term cash needs and contingencies, the Southern Company system has substantial cash flow from operating activities and access to capital markets and financial institutions. Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas intend to utilize operating cash flows, as well as commercial paper, lines of credit, bank notes, and securities issuances, as market conditions permit, as well as, under certain circumstances for the traditional electric operating companies, Southern Power, and Southern Company Gas, equity contributions and/or loans from Southern Company to meet their short-term capital needs.
At June 30, 2017 , Southern Company and its subsidiaries had approximately $1.4 billion of cash and cash equivalents. Committed credit arrangements with banks at June 30, 2017 were as follows:
 
Expires
 
 
 
Executable Term
Loans
 
Expires Within One Year
Company
2017
2018
2019
2020
2022
 
Total
 
Unused
 
One
Year
 
Two
Years
 
Term
Out
 
No Term
Out
 
(in millions)
Southern Company (a)
$

$

$

$

$
2,000

 
$
2,000

 
$
2,000

 
$

 
$

 
$

 
$

Alabama Power
3

532



800

 
1,335

 
1,335

 

 

 

 
35

Georgia Power




1,750

 
1,750

 
1,732

 

 

 

 

Gulf Power
30

195

25

30


 
280

 
280

 
45

 

 

 
40

Mississippi Power
113





 
113

 
100

 

 
13

 
13

 
100

Southern Power Company




750

 
750

 
675

 

 

 

 

Southern Company Gas (b)




1,900

 
1,900

 
1,849

 

 

 

 

Other
10

30




 
40

 
40

 
20

 

 
20

 
20

Southern Company Consolidated
$
156

$
757

$
25

$
30

$
7,200

 
$
8,168

 
$
8,011

 
$
65

 
$
13

 
$
33

 
$
195

(a)
Represents the Southern Company parent entity.
(b)
Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $1.2 billion of these arrangements. Southern Company Gas' committed credit arrangements also include $700 million for which Nicor Gas is the borrower and which is restricted for working capital needs of Nicor Gas.
See Note 6 to the financial statements of Southern Company under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
As reflected in the table above, in May 2017, Southern Company, Alabama Power, Georgia Power, and Southern Power Company each amended certain of their multi-year credit arrangements, which, among other things, extended the maturity dates from 2020 to 2022. Southern Company and Southern Power Company increased their borrowing ability under these arrangements to $2.0 billion from $1.25 billion and to $750 million from $600 million, respectively. Southern Company also terminated its $1.0 billion facility maturing in 2018. Also in May 2017, Southern Company Gas Capital and Nicor Gas terminated their existing credit arrangements for $1.3 billion and $700 million , respectively, which were to mature in 2017 and 2018, and entered into a new multi-year credit arrangement currently allocated for $1.2 billion and $700 million, respectively, with a maturity date of 2022.

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Most of these bank credit arrangements, as well as the term loan arrangements of Southern Company, Alabama Power, Georgia Power, Mississippi Power, and Southern Power Company, contain covenants that limit debt levels and contain cross-acceleration or cross-default provisions to other indebtedness (including guarantee obligations) that are restricted only to the indebtedness of the individual company. Such cross-default provisions to other indebtedness would trigger an event of default if the applicable borrower defaulted on indebtedness or guarantee obligations over a specified threshold. Such cross-acceleration provisions to other indebtedness would trigger an event of default if the applicable borrower defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2017 , Southern Company, the traditional electric operating companies, Southern Power Company, Southern Company Gas, and Nicor Gas were in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
Subject to applicable market conditions, Southern Company and its subsidiaries expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, Southern Company and its subsidiaries may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
A portion of the unused credit with banks is allocated to provide liquidity support to the pollution control revenue bonds of the traditional electric operating companies and the commercial paper programs of Southern Company, the traditional electric operating companies, Southern Power Company, Southern Company Gas, and Nicor Gas. The amount of variable rate pollution control revenue bonds of the traditional electric operating companies outstanding requiring liquidity support as of June 30, 2017 was approximately $1.6 billion . In June 2017, Georgia Power remarketed $318 million of variable rate pollution control bonds in index rate modes, reducing the liquidity support utilized under Georgia Power's bank credit arrangement. In addition, at June 30, 2017 , the traditional electric operating companies had approximately $626 million of pollution control revenue bonds outstanding that were required to be remarketed within the next 12 months.
Southern Company, the traditional electric operating companies (other than Mississippi Power), Southern Power Company, Southern Company Gas, and Nicor Gas make short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Short-term borrowings are included in notes payable in the balance sheets.
Details of short-term borrowings were as follows:
 
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
 
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Average
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Maximum
Amount
Outstanding
 
 
(in millions)
 
 
 
(in millions)
 
 
 
(in millions)
Commercial paper
 
$
2,257

 
1.5
%
 
$
2,519

 
1.3
%
 
$
2,946

Short-term bank debt
 
1,017

 
2.0
%
 
321

 
2.0
%
 
1,017

Total
 
$
3,274

 
1.7
%
 
$
2,840

 
1.4
%
 
 
(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 .
Southern Company believes the need for working capital can be adequately met by utilizing commercial paper programs, lines of credit, bank term loans, and operating cash flows.
Credit Rating Risk
At June 30, 2017 , Southern Company and its subsidiaries did 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change of certain subsidiaries to BBB and/or Baa2 or below. These contracts are for physical electricity and natural gas purchases and sales, fuel purchases, fuel transportation and storage, energy price risk management,

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transmission, interest rate management, and foreign currency risk management, and, at June 30, 2017 , included contracts related to the construction of new generation at Plant Vogtle Units 3 and 4.
The maximum potential collateral requirements under these contracts at June 30, 2017 were as follows:
Credit Ratings
Maximum Potential
Collateral
Requirements
 
(in millions)
At BBB and/or Baa2
$
39

At BBB- and/or Baa3
$
642

At BB+ and/or Ba1 (*)
$
2,555

(*)
Any additional credit rating downgrades at or below BB- and/or Ba3 could increase collateral requirements up to an additional $38 million.
Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Southern Company and its subsidiaries to access capital markets, and would be likely to impact the cost at which they do so.
On March 1, 2017, Moody's downgraded the senior unsecured debt rating of Mississippi Power to Ba1 from Baa3.
On March 20, 2017, Moody's revised its rating outlook for Georgia Power from stable to negative.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including the traditional electric operating companies, Southern Power, Southern Company Gas, Southern Company Gas Capital, and Nicor Gas) from stable to negative.
On March 30, 2017, Fitch placed the ratings of Southern Company, Georgia Power, and Mississippi Power on rating watch negative.
On June 22, 2017, Moody's placed the ratings of Mississippi Power on review for downgrade.
Financing Activities
During the first six months of 2017 , Southern Company issued approximately 7.8 million shares of common stock primarily through employee equity compensation plans and received proceeds of approximately $352 million.
In addition, during the second quarter 2017, Southern Company issued approximately 1.3 million shares of common stock through at-the-market issuances pursuant to sales agency agreements related to Southern Company's continuous equity offering program and received cash proceeds of approximately $65 million, net of $553,000 in fees and commissions.

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SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table outlines the long-term debt financing activities for Southern Company and its subsidiaries for the first six months of 2017 :
Company
Senior
Note Issuances
 
Senior
Note Maturities and Redemptions
 
Revenue
Bond
Maturities, Redemptions, and
Repurchases
 
Other
Long-Term
Debt
Issuances
 
Other
Long-Term
Debt Redemptions
and
Maturities (a)
 
(in millions)
Southern Company (b)
$
300

 
$

 
$

 
$
500

 
$
400

Alabama Power
550

 
200

 

 

 

Georgia Power
850

 
450

 
27

 

 
3

Gulf Power
300

 
85

 

 
6

 

Mississippi Power

 

 

 
40

 
893

Southern Power

 

 

 
3

 
3

Southern Company Gas (c)
450

 

 

 

 

Other

 

 

 

 
8

Elimination (d)

 

 

 
(40
)
 
(591
)
Southern Company Consolidated
$
2,450

 
$
735

 
$
27

 
$
509

 
$
716

(a)
Includes reductions in capital lease obligations resulting from cash payments under capital leases.
(b)
Represents the Southern Company parent entity.
(c)
The senior notes were issued by Southern Company Gas Capital and guaranteed by the Southern Company Gas parent entity.
(d)
Intercompany loans from Southern Company to Mississippi Power eliminated in Southern Company's Consolidated Financial Statements.
In March 2017, Southern Company repaid at maturity a $400 million 18-month floating rate bank loan.
In June 2017, Southern Company issued $500 million aggregate principal amount of Series 2017A 5.325% Junior Subordinated Notes due June 21, 2057. The proceeds were used to repay short-term indebtedness and for other general corporate purposes.
Also in June 2017, Southern Company issued $300 million aggregate principal amount of Series 2017A Floating Rate Senior Notes due September 30, 2020, which bear interest at a floating rate based on three-month LIBOR. The proceeds were used to repay short-term indebtedness and for other general corporate purposes.
Also in June 2017, Southern Company entered into two $100 million aggregate principal amount floating rate bank term loan agreements, which mature on June 21, 2018 and June 29, 2018 and bear interest based on one-month LIBOR. The proceeds were used for working capital and other general corporate purposes.
Except as described herein, Southern Company's subsidiaries used the proceeds of the debt issuances shown in the table above for their redemptions and maturities shown in the table above, to repay short-term indebtedness, and for general corporate purposes, including their continuous construction programs.
A portion of the proceeds of Gulf Power's senior note issuances was used in June 2017 to redeem 550,000 shares ($55 million aggregate liquidation amount) of Gulf Power's 6.00% Series Preference Stock, 450,000 shares ($45 million aggregate liquidation amount) of Gulf Power's Series 2007A 6.45% Preference Stock, and 500,000 shares ($50 million aggregate liquidation amount) of Gulf Power's Series 2013A 5.60% Preference Stock.
In March 2017, Gulf Power extended the maturity of a $100 million short-term floating rate bank loan bearing interest based on one-month LIBOR from April 2017 to October 2017 and subsequently repaid the loan in May 2017.
In June 2017, Georgia Power entered into three floating rate bank loans in aggregate principal amounts of $50 million, $150 million, and $100 million, which mature on December 1, 2017, May 31, 2018, and June 28, 2018,

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SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

respectively, and bear interest based on one-month LIBOR. Also in June 2017, Georgia Power borrowed $500 million pursuant to an uncommitted bank credit arrangement, which bears interest at a rate agreed upon by Georgia Power and the bank from time to time and is payable on no less than 30 days' demand by the bank. The proceeds from these bank loans were used to repay a portion of Georgia Power's existing indebtedness and for working capital and other general corporate purposes, including Georgia Power's continuous construction program.
In June 2017, Mississippi Power prepaid $300 million of the outstanding principal amount under its $1.2 billion unsecured term loan, which matures on March 30, 2018.
Subsequent to June 30, 2017, Nicor Gas agreed to issue $400 million aggregate principal amount of First Mortgage Bonds in a private placement, $200 million of which is expected to be issued in each of August 2017 and November 2017.
In addition to any financings that may be necessary to meet capital requirements and contractual obligations, Southern Company and its subsidiaries plan to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

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PART I
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
During the six months ended June 30, 2017 , there were no material changes to Southern Company's, Alabama Power's, Georgia Power's, Mississippi Power's, and Southern Power's disclosures about market risk. For additional market risk disclosures relating to Gulf Power and Southern Company Gas, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" of Gulf Power and Southern Company Gas, respectively, herein. For an in-depth discussion of each registrant's market risks, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" of each registrant in Item 7 of the Form 10-K and Note 1 to the financial statements of each registrant under "Financial Instruments," Note 11 to the financial statements of Southern Company, Alabama Power, and Georgia Power, Note 10 to the financial statements of Gulf Power, Mississippi Power, and Southern Company Gas, and Note 9 to the financial statements of Southern Power in Item 8 of the Form 10-K. Also see Note (C) and Note (H) to the Condensed Financial Statements herein for information relating to derivative instruments.
Item 4. Controls and Procedures.
(a)
Evaluation of disclosure controls and procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Southern Power, and Southern Company Gas conducted separate evaluations under the supervision and with the participation of each company's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based upon these evaluations, the Chief Executive Officer and the Chief Financial Officer, in each case, concluded that the disclosure controls and procedures are effective.
(b)
Changes in internal controls over financial reporting.
There have been no changes in Southern Company's, Alabama Power's, Georgia Power's, Gulf Power's, Mississippi Power's, Southern Power's, or Southern Company Gas' internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the second quarter 2017 that have materially affected or are reasonably likely to materially affect Southern Company's, Alabama Power's, Georgia Power's, Gulf Power's, Mississippi Power's, Southern Power's, or Southern Company Gas' internal control over financial reporting.

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ALABAMA POWER COMPANY

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ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Retail revenues
$
1,333

 
$
1,316

 
$
2,560

 
$
2,510

Wholesale revenues, non-affiliates
68

 
67

 
133

 
130

Wholesale revenues, affiliates
32

 
9

 
65

 
31

Other revenues
51

 
52

 
108

 
105

Total operating revenues
1,484

 
1,444

 
2,866

 
2,776

Operating Expenses:
 
 
 
 
 
 
 
Fuel
303

 
295

 
601

 
564

Purchased power, non-affiliates
40

 
40

 
75

 
76

Purchased power, affiliates
34

 
55

 
62

 
88

Other operations and maintenance
375

 
355

 
743

 
747

Depreciation and amortization
183

 
175

 
364

 
347

Taxes other than income taxes
95

 
94

 
191

 
191

Total operating expenses
1,030

 
1,014

 
2,036

 
2,013

Operating Income
454

 
430

 
830

 
763

Other Income and (Expense):
 
 
 
 
 
 
 
Allowance for equity funds used during construction
8

 
6

 
16

 
16

Interest expense, net of amounts capitalized
(77
)
 
(74
)
 
(153
)
 
(147
)
Other income (expense), net
1

 
(4
)
 
(4
)
 
(11
)
Total other income and (expense)
(68
)
 
(72
)
 
(141
)
 
(142
)
Earnings Before Income Taxes
386

 
358

 
689

 
621

Income taxes
151

 
140

 
277

 
242

Net Income
235

 
218

 
412

 
379

Dividends on Preferred and Preference Stock
5

 
5

 
9

 
9

Net Income After Dividends on Preferred and Preference Stock
$
230

 
$
213

 
$
403

 
$
370


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Net Income
$
235

 
$
218

 
$
412

 
$
379

Other comprehensive income (loss):
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
Changes in fair value, net of tax of $-, $-, $-, and $(1), respectively

 

 

 
(2
)
Reclassification adjustment for amounts included in net income,
net of tax of $1, $-, $1, and $1, respectively
1

 
1

 
2

 
2

Total other comprehensive income (loss)
1

 
1

 
2

 

Comprehensive Income
$
236

 
$
219

 
$
414

 
$
379

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

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ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Net income
$
412

 
$
379

Adjustments to reconcile net income to net cash provided from operating activities —
 
 
 
Depreciation and amortization, total
442

 
419

Deferred income taxes
192

 
175

Pension, postretirement, and other employee benefits
(24
)
 
(23
)
Other, net
4

 
(33
)
Changes in certain current assets and liabilities —
 
 
 
-Receivables
(58
)
 
64

-Fossil fuel stock
13

 
(32
)
-Other current assets
(75
)
 
(67
)
-Accounts payable
(154
)
 
(75
)
-Accrued taxes
52

 
102

-Accrued compensation
(74
)
 
(50
)
-Retail fuel cost over recovery
(65
)
 
(60
)
-Other current liabilities
7

 
8

Net cash provided from operating activities
672

 
807

Investing Activities:
 
 
 
Property additions
(738
)
 
(645
)
Nuclear decommissioning trust fund purchases
(117
)
 
(200
)
Nuclear decommissioning trust fund sales
117

 
200

Cost of removal, net of salvage
(54
)
 
(51
)
Change in construction payables
48

 
(27
)
Other investing activities
(15
)
 
(18
)
Net cash used for investing activities
(759
)
 
(741
)
Financing Activities:
 
 
 
Proceeds —
 
 
 
Senior notes
550

 
400

Capital contributions from parent company
327

 
237

Other long-term debt

 
45

Redemptions — Senior notes
(200
)
 
(200
)
Payment of common stock dividends
(357
)
 
(382
)
Other financing activities
(14
)
 
(17
)
Net cash provided from financing activities
306

 
83

Net Change in Cash and Cash Equivalents
219

 
149

Cash and Cash Equivalents at Beginning of Period
420

 
194

Cash and Cash Equivalents at End of Period
$
639

 
$
343

Supplemental Cash Flow Information:
 
 
 
Cash paid (received) during the period for —
 
 
 
Interest (net of $6 and $7 capitalized for 2017 and 2016, respectively)
$
140

 
$
131

Income taxes, net
88

 
(122
)
Noncash transactions — Accrued property additions at end of period
132

 
94

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

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ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
639

 
$
420

Receivables —
 
 
 
 
Customer accounts receivable
 
357

 
348

Unbilled revenues
 
161

 
146

Other accounts and notes receivable
 
36

 
27

Affiliated
 
33

 
40

Accumulated provision for uncollectible accounts
 
(9
)
 
(10
)
Fossil fuel stock
 
191

 
205

Materials and supplies
 
443

 
435

Prepaid expenses
 
86

 
34

Other regulatory assets, current
 
135

 
149

Other current assets
 
7

 
11

Total current assets
 
2,079

 
1,805

Property, Plant, and Equipment:
 
 
 
 
In service
 
26,466

 
26,031

Less: Accumulated provision for depreciation
 
9,354

 
9,112

Plant in service, net of depreciation
 
17,112

 
16,919

Nuclear fuel, at amortized cost
 
333

 
336

Construction work in progress
 
668

 
491

Total property, plant, and equipment
 
18,113

 
17,746

Other Property and Investments:
 
 
 
 
Equity investments in unconsolidated subsidiaries
 
67

 
66

Nuclear decommissioning trusts, at fair value
 
848

 
792

Miscellaneous property and investments
 
119

 
112

Total other property and investments
 
1,034

 
970

Deferred Charges and Other Assets:
 
 
 
 
Deferred charges related to income taxes
 
526

 
525

Deferred under recovered regulatory clause revenues
 
6

 
150

Other regulatory assets, deferred
 
1,209

 
1,157

Other deferred charges and assets
 
166

 
163

Total deferred charges and other assets
 
1,907

 
1,995

Total Assets
 
$
23,133

 
$
22,516

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.


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Table of Contents

ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholder's Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
361

 
$
561

Accounts payable —
 
 
 
 
Affiliated
 
242

 
297

Other
 
317

 
433

Customer deposits
 
91

 
88

Accrued taxes —
 
 
 
 
Accrued income taxes
 
39

 
45

Other accrued taxes
 
97

 
42

Accrued interest
 
81

 
78

Accrued compensation
 
125

 
193

Other regulatory liabilities, current
 
15

 
85

Other current liabilities
 
63

 
76

Total current liabilities
 
1,431

 
1,898

Long-term Debt
 
7,082

 
6,535

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
4,842

 
4,654

Deferred credits related to income taxes
 
64

 
65

Accumulated deferred ITCs
 
113

 
110

Employee benefit obligations
 
269

 
300

Asset retirement obligations
 
1,543

 
1,503

Other cost of removal obligations
 
648

 
684

Other regulatory liabilities, deferred
 
84

 
100

Other deferred credits and liabilities
 
69

 
63

Total deferred credits and other liabilities
 
7,632

 
7,479

Total Liabilities
 
16,145

 
15,912

Redeemable Preferred Stock
 
85

 
85

Preference Stock
 
196

 
196

Common Stockholder's Equity:
 
 
 
 
Common stock, par value $40 per share —
 
 
 
 
Authorized — 40,000,000 shares
 
 
 
 
Outstanding — 30,537,500 shares
 
1,222

 
1,222

Paid-in capital
 
2,950

 
2,613

Retained earnings
 
2,564

 
2,518

Accumulated other comprehensive loss
 
(29
)
 
(30
)
Total common stockholder's equity
 
6,707

 
6,323

Total Liabilities and Stockholder's Equity
 
$
23,133

 
$
22,516

The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

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Table of Contents
ALABAMA POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Alabama Power operates as a vertically integrated utility providing electric service to retail and wholesale customers within its traditional service territory located in the State of Alabama in addition to wholesale customers in the Southeast.
Many factors affect the opportunities, challenges, and risks of Alabama Power's business of providing electric service. These factors include the ability to maintain a constructive regulatory environment, to maintain and grow energy sales, and to effectively manage and secure timely recovery of costs. These costs include those related to projected long-term demand growth, stringent environmental standards, reliability, fuel, capital expenditures, and restoration following major storms. Alabama Power has various regulatory mechanisms that operate to address cost recovery. Effectively operating pursuant to these regulatory mechanisms and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge Alabama Power for the foreseeable future.
Alabama Power continues to focus on several key performance indicators including, but not limited to, customer satisfaction, plant availability, system reliability, and net income after dividends on preferred and preference stock.
RESULTS OF OPERATIONS
Net Income
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)

(% change)

(change in millions)

(% change)
$17
 
8.0
 
$33
 
8.9
Alabama Power's net income after dividends on preferred and preference stock for the second quarter 2017 was $230 million compared to $213 million for the corresponding period in 2016 . The increase was primarily related to an increase in rates under Rate RSE effective January 1, 2017 and an increase in other income (expense), net. These increases were partially offset by an increase in operations and maintenance expenses and a decrease in retail revenues associated with milder weather and lower customer usage in the second quarter 2017 compared to the corresponding period in 2016 .
Alabama Power's net income after dividends on preferred and preference stock for year-to-date 2017 was $403 million compared to $370 million for the corresponding period in 2016 . The increase was primarily related to an increase in rates under Rate RSE effective January 1, 2017, partially offset by a decrease in retail revenues associated with milder weather for year-to-date 2017 compared to the corresponding period in 2016.
Retail Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$17
 
1.3
 
$50
 
2.0
In the second quarter 2017 , retail revenues were $1.33 billion compared to $1.32 billion  for the corresponding period in 2016 . For year-to-date 2017 , retail revenues were $2.56 billion compared to $2.51 billion  for the corresponding period in 2016 .

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ALABAMA POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Details of the changes in retail revenues were as follows:
 
Second Quarter 2017

Year-to-Date 2017
 
(in millions)

(% change)

(in millions)

(% change)
Retail – prior year
$
1,316

 
 
 
$
2,510

 
 
Estimated change resulting from –
 
 
 
 
 
 
 
Rates and pricing
75

 
5.7

 
154

 
6.2

Sales decline
(11
)
 
(0.8
)
 
(12
)
 
(0.5
)
Weather
(11
)
 
(0.8
)
 
(66
)
 
(2.6
)
Fuel and other cost recovery
(36
)
 
(2.8
)
 
(26
)
 
(1.1
)
Retail – current year
$
1,333

 
1.3
%
 
$
2,560

 
2.0
%
Revenues associated with changes in rates and pricing increased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 primarily due to an increase in rates under Rate RSE effective January 1, 2017. See Note 3 to the financial statements of Alabama Power under "Retail Regulatory Matters" in Item 8 of the Form 10-K for additional information.
Revenues attributable to changes in sales decreased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 . Weather-adjusted residential KWH sales decreased 1.1% and 0.2% for the second quarter and year-to-date 2017 , respectively, primarily due to lower customer usage resulting from an increase in efficiency improvements in residential appliances and lighting, partially offset by customer growth. Weather-adjusted commercial KWH sales decreased 0.4% and 0.8% for the second quarter and year-to-date 2017 , respectively, primarily due to lower customer usage. Industrial KWH sales increased 1.0% for the second quarter 2017 when compared to the corresponding period in 2016 as a result of an increase in demand resulting from changes in production levels primarily in the chemicals and mining sectors, partially offset by a decrease in demand from the paper, primary metals, pipelines, and lumber sectors. Industrial KWH sales remained flat year-to-date 2017 when compared to the corresponding period in 2016 as a result of an increase in demand resulting from changes in production levels primarily in the chemicals and mining sectors, offset by a decrease in demand from the pipelines, lumber, and stone, clay, and glass sectors.
Revenues resulting from changes in weather decreased in the second quarter and year-to-date 2017 due to milder weather experienced in Alabama Power's service territory compared to the corresponding periods in 2016 . For the second quarter 2017 , the resulting decreases were 1.5% and 0.7% for residential and commercial sales revenues, respectively. For year-to-date 2017 , the resulting decreases were 5.2% and 1.4% for residential and commercial sales revenues, respectively.
Fuel and other cost recovery revenues decreased in the second quarter 2017 and year-to-date 2017 when compared to the corresponding periods in 2016 primarily due to an increase in wholesale revenues to affiliates, which offsets retail fuel cost recovery. Electric rates include provisions to recognize the full recovery of fuel costs, purchased power costs, PPAs certificated by the Alabama PSC, and costs associated with the natural disaster reserve. Under these provisions, fuel and other cost recovery revenues generally equal fuel and other cost recovery expenses and do not affect net income. See Note 3 to the financial statements of Alabama Power under "Retail Regulatory Matters" in Item 8 of the Form 10-K for additional information.
Wholesale Revenues Affiliates
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$23
 
255.6
 
$34
 
109.7
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by

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ALABAMA POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost and energy purchases are generally offset by energy revenues through Alabama Power's energy cost recovery clauses.
In the second quarter 2017 , wholesale revenues from sales to affiliates were $32 million compared to $9 million for the corresponding period in 2016 . The increase was primarily due to a 175.0% increase in KWH sales as a result of lower cost Alabama Power-owned generation available to the Southern Company system and a 29.3% increase in the price of energy due to an increase in natural gas prices. For year-to-date 2017 , wholesale revenues from sales to affiliates were $65 million compared to $31 million for the corresponding period in 2016 . The increase was primarily due to an 83.5% increase in KWH sales as a result of supporting Southern Company system transmission reliability and a 15.5% increase in the price of energy due to an increase in natural gas prices.
Fuel and Purchased Power Expenses
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)

(% change)
 
(change in millions)
 
(% change)
Fuel
$
8

 
2.7
 
$
37

 
6.6

Purchased power – non-affiliates

 
 
(1
)
 
(1.3
)
Purchased power – affiliates
(21
)
 
(38.2)
 
(26
)
 
(29.5
)
Total fuel and purchased power expenses
$
(13
)
 
 
 
$
10

 
 
In the second quarter 2017 , fuel and purchased power expenses were $377 million compared to $390 million for the corresponding period in 2016 . The decrease was primarily due to a $55 million decrease in the volume of KWHs purchased. This decrease was partially offset by a $24 million net increase related to the average cost of purchased power and fuel and an $18 million increase related to the volume of KWHs generated.
For year-to-date 2017 , fuel and purchased power expenses were $738 million compared to $728 million for the corresponding period in 2016 . The increase was primarily due to a $58 million increase in the volume of KWHs generated and a $31 million net increase related to the average cost of purchased power and fuel. These increases were partially offset by a $79 million decrease in the volume of KWHs purchased.
Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Alabama Power's energy cost recovery clause. See Note 3 to the financial statements of Alabama Power under "Retail Regulatory Matters – Rate ECR" in Item 8 of the Form 10-K for additional information.

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Table of Contents
ALABAMA POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Details of Alabama Power's generation and purchased power were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017

Year-to-Date 2016
Total generation (in billions of KWHs)
15
 
13
 
30
 
28
Total purchased power (in billions of KWHs)
1
 
3
 
2
 
4
Sources of generation (percent)  —
 
 
 
 
 
 
 
Coal
47
 
53
 
48
 
46
Nuclear
25
 
23
 
26
 
25
Gas
20
 
20
 
20
 
19
Hydro
8
 
4
 
6
 
10
Cost of fuel, generated (in cents per net KWH)  
 
 
 
 
 
 
 
Coal
2.63
 
2.84
 
2.61
 
2.85
Nuclear
0.76
 
0.79
 
0.75
 
0.78
Gas
2.75
 
2.52
 
2.76
 
2.49
Average cost of fuel, generated (in cents per net KWH) (a)
2.14
 
2.28
 
2.13
 
2.20
Average cost of purchased power (in cents per net KWH) (b)
7.11
 
3.94
 
6.92
 
4.37
(a)
KWHs generated by hydro are excluded from the average cost of fuel, generated.
(b)
Average cost of purchased power includes fuel, energy, and transmission purchased by Alabama Power for tolling agreements where power is generated by the provider.
Fuel
For year-to-date 2017 , fuel expense was $601 million compared to $564 million for the corresponding period in 2016 . The increase was primarily due to increases of 11.0% and 8.4% in the volume of KWHs generated by coal and natural gas, respectively, a 10.8% increase in the average cost of natural gas per KWH generated, which excludes fuel associated with tolling agreements, and a 28.1% decrease in the volume of KWHs generated by hydro facilities. The increase was partially offset by an 8.4% decrease in the average cost of coal per KWH generated.
Purchased Power – Affiliates
In the second quarter 2017 , purchased power expense from affiliates was $34 million compared to $55 million for the corresponding period in 2016 . The decrease was primarily related to a 61.1% decrease in the amount of energy purchased as a result of lower cost Alabama Power-owned generation, partially offset by a 60.3% increase in the average cost of purchased power per KWH as a result of higher natural gas prices.
For year-to-date 2017 , purchased power expense from affiliates was $62 million compared to $88 million for the corresponding period in 2016 . The decrease was primarily related to a 56.1% decrease in the amount of energy purchased due to an increase in generation as a result of supporting Southern Company system transmission reliability, partially offset by a 60.0% increase in the average cost of purchased power per KWH as a result of higher natural gas prices.
Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$20
 
5.6
 
$(4)
 
(0.5)
In the second quarter 2017 , other operations and maintenance expenses were $375 million compared to $355 million for the corresponding period in 2016 . The increase was primarily due to increases of $13 million in vegetation management costs, $7 million in nuclear generation plant improvement costs, and $3 million in employee benefit costs. The increase was partially offset by a $4 million decrease in scheduled other power generation outage costs.
Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$8
 
4.6
 
$17
 
4.9
In the second quarter 2017 , depreciation and amortization was $183 million compared to $175 million for the corresponding period in 2016 . For year-to-date 2017 , depreciation and amortization was $364 million compared to $347 million for the corresponding period in 2016 . These increases were primarily due to additional plant in service related to distribution, steam generation, and transmission assets. In addition, there was an increase in depreciation rates, effective January 1, 2017, associated with compliance-related steam projects, asset retirement obligation recovery, and other generation assets, partially offset by a decrease in distribution-related rates. See Note 1 to the financial statements of Alabama Power under "Depreciation and Amortization" in Item 8 of the Form 10-K for additional information.
Other Income (Expense), Net
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$5
 
125.0
 
$7
 
63.6
In the second quarter 2017 , other income (expense), net was $1 million compared to $(4) million for the corresponding period in 2016 . For year-to-date 2017 , other income (expense), net was $(4) million compared to $(11) million for the corresponding period in 2016 . The changes were primarily due to decreases in donations and increases in sales of non-utility property and unregulated lighting services in 2017.
Income Taxes
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$11
 
7.9
 
$35
 
14.5
In the second quarter 2017 , income taxes were $151 million compared to $140 million for the corresponding period in 2016 . The increase was primarily due to higher pre-tax earnings.
For year-to-date 2017 , income taxes were $277 million compared to $242 million for the corresponding period in 2016 . The increase was primarily due to higher pre-tax earnings and unrecognized tax benefits related to certain state deductions for federal income taxes.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Alabama Power's future earnings potential. The level of Alabama Power's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of Alabama Power's primary business of providing electric service. These factors include Alabama Power's ability to maintain a constructive regulatory environment that continues to allow for the timely recovery of prudently-incurred costs during a time of increasing costs and limited projected demand growth over the next several years. Future earnings will be driven primarily by customer growth. Earnings will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies and increasing volumes of electronic commerce transactions. Earnings are subject to a variety of other factors. These factors include weather, competition, new energy contracts with other utilities, energy conservation practiced by customers, the use of alternative energy sources by customers, the price of electricity, the price elasticity of demand, and the rate of economic growth or decline in Alabama Power's service territory. Demand for electricity is primarily driven by economic growth. The pace of economic growth and electricity demand may be affected by changes in regional and global economic conditions, which may impact future earnings. Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals is dependent on the final form of any legislation enacted and the related transition rules and cannot be determined at this time, but could have a material impact on Alabama Power's financial statements. For additional information relating to these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL of Alabama Power in Item 7 of the Form 10-K.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in rates on a timely basis. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Environmental compliance costs are recovered through Rate CNP Compliance. See Note 3 to the financial statements of Alabama Power under "Retail Regulatory Matters – Rate CNP Compliance" in Item 8 of the Form 10-K for additional information. Further, higher costs that are recovered through regulated rates could contribute to reduced demand for electricity, which could negatively affect results of operations, cash flows, and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" of Alabama Power in Item 7 and Note 3 to the financial statements of Alabama Power under "Environmental Matters" in Item 8 of the Form 10-K for additional information.
Environmental Statutes and Regulations
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Alabama Power in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule and the final rule revising the regulatory definition of waters of the U.S. for all Clean Water Act (CWA) programs.
On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed to rescind the final rule that revised the regulatory definition of waters of the U.S. for all CWA programs. The final rule has been stayed since October 2015 by the U.S. Court of Appeals for the Sixth Circuit.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The ultimate outcome of these matters cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Alabama Power in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.
FERC Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters" of Alabama Power in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' (including Alabama Power's) and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies (including Alabama Power) and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' (including Alabama Power's) and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Retail Regulatory Matters
Alabama Power's revenues from regulated retail operations are collected through various rate mechanisms subject to the oversight of the Alabama PSC. Alabama Power currently recovers its costs from the regulated retail business primarily through Rate RSE, Rate CNP, Rate ECR, and Rate NDR. In addition, the Alabama PSC issues accounting orders to address current events impacting Alabama Power. See Notes 1 and 3 to the financial statements of Alabama Power under "Nuclear Outage Accounting Order" and "Retail Regulatory Matters," respectively, in Item 8 of the Form 10-K for additional information regarding Alabama Power's rate mechanisms and accounting orders. The recovery balance of each regulatory clause for Alabama Power is reported in Note (B) to the Condensed Financial Statements herein.
Other Matters
Alabama Power is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Alabama Power is subject to certain claims and legal actions arising in the ordinary course of business. Alabama Power's 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions , CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Alabama Power cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Alabama Power's financial statements. See Note (B) to the Condensed Financial

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS



Statements herein for a discussion of various other contingencies, regulatory matters, and other matters being litigated which may affect future earnings potential.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Alabama Power prepares its financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Alabama Power in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Alabama Power's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Alabama Power in Item 7 of the Form 10-K for a complete discussion of Alabama Power's critical accounting policies and estimates related to Utility Regulation, Asset Retirement Obligations, Pension and Other Postretirement Benefits, and Contingent Obligations.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Alabama Power expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Alabama Power's revenue, including energy provided to customers, is from tariff offerings that provide electricity without a defined contractual term, as well as longer-term contractual commitments , including PPAs . Alabama Power expect s that the revenue from contracts with these customers will not result in a significant shift in the timing of revenue recognition for such sales .
Alabama Power's ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements, such as alternative revenue programs, are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Alabama Power's financial statements, if material. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Alabama Power expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Alabama Power intend s to use the modified retrospective method of adoption effective January 1, 2018. Alabama Power has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Alabama Power's financial statements, Alabama Power will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Alabama Power is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Alabama Power's operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Alabama Power's financial statements.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Alabama Power in Item 7 of the Form 10-K for additional information. Alabama Power's financial condition remained stable at June 30, 2017 . Alabama Power intends to continue to monitor its access to short-term and long-term capital markets as well as its bank credit arrangements to meet future capital and liquidity needs. See " Capital Requirements and Contractual Obligations ," " Sources of Capital ," and " Financing Activities " herein for additional information.
Net cash provided from operating activities totaled $672 million for the first six months of 2017 , a decrease of $135 million as compared to the first six months of 2016 . The decrease in net cash provided from operating activities was primarily due to the receipt of income tax refunds in 2016 as a result of bonus depreciation. Net cash used for investing activities totaled $759 million for the first six months of 2017 primarily due to gross property additions related to distribution, environmental, transmission, and steam generation. Net cash provided from financing activities totaled $306 million for the first six months of 2017 primarily due to an issuance of long-term debt and additional capital contributions from Southern Company, partially offset by common stock dividend payments and a redemption of long-term debt. Fluctuations in cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 include increases of $547 million in long-term debt, primarily due to the issuance of additional senior notes, $367 million in property, plant, and equipment, primarily due to additions to distribution, steam generation, and transmission, $337 million in additional paid-in capital due to capital contributions from Southern Company, and $219 million in cash and cash equivalents, as well as a decrease of $200 million in securities due within one year.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Alabama Power in Item 7 of the Form 10-K for a description of Alabama Power's capital requirements for its construction program, including estimated capital expenditures to comply with existing environmental statutes and regulations, scheduled maturities of long-term debt, as well as the related interest, derivative obligations, preferred and preference stock dividends, leases, purchase commitments, and trust funding requirements. Approximately $361 million will be required through June 30, 2018 to fund maturities of long-term debt.
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – Environmental Statutes and Regulations – General" and " – Global Climate Issues" of Alabama Power in Item 7 of the Form 10-K for additional information on Alabama Power's environmental compliance strategy.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



The construction program is subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental statutes and regulations; the outcome of any legal challenges to the environmental rules; changes in generating plants, including unit retirements and replacements and adding or changing fuel sources at existing generating units, to meet regulatory requirements; changes in the expected environmental compliance program; changes in FERC rules and regulations; Alabama PSC approvals; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; storm impacts; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered.
Sources of Capital
Alabama Power plans to obtain the funds to meet its future capital needs from sources similar to those used in the past, which were primarily from operating cash flows, short-term debt, term loans, external security issuances, and equity contributions from Southern Company. However, the amount, type, and timing of any future financings, if needed, will depend upon prevailing market conditions, regulatory approval, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" of Alabama Power in Item 7 of the Form 10-K for additional information.
Alabama Power's current liabilities sometimes exceed current assets because of long-term debt maturities and the periodic use of short-term debt as a funding source, as well as significant seasonal fluctuations in cash needs.
At June 30, 2017 , Alabama Power had approximately $639 million of cash and cash equivalents. Committed credit arrangements with banks at June 30, 2017 were as follows:
Expires
 
 
 
 
 
Expires Within One Year
2017
 
2018
 
2022
 
Total
 
Unused
 
Term Out
 
No Term Out
(in millions)
$
3

 
$
532

 
$
800

 
$
1,335

 
$
1,335

 
$

 
$
35

See Note 6 to the financial statements of Alabama Power under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
As reflected in the table above, in May 2017, Alabama Power amended its $800 million multi-year credit arrangement, which, among other things, extended the maturity date from 2020 to 2022.
Most of these bank credit arrangements, as well as Alabama Power's term loan arrangements, contain covenants that limit debt levels and contain cross-acceleration provisions to other indebtedness (including guarantee obligations) of Alabama Power. Such cross-acceleration provisions to other indebtedness would trigger an event of default if Alabama Power defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2017 , Alabama Power was in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
Subject to applicable market conditions, Alabama Power expects to renew or replace its bank credit arrangements as needed, prior to expiration. In connection therewith, Alabama Power may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
A portion of the unused credit with banks is allocated to provide liquidity support to Alabama Power's pollution control revenue bonds and commercial paper programs. The amount of variable rate pollution control revenue bonds outstanding requiring liquidity support was approximately $890 million as of June 30, 2017 . At June 30, 2017 , Alabama Power had no fixed rate pollution control revenue bonds outstanding that were required to be reoffered within the next 12 months.

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Alabama Power also has substantial cash flow from operating activities and access to capital markets, including a commercial paper program, to meet liquidity needs. Alabama Power may meet short-term cash needs through its commercial paper program. Alabama Power may also meet short-term cash needs through a Southern Company subsidiary organized to issue and sell commercial paper at the request and for the benefit of Alabama Power and the other traditional electric operating companies. Proceeds from such issuances for the benefit of Alabama Power are loaned directly to Alabama Power. The obligations of each traditional electric operating company under these arrangements are several and there is no cross-affiliate credit support.
Details of commercial paper borrowings were as follows:
 
 
Short-term Debt During the Period (*)
 
 
Average
Amount
Outstanding
 
Weighted
Average
Interest Rate
 
Maximum
Amount
Outstanding
 
 
(in millions)
 
 
 
(in millions)
Commercial paper
 
$
28

 
1.1
%
 
$
200

(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 . No short-term debt was outstanding at June 30, 2017 .
Alabama Power believes the need for working capital can be adequately met by utilizing commercial paper programs, lines of credit, and operating cash flows.
Credit Rating Risk
At June 30, 2017 , Alabama Power did 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change to BBB and/or Baa2 or below. These contracts are primarily for physical electricity purchases, fuel purchases, fuel transportation and storage, energy price risk management, and transmission.
The maximum potential collateral requirements under these contracts at June 30, 2017 were as follows:
Credit Ratings
Maximum Potential
Collateral
Requirements
 
(in millions)
At BBB and/or Baa2
$
1

At BBB- and/or Baa3
$
2

Below BBB- and/or Baa3
$
326

Included in these amounts are certain agreements that could require collateral in the event that either Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Alabama Power to access capital markets and would be likely to impact the cost at which it does so.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Alabama Power) from stable to negative.
Financing Activities
In February 2017, Alabama Power repaid at maturity $200 million aggregate principal amount of Series 2007A 5.55% Senior Notes.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS



In March 2017, Alabama Power issued $550 million aggregate principal amount of Series 2017A 2.45% Senior Notes due March 30, 2022. The proceeds were used to repay Alabama Power's short-term indebtedness and for general corporate purposes, including Alabama Power's continuous construction program.
Subsequent to June 30, 2017, Alabama Power repaid at maturity $36.1 million aggregate principal amount of Series 1993-A, 1993-B, and 1993-C Industrial Development Board of the City of Mobile, Alabama Pollution Control Revenue Refunding Bonds (Alabama Power Company Project).
In addition to any financings that may be necessary to meet capital requirements and contractual obligations, Alabama Power plans to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

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GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)

 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Retail revenues
$
1,904

 
$
1,907

 
$
3,593

 
$
3,624

Wholesale revenues, non-affiliates
40

 
40

 
79

 
82

Wholesale revenues, affiliates
9

 
10

 
17

 
15

Other revenues
95

 
94

 
191

 
202

Total operating revenues
2,048

 
2,051

 
3,880

 
3,923

Operating Expenses:
 
 
 
 
 
 
 
Fuel
445

 
439

 
815

 
815

Purchased power, non-affiliates
103

 
92

 
191

 
175

Purchased power, affiliates
138

 
111

 
310

 
250

Other operations and maintenance
399

 
439

 
781

 
896

Depreciation and amortization
223

 
214

 
444

 
425

Taxes other than income taxes
101

 
100

 
199

 
197

Total operating expenses
1,409

 
1,395

 
2,740

 
2,758

Operating Income
639

 
656

 
1,140

 
1,165

Other Income and (Expense):
 
 
 
 
 
 
 
Interest expense, net of amounts capitalized
(104
)
 
(99
)
 
(205
)
 
(193
)
Other income (expense), net
16

 
8

 
36

 
26

Total other income and (expense)
(88
)
 
(91
)
 
(169
)
 
(167
)
Earnings Before Income Taxes
551

 
565

 
971

 
998

Income taxes
199

 
211

 
355

 
371

Net Income
352

 
354

 
616

 
627

Dividends on Preferred and Preference Stock
5

 
5

 
9

 
9

Net Income After Dividends on Preferred and Preference Stock
$
347

 
$
349

 
$
607

 
$
618

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)

 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Net Income
$
352

 
$
354

 
$
616

 
$
627

Other comprehensive income (loss):
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
Reclassification adjustment for amounts included in net income,
net of tax of $-, $-, $1, and $1, respectively
1

 
1

 
2

 
1

Total other comprehensive income (loss)
1

 
1

 
2

 
1

Comprehensive Income
$
353

 
$
355

 
$
618

 
$
628

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

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CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Net income
$
616

 
$
627

Adjustments to reconcile net income to net cash provided from operating activities --
 
 
 
Depreciation and amortization, total
543

 
530

Deferred income taxes
159

 
157

Allowance for equity funds used during construction
(25
)
 
(24
)
Deferred expenses
41

 
39

Pension, postretirement, and other employee benefits
(45
)
 
(28
)
Settlement of asset retirement obligations
(62
)
 
(52
)
Other, net
(39
)
 
36

Changes in certain current assets and liabilities —
 
 
 
-Receivables
(150
)
 
(25
)
-Fossil fuel stock
(32
)
 
61

-Other current assets
(22
)
 
10

-Accounts payable
(153
)
 
6

-Accrued taxes
(194
)
 
(137
)
-Accrued compensation
(65
)
 
(44
)
-Retail fuel cost over recovery
(84
)
 
1

-Other current liabilities
(6
)
 
16

Net cash provided from operating activities
482

 
1,173

Investing Activities:
 
 
 
Property additions
(1,284
)
 
(1,058
)
Nuclear decommissioning trust fund purchases
(271
)
 
(386
)
Nuclear decommissioning trust fund sales
266

 
380

Cost of removal, net of salvage
(32
)
 
(34
)
Change in construction payables, net of joint owner portion
1

 
(75
)
Payments pursuant to LTSAs
(56
)
 
(14
)
Sale of property
63

 

Other investing activities
(12
)
 
17

Net cash used for investing activities
(1,325
)
 
(1,170
)
Financing Activities:
 
 
 
Increase in notes payable, net
37

 
39

Proceeds —
 
 
 
Capital contributions from parent company
380

 
239

Senior notes
850

 
650

FFB loan

 
300

Short-term borrowings
800

 

Redemptions and repurchases —
 
 
 
Pollution control revenue bonds
(27
)
 
(4
)
Senior notes
(450
)
 
(500
)
Payment of common stock dividends
(640
)
 
(653
)
Other financing activities
(19
)
 
(20
)
Net cash provided from financing activities
931

 
51

Net Change in Cash and Cash Equivalents
88

 
54

Cash and Cash Equivalents at Beginning of Period
3

 
67

Cash and Cash Equivalents at End of Period
$
91

 
$
121

Supplemental Cash Flow Information:
 
 
 
Cash paid during the period for —
 
 
 
Interest (net of $11 and $10 capitalized for 2017 and 2016, respectively)
$
186

 
$
174

Income taxes, net
213

 
78

Noncash transactions — Accrued property additions at end of period
348

 
288

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

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GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
91

 
$
3

Receivables —
 
 
 
 
Customer accounts receivable
 
565

 
523

Unbilled revenues
 
251

 
224

Joint owner accounts receivable
 
199

 
57

Other accounts and notes receivable
 
62

 
81

Affiliated
 
22

 
18

Accumulated provision for uncollectible accounts
 
(3
)
 
(3
)
Fossil fuel stock
 
330

 
298

Materials and supplies
 
477

 
479

Prepaid expenses
 
55

 
105

Other regulatory assets, current
 
193

 
193

Other current assets
 
22

 
38

Total current assets
 
2,264

 
2,016

Property, Plant, and Equipment:
 
 
 
 
In service
 
34,410

 
33,841

Less: Accumulated provision for depreciation
 
11,502

 
11,317

Plant in service, net of depreciation
 
22,908

 
22,524

Nuclear fuel, at amortized cost
 
559

 
569

Construction work in progress
 
5,422

 
4,939

Total property, plant, and equipment
 
28,889

 
28,032

Other Property and Investments:
 
 
 
 
Equity investments in unconsolidated subsidiaries
 
56

 
60

Nuclear decommissioning trusts, at fair value
 
874

 
814

Miscellaneous property and investments
 
51

 
46

Total other property and investments
 
981

 
920

Deferred Charges and Other Assets:
 
 
 
 
Deferred charges related to income taxes
 
675

 
676

Other regulatory assets, deferred
 
2,790

 
2,774

Other deferred charges and assets
 
589

 
417

Total deferred charges and other assets
 
4,054

 
3,867

Total Assets
 
$
36,188

 
$
34,835

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.


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GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholder's Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
261

 
$
460

Notes payable
 
1,228

 
391

Accounts payable —
 
 
 
 
Affiliated
 
367

 
438

Other
 
657

 
589

Customer deposits
 
269

 
265

Accrued taxes
 
212

 
407

Accrued interest
 
115

 
106

Accrued compensation
 
141

 
224

Asset retirement obligations, current
 
251

 
299

Other current liabilities
 
185

 
297

Total current liabilities
 
3,686

 
3,476

Long-term Debt
 
10,793

 
10,225

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
6,163

 
6,000

Deferred credits related to income taxes
 
118

 
121

Accumulated deferred ITCs
 
251

 
256

Employee benefit obligations
 
652

 
703

Asset retirement obligations, deferred
 
2,340

 
2,233

Other deferred credits and liabilities
 
206

 
199

Total deferred credits and other liabilities
 
9,730

 
9,512

Total Liabilities
 
24,209

 
23,213

Preferred Stock
 
45

 
45

Preference Stock
 
221

 
221

Common Stockholder's Equity:
 
 
 
 
Common stock, without par value —
 
 
 
 
Authorized — 20,000,000 shares
 
 
 
 
Outstanding — 9,261,500 shares
 
398

 
398

Paid-in capital
 
7,274

 
6,885

Retained earnings
 
4,052

 
4,086

Accumulated other comprehensive loss
 
(11
)
 
(13
)
Total common stockholder's equity
 
11,713

 
11,356

Total Liabilities and Stockholder's Equity
 
$
36,188

 
$
34,835

The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Georgia Power operates as a vertically integrated utility providing electric service to retail customers within its traditional service territory located within the State of Georgia and to wholesale customers in the Southeast.
Many factors affect the opportunities, challenges, and risks of Georgia Power's business of providing electric service. These factors include the ability to maintain a constructive regulatory environment, to maintain and grow energy sales, and to effectively manage and secure timely recovery of costs. These costs include those related to projected long-term demand growth, stringent environmental standards, reliability, fuel, capital expenditures, and restoration following major storms. Georgia Power has various regulatory mechanisms that operate to address cost recovery. Effectively operating pursuant to these regulatory mechanisms and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge Georgia Power for the foreseeable future.
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into an interim assessment agreement with the EPC Contractor (Interim Assessment Agreement), which the bankruptcy court approved on March 30, 2017. On June 9, 2017, Georgia Power and the other Vogtle Owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (Guarantee Settlement Agreement). Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (Guarantee Obligations), of which Georgia Power's proportionate share is approximately $1.7 billion, and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into a services agreement (Services Agreement), which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 27, 2017, the Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE and the Interim Assessment Agreement expired pursuant to its terms. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth Vogtle Construction Monitoring (VCM) report to be filed with the Georgia PSC in late August 2017.
An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Georgia Power's financial statements. The ultimate outcome of these matters also is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time. See FUTURE EARNINGS POTENTIAL – " Retail Regulatory Matters Nuclear Construction " herein for additional information on Plant Vogtle Units 3 and 4, including Georgia Power's preliminary cost-to-complete and cancellation cost assessments for Plant Vogtle Units 3 and 4.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Georgia Power continues to focus on several key performance indicators including, but not limited to, customer satisfaction, plant availability, system reliability, the execution of major construction projects, and net income after dividends on preferred and preference stock.
RESULTS OF OPERATIONS
Net Income
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(2)
 
(0.6)
 
$(11)
 
(1.8)
Georgia Power's net income after dividends on preferred and preference stock for the second quarter 2017 was $347 million compared to $349 million for the corresponding period in 2016 . For year-to-date 2017 , net income after dividends on preferred and preference stock was $607 million compared to $618 million for the corresponding period in 2016 . The decreases were primarily due to milder weather as compared to the corresponding periods in 2016 , partially offset by lower non-fuel operations and maintenance expenses.
Retail Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(3)
 
(0.2)
 
$(31)
 
(0.9)
In the second quarter 2017 , retail revenues were $1.90 billion compared to $1.91 billion for the corresponding period in 2016 . For year-to-date 2017 , retail revenues were $3.59 billion compared to $3.62 billion for the corresponding period in 2016 .
Details of the changes in retail revenues were as follows:
 
Second Quarter 2017
 
Year-to-Date 2017
 
(in millions)
 
(% change)
 
(in millions)
 
(% change)
Retail – prior year
$
1,907

 
 
 
$
3,624

 
 
Estimated change resulting from –
 
 
 
 
 
 
 
Rates and pricing
(7
)
 
(0.4
)
 
19

 
0.5

Sales growth (decline)
1

 
0.1

 
(11
)
 
(0.3
)
Weather
(38
)
 
(2.0
)
 
(110
)
 
(3.1
)
Fuel cost recovery
41

 
2.1

 
71

 
2.0

Retail – current year
$
1,904

 
(0.2
)%
 
$
3,593

 
(0.9
)%
Revenues associated with changes in rates and pricing decreased in the second quarter and increased year-to-date 2017 when compared to the corresponding periods in 2016. An increase in revenues related to the recovery of Plant Vogtle Units 3 and 4 construction financing costs under the NCCR tariff was more than offset in the second quarter 2017 by the rate pricing effect of decreased customer usage and lower contributions from commercial and industrial customers under a rate plan for variable demand-driven pricing. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Nuclear Constructions" of Georgia Power in Item 7 of the Form 10-K and FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Nuclear Construction – Regulatory Matters" herein for additional information related to the NCCR tariff.
Revenues attributable to changes in sales were essentially flat in the second quarter and decreased year-to-date 2017 when compared to the corresponding periods in 2016 . Weather-adjusted residential KWH sales increased 0.3%, weather-adjusted commercial KWH sales increased 0.4%, and weather-adjusted industrial KWH sales decreased

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS


1.3% in the second quarter 2017 when compared to the corresponding period in 2016 . For year-to-date 2017 , weather-adjusted residential KWH sales increased 0.8%, weather-adjusted commercial KWH sales decreased 1.0%, and weather-adjusted industrial KWH sales decreased 2.2% when compared to the corresponding period in 2016 . An increase of approximately 29,000 residential customers since June 30, 2016 contributed to the increase in weather-adjusted residential KWH sales. A decline in average customer usage resulting from an increase in energy saving initiatives and electronic commerce transactions contributed to the decrease in weather-adjusted commercial KWH sales, partially offset by an increase of approximately 2,000 commercial customers since June 30, 2016 . Decreased demand in the chemicals, paper, and transportation sectors was the main contributor to the decrease in weather-adjusted industrial KWH sales, partially offset by increased demand in the non-manufacturing and rubber sectors. Despite a more stable dollar and improving global economy, the industrial sector remains constrained by economic policy uncertainty.
Fuel revenues and costs are allocated between retail and wholesale jurisdictions. Retail fuel cost recovery revenues increased $41 million and $71 million in the second quarter and year-to-date 2017 , respectively, when compared to the corresponding periods in 2016 primarily due to higher natural gas prices, partially offset by lower energy sales resulting from milder weather as compared to the corresponding periods in 2016 . Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these fuel cost recovery provisions, fuel revenues generally equal fuel expenses and do not affect net income. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Fuel Cost Recovery" of Georgia Power in Item 7 of the Form 10-K for additional information.
Other Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$1
 
1.1
 
$(11)
 
(5.4)
For year-to-date 2017 , other revenues were $191 million compared to $202 million for the corresponding period in 2016 . The decrease was primarily due to a $14 million adjustment in 2016 for customer temporary facilities services revenues and an $8 million decrease in open access transmission tariff revenues, partially offset by a $7 million increase in outdoor lighting sales revenues primarily attributable to LED conversions and a $3 million increase in solar application fee revenue.
Fuel and Purchased Power Expenses
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
Fuel
$
6

 
1.4
 
$

 
Purchased power – non-affiliates
11

 
12.0
 
16

 
9.1
Purchased power – affiliates
27

 
24.3
 
60

 
24.0
Total fuel and purchased power expenses
$
44

 
 
 
$
76

 
 
In the second quarter 2017 , total fuel and purchased power expenses were $686 million compared to $642 million in the corresponding period in 2016 . The increase was primarily due to a $45 million increase in the average cost of fuel and purchased power primarily related to higher natural gas prices, slightly offset by a decrease related to the volume of KWHs generated and purchased due to milder weather, resulting in lower customer demand.
For year-to-date 2017 , total fuel and purchased power expenses were $1.32 billion compared to $1.24 billion in the corresponding period in 2016 . The increase was primarily due to an $89 million increase in the average cost of fuel and purchased power primarily related to higher natural gas prices, partially offset by a net decrease of $13 million

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS


related to the volume of KWHs generated and purchased due to milder weather, resulting in lower customer demand.
Fuel and purchased power energy transactions do not have a significant impact on earnings since these fuel expenses are generally offset by fuel revenues through Georgia Power's fuel cost recovery mechanism. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Fuel Cost Recovery" of Georgia Power in Item 7 of the Form 10-K for additional information.
Details of Georgia Power's generation and purchased power were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017
 
Year-to-Date 2016
Total generation (in billions of KWHs)
16
 
17
 
30
 
33
Total purchased power (in billions of KWHs)
6
 
6
 
13
 
12
Sources of generation (percent)  —
 
 
 
 
 
 
 
Coal
36
 
36
 
32
 
33
Nuclear
25
 
24
 
25
 
24
Gas
37
 
38
 
41
 
40
Hydro
2
 
2
 
2
 
3
Cost of fuel, generated (in cents per net KWH)  
 
 
 
 
 
 
 
Coal
3.20
 
3.37
 
3.23
 
3.45
Nuclear
0.84
 
0.84
 
0.84
 
0.85
Gas
2.75
 
2.18
 
2.76
 
2.10
Average cost of fuel, generated (in cents per net KWH)
2.43
 
2.29
 
2.41
 
2.26
Average cost of purchased power (in cents per net KWH) (*)
4.76
 
4.45
 
4.61
 
4.38
(*)
Average cost of purchased power includes fuel purchased by Georgia Power for tolling agreements where power is generated by the provider.
Fuel
In the second quarter 2017 , fuel expense was $445 million compared to $439 million in the corresponding period in 2016 . The increase was primarily due to a 26.2% increase in the average cost of natural gas per KWH generated, partially offset by a 6.1% decrease in the volume of KWHs generated by coal and natural gas. For year-to-date 2017 , fuel expense remained flat compared to the corresponding period in 2016 primarily resulting from a 31.4% increase in the average cost of natural gas per KWH generated, offset by a 9.5% decrease in the volume of KWHs generated by coal and natural gas.
Purchased Power – Non-Affiliates
In the second quarter 2017 , purchased power expense from non-affiliates was $103 million compared to $92 million in the corresponding period in 2016 . For year-to-date 2017 , purchased power expense from non-affiliates was $191 million compared to $175 million in the corresponding period in 2016 . The increases were primarily due to increases in the volume of KWHs purchased of 13.4% and 11.6% in the second quarter and year-to-date 2017 , respectively, due to unplanned outages at Georgia Power-owned generating units.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Purchased Power – Affiliates
In the second quarter 2017 , purchased power expense from affiliates was $138 million compared to $111 million in the corresponding period in 2016 . The increase was primarily the result of an 11.1% increase in the average cost per KWH purchased primarily resulting from higher natural gas prices and a 5.9% increase in the volume of KWHs purchased due to unplanned outages at Georgia Power-owned generating units and to support Southern Company system transmission reliability.
For year-to-date 2017 , purchased power expense from affiliates was $310 million compared to $250 million in the corresponding period in 2016 . The increase was primarily the result of a 10.1% increase in the volume of KWHs purchased due to unplanned outages at Georgia Power-owned generating units and to support Southern Company system transmission reliability and an 8.8% increase in the average cost per KWH purchased primarily resulting from higher natural gas prices.
Energy purchases from affiliates will vary depending on demand and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, all as approved by the FERC.
Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(40)
 
(9.1)
 
$(115)
 
(12.8)
In the second quarter 2017 , other operations and maintenance expenses were $399 million compared to $439 million in the corresponding period in 2016 . The decrease was primarily due to cost containment activities implemented in the third quarter 2016 that contributed to decreases of $14 million in generation maintenance costs and $9 million in transmission and distribution overhead line maintenance. Other factors include decreases of $9 million in customer accounts, service, and sales costs, $5 million in transmission station expenses, and $5 million in billing adjustments with integrated transmission system owners, partially offset by a $7 million increase in scheduled generation outage costs.
For year-to-date 2017 , other operations and maintenance expenses were $781 million compared to $896 million in the corresponding period in 2016 . The decrease was primarily due to cost containment activities implemented in the third quarter 2016 that contributed to decreases of $28 million in generation maintenance costs, $18 million in transmission and distribution maintenance costs, and $13 million in employee benefit costs. Other factors include a $19 million increase in gains from sales of integrated transmission system assets and a $14 million decrease in customer assistance expenses primarily in demand-side management costs related to the timing of new programs.
Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$9
 
4.2
 
$19
 
4.5
In the second quarter 2017 , depreciation and amortization was $223 million compared to $214 million in the corresponding period in 2016 . The increase was primarily due to a $7 million increase related to additional plant in service and a $4 million decrease in amortization of regulatory liabilities related to other cost of removal obligations that expired in December 2016.
For year-to-date 2017 , depreciation and amortization was $444 million compared to $425 million in the corresponding period in 2016 . The increase was primarily due to a $17 million increase related to additional plant in service and a $7 million decrease in amortization of regulatory liabilities related to other cost of removal obligations

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS


that expired in December 2016, partially offset by a $5 million decrease in depreciation related to generating unit retirements in 2016.
Interest Expense, Net of Amounts Capitalized
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$5
 
5.1
 
$12
 
6.2
In the second quarter 2017 , interest expense, net of amounts capitalized was $104 million compared to $99 million in the corresponding period in 2016 . For year-to-date 2017 , interest expense, net of amounts capitalized was $205 million compared to $193 million in the corresponding period in 2016 . The increases were primarily due to senior notes issuances and additional long-term borrowings from the FFB.
See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" herein for additional information on borrowings from the FFB.
Other Income (Expense), Net
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$8
 
100.0
 
$10
 
38.5
In the second quarter 2017 , other income (expense), net was $16 million compared to $8 million in the corresponding period in 2016 . For year-to-date 2017 , other income (expense), net was $36 million compared to $26 million in the corresponding period in 2016. The increases were primarily due to increases in gains on purchases of state tax credits.
Income Taxes
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(12)
 
(5.7)
 
$(16)
 
(4.3)
In the second quarter 2017 , income taxes were $199 million compared to $211 million in the corresponding period in 2016 . For year-to-date 2017 , income taxes were $355 million compared to $371 million in the corresponding period in 2016 . The decreases were primarily due to increased state ITCs and lower pre-tax earnings.
FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Georgia Power's future earnings potential. The level of Georgia Power's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of Georgia Power's business of providing electric service. These factors include Georgia Power's ability to maintain a constructive regulatory environment that continues to allow for the timely recovery of prudently-incurred costs during a time of increasing costs and limited projected demand growth over the next several years. Completing the cost assessments and determining future actions related to Plant Vogtle Units 3 and 4 construction and rate recovery are also major factors. Future earnings will be driven primarily by customer growth. Earnings will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies, increasing volumes of electronic commerce transactions, and higher multi-family home construction. Earnings are subject to a variety of other factors. These factors include weather, competition, new energy contracts with other utilities, energy conservation practiced by customers, the use of alternative energy sources by customers, the price of electricity, the price elasticity of demand, and the rate of economic growth or decline in Georgia Power's service territory. Demand for electricity is primarily

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driven by economic growth. The pace of economic growth and electricity demand may be affected by changes in regional and global economic conditions, which may impact future earnings.
Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals, including any potential changes to the availability of nuclear PTCs, is dependent on the final form of any legislation enacted and the related transition rules and cannot be determined at this time, but could have a material impact on Georgia Power's financial statements.
For additional information relating to these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL of Georgia Power in Item 7 of the Form 10-K and RISK FACTORS in Item 1A herein.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in rates on a timely basis. Georgia Power's Environmental Compliance Cost Recovery (ECCR) tariff allows for the recovery of capital and operations and maintenance costs related to environmental controls mandated by state and federal regulations. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Further, higher costs that are recovered through regulated rates could contribute to reduced demand for electricity, which could negatively affect results of operations, cash flows, and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" of Georgia Power in Item 7 and Note 3 to the financial statements of Georgia Power under "Environmental Matters" in Item 8 of the Form 10-K for additional information.
Environmental Statutes and Regulations
Air Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Air Quality" of Georgia Power in Item 7 of the Form 10-K for additional information regarding the EPA's eight-hour ozone National Ambient Air Quality Standard (NAAQS).
On June 2, 2017, the EPA published a final rule redesignating a 15-county area within metropolitan Atlanta to attainment for the 2008 eight-hour ozone NAAQS.
On June 18, 2017, the EPA published a notice delaying attainment designations for the 2015 eight-hour ozone NAAQS by one year, setting a revised deadline of October 1, 2018. The ultimate outcome of this matter cannot be determined at this time.
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Georgia Power in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule and the final rule revising the regulatory definition of waters of the U.S. for all Clean Water Act (CWA) programs.
On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed to rescind the final rule that revised the regulatory definition of waters of the U.S. for all CWA programs. The final rule has been stayed since October 2015 by the U.S. Court of Appeals for the Sixth Circuit.

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The ultimate outcome of these matters cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Georgia Power in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.
FERC Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters" of Georgia Power in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' (including Georgia Power's) and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies (including Georgia Power) and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' (including Georgia Power's) and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Retail Regulatory Matters
Georgia Power's revenues from regulated retail operations are collected through various rate mechanisms subject to the oversight of the Georgia PSC. Georgia Power currently recovers its costs from the regulated retail business through the 2013 ARP, which includes traditional base tariff rates, Demand-Side Management tariffs, ECCR tariffs, and Municipal Franchise Fee tariffs. In addition, financing costs related to the construction of Plant Vogtle Units 3 and 4 are being collected through the NCCR tariff and fuel costs are collected through a separate fuel cost recovery tariff. See " Nuclear Construction " herein and Note 3 to the financial statements of Georgia Power under "Retail Regulatory Matters – Nuclear Construction" in Item 8 of the Form 10-K for additional information regarding the NCCR tariff. Also see MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Fuel Cost Recovery" of Georgia Power in Item 7 of the Form 10-K for additional information regarding fuel cost recovery.
Renewables
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Integrated Resource Plan" of Georgia Power in Item 7 of the Form 10-K for additional information regarding renewable energy projects.
On May 16, 2017, the Georgia PSC approved Georgia Power's request to build, own, and operate a 139-MW solar generation facility at a U.S. Air Force base that is expected to be placed in service by the end of 2019.
During the six months ended June 30, 2017, Georgia Power continued construction of a 31-MW solar generation facility at a U.S. Marine Corps base that is expected to be placed in service in the fourth quarter 2017.
The ultimate outcome of these matters cannot be determined at this time.

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Integrated Resource Plan
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Integrated Resource Plan" of Georgia Power in Item 7 of the Form 10-K for additional information regarding Georgia Power's triennial Integrated Resource Plan.
On March 7, 2017, the Georgia PSC approved Georgia Power's decision to suspend work at a future generation site in Stewart County, Georgia, due to changing economics, including load forecasts and lower fuel costs. The timing of recovery for costs incurred of approximately $50 million will be determined by the Georgia PSC in a future base rate case. The ultimate outcome of this matter cannot be determined at this time.
Nuclear Construction
See Note 3 to the financial statements of Georgia Power under "Retail Regulatory Matters – Nuclear Construction" in Item 8 of the Form 10-K for additional information regarding the construction of Plant Vogtle Units 3 and 4, VCM reports, the NCCR tariff, and the Contractor Settlement Agreement.
Vogtle 3 and 4 Agreement and EPC Contractor Bankruptcy
In 2008, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into the Vogtle 3 and 4 Agreement, pursuant to which the EPC Contractor agreed to design, engineer, procure, construct, and test Plant Vogtle Units 3 and 4. Under the terms of the Vogtle 3 and 4 Agreement, the Vogtle Owners agreed to pay a purchase price subject to certain price escalations and adjustments, including fixed escalation amounts and index-based adjustments, as well as adjustments for change orders, and performance bonuses for early completion and unit performance. Georgia Power's proportionate share of Plant Vogtle Units 3 and 4 is 45.7% .
The Vogtle 3 and 4 Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million (approximately $420 million based on Georgia Power's ownership interest). Under the Toshiba Guarantee, Toshiba guaranteed certain payment obligations of the EPC Contractor, including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Vogtle Owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the Vogtle 3 and 4 Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020 and require 60 days' written notice to Georgia Power in the event the Westinghouse Letters of Credit will not be renewed.
Under the terms of the Vogtle 3 and 4 Agreement, the EPC Contractor did not have the right to terminate the Vogtle 3 and 4 Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the Vogtle 3 and 4 Agreement was 40% of the contract price (approximately $1.7 billion based on Georgia Power's ownership interest).
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into the Interim Assessment Agreement, which the bankruptcy court approved on March 30, 2017.
The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Vogtle Owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were paid directly to Fluor; (ii) the EPC Contractor provided certain engineering, procurement, and management services for Plant Vogtle Units 3 and 4, to the same extent as contemplated by the Vogtle 3 and 4 Agreement, and Georgia Power, on behalf of the Vogtle Owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Vogtle Owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor used commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the

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completion status of Plant Vogtle Units 3 and 4; (v) the EPC Contractor rejected or accepted the Vogtle 3 and 4 Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power did not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the Vogtle 3 and 4 Agreement and all related security and collateral under applicable law.
The Interim Assessment Agreement, as amended, expired on July 27, 2017. Georgia Power's aggregate liability for the Vogtle Owners under the Interim Assessment Agreement totaled approximately $650 million , of which $552 million had been paid or accrued as of June 30, 2017 . Georgia Power's proportionate share of this aggregate liability totaled approximately $297 million .
Subsequent to the EPC Contractor bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Plant Vogtle Units 3 and 4. Georgia Power, acting for itself and as agent for the Vogtle Owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Vogtle Owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million , of which $354 million had been paid or accrued as of June 30, 2017 . Georgia Power's proportionate share of this aggregate liability totaled approximately $183 million .
On June 9, 2017, Georgia Power and the other Vogtle Owners and Toshiba entered the Guarantee Settlement Agreement. Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion , of which Georgia Power's proportionate share is approximately $1.7 billion, and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Vogtle Owners and promptly pay them as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Vogtle Owners will forbear from exercising certain remedies, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Vogtle Owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Vogtle Owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.
On June 23, 2017, Toshiba released a revised outlook for fiscal year 2016, which reflected a negative shareholders' equity balance of approximately $5 billion as of March 31, 2017, and announced that its independent audit process was continuing. Toshiba has also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Vogtle Owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Georgia Power's financial statements.
Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into the Services Agreement, which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Vogtle Owners certain project-related contracts, (iii) join the Vogtle Owners as counterparties to certain assumed project-related contracts, and (iv) reject the Vogtle 3 and 4 Agreement.

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The Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE on July 27, 2017. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
The ultimate outcome of these matters cannot be determined at this time.
Regulatory Matters
In 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4 with a certified capital cost of $4.418 billion . In addition, in 2009 the Georgia PSC approved inclusion of the Plant Vogtle Units 3 and 4 related CWIP accounts in rate base, and the State of Georgia enacted the Georgia Nuclear Energy Financing Act, which allows Georgia Power to recover financing costs for nuclear construction projects certified by the Georgia PSC. Financing costs are recovered on all applicable certified costs through annual adjustments to the NCCR tariff by including the related CWIP accounts in rate base during the construction period. As of June 30, 2017 , Georgia Power had recovered approximately $1.4 billion of financing costs.
On December 20, 2016, the Georgia PSC voted to approve a settlement agreement (Vogtle Cost Settlement Agreement) resolving the following prudence matters: (i) none of the $3.3 billion of costs incurred through December 31, 2015 and reflected in the fourteenth VCM report will be disallowed from rate base on the basis of imprudence; (ii) the Contractor Settlement Agreement is reasonable and prudent and none of the amounts paid or to be paid pursuant to the Contractor Settlement Agreement should be disallowed from rate base on the basis of imprudence; (iii) financing costs on verified and approved capital costs will be deemed prudent provided they are incurred prior to December 31, 2019 and December 31, 2020 for Plant Vogtle Units 3 and 4, respectively; and (iv) (a) the in-service capital cost forecast will be adjusted to $5.680 billion (Revised Forecast), which includes a contingency of $240 million above Georgia Power's then current forecast of $5.440 billion , (b) capital costs incurred up to the Revised Forecast will be presumed to be reasonable and prudent with the burden of proof on any party challenging such costs, and (c) Georgia Power would have the burden to show that any capital costs above the Revised Forecast are reasonable and prudent. Under the terms of the Vogtle Cost Settlement Agreement, the certified in-service capital cost for purposes of calculating the NCCR tariff will remain at $4.418 billion . Construction capital costs above $4.418 billion will accrue AFUDC through the date each unit is placed in service. The ROE used to calculate the NCCR tariff was reduced from 10.95% (the ROE rate setting point authorized by the Georgia PSC in the 2013 ARP) to 10.00% effective January 1, 2016. For purposes of the AFUDC calculation, the ROE on costs between $4.418 billion and $5.440 billion will also be 10.00% and the ROE on any amounts above $5.440 billion would be Georgia Power's average cost of long-term debt. If the Georgia PSC adjusts Georgia Power's ROE rate setting point in a rate case prior to Plant Vogtle Units 3 and 4 being placed into retail rate base, then the ROE for purposes of calculating both the NCCR tariff and AFUDC will likewise be 95 basis points lower than the revised ROE rate setting point. If Plant Vogtle Units 3 and 4 are not placed in service by December 31, 2020, then (i) the ROE for purposes of calculating the NCCR tariff will be reduced an additional 300 basis points, or $8 million per month, and may, at the Georgia PSC's discretion, be accrued to be used for the benefit of customers, until such time as the units are placed in service and (ii) the ROE used to calculate AFUDC will be Georgia Power's average cost of long-term debt.
Under the terms of the Vogtle Cost Settlement Agreement, the Georgia PSC will determine, for retail ratemaking purposes, the process of transitioning Plant Vogtle Units 3 and 4 from a construction project to an operating plant no later than Georgia Power's base rate case required to be filed by July 1, 2019.
The Georgia PSC has approved fifteen VCM reports covering the periods through June 30, 2016, including construction capital costs incurred, which through that date totaled $3.7 billion . Georgia Power filed its sixteenth VCM report, covering the period from July 1 through December 31, 2016, requesting approval of $222 million of construction capital costs incurred during that period, with the Georgia PSC on February 27, 2017.
The ultimate outcome of these matters cannot be determined at this time.

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Revised Cost and Schedule
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power's preliminary assessment results indicate that its proportionate share of the remaining estimated cost to complete Plant Vogtle Units 3 and 4 ranges as follows:
Preliminary in-service dates
 
 
 
Unit 3
February 2021
March 2022
Unit 4
February 2022
March 2023
 
(in billions)
Preliminary estimated cost to complete
$
3.9

$
4.6

CWIP as of June 30, 2017
4.5

 
4.5

Guarantee Obligations
(1.7
)
 
(1.7
)
Estimated capital costs
$
6.7

$
7.4

Vogtle Cost Settlement Agreement Revised Forecast
(5.7
)
 
(5.7
)
Estimated net additional capital costs
$
1.0

$
1.7

Georgia Power's estimates for cost to complete and schedule are based on preliminary analysis and remain subject to further refinement of labor productivity and consumable and commodity quantities and costs.
Georgia Power's estimated financing costs during the construction period total approximately $3.1 billion to $3.5 billion , of which approximately $1.4 billion had been incurred through June 30, 2017.
Georgia Power's preliminary cancellation cost estimate results indicate that its proportionate share of the estimated cancellation costs is approximately $400 million . As a result, as of June 30, 2017, total estimated costs subject to evaluation by Georgia Power and the Georgia PSC in the event of a cancellation decision are as follows:
 
Preliminary Cancellation Cost Estimate
 
(in billions)
CWIP as of June 30, 2017
$
4.5

Financing costs collected, net of tax
1.4

Cancellation costs (*)
0.4

Total
$
6.3

(*)
The estimate for cancellation costs includes, but is not limited to, costs to terminate contracts for construction and other services, as well as costs to secure the Plant Vogtle Units 3 and 4 construction site.
The Guarantee Obligations continue to exist in the event of cancellation. In addition, under Georgia law, prudently incurred costs related to certificated projects cancelled by the Georgia PSC are allowed recovery, including carrying costs, in future retail rates. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth VCM report to be filed with the Georgia PSC in late August 2017.
The ultimate outcome of these matters is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time.

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Other Matters
As of June 30, 2017 , Georgia Power had borrowed $2.6 billion related to Plant Vogtle Units 3 and 4 costs through a loan guarantee agreement between Georgia Power and the DOE and a multi-advance credit facility among Georgia Power, the DOE, and the FFB. See Note 6 to the financial statements of Georgia Power under "DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " DOE Loan Guarantee Borrowings " herein for additional information, including applicable covenants, events of default, mandatory prepayment events, and conditions to borrowing.
The IRS has allocated PTCs to Plant Vogtle Units 3 and 4 which require that the applicable unit be placed in service prior to 2021. The net present value of Georgia Power's PTCs is estimated at approximately $400 million per unit.
There have been technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4 at the federal and state level and additional challenges may arise if construction proceeds. Processes are in place that are designed to assure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the NRC that occur throughout construction. As a result of such compliance processes, certain license amendment requests have been filed and approved or are pending before the NRC. Various design and other licensing-based compliance matters, including the timely resolution of Inspections, Tests, Analyses, and Acceptance Criteria and the related approvals by the NRC, may arise if construction proceeds, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs.
If construction continues, the risk remains that challenges with labor productivity, fabrication, delivery, assembly, and installation of plant systems, structures, and components, or other issues could arise and may further impact project schedule and cost.
The ultimate outcome of these matters cannot be determined at this time.
See RISK FACTORS of Georgia Power in Item 1A of the Form 10-K for a discussion of certain risks associated with the licensing, construction, and operation of nuclear generating units, including potential impacts that could result from a major incident at a nuclear facility anywhere in the world. See additional risks in Item 1A herein regarding the EPC Contractor's bankruptcy.
Other Matters
Georgia Power is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Georgia Power is subject to certain claims and legal actions arising in the ordinary course of business. Georgia Power's 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions , CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Georgia Power cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Georgia Power's financial statements. See Note (B) to the Condensed Financial Statements herein for a discussion of various other contingencies, regulatory matters, and other matters being litigated which may affect future earnings potential.

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ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Georgia Power prepares its financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Georgia Power in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Georgia Power's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Georgia Power in Item 7 of the Form 10-K for a complete discussion of Georgia Power's critical accounting policies and estimates related to Utility Regulation, Asset Retirement Obligations, Pension and Other Postretirement Benefits, and Contingent Obligations.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Georgia Power expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Georgia Power's revenue, including energy provided to customers, is from tariff offerings that provide electricity without a defined contractual term, as well as longer-term contractual commitments , including PPAs . Georgia Power expect s that the revenue from contracts with these customers will not result in a significant shift in the timing of revenue recognition for such sales .
Georgia Power's ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Georgia Power's financial statements, if material. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Georgia Power expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Georgia Power intend s to use the modified retrospective method of adoption effective January 1, 2018. Georgia Power has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Georgia Power's financial statements, Georgia Power will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the

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service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Georgia Power is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Georgia Power's operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Georgia Power's financial statements.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Georgia Power in Item 7 of the Form 10-K for additional information. Georgia Power's financial condition remained stable at June 30, 2017 . Georgia Power intends to continue to monitor its access to short-term and long-term capital markets as well as bank credit agreements to meet future capital and liquidity needs. See " Capital Requirements and Contractual Obligations ," " Sources of Capital ," and " Financing Activities " herein for additional information.
Net cash provided from operating activities totaled $482 million for the first six months of 2017 compared to $1.17 billion for the corresponding period in 2016 . The decrease was primarily due to the timing of vendor payments and an increase in under-recovered fuel costs. Net cash used for investing activities totaled $1.33 billion for the first six months of 2017 compared to $1.17 billion for the corresponding period in 2016 primarily related to installation of equipment to comply with environmental standards and construction of generation, transmission, and distribution facilities. Net cash provided from financing activities totaled $931 million for the first six months of 2017 compared to $51 million in the corresponding period in 2016 . The increase in cash provided from financing activities is primarily due to an increase in short-term borrowings, higher issuances of senior notes, and higher capital contributions received from Southern Company, partially offset by a decrease in borrowings from the FFB for construction of Plant Vogtle Units 3 and 4. Cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 include an increase in property, plant, and equipment of $857 million to comply with environmental standards and the construction of generation, transmission, and distribution facilities, an increase in notes payable of $837 million primarily due to issuances of short-term bank debt, an increase in paid-in capital of $389 million primarily due to capital contributions received from Southern Company, and an increase in long-term debt of $369 million primarily due to issuances of senior notes.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Georgia Power in Item 7 of the Form 10-K for a description of Georgia Power's capital requirements for its construction program, including estimated capital expenditures for Plant Vogtle Units 3 and 4 and to comply with existing environmental statutes and regulations, scheduled maturities of long-term debt, as well as related interest, derivative obligations, preferred and preference stock dividends, leases, purchase commitments, and trust funding requirements. Approximately $261 million will be required through June 30, 2018 to fund maturities of long-term debt. See " Sources of Capital " herein for additional information. Also see FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Nuclear Construction" for additional information regarding Plant Vogtle Units 3 and 4.
The construction program is subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental statutes and regulations; the outcome of any legal challenges to the

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


environmental rules; changes in generating plants, including unit retirements and replacements and adding or changing fuel sources at existing generating units, to meet regulatory requirements; changes in FERC rules and regulations; Georgia PSC approvals; changes in the expected environmental compliance program; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; storm impacts; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered. See Note 3 to the financial statements of Georgia Power under "Retail Regulatory Matters – Nuclear Construction" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " herein for information regarding additional factors that may impact construction expenditures, including Georgia Power's preliminary cost-to-complete and cancellation cost assessments for Plant Vogtle Units 3 and 4.
Sources of Capital
Georgia Power plans to obtain the funds required for construction and other purposes from sources similar to those used in the past, which were primarily from operating cash flows, short-term debt, external security issuances, term loans, equity contributions from Southern Company, and, to the extent available, borrowings from the FFB. However, the amount, type, and timing of any future financings, if needed, will depend upon regulatory approval, prevailing market conditions, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" of Georgia Power in Item 7 of the Form 10-K for additional information.
Georgia Power has entered into a loan guarantee agreement (Loan Guarantee Agreement) with the DOE, under which the proceeds of borrowings may be used to reimburse Georgia Power for Eligible Project Costs incurred in connection with its construction of Plant Vogtle Units 3 and 4. Under the Loan Guarantee Agreement, the DOE agreed to guarantee borrowings of up to $3.46 billion (not to exceed 70% of Eligible Project Costs) to be made by Georgia Power under a multi-advance credit facility (FFB Credit Facility) among Georgia Power, the DOE, and the FFB. Eligible Project Costs incurred through June 30, 2017 would allow for borrowings of up to $3.1 billion under the FFB Credit Facility, of which Georgia Power has borrowed $2.6 billion ; however, on July 27, 2017, Georgia Power entered into an amendment to the Loan Guarantee Agreement (LGA Amendment) to clarify the operation of the Loan Guarantee Agreement pending Georgia Power's completion of its comprehensive schedule, cost-to-complete, and cancellation cost assessments (Cost Assessments) for Plant Vogtle Units 3 and 4. Under the terms of the LGA Amendment, Georgia Power will not request any advances under the Loan Guarantee Agreement unless and until such time as Georgia Power has completed the Cost Assessments and made a determination to continue construction of Plant Vogtle Units 3 and 4 and satisfied certain other conditions related to continuing construction. See Note 6 to the financial statements of Georgia Power under "DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " DOE Loan Guarantee Borrowings " herein for additional information regarding the Loan Guarantee Agreement, including applicable covenants, events of default, mandatory prepayment events, and additional conditions to borrowing. Also see Note (B) to the Condensed Financial Statements under " Regulatory Matters Georgia Power Nuclear Construction " herein for additional information regarding Plant Vogtle Units 3 and 4.
At June 30, 2017 , Georgia Power's current liabilities exceeded current assets by $1.42 billion . Georgia Power's current liabilities frequently exceed current assets because of scheduled maturities of long-term debt ( $261 million at June 30, 2017 ) and the periodic use of short-term debt as a funding source ( $1.2 billion at June 30, 2017 ), as well as significant seasonal fluctuations in cash needs. Georgia Power intends to utilize operating cash flows, short-term debt, external security issuances, term loans, equity contributions from Southern Company, and, to the extent available, borrowings from the FFB to fund its short-term capital needs. Georgia Power has substantial cash flow from operating activities and access to the capital markets and financial institutions to meet liquidity needs.
At June 30, 2017 , Georgia Power had approximately $91 million of cash and cash equivalents. Georgia Power's committed credit arrangement with banks at June 30, 2017 was $1.75 billion of which $1.73 billion was unused. In May 2017, Georgia Power amended its multi-year credit arrangement, which, among other things, extended the maturity date from 2020 to 2022.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


This bank credit arrangement, as well as Georgia Power's term loan arrangements, contains a covenant that limits debt levels and contains a cross-acceleration provision to other indebtedness (including guarantee obligations) of Georgia Power. Such cross-acceleration provision to other indebtedness would trigger an event of default if Georgia Power defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2017 , Georgia Power was in compliance with this covenant. This bank credit arrangement does not contain a material adverse change clause at the time of borrowing.
Subject to applicable market conditions, Georgia Power expects to renew or replace this credit arrangement, as needed, prior to expiration. In connection therewith, Georgia Power may extend the maturity date and/or increase or decrease the lending commitments thereunder.
See Note 6 to the financial statements of Georgia Power under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
A portion of the unused credit with banks is allocated to provide liquidity support to Georgia Power's pollution control revenue bonds and commercial paper program. The amount of variable rate pollution control revenue bonds outstanding requiring liquidity support as of June 30, 2017 was approximately $550 million . In June 2017, Georgia Power remarketed $318 million of variable rate pollution control bonds in index rate modes, reducing the liquidity support utilized under Georgia Power's bank credit arrangement. In addition, at June 30, 2017 , Georgia Power had $436 million of pollution control revenue bonds outstanding that were required to be reoffered within the next 12 months.
Georgia Power may also meet short-term cash needs through a Southern Company subsidiary organized to issue and sell commercial paper at the request and for the benefit of Georgia Power and the other traditional electric operating companies. Proceeds from such issuances for the benefit of Georgia Power are loaned directly to Georgia Power. The obligations of each traditional electric operating company under these arrangements are several and there is no cross-affiliate credit support. Commercial paper is included in notes payable in the balance sheets.
Details of short-term borrowings were as follows:
 
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
 
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Average
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Maximum
Amount
Outstanding
 
 
(in millions)
 
 
 
(in millions)
 
 
 
(in millions)
Commercial paper
 
$
428

 
1.5
%
 
$
280

 
1.4
%
 
$
760

Short-term bank debt
 
800

 
2.0
%
 
227

 
2.0
%
 
800

Total
 
$
1,228

 
1.8
%
 
$
507

 
1.6
%
 
 
(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 .
Georgia Power believes the need for working capital can be adequately met by utilizing the commercial paper program, lines of credit, short-term bank notes, and operating cash flows.
Credit Rating Risk
At June 30, 2017 , Georgia Power did 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change to BBB- and/or Baa3 or below. These contracts are for physical electricity purchases and sales, fuel purchases, fuel transportation and storage, energy price risk management, and transmission, and, at June 30, 2017 , included contracts related to the construction of new generation at Plant Vogtle Units 3 and 4.

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GEORGIA POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The maximum potential collateral requirements under these contracts at June 30, 2017 were as follows:
Credit Ratings
Maximum Potential
Collateral
Requirements
 
(in millions)
At BBB- and/or Baa3
$
87

Below BBB- and/or Baa3
$
1,210

Included in these amounts are certain agreements that could require collateral in the event that Georgia Power or Alabama Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Georgia Power to access capital markets and would be likely to impact the cost at which it does so.
On March 20, 2017, Moody's revised its rating outlook for Georgia Power from stable to negative.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Georgia Power) from stable to negative.
On March 30, 2017, Fitch placed the ratings of Georgia Power on rating watch negative.
Financing Activities
In March 2017, Georgia Power issued $450 million aggregate principal amount of Series 2017A 2.00% Senior Notes due March 30, 2020 and $400 million aggregate principal amount of Series 2017B 3.25% Senior Notes due March 30, 2027. The proceeds were used to repay a portion of Georgia Power's short-term indebtedness and for general corporate purposes, including Georgia Power's continuous construction program.
In April 2017, Georgia Power purchased and held $27 million aggregate principal amount of Development Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Vogtle Project), Fifth Series 1995. Georgia Power may reoffer these bonds to the public at a later date.
In June 2017, Georgia Power repaid at maturity $450 million aggregate principal amount of Series 2007B 5.70% Senior Notes.
In June 2017, Georgia Power entered into three floating rate bank loans in aggregate principal amounts of $50 million, $150 million, and $100 million, which mature on December 1, 2017, May 31, 2018, and June 28, 2018, respectively, and bear interest based on one-month LIBOR. Also in June 2017, Georgia Power borrowed $500 million pursuant to an uncommitted bank credit arrangement, which bears interest at a rate agreed upon by Georgia Power and the bank from time to time and is payable on no less than 30 days' demand by the bank. The proceeds from these bank loans were used to repay a portion of Georgia Power's existing indebtedness and for working capital and other general corporate purposes, including Georgia Power's continuous construction program.
In addition to any financings that may be necessary to meet capital requirements and contractual obligations, Georgia Power plans to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

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GULF POWER COMPANY

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GULF POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017

2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Retail revenues
$
318

 
$
319

 
$
596

 
$
602

Wholesale revenues, non-affiliates
12

 
15

 
30

 
31

Wholesale revenues, affiliates
10

 
15

 
47

 
36

Other revenues
17

 
16

 
34

 
31

Total operating revenues
357

 
365

 
707

 
700

Operating Expenses:
 
 
 
 
 
 
 
Fuel
88

 
107

 
196

 
201

Purchased power, non-affiliates
35

 
32

 
67

 
62

Purchased power, affiliates
9

 
4

 
11

 
5

Other operations and maintenance
87

 
77

 
171

 
155

Depreciation and amortization
35

 
42

 
53

 
80

Taxes other than income taxes
28

 
29

 
55

 
58

Loss on Plant Scherer Unit 3

 

 
33

 

Total operating expenses
282

 
291

 
586

 
561

Operating Income
75

 
74

 
121

 
139

Other Income and (Expense):
 
 
 
 
 
 
 
Interest expense, net of amounts capitalized
(13
)
 
(12
)
 
(24
)
 
(25
)
Other income (expense), net
(1
)
 
(1
)
 
(2
)
 
(2
)
Total other income and (expense)
(14
)
 
(13
)
 
(26
)
 
(27
)
Earnings Before Income Taxes
61

 
61

 
95

 
112

Income taxes
24

 
24

 
38

 
44

Net Income
37

 
37

 
57

 
68

Dividends on Preference Stock
2

 
3

 
4

 
5

Net Income After Dividends on Preference Stock
$
35

 
$
34

 
$
53

 
$
63

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Net Income
$
37

 
$
37

 
$
57

 
$
68

Other comprehensive income (loss):
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
Changes in fair value, net of tax of
$-, $(1), $(1), and $(3), respectively
(1
)
 
(1
)
 
(1
)
 
(4
)
Total other comprehensive income (loss)
(1
)
 
(1
)
 
(1
)
 
(4
)
Comprehensive Income
$
36

 
$
36

 
$
56

 
$
64

The accompanying notes as they relate to Gulf Power are an integral part of these condensed financial statements.

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GULF POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Net income
$
57

 
$
68

Adjustments to reconcile net income to net cash provided from operating activities —
 
 
 
Depreciation and amortization, total
56

 
83

Deferred income taxes
19

 
16

Loss on Plant Scherer Unit 3
33

 

Other, net
(4
)
 
(3
)
Changes in certain current assets and liabilities —
 
 
 
-Receivables
(25
)
 
(6
)
-Fossil fuel stock
4

 
34

-Other current assets
10

 
1

-Accrued taxes
7

 
17

-Accrued compensation
(17
)
 
(12
)
-Over recovered regulatory clause revenues
(19
)
 
5

-Other current liabilities
3

 
(7
)
Net cash provided from operating activities
124

 
196

Investing Activities:
 
 
 
Property additions
(97
)
 
(68
)
Cost of removal, net of salvage
(9
)
 
(4
)
Change in construction payables
(14
)
 
(7
)
Other investing activities
(3
)
 
(5
)
Net cash used for investing activities
(123
)
 
(84
)
Financing Activities:
 
 
 
Increase (decrease) in notes payable, net
(190
)
 
46

Proceeds —
 
 
 
Common stock issued to parent
175

 

Capital contributions from parent company
5

 
5

Senior notes
300

 

Redemptions —
 
 
 
Preference stock
(150
)
 

Senior notes
(85
)
 
(125
)
Payment of common stock dividends
(63
)
 
(60
)
Other financing activities
(4
)
 
(6
)
Net cash used for financing activities
(12
)
 
(140
)
Net Change in Cash and Cash Equivalents
(11
)
 
(28
)
Cash and Cash Equivalents at Beginning of Period
56

 
74

Cash and Cash Equivalents at End of Period
$
45

 
$
46

Supplemental Cash Flow Information:
 
 
 
Cash paid (received) during the period for —
 
 
 
Interest (net of $- and $- capitalized for 2017 and 2016, respectively)
$
22

 
$
28

Income taxes, net
7

 
(3
)
Noncash transactions — Accrued property additions at end of period
19

 
13

The accompanying notes as they relate to Gulf Power are an integral part of these condensed financial statements.

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GULF POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
45

 
$
56

Receivables —
 
 
 
 
Customer accounts receivable
 
77

 
72

Unbilled revenues
 
70

 
55

Under recovered regulatory clause revenues
 
26

 
17

Other accounts and notes receivable
 
11

 
6

Affiliated
 
8

 
17

Accumulated provision for uncollectible accounts
 
(1
)
 
(1
)
Fossil fuel stock
 
67

 
71

Materials and supplies
 
57

 
55

Other regulatory assets, current
 
55

 
44

Other current assets
 
17

 
30

Total current assets
 
432

 
422

Property, Plant, and Equipment:
 
 
 
 
In service
 
5,156

 
5,140

Less: Accumulated provision for depreciation
 
1,427

 
1,382

Plant in service, net of depreciation
 
3,729

 
3,758

Construction work in progress
 
59

 
51

Total property, plant, and equipment
 
3,788

 
3,809

Deferred Charges and Other Assets:
 
 
 
 
Deferred charges related to income taxes
 
57

 
58

Other regulatory assets, deferred
 
510

 
512

Other deferred charges and assets
 
22

 
21

Total deferred charges and other assets
 
589

 
591

Total Assets
 
$
4,809

 
$
4,822

The accompanying notes as they relate to Gulf Power are an integral part of these condensed financial statements.


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GULF POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholder's Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
27

 
$
87

Notes payable
 
78

 
268

Accounts payable —
 
 
 
 
Affiliated
 
52

 
59

Other
 
46

 
54

Customer deposits
 
35

 
35

Accrued taxes
 
27

 
20

Accrued interest
 
9

 
8

Accrued compensation
 
23

 
40

Deferred capacity expense, current
 
22

 
22

Other regulatory liabilities, current
 

 
16

Other current liabilities
 
43

 
40

Total current liabilities
 
362

 
649

Long-term Debt
 
1,265

 
987

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
966

 
948

Employee benefit obligations
 
92

 
96

Deferred capacity expense
 
108

 
119

Asset retirement obligations, deferred
 
125

 
120

Other cost of removal obligations
 
218

 
249

Other regulatory liabilities, deferred
 
46

 
47

Other deferred credits and liabilities
 
74

 
71

Total deferred credits and other liabilities
 
1,629

 
1,650

Total Liabilities
 
3,256

 
3,286

Preference Stock
 

 
147

Common Stockholder's Equity:
 
 
 
 
Common stock, without par value —
 
 
 
 
Authorized — 20,000,000 shares
 
 
 
 
Outstanding — June 30, 2017: 7,392,717 shares
 
 
 
 
                    — December 31, 2016: 5,642,717 shares
 
678

 
503

Paid-in capital
 
596

 
589

Retained earnings
 
280

 
296

Accumulated other comprehensive income (loss)
 
(1
)
 
1

Total common stockholder's equity
 
1,553

 
1,389

Total Liabilities and Stockholder's Equity
 
$
4,809

 
$
4,822

The accompanying notes as they relate to Gulf Power are an integral part of these condensed financial statements.

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GULF POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Gulf Power operates as a vertically integrated utility providing electric service to retail customers within its traditional service territory located in northwest Florida and to wholesale customers in the Southeast.
Many factors affect the opportunities, challenges, and risks of Gulf Power's business of providing electric service. These factors include the ability to maintain a constructive regulatory environment, to maintain and grow energy sales, and to effectively manage and secure timely recovery of costs. These costs include those related to projected long-term demand growth, stringent environmental standards, reliability, restoration following major storms, fuel, and capital expenditures. Gulf Power has various regulatory mechanisms that operate to address cost recovery. Effectively operating pursuant to these regulatory mechanisms and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge Gulf Power for the foreseeable future.
On April 4, 2017, the Florida PSC approved a settlement agreement (2017 Rate Case Settlement Agreement) among Gulf Power and three intervenors with respect to Gulf Power's request to increase retail base rates. Under the terms of the 2017 Rate Case Settlement Agreement, Gulf Power increased rates effective with the first billing cycle in July 2017 to provide an annual overall net customer impact of approximately $54.3 million. The net customer impact consists of a $62.0 million increase in annual base revenues less an annual equivalent credit of approximately $7.7 million for 2017 for certain wholesale revenues to be provided through December 2019 through the purchased power capacity cost recovery clause. In addition, Gulf Power continued its authorized retail ROE midpoint (10.25%) and range (9.25% to 11.25%), is deemed to have an equity ratio of 52.5% for all retail regulatory purposes, and implemented new dismantlement accruals effective July 1, 2017. Gulf Power will also begin amortizing the regulatory asset associated with the investment balances remaining after the retirement of Plant Smith Units 1 and 2 (357 MWs) over 15 years effective January 1, 2018 and will implement new depreciation rates effective January 1, 2018. The 2017 Rate Case Settlement Agreement also resulted in a $32.5 million write-down of Gulf Power's ownership of Plant Scherer Unit 3 (205 MWs), which was recorded in the first quarter 2017. The remaining issues related to the inclusion of Gulf Power's investment in Plant Scherer Unit 3 in retail rates have been resolved as a result of the 2017 Rate Case Settlement Agreement, including recoverability of certain costs associated with the ongoing ownership and operation of the unit through the environmental cost recovery clause rate approved by the Florida PSC in November 2016.
Gulf Power continues to focus on several key performance indicators including, but not limited to, customer satisfaction, plant availability, system reliability, and net income after dividends on preference stock.
RESULTS OF OPERATIONS
Net Income
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$1
 
2.9
 
$(10)
 
(15.9)
Gulf Power's net income after dividends on preference stock for the second quarter 2017 was $35 million compared to $34 million for the corresponding period in 2016 . Gulf Power's net income after dividends on preference stock for year-to-date 2017 was $53 million compared to $63 million for the corresponding period in 2016 . The decrease for year-to-date 2017 was primarily due to a write-down of $32.5 million ($20 million after tax) of Gulf Power's ownership of Plant Scherer Unit 3 resulting from the 2017 Rate Case Settlement Agreement and higher operations and maintenance expenses, partially offset by lower depreciation and higher wholesale revenue. See Note (B) to the

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GULF POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Condensed Financial Statements under " Regulatory Matters Gulf Power Retail Base Rate Cases " herein for additional information regarding the 2017 Rate Case Settlement Agreement.
Retail Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(1)
 
(0.3)
 
$(6)
 
(1.0)
In the second quarter 2017 , retail revenues were $318 million compared to $319 million for the corresponding period in 2016 . For year-to-date 2017 , retail revenues were $596 million compared to $602 million for the corresponding period in 2016 .
Details of the changes in retail revenues were as follows:
 
Second Quarter 2017
 
Year-to-Date 2017
 
(in millions)
 
(% change)
 
(in millions)
 
(% change)
Retail – prior year
$
319

 
 
 
$
602

 
 
Estimated change resulting from –
 
 
 
 
 
 
 
Rates and pricing
5

 
1.6

 
7

 
1.2

Sales decline
(1
)
 
(0.3
)
 
(3
)
 
(0.5
)
Weather

 

 
(6
)
 
(1.0
)
Fuel and other cost recovery
(5
)
 
(1.6
)
 
(4
)
 
(0.7
)
Retail – current year
$
318

 
(0.3
)%
 
$
596

 
(1.0
)%
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters" of Gulf Power in Item 7 and Note 1 to the financial statements of Gulf Power under "Revenues" and Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters" in Item 8 of the Form 10-K for additional information regarding Gulf Power's retail base rate case and cost recovery clauses, including Gulf Power's fuel cost recovery, purchased power capacity recovery, environmental cost recovery, and energy conservation cost recovery clauses.
Revenues associated with changes in rates and pricing increased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 primarily due to an increase in retail base revenues, as well as an increase in environmental cost recovery effective November 2016 resulting from Gulf Power's ownership of Plant Scherer Unit 3 being rededicated to retail service.
Revenues attributable to changes in sales decreased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 . Weather-adjusted KWH sales to residential and commercial customers decreased 1.2% and 1.3%, respectively, for the second quarter 2017 and 1.3% and 1.0%, respectively, for year-to-date 2017 due to lower customer usage primarily resulting from efficiency improvements in appliances and lighting, partially offset by customer growth. KWH sales to industrial customers decreased 2.7% and 5.6% for the second quarter and year-to-date 2017 , respectively, primarily due to changes in customers' operations. The year-to-date 2017 decrease also reflects increased customer co-generation.
Fuel and other cost recovery revenues decreased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 , primarily due to lower fuel, purchased power capacity, and energy conservation recoverable costs, partially offset by higher environmental recoverable costs. Fuel and other cost recovery provisions include fuel expenses, the energy component of purchased power costs, purchased power capacity costs, and the difference between projected and actual costs and revenues related to energy conservation and environmental compliance. See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters – Cost Recovery Clauses – Retail Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.

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GULF POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Wholesale Revenues – Affiliates
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(5)
 
(33.3)
 
$11
 
30.6
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since the revenue related to these energy sales generally offsets the cost of energy sold.
In the second quarter 2017 , wholesale revenues from sales to affiliates were $10 million compared to $15 million for the corresponding period in 2016 . The decrease was primarily due to a 40.6% decrease in KWH sales due to decreased generation as a result of milder weather reducing Southern Company system loads.
For year-to-date 2017 , wholesale revenues from sales to affiliates were $47 million compared to $36 million for the corresponding period in 2016 . The increase was primarily due to a 17.2% increase in KWH sales as a result of supporting Southern Company system transmission reliability and a 10.0% increase in the price of energy due to higher natural gas prices.
Fuel and Purchased Power Expenses
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
Fuel
$
(19
)
 
(17.8
)
 
$
(5
)
 
(2.5
)
Purchased power – non-affiliates
3

 
9.4

 
5

 
8.1

Purchased power – affiliates
5

 
125.0

 
6

 
120.0

Total fuel and purchased power expenses
$
(11
)
 
 
 
$
6

 
 
In the second quarter 2017 , total fuel and purchased power expenses were $132 million compared to $143 million for the corresponding period in 2016 . The decrease was primarily the result of a $21 million net decrease related to the volume of KWHs generated and purchased due to milder weather in 2017 reducing demand, partially offset by an $11 million net increase due to the higher average cost of fuel associated with purchased power.
For year-to-date 2017 , total fuel and purchased power expenses were $274 million compared to $268 million for the corresponding period in 2016 . The increase was primarily the result of a $16 million net increase related to the higher average cost of fuel and purchased power resulting from higher natural gas prices, partially offset by a $10 million net decrease related to the volume of KWHs generated and purchased due to milder weather in 2017 reducing demand.
Fuel and purchased power transactions do not have a significant impact on earnings since energy and capacity expenses are generally offset by energy and capacity revenues through Gulf Power's fuel and purchased power capacity cost recovery clauses and long-term wholesale contracts. See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters – Cost Recovery Clauses – Retail Fuel Cost Recovery" and " – Purchased Power Capacity Recovery" in Item 8 of the Form 10-K for additional information.

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Details of Gulf Power's generation and purchased power were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017
 
Year-to-Date 2016
Total generation (in millions of KWHs)
1,898
 
2,064
 
4,220
 
3,880
Total purchased power   (in millions of KWHs)
1,218
 
1,629
 
2,676
 
3,389
Sources of generation (percent)  –
 
 
 
 
 
 
 
Coal
50
 
54
 
52
 
48
Gas
50
 
46
 
48
 
52
Cost of fuel, generated (in cents per net KWH)  –
 
 
 
 
 
 
 
Coal
3.17
 
4.14
 
3.23
 
4.05
Gas
3.88
 
4.11
 
3.54
 
3.92
Average cost of fuel, generated   (in cents per net KWH)
3.53
 
4.12
 
3.38
 
3.98
Average cost of purchased power (in cents per net KWH) (*)
5.37
 
3.50
 
4.93
 
3.35
(*)
Average cost of purchased power includes fuel purchased by Gulf Power for tolling agreements where power is generated by the provider.
Fuel
In the second quarter 2017 , fuel expense was $88 million compared to $107 million for the corresponding period in 2016 . The decrease was primarily due to a 14.3% decrease in the average cost of fuel resulting from lower coal and natural gas prices and a 15.3% decrease in the volume of KWHs generated by Gulf Power's coal-fired generation resources due to milder weather reducing demand.
For year-to-date 2017 , fuel expense was $196 million compared to $201 million for the corresponding period in 2016 . The decrease was primarily due to a 15.1% decrease in the average cost of fuel resulting from lower coal and natural gas prices, partially offset by an 8.8% increase in the volume of KWHs generated by Gulf Power's coal-fired and gas-fired generation resources due to Southern Company system reliability requirements.
Purchased Power – Non-Affiliates
In the second quarter 2017 , purchased power expense from non-affiliates was $35 million compared to $32 million for the corresponding period in 2016 . The increase was primarily due to a 68.7% increase in the average cost per KWH purchased primarily resulting from higher natural gas prices, partially offset by a 37.9% decrease in the volume of KWHs purchased due to a planned outage of an external generation resource under a PPA.
For year-to-date 2017 , purchased power expense from non-affiliates was $67 million compared to $62 million for the corresponding period in 2016 . The increase was primarily due to a 50.0% increase in the average cost per KWH purchased primarily resulting from higher natural gas prices, partially offset by a 25.6% decrease in the volume of KWHs purchased due to a planned outage of an external generation resource under a PPA.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.
Purchased Power – Affiliates
In the second quarter 2017 , purchased power expense from affiliates was $9 million compared to $4 million for the corresponding period in 2016 . The increase was primarily due to a 66.1% increase in the volume of KWHs purchased due to availability of power pool resources at lower cost compared to Gulf Power generation.
For year-to-date 2017 , purchased power expense from affiliates was $11 million compared to $5 million for the corresponding period in 2016 . The increase was primarily due to a 22.9% increase in the volume of KWHs

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purchased due to availability of power pool resources at lower cost compared to Gulf Power generation and a 67.1% increase in the average cost per KWH purchased primarily resulting from increased natural gas prices.
Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.
Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$10
 
13.0
 
$16
 
10.3
In the second quarter 2017 , other operations and maintenance expenses were $87 million compared to $77 million for the corresponding period in 2016 . For year-to-date 2017 , other operations and maintenance expenses were $171 million compared to $155 million for the corresponding period in 2016 . The increases were primarily due to higher expenses at generation facilities associated with routine and planned maintenance.
Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(7)
 
(16.7)
 
$(27)
 
(33.8)
In the second quarter 2017 , depreciation and amortization was $35 million compared to $42 million for the corresponding period in 2016 . For year-to-date 2017 , depreciation and amortization was $53 million compared to $80 million for the corresponding period in 2016 . The decreases were primarily due to $8 million and $28 million more of a reduction in depreciation, as authorized in a settlement agreement approved by the Florida PSC in 2013 (2013 Rate Case Settlement Agreement), in the second quarter and year-to-date 2017 , respectively, compared to the corresponding periods in 2016 . See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters – Retail Base Rate Case" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Gulf Power Retail Base Rate Cases " herein for additional information.
FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Gulf Power's future earnings potential. The level of Gulf Power's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of Gulf Power's business of providing electric service. These factors include Gulf Power's ability to maintain a constructive regulatory environment that continues to allow for the timely recovery of prudently-incurred costs during a time of increasing costs and limited projected demand growth over the next several years. Future earnings will be driven primarily by customer growth. Earnings will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies due to changes in the minimum allowable equipment efficiencies along with the continuation of changes in customer behavior. Earnings are subject to a variety of other factors. These factors include weather, competition, energy conservation practiced by customers, the use of alternative energy sources by customers, the price of electricity, the price elasticity of demand, and the rate of economic growth or decline in Gulf Power's service territory. Demand for electricity is primarily driven by economic growth. The pace of economic growth and electricity demand may be affected by changes in regional and global economic conditions, which may impact future earnings. Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals is dependent on the final form of any legislation enacted and the related transition rules and cannot be determined at this time, but could have a material impact on Gulf Power's financial statements. For additional information relating to these issues, see RISK FACTORS in Item

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1A and MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL of Gulf Power in Item 7 of the Form 10-K.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in retail rates or through long-term wholesale agreements on a timely basis or through market-based contracts. The State of Florida has statutory provisions that allow a utility to petition the Florida PSC for recovery of prudent environmental compliance costs that are not being recovered through base rates or any other recovery mechanism. Gulf Power's current long-term wholesale agreements contain provisions that permit charging the customer with costs incurred as a result of changes in environmental laws and regulations. The full impact of any such legislative or regulatory changes cannot be determined at this time. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Further, higher costs that are recovered through regulated rates or long-term wholesale agreements could contribute to reduced demand for electricity as well as impact the cost competitiveness of wholesale capacity, which could negatively affect results of operations, cash flows, and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters," "Retail Regulatory Matters – Cost Recovery Clauses – Environmental Cost Recovery," and "Other Matters" of Gulf Power in Item 7 and Note 3 to the financial statements of Gulf Power under "Environmental Matters" in Item 8 of the Form 10-K for additional information.
Environmental Statutes and Regulations
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Gulf Power in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule and the final rule revising the regulatory definition of waters of the U.S. for all Clean Water Act (CWA) programs.
On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed to rescind the final rule that revised the regulatory definition of waters of the U.S. for all CWA programs. The final rule has been stayed since October 2015 by the U.S. Court of Appeals for the Sixth Circuit.
The ultimate outcome of these matters cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Gulf Power in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.

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FERC Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters" of Gulf Power in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' (including Gulf Power's) and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies (including Gulf Power) and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' (including Gulf Power's) and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Retail Regulatory Matters
Gulf Power's rates and charges for service to retail customers are subject to the regulatory oversight of the Florida PSC. Gulf Power's rates are a combination of base rates and several separate cost recovery clauses for specific categories of costs. These separate cost recovery clauses address such items as fuel and purchased energy costs, purchased power capacity costs, energy conservation and demand side management programs, and the costs of compliance with environmental laws and regulations. Costs not addressed through one of the specific cost recovery clauses are recovered through base rates. See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters" in Item 8 of the Form 10-K for additional information.
Retail Base Rate Cases
The 2013 Rate Case Settlement Agreement authorized Gulf Power to reduce depreciation and record a regulatory asset up to $62.5 million from January 2014 through June 2017. In any given month, such depreciation reduction could not exceed the amount necessary for the retail ROE, as reported to the Florida PSC monthly, to reach the midpoint of the authorized retail ROE range then in effect. For 2014 and 2015, Gulf Power recognized reductions in depreciation of $8.4 million and $20.1 million, respectively. No net reduction in depreciation was recorded in 2016. In the first six months of 2017 , Gulf Power recognized the remaining allowable reductions in depreciation totaling $34.0 million.
On April 4, 2017, the Florida PSC approved the 2017 Rate Case Settlement Agreement among Gulf Power and three intervenors with respect to Gulf Power's request to increase retail base rates. Under the terms of the 2017 Rate Case Settlement Agreement, Gulf Power increased rates effective with the first billing cycle in July 2017 to provide an annual overall net customer impact of approximately $54.3 million. The net customer impact consists of a $62.0 million increase in annual base revenues less an annual equivalent credit of approximately $7.7 million for 2017 for certain wholesale revenues to be provided through December 2019 through the purchased power capacity cost recovery clause. In addition, Gulf Power continued its authorized retail ROE midpoint (10.25%) and range (9.25% to 11.25%), is deemed to have an equity ratio of 52.5% for all retail regulatory purposes, and implemented new dismantlement accruals effective July 1, 2017. Gulf Power will also begin amortizing the regulatory asset associated with the investment balances remaining after the retirement of Plant Smith Units 1 and 2 over 15 years effective January 1, 2018 and will implement new depreciation rates effective January 1, 2018. The 2017 Rate Case Settlement Agreement also resulted in a $32.5 million write-down of Gulf Power's ownership of Plant Scherer Unit 3, which was recorded in the first quarter 2017. The remaining issues related to the inclusion of Gulf Power's investment in Plant Scherer Unit 3 in retail rates have been resolved as a result of the 2017 Rate Case Settlement Agreement, including recoverability of certain costs associated with the ongoing ownership and operation of the unit through the environmental cost recovery clause rate approved by the Florida PSC in November 2016.
Cost Recovery Clauses
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Retail Regulatory Matters – Cost Recovery Clauses" of Gulf Power in Item 7 and Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters – Cost Recovery Clauses" in Item 8 of the Form 10-K for additional information regarding Gulf Power's recovery of retail costs through various regulatory clauses and accounting

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orders. Gulf Power has four regulatory clauses which are approved by the Florida PSC. See Note (B) to the Condensed Financial Statements herein for additional information.
As discussed previously, the 2017 Rate Case Settlement Agreement resolved the remaining issues related to Gulf Power's inclusion of certain costs associated with the ongoing ownership and operation of Plant Scherer Unit 3 in the environmental cost recovery clause and no adjustment to the environmental cost recovery clause rate approved by the Florida PSC in November 2016 was made.
Other Matters
Gulf Power is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Gulf Power is subject to certain claims and legal actions arising in the ordinary course of business. Gulf Power's 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions , CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Gulf Power cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Gulf Power's financial statements. See Note (B) to the Condensed Financial Statements herein for a discussion of various other contingencies, regulatory matters, and other matters being litigated which may affect future earnings potential.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Gulf Power prepares its financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Gulf Power in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Gulf Power's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Gulf Power in Item 7 of the Form 10-K for a complete discussion of Gulf Power's critical accounting policies and estimates related to Utility Regulation, Asset Retirement Obligations, Pension and Other Postretirement Benefits, and Contingent Obligations.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Gulf Power expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Gulf Power's revenue, including energy provided to customers, is from tariff offerings that provide electricity without a defined contractual term, as well as longer-term contractual commitments , including PPAs . Gulf Power expect s that the revenue from contracts with these customers will not result in a significant shift in the timing of revenue recognition for such sales .

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Gulf Power's ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Gulf Power's financial statements, if material. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Gulf Power expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Gulf Power intend s to use the modified retrospective method of adoption effective January 1, 2018. Gulf Power has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Gulf Power's financial statements, Gulf Power will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Gulf Power is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Gulf Power's operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Gulf Power's financial statements.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Gulf Power in Item 7 of the Form 10-K for additional information. Gulf Power's financial condition remained stable at June 30, 2017 . Gulf Power intends to continue to monitor its access to short-term and long-term capital markets as well as bank credit agreements to meet future capital and liquidity needs. See " Capital Requirements and Contractual Obligations ," " Sources of Capital ," and " Financing Activities " herein for additional information.
Net cash provided from operating activities totaled $124 million for the first six months of 2017 compared to $196 million for the corresponding period in 2016 . The $72 million decrease in net cash was primarily due to the timing of fossil fuel stock purchases, a federal income tax refund received in 2016, as well as decreases in cash flows associated with lower cost recovery clause rates. Net cash used for investing activities totaled $123 million in the first six months of 2017 primarily due to property additions to utility plant. Net cash used for financing activities totaled $12 million for the first six months of 2017 primarily due to the payment of short-term debt, redemptions of preference stock and long-term debt, and common stock dividend payments, partially offset by proceeds from

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issuances of long-term debt and common stock. Cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 primarily reflect the financing activities described above. Other significant changes include a decrease in other cost of removal obligations, as authorized in the 2013 Settlement Agreement, and a decrease in property, plant, and equipment primarily due to the write-down of Gulf Power's ownership of Plant Scherer Unit 3. See "Financing Activities" herein and Note (B) to the Condensed Financial Statements under " Regulatory Matters Gulf Power Retail Base Rate Cases " herein for additional information.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Gulf Power in Item 7 of the Form 10-K for a description of Gulf Power's capital requirements for its construction program, including estimated capital expenditures to comply with existing environmental statutes and regulations, scheduled maturities of long-term debt, as well as related interest, leases, derivative obligations, purchase commitments, and trust funding requirements. Approximately $7 million will be required through June 30, 2018 to fund maturities of long-term debt. In addition, at June 30, 2017 , $20 million of Gulf Power's total fixed rate pollution control revenue bonds required to be remarketed over the next 12 months are classified as securities due within one year. See " Financing Activities " herein for additional information.
The construction program is subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; storm impacts; changes in environmental statutes and regulations; the outcome of any legal challenges to the environmental rules; changes in generating plants, including unit retirements and replacements and adding or changing fuel sources at existing generating units, to meet regulatory requirements; changes in the expected environmental compliance programs; changes in FERC rules and regulations; Florida PSC approvals; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered.
Sources of Capital
Gulf Power plans to obtain the funds required to meet its future capital needs from sources similar to those used in the past, which were primarily from operating cash flows, short-term debt, external security issuances, term loans, and equity contributions from Southern Company. However, the amount, type, and timing of any future financings, if needed, will depend upon regulatory approval, prevailing market conditions, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" of Gulf Power in Item 7 of the Form 10-K for additional information.
Gulf Power's current liabilities frequently exceed current assets because of the continued use of short-term debt as a funding source to meet scheduled maturities of long-term debt, as well as significant seasonal fluctuations in cash needs. Gulf Power has substantial cash flow from operating activities and access to the capital markets and financial institutions to meet short-term liquidity needs, including its commercial paper program which is supported by bank credit facilities.

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At June 30, 2017 , Gulf Power had approximately $45 million of cash and cash equivalents. Committed credit arrangements with banks at June 30, 2017 were as follows:
Expires
 
 
 
 
 
Executable Term
Loans
 
Expires Within One
Year
2017
 
2018
 
2019
 
2020
 
Total
 
Unused
 
One
Year
 
Two
Years
 
Term
Out
 
No Term
Out
(in millions)
$
30

 
$
195

 
$
25

 
$
30

 
$
280

 
$
280

 
$
45

 
$

 
$

 
$
40

See Note 6 to the financial statements of Gulf Power under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
Most of these bank credit arrangements contain covenants that limit debt levels and contain cross-acceleration provisions to other indebtedness (including guarantee obligations) of Gulf Power. Such cross-acceleration provisions to other indebtedness would trigger an event of default if Gulf Power defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2017 , Gulf Power was in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
Subject to applicable market conditions, Gulf Power expects to renew or replace its bank credit arrangements, as needed, prior to expiration. In connection therewith, Gulf Power may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
Most of the unused credit arrangements with banks are allocated to provide liquidity support to Gulf Power's pollution control revenue bonds and commercial paper program. The amount of variable rate pollution control revenue bonds outstanding requiring liquidity support as of June 30, 2017 was approximately $82 million . In addition, at June 30, 2017 , Gulf Power had approximately $140 million of fixed rate pollution control revenue bonds outstanding that were required to be remarketed within the next 12 months.
Gulf Power may also meet short-term cash needs through a Southern Company subsidiary organized to issue and sell commercial paper at the request and for the benefit of Gulf Power and the other traditional electric operating companies. Proceeds from such issuances for the benefit of Gulf Power are loaned directly to Gulf Power. The obligations of each traditional electric operating company under these arrangements are several and there is no cross-affiliate credit support. Short-term borrowings are included in notes payable in the balance sheets.
Details of short-term borrowings were as follows:
 
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
 
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Average
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Maximum
Amount
Outstanding
 
 
(in millions)
 
 
 
(in millions)
 
 
 
(in millions)
Commercial paper
 
$
78

 
1.5
%
 
$
20

 
1.4
%
 
$
78

Short-term bank debt
 

 
%
 
53

 
1.7
%
 
100

Total
 
$
78

 
1.5
%
 
$
73

 
1.6
%
 
 
(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 .
Gulf Power believes the need for working capital can be adequately met by utilizing the commercial paper program, lines of credit, short-term bank loans, and operating cash flows.

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Credit Rating Risk
At June 30, 2017 , Gulf Power did 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change to BBB- and/or Baa3 or below. These contracts are for physical electricity purchases and sales, fuel transportation and storage, transmission, and energy price risk management.
The maximum potential collateral requirements under these contracts at June 30, 2017 were as follows:
Credit Ratings
Maximum Potential
Collateral
Requirements
 
(in millions)
At BBB- and/or Baa3
$
167

Below BBB- and/or Baa3
$
570

Included in these amounts are certain agreements that could require collateral in the event that Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Gulf Power to access capital markets and would be likely to impact the cost at which it does so.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Gulf Power) from stable to negative.
Market Price Risk
Gulf Power's market risk exposure relative to interest rate changes for the second quarter and year-to-date 2017 has not changed materially compared to the December 31, 2016 reporting period. Gulf Power's exposure to market volatility in commodity fuel prices and prices of electricity with respect to its wholesale generating capacity is limited because its long-term sales agreement shifts substantially all fuel cost responsibility to the purchaser.
In connection with the 2017 Rate Case Settlement Agreement, Gulf Power recorded a $32.5 million write-down of Gulf Power's ownership of Plant Scherer Unit 3 in the first quarter 2017 to resolve the inclusion of Gulf Power's investment in Plant Scherer Unit 3 in retail rates and no adjustment to the environmental cost recovery clause rate approved by the Florida PSC in November 2016 was made. The 2017 Rate Case Settlement Agreement provides that 100% of Gulf Power's ownership of Plant Scherer Unit 3 will be included in retail rates. This resolved the market price risk concern around Gulf Power's uncontracted wholesale generating capacity related to Plant Scherer Unit 3. See FUTURE EARNINGS POTENTIAL – " Retail Regulatory Matters " herein for additional information.
The Florida PSC extended the moratorium on Gulf Power's fuel-hedging program through January 1, 2021 in connection with the 2017 Rate Case Settlement Agreement. The moratorium does not have an impact on the recovery of existing hedges entered into under the previously-approved hedging program.
For additional discussion of Gulf Power's market risks, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" of Gulf Power in Item 7 of the Form 10-K.
Financing Activities
In January 2017, Gulf Power issued 1,750,000 shares of common stock to Southern Company and realized proceeds of $175 million. The proceeds were used for general corporate purposes, including Gulf Power's continuous construction program.
In March 2017, Gulf Power extended the maturity of a $100 million short-term floating rate bank loan bearing interest based on one-month LIBOR from April 2017 to October 2017 and subsequently repaid the loan in May 2017.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

In May 2017, Gulf Power issued $300 million aggregate principal amount of Series 2017A 3.30% Senior Notes due May 30, 2027. The proceeds, together with other funds, were used to repay at maturity $85 million aggregate principal amount of Series 2007A 5.90% Senior Notes due June 15, 2017; to repay outstanding commercial paper borrowings; to repay a $100 million short-term floating rate bank loan, as discussed above; and to redeem 550,000 shares ($55 million aggregate liquidation amount) of 6.00% Series Preference Stock, 450,000 shares ($45 million aggregate liquidation amount) of Series 2007A 6.45% Preference Stock, and 500,000 shares ($50 million aggregate liquidation amount) of Series 2013A 5.60% Preference Stock.
In addition to any financings that may be necessary to meet capital requirements, contractual obligations, and storm recovery, Gulf Power plans to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

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MISSISSIPPI POWER COMPANY

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MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Retail revenues
$
222

 
$
206

 
$
422

 
$
389

Wholesale revenues, non-affiliates
62

 
60

 
124

 
120

Wholesale revenues, affiliates
15

 
7

 
20

 
16

Other revenues
4

 
4

 
9

 
8

Total operating revenues
303

 
277

 
575

 
533

Operating Expenses:
 
 
 
 
 
 
 
Fuel
102

 
81

 
180

 
157

Purchased power, non-affiliates
2

 
1

 
3

 
1

Purchased power, affiliates
4

 
4

 
11

 
9

Other operations and maintenance
70

 
68

 
144

 
136

Depreciation and amortization
41

 
45

 
81

 
84

Taxes other than income taxes
26

 
25

 
52

 
50

Estimated loss on Kemper IGCC
3,012

 
81

 
3,120

 
134

Total operating expenses
3,257

 
305

 
3,591

 
571

Operating Loss
(2,954
)
 
(28
)
 
(3,016
)
 
(38
)
Other Income and (Expense):
 
 
 
 
 
 
 
Allowance for equity funds used during construction
36

 
30

 
71

 
59

Interest expense, net of amounts capitalized
(17
)
 
(15
)
 
(37
)
 
(31
)
Other income (expense), net
1

 
(1
)
 
1

 
(3
)
Total other income and (expense)
20

 
14

 
35

 
25

Loss Before Income Taxes
(2,934
)
 
(14
)
 
(2,981
)
 
(13
)
Income taxes (benefit)
(881
)
 
(17
)
 
(908
)
 
(27
)
Net Income (Loss)
(2,053
)
 
3

 
(2,073
)
 
14

Dividends on Preferred Stock
1

 
1

 
1

 
1

Net Income (Loss) After Dividends on Preferred Stock
$
(2,054
)
 
$
2

 
$
(2,074
)
 
$
13

CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Net Income (Loss)
$
(2,053
)
 
$
3

 
$
(2,073
)
 
$
14

Other comprehensive income (loss)

 

 

 

Qualifying hedges:
 
 
 
 
 
 
 
Changes in fair value, net of tax of $-, $-, $-, and $-, respectively

 

 
1

 

Total other comprehensive income (loss)

 

 
1

 

Comprehensive Income (Loss)
$
(2,053
)
 
$
3

 
$
(2,072
)
 
$
14

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

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MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Net income (loss)
$
(2,073
)
 
$
14

Adjustments to reconcile net income (loss) to net cash provided from operating activities —
 
 
 
Depreciation and amortization, total
94

 
82

Deferred income taxes
(860
)
 
(16
)
Allowance for equity funds used during construction
(71
)
 
(59
)
Estimated loss on Kemper IGCC
3,120

 
134

Other, net
(11
)
 
(8
)
Changes in certain current assets and liabilities —
 
 
 
-Receivables
(15
)
 
15

-Fossil fuel stock
21

 
6

-Other current assets
(10
)
 
31

-Accounts payable
(20
)
 
(12
)
-Accrued taxes

 
20

-Accrued compensation
(17
)
 
(12
)
-Over recovered regulatory clause revenues
(30
)
 
4

-Customer liability associated with Kemper refunds

 
(69
)
-Other current liabilities
7

 
7

Net cash provided from operating activities
135

 
137

Investing Activities:
 
 
 
Property additions
(337
)
 
(403
)
Construction payables
(19
)
 
(11
)
Government grant proceeds

 
137

Other investing activities
(5
)
 
(19
)
Net cash used for investing activities
(361
)
 
(296
)
Financing Activities:
 
 
 
Decrease in notes payable, net
(10
)
 

Proceeds —
 
 
 
Capital contributions from parent company
1,001

 
226

Long-term debt to parent company
40

 
200

Other long-term debt

 
900

Short-term borrowings
4

 

Redemptions —
 
 
 
Short-term borrowings

 
(475
)
Long-term debt to parent company
(591
)
 
(225
)
Other long-term debt
(300
)
 
(425
)
Other financing activities
(2
)
 
(3
)
Net cash provided from financing activities
142

 
198

Net Change in Cash and Cash Equivalents
(84
)
 
39

Cash and Cash Equivalents at Beginning of Period
224

 
98

Cash and Cash Equivalents at End of Period
$
140

 
$
137

Supplemental Cash Flow Information:
 
 
 
Cash paid (received) during the period for —
 
 
 
Interest (paid $53 and $49, net of $27 and $23 capitalized for 2017
and 2016, respectively)
$
26

 
$
26

Income taxes, net
(93
)
 
(122
)
Noncash transactions — Accrued property additions at end of period
59

 
94

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

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MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
140

 
$
224

Receivables —
 
 
 
 
Customer accounts receivable
 
33

 
29

Unbilled revenues
 
42

 
42

Income taxes receivable, current
 
544

 
544

Other accounts and notes receivable
 
25

 
14

Affiliated
 
20

 
15

Fossil fuel stock
 
20

 
100

Materials and supplies
 
44

 
76

Other regulatory assets, current
 
114

 
115

Other current assets
 
2

 
8

Total current assets
 
984

 
1,167

Property, Plant, and Equipment:
 
 
 
 
In service
 
4,826

 
4,865

Less: Accumulated provision for depreciation
 
1,283

 
1,289

Plant in service, net of depreciation
 
3,543

 
3,576

Construction work in progress
 
56

 
2,545

Total property, plant, and equipment
 
3,599

 
6,121

Other Property and Investments
 
22

 
12

Deferred Charges and Other Assets:
 
 
 
 
Deferred charges related to income taxes
 
61

 
361

Other regulatory assets, deferred
 
441

 
518

Accumulated deferred income taxes
 
404

 

Other deferred charges and assets
 
20

 
56

Total deferred charges and other assets
 
926

 
935

Total Assets
 
$
5,531

 
$
8,235

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.


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MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholder's Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year —
 
 
 
 
Parent
 
$

 
$
551

Other
 
1,028

 
78

Notes payable
 
17

 
23

Accounts payable —
 
 
 
 
Affiliated
 
54

 
62

Other
 
109

 
135

Customer deposits
 
16

 
16

Accrued taxes
 
97

 
99

Unrecognized tax benefits
 
385

 
383

Accrued interest
 
52

 
46

Accrued compensation
 
25

 
42

Asset retirement obligations, current
 
21

 
32

Over recovered regulatory clause liabilities
 
21

 
51

Other current liabilities
 
89

 
20

Total current liabilities
 
1,914

 
1,538

Long-term Debt
 
1,169

 
2,424

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 

 
756

Employee benefit obligations
 
111

 
115

Asset retirement obligations, deferred
 
149

 
146

Other cost of removal obligations
 
173

 
170

Other regulatory liabilities, deferred
 
80

 
84

Other deferred credits and liabilities
 
29

 
26

Total deferred credits and other liabilities
 
542

 
1,297

Total Liabilities
 
3,625

 
5,259

Redeemable Preferred Stock
 
33

 
33

Common Stockholder's Equity:
 
 
 
 
Common stock, without par value —
 
 
 
 
Authorized — 1,130,000 shares
 
 
 
 
Outstanding — 1,121,000 shares
 
38

 
38

Paid-in capital
 
4,527

 
3,525

Accumulated deficit
 
(2,689
)
 
(616
)
Accumulated other comprehensive loss
 
(3
)
 
(4
)
Total common stockholder's equity
 
1,873

 
2,943

Total Liabilities and Stockholder's Equity
 
$
5,531

 
$
8,235

The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

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MISSISSIPPI POWER COMPANY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Mississippi Power operates as a vertically integrated utility providing electric service to retail customers within its traditional service territory located within the State of Mississippi and to wholesale customers in the Southeast.
Many factors affect the opportunities, challenges, and risks of Mississippi Power's business of providing electric service. These factors include Mississippi Power's ability to maintain and grow energy sales and to operate in a constructive regulatory environment that provides timely recovery of prudently-incurred costs. These costs include those related to the Kemper County energy facility, projected long-term demand growth, reliability, fuel, and stringent environmental standards, as well as ongoing capital expenditures required for maintenance and restoration following major storms. Appropriately balancing required costs and capital expenditures with customer prices will continue to challenge Mississippi Power for the foreseeable future.
The Kemper IGCC was approved by the Mississippi PSC in the 2010 CPCN proceedings, subject to a construction cost cap of $2.88 billion, net of $245 million of grants awarded to the project by the DOE under the Clean Coal Power Initiative Round 2 (Initial DOE Grants) and excluding the cost of the lignite mine and equipment, the cost of the CO 2 pipeline facilities, AFUDC, and certain general exceptions, including change of law, force majeure, and beneficial capital (which exists when Mississippi Power demonstrates that the purpose and effect of the construction cost increase is to produce efficiencies that will result in a neutral or favorable effect on customers relative to the original proposal for the CPCN) (Cost Cap Exceptions). The combined cycle and associated common facilities portion of the Kemper IGCC were placed in service in August 2014.
In December 2015, the Mississippi PSC issued an order (In-Service Asset Rate Order), based on a stipulation (2015 Stipulation) between Mississippi Power and the Mississippi Public Utilities Staff (MPUS), authorizing rates that provide for the recovery of approximately $126 million annually related to the combined cycle and associated common facilities portion of Kemper IGCC assets previously placed in service. As required by the In-Service Asset Rate Order, on June 5, 2017, Mississippi Power made a rate filing requesting to adjust the amortization schedules of the regulatory assets reviewed and determined prudent in a manner that would not change customer rates or annual revenues. On June 28, 2017, the Mississippi PSC suspended this filing. On July 6, 2017, the Mississippi PSC issued an order requiring Mississippi Power to establish a regulatory liability account to maintain current rates related to the Kemper IGCC following the July 2017 completion of the amortization period for certain regulatory assets approved in the In-Service Asset Rate Order that would allow for subsequent refund if the Mississippi PSC deems the rates unjust and unreasonable.
The remainder of the plant includes the gasifiers and the gas clean-up facilities. The initial production of syngas began on July 14, 2016 for gasifier "B" and on September 13, 2016 for gasifier "A." Mississippi Power achieved integrated operation of both gasifiers on January 29, 2017, including the production of electricity from syngas in both combustion turbines. During testing, the plant produced and captured CO 2 , and produced sulfuric acid and ammonia, each of acceptable quality under the related off-take agreements. However, Mississippi Power experienced numerous challenges during the extended start-up process to achieve integrated operation of the gasifiers on a sustained basis. Most recently, in May 2017, after achieving these milestones, Mississippi Power determined that a critical system component, the syngas coolers, would need replacement sooner than originally planned, which would require significant lead time and significant cost. In addition, the long-term natural gas price forecast has decreased significantly and the estimated cost of operating and maintaining the facility during the first five full years of operations increased significantly since certification.
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC (Kemper Settlement Order). The Kemper Settlement Order established a new docket for the purposes of pursuing a global settlement of costs of the Kemper IGCC (Kemper IGCC Settlement Docket). The Mississippi PSC requested any such proposed settlement agreement reflect: (i) at a minimum, no rate increase to Mississippi Power customers (with a rate reduction focused on residential customers encouraged); (ii) removal of all cost risk to customers associated with the Kemper IGCC gasifier and related assets; and (iii) modification or amendment of the CPCN for the Kemper IGCC to allow only for ownership and operation of a natural gas facility. The Kemper Settlement Order provides that any related settlement agreement be filed within 45 days from the effective date of the Kemper Settlement Order. If a settlement agreement is filed, a hearing will be set 45 days from the date of the settlement's filing, and the appropriate scheduling order will be established.
Although the ability to achieve a negotiated settlement is uncertain, Mississippi Power intends to pursue any available settlement alternatives. In addition, the Kemper Settlement Order provides that, in the event a settlement agreement is not reached, the Mississippi PSC reserves its right to take any appropriate steps, including issuing an order to show cause as to why the CPCN for the Kemper IGCC should not be revoked.
On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.
At the time of project suspension, the total cost estimate for the Kemper IGCC was approximately $7.38 billion, including approximately $5.95 billion of costs subject to the construction cost cap, and was net of the $137 million in additional grants from the DOE received on April 8, 2016 (Additional DOE Grants). Mississippi Power recorded pre-tax charges to income for revisions to the cost estimate subject to the construction cost cap totaling $196 million ($121 million after tax) in the second quarter through May 31, 2017 and a total of $305 million ($188 million after tax) for year-to-date through May 31, 2017. In the aggregate, Mississippi Power incurred charges of $3.07 billion ($1.89 billion after tax) as a result of changes in the cost estimate above the cost cap for the Kemper IGCC through May 31, 2017. The May 31, 2017 cost estimate included approximately $175 million of estimated costs to be incurred beyond the then-estimated in-service date of June 30, 2017 that were expected to be subject to the $2.88 billion cost cap.
At June 30, 2017, approximately $3.3 billion in actual Kemper IGCC costs were not reflected in Mississippi Power's retail and wholesale rates, of which $0.5 billion was related to the combined cycle and associated facilities and $2.8 billion was related to the gasification portions of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ($2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
Total pre-tax charges to income for the estimated probable losses on the Kemper IGCC were $3.0 billion ($2.1 billion after tax) for the second quarter 2017 and $3.1 billion ($2.2 billion after tax) for the six months ended June 30, 2017. In the aggregate, since the Kemper IGCC project started, Mississippi Power has incurred charges of $6.0 billion ($3.9 billion after tax) through June 30, 2017.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was

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FINANCIAL CONDITION AND RESULTS OF OPERATIONS

previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
For additional information on the Kemper IGCC, including information on the project economic viability analysis, pending lawsuits, and an ongoing SEC investigation, see Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle " and "Other Matters" and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein.
In June 2017, Southern Company made equity contributions totaling $1.0 billion to Mississippi Power. Mississippi Power used a portion of the proceeds to (i) prepay $300 million of the outstanding principal amount under its $1.2 billion unsecured term loan; (ii) repay $591 million of the outstanding principal amount of promissory notes to Southern Company; and (iii) repay $10 million of the outstanding principal amount of bank loans.
Mississippi Power's financial statement presentation contemplates continuation of Mississippi Power as a going concern as a result of Southern Company's anticipated ongoing financial support of Mississippi Power. For additional information, see Notes 1 and 6 to the financial statements of Mississippi Power under "Recently Issued Accounting Standards" and "Going Concern," respectively, in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under "Going Concern" herein.
In addition to the rate recovery of the Kemper County energy facility, Mississippi Power continues to focus on several key performance indicators. In recognition that Mississippi Power's long-term financial success is dependent upon how well it satisfies its customers' needs, Mississippi Power's retail base rate mechanism, PEP, includes performance indicators that directly tie customer service indicators to Mississippi Power's allowed ROE. Mississippi Power also focuses on broader measures of customer satisfaction, plant availability, system reliability, and net income after dividends on preferred stock.
RESULTS OF OPERATIONS
Net Income (Loss)
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(2,056)
 
N/M
 
$(2,087)
 
N/M
N/M - Not meaningful
In the second quarter and year-to-date 2017, Mississippi Power's net loss after dividends on preferred stock was $2.05 billion and $2.07 billion , respectively, compared to net income of $2 million and $13 million , respectively, for the corresponding periods in 2016 . In the second quarter and year-to-date 2017, the decrease in net income was related to higher pre-tax charges associated with the Kemper IGCC of $3.0 billion ($2.1 billion after tax) and $3.1 billion ($2.2 billion after tax), respectively, compared to pre-tax charges of $81 million ($50 million after tax) and $134 million ($83 million after tax), respectively, for the corresponding periods in 2016. The changes in net income were partially offset by a decrease in depreciation and amortization and increases in retail revenues, AFUDC equity, and income tax benefits.
See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Retail Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$16
 
7.8
 
$33
 
8.5
In the second quarter 2017 , retail revenues were $222 million compared to $206 million for the corresponding period in 2016 . For year-to-date 2017 , retail revenues were $422 million compared to $389 million for the corresponding period in 2016 .
Details of the changes in retail revenues were as follows:
 
Second Quarter 2017
 
Year-to-Date 2017
 
(in millions)
 
(% change)
 
(in millions)
 
(% change)
Retail – prior year
$
206

 
 
 
$
389

 
 
Estimated change resulting from –
 
 
 
 
 
 
 
Rates and pricing
8

 
3.9

 
19

 
4.9

Sales growth (decline)
(2
)
 
(0.9
)
 
3

 
0.8

Weather
(2
)
 
(1.0
)
 
(7
)
 
(1.8
)
Fuel and other cost recovery
12

 
5.8

 
18

 
4.6

Retail – current year
$
222

 
7.8
 %
 
$
422

 
8.5
 %
Revenues associated with changes in rates and pricing increased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 primarily due to an ECO Plan rate increase implemented in the third quarter 2016, partially offset by an ECO Plan rate decrease implemented in the second quarter 2017.
Revenues attributable to changes in sales decreased for the second quarter 2017 when compared to the corresponding period in 2016 . Weather-adjusted KWH sales to residential customers decreased 2.7% due to lower customer usage. Weather-adjusted KWH sales to commercial customers decreased 0.8% due to lower customer usage, offset by customer growth. KWH sales to industrial customers decreased 1.3% primarily due to an unplanned outage by a large customer in 2017 and a decrease in the number of mid-size customers.
Revenues attributable to changes in sales increased for year-to-date 2017 when compared to the corresponding period in 2016 . Weather-adjusted KWH sales to residential and commercial customers decreased 0.7% and 0.5%, respectively, due to lower customer usage. KWH sales to industrial customers decreased 0.4% primarily due to an unplanned outage by a larger customer in 2017 and a decrease in the number of mid-size customers.
Fuel and other cost recovery revenues increased in the second quarter and year-to-date 2017 when compared to the corresponding periods in 2016 , primarily as a result of higher recoverable fuel costs. See " Fuel and Purchased Power Expenses " herein for additional information. Recoverable fuel costs include fuel and purchased power expenses reduced by the fuel portion of wholesale revenues from energy sold to customers outside Mississippi Power's service territory. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of purchased power costs, and do not affect net income.
Wholesale Revenues – Non-Affiliates
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$2
 
3.3
 
$4
 
3.3
Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Mississippi Power's and the Southern Company system's generation, demand for

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energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and municipalities located in southeastern Mississippi under cost-based electric tariffs which are subject to regulation by the FERC. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "FERC Matters" of Mississippi Power in Item 7 of the Form 10-K and – FUTURE EARNINGS POTENTIAL – "FERC Matters" herein for additional information.
In the second quarter and year-to-date 2017, wholesale revenues from sales to non-affiliates were $62 million and $124 million , respectively, compared to $60 million and $120 million for the corresponding periods in 2016 . The increases were due to increases in energy revenues of $4 million and $5 million in the second quarter and year-to-date 2017, respectively, primarily resulting from higher fuel prices, partially offset by decreases in base and capacity revenues of $2 million and $1 million, respectively, primarily due to milder weather resulting in lower sales.
Wholesale Revenues – Affiliates
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$8
 
N/M
 
$4
 
25.0
N/M - Not meaningful
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost.
In the second quarter 2017 , wholesale revenues from sales to affiliates were $15 million compared to $7 million for the corresponding period in 2016 . The increase was due to a $6 million increase in KWH sales and a $2 million increase primarily due to higher natural gas prices.
For year-to-date 2017 , wholesale revenues from sales to affiliates were $20 million compared to $16 million for the corresponding period in 2016 . The increase was primarily due to higher natural gas prices.
Fuel and Purchased Power Expenses
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
Fuel
$
21

 
25.9
 
$
23

 
14.6
Purchased power – non-affiliates
1

 
100.0
 
2

 
200.0
Purchased power – affiliates

 
 
2

 
22.2
Total fuel and purchased power expenses
$
22

 
 
 
$
27

 
 
In the second quarter 2017 , total fuel and purchased power expenses were $108 million compared to $86 million for the corresponding period in 2016 . The increase was due to a $17 million increase in natural gas prices and a $5 million increase in the volume of KWHs generated and purchased.
For year-to-date 2017 , total fuel and purchased power expenses were $194 million compared to $167 million for the corresponding period in 2016 . The increase was due to a $34 million increase in natural gas prices, partially offset by a $7 million decrease in the volume of KWHs generated and purchased.

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Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clause.
Details of Mississippi Power's generation and purchased power were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017
 
Year-to-Date 2016
Total generation (in millions of KWHs)
3,927
 
3,728
 
7,088
 
7,315
Total purchased power (in millions of KWHs) (*)
121
 
188
 
362
 
449
Sources of generation (percent)  –
 
 
 
 
 
 
 
Coal
7
 
5
 
8
 
8
Gas
93
 
95
 
92
 
92
Cost of fuel, generated (in cents per net KWH)  
 
 
 
 
 
 
 
Coal
3.61
 
5.49
 
3.46
 
4.16
Gas
2.73
 
2.17
 
2.69
 
2.16
Average cost of fuel, generated (in cents per net KWH)
2.79
 
2.33
 
2.76
 
2.32
Average cost of purchased power (in cents per net KWH) (*)
4.74
 
2.55
 
3.80
 
2.33
(*)
Includes energy produced during the test period for the Kemper IGCC, which is accounted for in accordance with FERC guidance.
Fuel
In the second quarter 2017 , total fuel expense was $102 million compared to $81 million for the corresponding period in 2016 . The increase was due to a 20% increase in the average cost of fuel per KWH generated, primarily due to a 26% higher cost of natural gas, and a 6% increase in the volume of KWHs generated.
For year-to-date 2017 , total fuel expense was $180 million compared to $157 million for the corresponding period in 2016 . The increase was due to a 19% increase in the average cost of fuel per KWH generated primarily due to a 25% higher cost of natural gas, partially offset by a 3% decrease in the volume of KWHs generated.
Purchased Power
Energy purchases will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's service territory, and the availability of the Southern Company system's generation. Energy purchases from affiliates are made in accordance with the IIC, as approved by the FERC.
Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$2
 
2.9
 
$8
 
5.9
For year-to-date 2017 , other operations and maintenance expenses were $144 million compared to $136 million for the corresponding period in 2016 . The increase was primarily associated with the Kemper IGCC in-service assets.
See FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle Rate Recovery of Kemper IGCC Costs 2015 Rate Case " herein for additional information.

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Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(4)
 
(8.9)
 
$(3)
 
(3.6)
In the second quarter 2017 , depreciation and amortization was $41 million compared to $45 million for the corresponding period in 2016 . For year-to-date 2017 , depreciation and amortization was $81 million compared to $84 million for the corresponding period in 2016 . The decreases were primarily related to changes in amortization and deferrals associated with regulatory assets.
See Note 1 to the financial statements of Mississippi Power under "Depreciation, Depletion, and Amortization" in Item 8 of the Form 10-K.
Estimated Loss on Kemper IGCC
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$2,931
 
N/M
 
$2,986
 
N/M
N/M - Not meaningful
Prior to the project suspension on June 28, 2017, estimated probable losses on the Kemper IGCC totaled $196 million and $305 million in the second quarter and year-to-date 2017 , respectively, compared to $81 million and $134 million in the second quarter and year-to-date 2016 , respectively. These losses reflected revisions of estimated costs expected to be incurred on the construction of the Kemper IGCC prior to project suspension in excess of the $2.88 billion cost cap established by the Mississippi PSC, net of the Initial DOE Grants and excluding the Cost Cap Exceptions.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion, which includes estimated costs associated with the gasification portions of the plant and lignite mine.
See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle " and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.
Allowance for Equity Funds Used During Construction
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$6
 
20.0
 
$12
 
20.3
In the second quarter 2017 , AFUDC equity was $36 million compared to $30 million for the corresponding period in 2016 . For year-to-date 2017 , AFUDC equity was $71 million compared to $59 million for the corresponding period in 2016 . The increases resulted from a higher AFUDC rate and an increase in Kemper IGCC CWIP subject to AFUDC prior to project suspension.
See Note 3 to the financial statements of Mississippi Power under "FERC Matters" and "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated

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Coal Gasification Combined Cycle " and Note (B) to the Condensed Financial Statements under " FERC Matters " and " Integrated Coal Gasification Combined Cycle " herein for additional information regarding the Kemper IGCC.
Interest Expense, Net of Amounts Capitalized
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$2
 
13.3
 
$6
 
19.4
In the second quarter 2017 , interest expense, net of amounts capitalized was $17 million compared to $15 million , for the corresponding period in 2016 . For year-to-date 2017 , interest expense, net of amounts capitalized was $37 million compared to $31 million for the corresponding period in 2016 . The increases were primarily associated with the Kemper IGCC in-service assets.
See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.
Income Taxes (Benefit)
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(864)
 
N/M
 
$(881)
 
N/M
N/M - Not meaningful
In the second quarter 2017 , income tax benefit was $881 million compared to $17 million for the corresponding period in 2016 . For year-to-date 2017 , income tax benefit was $908 million compared to $27 million for the corresponding period in 2016 . The changes were primarily due to the estimated probable losses on the Kemper IGCC, net of the non-deductible AFUDC equity portion and the related state valuation allowances.
See Note (G) to the Condensed Financial Statements herein for additional information.
FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Mississippi Power's future earnings potential. The level of Mississippi Power's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of Mississippi Power's business of providing electric service. These factors include Mississippi Power's ability to recover its prudently-incurred costs, including those related to the remainder of the Kemper County energy facility not included in current rates, in a timely manner during a time of increasing costs and its ability to prevail against legal challenges associated with the Kemper County energy facility. Future earnings will be driven primarily by customer growth. Earnings will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies and increasing volumes of electronic commerce transactions. Earnings are subject to a variety of other factors. These factors include weather, competition, developing new and maintaining existing energy contracts and associated load requirements with other utilities and other wholesale customers, energy conservation practiced by customers, the use of alternative energy sources by customers, the price of electricity, the price elasticity of demand, and the rate of economic growth or decline in Mississippi Power's service territory. Demand for electricity is primarily driven by economic growth. The pace of economic growth and electricity demand may be affected by changes in regional and global economic conditions, which may impact future earnings.
Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals is dependent on the final form of any legislation enacted and the related

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transition rules and cannot be determined at this time, but could have a material impact on Mississippi Power's financial statements.
For additional information relating to these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL of Mississippi Power in Item 7 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in rates on a timely basis or through long-term wholesale agreements. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Further, higher costs that are recovered through regulated rates could contribute to reduced demand for electricity, which could negatively affect results of operations, cash flows, and financial condition. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" of Mississippi Power in Item 7 and Note 3 to the financial statements of Mississippi Power under "Environmental Matters" in Item 8 of the Form 10-K for additional information.
Environmental Statutes and Regulations
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Mississippi Power in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule and the final rule revising the regulatory definition of waters of the U.S. for all Clean Water Act (CWA) programs.
On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
On June 27, 2017, the EPA and the U.S. Army Corps of Engineers proposed to rescind the final rule that revised the regulatory definition of waters of the U.S. for all CWA programs. The final rule has been stayed since October 2015 by the U.S. Court of Appeals for the Sixth Circuit.
The ultimate outcome of these matters cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Mississippi Power in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.

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FERC Matters
Municipal and Rural Associations Tariff
See Note 3 to the financial statements of Mississippi Power under "FERC Matters" in Item 8 of the Form 10-K for additional information regarding a settlement agreement entered into by Mississippi Power regarding the establishment of a regulatory asset for Kemper IGCC-related costs. See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for information regarding the Kemper IGCC.
In March 2016, Mississippi Power reached a settlement agreement with its wholesale customers, which was subsequently approved by the FERC, for an increase in wholesale base revenues under the MRA cost-based electric tariff, primarily as a result of placing scrubbers for Plant Daniel Units 1 and 2 in service in 2015. The settlement agreement became effective for services rendered beginning May 1, 2016, resulting in an estimated annual revenue increase of $7 million under the MRA cost-based electric tariff. Additionally, under the settlement agreement, the tariff customers agreed to similar regulatory treatment for MRA tariff ratemaking as the treatment approved for retail ratemaking under the In-Service Asset Rate Order. This regulatory treatment primarily includes (i) recovery of the Kemper IGCC assets currently operational and providing service to customers and other related costs, (ii) amortization of the Kemper IGCC-related regulatory assets included in rates under the settlement agreement over the 36 months ending April 30, 2019, (iii) Kemper IGCC-related expenses included in rates under the settlement agreement no longer being deferred and charged to expense, and (iv) removing all of the Kemper IGCC CWIP from rate base with a corresponding increase in accrual of AFUDC. The additional resulting AFUDC totaled approximately $22 million through the suspension of Kemper IGCC start-up activities.
See Note (B) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle " herein for additional information.
Fuel Cost Recovery
Mississippi Power has a wholesale MRA and a Market Based (MB) fuel cost recovery factor. At June 30, 2017, the amount of over-recovered wholesale MRA fuel costs included in the balance sheets was $7 million compared to $13 million at December 31, 2016. Over-recovered wholesale MB fuel costs included in the balance sheets were immaterial at June 30, 2017 and December 31, 2016.
See Note 3 to the financial statements of Mississippi Power under "FERC Matters – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.
Market-Based Rate Authority
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters Market-Based Rate Authority" of Mississippi Power in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' (including Mississippi Power's) and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies (including Mississippi Power) and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' (including Mississippi Power's) and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Retail Regulatory Matters
Mississippi Power's rates and charges for service to retail customers are subject to the regulatory oversight of the Mississippi PSC. Mississippi Power's rates are a combination of base rates and several separate cost recovery

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clauses for specific categories of costs. These separate cost recovery clauses address such items as fuel and purchased power, energy efficiency programs, ad valorem taxes, property damage, and the costs of compliance with environmental laws and regulations. Costs not addressed through one of the specific cost recovery clauses are recovered through Mississippi Power's base rates. See Note 3 to the financial statements of Mississippi Power under "Retail Regulatory Matters" and "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Mississippi Power " and " Integrated Coal Gasification Combined Cycle " herein for additional information.
Renewables
Mississippi Power placed in service two solar projects in January 2017 and June 2017. A third solar project is expected to be placed in service in the third quarter 2017. Mississippi Power may retire the renewable energy credits (REC) generated on behalf of its customers or sell the RECs, separately or bundled with energy, to third parties.
On June 9, 2017, Mississippi Power submitted a CPCN to the Mississippi PSC for the approval of construction, operation, and maintenance of a 52.5-MW solar energy generating facility, which, if approved, is expected to be placed in service by January 2020. The ultimate outcome of this matter cannot be determined at this time.
Performance Evaluation Plan
On March 15, 2017, Mississippi Power submitted its annual PEP lookback filing for 2016, which reflected the need for a $5 million surcharge to be recovered from customers. The filing has been suspended for review by the Mississippi PSC. The ultimate outcome of this matter cannot be determined at this time.
Energy Efficiency
On July 6, 2017, the Mississippi PSC issued an order approving Mississippi Power's Energy Efficiency Cost Rider compliance filing, which increased annual retail revenues by approximately $2 million effective with the first billing cycle for August 2017.
Environmental Compliance Overview Plan
On May 4, 2017, the Mississippi PSC approved Mississippi Power's ECO Plan filing for 2017, which requested the maximum 2% annual increase in revenues, approximately $18 million, primarily related to the Plant Daniel Units 1 and 2 scrubbers placed in service in 2015. The rates became effective with the first billing cycle for June 2017. Approximately $26 million of related revenue requirements in excess of the 2% maximum was deferred for inclusion in the 2018 filing.
Fuel Cost Recovery
At June 30, 2017 , the amount of over-recovered retail fuel costs included on the condensed balance sheet was $14 million compared to $37 million at December 31, 2016.
Ad Valorem Tax Adjustment
On July 6, 2017, the Mississippi PSC approved Mississippi Power's annual ad valorem tax adjustment factor filing for 2017, which included an annual rate increase of 0.85%, or $8 million in annual retail revenues, primarily due to increased assessments.
Integrated Coal Gasification Combined Cycle
See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K for information regarding Mississippi Power's construction of the Kemper IGCC.
Kemper IGCC Overview
The Kemper IGCC was designed to utilize IGCC technology with an expected output capacity of 582 MWs and to be fueled by locally mined lignite (an abundant, lower heating value coal) from a mine owned by Mississippi Power

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and situated adjacent to the Kemper IGCC. The mine, operated by North American Coal Corporation, started commercial operation in 2013. In connection with the Kemper IGCC, Mississippi Power constructed approximately 61 miles of CO 2 pipeline infrastructure for the transport of captured CO 2 for use in enhanced oil recovery.
Kemper IGCC Schedule and Cost Estimate
In 2012, the Mississippi PSC issued the 2012 MPSC CPCN Order, a detailed order confirming the CPCN originally approved by the Mississippi PSC in 2010 authorizing the acquisition, construction, and operation of the Kemper IGCC. The certificated cost estimate of the Kemper IGCC included in the 2012 MPSC CPCN Order was $2.4 billion , net of $245 million of Initial DOE Grants and excluding the cost of the lignite mine and equipment, the cost of the CO 2 pipeline facilities, and AFUDC related to the Kemper IGCC. The 2012 MPSC CPCN Order approved a construction cost cap of up to $2.88 billion , with recovery of prudently-incurred costs subject to approval by the Mississippi PSC. The Kemper IGCC was originally projected to be placed in service in May 2014. Mississippi Power placed the combined cycle and the associated common facilities portion of the Kemper IGCC in service in August 2014. The remainder of the plant includes the gasifiers and the gas clean-up facilities. The initial production of syngas began on July 14, 2016 for gasifier "B" and on September 13, 2016 for gasifier "A." Mississippi Power achieved integrated operation of both gasifiers on January 29, 2017, including the production of electricity from syngas in both combustion turbines. During testing, the plant produced and captured CO 2 , and produced sulfuric acid and ammonia, each of acceptable quality under the related off-take agreements. However, Mississippi Power experienced numerous challenges during the extended start-up process to achieve integrated operation of the gasifiers on a sustained basis. Most recently, in May 2017, after achieving these milestones, Mississippi Power determined that a critical system component, the syngas coolers, would need replacement sooner than originally planned, which would require significant lead time and significant cost. In addition, the long-term natural gas price forecast has decreased significantly and the estimated cost of operating and maintaining the facility during the first five full years of operations increased significantly since certification.
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC. On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.

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Mississippi Power's Kemper IGCC 2010 project estimate, cost estimate at the time of project suspension (which includes the impacts of the Mississippi Supreme Court's (Court) decision discussed herein under " Rate Recovery of Kemper IGCC Costs 2013 MPSC Rate Order "), and actual costs incurred as of June 30, 2017 , all of which include 100% of the costs for the Kemper IGCC, are as follows:
Cost Category
2010 Project Estimate (a)
 
Cost Estimate
at
Suspension (b)
 
June 30, 2017
Actual Costs
 
(in billions)
Plant Subject to Cost Cap (c)(e)
$
2.40

 
$
5.95

 
$
5.68

Lignite Mine and Equipment
0.21

 
0.23

 
0.23

CO 2  Pipeline Facilities
0.14

 
0.11

 
0.11

AFUDC (d)
0.17

 
0.85

 
0.85

Combined Cycle and Related Assets Placed in
Service – Incremental
(e)

 
0.05

 
0.05

General Exceptions
0.05

 
0.10

 
0.08

Deferred Costs (e)

 
0.23

 
0.23

Additional DOE Grants

 
(0.14
)
 
(0.14
)
Total Kemper IGCC
$
2.97

 
$
7.38

 
$
7.09

(a)
Represents the certificated cost estimate adjusted to include the certificated estimate for the CO 2 pipeline facilities approved in 2011 by the Mississippi PSC, as well as the lignite mine and equipment, AFUDC, and general exceptions.
(b)
Represents actual costs through June 30, 2017 and projected costs at the time of project suspension, including estimated post-in-service costs which were expected to be subject to the cost cap.
(c)
The 2012 MPSC CPCN Order approved a construction cost cap of up to $2.88 billion , net of the Initial DOE Grants and excluding the Cost Cap Exceptions. The Cost Estimate at Suspension and the Actual Costs include non-incremental operating and maintenance costs related to the combined cycle and associated common facilities placed in service in August 2014 that are subject to the $2.88 billion cost cap and exclude post-in-service costs for the lignite mine. See " Rate Recovery of Kemper IGCC Costs 2013 MPSC Rate Order " herein for additional information.
(d)
Mississippi Power's 2010 Project Estimate included recovery of financing costs during construction rather than the accrual of AFUDC. This approach was not approved by the Mississippi PSC as described in " Rate Recovery of Kemper IGCC Costs 2013 MPSC Rate Order ." The Cost Estimate at Suspension also reflects the impact of a settlement agreement with the wholesale customers for cost-based rates under FERC's jurisdiction. See " FERC Matters " herein for additional information.
(e)
Non-capital Kemper IGCC-related costs incurred during construction were initially deferred as regulatory assets. Some of these costs are included in current rates and are being recognized through income; however, such costs remained in the Cost Estimate at Suspension and are reflected in the Actual Costs at June 30, 2017 . The equity return associated with assets placed in service and other non-CWIP accounts deferred for regulatory purposes, as well as the wholesale portion of debt carrying costs, whether deferred or recognized through income, was not included in the Cost Estimate at Suspension or in the Actual Costs at June 30, 2017 . At June 30, 2017, such deferred amounts totaled $33 million and $1 million , respectively.
Mississippi Power recorded pre-tax charges to income for revisions to the cost estimate of $196 million ( $121 million after tax) in the second quarter through May 31, 2017 and a total of $305 million ( $188 million after tax) for year-to-date through May 31, 2017. In the aggregate, Mississippi Power incurred charges of $3.07 billion ( $1.89 billion after tax) as a result of changes in the cost estimate above the cost cap for the Kemper IGCC through May 31, 2017. The May 31, 2017 cost estimate included approximately $175 million of estimated costs to be incurred beyond the then-estimated in-service date of June 30, 2017 that were expected to be subject to the $2.88 billion cost cap.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ( $2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are

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ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
In the aggregate, Mississippi Power recorded total pre-tax charges to income for the estimated probable losses on the Kemper IGCC totaling $3.0 billion for the second quarter 2017 and $3.1 billion for the six months ended June 30, 2017.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC, of which $1.2 billion is included in plant in service, $14 million in materials and supplies, $22 million in other regulatory assets, current, and $95 million in other regulatory assets, deferred.
Rate Recovery of Kemper IGCC Costs
Given the variety of potential scenarios and the uncertainty of the outcome of future regulatory proceedings with the Mississippi PSC (and any subsequent related legal challenges), the ultimate outcome of the rate recovery matters discussed herein, including the resolution of legal challenges, cannot now be determined but could result in further material charges that could have a material impact on Mississippi Power's results of operations, financial condition, and liquidity.
Kemper IGCC Settlement Docket
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC. The Kemper Settlement Order established the Kemper IGCC Settlement Docket. The Mississippi PSC requested any such proposed settlement agreement reflect: (i) at a minimum, no rate increase to Mississippi Power customers (with a rate reduction focused on residential customers encouraged); (ii) removal of all cost risk to customers associated with the Kemper IGCC gasifier and related assets; and (iii) modification or amendment of the CPCN for the Kemper IGCC to allow only for ownership and operation of a natural gas facility. The Kemper Settlement Order provides that any related settlement agreement be filed within 45 days from the effective date of the Kemper Settlement Order. If a settlement agreement is filed, a hearing will be set 45 days from the date of the settlement's filing, and the appropriate scheduling order will be established.
Although the ability to achieve a negotiated settlement is uncertain, Mississippi Power intends to pursue any available settlement alternatives. In addition, the Kemper Settlement Order provides that, in the event a settlement agreement is not reached, the Mississippi PSC reserves its right to take any appropriate steps, including issuing an order to show cause as to why the CPCN for the Kemper IGCC should not be revoked.
On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.
At June 30, 2017, approximately $3.3 billion in actual Kemper IGCC costs were not reflected in Mississippi Power's retail and wholesale rates, of which $0.5 billion was related to the combined cycle and associated facilities and $2.8 billion was related to the gasification portions of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ( $2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.

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As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
Prudence
On August 17, 2016, the Mississippi PSC issued an order establishing a discovery docket to manage all filings related to the prudence of the Kemper IGCC. On October 3, 2016, Mississippi Power made a required compliance filing, which included a review and explanation of differences between the Kemper IGCC project estimate set forth in the 2010 CPCN proceedings and the most recent Kemper IGCC project estimate, as well as comparisons of current cost estimates and current expected plant operational parameters to the estimates presented in the 2010 CPCN proceedings for the first five years after the Kemper IGCC is placed in service. Compared to amounts presented in the 2010 CPCN proceedings, operations and maintenance expenses have increased an average of $105 million annually and maintenance capital has increased an average of $44 million annually for the first full five years of operations for the Kemper IGCC. Additionally, while the current estimated operational availability estimates reflect ultimate results similar to those presented in the 2010 CPCN proceedings, the ramp up period for the current estimates reflects a lower starting point and a slower escalation rate. On November 17, 2016, Mississippi Power submitted a supplemental filing to the October 3, 2016 compliance filing to present revised non-fuel operations and maintenance expense projections for the first year after the Kemper IGCC is placed in service. This supplemental filing included approximately $68 million in additional estimated operations and maintenance costs expected to be required to support the operations of the Kemper IGCC during that period.
Mississippi Power responded to numerous requests for information from interested parties in the discovery docket, which is now complete. Mississippi Power expects the Mississippi PSC to utilize this information in connection with the ultimate resolution of Kemper IGCC cost recovery.
Economic Viability Analysis
In the fourth quarter 2016, as a part of its Integrated Resource Plan process, the Southern Company system completed its regular annual updated fuel forecast, the 2017 Annual Fuel Forecast. This updated fuel forecast reflected significantly lower long-term estimated costs for natural gas than were previously projected. As a result of the updated long-term natural gas forecast, as well as the revised operating expense projections reflected in the discovery docket filings discussed above, on February 21, 2017, Mississippi Power filed an updated project economic viability analysis of the Kemper IGCC as required under the 2012 MPSC CPCN Order confirming authorization of the Kemper IGCC. The project economic viability analysis measures the life cycle economics of the Kemper IGCC compared to feasible alternatives, natural gas combined cycle generating units, under a variety of scenarios and considering fuel, operating and capital costs, and operating characteristics, as well as federal and state taxes and incentives. The reduction in the projected long-term natural gas prices in the 2017 Annual Fuel Forecast and, to a lesser extent, the increase in the estimated Kemper IGCC operating costs, negatively impact the updated project economic viability analysis.
Mississippi Power expects the Mississippi PSC to address this matter in connection with the Kemper IGCC Settlement Docket.
2015 Rate Case
On August 13, 2015, the Mississippi PSC approved Mississippi Power's request for interim rates, which presented an alternative rate proposal (In-Service Asset Proposal) designed to recover Mississippi Power's costs associated with the Kemper IGCC assets that are commercially operational and currently providing service to customers (the

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transmission facilities, combined cycle, natural gas pipeline, and water pipeline) and other related costs. The interim rates were designed to collect approximately $159 million annually and became effective in September 2015, subject to refund and certain other conditions.
On December 3, 2015, the Mississippi PSC issued the In-Service Asset Rate Order adopting in full the 2015 Stipulation entered into between Mississippi Power and the MPUS regarding the In-Service Asset Proposal. The In-Service Asset Rate Order provided for retail rate recovery of an annual revenue requirement of approximately $126 million , based on Mississippi Power's actual average capital structure, with a maximum common equity percentage of 49.733% , a 9.225% return on common equity, and actual embedded interest costs. The In-Service Asset Rate Order also included a prudence finding of all costs in the stipulated revenue requirement calculation for the in-service assets. The stipulated revenue requirement excluded the costs of the Kemper IGCC related to the 15% undivided interest that was previously projected to be purchased by SMEPA but reserved Mississippi Power's right to seek recovery in a future proceeding. See " Termination of Proposed Sale of Undivided Interest " herein for additional information. With implementation of the new rates on December 17, 2015, the interim rates were terminated and, in March 2016, Mississippi Power completed customer refunds of approximately $11 million for the difference between the interim rates collected and the permanent rates.
In 2011, the Mississippi PSC authorized Mississippi Power to defer all non-capital Kemper IGCC-related costs to a regulatory asset through the in-service date. In connection with the implementation of the In-Service Asset Order and wholesale rates, Mississippi Power began expensing certain ongoing project costs and certain retail debt carrying costs that previously were deferred and began amortizing certain regulatory assets associated with assets placed in service and consulting and legal fees. The amortization periods for these regulatory assets vary from two years to 10 years as set forth in the In-Service Asset Rate Order and the settlement agreement with wholesale customers. As of June 30, 2017, the balance associated with these regulatory assets was $117 million, of which $22 million is included in current assets. See "FERC Matters" herein for additional information related to the 2016 settlement agreement with wholesale customers.
The In-Service Asset Rate Order requires Mississippi Power to submit an annual true-up calculation of its actual cost of capital, compared to the stipulated total cost of capital, with the first occurring as of May 31, 2016. At June 30, 2017, Mississippi Power's related regulatory liability included in its balance sheet totaled approximately $10 million.
As required by the In-Service Asset Rate Order, on June 5, 2017, Mississippi Power made a rate filing requesting to adjust the amortization schedules of the regulatory assets reviewed and determined prudent in the In-Service Asset Order in a manner that would not change customer rates or annual revenues. On June 28, 2017, the Mississippi PSC suspended this filing. On July 6, 2017, the Mississippi PSC issued an order requiring Mississippi Power to establish a regulatory liability account to maintain current rates related to the Kemper IGCC following the July 2017 completion of the amortization period for certain regulatory assets approved in the In-Service Asset Rate Order that would allow for subsequent refund if the Mississippi PSC deems the rates unjust and unreasonable.
2013 MPSC Rate Order
In January 2013, Mississippi Power entered into a settlement agreement with the Mississippi PSC that was intended to establish the process for resolving matters regarding cost recovery related to the Kemper IGCC (2013 Settlement Agreement). Under the 2013 Settlement Agreement, Mississippi Power agreed to limit the portion of prudently-incurred Kemper IGCC costs to be included in retail rate base to the $2.4 billion certificated cost estimate, plus the Cost Cap Exceptions, but excluding AFUDC, and any other costs permitted or determined to be excluded from the $2.88 billion cost cap by the Mississippi PSC. In March 2013, the Mississippi PSC issued a rate order approving retail rate increases of 15% effective March 19, 2013 and 3% effective January 1, 2014, which collectively were designed to collect $156 million annually beginning in 2014 (2013 MPSC Rate Order) to be used to mitigate customer rate impacts after the Kemper IGCC was placed in service, based on a mirror CWIP methodology (Mirror CWIP rate).

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On February 12, 2015, the Court reversed the 2013 MPSC Rate Order and, on July 7, 2015, the Mississippi PSC ordered that the Mirror CWIP rate be terminated effective July 20, 2015 and required the fourth quarter 2015 refund of the $342 million previously collected, along with associated carrying costs of $29 million .
Because the 2013 MPSC Rate Order did not provide for the inclusion of CWIP in rate base as permitted by the Baseload Act, Mississippi Power continued to record AFUDC on the Kemper IGCC. Between the original May 2014 estimated in-service date and the June 2017 project suspension date, Mississippi Power recorded $493 million of AFUDC on the Kemper IGCC subject to the $2.88 billion cost cap and Cost Cap Exception amounts, of which $459 million related to the gasification portions of the Kemper IGCC.
Mississippi Power expects the Mississippi PSC to address this matter in connection with the Kemper IGCC Settlement Docket.
Lignite Mine and CO 2 Pipeline Facilities
In conjunction with the Kemper IGCC, Mississippi Power owns the lignite mine and equipment and mineral reserves located around the Kemper IGCC site. The mine started commercial operation in June 2013.
In 2010, Mississippi Power executed a 40 -year management fee contract with Liberty Fuels Company, LLC (Liberty Fuels), a wholly-owned subsidiary of The North American Coal Corporation, which developed, constructed, and is responsible for the mining operations through the end of the mine reclamation. As the mining permit holder, Liberty Fuels has a legal obligation to perform mine reclamation and Mississippi Power has a contractual obligation to fund all reclamation activities. In addition to the obligation to fund the reclamation activities, Mississippi Power provides working capital support to Liberty Fuels through cash advances for capital purchases, payroll, and other operating expenses. See Note 1 to the financial statements of Mississippi Power under "Asset Retirement Obligations and Other Costs of Removal" and "Variable Interest Entities" in Item 8 of the Form 10-K for additional information.
In addition, Mississippi Power constructed the CO 2 pipeline for the planned transport of captured CO 2 for use in enhanced oil recovery. Mississippi Power entered into agreements with Denbury Onshore (Denbury) and Treetop Midstream Services, LLC (Treetop), pursuant to which Denbury would purchase 70% of the CO 2 captured from the Kemper IGCC and Treetop would purchase 30% of the CO 2 captured from the Kemper IGCC. On June 3, 2016, Mississippi Power cancelled its contract with Treetop and amended its contract with Denbury to reflect, among other things, Denbury's agreement to purchase 100% of the CO 2 captured from the Kemper IGCC and an initial contract term of 16 years. Denbury has the right to terminate the contract at any time because Mississippi Power did not place the Kemper IGCC in service by July 1, 2017.
The ultimate outcome of these matters cannot be determined at this time.
Termination of Proposed Sale of Undivided Interest
In 2010 and as amended in 2012, Mississippi Power and SMEPA entered into an agreement whereby SMEPA agreed to purchase a 15% undivided interest in the Kemper IGCC ( 15% Undivided Interest). On May 20, 2015, SMEPA notified Mississippi Power of its termination of the agreement. Mississippi Power previously received a total of $275 million of deposits from SMEPA that were required to be returned to SMEPA with interest. On June 3, 2015, Southern Company, pursuant to its guarantee obligation, returned approximately $301 million to SMEPA. Subsequently, Mississippi Power issued a promissory note in the aggregate principal amount of approximately $301 million to Southern Company, which was repaid in June 2017.
Litigation
On April 26, 2016, a complaint against Mississippi Power was filed in Harrison County Circuit Court (Circuit Court) by Biloxi Freezing & Processing Inc., Gulfside Casino Partnership, and John Carlton Dean, which was amended and refiled on July 11, 2016 to include, among other things, Southern Company as a defendant. The individual plaintiff alleges that Mississippi Power and Southern Company violated the Mississippi Unfair Trade Practices Act. All plaintiffs have alleged that Mississippi Power and Southern Company concealed, falsely

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represented, and failed to fully disclose important facts concerning the cost and schedule of the Kemper IGCC and that these alleged breaches have unjustly enriched Mississippi Power and Southern Company. The plaintiffs seek unspecified actual damages and punitive damages; ask the Circuit Court to appoint a receiver to oversee, operate, manage, and otherwise control all affairs relating to the Kemper IGCC; ask the Circuit Court to revoke any licenses or certificates authorizing Mississippi Power or Southern Company to engage in any business related to the Kemper IGCC in Mississippi; and seek attorney's fees, costs, and interest. The plaintiffs also seek an injunction to prevent any Kemper IGCC costs from being charged to customers through electric rates. On June 23, 2017, the Circuit Court ruled in favor of motions by Southern Company and Mississippi Power and dismissed the case. On July 7, 2017, the plaintiffs filed notice to appeal to the Court.
On June 9, 2016, Treetop, Greenleaf CO 2 Solutions, LLC (Greenleaf), Tenrgys, LLC, Tellus Energy, LLC, WCOA, LLC, and Tellus Operating Group filed a complaint against Mississippi Power, Southern Company, and SCS in the state court in Gwinnett County, Georgia. The complaint relates to the cancelled CO 2 contract with Treetop and alleges fraudulent misrepresentation, fraudulent concealment, civil conspiracy, and breach of contract on the part of Mississippi Power, Southern Company, and SCS and seeks compensatory damages of $100 million , as well as unspecified punitive damages. Southern Company, Mississippi Power, and SCS have moved to compel arbitration pursuant to the terms of the CO 2 contract, which the court granted on May 4, 2017. On June 28, 2017, Treetop, Greenleaf, Tenrgys, LLC, Tellus Energy, LLC, WCOA, LLC, and Tellus Operating Group filed a claim for arbitration requesting $500 million in damages.
Mississippi Power believes these legal challenges have no merit; however, an adverse outcome in these proceedings could have a material impact on Mississippi Power's results of operations, financial condition, and liquidity. Mississippi Power will vigorously defend itself in these matters, and the ultimate outcome of these matters cannot be determined at this time.
Baseload Act
In 2008, the Baseload Act was signed by the Governor of Mississippi. The Baseload Act authorizes, but does not require, the Mississippi PSC to adopt a cost recovery mechanism that includes in retail base rates, prior to and during construction, all or a portion of the prudently-incurred pre-construction and construction costs incurred by a utility in constructing a base load electric generating plant. Prior to the passage of the Baseload Act, such costs would traditionally be recovered only after the plant was placed in service. The Baseload Act also provides for periodic prudence reviews by the Mississippi PSC and prohibits the cancellation of any such generating plant without the approval of the Mississippi PSC. In the event of cancellation of the construction of the plant without approval of the Mississippi PSC, the Baseload Act authorizes the Mississippi PSC to make a public interest determination as to whether and to what extent the utility will be afforded rate recovery for costs incurred in connection with such cancelled generating plant.
Income Tax Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Income Tax Matters" of Mississippi Power in Item 7 of the Form 10-K and Note (G) to the Condensed Financial Statements under " Section 174 Research and Experimental Deduction " herein for additional information on bonus depreciation, investment tax credits, and the Section 174 research and experimental deduction.
Bonus Depreciation
Approximately $370 million of positive cash flows is expected to result from bonus depreciation for the 2017 tax year, but may not all be realized in 2017 due to net operating loss projections for the 2017 tax year, and is dependent upon placing the remainder of the Kemper IGCC in service by December 31, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount previously estimated as bonus depreciation would be claimed as a deduction under IRC Section 165. As of June 30, 2017, $82 million has been received through quarterly income tax refunds for bonus depreciation related to the Kemper IGCC, which may be subject to repayment. See Note (B) to the Condensed Financial Statements under "Integrated Coal Gasification Combined

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Cycle" herein and Note (G) to the Condensed Financial Statements herein for additional information. The ultimate outcome of this matter cannot be determined at this time.
Section 174 Research and Experimental Deduction
Southern Company, on behalf of Mississippi Power, has reflected deductions for research and experimental (R&E) expenditures related to the Kemper IGCC in its federal income tax calculations since 2013 and filed amended federal income tax returns for 2008 through 2013 to also include such deductions. In December 2016, Southern Company and the IRS reached a proposed settlement, subject to approval of the U.S. Congress Joint Committee on Taxation, resolving a methodology for these deductions. Due to the uncertainty related to this tax position, Mississippi Power had unrecognized tax benefits associated with these R&E deductions totaling approximately $464 million as of June 30, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount not allowed under IRC Section 174 would be claimed as a deduction under IRC Section 165, and would result in a reversal of the related unrecognized tax benefits, excluding interest. See Notes (B) and (G) to the Condensed Financial Statements under "Integrated Coal Gasification Combined Cycle" and "Section 174 Research and Experimental Deduction," respectively, herein for additional information. This matter is expected to be resolved in the next 12 months; however, the ultimate outcome of this matter cannot be determined at this time.
Other Matters
Mississippi Power is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Mississippi Power is subject to certain claims and legal actions arising in the ordinary course of business. Mississippi Power's 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions , CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Mississippi Power cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Mississippi Power's financial statements. See Note (B) to the Condensed Financial Statements herein for a discussion of various other contingencies, regulatory matters, and other matters being litigated which may affect future earnings potential.
The SEC is conducting a formal investigation of Southern Company and Mississippi Power concerning the estimated costs and expected in-service date of the Kemper IGCC. Southern Company and Mississippi Power believe the investigation is focused primarily on periods subsequent to 2010 and on accounting matters, disclosure controls and procedures, and internal controls over financial reporting associated with the Kemper IGCC. See ACCOUNTING POLICIES – " Application of Critical Accounting Policies and Estimates " herein for additional information on the Kemper IGCC. The ultimate outcome of this matter cannot be determined at this time; however, it is not expected to have a material impact on the financial statements of Mississippi Power.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Mississippi Power prepares its financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Mississippi Power in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Mississippi Power's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of

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Mississippi Power in Item 7 of the Form 10-K for a complete discussion of Mississippi Power's critical accounting policies and estimates related to Utility Regulation, Asset Retirement Obligations, Pension and Other Postretirement Benefits, AFUDC, Unbilled Revenues, and Contingent Obligations.
Kemper IGCC Rate Recovery
For periods prior to the second quarter 2017, significant accounting estimates included Kemper IGCC estimated construction costs, project completion date, and rate recovery. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Kemper IGCC Estimated Construction Costs, Project Completion Date, and Rate Recovery" of Mississippi Power in Item 7 of the Form 10-K for additional information. Mississippi Power recorded total pre-tax charges to income related to the Kemper IGCC of $428 million ($264 million after tax) in 2016, $365 million ($226 million after tax) in 2015, $868 million ($536 million after tax) in 2014, and $1.2 billion ($729 million after tax) in prior years.
As a result of the Mississippi PSC's June 21, 2017 stated intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant rather than an IGCC plant, as well as Mississippi Power's June 28, 2017 suspension of the operation and start-up of the gasifier portion of the Kemper IGCC, the estimated construction costs and project completion date are no longer considered significant accounting estimates. Significant accounting estimates for the June 30, 2017 financial statements presented herein include the overall assessment of rate recovery for the Kemper County energy facility and the estimated costs for the potential cancellation of the Kemper IGCC.
While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ( $2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
In the aggregate, since the Kemper IGCC project started, Mississippi Power has incurred charges of $5.96 billion ($3.94 billion after tax) through June 30, 2017. Mississippi Power recorded total pre-tax charges to income for the estimated probable losses on the Kemper IGCC of $3.0 billion ($2.1 billion after tax) and $81 million ($50 million after tax) in the second quarter 2017 and the second quarter 2016, respectively, and total pre-tax charges of $3.1 billion ($2.2 billion after tax) and $134 million ($83 million after tax) year-to-date in 2017 and 2016, respectively.
Given the significant judgment involved in estimating the costs to cancel the gasifier portion of the Kemper IGCC, the ultimate rate recovery for the Kemper IGCC, including the $0.5 billion of combined cycle-related costs not yet in rates, and the impact on Mississippi Power's results of operations, Mississippi Power considers these items to be critical accounting estimates. See Note 3 to the financial statements of Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under "Integrated Coal Gasification Combined Cycle" herein for additional information.

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Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Mississippi Power expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Mississippi Power's revenue, including energy provided to customers, is from tariff offerings that provide electricity without a defined contractual term, as well as longer-term contractual commitments , including PPAs . Mississippi Power expect s that the revenue from contracts with these customers will not result in a significant shift in the timing of revenue recognition for such sales .
Mississippi Power's ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements, such as alternative revenue programs, are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Mississippi Power's financial statements, if material. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Mississippi Power expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Mississippi Power intend s to use the modified retrospective method of adoption effective January 1, 2018. Mississippi Power has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Mississippi Power's financial statements, Mississippi Power will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Mississippi Power is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Mississippi Power's operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Mississippi Power's financial statements.

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FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Mississippi Power in Item 7 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Integrated Coal Gasification Combined Cycle " herein for additional information. Earnings for the six months ended June 30, 2017 were negatively affected by revisions to the cost estimate for the Kemper IGCC.
Mississippi Power's capital expenditures and debt maturities are expected to materially exceed operating cash flows through 2022. Projected capital expenditures in that period include investments to maintain existing generation facilities, to add environmental modifications to existing generating units, and to expand and improve transmission and distribution facilities.
In the second quarter 2017, Mississippi Power borrowed an additional $40 million under a promissory note issued to Southern Company. In June 2017, Southern Company made equity contributions totaling $1.0 billion to Mississippi Power. Mississippi Power used a portion of the proceeds to prepay $901 million of outstanding debt.
As of June 30, 2017, Mississippi Power's current liabilities exceeded current assets by approximately $930 million primarily due to $935 million in long-term debt that matures within the next 12 months and $107 million of short-term debt. Mississippi Power intends to utilize operating cash flows, lines of credit, and bank term loans, as market conditions permit, as well as, under certain circumstances, commercial paper and/or equity contributions and/or loans from Southern Company to fund Mississippi Power's short-term capital needs.
Net cash provided from operating activities totaled $135 million for the first six months of 2017, a decrease of $2 million as compared to the corresponding period in 2016. The decrease in cash provided from operating activities is primarily due to lower taxes related to the Kemper IGCC, the timing of payments for ad valorem taxes and materials and supplies, and the timing of payments received from affiliates and customers, partially offset by the completion of Mirror CWIP refunds in 2016. See Notes (B) and (G) to the Condensed Financial Statements under " Integrated Coal Gasification Combined Cycle Rate Recovery of Kemper IGCC Costs " and " Unrecognized Tax Benefits Section 174 Research and Experimental Deduction " herein for additional information. Net cash used for investing activities totaled $361 million for the first six months of 2017 primarily due to gross property additions related to the Kemper IGCC. Net cash provided from financing activities totaled $142 million for the first six months of 2017 primarily due to capital contributions from Southern Company, offset by redemptions of long-term debt. Cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 include an increase in paid-in capital of $1.0 billion due to capital contributions from Southern Company, a portion of which was used to repay $300 million of securities due within one year, $591 million of long-term debt, and $10 million of short-term debt. Long-term debt decreased primarily due to the reclassification of $1.2 billion in unsecured term loans to securities due within one year. Other significant changes include decreases of $2.5 billion in construction work in progress, $1.1 billion in total common stockholder's equity, $352 million in accumulated deferred income taxes, and $300 million in deferred charges related to income taxes. All of these changes primarily result from the Kemper IGCC estimated loss. See FUTURE EARNINGS POTENTIAL – "Integrated Coal Gasification Combined Cycle" and Note (B) to the Condensed Financial Statements under "Integrated Coal Gasification Combined Cycle" herein for additional information.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Mississippi Power in Item 7 of the Form 10-K for a description of Mississippi Power's capital requirements for its construction program, including estimated capital expenditures for new generating resources and to comply with existing environmental statutes and regulations, scheduled maturities of long-term debt, as well as related interest, leases, purchase commitments, derivative

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

obligations, preferred stock dividends, trust funding requirements, and unrecognized tax benefits. Approximately $935 million will be required through June 30, 2018 to fund maturities of long-term debt and $17 million will be required to fund maturities of short-term debt. In addition, Mississippi Power has $40 million of tax-exempt variable rate demand obligations that are supported by short-term credit facilities and $50 million of fixed rate pollution control revenue bonds that are required to be remarketed over the next 12 months. See " Sources of Capital " and FUTURE EARNINGS POTENTIAL – "Integrated Coal Gasification Combined Cycle" herein for additional information.
The construction program of Mississippi Power is currently estimated to be $561 million for 2017 , $192 million for 2018, $182 million for 2019, $235 million for 2020, $199 million for 2021, and $245 million for 2022. These estimated expenditures do not include potential compliance costs that may arise from the EPA's final rules and guidelines or future state plans that would limit CO 2 emissions from existing, new, modified, or reconstructed fossil-fuel-fired electric generating units.
The construction program is subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; storm impacts; changes in environmental statutes and regulations; the outcome of any legal challenges to the environmental rules; changes in generating plants, including unit retirements and replacements and adding or changing fuel sources at existing units, to meet regulatory requirements; changes in FERC rules and regulations; Mississippi PSC approvals; changes in the expected environmental compliance program; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; and the cost of capital.
Sources of Capital
Mississippi Power plans to obtain the funds required for construction and other purposes from operating cash flows, external security issuances, term loans, and/or short-term debt, as well as, under certain circumstances, equity contributions and/or loans from Southern Company. The amount, type, and timing of future financings will depend upon regulatory approval, prevailing market conditions, and other factors, which includes resolution of the Kemper County energy facility cost recovery. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" and – FUTURE EARNINGS POTENTIAL – "Integrated Coal Gasification Combined Cycle – Rate Recovery of Kemper IGCC Costs" of Mississippi Power in Item 7 of the Form 10-K for additional information.
On February 28, 2017, the maturity dates for $551 million in promissory notes to Southern Company were extended to July 31, 2018. In the second quarter 2017, Mississippi Power borrowed an additional $40 million under a promissory note issued to Southern Company. In June 2017, Southern Company made equity contributions totaling $1.0 billion to Mississippi Power. Mississippi Power used a portion of the proceeds to (i) prepay $300 million of the outstanding principal amount under its $1.2 billion unsecured term loan; (ii) repay all of the $591 million outstanding principal amount of promissory notes to Southern Company; and (iii) repay $10 million of the outstanding principal amount of bank loans.
As of June 30, 2017, Mississippi Power's current liabilities exceeded current assets by approximately $930 million primarily due to $935 million in long-term debt that matures within the next 12 months and $107 million of short-term debt. Mississippi Power intends to utilize operating cash flows, lines of credit, and bank term loans, as market conditions permit, as well as, under certain circumstances, commercial paper and/or equity contributions and/or loans from Southern Company to fund Mississippi Power's short-term capital needs. Specifically, Mississippi Power has been informed by Southern Company that in the event sufficient funds are not available from external sources, Southern Company intends to provide Mississippi Power with loans and/or equity contributions sufficient to fund the remaining indebtedness scheduled to mature and other cash needs over the next 12 months. Therefore, Mississippi Power's financial statement presentation contemplates continuation of Mississippi Power as a going concern as a result of Southern Company's anticipated ongoing financial support of Mississippi Power. For additional information, see Notes 1 and 6 to the financial statements of Mississippi Power under "Recently Issued

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Accounting Standards" and "Going Concern," respectively, in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under "Going Concern" herein.
At June 30, 2017 , Mississippi Power had approximately $140 million of cash and cash equivalents. Committed credit arrangements with banks at June 30, 2017 were as follows:
Expires
 
 
 
Executable Term
Loans
 
Expires Within One
Year
2017
 
Total
 
Unused
 
One
Year
 
Two
Years
 
Term
Out
 
No Term
Out
(in millions)
$
113

 
$
113

 
$
100

 
$

 
$
13

 
$
13

 
$
100

See Note 6 to the financial statements of Mississippi Power under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
Most of these bank credit arrangements, as well as Mississippi Power's term loan agreement, contain covenants that limit debt levels and typically contain cross acceleration to other indebtedness (including guarantee obligations) of Mississippi Power. Such cross-acceleration provisions to other indebtedness would trigger an event of default if Mississippi Power defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2017 , Mississippi Power was in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowing.
Subject to applicable market conditions, Mississippi Power expects to seek to renew or replace its credit arrangements as needed, prior to expiration. In connection therewith, Mississippi Power may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
A portion of the $100 million unused credit arrangements with banks is allocated to provide liquidity support to Mississippi Power's pollution control revenue bonds. The amount of variable rate pollution control revenue bonds outstanding requiring liquidity support as of June 30, 2017 was approximately $40 million . In addition, at June 30, 2017 , Mississippi Power had approximately $50 million of fixed rate pollution control bonds outstanding that were required to be remarketed within the next 12 months.
Short-term borrowings are included in notes payable in the balance sheets. Details of short-term borrowings were as follows:
 
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
 
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Average
Amount
Outstanding
 
Weighted
Average
Interest
Rate
 
Maximum
Amount
Outstanding
 
 
(in millions)
 
 
 
(in millions)
 
 
 
(in millions)
Short-term bank debt
 
$
17

 
2.9%
 
$
29

 
3.1%
 
$
36

(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 .
Credit Rating Risk
At June 30, 2017 , Mississippi Power does 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 contracts that have required or could require collateral, but not accelerated payment, in the event of a credit rating change to BBB and/or Baa2 or below. These contracts are for physical electricity purchases and

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS

sales, fuel transportation and storage, energy price risk management, and transmission. At June 30, 2017 , the maximum potential collateral requirements under these contracts at a rating of BBB and/or Baa2 or BBB- and/or Baa3 was not material. The maximum potential collateral requirements at a rating below BBB- and/or Baa3 equaled approximately $243 million.
Included in these amounts are certain agreements that could require collateral in the event that Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Mississippi Power to access capital markets, and would be likely to impact the cost at which it does so.
On March 1, 2017, Moody's downgraded the senior unsecured debt rating of Mississippi Power to Ba1 from Baa3.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Mississippi Power) from stable to negative.
On March 30, 2017, Fitch placed the ratings of Mississippi Power on rating watch negative.
On June 22, 2017, Moody's placed the ratings of Mississippi Power on review for downgrade.
Financing Activities
In March 2017, Mississippi Power issued a $9 million short-term bank note bearing interest at 5% per annum, which was repaid in April 2017.
In February 2017, Mississippi Power amended $551 million in promissory notes to Southern Company extending the maturity dates of the notes from December 1, 2017 to July 31, 2018. In the second quarter 2017, Mississippi Power borrowed an additional $40 million under a promissory note issued to Southern Company.
In June 2017, Southern Company made equity contributions totaling $1.0 billion to Mississippi Power. Mississippi Power used a portion of the proceeds to (i) prepay $300 million of the outstanding principal amount under its $1.2 billion unsecured term loan, which matures on March 30, 2018; (ii) repay all of the $591 million outstanding principal amount of promissory notes to Southern Company; and (iii) repay a $10 million short-term bank loan.

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SOUTHERN POWER COMPANY
AND SUBSIDIARY COMPANIES

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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
Wholesale revenues, non-affiliates
$
436

 
$
264

 
$
783

 
$
480

Wholesale revenues, affiliates
90

 
107

 
190

 
204

Other revenues
3

 
2

 
6

 
4

Total operating revenues
529

 
373

 
979

 
688

Operating Expenses:
 
 
 
 
 
 
 
Fuel
139

 
96

 
271

 
187

Purchased power, non-affiliates
29

 
21

 
54

 
35

Purchased power, affiliates
11

 
2

 
16

 
8

Other operations and maintenance
97

 
86

 
190

 
162

Depreciation and amortization
129

 
81

 
247

 
154

Taxes other than income taxes
12

 
6

 
24

 
13

Total operating expenses
417


292

 
802

 
559

Operating Income
112

 
81

 
177

 
129

Other Income and (Expense):
 
 
 
 
 
 
 
Interest expense, net of amounts capitalized
(48
)
 
(22
)
 
(97
)
 
(43
)
Other income (expense), net
2

 
1

 
(2
)
 
1

Total other income and (expense)
(46
)
 
(21
)
 
(99
)
 
(42
)
Earnings Before Income Taxes
66

 
60

 
78

 
87

Income taxes (benefit)
(38
)
 
(41
)
 
(90
)
 
(65
)
Net Income
104

 
101

 
168

 
152

Less: Net income attributable to noncontrolling interests
22

 
12

 
17

 
13

Net Income Attributable to Southern Power
$
82

 
$
89

 
$
151

 
$
139

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
2017
 
2016
 
2017
 
2016
 
(in millions)
 
(in millions)
Net Income
$
104

 
$
101

 
$
168

 
$
152

Other comprehensive income (loss):
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
Changes in fair value, net of tax of
$24, $(15), $20, and $(15), respectively
40

 
(24
)
 
32

 
(24
)
Reclassification adjustment for amounts included in net income,
net of tax of $(27), $8, $(30), and $8, respectively
(45
)
 
13

 
(48
)
 
14

Total other comprehensive income (loss)
(5
)
 
(11
)
 
(16
)
 
(10
)
Comprehensive Income
99

 
90

 
152

 
142

Less: Comprehensive income attributable to noncontrolling interests
22

 
12

 
17

 
13

Comprehensive Income Attributable to Southern Power
$
77

 
$
78

 
$
135

 
$
129

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
For the Six Months Ended June 30,
 
2017
 
2016
 
(in millions)
Operating Activities:
 
 
 
Net income
$
168

 
$
152

Adjustments to reconcile net income to net cash provided from operating activities —
 
 
 
Depreciation and amortization, total
264

 
159

Deferred income taxes
91

 
(71
)
Amortization of investment tax credits
(28
)
 
(15
)
Deferred revenues
(34
)
 
(31
)
Income taxes receivable, non-current
(58
)
 

Other, net
(1
)
 
9

Changes in certain current assets and liabilities —
 
 
 
-Receivables
(58
)
 
(76
)
-Prepaid income taxes
33

 
(147
)
-Other current assets
20

 
5

-Accounts payable
(45
)
 
4

-Accrued taxes
4

 
62

-Other current liabilities
(8
)
 

Net cash provided from operating activities
348

 
51

Investing Activities:
 
 
 
Business acquisitions
(1,020
)
 
(502
)
Property additions
(145
)
 
(1,281
)
Change in construction payables
(167
)
 
(137
)
Payments pursuant to LTSAs
(68
)
 
(43
)
Investment in restricted cash
(16
)
 
(646
)
Distribution of restricted cash
27

 
649

Other investing activities
(2
)
 
(25
)
Net cash used for investing activities
(1,391
)
 
(1,985
)
Financing Activities:
 
 
 
Increase in notes payable, net
189

 
695

Proceeds —
 
 
 
Senior notes

 
1,241

Capital contributions from parent company

 
300

Distributions to noncontrolling interests
(40
)
 
(11
)
Capital contributions from noncontrolling interests
73

 
179

Purchase of membership interests from noncontrolling interests

 
(129
)
Payment of common stock dividends
(158
)
 
(136
)
Other financing activities
(21
)
 
(13
)
Net cash provided from financing activities
43

 
2,126

Net Change in Cash and Cash Equivalents
(1,000
)
 
192

Cash and Cash Equivalents at Beginning of Period
1,099

 
830

Cash and Cash Equivalents at End of Period
$
99

 
$
1,022

Supplemental Cash Flow Information:
 
 
 
Cash paid (received) during the period for —
 
 
 
Interest (net of $4 and $21 capitalized for 2017 and 2016, respectively)
$
113

 
$
42

Income taxes, net
(117
)
 
115

Noncash transactions — Accrued property additions at end of period
19

 
108

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
99

 
$
1,099

Receivables —
 
 
 
 
Customer accounts receivable
 
158

 
102

Other accounts receivable
 
37

 
34

Affiliated
 
65

 
57

Fossil fuel stock
 
15

 
15

Materials and supplies
 
349

 
337

Prepaid income taxes
 
41

 
74

Other current assets
 
26

 
39

Total current assets
 
790

 
1,757

Property, Plant, and Equipment:
 
 
 
 
In service
 
13,731

 
12,728

Less: Accumulated provision for depreciation
 
1,689

 
1,484

Plant in service, net of depreciation
 
12,042

 
11,244

Construction work in progress
 
344

 
398

Total property, plant, and equipment
 
12,386

 
11,642

Other Property and Investments:
 
 
 
 
Intangible assets, net of amortization of $35 and $22
at June 30, 2017 and December 31, 2016, respectively
 
423

 
436

Total other property and investments
 
423

 
436

Deferred Charges and Other Assets:
 
 
 
 
Prepaid LTSAs
 
61

 
101

Accumulated deferred income taxes
 
536

 
594

Income taxes receivable, non-current
 
69

 
11

Other deferred charges and assets — affiliated
 
28

 
13

Other deferred charges and assets — non-affiliated
 
410

 
615

Total deferred charges and other assets
 
1,104

 
1,334

Total Assets
 
$
14,703

 
$
15,169

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholders' Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
909

 
$
560

Notes payable
 
398

 
209

Accounts payable —
 
 
 
 
Affiliated
 
68

 
88

Other
 
93

 
278

Accrued taxes —
 
 
 
 
Accrued income taxes
 
35

 
148

Other accrued taxes
 
21

 
7

Accrued interest
 
25

 
36

Acquisitions payable
 

 
461

Contingent consideration
 
11

 
46

Other current liabilities
 
67

 
70

Total current liabilities
 
1,627

 
1,903

Long-term Debt
 
4,816

 
5,068

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
174

 
152

Accumulated deferred ITCs
 
1,914

 
1,839

Asset retirement obligations
 
69

 
64

Other deferred credits and liabilities
 
238

 
304

Total deferred credits and other liabilities
 
2,395

 
2,359

Total Liabilities
 
8,838

 
9,330

Redeemable Noncontrolling Interests
 
51

 
164

Common Stockholder's Equity:
 
 
 
 
Common stock, par value $.01 per share —
 
 
 
 
Authorized — 1,000,000 shares
 
 
 
 
Outstanding — 1,000 shares
 

 

Paid-in capital
 
3,671

 
3,671

Retained earnings
 
717

 
724

Accumulated other comprehensive income
 
19

 
35

Total common stockholder's equity
 
4,407

 
4,430

Noncontrolling interests
 
1,407

 
1,245

Total stockholders' equity
 
5,814

 
5,675

Total Liabilities and Stockholders' Equity
 
$
14,703

 
$
15,169

The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.

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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


SECOND QUARTER 2017 vs. SECOND QUARTER 2016
AND
YEAR-TO-DATE 2017 vs. YEAR-TO-DATE 2016


OVERVIEW
Southern Power constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. Southern Power continually seeks opportunities to execute its strategy to create value through various transactions including acquisitions and sales of assets, construction and development of new generating facilities, and entry into PPAs primarily with investor-owned utilities, independent power producers, municipalities, and other load-serving entities. In general, Southern Power has constructed or acquired new generating capacity only after entering into or assuming long-term PPAs for the new facilities.
During the six months ended June 30, 2017 , Southern Power acquired or completed the construction of, and placed in service, approximately 498 MWs of solar and wind facilities. In addition, Southern Power continued developing its portfolio of wind projects as well as the construction to expand the Mankato natural gas facility by 345 MWs of capacity. Subsequent to June 30, 2017 , Southern Power acquired and commenced construction of Cactus Flats, a 148-MW wind facility. See FUTURE EARNINGS POTENTIAL " Acquisitions " and " Construction Projects " herein for additional information.
At June 30, 2017 , Southern Power had an average investment coverage ratio of 91% through 2021 and 90% through 2026, with an average remaining contract duration of approximately 16  years. These ratios include the PPAs and capacity associated with facilities currently under construction and acquisitions discussed herein. See FUTURE EARNINGS POTENTIAL " Power Sales Agreements " herein for additional information.
Southern Power continues to focus on several key performance indicators, including, but not limited to, peak season equivalent forced outage rate, contract availability, and net income.
RESULTS OF OPERATIONS
Net Income
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$(7)
 
(7.9)
 
$12
 
8.6
Net income attributable to Southern Power for the second quarter 2017 was $82 million compared to $89 million for the corresponding period in 2016 . The decrease was primarily due to increased interest expense from debt issuances to fund acquisitions and construction and an increase in net income attributable to noncontrolling interests, significantly offset by additional operating income related to new generating facilities.
Net income attributable to Southern Power for year-to-date 2017 was $151 million compared to $139 million for the corresponding period in 2016 . The increase was primarily due to additional operating income from new generating facilities, as well as increased federal income tax benefits from wind PTCs, partially offset by increased interest expense from debt issuances to fund acquisitions and construction. For additional information on new generating facilities placed in service during 2016 and 2017, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – " Acquisitions " and " Construction Projects " of Southern Power in Item 7 of the Form 10-K and FUTURE EARNINGS POTENTIAL – " Acquisitions " and " Construction Projects " herein.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Operating Revenues
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$156
 
41.8
 
$291
 
42.3
Total operating revenues include PPA capacity revenues, which are derived primarily from long-term contracts involving natural gas and biomass generating facilities, and PPA energy revenues, which include sales from Southern Power's natural gas, biomass, solar, and wind facilities. To the extent Southern Power has capacity not contracted under a PPA, it may sell power into the wholesale market and, to the extent the generation assets are part of the IIC, as approved by the FERC, it may sell power into the power pool.
Natural Gas and Biomass Capacity and Energy Revenue
Capacity revenues generally represent the greatest contribution to net income and are designed to provide recovery of fixed costs plus a return on investment.
Energy is generally sold at variable cost or is indexed to published gas indices. Energy revenues will vary depending on the energy demand of Southern Power's customers and their generation capacity, as well as the market prices of wholesale energy compared to the cost of Southern Power's energy. Energy revenues also include fees for support services, fuel storage, and unit start charges. Increases and decreases in energy revenues under PPAs that are driven by fuel or purchased power prices are accompanied by an increase or decrease in fuel and purchased power costs and do not have a significant impact on net income.
Solar and Wind Energy Revenue
Southern Power's electricity sales from solar and wind generating facilities are predominantly through long-term PPAs that do not have a capacity charge. Customers either purchase the energy output of a dedicated renewable facility through an energy charge or pay a fixed price for electricity sold to the grid. As a result, Southern Power's ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, and other factors.
See FUTURE EARNINGS POTENTIAL – "Power Sales Agreements" herein for additional information regarding Southern Power's PPAs.
Details of Southern Power's operating revenues were as follows:
 
Second Quarter 2017
 
Second Quarter 2016
 
Year-to-Date 2017
 
Year-to-Date 2016
 
(in millions)
PPA capacity revenues
$
149

 
$
133

 
$
298

 
$
258

PPA energy revenues
270

 
168

 
466

 
285

Total PPA revenues
419

 
301

 
764

 
543

Non-PPA revenues
107

 
70

 
209

 
141

Other revenues
3

 
2

 
6

 
4

Total operating revenues
$
529

 
$
373

 
$
979

 
$
688


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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


In the second quarter 2017 , total operating revenues were $529 million , reflecting a $156 million , or 42% , increase from the corresponding period in 2016 . The increase in operating revenues was primarily due to the following:
PPA capacity revenues increased $16 million, or 12%, primarily due to new PPAs related to natural gas facilities and additional customer load requirements.
PPA energy revenues increased $102 million, or 61%, primarily due to an $85 million increase in sales from new solar and wind facilities and a $20 million increase in sales from new natural gas PPAs and additional customer load requirements.
Non-PPA revenues increased $37 million, or 53%, due to a $23 million increase in the volume of KWHs sold primarily from uncovered natural gas capacity through short-term opportunity sales, as well as a $14 million increase in the price of energy primarily due to increased natural gas prices.
For year-to-date 2017 , total operating revenues were $979 million , reflecting a $291 million , or 42% , increase from the corresponding period in 2016 . The increase in operating revenues was primarily due to the following:
PPA capacity revenues increased $40 million, or 16%, primarily due to new PPAs related to natural gas facilities and additional customer load requirements.
PPA energy revenues increased $181 million, or 64%, primarily due to a $137 million increase in sales from new solar and wind facilities and a $37 million increase in sales from new natural gas PPAs and additional customer load requirements.
Non-PPA revenues increased $68 million, or 48%, due to a $48 million increase in the volume of KWHs sold primarily from uncovered natural gas capacity through short-term opportunity sales, as well as a $20 million increase in the price of energy primarily due to increased natural gas prices.
Fuel and Purchased Power Expenses
Fuel costs constitute the single largest expense for Southern Power. In addition, Southern Power purchases a portion of its electricity needs from the wholesale market. Details of Southern Power's generation and purchased power were as follows:
 
Second Quarter 2017
Second Quarter 2016
 
Year-to-Date 2017
Year-to-Date 2016
 
(in billions of KWHs)
Generation
10.9
9.1
 
20.6
16.7
Purchased power
1.2
0.9
 
2.2
1.5
Total generation and purchased power
12.1
10.0
 
22.8
18.2
 
 
 
 
 
 
Total generation and purchased power, excluding solar, wind, and tolling agreements
5.6
5.7
 
10.5
11.0
Southern Power's PPAs for natural gas and biomass generation generally provide that the purchasers are responsible for either procuring the fuel (tolling agreements) or reimbursing Southern Power for substantially all of the cost of fuel relating to the energy delivered under such PPAs. Consequently, changes in such fuel costs are generally accompanied by a corresponding change in related fuel revenues and do not have a significant impact on net income. Southern Power is responsible for the cost of fuel for generating units that are not covered under PPAs. Power from these generating units is sold into the wholesale market or into the power pool for capacity owned directly by Southern Power.
Purchased power expenses will vary depending on demand, availability, and the cost of generating resources throughout the Southern Company system and other contract resources. Load requirements are submitted to the power pool on an hourly basis and are fulfilled with the lowest cost alternative, whether that is generation owned by

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Southern Power, an affiliate company, or external parties. Such purchased power costs are generally recovered through PPA revenues.
Details of Southern Power's fuel and purchased power expenses were as follows:
 
Second Quarter 2017
vs.
Second Quarter 2016
 
Year-to-Date 2017
vs.
Year-to-Date 2016
 
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
Fuel
$
43

 
44.8
 
$
84

 
44.9
Purchased power
17

 
73.9
 
27

 
62.8
Total fuel and purchased power expenses
$
60

 
 
 
$
111

 
 
In the second quarter 2017 , total fuel and purchased power expenses increased $60 million, or 50.4%, compared to the corresponding period in 2016 . Fuel expense increased $43 million primarily due to a $51 million increase in the average cost of natural gas per KWH generated, partially offset by an $8 million decrease in the volume of KWHs generated, excluding solar, wind, and tolling agreements. Purchased power expense increased $17 million primarily due to a $10 million increase in the volume of KWHs purchased and a $6 million increase associated with the average cost of purchased power.
For year-to-date 2017 , total fuel and purchased power expenses increased $111 million, or 48.3%, compared to the corresponding period in 2016 . Fuel expense increased $84 million primarily due to a $105 million increase in the average cost of natural gas per KWH generated, partially offset by a $22 million decrease in the volume of KWHs generated, excluding solar, wind, and tolling agreements. Purchased power expense increased $27 million due to a $19 million increase in the volume of KWHs purchased and an $8 million increase associated with the average cost of purchased power.
Other Operations and Maintenance Expenses
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$11
 
12.8
 
$28
 
17.3
In the second quarter 2017 , other operations and maintenance expenses were $97 million compared to $86 million for the corresponding period in 2016 . The increase was primarily due to a $19 million increase associated with new solar, wind, and gas facilities and a $5 million increase associated with employee compensation and expenses in support of Southern Power's overall growth strategy, partially offset by a $9 million decrease in scheduled outage maintenance expenses and a $5 million decrease in non-outage operations and maintenance expenses.
For year-to-date 2017 , other operations and maintenance expenses were $190 million compared to $162 million for the corresponding period in 2016 . The increase was primarily due to a $35 million increase associated with new solar, wind, and gas facilities and a $10 million increase associated with employee compensation and expenses in support of Southern Power's overall growth strategy, partially offset by a $16 million decrease in scheduled outage maintenance expenses and a $4 million decrease in non-outage operations and maintenance expenses.
Depreciation and Amortization
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$48
 
59.3
 
$93
 
60.4
In the second quarter 2017 , depreciation and amortization was $129 million compared to $81 million for the corresponding period in 2016 . For year-to-date 2017 , depreciation and amortization was $247 million compared to

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$154 million for the corresponding period in 2016 . The increases were primarily due to new solar, wind, and gas facilities placed in service.
Interest Expense, net of Amounts Capitalized
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$26
 
118.2
 
$54
 
125.6
In the second quarter 2017 , interest expense, net of amounts capitalized was $48 million compared to $22 million for the corresponding period in 2016 . The increase was primarily due to an increase of $16 million in interest expense related to additional debt issued in 2016, primarily to fund Southern Power's growth strategy and continuous construction program, as well as a $9 million decrease in capitalized interest associated with completing construction of and placing in service solar facilities.
For year-to-date 2017 , interest expense, net of amounts capitalized was $97 million compared to $43 million for the corresponding period in 2016 . The increase was primarily due to an increase of $36 million in interest expense related to additional debt issued in 2016, primarily to fund Southern Power's growth strategy and continuous construction program, as well as a $17 million decrease in capitalized interest associated with completing construction of and placing in service solar facilities.
Other Income (Expense), Net
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$1
 
100.0
 
$(3)
 
(300.0)
In the second quarter 2017 , other income (expense), net was $2 million compared to $1 million for the corresponding period in 2016 . For year-to-date 2017 , other income (expense), net was $(2) million compared to $1 million for the corresponding period in 2016 . The changes include increases of $99 million and $116 million from currency losses arising from translation of €1.1 billion euro-denominated fixed-rate notes into U.S. dollars for the second quarter and year-to-date 2017, respectively, fully offset by an equal change in gains on the foreign currency hedges that were reclassified from accumulated OCI into earnings. See Note (H) to the Condensed Financial Statements herein for additional information.
Income Taxes (Benefit)
Second Quarter 2017 vs. Second Quarter 2016
 
Year-to-Date 2017 vs. Year-to-Date 2016
(change in millions)
 
(% change)
 
(change in millions)
 
(% change)
$3
 
7.3
 
$(25)
 
(38.5)
In the second quarter 2017 , income tax benefit was $38 million compared to $41 million for the corresponding period in 2016 . The decrease was primarily due to a $29 million decrease in ITC benefits, partially offset by a $27 million increase in wind PTC benefits.
For year-to-date 2017 , income tax benefit was $90 million compared to $65 million for the corresponding period in 2016 . The increase was primarily due to a $57 million increase in wind PTC benefits, a $4 million increase resulting from state apportionment rate changes, and a $4 million increase related to lower pre-tax earnings, partially offset by a $41 million decrease in ITC benefits.
See Note (G) to the Condensed Financial Statements herein for additional information on income taxes and Note 1 to the financial statements of Southern Power under "Income and Other Taxes" in Item 8 of the Form 10-K for additional information on ITCs.

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FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Southern Power's future earnings potential. The level of Southern Power's future earnings depends on numerous factors that affect the opportunities, challenges, and risks of Southern Power's competitive wholesale business. These factors include: Southern Power's ability to achieve sales growth while containing costs; regulatory matters; creditworthiness of customers; total generating capacity available in Southern Power's market areas; the successful remarketing of capacity as current contracts expire; Southern Power's ability to execute its growth strategy, including successful additional investments in renewable and other energy projects, and to develop and construct generating facilities. Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals, including any potential changes to the availability or realizability of ITCs and PTCs, is dependent on the final form of any legislation enacted and the related transition rules, and cannot be determined at this time, but could have a material impact on Southern Power's consolidated financial statements.
Demand for electricity is primarily driven by economic growth. The pace of economic growth and electricity demand may be affected by changes in regional and global economic conditions, as well as renewable portfolio standards, which may impact future earnings.
Other factors that could influence future earnings include weather, demand, cost of generation from facilities within the power pool, and operational limitations. For additional information relating to these factors, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL of Southern Power in Item 7 of the Form 10-K.
Power Sales Agreements
See BUSINESS – "The Southern Company System – Southern Power" in Item 1 of the Form 10-K for additional information regarding Southern Power's PPAs. Generally, under the solar and wind generation PPAs, the purchasing party retains the right to keep or resell the renewable energy credits.
At June 30, 2017 , Southern Power's average investment coverage ratio for its generating assets, based on the ratio of investment under contract to total investment using the respective generation facilities' net book value (or expected in-service value for facilities under construction) as the investment amount, was 91% through 2021 and 90% through 2026, with an average remaining contract duration of approximately 16  years.
Environmental Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters" of Southern Power in Item 7 of the Form 10-K for information on the development by federal and state environmental regulatory agencies of additional control strategies for emissions of air pollution from industrial sources, including electric generating facilities. Compliance with possible additional federal or state legislation or regulations related to global climate change, air quality, water quality, or other environmental and health concerns could also significantly affect Southern Power. While Southern Power's PPAs generally contain provisions that permit charging the counterparty with some of the new costs incurred as a result of changes in environmental laws and regulations, the full impact of any such legislative or regulatory changes cannot be determined at this time.
Environmental Statutes and Regulations
Water Quality
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Environmental Statutes and Regulations Water Quality" of Southern Power in Item 7 of the Form 10-K for additional information regarding the final effluent guidelines rule.

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On April 25, 2017, the EPA published a notice announcing it would reconsider the effluent guidelines rule, which had been finalized in November 2015. On June 6, 2017, the EPA proposed a rule establishing a stay of the compliance deadlines for certain effluent limitations and pretreatment standards under the rule.
The ultimate outcome of this matter cannot be determined at this time.
Global Climate Issues
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters Global Climate Issues" of Southern Power in Item 7 of the Form 10-K for additional information.
On March 28, 2017, the U.S. President signed an executive order directing agencies to review actions that potentially burden the development or use of domestically produced energy resources. The executive order specifically directs the EPA to review the Clean Power Plan and final greenhouse gas emission standards for new, modified, and reconstructed electric generating units and, if appropriate, take action to suspend, revise, or rescind those rules.
On June 1, 2017, the U.S. President announced that the United States will withdraw from the non-binding Paris Agreement and begin renegotiation of its terms.
The ultimate outcome of these matters cannot be determined at this time.
FERC Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters" of Southern Power in Item 7 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' and Southern Power's market power proceeding, it remains a separate, ongoing matter.
Acquisitions
During the six months ended June 30, 2017 , in accordance with Southern Power's overall growth strategy, Southern Renewable Partnerships, LLC (SRP), one of Southern Power's wholly-owned subsidiaries, acquired the Bethel wind facility. Acquisition-related costs were expensed as incurred and were not material. See Note (I) to the Condensed Financial Statements under " Southern Power " herein and MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Southern Power in Item 7 of the Form 10-K for additional information.
Project Facility
Resource
Approximate Nameplate Capacity ( MW )
Location
Percentage Ownership
Actual COD
PPA Counterparties
PPA Contract Period
Bethel
Wind
276
Castro County, TX
100
%
 
January 2017
Google Energy, LLC
12 years
The aggregate amounts of revenue and net income, excluding impacts from PTCs, recognized by Southern Power related to the Bethel facility included in the condensed consolidated statements of income for year-to-date 2017 were immaterial . The Bethel facility did not have operating revenues or activities prior to completion of construction and the assets being placed in service; therefore, supplemental pro forma information for the comparable 2016 period is not meaningful and has been omitted.
Subsequent to June 30, 2017, Southern Power acquired a 100% ownership interest in and commenced construction of the Cactus Flats 148-MW wind facility, the majority of which is covered by two PPAs, which expire in 2030 and

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2033. The facility is expected to be placed in service in mid-2018. The ultimate outcome of this matter cannot be determined at this time.
Construction Projects
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Acquisitions" and "Construction Projects" of Southern Power in Item 7 of the Form 10-K and FINANCIAL CONDITION AND LIQUIDITY – " Capital Requirements and Contractual Obligations " herein for additional information.
Construction Projects Completed and in Progress
During the six months ended June 30, 2017 , in accordance with its overall growth strategy, Southern Power completed construction of and placed in service, or continued construction of, the projects set forth in the following table. Through June 30, 2017 , total costs of construction incurred for these projects were $421 million , of which $49 million remained in CWIP for the Mankato facility acquired in 2016. Total aggregate construction costs, excluding the acquisition costs, are expected to be $170 million to $190 million for the Mankato facility. The ultimate outcome of this matter cannot be determined at this time.
Project Facility
Resource
Approximate Nameplate Capacity ( MW )
Location
Actual/Expected COD
PPA Counterparties
PPA Contract Period
Projects Completed During the Six Months Ended June 30, 2017
East Pecos
Solar
120
Pecos County, TX
March 2017
Austin Energy
15 years
Lamesa
Solar
102
Dawson County, TX
April 2017
City of Garland, Texas
15 years
 
 
 
 
 
 
 
Project Under Construction as of June 30, 2017
Mankato
Natural Gas
345
Mankato, MN
Second quarter 2019
Northern States Power Company
20 years
Development Projects
In December 2016, as part of Southern Power's renewable development strategy, SRP entered into a joint development agreement with Renewable Energy Systems Americas, Inc. to develop and construct approximately 3,000 MWs of wind projects. Also in December 2016, Southern Power signed agreements and made payments to purchase wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for construction of the facilities. All of the wind turbine equipment was delivered by April 2017, which allows the projects to qualify for 100% PTCs for 10 years following their expected commercial operation dates between 2018 and 2020. The ultimate outcome of these matters cannot be determined at this time.
Income Tax Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Income Tax Matters" of Southern Power in Item 7 of the Form 10-K and Note (G) to the Condensed Financial Statements herein for additional information.
Other Matters
Southern Power is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Southern Power is subject to certain claims and legal actions arising in the ordinary course of business. Southern Power's 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 air quality and water standards, has occurred throughout the

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U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against Southern Power cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein , management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Southern Power's financial statements.
During 2015, Southern Power indirectly acquired a 51% membership interest in RE Roserock LLC (Roserock), the owner of the Roserock facility in Pecos County, Texas, which was under construction by Recurrent Energy, LLC and was subsequently placed in service in November 2016. Prior to placing the facility in service, certain solar panels were damaged during installation. While the facility currently is generating energy consistent with operational expectations and PPA obligations, Southern Power is pursuing remedies under its insurance policies and other contracts to repair or replace these solar panels. In connection therewith, Southern Power is withholding payments of approximately $26 million from the construction contractor, who has placed a lien on the Roserock facility for the same amount. The amounts withheld are included in other accounts payable and other current liabilities on Southern Power's consolidated balance sheets. On May 18, 2017, Roserock filed a lawsuit in the state district court in Pecos County, Texas, against X.L. America, Inc. (XL) and North American Elite Insurance Company (North American Elite) seeking recovery from an insurance policy for damages resulting from a hail storm and certain installation practices by the construction contractor, McCarthy Building Companies, Inc. (McCarthy). On May 19, 2017, Roserock filed a separate lawsuit against McCarthy in the state district court in Travis County, Texas alleging breach of contract and breach of warranty for the damages sustained at the Roserock facility, which has since been moved to the U.S. District Court for the Western District of Texas. On May 22, 2017, McCarthy filed a lawsuit against Roserock, Array Technologies, Inc., Canadian Solar (USA), Inc., XL, and North American Elite in the U.S. District Court for the Western District of Texas alleging, among other things, breach of contract, and requesting foreclosure of mechanic's liens against Roserock. On July 18, 2017, the U.S. District Court for the Western District of Texas consolidated the two pending lawsuits. Southern Power intends to vigorously pursue and defend these matters, the ultimate outcome of which cannot be determined at this time.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Southern Power prepares its consolidated financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Southern Power in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Southern Power's results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Southern Power in Item 7 of the Form 10-K for a complete discussion of Southern Power's critical accounting policies and estimates related to Revenue Recognition, Impairment of Long-Lived Assets and Intangibles, Acquisition Accounting, and ITCs.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Southern Power expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. However, given Southern Power's core activities of selling

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generation capacity and energy to high credit rated customers, Southern Power currently does not expect the new standard to have a significant impact to net income. Southern Power's ongoing evaluation of revenue streams and related contracts includes the evaluation of identified revenue streams tied to longer-term contractual arrangements, such as certain capacity and energy payments under PPAs that are expected to be excluded from the scope of ASC 606 and included in the scope of the current leasing guidance (ASC 840).
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Southern Power intends to use the modified retrospective method of adoption effective January 1, 2018. Southern Power has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Southern Power's financial statements, Southern Power will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Southern Power in Item 7 of the Form 10-K for additional information. Southern Power's financial condition remained stable at June 30, 2017 . Southern Power intends to continue to monitor its access to short-term and long-term capital markets as well as bank credit agreements as needed to meet future capital and liquidity needs. See " Sources of Capital " herein for additional information on lines of credit.
Net cash provided from operating activities totaled $348 million for the first six months of 2017 compared to $51 million for the first six months of 2016 . The increase in net cash provided from operating activities was primarily due to an increase in energy sales arising from new solar and wind facilities and a decrease in income taxes paid, partially offset by an increase in interest paid. See FUTURE EARNINGS POTENTIAL "Income Tax Matters – Bonus Depreciation" of Southern Power in Item 7 of the Form 10-K for additional information. Net cash used for investing activities totaled $1.4 billion for the first six months of 2017 primarily due to payments for renewable acquisitions and the construction of generating facilities. See FUTURE EARNINGS POTENTIAL " Acquisitions " and " Construction Projects " herein for additional information. Net cash provided from financing activities totaled $43 million for the first six months of 2017 primarily due to notes payable and contributions from noncontrolling interests, partially offset by dividends to Southern Company and distributions to noncontrolling interests. Cash flows from financing activities may vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes for the first six months of 2017 include a $1.0 billion decrease in cash and cash equivalents and a $798 million increase in property, plant, and equipment in-service primarily related to acquisitions, as well as a $54 million decrease in CWIP primarily due to East Pecos and Lamesa being placed in service, partially offset by equipment purchased for wind construction projects. See FUTURE EARNINGS POTENTIAL " Acquisitions " and " Construction Projects " herein for additional information.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Southern Power in Item 7 of the Form 10-K for a description of Southern Power's capital requirements for its construction program, scheduled maturities of long-term debt, as well as the related interest, derivative obligations, leases, unrecognized tax benefits, and other purchase

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commitments. Approximately $909 million will be required to repay maturities of long-term debt through June 30, 2018 .
Southern Power's construction program includes estimates for potential plant acquisitions, new construction and development, capital improvements, and work to be performed under LTSAs and is subject to periodic review and revision. Planned expenditures for plant acquisitions may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy. Actual capital costs may vary from these estimates because of numerous factors such as: changes in business conditions; changes in the expected environmental compliance program; changes in environmental statutes and regulations; the outcome of any legal challenges to the environmental rules; changes in FERC rules and regulations; changes in load projections; changes in legislation; the cost and efficiency of construction labor, equipment, and materials; project scope and design changes; and the cost of capital. See Note (I) to the Condensed Financial Statements herein for additional information.
Sources of Capital
Southern Power plans to obtain the funds required for acquisitions, construction, development, and other purposes from operating cash flows, short-term debt, securities issuances, term loans, tax equity partnership contributions, and equity contributions from Southern Company. However, the amount, type, and timing of any future financings, if needed, will depend upon prevailing market conditions, regulatory approval, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" of Southern Power in Item 7 of the Form 10-K for additional information.
As of June 30, 2017, Southern Power's current liabilities exceeded current assets by $837 million due to long-term debt maturing in the next 12 months, the use of short-term debt as a funding source, and construction payables, as well as fluctuations in cash needs, due to both seasonality and the stage of acquisitions and construction projects. In 2017 , Southern Power expects to utilize the debt capital markets, bank term loans, and commercial paper markets as the source of funds for the majority of its debt maturities.
As of June 30, 2017 , Southern Power had cash and cash equivalents of approximately $99 million .
Southern Power believes the need for working capital can be adequately met by utilizing the commercial paper program, the Facility (as defined below), bank term loans, and operating cash flows.
Southern Power's commercial paper program is used to finance acquisition and construction costs related to electric generating facilities, for general corporate purposes, and to finance maturing debt. Commercial paper is included in notes payable on the condensed consolidated balance sheet at June 30, 2017.
Details of commercial paper were as follows:
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
Amount Outstanding
Weighted Average Interest Rate
 
Average Amount Outstanding
 
Weighted Average Interest Rate
 
Maximum
Amount
Outstanding
 
(in millions)
 
 
(in millions)
 
 
 
(in millions)
Commercial paper
$
398

1.5
%
 
$
328

 
1.3
%
 
$
419

(*)
Average and maximum amounts are based upon daily balances during the three -month period ended June 30, 2017 .
At June 30, 2017 , Southern Power had a committed credit facility (Facility) of $750 million , of which $75 million has been used for letters of credit and $675 million remains unused. In May 2017, Southern Power amended the Facility, which, among other things, extended the maturity date from 2020 to 2022 and increased Southern Power's borrowing ability under this Facility to $750 million from $600 million. Proceeds from the Facility may be used for working capital and general corporate purposes as well as liquidity support for Southern Power's commercial paper program. Subject to applicable market conditions, Southern Power expects to renew or replace the Facility, as

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needed, prior to expiration. In connection therewith, Southern Power may extend the maturity date and/or increase or decrease the lending commitment thereunder. See Note 6 to the financial statements of Southern Power under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
The Facility, as well as Southern Power's term loan agreement, contains a covenant that limits the ratio of debt to capitalization (as defined in the Facility) to a maximum of 65% and contains a cross-default provision that is restricted only to indebtedness of Southern Power. For purposes of this definition, debt excludes any project debt incurred by certain subsidiaries of Southern Power to the extent such debt is non-recourse to Southern Power, and capitalization excludes the capital stock or other equity attributable to such subsidiary. Southern Power is currently in compliance with all covenants in the Facility.
In December 2016, Southern Power entered into an agreement for a $120 million continuing letter of credit facility for standby letters of credit expiring in 2019. At June 30, 2017 , the total amount available under this letter of credit facility was $62 million.
Southern Power's subsidiaries do not borrow under the commercial paper program and are not parties to, and do not borrow under, the Facility or the continuing letter of credit facility.
Credit Rating Risk
Southern Power does 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change to BBB and/or Baa2, or below. These contracts are for physical electricity purchases and sales, fuel transportation and storage, energy price risk management, transmission, and foreign currency risk management.
The maximum potential collateral requirements under these contracts at June 30, 2017 were as follows:
Credit Ratings
Maximum Potential
Collateral
Requirements
 
(in millions)
At BBB and/or Baa2
$
38

At BBB- and/or Baa3
$
392

At BB+ and/or Ba1 (*)
$
1,127

(*)
Any additional credit rating downgrades at or below BB- and/or Ba3 could increase collateral requirements up to an additional $38 million.
Included in these amounts are certain agreements that could require collateral in the event that Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Southern Power to access capital markets and would be likely to impact the cost at which it does so.
In addition, Southern Power has a PPA that could require collateral, but not accelerated payment, in the event of a downgrade of Southern Power's credit. The PPA requires credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Southern Power) from stable to negative.
Financing Activities
Southern Power did not issue or redeem any securities during the six months ended June 30, 2017.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


In addition to any financings that may be necessary to meet capital requirements and contractual obligations, Southern Power plans to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

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SOUTHERN COMPANY GAS
AND SUBSIDIARY COMPANIES

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
For the Three Months Ended June 30,
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
For the Six Months Ended June 30,
 
2017
 
 
2016
 
2017
 
 
2016
 
(in millions)
 
 
(in millions)
 
(in millions)
 
 
(in millions)
Operating Revenues:
 
 
 
 
 
 
 
 
 
Natural gas revenues (includes revenue taxes of
$19, $17, $67, and $57 for the periods presented,
respectively)
$
684

 
 
$
539

 
$
2,214

 
 
$
1,841

Other revenues
32

 
 
32

 
62

 
 
64

Total operating revenues
716

 
 
571

 
2,276

 
 
1,905

Operating Expenses:
 
 
 
 
 
 
 
 
 
Cost of natural gas
232

 
 
184

 
951

 
 
755

Cost of other sales
6

 
 
7

 
13

 
 
14

Other operations and maintenance
213

 
 
213

 
467

 
 
454

Depreciation and amortization
125

 
 
104

 
244

 
 
206

Taxes other than income taxes
44

 
 
37

 
114

 
 
99

Merger-related expenses

 
 
53

 

 
 
56

Total operating expenses
620

 
 
598

 
1,789

 
 
1,584

Operating Income (Loss)
96

 
 
(27
)
 
487

 
 
321

Other Income and (Expense):
 
 
 
 
 
 
 
 
 
Earnings from equity method investments
29

 
 
1

 
68

 
 
2

Interest expense, net of amounts capitalized
(48
)
 
 
(48
)
 
(94
)
 
 
(96
)
Other income (expense), net
3

 
 
2

 
7

 
 
5

Total other income and (expense)
(16
)
 
 
(45
)
 
(19
)
 
 
(89
)
Earnings (Loss) Before Income Taxes
80

 
 
(72
)
 
468

 
 
232

Income taxes (benefit)
31

 
 
(24
)
 
180

 
 
87

Net Income (Loss)
49

 
 
(48
)
 
288

 
 
145

Less: Net income attributable to noncontrolling interest

 
 
3

 

 
 
14

Net Income (Loss) Attributable to Southern Company Gas
$
49

 
 
$
(51
)
 
$
288

 
 
$
131

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
For the Three Months Ended June 30,
 
 
For the Three Months Ended June 30,
 
For the Six Months Ended June 30,
 
 
For the Six Months Ended June 30,
 
2017
 
 
2016
 
2017
 
 
2016
 
(in millions)
 
 
(in millions)
 
(in millions)
 
 
(in millions)
Net Income (Loss)
$
49

 
 
$
(48
)
 
$
288

 
 
$
145

Other comprehensive income (loss):
 
 
 
 
 
 
 
 
 
Qualifying hedges:
 
 
 
 
 
 
 
 
 
Changes in fair value, net of tax of
$(1), $(7), $(2), and $(23), respectively
(1
)
 
 
(12
)
 
(2
)
 
 
(41
)
Reclassification adjustment for amounts included in
net income, net of tax of $-, $-, $-, and $-,
respectively

 
 
2

 

 
 
1

Pension and other postretirement benefit plans:
 
 
 
 
 
 
 
 
 
Reclassification adjustment for amounts included in
net income, net of tax of $-, $2, $-, and $4,
respectively

 
 
2

 
(1
)
 
 
5

Total other comprehensive income (loss)
(1
)
 
 
(8
)
 
(3
)
 
 
(35
)
Comprehensive Income (Loss)
48

 
 
(56
)
 
285

 
 
110

Less: Comprehensive income attributable to
noncontrolling interest

 
 
3

 

 
 
14

Comprehensive Income (Loss) Attributable to
Southern Company Gas
$
48

 
 
$
(59
)
 
$
285

 
 
$
96

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
 
Successor
 
 
Predecessor
 
For the Six Months Ended June 30,
 
 
For the Six Months Ended June 30,
 
2017
 
 
2016
 
(in millions)
 
 
(in millions)
Operating Activities:
 
 
 
 
Net income
$
288

 
 
$
145

Adjustments to reconcile net income to net cash provided from operating activities —
 
 
 
 
Depreciation and amortization, total
244

 
 
206

Deferred income taxes
144

 
 
8

Stock based compensation expense
19

 
 
20

Hedge settlements

 
 
(26
)
Mark-to-market adjustments
(49
)
 
 
162

Other, net
(53
)
 
 
(77
)
Changes in certain current assets and liabilities —
 
 
 
 
-Receivables
420

 
 
181

-Natural gas for sale, net of temporary LIFO liquidation
223

 
 
273

-Prepaid income taxes
24

 
 
151

-Other current assets
(12
)
 
 
37

-Accounts payable
(102
)
 
 
43

-Accrued taxes
(8
)
 
 
41

-Accrued compensation
(12
)
 
 
(21
)
-Other current liabilities
25

 
 
(30
)
Net cash provided from operating activities
1,151

 
 
1,113

Investing Activities:
 
 
 
 
Property additions
(684
)
 
 
(509
)
Cost of removal, net of salvage
(25
)
 
 
(32
)
Change in construction payables, net
23

 
 
(7
)
Investment in unconsolidated subsidiaries
(111
)
 
 
(14
)
Other investing activities
16

 
 
3

Net cash used for investing activities
(781
)
 
 
(559
)
Financing Activities:
 
 
 
 
Decrease in notes payable, net
(631
)
 
 
(896
)
Proceeds —
 
 
 
 
First mortgage bonds

 
 
250

Capital contributions from parent company
57

 
 

       Senior notes
450

 
 
350

Redemptions and repurchases — First mortgage bonds

 
 
(125
)
Distributions to noncontrolling interest

 
 
(19
)
Payment of common stock dividends
(221
)
 
 
(128
)
Other financing activities
(6
)
 
 
10

Net cash used for financing activities
(351
)
 
 
(558
)
Net Change in Cash and Cash Equivalents
19

 
 
(4
)
Cash and Cash Equivalents at Beginning of Period
19

 
 
19

Cash and Cash Equivalents at End of Period
$
38

 
 
$
15

Supplemental Cash Flow Information:
 
 
 
 
Cash paid (received) during the period for —
 
 
 
 
Interest (net of $7 and $3 capitalized for 2017 and 2016, respectively)
$
105

 
 
$
119

Income taxes, net
20

 
 
(100
)
Noncash transactions — Accrued property additions at end of period
84

 
 
41

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.


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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Assets
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Assets:
 
 
 
 
Cash and cash equivalents
 
$
38

 
$
19

Receivables —
 
 
 
 
Energy marketing receivables
 
482

 
623

Customer accounts receivable
 
270

 
364

Unbilled revenues
 
69

 
239

Other accounts and notes receivable
 
63

 
76

Accumulated provision for uncollectible accounts
 
(35
)
 
(27
)
Materials and supplies
 
24

 
26

Natural gas for sale
 
477

 
631

Prepaid expenses
 
69

 
80

Assets from risk management activities, net of collateral
 
114

 
128

Other regulatory assets, current
 
72

 
81

Other current assets
 
20

 
10

Total current assets
 
1,663

 
2,250

Property, Plant, and Equipment:
 
 
 
 
In service
 
14,850

 
14,508

Less: Accumulated depreciation
 
4,550

 
4,439

Plant in service, net of depreciation
 
10,300

 
10,069

Construction work in progress
 
779

 
496

Total property, plant, and equipment
 
11,079

 
10,565

Other Property and Investments:
 
 
 
 
Goodwill
 
5,967

 
5,967

Equity investments in unconsolidated subsidiaries
 
1,610

 
1,541

Other intangible assets, net of amortization of $80 and $34
at June 30, 2017 and December 31, 2016, respectively
 
320

 
366

Miscellaneous property and investments
 
21

 
21

Total other property and investments
 
7,918

 
7,895

Deferred Charges and Other Assets:
 
 
 
 
Other regulatory assets, deferred
 
963

 
973

Other deferred charges and assets
 
186

 
170

Total deferred charges and other assets
 
1,149

 
1,143

Total Assets
 
$
21,809

 
$
21,853

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.


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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's Equity
 
At June 30, 2017
 
At December 31, 2016
 
 
(in millions)
Current Liabilities:
 
 
 
 
Securities due within one year
 
$
22

 
$
22

Notes payable
 
626

 
1,257

Energy marketing trade payables
 
534

 
597

Accounts payable
 
327

 
348

Customer deposits
 
134

 
153

Accrued taxes —
 
 
 
 
Accrued income taxes
 
23

 
26

Other accrued taxes
 
63

 
68

Accrued interest
 
50

 
48

Accrued compensation
 
45

 
58

Liabilities from risk management activities, net of collateral
 
20

 
62

Other regulatory liabilities, current
 
146

 
102

Accrued environmental remediation, current
 
63

 
69

Temporary LIFO liquidation
 
69

 

Other current liabilities
 
113

 
108

Total current liabilities
 
2,235

 
2,918

Long-term Debt
 
5,677

 
5,259

Deferred Credits and Other Liabilities:
 
 
 
 
Accumulated deferred income taxes
 
2,091

 
1,975

Employee benefit obligations
 
432

 
441

Other cost of removal obligations
 
1,638

 
1,616

Accrued environmental remediation, deferred
 
353

 
357

Other regulatory liabilities, deferred
 
50

 
51

Other deferred credits and liabilities
 
91

 
127

Total deferred credits and other liabilities
 
4,655

 
4,567

Total Liabilities
 
12,567

 
12,744

Common Stockholder's Equity:
 
 
 
 
Common stock, par value $0.01 per share —
 
 
 
 
Authorized — 100 million shares
 
 
 
 
Outstanding — 100 shares
 

 

Paid in capital
 
9,164

 
9,095

Retained earnings (accumulated deficit)
 
55

 
(12
)
Accumulated other comprehensive income
 
23

 
26

Total common stockholder's equity
 
9,242

 
9,109

Total Liabilities and Stockholder's Equity
 
$
21,809

 
$
21,853

The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.



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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


OVERVIEW
Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas through utilities in seven states – Illinois, Georgia, Virginia, New Jersey, Florida, Tennessee, and Maryland. Southern Company Gas and its subsidiaries are also involved in several other complementary businesses.
Southern Company Gas has four reportable segments – gas distribution operations, gas marketing services, wholesale gas services, and gas midstream operations – and one non-reportable segment – all other. For additional information on these segments, see Note (K) to the Condensed Financial Statements herein and "BUSINESS – Southern Company Gas" in Item 1 of the Form 10-K.
Many factors affect the opportunities, challenges, and risks of Southern Company Gas' business. These factors include the ability to maintain constructive regulatory environments, to maintain and grow natural gas sales, and to effectively manage and secure timely recovery of costs. Southern Company Gas has various regulatory mechanisms that operate to address cost recovery. Effectively operating pursuant to these regulatory mechanisms and appropriately balancing required costs and capital expenditures with customer prices will continue to challenge Southern Company Gas for the foreseeable future.
Merger and Acquisition Activities
On July 1, 2016, Southern Company Gas completed the Merger, which was accounted for by Southern Company using the acquisition method of accounting whereby the assets acquired and liabilities assumed were recognized at fair value as of the acquisition date. Pushdown accounting was applied to create a new cost basis for Southern Company Gas assets, liabilities, and equity as of the acquisition date. Accordingly, the successor financial statements reflect a new basis of accounting and successor and predecessor period financial results (separated by a heavy black line) are presented, but are not comparable. As a result of the application of acquisition accounting, certain discussions herein include disclosure of the predecessor and successor periods. See Note (I) to the Condensed Financial Statements herein for additional information relating to the Merger.
In September 2016, Southern Company Gas paid approximately $1.4 billion to acquire a 50% equity interest in SNG. On March 31, 2017, Southern Company Gas made an additional $50 million contribution to maintain its 50% equity interest in SNG. Southern Company Gas recorded equity investment income of $24 million and $58 million from this investment in the second quarter and year-to-date 2017 , respectively. See Note (J) to the Condensed Financial Statements herein and Notes 4 and 11 to the financial statements of Southern Company Gas under "Equity Method Investments – SNG" and "Investment in SNG," respectively, in Item 8 of the Form 10-K for additional information.
In October 2016, Southern Company Gas completed its purchase of Piedmont's 15% interest in SouthStar, which eliminated the noncontrolling interest associated with SouthStar. See Note 4 to the financial statements of Southern Company Gas under "Variable Interest Entities" in Item 8 of the Form 10-K for additional information.
Operating Metrics
Southern Company Gas continues to focus on several operating metrics, including Heating Degree Days, customer count, and volumes of natural gas sold. For additional information on these indicators, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS – "Operating Metrics" of Southern Company Gas in Item 7 of the Form 10-K.
Southern Company Gas measures weather and the effect on its business using Heating Degree Days. Generally, increased Heating Degree Days result in higher demand for natural gas on Southern Company Gas' distribution system. With the exception of Southern Company Gas' utilities in Illinois and Florida, Southern Company Gas has various regulatory mechanisms, such as weather normalization mechanisms, which limit its exposure to weather changes within typical ranges in each of its utilities' respective service territory. However, the utility customers in Illinois and the gas marketing services customers primarily in Georgia can be impacted by warmer- or colder-than-normal weather. Southern Company Gas utilizes weather hedges at gas distribution operations and gas marketing services to reduce negative earnings impact in the event of warmer-than-normal weather, while retaining all of the

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


earnings upside in the event of colder-than-normal weather for gas distribution operations in Illinois and most of the earnings upside for gas marketing services.
The number of customers at gas distribution operations and energy customers at gas marketing services can be impacted by natural gas prices, economic conditions, and competition from alternative fuels. Gas marketing services' customers are primarily located in Georgia and Illinois.
Southern Company Gas' natural gas volume metrics for gas distribution operations and gas marketing services illustrate the effects of weather and customer demand for natural gas. Wholesale gas services' physical sales volumes represent the daily average natural gas volumes sold to its customers.
Seasonality of Results
During the months of November through March, natural gas usage and operating revenues are generally higher, as more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. Occasionally in the summer, wholesale gas services' operating revenues are impacted due to peak usage by power generators in response to summer energy demands. Southern Company Gas' base operating expenses, excluding cost of natural gas, bad debt expense, and certain incentive compensation costs, are incurred relatively evenly during a year. Seasonality also affects the comparison of certain balance sheet items across quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. However, these items are comparable when reviewing Southern Company Gas' annual results. Operating results for the interim periods presented are not necessarily indicative of annual results and can vary significantly from quarter to quarter.
RESULTS OF OPERATIONS
Net Income
Net income attributable to Southern Company Gas for the successor second quarter 2017 and net loss attributable to Southern Company Gas for the predecessor second quarter 2016 were $49 million and $51 million , respectively. Net income attributable to Southern Company Gas for the successor year-to-date 2017 and the predecessor year-to-date 2016 was $288 million and $131 million , respectively.
As a result of purchasing the remaining interest in SouthStar in October 2016, all net income was attributable to Southern Company Gas in the successor period. Net income for the successor second quarter 2017 was negatively impacted by $5 million due to the pushdown of acquisition accounting related to the Merger and included $10 million in after-tax earnings from the SNG investment, net of related interest expense. Also reflected in net income was an increase of $12 million, after tax, from additional infrastructure replacement programs at gas distribution operations, net of increased depreciation and a base rate increase at Atlanta Gas Light effective March 1, 2017. The successor second quarter 2017 also included $11 million in after-tax losses from commercial activity and $8 million in after-tax mark-to-market gains at wholesale gas services.
Net loss attributable to Southern Company Gas for the predecessor second quarter 2016 included $39 million in after-tax Merger-related expenses, as well as $5 million in after-tax losses from commercial activity at wholesale gas services and $50 million in net after-tax mark-to-market losses at wholesale gas services and gas marketing services due to changes in natural gas price volatility in the period.
Net income attributable to Southern Company Gas for the successor year-to-date 2017 was negatively impacted by $2 million due to the pushdown of acquisition accounting related to the Merger and included $25 million in after-tax earnings from the SNG investment, net of related interest expense. The successor year-to-date 2017 included an increase of $19 million, after tax, from additional infrastructure replacement programs at gas distribution operations, net of increased depreciation and a base rate increase at Atlanta Gas Light effective March 1, 2017. The successor year-to-date 2017 also included $41 million in after-tax gains from commercial activity at wholesale gas services, $27 million in net after-tax mark-to-market gains at wholesale gas services and gas marketing services, and a reduction of $9 million, after tax, resulting from warmer-than-normal weather, net of hedging.
Net income attributable to Southern Company Gas for the predecessor year-to-date 2016 included $41 million in after-tax Merger-related expenses and $21 million in after-tax mark-to-market gains from commercial activity at

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


wholesale gas services. Also reflected in net income was $38 million in net after-tax mark-to-market losses at wholesale gas services and gas marketing services and a decrease of $5 million, after tax, resulting from warmer-than-normal weather, net of hedging.
Natural Gas Revenues
Natural gas revenues for the successor second quarter 2017 and the predecessor second quarter 2016 were $684 million and $539 million , respectively. Natural gas revenues for the successor year-to-date 2017 and the predecessor year-to-date 2016 were $2.2 billion and $1.8 billion , respectively.
Natural gas revenues for the successor second quarter 2017 included recovery of $232 million in cost of natural gas and $12 million in net losses from wholesale gas services. Also included in natural gas revenues were $26 million in additional revenues generated from gas distribution operations as a result of continued investment in infrastructure replacement programs and a $2 million decrease attributable to warmer-than-normal weather, net of hedging.
Natural gas revenues for the predecessor second quarter 2016 reflected recovery of $184 million in cost of natural gas and $95 million in net losses from wholesale gas services, primarily due to mark-to-market losses on storage, transportation, and forward commodity derivatives.
Natural gas revenues for the successor year-to-date 2017 included recovery of $951 million in cost of natural gas and $119 million in net revenues from wholesale gas services. Also included in natural gas revenues was $45 million in additional revenues generated from gas distribution operations as a result of continued investment in infrastructure replacement programs and a $15 million decrease attributable to warmer-than-normal weather, net of hedging.
Natural gas revenues for the predecessor year-to-date 2016 reflected recovery of $755 million in cost of natural gas and $32 million in net losses from wholesale gas services. Also included in natural gas revenues was a $7 million decrease attributable to warmer-than-normal weather, net of hedging.
See "Segment Information" herein for additional information on wholesale gas services' revenues and losses.
Natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, recoverable natural gas revenues generally equal the cost of natural gas and do not affect net income from gas distribution operations. See "Cost of Natural Gas" herein for additional information. Revenue impacts from weather and customer growth are described further below.
Heating Season is the period from November through March when natural gas usage and operating revenues are generally higher. Weather typically does not have a significant net income impact during the non-Heating Season. The following table presents the Heating Degree Days information for Illinois and Georgia, the primary locations where Southern Company Gas' operations are impacted by weather.
 
 
Second Quarter
 
2017
vs.
2016
 
2017
vs.
normal
 
Year-to-Date
 
2017
vs.
2016
 
2017
vs.
normal
 
 
Normal (a)
 
2017
 
2016
 
(warmer)
 
(warmer)
 
Normal (a)
 
2017
 
2016
 
(warmer)
 
(warmer)
Illinois (b)
 
639

 
555

 
639

 
(13
)%
 
(13
)%
 
3,760

 
3,110

 
3,340

 
(7
)%
 
(17
)%
Georgia
 
137

 
75

 
114

 
(34
)%
 
(45
)%
 
1,636

 
1,000

 
1,448

 
(31
)%
 
(39
)%
(a)
Normal represents the 10-year average from January 1, 2007 through June 30, 2016 for Illinois at Chicago Midway International Airport and for Georgia at Atlanta Hartsfield-Jackson International Airport, based on information obtained from the National Oceanic and Atmospheric Administration, National Climatic Data Center.
(b)
The 10-year average Heating Degree Days established by the Illinois Commission in Nicor Gas' 2009 rate case is 617 for the second quarter and 3,519 for the first six months from 1998 through 2007.
For the successor second quarter 2017 and the predecessor second quarter 2016, the weather-related negative pre-tax income impact was limited to $2 million in each period.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Southern Company Gas hedged its exposure to warmer-than-normal weather at Nicor Gas in Illinois; therefore, the weather-related negative pre-tax income impact on gas distribution operations was limited to $5 million ($3 million after tax) and $7 million ($5 million after tax) for the successor year-to-date 2017 and the predecessor year-to-date 2016 , respectively. Southern Company Gas also hedged its exposure at gas marketing services to warmer-than-normal weather in Georgia; therefore, the weather-related negative pre-tax income impact on gas marketing services was limited to $10 million ($6 million after tax) for the successor year-to-date 2017 and there was no impact for the predecessor year-to-date 2016 .
The following table provides the number of customers served by Southern Company Gas at June 30, 2017 and 2016 :
 
June 30,
 
 
 
2017
 
2016
 
2017 vs. 2016
 
(in thousands, except market share %)
 
(% change)
Gas distribution operations
4,573

 
4,544

 
0.6
 %
Gas marketing services
 
 
 
 
 
Energy customers (*)
768

 
630

 
21.9
 %
Market share of energy customers in Georgia
29.1
%
 
29.3
%
 
 
Service contracts
1,188

 
1,197

 
(0.8
)%
(*)
Includes approximately 140,000 customers as of June 30, 2017 that were contracted to serve beginning April 1, 2017.
Southern Company Gas anticipates overall customer growth trends at gas distribution operations to continue in 2017 , as it expects continued improvement in the new housing market and low natural gas prices.
Gas marketing services' market share in Georgia decreased slightly at June 30, 2017 compared to June 30, 2016 as a result of a highly competitive marketing environment, which Southern Company Gas expects to continue for the foreseeable future. Southern Company Gas will continue efforts at gas marketing services to enter into targeted markets and expand its energy customers and service contracts.
Cost of Natural Gas
Cost of natural gas was $232 million for the successor second quarter 2017 and $184 million for the predecessor second quarter 2016 , which primarily reflected an increase of 63% in natural gas prices during the successor second quarter 2017 compared to the corresponding period in 2016, partially offset by lower demand for natural gas driven by warmer-than-normal weather.
Cost of natural gas was $951 million for the successor year-to-date 2017 and $755 million for the predecessor year-to-date 2016 , which primarily reflected an increase of 61% in natural gas prices during the successor year-to-date 2017 compared to the corresponding period in 2016, partially offset by lower demand for natural gas driven by warmer-than-normal weather.
Natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, recoverable natural gas revenues generally equal the cost of natural gas and do not affect net income from gas distribution operations. For additional information, see MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS – "Cost of Natural Gas" of Southern Company Gas in Item 7 of the Form 10-K and "Natural Gas Revenues" herein.

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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following table details the volumes of natural gas sold during all periods presented.
 
Second Quarter
 
2017
vs.
2016
 
Year-to-Date
 
2017
vs.
2016
 
2017
 
2016
 
% Change
 
2017
 
2016
 
% Change
Gas distribution operations  
(mmBtu in millions)
 
 
 
 
 
 
 
 
 
 
 
Firm
102

 
107

 
(4.7
)%
 
365

 
396

 
(7.8
)%
Interruptible
23

 
22

 
4.5
 %
 
48

 
49

 
(2.0
)%
Total
125

 
129

 
(3.1
)%
 
413

 
445

 
(7.2
)%
Gas marketing services  
(mmBtu in millions)
 
 
 
 
 
 
 
 
 
 
 
Firm:
 
 
 
 
 
 
 
 
 
 
 
Georgia
4

 
4

 
 %
 
17

 
21

 
(19.0
)%
Illinois
2

 
2

 
 %
 
7

 
8

 
(12.5
)%
Other emerging markets
3

 
2

 
50.0
 %
 
8

 
7

 
14.3
 %
Interruptible:
 
 
 
 
 
 
 
 
 
 
 
Large commercial and industrial
3

 
4

 
(25.0
)%
 
7

 
8

 
(12.5
)%
Total
12

 
12

 
 %
 
39

 
44

 
(11.4
)%
Wholesale gas services
(mmBtu in millions/day)
 
 
 
 
 
 
 
 
 
 
 
Daily physical sales
6.2

 
7.2

 
(13.9
)%
 
6.4

 
7.6

 
(15.8
)%
Other Operations and Maintenance Expenses
Other operations and maintenance expenses were $213 million for both the successor second quarter 2017 and the predecessor second quarter 2016 .
Other operations and maintenance expenses were $467 million for the successor year-to-date 2017 and $454 million for the predecessor year-to-date 2016 . Other operations and maintenance expense for the successor year-to-date period reflected increased compensation expenses and pipeline and maintenance expenses, partially offset by low bad debt expense.
Depreciation and Amortization
Depreciation and amortization was $125 million for the successor second quarter 2017 and $104 million for the predecessor second quarter 2016 . The successor second quarter 2017 included $9 million of additional net amortization of intangible assets as a result of fair value adjustments in acquisition accounting at gas midstream operations and gas distribution operations, as well as $7 million in additional depreciation at gas distribution operations due to a $1.1 billion increase in gross property, plant, and equipment since June 30, 2016.
Depreciation and amortization was $244 million for the successor year-to-date 2017 and $206 million for the predecessor year-to-date 2016 . The successor year-to-date 2017 included $19 million of additional net amortization of intangible assets as a result of fair value adjustments in acquisition accounting at gas midstream operations and gas distribution operations, as well as $13 million in additional depreciation at gas distribution operations due to additional assets placed in service.
Taxes Other Than Income Taxes
For the successor second quarter 2017 and the predecessor second quarter 2016 , taxes other than income taxes were $44 million and $37 million , respectively. For the successor year-to-date 2017 and the predecessor year-to-date

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2016 , taxes other than income taxes were $114 million and $99 million , respectively. Taxes other than income taxes consist primarily of revenue tax expenses, property taxes, and payroll taxes. Taxes other than income taxes in the successor periods reflected increased revenue-based taxes due to higher revenues at gas distribution operations.
Earnings from Equity Method Investments
For the successor second quarter 2017 , earnings from equity method investments were $29 million , which consisted of $24 million in earnings from SNG and $5 million in earnings from all other investments. For the predecessor second quarter 2016 , earnings from equity method investments were not material.
For the successor year-to-date 2017 , earnings from equity method investments were $68 million , which consisted of $58 million in earnings from SNG and $10 million in earnings from all other investments. For the predecessor year-to-date 2016 , earnings from equity method investments were not material.
See Notes 4 and 11 to the financial statements of Southern Company Gas under "Equity Method Investments – SNG" and "Investment in SNG," respectively, in Item 8 of the Form 10-K and Note (J) to the Condensed Financial Statements under " Southern Company Gas Equity Method Investments " herein for additional information.
Interest Expense, Net of Amounts Capitalized
For both the successor second quarter 2017 and the predecessor second quarter 2016, interest expense, net of amounts capitalized was $48 million . The successor second quarter 2017 reflects a $10 million reduction resulting from the fair value adjustment of long-term debt in acquisition accounting, partially offset by $6 million of additional interest expense on new debt issuances in 2017 and 2016.
For the successor year-to-date 2017 and the predecessor year-to-date 2016 , interest expense, net of amounts capitalized was $94 million and $96 million , respectively. The successor year-to-date 2017 reflects a $19 million reduction resulting from the fair value adjustment of long-term debt in acquisition accounting, partially offset by $12 million of additional interest expense on new debt issuances in 2017 and 2016.
Income Taxes (Benefit)
For the successor second quarter 2017 and the predecessor second quarter 2016, income taxes (benefit) were $31 million and $(24) million , respectively, driven by pre-tax earnings.
For the successor year-to-date 2017 and the predecessor year-to-date 2016 , income taxes were $180 million and $87 million , respectively, driven by pre-tax earnings and the non-deductibility of certain Merger-related expenses.
Performance and Non-GAAP Measures
Prior to the Merger, Southern Company Gas evaluated segment performance using earnings before interest and taxes (EBIT), which includes operating income, earnings from equity method investments, and other income (expense), net. EBIT excludes interest expense, net of amounts capitalized and income taxes (benefit), which were evaluated on a consolidated basis for those periods. EBIT is used herein to discuss the results of Southern Company Gas' segments for the predecessor period, as EBIT was the primary measure of segment profit or loss for that period. Subsequent to the Merger, Southern Company Gas changed its segment performance measure from EBIT to net income to better align with the performance measure utilized by Southern Company. EBIT for the successor second quarter and year-to-date 2017 presented herein is considered a non-GAAP measure. Southern Company Gas also discusses consolidated EBIT, which is considered a non-GAAP measure for all periods presented. The presentation of consolidated EBIT is believed to provide useful supplemental information regarding a consolidated measure of profit or loss. Southern Company Gas further believes that the presentation of segment EBIT for the successor second quarter and year-to-date 2017 is useful as it allows for a measure of comparability to the other companies with different capital and legal structures, which accordingly may be subject to different interest rates and effective tax rates. The applicable reconciliations of net income to consolidated EBIT and segment EBIT are provided herein.

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Adjusted operating margin is a non-GAAP measure that is calculated as operating revenues minus cost of natural gas, cost of other sales, and revenue tax expense. Adjusted operating margin excludes other operations and maintenance expenses, depreciation and amortization, taxes other than income taxes, and Merger-related expenses, which are included in the calculation of operating income as calculated in accordance with GAAP and reflected in the consolidated statements of income. The presentation of adjusted operating margin is believed to provide useful information regarding the contribution resulting from customer growth at gas distribution operations since the cost of natural gas and revenue tax expense can vary significantly and are generally billed directly to customers. Southern Company Gas further believes that utilizing adjusted operating margin at gas marketing services, wholesale gas services, and gas midstream operations allows it to focus on a direct measure of adjusted operating margin before overhead costs. The applicable reconciliation of operating income to adjusted operating margin is provided herein.
EBIT and adjusted operating margin should not be considered alternatives to, or more meaningful indicators of, Southern Company Gas' operating performance than consolidated net income attributable to Southern Company Gas or operating income as determined in accordance with GAAP. In addition, Southern Company Gas' adjusted operating margin may not be comparable to similarly titled measures of other companies.
 
Successor


Predecessor
 
Successor
 
 
Predecessor
 
Second Quarter 2017
 
 
Second Quarter 2016
 
Year-to-Date 2017
 
 
Year-to-Date 2016
 
(in millions)


(in millions)
 
(in millions)
 
 
(in millions)
Operating Income
$
96

 
 
$
(27
)
 
$
487

 
 
$
321

Other operating expenses (a)
382

 
 
407

 
825

 
 
815

Revenue taxes (b)
(18
)
 
 
(17
)
 
(65
)
 
 
(56
)
Adjusted Operating Margin
$
460

 
 
$
363

 
$
1,247

 
 
$
1,080

(a)
Includes other operations and maintenance, depreciation and amortization, taxes other than income taxes, and Merger-related expenses.
(b)
Nicor Gas' revenue tax expenses, which are passed through directly to customers.
 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
 
Second Quarter 2017
 
 
Second Quarter 2016
 
Year-to-Date 2017
 
 
Year-to-Date 2016
 
(in millions)
 
 
(in millions)
 
(in millions)
 
 
(in millions)
Consolidated Net Income (Loss) Attributable to Southern Company Gas
$
49

 
 
$
(51
)
 
$
288

 
 
$
131

Net income attributable to noncontrolling interest (*)

 
 
3

 

 
 
14

Income taxes
31

 
 
(24
)
 
180

 
 
87

Interest expense, net of amounts capitalized
48

 
 
48

 
94

 
 
96

EBIT
$
128

 
 
$
(24
)
 
$
562

 
 
$
328

(*)
See Note 4 to the financial statements of Southern Company Gas under "Variable Interest Entities" in Item 8 of the Form 10-K for additional information.

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Segment Information
Adjusted operating margin, operating expenses, and Southern Company Gas' primary performance metric for each segment is illustrated in the tables below. See Note (K) to the Condensed Financial Statements herein for additional information.

Successor


Predecessor
 
Second Quarter 2017


Second Quarter 2016

 Adjusted Operating

Operating

Net


Adjusted Operating

Operating



Margin (*)

Expenses (*)

Income


Margin (*)

Expenses (*)

EBIT

(in millions)


(in millions)
Gas distribution operations
$
409


$
283


$
54



$
386


$
269


$
118

Gas marketing services
57


48


4



66


37


29

Wholesale gas services
(13
)

14


(17
)


(96
)

16


(112
)
Gas midstream operations
7


13


9



6


12


(5
)
All other
3


9


(1
)


2


58


(55
)
Intercompany eliminations
(3
)

(3
)




(1
)

(2
)

1

Consolidated
$
460


$
364


$
49



$
363


$
390


$
(24
)
(*)
Operating margin and operating expenses are adjusted for Nicor Gas' revenue tax expenses, which are passed through directly to customers.
 
Successor
 
 
Predecessor
 
Year-to-Date 2017
 
 
Year-to-Date 2016
 
 Adjusted Operating
 
Operating
 
Net
 
 
Adjusted Operating
 
Operating
 
 
 
Margin (*)
 
Expenses (*)
 
Income
 
 
Margin (*)
 
Expenses (*)
 
EBIT
 
(in millions)
 
 
(in millions)
Gas distribution operations
$
951

 
$
596

 
$
171

 
 
$
911

 
$
560

 
$
353

Gas marketing services
162

 
101

 
35

 
 
190

 
81

 
109

Wholesale gas services
118

 
29

 
51

 
 
(36
)
 
33

 
(68
)
Gas midstream operations
16

 
25

 
25

 
 
15

 
24

 
(6
)
All other
5

 
14

 
6

 
 
4

 
65

 
(60
)
Intercompany eliminations
(5
)
 
(5
)
 

 
 
(4
)
 
(4
)
 

Consolidated
$
1,247

 
$
760

 
$
288

 
 
$
1,080

 
$
759

 
$
328

(*)
Operating margin and operating expenses are adjusted for Nicor Gas' revenue tax expenses, which are passed through directly to customers.
Gas Distribution Operations
Gas distribution operations is the largest component of Southern Company Gas' business and is subject to regulation and oversight by agencies in each of the states it serves. With the exception of Atlanta Gas Light, Southern Company Gas' second largest utility that operates in a deregulated natural gas market and has a straight-fixed-variable rate design that minimizes the variability of its revenues based on consumption, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are a function of weather conditions, price levels for natural gas, and general economic conditions that may impact customers' ability to pay for natural gas consumed. Southern Company Gas has various weather mechanisms, such as weather normalization mechanisms and weather derivative instruments, that limit its exposure to weather changes within typical ranges in its natural gas utilities' service territories.

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Successor Second Quarter 2017
Net income of $54 million includes $409 million in adjusted operating margin, $283 million in operating expenses, and $2 million in other income (expense), net, which resulted in EBIT of $128 million . Net income also includes $40 million in interest expense and $34 million in income tax expense. Adjusted operating margin reflects $26 million in additional revenue from the continued investment in infrastructure replacement programs, a base rate increase at Atlanta Gas Light effective March 1, 2017, and a $1 million positive impact of weather, net of hedging, despite warmer-than-normal weather. Operating expenses reflect additional depreciation due to continued investment in infrastructure programs and increased pipeline compliance and maintenance activities.
Predecessor Second Quarter 2016
EBIT of $118 million includes $386 million in adjusted operating margin, $269 million in operating expenses, and $1 million in other income (expense), net. Adjusted operating margin reflects revenue from continued investment in infrastructure replacement programs and increased usage and customer growth, partially offset by a $1 million negative impact of warmer-than-normal weather, net of hedging. Operating expenses reflect depreciation associated with additional assets placed in service.
Successor Year-to-Date 2017
Net income of $171 million includes $951 million in adjusted operating margin, $596 million in operating expenses, and $6 million in other income (expense), net, which resulted in EBIT of $361 million . Net income also includes $80 million in interest expense and $110 million in income tax expense. Adjusted operating margin reflects $45 million in additional revenue from continued investment in infrastructure replacement programs and a base rate increase at Atlanta Gas Light effective March 1, 2017. Also included in adjusted operating margin was increased customer growth, partially offset by a $5 million negative impact of warmer-than-normal weather, net of hedging. Operating expenses reflect a $13 million increase in depreciation associated with additional assets placed in service, as well as increased compensation expense, legal expenses, and pipeline compliance and maintenance activities.
Predecessor Year-to-Date 2016
EBIT of $353 million includes $911 million in adjusted operating margin, $560 million in operating expenses, and $2 million in other income (expense), net. Adjusted operating margin reflects revenue from continued investment in infrastructure replacement programs and increased usage and customer growth, partially offset by a $7 million negative impact of warmer-than-normal weather, net of hedging. Operating expenses reflect depreciation associated with additional assets placed in service.
Gas Marketing Services
Gas marketing services consists of several businesses that provide energy-related products and services to natural gas markets, including warranty sales. Gas marketing services is weather sensitive and uses a variety of hedging strategies, such as weather derivative instruments and other risk management tools, to partially mitigate potential weather impacts. Operating expenses primarily reflect employee costs, marketing, and bad debt expenses.
Successor Second Quarter 2017
Net income of $4 million includes $57 million in adjusted operating margin and $48 million in operating expenses, which resulted in EBIT of $9 million . Net income also includes $2 million in interest expense and $3 million in income tax expense. Adjusted operating margin reflects a $3 million negative impact of warmer-than-normal weather, net of hedging. Operating expenses reflect $10 million in additional amortization of intangible assets due to fair value adjustments to certain assets and liabilities in the application of acquisition accounting.
Predecessor Second Quarter 2016
EBIT of $29 million includes $66 million in adjusted operating margin and $37 million in operating expenses. Adjusted operating margin reflects $7 million in unrealized hedge gains and a $1 million negative impact of

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weather, net of hedging. Earnings in the predecessor period include $3 million attributable to noncontrolling interest.
Successor Year-to-Date 2017
Net income of $35 million includes $162 million in adjusted operating margin and $101 million in operating expenses, which resulted in EBIT of $61 million . Net income also includes $3 million in interest expense and $23 million in income tax expense. Adjusted operating margin reflects $2 million of additional revenue as a result of fair value adjustments to certain assets and liabilities in the application of acquisition accounting, as well as a $10 million negative impact of warmer-than-normal weather, net of hedging and $7 million in unrealized hedge losses. Operating expenses also reflect $20 million in additional amortization of intangible assets due to fair value adjustments to certain assets and liabilities in the application of acquisition accounting.
Predecessor Year-to-Date 2016
EBIT of $109 million includes $190 million in adjusted operating margin and $81 million in operating expenses. Adjusted operating margin reflects $9 million in unrealized hedge gains. Earnings in the predecessor period include $14 million attributable to noncontrolling interest.
Wholesale Gas Services
Wholesale gas services is involved in asset management and optimization, storage, transportation, producer and peaking services, natural gas supply, natural gas services, and wholesale gas marketing. Southern Company Gas has positioned the business to generate positive economic earnings on an annual basis even under low volatility market conditions that can result from a number of factors. When market price volatility increases, wholesale gas services is well positioned to capture significant value and generate stronger results. Operating expenses primarily reflect employee compensation and benefits.
Successor Second Quarter 2017
Net loss of $17 million includes $(13) million in adjusted operating margin and $14 million in operating expenses, which resulted in a loss before interest and taxes of $27 million. Also included in net loss is $1 million in interest expense and $11 million in income tax benefit.
Predecessor Second Quarter 2016
Loss before interest and taxes of $112 million includes $(96) million in adjusted operating margin and $16 million in operating expenses.
Successor Year-to-Date 2017
Net income of $51 million includes $118 million in adjusted operating margin and $29 million in operating expenses, which resulted in EBIT of $89 million . Net income also includes $3 million in interest expense and $35 million in income tax expense.
Predecessor Year-to-Date 2016
Loss before interest and taxes of $68 million includes $(36) million in adjusted operating margin, $33 million in operating expenses, and $1 million in other income (expense), net.

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The following table illustrates the components of wholesale gas services' adjusted operating margin for the periods presented.
 
Successor


Predecessor
 
 
Successor
 
 
Predecessor
 
Second Quarter 2017
 
 
Second Quarter 2016
 
 
Year-to-Date 2017
 
 
Year-to-Date 2016
 
(in millions)


(in millions)
 
 
(in millions)
 
 
(in millions)
Commercial activity recognized
$
(18
)
 
 
$
(8
)
 
 
$
69

 
 
$
34

Gain (loss) on storage derivatives
17

 
 
(36
)
 
 
18

 
 
(38
)
Gain (loss) on transportation and forward commodity derivatives
(2
)
 
 
(52
)
 
 
37

 
 
(31
)
LOCOM adjustments, net of current period recoveries
(1
)
 
 

 
 
(1
)
 
 
(1
)
Impact of purchase accounting adjustments
(9
)
 
 

 
 
(5
)
 
 

Adjusted Operating Margin
$
(13
)
 
 
$
(96
)
 
 
$
118

 
 
$
(36
)
Change in Commercial Activity
The commercial activity at wholesale gas services includes recognition of storage and transportation values that were generated in prior periods, which reflect the impact of prior period hedge gains and losses as associated physical transactions occur. Warmer-than-normal weather during the 2016/2017 Heating Season, lower power generation volumes, and build-out of new U.S. pipeline infrastructure, along with increases in natural gas supply, caused low volatility and a tightening of locational or transportation spreads in 2017, negatively impacting the amount of commercial activity revenues generated relative to demand fees for contracted pipeline transportation and storage capacity, and minimum sharing under asset management agreements. However, as natural gas prices and forward storage or time spreads increased, wholesale gas services was able to capture higher storage values that it expects to recognize as commercial activity revenues when natural gas is physically withdrawn from storage. Southern Company Gas anticipates continued low volatility in certain areas of wholesale gas services' portfolio.
Change in Storage and Transportation Derivatives
Volatility in the natural gas market arises from a number of factors, such as weather fluctuations or changes in supply or demand for natural gas in different regions of the U.S. The volatility of natural gas commodity prices has a significant impact on Southern Company Gas' customer rates, long-term competitive position against other energy sources, and the ability of wholesale gas services to capture value from locational and seasonal spreads. In 2017 and 2016 , there was little price volatility; however, the potential exists for market fundamentals indicating some level of increased volatility that would benefit Southern Company Gas' portfolio of pipeline transportation capacity. Additionally, during the first six months of 2017 , forward storage or time spreads applicable to the locations of wholesale gas services' specific storage positions resulted in storage derivative gains. Transportation and forward commodity derivative gains are primarily the result of narrowing transportation basis spreads due to some reduction in supply constraints resulting from new U.S. pipeline infrastructure and increases in natural gas supply and warmer-than-normal weather, which impacted forward prices at natural gas receipt and delivery points, primarily in the Northeast and Midwest regions.
Withdrawal Schedule and Physical Transportation Transactions
The expected natural gas withdrawals from storage and expected offset to prior hedge losses/gains associated with the transportation portfolio of wholesale gas services are presented in the following table, along with the net operating revenues expected at the time of withdrawal from storage and the physical flow of natural gas between contracted transportation receipt and delivery points. Wholesale gas services' expected net operating revenues exclude storage and transportation demand charges, as well as other variable fuel, withdrawal, receipt, and delivery charges, but are net of the estimated impact of profit sharing under its asset management agreements. Further, the amounts that are realizable in future periods are based on the inventory withdrawal schedule, planned physical flow of natural gas between the transportation receipt and delivery points, and forward natural gas prices at June 30,

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2017 . A portion of wholesale gas services' storage inventory and transportation capacity is economically hedged with futures contracts, which results in the realization of substantially fixed net operating revenues.
 
Storage withdrawal schedule
 
 
 
Total storage
(WACOG $2.75)
 
Expected net operating gains (a)
 
Physical transportation transactions – expected net operating losses (b)
 
(in mmBtu in millions)
 
(in millions)
 
(in millions)
2017
36.5

 
$
5

 
$
(10
)
2018 and thereafter
30.9

 
12

 
(27
)
Total at June 30, 2017
67.4

 
$
17

 
$
(37
)
(a)
Represents expected operating gains from planned storage withdrawals associated with existing inventory positions and could change as wholesale gas services adjusts its daily injection and withdrawal plans in response to changes in future market conditions and forward NYMEX price fluctuations.
(b)
Represents the periods associated with the transportation derivative gains during which the derivatives will be settled and the physical transportation transactions will occur that offset the derivative gains that were previously recognized.
The unrealized storage and transportation derivative gains do not change the underlying economic value of wholesale gas services' storage and transportation positions and will be reversed when the related transactions occur and are recognized. For more information on wholesale gas services' energy marketing and risk management activities, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" of Southern Company Gas in Item 7 of the Form 10-K.
Gas Midstream Operations
Gas midstream operations consists primarily of gas pipeline investments, with storage and fuels also aggregated into this segment. Gas pipeline investments consist of the SNG interest, Horizon Pipeline, Atlantic Coast Pipeline, PennEast Pipeline, Dalton Pipeline, and Magnolia Enterprise Holdings, Inc. See Note (J) to the Condensed
Financial Statements herein and Notes 4 and 11 to the financial statements of Southern Company Gas under "Equity
Method Investments – SNG" and "Investment in SNG," respectively, in Item 8 of the Form 10-K for additional
information.
Successor Second Quarter 2017
Net income of $9 million includes $7 million in adjusted operating margin, $13 million in operating expenses, $28 million in earnings from equity method investments, which consists primarily of equity in earnings from the investment in SNG, and $1 million in other income (expense), net, which resulted in EBIT of $23 million . Also included in net income are $8 million in interest expense and $6 million in income tax expense.
Predecessor Second Quarter 2016
Loss before interest and taxes of $5 million includes $6 million in adjusted operating margin, $12 million in operating expenses, and $1 million of other income (expense), net.
Successor Year-to-Date 2017
Net income of $25 million includes $16 million in adjusted operating margin, $25 million in operating expenses, $66 million in earnings from equity method investments, which consists primarily of equity in earnings from the investment in SNG, and $2 million in other income (expense), net, which resulted in EBIT of $59 million . Also included in net income are $17 million in interest expense and $17 million in income tax expense.
Predecessor Year-to-Date 2016
Loss before interest and taxes of $6 million includes $15 million in adjusted operating margin, $24 million in operating expenses, and $3 million of other income (expense), net.

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All Other
All other includes Southern Company Gas' investment in Triton, AGL Services Company, and Southern Company Gas Capital, as well as various corporate operating expenses that are not allocated to the reportable segments and interest income (expense) associated with affiliate financing arrangements. There were no Merger-related expenses for the successor second quarter or year-to-date 2017 . For the predecessor second quarter 2016 and year-to-date 2016 , Merger-related expenses included in operating expenses were $53 million and $56 million , respectively.
Segment Reconciliations
Reconciliations of consolidated net income attributable to Southern Company Gas to EBIT for the successor second quarter and year-to-date 2017 , and operating income to adjusted operating margin for all periods presented, are in the following tables. See Note (K) to the Condensed Financial Statements herein for additional information.

Successor

Second Quarter 2017

Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated

(in millions)
Consolidated Net Income
$
54

$
4

$
(17
)
$
9

$
(1
)
$

$
49

Income taxes
34

3

(11
)
6

(1
)

31

Interest expense, net of
amounts capitalized
40

2

1

8

(3
)

48

EBIT
$
128

$
9

$
(27
)
$
23

$
(5
)
$

$
128

 
Successor
 
Year-to-Date 2017
 
Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated
 
(in millions)
Consolidated Net Income
$
171

$
35

$
51

$
25

$
6

$

$
288

Income taxes
110

23

35

17

(5
)

180

Interest expense, net of
amounts capitalized
80

3

3

17

(9
)

94

EBIT
$
361

$
61

$
89

$
59

$
(8
)
$

$
562


Successor

Second Quarter 2017

Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated

(in millions)
Operating Income (Loss)
$
126

$
9

$
(27
)
$
(6
)
$
(6
)
$

$
96

Other operating expenses (a)
301

48

14

13

9

(3
)
382

Revenue tax expense (b)
(18
)





(18
)
Adjusted Operating Margin
$
409

$
57

$
(13
)
$
7

$
3

$
(3
)
$
460


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Successor
 
Year-to-Date 2017
 
Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated
 
(in millions)
Operating Income (Loss)
$
355

$
61

$
89

$
(9
)
$
(9
)
$

$
487

Other operating expenses (a)
661

101

29

25

14

(5
)
825

Revenue tax expense (b)
(65
)





(65
)
Adjusted Operating Margin
$
951

$
162

$
118

$
16

$
5

$
(5
)
$
1,247


Predecessor

Second Quarter 2016

Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated

(in millions)
Operating Income (Loss)
$
117

$
29

$
(112
)
$
(6
)
$
(56
)
$
1

$
(27
)
Other operating expenses (a)
286

37

16

12

58

(2
)
407

Revenue tax expense (b)
(17
)





(17
)
Adjusted Operating Margin
$
386

$
66

$
(96
)
$
6

$
2

$
(1
)
$
363

 
Predecessor
 
Year-to-Date 2016
 
Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services
Gas Midstream Operations
All Other
Intercompany Elimination
Consolidated
 
(in millions)
Operating Income (Loss)
$
351

$
109

$
(69
)
$
(9
)
$
(61
)
$

$
321

Other operating expenses (a)
616

81

33

24

65

(4
)
815

Revenue tax expense (b)
(56
)





(56
)
Adjusted Operating Margin
$
911

$
190

$
(36
)
$
15

$
4

$
(4
)
$
1,080

(a)
Includes other operations and maintenance, depreciation and amortization, taxes other than income taxes, and Merger-related expenses.
(b)
Nicor Gas' revenue tax expenses, which are passed through directly to customers.
FUTURE EARNINGS POTENTIAL
The results of operations discussed above are not necessarily indicative of Southern Company Gas' future earnings potential. The level of Southern Company Gas' future earnings depends on numerous factors that affect the opportunities, challenges, and risks of its primary business of natural gas distribution and complementary businesses in the gas marketing services, wholesale gas services, and gas midstream operations sectors. These factors include Southern Company Gas' ability to maintain a constructive regulatory environment that allows for the timely recovery of prudently-incurred costs, the completion and subsequent operation of ongoing infrastructure and other construction projects, creditworthiness of customers, Southern Company Gas' ability to optimize its transportation and storage positions, and its ability to re-contract storage rates at favorable prices. Future earnings in the near term will depend, in part, upon maintaining and growing sales and customers which are subject to a number of factors. These factors include weather, competition, new energy contracts with other utilities, energy conservation practiced

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by customers, the use of alternative energy sources by customers, the price of natural gas, the price elasticity of demand, and the rate of economic growth or decline in Southern Company Gas' service territories. Demand for natural gas is primarily driven by economic growth. The pace of economic growth and natural gas demand may be affected by changes in regional and global economic conditions, which may impact future earnings.
Current proposals related to potential federal tax reform legislation are primarily focused on reducing the corporate income tax rate, allowing 100% of capital expenditures to be deducted, and eliminating the interest deduction. The ultimate impact of any tax reform proposals is dependent on the final form of any legislation enacted and the related transition rules and cannot be determined at this time, but could have a material impact on Southern Company Gas' financial statements.
On July 6, 2017, the State of Illinois enacted tax legislation that increased the effective corporate income tax rate from 5.25% to 7.0% (making the total corporate tax rate 9.5% when combined with the 2.5% personal property replacement tax) effective July 1, 2017. In addition to increasing taxes on future earnings, this legislation will require Southern Company Gas to adjust existing accumulated deferred income tax liabilities to reflect an increased tax rate, and any portion not recoverable through rates will impact earnings. Southern Company Gas is currently evaluating these changes. The ultimate impact of this legislation cannot be determined at this time, but could have a material impact on Southern Company Gas' financial statements.
Volatility of natural gas prices has a significant impact on Southern Company Gas' customer rates, long-term competitive position against other energy sources, and the ability of its gas marketing services and wholesale gas services segments to capture value from locational and seasonal spreads. Additionally, changes in commodity prices subject a significant portion of Southern Company Gas' operations to earnings variability.
Over the longer-term, volatility is expected to be low to moderate and locational and/or transportation spreads are expected to decrease as new pipelines are built to reduce the existing supply constraints in the shale areas of the Northeast U.S. To the extent these pipelines are delayed or not built, volatility could increase. Additional economic factors may contribute to this environment, including a significant drop in oil and natural gas prices, which could lead to consolidation of natural gas producers or reduced levels of natural gas production. Further, if economic conditions continue to improve, including the new housing market, the demand for natural gas may increase, which may cause natural gas prices to rise and drive higher volatility in the natural gas markets on a longer-term basis.
For additional information relating to these issues, see "Risk Factors" of Southern Company Gas in Item 1A of the Form 10-K.
In September 2016, Southern Company Gas acquired a 50% equity interest in SNG. See OVERVIEW – "Merger and Acquisition Activities" and Note (J) to the Condensed Financial Statements herein and Notes 4 and 11 to the financial statements of Southern Company Gas under "Equity Method Investments – SNG" and "Investment in SNG," respectively, in Item 8 of the Form 10-K for additional information. As part of its business strategy, Southern Company Gas regularly considers and evaluates joint development arrangements as well as acquisitions and dispositions of businesses and assets.
Environmental Matters
Compliance costs related to federal and state environmental statutes and regulations could affect earnings if such costs cannot continue to be fully recovered in rates on a timely basis or through market-based contracts. Environmental compliance spending over the next several years may differ materially from the amounts estimated. The timing, specific requirements, and estimated costs could change as environmental statutes and regulations are adopted or modified, as compliance plans are revised or updated, and as legal challenges to rules are completed. Further, higher costs that are recovered through regulated rates could contribute to reduced demand for natural gas, which could negatively affect results of operations, cash flows, and financial condition. See Note (B) under " Environmental Remediation " to the Condensed Financial Statements herein and MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "Environmental Matters" of Southern Company Gas in Item 7 and Note 3 to the financial statements of Southern Company Gas under "Environmental Matters" in Item 8 of the Form 10-K for additional information.

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FERC Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS FUTURE EARNINGS POTENTIAL "FERC Matters" of Southern Company Gas in Item 7 and Note 4 to the financial statements of Southern Company Gas in Item 8 of the Form 10-K for additional information regarding the Dalton Pipeline project.
On August 1, 2017, the Dalton Pipeline was placed in service as authorized by the FERC and transportation service for customers commenced.
Regulatory Matters
See Note 3 to the financial statements of Southern Company Gas under "Regulatory Matters" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under " Regulatory Matters Southern Company Gas " herein for additional information regarding Southern Company Gas' regulatory matters.
Riders
Nicor Gas has established a variable tax cost adjustment rider, which was approved by the Illinois Commission effective July 16, 2017. This rider provides for recovery of the invested capital tax imposed on Nicor Gas through an annual true-up and reconciliation mechanism. Accordingly, this rider will not have a significant effect on Southern Company Gas' net income.
Natural Gas Cost Recovery
Southern Company Gas has established natural gas cost recovery rates approved by the relevant state regulatory agencies in the states in which it serves. Natural gas cost recovery revenues are adjusted for differences in actual recoverable natural gas costs and amounts billed in current regulated rates. Changes in the billing factor will not have a significant effect on Southern Company Gas' revenues or net income, but will affect cash flows.
Base Rate Cases
Settled Base Rate Cases
On February 21, 2017, the Georgia PSC approved the Georgia Rate Adjustment Mechanism (GRAM) and a $20 million increase in annual base rate revenues for Atlanta Gas Light, effective March 1, 2017. GRAM adjusts base rates annually, up or down, based on the previously approved ROE of 10.75% and does not collect revenue through special riders and surcharges. Various infrastructure programs previously authorized by the Georgia PSC under Atlanta Gas Light's STRIDE program, which include the Integrated Vintage Plastic Replacement Program, Integrated System Reinforcement Program, and Integrated Customer Growth Program, will continue under GRAM and the recovery of and return on the infrastructure program investments will be included in annual base rate adjustments. The Georgia PSC will review Atlanta Gas Light's performance annually under GRAM.
Beginning with the next rate adjustment in June 2018, Atlanta Gas Light's recovery of the previously unrecovered Pipeline Replacement Program revenue through 2014, as well as the mitigation costs associated with the Pipeline Replacement Program that were not previously included in its rates, will also be included in GRAM. In connection with the GRAM approval, the last monthly Pipeline Replacement Program surcharge increase became effective March 1, 2017.
In September 2016, Elizabethtown Gas filed a general base rate case with the New Jersey BPU requesting a $19 million increase in annual base rate revenues. The requested increase was based on a projected 12-month test year ending March 31, 2017 and a ROE of 10.25%. On June 30, 2017, the New Jersey BPU approved a settlement that provides for a $13 million increase in annual base rate revenues, effective July 1, 2017, based on a ROE of 9.6%. Also included in the settlement was a new composite depreciation rate that is expected to result in a $3 million annual reduction of depreciation.

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Pending Base Rate Cases
On March 10, 2017, Nicor Gas filed a general base rate case with the Illinois Commission requesting a $208 million increase in annual base rate revenues. The requested increase is based on a 2018 projected test year and a ROE of 10.7%. The Illinois Commission is expected to rule on the requested increase within the 11-month statutory time limit, after which rate adjustments will be effective.
On March 31, 2017, Virginia Natural Gas filed a general base rate case with the Virginia Commission requesting a $44 million increase in annual base rate revenues. The requested increase is based on a projected 12-month test year beginning September 1, 2017 and a ROE of 10.25%. The requested increase includes $13 million related to the recovery of investments under the Steps to Advance Virginia's Energy (SAVE) program. The Virginia Commission is expected to rule on the requested increase in the first quarter 2018. Rate adjustments are expected to be effective September 1, 2017, subject to refund.
The ultimate outcome of these pending base rate cases cannot be determined at this time.
Regulatory Infrastructure Programs
Southern Company Gas is engaged in various infrastructure programs that update or expand its gas distribution systems to improve reliability and ensure the safety of its utility infrastructure, and recovers in rates its investment and a return associated with these infrastructure programs.
Nicor Gas
In 2014, the Illinois Commission approved Nicor Gas' nine-year regulatory infrastructure program, Investing in Illinois. Under this program, Nicor Gas placed into service $75 million of qualifying assets during the first six months of 2017 .
Atlanta Gas Light
Atlanta Gas Light's STRIDE program, which started in 2009, consists of three individual programs that update and expand gas distribution systems and liquefied natural gas facilities as well as improve system reliability to meet operational flexibility and customer growth. Through the programs under STRIDE, Atlanta Gas Light invested $94 million during the first six months of 2017 .
In August 2016, Atlanta Gas Light filed a petition with the Georgia PSC for approval of a four-year extension of its Integrated System Reinforcement Program (i-SRP) seeking approval to invest an additional $177 million to improve and upgrade its core gas distribution system in years 2017 through 2020.
The recovery of and return on current and future capital investments under the STRIDE program will be included in the annual base rate revenue adjustment under GRAM rather than a separate surcharge. The proposed capital investments associated with the extension of i-SRP were included in the 2017 annual base rate revenue under GRAM that was approved by the Georgia PSC on February 21, 2017. See " Base Rate Cases " herein for additional information.
Elizabethtown Gas
In 2013, the New Jersey BPU approved the extension of Elizabethtown Gas' Aging Infrastructure Replacement program, under which Elizabethtown Gas invested $12 million during the first six months of 2017 .
Virginia Natural Gas
In March 2016, the Virginia Commission approved an extension to the SAVE program, under which Virginia Natural Gas invested $14 million during the first six months of 2017 .
Florida City Gas
The Florida PSC approved Florida City Gas' Safety, Access, and Facility Enhancement program in 2015. Under the program, Florida City Gas invested $7 million during the first six months of 2017 .

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Other Matters
Southern Company Gas is involved in various other matters being litigated and regulatory matters that could affect future earnings. In addition, Southern Company Gas is subject to certain claims and legal actions arising in the ordinary course of business. The ultimate outcome of such pending or potential litigation against Southern Company Gas cannot be predicted at this time; however, for current proceedings not specifically reported in Note (B) to the Condensed Financial Statements herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on Southern Company Gas' financial statements. See Note (B) to the Condensed Financial Statements herein for a discussion of various other contingencies and regulatory matters, and other matters being litigated which may affect future earnings potential.
Nicor Gas and Nicor Energy Services Company, wholly-owned subsidiaries of Southern Company Gas, and Nicor Inc. were defendants in a putative class action initially filed in 2011 in the state court in Cook County, Illinois. The plaintiffs purported to represent a class of the customers who purchased the Gas Line Comfort Guard product from Nicor Energy Services Company and variously alleged that the marketing, sale, and billing of the Gas Line Comfort Guard product violated the Illinois Consumer Fraud and Deceptive Business Practices Act, constituting common law fraud and resulting in unjust enrichment of these entities. The plaintiffs sought, on behalf of the classes they purported to represent, actual and punitive damages, interest, costs, attorney fees, and injunctive relief. On February 8, 2017, the judge denied the plaintiffs' motion for class certification and Southern Company Gas' motion for summary judgment. On March 7, 2017, the parties reached a settlement, which was finalized and effective on April 3, 2017. The settlement did not have a material impact on Southern Company Gas' financial statements.
ACCOUNTING POLICIES
Application of Critical Accounting Policies and Estimates
Southern Company Gas prepares its financial statements in accordance with GAAP. Significant accounting policies are described in Note 1 to the financial statements of Southern Company Gas in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on Southern Company Gas' results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements. See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES – "Application of Critical Accounting Policies and Estimates" of Southern Company Gas in Item 7 of the Form 10-K for a complete discussion of Southern Company Gas' critical accounting policies and estimates related to Utility Regulation, Pushdown of Acquisition Accounting, Assessment of Assets, Derivatives and Hedging Activities, Pension and Other Postretirement Benefits, and Contingent Obligations.
Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While Southern Company Gas expect s most of its revenue to be included in the scope of ASC 606, it has not fully completed its evaluation of all revenue arrangements. The majority of Southern Company Gas' revenue, including energy provided to customers, is from tariff offerings that provide natural gas without a defined contractual term, as well as longer-term contractual agreements , including non-derivative natural gas asset management and optimization arrangements . Southern Company Gas expect s that the revenue from contracts with these customers will not result in a significant shift in the timing of revenue recognition for such sales .
Southern Company Gas' ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements, such as energy-related derivatives and alternative revenue programs, are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on Southern Company Gas' financial statements. In addition, the power

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and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Southern Company Gas expect s CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. Southern Company Gas intend s to use the modified retrospective method of adoption effective January 1, 2018. Southern Company Gas has also elected to utilize practical expedients which allow it to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in Southern Company Gas' financial statements, Southern Company Gas will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On January 26, 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with the carrying amount as part of Step 2 of the goodwill impairment test. Under the new standard, the goodwill impairment loss will be measured as the excess of a reporting unit's carrying amount over its fair value, not exceeding the total amount of goodwill allocated to that reporting unit, which may increase the frequency of goodwill impairment charges if a future goodwill impairment test does not pass the Step 1 evaluation. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Southern Company Gas is currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Southern Company Gas' operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Southern Company Gas' financial statements.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" of Southern Company Gas in Item 7 of the Form 10-K for additional information. As a result of the Merger that closed on July 1, 2016, the results reported herein include disclosure of the successor second quarter and year-to-date 2017 and the predecessor second quarter and year-to-date 2016. See OVERVIEW – " Merger and Acquisition Activities " and Note (I) to the Condensed Financial Statements under "Southern Company – Merger with Southern Company Gas" herein for additional information.

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Southern Company Gas' financial condition remained stable at June 30, 2017 . Southern Company Gas intends to continue to monitor its access to short-term and long-term capital markets as well as bank credit agreements to meet future capital and liquidity needs. See " Capital Requirements and Contractual Obligations ," " Sources of Capital ," and " Financing Activities " herein for additional information.
By regulation, Nicor Gas is restricted, to the extent of its retained earnings balance, in the amount it can dividend or loan to affiliates and is not permitted to make money pool loans to affiliates. Due to the increased working capital requirements associated with Nicor Gas' Investing in Illinois infrastructure replacement program, since 2015, Nicor Gas has temporarily ceased distributing dividends to Southern Company Gas. Elizabethtown Gas is restricted by its dividend policy as established by the New Jersey BPU in the amount it can dividend to its parent company to the extent of 70% of its quarterly net income. Additionally, as stipulated in the New Jersey BPU's order approving the Merger, Southern Company Gas is prohibited from paying dividends to its parent company, Southern Company, if Southern Company Gas' senior unsecured debt rating falls below investment grade. As of June 30, 2017 , the amount of subsidiary retained earnings and net income available to dividend totaled $739 million . These restrictions did not have any impact on Southern Company Gas' ability to meet its cash obligations, nor does management expect such restrictions to materially impact Southern Company Gas' ability to meet its currently anticipated cash obligations.
Net cash provided from operating activities totaled $1.2 billion for the successor first six months of 2017 and $1.1 billion for the predecessor first six months of 2016 . These cash flows were primarily driven by the sale of natural gas inventory during the respective periods.
Net cash used for investing activities totaled $781 million for the successor first six months of 2017 , primarily due to gross property additions related to capital expenditures for infrastructure replacement programs at gas distribution operations and capital contributed to equity method investments in pipelines. Net cash used for investing activities totaled $559 million for the predecessor first six months of 2016 , primarily due to gross property additions related to capital expenditures for infrastructure replacement programs at gas distribution operations.
Net cash used for financing activities totaled $351 million for the successor first six months of 2017 , primarily due to net repayments of commercial paper borrowings and common stock dividend payments to Southern Company, partially offset by proceeds from debt issuances and capital contributions from Southern Company. Net cash used for financing activities totaled $558 million for the predecessor first six months of 2016 , primarily due to net repayments of commercial paper borrowings, the redemption of long-term debt, and common stock dividend payments to shareholders, partially offset by proceeds from debt issuances . Cash flows from financing activities vary from period to period based on capital needs and the maturity or redemption of securities.
Significant balance sheet changes at June 30, 2017 include an increase of $514 million in total property, plant, and equipment primarily due to capital expenditures for infrastructure replacement programs, an increase in long-term debt of $418 million primarily due to $450 million of senior notes issued in May 2017, and decreases of $223 million in natural gas for sale, including temporary LIFO liquidation due to the use of natural gas stored during the first six months of 2017 , and $631 million in notes payable related primarily to net repayments of commercial paper borrowings at Nicor Gas. Other significant balance sheet changes include decreases of $141 million and $63 million in energy marketing receivables and payables, respectively, due to lower natural gas prices.
Capital Requirements and Contractual Obligations
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Capital Requirements and Contractual Obligations" of Southern Company Gas in Item 7 of the Form 10-K for a description of Southern Company Gas' capital requirements for its infrastructure programs, scheduled maturities of long-term debt and the related interest, as well as pipeline charges, storage capacity, and gas supply, operating leases, asset management agreements, standby letters of credit and performance/surety bonds, financial derivative obligations, pension and other postretirement benefit plans, and other purchase commitments, primarily related to environmental remediation liabilities. Approximately $22 million will be required through June 30, 2018 to fund maturities of long-term debt. See " Sources of Capital " herein for additional information.

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The regulatory infrastructure programs and other construction programs are subject to periodic review and revision, and actual costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in FERC rules and regulations; state regulatory approvals; changes in legislation; the cost and efficiency of labor, equipment, and materials; project scope and design changes; and the cost of capital. In addition, there can be no assurance that costs related to capital expenditures will be fully recovered. See Note 3 to the consolidated financial statements of Southern Company Gas in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements herein for information regarding additional factors that may impact infrastructure investment expenditures.
Sources of Capital
Southern Company Gas plans to obtain the funds to meet its future capital needs through operating cash flows, short-term debt borrowings under its commercial paper programs, external securities issuances, and equity contributions from Southern Company. However, the amount, type, and timing of any future financings, if needed, depend upon regulatory approval, prevailing market conditions, and other factors. See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" of Southern Company Gas in Item 7 of the Form 10-K for additional information.
At June 30, 2017 , Southern Company Gas' current liabilities exceeded current assets by $572 million primarily as a result of $626 million in notes payable. Southern Company Gas' current liabilities frequently exceed current assets because of commercial paper borrowings used to fund daily operations, scheduled maturities of long-term debt, and significant seasonal fluctuations in cash needs. Southern Company Gas intends to utilize operating cash flows, commercial paper, and debt securities issuances, as market conditions permit, as well as equity contributions from Southern Company to fund its short-term capital needs. Southern Company Gas has substantial cash flow from operating activities and access to the capital markets and financial institutions to meet liquidity needs.
At June 30, 2017 , Southern Company Gas had approximately $38 million of cash and cash equivalents. Committed credit arrangements with banks at June 30, 2017 were as follows:
 
Expires
 
 
Company
2022
 
Unused
 
(in millions)
Southern Company Gas Capital
$
1,200

 
$
1,149

Nicor Gas
700

 
700

Total
$
1,900

 
$
1,849

Additionally, Pivotal Utility Holdings is party to a series of loan agreements with the New Jersey Economic Development Authority and Brevard County, Florida under which five series of gas facility revenue bonds totaling $200 million have been issued.
See Note 6 to the consolidated financial statements of Southern Company Gas under "Bank Credit Arrangements" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under " Bank Credit Arrangements " herein for additional information.
As reflected in the table above, in May 2017, Southern Company Gas Capital and Nicor Gas terminated their existing credit arrangements for $1.3 billion and $700 million, respectively, which were to mature in 2017 and 2018, and entered into a new multi-year credit arrangement (Facility) currently allocated for $1.2 billion and $700 million, respectively, with a maturity date of 2022.
The Facility included in the table above contains a covenant that limits the ratio of debt to capitalization (as defined in each facility) to a maximum of 70% for each of Southern Company Gas and Nicor Gas and contains a cross-acceleration provision to other indebtedness (including guarantee obligations) of the applicable company. Such cross-acceleration provision to other indebtedness would trigger an event of default of the applicable company if Southern Company Gas or Nicor Gas defaulted on indebtedness, the payment of which was then accelerated. At

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June 30, 2017 , each of the applicable companies was in compliance with such covenant. The Facility does not contain a material adverse change clause at the time of borrowings.
Subject to applicable market conditions, the applicable company expects to renew or replace the Facility as needed, prior to expiration. In connection therewith, the applicable company may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
Southern Company Gas makes short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Commercial paper borrowings are included in notes payable in the balance sheets.
Details of short-term borrowings were as follows:
 
Short-term Debt at
June 30, 2017
 
Short-term Debt During the Period (*)
 
Amount
Outstanding
 
Weighted Average Interest Rate
 
Average Amount Outstanding
 
Weighted Average Interest Rate
 
Maximum Amount Outstanding
Commercial paper:
(in millions)
 
 
 
(in millions)
 
 
 
(in millions)
Southern Company Gas Capital
$
581

 
1.5
%
 
$
558

 
1.3
%
 
$
750

Nicor Gas
45

 
1.4

 
143

 
1.2

 
308

Short-term loans:
 
 
 
 
 
 
 
 
 
Southern Company Gas

 

 

 
4.0

 
40

Total
$
626

 
1.5
%
 
$
701

 
1.3
%
 
 
(*)
Average and maximum amounts are based upon daily balances during the successor three-month period ended June 30, 2017 .
Southern Company Gas believes the need for working capital can be adequately met by utilizing commercial paper programs, lines of credit, and operating cash flows.
Credit Rating Risk
Southern Company Gas does 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change below BBB- and/or Baa3. These contracts are for physical gas purchases and sales and energy price risk management. The maximum potential collateral requirements under these contracts at June 30, 2017 were $9 million .
Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of Southern Company Gas to access capital markets, and would be likely to impact the cost at which it does so.
On March 24, 2017, S&P revised its consolidated credit rating outlook for Southern Company and its subsidiaries (including Southern Company Gas, Southern Company Gas Capital, and Nicor Gas) from stable to negative.
Financing Activities
The long-term debt on Southern Company Gas' consolidated balance sheets includes both principal and non-principal components. As of June 30, 2017 , the non-principal components totaled $537 million , which consisted of the unamortized portions of the fair value adjustment recorded in purchase accounting, debt premiums, debt discounts, and debt issuance costs.
In May 2017, Southern Company Gas Capital issued $450 million aggregate principal amount of Series 2017A 4.40% Senior Notes due May 30, 2047. The proceeds were used to repay Southern Company Gas' short-term indebtedness and for general corporate purposes.

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Subsequent to June 30, 2017, Atlanta Gas Light Company repaid at maturity $22 million of Series C medium-term notes.
Subsequent to June 30, 2017, Nicor Gas agreed to issue $400 million aggregate principal amount of First Mortgage Bonds in a private placement, $200 million of which is expected to be issued in each of August 2017 and November 2017.
In addition to any financings that may be necessary to meet capital requirements and contractual obligations, Southern Company Gas plans to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.
Market Price Risk
Other than the items discussed below, there were no material changes to Southern Company Gas' disclosures about market price risk during the successor second quarter and year-to-date 2017. For an in-depth discussion of Southern Company Gas' market price risks, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" of Southern Company Gas in Item 7 of the Form 10-K. Also see Notes (C) and (H) to the Condensed Financial Statements herein for information relating to derivative instruments.
Southern Company Gas is exposed to market risks, primarily commodity price risk, interest rate risk, and weather risk. Due to various cost recovery mechanisms, the natural gas distribution utilities of Southern Company Gas that sell natural gas directly to end-use customers have limited exposure to market volatility of natural gas prices. Certain natural gas distribution utilities of Southern Company Gas manage fuel-hedging programs implemented per the guidelines of their respective state regulatory agencies to hedge the impact of market fluctuations in natural gas prices for customers. For the weather risk associated with Nicor Gas, Southern Company Gas has a corporate weather hedging program that utilizes weather derivatives to reduce the risk of lower operating margins potentially resulting from significantly warmer-than-normal weather. In addition, certain non-regulated operations routinely utilize various types of derivative instruments to economically hedge certain commodity price and weather risks inherent in the natural gas industry. These instruments include a variety of exchange-traded and over-the-counter energy contracts, such as forward contracts, futures contracts, options contracts, and swap agreements. Some of these economic hedge activities may not qualify, or are not designated, for hedge accounting treatment. The following table illustrates the change in the net fair value of Southern Company Gas' derivative instruments during all periods presented, and provides details of the net fair value of contracts outstanding as of the dates presented.
 
Successor
 
 
Predecessor
 
 
Successor
 
 
Predecessor
 
Second Quarter
 
 
Second Quarter
 
 
Year-to-Date
 
 
Year-to-Date
 
2017
 
 
2016
 
 
2017
 
 
2016
 
(in millions)
 
 
(in millions)
 
 
(in millions)
 
 
(in millions)
Contracts outstanding at beginning of period, assets (liabilities), net
$
64

 
 
$
(44
)
 
 
$
12

 
 
$
75

Contracts realized or otherwise settled
(20
)
 
 
8

 
 
(16
)
 
 
(77
)
Current period changes (a)
7

 
 
(48
)
 
 
55

 
 
(82
)
Contracts outstanding at the end of period, assets (liabilities), net
51

 
 
(84
)
 
 
51

 
 
(84
)
Netting of cash collateral
71

 
 
120

 
 
71

 
 
120

Cash collateral and net fair value of contracts outstanding at end of period (b)
$
122

 
 
$
36

 
 
$
122

 
 
$
36

(a)
Current period changes also include the fair value of new contracts entered into during the period, if any.
(b)
Net fair value of derivative instruments outstanding includes premiums and the intrinsic values associated with weather derivatives of $11 million at June 30, 2017 and $5 million at June 30, 2016 .

186

Table of Contents
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The maturities of Southern Company Gas' energy-related derivative contracts at June 30, 2017 were as follows:
 
 
 
Fair Value Measurements
 
 
 
Successor – June 30, 2017
 
Total
Fair Value
 
Maturity
 
 
Year 1 
 
Years 2 & 3
 
Years 4 and thereafter
 
(in millions)
Level 1 (a)
$
(12
)
 
$
5

 
$
(14
)
 
$
(3
)
Level 2 (b)
63

 
27

 
30

 
6

Fair value of contracts outstanding at end of period (c)
$
51

 
$
32

 
$
16

 
$
3

(a)
Valued using NYMEX futures prices.
(b)
Valued using basis transactions that represent the cost to transport natural gas from a NYMEX delivery point to the contract delivery point. These transactions are based on quotes obtained either through electronic trading platforms or directly from brokers.
(c)
Excludes cash collateral of $71 million at June 30, 2017 .

187

Table of Contents

NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
GULF POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
(UNAUDITED)


INDEX TO THE NOTES TO THE CONDENSED FINANCIAL STATEMENTS





INDEX TO APPLICABLE NOTES TO FINANCIAL STATEMENTS BY REGISTRANT
The following unaudited notes to the condensed financial statements are a combined presentation. The list below indicates the registrants to which each footnote applies.
Registrant
Applicable Notes
Southern Company
A, B, C, D, E, F, G, H, I, J, K
Alabama Power
A, B, C, E, F, G, H
Georgia Power
A, B, C, E, F, G, H
Gulf Power
A, B, C, E, F, G, H
Mississippi Power
A, B, C, E, F, G, H
Southern Power
A, B, C, D, E, G, H, I
Southern Company Gas
A, B, C, E, F, G, H, I, J, K


188


THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
GULF POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES

NOTES TO THE CONDENSED FINANCIAL STATEMENTS:
(UNAUDITED)

(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, 2016 have been derived from the audited financial statements of each registrant. In the opinion of each registrant's 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 June 30, 2017 and 2016 . 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 unless specifically required by GAAP. 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.
Southern Company's financial statements reflect its investments in its subsidiaries, including Southern Company Gas as a result of the Merger, on a consolidated basis. Southern Company Gas' results of operations and cash flows for the three and six months ended June 30, 2017 and financial condition as of June 30, 2017 and December 31, 2016 are reflected within Southern Company's consolidated amounts in these accompanying notes herein. The equity method is used for entities in which Southern Company has significant influence but does not control, including Southern Company Gas' investment in SNG, and for variable interest entities where Southern Company has an equity investment but is not the primary beneficiary. See Note (I) under " Southern Company Merger with Southern Company Gas " for additional information regarding the Merger.
Pursuant to the Merger, Southern Company pushed down the application of the acquisition method of accounting to the consolidated financial statements of Southern Company Gas such that the assets and liabilities are recorded at their respective fair values, and goodwill has been established for the excess of the purchase price over the fair value of net identifiable assets. Accordingly, the consolidated financial statements of Southern Company Gas for periods before and after July 1, 2016 (acquisition date) reflect different bases of accounting, and the financial positions and results of operations of those periods are not comparable. Throughout Southern Company Gas' condensed consolidated financial statements and the accompanying notes herein, periods prior to July 1, 2016 are identified as "predecessor," while periods after the acquisition date are identified as "successor."
Certain prior year data presented in the financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the results of operations, financial position, or cash flows of any registrant.

189


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Recently Issued Accounting Standards
In 2014, the FASB issued ASC 606, Revenue from Contracts with Customers (ASC 606), replacing the existing accounting standard and industry specific guidance for revenue recognition with a five-step model for recognizing and measuring revenue from contracts with customers. The underlying principle of the standard is to recognize revenue to depict the transfer of goods or services to customers at the amount expected to be collected. The new standard also requires enhanced disclosures regarding the nature, amount, timing, and uncertainty of revenue and the related cash flows arising from contracts with customers.
While the registrants expect most of their revenue to be included in the scope of ASC 606, they have not fully completed the evaluation of all revenue arrangements. The majority of Southern Company's, the traditional electric operating companies', and Southern Company Gas' revenue, including energy provided to customers, is from tariff offerings that provide electricity or natural gas without a defined contractual term, as well as longer-term contractual commitments , including PPAs and non-derivative natural gas asset management and optimization arrangements . The majority of Southern Power's revenues includes longer-term PPAs for generation capacity and energy. The registrants expect the adoption of ASC 606 will not result in a significant shift from the current timing of revenue recognition for such transactions .
The registrants' ongoing evaluation of other revenue streams and related contracts includes unregulated sales to customers. Some revenue arrangements, such as certain PPAs , energy-related derivatives , and alternative revenue programs, are excluded from the scope of ASC 606 and, therefore, will be accounted for and disclosed or presented separately from revenues under ASC 606 on the registrants' financial statements. In addition, the power and utilities industry continues to evaluate other specific industry issues, including the applicability of ASC 606 to contributions in aid of construction (CIAC). Although final implementation guidance has not been issued, Southern Company, the traditional electric operating companies, and Southern Company Gas expect CIAC to be out of the scope of ASC 606.
The new standard is effective for interim and annual reporting periods beginning after December 15, 2017. The registrants intend to use the modified retrospective method of adoption effective January 1, 2018. The registrants have also elected to utilize practical expedients which allow them to apply the standard to open contracts at the date of adoption and to reflect the aggregate effect of all modifications when identifying performance obligations and allocating the transaction price for contracts modified before the effective date. Under the modified retrospective method of adoption, prior year reported results are not restated; however, a cumulative-effect adjustment to retained earnings at January 1, 2018 is recorded. In addition, disclosures will include comparative information on 2018 financial statement line items under current guidance. While the adoption of ASC 606, including the cumulative-effect adjustment, is not expected to have a material impact on either the timing or amount of revenues recognized in the registrants' financial statements, the registrants will continue to evaluate the requirements, as well as any additional clarifying guidance that may be issued.
On January 26, 2017, the FASB issued ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment (ASU 2017-04). ASU 2017-04 removes the requirement to compare the implied fair value of goodwill with the carrying amount as part of Step 2 of the goodwill impairment test. Under the new standard, the goodwill impairment loss will be measured as the excess of a reporting unit's carrying amount over its fair value, not exceeding the total amount of goodwill allocated to that reporting unit, which may increase the frequency of goodwill impairment charges if a future goodwill impairment test does not pass the Step 1 evaluation. ASU 2017-04 is effective prospectively for annual and interim periods beginning on or after December 15, 2019, and early adoption is permitted on testing dates after January 1, 2017.
On March 10, 2017, the FASB issued ASU No. 2017-07, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost (ASU 2017-07). ASU 2017-07 requires that an employer report the service cost component in the same line item or items as other compensation costs and requires the other components of net periodic pension and postretirement benefit costs to be separately presented in the income statement outside income from operations. Additionally, only the service cost component is eligible for capitalization, when applicable. However, all cost components remain eligible

190


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

for capitalization under FERC regulations. ASU 2017-07 will be applied retrospectively for the presentation of the service cost component and the other components of net periodic pension and postretirement benefit costs in the income statement. The capitalization of the service cost component of net periodic pension and postretirement benefit costs in assets will be applied on a prospective basis. ASU 2017-07 is effective for annual periods beginning after December 15, 2017, including interim periods within those annual periods. Southern Company, the traditional electric operating companies, and Southern Company Gas are currently evaluating the new standard. The presentation changes required for net periodic pension and postretirement benefit costs will result in a decrease in Southern Company's , the traditional electric operating companies', and Southern Company Gas' operating income and an increase in other income for 2016 and 2017 and are expected to result in a decrease in operating income and an increase in other income for 2018. The adoption of ASU 2017-07 is not expected to have a material impact on Southern Company's , the traditional electric operating companies', or Southern Company Gas' financial statements.
Affiliate Transactions
Prior to the completion of Southern Company Gas' acquisition of its 50% equity interest in SNG, SCS (as agent for Alabama Power, Georgia Power, and Southern Power) and Southern Company Gas had entered into long-term interstate natural gas transportation agreements with SNG. The interstate transportation service provided to Alabama Power, Georgia Power, Southern Power, and Southern Company Gas by SNG pursuant to these agreements is governed by the terms and conditions of SNG's natural gas tariff and is subject to FERC regulation. For the six months ended June 30, 2017 , transportation costs under these agreements for Alabama Power, Georgia Power, Southern Power, and Southern Company Gas were approximately $4 million , $51 million , $13 million , and $16 million , respectively.
SCS, as agent for Georgia Power and Southern Power, has agreements with certain subsidiaries of Southern Company Gas to purchase natural gas. For the six months ended June 30, 2017 , natural gas purchases made by Georgia Power and Southern Power from Southern Company Gas' subsidiaries were approximately $9 million and $56 million , respectively.
Goodwill and Other Intangible Assets
At June 30, 2017 and December 31, 2016, goodwill was as follows:
 
Goodwill
 
At June 30, 2017
At December 31, 2016
 
(in millions)
Southern Company
$
6,271

$
6,251

Southern Power
$
2

$
2

Southern Company Gas
 
 
Gas distribution operations
$
4,702

$
4,702

Gas marketing services
1,265

1,265

Southern Company Gas total
$
5,967

$
5,967

Goodwill is not amortized, but is subject to an annual impairment test during the fourth quarter of each year, or more frequently if impairment indicators arise.

191


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Other intangible assets were as follows:
 
At June 30, 2017
 
At December 31, 2016
 
Gross Carrying Amount
Accumulated Amortization
Other
Intangible Assets, Net
 
Gross Carrying Amount
Accumulated Amortization
Other
Intangible Assets, Net
 
(in millions)
 
(in millions)
Southern Company
 
 
 
 
 
 
 
Other intangible assets subject to amortization:
 
 
 
 
 
 
 
Customer relationships
$
288

$
(57
)
$
231

 
$
268

$
(32
)
$
236

Trade names
159

(11
)
148

 
158

(5
)
153

Patents
4


4

 
4


4

Backlog
5

(1
)
4

 
5

(1
)
4

Storage and transportation contracts
64

(21
)
43

 
64

(2
)
62

Software and other
4

(1
)
3

 
2


2

PPA fair value adjustments
456

(35
)
421

 
456

(22
)
434

Total other intangible assets subject to amortization
$
980

$
(126
)
$
854

 
$
957

$
(62
)
$
895

Other intangible assets not subject to amortization:
 
 
 
 
 
 
 
Federal Communications Commission licenses
$
75

$

$
75

 
$
75

$

$
75

Total other intangible assets
$
1,055

$
(126
)
$
929

 
$
1,032

$
(62
)
$
970

 
 
 
 
 
 
 
 
Southern Power
 
 
 
 
 
 
 
Other intangible assets subject to amortization:
 
 
 
 
 
 
 
PPA fair value adjustments
$
456

$
(35
)
$
421

 
$
456

$
(22
)
$
434

 
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
 
 
Other intangible assets subject to amortization:
 
 
 
 
 
 
 
Gas marketing services
 
 
 
 
 
 
 
Customer relationships
$
221

$
(53
)
$
168

 
$
221

$
(30
)
$
191

Trade names
115

(6
)
109

 
115

(2
)
113

Wholesale gas services
 
 
 
 
 
 
 
Storage and transportation contracts
64

(21
)
43

 
64

(2
)
62

Total other intangible assets subject to amortization
$
400

$
(80
)
$
320

 
$
400

$
(34
)
$
366


192


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Amortization associated with other intangible assets was as follows:
 
Three Months Ended
Six Months Ended
 
June 30, 2017
 
(in millions)
Southern Company
$
29

$
65

Southern Power
$
6

$
13

Southern Company Gas
$
20

$
46

See Note 12 to the financial statements of Southern Company under "Southern Power" and Note 2 to the financial statements of Southern Power in Item 8 of the Form 10-K for additional information regarding Southern Power's PPA fair value adjustments related to its business acquisitions. Also see Note (I) under " Southern Company Acquisition of PowerSecure " and " Merger with Southern Company Gas " for additional information.
Property Damage Reserve
See Note 1 to the financial statements of Gulf Power under "Property Damage Reserve" in Item 8 of the Form 10-K for additional information.
Gulf Power's cost of repairing damages from major storms and other uninsured property damages, including uninsured damages to transmission and distribution facilities, generation facilities, and other property is charged to Gulf Power's property damage reserve. In accordance with a settlement agreement approved by the Florida PSC on April 4, 2017 (2017 Rate Case Settlement Agreement), Gulf Power suspended further property damage reserve accruals effective April 2017. Gulf Power may make discretionary accruals, but is required to resume accruals of $3.5 million annually if the reserve balance falls below zero . In addition, Gulf Power may initiate a storm surcharge to recover costs associated with any tropical systems named by the National Hurricane Center or other catastrophic storm events that reduce the property damage reserve in the aggregate by approximately $31 million ( 75% of the April 1, 2017 balance) or more. The storm surcharge would begin, on an interim basis, 60 days following the filing of a cost recovery petition, would be limited to $4.00 /month for a 1,000 KWH residential customer unless Gulf Power incurs in excess of $100 million in qualified storm recovery costs in a calendar year, and would replenish the storm reserve to approximately $40 million . See Note (B) under " Regulatory Matters Gulf Power Retail Base Rate Cases " for additional details regarding the 2017 Rate Case Settlement Agreement.
Natural Gas for Sale
Southern Company Gas' natural gas distribution utilities, with the exception of Nicor Gas, carry natural gas inventory on a WACOG basis.
Nicor Gas' natural gas inventory is carried at cost on a LIFO basis. Inventory decrements occurring during the year that are restored prior to year end are charged to cost of natural gas at the estimated annual replacement cost. Inventory decrements that are not restored prior to year end are charged to cost of natural gas at the actual LIFO cost of the inventory layers liquidated. Southern Company Gas' inventory decrement at June 30, 2017 is expected to be restored prior to year end. The cost of natural gas, including inventory costs, is recovered from customers under a purchased gas recovery mechanism adjusted for differences between actual costs and amounts billed; therefore, LIFO liquidations have no impact on Southern Company's or Southern Company Gas' net income.
Natural gas inventories for Southern Company Gas' non-utility businesses are carried at the lower of weighted average cost or current market price, with cost determined on a WACOG basis. For any declines in market prices below the WACOG considered to be other than temporary, an adjustment is recorded to reduce the value of natural gas inventories to market value. Southern Company Gas had no material LOCOM adjustment in any period presented.

193


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(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, the business activities of Southern Company's subsidiaries 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 air quality and water standards, has occurred throughout the U.S. This litigation has included claims for damages alleged to have been caused by CO 2 and other emissions, CCR, and alleged exposure to hazardous materials, and/or requests for injunctive relief in connection with such matters.
The ultimate outcome of such pending or potential litigation against each registrant and any subsidiaries cannot be predicted at this time; however, for current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on such registrant's financial statements.
Southern Company
On January 20, 2017, a purported securities class action complaint was filed against Southern Company, certain of its officers, and certain former Mississippi Power officers in the U.S. District Court for the Northern District of Georgia, Atlanta Division, by Monroe County Employees' Retirement System on behalf of all persons who purchased shares of Southern Company's common stock between April 25, 2012 and October 29, 2013. The complaint alleges that Southern Company, certain of its officers, and certain former Mississippi Power officers made materially false and misleading statements regarding the Kemper IGCC in violation of certain provisions under the Securities Exchange Act of 1934, as amended. The complaint seeks, among other things, compensatory damages and litigation costs and attorneys' fees. On June 12, 2017, the plaintiffs filed an amended complaint that provided additional detail about their claims, increased the purported class period by one day, and added certain other former Mississippi Power officers as defendants. On July 27, 2017, the defendants filed a motion to dismiss the plaintiffs' amended complaint with prejudice.
On February 27, 2017, Jean Vineyard filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia that names as defendants Southern Company, certain of its directors, certain of its officers, and certain former Mississippi Power officers. The complaint alleges that the defendants caused Southern Company to make false or misleading statements regarding the Kemper IGCC cost and schedule. Further, the complaint alleges that the defendants were unjustly enriched and caused the waste of corporate assets. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages and, on her own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiff also seeks certain changes to Southern Company's corporate governance and internal processes. On March 27, 2017, the court deferred this lawsuit until 30 days after certain further action in the purported securities class action complaint discussed above.
On May 15, 2017, Helen E. Piper Survivor's Trust filed a shareholder derivative lawsuit in the Superior Court of Gwinnett County, State of Georgia, that names as defendants Southern Company, certain of its directors, certain of its officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper IGCC. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper IGCC schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages and disgorgement of profits and, on its behalf, attorneys'

194


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

fees and costs in bringing the lawsuit. The plaintiff also seeks certain unspecified changes to Southern Company's corporate governance and internal processes.
On June 1, 2017, Judy Mesirov filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia, that names as defendants Southern Company, certain of its current and former directors, certain of its officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper IGCC. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper IGCC schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. The plaintiff seeks to recover, on behalf of Southern Company, unspecified actual damages, disgorgement of profits, and equitable relief and, on her own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiff also seeks certain unspecified changes to Southern Company's corporate governance and internal processes.
Southern Company believes these legal challenges have no merit; however, an adverse outcome in any of these proceedings could have an impact on Southern Company's results of operations, financial condition, and liquidity. Southern Company will vigorously defend itself in these matters, the ultimate outcome of which cannot be determined at this time.
Georgia Power
In 2011, plaintiffs filed a putative class action against Georgia Power in the Superior Court of Fulton County, Georgia alleging that Georgia Power's collection in rates of municipal franchise fees (all of which are remitted to municipalities) exceeded the amounts allowed in orders of the Georgia PSC and alleging certain state tort law claims. In November 2016, the Georgia Court of Appeals reversed the trial court's previous dismissal of the case and remanded the case to the trial court for further proceedings. Georgia Power has filed a petition for writ of certiorari with the Georgia Supreme Court. Georgia Power believes the plaintiffs' claims have no merit and intends to vigorously defend itself in this matter. The ultimate outcome of this matter cannot be determined at this time.
Southern Power
During 2015, Southern Power indirectly acquired a 51% membership interest in RE Roserock LLC (Roserock), the owner of the Roserock facility in Pecos County, Texas, which was under construction by Recurrent Energy, LLC and was subsequently placed in service in November 2016. Prior to placing the facility in service, certain solar panels were damaged during installation. While the facility currently is generating energy consistent with operational expectations and PPA obligations, Southern Power is pursuing remedies under its insurance policies and other contracts to repair or replace these solar panels. In connection therewith, Southern Power is withholding payments of approximately $26 million from the construction contractor, who has placed a lien on the Roserock facility for the same amount. The amounts withheld are included in other accounts and notes payable and other current liabilities on Southern Company's consolidated balance sheets and other accounts payable and other current liabilities on Southern Power's consolidated balance sheets. On May 18, 2017, Roserock filed a lawsuit in the state district court in Pecos County, Texas, against X.L. America, Inc. (XL) and North American Elite Insurance Company (North American Elite) seeking recovery from an insurance policy for damages resulting from a hail storm and certain installation practices by the construction contractor, McCarthy Building Companies, Inc. (McCarthy). On May 19, 2017, Roserock filed a separate lawsuit against McCarthy in the state district court in Travis County, Texas alleging breach of contract and breach of warranty for the damages sustained at the Roserock facility, which has since been moved to the U.S. District Court for the Western District of Texas. On May 22, 2017, McCarthy filed a lawsuit against Roserock, Array Technologies, Inc., Canadian Solar (USA), Inc., XL, and North American Elite in the U.S. District Court for the Western District of Texas alleging, among other things, breach of contract, and requesting foreclosure of mechanic's liens against Roserock. On July 18, 2017, the U.S. District Court for the Western District of Texas consolidated the two pending lawsuits. Southern Power intends to vigorously pursue and defend these matters, the ultimate outcome of which cannot be determined at this time.

195


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Southern Company Gas
Nicor Gas and Nicor Energy Services Company, wholly-owned subsidiaries of Southern Company Gas, and Nicor Inc. were defendants in a putative class action initially filed in 2011 in the state court in Cook County, Illinois. The plaintiffs purported to represent a class of the customers who purchased the Gas Line Comfort Guard product from Nicor Energy Services Company and variously alleged that the marketing, sale, and billing of the Gas Line Comfort Guard product violated the Illinois Consumer Fraud and Deceptive Business Practices Act, constituting common law fraud and resulting in unjust enrichment of these entities. The plaintiffs sought, on behalf of the classes they purported to represent, actual and punitive damages, interest, costs, attorney fees, and injunctive relief. On February 8, 2017, the judge denied the plaintiffs' motion for class certification and Southern Company Gas' motion for summary judgment. On March 7, 2017, the parties reached a settlement, which was finalized and effective on April 3, 2017. The settlement did not have a material impact on Southern Company's or Southern Company Gas' financial statements.
Environmental Remediation
The Southern Company system 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 Southern Company system could incur substantial costs to clean up affected sites. The traditional electric operating companies and the natural gas distribution utilities in Illinois, New Jersey, Georgia, and Florida have each received authority from their respective state PSCs or other applicable state regulatory agencies to recover approved environmental compliance costs through regulatory mechanisms. These regulatory mechanisms are adjusted annually or as necessary within limits approved by the state PSCs or other applicable state regulatory agencies.
Georgia Power's environmental remediation liability was $12 million and $17 million as of June 30, 2017 and December 31, 2016, respectively. Georgia Power has been designated or identified as a potentially responsible party at sites governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and assessment and potential cleanup of such sites is expected.
Gulf Power's environmental remediation liability includes estimated costs of environmental remediation projects of approximately $51 million and $44 million as of June 30, 2017 and December 31, 2016, respectively. These estimated costs primarily 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's substations. The schedule for completion of the remediation projects is subject to FDEP approval. The projects have been approved by the Florida PSC for recovery through Gulf Power's environmental cost recovery clause; therefore, these liabilities have no impact on net income.
Southern Company Gas' environmental remediation liability was $416 million and $426 million as of June 30, 2017 and December 31, 2016, respectively, based on the estimated cost of environmental investigation and remediation associated with known current and former manufactured gas plant operating sites. These environmental remediation expenditures are recoverable from customers through rate mechanisms approved by the applicable state regulatory agencies of the natural gas distribution utilities, with the exception of one site representing $5 million of the total accrued remediation costs.
The final outcome of these matters cannot be determined at this time. However, the final disposition of these matters is not expected to have a material impact on the financial statements of Southern Company, Georgia Power, Gulf Power, or Southern Company Gas.
FERC Matters
Municipal and Rural Associations Tariff
See Note 3 to the financial statements of Mississippi Power under "FERC Matters" in Item 8 of the Form 10-K for additional information regarding a settlement agreement entered into by Mississippi Power regarding the

196


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

establishment of a regulatory asset for Kemper IGCC-related costs. See " Integrated Coal Gasification Combined Cycle " herein for information regarding the Kemper IGCC.
In March 2016, Mississippi Power reached a settlement agreement with its wholesale customers, which was subsequently approved by the FERC, for an increase in wholesale base revenues under the MRA cost-based electric tariff, primarily as a result of placing scrubbers for Plant Daniel Units 1 and 2 in service in 2015. The settlement agreement became effective for services rendered beginning May 1, 2016, resulting in an estimated annual revenue increase of $7 million under the MRA cost-based electric tariff. Additionally, under the settlement agreement, the tariff customers agreed to similar regulatory treatment for MRA tariff ratemaking as the treatment approved for retail ratemaking through an order issued by the Mississippi PSC in December 2015 (In-Service Asset Rate Order). This regulatory treatment primarily includes (i) recovery of the Kemper IGCC assets currently operational and providing service to customers and other related costs, (ii) amortization of the Kemper IGCC-related regulatory assets included in rates under the settlement agreement over the 36 months ending April 30, 2019, (iii) Kemper IGCC-related expenses included in rates under the settlement agreement no longer being deferred and charged to expense, and (iv) removing all of the Kemper IGCC CWIP from rate base with a corresponding increase in accrual of AFUDC. The additional resulting AFUDC totaled approximately $22 million through the suspension of Kemper IGCC start-up activities.
See " Integrated Coal Gasification Combined Cycle " herein for additional information.
Fuel Cost Recovery
Mississippi Power has a wholesale MRA and a Market Based (MB) fuel cost recovery factor. At June 30, 2017 , the amount of over-recovered wholesale MRA fuel costs included in the balance sheets was $7 million compared to $13 million at December 31, 2016 . Over-recovered wholesale MB fuel costs included in the balance sheets were immaterial at June 30, 2017 and December 31, 2016 .
See Note 3 to the financial statements of Mississippi Power under "FERC Matters Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.
Market-Based Rate Authority
See Note 3 to the financial statements of Southern Company and Mississippi Power under "FERC Matters Market-Based Rate Authority" and Note 3 to the financial statements of Alabama Power, Georgia Power, Gulf Power, and Southern Power under "FERC Matters" in Item 8 of the Form 10-K for additional information regarding the traditional electric operating companies' and Southern Power's market power proceeding and amendment to their market-rate tariff.
On May 17, 2017, the FERC accepted the traditional electric operating companies' and Southern Power's compliance filing accepting the terms of the FERC's February 2, 2017 order regarding an amendment by the traditional electric operating companies and Southern Power to their market-based rate tariff. While the FERC's order references the traditional electric operating companies' and Southern Power's market power proceeding, it remains a separate, ongoing matter.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Regulatory Matters
Alabama Power
See Note 3 to the financial statements of Southern Company and Alabama Power under "Regulatory Matters Alabama Power" and "Retail Regulatory Matters," respectively, in Item 8 of the Form 10-K for additional information regarding Alabama Power's recovery of retail costs through various regulatory clauses and accounting orders. The balance of each regulatory clause recovery on the balance sheet follows:
Regulatory Clause
Balance Sheet Line Item
June 30,
2017
December 31,
2016


(in millions)
Rate CNP Compliance (*)
Deferred under recovered regulatory clause revenues
$
6

$
9

Rate CNP PPA
Over recovered regulatory clause revenues
1


 
Deferred under recovered regulatory clause revenues

142

Retail Energy Cost Recovery
Other regulatory liabilities, current
11

76

Natural Disaster Reserve
Other regulatory liabilities, deferred
56

69

(*)
In accordance with an accounting order issued on February 17, 2017 by the Alabama PSC, Alabama Power reclassified $36 million of its under recovered balance for Rate CNP Compliance to a deferred regulatory asset account.
Georgia Power
Rate Plans
See Note 3 to the financial statements of Southern Company and Georgia Power under "Regulatory Matters – Georgia Power – Rate Plans" and "Retail Regulatory Matters – Rate Plans," respectively, in Item 8 of the Form 10-K for additional information.
Georgia Power's revenues from regulated retail operations are collected through various rate mechanisms subject to the oversight of the Georgia PSC. Georgia Power currently recovers its costs from the regulated retail business through the 2013 ARP, which includes traditional base tariff rates, Demand-Side Management tariffs, Environmental Compliance Cost Recovery tariffs, and Municipal Franchise Fee tariffs. In addition, financing costs related to the construction of Plant Vogtle Units 3 and 4 are being collected through the NCCR tariff and fuel costs are collected through a separate fuel cost recovery tariff. See " Nuclear Construction " herein and Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Nuclear Construction" and Georgia Power under "Retail Regulatory Matters – Nuclear Construction" in Item 8 of the Form 10-K for additional information regarding the NCCR tariff. Also see " Fuel Cost Recovery " herein and Note 3 to the financial statements of Southern Company under "Regulatory Matters – Georgia Power – Fuel Cost Recovery" and Georgia Power under "Retail Regulatory Matters – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information regarding fuel cost recovery.
Integrated Resource Plan
See Note 3 to the financial statements of Southern Company and Georgia Power under "Regulatory Matters – Georgia Power – Integrated Resource Plan" and "Retail Regulatory Matters – Integrated Resource Plan," respectively, in Item 8 of the Form 10-K for additional information regarding Georgia Power's triennial Integrated Resource Plan.
On March 7, 2017, the Georgia PSC approved Georgia Power's decision to suspend work at a future generation site in Stewart County, Georgia, due to changing economics, including load forecasts and lower fuel costs. The timing

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

of recovery for costs incurred of approximately $50 million will be determined by the Georgia PSC in a future base rate case. The ultimate outcome of this matter cannot be determined at this time.
Fuel Cost Recovery
See Note 3 to the financial statements of Southern Company and Georgia Power under "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.
As of June 30, 2017 , Georgia Power's under recovered fuel balance totaled $61 million and is included in other deferred charges and assets on Southern Company's and Georgia Power's condensed balance sheets. As of December 31, 2016 , Georgia Power's over recovered fuel balance totaled $84 million and is included in other current liabilities on Southern Company's and Georgia Power's condensed balance sheets.
Fuel cost recovery revenues are adjusted for differences in actual recoverable fuel costs and amounts billed in current regulated rates. Accordingly, changes in the billing factor will not have a significant effect on Southern Company's or Georgia Power's revenues or net income, but will affect cash flow.
Nuclear Construction
See Note 3 to the financial statements of Southern Company and Georgia Power under "Regulatory Matters – Georgia Power – Nuclear Construction" and "Retail Regulatory Matters – Nuclear Construction," respectively, in Item 8 of the Form 10-K for additional information regarding Georgia Power's construction of Plant Vogtle Units 3 and 4, Vogtle Construction Monitoring (VCM) reports, the NCCR tariff, and the Contractor Settlement Agreement.
Vogtle 3 and 4 Agreement and EPC Contractor Bankruptcy
In 2008, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into the Vogtle 3 and 4 Agreement, pursuant to which the EPC Contractor agreed to design, engineer, procure, construct, and test Plant Vogtle Units 3 and 4. Under the terms of the Vogtle 3 and 4 Agreement, the Vogtle Owners agreed to pay a purchase price subject to certain price escalations and adjustments, including fixed escalation amounts and index-based adjustments, as well as adjustments for change orders, and performance bonuses for early completion and unit performance. Georgia Power's proportionate share of Plant Vogtle Units 3 and 4 is 45.7% .
The Vogtle 3 and 4 Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million (approximately $420 million based on Georgia Power's ownership interest). Under the Toshiba Guarantee, Toshiba guaranteed certain payment obligations of the EPC Contractor, including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Vogtle Owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the Vogtle 3 and 4 Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020 and require 60 days' written notice to Georgia Power in the event the Westinghouse Letters of Credit will not be renewed.
Under the terms of the Vogtle 3 and 4 Agreement, the EPC Contractor did not have the right to terminate the Vogtle 3 and 4 Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the Vogtle 3 and 4 Agreement was 40% of the contract price (approximately $1.7 billion based on Georgia Power's ownership interest).
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into an interim assessment agreement with the EPC Contractor (Interim Assessment Agreement), which the bankruptcy court approved on March 30, 2017.
The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Vogtle Owners, all costs accrued by the EPC

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were paid directly to Fluor; (ii) the EPC Contractor provided certain engineering, procurement, and management services for Plant Vogtle Units 3 and 4, to the same extent as contemplated by the Vogtle 3 and 4 Agreement, and Georgia Power, on behalf of the Vogtle Owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Vogtle Owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor used commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the completion status of Plant Vogtle Units 3 and 4; (v) the EPC Contractor rejected or accepted the Vogtle 3 and 4 Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power did not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the Vogtle 3 and 4 Agreement and all related security and collateral under applicable law.
The Interim Assessment Agreement, as amended, expired on July 27, 2017. Georgia Power's aggregate liability for the Vogtle Owners under the Interim Assessment Agreement totaled approximately $650 million , of which $552 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $297 million .
Subsequent to the EPC Contractor bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Plant Vogtle Units 3 and 4. Georgia Power, acting for itself and as agent for the Vogtle Owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Vogtle Owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately $400 million , of which $354 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $183 million .
On June 9, 2017, Georgia Power and the other Vogtle Owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (Guarantee Settlement Agreement). Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (Guarantee Obligations), of which Georgia Power's proportionate share is approximately $1.7 billion , and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Vogtle Owners and promptly pay them as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Vogtle Owners will forbear from exercising certain remedies, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Vogtle Owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Vogtle Owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.
On June 23, 2017, Toshiba released a revised outlook for fiscal year 2016, which reflected a negative shareholders' equity balance of approximately $5 billion as of March 31, 2017, and announced that its independent audit process was continuing. Toshiba has also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Vogtle Owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Southern Company's and Georgia Power's financial statements.
Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into a services agreement (Services Agreement), which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Vogtle Owners certain project-related contracts, (iii) join the Vogtle Owners as counterparties to certain assumed project-related contracts, and (iv) reject the Vogtle 3 and 4 Agreement. The Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE on July 27, 2017. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
The ultimate outcome of these matters cannot be determined at this time.
Regulatory Matters
In 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4 with a certified capital cost of $4.418 billion . In addition, in 2009 the Georgia PSC approved inclusion of the Plant Vogtle Units 3 and 4 related CWIP accounts in rate base, and the State of Georgia enacted the Georgia Nuclear Energy Financing Act, which allows Georgia Power to recover financing costs for nuclear construction projects certified by the Georgia PSC. Financing costs are recovered on all applicable certified costs through annual adjustments to the NCCR tariff by including the related CWIP accounts in rate base during the construction period. As of June 30, 2017 , Georgia Power had recovered approximately $1.4 billion of financing costs.
On December 20, 2016, the Georgia PSC voted to approve a settlement agreement (Vogtle Cost Settlement Agreement) resolving the following prudence matters: (i) none of the $3.3 billion of costs incurred through December 31, 2015 and reflected in the fourteenth VCM report will be disallowed from rate base on the basis of imprudence; (ii) the Contractor Settlement Agreement is reasonable and prudent and none of the amounts paid or to be paid pursuant to the Contractor Settlement Agreement should be disallowed from rate base on the basis of imprudence; (iii) financing costs on verified and approved capital costs will be deemed prudent provided they are incurred prior to December 31, 2019 and December 31, 2020 for Plant Vogtle Units 3 and 4, respectively; and (iv) (a) the in-service capital cost forecast will be adjusted to $5.680 billion (Revised Forecast), which includes a contingency of $240 million above Georgia Power's then current forecast of $5.440 billion , (b) capital costs incurred up to the Revised Forecast will be presumed to be reasonable and prudent with the burden of proof on any party challenging such costs, and (c) Georgia Power would have the burden to show that any capital costs above the Revised Forecast are reasonable and prudent. Under the terms of the Vogtle Cost Settlement Agreement, the certified in-service capital cost for purposes of calculating the NCCR tariff will remain at $4.418 billion . Construction capital costs above $4.418 billion will accrue AFUDC through the date each unit is placed in service. The ROE used to calculate the NCCR tariff was reduced from 10.95% (the ROE rate setting point authorized by the Georgia PSC in the 2013 ARP) to 10.00% effective January 1, 2016. For purposes of the AFUDC calculation, the ROE on costs between $4.418 billion and $5.440 billion will also be 10.00% and the ROE on any amounts above $5.440 billion would be Georgia Power's average cost of long-term debt. If the Georgia PSC adjusts Georgia Power's ROE rate setting point in a rate case prior to Plant Vogtle Units 3 and 4 being placed into retail rate base, then the ROE for purposes of calculating both the NCCR tariff and AFUDC will likewise be 95 basis points lower than the revised ROE rate setting point. If Plant Vogtle Units 3 and 4 are not placed in service by December 31, 2020, then (i) the ROE for purposes of calculating the NCCR tariff will be reduced an additional 300 basis points, or $8 million per month, and may, at the Georgia PSC's discretion, be accrued to be used for the benefit of customers, until such time as the units are placed in service and (ii) the ROE used to calculate AFUDC will be Georgia Power's average cost of long-term debt.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Under the terms of the Vogtle Cost Settlement Agreement, the Georgia PSC will determine, for retail ratemaking purposes, the process of transitioning Plant Vogtle Units 3 and 4 from a construction project to an operating plant no later than Georgia Power's base rate case required to be filed by July 1, 2019.
The Georgia PSC has approved fifteen VCM reports covering the periods through June 30, 2016, including construction capital costs incurred, which through that date totaled $3.7 billion . Georgia Power filed its sixteenth VCM report, covering the period from July 1 through December 31, 2016, requesting approval of $222 million of construction capital costs incurred during that period, with the Georgia PSC on February 27, 2017.
The ultimate outcome of these matters cannot be determined at this time.
Revised Cost and Schedule
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power's preliminary assessment results indicate that its proportionate share of the remaining estimated cost to complete Plant Vogtle Units 3 and 4 ranges as follows:
Preliminary in-service dates
 
 
 
Unit 3
February 2021
March 2022
Unit 4
February 2022
March 2023
 
(in billions)
Preliminary estimated cost to complete
$
3.9

$
4.6

CWIP as of June 30, 2017
4.5

 
4.5

Guarantee Obligations
(1.7
)
 
(1.7
)
Estimated capital costs
$
6.7

$
7.4

Vogtle Cost Settlement Agreement Revised Forecast
(5.7
)
 
(5.7
)
Estimated net additional capital costs
$
1.0

$
1.7

Georgia Power's estimates for cost to complete and schedule are based on preliminary analysis and remain subject to further refinement of labor productivity and consumable and commodity quantities and costs.
Georgia Power's estimated financing costs during the construction period total approximately $3.1 billion to $3.5 billion , of which approximately $1.4 billion had been incurred through June 30, 2017.
Georgia Power's preliminary cancellation cost estimate results indicate that its proportionate share of the estimated cancellation costs is approximately $400 million . As a result, as of June 30, 2017, total estimated costs subject to evaluation by Georgia Power and the Georgia PSC in the event of a cancellation decision are as follows:
 
Preliminary Cancellation Cost Estimate
 
(in billions)
CWIP as of June 30, 2017
$
4.5

Financing costs collected, net of tax
1.4

Cancellation costs (*)
0.4

Total
$
6.3

(*)
The estimate for cancellation costs includes, but is not limited to, costs to terminate contracts for construction and other services, as well as costs to secure the Plant Vogtle Units 3 and 4 construction site.
The Guarantee Obligations continue to exist in the event of cancellation. In addition, under Georgia law, prudently incurred costs related to certificated projects cancelled by the Georgia PSC are allowed recovery, including carrying

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

costs, in future retail rates. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth VCM report to be filed with the Georgia PSC in late August 2017.
The ultimate outcome of these matters is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time.
Other Matters
As of June 30, 2017 , Georgia Power had borrowed $2.6 billion related to Plant Vogtle Units 3 and 4 costs through a loan guarantee agreement between Georgia Power and the DOE and a multi-advance credit facility among Georgia Power, the DOE, and the FFB. See Note 6 to the financial statements of Southern Company and Georgia Power under "DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K and Note (E) under " DOE Loan Guarantee Borrowings " for additional information, including applicable covenants, events of default, mandatory prepayment events, and conditions to borrowing.
The IRS has allocated PTCs to Plant Vogtle Units 3 and 4 which require that the applicable unit be placed in service prior to 2021. The net present value of Georgia Power's PTCs is estimated at approximately $400 million per unit.
There have been technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4 at the federal and state level and additional challenges may arise if construction proceeds. Processes are in place that are designed to assure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the NRC that occur throughout construction. As a result of such compliance processes, certain license amendment requests have been filed and approved or are pending before the NRC. Various design and other licensing-based compliance matters, including the timely resolution of Inspections, Tests, Analyses, and Acceptance Criteria and the related approvals by the NRC, may arise if construction proceeds, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs.
If construction continues, the risk remains that challenges with labor productivity, fabrication, delivery, assembly, and installation of plant systems, structures, and components, or other issues could arise and may further impact project schedule and cost.
The ultimate outcome of these matters cannot be determined at this time.
Gulf Power
See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters" in Item 8 of the Form 10-K for additional information regarding Gulf Power's rates and charges for service to retail customers.
Retail Base Rate Cases
See Note 3 to the financial statements of Southern Company and Gulf Power under "Regulatory Matters – Gulf Power – Retail Base Rate Cases" and "Retail Regulatory Matters – Retail Base Rate Cases," respectively, in Item 8 of the Form 10-K for additional information.
In 2013, the Florida PSC approved a settlement agreement (2013 Rate Case Settlement Agreement) that authorized Gulf Power to reduce depreciation and record a regulatory asset up to $62.5 million from January 2014 through June 2017. In any given month, such depreciation reduction could not exceed the amount necessary for the retail ROE, as reported to the Florida PSC monthly, to reach the midpoint of the authorized retail ROE range then in effect. For 2014 and 2015, Gulf Power recognized reductions in depreciation of $8.4 million and $20.1 million , respectively. No net reduction in depreciation was recorded in 2016. In the first six months of 2017 , Gulf Power recognized the remaining allowable reductions in depreciation totaling $34.0 million .

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

On April 4, 2017, the Florida PSC approved the 2017 Rate Case Settlement Agreement among Gulf Power and three intervenors with respect to Gulf Power's request to increase retail base rates. Under the terms of the 2017 Rate Case Settlement Agreement, Gulf Power increased rates effective with the first billing cycle in July 2017 to provide an annual overall net customer impact of approximately $54.3 million . The net customer impact consists of a $62.0 million increase in annual base revenues less an annual equivalent credit of approximately $7.7 million for 2017 for certain wholesale revenues to be provided through December 2019 through the purchased power capacity cost recovery clause. In addition, Gulf Power continued its authorized retail ROE midpoint ( 10.25% ) and range ( 9.25% to 11.25% ), is deemed to have an equity ratio of 52.5% for all retail regulatory purposes, and implemented new dismantlement accruals effective July 1, 2017. Gulf Power will also begin amortizing the regulatory asset associated with the investment balances remaining after the retirement of Plant Smith Units 1 and 2 ( 357 MWs) over 15 years effective January 1, 2018 and will implement new depreciation rates effective January 1, 2018. The 2017 Rate Case Settlement Agreement also resulted in a $32.5 million write-down of Gulf Power's ownership of Plant Scherer Unit 3 ( 205 MWs), which was recorded in the first quarter 2017. The remaining issues related to the inclusion of Gulf Power's investment in Plant Scherer Unit 3 in retail rates have been resolved as a result of the 2017 Rate Case Settlement Agreement, including recoverability of certain costs associated with the ongoing ownership and operation of the unit through the environmental cost recovery clause rate approved by the Florida PSC in November 2016.
Cost Recovery Clauses
See Note 3 to the financial statements of Gulf Power under "Retail Regulatory Matters – Cost Recovery Clauses" in Item 8 of the Form 10-K for additional information regarding Gulf Power's recovery of retail costs through various regulatory clauses and accounting orders. Gulf Power has four regulatory clauses which are approved by the Florida PSC. The balance of each regulatory clause recovery on the balance sheet follows:
Regulatory Clause
Balance Sheet Line Item
June 30,
2017
December 31,
2016


(in millions)
Fuel Cost Recovery
Under recovered regulatory clause revenues
$
7

$

Fuel Cost Recovery
Other regulatory liabilities, current

15

Purchased Power Capacity Recovery
Under recovered regulatory clause revenues
5


Environmental Cost Recovery
Under recovered regulatory clause revenues
12

13

Energy Conservation Cost Recovery
Under recovered regulatory clause revenues
2

4

As discussed previously, the 2017 Rate Case Settlement Agreement resolved the remaining issues related to Gulf Power's inclusion of certain costs associated with the ongoing ownership and operation of Plant Scherer Unit 3 in the environmental cost recovery clause and no adjustment to the environmental cost recovery clause rate approved by the Florida PSC in November 2016 was made.
Mississippi Power
Performance Evaluation Plan
See Note 3 to the financial statements of Mississippi Power under "Retail Regulatory Matters – Performance Evaluation Plan" in Item 8 of the Form 10-K for additional information regarding Mississippi Power's base rates.
On March 15, 2017, Mississippi Power submitted its annual PEP lookback filing for 2016, which reflected the need for a $5 million surcharge to be recovered from customers. The filing has been suspended for review by the Mississippi PSC. The ultimate outcome of this matter cannot be determined at this time.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Energy Efficiency
See Note 3 to the financial statements of Mississippi Power under "Retail Regulatory Matters – Energy Efficiency" in Item 8 of the Form 10-K for additional information regarding Mississippi Power's energy efficiency programs.
On July 6, 2017, the Mississippi PSC issued an order approving Mississippi Power's Energy Efficiency Cost Rider compliance filing, which increased annual retail revenues by approximately $2 million effective with the first billing cycle for August 2017.
Environmental Compliance Overview Plan
On May 4, 2017, the Mississippi PSC approved Mississippi Power's ECO Plan filing for 2017, which requested the maximum 2% annual increase in revenues, approximately $18 million , primarily related to the Plant Daniel Units 1 and 2 scrubbers placed in service in 2015. The rates became effective with the first billing cycle for June 2017. Approximately $26 million of related revenue requirements in excess of the 2% maximum was deferred for inclusion in the 2018 filing.
Fuel Cost Recovery
See Note 3 to the financial statements of Mississippi Power under "Retail Regulatory Matters – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information regarding Mississippi Power's retail fuel cost recovery.
At June 30, 2017 , the amount of over-recovered retail fuel costs included on Mississippi Power's condensed balance sheet was $14 million compared to $37 million at December 31, 2016 .
Ad Valorem Tax Adjustment
See Note 3 to the financial statements of Mississippi Power under "Retail Regulatory Matters – Ad Valorem Tax Adjustment" in Item 8 of the Form 10-K for additional information regarding Mississippi Power's ad valorem tax adjustments.
On July 6, 2017, the Mississippi PSC approved Mississippi Power's annual ad valorem tax adjustment factor filing for 2017, which included an annual rate increase of 0.85% , or $8 million in annual retail revenues, primarily due to increased assessments.
Southern Company Gas
Natural Gas Cost Recovery
Southern Company Gas has established natural gas cost recovery rates approved by the relevant state regulatory agencies in the states in which it serves. Natural gas cost recovery revenues are adjusted for differences in actual recoverable natural gas costs and amounts billed in current regulated rates. Changes in the billing factor will not have a significant effect on Southern Company's or Southern Company Gas' revenues or net income, but will affect cash flows.
Base Rate Cases
See Note 3 to the financial statements of Southern Company Gas under "Regulatory Matters – Base Rate Cases" in Item 8 of the Form 10-K for additional information.
Settled Base Rate Cases
On February 21, 2017, the Georgia PSC approved the Georgia Rate Adjustment Mechanism (GRAM) and a $20 million increase in annual base rate revenues for Atlanta Gas Light, effective March 1, 2017. GRAM adjusts base rates annually, up or down, based on the previously approved ROE of 10.75% and does not collect revenue through special riders and surcharges. Various infrastructure programs previously authorized by the Georgia PSC under Atlanta Gas Light's STRIDE program, which include the Integrated Vintage Plastic Replacement Program,

205


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Integrated System Reinforcement Program, and Integrated Customer Growth Program, will continue under GRAM and the recovery of and return on the infrastructure program investments will be included in annual base rate adjustments. The Georgia PSC will review Atlanta Gas Light's performance annually under GRAM.
Beginning with the next rate adjustment in June 2018, Atlanta Gas Light's recovery of the previously unrecovered Pipeline Replacement Program revenue through 2014, as well as the mitigation costs associated with the Pipeline Replacement Program that were not previously included in its rates, will also be included in GRAM. In connection with the GRAM approval, the last monthly Pipeline Replacement Program surcharge increase became effective March 1, 2017.
In September 2016, Elizabethtown Gas filed a general base rate case with the New Jersey BPU requesting a $19 million increase in annual base rate revenues. The requested increase was based on a projected 12 -month test year ending March 31, 2017 and a ROE of 10.25% . On June 30, 2017, the New Jersey BPU approved a settlement that provides for a $13 million increase in annual base rate revenues, effective July 1, 2017, based on a ROE of 9.6% . Also included in the settlement was a new composite depreciation rate that is expected to result in a $3 million annual reduction of depreciation.
Pending Base Rate Cases
On March 10, 2017, Nicor Gas filed a general base rate case with the Illinois Commission requesting a $208 million increase in annual base rate revenues. The requested increase is based on a 2018 projected test year and a ROE of 10.7% . The Illinois Commission is expected to rule on the requested increase within the 11 -month statutory time limit, after which rate adjustments will be effective.
On March 31, 2017, Virginia Natural Gas filed a general base rate case with the Virginia Commission requesting a $44 million increase in annual base rate revenues. The requested increase is based on a projected 12 -month test year beginning September 1, 2017 and a ROE of 10.25% . The requested increase includes $13 million related to the recovery of investments under the Steps to Advance Virginia's Energy (SAVE) program. The Virginia Commission is expected to rule on the requested increase in the first quarter 2018. Rate adjustments are expected to be effective September 1, 2017, subject to refund.
The ultimate outcome of these pending base rate cases cannot be determined at this time.
Regulatory Infrastructure Programs
Southern Company Gas is engaged in various infrastructure programs that update or expand its gas distribution systems to improve reliability and ensure the safety of its utility infrastructure, and recovers in rates its investment and a return associated with these infrastructure programs. See Note 3 to the financial statements of Southern Company and Southern Company Gas under "Regulatory Matters – Southern Company Gas – Regulatory Infrastructure Programs" and "Regulatory Matters – Regulatory Infrastructure Programs," respectively, in Item 8 of the Form 10-K for additional information.
Nicor Gas
In 2014, the Illinois Commission approved Nicor Gas' nine -year regulatory infrastructure program, Investing in Illinois. Under this program, Nicor Gas placed into service $75 million of qualifying assets during the first six months of 2017 .
Atlanta Gas Light
Atlanta Gas Light's STRIDE program, which started in 2009, consists of three individual programs that update and expand gas distribution systems and liquefied natural gas facilities as well as improve system reliability to meet operational flexibility and customer growth. Through the programs under STRIDE, Atlanta Gas Light invested $94 million during the first six months of 2017 .

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

In August 2016, Atlanta Gas Light filed a petition with the Georgia PSC for approval of a four -year extension of its Integrated System Reinforcement Program (i-SRP) seeking approval to invest an additional $177 million to improve and upgrade its core gas distribution system in years 2017 through 2020.
The recovery of and return on current and future capital investments under the STRIDE program will be included in the annual base rate revenue adjustment under GRAM rather than a separate surcharge. The proposed capital investments associated with the extension of i-SRP were included in the 2017 annual base rate revenue under GRAM that was approved by the Georgia PSC on February 21, 2017. See "Base Rate Cases" herein for additional information.
Elizabethtown Gas
In 2013, the New Jersey BPU approved the extension of Elizabethtown Gas' Aging Infrastructure Replacement program, under which Elizabethtown Gas invested $12 million during the first six months of 2017 .
Virginia Natural Gas
In March 2016, the Virginia Commission approved an extension to the SAVE program, under which Virginia Natural Gas invested $14 million during the first six months of 2017 .
Florida City Gas
The Florida PSC approved Florida City Gas' Safety, Access, and Facility Enhancement program in 2015. Under the program, Florida City Gas invested $7 million during the first six months of 2017 .
Integrated Coal Gasification Combined Cycle
See Note 3 to the financial statements of Southern Company and Mississippi Power under "Integrated Coal Gasification Combined Cycle" in Item 8 of the Form 10-K for information regarding Mississippi Power's construction of the Kemper IGCC.
Kemper IGCC Overview
The Kemper IGCC was designed to utilize IGCC technology with an expected output capacity of 582 MWs and to be fueled by locally mined lignite (an abundant, lower heating value coal) from a mine owned by Mississippi Power and situated adjacent to the Kemper IGCC. The mine, operated by North American Coal Corporation, started commercial operation in 2013. In connection with the Kemper IGCC, Mississippi Power constructed approximately 61 miles of CO 2 pipeline infrastructure for the transport of captured CO 2 for use in enhanced oil recovery.
Kemper IGCC Schedule and Cost Estimate
In 2012, the Mississippi PSC issued the 2012 MPSC CPCN Order, a detailed order confirming the CPCN originally approved by the Mississippi PSC in 2010 authorizing the acquisition, construction, and operation of the Kemper IGCC. The certificated cost estimate of the Kemper IGCC included in the 2012 MPSC CPCN Order was $2.4 billion , net of $245 million of grants awarded to the Kemper IGCC project by the DOE under the Clean Coal Power Initiative Round 2 (Initial DOE Grants) and excluding the cost of the lignite mine and equipment, the cost of the CO 2 pipeline facilities, and AFUDC related to the Kemper IGCC. The 2012 MPSC CPCN Order approved a construction cost cap of up to $2.88 billion , with recovery of prudently-incurred costs subject to approval by the Mississippi PSC. The Kemper IGCC was originally projected to be placed in service in May 2014. Mississippi Power placed the combined cycle and the associated common facilities portion of the Kemper IGCC in service in August 2014. The remainder of the plant includes the gasifiers and the gas clean-up facilities. The initial production of syngas began on July 14, 2016 for gasifier "B" and on September 13, 2016 for gasifier "A." Mississippi Power achieved integrated operation of both gasifiers on January 29, 2017, including the production of electricity from syngas in both combustion turbines. During testing, the plant produced and captured CO 2 , and produced sulfuric acid and ammonia, each of acceptable quality under the related off-take agreements. However, Mississippi Power experienced numerous challenges during the extended start-up process to achieve integrated operation of the

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(UNAUDITED)

gasifiers on a sustained basis. Most recently, in May 2017, after achieving these milestones, Mississippi Power determined that a critical system component, the syngas coolers, would need replacement sooner than originally planned, which would require significant lead time and significant cost. In addition, the long-term natural gas price forecast has decreased significantly and the estimated cost of operating and maintaining the facility during the first five full years of operations increased significantly since certification.
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC (Kemper Settlement Order). On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Mississippi Power's Kemper IGCC 2010 project estimate, cost estimate at the time of project suspension (which includes the impacts of the Mississippi Supreme Court's (Court) decision discussed herein under "Rate Recovery of Kemper IGCC Costs – 2013 MPSC Rate Order"), and actual costs incurred as of June 30, 2017 , all of which include 100% of the costs for the Kemper IGCC, are as follows:
Cost Category
2010 Project Estimate (a)
 
Cost Estimate
at
Suspension (b)
 
June 30, 2017
Actual Costs
 
(in billions)
Plant Subject to Cost Cap (c)(e)
$
2.40

 
$
5.95

 
$
5.68

Lignite Mine and Equipment
0.21

 
0.23

 
0.23

CO 2  Pipeline Facilities
0.14

 
0.11

 
0.11

AFUDC (d)
0.17

 
0.85

 
0.85

Combined Cycle and Related Assets Placed in
Service – Incremental
(e)

 
0.05

 
0.05

General Exceptions
0.05

 
0.10

 
0.08

Deferred Costs (e)

 
0.23

 
0.23

Additional DOE Grants (f)

 
(0.14
)
 
(0.14
)
Total Kemper IGCC
$
2.97

 
$
7.38

 
$
7.09

(a)
Represents the certificated cost estimate adjusted to include the certificated estimate for the CO 2 pipeline facilities approved in 2011 by the Mississippi PSC, as well as the lignite mine and equipment, AFUDC, and general exceptions.
(b)
Represents actual costs through June 30, 2017 and projected costs at the time of project suspension, including estimated post-in-service costs which were expected to be subject to the cost cap.
(c)
The 2012 MPSC CPCN Order approved a construction cost cap of up to $2.88 billion , net of the Initial DOE Grants and excluding the cost of the lignite mine and equipment, the cost of the CO 2 pipeline facilities, AFUDC, and certain general exceptions, including change of law, force majeure, and beneficial capital (which exists when Mississippi Power demonstrates that the purpose and effect of the construction cost increase is to produce efficiencies that will result in a neutral or favorable effect on customers relative to the original proposal for the CPCN) (Cost Cap Exceptions). The Cost Estimate at Suspension and the Actual Costs include non-incremental operating and maintenance costs related to the combined cycle and associated common facilities placed in service in August 2014 that are subject to the $2.88 billion cost cap and exclude post-in-service costs for the lignite mine. See " Rate Recovery of Kemper IGCC Costs 2013 MPSC Rate Order " herein for additional information.
(d)
Mississippi Power's 2010 Project Estimate included recovery of financing costs during construction rather than the accrual of AFUDC. This approach was not approved by the Mississippi PSC as described in " Rate Recovery of Kemper IGCC Costs 2013 MPSC Rate Order ." The Cost Estimate at Suspension also reflects the impact of a settlement agreement with the wholesale customers for cost-based rates under FERC's jurisdiction. See " FERC Matters " herein for additional information.
(e)
Non-capital Kemper IGCC-related costs incurred during construction were initially deferred as regulatory assets. Some of these costs are included in current rates and are being recognized through income; however, such costs remained in the Cost Estimate at Suspension and are reflected in the Actual Costs at June 30, 2017 . The equity return associated with assets placed in service and other non-CWIP accounts deferred for regulatory purposes, as well as the wholesale portion of debt carrying costs, whether deferred or recognized through income, was not included in the Cost Estimate at Suspension or in the Actual Costs at June 30, 2017 . At June 30, 2017, such deferred amounts totaled $33 million and $1 million , respectively.
(f)
On April 8, 2016, Mississippi Power received approximately $137 million in additional grants from the DOE for the Kemper IGCC (Additional DOE Grants).
Mississippi Power recorded pre-tax charges to income for revisions to the cost estimate of $196 million ( $121 million after tax) in the second quarter through May 31, 2017 and a total of $305 million ( $188 million after tax) for year-to-date through May 31, 2017. In the aggregate, Mississippi Power incurred charges of $3.07 billion ( $1.89 billion after tax) as a result of changes in the cost estimate above the cost cap for the Kemper IGCC through May 31, 2017. The May 31, 2017 cost estimate included approximately $175 million of estimated costs to be incurred beyond the then-estimated in-service date of June 30, 2017 that were expected to be subject to the $2.88 billion cost cap.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ( $2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
In the aggregate, Mississippi Power recorded total pre-tax charges to income for the estimated probable losses on the Kemper IGCC totaling $3.0 billion for the second quarter 2017 and $3.1 billion for the six months ended June 30, 2017.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC, of which $1.2 billion is included in plant in service, $14 million in materials and supplies, $22 million in other regulatory assets, current, and $95 million in other regulatory assets, deferred.
Rate Recovery of Kemper IGCC Costs
Given the variety of potential scenarios and the uncertainty of the outcome of future regulatory proceedings with the Mississippi PSC (and any subsequent related legal challenges), the ultimate outcome of the rate recovery matters discussed herein, including the resolution of legal challenges, cannot now be determined but could result in further material charges that could have a material impact on Southern Company's and Mississippi Power's results of operations, financial condition, and liquidity.
Kemper IGCC Settlement Docket
On June 21, 2017, the Mississippi PSC stated its intent to issue an order (which occurred on July 6, 2017) directing Mississippi Power to pursue a settlement under which the Kemper County energy facility would be operated as a natural gas plant, rather than an IGCC plant, and address all issues associated with the Kemper IGCC. The Kemper Settlement Order established a new docket for the purposes of pursuing a global settlement of costs of the Kemper IGCC (Kemper IGCC Settlement Docket). The Mississippi PSC requested any such proposed settlement agreement reflect: (i) at a minimum, no rate increase to Mississippi Power customers (with a rate reduction focused on residential customers encouraged); (ii) removal of all cost risk to customers associated with the Kemper IGCC gasifier and related assets; and (iii) modification or amendment of the CPCN for the Kemper IGCC to allow only for ownership and operation of a natural gas facility. The Kemper Settlement Order provides that any related settlement agreement be filed within 45 days from the effective date of the Kemper Settlement Order. If a settlement agreement is filed, a hearing will be set 45 days from the date of the settlement's filing, and the appropriate scheduling order will be established.
Although the ability to achieve a negotiated settlement is uncertain, Mississippi Power intends to pursue any available settlement alternatives. In addition, the Kemper Settlement Order provides that, in the event a settlement agreement is not reached, the Mississippi PSC reserves its right to take any appropriate steps, including issuing an order to show cause as to why the CPCN for the Kemper IGCC should not be revoked.
On June 28, 2017, Mississippi Power notified the Mississippi PSC that it would begin a process to suspend operations and start-up activities on the gasifier portion of the Kemper IGCC, given the uncertainty as to the future of the gasifier portion of the Kemper IGCC. Mississippi Power expects to continue to operate the combined cycle portion of the Kemper IGCC as it has done since August 2014.
At June 30, 2017, approximately $3.3 billion in actual Kemper IGCC costs were not reflected in Mississippi Power's retail and wholesale rates, of which $0.5 billion was related to the combined cycle and associated facilities and $2.8 billion was related to the gasification portions of the Kemper IGCC.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

While the ultimate disposition of the gasification portions of the Kemper IGCC remains subject to the Mississippi PSC's jurisdiction, including the potential resolution of the matters addressed in the Kemper Settlement Order, given the Mississippi PSC's stated intent regarding no further rate increase for the Kemper County energy facility, cost recovery of the gasification portions is no longer probable; therefore, Mississippi Power recorded an additional charge to income in June 2017 of $2.8 billion ( $2.0 billion after tax), which includes estimated costs associated with the gasification portions of the plant and lignite mine. In the event the gasification portions of the project are ultimately canceled, additional pre-tax costs currently estimated at approximately $100 million to $200 million are expected to be incurred.
As of June 30, 2017, Mississippi Power has recorded a total of approximately $1.3 billion in costs associated with the combined cycle portion of the Kemper IGCC including transmission and related regulatory assets, of which $0.8 billion is included in retail and wholesale rates. The $0.5 billion not included in current rates includes costs in excess of the original 2010 estimate for the combined cycle portion of the facility, as well as the 15% that was previously contracted to SMEPA. Mississippi Power has calculated the revenue requirements resulting from these remaining costs, using reasonable assumptions for amortization periods, and expects them to be recovered through rates consistent with the Mississippi PSC's requested settlement conditions. The ultimate outcome will be determined by the Mississippi PSC in the Kemper IGCC Settlement Docket proceedings.
Prudence
On August 17, 2016, the Mississippi PSC issued an order establishing a discovery docket to manage all filings related to the prudence of the Kemper IGCC. On October 3, 2016, Mississippi Power made a required compliance filing, which included a review and explanation of differences between the Kemper IGCC project estimate set forth in the 2010 CPCN proceedings and the most recent Kemper IGCC project estimate, as well as comparisons of current cost estimates and current expected plant operational parameters to the estimates presented in the 2010 CPCN proceedings for the first five years after the Kemper IGCC is placed in service. Compared to amounts presented in the 2010 CPCN proceedings, operations and maintenance expenses have increased an average of $105 million annually and maintenance capital has increased an average of $44 million annually for the first full five years of operations for the Kemper IGCC. Additionally, while the current estimated operational availability estimates reflect ultimate results similar to those presented in the 2010 CPCN proceedings, the ramp up period for the current estimates reflects a lower starting point and a slower escalation rate. On November 17, 2016, Mississippi Power submitted a supplemental filing to the October 3, 2016 compliance filing to present revised non-fuel operations and maintenance expense projections for the first year after the Kemper IGCC is placed in service. This supplemental filing included approximately $68 million in additional estimated operations and maintenance costs expected to be required to support the operations of the Kemper IGCC during that period.
Mississippi Power responded to numerous requests for information from interested parties in the discovery docket, which is now complete. Mississippi Power expects the Mississippi PSC to utilize this information in connection with the ultimate resolution of Kemper IGCC cost recovery.
Economic Viability Analysis
In the fourth quarter 2016, as a part of its Integrated Resource Plan process, the Southern Company system completed its regular annual updated fuel forecast, the 2017 Annual Fuel Forecast. This updated fuel forecast reflected significantly lower long-term estimated costs for natural gas than were previously projected. As a result of the updated long-term natural gas forecast, as well as the revised operating expense projections reflected in the discovery docket filings discussed above, on February 21, 2017, Mississippi Power filed an updated project economic viability analysis of the Kemper IGCC as required under the 2012 MPSC CPCN Order confirming authorization of the Kemper IGCC. The project economic viability analysis measures the life cycle economics of the Kemper IGCC compared to feasible alternatives, natural gas combined cycle generating units, under a variety of scenarios and considering fuel, operating and capital costs, and operating characteristics, as well as federal and state taxes and incentives. The reduction in the projected long-term natural gas prices in the 2017 Annual Fuel Forecast

211


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

and, to a lesser extent, the increase in the estimated Kemper IGCC operating costs, negatively impact the updated project economic viability analysis.
Mississippi Power expects the Mississippi PSC to address this matter in connection with the Kemper IGCC Settlement Docket.
2015 Rate Case
On August 13, 2015, the Mississippi PSC approved Mississippi Power's request for interim rates, which presented an alternative rate proposal (In-Service Asset Proposal) designed to recover Mississippi Power's costs associated with the Kemper IGCC assets that are commercially operational and currently providing service to customers (the transmission facilities, combined cycle, natural gas pipeline, and water pipeline) and other related costs. The interim rates were designed to collect approximately $159 million annually and became effective in September 2015, subject to refund and certain other conditions.
On December 3, 2015, the Mississippi PSC issued the In-Service Asset Rate Order adopting in full a stipulation (2015 Stipulation) entered into between Mississippi Power and the MPUS regarding the In-Service Asset Proposal. The In-Service Asset Rate Order provided for retail rate recovery of an annual revenue requirement of approximately $126 million , based on Mississippi Power's actual average capital structure, with a maximum common equity percentage of 49.733% , a 9.225% return on common equity, and actual embedded interest costs. The In-Service Asset Rate Order also included a prudence finding of all costs in the stipulated revenue requirement calculation for the in-service assets. The stipulated revenue requirement excluded the costs of the Kemper IGCC related to the 15% undivided interest that was previously projected to be purchased by SMEPA but reserved Mississippi Power's right to seek recovery in a future proceeding. See " Termination of Proposed Sale of Undivided Interest " herein for additional information. With implementation of the new rates on December 17, 2015, the interim rates were terminated and, in March 2016, Mississippi Power completed customer refunds of approximately $11 million for the difference between the interim rates collected and the permanent rates.
In 2011, the Mississippi PSC authorized Mississippi Power to defer all non-capital Kemper IGCC-related costs to a regulatory asset through the in-service date. In connection with the implementation of the In-Service Asset Order and wholesale rates, Mississippi Power began expensing certain ongoing project costs and certain retail debt carrying costs that previously were deferred and began amortizing certain regulatory assets associated with assets placed in service and consulting and legal fees. The amortization periods for these regulatory assets vary from two years to 10 years as set forth in the In-Service Asset Rate Order and the settlement agreement with wholesale customers. As of June 30, 2017, the balance associated with these regulatory assets was $117 million , of which $22 million is included in current assets. See "FERC Matters" herein for additional information related to the 2016 settlement agreement with wholesale customers.
The In-Service Asset Rate Order requires Mississippi Power to submit an annual true-up calculation of its actual cost of capital, compared to the stipulated total cost of capital, with the first occurring as of May 31, 2016. At June 30, 2017, Mississippi Power's related regulatory liability included in its balance sheet totaled approximately $10 million .
As required by the In-Service Asset Rate Order, on June 5, 2017, Mississippi Power made a rate filing requesting to adjust the amortization schedules of the regulatory assets reviewed and determined prudent in the In-Service Asset Order in a manner that would not change customer rates or annual revenues. On June 28, 2017, the Mississippi PSC suspended this filing. On July 6, 2017, the Mississippi PSC issued an order requiring Mississippi Power to establish a regulatory liability account to maintain current rates related to the Kemper IGCC following the July 2017 completion of the amortization period for certain regulatory assets approved in the In-Service Asset Rate Order that would allow for subsequent refund if the Mississippi PSC deems the rates unjust and unreasonable.
2013 MPSC Rate Order
In January 2013, Mississippi Power entered into a settlement agreement with the Mississippi PSC that was intended to establish the process for resolving matters regarding cost recovery related to the Kemper IGCC (2013 Settlement

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Agreement). Under the 2013 Settlement Agreement, Mississippi Power agreed to limit the portion of prudently-incurred Kemper IGCC costs to be included in retail rate base to the $2.4 billion certificated cost estimate, plus the Cost Cap Exceptions, but excluding AFUDC, and any other costs permitted or determined to be excluded from the $2.88 billion cost cap by the Mississippi PSC. In March 2013, the Mississippi PSC issued a rate order approving retail rate increases of 15% effective March 19, 2013 and 3% effective January 1, 2014, which collectively were designed to collect $156 million annually beginning in 2014 (2013 MPSC Rate Order) to be used to mitigate customer rate impacts after the Kemper IGCC was placed in service, based on a mirror CWIP methodology (Mirror CWIP rate).
On February 12, 2015, the Court reversed the 2013 MPSC Rate Order and, on July 7, 2015, the Mississippi PSC ordered that the Mirror CWIP rate be terminated effective July 20, 2015 and required the fourth quarter 2015 refund of the $342 million previously collected, along with associated carrying costs of $29 million .
Because the 2013 MPSC Rate Order did not provide for the inclusion of CWIP in rate base as permitted by the Baseload Act, Mississippi Power continued to record AFUDC on the Kemper IGCC. Between the original May 2014 estimated in-service date and the June 2017 project suspension date, Mississippi Power recorded $493 million of AFUDC on the Kemper IGCC subject to the $2.88 billion cost cap and Cost Cap Exception amounts, of which $459 million related to the gasification portions of the Kemper IGCC.
Mississippi Power expects the Mississippi PSC to address this matter in connection with the Kemper IGCC Settlement Docket.
Lignite Mine and CO 2 Pipeline Facilities
In conjunction with the Kemper IGCC, Mississippi Power owns the lignite mine and equipment and mineral reserves located around the Kemper IGCC site. The mine started commercial operation in June 2013.
In 2010, Mississippi Power executed a 40 -year management fee contract with Liberty Fuels Company, LLC (Liberty Fuels), a wholly-owned subsidiary of The North American Coal Corporation, which developed, constructed, and is responsible for the mining operations through the end of the mine reclamation. As the mining permit holder, Liberty Fuels has a legal obligation to perform mine reclamation and Mississippi Power has a contractual obligation to fund all reclamation activities. In addition to the obligation to fund the reclamation activities, Mississippi Power provides working capital support to Liberty Fuels through cash advances for capital purchases, payroll, and other operating expenses. See Note 1 to the financial statements of Mississippi Power under "Asset Retirement Obligations and Other Costs of Removal" and "Variable Interest Entities" in Item 8 of the Form 10-K for additional information.
In addition, Mississippi Power constructed the CO 2 pipeline for the planned transport of captured CO 2 for use in enhanced oil recovery. Mississippi Power entered into agreements with Denbury Onshore (Denbury) and Treetop Midstream Services, LLC (Treetop), pursuant to which Denbury would purchase 70% of the CO 2 captured from the Kemper IGCC and Treetop would purchase 30% of the CO 2 captured from the Kemper IGCC. On June 3, 2016, Mississippi Power cancelled its contract with Treetop and amended its contract with Denbury to reflect, among other things, Denbury's agreement to purchase 100% of the CO 2 captured from the Kemper IGCC and an initial contract term of 16 years. Denbury has the right to terminate the contract at any time because Mississippi Power did not place the Kemper IGCC in service by July 1, 2017.
The ultimate outcome of these matters cannot be determined at this time.
Termination of Proposed Sale of Undivided Interest
In 2010 and as amended in 2012, Mississippi Power and SMEPA entered into an agreement whereby SMEPA agreed to purchase a 15% undivided interest in the Kemper IGCC ( 15% Undivided Interest). On May 20, 2015, SMEPA notified Mississippi Power of its termination of the agreement. Mississippi Power previously received a total of $275 million of deposits from SMEPA that were required to be returned to SMEPA with interest. On June 3, 2015, Southern Company, pursuant to its guarantee obligation, returned approximately $301 million to SMEPA.

213


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Subsequently, Mississippi Power issued a promissory note in the aggregate principal amount of approximately $301 million to Southern Company, which was repaid in June 2017.
Litigation
On April 26, 2016, a complaint against Mississippi Power was filed in Harrison County Circuit Court (Circuit Court) by Biloxi Freezing & Processing Inc., Gulfside Casino Partnership, and John Carlton Dean, which was amended and refiled on July 11, 2016 to include, among other things, Southern Company as a defendant. The individual plaintiff alleges that Mississippi Power and Southern Company violated the Mississippi Unfair Trade Practices Act. All plaintiffs have alleged that Mississippi Power and Southern Company concealed, falsely represented, and failed to fully disclose important facts concerning the cost and schedule of the Kemper IGCC and that these alleged breaches have unjustly enriched Mississippi Power and Southern Company. The plaintiffs seek unspecified actual damages and punitive damages; ask the Circuit Court to appoint a receiver to oversee, operate, manage, and otherwise control all affairs relating to the Kemper IGCC; ask the Circuit Court to revoke any licenses or certificates authorizing Mississippi Power or Southern Company to engage in any business related to the Kemper IGCC in Mississippi; and seek attorney's fees, costs, and interest. The plaintiffs also seek an injunction to prevent any Kemper IGCC costs from being charged to customers through electric rates. On June 23, 2017, the Circuit Court ruled in favor of motions by Southern Company and Mississippi Power and dismissed the case. On July 7, 2017, the plaintiffs filed notice to appeal to the Court.
On June 9, 2016, Treetop, Greenleaf CO 2 Solutions, LLC (Greenleaf), Tenrgys, LLC, Tellus Energy, LLC, WCOA, LLC, and Tellus Operating Group filed a complaint against Mississippi Power, Southern Company, and SCS in the state court in Gwinnett County, Georgia. The complaint relates to the cancelled CO 2 contract with Treetop and alleges fraudulent misrepresentation, fraudulent concealment, civil conspiracy, and breach of contract on the part of Mississippi Power, Southern Company, and SCS and seeks compensatory damages of $100 million , as well as unspecified punitive damages. Southern Company, Mississippi Power, and SCS have moved to compel arbitration pursuant to the terms of the CO 2 contract, which the court granted on May 4, 2017. On June 28, 2017, Treetop, Greenleaf, Tenrgys, LLC, Tellus Energy, LLC, WCOA, LLC, and Tellus Operating Group filed a claim for arbitration requesting $500 million in damages.
Southern Company and Mississippi Power believe these legal challenges have no merit; however, an adverse outcome in these proceedings could have a material impact on Southern Company's and Mississippi Power's results of operations, financial condition, and liquidity. Southern Company and Mississippi Power will vigorously defend themselves in these matters, and the ultimate outcome of these matters cannot be determined at this time.
Baseload Act
In 2008, the Baseload Act was signed by the Governor of Mississippi. The Baseload Act authorizes, but does not require, the Mississippi PSC to adopt a cost recovery mechanism that includes in retail base rates, prior to and during construction, all or a portion of the prudently-incurred pre-construction and construction costs incurred by a utility in constructing a base load electric generating plant. Prior to the passage of the Baseload Act, such costs would traditionally be recovered only after the plant was placed in service. The Baseload Act also provides for periodic prudence reviews by the Mississippi PSC and prohibits the cancellation of any such generating plant without the approval of the Mississippi PSC. In the event of cancellation of the construction of the plant without approval of the Mississippi PSC, the Baseload Act authorizes the Mississippi PSC to make a public interest determination as to whether and to what extent the utility will be afforded rate recovery for costs incurred in connection with such cancelled generating plant.
Income Tax Matters
See Note 3 to the financial statements of Southern Company and Mississippi Power under "Integrated Coal Gasification Combined Cycle – Bonus Depreciation," " – Investment Tax Credits," and " – Section 174 Research and Experimental Deduction" in Item 8 of the Form 10-K and Note (G) under " Section 174 Research and

214


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Experimental Deduction " for additional information on bonus depreciation, investment tax credits, and the Section 174 research and experimental deduction.
Bonus Depreciation
Approximately $370 million of positive cash flows is expected to result from bonus depreciation for the 2017 tax year, but may not all be realized in 2017 due to net operating loss projections for the 2017 tax year, and is dependent upon placing the remainder of the Kemper IGCC in service by December 31, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount previously estimated as bonus depreciation would be claimed as a deduction under IRC Section 165. As of June 30, 2017, $82 million has been received through quarterly income tax refunds for bonus depreciation related to the Kemper IGCC, which may be subject to repayment. See Note (G) for additional information. The ultimate outcome of this matter cannot be determined at this time.
Section 174 Research and Experimental Deduction
Southern Company, on behalf of Mississippi Power, has reflected deductions for research and experimental (R&E) expenditures related to the Kemper IGCC in its federal income tax calculations since 2013 and filed amended federal income tax returns for 2008 through 2013 to also include such deductions. In December 2016, Southern Company and the IRS reached a proposed settlement, subject to approval of the U.S. Congress Joint Committee on Taxation, resolving a methodology for these deductions. Due to the uncertainty related to this tax position, Southern Company and Mississippi Power had unrecognized tax benefits associated with these R&E deductions totaling approximately $464 million as of June 30, 2017. If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount not allowed under IRC Section 174 would be claimed as a deduction under IRC Section 165, and would result in a reversal of the related unrecognized tax benefits, excluding interest. See Note (G) for additional information. This matter is expected to be resolved in the next 12 months; however, the ultimate outcome of this matter cannot be determined at this time.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(C)
FAIR VALUE MEASUREMENTS
As of June 30, 2017 , assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:
 
Fair Value Measurements Using:
 
 
As of June 30, 2017:
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Net Asset Value as a Practical Expedient (NAV)
 
Total
 
(in millions)
Southern Company
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives (a)(b)
$
193

 
$
179

 
$

 
$

 
$
372

Interest rate derivatives

 
11

 

 

 
11

Foreign currency derivatives

 
56

 

 

 
56

Nuclear decommissioning trusts (c)
728

 
966

 

 
25

 
1,719

Cash equivalents
834

 

 

 

 
834

Other investments
9

 

 
1

 

 
10

Total
$
1,764

 
$
1,212

 
$
1

 
$
25

 
$
3,002

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives (a)(b)
$
205

 
$
161

 
$

 
$

 
$
366

Interest rate derivatives

 
23

 

 

 
23

Foreign currency derivatives

 
23

 

 

 
23

Contingent consideration

 

 
20

 

 
20

Total
$
205

 
$
207

 
$
20

 
$

 
$
432

 
 
 
 
 
 
 
 
 
 
Alabama Power
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
9

 
$

 
$

 
$
9

Nuclear decommissioning trusts: (d)
 
 
 
 
 
 
 
 


Domestic equity
411

 
79

 

 

 
490

Foreign equity
56

 
54

 

 

 
110

U.S. Treasury and government agency securities

 
29

 

 

 
29

Corporate bonds
22

 
145

 

 

 
167

Mortgage and asset backed securities

 
18

 

 

 
18

Private Equity

 

 

 
25

 
25

Other

 
6

 

 

 
6

Cash equivalents
493

 

 

 

 
493

Total
$
982

 
$
340

 
$

 
$
25

 
$
1,347

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
11

 
$

 
$

 
$
11


216


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
Fair Value Measurements Using:
 
 
As of June 30, 2017:
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Net Asset Value as a Practical Expedient (NAV)
 
Total
 
(in millions)
Georgia Power
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
15

 
$

 
$

 
$
15

Interest rate derivatives

 
1

 

 

 
1

Nuclear decommissioning trusts: (d) (e)
 
 
 
 
 
 
 
 
 
Domestic equity
225

 
1

 

 

 
226

Foreign equity

 
147

 

 

 
147

U.S. Treasury and government agency securities

 
198

 

 

 
198

Municipal bonds

 
72

 

 

 
72

Corporate bonds

 
169

 

 

 
169

Mortgage and asset backed securities

 
41

 

 

 
41

Other
14

 
7

 

 

 
21

Cash equivalents
50

 

 

 

 
50

Total
$
289

 
$
651

 
$

 
$

 
$
940

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
14

 
$

 
$

 
$
14

Interest rate derivatives

 
3

 

 

 
3

Total
$

 
$
17

 
$

 
$

 
$
17

 
 
 
 
 
 
 
 
 
 
Gulf Power
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
1

 
$

 
$

 
$
1

Cash equivalents
21

 

 

 

 
21

Total
$
21

 
$
1

 
$

 
$

 
$
22

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
29

 
$

 
$

 
$
29

 
 
 
 
 
 
 
 
 
 
Mississippi Power
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
2

 
$

 
$

 
$
2

Interest rate derivatives

 
3

 

 

 
3

Cash equivalents
100

 

 

 

 
100

Total
$
100

 
$
5

 
$

 
$

 
$
105

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
10

 
$

 
$

 
$
10

 
 
 
 
 
 
 
 
 
 

217


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
Fair Value Measurements Using:
 
 
As of June 30, 2017:
Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)
 
Significant
Other
Observable
Inputs
(Level 2)
 
Significant
Unobservable
Inputs
(Level 3)
 
Net Asset Value as a Practical Expedient (NAV)
 
Total
 
(in millions)
Southern Power
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
14

 
$

 
$

 
$
14

Foreign currency derivatives

 
56

 

 

 
56

Total
$

 
$
70

 
$

 
$

 
$
70

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives
$

 
$
9

 
$

 
$

 
$
9

Foreign currency derivatives

 
23

 

 

 
23

Contingent consideration

 

 
20

 

 
20

Total
$


$
32


$
20


$


$
52

 
 
 
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
 
 
 
 
Assets:
 
 
 
 
 
 
 
 
 
Energy-related derivatives (a)(b)
$
193

 
$
138

 
$

 
$

 
$
331

Liabilities:
 
 
 
 
 
 
 
 
 
Energy-related derivatives (a)(b)
$
205

 
$
86

 
$

 
$

 
$
291

(a)
Excludes $11 million associated with certain weather derivatives accounted for based on intrinsic value rather than fair value.
(b)
Excludes cash collateral of $71 million .
(c)
For additional detail, see the nuclear decommissioning trusts sections for Alabama Power and Georgia Power in this table.
(d)
Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies.
(e)
Includes the investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of June 30, 2017 , approximately $38 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program.
Southern Company, Alabama Power, and Georgia Power continue to elect the option to fair value investment securities held in the nuclear decommissioning trust funds. The fair value of the funds at Southern Company, including reinvested interest and dividends and excluding the funds' expenses, increased by $55 million and $118 million , respectively, for the three and six months ended June 30, 2017 , and by $47 million and $67 million , respectively, for the three and six months ended June 30, 2016 . Alabama Power recorded an increase in fair value of $28 million and $62 million , respectively, for the three and six months ended June 30, 2017 and $29 million and $40 million , respectively, for the three and six months ended June 30, 2016 as a change in regulatory liabilities related to its AROs. Georgia Power recorded increases in fair value of $27 million and $56 million , respectively, for the three and six months ended June 30, 2017 and $18 million and $27 million , respectively, for the three and six months ended June 30, 2016 as a change in its regulatory asset related to its AROs.
Valuation Methodologies
The energy-related derivatives primarily consist of exchange-traded and 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 overnight index swap interest rates. Interest rate derivatives are also standard over-the-counter products that are valued using

218


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

observable market data and assumptions commonly used by market participants. The fair value of interest rate derivatives reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future interest rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and occasionally, implied volatility of interest rate options. The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and discount rates. The interest rate derivatives and cross-currency swaps are categorized as Level 2 under Fair Value Measurements as these inputs are based on observable data and valuations of similar instruments. See Note (H) for additional information on how these derivatives are used.
The NRC requires licensees of commissioned nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. For fair value measurements of the investments within the nuclear decommissioning trusts, external pricing vendors are designated for each asset class with each security specifically assigned a primary pricing source. For investments held within commingled funds, fair value is determined at the end of each business day through the net asset value, which is established by obtaining the underlying securities' individual prices from the primary pricing source. A market price secured from the primary source vendor is then evaluated by management in its valuation of the assets within the trusts. As a general approach, fixed income 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' judgments, are also obtained when available. See Note 1 to the financial statements of Southern Company, Alabama Power, and Georgia Power under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.
Southern Power has contingent payment obligations related to certain acquisitions whereby Southern Power is obligated to make generation-based payments to the seller over a period ranging from 10 to 30 years, beginning at the commercial operation date. The obligation is categorized as Level 3 under Fair Value Measurements as the fair value is determined using significant unobservable inputs for the forecasted facility generation in MW-hours, as well as other inputs such as a fixed dollar amount per MW-hour, and a discount rate, and is evaluated periodically. The fair value of contingent consideration reflects the net present value of expected payments and any periodic change arising from forecasted generation is expected to be immaterial.
"Other investments" include investments that are not traded in the open market. The fair value of these investments has been determined based on market factors including comparable multiples and the expectations regarding cash flows and business plan executions.
As of June 30, 2017 , the fair value measurements of private equity investments held in the nuclear decommissioning trust that are calculated at net asset value per share (or its equivalent) as a practical expedient, as well as the nature and risks of those investments, were as follows:
As of June 30, 2017:
Fair
Value
 
Unfunded
Commitments
 
Redemption
Frequency
 
Redemption
Notice Period
 
(in millions)
 
 
 
 
Southern Company
$
25

 
$
22

 
Not Applicable
 
Not Applicable
Alabama Power
$
25

 
$
22

 
Not Applicable
 
Not Applicable
Private equity funds include a fund-of-funds that invests in high-quality private equity funds across several market sectors, funds that invest in real estate assets, and a fund that acquires companies to create resale value. Private equity funds do not have redemption rights. Distributions from these funds will be received as the underlying investments in the funds are liquidated. Liquidations are expected to occur at various times over the next 10 years .

219


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

As of June 30, 2017 , other financial instruments for which the carrying amount did not equal fair value were as follows:
 
Carrying
Amount
 
Fair
Value
 
(in millions)
Long-term debt, including securities due within one year:
 
 
 
Southern Company
$
46,631

 
$
48,228

Alabama Power
$
7,440

 
$
8,041

Georgia Power
$
10,888

 
$
11,585

Gulf Power
$
1,292

 
$
1,336

Mississippi Power
$
2,125

 
$
2,071

Southern Power
$
5,725

 
$
5,878

Southern Company Gas
$
5,699

 
$
6,031

The fair values are determined using Level 2 measurements and are based on quoted market prices for the same or similar issues or on the current rates available to Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, Southern Power, and Southern Company Gas.
(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 information on the stock option and performance share plans. The effect of both stock options and performance share award units was determined using the treasury stock method. Shares used to compute diluted earnings per share were as follows:
 
Three Months Ended June 30, 2017
Three Months Ended June 30, 2016
Six Months Ended June 30, 2017
Six Months Ended June 30, 2016
 
(in millions)
As reported shares
998

934

996

925

Effect of options and performance share award units
7

6

7

6

Diluted shares
1,005

940

1,003

931

Stock options and performance share award units that were not included in the diluted earnings per share calculation because they were anti-dilutive were immaterial for the three and six months ended June 30, 2017 and 2016 .

220


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Changes in Stockholders' Equity
The following table presents year-to-date changes in stockholders' equity of Southern Company:
 
Number of
Common Shares
 
Common
Stockholders'
Equity
Preferred and
Preference
Stock of
Subsidiaries
 
Total
Stockholders'
Equity
 
Issued
Treasury
 
Noncontrolling Interests (*)
 
(in thousands)
 
(in millions)
Balance at December 31, 2016
991,213

(819
)
 
$
24,758

$
609

$
1,245

$
26,612

Consolidated net income (loss) attributable to Southern Company


 
(723
)


(723
)
Other comprehensive income (loss)


 
(11
)


(11
)
Stock issued
9,129


 
417



417

Stock-based compensation


 
72



72

Cash dividends on common stock


 
(1,134
)


(1,134
)
Preference stock redemption


 

(150
)

(150
)
Contributions from noncontrolling interests


 



71

71

Distributions to noncontrolling interests


 


(40
)
(40
)
Net income attributable to noncontrolling interests


 


16

16

Reclassification from redeemable noncontrolling interests


 


114

114

Other

(49
)
 
(7
)
3

1

(3
)
Balance at June 30, 2017
1,000,342

(868
)
 
$
23,372

$
462

$
1,407

$
25,241

 
 
 
 
 
 
 
 
Balance at December 31, 2015
915,073

(3,352
)
 
$
20,592

$
609

$
781

$
21,982

Consolidated net income attributable to Southern Company


 
1,112



1,112

Other comprehensive income (loss)


 
(117
)


(117
)
Stock issued
27,297

2,599

 
1,383



1,383

Stock-based compensation


 
67



67

Cash dividends on common stock


 
(1,023
)


(1,023
)
Contributions from noncontrolling interests


 


169

169

Distributions to noncontrolling interests


 


(10
)
(10
)
Purchase of membership interests from noncontrolling interests


 


(129
)
(129
)
Net income attributable to noncontrolling interests


 


11

11

Other

(19
)
 
1



1

Balance at June 30, 2016
942,370

(772
)
 
$
22,015

$
609

$
822

$
23,446

(*)
Related to Southern Power Company and excludes redeemable noncontrolling interests. In April 2017, approximately $114 million was reclassified from redeemable noncontrolling interests to noncontrolling interests, included in stockholder's equity, due to the expiration of SunPower Corp's option to require Southern Power to purchase its membership interests in one of the solar partnerships. See Note 10 to the financial statements of Southern Power in Item 8 of the Form 10-K for additional information.

221


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(E)
FINANCING
Going Concern
As of June 30, 2017 , Mississippi Power's current liabilities exceeded current assets by approximately $930 million primarily due to approximately $935 million that will be required through June 30, 2018 to fund maturities of long-term debt and $17 million that will be required to fund maturities of short-term debt. In addition, Mississippi Power has $40 million of tax-exempt variable rate demand obligations that are supported by short-term credit facilities and $50 million of fixed rate pollution control revenue bonds that are required to be remarketed over the next 12 months. Mississippi Power intends to utilize operating cash flows, lines of credit, and bank term loans, as market conditions permit, as well as, under certain circumstances, commercial paper and/or equity contributions and/or loans from Southern Company to fund Mississippi Power's short-term capital needs. Specifically, Mississippi Power has been informed by Southern Company that in the event sufficient funds are not available from external sources, Southern Company intends to provide Mississippi Power with loans and/or equity contributions sufficient to fund the remaining indebtedness scheduled to mature and other cash needs over the next 12 months. Therefore, Mississippi Power's financial statement presentation contemplates continuation of Mississippi Power as a going concern as a result of Southern Company's anticipated ongoing financial support of Mississippi Power. For additional information, see Notes 1 and 6 to the financial statements of Mississippi Power under "Recently Issued Accounting Standards" and "Going Concern," respectively, in Item 8 of the Form 10-K and Note (B) under " Integrated Coal Gasification Combined Cycle ."
DOE Loan Guarantee Borrowings
See Note 6 to the financial statements of Southern Company and Georgia Power in Item 8 of the Form 10-K for additional information regarding Georgia Power's loan guarantee agreement (Loan Guarantee Agreement) with the DOE and related multi-advance term loan facility (FFB Credit Facility) with the FFB.
On July 27, 2017, Georgia Power entered into an amendment to the Loan Guarantee Agreement (LGA Amendment) in connection with the DOE's consent to Georgia Power's entry into the Services Agreement and the related intellectual property licenses (IP Licenses). The purpose of the amendment is to clarify the operation of the Loan Guarantee Agreement pending Georgia Power's completion of its comprehensive schedule, cost-to-complete, and cancellation cost assessments being prepared as a result of the bankruptcy of the EPC Contractor (Cost Assessments).
Under the terms of the Loan Guarantee Agreement, upon termination of the Vogtle 3 and 4 Agreement, further advances are conditioned upon the DOE's approval of any agreements entered into in replacement of the Vogtle 3 and 4 Agreement. Under the terms of the LGA Amendment, Georgia Power will not request any advances unless and until such time as Georgia Power has (i) completed the Cost Assessments and made a determination to continue construction of Plant Vogtle Units 3 and 4, (ii) delivered to the DOE an updated project schedule, construction budget, and other information, (iii) entered into one or more agreements with a construction contractor or contractors that will be primarily responsible for construction of Plant Vogtle Units 3 and 4 and such agreements have been approved by the DOE (together with the Services Agreement and the IP Licenses, the Replacement EPC Arrangements), and (iv) entered into a further amendment to the Loan Guarantee Agreement with the DOE to reflect the Replacement EPC Arrangements.
Upon satisfaction of the conditions described above, advances may be requested under the FFB Credit Facility on a quarterly basis through 2020. The final maturity date for each advance under the FFB Credit Facility is February 20, 2044. Interest is payable quarterly and principal payments will begin on February 20, 2020. Borrowings under the FFB Credit Facility will bear interest at the applicable U.S. Treasury rate plus a spread equal to 0.375% .
In addition to the conditions described above, future advances are subject to satisfaction of customary conditions, as well as certification of compliance with the requirements of the Title XVII Loan Guarantee Program, accuracy of project-related representations and warranties, delivery of updated project-related information, absence of liens on Georgia Power's ownership interest in Plant Vogtle Units 3 and 4 other than permitted liens, evidence of compliance

222


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

with the prevailing wage requirements of the Davis-Bacon Act of 1931, as amended, and certification from the DOE's consulting engineer that proceeds of the advances are used to reimburse Eligible Project Costs.
Under the Loan Guarantee Agreement, Georgia Power is subject to customary borrower affirmative and negative covenants and events of default. In addition, Georgia Power is subject to project-related reporting requirements and other project-specific covenants and events of default.
In the event certain mandatory prepayment events occur, the FFB's commitment to make further advances under the FFB Credit Facility will terminate and Georgia Power will be required to prepay the outstanding principal amount of all borrowings under the FFB Credit Facility over a period of five years (with level principal amortization). Among other things, these mandatory prepayment events include (i) the termination of the Services Agreement or rejection of the Services Agreement in bankruptcy if Georgia Power does not maintain access to intellectual property rights under the IP Licenses; (ii) a decision by Georgia Power not to continue construction of Plant Vogtle Units 3 and 4; (iii) a failure by Georgia Power to complete the Cost Assessments or enter into Replacement EPC Arrangements by December 31, 2017; (iv) cancellation of Plant Vogtle Units 3 and 4 by the Georgia PSC, or by Georgia Power if authorized by the Georgia PSC; and (v) cost disallowances by the Georgia PSC that could have a material adverse effect on completion of Plant Vogtle Units 3 and 4 or Georgia Power's ability to repay the outstanding borrowings under the FFB Credit Facility. Under certain circumstances, insurance proceeds and any proceeds from an event of taking must be applied to immediately prepay outstanding borrowings under the FFB Credit Facility. In addition, under certain circumstances Georgia Power may be required to make additional prepayments in connection with its receipt of payments under the Guarantee Settlement Agreement or from the EPC Contractor under the Vogtle 3 and 4 Agreement. Georgia Power also may voluntarily prepay outstanding borrowings under the FFB Credit Facility. Under the FFB Credit Facility, any prepayment (whether mandatory or optional) will be made with a make-whole premium or discount, as applicable.
See Note (B) under " Regulatory Matters Georgia Power Nuclear Construction " for additional information regarding Plant Vogtle Units 3 and 4.
Bank Credit Arrangements
Bank credit arrangements provide liquidity support to the registrants' commercial paper borrowings and the traditional electric operating companies' pollution control revenue bonds. The amount of variable rate pollution control revenue bonds of the traditional electric operating companies outstanding requiring liquidity support as of June 30, 2017 was approximately $1.6 billion (comprised of approximately $890 million at Alabama Power, $550 million at Georgia Power, $82 million at Gulf Power, and $40 million at Mississippi Power). In June 2017, Georgia Power remarketed $318 million of variable rate pollution control bonds in index rate modes, reducing the liquidity support utilized under Georgia Power's bank credit arrangement. In addition, at June 30, 2017 , the traditional electric operating companies had approximately $626 million (comprised of approximately $436 million at Georgia Power, $140 million at Gulf Power, and $50 million at Mississippi Power) of pollution control revenue bonds outstanding that were required to be reoffered within the next 12 months. See Note 6 to the financial statements of each registrant under "Bank Credit Arrangements" in Item 8 of the Form 10-K and " Financing Activities " herein for additional information.

223


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

The following table outlines the committed credit arrangements by company as of June 30, 2017 :
 
Expires
 
 
 
Executable Term
Loans
 
Expires Within
One Year
Company
2017
2018
2019
2020
2022
 
Total
 
Unused
 
One
Year
 
Two
Years
 
Term
Out
 
No Term
Out
 
(in millions)
Southern Company (a)
$

$

$

$

$
2,000

 
$
2,000

 
$
2,000

 
$

 
$

 
$

 
$

Alabama Power
3

532



800

 
1,335

 
1,335

 

 

 

 
35

Georgia Power




1,750

 
1,750

 
1,732

 

 

 

 

Gulf Power
30

195

25

30


 
280

 
280

 
45

 

 

 
40

Mississippi Power
113





 
113

 
100

 

 
13

 
13

 
100

Southern Power Company




750

 
750

 
675

 

 

 

 

Southern Company Gas (b)




1,900

 
1,900

 
1,849

 

 

 

 

Other
10

30




 
40

 
40

 
20

 

 
20

 
20

Southern Company Consolidated
$
156

$
757

$
25

$
30

$
7,200

 
$
8,168

 
$
8,011

 
$
65

 
$
13

 
$
33

 
$
195

(a)
Represents the Southern Company parent entity.
(b)
Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $1.2 billion of these arrangements. Southern Company Gas' committed credit arrangements also include $700 million for which Nicor Gas is the borrower and which is restricted for working capital needs of Nicor Gas.
As reflected in the table above, in May 2017, Southern Company, Alabama Power, Georgia Power, and Southern Power Company each amended certain of their multi-year credit arrangements, which, among other things, extended the maturity dates from 2020 to 2022. Southern Company and Southern Power Company increased their borrowing ability under these arrangements to $2.0 billion from $1.25 billion and to $750 million from $600 million , respectively. Southern Company also terminated its $1.0 billion facility maturing in 2018. Also in May 2017, Southern Company Gas Capital and Nicor Gas terminated their existing credit arrangements for $1.3 billion and $700 million , respectively, which were to mature in 2017 and 2018, and entered into a new multi-year credit arrangement currently allocated for $1.2 billion and $700 million , respectively, with a maturity date of 2022.
Subject to applicable market conditions, Southern Company and its subsidiaries expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, Southern Company and its subsidiaries may extend the maturity dates and/or increase or decrease the lending commitments thereunder.

224


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Financing Activities
The following table outlines the long-term debt financing activities for Southern Company and its subsidiaries for the first six months of 2017 :
Company
Senior Note Issuances
 
Senior
Note Maturities and Redemptions
 
Revenue
Bond
Maturities, Redemptions, and
Repurchases
 
Other
Long-Term
Debt
Issuances
 
Other
Long-Term Debt Redemptions
and
Maturities (a)
 
(in millions)
Southern Company (b)
$
300

 
$

 
$

 
$
500

 
$
400

Alabama Power
550

 
200

 

 

 

Georgia Power
850

 
450

 
27

 

 
3

Gulf Power
300

 
85

 

 
6

 

Mississippi Power

 

 

 
40

 
893

Southern Power

 

 

 
3

 
3

Southern Company Gas (c)
450

 

 

 

 

Other

 

 

 

 
8

Elimination (d)

 

 

 
(40
)
 
(591
)
Southern Company Consolidated
$
2,450

 
$
735

 
$
27

 
$
509

 
$
716

(a)
Includes reductions in capital lease obligations resulting from cash payments under capital leases.
(b)
Represents the Southern Company parent entity.
(c)
The senior notes were issued by Southern Company Gas Capital and guaranteed by the Southern Company Gas parent entity.
(d)
Intercompany loans from Southern Company to Mississippi Power eliminated in Southern Company's Consolidated Financial Statements.
Southern Company
In June 2017, Southern Company issued $500 million aggregate principal amount of Series 2017A 5.325% Junior Subordinated Notes due June 21, 2057. The proceeds were used to repay short-term indebtedness and for other general corporate purposes.
Also in June 2017, Southern Company issued $300 million aggregate principal amount of Series 2017A Floating Rate Senior Notes due September 30, 2020, which bear interest at a floating rate based on three -month LIBOR. The proceeds were used to repay short-term indebtedness and for other general corporate purposes.
Also in June 2017, Southern Company entered into two $100 million aggregate principal amount floating rate bank term loan agreements, which mature on June 21, 2018 and June 29, 2018 and bear interest based on one -month LIBOR. The proceeds were used for working capital and other general corporate purposes.
Alabama Power
In March 2017, Alabama Power issued $550 million aggregate principal amount of Series 2017A 2.45% Senior Notes due March 30, 2022. The proceeds were used to repay Alabama Power's short-term indebtedness and for general corporate purposes, including Alabama Power's continuous construction program.
Georgia Power
In March 2017, Georgia Power issued $450 million aggregate principal amount of Series 2017A 2.00% Senior Notes due March 30, 2020 and $400 million aggregate principal amount of Series 2017B 3.25% Senior Notes due March 30, 2027. The proceeds were used to repay a portion of Georgia Power's short-term indebtedness and for general corporate purposes, including Georgia Power's continuous construction program.

225


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

In April 2017, Georgia Power purchased and held $27 million aggregate principal amount of Development Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Vogtle Project), Fifth Series 1995. Georgia Power may reoffer these bonds to the public at a later date.
In June 2017, Georgia Power entered into three floating rate bank loans in aggregate principal amounts of $50 million , $150 million , and $100 million , which mature on December 1, 2017, May 31, 2018, and June 28, 2018, respectively, and bear interest based on one -month LIBOR. Also in June 2017, Georgia Power borrowed $500 million pursuant to an uncommitted bank credit arrangement, which bears interest at a rate agreed upon by Georgia Power and the bank from time to time and is payable on no less than 30 days' demand by the bank. The proceeds from these bank loans were used to repay a portion of Georgia Power's existing indebtedness and for working capital and other general corporate purposes, including Georgia Power's continuous construction program.
Gulf Power
In March 2017, Gulf Power extended the maturity of a $100 million short-term floating rate bank loan bearing interest based on one -month LIBOR from April 2017 to October 2017 and subsequently repaid the loan in May 2017.
In May 2017, Gulf Power issued $300 million aggregate principal amount of Series 2017A 3.30% Senior Notes due May 30, 2027. The proceeds, together with other funds, were used to repay at maturity $85 million aggregate principal amount of Series 2007A 5.90% Senior Notes due June 15, 2017; to repay outstanding commercial paper borrowings; to repay a $100 million short-term floating rate bank loan, as discussed above; and to redeem 550,000 shares ( $55 million aggregate liquidation amount) of Gulf Power's 6.00% Series Preference Stock, 450,000 shares ( $45 million aggregate liquidation amount) of Gulf Power's Series 2007A 6.45% Preference Stock, and 500,000 shares ( $50 million aggregate liquidation amount) of Gulf Power's Series 2013A 5.60% Preference Stock.
Mississippi Power
In March 2017, Mississippi Power issued a $9 million short-term bank note bearing interest at 5% per annum, which was repaid in April 2017.
In February 2017, Mississippi Power amended $551 million in promissory notes to Southern Company extending the maturity dates of the notes from December 1, 2017 to July 31, 2018. In the second quarter 2017, Mississippi Power borrowed an additional $40 million under a promissory note issued to Southern Company.
In June 2017, Southern Company made equity contributions totaling $1.0 billion to Mississippi Power. Mississippi Power used a portion of the proceeds to (i) prepay $300 million of the outstanding principal amount under its $1.2 billion unsecured term loan, which matures on March 30, 2018; (ii) repay all of the $591 million outstanding principal amount of promissory notes to Southern Company; and (iii) repay a $10 million short-term bank loan.
Southern Company Gas
In May 2017, Southern Company Gas Capital issued $450 million aggregate principal amount of Series 2017A 4.40% Senior Notes due May 30, 2047. The proceeds were used to repay Southern Company Gas' short-term indebtedness and for general corporate purposes.
(F)
RETIREMENT BENEFITS
Southern Company has a defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at Southern Company Gas, as discussed below, and PowerSecure. The Southern Company qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). No mandatory contributions to the Southern Company qualified pension plan are anticipated for the year ending December 31, 2017 . 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 electric

226


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

operating companies fund related other postretirement trusts to the extent required by their respective regulatory commissions.
In addition, Southern Company Gas has a qualified defined benefit, trusteed, pension plan covering certain eligible employees, which was closed in 2012 to new employees. This qualified pension plan is funded in accordance with requirements of ERISA. No mandatory contributions to the Southern Company Gas qualified pension plan are anticipated for the year ending December 31, 2017 . Southern Company Gas also provides certain non-qualified defined benefit and defined contribution 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 Gas provides certain medical care and life insurance benefits for eligible retired employees through a postretirement benefit plan. Southern Company Gas also has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.
See Note 2 to the financial statements of Southern Company, Alabama Power, Georgia Power, Gulf Power, Mississippi Power, and Southern Company Gas in Item 8 of the Form 10-K for additional information.

227


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Components of the net periodic benefit costs for the three and six months ended June 30, 2017 and 2016 are presented in the following tables.
Pension Plans
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
(in millions)
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
Service cost
$
74

 
$
16

 
$
18

 
$
4

 
$
3

Interest cost
113

 
24

 
35

 
5

 
5

Expected return on plan assets
(225
)
 
(49
)
 
(70
)
 
(9
)
 
(10
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
3

 

 
1

 

 
1

Net (gain)/loss
41

 
11

 
14

 
1

 
2

Net periodic pension cost (income)
$
6

 
$
2

 
$
(2
)
 
$
1

 
$
1

Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
Service cost
$
147

 
$
32

 
$
37

 
$
7

 
$
7

Interest cost
227

 
48

 
69

 
10

 
10

Expected return on plan assets
(449
)
 
(98
)
 
(141
)
 
(19
)
 
(20
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
6

 
1

 
2

 

 
1

Net (gain)/loss
81

 
21

 
28

 
3

 
4

Net periodic pension cost (income)
$
12

 
$
4

 
$
(5
)
 
$
1

 
$
2

Three Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
Service cost
$
62

 
$
15

 
$
18

 
$
3

 
$
3

Interest cost
101

 
24

 
34

 
4

 
5

Expected return on plan assets
(187
)
 
(46
)
 
(65
)
 
(8
)
 
(8
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
3

 

 
2

 
1

 

Net (gain)/loss
37

 
10

 
13

 
1

 
1

Net periodic pension cost
$
16

 
$
3

 
$
2

 
$
1

 
$
1

Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
Service cost
$
124

 
$
29

 
$
35

 
$
6

 
$
6

Interest cost
201

 
48

 
68

 
9

 
10

Expected return on plan assets
(374
)
 
(92
)
 
(129
)
 
(17
)
 
(17
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
7

 
1

 
3

 
1

 

Net (gain)/loss
75

 
20

 
27

 
3

 
3

Net periodic pension cost
$
33

 
$
6

 
$
4

 
$
2

 
$
2


228


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Pension Plans
Southern
Company
Gas
 
(in millions)
Successor – Three Months Ended June 30, 2017
 
Service cost
$
5

Interest cost
10

Expected return on plan assets
(17
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
5

Net periodic pension cost
$
2

Successor – Six Months Ended June 30, 2017
 
Service cost
$
11

Interest cost
20

Expected return on plan assets
(35
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
10

Net periodic pension cost
$
5

 
 
 
 
Predecessor – Three Months Ended June 30, 2016
 
Service cost
$
7

Interest cost
11

Expected return on plan assets
(17
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
7

Net periodic pension cost
$
7

Predecessor – Six Months Ended June 30, 2016
 
Service cost
$
13

Interest cost
21

Expected return on plan assets
(33
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
13

Net periodic pension cost
$
13


229


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Postretirement Benefits
Southern
Company
 
Alabama
Power
 
Georgia
Power
 
Gulf
Power
 
Mississippi
Power
 
(in millions)
Three Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
Service cost
$
6

 
$
2

 
$
1

 
$
1

 
$
1

Interest cost
20

 
4

 
8

 

 
1

Expected return on plan assets
(17
)
 
(8
)
 
(6
)
 
(1
)
 
(1
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
1

 
1

 
1

 

 

Net (gain)/loss
5

 
1

 
1

 

 

Net periodic postretirement benefit cost
$
15

 
$

 
$
5

 
$

 
$
1

Six Months Ended June 30, 2017
 
 
 
 
 
 
 
 
 
Service cost
$
12

 
$
3

 
$
3

 
$
1

 
$
1

Interest cost
40

 
9

 
15

 
1

 
2

Expected return on plan assets
(33
)
 
(14
)
 
(12
)
 
(1
)
 
(1
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
3

 
2

 
1

 

 

Net (gain)/loss
7

 
1

 
3

 

 

Net periodic postretirement benefit cost
$
29

 
$
1

 
$
10

 
$
1

 
$
2

Three Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
Service cost
$
6

 
$
2

 
$
1

 
$
1

 
$
1

Interest cost
17

 
4

 
7

 

 
1

Expected return on plan assets
(14
)
 
(7
)
 
(5
)
 
(1
)
 
(1
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
1

 
1

 
1

 

 

Net (gain)/loss
4

 
1

 
2

 

 

Net periodic postretirement benefit cost
$
14

 
$
1

 
$
6

 
$

 
$
1

Six Months Ended June 30, 2016
 
 
 
 
 
 
 
 
 
Service cost
$
11

 
$
3

 
$
3

 
$
1

 
$
1

Interest cost
35

 
9

 
15

 
1

 
2

Expected return on plan assets
(28
)
 
(13
)
 
(11
)
 
(1
)
 
(1
)
Amortization:
 
 
 
 
 
 
 
 
 
Prior service costs
3

 
2

 
1

 

 

Net (gain)/loss
7

 
1

 
4

 

 

Net periodic postretirement benefit cost
$
28

 
$
2

 
$
12

 
$
1

 
$
2


230


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Postretirement Benefits
Southern
Company
Gas
 
(in millions)
Successor – Three Months Ended June 30, 2017
 
Service cost
$

Interest cost
2

Expected return on plan assets
(1
)
Amortization:
 
Prior service costs

Net (gain)/loss
1

Net periodic postretirement benefit cost
$
2

Successor – Six Months Ended June 30, 2017
 
Service cost
$
1

Interest cost
5

Expected return on plan assets
(3
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
2

Net periodic postretirement benefit cost
$
4

 
 
 
 
Predecessor – Three Months Ended June 30, 2016
 
Service cost
$

Interest cost
2

Expected return on plan assets
(1
)
Amortization:
 
Prior service costs

Net (gain)/loss
1

Net periodic postretirement benefit cost
$
2

Predecessor – Six Months Ended June 30, 2016
 
Service cost
$
1

Interest cost
5

Expected return on plan assets
(3
)
Amortization:
 
Prior service costs
(1
)
Net (gain)/loss
2

Net periodic postretirement benefit cost
$
4


231


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(G)
INCOME TAXES
See Note 5 to the financial statements of each registrant in Item 8 of the Form 10-K for additional tax information.
Current and Deferred Income Taxes
Tax Credit Carryforwards
Southern Company had federal ITC and PTC carryforwards (primarily related to Southern Power) totaling $1.9 billion as of June 30, 2017 compared to $1.8 billion as of December 31, 2016 .
The federal ITC carryforwards begin expiring in 2032 but are expected to be fully utilized by 2022. The PTC carryforwards begin expiring in 2036 but are expected to be utilized by 2022. The expected utilization of tax credit carryforwards could be further delayed by numerous factors. These factors include the acquisition of additional renewable projects, increased generation at existing wind facilities, carrying back the federal net operating loss, and potential tax reform legislation, as well as additional deductions in the event of an asset abandonment. The ultimate outcome of these matters cannot be determined at this time.
Valuation Allowances
At June 30, 2017 , valuation allowances were as follows:
 
Mississippi Power
 
Southern Company
Gas
 
Southern Company
 
(in millions)
Federal
$

 
$
18

 
$
18

State (net of federal benefit)
46

 
1

 
63

Balance at June 30, 2017
$
46

 
$
19

 
$
81

Southern Company had valuation allowances, net of the federal benefit, of $81 million at June 30, 2017 compared to $21 million at December 31, 2016. The increase was primarily due to Mississippi Power's projected inability to utilize the State of Mississippi net operating loss.
Effective Tax Rate
Southern Company
Southern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity, and federal income tax benefits from ITCs and PTCs.
Southern Company's effective tax (benefit) rate was (28.6)% for the six months ended June 30, 2017 compared to 29.4% for the corresponding period in 2016 . The effective tax rate decrease was primarily due to the estimated probable losses on the Kemper IGCC, net of the non-deductible AFUDC equity portion. Other factors include an increase in tax benefits from wind PTCs and state apportionment rate changes, partially offset by a decrease in tax benefits from ITCs and an increase in state valuation allowances.
Southern Company recognizes PTCs when wind energy is generated and sold (using the prescribed KWH rate in applicable federal and state statutes), which may differ significantly from amounts computed on a quarterly basis using an overall estimated annual effective income tax rate. Southern Company uses this method of recognition since the amount of PTCs can be significantly impacted by wind generation. This method can significantly affect the effective income tax rate for the period depending on the amount of pretax income.
Mississippi Power
Mississippi Power's effective tax (benefit) rate was (30.5)% for the six months ended June 30, 2017 compared to (208.1)% for the corresponding period in 2016 . The effective tax rate increase was primarily due to the estimated

232


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

probable losses on the Kemper IGCC, net of the non-deductible AFUDC equity portion and the related state valuation allowances.
Southern Power
Southern Power's effective tax (benefit) rate was (114.7)% for the six months ended June 30, 2017 compared to (74.0)% for the corresponding period in 2016 . The effective tax rate decrease was primarily due to additional PTCs arising from Southern Power's wind facility acquisitions, state apportionment rate changes, and lower pre-tax earnings, partially offset by a decrease in tax benefits from ITCs.
Southern Power recognizes PTCs when wind energy is generated and sold (using the prescribed KWH rate in applicable federal and state statutes), which may differ significantly from amounts computed on a quarterly basis using an overall estimated annual effective income tax rate. Southern Power uses this method of recognition since the amount of PTCs can be significantly impacted by wind generation. This method can significantly affect the effective income tax rate for the period depending on the amount of pretax income.
Unrecognized Tax Benefits
See Note 5 to the financial statements of each registrant under "Unrecognized Tax Benefits" in Item 8 of the Form 10-K for additional information.
Changes during the six months ended June 30, 2017 for unrecognized tax benefits were as follows:
 
Mississippi Power
 
Southern Power
 
Southern Company
 
(in millions)
Unrecognized tax benefits as of December 31, 2016
$
465

 
$
17

 
$
484

Tax positions from current periods
3

 
1

 
10

Tax positions from prior periods

 
1

 
7

Balance as of June 30, 2017
$
468

 
$
19

 
$
501

The tax positions from current and prior periods primarily relate to state tax benefits and charitable contribution carryforwards that will be impacted as a result of the proposed settlement of R&E expenditures associated with the Kemper IGCC. See " Section 174 Research and Experimental Deduction " herein for additional information. These amounts are presented on a gross basis without considering the related federal or state income tax impact.
The impact on the effective tax rate, if recognized, is as follows:
 
As of June 30, 2017
 
As of December 31, 2016
 
Mississippi Power
 
Southern Power
 
Southern Company
 
Southern Company
 
(in millions)
Tax positions impacting the effective tax rate
$
4

 
$
19

 
$
37

 
$
20

Tax positions not impacting the effective tax rate
464

 

 
464

 
464

Balance of unrecognized tax benefits
$
468

 
$
19

 
$
501

 
$
484

The tax positions impacting the effective tax rate primarily relate to federal deferred income tax credits and Southern Company's estimate of the uncertainty related to the amount of those benefits, and state tax benefits and charitable contribution carryforwards that will be impacted as a result of the proposed settlement of R&E expenditures associated with the Kemper IGCC. See " Section 174 Research and Experimental Deduction " herein for additional information. If these tax positions are not able to be recognized due to a federal audit adjustment in

233


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

the amount that has been estimated, the amount of tax credit carryforwards discussed above would be reduced by approximately $98 million .
Accrued interest for all tax positions other than the Section 174 R&E deductions was immaterial for all periods presented.
All of the registrants classify interest on tax uncertainties as interest expense. None of the registrants accrued any penalties on uncertain tax positions.
It is reasonably possible that the amount of the unrecognized tax benefits could change within 12 months . The settlement of federal and state audits and the U.S. Congress Joint Committee on Taxation approval of the R&E expenditures associated with the Kemper IGCC could impact the balances significantly. At this time, an estimate of the range of reasonably possible outcomes cannot be determined. See " Section 174 Research and Experimental Deduction " herein for more information.
The IRS has finalized its audits of Southern Company's consolidated federal income tax returns through 2012. Southern Company has filed its 2013, 2014, and 2015 federal income tax returns and has received partial acceptance letters from the IRS; however, the IRS has not finalized its audits. Southern Company is a participant in the Compliance Assurance Process of the IRS. In addition, the pre-Merger Southern Company Gas 2014 federal tax return is currently under audit. The audits for Southern Company's state income tax returns have either been concluded, or the statute of limitations has expired, for years prior to 2011.
Section 174 Research and Experimental Deduction
Southern Company reflected deductions for R&E expenditures related to the Kemper IGCC in its federal income tax calculations since 2013 and filed amended federal income tax returns for 2008 through 2013 to also include such deductions.
The Kemper IGCC is based on first-of-a-kind technology, and Southern Company and Mississippi Power believe that a significant portion of the plant costs qualify as deductible R&E expenditures under IRC Section 174. In December 2016, Southern Company and the IRS reached a proposed settlement, subject to approval of the U.S. Congress Joint Committee on Taxation, resolving a methodology for these deductions. Due to the uncertainty related to this tax position, Southern Company and Mississippi Power had unrecognized tax benefits associated with these R&E deductions totaling approximately $464 million and associated interest of $36 million as of June 30, 2017 . If the suspension of the Kemper IGCC start-up activities results in an abandonment, any amount not allowed under IRC Section 174 would be claimed as a deduction under IRC Section 165, and would result in a reversal of the related unrecognized tax benefits, excluding interest. The ultimate outcome of this matter cannot be determined at this time.
(H)
DERIVATIVES
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas are exposed to market risks, including commodity price risk, interest rate risk, weather risk, and occasionally foreign currency exchange rate 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 company's policies in areas such as counterparty exposure and risk management practices. Southern Company Gas' wholesale gas operations use various contracts in its commercial activities that generally meet the definition of derivatives. For the traditional electric operating companies, Southern Power, and Southern Company Gas' other businesses, each company's 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 and are presented on a net basis. See Note (C) for additional information. In the statements of cash flows, the cash impacts of settled energy-related and interest rate derivatives are recorded as operating activities. The cash

234


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

impacts of settled foreign currency derivatives are classified as operating or financing activities to correspond with classification of the hedged interest or principal, respectively.
Energy-Related Derivatives
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas enter into energy-related derivatives to hedge exposures to electricity, natural gas, and other fuel price changes. However, due to cost-based rate regulations and other various cost recovery mechanisms, the traditional electric operating companies and the natural gas distribution utilities have limited exposure to market volatility in energy-related commodity prices. Each of the traditional electric operating companies and certain of the natural gas distribution utilities of Southern Company Gas manage fuel-hedging programs, implemented per the guidelines of their respective state PSCs or other applicable state regulatory agencies, through the use of financial derivative contracts, which is expected to continue to mitigate price volatility. The Florida PSC extended the moratorium on Gulf Power's fuel-hedging program through January 1, 2021 in connection with the 2017 Rate Case Settlement Agreement. The moratorium does not have an impact on the recovery of existing hedges entered into under the previously-approved hedging program. The traditional electric operating companies (with respect to wholesale generating capacity) and Southern Power have limited exposure to market volatility in energy-related commodity prices because their long-term sales contracts shift substantially all fuel cost responsibility to the purchaser. However, the traditional electric operating companies and Southern Power may be exposed to market volatility in energy-related commodity prices to the extent any uncontracted capacity is used to sell electricity. Southern Company Gas retains exposure to price changes that can, in a volatile energy market, be material and can adversely affect its results of operations.
Southern Company Gas also enters into weather derivative contracts as economic hedges of operating margins in the event of warmer-than-normal weather. Exchange-traded options are carried at fair value, with changes reflected in operating revenues. Non exchange-traded options are accounted for using the intrinsic value method. Changes in the intrinsic value for non-exchange-traded contracts are reflected in the statements of income.
Energy-related derivative contracts are accounted for under one of three methods:
Regulatory Hedges — Energy-related derivative contracts which are designated as regulatory hedges relate primarily to the traditional electric operating companies' and the natural gas distribution utilities' 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) 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 and natural gas industries. 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.

235


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

At June 30, 2017 , the net volume of energy-related derivative contracts for natural gas positions for the Southern Company system, 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 non-hedge date for derivatives not designated as hedges, were as follows:
 
Net
Purchased
mmBtu
 
Longest
Hedge
Date
 
Longest
Non-Hedge
Date
 
(in millions)
 
 
 
 
Southern Company (*)
472
 
2021
 
2024
Alabama Power
70
 
2020
 
Georgia Power
160
 
2020
 
Gulf Power
35
 
2020
 
Mississippi Power
41
 
2021
 
Southern Power
25
 
2017
 
Southern Company Gas (*)
141
 
2019
 
2024
(*)
Southern Company's and Southern Company Gas' derivative instruments include both long and short natural gas positions. A long position is a contract to purchase natural gas and a short position is a contract to sell natural gas. Southern Company Gas' volume represents the net of long natural gas positions of 3.5 billion mmBtu and short natural gas positions of 3.4 billion mmBtu as of June 30, 2017 , which is also included in Southern Company's total volume.
In addition to the volumes discussed above, the traditional electric 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 31 million mmBtu for Southern Company, 10 million mmbtu for Georgia Power and Southern Power, 5 million mmbtu for Alabama Power, and 3 million mmBtu for Gulf Power and Mississippi Power.
For cash flow hedges of energy-related derivatives, the amounts expected to be reclassified from accumulated OCI to earnings for the next 12 -month period ending June 30, 2018 are $6 million for Southern Power and immaterial for all other registrants.
Interest Rate Derivatives
Southern Company and certain subsidiaries may 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 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. Fair value gains or losses on derivatives that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.

236


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

At June 30, 2017 , the following interest rate derivatives were outstanding:
 
Notional
Amount
 
Interest
Rate
Received
Weighted
Average
Interest
Rate Paid
Hedge
Maturity
Date
 
Fair Value
Gain (Loss) at June 30, 2017
 
(in millions)
 
 
 
 
 
(in millions)
Cash Flow Hedges of Existing Debt
 
 
 
 
 
 
Mississippi Power
$
900

 
1-month
LIBOR 
0.79%
March 2018
 
$
3

Fair Value Hedges of Existing Debt
 
 
 
 
 
 
Southern Company (*)
250

 
1.30%
3-month
LIBOR + 0.17%
August 2017
 

Southern Company (*)
300

 
2.75%
3-month
LIBOR + 0.92%
June 2020
 
1

Southern Company (*)
1,500

 
2.35%
1-month
LIBOR + 0.87%
July 2021
 
(14
)
Georgia Power
250

 
5.40%
3-month
LIBOR + 4.02%
June 2018
 

Georgia Power
500

 
1.95%
3-month
LIBOR + 0.76%
December 2018
 
(2
)
Georgia Power
200

 
4.25%
3-month
LIBOR + 2.46%
December 2019
 
1

Southern Company Consolidated
$
3,900

 
 
 
 
 
$
(11
)
(*)
Represents the Southern Company parent entity.
The estimated pre-tax gains (losses) related to interest rate derivatives expected to be reclassified from accumulated OCI to interest expense for the next 12 -month period ending June 30, 2018 are $(21) million for Southern Company and immaterial for all other registrants. Southern Company and certain subsidiaries have deferred gains and losses expected to be amortized into earnings through 2046 .
Foreign Currency Derivatives
Southern Company and certain subsidiaries may also enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars. Derivatives related to forecasted transactions are accounted for as cash flow hedges 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 that the hedged transactions affect earnings, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Any ineffectiveness is recorded directly to earnings. The derivatives employed as hedging instruments are structured to minimize ineffectiveness.

237


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

At June 30, 2017 , the following foreign currency derivatives were outstanding:

Pay Notional
Pay Rate
Receive Notional
Receive Rate
Hedge
Maturity Date
Fair Value
Gain (Loss) at June 30, 2017

(in millions)
 
(in millions)
 
 
(in millions)
Cash Flow Hedges of Existing Debt
 
 
 
 
 
Southern Power
$
677

2.95%
600

1.00%
June 2022
$
18

Southern Power
564

3.78%
500

1.85%
June 2026
15

Total
$
1,241

 
1,100

 
 
$
33

The estimated pre-tax gains (losses) related to foreign currency derivatives that will be reclassified from accumulated OCI to earnings for the next 12 -month period ending June 30, 2018 are $(23) million for Southern Company and Southern Power.
Derivative Financial Statement Presentation and Amounts
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas enter into derivative contracts that may contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Southern Company and certain subsidiaries also utilize master netting agreements to mitigate exposure to counterparty credit risk. These agreements may contain provisions that permit netting across product lines and against cash collateral. The fair value amounts of derivative assets and liabilities on the balance sheet are presented net to the extent that there are netting arrangements or similar agreements with the counterparties.

238


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:
 
As of June 30, 2017
As of December 31, 2016
Derivative Category and Balance Sheet Location
Assets
Liabilities
Assets
Liabilities
 
(in millions)
(in millions)
Southern Company
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral
$
23

$
35

$
73

$
27

Other deferred charges and assets/Other deferred credits and liabilities
8

31

25

33

Total derivatives designated as hedging instruments for regulatory purposes
$
31

$
66

$
98

$
60

Derivatives designated as hedging instruments in cash flow and fair value hedges
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral
$
13

$
10

$
23

$
7

Interest rate derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral
11

1

12

1

Other deferred charges and assets/Other deferred credits and liabilities

22

1

28

Foreign currency derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral

23


25

Other deferred charges and assets/Other deferred credits and liabilities
56



33

Total derivatives designated as hedging instruments in cash flow and fair value hedges
$
80

$
56

$
36

$
94

Derivatives not designated as hedging instruments
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral
$
237

$
202

$
489

$
483

Other deferred charges and assets/Other deferred credits and liabilities
102

86

66

81

Interest rate derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities, net of collateral


1


Total derivatives not designated as hedging instruments
$
339

$
288

$
556

$
564

Gross amounts recognized
$
450

$
410

$
690

$
718

Gross amounts offset (*)
$
(219
)
$
(290
)
$
(462
)
$
(524
)
Net amounts recognized in the Balance Sheets
$
231

$
120

$
228

$
194


239


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
As of June 30, 2017
As of December 31, 2016
Derivative Category and Balance Sheet Location
Assets
Liabilities
Assets
Liabilities
 
(in millions)
(in millions)
 
 
 
 
 
Alabama Power
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities
$
7

$
7

$
13

$
5

Other deferred charges and assets/Other deferred credits and liabilities
2

4

7

4

Total derivatives designated as hedging instruments for regulatory purposes
$
9

$
11

$
20

$
9

Gross amounts recognized
$
9

$
11

$
20

$
9

Gross amounts offset
$
(6
)
$
(6
)
$
(8
)
$
(8
)
Net amounts recognized in the Balance Sheets
$
3

$
5

$
12

$
1

 
 
 
 
 
Georgia Power
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
10

$
4

$
30

$
1

Other deferred charges and assets/Other deferred credits and liabilities
5

10

14

7

Total derivatives designated as hedging instruments for regulatory purposes
$
15

$
14

$
44

$
8

Derivatives designated as hedging instruments in cash flow and fair value hedges
 
 
 
 
Interest rate derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
1

$
1

$
2

$

Other deferred charges and assets/Other deferred credits and liabilities

2


3

Total derivatives designated as hedging instruments in cash flow and fair value hedges
$
1

$
3

$
2

$
3

Gross amounts recognized
$
16

$
17

$
46

$
11

Gross amounts offset
$
(9
)
$
(9
)
$
(8
)
$
(8
)
Net amounts recognized in the Balance Sheets
$
7

$
8

$
38

$
3

 
 
 
 
 
Gulf Power
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Liabilities from risk management activities
$
1

$
16

$
4

$
12

Other deferred charges and assets/Other deferred credits and liabilities

13

1

17

Total derivatives designated as hedging instruments for regulatory purposes
$
1

$
29

$
5

$
29

Gross amounts recognized
$
1

$
29

$
5

$
29

Gross amounts offset
$
(1
)
$
(1
)
$
(4
)
$
(4
)
Net amounts recognized in the Balance Sheets
$

$
28

$
1

$
25


240


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
As of June 30, 2017
As of December 31, 2016
Derivative Category and Balance Sheet Location
Assets
Liabilities
Assets
Liabilities
 
(in millions)
(in millions)
 
 
 
 
 
Mississippi Power
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
1

$
6

$
2

$
6

Other deferred charges and assets/Other deferred credits and liabilities
1

4

2

5

Total derivatives designated as hedging instruments for regulatory purposes
$
2

$
10

$
4

$
11

Derivatives designated as hedging instruments in cash flow and fair value hedges
 
 
 
 
Interest rate derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
3

$

$
2

$

Other deferred charges and assets/Other deferred credits and liabilities


1


Total derivatives designated as hedging instruments in cash flow and fair value hedges
$
3

$

$
3

$

Gross amounts recognized
$
5

$
10

$
7

$
11

Gross amounts offset
$
(2
)
$
(2
)
$
(3
)
$
(3
)
Net amounts recognized in the Balance Sheets
$
3

$
8

$
4

$
8

 
 
 
 
 
Southern Power
 
 
 
 
Derivatives designated as hedging instruments in cash flow and fair value hedges
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
13

$
8

$
18

$
4

Foreign currency derivatives:
 
 
 
 
Other current assets/Other current liabilities

23


25

Other deferred charges and assets/Other deferred credits and liabilities
56



33

Total derivatives designated as hedging instruments in cash flow and fair value hedges
$
69

$
31

$
18

$
62

Derivatives not designated as hedging instruments
 
 
 
 
Energy-related derivatives:
 
 
 
 
Other current assets/Other current liabilities
$
1

$
1

$
3

$
1

Interest rate derivatives:
 
 
 
 
Other current assets/Other current liabilities


1


Total derivatives not designated as hedging instruments
$
1

$
1

$
4

$
1

Gross amounts recognized
$
70

$
32

$
22

$
63

Gross amounts offset
$
(2
)
$
(2
)
$
(5
)
$
(5
)
Net amounts recognized in the Balance Sheets
$
68

$
30

$
17

$
58


241


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
As of June 30, 2017
As of December 31, 2016
Derivative Category and Balance Sheet Location
Assets
Liabilities
Assets
Liabilities
 
(in millions)
(in millions)
 
 
 
 
 
Southern Company Gas
 
 
 
 
Derivatives designated as hedging instruments for regulatory purposes
 
 
 
 
Energy-related derivatives:
 
 
 
 
Assets from risk management activities/Liabilities from risk management activities-current
$
4

$
2

$
24

$
3

Other deferred charges and assets/Other deferred credits and liabilities


1


Total derivatives designated as hedging instruments for regulatory purposes
$
4

$
2

$
25

$
3

Derivatives designated as hedging instruments in cash flow and fair value hedges
 
 
 
 
Energy-related derivatives:
 
 
 
 
Assets from risk management activities/Liabilities from risk management activities-current
$

$
2

$
4

$
3

Derivatives not designated as hedging instruments
 
 
 
 
Energy-related derivatives:
 
 
 
 
Assets from risk management activities/Liabilities from risk management activities-current
$
236

$
201

$
486

$
482

Other deferred charges and assets/Other deferred credits and liabilities
102

86

66

81

Total derivatives not designated as hedging instruments
$
338

$
287

$
552

$
563

Gross amounts of recognized
$
342

$
291

$
581

$
569

Gross amounts offset (*)
$
(196
)
$
(267
)
$
(435
)
$
(497
)
Net amounts recognized in the Balance Sheets
$
146

$
24

$
146

$
72

(*)
Gross amounts offset include cash collateral held on deposit in broker margin accounts of $71 million and $62 million as of June 30, 2017 and December 31, 2016 , respectively.
At June 30, 2017 and December 31, 2016 , the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows:
Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet at June 30, 2017
Derivative Category and Balance Sheet
Location
Southern
Company (b)
Alabama
Power
Georgia
Power
Gulf
Power
Mississippi
Power
Southern Company Gas (b)
 
(in millions)
 
Energy-related derivatives:
 
 
 
 
 
 
Other regulatory assets, current
$
(24
)
$
(3
)
$

$
(15
)
$
(5
)
$
(1
)
Other regulatory assets, deferred
(23
)
(2
)
(5
)
(13
)
(3
)

Other regulatory liabilities, current (a)
13

3

6



4

Total energy-related derivative gains (losses)
$
(34
)
$
(2
)
$
1

$
(28
)
$
(8
)
$
3

(a)
Georgia Power includes other regulatory liabilities, current in other current liabilities.
(b)
Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $ 1 million at June 30, 2017 .

242


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet at December 31, 2016
Derivative Category and Balance Sheet
Location
Southern
Company (c)
Alabama
Power
Georgia
Power
Gulf
Power
Mississippi
Power
Southern Company Gas (c)
 
(in millions)
 
Energy-related derivatives:
 
 
 
 
 
 
Other regulatory assets, current
$
(16
)
$
(1
)
$

$
(9
)
$
(5
)
$
(1
)
Other regulatory assets, deferred
(19
)


(16
)
(3
)

Other regulatory liabilities, current (a)
56

8

29

1

1

17

Other regulatory liabilities, deferred (b)
12

4

7



1

Total energy-related derivative gains (losses)
$
33

$
11

$
36

$
(24
)
$
(7
)
$
17

(a)
Georgia Power includes other regulatory liabilities, current in other current liabilities.
(b)
Georgia Power includes other regulatory liabilities, deferred in other deferred credits and liabilities.
(c)
Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $ 8 million at December 31, 2016 .
For the three months ended June 30, 2017 and 2016 , the pre-tax effects of energy-related derivatives, interest rate derivatives, and foreign currency derivatives designated as cash flow hedging instruments were as follows:
Derivatives in Cash Flow
Hedging Relationships
Gain (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
Gain (Loss) Reclassified from Accumulated OCI into
Income (Effective Portion)
 
Statements of Income Location
Amount
 
2017
 
2016
 
 
2017
 
2016
 
(in millions)
 
 
(in millions)
Southern Company
 
 
 
 
 
 
 
 
Energy-related derivatives
$
(9
)
 
$

 
Depreciation and amortization
$
(2
)
 
$

Interest rate derivatives
(1
)
 
6

 
Interest expense, net of amounts capitalized
(5
)
 
(4
)
Foreign currency derivatives
71

 
(39
)
 
Interest expense, net of amounts capitalized
(5
)
 
(1
)
 
 
 
 
 
Other income (expense), net (*)
79

 
(20
)
Total
$
61

 
$
(33
)
 
 
$
67

 
$
(25
)
Alabama Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$

 
$

 
Interest expense, net of amounts capitalized
$
(2
)
 
$
(2
)
Georgia Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$

 
$

 
Interest expense, net of amounts capitalized
$
(1
)
 
$
(1
)
Gulf Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$
(1
)
 
$
(2
)
 
Interest expense, net of amounts capitalized
$

 
$

Southern Power
 
 
 
 
 
 
 
 
Energy-related derivatives
$
(7
)
 
$

 
Depreciation and amortization
$
(2
)
 
$

Foreign currency derivatives
71

 
(39
)
 
Interest expense, net of amounts capitalized
(5
)
 
(1
)
 
 
 
 
 
Other income (expense), net (*)
79

 
(20
)
Total
$
64

 
$
(39
)
 
 
$
72

 
$
(21
)
(*)
The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.

243


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

For Southern Company Gas, the pre-tax effect of energy related derivatives and interest rate derivatives designated as cash flow hedging instruments recognized in OCI and those reclassified from accumulated OCI into earnings for the successor three months ended June 30, 2017 and the predecessor three months ended June 30, 2016 were as follows:

Gain (Loss) Recognized in OCI on Derivative (Effective Portion)


Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)

Successor


Predecessor


Successor


Predecessor
Derivatives in Cash Flow Hedging Relationships
Three Months Ended June 30, 2017


Three Months Ended June 30, 2016

Statements of Income Location
Three Months Ended June 30, 2017


Three Months Ended June 30, 2016

(in millions)


(in millions)


(in millions)


(in millions)
Energy-related derivatives
$
(2
)


$


Cost of natural gas
$



$
(1
)
Interest rate derivatives



(19
)

Interest expense, net of amounts capitalized



(1
)
Total
$
(2
)


$
(19
)


$



$
(2
)

244


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

For the six months ended June 30, 2017 and 2016 , the pre-tax effects of energy-related derivatives, interest rate derivatives, and foreign currency derivatives designated as cash flow hedging instruments were as follows:
Derivatives in Cash Flow
Hedging Relationships
Gain (Loss)
Recognized in OCI
on Derivative
(Effective Portion)
 
Gain (Loss) Reclassified from Accumulated OCI into
Income (Effective Portion)
 
Statements of Income Location
Amount
 
2017
 
2016
 
 
2017
 
2016
 
(in millions)
 
 
(in millions)
Southern Company
 
 
 
 
 
 
 
 
Energy-related derivatives
$
(20
)
 
$

 
Depreciation and amortization
$
(6
)
 
$

Interest rate derivatives
(1
)
 
(184
)
 
Interest expense, net of amounts capitalized
(10
)
 
(7
)
Foreign currency derivatives
67

 
(39
)
 
Interest expense, net of amounts capitalized
(12
)
 
(1
)
 
 
 
 
 
Other income (expense), net (*)
96

 
(20
)
Total
$
46

 
$
(223
)
 
 
$
68

 
$
(28
)
Alabama Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$

 
$
(4
)
 
Interest expense, net of amounts capitalized
$
(3
)
 
$
(3
)
Georgia Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$

 
$

 
Interest expense, net of amounts capitalized
$
(3
)
 
$
(2
)
Gulf Power
 
 
 
 
 
 
 
 
Energy-related derivatives
$
(1
)
 
$

 
Depreciation and amortization
$

 
$

Interest rate derivatives
(1
)
 
(7
)
 
Interest expense, net of amounts capitalized

 

Total
$
(2
)
 
$
(7
)
 
 
$

 
$

Mississippi Power
 
 
 
 
 
 
 
 
Interest rate derivatives
$

 
$

 
Interest expense, net of amounts capitalized
$
(1
)
 
$
(1
)
Southern Power
 
 
 
 
 
 
 
 
Energy-related derivatives
$
(15
)
 
$

 
Depreciation and amortization
$
(6
)
 
$

Interest rate derivatives

 

 
Interest expense, net of amounts capitalized

 
(1
)
Foreign currency derivatives
67

 
(39
)
 
Interest expense, net of amounts capitalized
(12
)
 
(1
)
 


 


 
Other income (expense), net (*)
96

 
(20
)
Total
$
52

 
$
(39
)
 
 
$
78

 
$
(22
)
(*)
The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.

245


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

For Southern Company Gas, the pre-tax effect of energy related derivatives and interest rate derivatives designated as cash flow hedging instruments recognized in OCI and those reclassified from accumulated OCI into earnings for the successor six months ended June 30, 2017 and the predecessor six months ended June 30, 2016 were as follows:
 
Gain (Loss) Recognized in OCI on Derivative (Effective Portion)
 
 
Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
 
Successor
 
 
Predecessor
 
 
Successor
 
 
Predecessor
Derivatives in Cash Flow Hedging Relationships
Six Months Ended June 30, 2017
 
 
Six Months Ended June 30, 2016
 
Statements of Income Location
Six Months Ended June 30, 2017
 
 
Six Months Ended June 30, 2016
 
(in millions)
 
 
(in millions)
 
 
(in millions)
 
 
(in millions)
Energy-related derivatives
$
(4
)
 
 
$

 
Cost of natural gas
$

 
 
$
(1
)
Interest rate derivatives

 
 
(64
)
 
Interest expense, net of amounts capitalized

 
 

Total
$
(4
)
 
 
$
(64
)
 
 
$

 
 
$
(1
)
For the three and six months ended June 30, 2017 and 2016 , the pre-tax effects of energy-related derivatives and interest rate derivatives designated as cash flow hedging instruments were immaterial for the other registrants.
For the three and six months ended June 30, 2017 and 2016 , the pre-tax effects of energy-related derivatives and interest rate derivatives not designated as hedging instruments on the statements of income were as follows:
 
 
Gain (Loss)
 
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
Derivatives in Non-Designated Hedging Relationships
Statements of Income Location
2017
2016
 
2017
2016
 
 
(in millions)
 
(in millions)
Southern Company
 
 
 
 
 
 
Energy Related derivatives:
Natural gas revenues (*)
$
16

$

 
$
65

$

 
Cost of natural gas
(2
)

 
(4
)

Total derivatives in non-designated hedging relationships
$
14

$

 
$
61

$

(*)
Excludes gains (losses) recorded in cost of natural gas associated with weather derivatives of $1 million and $15 million for the three and six months ended June 30, 2017 , respectively.

246


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
 
Gain (Loss)
 
 
Successor


Predecessor
 
Successor
 
 
Predecessor
Derivatives in Non-Designated Hedging Relationships
Statements of Income Location
Three Months Ended
June 30, 2017
 
 
Three Months Ended
June 30, 2016
 
Six Months Ended June 30, 2017
 
 
Six
Months Ended
June 30, 2016
 
 
(in millions)
 
 
(in millions)
 
(in millions)
 
 
(in millions)
Southern Company Gas
 
 
 
 
 
 
 
 
 
 
Energy Related derivatives:
Natural gas revenues (*)
$
16

 
 
$
(21
)
 
$
65

 
 
$
(1
)
 
Cost of natural gas
(2
)
 
 
(61
)
 
(4
)
 
 
(62
)
Total derivatives in non-designated hedging relationships
$
14

 
 
$
(82
)
 
$
61

 
 
$
(63
)
(*)
Excludes gains recorded in cost of natural gas associated with weather derivatives of $15 million for the successor six months ended June 30, 2017 and immaterial amounts for all other periods presented.
For the three and six months ended June 30, 2017 and 2016 , the pre-tax effects of energy-related derivatives and interest rate derivatives not designated as hedging instruments were immaterial for the traditional electric operating companies and Southern Power.
For the three and six months ended June 30, 2017 and 2016 , the pre-tax effects of interest rate derivatives designated as fair value hedging instruments were as follows:
Derivatives in Fair Value Hedging Relationships
 
 
Gain (Loss)
 
 
Three Months Ended
June 30,
Six Months Ended
June 30,
Derivative Category
Statements of Income Location
2017
 
2016
2017
 
2016
 
 
(in millions)
(in millions)
Southern Company
 
 
 
 
 
 
 
Interest rate derivatives:
Interest expense, net of amounts capitalized
$
7

 
$
4

$
(1
)
 
$
24

Georgia Power
 
 
 
 
 
 
 
Interest rate derivatives:
Interest expense, net of amounts capitalized
$

 
$

$
(1
)
 
$
15

For the three and six months ended June 30, 2017 and 2016 , the pre-tax effects of interest rate derivatives designated as fair value hedging instruments were offset by changes to the carrying value of long-term debt.
There was no material ineffectiveness recorded in earnings for any registrant for any period presented.
Contingent Features
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas 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 June 30, 2017 , the registrants had no collateral posted with derivative counterparties to satisfy these arrangements.
At June 30, 2017 , the fair value of derivative liabilities with contingent features was immaterial for all registrants. The maximum potential collateral requirements arising from the credit-risk-related contingent features, at a rating below BBB- and/or Baa3, were $11 million for Southern Company, $10 million for the traditional electric operating companies and Southern Power, and $1 million for Southern Company Gas. The maximum potential collateral

247


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

requirements arising from the credit-risk-related contingent features for the traditional electric operating companies and Southern Power include certain agreements that could require collateral in the event that one or more Southern Company power pool participants has a credit rating change to below investment grade.
Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. If collateral is required, fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are not offset against fair value amounts recognized for derivatives executed with the same counterparty.
Alabama Power and Southern Power maintain accounts with certain regional transmission organizations to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, Alabama Power and Southern Power may be required to post collateral. At June 30, 2017 , cash collateral posted in these accounts was immaterial. Southern Company Gas maintains accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, Southern Company Gas may be required to deposit cash into these accounts. At June 30, 2017 , cash collateral held on deposit in broker margin accounts was $71 million .
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas are exposed to losses related to financial instruments in the event of counterparties' nonperformance. Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas only enter into agreements and material transactions with counterparties that have investment grade credit ratings by Moody's and S&P or with counterparties who have posted collateral to cover potential credit exposure. Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas have also established risk management policies and controls to determine and monitor the creditworthiness of counterparties in order to mitigate Southern Company's, the traditional electric operating companies', Southern Power's, and Southern Company Gas' exposure to counterparty credit risk. Southern Company Gas may require counterparties to pledge additional collateral when deemed necessary.
In addition, Southern Company Gas conducts credit evaluations and obtains appropriate internal approvals for the counterparty's line of credit before any transaction with the counterparty is executed. In most cases, the counterparty must have an investment grade rating, which includes a minimum long-term debt rating of Baa3 from Moody's and BBB- from S&P. Generally, Southern Company Gas requires credit enhancements by way of a guaranty, cash deposit, or letter of credit for transaction counterparties that do not have investment grade ratings.
Southern Company Gas also utilizes master netting agreements whenever possible to mitigate exposure to counterparty credit risk. When Southern Company Gas is engaged in more than one outstanding derivative transaction with the same counterparty and it also has a legally enforceable netting agreement with that counterparty, the "net" mark-to-market exposure represents the netting of the positive and negative exposures with that counterparty and a reasonable measure of Southern Company Gas' credit risk. Southern Company Gas also uses other netting agreements with certain counterparties with whom it conducts significant transactions. Master netting agreements enable Southern Company Gas to net certain assets and liabilities by counterparty. Southern Company Gas also nets across product lines and against cash collateral provided the master netting and cash collateral agreements include such provisions. Southern Company Gas may require counterparties to pledge additional collateral when deemed necessary.
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company Gas do not anticipate a material adverse effect on the financial statements as a result of counterparty nonperformance.

248


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(I)
ACQUISITIONS
Southern Company
Merger with Southern Company Gas
Southern Company Gas is an energy services holding company whose primary business is the distribution of natural gas through the natural gas distribution utilities. On July 1, 2016, Southern Company completed the Merger for a total purchase price of approximately $8.0 billion and Southern Company Gas became a wholly-owned, direct subsidiary of Southern Company.
The Merger was accounted for using the acquisition method of accounting with the assets acquired and liabilities assumed recognized at fair value as of the acquisition date. The following table presents the final purchase price allocation:
Southern Company Gas Purchase Price
 
 
(in millions)
Current assets
$
1,557

Property, plant, and equipment
10,108

Goodwill
5,967

Intangible assets
400

Regulatory assets
1,118

Other assets
229

Current liabilities
(2,201
)
Other liabilities
(4,742
)
Long-term debt
(4,261
)
Noncontrolling interest
(174
)
Total purchase price
$
8,001

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed of $6.0 billion is recognized as goodwill, which is primarily attributable to positioning the Southern Company system to provide natural gas infrastructure to meet customers' growing energy needs and to compete for growth across the energy value chain. Southern Company anticipates that much of the value assigned to goodwill will not be deductible for tax purposes.
The valuation of identifiable intangible assets included customer relationships, trade names, and storage and transportation contracts with estimated lives of one to 28 years . The estimated fair value measurements of identifiable intangible assets were primarily based on significant unobservable inputs (Level 3).
The results of operations for Southern Company Gas have been included in Southern Company's consolidated financial statements from the date of acquisition and consist of operating revenues of $716 million and $2.3 billion and net income of $49 million and $288 million for the three and six months ended June 30, 2017 , respectively.
The following summarized unaudited pro forma consolidated statement of earnings information assumes that the acquisition of Southern Company Gas was completed on January 1, 2015. The summarized unaudited pro forma consolidated statement of earnings information includes adjustments for (i) intercompany sales, (ii) amortization of intangible assets, (iii) adjustments to interest expense to reflect current interest rates on Southern Company Gas debt and additional interest expense associated with borrowings by Southern Company to fund the Merger, and (iv) the elimination of nonrecurring expenses associated with the Merger.

249


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
For the Six Months Ended June 30,
 
2016
Operating revenues (in millions)
$
10,346

Net income attributable to Southern Company (in millions)
$
1,255

Basic Earnings Per Share (EPS)
$
1.34

Diluted EPS
$
1.33

These unaudited pro forma results are for comparative purposes only and may not be indicative of the results that would have occurred had this acquisition been completed on January 1, 2015 or the results that would be attained in the future.
Acquisition of PowerSecure
On May 9, 2016, Southern Company acquired all of the outstanding stock of PowerSecure, a provider of products and services in the areas of distributed generation, energy efficiency, and utility infrastructure, for $18.75 per common share in cash, resulting in an aggregate purchase price of $429 million . As a result, PowerSecure became a wholly-owned subsidiary of Southern Company.
The acquisition of PowerSecure was accounted for using the acquisition method of accounting with the assets acquired and liabilities assumed recognized at fair value as of the acquisition date. The following table presents the final purchase price allocation:
PowerSecure Purchase Price
 
 
(in millions)
Current assets
$
172

Property, plant, and equipment
46

Intangible assets
106

Goodwill
284

Other assets
4

Current liabilities
(121
)
Long-term debt, including current portion
(48
)
Deferred credits and other liabilities
(14
)
Total purchase price
$
429

The excess of the purchase price over the estimated fair values of the assets acquired and liabilities assumed of $284 million was recognized as goodwill, which is primarily attributable to expected business expansion opportunities for PowerSecure. Southern Company anticipates that the majority of the value assigned to goodwill will not be deductible for tax purposes.
The valuation of identifiable intangible assets included customer relationships, trade names, patents, backlog, and software with estimated lives of one to 26 years. The estimated fair value measurements of identifiable intangible assets were primarily based on significant unobservable inputs (Level 3).
The results of operations for PowerSecure have been included in Southern Company's consolidated financial statements from the date of acquisition and are immaterial to the consolidated financial results of Southern Company. Pro forma results of operations have not been presented for the acquisition because the effects of the acquisition were immaterial to Southern Company's consolidated financial results for all periods presented.

250


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Southern Power
See Note 2 to the financial statements of Southern Power and Note 12 to the financial statements of Southern Company under "Southern Power" in Item 8 of the Form 10-K for additional information.
Acquisitions During the Six Months Ended June 30, 2017
During the six months ended June 30, 2017, in accordance with Southern Power's overall growth strategy, Southern Renewable Partnerships, LLC (SRP), one of Southern Power's wholly-owned subsidiaries, acquired the Bethel wind facility . Acquisition-related costs were expensed as incurred and were not material.
Project Facility
Resource
Seller; Acquisition Date
Approximate Nameplate Capacity ( MW )
Location
Southern Power Percentage Ownership
Actual COD
PPA Contract Period
Bethel
Wind
Invenergy,
January 6, 2017
276
Castro County, TX
100
%
 
January 2017
12 years
The aggregate amounts of revenue and net income, excluding impacts from PTCs, recognized by Southern Power related to the Bethel facility included in Southern Power's condensed consolidated statements of income for year-to-date 2017 were immaterial . The Bethel facility did not have operating revenues or activities prior to completion of construction and the assets being placed in service; therefore, supplemental pro forma information for the comparable 2016 period is not meaningful and has been omitted.
In connection with Southern Power's 2016 acquisitions, allocations of the purchase price to individual assets were finalized during the six months ended June 30, 2017 with no changes to amounts originally reported for Boulder 1, Grant Plains, Grant Wind, Henrietta, Mankato, Passadumkeag, Salt Fork, Tyler Bluff, and Wake Wind.
Acquisitions Subsequent to June 30, 2017
Subsequent to June 30, 2017, Southern Power acquired a 100% ownership interest in and commenced construction of the Cactus Flats 148 -MW wind facility, the majority of which is covered by two PPAs, which expire in 2030 and 2033. The facility is expected to be placed in service in mid-2018. The ultimate outcome of this matter cannot be determined at this time.
Construction Projects Completed and in Progress
During the six months ended June 30, 2017 , in accordance with its overall growth strategy, Southern Power completed construction of and placed in service, or continued construction of, the projects set forth in the following table. Through June 30, 2017 , total costs of construction incurred for these projects were $421 million , of which $49 million remained in CWIP for the Mankato facility acquired in 2016. Total aggregate construction costs, excluding the acquisition costs, are expected to be $170 million to $190 million for the Mankato facility. The ultimate outcome of this matter cannot be determined at this time.
Project Facility
Resource
Approximate Nameplate Capacity ( MW )
Location
Actual/Expected COD
PPA Contract Period
Projects Completed During the Six Months Ended June 30, 2017
East Pecos
Solar
120
Pecos County, TX
March 2017
15 years
Lamesa
Solar
102
Dawson County, TX
April 2017
15 years
 
 
 
 
 
 
Project Under Construction as of June 30, 2017
Mankato
Natural Gas
345
Mankato, MN
Second quarter 2019
20 years

251


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Development Projects
In December 2016, as part of Southern Power's renewable development strategy, SRP entered into a joint development agreement with Renewable Energy Systems Americas, Inc. to develop and construct approximately 3,000 MWs of wind projects. Also in December 2016, Southern Power signed agreements and made payments to purchase wind turbine equipment from Siemens Wind Power, Inc. and Vestas-American Wind Technology, Inc. to be used for construction of the facilities. All of the wind turbine equipment was delivered by April 2017, which allows the projects to qualify for 100% PTCs for 10 years following their expected commercial operation dates between 2018 and 2020. The ultimate outcome of these matters cannot be determined at this time.
(J)
JOINT OWNERSHIP AGREEMENTS
Southern Company Gas
See Note 4 to the financial statements of Southern Company Gas in Item 8 of the Form 10-K for additional information.
Equity Method Investments
The carrying amounts of Southern Company Gas' equity method investments as of June 30, 2017 and December 31, 2016 and related income from those investments for the successor three and six month periods ended June 30, 2017 and the predecessor three and six month periods ended June 30, 2016 were as follows:
 
 
 
Balance Sheet Information
June 30, 2017
December 31, 2016
 
(in millions)
SNG
$
1,405

$
1,394

Atlantic Coast Pipeline
53

33

PennEast Pipeline
45

22

Triton
43

44

Pivotal JAX LNG, LLC
32

16

Horizon Pipeline
31

30

Other
1

2

Total
$
1,610

$
1,541

 
Successor
 
 
Predecessor
 
Successor
 
 
Predecessor
Income Statement Information
Three Months Ended June 30, 2017
 
 
Three Months Ended June 30, 2016
 
Six Months Ended June 30, 2017
 
 
Six Months Ended June 30, 2016
 
(in millions)
 
 
(in millions)
 
(in millions)
 
 
(in millions)
SNG
$
24

 
 
$

 
$
58

 
 
$

Triton
2

 
 
1

 
2

 
 
1

PennEast Pipeline
1

 
 

 
4

 
 

Atlantic Coast Pipeline
2

 
 

 
3

 
 

Horizon Pipeline

 
 

 
1

 
 
1

Total
$
29

 
 
$
1

 
$
68

 
 
$
2

Southern Natural Gas
In September 2016, Southern Company Gas, through a wholly-owned, indirect subsidiary, acquired a 50% equity interest in SNG, which is accounted for as an equity method investment. On March 31, 2017, Southern Company

252


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Gas made an additional $50 million contribution to maintain its 50% equity interest in SNG. See Note 11 to the financial statements of Southern Company Gas under "Investment in SNG" in Item 8 of the Form 10-K for additional information on this investment. Selected financial information of SNG for the three and six months ended June 30, 2017 is as follows:
Income Statement Information
Three Months Ended June 30, 2017
Six Months Ended June 30, 2017
 
(in millions)
Revenues
$
143

$
298

Operating income
$
63

$
147

Net income
$
48

$
114


253


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

(K) SEGMENT AND RELATED INFORMATION
Southern Company
The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The four traditional electric operating companies – Alabama Power, Georgia Power, Gulf Power, and Mississippi Power – are vertically integrated utilities providing electric service in four Southeastern states. Southern Power constructs, acquires, owns, and manages power generation assets, including renewable energy projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through the seven natural gas distribution utilities in seven states and is involved in several other complementary businesses including gas marketing services, wholesale gas services, and gas midstream operations.
Southern Company's reportable business segments are the sale of electricity by the four traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $90 million and $190 million for the three and six months ended June 30, 2017 , respectively, and $107 million and $204 million for the three and six months ended June 30, 2016 , respectively. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing energy technologies and services to electric utilities and large industrial, commercial, institutional, and municipal customers; as well as investments in telecommunications and leveraged lease projects. All other inter-segment revenues are not material.

254


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

Financial data for business segments and products and services for the three and six months ended June 30, 2017 and 2016 was as follows:
 
Electric Utilities
 
 
 
 
 
Traditional
Electric Operating
Companies
Southern
Power
Eliminations
Total
Southern Company Gas
All
Other
Eliminations
Consolidated
 
(in millions)
Three Months Ended
June 30, 2017:
 
 
 
 
 
 
 
 
Operating revenues
$
4,157

$
529

$
(101
)
$
4,585

$
716

$
166

$
(37
)
$
5,430

Segment net income (loss) (a)(b)
(1,442
)
82


(1,360
)
49

(68
)
(2
)
(1,381
)
Six Months Ended
June 30, 2017:
 
 
 
 
 
 
 
 
Operating revenues
$
7,943

$
979

$
(206
)
$
8,716

$
2,276

$
289

$
(79
)
$
11,202

Segment net income (loss) (a)(b)(c)
(1,010
)
151


(859
)
288

(152
)

(723
)
Total assets at June 30, 2017
$
71,503

$
14,703

$
(317
)
$
85,889

$
21,809

$
2,348

$
(1,362
)
$
108,684

Three Months Ended
June 30, 2016:
 
 
 
 
 
 
 
 
Operating revenues
$
4,115

$
373

$
(109
)
$
4,379

$

$
125

$
(45
)
$
4,459

Segment net income (loss) (a)(b)
599

89


688


(61
)
(4
)
623

Six Months Ended
June 30, 2016:
 
 
 
 
 
 
 
 
Operating revenues
$
7,884

$
688

$
(212
)
$
8,360

$

$
172

$
(81
)
$
8,451

Segment net income (loss) (a)(b)
1,064

139


1,203


(84
)
(7
)
1,112

Total assets at December 31, 2016
$
72,141

$
15,169

$
(316
)
$
86,994

$
21,853

$
2,474

$
(1,624
)
$
109,697

(a)
Attributable to Southern Company.
(b)
Segment net income (loss) for the traditional electric operating companies includes pre-tax charges for estimated probable losses on the Kemper IGCC of $3.0 billion ( $2.1 billion after tax) and $81 million ( $50 million after tax) for the three months ended June 30, 2017 and 2016 , respectively, and $3.1 billion ( $2.2 billion after tax) and $134 million ( $83 million after tax) for the six months ended June 30, 2017 and 2016 , respectively. See Note (B) under " Integrated Coal Gasification Combined Cycle Kemper IGCC Schedule and Cost Estimate " for additional information.
(c)
Segment net income (loss) for the traditional electric operating companies also includes a pre-tax charge for the write-down of Gulf Power's ownership of Plant Scherer Unit 3 of $33 million ( $20 million after tax) for the six months ended June 30, 2017 . See Note (B) under " Regulatory Matters Gulf Power Retail Base Rate Cases " for additional information.
Products and Services
 
 
Electric Utilities' Revenues
Period
 
Retail
 
Wholesale
 
Other
 
Total
 
 
(in millions)
Three Months Ended June 30, 2017
 
$
3,777

 
$
618

 
$
190

 
$
4,585

Three Months Ended June 30, 2016
 
3,748

 
446

 
185

 
4,379

 
 
 
 
 
 
 
 
 
Six Months Ended June 30, 2017
 
$
7,171

 
$
1,149

 
$
396

 
$
8,716

Six Months Ended June 30, 2016
 
7,124

 
842

 
394

 
8,360


255


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
Southern Company Gas' Revenues
Period
Gas
Distribution
Operations
Gas
Marketing
Services
Other
Total
 
(in millions)
Three Months Ended June 30, 2017
$
557

$
166

$
(7
)
$
716

Six Months Ended June 30, 2017
$
1,689

$
454

$
133

$
2,276

Southern Company Gas
Southern Company Gas manages its business through four reportable segments – gas distribution operations, gas marketing services, wholesale gas services, and gas midstream operations. The non-reportable segments are combined and presented as all other.
Gas distribution operations is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in seven states. Gas marketing services includes natural gas marketing to end-use customers primarily in Georgia and Illinois. Additionally, gas marketing services provides home equipment protection products and services. Wholesale gas services provides natural gas asset management and/or related logistics services for each of Southern Company Gas' utilities except Nicor Gas as well as for non-affiliated companies. Additionally, wholesale gas services engages in natural gas storage and gas pipeline arbitrage and related activities. Gas midstream operations primarily consists of Southern Company Gas' pipeline investments, with storage and fuel operations also aggregated into this segment. The all other column includes segments below the quantitative threshold for separate disclosure, including the subsidiaries that fall below the quantitative threshold for separate disclosure.
After the Merger, Southern Company Gas changed its segment performance measure to net income. In order to properly assess net income by segment, Southern Company Gas executed various intercompany note agreements to revise interest charges to its segments. Since such agreements did not exist in the predecessor period, Southern Company Gas is unable to provide the comparable net income.
Business segment financial data for the successor three and six months ended June 30, 2017 and the predecessor three and six months ended June 30, 2016 was as follows:
 
Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services (*)
Gas Midstream Operations
Total
All Other
Eliminations
Consolidated
 
(in millions)
Successor – Three Months Ended June 30, 2017:
 
 
 
 
 
 
Operating revenues
$
603

$
166

$
(12
)
$
12

$
769

$
3

$
(56
)
$
716

Segment net income
54

4

(17
)
9

50

(1
)

49

Successor – Six Months Ended June 30, 2017:
 
 
 
 
 
 
Operating revenues
$
1,783

$
454

$
119

$
37

$
2,393

$
5

$
(122
)
$
2,276

Segment net income
171

35

51

25

282

6


288

Successor – Total assets at
June 30, 2017
$
18,257

$
2,093

$
989

$
2,381

$
23,720

$
11,182

$
(13,093
)
$
21,809


256


NOTES TO THE CONDENSED FINANCIAL STATEMENTS: (Continued)
(UNAUDITED)

 
Gas Distribution Operations
Gas Marketing Services
Wholesale Gas Services (*)
Gas Midstream Operations
Total
All Other
Eliminations
Consolidated
 
(in millions)
Predecessor – Three Months Ended June 30, 2016:
 
 
 
 
 
 
Operating revenues
$
547

$
149

$
(95
)
$
10

$
611

$
2

$
(42
)
$
571

Segment EBIT
118

29

(112
)
(5
)
30

(55
)
1

(24
)
Predecessor – Six Months Ended June 30, 2016:
 
 
 
 
 
 
Operating revenues
$
1,575

$
435

$
(32
)
$
25

$
2,003

$
4

$
(102
)
$
1,905

Segment EBIT
353

109

(68
)
(6
)
388

(60
)

328

Successor – Total assets at
December 31, 2016
$
19,453

$
2,084

$
1,127

$
2,211

$
24,875

$
11,145

$
(14,167
)
$
21,853

(*)
The revenues for wholesale gas services are netted with costs associated with its energy and risk management activities. A reconciliation of operating revenues and intercompany revenues is shown in the following table.
 
Third Party Gross Revenues
 
Intercompany Revenues
 
Total Gross Revenues
 
Less Gross Gas Costs
 
Operating Revenues
 
(in millions)
Successor – Three Months Ended June 30, 2017
$
1,531

 
$
123

 
$
1,654

 
$
1,666

 
$
(12
)
Successor – Six Months Ended June 30, 2017
3,370

 
259

 
3,629

 
3,510

 
119

Predecessor – Three Months Ended June 30 , 2016
$
1,061

 
$
58

 
$
1,119

 
$
1,214

 
$
(95
)
Predecessor – Six Months Ended June 30 , 2016
2,500

 
143

 
2,643

 
2,675

 
(32
)

257


PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
See the Notes to the Condensed Financial Statements herein for information regarding certain legal and administrative proceedings in which the registrants are involved.
I tem 1A. Risk Factors.
See RISK FACTORS in Item 1A of the Form 10-K for a discussion of the risk factors of the registrants. Except as described below, there have been no material changes to these risk factors from those previously disclosed in the Form 10-K.
The bankruptcy filing of the EPC Contractor is expected to have a material impact on the construction cost and schedule of, as well as the cost recovery for, Plant Vogtle Units 3 and 4 and could have a material impact on the financial statements of Southern Company and Georgia Power, and any inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4, and therefore on the financial statements of Southern Company and Georgia Power.
See "Construction Risk" in Item 1A – Risk Factors of Southern Company and Georgia Power in the Form 10-K for a discussion of risks relating to major construction projects, including Plant Vogtle Units 3 and 4 and see Note (B) to the Condensed Financial Statements under "Regulatory Matters – Georgia Power – Nuclear Construction" herein and Note (E) to the Condensed Financial Statements under "DOE Loan Guarantee Borrowings" herein for additional information.
On March 29, 2017, the EPC Contractor filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code. To provide for a continuation of work at Plant Vogtle Units 3 and 4, Georgia Power, acting for itself and as agent for the Vogtle Owners, entered into an interim assessment agreement with the EPC Contractor (Interim Assessment Agreement), which the bankruptcy court approved on March 30, 2017.
The Interim Assessment Agreement provided, among other items, that during the term of the Interim Assessment Agreement (i) Georgia Power was obligated to pay, on behalf of the Vogtle Owners, all costs accrued by the EPC Contractor for subcontractors and vendors for services performed or goods provided, with these amounts paid to the EPC Contractor, except that amounts accrued for Fluor Corporation (Fluor) were paid directly to Fluor; (ii) the EPC Contractor provided certain engineering, procurement, and management services for Plant Vogtle Units 3 and 4, to the same extent as contemplated by the Vogtle 3 and 4 Agreement, and Georgia Power, on behalf of the Vogtle Owners, made payments of $5.4 million per week for these services; (iii) Georgia Power had the right to make payments, on behalf of the Vogtle Owners, directly to subcontractors and vendors who had accounts past due with the EPC Contractor; (iv) the EPC Contractor used commercially reasonable efforts to provide information reasonably requested by Georgia Power as was necessary to continue construction and investigation of the completion status of Plant Vogtle Units 3 and 4; (v) the EPC Contractor rejected or accepted the Vogtle 3 and 4 Agreement by the termination of the Interim Assessment Agreement; and (vi) Georgia Power did not exercise any remedies against Toshiba under the Toshiba Guarantee. Under the Interim Assessment Agreement, all parties expressly reserved all rights and remedies under the Vogtle 3 and 4 Agreement and all related security and collateral under applicable law.
The Interim Assessment Agreement, as amended, expired on July 27, 2017. Georgia Power's aggregate liability for the Vogtle Owners under the Interim Assessment Agreement totaled approximately $650 million, of which $552 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $297 million.
Subsequent to the EPC Contractor bankruptcy filing, a number of subcontractors to the EPC Contractor, including Fluor Enterprises, Inc., a subsidiary of Fluor, alleged non-payment by the EPC Contractor for amounts owed for work performed on Plant Vogtle Units 3 and 4. Georgia Power, acting for itself and as agent for the Vogtle Owners, has taken, and continues to take, actions to remove liens filed by these subcontractors through the posting of surety bonds. Georgia Power estimates the aggregate liability, through July 31, 2017, of the Vogtle Owners for the removal of subcontractor liens and payment of other EPC Contractor pre-petition accounts payable to total approximately

258

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$400 million , of which $354 million had been paid or accrued as of June 30, 2017. Georgia Power's proportionate share of this aggregate liability totaled approximately $183 million .
The Vogtle 3 and 4 Agreement also provided for liquidated damages upon the EPC Contractor's failure to fulfill the schedule and certain performance guarantees, each subject to an aggregate cap of 10% of the contract price, or approximately $920 million (approximately $420 million based on Georgia Power's ownership interest). Under the Toshiba Guarantee, Toshiba guaranteed certain payment obligations of the EPC Contractor, including any liability of the EPC Contractor for abandonment of work. In January 2016, Westinghouse delivered to the Vogtle Owners $920 million of letters of credit from financial institutions (Westinghouse Letters of Credit) to secure a portion of the EPC Contractor's potential obligations under the Vogtle 3 and 4 Agreement. The Westinghouse Letters of Credit are subject to annual renewals through June 30, 2020 and require 60 days' written notice to Georgia Power in the event the Westinghouse Letters of Credit will not be renewed.
Under the terms of the Vogtle 3 and 4 Agreement, the EPC Contractor did not have the right to terminate the Vogtle 3 and 4 Agreement for convenience. In the event of an abandonment of work by the EPC Contractor, the maximum liability of the EPC Contractor under the Vogtle 3 and 4 Agreement was 40% of the contract price (approximately $1.7 billion based on Georgia Power's ownership interest). In addition, the Vogtle Owners could terminate the Vogtle 3 and 4 Agreement for certain breaches by the EPC Contractor, including abandonment of work by the EPC Contractor.
On June 9, 2017, Georgia Power and the other Vogtle Owners and Toshiba entered into a settlement agreement regarding the Toshiba Guarantee (Guarantee Settlement Agreement). Pursuant to the Guarantee Settlement Agreement, Toshiba acknowledged the amount of its obligation under the Toshiba Guarantee is $3.68 billion (Guarantee Obligations), of which Georgia Power's proportionate share is approximately $1.7 billion, and that the Guarantee Obligations exist regardless of whether Plant Vogtle Units 3 and 4 are completed. The Guarantee Settlement Agreement also provides for a schedule of payments for the Guarantee Obligations, beginning in October 2017 and continuing through January 2021. In the event Toshiba receives certain payments, including sale proceeds, from or related to Westinghouse (or its subsidiaries) or Toshiba Nuclear Energy Holdings (UK) Limited (or its subsidiaries), it will hold a portion of such payments in trust for the Vogtle Owners and promptly pay them as offsets against any remaining Guarantee Obligations. Under the Guarantee Settlement Agreement, the Vogtle Owners will forbear from exercising certain remedies, including drawing on the Westinghouse Letters of Credit, until June 30, 2020, unless certain events of nonpayment, insolvency, or other material breach of the Guarantee Settlement Agreement by Toshiba occur. If such an event occurs, the balance of the Guarantee Obligations will become immediately due and payable, and the Vogtle Owners may exercise any and all rights and remedies, including drawing on the Westinghouse Letters of Credit without restriction. In addition, the Guarantee Settlement Agreement does not restrict the Vogtle Owners from fully drawing on the Westinghouse Letters of Credit in the event they are not renewed or replaced prior to the expiration date.
On June 23, 2017, Toshiba released a revised outlook for fiscal year 2016, which reflected a negative shareholders' equity balance of approximately $5 billion as of March 31, 2017, and announced that its independent audit process was continuing. Toshiba has also announced the existence of material events and conditions that raise substantial doubt about Toshiba's ability to continue as a going concern. As a result, substantial risk regarding the Vogtle Owners' ability to fully collect the Guarantee Obligations continues to exist. An inability or other failure by Toshiba to perform its obligations under the Guarantee Settlement Agreement could have a further material impact on the net cost to the Vogtle Owners to complete construction of Plant Vogtle Units 3 and 4 and, therefore, on Southern Company's and Georgia Power's financial statements.
Additionally, on June 9, 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, and the EPC Contractor entered into a services agreement (Services Agreement), which was amended and restated on July 20, 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear. On July 20, 2017, the bankruptcy court approved the EPC Contractor's motion seeking authorization to (i) enter into the Services Agreement, (ii) assume and assign to the Vogtle Owners certain project-related contracts, (iii) join the

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Vogtle Owners as counterparties to certain assumed project-related contracts, and (iv) reject the Vogtle 3 and 4 Agreement. The Services Agreement, and the EPC Contractor's rejection of the Vogtle 3 and 4 Agreement, became effective upon approval by the DOE on July 27, 2017. The Services Agreement will continue until the start-up and testing of Plant Vogtle Units 3 and 4 is complete and electricity is generated and sold from both units. The Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
Georgia Power and the other Vogtle Owners are continuing to conduct comprehensive schedule and cost-to-complete assessments, as well as cancellation cost assessments, to determine the impact of the EPC Contractor's bankruptcy filing on the construction cost and schedule for Plant Vogtle Units 3 and 4. Georgia Power's preliminary assessment results indicate that its proportionate share of the remaining estimated cost to complete Plant Vogtle Units 3 and 4 ranges as follows:
Preliminary in-service dates
 
 
 
Unit 3
February 2021
March 2022
Unit 4
February 2022
March 2023
 
(in billions)
Preliminary estimated cost to complete
$
3.9

$
4.6

CWIP as of June 30, 2017
4.5

 
4.5

Guarantee Obligations
(1.7
)
 
(1.7
)
Estimated capital costs
$
6.7

$
7.4

Vogtle Cost Settlement Agreement Revised Forecast
(5.7
)
 
(5.7
)
Estimated net additional capital costs
$
1.0

$
1.7

Georgia Power's estimates for cost to complete and schedule are based on preliminary analysis and remain subject to further refinement of labor productivity and consumable and commodity quantities and costs.
Georgia Power's estimated financing costs during the construction period total approximately $3.1 billion to $3.5 billion , of which approximately $1.4 billion had been incurred through June 30, 2017.
Georgia Power's preliminary cancellation cost estimate results indicate that its proportionate share of the estimated cancellation costs is approximately $400 million . As a result, as of June 30, 2017, total estimated costs subject to evaluation by Georgia Power and the Georgia PSC in the event of a cancellation decision are as follows:
 
Preliminary Cancellation Cost Estimate
 
(in billions)
CWIP as of June 30, 2017
$
4.5

Financing costs collected, net of tax
1.4

Cancellation costs (*)
0.4

Total
$
6.3

(*)
The estimate for cancellation costs includes, but is not limited to, costs to terminate contracts for construction and other services, as well as costs to secure the Plant Vogtle Units 3 and 4 construction site.
The Guarantee Obligations continue to exist in the event of cancellation. In addition, under Georgia law, prudently incurred costs related to certificated projects cancelled by the Georgia PSC are allowed recovery, including carrying costs, in future retail rates. Georgia Power will continue working with the Georgia PSC and the other Vogtle Owners to determine future actions related to Plant Vogtle Units 3 and 4, including, but not limited to, the status of construction and rate recovery, and currently expects to include its recommendation in its seventeenth Vogtle Construction Monitoring report to be filed with the Georgia PSC in late August 2017.

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The ultimate outcome of these matters is dependent on the completion of the assessments described above, as well as the related regulatory treatment, and cannot be determined at this time.
Item 6.    Exhibits.
The exhibits below with an asterisk (*) preceding the exhibit number are filed herewith. The remaining exhibits have previously been filed with the SEC and are incorporated herein by reference. The exhibits marked with a pound sign (#) are management contracts or compensatory plans or arrangements.
 
 
(4) Instruments Describing Rights of Security Holders, Including Indentures
 
 
 
 
 
 
 
Southern Company
 
 
 
 
 
 
*
(a)1
-
Fourth Supplemental Indenture to Junior Subordinated Note Indenture, dated as of June 21, 2017, providing for the issuance of the Series 2017A 5.325% Junior Subordinated Notes due June 21, 2057.
 
 
 
 
 
 
*
(a)2
-
Nineteenth Supplemental Indenture to Senior Note Indenture, dated as of June 21, 2017, providing for the issuance of the Series 2017A Floating Rate Senior Notes due September 30, 2020.
 
 
 
 
 
 
 
Georgia Power
 
 
 
 
 
 
 
(c)1
-
Amendment No. 3, dated July 27, 2017 to Loan Guarantee Agreement dated February 20, 2014, between Georgia Power and the DOE. (Designated in Form 8-K dated July 27, 2017, File No. 1-6468, as Exhibit 4.1.)
 
 
 
 
 
 
 
Gulf Power
 
 
 
 
 
 
 
(d)
-
Twenty-Second Supplemental Indenture to Senior Note Indenture, dated as of May 18, 2017, providing for the issuance of the Series 2017A 3.30% Senior Notes due May 30, 2027. (Designated in Form 8-K dated May 15, 2017, File No. 001-31737, as Exhibit 4.2.)
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
(g)1
-
Form of Southern Company Gas Capital Corporation's Series 2017A 4.400% Senior Notes due May 30, 2047. (Designated in Form 8-K dated May 4, 2017, File No. 1-14174, as Exhibit 4.1.)
 
 
 
 
 
 
 
(g)2
-
Form of Southern Company Gas' Guarantee related to the Series 2017A 4.400% Senior Notes due May 30, 2047. (Designated in Form 8-K dated May 4, 2017, File No. 1-14174, as Exhibit 4.3.)
 
 
 
 
 
 
 
(10) Material Contracts
 
 
 
 
 
Georgia Power
 
 
 
 
 
 
 
(c)1
-
Amendment No. 2 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated May 12, 2017, File No. 1-6468, as Exhibit 10.1.)
 
 
(c)2
-
Amendment No. 3 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated June 3, 2017, File No. 1-6468, as Exhibit 10.1.)

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(c)3
-
Amendment No. 4 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated June 5, 2017, File No. 1-6468, as Exhibit 10.1.)
 
 
(c)4
-
Amendment No. 5 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated June 16, 2017, File No. 1-6468, as Exhibit 10.2.)
 
 
(c)5
-
Amendment No. 6 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated June 22, 2017, File No. 1-6468, as Exhibit 10.1.)
 
 
(c)6
-
Amendment No. 7 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated June 28, 2017, File No. 1-6468, as Exhibit 10.1.)
 
 
(c)7
-
Amendment No. 8 to Interim Assessment Agreement dated as of March 29, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse, WECTEC Staffing Services LLC, and WECTEC. (Designated in Form 8-K dated July 20, 2017, File No. 1-6468, as Exhibit 10.1.)
 
 
(c)8
-
Settlement Agreement dated as of June 9, 2017, by and among Georgia Power, Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Toshiba Corporation. (Designated in Form 8-K dated June 16, 2017, File No. 1-6468, as Exhibit 10.1.)
 
*
(c)9
-
Amended and Restated Services Agreement dated as of June 20, 2017, by and among Georgia Power, for itself and as agent for Oglethorpe Power Corporation, Municipal Electric Authority of Georgia, MEAG Power SPVJ, LLC, MEAG Power SPVM, LLC, MEAG Power SPVP, LLC, and The City of Dalton, acting by and through its Board of Water, Light and Sinking Fund Commissioners, and Westinghouse and WECTEC. (Georgia Power has requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the SEC. Georgia Power omitted such portions from the filing and filed them separately with the SEC.)
 
 
 
 
 
 
 
(24) Power of Attorney and Resolutions
 
 
 
 
 
 
 
Southern Company
 
 
 
 
 
 
 
(a)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 1-3526 as Exhibit 24(a).)
 
 
 
 
 
 
 
Alabama Power
 
 
 
 
 
 
 
(b)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 1-3164 as Exhibit 24(b).)
 
 
 
 
 

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Georgia Power
 
 
 
 
 
 
 
(c)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 1-6468 as Exhibit 24(c).)
 
 
 
 
 
 
 
Gulf Power
 
 
 
 
 
 
 
(d)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 001-31737 as Exhibit 24(d).)
 
 
 
 
 
 
 
Mississippi Power
 
 
 
 
 
 
 
(e)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 001-11229 as Exhibit 24(e).)
 
 
 
 
 
 
 
Southern Power
 
 
 
 
 
 
 
(f)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 001-37803 as Exhibit 24(f).)
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
 
 
(g)
-
Power of Attorney and resolution. (Designated in the Form 10-K for the year ended December 31, 2016, File No. 1-14174 as Exhibit 24(g).)
 
 
 
 
 
 
 
(31) Section 302 Certifications
 
 
 
 
 
 
 
Southern Company
 
 
 
 
 
 
*
(a)1
-
Certificate of Southern Company's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(a)2
-
Certificate of Southern Company's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Alabama Power
 
 
 
 
 
 
*
(b)1
-
Certificate of Alabama Power's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(b)2
-
Certificate of Alabama Power's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Georgia Power
 
 
 
 
 
 
*
(c)1
-
Certificate of Georgia Power's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(c)2
-
Certificate of Georgia Power's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Gulf Power
 
 
 
 
 
 
*
(d)1
-
Certificate of Gulf Power's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(d)2
-
Certificate of Gulf Power's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Mississippi Power
 
 
 
 
 
 
*
(e)1
-
Certificate of Mississippi Power's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 

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*
(e)2
-
Certificate of Mississippi Power's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Southern Power
 
 
 
 
 
 
*
(f)1
-
Certificate of Southern Power Company's Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(f)2
-
Certificate of Southern Power Company's Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
 
*
(g)1
-
Certificate of Southern Company Gas' Chief Executive Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
*
(g)2
-
Certificate of Southern Company Gas' Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
(32) Section 906 Certifications
 
 
 
 
 
 
 
Southern Company
 
 
 
 
 
 
*
(a)
-
Certificate of Southern Company's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Alabama Power
 
 
 
 
 
 
*
(b)
-
Certificate of Alabama Power's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Georgia Power
 
 
 
 
 
 
*
(c)
-
Certificate of Georgia Power's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Gulf Power
 
 
 
 
 
 
*
(d)
-
Certificate of Gulf Power's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Mississippi Power
 
 
 
 
 
 
*
(e)
-
Certificate of Mississippi Power's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Southern Power
 
 
 
 
 
 
*
(f)
-
Certificate of Southern Power Company's Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 
 
 
Southern Company Gas
 
 
 
 
 
 
*
(g)
-
Certificate of Southern Company Gas' Chief Executive Officer and Chief Financial Officer required by Section 906 of the Sarbanes-Oxley Act of 2002.
 
 
 
 
 

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(101) Interactive Data Files
 
 
 
 
 
 
*
INS
-
XBRL Instance Document
 
*
SCH
-
XBRL Taxonomy Extension Schema Document
 
*
CAL
-
XBRL Taxonomy Calculation Linkbase Document
 
*
DEF
-
XBRL Definition Linkbase Document
 
*
LAB
-
XBRL Taxonomy Label Linkbase Document
 
*
PRE
-
XBRL Taxonomy Presentation Linkbase Document

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THE SOUTHERN COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
THE SOUTHERN COMPANY
 
 
 
 
By
 
Thomas A. Fanning
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
Art P. Beattie
 
 
Executive Vice President and Chief Financial Officer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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ALABAMA POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
ALABAMA POWER COMPANY
 
 
 
 
By
 
Mark A. Crosswhite
 
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
Philip C. Raymond
 
 
Executive Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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GEORGIA POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
GEORGIA POWER COMPANY
 
 
 
 
By
 
W. Paul Bowers
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
W. Ron Hinson
 
 
Executive Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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Table of Contents

GULF POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
GULF POWER COMPANY
 
 
 
 
By
 
S. W. Connally, Jr.
 
 
Chairman, President and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
Xia Liu
 
 
Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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MISSISSIPPI POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
MISSISSIPPI POWER COMPANY
 
 
 
 
By
 
Anthony L. Wilson
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
Moses H. Feagin
 
 
Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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SOUTHERN POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
SOUTHERN POWER COMPANY
 
 
 
 
By
 
Joseph A. Miller
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
William C. Grantham
 
 
Senior Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017

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SOUTHERN COMPANY GAS
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
 
 
SOUTHERN COMPANY GAS
 
 
 
 
By
 
Andrew W. Evans
 
 
Chairman, President, and Chief Executive Officer
 
 
(Principal Executive Officer)
 
 
 
 
By
 
Elizabeth W. Reese
 
 
Executive Vice President, Chief Financial Officer, and Treasurer
 
 
(Principal Financial Officer)
 
 
 
 
By
 
/s/ Melissa K. Caen
 
 
 
(Melissa K. Caen, Attorney-in-fact)
 
Date: August 1, 2017


272

Exhibit 4(a)1








THE SOUTHERN COMPANY

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUSTEE





_______________

FOURTH SUPPLEMENTAL INDENTURE

DATED AS OF JUNE 21, 2017


_______________



$500,000,000


SERIES 2017A 5.325% JUNIOR SUBORDINATED NOTES

DUE JUNE 21, 2057











TABLE OF CONTENTS 1  


 
 
PAGE
 
 
 
ARTICLE 1
1

 
SECTION 101. Establishment
1

 
SECTION 102. Definitions
2

 
SECTION 103. Payment of Principal and Interest
4

 
SECTION 104. Deferral of Interest Payments
5

 
SECTION 105. Denominations
6

 
SECTION 106. Global Securities
6

 
SECTION 107. Transfer
7

 
SECTION 108. Redemption at the Company’s Option
8

 
SECTION 109. Events of Default
9

 
SECTION 110. Information to Holders
10

 
 
 
ARTICLE 2
10

 
SECTION 201. Recitals by Company
10

 
SECTION 202. Ratification and Incorporation of Original Indenture
10

 
SECTION 203. Executed in Counterparts
10

 
SECTION 204. Legends
10

EXHIBIT A
Form of Series 2017A Note
A-1
EXHIBIT B
Certificate of Authentication
B-1



___________________________
1 This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.



i


THIS FOURTH SUPPLEMENTAL INDENTURE is made as of the 21 st day of June, 2017, by and between THE SOUTHERN COMPANY, a Delaware corporation, 30 Ivan Allen Jr. Blvd., N.W., Atlanta, Georgia 30308 (the “Company”), and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, 150 East 42 nd Street, 40 th Floor, New York, New York 10017 (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Subordinated Note Indenture, dated as of October 1, 2015 (the “Original Indenture”), with Wells Fargo Bank, National Association;
WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Fourth Supplemental Indenture, is herein called the “Indenture”;
WHEREAS, under the Original Indenture, a new series of Junior Subordinated Notes may at any time be established pursuant to a supplemental indenture executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new series of Junior Subordinated Notes;
WHEREAS, additional Junior Subordinated Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of this Fourth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
Series 2017A Junior Subordinated Notes
SECTION 101. Establishment . There is hereby established a new series of Junior Subordinated Notes to be issued under the Indenture, to be designated as the Company’s Series 2017A 5.325% Junior Subordinated Notes due June 21, 2057 (the “Series 2017A Notes”).
There are to be authenticated and delivered $500,000,000 principal amount of Series 2017A Notes, and such principal amount of the Series 2017A Notes may be increased from time to time pursuant to Section 301 of the Original Indenture. All Series 2017A Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for





issuances of additional Series 2017A Notes. Any such additional Series 2017A Notes will have the same interest rate, maturity and other terms as those initially issued (except for the public offering price and issue date and the initial interest accrual date and initial Interest Payment Date (as defined below), if applicable). No Series 2017A Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series 2017A Notes shall be issued in fully registered form.
The Series 2017A Notes shall be issued in the form of one or more Global Securities in substantially the form set out in Exhibit A hereto. The Depositary with respect to the Series 2017A Notes shall be The Depository Trust Company.
The form of the Trustee’s Certificate of Authentication for the Series 2017A Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series 2017A Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
SECTION 102. Definitions . The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
“1933 Act” has the meaning set forth in Section 106 of this Fourth Supplemental Indenture.
“Additional Interest” has the meaning set forth in Section 104 of this Fourth Supplemental Indenture.
“Administrative Action” means any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement including any notice or announcement of intent to issue or adopt any administrative pronouncement, ruling, regulatory procedure or regulation.
“Applicable Rating Agency” means any Rating Agency that (i)(a) published a rating for the Company on the date of initial issuance of the Series 2017A Notes and (b) publishes a rating for the Company at such time as a Rating Agency Event occurs, or (ii) any successor to a Rating Agency described in the preceding clause (i).
“Distribution Compliance Period” has the meaning set forth in Section 107 of this Fourth Supplemental Indenture.
“Interest Payment Dates” means June 21 and December 21 of each year, commencing December 21, 2017.
“Optional Deferral Period” has the meaning set forth in Section 104 of this Fourth Supplemental Indenture.
“Original Issue Date” means June 21, 2017.

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“Rating Agency” means any nationally recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended).
“Rating Agency Event” means a change to the methodology or criteria that were employed by an Applicable Rating Agency for purposes of assigning equity credit to securities such as the Series 2017A Notes on the date of initial issuance of the Series 2017A Notes (the “current methodology”), which change either (i) shortens the period of time during which equity credit pertaining to the Series 2017A Notes would have been in effect had the current methodology not been changed by the Applicable Rating Agency, or (ii) reduces the amount of equity credit assigned to the Series 2017A Notes by the Applicable Rating Agency as compared with the amount of equity credit that such Rating Agency assigned to the Series 2017A Notes as of the date of initial issuance of the Series 2017A Notes.
“Regular Record Date” means, with respect to each Interest Payment Date, the close of business (i) on the Business Day immediately preceding such Interest Payment Date if any Series 2017A Notes are issuable in the form of one or more Global Securities or (ii) on the 15th calendar day preceding such Interest Payment Date if no Series 2017A Notes are issuable in the form of one or more Global Securities (whether or not a Business Day).
“Regulation S Global Note” has the meaning set forth in Section 106 of this Fourth Supplemental Indenture.
“Regulation S Legend” has the meaning set forth in Section 106 of this Fourth Supplemental Indenture.
“Rule 144A Global Note” has the meaning set forth in Section 106 of this Fourth Supplemental Indenture.
“Rule 144A Legend” has the meaning set forth in Section 106 of this Fourth Supplemental Indenture.
“Securities Rate” has the meaning set forth in Section 103 of this Fourth Supplemental Indenture.
“Stated Maturity” means June 21, 2057.
“Tax Event” means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of:
(a) any amendment to, clarification of, or change, including any announced prospective change, in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under those laws or treaties;
(b) an Administrative Action;
(c) any amendment to, clarification of, or change in the official position or the interpretation of any Administrative Action or any interpretation or pronouncement that provides for a position

3



with respect to an Administrative Action that differs from the previously generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, regardless of the time or manner in which that amendment, clarification or change is introduced or made known; or
(d) a threatened challenge asserted in writing in connection with an audit of the Company or an audit of any of the subsidiaries of the Company, or a publicly-known threatened challenge asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Series 2017A Notes, which amendment, clarification or change is effective or the Administrative Action is taken or issued, or interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known after the date of original issuance of the Series 2017A Notes, there is more than an insubstantial risk that interest payable by the Company on the Series 2017A Notes is not deductible, or within 90 days of the date of such opinion would not be deductible, in whole or in part, by the Company for United States federal income tax purposes.
SECTION 103. Payment of Principal and Interest . The principal of the Series 2017A Notes shall be due at the Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series 2017A Notes shall bear interest at the rate of 5.325% per annum (the “Securities Rate”) until paid or duly provided for. Interest shall be paid semi-annually in arrears on each Interest Payment Date to the Person in whose name the Series 2017A Notes are registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. So long as an Optional Deferral Period is not occurring, any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series 2017A Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series 2017A Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series 2017A Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.
Payments of interest on the Series 2017A Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series 2017A Notes shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on the Series 2017A Notes is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable.
Payment of the principal and interest (including Additional Interest) due at the Stated Maturity or earlier redemption of the Series 2017A Notes shall be made upon surrender of the Series 2017A Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series 2017A Notes (including Additional Interest) shall be paid in such coin or currency of the United

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States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.
SECTION 104. Deferral of Interest Payments . So long as no Event of Default has occurred and is continuing, the Company may, at its option, on one or more occasions, defer payment of all or part of the current and accrued interest otherwise due on the Series 2017A Notes by extending the interest payment period for up to ten (10) consecutive years (each period, commencing on the date that the first such interest payment would otherwise have been made, an “Optional Deferral Period”). A deferral of interest payments may not extend beyond the Stated Maturity or end on a day other than an Interest Payment Date. Any deferred interest on the Series 2017A Notes will accrue additional interest at the Securities Rate from the applicable Interest Payment Date to the date of payment, compounded semi-annually (such deferred interest and additional interest accrued thereon, “Additional Interest”), to the extent permitted under applicable law. No interest shall be due and payable during an Optional Deferral Period, except at the end of such Optional Deferral Period or upon a redemption of the Series 2017A Notes during such Optional Deferral Period.
So long as no Event of Default has occurred and is continuing, prior to the termination of any Optional Deferral Period, the Company may further defer the payment of interest by extending such Optional Deferral Period; provided that such Optional Deferral Period together with all such previous and further deferrals of interest payments shall not exceed ten (10) consecutive years at any one time or extend beyond the Stated Maturity. Upon the termination of any Optional Deferral Period, which shall be an Interest Payment Date, the Company shall pay all interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, to the Person in whose name the Series 2017A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Once the Company pays all interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, it shall be entitled again to defer interest payments on the Series 2017A Notes as described above.
During an Optional Deferral Period, subject to the next succeeding sentence, the Company (a) shall not declare or pay any dividend or make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (b) shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Series 2017A Notes. The preceding sentence, however, shall not restrict (i) any of the actions described in the preceding sentence resulting from any reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock, (ii) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions

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of such capital stock or the security being converted or exchanged, (iii) dividends, payments or distributions payable in shares of capital stock, (iv) redemptions, purchases or other acquisitions of shares of capital stock in connection with any employment contract, incentive plan, benefit plan or other similar arrangement of the Company or any of its subsidiaries or in connection with a dividend reinvestment or stock purchase plan, or (v) any declaration of a dividend in connection with implementation of any stockholders’ rights plan, or the issuance of rights, stock or other property under any such plan, or the redemption, repurchase or other acquisition of any such rights pursuant thereto.
The Company shall provide to the Trustee notice, as provided in Section 105 of the Original Indenture, of its selection or extension of an Optional Deferral Period at least 10 Business Days and not more than 60 Business Days prior to the earlier of (a) the next applicable Interest Payment Date or (b) the date, if any, upon which the Company is required to give notice of such Interest Payment Date or the Regular Record Date thereof to any applicable self-regulatory organization. In addition, the Company shall deliver to the Trustee an Officers’ Certificate stating that no default or Event of Default shall have occurred and be continuing. Subject to receipt of such Officers’ Certificate, the Trustee shall forward such notice promptly to the Holders of the Series 2017A Notes as provided in Section 106 of the Original Indenture.
SECTION 105. Denominations . The Series 2017A Notes may be issued in the denominations of $200,000 and integral multiples of $1,000 in excess thereof.
SECTION 106. Global Securities . The Series 2017A Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. The Series 2017A Notes will be initially issued pursuant to an exemption or exemptions from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”). Beneficial interests in the Series 2017A Notes offered and sold to “qualified institutional buyers” (as defined in Rule 144A under the 1933 Act) in reliance upon Rule 144A under the 1933 Act shall be represented by one or more separate Global Securities (each, a “Rule 144A Global Note”). Each Rule 144A Global Note shall bear the Rule 144A legend in substantially the form set forth in Exhibit A hereto (the “Rule 144A Legend”). Beneficial interests in the Series 2017A Notes offered and sold to purchasers outside of the United States pursuant to Regulation S under the 1933 Act shall be represented by one or more separate Global Securities (each, a “Regulation S Global Note”) and shall bear the Regulation S legend in substantially the form set forth in Exhibit A hereto (the “Regulation S Legend”).
Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series 2017A Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary.
Subject to the procedures of the Depositary, a Global Security shall be exchangeable for Series 2017A Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the

6



Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series 2017A Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series 2017A Notes registered in such names as the Depositary shall direct.
Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.    
SECTION 107. Transfer . A Rule 144A Global Note may not be transferred on the Security Register except in compliance with the restrictions on transfer contained in the Rule 144A Legend and upon receipt by the Security Registrar of a completed and executed Transfer Certificate in the form contained in Exhibit A hereto. Prior to the expiration of 40 days beginning on and including the later of (i) the day on which the offering of the Series 2017A Notes commences and (ii) the Original Issue Date (the “Distribution Compliance Period”), a Regulation S Global Note may not be transferred on the Security Register except in compliance with the restrictions on transfer contained in the Regulation S Legend and upon receipt by the Security Registrar of a completed and executed Transfer Certificate in the form contained in Exhibit A. No service charge will be made for any transfer or exchange of Series 2017A Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.
The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary, in accordance with this Fourth Supplemental Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor.
Until the expiration of the Distribution Compliance Period, transfers by an owner of a beneficial interest in a Regulation S Global Note to a transferee who takes delivery of such interest through a Rule 144A Global Note will be made only upon receipt by the Trustee of a completed and executed Transfer Certificate in the form contained in Exhibit A hereto from the transferor of the beneficial interest to the effect that such transfer is being made to a person whom the transferor reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A and the requirements of applicable securities laws of any state of the United States or any other jurisdiction.
Transfers by an owner of a beneficial interest in the Rule 144A Global Note to a transferee who takes delivery through the Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, will be made only upon receipt by the Trustee of a Transfer Certificate in the form contained in Exhibit A hereto from the transferor to the effect that such transfer is being made in accordance with Regulation S or Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Distribution Compliance Period,

7



the interest transferred will be held immediately thereafter through Euroclear Bank S.A./N.V., as operator of the Euroclear System or Clearstream Banking, société anonyme, Luxembourg.
Any beneficial interest in one of the Global Securities that is transferred to a person who takes delivery in the form of an interest in another Global Security will, upon transfer, cease to be an interest in the initial Global Security and will become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.
Transfers of beneficial interests between a Rule 144A Global Note and a Regulation S Global Note, and other transfers relating to beneficial interests in the Global Securities, shall be reflected by endorsements of the Trustee, as custodian for The Depository Trust Company, on the schedules attached to such Rule 144A Global Note and Regulation S Global Note.
Neither the Trustee, the Security Registrar nor any transfer agent shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of any interest in any Series 2017A Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Neither the Company nor the Trustee shall have any liability for acts or omissions of the Depositary, for the Depositary records of beneficial interest, for any transactions between the Depositary, any participant member of the Depositary and/or beneficial owner of any interest in any Series 2017A Notes, or in respect of any transfers effected by the Depositary or by any participant member of the Depositary or any beneficial owner of any interest in any Series 2017A Notes held through any such participant member of the Depositary.
The Company shall not be required (a) to issue, register the transfer of or exchange any Series 2017A Notes during a period beginning at the opening of business fifteen (15) days before the day of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series 2017A Notes to be called for redemption, and ending at the close of business on the day of the mailing, or (b) to register the transfer of or exchange any Series 2017A Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series 2017A Notes redeemed in part.
SECTION 108. Redemption at the Company’s Option . At any time and from time to time on or after June 21, 2022, the Series 2017A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2017A Notes being redeemed plus accrued and unpaid interest (including any Additional Interest) on the Series 2017A Notes being redeemed to the Redemption Date.

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In addition, before June 21, 2022, if a Tax Event shall occur and be continuing, the Company may redeem the Series 2017A Notes following the occurrence of that Tax Event, in whole, but not in part, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.
In addition, before June 21, 2022, if a Rating Agency Event shall occur and be continuing, the Company may redeem the Series 2017A Notes following the occurrence of that Rating Agency Event, in whole, but not in part, at a Redemption Price equal to 102% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.
In the event of redemption of the Series 2017A Notes in part only, a new Series 2017A Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof.
The Series 2017A Notes will not have a sinking fund.
Notice of redemption shall be given as provided in Section 1104 of the Original Indenture.
Any redemption of less than all of the Series 2017A Notes shall, with respect to the principal thereof, be divisible by $1,000.
SECTION 109. Events of Default.
The Event of Default set forth in Section 501(5) of the Original Indenture shall not apply to the Series 2017A Notes. The Events of Default set forth in paragraphs (1), (3), (6) and (7) shall apply to the Series 2017A Notes.
For purposes of this Section 109, the term “Default” means the following event: default in the performance or breach of any covenant or warranty of the Company in the Indenture (other than a covenant or warranty (i) a default in whose performance or whose breach is addressed in any paragraph of Section 501 of the Original Indenture (other than Section 501(5)) or (ii) which has expressly been included in the Indenture solely for the benefit of one or more series of Junior Subordinated Notes other than the Series 2017A Notes), and continuance of such default or breach for a period of 90 days after there has been given, by registered or certified mail, to the Company by the Trustee, or to the Company and the Trustee by the Holders of at least 25% in principal amount of the Outstanding Series 2017A Notes, a written notice specifying such default or breach and requiring it to be remedied and stating that such notice is a “Notice of Covenant Default” hereunder.
Upon the occurrence and continuance of a Default, the Trustee and the Holders of the Series 2017A Notes shall have the same rights and remedies, and shall be subject to the same limitations, restrictions, protections and exculpations, and the Company shall be subject to the same obligations and restrictions, in each case, as would apply if such Default was an Event of Default or an event which after notice or lapse of time or both would become an Event of Default; provided, that the principal of and accrued interest on the Series 2017A Notes may not be declared immediately due and payable by reason of the occurrence and continuation of a Default, and any notice of declaration

9



or acceleration based on such Default shall be null and void with respect to the Series 2017A Notes; provided, further that in case a Default has occurred and is continuing, the Trustee shall not be subject to Section 601(b) of the Original Indenture unless an Event of Default has occurred and is continuing.
SECTION 110. Information to Holders . Upon the request of any Holder, any holder of a beneficial interest in the Series 2017A Notes, or the Trustee (on behalf of a Holder or a holder of a beneficial interest in the Series 2017A Notes), the Company will furnish such information as is specified in paragraph (d)(4) of Rule 144A promulgated under the 1933 Act to Holders (and to holders of beneficial interests in the Series 2017A Notes), to prospective purchasers of the Series 2017A Notes (and of beneficial interests in the Series 2017A Notes) who are qualified institutional buyers or to the Trustee for delivery to such Holder or prospective purchasers of the Series 2017A Notes or beneficial interests therein, as the case may be, unless, at the time of such request, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.
Delivery of information to the Trustee pursuant to this Section 110 is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants under the Indenture.

ARTICLE 2
Miscellaneous Provisions
SECTION 201. Recitals by Company . The recitals in this Fourth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series 2017A Notes and of this Fourth Supplemental Indenture as fully and with like effect as if set forth herein in full.
SECTION 202. Ratification and Incorporation of Original Indenture . As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture, as supplemented by this Fourth Supplemental Indenture shall be read, taken and construed as one and the same instrument.
SECTION 203. Executed in Counterparts . This Fourth Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.
SECTION 204. Legends . Except as determined by the Company in accordance with applicable law, each Series 2017A Note shall bear the applicable legends relating to restrictions on transfer pursuant to the securities laws in substantially the form set forth on Exhibit A hereto.


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IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officer, all as of the day and year first above written.

 
THE SOUTHERN COMPANY
 
 
 



 
 
By:
/s/Art P. Beattie
 
 
 
Art P. Beattie
Executive Vice President and Chief Financial Officer
 
 
 


 
 
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
 
 



 
 
By:
/s/Stefan Victory
 
 
 
Stefan Victory
Vice President
 





EXHIBIT A

FORM OF SERIES 2017A NOTE


[RULE 144A LEGEND FOR USE WITH RULE 144A GLOBAL NOTES]

NEITHER THIS NOTE NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). EACH HOLDER HEREOF, AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE SOUTHERN COMPANY (THE “COMPANY”) THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE WHICH IS SIX MONTHS (IF ALL APPLICABLE CONDITIONS TO SUCH RESALE UNDER RULE 144 UNDER THE 1933 ACT (OR ANY SUCCESSOR PROVISION THEREOF) ARE SATISFIED) AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE THEREOF, THE ISSUANCE DATE OF ANY SUBSEQUENT ISSUANCE OF ADDITIONAL NOTES OF THE SAME SERIES AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS NOTE OR THE EXPIRATION OF SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY SUCH RULE 144 (OR SUCH SUCCESSOR PROVISION) PERMITTING RESALES OF THIS NOTE WITHOUT ANY CONDITIONS (THE “RESALE RESTRICTION TERMINATION DATE”) OTHER THAN (A)(1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE 1933 ACT (IF AVAILABLE), (3) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ATTACHED TO THIS NOTE), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ATTACHED TO THIS NOTE), (5) IN ACCORDANCE WITH ANOTHER APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND (B) IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE FOREGOING RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (i) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT OR (ii) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF, PARAGRAPH (k)(2) OF RULE 902 UNDER REGULATION S UNDER THE 1933 ACT. THE HOLDER OF THIS NOTE ACKNOWLEDGES THAT THE COMPANY OR THE TRUSTEE RESERVES THE RIGHT PRIOR TO ANY OFFER, SALE OR OTHER TRANSFER (1) PURSUANT TO CLAUSE (A)(2) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,




CERTIFICATIONS OR OTHER INFORMATION SATISFACTORY TO THE COMPANY AND THE TRUSTEE AND (2) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE AS TO COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE.


[REGULATION S LEGEND FOR USE WITH REGULATION S GLOBAL NOTES]

THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE DATE OF THE COMMENCEMENT OF THE OFFERING OF THE SECURITIES AND THE DATE OF ORIGINAL ISSUANCE OF THE SECURITIES, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S OR RULE 144A UNDER THE 1933 ACT OR ANY OTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.








NO. __
CUSIP NO.                           .

THE SOUTHERN COMPANY
SERIES 2017A 5.325% JUNIOR SUBORDINATED NOTE
DUE JUNE 21, 2057


 
Initial Principal Amount:
$__________
 
 
 
 
Regular Record Date:
One Business Day prior to Interest Payment Date (if any Series 2017A Notes are issuable in the form of one or more Global Securities) or 15th calendar day prior to Interest Payment Date (if no Series 2017A Notes are issuable in the form of one or more Global Securities)
 
 
 
 
Original Issue Date:
June 21, 2017
 
 
 
 
Stated Maturity:
June 21, 2057
 
 
 
 
Interest Payment Dates:
June 21 and December 21
 
 
 
 
Interest Rate:
5.325% per annum
 
 
 
 
Authorized Denomination:
$200,000 and integral multiples of $1,000 in excess thereof

The Southern Company, a Delaware corporation (the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to _____________________________________, or registered assigns, the principal sum of _________ DOLLARS ($__________), or such other amount as indicated on the Schedule of Increases or Decreases in Global Security attached as Schedule I hereto, on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, semi-annually in arrears on each Interest Payment Date as specified above, commencing on December 21, 2017 and on the Stated Maturity (or upon earlier redemption) at the rate per annum shown above until the principal hereof is paid or made available for payment and at such rate on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on whic

A-1


h the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.
Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of a 360-day year of twelve 30-day months. In the event that any date on which interest is payable on this Note is not a Business Day, then payment of the interest payable on such date will be made on the next succeeding day that is a Business Day (and without any interest or other payment in respect of any such delay), with the same force and effect as if made on the date the payment was originally payable. A “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.
So long as no Event of Default shall have occurred and be continuing, the Company may, at its option, on one or more occasions, defer payment of all or part of the current and accrued interest otherwise due on the Series 2017A Notes by extending the interest payment period for up to ten (10) consecutive years (each period, commencing on the date that the first such interest payment would otherwise have been made, an “Optional Deferral Period”). A deferral of interest payments may not extend beyond the Stated Maturity or end on a day other than an Interest Payment Date. As provided in the Indenture, Additional Interest on the Series 2017A Notes will accrue to the extent permitted by law. No interest shall be due and payable during an Optional Deferral Period, except at the end of such Optional Deferral Period or upon a redemption of the Series 2017A Notes during such Optional Deferral Period.
So long as no Event of Default shall have occurred and be continuing, prior to the termination of any Optional Deferral Period, the Company may further defer the payment of interest by extending such Optional Deferral Period; provided that such Optional Deferral Period together with all such previous and further deferrals of interest payments shall not exceed ten (10) consecutive years at any one time or extend beyond the Stated Maturity. Upon the termination of any Optional Deferral Period, which shall be an Interest Payment Date, the Company shall pay all interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, to the Person in whose name the Series 2017A Notes are registered on the Regular Record Date for such Interest Payment Date, provided that interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, payable at Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Once the Company pays all interest accrued and unpaid on the Series 2017A Notes, including any Additional Interest, it shall be entitled again to defer interest payments on the Series 2017A Notes as described above.
During an Optional Deferral Period, subject to the next succeeding sentence, (a) the Company shall not declare or pay any dividend or make any distributions with respect to, or redeem, purchase, acquire or make a liquidation payment with respect to, any of its capital stock, and (b) the Company shall not make any payment of interest, principal or premium, if any, on or repay, repurchase or redeem any debt securities (including guarantees) issued by the Company which rank pari passu with or junior to the Series 2017A Notes. The preceding sentence, however, shall not restrict (i) any of the actions described in the preceding sentence resulting from any reclassification of the Company’s capital stock or the exchange or conversion of one class or series of the Company’s capital stock for another class or series of the Company’s capital stock, (ii) the purchase of fractional interests in shares of the Company’s capital stock pursuant to the conversion or exchange provisions of such capital stock or the security being converted or exchanged, (iii) dividends, payments or

A-2


distributions payable in shares of capital stock, (iv) redemptions, purchases or other acquisitions of shares of capital stock in connection with any employment contract, incentive plan, benefit plan or other similar arrangement of the Company or any of its subsidiaries or in connection with a dividend reinvestment or stock purchase plan, or (v) any declaration of a dividend in connection with implementation of any stockholders’ rights plan, or the issuance of rights, stock or other property under any such plan, or the redemption, repurchase or other acquisition of any such rights pursuant thereto.
The Company shall provide to the Trustee written notice of its selection or extension of an Optional Deferral Period at least 10 Business Days and not more than 60 Business Days prior to the earlier of (a) the next applicable Interest Payment Date or (b) the date, if any, upon which the Company is required to give notice of such Interest Payment Date or the Regular Record Date thereof to any applicable self-regulatory organization. The Trustee shall forward such notice promptly to the Holders of the Series 2017A Notes.
Payment of the principal of and interest (including Additional Interest) due at the Stated Maturity or earlier redemption of the Series 2017A Notes shall be made upon surrender of the Series 2017A Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series 2017A Notes (including Additional Interest) shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date)(including Additional Interest) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.
The indebtedness evidenced by this Note, including the principal hereof and interest hereon, is, to the extent provided in the Indenture, subordinate and junior in right of payment and upon liquidation to the prior payment in full of all Senior Indebtedness (as defined in the Indenture), and this Note is issued subject to the provisions of the Indenture with respect thereto. Each Holder of this Note, by accepting the same, (a) agrees to and shall be bound by such provisions, (b) authorizes and directs the Trustee on his behalf to take such action as may be necessary or appropriate to effectuate the subordination so provided, and (c) appoints the Trustee his attorney-in-fact for any and all such purposes. Each Holder hereof, by his acceptance hereof, waives all notice of the acceptance of the subordination provisions contained herein and in the Indenture by each holder of Senior Indebtedness, whether now outstanding or hereafter incurred, and waives reliance by each such holder upon said provisions.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.


A-3


IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.

Dated:

 
THE SOUTHERN COMPANY
 
 
 
 
 
By:
 
 
 
Title:
 
 
 
 
 
 
Attest:
 
 
 
 
 
 
 
 
 
 
 
Title:
 
 
 
 
 
 
 


{Seal of THE SOUTHERN COMPANY appears here}




A-4




CERTIFICATE OF AUTHENTICATION

This is one of the Junior Subordinated Notes referred to in the within-mentioned Indenture.

 
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
 
 
 
 
By:
 
 
 
Authorized Signatory


A-5


(Reverse Side of Note)


This Note is one of a duly authorized issue of Junior Subordinated Notes of the Company (the “Notes”), issued and issuable in one or more series under a Subordinated Note Indenture, dated as of October 1, 2015, as supplemented (the “Indenture”), between the Company and Wells Fargo Bank, National Association, Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as Series 2017A 5.325% Junior Subordinated Notes due June 21, 2057 (the “Series 2017A Notes”) which is unlimited in principal amount. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.
The Series 2017A Notes will not have a sinking fund.
At any time and from time to time on or after June 21, 2022, the Series 2017A Notes will be subject to redemption at the option of the Company in whole or in part upon not less than 30 nor more than 60 days’ notice, at a Redemption Price equal to 100% of the principal amount of the Series 2017A Notes being redeemed plus accrued and unpaid interest (including any Additional Interest) on the Series 2017A Notes being redeemed to the Redemption Date.
In addition, if a Tax Event shall occur and be continuing, the Company may redeem the Series 2017A Notes following the occurrence of that Tax Event, in whole, but not in part, before June 21, 2022, at a Redemption Price equal to 100% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.
“Administrative Action” means any judicial decision or any official administrative pronouncement, ruling, regulatory procedure, notice or announcement including any notice or announcement of intent to issue or adopt any administrative pronouncement, ruling, regulatory procedure or regulation.
“Tax Event” means that the Company shall have received an Opinion of Counsel experienced in such matters to the effect that, as a result of:
(a) any amendment to, clarification of, or change, including any announced prospective change, in the laws or treaties of the United States or any political subdivisions or taxing authorities, or any regulations under those laws or treaties;
(b) an Administrative Action;
(c) any amendment to, clarification of, or change in the official position or the interpretation of any Administrative Action or any interpretation or pronouncement that provides for a position with respect to an Administrative Action that differs from the previously generally accepted position, in each case by any legislative body, court, governmental authority or regulatory body, regardless of the time or manner in which that amendment, clarification or change is introduced or made known; or
(d) a threatened challenge asserted in writing in connection with an audit of the Company or an audit of any of the subsidiaries of the Company, or a publicly-known threatened challenge

A-6


asserted in writing against any other taxpayer that has raised capital through the issuance of securities that are substantially similar to the Series 2017A Notes, which amendment, clarification or change is effective or the Administrative Action is taken or issued, or interpretation or pronouncement is issued or threatened challenge is asserted or becomes publicly-known after the date of original issuance of the Series 2017A Notes, there is more than an insubstantial risk that interest payable by the Company on the Series 2017A Notes is not deductible, or within 90 days of the date of such opinion would not be deductible, in whole or in part, by the Company for United States federal income tax purposes.
In addition, if a Rating Agency Event shall occur and be continuing, the Company may redeem the Series 2017A Notes following the occurrence of that Rating Agency Event, in whole, but not in part, before June 21, 2022, at a Redemption Price equal to 102% of the principal amount to be redeemed plus any accrued but unpaid interest (including any Additional Interest) to the Redemption Date.
“Applicable Rating Agency” means any Rating Agency that (i)(a) published a rating for the Company on the date of initial issuance of the Series 2017A Notes and (b) publishes a rating for the Company at such time as a Rating Agency Event occurs, or (ii) any successor to a Rating Agency described in the preceding clause (i).
“Rating Agency” means any nationally recognized statistical rating organization (within the meaning of Section 3(a)(62) of the Securities Exchange Act of 1934, as amended).
“Rating Agency Event” means a change to the methodology or criteria that were employed by an Applicable Rating Agency for purposes of assigning equity credit to securities such as the Series 2017A Notes on the date of initial issuance of the Series 2017A Notes (the “current methodology”), which change either (i) shortens the period of time during which equity credit pertaining to the Series 2017A Notes would have been in effect had the current methodology not been changed by the Applicable Rating Agency, or (ii) reduces the amount of equity credit assigned to the Series 2017A Notes by the Applicable Rating Agency as compared with the amount of equity credit that such Rating Agency has assigned to the Series 2017A Notes as of the date of initial issuance of the Series 2017A Notes.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. The Series 2017A Notes will not have a sinking fund.
If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon

A-7


the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.
No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, together with the completed and executed Transfer Certificate attached hereto (as applicable), and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without coupons in denominations of $200,000 and integral multiples of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.
The Company and, by acceptance of this Series 2017A Note or a beneficial interest in this Series 2017A Note, each Holder hereof and any person acquiring a beneficial interest herein, agree that for United States federal, state and local tax purposes it is intended that this Series 2017A Note constitute indebtedness.
This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.



A-8


ABBREVIATIONS

The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM-  as tenants in common
UNIF GIFT MIN ACT- _______ Custodian ________
                                         (Cust)                     (Minor)
TEN ENT-   as tenants by the entireties
 
 
JT TEN-       as joint tenants with right of survivorship and not as tenants in common
under Uniform Gifts to
Minors Act

___________________
            (State)

Additional abbreviations may also be used
though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
_____________________________________________________________________________
(please insert Social Security or other identifying number of assignee)

_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_____________________________________________________________________________

_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
_____________________________________________________________________________

_____________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

Dated:
 
 
 
 
 
 



NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

A-9


TRANSFER CERTIFICATE
In connection with any transfer of any of the Series 2017A Notes evidenced by this certificate [prior to the expiration of the Distribution Compliance Period] 1 , the undersigned confirms that such Series 2017A Notes are being:
CHECK ONE BOX BELOW
(1)
 
o
 
exchanged for the undersigned’s own account without transfer; or
 
 
 
 
 
(2)
 
o
 
transferred to the Company; or
 
 
 
 
 
(3)
 
o
 
transferred to a person whom the undersigned reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), purchasing for its own account or for the account of a “qualified institutional buyer” to whom notice is given that the resale, pledge or other transfer is being made in reliance on Rule 144A under the 1933 Act; or
 
 
 
 
 
(4)
 
o
 
transferred pursuant to an exemption under Rule 144 under the 1933 Act; or
 
 
 
 
 
(5)
 
o
 
transferred in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S under the 1933 Act; or
 
 
 
 
 
(6)
 
o
 
transferred pursuant to another available exemption from the registration requirements of the 1933 Act; or
 
 
 
 
 
(7)
 
o
 
transferred pursuant to an effective registration statement under the 1933 Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of the Series 2017A Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided , however , that if box (4) or (6) is checked, the Company may require, prior to registering any such transfer of the Series 2017A Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, such as the exemption provided by Rule 144 under the 1933 Act; provided , further , that if box (3) is checked, the transferee must certify that it is a qualified institutional buyer as defined in Rule 144A.
Date: _____________________

_____________________________________________
Signature

_____________________________________________
Tax Identification Number


_______________________________
1 [To be included for Regulation S Global Notes only.]

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TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Series 2017A Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the 1933 Act, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: _____________________
_______________________________
Signature
NOTICE: If an entity, to be executed by an executive officer.


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SCHEDULE I TO GLOBAL SECURITY

The initial amount of the Global Securities evidenced by this certificate is $_______________.

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made



Date
Amount of increase in Principal Amount of this Global Security
Amount of decrease in Principal Amount of this Global Security
Principal Amount of this Global Security following each decrease or increase
Signature of authorized signatory of Trustee or Securities Registrar
 
 
 
 
 



A-12


EXHIBIT B


CERTIFICATE OF AUTHENTICATION


This is one of the Junior Subordinated Notes referred to in the within-mentioned Indenture.

 
WELLS FARGO BANK, NATIONAL
ASSOCIATION, as Trustee
 
 
 
 
By:
 
 
 
Authorized Signatory


B-1

Exhibit 4(a)2






THE SOUTHERN COMPANY

TO

WELLS FARGO BANK, NATIONAL ASSOCIATION,
TRUSTEE





____________________


NINETEENTH SUPPLEMENTAL INDENTURE

DATED AS OF JUNE 21, 2017


____________________





SERIES 2017A FLOATING RATE SENIOR NOTES

DUE SEPTEMBER 30, 2020







TABLE OF CONTENTS 1  

 
 
Page
 
 
 
 
 
 
ARTICLE 1
SERIES 2017A SENIOR NOTES
1

 
 
 
 
 
SECTION 101.
Establishment
1

 
SECTION 102.
Definitions
2

 
SECTION 103.
Payment of Principal and Interest
4

 
SECTION 104.
Determination of Interest
4

 
SECTION 105.
Denominations
5

 
SECTION 106.
Global Securities
5

 
SECTION 107.
Transfer
6

 
SECTION 108.
Redemption at the Company’s Option
7

 
SECTION 109.
Information to Holders
8

 
 
 
 
 
 
 
 
 
ARTICLE 2
MISCELLANEOUS PROVISIONS
8

 
 
 
 
 
SECTION 201.
Recitals by Company
8

 
SECTION 202.
Ratification and Incorporation of Original Indenture
8

 
SECTION 203.
Executed in Counterparts
8

 
SECTION 204.
Legends
9

 
 
 
 
EXHIBIT A Form of Series 2017A Note
A-1
 
 
 
 
EXHIBIT B Certificate of Authentication
B-1













_________________________
1 This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.


i



THIS NINETEENTH SUPPLEMENTAL INDENTURE is made as of the 21 st day of June, 2017, by and between THE SOUTHERN COMPANY, a Delaware corporation, 30 Ivan Allen Jr. Blvd., N.W., Atlanta, Georgia 30308 (the “Company”), and Wells Fargo Bank, National Association, a national banking association, 150 East 42 nd Street, 40 th Floor, New York, New York 10017 (the “Trustee”).
W I T N E S S E T H:
WHEREAS, the Company has heretofore entered into a Senior Note Indenture, dated as of January 1, 2007 (the “Original Indenture”), with Wells Fargo Bank, National Association;
WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as heretofore supplemented and as further supplemented by this Nineteenth Supplemental Indenture, is herein called the “Indenture”;
WHEREAS, under the Original Indenture, a new series of Senior Notes may at any time be established pursuant to a supplemental indenture executed by the Company and the Trustee;
WHEREAS, the Company proposes to create under the Indenture a new series of Senior Notes;
WHEREAS, additional Senior Notes of other series hereafter established, except as may be limited in the Original Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified; and
WHEREAS, all conditions necessary to authorize the execution and delivery of this Nineteenth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.
NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE 1
SERIES 2017A SENIOR NOTES
SECTION 101.     Establishment . There is hereby established a new series of Senior Notes to be issued under the Indenture, to be designated as the Company’s Series 2017A Floating Rate Senior Notes due September 30, 2020 (the “Series 2017A Notes”).
There are to be authenticated and delivered $300,000,000 principal amount of Series 2017A Notes, and such principal amount of the Series 2017A Notes may be increased from time to time pursuant to Section 301 of the Original Indenture. All Series 2017A Notes need not be issued at the same time and such series may be reopened at any time, without the consent of any Holder, for issuances of additional Series 2017A Notes. Any such additional Series 2017A Notes will have the




same interest rate, maturity and other terms as those initially issued (except for the public offering price and issue date and the initial interest accrual date and initial Interest Payment Date (as defined below), if applicable). No Series 2017A Notes shall be authenticated and delivered in excess of the principal amount as so increased except as provided by Sections 203, 303, 304, 907 or 1107 of the Original Indenture. The Series 2017A Notes shall be issued in fully registered form.
The Series 2017A Notes shall be issued in the form of one or more Global Securities in substantially the form set out in Exhibit A hereto. The Depositary with respect to the Series 2017A Notes shall be The Depository Trust Company.
The form of the Trustee’s Certificate of Authentication for the Series 2017A Notes shall be in substantially the form set forth in Exhibit B hereto.
Each Series 2017A Note shall be dated the date of authentication thereof and shall bear interest from the date of original issuance thereof or from the most recent Interest Payment Date to which interest has been paid or duly provided for.
SECTION 102.     Definitions . The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.
“1933 Act” has the meaning set forth in Section 106 of this Nineteenth Supplemental Indenture.
“Calculation Agent” means Wells Fargo Bank, National Association, or its successor appointed by the Company, acting as calculation agent.
“Distribution Compliance Period” has the meaning set forth in Section 107 of this Nineteenth Supplemental Indenture.
“Interest Determination Date” means the second London Business Day immediately preceding the first day of the relevant Interest Period.
“Interest Payment Dates” means the 30 th day of March, June, September and December, commencing September 30, 2017; provided, however, in the event that any Interest Payment Date (other than the Interest Payment Date that is the Stated Maturity or a Redemption Date) would otherwise be a day that is not a Business Day, the Interest Payment Date will be the next succeeding Business Day.
“Interest Period” means the period commencing on an Interest Payment Date (or, with respect to the initial Interest Period only, commencing on the Original Issue Date) and ending on the day before the next succeeding Interest Payment Date.
“LIBOR” means, with respect to any Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first day of that Interest Period and ending on the next Interest Payment Date that appears on Reuters

2



LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period. If such rate does not appear on the Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for the Interest Period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market (which may include affiliates of one or more of the underwriters of the Series 2017A Notes) selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., London time, on the Interest Determination Date for that Interest Period. The Calculation Agent will request the principal London office of each such bank to provide a quotation of its rate. If at least two such quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of the rates quoted by three major banks in New York City (which may include affiliates of one or more of the underwriters of the Series 2017A Notes) selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., New York City time, on the Interest Determination Date for that Interest Period for loans in U.S. dollars to leading European banks for that Interest Period and in a principal amount of not less than $1,000,000. However, if fewer than three banks selected by the Calculation Agent to provide quotations are quoting as described above, LIBOR for that Interest Period will be the same as LIBOR as determined for the previous Interest Period.
“London Business Day” means a day that is a Business Day and a day on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.
“Original Issue Date” means June 21, 2017.
“Regular Record Date” means, with respect to each Interest Payment Date, the 15 th  calendar day preceding such Interest Payment Date (whether or not a Business Day).
“Regulation S Global Note” has the meaning set forth in Section 106 of this Nineteenth Supplemental Indenture.
“Regulation S Legend” has the meaning set forth in Section 106 of this Nineteenth Supplemental Indenture.
“Rule 144A Global Note” has the meaning set forth in Section 106 of this Nineteenth Supplemental Indenture.
“Rule 144A Legend” has the meaning set forth in Section 106 of this Nineteenth Supplemental Indenture.

3



“Reuters LIBOR01 Page” means the display designated as Reuters LIBOR01 on the Reuters service (or such other page as may replace the Reuters LIBOR01 Page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices comparable to the London Interbank Offered rate for U.S. dollar deposits).
“Stated Maturity” means September 30, 2020; provided that if the Stated Maturity is not a Business Day, the principal and interest due on that date will be payable on the next succeeding Business Day, and no interest shall accrue for the intervening period.
SECTION 103.     Payment of Principal and Interest . The principal of the Series 2017A Notes shall be due at Stated Maturity (unless earlier redeemed). The unpaid principal amount of the Series 2017A Notes shall bear interest at the rates set quarterly pursuant to Section 104 hereof until paid or duly provided for. Interest shall be paid quarterly in arrears on each Interest Payment Date to the Person in whose name the Series 2017A Notes are registered at the close of business on the Regular Record Date for such Interest Payment Date, provided that interest payable at the Stated Maturity or on a Redemption Date as provided herein will be paid to the Person to whom principal is payable. Any such interest that is not so punctually paid or duly provided for will forthwith cease to be payable to the Holders on such Regular Record Date and may either be paid to the Person or Persons in whose name the Series 2017A Notes are registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of the Series 2017A Notes not less than ten (10) days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Series 2017A Notes shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Original Indenture.
Payments of interest on the Series 2017A Notes will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for the Series 2017A Notes shall be computed and paid on the basis of the actual number of days elapsed over a 360-day year.
Payment of the principal and interest due at the Stated Maturity or earlier redemption of the Series 2017A Notes shall be made upon surrender of the Series 2017A Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series 2017A Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payments of interest (including interest on any Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least sixteen (16) days prior to the date for payment by the Person entitled thereto.
SECTION 104.     Determination of Interest . The Series 2017A Notes will bear interest for each Interest Period at a per annum rate determined by the Calculation Agent, subject to the maximum interest rate permitted by New York or other applicable state law, as such law may be modified by United States law of general application. The interest rate applicable during each Interest Period will be equal to LIBOR on the Interest Determination Date for such Interest Period plus

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0.70%; provided, that in no event shall the applicable interest rate be less than 0% for any Interest Period. Promptly upon such determination, the Calculation Agent will notify the Company and the Trustee, if the Trustee is not then serving as the Calculation Agent, of the interest rate for the new Interest Period. The interest rate determined by the Calculation Agent,
absent manifest error, shall be binding and conclusive upon the beneficial owners and Holders of the Series 2017A Notes, the Company and the Trustee.
Upon the request of a Holder of the Series 2017A Notes, the Calculation Agent will provide to such Holder the interest rate in effect on the date of such request and, if determined, the interest rate for the next Interest Period.
SECTION 105.     Denominations . The Series 2017A Notes may be issued in denominations of $2,000 and integral multiples of $1,000 in excess thereof.
SECTION 106.     Global Securities . The Series 2017A Notes will be issued in the form of one or more Global Securities registered in the name of the Depositary (which shall be The Depository Trust Company) or its nominee. The Series 2017A Notes will be initially issued pursuant to an exemption or exemptions from the registration requirements of the Securities Act of 1933, as amended (the “1933 Act”). Beneficial interests in the Series 2017A Notes offered and sold to “qualified institutional buyers” (as defined in Rule 144A under the 1933 Act) in reliance upon Rule 144A under the 1933 Act shall be represented by one or more separate Global Securities (each, a “Rule 144A Global Note”). Each Rule 144A Global Note shall bear the Rule 144A legend in substantially the form set forth in Exhibit A hereto (the “Rule 144A Legend”). Beneficial interests in the Series 2017A Notes offered and sold to purchasers outside of the United States pursuant to Regulation S under the 1933 Act shall be represented by one or more separate Global Securities (each, a “Regulation S Global Note”) and shall bear the Regulation S legend in substantially the form set forth in Exhibit A hereto (the “Regulation S Legend”).
Except under the limited circumstances described below, Series 2017A Notes represented by one or more Global Securities will not be exchangeable for, and will not otherwise be issuable as, Series 2017A Notes in definitive form. The Global Securities described above may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.
Owners of beneficial interests in such a Global Security will not be considered the Holders thereof for any purpose under the Indenture, and no Global Security representing a Series 2017A Note shall be exchangeable, except for another Global Security of like denomination and tenor to be registered in the name of the Depositary or its nominee or to a successor Depositary or its nominee. The rights of Holders of such Global Security shall be exercised only through the Depositary.
Subject to the procedures of the Depositary, a Global Security shall be exchangeable for Series 2017A Notes registered in the names of persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company, or if at any time the Depositary ceases to be a clearing agency registered under the Securities Exchange Act of 1934, as amended, at a time when the Depositary is required to be so

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registered to act as such Depositary and no successor Depositary shall have been appointed by the Company, in each case within 90 days after the Company receives such notice or becomes aware of such cessation, (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable, or (iii) there shall have occurred an Event of Default with respect to the Series
2017A Notes. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Series 2017A Notes registered in such names as the Depositary shall direct.
Neither the Company, the Trustee nor any agent of the Company or the Trustee shall have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in a Global Security or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
SECTION 107.     Transfer . A Rule 144A Global Note may not be transferred on the Security Register except in compliance with the restrictions on transfer contained in the Rule 144A Legend and upon receipt by the Security Registrar of a completed and executed Transfer Certificate in the form contained in Exhibit A. Prior to the expiration of 40 days beginning on and including the later of (i) the day on which the offering of the Series 2017A Notes commences and (ii) the Original Issue Date (the “Distribution Compliance Period”), a Regulation S Global Note may not be transferred on the Security Register except in compliance with the restrictions on transfer contained in the Regulation S Legend and upon receipt by the Security Registrar of a completed and executed Transfer Certificate in the form contained in Exhibit A hereto. No service charge will be made for any transfer or exchange of Series 2017A Notes, but payment will be required of a sum sufficient to cover any tax or other governmental charge that may be imposed in connection therewith.
The transfer and exchange of beneficial interests in the Global Securities shall be effected through the Depositary, in accordance with this Nineteenth Supplemental Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor.
Until the expiration of the Distribution Compliance Period, transfers by an owner of a beneficial interest in a Regulation S Global Note to a transferee who takes delivery of such interest through a Rule 144A Global Note will be made only upon receipt by the Trustee of a completed and executed Transfer Certificate in the form contained in Exhibit A hereto from the transferor of the beneficial interest to the effect that such transfer is being made to a person whom the transferor reasonably believes is a qualified institutional buyer (as defined in Rule 144A under the Securities Act) in a transaction meeting the requirements of Rule 144A and the requirements of applicable securities laws of any state of the United States or any other jurisdiction.
Transfers by an owner of a beneficial interest in the Rule 144A Global Note to a transferee who takes delivery through the Regulation S Global Note, whether before or after the expiration of the Distribution Compliance Period, will be made only upon receipt by the Trustee of a Transfer Certificate in the form contained in Exhibit A hereto from the transferor to the effect that such transfer is being made in accordance with Regulation S or Rule 144 under the Securities Act and that, if such transfer is being made prior to the expiration of the Distribution Compliance Period, the interest transferred will be held immediately thereafter through Euroclear Bank S.A./N.V., as operator of the Euroclear System or Clearstream Banking, société anonyme, Luxembourg.

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Any beneficial interest in one of the Global Securities that is transferred to a person who takes delivery in the form of an interest in another Global Security will, upon transfer, cease to be an interest in the initial Global Security and will become an interest in the other Global Security and, accordingly, will thereafter be subject to all transfer restrictions, if any, and other procedures applicable to beneficial interests in such other Global Security for as long as it remains such an interest.
Transfers of beneficial interests between a Rule 144A Global Note and a Regulation S Global Note, and other transfers relating to beneficial interests in the Global Securities, shall be reflected by endorsements of the Trustee, as custodian for The Depository Trust Company, on the schedules attached to such Rule 144A Global Note and Regulation S Global Note.
Neither the Trustee, the Security Registrar nor any transfer agent shall have any obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of any interest in any Series 2017A Note (including any transfers between or among Depositary participants, members or beneficial owners in any Global Security) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.
Neither the Company nor the Trustee shall have any liability for acts or omissions of the Depositary, for the Depositary records of beneficial interest, for any transactions between the Depositary, any participant member of the Depositary and/or beneficial owner of any interest in any Series 2017A Notes, or in respect of any transfers effected by the Depositary or by any participant member of the Depositary or any beneficial owner of any interest in any Series 2017A Notes held through any such participant member of the Depositary.
The Company shall not be required (a) to issue, register the transfer of or exchange any Series 2017A Notes during a period beginning at the opening of business fifteen (15) days before the date of the mailing of a notice pursuant to Section 1104 of the Original Indenture identifying the serial numbers of the Series 2017A Notes to be called for redemption, and ending at the close of business on the date of the mailing, or (b) to register the transfer of or exchange any Series 2017A Notes theretofore selected for redemption in whole or in part, except the unredeemed portion of any Series 2017A Notes redeemed in part.
SECTION 108.     Redemption at the Company’s Option . On or after September 30, 2019, the Series 2017A Notes will be subject to redemption, from time to time, at the option of the Company, in whole or in part, on any Interest Payment Date upon not less than 15 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Series 2017A Notes being redeemed plus accrued and unpaid interest on the Series 2017A Notes being redeemed to the Redemption Date.
If the Redemption Date is not a Business Day, the principal and interest due on that date will be payable on the next succeeding Business Day, and no interest shall accrue for the intervening period.

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In the event of redemption of the Series 2017A Notes in part only, a new Series 2017A Note or Notes for the unredeemed portion will be issued in the name or names of the Holders thereof upon the surrender thereof.
The Series 2017A Notes will not have a sinking fund.
Except as otherwise provided herein, notice of redemption shall be given as provided in Section 1104 of the Original Indenture.
Any redemption of less than all of the Series 2017A Notes shall, with respect to the principal thereof, be divisible by $1,000.
SECTION 109.     Information to Holders . Upon the request of any Holder, any holder of a beneficial interest in the Series 2017A Notes, or the Trustee (on behalf of a Holder or a holder of a beneficial interest in the Series 2017A Notes), the Company will furnish such information as is specified in paragraph (d)(4) of Rule 144A promulgated under the 1933 Act to Holders (and to holders of beneficial interests in the Series 2017A Notes), to prospective purchasers of the Series 2017A Notes (and of beneficial interests in the Series 2017A Notes) who are qualified institutional buyers or to the Trustee for delivery to such Holder or prospective purchasers of the Series 2017A Notes or beneficial interests therein, as the case may be, unless, at the time of such request, the Company is subject to the reporting requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended.
Delivery of information to the Trustee pursuant to this Section 109 is for informational purposes only and the Trustee’s receipt of such shall not constitute constructive notice of any information contained therein or determinable from information contained therein, including the Company’s compliance with any of its covenants under the Indenture.
ARTICLE 2
MISCELLANEOUS PROVISIONS
SECTION 201.     Recitals by Company . The recitals in this Nineteenth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of Series 2017A Notes and of this Nineteenth Supplemental Indenture as fully and with like effect as if set forth herein in full.
SECTION 202.     Ratification and Incorporation of Original Indenture . As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture as supplemented by this Nineteenth Supplemental Indenture shall be read, taken and construed as one and the same instrument.
SECTION 203.     Executed in Counterparts . This Nineteenth Supplemental Indenture may be simultaneously executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

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SECTION 204.     Legends . Except as determined by the Company in accordance with applicable law, each Series 2017A Note shall bear the applicable legends relating to restrictions on transfer pursuant to the securities laws in substantially the form set forth on Exhibit A hereto.


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IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officer, all as of the day and year first above written.
 
THE SOUTHERN COMPANY


 
 
By:
/s/Art P. Beattie
 
 
 
Art P. Beattie
Executive Vice President and
Chief Financial Officer

 




 
 
 
 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee


 
 
By:
/s/Stefan Victory
 
 
 
Stefan Victory
Vice President

 







EXHIBIT A

FORM OF SERIES 2017A NOTE


[RULE 144A LEGEND FOR USE WITH RULE 144A GLOBAL NOTES]

NEITHER THIS NOTE NOR ANY BENEFICIAL INTEREST HEREIN HAS BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”). EACH HOLDER HEREOF, AND EACH OWNER OF A BENEFICIAL INTEREST HEREIN, BY PURCHASING THIS NOTE, AGREES FOR THE BENEFIT OF THE SOUTHERN COMPANY (THE “COMPANY”) THAT THIS NOTE MAY NOT BE RESOLD, PLEDGED OR OTHERWISE TRANSFERRED PRIOR TO THE DATE WHICH IS SIX MONTHS (IF ALL APPLICABLE CONDITIONS TO SUCH RESALE UNDER RULE 144 UNDER THE 1933 ACT (OR ANY SUCCESSOR PROVISION THEREOF) ARE SATISFIED) AFTER THE LATER OF THE ORIGINAL ISSUANCE DATE THEREOF, THE ISSUANCE DATE OF ANY SUBSEQUENT ISSUANCE OF ADDITIONAL NOTES OF THE SAME SERIES AND THE LAST DATE ON WHICH THE COMPANY OR ANY AFFILIATE THEREOF WAS THE OWNER OF THIS NOTE OR THE EXPIRATION OF SUCH SHORTER PERIOD AS MAY BE PRESCRIBED BY SUCH RULE 144 (OR SUCH SUCCESSOR PROVISION) PERMITTING RESALES OF THIS NOTE WITHOUT ANY CONDITIONS (THE “RESALE RESTRICTION TERMINATION DATE”) OTHER THAN (A)(1) TO THE COMPANY, (2) IN A TRANSACTION ENTITLED TO AN EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE 1933 ACT (IF AVAILABLE), (3) SO LONG AS THIS NOTE IS ELIGIBLE FOR RESALE PURSUANT TO RULE 144A UNDER THE 1933 ACT (“RULE 144A”), TO A PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR OTHER TRANSFER IS BEING MADE IN RELIANCE ON RULE 144A UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ATTACHED TO THIS NOTE), (4) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR 904 OF REGULATION S UNDER THE 1933 ACT (AS INDICATED BY THE BOX CHECKED BY THE TRANSFEROR ON THE CERTIFICATE OF TRANSFER ATTACHED TO THIS NOTE), (5) IN ACCORDANCE WITH ANOTHER APPLICABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE 1933 ACT (AND BASED UPON AN OPINION OF COUNSEL ACCEPTABLE TO THE COMPANY), OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE 1933 ACT AND (B) IN EACH CASE IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED STATES. THE FOREGOING RESTRICTIONS ON RESALE WILL NOT APPLY SUBSEQUENT TO THE RESALE RESTRICTION TERMINATION DATE. THE HOLDER HEREOF, BY PURCHASING THIS NOTE, REPRESENTS AND AGREES FOR THE BENEFIT OF THE COMPANY THAT IT IS (i) A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE 1933 ACT OR (ii) A NON-U.S. PERSON OUTSIDE THE UNITED STATES WITHIN THE




MEANING OF, OR AN ACCOUNT SATISFYING THE REQUIREMENTS OF, PARAGRAPH (k)(2) OF RULE 902 UNDER REGULATION S UNDER THE 1933 ACT. THE HOLDER OF THIS NOTE ACKNOWLEDGES THAT THE COMPANY OR THE TRUSTEE RESERVES THE RIGHT PRIOR TO ANY OFFER, SALE OR OTHER TRANSFER (1) PURSUANT TO CLAUSE (A)(2) PRIOR TO THE RESALE RESTRICTION TERMINATION DATE TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL, CERTIFICATIONS OR OTHER INFORMATION SATISFACTORY TO THE COMPANY AND THE TRUSTEE AND (2) IN EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATE AS TO COMPLIANCE WITH CERTAIN CONDITIONS TO TRANSFER IS COMPLETED AND DELIVERED BY THE TRANSFEROR TO THE COMPANY AND THE TRUSTEE.


[REGULATION S LEGEND FOR USE WITH REGULATION S GLOBAL NOTES]

THE SECURITIES COVERED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, U.S. PERSONS (I) AS PART OF THEIR DISTRIBUTION AT ANY TIME OR (II) OTHERWISE UNTIL 40 DAYS AFTER THE LATER OF THE DATE OF THE COMMENCEMENT OF THE OFFERING OF THE SECURITIES AND THE DATE OF ORIGINAL ISSUANCE OF THE SECURITIES, EXCEPT IN EITHER CASE IN ACCORDANCE WITH REGULATION S OR RULE 144A UNDER THE 1933 ACT OR ANY OTHER AVAILABLE EXEMPTION FROM REGISTRATION UNDER THE 1933 ACT. TERMS USED ABOVE HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S.




NO. _______
CUSIP NO. ___________________

THE SOUTHERN COMPANY
SERIES 2017A FLOATING RATE SENIOR NOTE
DUE SEPTEMBER 30, 2020
 
Initial Principal Amount:
$______________

 
Regular Record Date:
15th calendar day prior to the applicable Interest Payment Date (whether or not a Business Day)

 
Original Issue Date:
June 21, 2017

 
Stated Maturity:
September 30, 2020; provided that if the Stated Maturity is not a Business Day, the principal and interest due on that date will be payable on the next succeeding Business Day, and no interest shall accrue for the intervening period.

 
Interest Payment Dates:
30 th  day of March, June, September and December; provided, however, in the event that any Interest Payment Date (other than the Interest Payment Date that is the Stated Maturity or a Redemption Date) would otherwise be a day that is not a Business Day, the Interest Payment Date will be the next succeeding Business Day
 
Interest Rate:
LIBOR plus 0.70% per annum, as set on each Interest Determination Date

 
Authorized Denominations:
$2,000 or any integral multiple of $1,000 in excess thereof

The Southern Company, a Delaware corporation (the “Company,” which term includes any successor corporation under the Indenture referred to on the reverse hereof), for value received, hereby promises to pay to _____________________________________, or registered assigns, the principal sum of ________________________________ DOLLARS ($__________), or such other amount as indicated on the Schedule of Increases or Decreases in Global Security attached hereto as Schedule I, on the Stated Maturity shown above (or upon earlier redemption), and to pay interest thereon from the Original Issue Date shown above, or from the most recent Interest Payment Date to which interest has been paid or duly provided for, quarterly in arrears on each Interest Payment Date as specified above, commencing on September 30, 2017 and on the Stated Maturity (or upon earlier redemption) at the rates per annum determined in accordance with the provisions specified below until the principal hereof is paid or made available for payment and at such rates on any overdue principal and on any overdue installment of interest. The interest so payable, and punctually paid or duly provided for, on any Interest Payment Date (other than an Interest Payment Date that is the Stated Maturity or on a Redemption Date) will, as provided in such Indenture, be paid to the Person in whose name this Note (the “Note”) is registered at the close of business on the Regular Record Date as specified above next preceding such Interest Payment Date, provided that

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any interest payable at the Stated Maturity or on any Redemption Date will be paid to the Person to whom principal is payable. Except as otherwise provided in the Indenture, any such interest not so punctually paid or duly provided for will forthwith cease to be payable to the Holder on such Regular Record Date and may either be paid to the Person in whose name this Note is registered at the close of business on a Special Record Date for the payment of such defaulted interest to be fixed by the Trustee, notice whereof shall be given to Holders of Notes of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange, if any, on which the Notes of this series shall be listed, and upon such notice as may be required by any such exchange, all as more fully provided in the Indenture.
The Series 2017A Notes (as defined on the reverse hereof) will bear interest for each Interest Period at a per annum rate determined by the Calculation Agent, subject to the maximum interest rate permitted by New York or other applicable state law, as such law may be modified by United States law of general application. The interest rate applicable during each Interest Period will be equal to LIBOR on the Interest Determination Date for such Interest Period plus 0.70%; provided, that in no event shall the applicable interest rate be less than 0% for any Interest Period. Promptly upon such determination, the Calculation Agent will notify the Company and the Trustee, if the Trustee is not then serving as the Calculation Agent, of the interest rate for the new Interest Period. The interest rate determined by the Calculation Agent, absent manifest error, shall be binding and conclusive upon the beneficial owners and Holders of the Series 2017A Notes, the Company and the Trustee.
“Calculation Agent” means The Wells Fargo Bank, National Association, or its successor appointed by the Company, acting as calculation agent.
“Interest Determination Date” means the second London Business Day immediately preceding the first day of the relevant Interest Period.
“Interest Period” means the period commencing on an Interest Payment Date (or, with respect to the initial Interest Period only, commencing on the Original Issue Date) and ending on the day before the next succeeding Interest Payment Date.
“LIBOR” means, with respect to any Interest Period, the rate (expressed as a percentage per annum) for deposits in U.S. dollars for a three-month period commencing on the first day of that Interest Period and ending on the next Interest Payment Date that appears on Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period. If such rate does not appear on the Reuters LIBOR01 Page as of 11:00 a.m. (London time) on the Interest Determination Date for that Interest Period, LIBOR will be determined on the basis of the rates at which deposits in U.S. dollars for the Interest Period and in a principal amount of not less than $1,000,000 are offered to prime banks in the London interbank market by four major banks in the London interbank market (which may include affiliates of one or more of the underwriters of the Series 2017A Notes) selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., London time, on the Interest Determination Date for that Interest Period. The Calculation Agent will request the principal London office of each such bank to provide a quotation of its rate. If at least

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two such quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of such quotations. If fewer than two quotations are provided, LIBOR with respect to that Interest Period will be the arithmetic mean of the rates quoted by three major banks in New York City (which may include affiliates of one or more of the underwriters of the Series 2017A Notes) selected by the Calculation Agent (after consultation with the Company), at approximately 11:00 a.m., New York City time, on the Interest Determination Date for that Interest Period for loans in U.S. dollars to leading European banks for that Interest Period and in a principal amount of not less than $1,000,000. However, if fewer than three banks selected by the Calculation Agent to provide quotations are quoting as described above, LIBOR for that Interest Period will be the same as LIBOR as determined for the previous Interest Period.
“London Business Day” means a day that is a Business Day and a day on which dealings in deposits in U.S. dollars are transacted, or with respect to any future date are expected to be transacted, in the London interbank market.
“Reuters LIBOR01 Page” means the display designated as Reuters LIBOR01 on the Reuters service (or such other page as may replace the Reuters LIBOR01 Page on that service, or such other service as may be nominated as the information vendor, for the purpose of displaying rates or prices comparable to the London Interbank Offered rate for U.S. dollar deposits).
Payments of interest on this Note will include interest accrued to but excluding the respective Interest Payment Dates. Interest payments for this Note shall be computed and paid on the basis of the actual number of days elapsed over a 360-day year. A “Business Day” shall mean any day other than a Saturday or a Sunday or a day on which banking institutions in New York City are authorized or required by law or executive order to remain closed or a day on which the Corporate Trust Office of the Trustee is closed for business.
Payment of the principal of and interest due at the Stated Maturity or earlier redemption of the Series 2017A Notes shall be made upon surrender of the Series 2017A Notes at the Corporate Trust Office of the Trustee. The principal of and interest on the Series 2017A Notes shall be paid in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts. Payment of interest (including interest on an Interest Payment Date) will be made, subject to such surrender where applicable, at the option of the Company, (i) by check mailed to the address of the Person entitled thereto as such address shall appear in the Security Register or (ii) by wire transfer or other electronic transfer at such place and to such account at a banking institution in the United States as may be designated in writing to the Trustee at least 16 days prior to the date for payment by the Person entitled thereto.
REFERENCE IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE HEREOF, WHICH FURTHER PROVISIONS SHALL FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.
Unless the certificate of authentication hereon has been executed by the Trustee by manual signature, this Note shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed under its corporate seal.
Dated:
 
THE SOUTHERN COMPANY
 
 
 
 
 
By:
 
 
 
Title:
 
 
 
 
 
 
Attest:
 
 
 
 
 
 
 
 
 
 
 
Title:
 
 
 
 
 
 
 

{Seal of THE SOUTHERN COMPANY appears here}



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CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned Indenture.
 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee


 
 
By:
 
 
 
 
Authorized Officer
 


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(Reverse Side of Note)
This Note is one of a duly authorized issue of Senior Notes of the Company (the “Notes”), issued and issuable in one or more series under a Senior Note Indenture (the “Original Indenture”), dated as of January 1, 2007, as supplemented, including by a Nineteenth Supplemental Indenture dated as of June 21, 2017 (the “Indenture”), between the Company and Wells Fargo Bank, National Association, Trustee (the “Trustee,” which term includes any successor trustee under the Indenture), to which Indenture and all indentures incidental thereto reference is hereby made for a statement of the respective rights, limitation of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Notes issued thereunder and of the terms upon which said Notes are, and are to be, authenticated and delivered. This Note is one of the series designated on the face hereof as Series 2017A Floating Rate Senior Notes due September 30, 2020 (the “Series 2017A Notes”) which is unlimited in aggregate principal amount. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Indenture.
On or after September 30, 2019, the Series 2017A Notes will be subject to redemption, from time to time, at the option of the Company, in whole or in part, on any Interest Payment Date upon not less than 15 nor more than 60 days’ notice, at a redemption price equal to 100% of the principal amount of the Series 2017A Notes being redeemed plus accrued and unpaid interest on the Series 2017A Notes being redeemed to the Redemption Date.
If the Redemption Date is not a Business Day, the principal and interest due on that date will be payable on the next succeeding Business Day, and no interest shall accrue for the intervening period.
In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof will be issued in the name of the Holder hereof upon the surrender hereof. The Series 2017A Notes will not have a sinking fund.
If an Event of Default with respect to the Notes of this series shall occur and be continuing, the principal of the Notes of this series may be declared due and payable in the manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Notes of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Notes at the time Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of specified percentages in principal amount of the Notes of each series at the time Outstanding, on behalf of the Holders of all Notes of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange hereof or in lieu hereof, whether or not notation of such consent or waiver is made upon this Note.

A-6



No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of and interest on this Note at the times, place and rates, and in the coin or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Note is registrable in the Security Register, upon surrender of this Note for registration of transfer at the office or agency of the Company for such purpose, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Security Registrar and duly executed by, the Holder hereof or his attorney duly authorized in writing, together with the completed and executed Transfer Certificate attached hereto (as applicable), and thereupon one or more new Notes of this series, of authorized denominations and of like tenor and for the same aggregate principal amount, will be issued to the designated transferee or transferees. No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.
The Notes of this series are issuable only in registered form without coupons in denominations of $2,000 and any integral multiple of $1,000 in excess thereof. As provided in the Indenture and subject to certain limitations therein set forth, Notes of this series are exchangeable for a like aggregate principal amount of Notes of this series of a different authorized denomination, as requested by the Holder surrendering the same upon surrender of the Note or Notes to be exchanged at the office or agency of the Company.
This Note shall be governed by, and construed in accordance with, the internal laws of the State of New York.



A-7



ABBREVIATIONS
The following abbreviations, when used in the inscription on the face of this instrument, shall be construed as though they were written out in full according to applicable laws or regulations:


TEN COM-  as tenants in common
UNIF GIFT MIN ACT- _______ Custodian ________
                                         (Cust)                     (Minor)
TEN ENT-   as tenants by the entireties
 
 
JT TEN-       as joint tenants with right of survivorship and not as tenants in common
under Uniform Gifts to
Minors Act

___________________
            (State)

Additional abbreviations may also be used
though not on the above list.

FOR VALUE RECEIVED, the undersigned hereby sell(s) and transfer(s) unto
_____________________________________________________________________________
(please insert Social Security or other identifying number of assignee)

_____________________________________________________________________________
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE OF ASSIGNEE
_____________________________________________________________________________

_____________________________________________________________________________
the within Note and all rights thereunder, hereby irrevocably constituting and appointing
_____________________________________________________________________________

_____________________________________________________________________________
agent to transfer said Note on the books of the Company, with full power of substitution in the premises.

Dated:
 
 
 
 
 
 



NOTICE: The signature to this assignment must correspond with the name as written upon the face of the within instrument in every particular without alteration or enlargement, or any change whatever.

A-8



TRANSFER CERTIFICATE
In connection with any transfer of any of the Series 2017A Notes evidenced by this certificate [prior to the expiration of the Distribution Compliance Period] 2 , the undersigned confirms that such Series 2017A Notes are being:
CHECK ONE BOX BELOW
(1)
    exchanged for the undersigned’s own account without transfer; or
(2)
    transferred to the Company; or
(3)
    transferred to a person whom the undersigned reasonably believes is a “qualified institutional buyer” within the meaning of Rule 144A under the Securities Act of 1933, as amended (the “1933 Act”), purchasing for its own account or for the account of a “qualified institutional buyer” to whom notice is given that the resale, pledge or other transfer is being made in reliance on Rule 144A under the 1933 Act; or
(4)
□     transferred pursuant to an exemption under Rule 144 under the 1933 Act; or
(5)
□     transferred in an offshore transaction in accordance with Rule 903 or Rule 904 of Regulation S under the 1933 Act; or
(6)
    transferred pursuant to another available exemption from the registration requirements of the 1933 Act; or
(7)
□     transferred pursuant to an effective registration statement under the 1933 Act.
Unless one of the boxes is checked, the Trustee will refuse to register any of the Series 2017A Notes evidenced by this certificate in the name of any person other than the registered Holder thereof; provided , however , that if box (4) or (6) is checked, the Company may require, prior to registering any such transfer of the Series 2017A Notes, such legal opinions, certifications and other information as the Company has reasonably requested to confirm that such transfer is being made pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the 1933 Act, such as the exemption provided by Rule 144 under the 1933 Act; provided , further , that if box (3) is checked, the transferee must certify that it is a qualified institutional buyer as defined in Rule 144A.
Date: _____________________

__________________________________________
Signature


__________________________________________
Tax Identification Number
____________________
2 [To be included for Regulation S Global Notes only.]

A-9




TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this Series 2017A Note for its own account or an account with respect to which it exercises sole investment discretion and that it and any such account is a “qualified institutional buyer” within the meaning of Rule 144A under the 1933 Act, and is aware that the sale to it is being made in reliance on Rule 144A and acknowledges that it has received such information regarding the Company as the undersigned has requested pursuant to Rule 144A or has determined not to request such information and that it is aware that the transferor is relying upon the undersigned’s foregoing representations in order to claim the exemption from registration provided by Rule 144A.
Date: _______________________
____________________________
Signature
NOTICE: If an entity, to be executed by an executive officer.

A-10




SCHEDULE I TO GLOBAL SECURITY

The initial amount of the Global Securities evidenced by this certificate is $_______________.

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in this Global Security have been made



Date
 
Amount of increase in Principal Amount of this Global Security
 
Amount of decrease in Principal Amount of this Global Security
 
Principal Amount of this Global Security following each decrease or increase
 
Signature of authorized signatory of Trustee or Securities Registrar


A-11



EXHIBIT B
CERTIFICATE OF AUTHENTICATION
This is one of the Senior Notes referred to in the within-mentioned Indenture.
 
WELLS FARGO BANK, NATIONAL ASSOCIATION, as Trustee


 
 
By:
 
 
 
 
Authorized Officer
 


B-1
Exhibit 10(c)9

CONFIDENTIAL& PROPRIETARY
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Georgia Power Company has requested confidential treatment for certain portions of this document pursuant to an application for confidential treatment sent to the Securities and Exchange Commission. Georgia Power Company has omitted such portions from this filing and filed them separately with the Securities and Exchange Commission. Such omissions are designated as “[***].”




AMENDED AND RESTATED SERVICES AGREEMENT
BETWEEN
GEORGIA POWER COMPANY, FOR ITSELF AND AS AGENT FOR OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION) , MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA , MEAG POWER SPVJ , LLC , MEAG POWER SPVM, LLC , MEAG POWER SPVP, LLC , AND THE CITY OF DALTON, GEORGIA, ACTING BY AND THROUGH ITS BOARD OF WATER, LIGHT AND SINKING FUND COMMISSIONERS
AND
WESTINGHOUSE ELECTRIC COMPANY LLC
AND
WECTEC GLOBAL PROJECT SERVICES INC.






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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS
2
ARTICLE 2. INTERPRETATION
6
ARTICLE 3. TERM; CONDITIONS PRECEDENT
7
ARTICLE 4. SCOPE OF WORK
8
ARTICLE 5. OWNERS’ RESPONSIBILITIES AND RIGHTS; OVERSIGHT OF SERVICES
15
ARTICLE 6. IP DELIVERABLES
18
ARTICLE 7. CONTRACT RATES
20
ARTICLE 8. INVOICES AND PAYMENTS
20
ARTICLE 9. RECORDS; AUDIT
20
ARTICLE 10. DEFECTIVE SERVICES AND EQUIPMENT WARRANTY
21
ARTICLE 11. REPRESENTATIONS AND WARRANTIES
22
ARTICLE 12. TITLE AND RISK OF LOSS
24
ARTICLE 13. QUALITY ASSURANCE REQUIREMENTS
24
ARTICLE 14. CONFIDENTIAL AND PROPRIETARY INFORMATION
27
ARTICLE 15. CONTRACT ADMINISTRATION NOTICES
39
ARTICLE 16. INDEMNITY
40
ARTICLE 17. LIMITATION OF LIABILITY
43
ARTICLE 18. BENEFITED PARTIES
44
ARTICLE 19. DISPUTE RESOLUTION
44
ARTICLE 20. TERMINATION
45
ARTICLE 21. ASSIGNMENT
46
ARTICLE 22. GOVERNING LAWS AND REGULATIONS, VENUE, AND COMPLIANCE WITH LAWS
47

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ARTICLE 23. EQUAL EMPLOYMENT OPPORTUNITY
49
ARTICLE 24. INSURANCE
50
ARTICLE 25. UNFORESEEABLE CONDITIONS
54
ARTICLE 26. CYBER SECURITY PROGRAM REQUIREMENTS
54
ARTICLE 27. COMPLIANCE WITH SITE AND SECURITY RULES AND POLICIES
55
ARTICLE 28. FITNESS FOR DUTY
58
ARTICLE 29. EMPLOYEE PROTECTION
59
ARTICLE 30. NO TOLERATION OF UNACCEPTABLE BEHAVIORS
60
ARTICLE 31. NON-ENGLISH SPEAKING SERVICE PROVIDER WORKERS
62
ARTICLE 32. COMMUNICATIONS
63
ARTICLE 33. MISCELLANEOUS
63
EXHIBIT A    SERVICES AND DIVISION OF RESPONSIBILITY
 
EXHIBIT B    DELIVERABLES
 
EXHIBIT C    RATES AND INVOICING
 
EXHIBIT D    FORM OF STAFF AUGMENTATION AGREEMENT
 
EXHIBIT E    FORM OF CONFIDENTIALITY AGREEMENT
 
EXHIBIT F    FACILITY IP LICENSE IN THE EVENT OF A TRIGGERING EVENT
 
EXHIBIT G    IP LICENSE
 
EXHIBIT H    SUBCONTRACTS AND PURCHASE ORDERS
 
EXHIBIT I    RATES FOR LEASED EQUIPMENT
 
EXHIBIT J-1     DAVIS-BACON ACT REQUIRED PROVISIONS
 
EXHIBIT J-2     DAVIS-BACON ACT WAGE DETERMINATION(S)
 
EXHIBIT J-3    HEAVY WAGE DETERMINATION
 

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EXHIBIT J-4     BUILDING WAGE DETERMINATION
 
EXHIBIT J-5     HIGHWAY WAGE DETERMINATION
 



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AMENDED AND RESTATED SERVICES AGREEMENT
THIS AMENDED AND RESTATED SERVICES AGREEMENT (“Agreement”) is made and entered into this 20 th day of July, 2017 (“Execution Date”), by and among GEORGIA POWER COMPANY, a Georgia corporation (“GPC”), for itself and as agent for OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, MEAG POWER SPVJ, LLC, MEAG POWER SPVM, LLC, MEAG POWER SPVP, LLC, and THE CITY OF DALTON, GEORGIA, ACTING BY AND THROUGH ITS BOARD OF WATER, LIGHT AND SINKING FUND COMMISSIONERS, as “Owners,” and WESTINGHOUSE ELECTRIC COMPANY LLC, a Delaware limited liability company having a place of business in Cranberry Township, Pennsylvania (“Westinghouse”), and WECTEC GLOBAL PROJECT SERVICES INC., a Louisiana corporation having a place of business in Charlotte, North Carolina (“WECTEC”). Westinghouse and WECTEC will be referred to collectively as “Service Provider.” Owners and Service Provider may be referred to individually as “Party” and collectively as the “Parties.”
WITNESSETH:
WHEREAS, Service Provider and GPC, for itself and as agent for the Owners, are parties to that certain Engineering, Procurement, and Construction Agreement dated April 8, 2008, as amended (“EPC Agreement”) to, among other things, design, procure, construct, test, and start up two new AP1000 ® nuclear units, Units 3 and 4, at the Vogtle Electric Generating Plant in Waynesboro, Georgia (“Project”); and
WHEREAS, under the EPC Agreement, Service Provider acted as the prime contractor for engineering, procurement, and construction activities for the Project; and
WHEREAS, on March 29, 2017, Service Provider and certain of its affiliates and subsidiaries commenced cases (“Bankruptcy Cases”) under Chapter 11 of Title 11 of the United States Code before the United States Bankruptcy Court for the Southern District of New York (“Bankruptcy Court”); and
WHEREAS, Service Provider and the Owners entered into an Interim Assessment Agreement dated March 29, 2017 (as amended, the “Interim Agreement”); and
WHEREAS, following rejection of the EPC Agreement and termination of the Interim Agreement, Owners wish for Service Provider to provide certain technical support and construction support services in connection with the continued design, procurement, construction, testing, startup, and initial operation of the Project, and the Parties agree that Service Provider will do so only on a fully cost-reimbursable plus Fee basis, with its liability capped;
WHEREAS, the Parties entered into that certain Services Agreement, dated June 9, 2017 (the “Existing Services Agreement”);

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WHEREAS, this Agreement, on the terms and subject to the conditions set forth herein, shall amend and restate, in its entirety, the Existing Services Agreement.
NOW, THEREFORE, in consideration of the premises and the terms and conditions set forth herein, the Parties agree as follows:
ARTICLE 1.         DEFINITIONS
1.1      “Affiliates” means, with respect to any Party, any other Person that, as of the Effective Date or at any time thereafter, (a) owns or controls, directly or indirectly, the Party, (b) is owned or controlled by the Party, or (c) is under common ownership or control with the Party, where “own” means ownership of fifty percent (50%) or more of the equity interests or rights to distributions on account of equity of the Party and “control” means the power to direct the management or policies of the Party, whether through the ownership of voting securities, by contract, or otherwise.
1.2      “ASME” means the American Society of Mechanical Engineers.
1.3      “COL” means the combined licenses issued by the NRC pursuant to 10 C.F.R. Part 52 for Vogtle Units 3 and 4, respectively.
1.4      “Corrective Action Program” or “CAP” means measures established to assure that conditions adverse to quality, including, but not limited to, failures, malfunctions, deficiencies, deviations, defective material and equipment, and non-conformances are promptly identified and corrected. The measures shall assure that the cause of the condition is determined and corrective action taken to preclude repetition. The Corrective Action Program shall comply with, among other things, NEI 08-02, “Corrective Action Processes for New Nuclear Power Plants During Construction” and is part of the Quality Assurance Program as defined in Section 13.1.
1.5      “DCD” means the AP1000 ® Nuclear Power Plant Design Control Document, as certified and approved by the NRC in 10 C.F.R. Part 52 Appendix D.
1.6      “Deliverables” shall have the meaning set forth in Exhibit B (Deliverables).
1.7      “Design Bases” shall have the meaning ascribed to it in 10 C.F.R. § 50.2.
1.8      “Environmental Law” means the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. § 9601 et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. § 6901 et seq.; the Federal Water Pollution Control Act, 33 U.S.C. § 1251 et seq.; the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Toxic Substances Control Act, 15 U.S.C. §§ 2601 through 2629; the Oil Pollution Act, 33 U.S.C. § 2701 et seq.; the Emergency Planning and Community Right-to-Know Act, 42 U.S.C. § 11001 et seq.; the Safe Drinking Water Act, 42 U.S.C. §§ 300f through 300j; the Endangered Species Act, 16 U.S.C. §§ 1531- 1544 and all Laws (including implementing regulations) of any Government Authority having jurisdiction over the Project addressing the environment, human health, safety, natural resources,

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plant and animal species, cultural and archeological resources or the use or release into the environment of any Hazardous Materials.
1.9      “ERA” means the Energy Reorganization Act of 1974, as amended.
1.10      “Facility” means Vogtle Units 3 and 4 and the systems, structures and components that will be utilized by one or both Units.
1.11      “Facility IP” shall have the meaning set forth in Exhibit F (Facility IP License in the Event of a Triggering Event).
1.12      “Facility Purposes” has the meaning set forth in Section 14.4.
1.13      “Fee” has the meaning specified in Exhibit C (Rates and Invoicing).
1.14      “Financing Parties” means the lenders and financing institutions providing construction, interim and/or long-term financing for the Facility or any portion thereof, including any financing in the form of a synthetic lease or leveraged lease, and their assigns and a trustee or agent acting on behalf of the lenders or financing institutions. The U.S. Department of Energy, in its capacity as a guarantor of any indebtedness issued by any Owner, and any trustee or agent acting on behalf of the DOE, shall be deemed “Financing Parties.”
1.15      “Fitness for Duty” or “FFD” means the fitness-for-duty programs, developed pursuant to 10 C.F.R. Part 26, that provide reasonable assurance that nuclear facility personnel are trustworthy, will perform their tasks in a reliable manner, are not under the influence of any substance, legal or illegal, that may impair their ability to perform their duties, and are not mentally or physically impaired from any cause that can adversely affect their ability to safely and competently perform their duties.
1.16      “Government Authority” means a federal, state, county, city, local, municipal, foreign or other government or quasi-government authority or a department, agency, subdivision, court or other tribunal of any of the foregoing that has jurisdiction over Owners, Service Provider, the Facility or the activities that are the subject of this Agreement.
1.17      “Governmental Approval” means an authorization, consent, approval, clearance, license, ruling, permit, tariff, certification, exemption, filing, variance, order, judgment, no-action or no-objection certificate, certificate, decree, decision, declaration or publication of, notices to, confirmation or exemption from, or registration by or with a Government Authority relating to the Facility.
1.18      “Georgia PSC Certification Order” means the final, unappealable order issued by the Georgia Public Service Commission with respect to GPC’s application for certification of the recovery of the costs of the Units.
1.19      “Hazardous Materials” means each substance designated as a hazardous waste, hazardous substance, hazardous material, pollutant, contaminant or toxic substance under any

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Environmental Law and any petroleum or petroleum products, radon, radioactive materials or wastes, asbestos in any form, lead or lead-containing materials, urea formaldehyde foam insulation and polychlorinated biphenyls that have been released into the environment in concentrations or locations for which remedial action is required under any applicable Environmental Law.
1.20      “Intellectual Property” or “IP” shall have the meaning set forth in Exhibit G (IP License).
1.21      “ITAAC” means the NRC inspections, tests and analyses and their associated acceptance criteria which are approved and issued for the Facility pursuant to 10 C.F.R. § 52.97(b).
1.22      “Law” means (a) a constitution, statute, law, rule, regulation, code, treaty, ordinance, judgment, decree, writ, order, concession, grant, franchise, license, agreement, directive, guideline, policy, requirement, or any other governmental restriction or any similar form of decision of or determination by, or any binding interpretation or administration of any of the foregoing, by a Government Authority, whether now or hereafter in effect and (b) requirements or conditions on or with respect to the issuance, maintenance or renewal of a Governmental Approval or applications therefor, whether now or hereafter in effect, including, without limitation, the Licensing Basis, the Design Bases for the Facility and the COL.
1.23      “Licensed IP” shall have the meaning set forth in Exhibit G (IP License).
1.24      “Licensing Basis” means the ITAAC, COL, UFSAR (including, but not limited to, the plant-specific design-basis information defined in 10 C.F.R. § 50.2 documented therein) and other NRC rules, regulations, and requirements applicable to the Facility, including, but not limited to, the licensee’s written commitments for ensuring compliance with and operation within applicable NRC requirements and the Facility-specific design basis (including, but not limited to, all modifications and additions to such commitments that are docketed and in effect over the term of the COL). The Licensing Basis includes orders, license conditions, exemptions, and technical specifications.
1.25      “Loan Guaranty Agreements” means the respective Loan Guarantee Agreements between the U.S. Department of Energy, as Guarantor, and MEAG, OPC, and GPC, respecting the Project.
1.26      “NRC” means the United States Nuclear Regulatory Commission.
1.27      “Nuclear Safety Culture” means the core values and behaviors resulting from a collective commitment by leaders and individuals to emphasize safety over competing goals to ensure protection of people and the environment, as defined in the NRC’s Safety Culture Policy Statement, 76 Fed. Reg. 34773 (June 14, 2011).
1.28      OSHA ” means Occupational Safety and Health Administration.

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1.29      “OSHA of 1970” means Occupational Safety and Health Act of 1970, as amended .
1.30      “OSHA Log” means OSHA’s Form 300, Log of Work-Related Injuries and Illnesses, required to be maintained pursuant to 29 C.F.R. § 1904.
1.31      “OSHA Standards” means the OSHA and regulatory standards or state plan equivalent.
1.32      “Owner Persons Indemnified” shall have the meaning set forth in Article 16.
1.33      “Owners” means, collectively, GPC, OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), an electric membership corporation formed under the laws of the State of Georgia (“OPC”), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, a public body corporate and politic and an instrumentality of the State of Georgia, MEAG POWER SPVJ, LLC, MEAG POWER SPVM, LLC, MEAG POWER SPVP, LLC, each a Georgia limited liability company (“MEAG”), and THE CITY OF DALTON, GEORGIA, an incorporated municipality in the State of Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners.
1.34      “Owners’ Authorized Representative” means the Person who Owners designate in writing to act on behalf of Owners under this Agreement.
1.35      “Ownership Agreement” means Plant Alvin W. Vogtle Additional Units Ownership and Participation Agreement dated April 21, 2006, as amended.
1.36      “Person” means an individual, corporation, company, partnership, joint venture, association, limited liability company, trust, unincorporated organization, Government Authority or other entity.
1.37      “Prime Rate” means, as of a particular date, the prime rate of interest as published on that date in The Wall Street Journal , and generally defined therein as “the base rate on corporate loans posted by at least 75% of the nation’s 30 largest banks.”
1.38      “Project Controls” refers to those processes and work activities (e.g., scheduling, planning, cost control, coordination, etc.) performed in the course of construction management of the Project.
1.39      “Project Schedule” means the integrated Project Schedule for the Project.
1.40      “QA” means quality assurance.
1.41      “Recoverable Costs” means the following: cancelation costs for all subcontracts and purchase orders listed on Exhibit H (Subcontracts and Purchase Orders) and subcontracts and purchase orders approved by Owners and executed by Service Provider after the Effective Date, demobilization costs, and other direct out-of-pocket costs that are permitted to be recovered by Service Provider under this Agreement and that are actually incurred by the Service

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Provider. For the avoidance of doubt, the definition of “Recoverable Costs” does include employee severance costs actually incurred and that are consistent with the Westinghouse and WECTEC severance programs that were effective immediately prior to the Westinghouse bankruptcy. The definition of “Recoverable Costs” does not include liabilities or damages arising from or related to Service Provider’s terminating or releasing employees as a result of Owners’ suspension or termination of this Agreement or Owners’ reduction, suspension or termination of Services under Section 4.3(b) (Changes to the Scope of Services After the Transition Period.)
1.42      “Representatives” means officers , directors, employees, members, or other authorized agents.
1.43      “Safety Program” means the comprehensive safety program that governs all of Service Provider’s activities at the Site in connection with its performance of the Services.
1.44      “Services” means all services the Service Provider is obligated to perform pursuant to this Agreement.
1.45      “Site” means the premises (or portion thereof) owned or leased by Owners on which the Facility is or will be located, including, but not limited to, construction laydown areas. “Site” shall not include the portions of the Vogtle site dedicated solely to Vogtle Units 1 and 2, except to the extent such portions are needed for access, ingress, egress, or will otherwise be impacted by construction or operation of the Facility.
1.46      “SNC” means Southern Nuclear Operating Company, Inc.
1.47      “Third Party” means a Person other than Owners, Service Provider, SNC or any of their Affiliates or employees .
1.48      “UFSAR” means the Vogtle Units 3 and 4 Updated Final Safety Analysis Report, as amended and updated from time to time.
1.49      “Unit” or “Units” means the electric generating plants, utilizing the AP1000 ® standard design as certified by the NRC in Appendix D to 10 C.F.R. Part 52, that are to be constructed and operated as either Vogtle Unit 3 or Vogtle Unit 4.
ARTICLE 2.      INTERPRETATION
2.1      Titles, headings, and subheadings of the various articles and paragraphs of this Agreement are used for convenience only and shall not be deemed to be a part thereof or be taken into consideration in the interpretation or construction of this Agreement.
2.2      Words importing the singular only shall also include the plural and vice versa where the context requires. Words in the masculine gender shall be deemed to include the feminine gender and vice versa.

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2.3      Unless otherwise stated or the context otherwise requires, any reference to a document shall mean such document as amended, supplemented or otherwise modified and in effect from time to time.
2.4      Unless otherwise stated, any reference to a party shall include its successors and permitted assigns, and any reference to a Government Authority shall include an entity succeeding to its functions.
2.5      Wherever a provision is made in this Agreement for the giving of notice, consent, agreement or approval by a person, such notice, consent, agreement or approval shall be in writing, and the words “notify” and “agreement” shall be construed accordingly.
2.6      This Agreement and the documentation to be supplied hereunder shall be in the English language.
2.7      All monetary amounts contained in this Agreement refer to the currency of the United States unless otherwise specifically provided.
2.8      A reference contained herein to this Agreement or another agreement shall mean this Agreement or such other agreement, as they may be amended or supplemented, unless otherwise stated.
2.9      Words and abbreviations not otherwise defined in this Agreement which have well-known nuclear industry meanings in the United States are used in this Agreement in accordance with those recognized meanings.
2.10      Neither Service Provider nor Owners shall assert or claim a presumption disfavoring the other by virtue of the fact that this Agreement was drafted primarily by the other, and this Agreement shall be construed as if drafted jointly by Owners and Service Provider and no presumption or burden of proof will arise favoring or disfavoring a Party by virtue of the authorship of any of the provisions of this Agreement. Any rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be applied in the interpretation of this Agreement.
2.11      The word “hereby,” “herein,” “hereunder” or any other word of similar meaning refers to the entire document in which it is contained.
2.12      A reference to an Article includes all Sections and Subsections contained in such Article, and a reference to a Section or Subsection includes all subsections of such Section or Subsection including all exhibits referenced therein.
2.13      All exhibits referred to in, and attached to, this Agreement are hereby incorporated herein in full by this reference.

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ARTICLE 3.      TERM; CONDITIONS PRECEDENT
3.1      Effective Date; Term . Except as provided in Section 3.4, this Agreement shall become effective upon the satisfaction of the Conditions Precedent in Section 3.2 (such date being the “Effective Date”) and, unless earlier terminated in accordance with the provisions of this Agreement, shall remain in full force and effect for a term ending upon the completion of startup and testing and the commencement of sale of electricity of both Units.
3.2      Conditions Precedent . Except as provided in Section 3.4, this Agreement shall not be binding unless and until each of the following conditions are satisfied (“Conditions Precedent”):
(a)      Service Provider has rejected the EPC Agreement;
(b)      Service Provider has obtained approval to enter into this Agreement from its Debtor-in-Possession lender;
(c)      Service Provider has obtained an order from the Bankruptcy Court approving Service Provider’s rejection of the EPC Agreement and execution of this Agreement;
(d)      Owners have obtained approval of this Agreement by the Department of Energy in accordance with the terms of the Loan Guaranty Agreements; and
(e)      Service Provider has obtained approval for this Agreement from its Boards of Directors.
3.3      Efforts to Satisfy Conditions . Commencing on the Execution Date, Service Provider and Owners shall use reasonable efforts to cause the satisfaction of the Conditions Precedent.
3.4      Failure of Conditions Precedent . If for any reason the Conditions Precedent are not satisfied by sixty (60) days from the Execution Date, this Agreement shall be deemed null and void unless the time period is extended by mutual agreement of the Parties. At any time, if the Parties agree in writing that one of the Conditions Precedent cannot be satisfied, this Agreement shall be deemed null and void upon the date of the Parties’ written agreement.
3.5      Effect of Prior Project Agreements . As of the Effective Date, all ongoing work performed by Service Provider in connection with the Project, regardless of whether such work was previously governed by the EPC Agreement or the Interim Agreement, shall be exclusively governed by this Agreement. Nothing in this Agreement shall constitute an amendment to, modification of or novation of the EPC Agreement. This Agreement is an independent agreement between Service Provider and Owners. Nothing in this Agreement shall constitute a waiver of any Party’s claims or right to make a claim or any Party’s defenses under the EPC Agreement or otherwise.

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ARTICLE 4.      SCOPE OF WORK
4.1      Transfer of Control of Project . On the Effective Date, Service Provider shall transfer and Owners will assume control of the Site and project-level direction and control of the work required to complete the Facility, with ultimate decision-making and direction of all work residing in Owners subject to the terms of Article 13. For a period of ninety (90) days beginning on the Effective Date, Service Provider will provide engineering, procurement, and construction support services consistent with work currently being performed by Service Provider in connection with the Project, except as otherwise directed by Owners or agreed upon by the Parties (the “Transition Period”). During the Transition Period, Service Provider will support the transition of responsibilities to Owners or their designees, as directed, as efficiently and promptly as possible.
(a)      Access and Resource Commitment . Service Provider shall (i) make commercially reasonable efforts to maintain current staffing and resource levels, except as expressly authorized by Owners with respect to transferred responsibilities and the process described in Section 4.1(e) (Staffing and Resource Assessment); (ii) maintain Owners’ access to on-Site and off-Site facilities, construction equipment, temporary construction facilities and systems, and materials to support continuation of work on the Project and the transition of Project Controls to Owners; and (iii) to the extent required under Section 4.1(f), maintain and provide Owners access to Service Provider’s IT network (on-Site and off-Site) in order to support continuation of work on the Project and transition of Project Controls to Owners. Owners agree to comply with Service Provider’s applicable Westinghouse policies required for infrastructure access and end use any time Owners access Service Provider’s IT network, provided that Service Provider will provide a copy of such policies to Owners on a timetable that supports Owners’ access. Service Provider warrants that it will not apply such policies to Owners in a manner that will unreasonably inhibit Owners’ access to Service Provider’s IT network as contemplated under this Agreement, or cause Service Provider to fail to provide the access otherwise required under this Agreement. Service Provider shall not amend any such policies in a manner that will unreasonably inhibit Owners’ access to Service Provider’s IT network as contemplated under this Agreement or cause Service Provider to fail to provide the access otherwise required under this Agreement.
(b)      Transfer of Project Controls . Service Provider will support transition of the Project Schedule and Project Controls functions to Owners. The current integrated Project Schedule will be transferred in its native format (e.g., XER files). Following the transfer of the Project Schedule and Project Controls to Owners, Service Provider will provide ongoing Project Controls information to Owners to enable Owners to track the Project Schedule and costs.
(c)      Subcontracts . Service Provider shall assume and assign to Owners or their designee, and Owners or their designee shall assume, the contracts listed on Exhibit H, Part A; provided that Owners may elect, by giving written notice thereof to Service Provider within a reasonable time prior to the entry of an order authorizing the

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assumption and assignment of such contracts, not to accept any such contract, whereupon such contract will be removed from Exhibit H, Part A. Service Provider shall assume the contracts listed on Exhibit H, Part B as amended to include Owners as parties thereto, including the ability to exercise the rights and remedies thereunder and with a direct obligation to pay the counterparty for all liabilities thereunder; provided that Owners may elect, by giving written notice thereof to Service Provider within a reasonable time prior to the entry of an order authorizing the assumption of such contracts, not to have the Service Provider assume any such contract, whereupon such contract will be removed from Exhibit H, Part B. Owners shall be responsible for any amount required to be paid in order to assume such contracts. Owners agree to take such actions as may be required to obtain Bankruptcy Court approval of such assumptions. The terms “subcontracts” and “contracts,” as used within this Section 4.1(c), include and refer to subcontracts and purchase orders as listed on Exhibit H.
(d)      Refinement of Services, Deliverables, and Schedule . During the Transition Period, Owners and Service Provider will further define (i) the Services that Service Provider will perform, (ii) division of responsibilities, (iii) the Deliverables; and (iv) the schedule for completion of Services and delivery of Deliverables to support the updated Project Schedule that will be developed by Owners with Service Provider’s input. The Services and Deliverables defined in accordance with this Section 4.1 will be consistent with the high-level descriptions of Services and Deliverables set forth in Exhibit A (Services and Division of Responsibility) and Exhibit B (Deliverables) and any other applicable requirements in this Agreement.
(e)      Staffing and Resource Assessment .
(i)
Service Provider will support Owners’ identification of on-Site and off-Site personnel, facilities, equipment, and infrastructure needed to support completion of the Project.
(ii)
Throughout the term of this Agreement, Owners may, at Owners’ election, subject to applicable laws, rules and regulations, remove personnel from the Site for cause, and with reasonable notice where practicable. Owners may request relocation of Service Provider’s personnel to the Site, subject to Service Provider’s and the employee’s consent. In the case of relocation, Owners shall be responsible for reasonable relocation expenses (not to include any markup or additional fee).
(iii)
Service Provider and Owners will work together to adjust current staffing to levels necessary to perform the Services under this Agreement. Owners shall not be responsible for employee severance or other employee separation costs, liabilities, or damages that result in any way from the staff reductions made during the Transition Period.

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(iv)
Certain of Service Provider’s personnel will work at the direction and control of Owners’ personnel (such Services referred to herein as the “Secondment Services”). The Secondment Services will be governed by the terms and conditions of a Staff Augmentation Agreement between Service Provider and Owners, a form of which is attached hereto as Exhibit D (Form of Staff Augmentation Agreement).
(v)
Owners will have the right to offer employment to, hire, or offer another contractual arrangement to Service Provider’s employees and contract staff on-Site (subject to prior employment-related agreements between Service Provider and such personnel). Owners will have the right to offer employment to, hire, or offer another contractual arrangement to Service Provider’s employees and contract staff not working on-Site (subject to prior employment-related agreements between Service Provider and such personnel) only with the consent of Service Provider, which shall not be unreasonably withheld.
(vi)
The terms of this Section 4.1(e) shall be effective during and after the Transition Period.
(f)      Access to Project Management/Project Controls Information . Service Provider will make available and deliver as necessary to Owners in electronic format (where possible) data, documentation, and applications (including input files) necessary to support transition of the project management and the discrete scopes of work to be transferred to Owners. The information and data available to Owners will be that data and information required for Owners to (1) evaluate the status of the Project and work necessary for completion of the Project, (2) assume responsibility for scope previously performed by Service Provider (including historical information), and (3) perform project management functions. For the software applications required to fulfill items (1), (2), and (3) above, subject to applicable license restrictions, Service Provider will provide input files and data upon request and will work with Owners to evaluate which applications will be maintained by Owners for the balance of the Project and which will be maintained by Service Provider on Owners’ behalf (and with full Owners access). Except where unavailable, Service Provider will provide all information and data in the existing file format(s) used by the Service Provider where such format(s) is required to enable Owners’ use as contemplated herein. If such file format(s) is unavailable, Service Provider will work with Owners to provide information and data in a format that enables Owners’ use as contemplated herein. At Owners’ election and expense, this information and any other documentation/records agreed upon by the Parties will be transferred to a single Site document management system maintained by Service Provider or to Owners’ document management systems (e.g., CIMS, Documentum). The terms of this Section

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4.1(f) shall continue after the Transition Period as necessary for Owners to complete the Project.
(g)      Transfer of Program Responsibility . Service Provider will support the transition of control of the Site and the primary responsibility for the following Site-based programs to Owners: access; security; Fitness For Duty; Employee Concerns Program; communications; project accounting and finance; and such other safety, regulatory, or administrative programs as mutually agreed by the Parties. Service Provider will support transition to a single PI & CAP for the Site, which transition will include the development by the Parties of an interface protocol between Service Provider’s existing PI & CAP and Owners’ existing PI & CAP. The interface protocol will control, at a minimum, the provision of PI & CAP related documentation from Service Provider to Owners, the treatment of any existing open issues within Service Provider’s PI & CAP respecting activities which are not Services under this Agreement but nonetheless relate to the Site, and the systems and infrastructure which will be used for the single PI & CAP. Work performed by Service Provider under this section 4.1(g) is reimbursable.
(h)      Transfer of Regulatory Permits . During the Transition Period, the Parties will identify the permits held by Service Provider that Owners require to complete the Project, and Service Provider will facilitate the transfer of those regulatory permits to Owners’ or Owners’ designee that are required to complete the Project.
(i)      Insurance . Service Provider will provide a list of existing insurance policies related to the Project, facilities, and equipment within thirty (30) days of the Effective Date and maintain such policies until at least sixty (60) days after the Effective Date. Service Provider will support Owners’ efforts to obtain insurance coverage formerly held by Service Provider. Prior to cancellation of any existing insurance policies, Service Provider will provide prompt notice to Owners and at least within ten (10) days of knowledge that cancellation will occur.
(j)      Service Provider will support other transition efforts reasonably requested by Owners, including but not limited to regulatory compliance (including but not limited to Georgia Public Service Commission and Securities Exchange Commission reporting or approval requirements), and coordination and cooperation with subcontractors, vendors, suppliers, and consultants.
(k)      Service Provider may sell and Owners may purchase certain Service Provider facilities and/or construction equipment at the prices established by an independent valuation company mutually agreed upon by the Parties. Commencing on the Effective Date, Owners will lease certain construction equipment consistent with the terms of Exhibit C (Rates and Invoicing), subject to Owners’ election to stop using such equipment at any time during the term of this Agreement.

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4.2      Scope of Services . Service Provider will provide mutually agreed engineering, procurement, and construction support services, the categories of which are set forth in Exhibit A (Services and Division of Responsibility), as refined during the Transition Period, or otherwise agreed upon by the Parties.
4.3      Changes to the Scope of Services after the Transition Period .
(a)      Owners may desire additions to the scope of Services. Service Provider agrees to consider, in accordance with this Agreement, additions to the scope of Services which are related to the Services for the Project and which do not materially affect the nature of the Services or resource requirements of Service Provider.
(b)      Owners, in their sole discretion, shall have the right to reduce or terminate certain Services or portions thereof at any time for their convenience by providing written notice to Service Provider at least fifteen (15) days in advance of the date of termination or other minimally necessary time period required to comply with the WARN Act, as measured from the date of written notice of termination, with respect to employees who are not performing Secondment Services. Following such notice period, Service Provider shall require its employees and subcontractors to cease work thereon, except to the extent otherwise required by the notice itself or by industry safety practices or applicable law, rules or regulations. Owners shall be obligated to pay amounts due, in accordance with Exhibit C (Rates and Invoicing) herein, for Services performed prior to Owners’ reduction notice and for any Recoverable Costs associated with such reduction or termination.
(c)      Service Provider will not perform Services that it reasonably determines to be new or different or beyond those set forth herein and in Exhibit A (Services and Division of Responsibility) without prior written authorization from Owners’ Authorized Representative. To establish authorization for extra compensation for changes in the scope of Services, Service Provider will submit to Owners, in advance of performing the new or different Services, a proposal for the new or different Services, and will submit therewith such cost and schedule information as reasonably required for Owners to evaluate the proposal. Before beginning the new or different Services, Service Provider must secure written authorization from Owners. Service Provider agrees that it will not knowingly make any Claim for payment for new or different Services that Service Provider knew were not authorized in writing by Owners in advance of commencement of the performance of such Services.
4.4      Schedule . Service Provider shall endeavor to perform Services under this Agreement in a timely manner in order to support the Project Schedule. However, as provided for in this Agreement, Owners have the responsibility for the Project Schedule, and Service Provider shall have no liability for Project delays, costs, claims, damages, or losses arising from delays to the Project Schedule. Upon becoming aware that any Services are expected to be completed more than thirty (30) days after the projected date set forth in the Project Schedule, Service Provider will notify Owners in writing of their Service affected and the cause. Service

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Provider agrees to make reasonable efforts to comply with Owners’ requests to accelerate or recover the Project Schedule.
4.5      Qualification of Service Provider Personnel . Service Provider shall be properly licensed to perform that portion of the Services which require a professional license by law (e.g., engineering design work that must be performed by a licensed professional engineer) and shall be authorized and qualified to do business in all governmental jurisdictions in which the Services are to be performed and will maintain such licenses and qualifications as long as reasonably required to perform the Services. Upon reasonable advance written request of Owners, Service Provider shall furnish to Owners such evidence as Owners may reasonably require relating to Service Provider’s qualifications. The Parties agree that (1) Service Provider is not to be considered the constructor of the Project or otherwise responsible for the supervision of the construction of the Project, (2) that Service Provider may not be licensed as a contractor under the laws of the State of Georgia, (3) the Services being rendered under this Agreement do not constitute construction services under Georgia law, (4) the Services do not require a contractor’s license under Georgia law, and (5) Owners are not relying on Service Provider for any contractor license.
4.6      Subcontractors . The Services to be performed by Service Provider hereunder shall not be subcontracted nor shall Service Provider procure consultants or other outside services and facilities without the prior written approval of Owners, which Owners may withhold or provide in their discretion. Notwithstanding the foregoing, Service Provider may subcontract its Services in whole or in part to an Affiliate of Service Provider without the prior approval of Owners; provided, however, with the exception of Mangiarotti, WesDyne, and Nuclear Parts Organization (“NPO”), any Services performed by an Affiliate of Service Provider shall be subject to the same pricing terms contained in Exhibit C (Rates and Invoicing) as if Service Provider had performed such Services directly. Owners will incur no duplication of costs or multiple markups as a result of any subcontract. With regard to Mangiarotti, WesDyne, and NPO, such Affiliates will be treated as third party subcontractors, and Owners shall have review and approval rights with regard to these subcontracts.
4.7      Payment to Subcontractors and Vendors; No Liens . Service Provider shall be solely responsible for paying the subcontractors and vendors it engages on the Project. Service Provider shall obtain interim and final lien waivers in the forms provided by Owners from subcontractors and vendors. Service Provider shall provide Owners with copies of the lien waivers upon request. Service Provider shall notify Owners within five (5) days of receipt of knowledge of any liens filed against, or threatened to be filed against, the Facility, Site and/or equipment.
4.8      Support for Governmental Hearings . Service Provider understands and acknowledges that as a result of its performance of this Agreement and the special knowledge it possesses, and in order to defend and explain the decisions, procedures and standards applicable to its furnishing or performing the Services, Service Provider may be called upon to appear at governmental and other hearings. At Owners’ expense, including but not limited to the cost of Service Providers’ reasonable legal fees, Service Provider agrees that it will appear in such

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hearings when requested by GPC or Owners. At Owners’ expense, Service Provider will also assist GPC or Owners in the preparation of testimony, reports, or other documents required in any non-adverse lawsuits or governmental or other hearings when called upon to do so by GPC or Owners as part of the Services.
ARTICLE 5.      OWNERS’ RESPONSIBILITIES AND RIGHTS; OVERSIGHT OF SERVICES
5.1      Independent Contractor . In its performance under this Agreement, Service Provider is and will at all times act as an independent contractor. Subject to the requirements of this Agreement and Owners’ ultimate direction of the work required to complete the Facility, Service Provider will be free to perform the obligations of this Agreement by such methods and in such manner as Service Provider may choose, furnishing necessary labor, tools, equipment and materials, and taking the requisite steps to perform the Services appropriately and safely, having supervision over and responsibility for the safety and health of its Representatives while on Owners’ premises. Service Provider shall maintain control over and responsibility for its offsite tools, equipment and materials. No partnership, joint venture, agency or employment relationship is created by this Agreement, and Service Provider is not and will not act as an agent or employee of Owners except as required and designated by Owners for procurement. Service Provider’s Representatives have no right to participate in any of Owners’ employee benefit plans, including but not limited to the provision of health insurance under the Patient Protection and Affordable Care Act of 2010 (“ACA”), as a result of providing the Services. Service Provider shall be solely responsible for (i) payment of all compensation to its employees, (ii) the withholding of federal, state, and local taxes from such compensation and the payment of all such withheld amounts to the appropriate agencies or authorities, (iii) payment to the appropriate agencies or authorities of state unemployment insurance, federal unemployment insurance, FICA and state disability insurance, (iv) paying workers’ compensation insurance, and (v) providing the workers with all necessary and appropriate benefits including, without limitation, any health and welfare coverage required under applicable law, including, without limitation, the Health Insurance Portability and Accountability Act of 1996, as amended or revised (“HIPAA”) or the ACA or other applicable federal and state health care requirements.
5.2      Appointment of Agents . Owners have appointed GPC as their agent for all purposes under this Agreement pursuant to the Ownership Agreement, with the power and authority to bind Owners to their obligations herein. All obligations required under this Agreement to be fulfilled by the Owners will be performed by or at the direction of GPC, as agent for the Owners. Copies of the Ownership Agreement have been provided to and received by Service Provider. Owners will not materially change (in terms of the effect of any change on the agent’s authority with respect to this Agreement) the agency authority granted to GPC (or a successor agent) under the Ownership Agreement without Service Provider’s prior written approval not to be unreasonably withheld. GPC, acting for itself and as agent for the other Owners, has appointed SNC as agent for the implementation and administration of this Agreement. SNC is the exclusive licensed operator of Vogtle Units 1 and 2 and is the licensed operator of the Facility having exclusive control over licensed activities at the Facility.

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5.3      Owners’ Authorized Representative(s) . Owners shall appoint Owners’ Authorized Representative(s) (and shall have the right to appoint a successor or replacement Owners’ Authorized Representative(s)) with whom Service Provider may consult at all reasonable times and whose written instructions, requests and decisions shall be binding upon Owners as to all matters pertaining to this Agreement. Service Provider shall have the right to rely upon a communication from Owners’ Authorized Representative(s) as a communication on behalf of all of the Owners and shall not rely upon any instruction or direction issued by any other representatives of Owners other than Owners’ Inspector as provided in Section 5.4.
5.4      Owners’ Inspector . Owners reserve the right, but shall not be obligated, to appoint inspectors to follow the progress of the Services provided by subcontractors to the Service Provider (each, an “Owners’ Inspector”). Owners’ Inspectors shall be granted access to the Services being performed at vendor facilities as allowed in the respective subcontract or as required by law, and being performed at Service Provider facilities (not the Site) as reasonably requested and agreed to by Service Provider. Such access shall not be conditioned on Owners or Owners’ Inspector waiving the right to reasonably safe access and accommodations. Owners may, but are not obligated to, authorize an Owners’ Inspector to stop work, provide direction to Service Provider, or take other actions which are the right or responsibility of Owners under this Agreement. Owners will notify Service Provider in writing of the appointment of any Owners’ Inspector and the scope of the Owners’ Inspector’s authorization to bind Owners. All expenses incurred by Service Provider in connection with complying with the directives of Owners’ Inspector pursuant to this Section 5.4 shall constitute actual costs. Service Provider will in no event be considered in breach of any other provision of this Agreement due to its compliance with the directions of Owners’ Inspector unless such directions are known to the Service Provider to be outside the scope of the Owners’ Inspector’s ability to bind Owners.
5.5      Project Metrics . Service Provider will provide information reasonably requested by Owners to enable Owners to evaluate applicable and relevant schedule and cost information for the Project. Whether or not a request has been made by Owners, Service Provider will promptly notify Owners of any event or circumstance of which Service Provider becomes aware which has a material adverse effect on the performance, cost or schedule of completion of the Services. Such project metric documentation and services include, but are not limited to, the following:
(a)      Monthly Status Reports . On or before the tenth (10th) day of each month, Service Provider shall submit monthly Project reports in a form including such information as reasonably requested by Owners.
(b)      Project Controls Information. Service Provider will provide all schedule and cost information in its possession and reasonably requested by Owners to enable Owners to track Project cost and schedule information.
(c)      Schedule and Budgeting Plans . Thirty (30) days prior to the beginning of a calendar quarter, Service Provider will provide good faith estimated schedule information and cost-breakdowns, including supporting information as reasonably requested by Owners, for Services expected to be performed during the immediately

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forthcoming quarter. Such estimates shall be broken down into specific categories of Services as reasonably directed by Owners. Within fifteen (15) days of receipt of Service Provider’s estimate, Owners may, with respect to Services in the immediately forthcoming quarter: (i) issue a hold on some or all Services (provided that Owners continue to pay Service Provider for all resources dedicated to the Project and affected by the hold period); or (ii) establish a budget cap applicable to the Services or a portion of the Services. Service Provider agrees that it will take commercially reasonable actions to avoid expending or incurring more than any Owner-issued budget cap, except with Owners’ prior written approval.
5.6      Owners’ Access and Oversight Rights .
(a)      In accordance with facility protocol and during reasonable times, Owners will have the right to have its personnel or other representatives (including Third Parties) oversee the performance of the Services in order to determine that the Services comply with the requirements of this Agreement and also to determine that the Services will be performed at a rate that is consistent with or as provided in the Project Schedule. Owners’ oversight shall not be deemed to: (i) be supervision by Owners of Service Provider; or (ii) relieve Service Provider of any responsibility for performing the Services in accordance with this Agreement. Owners may report to Service Provider any unsafe or improper conditions or practices observed at the job site for action by Service Provider in correction or enforcement.
(b)      Upon receipt of reasonable notice, Owners shall have reasonable access to applicable parts of Service Provider’s and/or its subcontractors’ facilities engaged in performance of the Services, wherever located, at reasonable times and subject to the reasonable requirements of Service Provider or its subcontractors, and as necessary to enable Owners to monitor the performance of Services.
5.7      Owners’ Approval Rights . Service Provider shall obtain Owners’ written approval (which may be provided by Owners’ Authorized Representative), which Owners may withhold or provide in their sole discretion, prior to taking any of the following actions:
(a)      any change in the design of the Facility, based on an approval process to be defined by the Owner s , with support of the Service Provider, to ensure effective control of design and execution of the work. Such process shall include definition of how approval shall be documented and recorded, as well as appropriate thresholds for approval requirements;
(b)      any change in the means of performing the Services that will require a change to the Licensing Basis (regardless of whether such licensing change requires NRC approval); or
(c)      modifying the means, methods, or schedule for Services such that Service Provider knows that the cost to Owners for the Services will materially increase.

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5.8      Right to Stop Work . Owners reserve the right to stop performance of any portion of the Services for any or no reason by providing Service Provider with a written stop work order from Owners’ Authorized Representative, provided that Owners continue to pay Service Provider for the resources to the extent allocated to the Project and directly affected by the stop work order, and the payment amount shall be commensurate with the percentage of allocation.
5.9      Removal of Personnel . Subject to applicable laws, rules and regulations, Owners, for reasonable cause, have the right to require Service Provider to remove any employee, subcontractor, or subcontractor employee from the Site or from performing Services hereunder. Owners shall provide Service Provider the basis for the removal.
5.10      Not Exclusive Dealings Agreement . This Agreement is not intended to be and shall not be construed to be an exclusive dealings agreement between Owners and Service Provider. Owners shall at all times, in their sole discretion, be free to self-perform any Services or have such Services performed by another party subject to and consistent with the IP licensing agreements in Exhibits F (Facility IP License in the Event of a Triggering Event) and G (IP License), provided that any associated reduction in Services will be only as provided in Section 4.3(b).
5.11      Safeguards Information; Security Related Information .
(a)      To the extent not previously provided, Owners shall review and approve all Service Provider Safeguards Information (“SGI”) and Security Related Information (“SRI”) control and access procedures for the Project and revisions and training requirements that could impact performance of Owners’ SGI activities prior to issuance or implementation. Service Provider shall perform a 100% Owners’ SGI inventory/accountability check annually. Notification shall be given to Owners prior to start of the inventory/accountability checks, and results from those checks shall be formally reported to Owners.
(b)      Service Provider will maintain all SGI and SRI contained in Facility-related documentation and materials retained by Service Provider in accordance with applicable NRC regulatory requirements.
ARTICLE 6.      IP DELIVERABLES
6.1      Service Provider IP Deliverables . Throughout the term of this Agreement and as Services are performed, Service Provider will deliver certain Licensed IP in the form of documentation, drawings, Confidential and Proprietary Information, intellectual property, software, applications, databases, procedures, and manuals. The categories of IP Deliverables are set forth in detail in Exhibit B (Deliverables), which identifies the IP and other deliverables to be provided by Service Provider under this Agreement. Service Provider will deliver such Licensed IP to Owners electronically to enable Owners’ use of the IP Deliverables for Facility Purposes as set forth in this Agreement and in the IP License attached hereto as Exhibit G (IP License). Where available, Service Provider will deliver the “quality assurance record” (as that

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term is defined in 10 CFR Part 50, Appendix B, XVII) of the Licensed IP, which is in .pdf format. When requested by Owners, Service Provider will also deliver the Licensed IP in .doc or .dwg format. Owners acknowledge that any Licensed IP delivered by Service Provider in .doc or .dwg format may contain errors and omissions, and are therefore being provided “as is, where is,” without warranty or any assurance of accuracy.
Nothing in this Section 6.1 shall restrict Owners’ right to receive or take possession of Facility IP pursuant to Exhibit F (Facility IP License in the Event of a Triggering Event). Except where provided in Exhibit F (Facility IP License in the Event of a Triggering Event), in no event will Service Provider be required to deliver to Owners the following categories of Licensed IP: (i) detailed design calculations and methodologies used to create Licensed IP; (ii) computer code input files and source codes; (iii) manufacturing technology and associated information; (iv) nuclear fuel design information; (v) safety analysis methodologies; and (vi) third party information which Service Provider does not have the contractual right to provide.
6.2      Maintenance of Facility IP . Except to the extent expressly precluded by law or court order, and then only to the narrowest extent required by such law or court order, Service Provider will maintain Facility IP, including any Facility IP newly developed during the term of this Agreement, in a form that enables Service Provider to perform the Services and preserves Owners’ right under Exhibits F (Facility IP License in the Event of a Triggering Event) and G (IP License).
6.3      Access to Facility IP . Regardless of whether certain Facility IP is deliverable under this Agreement, Westinghouse will provide Owners electronic access (except where electronic versions are unavailable or impractical for the required purpose) at the Site to the Facility IP, including but not limited to design calculations and all documents referenced or cited in the DCD and required to be incorporated into or referenced in the COL, as needed (i) to meet all applicable regulatory requirements and (ii) to exercise Owners’ oversight role (including participation in the design change process) (“Accessible IP”). The NRC will have the same access as Owners with respect to item (i) herein. Where Service Provider maintains electronic versions of Accessible IP, Service Provider will provide Owners’ personnel with access to read-only versions of such Accessible IP from workstations supplied by Service Provider for use on-Site and at Owners’ off-Site corporate offices. Owners’ access to Accessible IP will be available at any time, without the need for prior notice or authorization, with full implementation of this requirement to occur as soon as reasonably possible after the Effective Date. Owners will not copy or otherwise reproduce any Accessible IP. For Accessible IP that does not exist in electronic form, Service Provider will provide hard copies at the Site promptly upon Owners’ request.
6.4      Facility IP Licenses .  Owners’ rights with respect to Facility IP shall be governed by the provisions of Exhibits G (IP License) and F (Facility IP License in the Event of a Triggering Event), which shall be executed in parallel to this Agreement and the terms of which are incorporated herein by reference. The sale or license of any Facility IP by Service Provider or its Affiliates shall not be free and clear of, or otherwise adversely effect, any license of Facility IP granted to Owners under the Agreement and Exhibits F (Facility IP License in the Event of a

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Triggering Event) and G (IP License), pursuant to Section 363 of the Bankruptcy Code or other applicable law.
ARTICLE 7.      CONTRACT RATES
The rates charged to Owners for the Services are set out in Exhibit C (Rates and Invoicing).
ARTICLE 8.      INVOICES AND PAYMENTS
8.1      The requirements and processes applicable to invoices under this Agreement are set out in Exhibit C (Rates and Invoicing).
8.2      Respective Payment Responsibility . Owners shall be severally, not jointly, liable for the payments due hereunder; provided, however, that GPC shall act on behalf of all Owners for purposes of the receipt of invoices and aggregating the payments received from the Owners prior to making payment in accordance with the provisions of this Agreement. Each individual Owner is responsible for that percentage of payments due hereunder that is equivalent to such individual Owner’s respective ownership interest percentage in the Project at the time such payment obligation accrues. In the event that an Owner does not pay in full the amount that is due from such Owner, and another Owner does not make such payment on behalf of such non-paying Owner, GPC shall notify Service Provider no later than the due date for the payment of the identity of the Owner(s) that did not pay in full and the amount of such shortfall in payment from such Owner(s).
ARTICLE 9.      RECORDS; AUDIT
9.1      Subject to Service Provider’s established records retention policy, Service Provider shall maintain and shall cause its subcontractors and vendors to maintain all technical documentation and other work product relative to the Services performed or provided under this Agreement throughout the term of this Agreement or for a longer period as required by applicable laws.   If termination of this Agreement occurs prior to completion of the second Unit, Service Provider shall arrange for transfer of the lifetime quality records existing as of the date of the termination identified as Deliverables in Exhibit B (Deliverables) which Owners are required by NRC regulations or other applicable Law to retain as the NRC licensee for the Facility. The Service Provider may act as an authorized agent for retaining lifetime quality records in accordance with NQA-1-1994 as directed by Owners.
9.2      Except to the extent applicable laws require a longer retention, Service Provider shall maintain and shall cause its subcontractors and vendors performing services to maintain complete accounting records relating to the Services performed or provided and reimbursements from Owners due under this Agreement for a period of three (3) years after termination or completion of the Services, or such longer period as required by Law.  Service Provider shall retain accounting records in accordance with generally accepted accounting principles in the United States, as set forth in pronouncements of the Financial Accounting Standards Board (and its predecessors) and the American Institute of Certified Public Accountants.

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9.3      In addition to the obligations in Sections 9.1 and 9.2, Service Provider shall maintain its records in compliance with the applicable provisions of 10 C.F.R. § 50.71 and other applicable laws until such time as Service Provider delivers such records to Owners in accordance with this Agreement.  At Owners’ request, Service Provider shall allow Owners to audit and inspect its records related to the Services performed or provided under this Agreement in order for Owners to assess, verify, or demonstrate compliance with 10 C.F.R. § 50.71 and other applicable federal regulations.
9.4      At Owners’ expense, Owners’ third-party independent auditor will have the right not more than twice in a twelve month period to examine on Service Provider’s premises all reasonable information required by Owners to substantiate proper invoicing. Such audit will provide Owners with a reasonable opportunity to verify that all costs and charges have been properly invoiced in accordance with the terms of this Agreement.  In no event shall Owners have a right to demand an audit more than six months following the period to be audited. If an audit by the auditor reveals charges to or paid by Owners as charges or fees which are incorrectly charged, then Owners shall be entitled upon demand to a refund from Service Provider of such charges plus interest since the date of payment of the over-charges at a rate equal to the Prime Rate plus one percent (1%).  The limitation of liability in Section 17.2 shall not impair Owners’ entitlement to a refund under this Section 9.4. Notwithstanding anything in this Section 9.4 to the contrary, Owners shall not be restricted from any audit rights that they are required to have in order to comply with applicable laws, including without limitation the requirements of the NRC.
9.5      Service Provider shall provide, and shall use commercially reasonable efforts to require its subcontractors and vendors to provide, reasonable assistance to Owners in responding to requests and inspections by any Government Authority for information in connection with the Services.
ARTICLE 10.      DEFECTIVE SERVICES AND EQUIPMENT WARRANTY
10.1      Professional Services . The Services under this Agreement which require a professional license under applicable law (e.g., engineering design work that must be performed by a licensed Professional Engineer) shall be performed (i) in a professional, prudent and workmanlike manner by qualified persons using competent, professional knowledge and judgment at the degree of skill and care customary to the nuclear power industry, and (ii) in accordance with Law, regulations, Licensing Basis, this Agreement, industry codes and standards. Subject to all limitations of Service Provider’s liability in this Agreement, in the event that any Services which are subject to this Section 10.1, and which are not Secondment Services, result in work product that is determined to be defective, such work shall be re-performed by Service Provider at Service Provider’s expense. Service Provider’s total liability for any claims under this section shall be limited to the insurance proceeds recoverable from a mutually agreeable professional liability insurance policy covering Service Provider and the Services.
10.2      Non-Professional Services . Other labor Services provided under this Agreement which do not require a professional license under applicable law will be performed by qualified

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personnel. For any such Services that are not Secondment Services that result in work product that is determined to be defective, Service Provider shall, at no cost to Owners, re-perform the Services.
10.3      Under this Agreement, work product shall only be deemed “defective” if it (i) contains clear and material errors in calculations, dimensions, configurations, specifications, or quantifications which cannot be dispositioned use-as-is; (ii) was created in a manner known to be contrary to written NRC regulations; or (iii) was created in a manner known to be contrary to the Licensing Basis. No work product shall be deemed defective if it is performed in accordance with the standard of care set forth in Section 10.1 or is a result of exercise of reasonable professional judgment. Re-performance of the Services shall be Owners’ exclusive remedy and Service Provider shall not be responsible for any project costs or delays resulting therefrom.
10.4      Service Provider agrees that, in the event of a dispute with Owners regarding whether a failure to comply with the above requirements and obligations in Sections 10.1 or 10.2 occurred, Service Provider will continue with the Services and take all action necessary to correct, perform, or re-perform the Services in accordance with Owners’ instructions to the extent allowed by law and reasonable professional judgment. Work performed under this section shall be invoiced and paid for in accordance with Exhibit C (Rates and Invoicing). No actions taken to remedy an alleged deficiency under this Section 10.4 shall prejudice Service Provider’s right to assert a Claim.
10.5      Equipment Warranty .
(a)      Third-Party Equipment . For any Facility equipment furnished through Service Provider, Service Provider shall (i) designate Owners as an express third-party beneficiary of such warranties, (ii) provide copies of all warranties and applicable contracts to Owners, and (iii) ensure that all available warranties are assigned to and operate for the benefit of Owners.
(b)      Service-Provider Equipment . For any Facility equipment manufactured by Service Provider or its Affiliates and delivered after the Effective Date, Service Provider agrees to provide a commercially reasonable equipment warranty as is customary in the nuclear industry, subject to prior agreement by Owners to the terms of such warranty, which will be set forth in the procurement documents applicable to such equipment. This warranty shall be subject to the limitations of liability in Sections 17.1(a) and 17.2.
ARTICLE 11.      REPRESENTATIONS AND WARRANTIES
11.1      Representations, Warranties and Covenants of Service Provider . Service Provider represents and warrants to Owners as follows:
(a)      Organization and Power . Each entity constituting Service Provider is a corporation, limited liability company, or partnership duly organized, validly existing and in good standing under the laws of the state of its formation. Each Service Provider

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entity is duly qualified as a foreign entity authorized to do business and is in good standing in every jurisdiction that such qualification is required, except where the failure to be so qualified would not have a material adverse effect on such entity.
(b)      Authority; Binding Effect . As of the Effective Date, Service Provider has all requisite power and authority to execute and deliver this Agreement and all related documents, as applicable, and to provide the Services. As of the Effective Date, all necessary action by the board of directors and stockholders of WECTEC and the manager and/or the members of Westinghouse required to have been taken by or on behalf of each by applicable law, their respective formation documents or otherwise, have been taken to authorize (1) the execution and delivery on their behalf of this Agreement, and (2) the performance of their respective obligations hereunder. This Agreement will constitute as of the Effective Date the valid and binding agreement of Service Provider, enforceable against Service Provider in accordance with its terms, except (1) as the same may be limited by applicable bankruptcy, insolvency, moratorium or similar laws of general application relating to or affecting creditors’ rights, including, without limitation, the effect of statutory or other laws regarding fraudulent conveyances and preferential transfers, and (2) for the limitations imposed by general principles of equity.
(c)      No Conflict, Approvals . The execution and delivery of this Agreement does not and will not, and the performance of the Services will not: (1) violate or conflict with the charter documents of either of WECTEC or Westinghouse, (2) to the best of Service Provider’s knowledge, conflict with or result in a violation of any permit, concession, franchise or license or any law, rule or regulation applicable to Service Provider or any of its properties or assets, except, in the case of clause (2), for any such breaches, conflicts or violations that would not reasonably be expected to have a material adverse effect on Service Provider and would not impair the ability of Service Provider to perform its obligations under this Agreement.
11.2      Representations and Warranties of Owners . Owners represent and warrant to Service Provider as follows:
(a) Organization and Power . Each Owner is a corporation duly organized, validly existing and in good standing under the laws of the state of its formation. Each Owner is duly qualified as a foreign entity authorized to do business and is in good standing in every jurisdiction that such qualification is required, except where the failure to be so qualified would not have a material adverse effect on such entity.
(b) Authority; Binding Effect . GPC has all requisite power and authority to execute and deliver this Agreement and all related documents, as applicable. All necessary action by the board of directors, stockholders, and/or manager of each Owner required to have been taken by or on behalf of such Owner by applicable law, its formation documents or otherwise, have been taken to authorize (1) the execution and delivery of this Agreement on its behalf and on behalf of such Owner, and (2) the performance of its obligations hereunder. This Agreement constitutes or will constitute

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when delivered to Service Provider, as applicable, the valid and binding agreement of Owners, enforceable against each Owner in accordance with its terms, except (1) as the same may be limited by applicable bankruptcy, insolvency, moratorium or similar laws of general application relating to or affecting creditors’ rights, including, without limitation, the effect of statutory or other laws regarding fraudulent conveyances and preferential transfers, and (2) for the limitations imposed by general principles of equity.
(c) No Conflict, Approvals . The execution and delivery of this Agreement does not and will not, and the performance of its obligations hereunder will not, (1) violate or conflict with the charter documents of Owners, or (2) subject to the consents specified in Section 3.2, constitute a breach or default (or an event that with notice or lapse of time or both would become a breach or default) or give rise to any lien, third party right of termination, cancellation, material modification or acceleration, or loss of any benefit, under any contract to which Owners is a party or by which it is bound, or (3) conflict with or result in a violation of any permit, concession, franchise or license or any law, rule or regulation applicable to Owners, except, in the case of clauses (2) and (3), for any such breaches, conflicts or violations that would not reasonably be expected to have a material adverse effect on Owners and would not impair the ability of Owners to perform its obligations under this Agreement.
(d) Governmental Approvals . Except as set forth in Section 3.2, neither the execution and delivery by GPC of this Agreement nor the performance by GPC and Owners of their obligations hereunder will require any Governmental Approval, except where the failure to obtain such Governmental Approval would not reasonably be expected to have a material adverse effect on Owners and would not impair the ability of Owners to perform their obligations under this Agreement.
ARTICLE 12.      TITLE AND RISK OF LOSS
Title and risk of loss to all equipment that will become a permanent part of the Project or will be installed in the Project, and as provided under this Agreement, passes to Owners upon tender of such equipment to the carrier.
ARTICLE 13.      QUALITY ASSURANCE REQUIREMENTS
13.1    (a)    Service Provider currently has a quality assurance program(s), which will be used in the performance of Services under this Agreement and which has been accepted by the NRC (“Quality Assurance Program”).  Service Provider will maintain its Quality Assurance Program and any changes thereto shall meet the requirements of 10 C.F.R. Part 50, Appendix B and ASME NQA-1 – 1994; provided however that compliance with ASME NQA-1 – 2008, including NQA-1a-2009 Addenda will be considered to be compliant with ASME NQA-1 – 1994. Any changes to Service Provider’s Quality Assurance Program shall be submitted to and, if necessary, accepted by the NRC consistent with 10 C.F.R. 50.54(a) and accepted by Owners. 

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(b) Service Provider’s Quality Assurance Program and associated policies and procedures shall address Service Provider’s Services, including without limitation systems, structures and components in a manner consistent with their classification with respect to their importance to nuclear safety (i.e., safety related, important to safety, non-safety related) or their importance to the capacity, operability and reliability of the Facility as classified in the Vogtle Units 3 and 4 UFSAR. 
(c) An interface document will be drafted and finalized prior to the conclusion of the Transition Period by the Service Provider and Owners to describe the interface between Service Provider and Owner Quality Assurance programs consistent with this Agreement.
(d) Service Provider’s Quality Assurance Program is subject to review and audit by Owners for compliance with 10 C.F.R. Part 50, Appendix B and ASME NQA-1 - 1994.  Owners’ right to direct the quality assurance Services shall only extend to the Quality Assurance Program procedures and manuals applicable to the Project. Direction given by Owners shall be Project-specific and shall not require Service Provider to modify its Quality Assurance Program in such a way that the modification would impact other projects or Service Provider activities not being undertaken in support of the Project.
13.2 (a)    Service Provider shall be responsible to perform the quality control and inspection Services to the extent specified by Owners as determined in the Transition Period.  The quality control and inspection activities will be consistent with the nuclear safety quality classification of the system, structure or component under evaluation. The Persons performing quality control functions for Service Provider shall report organizationally such that inspection activities are performed consistent with 10 C.F.R. Part 50, Appendix B and NQA-1-1994.
(b)    Nothing in this Section 13.2 shall prevent Owners from performing any quality control and inspection activities themselves or designating a Third Party to so perform, in accordance with Section 4.3(b) governing the reduction or elimination of certain Services or portions thereof. In the event that Owners provide notice that any quality control and inspection activities will be transitioned to Owners or to a Third Party, Owners will specify the Services necessary from Service Provider to support such transition; provided that inspection activities during and after such transition will continue to remain consistent with ASME NQA-1 and 10 C.F.R. Part 50, Appendix B requirements. Owners will compensate Service Provider in accordance with Exhibit C (Rates and Invoicing) for such Services, and Service Provider will perform the specified Services in support of such transition.
13.3 (a)    For purposes of the ASME Code, Service Provider shall be designated as Owners’ agent as referenced in the Nuclear Development ASME Quality Assurance Manual (“NDAQAM”).  Westinghouse and WECTEC have provided Owners with the documentation regarding their existing ASME QA programs and ASME N-stamp certificates as referenced in NDAQAM, in accordance with ASME requirements.  Westinghouse and WECTEC agree that they will maintain those programs and certificates as they exist as of the Execution Date of this Agreement and will not take any action that will alter their ASME status for purposes of the

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Services covered by this Agreement for the Project.  Westinghouse and WECTEC may update their ASME QA programs and certificates as required to maintain compliance with the ASME Code in accordance with 10 C.F.R. §50.54(a).
(b) Work performed at Vogtle Units 3 and 4, in accordance with this Agreement, which is subject to ASME Code shall be performed in accordance with Owners, Westinghouse and WECTEC ASME QA programs to meet the requirements of ASME Certificate Holder responsibilities. For the performance of ASME Code responsibilities, a specific ASME interface agreement will be maintained between the Parties.
(c) The Parties recognize that ASME QA programs and ASME N-stamp certificates involve significant time and effort to obtain, are important to the Project, and that it would cause immediate, significant impacts to Owners should Service Provider cease to maintain its ASME status or cease performing the Services governed by ASME QA and N-stamp requirements. In recognition of the unique nature of ASME QA programs and N-stamp certificate requirements, Service Provider agrees to provide Owners with notice, in writing, six (6) months before taking any action that would impact its ASME status or ceasing to perform the Services governed by the ASME QA and N-stamp requirements. If Service Provider has provided such notice and Owners request support, then the Service Provider agrees to provide the applicable Services as necessary to support the transition of ASME QA and N-stamp requirements to Owners or its Representative as directed by Owners.
13.4    Some of the Services performed under this Agreement may be subject to the provisions of 10 C.F.R. Part 21 and 10 C.F.R. § 50.55(e).  A copy of Service Provider notifications relative to this Agreement to the NRC pursuant to 10 C.F.R. Part 21 or 10 C.F.R. § 50.55(e), if any, shall be transmitted to Owners.  Service Provider will notify Owners of nonconformances reportable to the NRC as well as nonconformances judged not reportable to the NRC but which are considered to be a “Significant Condition Adverse to Quality” pursuant to ASME NQA-1 – 1994 and are relevant to the AP1000 ® and the Project.
13.5    (a)    The Service Provider qualifies safety-related suppliers in accordance with the requirements in 10 C.F.R. Part 50, Appendix B and ASME NQA-1 – 1994 and maintains a list of these qualified suppliers. The Service Provider shall continue to maintain the qualification of the suppliers performing Services governed by this Agreement that are currently on Service Provider’s list of qualified suppliers. Suppliers who are no longer performing Services related to the Project may be removed from the list with Owners’ concurrence. Service Provider will provide (i) access pursuant to Section 13.6 for the qualified suppliers involved in the Services performed under this Agreement, and (ii) information described in Section 13.5(d) supporting Service Provider’s qualified suppliers list that Owners request in order to procure materials, components and/or services for the Project.
(b)    For those suppliers governed by Section 13.5 of this Agreement, the Service Provider will establish a method to communicate to Owners on an on-going basis current supplier status, for Project procurement activities, whether such procurement is performed by Owners, a Third Party, or Service Provider.

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(c)    Owners may request Service Provider to provide auditing, evaluation or source verification Services for new or current suppliers for the Project, and Service Provider will provide such auditing or evaluation Services regardless of whether the new suppliers will be included on Service Provider’s list of qualified suppliers or on Owners’ list of qualified suppliers. These auditing, evaluation, or source verification Services will be completed at a mutually agreed upon time among Owners, the Service Provider and the supplier.
(d)    Service Provider shall perform all annual evaluations and audits that are part of the Services provided pursuant to this Section 13 in compliance with applicable Law. Service Provider shall not use a grace period pertaining to the same without Owners’ prior written approval which shall not be unreasonably withheld. Service Provider shall provide the quality records as required by the Owners’ quality assurance program to utilize these suppliers. Audit reports produced under agreement by Third Party sources (example NIAC) are prohibited by agreement to be provided to Owners. For such audit reports only, Owners may receive the outcome, i.e. qualification status, or may review the associated quality records at the Service Provider’s facilities pursuant to Section 13.6.
13.6    Owners’ Representative(s) shall be given reasonable access to Service Provider’s facilities and records for inspection and audit of the Quality Assurance Programs.  Service Provider shall use commercially reasonable efforts to ensure that all future procurement purchase orders and contracts prepared by Service Provider include provisions for access by Owners or their Representative(s) to Service Provider’s and vendors’ facilities and records for similar inspection and audit.
ARTICLE 14.      CONFIDENTIAL AND PROPRIETARY INFORMATION
14.1      As used in this Agreement, “Confidential and Proprietary Information” means the terms of this Agreement and any and all information, data, software, matter or thing of a secret, confidential or private nature identified as “confidential”, “proprietary” or the like by the Party which claims the information to be proprietary, relating to the business of the disclosing Party or its Affiliates, including matters of a technical nature (such as know-how, processes, data and techniques), matters of a business nature (such as information about schedules, costs, profits, markets, sales, customers, suppliers, the Parties’ contractual dealings with each other and the projects that are the subject-matter thereof), matters of a proprietary nature (such as information about patents, patent applications, copyrights, trade secrets and trademarks), other information of a similar nature, and any other information which has been derived from the foregoing information by the receiving Party; provided, however, that Confidential and Proprietary Information shall not include information which: (a) is legally in possession of a receiving Party prior to receipt thereof from the other Party; (b) a receiving Party can show by reasonable evidence to have been independently developed by the receiving Party or its employees, consultants, Affiliates or agents; (c) enters the public domain through no fault of a receiving Party or others within its control; or (d) is disclosed to a receiving Party by a third party, without restriction or breach of an obligation of confidentiality to the disclosing Party.

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14.2      Notwithstanding any prior agreements between the Parties governing the protection of Service Provider’s or Owners’ Confidential and Proprietary Information transferred or used in connection with the Project, including provisions in such prior agreements regarding the survival of the Parties’ confidentiality obligations in connection therewith, as of the Effective Date, the provisions of this Article 14 shall control the protection of all Confidential and Proprietary Information transmitted or used in connection with the Project regardless of whether such information was covered by a previous agreement between the Parties.
14.3      Use and Protection of Owners’ Confidential and Proprietary Information .
(a)      Title to Confidential and Proprietary Information provided by Owners to Service Provider and all copies made by or for Service Provider in whole or in part from such Confidential and Proprietary Information remains with Owners. Service Provider agrees that it will not, during or for fifteen (15) years after the term of this Agreement, disclose any Confidential and Proprietary Information of Owners and their Affiliates, which is provided to Service Provider during the performance of Services under this Agreement to any Person (other than subcontractors or vendors, as required for the performance of the Services, provided that such subcontractors or vendors agree in writing to be bound by the same obligation of non-disclosure and confidentiality as provided in this Section 14.3), or to the general public for any reason or purpose whatsoever without the prior written consent of Owners, and that such Confidential and Proprietary Information received by Service Provider shall be used by it exclusively in connection with the performance of its responsibilities relating to the Services to be performed hereunder. Notwithstanding the foregoing, the above fifteen (15) year period shall not apply to Confidential and Proprietary Information of Owners which is defined by Law as Owners’ trade secrets, which Confidential and Proprietary Information shall be maintained as confidential and proprietary by Service Provider as permitted under applicable Law. Nothing herein grants the right to Service Provider (or implies a license under any patent) to sell, license, lease, or cause to have sold any Confidential and Proprietary Information supplied by Owners under this Agreement. However, nothing herein shall prevent Service Provider from disclosing Confidential and Proprietary Information of Owners or their Affiliates as required by Law or an order of a Government Authority; provided that Service Provider shall, if Service Provider has adequate advance notice, give Owners reasonable notice so as to allow Owners to seek a protective order or similar protection. If, in the opinion of its legal counsel and in the absence of a protective order or waiver, Service Provider is legally compelled to disclose Owners’ Confidential and Proprietary Information, Service Provider will disclose only the minimum amount of such information or data as, in the opinion of its legal counsel, is legally required. In any such event, Service Provider agrees to use good faith efforts to ensure that the Confidential and Proprietary Information that is so disclosed will be accorded confidential treatment. In addition, Service Provider may, upon Owners’ written permission, which shall not be unreasonably withheld, and in accordance with the below, be authorized to receive and use certain Confidential and Proprietary Information of Owners for the limited use and purposes of performing or assisting in the performance of

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start-up, commissioning, licensing and start-up maintenance services for other AP1000 ® nuclear power plant owners. Any such request by Service Provider shall identify (i) the specifics of the Owners’ Confidential and Proprietary Information to be used, (ii) the specific use and purposes for which it is intended to be applied by Service Provider, including an explanation of why Service Provider requires Owner’s Confidential and Proprietary Information, (iii) whether Service Provider intends to disclose such information to Third Parties, and if so, the identity of such Third Parties, and (iv) Service Provider’s assurances that it will exercise reasonable efforts consistent with its efforts to protect against the unauthorized disclosure of its own Confidential and Proprietary Information, to preclude against the unauthorized disclosure or publication of Owner’s Confidential and Proprietary Information. Service Provider shall obtain written assurances from any Third Party recipients that they will not use, disclose or publish Owners’ Confidential and Proprietary Information except as expressly authorized by Owners for the limited use and purposes identified by Service Provider as required in (ii) above.
(b)      In the use of any Confidential and Proprietary Information of the other Party for the purpose of providing required information to, and/or securing Governmental Approvals from, any Government Authority, Owners and Service Provider will cooperate to minimize the amount of such information furnished consistent with the interests of the other Party and the requirements of the Government Authority involved.
(c)      Nothing herein shall prevent Service Provider from disclosing to the appropriate Government Authority any noncompliance or violation of Laws within the jurisdiction of such Government Authority.
(d)      Should Service Provider discover a breach of the terms and conditions of a non-disclosure and confidentiality agreement with a Third Party to which it is permitted to disclose Owners’ Confidential and Proprietary Information under this Agreement, Service Provider will promptly notify Owners of such breach and provide to Owners necessary information and support pertaining to any suit or proceeding brought by Owners against Recipient for such breach.
(e)      Owners shall not be responsible to Service Provider or Third Parties for the consequence of the use or misuse of Owners’ Confidential and Proprietary Information by Service Provider or Third Parties, and Owners make no warranties, express or implied, to the extent of any use or misuse of Owners’ Confidential and Proprietary Information by Service Provider or Third Parties.
14.4      Protection of Service Provider’s Confidential and Proprietary Information
(a)      Owners’ Use .
(i)      Owners agree to use Confidential and Proprietary Information provided by Service Provider and copies thereof, including Licensed IP and

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Deliverables, solely for the purposes of Facility (and associated simulators) construction, testing, completion of ITAACs, start-up, trouble-shooting, response to plant events, inspection, evaluation of system or component performance, scheduling, investigations, operation, maintenance, training, repair, licensing, modification, decommissioning and compliance with Laws or Government Authorities (collectively, the “Facility Purposes”). Nothing herein grants the right to Owners (or implies a license under any patent) to sell, license, lease, or cause to have sold any Confidential and Proprietary Information supplied by Service Provider under this Agreement.
(ii)      Title to Confidential and Proprietary Information provided by Service Provider to Owners and all copies made by or for Owners in whole or in part from such Confidential and Proprietary Information remains with Service Provider. Owners shall include Service Provider’s confidential or proprietary markings as provided by Service Provider on all copies thereof and excerpts made therefrom except with respect to excerpts made or used internally by Owners for Facility Purposes; provided, however, that Owners shall destroy any such excerpts which do not include Service Provider’s confidential or proprietary markings when no longer needed for the purpose for which they were made. Except as otherwise provided under this Section 14.4 or Section 14.5, Owners agree to keep such Confidential and Proprietary Information confidential, to use such Confidential and Proprietary Information only for the Facility Purposes and not to sell, transfer, sublicense, disclose or otherwise make available any of such Confidential and Proprietary Information to others (other than Affiliates and Representatives). However, nothing in this Article 14 shall prevent Owners from disclosing Confidential and Proprietary Information of Service Provider or its Affiliates as required by Law or an order of a Government Authority (including without limitation the COL and/or Georgia PSC Certification Order); provided that Owners shall, if Owners have adequate advance notice, give Service Provider reasonable notice so as to allow Service Provider to seek a protective order or similar protection. If, in the opinion of Owners’ legal counsel and in the absence of a protective order or waiver, Owners are legally compelled to disclose Confidential and Proprietary Information, Owners will disclose only the minimum amount of such information or data as, in the opinion of Owners’ legal counsel, is legally required. In any such event, Owners agree to use good faith efforts to ensure that Confidential and Proprietary Information that is so disclosed will be accorded confidential treatment.
(iii)      Service Provider hereby grants to Owners and their Affiliates, officers, directors, employees, attorneys and Representatives who have a need for access to know such Confidential and Proprietary Information reasonably related to the exercise of any rights of the Owners hereunder a transferable (but only as part of the sale or transfer of the Facility or the operating responsibilities related thereto), royalty-free, fully paid up, irrevocable, nonexclusive, perpetual license to

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use and copy Service Provider’s Confidential and Proprietary Information but only for the Facility Purposes (and for the associated simulators).
(b)      Owners’ Disclosure to Third Party Recipients .
(i)      The disclosure by Owners to Third Parties (hereinafter referred to as “Recipients” or “Recipient”) of Service Provider’s Confidential and Proprietary Information that has been furnished to Owners prior to or after the Effective Date of this Agreement, shall be governed exclusively by the provisions of this Agreement, and shall be made in accordance with the procedures and subject to the limitations set forth in Sections 14.4 and 14.5.
(ii)      Owners shall enter into a Confidentiality Agreement with the Recipient substantially on the terms set forth in Exhibit E (Form of Confidentiality Agreement); provided, however, that the Owners may disclose such Confidential and Proprietary Information without entering into such agreements to those persons to which access is required by any Government Authority or as necessary in order to comply with Law, or, in the case of Owners that receive financing from or are subject to the rules or regulations of the U.S. Rural Utilities Service and the U.S. Department of Energy, such Owners may disclose such Confidential and Proprietary Information without entering into such agreements to the U.S. Rural Utilities Service and the U.S. Department of Energy. Any Recipient that has executed a confidentiality agreement or acknowledgement in a form attached to the EPC Agreement or agreement otherwise agreed to by Service Provider in connection with the provision of Confidential and Proprietary Information associated with the Project shall not be required to execute a new confidentiality agreement in the form of Exhibit E (Form of Confidentiality Agreement), it being agreed by the Parties that the confidentiality agreement or acknowledgment signed by such Recipient shall remain in effect for the purposes of and shall satisfy the requirements of, and be considered a Confidentiality Agreement under, this Article 14.
(iii)      Should Owners discover a breach of the terms and conditions of a Confidentiality Agreement with a Third Party, Owners will promptly notify Service Provider of such breach and provide to Service Provider necessary information and support pertaining to any suit or proceeding contemplated or brought by Service Provider against Recipient for such breach.
(iv)      Service Provider shall not be responsible to Owners for the consequence of the use or misuse of Service Provider’s Confidential and Proprietary Information by Third Parties. Service Provider makes no warranties, express or implied, to the extent of any such use or misuse of Service Provider’s Confidential and Proprietary Information by Third Parties.

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(v)    Nothing herein shall prevent Owners from disclosing to the appropriate Government Authority any noncompliance or violation of Laws within the jurisdiction of such Government Authority.
(c)     Export Control .

(i)    Each Party agrees not to disclose, directly or indirectly transfer, export, or re-export any Confidential and Proprietary Information, or any direct or indirect products or technical data resulting therefrom to any country, natural person or entity, except in accordance with applicable export control Law.
  
(ii)     To assure compliance with the export control Laws and regulations of the United States government, specifically the U. S. Department of Energy export regulations of nuclear technology under 10 C.F.R. Part 810, the U.S. Nuclear Regulatory Commission export and import regulations related to nuclear equipment and material under 10 C.F.R. Part 110, and the U.S. Department of Commerce export regulations of commercial or dual-use technology under 15 C.F.R. Part 730 et seq. concerning the export of technical data or similar information to specific countries, locations, or entities, a Party shall not disclose or permit the disclosure, transfer or re-export, directly or indirectly, of any Confidential and Proprietary Information it receives hereunder that a receiving Party considers to be potentially subject to U.S. export control, or any product or technical data derived from such Confidential and Proprietary Information, except in compliance with such export control laws and regulations, which may be contingent on additional United States Governmental Approvals.

(iii)    Each Party shall cooperate in good faith with the reasonable requests of the other Party made for purposes of either Party’s compliance with such Laws and regulations. Service Provider acknowledges that Confidential and Proprietary Information which is subject to U.S. export control is contained within databases and/or servers located at the Site. Service Provider shall ensure that all Service Provider personnel granted access to the Site shall (a) not be included in any published lists maintained by the U.S. government of persons and entities whose export or import privileges have been denied or restricted and (b) either be a U.S. Person (defined as a U.S. citizen, lawful permanent resident, or protected individual under the Immigration and Naturalization Act of 8 U.S.C. § 1324b(a)(3)), person from a “generally authorized” country, the recipient of a “deemed export” authorization, or a person acting under continuance activities per the savings clause provision of 10 C.F.R. § 810.16(b), and Service Provider shall be required to maintain with Owner or obtain such authorizations as needed and comply with any and all corresponding reporting obligations. Nothing in this Section 14.4(c)(iii) shall limit Owners’ right to deny access to the Site to any Service Provider personnel where Owners determine that granting access would not comply with applicable Law. In the event the Parties agree that a formal

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technology control plan or an additional server or database is needed to maintain appropriate management of Confidential and Proprietary Information subject to export control, the Parties shall cooperate to agree and implement such additional measures.

(iv)    Notwithstanding any other provisions in this Agreement, the obligations set forth in this Section 14.4(c) shall be binding on the Parties so long as the relevant United States export control Laws and regulations are in effect.
  
14.5      Special Procedures Pertaining to Service Provider’s Confidential and Proprietary Information .
(a)      Categories of Service Provider Information . The Parties acknowledge and agree that certain Confidential and Proprietary Information of Service Provider delivered to Owners under this Agreement in accordance with Exhibit B (Deliverables) as Licensed IP may be disclosed on a confidential basis without the prior consent of Service Provider (“Service Provider Disclosable Information,” as described in Section 14.5(b)), and that certain other Confidential and Proprietary Information of Service Provider delivered to Owners as Licensed IP may not be disclosed by Owners to any Third Parties without the prior consent of Service Provider (“Service Provider Non-Disclosable Information,” as described in Section 14.5(d)). Owners agree to abide by the provisions of this Section 14.5 governing the release of Service Provider’s Confidential and Proprietary Information.
(b)      Service Provider Disclosable Information . Service Provider Disclosable Information consists of the following Confidential and Proprietary Information that has been developed by Service Provider, to the extent such information does not include Service Provider Non-Disclosable Information as described in Section 14.5(d), below:
(i)
Descriptions of the plant, its components, or its systems (physical characteristics, general outline drawings, equipment lists, termination drawings, general arrangement drawings, electrical drawings, and basic schematic drawings);
(ii)
Plant, component, or system data that can be measured by plant sensors;
(iii)
Information that may be acquired by physical measurement, such as location, dimensions, weight and material properties;
(iv)
Service Provider operating and maintenance manuals, and QA documentation;

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(v)
Erection and commissioning documentation such as installation and layout drawings, and control room panel assembly and location drawings;
(vi)
Information or calculations directly developed using publicly available methods or data;
(vii)
Final results of calculated information or input assumptions to calculated information such that calculations could be recreated by a Third Party using the Third Party’s own then-existing methods (excluding Service Provider-developed test or experience-based data, methodologies, correlations and models, which Service Provider will not release to the Owners);
(viii)
Design specifications for non-safety related equipment and system specification documents (“SSDs”) for non-safety related systems with the exception of the following: (A) all design specifications for non-safety Instrumentation & Control (“I&C”) systems, and (B) SSDs identified for the systems listed below:
(1)    Chemical and Volume Control System
(2)    Data Display and Processing System
(3)    Diverse Actuation System
(4)    Incore Instrumentation System
(5)    Operation and Control Centers
(6)    Plant Control System
(7)    Main Turbine Control and Diagnostics System
(8)    Main Generation System
(9)    Special Monitoring Systems; and
(ix)
Documents, materials, and underlying data created and provided under Section 5.5.
(c)      Procedures for Release of Service Provider Disclosable Information . Service Provider Disclosable Information may be disclosed by Owners to Third Parties without prior notice to Service Provider, provided that such disclosure is exclusively for the Facility Purposes and provided that:

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(i)
Owners shall take reasonable steps to minimize the disclosure of Service Provider’s Confidential and Proprietary Information to only that information necessary for a Recipient to perform its contracted functions;
(ii)
Owners shall execute a Confidentiality Agreement substantially in the form of Exhibit E (Form of Confidentiality Agreement) with the Recipient governing the disclosure of Service Provider’s Confidential and Proprietary Information consistent with Section 14.4(b)(ii);
(iii)
Service Provider has the right to audit Owners’ records and the contents of any agreements (subject to Owners right to protect confidential and proprietary information of Owners and Third Parties) executed between Owners and a Recipient governing the disclosure of Service Provider’s Confidential and Proprietary Information; and
(iv)
The provisions of Section 14.4(b)(iii), (iv) and (v) shall apply to such disclosure.
(d)      Service Provider Non-Disclosable Information . Service Provider Non-Disclosable Information consists of the following information that has been developed by Service Provider:
(i)
Calculation for safety-related equipment and systems;
(ii)
Plant Design Model;
(iii)
I&C functional system software and interface requirements and functional logic diagrams;
(iv)
Design specifications and qualification reports for safety-related equipment;
(v)
SSDs for safety related systems;
(vi)
I&C architecture diagrams, I&C software verification and validation documentation, I&C testing procedures and test results;
(vii)
Component data packages which include Manufacturing Deviation Notices, Certified Material Test Reports and Quality Releases (will typically be provided to the Owners in the final data package if the deviations exceed the official design/fabrication specifications); and

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(viii)
Information which contains confidential intellectual property of Service Provider’s subcontractors, vendors, or other Service Provider utility customers which is licensed to Service Provider and which Service Provider has the right to sub-license to Owners, or confidential intellectual property of Service Provider’s subcontractors or vendors licensed directly to Owners.
(e)      Procedures Pertaining to Service Provider Non-Disclosable Information . Upon written request by Owners in accordance with the provisions of this Section 14.5(e), Service Provider shall consider the disclosure of Service Provider Non-Disclosable Information. The request shall identify the information requested to be disclosed, the work that is to be performed and the name of the intended Recipient. The request shall be in writing sent to Service Provider. The request shall be reviewed by Service Provider for acceptability for disclosure based on the principle, agreed to by Owners and Service Provider, that Service Provider has the right to protect its proprietary information in which it has made a substantial investment and which required substantial innovation, balanced against whether such disclosure would jeopardize such proprietary rights of Service Provider and the principle that Owners have the right to assure that services associated with maintenance and operation of the Facility are in all respects prudent, including cost, and thus may need to be performed by Third Party service providers. The determination of whether or not to disclose the information shall be made by Service Provider in its discretion based on the above principles and with an agreement that information can be adequately protected by requiring Third Party employees to work solely for the Project and to segregate information from the Third Party’s corporate servers and other Third Party employees. Service Provider shall make commercially reasonable efforts to respond within five (5) business days of receipt of a written request from Owners to disclose specific Service Provider Non-Disclosable Information. If, at the end of fifteen (15) business days following such receipt by Service Provider of a written request from Owners to disclose specific Service Provider Non-Disclosable Information, Service Provider has not rejected the request to disclose specific Service Provider Non-Disclosable information, such request shall be deemed accepted by Service Provider. If Service Provider agrees to the disclosure of such information, the specific information to be provided to the Recipient (subject to Owners’ right to protect Confidential and Proprietary Information of Owners and Recipient) shall be subject to review and approval by Service Provider and shall be governed by the terms of the confidentiality agreement with the Recipient substantially in the forms set forth in Exhibit E (Form of Confidentiality Agreement).
(f)      Documents Containing Combined Information . Where a document marked “Confidential and Proprietary” or the like contains Service Provider Disclosable Information and Service Provider Non-Disclosable Information, Owners shall not disclose any Service Provider Non-Disclosable Information without Service Provider’s prior written consent. Owners shall have the right to:

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(i)
request Service Provider to prepare and verify the accuracy of a version of such document containing only Service Provider Disclosable Information;
(ii)
request Service Provider to prepare and verify the accuracy of a document which contains the specific information requested by the Third Party service provider; or
(iii)
itself extract the Service Provider Disclosable Information from such document and provide the Disclosable Information to the Third Party service provider in accordance with the procedures set forth in Section 14.5(c). All right, title and interest in Service Provider Disclosable Information contained in such document or material prepared by Owners remains with Service Provider and, for the avoidance of doubt, is hereby assigned to Service Provider. Owner shall make commercially reasonable efforts to give notice to Service Provider and access prior to disclosure of any extract of Service Provider Disclosable Information and will provide a copy of such upon Service Provider’s request.
Service Provider shall be reimbursed pursuant to Exhibit C (Rates and Invoicing) for the preparation and verification of documents for Owners under Section 14.5(f)(i) and (ii) above. Service Provider shall assume no liability for, and will not warrant the accuracy or validity of, any version of a document containing Service Provider Disclosable Information prepared by Owners pursuant to Section 14.5(f)(iii) above.
(g)      Additional Procedures . Owners and Service Provider shall each designate a contact person for the purposes of administering the release of Service Provider’s Confidential and Proprietary Information. Owners’ contact person shall be responsible for (i) ensuring that an agreement is executed with the Recipient governing the disclosure of Service Provider Confidential and Proprietary Information consistent with Section 14.4(b) before the information is released and (ii) making formal requests to Service Provider for the release of information designated as Service Provider’s Non-Disclosable Information. Service Provider’s contact person shall be responsible for (i) handling and expediting responses to Owners’ requests for release of information not specifically designated as Service Provider Disclosable Information and (ii) conducting periodic reviews of Owners’ records listing the Recipients and purposes of disclosure of Service Provider Confidential and Proprietary Information.
14.6      Software . Software provided to Owners by Service Provider shall be subject to the license provisions set forth in Exhibit G (IP License).
14.7      Nothing in this Article 14 limits Owners’ rights pursuant to Article 6 or the Exhibit F (Facility IP License in the Event of a Triggering Event); provided that Owners will comply with the provisions of Article 6 or the Facility IP License in the Event of a Triggering Event, as applicable, with respect to the sharing of Confidential and Proprietary Information with

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any third party. Each Party acknowledges that, during the term of this Agreement, it may have access to Confidential and Proprietary Information of the other Party and its Affiliates, including Third Party proprietary information, which represents a substantial investment. Unless the disclosing Party agrees otherwise in advance and in writing, or unless provided otherwise in this Agreement, the receiving Party agrees that it will limit access to such Confidential and Proprietary Information, including Third Party proprietary information, to its directors, officers, employees, and Representatives, who require the information in connection with activities under this Agreement. 
(a)      Each receiving Party agrees to exercise reasonable efforts, consistent with or better than the efforts that it exercises to protect information of its own that it regards as confidential or proprietary, to keep such Confidential and Proprietary Information in confidence and not to copy or permit others to copy or access the information or disclose, redistribute, or publish the same to unauthorized persons. 
(b)      Each receiving Party agrees that, except where Service Provider elects to do so in order to utilize service support located outside the United States, disclosing Party’s Confidential and Proprietary Information will exclusively be stored, processed, accessed and/or viewed in or from United States data centers and receiving Party will not export any such Confidential and Proprietary Information nor allow access by any foreign national contrary to the laws of the United States. The release of any Confidential and Proprietary Information to receiving Party will be subject to and in accordance with any applicable laws, including applicable United States export laws and regulations (if any).
(c)      Each receiving Party acknowledges and agrees that any disclosure or use of the disclosing Party’s Confidential and Proprietary Information, except as otherwise authorized herein or by disclosing Party in writing, would be wrongful and cause immediate and irreparable injury to disclosing Party or to any third party owner whose Confidential and Proprietary Information is under disclosing Party’s care and custody and agrees to cooperate with disclosing Party in obtaining an injunction if necessary to prevent further disclosure thereof.
(d)      Each receiving Party agrees to immediately notify disclosing Party of any unauthorized disclosure or use or any such Confidential and Proprietary Information of which receiving Party becomes aware, and receiving Party will be liable to disclosing Party for any such unauthorized disclosure or use of such Confidential and Proprietary Information.
14.8      Special Recipients .
(a)      The Parties acknowledge that Owners and the owners and operators of the V.C. Summer project (“VCS Owners”) may be working closely together on their respective AP1000 ® projects. Owners and VCS Owners may coordinate with, undertake joint work initiatives with, share information with, or make similar arrangements whereby Owners and the VCS Owners are seeking alignment, cost sharing, efficiency, or

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otherwise combining their efforts. Owners and the VCS Owners will have the right to discuss and share Confidential and Proprietary Information for purposes of discussing the Vogtle or V.C. Summer projects. For purposes of this Article 14, the VCS Owners will not be considered third parties but will be treated in the same manner as Owners’ employees.
(b)      For credit rating agencies (e.g., S&P, Moody’s) and any financial institution, bank, or Government Authority that is a lender or guarantor for any Owner(s), Owners shall have the right to disclose certain non-technical Confidential and Proprietary Information of Service Provider without requiring the Recipient to execute a non-disclosure agreement. The non-technical Confidential and Proprietary Information referred to in this section includes, by way of illustration and not limitation, this Agreement, status reports relating to the Project schedule and estimated Project costs, paid-to-date information, cost estimates, and agreements with respect to the assignment or potential assignment of this Agreement; provided, however, that Owners have reasonable assurance from the agency, institution, bank, or entity that the Confidential and Proprietary Information will receive confidential treatment.
ARTICLE 15.      CONTRACT ADMINISTRATION NOTICES
All notices specifically related to the terms and conditions of this Agreement or otherwise required under this Agreement shall be effective only at the time of receipt thereof and only when received by the Parties to whom they are addressed at the following addresses:
If to Owners :

Georgia Power Company
Attn: David L. McKinney, Vice President-Nuclear Development
241 Ralph McGill Blvd., NE
BIN 102321
Atlanta, GA 30308
Email: dlmckinn@southernco.com

Southern Nuclear Operating Company, Inc.
Attn:   Mark D. Rauckhorst
           Executive Vice President-Vogtle 3/4 Construction
7825 River Road
BIN 63031
Waynesboro, GA 30830
Email: mdrauckh@southernco.com

Balch & Bingham LLP
Attn: M. Stanford Blanton
1710 Sixth Avenue North
Birmingham, AL 35203
Email: sblanton@balch.com

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If to Service Provider :

Westinghouse Electric Company LLC
Attn:   Michael T. Sweeney, Senior Vice President
           & General Counsel
1000 Westinghouse Drive
Cranberry Township, PA 16066
Email: sweenemt@westinghouse.com

WECTEC Global Project Services Inc.; Westinghouse Electric Company LLC
Attn: David Durham, President WECTEC; Senior Vice President New Project Business
3735 Glen Lake Drive
Charlotte, NC 28208
Email: durhamdc@westinghouse.com

ARTICLE 16.      INDEMNITY
16.1      Service Provider Indemnity .  Except with respect to a Nuclear Incident, as that term is defined under the Atomic Energy Act of 1954, as amended (the “AEA”), Service Provider shall indemnify, hold harmless and defend Owners, their present and future Affiliates and the respective directors, officers, employees, representatives, agents, shareholders, attorneys, successors and assigns of each of them and all persons or entities claiming through them (collectively referred to as “Owner Persons Indemnified”), from and against (i) all third party claims associated with any injury of or death to natural persons or damage to or destruction of third party property to the extent that such injury, death or damage is proximately caused by or arises out of the negligence or willful misconduct of Service Provider in the performance or prosecution by Service Provider or its Representatives of the Services hereunder; (ii) any violation of Law to the extent such violation of Law is made by Service Provider, its subcontractors, or the Representatives of either acting within the scope of their employment; (iii) any and all claims, demands, causes of action, damages, liabilities, losses, penalties, costs and expenses (including reasonable attorneys’ fees) associated with (A) the release on or from the Site or any other location of any Hazardous Materials to the extent caused by the negligent acts or negligent omissions or willful misconduct of Service Provider, its subcontractors, or their Representatives acting within the scope of their employment, or (B) contamination of the environment or injury to natural resources resulting from Hazardous Materials to the extent caused by the negligent acts or omissions or willful misconduct of Service Provider, its subcontractors, or their Representatives acting within the scope of their employment; and (iv) any and all claims, losses, damages, liabilities, legal fees and expenses resulting from or arising in connection with any failure of Service Provider, its subcontractors, or their Representatives to pay salaries or wages, payroll taxes and employee benefits, or to withhold appropriate taxes. The Parties agree that the indemnity obligations of this section do not apply to any claims, demands,

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causes of action, damages, liabilities, losses, penalties, costs and expenses caused by acts or omissions of Service Provider employees seconded to Owners.
16.2      Owners’ Indemnity . Owners shall indemnify, hold harmless and defend Service Provider, its present and future Affiliates and the respective directors, officers, employees, representatives, agents, shareholders, attorneys, successors and assigns of each of them and all persons or entities claiming through them (collectively referred to as “Service Provider Persons Indemnified”), from and against (i) all third party claims associated with any injury of or death to natural persons or damage to or destruction of third party property to the extent that such injury, death or damage is proximately caused by or arises out of the negligence or willful misconduct of Owners or their Representatives in the performance or prosecution by Owners or its Representatives of work related to the Project; (ii) any violation of Law to the extent such violation of Law is made by Owners or their Representatives in the performance or prosecution by Owners or their Representatives of work related to the Project; (iii) any and all claims, demands, causes of action, damages, liabilities, losses, penalties, costs and expenses (including reasonable attorneys’ fees) associated with (A) the Release on or from the Site or any other location of any Hazardous Materials to the extent caused by the negligent acts or negligent omissions or willful misconduct of Owners or their Representatives in the performance or prosecution by Owners or their Representatives of work related to the Project, or (B) contamination of the environment or injury to natural resources resulting from Hazardous Materials to the extent caused by the negligent acts or omissions or willful misconduct of Owners or their Representatives in the performance or prosecution by Owners or their Representatives of work related to the Project; (iv) all third-party claims of delay, additional work, or other commercial claims, in all such cases arising after the Effective Date, by any third-party contractor having privity with Owners and performing work related to the Project, or by such contractor’s subcontractors, vendors or suppliers, performing work related to the Project; and (v) all third-party claims of delay, additional work, or other commercial claims, in all such cases arising after the Effective Date, by any third-party contractor having privity with Service Provider under a subcontract or purchase order listed on Exhibit H, Part B or a subcontract or purchase order the Owners direct the Service Provider to assume to permit Service Provider to perform the Services hereunder, or by such contractor’s subcontractors, vendors or suppliers, performing work related to the Project. This Owners’ indemnity obligation shall not apply to any claim arising out of Service Provider’s, its subcontractors’, or their Representatives’ (a) failure to comply with applicable Law, (b) reckless or intentionally wrongful conduct, including activities or actions that Service Provider knows are contrary to Owners’ written direction or position, which are not contrary to Law or the terms of this Agreement, or (c) actions other than those taken pursuant to this Agreement.
16.3      Notice of Third Party Claims .  If any Person that is not a Party to this Agreement or an Affiliate of a Party to this Agreement notifies any Persons Indemnified with respect to any matter that may give rise to a claim for indemnification against Service Provider or Owners under this Agreement, then the Persons Indemnified shall promptly notify the indemnifying Party of all relevant details thereof then known to the Persons Indemnified.  In the event that the Persons Indemnified fails to give prompt notice as stated above, the obligation to indemnify shall

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be waived to the extent that said notice failure causes actual and material prejudice to the indemnifying Party’s ability to defend the claim for which indemnity is requested. The Party providing the indemnity of any third-party claim shall have control of the defense of indemnified claims including the selection of defense counsel and settlement of all indemnified claims.
16.4      Intellectual Property Infringement .
(a)      Service Provider shall indemnify, hold harmless, release and defend Owner Persons Indemnified from all losses which may be incurred on account of alleged or claimed infringement of any United States patent or United States copyright, or misappropriation of any trade secret, trademark rights, proprietary rights or other intellectual property rights of any third party, arising out of the performance of Services by Service Provider. Owners shall promptly notify Service Provider of such claims, suits and actions in writing and Service Provider shall pay all costs, expenses, settlements and/or judgments resulting therefrom.
(b)      If a claim of infringement or misappropriation is made, Service Provider may, and if the Services provided hereunder by Service Provider are held by a court of competent jurisdiction to constitute an infringement or misappropriation of any United States patent or United States copyright, trade secret, trademark rights, proprietary rights or other intellectual property rights of any third party, and if the use of said Services is enjoined, Service Provider shall, at its sole expense, either:  (a) procure for Owners the right to continue using said Services; or (b) modify the infringing Services so they become non-infringing, to the extent reasonably possible without diminishing the capability and capacity of the Services.  In the event the above alternatives are unavailable to Service Provider, then, with the approval of Owners, Service Provider shall seek alternate ways and means to provide such Services for which it is obligated under this Agreement so long as such alternate means are reasonably acceptable to Owners. 
(c)      Notwithstanding the above, Service Provider shall not compromise or settle any claim, action, suit or proceeding in which Owners are named without Owners’ prior written consent, which consent shall not be unreasonably conditioned, delayed or withheld unless such settlement provides for the payment of money only by Service Provider and provides for a full, complete and unconditional (other than ceasing Services) release of Owners.
(d)      The foregoing indemnity shall not apply in situations where (i) the Services are furnished in accordance with designs supplied by Owner or to the extent any Service furnished hereunder is modified or combined by Owner or others with items not furnished hereunder, or (ii) Owners use the Services of Service Provider contrary to written instructions from Service Provider that specify in detail the use or uses of such Services which will constitute an infringement of any United States patent or United States copyright, or the violation of any trade secret, trademark right, proprietary right or other intellectual property right of any third party. In the event a suit or proceeding is brought against Service Provider as a result of such Owners’ design modification or combination, or actions not approved by Service Provider, Owners will indemnify and hold Service Provider harmless to the same extent as

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Service Provider has agreed to indemnify and hold Owners harmless hereunder; provided that Owners’ indemnity obligations under this Section 16.4(d) will not be limited by Section 17.4.
(e)      Any indemnities associated with third-party software shall be governed by the terms of the license agreements associated with such third-party software.
ARTICLE 17.      LIMITATION OF LIABILITY
17.1      Limitations Applicable to Warranty Work .
(a)      Equipment Warranty Cap . Service Provider’s cumulative aggregate liability under all warranties applicable to Service Provider-manufactured equipment in Section 10.5(b) shall be five million dollars ($5,000,000).
(b)      Professional Services Warranty Cap . Service Provider’s liability for re-performance or repair in relation to defective professional services under Section 10.1 herein shall be limited to the insurance proceeds recoverable under the professional liability coverage required by Article 24.
17.2      Service Provider’s cumulative aggregate liability to Owners under or related to this Agreement for any and all claims, losses, re-work warranty obligations, expenses, damages, suits, judgments, fines, penalties, or liabilities of any kind arising out of or in connection with this Agreement shall not exceed the total amount of the Fee paid to Service Provider as of the date the liability arose under this Agreement; provided, however, that the foregoing limitation in this Section 17.2 shall not apply to the following, which shall not be considered in determining whether such aggregate liability cap has been exceeded: any loss or damage, to the extent insurance proceeds are available from the insurance required under this Agreement, it being the Parties’ specific intent that the limitations of liability hereunder shall not relieve the insurer’s obligation for such insured risks.
17.3      Except for breaches of Article 14 or use of Intellectual Property outside the permissible license scope, under no circumstances shall either Party be liable to the Persons Indemnified of the other Party for consequential losses or damages, including, but not limited to, in the character of (a) loss of use of power systems, production facilities or equipment, (b) loss of profits or revenues, (c) loss of tax credits, (d) cost of purchased or replacement power, (e) damages suffered by customers for service interruptions, or (f) costs of financing.
17.4      Owners’ Aggregate Liability Cap . Other than Owners’ indemnity obligations hereunder, Owners’ cumulative aggregate liability to Service Provider under this Agreement from any and all causes arising out of or in connection with this Agreement shall not exceed the total amount of payment actually paid and/or due to Service Provider in accordance with Exhibit C (Rates and Invoicing).
17.5      Springing License Exclusive Remedy . Upon the occurrence of a Triggering Event under Exhibit F (Facility IP License in the Event of a Triggering Event), Owners shall be entitled

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to exercise their license rights thereunder. The provision of such a license on a royalty-free basis and the disclosure of Facility IP thereunder shall be Owners’ sole and exclusive remedy and Service Provider’s sole liability, with respect to the acts or omissions giving rise to the Triggering Event.
17.6      Limitations on liability expressed in this Article 17 shall apply even in the event of the fault, negligence, or strict liability of Service Provider or Owners, as applicable, or otherwise and shall extend to the Parties’ directors, officers and employees, and to any affiliated entity of the Party hereto, and its directors, officers and employees.
ARTICLE 18.      BENEFITED PARTIES
Service Provider understands and agrees that GPC is entering into this Agreement not only for its own benefit but also and equally for the direct benefit of Owners. By agreement, SNC has the right and obligation to construct, operate and maintain generating plants, which are owned jointly by GPC and the other Owners, and SNC has the right to enter into agreements for exercising said rights and performing said obligations.  As their interests appear, it is further agreed that each and every right, benefit and remedy accruing to GPC likewise accrues to the Owners including but not limited to the right to enforce this Agreement in their own name or names. For the avoidance of doubt, each of Owners and SNC are Owner Persons Indemnified under this Agreement. Notwithstanding the foregoing, as between GPC, Owners, and Service Provider, GPC shall remit (on behalf of Owners) all payments to Service Provider hereunder, and Service Provider shall submit all invoices to GPC for payment. Owners represent that Owners are the sole present owners (subject to mortgage indentures) of the Facility to which the Services relate and that GPC is authorized to bind, and does bind, all present Owners to the limitations of liability set forth in this Agreement. In the event that any other entity obtains any ownership interest in a facility for which Services are performed, then Owners agree to bind such entity to such limitations of liability.
ARTICLE 19.      DISPUTE RESOLUTION
19.1 A “Claim” is a demand or assertion by one of the Parties seeking, as a matter of right, adjustment or interpretation of Agreement terms, payment of money, extension of time, or other relief with respect to the terms of this Agreement. The term “Claim” also includes other disputes and matters in question between Owners and Service Provider arising out of or relating to this Agreement (including the breach, termination or validity thereof, and whether arising out of tort or contract).
19.2 All Claims not otherwise resolved by the Parties shall be submitted to and decided by arbitration before a three-member panel (the “Panel”) pursuant to the then-current e.g. , CPR Rules for Expedited Arbitration of Construction Disputes and the Federal Arbitration Act, 9 U.S.C. §§ 1 et seq . The Panel members shall be mutually agreeable to the Parties and are as of the date of this Agreement Jesse B. Grove, David Lane and Richard Alexander. Upon any vacancy on the Panel, the Parties shall endeavor to agree on a replacement member promptly, notwithstanding whether any Claim then is pending.
19.3 Either Party may commence arbitration by providing written notice of a Claim to the other and to the members of the Panel. Such notice shall include a written statement of the

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Claim along with substantiation for the Claim. The receiving Party shall respond with a statement of its position on the Claim and substantiation for its position within twenty-one (21) days of such notice.
19.4 No later than thirty (30) days after notice of a Claim, the Panel shall hold an initial pre-hearing conference for the planning and scheduling of the arbitration. The Panel may establish procedures and otherwise conduct the arbitration in such manner as it deems appropriate to assure an expeditious and fair resolution of the Claim. Unless extended by agreement of the Parties or by order of the Panel, in no event shall the Panel’s final decision be issued later than one hundred eighty (180) days after notice of a Claim.
19.5 The place of the arbitration shall be Atlanta, Georgia.
19.6 The decision of the Panel is final and binding and is not subject to further arbitration or litigation by either Party.
19.7 Notwithstanding anything in this Article to the contrary, a Party may file a complaint in a court of competent jurisdiction to seek enforcement of the agreement to arbitrate set forth in this Article, other injunctive relief or specific performance, or enforcement of any decision or award issued by the Panel.
ARTICLE 20.      TERMINATION
20.1      Owners, in their sole discretion, shall have the right to terminate this Agreement without cause by providing written notice to Service Provider at least thirty (30) days in advance of the date of termination or other minimally necessary time period such that Service Provider complies with federal and state notice requirements (e.g., WARN Act) as measured from the date of written notice of termination. In the event of such a termination, Service Provider shall be compensated in accordance with the terms of Section 20.3. In no event shall termination costs include such costs as loss of anticipated profit.
20.2      Either Party may terminate this Agreement on the basis of a material breach by written notice of breach where the breaching Party fails to cure the default within thirty (30) days. For the avoidance of doubt, Service Provider may terminate this Agreement in the event that Owner fails to make payment on any invoice within thirty (30) days after the due date of such invoice and Owner fails to cure the non-payment default within thirty (30) days.
20.3      Termination Costs . In the event of Owners’ termination for convenience under Section 20.1, Service Provider shall recover from Owners, as complete, full, and final settlement for such terminated work, a sum equal to Service Provider’s actual direct costs for work performed as of the termination date. In addition, Service Provider shall recover from Owners its reasonable and direct costs incurred to terminate its subcontracts and purchase orders that support the Project. Service Provider shall in no event be entitled to recover indirect, special,

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incidental, consequential or exemplary damages, including but not limited to loss of profits or revenue on Services not performed. Service Provider shall also recover the following from the Owner in the event of termination for convenience:
(a) Direct costs for storage, transportation, insurance and other costs incurred, reasonably necessary for the preservation, protection, or disposition of the materials or equipment.
(b) Direct costs for demobilization, including removal of equipment or other materials, and personnel-related costs (i.e., internal administrative costs and severance (consistent with Westinghouse’s and WECTEC’s severance programs effective immediately prior to bankruptcy), but not liabilities or damages arising from Service Provider’s release or termination of an employee or employees); and
(c) Any other costs approved in writing by Owners in advance of the termination date.
20.4      Service Provider shall not be paid for any Services performed by it or its subcontractors or costs incurred after receipt of a notice of suspension or termination, which Service Provider could reasonably have avoided, nor shall Owners be liable for any anticipated profits on Services not performed, or for any loss or damage with respect to any equipment, materials or property purchased or leased for anticipated use in the Services, unless such equipment, materials or property were specifically authorized by Owners. Payment as specified in this Article 20, and indemnity specified in Article 17, as applicable, shall be Service Provider’s sole and exclusive remedies and Owners’ sole and exclusive obligation and liability to Service Provider with respect to such termination.
20.5      Without limiting the terms of the Facility IP License in the Event of a Triggering Event (Exhibit F), from and after termination of this Agreement, Service Provider shall have no obligation to deliver any further Facility IP to Owners.
ARTICLE 21.      ASSIGNMENT
Owners’ consent shall not be required for Service Provider’s assignment in connection with the Bankruptcy Cases of its rights or obligations under this Agreement; provided however, that the rights of Owners under the Bankruptcy Code are preserved in all respects. After the conclusion of the Bankruptcy Cases, Service Provider shall be entitled to assign its rights or obligations under this Agreement without prior approval of Owners. Owners shall not assign this Agreement in whole or in part without the prior written consent of Service Provider, which consent shall not be unreasonably withheld; provided, however, that this Agreement may be assigned in whole or part by the Owners to any agent, replacing GPC as agent for the Owners, pursuant to the provisions of the Ownership Agreement; and provided further that any Owner shall be permitted to assign this Agreement to another Owner or to an Affiliate in accordance with the Ownership

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Agreement or to any purchaser or any Financing Parties in connection with the transfer of control or ownership of the Facility.
ARTICLE 22.      GOVERNING LAWS AND REGULATIONS, VENUE, AND COMPLIANCE WITH LAWS
22.1      With acknowledgment that the terms and conditions of this Article 22 have been expressly bargained for and are an essential part of this Agreement, the Parties agree that this Agreement will be governed by and interpreted in accordance with the laws of the State of New York, without giving effect to any choice-of-law rules that may require the application of the laws of another jurisdiction. The Parties agree that the exclusive jurisdiction and venue for any action relating to this Agreement shall be as provided in Article 19. To the extent allowable under this Agreement, for any suit or action in a court of law relating to this Agreement, the Parties agree that the exclusive jurisdiction (personal and, as allowed, subject matter) and venue for any action relating to this Agreement shall be the United States District Court for the District of Columbia, and the Parties hereby consent to such jurisdiction and venue. Owners and Service Provider each hereby irrevocably waive their respective rights to a trial by jury in any action or proceeding arising out of this Agreement.
22.2      Service Provider represents that in performing the obligations of this Agreement, all applicable federal, state and local laws and regulations and Executive Orders of the President of the United States have been and will be complied with by Service Provider and its Representatives.
22.3      Without limiting the generality of the foregoing obligation, Service Provider agrees that it is responsible for obtaining all applicable permits, licenses, or other Governmental Approval necessary for and unique to Service Provider’s performance of the Services. Service Provider will adhere to applicable Laws including for example: (i) all labor laws and regulations including the use of U.S. citizens or properly documented alien workers under the Immigration Act of 1990 and the Immigration and Nationality Act of 1952, as amended; (ii) all applicable safety and health standards required by the NRC, the Atomic Energy Act of 1954, as amended, and the ERA, as well as all applicable safety and health standards promulgated under the OSHA of 1970, including but not limited to OSHA General Industry Regulations 1910.269 and 1926 Subpart V and all applicable state or local health or safety authority with jurisdiction over the Services performed or to be performed under this Agreement; (iii) the Department of Homeland Security’s E-Verify requirements as well as applicable State immigration laws; (iv) the Foreign Corrupt Practices Act, 15 U.S.C. §§ 78dd-I et seq. (as that act may be amended from time to time); (v) the Department of Energy’s regulations, including but not limited to the protection of special nuclear material and sensitive nuclear technology; and (vi) all applicable laws and regulations identified in this Agreement. Service Provider expressly agrees to indemnify, defend and hold harmless the Owner Persons Indemnified from and against all claims, fines or penalties of every kind and nature presented or brought for any claim or liability arising from or based on the violation of any Law on the part of Service Provider or its Representatives.

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22.4      Each Party hereby represents and warrants as follows at all times during the term of this Agreement: (i) all of its activities are authorized and in compliance with and not prohibited by 10 C.F.R. Part 810; (ii) neither it, nor any of its employees, authorized agents, subcontractors, principals or beneficial owners is a Specially Designated National as defined by U.S. Department of the Treasury Office of Foreign Asset Control (“OFAC”); (iii) neither it, nor any of its employees, authorized agents, subcontractors, principals or beneficial owners, is a citizen of a country subject to an OFAC Country Sanction; and (iv) it, and all of its employees, authorized agents, subcontractors, principals or beneficial owners, are in compliance with any and all applicable Laws and regulations relating to the prevention of money laundering and the financing of terrorism to which they are expressly subject.
22.5      Certain Owners are government contractors under an Area Wide Public Utilities Contract with the General Services Administration of the United States government. Service Provider agrees that each of the clauses contained in the Federal Acquisition Regulations referred to below, shall, as if set forth herein in full text, be incorporated into and form a part of this Agreement, and Service Provider shall comply therewith if the amount of this Agreement and the circumstances surrounding its performance require such Owner to include such clause in contracts between such Owner and others:
(1)         52.203-3           Gratuities (APR 1984);
(2)         52.203-6           Restrictions on SubService Provider Sales to the Government (SEP
                                       2006);
(3)         52.203-7           Anti-Kickback Procedures (MAY 2014);
(4)         52.219-8           Utilization of Small Business Concerns (OCT 2014);
(5)         52.219-9           Small Business Subcontracting Plan (OCT 2014);
(6)         52.222-21         Prohibition of Segregated Facilities (FEB 1999);
(7)         52.222-26         Equal Opportunity (MAR 2007);
(8)         52.222-37         Employment Reports on Veterans (JUL 2014);
(9)         52.222-40         Notification of Employee Rights under the National Labor
                                       Relations Act  (DEC 2010);
(10)       52.222-50         Combating Trafficking in Persons (FEB 2009);
(11)       52.222-54         Employment Eligibility Verification (AUG 2013); and
(12)       52.225-13         Restrictions on Certain Foreign Purchases (JUN 2008).

22.6      If Service Provider is subject to the requirements set forth in Federal Acquisition Regulations 52.219-9, Service Provider will (i) adopt a subcontracting plan (“Plan”) that complies with the requirements of 52.219-9; (ii) provide a written copy of the Plan to Owners, and (iii) upon written request, provide timely periodic reports to Owners that reflect the amounts paid to subcontractors who are a small business concern, veteran-owned small business concern, service-disabled veteran-owned small business concern, HUBZone small business concern, small disadvantaged business concern, or women-owned small business concern.
22.7      Service Provider represents and warrants that Service Provider is not debarred, suspended or proposed for debarment to any department, agency or other division of the United

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States government. In the event that Service Provider or any of its officers become debarred, suspended or proposed for debarment during the term of this Agreement, Service Provider will immediately notify Owners verbally and in writing.
22.8      Service Provider certifies that no federal funds have been paid or will be paid to any Person including any registered lobbyists for influencing or attempting to influence an officer or employee of any Federal agency in connection with this Agreement or subsequent amendments of this Agreement.
22.9     Davis-Bacon Act Required Contract Clauses .
(a)    The contract clauses contained under the heading “Davis-Bacon Act Required Provisions” in Exhibit J-1 (Davis-Bacon Act Required Provisions) to this Agreement shall, as if set forth herein in full text, be incorporated into and form a part of this Agreement, and Service Provider shall comply therewith if the amount of this Agreement and the circumstances surrounding its performance require any Owners to include such clauses in this Agreement.
(1)    The Parties will cooperate in seeking appropriate exemptions from disclosure under the Freedom of Information Act, 5 U.S.C. § 552, and associated regulations for certified payroll data provided to federal agencies in the course of compliance with the Davis-Bacon Act and the Davis-Bacon Act regulations.
(2)    Where necessary and required by law, Service Provider will support Owners with the maintenance of the DAVIS-BACON AND RELATED ACTS COMPLIANCE PROGRAM FOR VOGTLE UNITS 3&4 PROJECT.
(b)    The wage determinations set forth in Exhibits J-2 through J-5 are applicable to Services provided under this Agreement.
ARTICLE 23.      EQUAL EMPLOYMENT OPPORTUNITY
23.1      Owners comply with all applicable federal and state fair employment Laws, including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, all provisions of Executive Order 11246, as amended, 41 C.F.R. § 60-1, and all of the rules, regulations and relevant orders of the Secretary of Labor. Owners prohibit any acts of discrimination, or illegal harassment on the basis of race, color, religion, age, disability, veteran status, gender, sex, sexual orientation, gender identity, national origin or any other basis prohibited by law. Owners are committed to taking affirmative action as required by Law and to ensure that applicants are employed, and that employees are treated during employment, without regard to their race, gender, color, religion, age, national origin, disability, veteran status, or any classification protected by federal, state or local law. Such action includes, but is not limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including

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apprenticeship. Owners will post in conspicuous places, available to employees and applicants for employment, all legally required notices stating that all qualified applicants will receive consideration for employment without regard to race, color, religion, age, national origin, sex, sexual orientation, gender identity, disability, or veteran status.
23.2      Service Provider will comply with all applicable federal and state fair employment Laws, including, without limitation, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 and the Americans with Disabilities Act of 1990, and all provisions of Executive Order 11246, as amended, 41 C.F.R. § 60-1, and all of the rules, regulations and relevant orders of the Secretary of Labor. Service Provider will not discriminate against any employee or applicant for employment because of race, color, religion, age, disability, veteran status, genetic information, sex, sexual orientation, gender identity, national origin, or any classification protected by federal, state or local law. Service Provider shall take affirmative action as required by law and to ensure that applicants are employed, and that employees are treated during employment without regard to their race, gender, color, religion, age, national origin, disability, veteran status, or any classification protected by federal, state or local law. Such action will include, but not be limited to, the following: employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship. Service Provider agrees to post in conspicuous places, available to employees and applicants for employment, all government required notices stating that all qualified applicants will receive consideration for employment without regard to race, sex, sexual orientation, gender identity, color, religion, age, national origin, physical handicap, or veteran status.
23.3      In accordance with the U.S. Department of Labor’s regulations implementing the Vietnam Era Veterans Readjustment Assistance Act, as amended, at 41 C.F.R. Part 60-300, Owners and Service Provider shall abide by the requirements of 41 C.F.R. § 60-300.5(a). This regulation prohibits discrimination against qualified protected veterans and requires affirmative action by covered prime Service Providers and subcontractors to employ and advance in employment qualified protected veterans.
23.4      In accordance with the U.S. Department of Labor’s regulations implementing Section 503 of the Rehabilitation Act of 1973, as amended at 41 C.F.R. Part 60-741, Owners and Service Provider shall abide by the requirements of 41 C.F.R. § 60-741.5(a). This regulation prohibits discrimination against qualified individuals on the basis of disability and requires affirmative action by covered prime contractors and subcontractors to employ and advance in employment qualified individuals with disabilities.
ARTICLE 24.      INSURANCE
24.1      Service Provider-Furnished Insurance for Off-Site Activities . Service Provider (and its subcontractors, if any) shall provide and maintain in effect during performance of the Services the following insurance with minimum limits as specified for each type of insurance to cover off-Site activities:

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(a)      Workers’ Compensation Insurance in accordance with statutory requirements and Employer’s Liability Insurance with limits not less than $1,000,000. Coverage should include claims for applicable workers’ compensation, occupational disease, personal injuries, and death to Service Provider’s employees in amounts required by statute.
(b)      Commercial General Liability Insurance, including with limits not less than $2,000,000 each occurrence, and annual aggregate, and including broad form contractual coverage, product liability and one (1) years’ completed operations coverage, broad form bodily injury and property damage coverage. Any deductible or self-insured retention cost shall be for the account of Owners, but such deductible or self-insured retention cost shall not exceed $250,000.
(c)      Excess Liability or Umbrella Liability Insurance for Bodily Injury and Property Damage Liability with $5,000,000 combined single limit each occurrence and in the aggregate. Any deductible shall be for the account of Service Provider. Any excess liability or umbrella policy will be applicable to the general liability, auto liability and employer’s liability policies that are required.
(d)      The Commercial General Liability and the Excess Liability or Umbrella Liability insurance coverages must name the Owners Persons Indemnified as well as their respective officers, directors, employees, agents, and representatives as additional insureds with respect to liability arising out of Services performed by or on behalf of Service Provider under this Agreement; provided that Service Provider’s insurance will not provide coverage for injury or damages to the extent resulting from the sole negligence of the Owners Persons Indemnified.
(e)      Other insurance as may be mutually agreed upon by the Parties.
24.2      Professional Liability. Service Provider will make all commercially reasonable efforts to maintain and renew as necessary its professional liability coverage currently in place. At Owners’ option, Owners and Service Provider will cooperate to obtain professional liability coverage in addition to that already in place, or if necessary to replace Service Provider’s existing professional liability coverage. Service Provider will maintain such professional liability coverage at Owners’ expense.
24.3      Service Provider’s Property. Service Provider will be responsible for providing and maintaining property insurance coverage, to the extent such property is not a permanent part of the finished Project and not covered by a separate Builder’s Risk Insurance Policy provided and maintained by Owners pursuant to Section 24.11.
24.4      Automobile Liability Coverage. Service Provider will be responsible for providing and maintaining Comprehensive Automobile Liability insurance, including coverage for owned, hired and non-owned automobiles, with a combined single limit not less than $2,000,000 per occurrence.

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24.5      Service Provider shall use commercially reasonable efforts to ensure the insurance required by Sections 24.1, 24.2, 24.3 and 24.4 shall contain a waiver of subrogation by Service Provider’s (or any subcontractor’s) insurance carrier against Owners and its insurance carrier with respect to all obligations assumed by Service Provider pursuant to this Agreement. All such insurance shall be with sound insurance companies. The liability policies under Section 24.1(b) shall not have any “other insurance” clause or language which would jeopardize the primacy of Service Provider’s insurance with respect to the Owners’ self-insured retention or excess insurance policies.
24.6      Service Provider shall require its insurer(s) to issue endorsements (if required) to add Owners, their subsidiaries, associated and/or affiliated companies, their successors and assigns, SNC and Southern Company Services, Inc., and the officers, directors, agents and employees of any of them, as additional insureds on Service Provider’s off-Site policies, established pursuant to Section 24.1, and Service Provider’s Automobile Liability Coverage, established pursuant to Section 24.4.
24.7      Service Provider must notify Owners at least thirty (30) days before the effective date of any cancellation (and ten (10) days due to nonpayment of premium) of any of the required policies.
24.8      Service Provider agrees to submit to Owners Certificates of Insurance evidencing the coverage prescribed by this Agreement and the expiration date(s) of each applicable policy. All such requested Certificates of Insurance will be submitted to Owners. In no event, however, will Owners’ collection and review of such certificates (or decision not to collect and review such certificates) create any responsibility on the part of Owners to verify the appropriateness and validity of Service Provider’s insurance, to notify Service Provider with regard to any matter related to its insurance, or to ensure that the insurance requirements above have been satisfied; nor does such collection and retention create a waiver by Owners of any of their rights in connection with such insurance.
24.9      Owner-Controlled Insurance Program. Owners will provide Service Provider with Workers’ Compensation Insurance, Commercial General Liability Insurance and Excess Liability Insurance for Services performed on-Site through its Owner-Controlled Insurance Program (“OCIP”). If at any time the OCIP is not maintained, Service Provider will be responsible for maintaining coverage identical to the coverage listed in Section 24.1.
24.10      Nuclear Insurance.
(a)      Owners will maintain insurance to cover the legal obligation to pay damages because of bodily injury or property damage caused by a Nuclear Incident, as that term is defined under the AEA, such policy to be provided by American Nuclear Insurers or the equivalent. The insurance will be in such form and in such amount to meet the financial protection requirements of NRC regulations and the AEA. As provided by the AEA, Service Provider and its subcontractors shall be included among the insureds or persons protected under the financial protection arrangements in the AEA.

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(b)      Owners will maintain a governmental indemnity agreement pursuant to NRC regulations and the AEA.
(c)      In the event that the financial protection system contemplated by Section 170 of the AEA is repealed or changed, Owners will maintain in effect, during the period of operation of the Facility, liability protection through governmental indemnity, limitation of liability and/or insurance which takes into account the availability of insurance, customary practice in the United States electric utility industry for plants of similar size and character, and other relevant factors in light of the then existing conditions.
(d)      As required by the NRC, the foregoing financial protection, indemnification agreement, and insurance will be maintained in effect from the time nuclear fuel or materials first arrive at the Site.
24.11      Property Insurance. Owners will also maintain such property insurance, including an insurer’s waiver of subrogation in favor of Service Provider, its subcontractors and suppliers, as is available at a reasonable cost and on reasonable limits from Nuclear Electric Insurance Limited, or other sources consistent with the regulations of the NRC and the current industry practice, providing protection against direct physical loss or damage to the Facility. Subject to Article 17 hereunder (Limitation of Liability), any deductible amount under such property insurance that may be applicable to any damage to the property of Owners will be borne by Owners. Owners waive any right of recovery from Service Provider, its subcontractors or suppliers for damage to any property located at the Site arising out of a Nuclear Incident as that term is defined under the AEA.
24.12      Employees’ Claims. Service Provider will promptly inform Owners in writing of any employee’s claim, whether workers’ compensation, tort liability or otherwise, for bodily injury allegedly caused by a nuclear energy hazard arising out of the Project, or during the course of transporting nuclear material from the Project. Service Provider’s written notice will provide the following information:
Name and address of claimant;
Time and place of alleged exposure to nuclear energy hazard, if known; and
Description of alleged bodily injury.

The notice is to be addressed to:
Southern Nuclear Operating Company, Inc.
Attention: Director, Supply Chain Management
Post Office Box 1295
Birmingham, Alabama 35201


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ARTICLE 25.      UNFORESEEABLE CONDITIONS
Neither Party hereto shall be considered in default in the performance of its obligations hereunder to the extent that the performance of any such obligation is delayed due to acts of God, acts of civil or military authority, governmental priorities, fires, labor disputes, strikes (but not including strikes of Service Provider’s employees unless part of a nationwide or sector-wide strike), acts of the public enemy, floods, epidemic, war, riot, or like occurrences, provided such occurrences are beyond the control, and without the fault, of the Party seeking excuse hereunder; provided however that Owners’ payment obligations shall not be subject to any excuse for unforeseeable conditions. Any Party seeking excuse under this Article 25 shall promptly notify in writing the other Party of its delay and take all reasonable steps to mitigate the effect of such delay on the other Party, except that any Party shall have the right to settle its strikes or labor disputes in its sole discretion. The Party claiming excuse shall resume its obligations as soon as practical. The unaffected Party may take any actions available under this Agreement or available by law to mitigate or resolve the cause of the claimed excuse.
ARTICLE 26.      CYBER SECURITY PROGRAM REQUIREMENTS
26.1      Protection of Digital Computer and Communication Systems and Networks . Service Provider understands that Owners are required under 10 C.F.R. § 73.54 to assure all Services performed related to digital computer and communication systems and networks are adequately protected against cyber-attacks, including the design basis threat described in 10 C.F.R. § 73.1, or Services associated with (i) safety-related and important-to-safety functions, (ii) security functions, (iii) emergency preparedness functions, and (iv) support systems and equipment which if compromised, would adversely impact safety, security, or emergency preparedness functions. Service Provider agrees that all related Services performed by Service Provider will be performed in compliance with Owners’ cyber security plan.
26.2      Procurement of Services . When providing cyber security related Services or any Services on critical digital assets (hardware, firmware, operating systems, or application software) at Owners’ facilities, such Services will be subject to the controls of the Service Provider’s Quality Assurance Program including the Quality Assurance Interface Agreement, including as follows (provided that in the event of a conflict, Owners’ Quality Assurance Program requirements will control):
(a)      Service Provider, before beginning permitted access to Owners’ network, will be made aware of and trained on Owners’ Quality Assurance Program and must agree to abide by the relevant policies; and Service Provider will at all times remain responsible for the compliance of its authorized Representatives and sub-tier contractors.
(b)      Service Provider will participate in Owners’ cyber security training programs or equivalent qualification from Service Provider, subject to Owners’ approval of such qualification.
(c)      Service Provider will require:

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(i)        configuration management of the Service Provider’s computers, hardware or other equipment to include virus protection, patch management, authentication requirements and secure internet connections;
(ii)       the maintenance and secure transfer and storage of information and code while off-Site to include appropriate encryption, security and deletion protocols;
(iii)      a duty to protect confidentiality;
(iv)      software quality assurance (“SQA”) procedures;
(v)       approved and disapproved software requirements tabulation;
(vi)      processes and procedures for background investigations; and
(vii)     Owners’ right to audit or access Service Provider’s cyber security program.
ARTICLE 27.      COMPLIANCE WITH SITE AND SECURITY RULES AND POLICIES
27.1      Throughout the term of this Agreement, whenever any Service Provider Representatives are at the Site, Service Provider and its Representatives shall comply with all applicable rules, regulations, policies, programs, procedures and other requirements of Owners, including, but not limited to, applicable requirements relating to site, security, FFD, quality concerns, quality control, quality assurance, safety, radiation protection and control, environmental compliance and regulatory compliance, and electronic communications (collectively, “Site Rules”). If at any time during the term of this Agreement, Service Provider or its Representatives fail to comply with Owners’ Site Rules, Owners reserve the right to exercise all their legal remedies including the right to refuse Site entry to or have removed from the Site Service Provider or its Representatives. It is Owners’ expectation that these Site Rules be communicated by Service Provider to its Representatives before they are granted access to any of Owners’ locations.
27.2      Asbestos Responsibility . Certain areas for which Service Provider has contracted to perform work may contain asbestos. As used in this Section 27.2, the term “asbestos” includes “asbestos-containing material” and “presumed asbestos-containing material”, as these terms are defined in 29 C.F.R. § 1926.1101 and 29 C.F.R. § 1910.1001. Areas within the Site which are known by Owners to contain asbestos are posted. It is Service Provider’s responsibility to exercise caution while at the Site in light of the potential that the area in which Service Provider is working may contain asbestos. Service Provider shall take the following precautions, unless advised otherwise in writing by Owners: (1) Service Provider must check for postings in the area, and (2) Service Provider must be sensitive to the potential that asbestos might exist. If Service Provider determines that there is a potential that asbestos exists in the work area or

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component, Service Provider shall immediately stop work and notify Owners to investigate the potential asbestos-containing material to determine if, in fact, the material contains asbestos. If the material is found to be asbestos, Service Provider must coordinate any related Services with Owners. Under no circumstances shall work continue when asbestos is discovered without the specific approval of Owners. Unless authorized in writing by Owners in advance, Service Provider shall not use asbestos in the Facility.
27.3      Service Provider will obtain from Owners all Site Rules and procedures and educate its Representatives concerning such Site Rules and procedures before any of its Representatives enter any of Owners’ premises. Service Provider acknowledges that its Representatives may be required to successfully complete indoctrination classes and similar instructional classes concerning such procedures before admission to, or the performance of Services on, Owners’ premises.
27.4      Owners have a zero tolerance policy on firearms being brought onto Owners’ property. Under no circumstance is a Service Provider employee, agent, or Representative to bring firearms, explosives or any other incendiary devices onto any property owned or operated by Owners. This prohibition includes leaving such items in a vehicle that is parked in Owners’ parking lot. Violation of this policy could result in Service Provider or its Representatives being barred from all property owned or operated by Owners or their Affiliates.
27.5      Safety . Service Provider will be solely responsible for conforming to safety practices dictated by the nature and condition of the Services while at the Site, including compliance with OSHA of 1970. Service Provider and its Representatives must be trained in accordance with applicable OSHA Standards. Within a reasonable time following a specific request by Owners, Service Provider shall provide Owners copies of training records for its Representatives concerning a particular safety and health standard and/or particular substantive or technical training requirement of the job.
27.6      Reporting of Accidents and Noncompliance with Safety Requirements . Service Provider will promptly report to Owners, on such form and in such detail prescribed below, all accidents causing, or having the potential to cause, personal injury or property damage and other unsafe acts or conditions, arising from or otherwise connected with performance of the Services at the Site or Owners’ premises. In the event Owners provide written notification to Service Provider of any noncompliance with the provisions of this Section 27.6, Service Provider shall take corrective action promptly in a manner acceptable to Owners. Owners will not be obligated to identify, and notify Service Provider of, noncompliance with this Section 27.6 and any failure by Owners to identify, and notify Service Provider of, such noncompliance will not relieve Service Provider of any obligation or liability under this Agreement.
27.7      Medical/Injuries Reporting . Owners shall provide first aid to Service Providers Representatives on-Site. Injuries that require treatment beyond first aid will follow Owners’ emergency response procedures.

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27.8      Service Provider shall immediately notify Owners of any recordable injury or potential serious hazard to personnel on the job site. Service Providers shall submit a detailed, written report to Owners within forty-eight (48) hours of the recordable injury or serious incident. The injury report will contain the following information:
Name of injured person and employee identification number,
Date of injury,
Names of any witnesses and employee identification numbers,
Accident description,
Cause of accident as evident at the time,
Action taken to prevent re-occurrence, and
Nature/Extent of injury.

All Service Provider personnel requiring medical attention on the Site or as a result of or relating to the Services performed on the Site will be drug screened by Owners as soon as possible and the test results must be forwarded to the designated Owners’ Representative.
Service Provider shall post and keep current its OSHA Log at their on-Site office while Service Provider is performing Services for Owners. A copy of this OSHA Log will be provided to Service Provider representatives upon request.
Owner’s Representative is responsible for reporting all serious incidents, injuries, and occupational illnesses that occur on-Site to Service Provider’s Representatives. Owners shall perform an investigation, and a Service Provider’s representative may participate in the investigation as determined by Owners’ management and Service Provider. The investigation results and corrective actions must be provided to Service Provider, and Service Provider reserves the right to require additional corrective measures.
For clarity, the above reporting obligation and other requirements of this Section 27.8 shall only arise in connection with the performance of Services at or on Owners’ property.
27.9      In the event that Service Provider requires access to the Vogtle Units 1 and 2 site, Service Provider will comply with all requests by Owners to facilitate such access, as required by NRC regulations and Owners’ procedures. Owners reserve the right, in preparation for the declaration of a protected area for the Project, to specify additional requirements with respect to Fitness for Duty and access authorization, with the consent of Service Provider which consent will not be unreasonable withheld.

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ARTICLE 28.      FITNESS FOR DUTY
28.1    The NRC’s Fitness For Duty regulatory requirements, codified in 10 C.F.R. Part 26, require licensees authorized to construct and operate nuclear power reactors to implement an FFD program that includes contract personnel such as Service Provider and its Representatives. Service Provider agrees that, by performing hereunder, Service Provider accepts and shall strictly adhere to the following requirements that:
(a)    Service Provider will adhere to Owners’ FFD program;
(b)    Service Provider and its Representatives will provide support to Owners in connection with Owners’ FFD program, including without limitation making personnel available and providing documents and information reasonably requested by Owners;
(c)    Service Provider Representatives who have been denied access or have been removed from activities within the scope of 10 C.F.R. Part 26 at any nuclear power plant for violation of the FFD policy will not be assigned to work within the scope of 10 C.F.R. Part 26 without the knowledge and consent of Owners;
(d)    Service Provider supervisory Representatives, to the extent that they are covered by 10 C.F.R. Part 26, will be trained in techniques and procedures for initiating appropriate corrective action;
(e)    Owners are responsible to the NRC for maintaining an effective FFD program and that duly authorized representatives of the NRC may inspect, copy or take away copies of reports related to the implementation of Owners’ FFD program under scope of contracted activities;
(f)    Service Provider Representatives responding to work at Owners’ facilities shall be fit for duty within the scope of 10 C.F.R. Part 26 and able to fully perform the assigned work activities; and
(g)    all Service Provider Representatives shall report to work physically able to perform their job duties and that the Service Provider shall consider the scope of work required for each contract employee and the physical and mental requirements for each job (e.g., ladder climbing; work at elevations; working in extreme temperatures; heavy lifting; prolonged walking/standing; cognitive ability). Prior to an assignment under this Agreement, the Service Provider shall exercise due diligence to ensure that its Representatives who have pre-existing medical conditions that might contraindicate their work in these environments are appropriately evaluated prior to assignment.

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ARTICLE 29.      EMPLOYEE PROTECTION
29.1      To the extent required by Law, Service Provider and its personnel shall comply with the requirements of Section 211, “Employee Protection,” of the Energy Reorganization Act of 1974, 42 U.S.C. § 5851, as amended; 10 C.F.R. § 50.7, “Protection of Employees Who Provide Information” and 29 C.F.R. Part 24.
29.2      Service Provider and its Representatives will maintain a safety conscious work environment (“SCWE”) in which all employees feel free to raise concerns without fear of harassment, intimidation, retaliation or discrimination.
29.3      Service Provider and its Representatives will be subject to Owners’ programs and procedures at all locations where Services under this Agreement are being performed to advise their personnel that they are entitled and encouraged to raise safety concerns to their management, to Owners, and to the NRC without fear of discharge or other discrimination. Owners’ programs to which Service Provider and its Representatives are subject will include a Project Employee Concerns Program (“Project ECP”) and a Project Corrective Action Program (“Project CAP”). The Project ECP and Project CAP will be reflected in written policies and procedures that employees may use to raise their concerns, and availability of the Project ECP and Project CAP will be broadly communicated. At the request of Owners and for the purposes of Owners’ administration of the Project ECP, Service Provider will provide access to its personnel, and non-privileged documentation and records, as well as provide support Services on an as-needed basis (provided Service Provider has the available personnel). At the request of Owners and for the purposes of Owners’ administration of the Project ECP, Service Provider will provide access to Service Provider’s proprietary ECP policies and procedures for the limited purposes of transitioning to a Project ECP and, after the transition to a Project ECP is complete, Owners shall have access only in the event that such access is necessary for Owners to comply with any regulatory obligation or to administer any Project ECP investigation. Service Provider will provide Owners’ Project ECP personnel with access to Service Provider’s Vogtle Site-related non-privileged ECP records for Owners’ use in maintaining and administering the Project ECP. For those ECP records generated prior to the Effective Date, Service Provider’s obligation to provide ECP records is limited to those records relevant to Owners’ administration of a Project ECP investigation or Owners’ administration of a referred allegation from the NRC and Service Provider reserves the right to withhold records which, in the opinion of Service Provider’s legal counsel, should be withheld.
29.4      As part of its employee training program for employees at Owners’ Site, Service Provider will provide training to its employees regarding requirements of Section 211 of the ERA, 10 C.F.R. § 50.7, and NRC’s Form 3. Employee training must also include information on Nuclear Safety Culture and SCWE. Owners shall have the right to audit training materials and the effectiveness of such training not less than every twelve (12) months during the term of this Agreement.
29.5      All employment decisions for Service Provider’s employees will be made by Service Provider. Owners are not a joint employer with Service Provider and do not direct or

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control Service Provider’s employees, except those seconded to Owners. Consistent with the confidentiality requirements of its own ECP, Service Provider will promptly notify Owners’ Project ECP representative of any allegation or complaint made by any Service Provider employee of harassment or intimidation under Section 211 of the ERA and 10 C.F.R. § 50.7 regarding the Project, or any investigation or proceeding relating to such an allegation or complaint. Service Provider will inform Owners promptly of any significant investigatory activity by the NRC and any enforcement action by the NRC related to any such allegation or complaint of harassment or intimidation under Section 211 related to the Project. If Service Provider takes any adverse employment action, limited to termination or demotion, of any Service Provider personnel involved in such allegation or complaint Service Provider will provide notification to Owners’ legal counsel of such adverse employment action contemporaneously with notification to the affected personnel. Nothing in this Section 29.5 shall limit Owners’ access to records and documentation related to such allegation or complaint in the event that such access is necessary for Owners to comply with any regulatory obligation.
29.6      Within two (2) business days of Service Provider’s ECP’s receipt of a nuclear safety or quality concern relating to the Services at the Project, Service Provider will provide notice of such concern to the Project ECP representative at the Vogtle site or corporate office. Service Provider will also ensure associated records and reports are maintained in accordance with applicable retention policies as specified by NRC regulations and provide a copy of such non-privileged records, with the exception of Service Provider’s proprietary ECP policies and procedures which shall be available per Section 29.3, at the request of the Project ECP representative.
29.7      Service Provider agrees to indemnify and hold harmless the Owner Persons Indemnified from any claims by Service Provider’s employees (except for those seconded to Owners) and associated costs (including costs of defense, attorney’s fees and court costs), expenses, fines, penalties or other liability arising solely from conduct of Service Provider or its Representatives found to be in violation of Section 211 of the ERA or 10 C.F.R. § 50.7.
29.8      In accordance with 10 C.F.R. § 50.7, this Agreement does not in any way prohibit or restrict or otherwise discourage the free flow of information from Service Provider or its Representatives to the NRC. Further, any associated subcontract affecting the terms, compensation, conditions and privileges of employment will not contain any provision which prohibits, restricts or otherwise discourages the free flow of information to the NRC.
ARTICLE 30.      NO TOLERATION OF UNACCEPTABLE BEHAVIORS
30.1      The Parties and their Representatives shall at all times conduct their business activities pursuant to this Agreement in an ethical manner and in compliance with all applicable laws and regulations. Representatives shall not, at any time, exhibit the following behaviors:
(a)      Harassment or unlawful discrimination of any kind or character, including but not limited to conduct or language derogatory to any individual, race, color, religion, age, disability, veteran status, genetic information, sex, sexual orientation, gender

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identity, national origin, or any classification protected by federal, state or local law, that creates an intimidating, hostile or offensive working environment. Specific examples include, but are not limited to, jokes, pranks, epithets, written or graphic material, or hostility or aversion toward an individual or group on the basis of a legally protected status.
(b)      Any conduct or acts such as threats or violence that creates a hostile, abusive, or intimidating work environment. Examples of such inappropriate behaviors include, but are not limited to, fighting, abusive language, inappropriate signage, use or possession of firearms on Owners’ property, and destruction of any Party’s or any Party’s employee property at the worksite or the threat of any of the foregoing.
(c)      Service Provider’s practices that are unsafe or harmful to the natural environment.
(d)      Use of Owners’ or Service Provider’s computers, email, telephone or voice-mail system that in any way involves material that is obscene, pornographic, sexually oriented, threatening, or otherwise derogatory or offensive to any individual, race, color, religion, age, disability, veteran status, genetic information, sex, sexual orientation, gender identity, national origin, or any classification protected by federal, state or local law.
(e)      The use of, being under the influence of, or possession of alcoholic beverages or unlawful drugs on Owners’ property.
(f)      Engagement in any activity that creates a conflict of interest or appearance of the same, or that jeopardizes the integrity of Owners or Service Provider (including but not limited to providing gifts and gratuities to Owners’ employees).
(g)      Posting in any social media forum (Facebook, Twitter, blogs, etc.) or communicating in any other public setting in a manner that does not constitute protected speech or protected activity and violates any of the provisions of this Agreement, regardless of whether those postings or communication are made using Owners’ resources, Service Provider resources, or any Representative’s resources, during or outside of work hours. Examples include, but are not limited to, divulging Confidential and Proprietary Information or making harassing or discriminating statements about, or directed at, employees or customers of Owners or its Affiliates or Service Provider or its Affiliates. No Representative will imply or in any way indicate that he/she speaks on behalf of Owners or its Affiliates or Service Provider or its Affiliates in any social media forum or any other public setting. Each Party reserves the right to monitor all communication made by anyone on such Party’s equipment, including laptops, cellular telephones, and portable computing devices ( e.g. , Blackberry, Smart Phones) and no Person has any reasonable expectation of privacy in such communications. Each Party’s right to monitor includes, but is not limited to, the right to archive, store, and forensically recover electronic communications on such Party’s equipment.

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30.2      Owners and Service Provider shall communicate these required behaviors to all Representatives that work on the Project. If a Service Provider Representative observes an Owners’ employee doing or is ever asked by an Owners’ employee to do something the Representative considers to be unethical, illegal, or in violation of these behavior standards, Owners expect Service Provider to notify Owners’ management immediately.
ARTICLE 31.      NON-ENGLISH SPEAKING SERVICE PROVIDER WORKERS
31.1      Service Provider shall at all times assure that an English speaking Representative of Service Provider is provided for non-English speaking Service Provider Representatives and its subcontractors (“Service Provider Workers”). The Representative must have the ability to communicate with and translate the foreign language of all non­English speaking Service Provider Workers to assure that the ability to communicate vital information is readily available. If the non-English speaking Service Provider Workers are divided into work groups, it shall remain the responsibility of the Service Provider that an English speaking Representative of Service Provider is provided so as to assure that the ability to communicate vital information is still readily available to all non-English speaking Service Provider Workers. Service Provider represents and warrants that it has communicated and translated to its non-English speaking Service Provider Workers including all information and training required by applicable laws and regulations and all other safety and health requirements, in addition to all job related duties. These requirements include but are not limited to OSHA of 1970, the Service Provider’s Safety Program, the contract documents including contract safety requirements, any relevant manufacturer’s information such as Material Safety Data Sheets, and the specific project safety plan for the work to be performed for Owners, in addition to any relevant hazards and special Site conditions that Owners have notified Service Provider may be encountered by Service Provider and/or its Service Provider Workers .
31.2      Service Provider represents and warrants that it has communicated and translated to its non-English speaking Service Provider Workers including all information and training required by applicable laws and regulations and all other safety and health requirements, in addition to all job related duties. These requirements include but are not limited to OSHA of 1970, the Service Provider’s Safety Program, the contract documents including contract safety requirements, any relevant manufacturer’s information such as Material Safety Data Sheets, and the specific project safety plan for the work to be performed for SNC, in addition to any relevant hazards and special Site conditions that SNC has notified Service Provider may be encountered by Service Provider and or its Service Provider Workers .

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ARTICLE 32.      COMMUNICATIONS
Service Provider will coordinate all media responses related to the Project with Owners, which must be approved in writing and aligned with Owners’ Nuclear Development Communications. To the extent reasonably practicable, Owners will coordinate press releases related to the Project with Service Provider. No right is granted to Owners to use as a trademark the name “Westinghouse”, the “Circle W” logo or the phrase “You Can Be Sure…”, either alone or in combination with any other word or symbol, without the written approval of Service Provider.
ARTICLE 33.      MISCELLANEOUS
33.1      Severability . In the event that any of the provisions of this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, Owners and Ser vice Provider shall negotiate in good faith to reach an equitable adjustment in the provisions of this Agreement with a view toward effecting the purpose of this Agreement, and the validity and enforceability of the remaining provisions shall not be affected thereby.
33.2      Survival . All terms that by their nature and context extend beyond the expiration or termination of this Agreement shall survive its termination.
33.3      Waiver of Breach . The waiver by either Party of a breach of any provision of this Agreement shall not be construed as a waiver of any subsequent breach by the other Party.
33.4      Entire Agreement . The Parties hereto enter into this Agreement intending to be legally bound hereby. This Agreement represents the entire agreement between the Parties with respect to and supersedes all prior agreements regarding the subject matter hereof, including the Existing Services Agreement.
33.5      Further Assurances . Each Party hereto shall, at the other Party’s reasonable request, do, execute, acknowledge and deliver all such further acts, conveyances, assignments, transfers, documents and other assurances necessary to effectuate the purposes and carry out the terms and intent of this Agreement.
(Signatures on following page)

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed and attested by their duly authorized officers as of the day and year first herein above written.

GEORGIA POWER COMPANY, FOR ITSELF
 
WECTEC GLOBAL PROJECT
AND AS AGENT FOR OGLETHORPE
 
SERVICES INC.
POWER CORPORATION (AN ELECTRIC
 
 
 
 
MEMBERSHIP CORPORATION),
 
 
 
 
MUNICIPAL ELECTRIC AUTHORITY OF
 
BY:
/s/David C. Durham
GEORGIA, MEAG POWER SPVJ, LLC,
 
NAME:
David C. Durham
MEAG POWER SPVM, LLC, MEAG POWER
 
 
 
(Typed or Printed)
SPVP, LLC, AND THE CITY OF DALTON,
 
TITLE:
President
GEORGIA, ACTING BY AND THROUGH ITS
 
 
 
 
BOARD OF WATER, LIGHT AND SINKING
 
 
 
 
FUND COMMISSIONERS
 
 
 
 

BY:
/s/Chris Cummiskey
 
 
 
NAME:
Chris Cummiskey
 
 
(Typed or Printed)
 
 
 
TITLE:
Executive Vice President, Georgia Power Company
 
 
 
 
 
 
WESTINGHOUSE ELECTRIC
COMPANY LLC
 
 
 
BY:
/s/Jose E. Gutierrez
 
 
 
NAME:
Jose E. Gutierrez
 
 
(Typed or Printed)
 
 
 
TITLE:
President and CEO



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EXHIBIT A
SERVICES AND DIVISION OF RESPONSIBILITY

Table A.1 – Scope of Services
 
Service Provider Scope
Notes
ENGINEERING SERVICES
E1
Records management/document delivery for the Design Engineering
Will facilitate reconciliation of simulator modeling to Unit 3 configuration.
E2
Maintain design authority responsibility
Includes delegated ASME B&PV responsibility. Includes engineering support associated with design changes.
Design changes will be authorized by SNC.(per Agreement, section 5.7(a))

E3
Support engineering management and design services to complete the AP1000 ®  standard plant portion of the Vogtle Units 3 and 4 design
Includes Site and field and offsite engineering.
E4
Support engineering management and design services to complete the Vogtle Units 3 & 4 Site-specific design
Includes Site and field and offsite engineering.
E5
Engineering support for completion of security-related SSCs
Includes Building 304, Building 305, and Receiving Warehouse structures and equipment.
Includes related procurement support.
Includes support of system interfaces with Vogtle 1&2 security-related SSCs.
E6
Engineering support for security perimeter
Includes transitional boundary between Unit 3 and Unit 4.
Includes related procurement support, computer system installation and testing, and security system ITAAC closure.
E7
Engineering support for civil work
Includes “No Man’s Land” between Unit 3 and Units 1&2.
Includes related procurement support.
E8
Engineering support for site communications systems; security computer system; and alarm stations
Includes integration of Units 1&2 security and communications systems.
Includes related procurement support.

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Service Provider Scope
Notes
E9
Full implementation of Fuel Load Baseline (including Baseline 8 and post-Baseline 8) at the Site and Cranberry
Includes, but is not limited to, software development, testing, and installation; Baseline 8 simulator; Baseline 8 procedures; Integrated System Validation (ISV) and Human Factors Engineering (HFE) activities including final resolution of BL7 ISV, TSV and DV HED’s, classroom training development and delivery to the ISV subjects, ISV shakedown, development of APP-OCS-GER-420 and 520 reports to support ITAAC closure; and I&C hardware and software implementation.
In connection with I&C hardware and software implementation, Service Provider to support SNC’s procurement of spare parts based on lessons learned from other nuclear construction projects.
E10
Cyber security support, including support for ongoing CDA assessment, remediation, and validation scope
Includes providing documentation/procedures, design information, databases/tools and supporting updates to the same. Includes upgrade of core I&C systems for compliance with cyber security requirements.
E11
Complete CYS design, testing, and implementation
Includes software development, testing, and installation.
E12
Support for NRC core I&C inspections and cyber security program development
Support includes participation in NRC inspections and ITAACS for I&C systems, software and documentation utilized for recommending vendor upgrades to procured equipment and SNC Site cyber program development.
E13
Maintain Westinghouse ASME Program and N Stamp
Includes maintenance of ASME QA program(s).
E14
Safety analysis support for startup
Emergent safety analysis, transient, etc. support necessitated by changes to flows, temperatures, detectors, etc. Must ensure engineering changes do not affect safety analysis.
E15
Certified for Construction drawings
Service Provider will provide support for the development of “as-built” drawing.
CONSTRUCTION SUPPORT SERVICES
C1
Resident Engineer (with design authority approval capacity) located at the Site
Resident engineer will be an onsite engineer with the authority to sign-off on design change to the site specific design as well as the standard plant design
C2
Provide staffing, facilities, documentation, and program management platforms/programs to support ongoing implementation of construction security, FFD, and access and screening functions
--
C3
Maintain ASME programs
These programs include WEC ASME QA programs as required to comply with ASME code requirements.

 
 
 

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Service Provider Scope
Notes
C4
Gathering and distributing to SNC lessons learned from China AP1000 ®  projects, especially those lessons learned related to construction, testing, and startup activities.
 
C5
Provide schedule information and performance monitoring support services
Provide access to the live Primavera P6 Integrated Project Schedule for the Project until such time that the schedule can be migrated to a SNC domain; this access includes schedule(s) or schedule information that may reside within the VC Summer Primavera environment, if those schedule(s) or schedule information are applicable to the Project.
Provide staffing to support the SNC-led Project Controls department performance monitoring and usage of the Primavera P6 Integrated Project Schedule through the transition period.
Maintain licenses and applications, including Primavera P6, Deltek Acumen Fuse, SmartPlant, and Maximo software.
C6
Support of generation and revision control of the Construction Records Information Management (RIM) work packages
Review and closure of RIM packages to site data center (SDC).
Support for transfer of documents from SDC to SNC document management system (CIMS, Documentum).
Support coordination of RIM work packages (records) into SNC document management system and long term goal of usage of a single Site repository for document control.

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Service Provider Scope
Notes
C7
Maintain and support IT solutions and IT infrastructure required to complete the Project, including the onsite IT team for support of the Site IT network and associated infrastructure
Charlotte, Canton, Cranberry and on-Site IT teams to provide full support for all construction and engineering support applications, network engineering, telephony and functional user support for the Project.
Includes provision and maintenance of WECTEC/Westinghouse databases and software including base software, application software, Third Party software, configuration data, software documentation; lifecycle maintenance and required upgrades; provision and management of all hardware and associated maintenance.
Includes maintaining the following such that applications and data are recoverable: source code for applications, archived vendor software installations along with configurations / customizations, archived data for applications, installation documentation for applications, installation documentation for any supporting applications, and application architecture diagrams.
Includes third party escrow of critical applications and data (example: Iron Mountain) in order to provide SNC Technology Solutions a means to recover applications and data should they become unavailable through WECTEC.
Includes support of all on-Site WECTEC IT infrastructure including network (wired and wireless), cameras, PC’s, switches, firewalls, telephony, and any other IT equipment. Includes provision and maintenance of network hardware and associated software configuration data, software/hardware documentation, lifecycle maintenance, and required upgrades.

Includes leaving all existing WECTEC Vogtle WAN/LAN infrastructure (Ethernet / Fiber) in place when Service Provider ceases to provide Services, regardless of the reason for Service Provider ceasing to provide Services.


C8
Provide the staffing support to complement SNC staffing for conducting the daily business of the OCC on a 24/7 basis
Operational Control Center (OCC) support will include facilitating and tracking issues, maintaining status and reporting critical activities as well as support for coordination of engineering, procurement, construction and startup and facilitating strategic planning for milestones to ensure performance consistent with the Post-Transition Schedule.
Staffing support includes coordinators, supervision admins, procurement, FE’s, DE’s, QC, schedulers, and data analysts.

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Service Provider Scope
Notes
C9
Support for compliance with all environmental permit and regulatory obligations for Vogtle Units 3 and 4 (including Site facilities)
Includes provision of all required labor, equipment and consumable supplies.
Includes coordinating with construction organizations (Safety, Area Managers, Subcontractors, etc.); regulatory required inspections; performing required environmental observations, data collection, and sampling; waste management (Hazardous, Universal, Oil Debris, etc.); SPCC containment management; Spill Response/Spill Kit Management; and implementing construction storm water Erosion Sediment & Pollution Prevention Plans (Storm Water Maintenance).
Includes SNC access to existing WECTEC Storm Water Design Professionals.
C10
Provide the staffing support necessary to complement SNC staffing for scoping and building work packages, work package tracking, and work package closure
Includes oversight of involved subcontractors.
Staffing support includes planners, procurement, FE’s, DE’s, QC, etc.
C11
Support of chemistry testing for testing and startup
 
C12
Oversight and Control of ASME Welding Processes
ASME welding – N-stamp certificate holder requirement
LICENSING SERVICES
L1
ITAAC Support
Includes ITAAC schedule activity management; subcontract scope review, support work package screening; vendor/supplier prioritization; Principle Closure Documentation (PCD) development; Completion Package (CP) development; PDP (Performance and Documentation Plan) development; and PCD tracking and maintenance.
Includes design, installation, analyses and testing information required to support ITAAC closure.

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Service Provider Scope
Notes
L2
Preparation of Licensing Change Packages and departures (LAR and non-LAR)
Includes markups to the current Licensing Basis (e.g., UFSAR, Tier 1, Technical Specifications, etc.), results of screening activities, and Licensing Impact Reviews for engineering products.
Support NRC meetings for LARs and responses to NRC Requests for Additional Information at Owners’ request.
Includes risk release reviews upon request by Owners.
Service Provider shall ensure all engineering support (including arising out of Baselines, ITAAC, or construction support) related to licensing materials (either covered with the Services or licensing materials being prepared by Owners) is completed such that the licensing materials can be developed in compliance with the Post-Transition Schedule.
Support SNC and other owners before state/federal regulatory authorities.
Maintenance of LCP schedule ties, licensing construction holds, schedule and program management.

L3
Licensing support of emergent engineering issues
Owners may request input for development of licensing positions or development of DCPs. Includes participation in LRBs, CCBs, Operations Safety Committee, Offsite Operations Safety Committee and preparation/support of emergent tech spec changes.
L4
Support for NRC inspections, requests for information and Owner RFIs
 
L5
Support for any challenges, hearings, or proceedings before the NRC, including, but not limited to, related to license amendments and ITAAC closure
Support includes NRC inspections, topical report reviews that directly support the Vogtle project, industry and site Quality Assurance audits, and INPO assessments through plant construction and testing.
L6
Support 10 CFR Part 21, 10 CFR 50.55(e) and 10 CFR 50.46 evaluations and reports
Including continuing to report 10 CFR Part 21 and 50.55(e) issues and 10 CFR 50.46 evaluations in accordance with regulations.
PROCUREMENT SERVICES
P1
Procurement of Modules
     Mechanical Modules
     Structural Modules, including Book II and III Materials
     Safety related structural steel platforms and structures
     Management of all direct procurement and support organizations, including:
o      Engineering (procurement and design)
o      Supply chain/commercial/legal
o      Licensing
o      Quality


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Service Provider Scope
Notes
P2
Procurement of Engineered Components (includes ASME valves)
     Tagged mechanical and electrical equipment (ex., valves, pumps, tanks, heat exchangers, MCC, batteries, etc.)
     Standalone power source for security systems in the standard plant design
     Security system computer equipment and associated infrastructure for all plant buildings

o      Project controls
o      Management of assigned budgets and/or input into the SNC financial governance process
o      Document Management
     Interface with design authority
o      Cyber security modifications
o      Design changes/improvements and lessons learned
o      Disposition of vendor requests for changes and non-conformances
     Commercial grade dedication as required
     Incorporating design changes into Permanent Plant Equipment only, post-delivery
     Management of all quality/potential quality issues (regardless of when identified)
     Maintain requisitioning, purchasing and vendor interface for engineering, procurement and any software purchases and licenses
     Transition specific software platform responsibility to SNC, as requested

Radiation monitoring equipment is supplied as part of the I&C package. Neutron sources are supplied under the fuels contract.

P3
Procurement of ASME III Materials (Pipe/Pipe Supports and other ASME procurements)

P4
Procurement of Highly Engineered Materials (Rebar, Embeds, non-ASME Pipe/Pipe Supports)

P5
Procurement/management of consumables, spare parts, components, instrumentation, equipment, and outside services related to testing and startup
Includes support for development of spare parts lists to support startup testing and plant operation.
Includes management of all non-safety issues.

P6
Maintain and continue execution of Westinghouse Human Factors Program with existing personnel

Plant equipment local control panels shall conform to human factors guidelines as described in APP-GW-GRP-001.

PROGRAM SERVICES
ONP1
QA/QC
In accordance with 10 C.F.R. Part 50, Appendix B and ASME 1-1994. See Agreement, Article 13
ONP2
Continue execution of Site ECP Program with existing personnel
Includes provision of requested information to SNC ECP leadership.

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Service Provider Scope
Notes
ONP3
Maintain and manage Westinghouse QA program, including maintaining Westinghouse CAPAL program.
The Corrective Action Program is required to be compliant with 10 CFR Part 50 Appendix B for safety related SSCs.
Includes performance of Root Cause Analyses, Apparent Cause Analyses, and preparation of related supporting documentation (CAPAL attachments related to the Services)
ONP4
Implementation the Interface of Corrective Action Programs (ICAP) Agreement and supporting full implementation of SNC CAP process.
Support transition to a single PI & CAP for the Site and development and implementation of interface protocol between Service Provider’s Corrective Action Program and SNC’s PI & CAP.
ONP5
Nuclear Safety Culture (NSC) Program
 
ONP6
Fully implement a Lessons Learned Program for Vogtle Units 3 and 4
 
ONP7
Fully implement a Trending Program in accordance with corrective action programs
 
ONP8
Aging Management for Electrical Cables
SNC will support Service Provider in completion of TAN DELTA testing.
ONP9
Equipment Qualification
 
ONP10
Containment Leak Rate Testing
 
ONP11
MOV/AOV
 
ONP12
PSI/ISI & PST/IST
 
ONP13
Snubber programs
 
ONP14
Development, implementation, and maintenance of fire protection program for areas under Westinghouse control.

Includes compliance with SNC fire protection program for areas under SNC control.
ONP15
Flow Accelerated Corrosion Acceptance Criteria
 
ONP16
Construction Training
Support initial and requalification needs for the Site construction; review and oversight of qualification program and maintenance of programs; and provide for LMS entry, qualification structure, and content changes.
ONP17
Emergency Preparedness and Training
 
ONP18
QA letter responses
Related to the communication of Site D/Ns and/or supplier issues that are identified during audits and resolution of those items.
ONP19
Construction Procedure Maintenance
Service Provider to support for ASME procedures
ONP20
Welding Program
Service Provider to support for ASME procedures
ONP21
Project Management Functions
 
ONP22
Baseline Test Data Accumulation and Analysis
 

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Service Provider Scope
Notes
ONP23
FOAK test programs
Include equipment
ONP24
Procurement / subcontract support
 
ONP25
Equipment labeling
Support
ONP26
Overall equipment maintenance program

Support
OPS READINESS SERVICES
OP1
Training
Support initial and requalification needs for the Site construction; review and oversight of qualification program and maintenance of programs; and provide for LMS entry, qualification structure, and content changes.
OP2
Support of physical security program implementation, including delivery of design information
Including work required to support fuel on-Site
OP3
Support of Initial Test Program (ITP) (includes Component, Pre-Operational, and Startup Testing) Performance Testing, and engineering support
Westinghouse will support SNC for site acceptance testing.
OP4
Development of testing specifications and procedures, preparation of SSCs for testing, conduct of testing and supporting programs/processes
Includes evaluation of test results, and resolution of RFIs, design issues, testing deficiencies, or other issues identified during testing. Development of test acceptance criteria and support approval.
OP5
Procedure preparation and updating for areas related to engineering support
Includes the drafting, updating, correction, and maintenance of all required procedures. Includes all standard plant procedures, except where directed otherwise by Owners.
OP6
Maintain and upgrade Unit 3 referenced simulators to successfully achieve Plant Referenced configuration including documentation and software changes necessary to implement baseline 8 design changes deferred to a later date.

Include all updated Simulator Training System (STS) documents

 
 
 

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Service Provider Scope
Notes
OP7
Provide procedures in time to support operator and instructor GAP Training as per the SNC schedule (Update to BL 8.4 or greater)

Includes:
i.      Deliver remaining SOPs
ii.      Deliver remaining MTIS procedures
iii.      Deliver remaining FHS procedures
iv.      Deliver AOPs and associated background documents
v.      Deliver EOPs and associated background documents
vi.      Deliver GOPs
vii.      Deliver P72 procedures
viii.      Deliver SAMGs including FLEX and Fukushima regulatory-required updates
ix.      Deliver ARPs
x.      Deliver site specific procedures as identified by SNC
xi.      Perform simulator validation of EOPs and AOPs
Includes set-point data base to maintain ARPs in sync with procedures listed in i – viii above.
OP8
M&TE (Maintenance and Test Equipment)
 
OP9
Configuration management
 

Notes:
1.
Where the term “includes” or “including” or similar is used, it should be read to mean “includes, but is not limited to” or “including, but not limited to”.
2.
As provided in the Agreement, SNC may elect to transition certain Services or portions or Services from Service Provider to SNC or to a Third Party. Nothing in this Table A.1 limits SNC’s right to so elect, and Service Provider agrees to provide support for any such transition elected by SNC in accordance with the Agreement.
3.
For all program-related Services, SNC anticipates transition of responsibility for and management of all programs to SNC either during the term of the Agreement or as part of the winding down of Services under the Agreement. For program-related Services, the Scope of Services listed in this Table A.1 should be presumed to include Service Provider’s support for any such transition and continued support as directed by SNC after such transition.

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Table A.2 – Division of Responsibilities

Facilities and Functional Areas
Division of Responsibility
Asset Preservation to Maintenance
SNC with Service Provider support
Construction Engineering
SNC with Service Provider support*
Licensing
SNC with Service Provider support
ITAAC
SNC with Service Provider support*
Information Technology
SNC with Service Provider support
Construction
SNC with Service Provider support*
Procurement
SNC with Service Provider support
ITP
SNC with Service Provider support
PI & CAP
SNC with Service Provider support
Document Control
SNC with Service Provider support
Cyber Security
SNC with Service Provider support
Training
SNC with Service Provider support
Digital I&C, Baseline 8, Simulator (LSS/CAS/PRS), I&C support through ITP
Service Provider (subject to Owners’ approval of changes)
Fire Protection
SNC with Service Provider support
Operational Control Center
SNC with Service Provider support*
Plant Security and Communications
SNC with Service Provider support
Vogtle 3 & 4 Plant Design Authority and Vogtle 3 & 4 Plant Design
Service Provider (subject to Owners’ approval of changes)
Work Management
SNC with Service Provider support
Aging Management for Elec Cables
Service Provider
Equipment Qualification Program
SNC with Service Provider support
Containment Leak Rate Program
SNC with Service Provider support
MOV and AOV Program
SNC with Service Provider support
ISI Program
SNC with Service Provider support
PST/IST Program
SNC with Service Provider support
Snubber Program
SNC with Service Provider support
Project Controls and Project Management
SNC with Service Provider support*

*The Parties acknowledge that Service Provider’s support under the noted areas shall be limited to staff augmentation unless mutually agreed otherwise.



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EXHIBIT B
DELIVERABLES

The list of the types of Facility documentation to be provided to Owners will include the types of deliverable documents as provided in the table below. If appropriate and requested by the Owners, where there is a difference between the as-designed and as-built condition of the Facility, applicable Facility documentation shall reflect the as-built condition of the Facility. Each document shall be provided with all outstanding Non Conformances and EDCRs, as well as any outstanding configuration management system debt at time of turnover.

AP1000 ® Facility documentation classified as Proprietary Class 2 or Non-Proprietary Class 3 specifically related to the design, construction, operation and maintenance of the Facility and identified in the table and lists below shall be provided via a controlled website or similar electronic information portal (but not SharePoint).

Instructions for access and review of Facility documentation, including a listing of index fields and query options, shall be provided by the Service Provider and may be electronically posted via a controlled website or similar electronic information portal that allows Owners to download such documentation (but in no event shall Service Provider use SharePoint for this purpose). All controlled Facility documentation will be provided with revision level control, and be uniquely designated.

The proprietary or non-proprietary classification of all documents included in the Facility documentation will be defined on an individual document level. Classification shall be in accordance with Service Provider’s BMS-LGL-28, “Proprietary Information and Intellectual Property Management Policies and Procedures”. Owners’ treatment of Facility documentation is described in Article 14 of the Amended and Restated Services Agreement.

I.
Categories of Deliverables:

A.
Documentation
See detailed breakdown table below in Section D.

B.
Equipment
As part of its provision of the Services, Service Provider will deliver certain equipment, hardware and associated software, machinery, components, materials, and other items that will become a permanent part of the Facility (including certain items provided by Third Parties) (“Equipment”). During the Transition Period, the Parties will develop a schedule for the provision of the Equipment to support the Project Schedule.


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This section does not list all Equipment or all categories of Equipment that will be delivered by Service Provider in connection with the Services. Service Provider will provide such Equipment as part and parcel of its performance of the Services. However, for the avoidance of doubt, the following Equipment will be provided pursuant to this Amended and Restated Services Agreement (all items include related components, hardware, and software, as applicable):

1.
Limited-scope and plant reference simulators updated to Baseline 8+.
2.
CYS/CMS - Cyber Monitoring System
3.
SES - Security computer system (ARINC)
4.
Safety and non-safety I&C deliverables, including but not limited to:
Application software logic diagrams
I/O database with all I/O points
Termination Lists/Drawings
Software requirements traceability matrices
Operation and Maintenance Manual (O&M Manual)
Hardware change kits and FCN documentation
Hardware installation instructions
Ovation and Common Q Logic and graphics packages
Instrumentation datasheets, specifications, and installation details
Regression testing reports and analysis
System design criteria and functional specification
5.
Standard Input-Output System (SIOS) test cart for PMS testing
6.
All safety and non-safety core I&C systems
7.
Permanent Plant Equipment
8.
Modules
9.
Engineered Material (Rebar, Embeds, Piping and Pipe Supports)
10.
ASME Material

C.
Software/Databases
1.
Baseline 8 (fully implemented for all applicable systems/functions)
all software updates and any future I&C design changes
2.
NAP Monitor and Developer software tool
3.
Executable Software for I&C systems
4.
PLCs and any component software that interfaces with PLCs
5.
RITS data access
6.
Computerized Procedure System, including procedure builder executable software
7.
Wall Panel Navigation executable software
8.
DCIS application executable software

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9.
Provide base software and licenses required to support installation of I&C (Common Q, Ovation, etc.)
10.
All BL8 software delivery for ICE-TE

D.
Documentation

GENERAL AND ADMINISTRATIVE
Document Number Notes - Comments 1
1.      Design Control Document (Licensing), including information identified as “incorporated by reference” in DCD Table 1.6-1.
     APP-GW-GLR-700  (DCD Rev. 19)
     Applicable Documents Specified in Table 1.6-1 of the DCD/FSAR (Documents Incorporated by Reference)
2.      AP1000 ®  and AP600 WCAPs and Technical Reports that Apply to the Implemented Design
     See above
     APP-FSAR-GLN-XXX  (Any Licensing Departures and Changes applicable to SNC)
3.      AP1000 ®  Documentation Guidelines and Document Numbering
     APP-GW-GMP-005 Latest Rev. (Document Numbering Procedure)
     APP-GW-GMP-006 Latest Rev. (Component Numbering Procedure)

4.      Core Reference Report for first core
     APP-GW-GLR-156   AP1000 ®  Core Reference Report
5.      Security Related information (Target Sets, Safeguards and SUNSI Information)
     APP-GW-GLR-066 (TR-94)   AP1000 ®  Safeguards Report
     Other Assessments and Target Set Documents.
     SUNSI information provided as applicable for each deliverable identified in this able
6.      Onsite and Offsite dose analysis reports

     Agreed Documents – Document numbers will be defined.
7.      Vendor manuals
     APP-xxx-VMM (Vendor Manuals)
     APP-xxx-JED (Instrument Vendor Catalog)    
8.      WEC Emergency Preparedness Plan (SV-G1-GSH-004)
     SV0-G1-GSH-004 .
9.      Licensing documentation including
a.      Licensing Change Packages, including markups to the Current Licensing Basis (e.g.,
     APP-FSAR-GLN-XXX  (Any Licensing Departures and Changes applicable to SNC along with checklists and forms providing supporting documentation)

______________________
            1 Documents listed in this column are intended to provide a list of deliverables necessary to satisfy the deliverable obligations. It is understood that some needs may occur in which other documents may be required to complete the deliverable obligations and the parties will negotiate these requests in good faith on a case by case basis.

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UFSAR, Tier 1, Technical Specifications, etc.)
b.      Completed form detailing Engineering supporting documents
c.      All current native CAD files or other native file types that serve as the source files for figures in the UFSAR and Plant-specific Tier 1
     Native Drawing Files (FSAR drawing files)
PROJECT MANAGEMENT
Project Management Procedures are various numbered documents. The listed documents that will meet those definitions will be provided.
1.      Project Execution Plan
 
2.      Project Specific Control Procedures
 
3.      Project Schedule (includes Engineering, Procurement, QA, ITP and Construction)
 
4.      Project Change Notices (Scope, Budget, Schedule Variances)
 
5.      Official Project Correspondence
 
6.      Monthly Progress Reports (which includes project control reports, project schedule status updates, financial status, etc.)
 
7.      PCC outstanding issues list
 
 
 
QUALITY ASSURANCE
 
1.      Service Provider Quality Assurance Program
     Westinghouse QMS
2.      QA Procedures produced specifically for Vogtle 3&4 Project which describe the interface with SNC
     Pursuant to the interface agreed per Section 13.1(c)
3.      QA Data Packages, as relevant, including items such as:
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
a.      Approved Non-Conformance Reports/ Dispositions (N&Ds)
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
b.      Radiographic/Non-Destructive Test Data (Radiographs)
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
     APP-xxx-VW  (Equipment (formerly vendor) Welding and Non-Destructive Evaluation)

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c.      Non-Destructive Examination Records (NDE)
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
     APP-xxx-VW  (Equipment (formerly vendor) Welding and Non-Destructive Evaluation)
d.      Heat Treatment Records
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
e.      Material Origin Certifications
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
f.      Field Inspection Reports
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
g.      Weld Data Reports
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
h.      Final Quality Inspection and Release Documents or Certificate of Compliance
     APP-xxx-VQQ  (Equipment (formerly vendor) QA/QC - Inspection Document)
4.      Applicable Quality Records supporting the current suppliers on the Westinghouse QSL (Qualified Supplier List) applicable to Vogtle 3 & 4 Project
     See Section 13.5
Audit reports produced under agreement by Third Party sources (example NIAC) are prohibited by agreement to be provided to the Owners.
ENGINEERING
 
1.      Systems
 
a.      Applicable Calculations & calc notes
     APP-xxx-M3C-100  (Mech System Control Requirements)
     APP-xxx-M3C-101 (Instrumentation Requirements)
     APP-xxx-M3C-300  (Power Production Reliability)
     APP-xxx-E8C-100  (Elect System Control Requirements )
     APP-xxx-E8C-101  (Elect System Instrumentation Requirements)
     APP-xxx-E8C-100  (Elect System Power Production Requirements)
     APP-xxx-J7C  (Component Functional Logic and Setpoint Calculations)
     Documents may also be 800100, 800101, and  800300
b.      System Specification Documents (design criteria and functional specifications)
     APP-xxx-M3-001  (Mechanical System Specification Documents)
     APP-xxx-E8-001  (AC Electrical System Specification Documents)
     APP-xxx-J7-001  (Instrumentation and Control Systems)

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c.      Piping and Instrumentation Diagram
     APP-xxx-M6-  (Piping and Instrumentation Diagrams)
d.      Piping Isometrics
     APP-xxx-PLW  (Pipe Line Work Packages)
e.      HVAC Duct and Support Drawings
     APP-Vxx-MD (Ductwork and Dampers)
     APP-xxxx-SH (Hangers and Supports-Multipurpose)
f.      Logic Diagrams
     APP-J3-xxx  (I & C - Logic Diagrams, PBDs, Interlock Sheets)
g.      Single Line Diagrams
     APP-xxx-E3  (System One-Line Diagrams)
h.      Three Line Diagrams
     APP-xxx-E4  (System Three-Line Diagrams)
     APP-xxx-E5  (Combined Wiring Diagrams)
i.      Wiring Diagrams
     APP-xxx-E3  (System One-Line Diagrams)
     APP-xxx-E5  (Combined Wiring Diagrams)
     APP-xxx-ED  (480V, 380V & 227V Distribution Panels)
j.      Piping Specifications
     APP-PL02-Z0-101  (AP1000 ®  Class 1 Piping and Non-Class 1 Extensions Design Specification)
     APP-PL02-Z0-102  (AP1000 ®  Class 2, 3 Piping and B31 .1 Extensions Design Specification)
     APP-GW-P1-200  (AP1000 ®  Non-ASME III Piping Design  Requirements)
     APP-PL02-Z0-007  (
    
     ®  Specification for Shop Fabricated Piping)
     APP-PL02-Z0-008  (AP1000 ®  Field Fabricated Piping and Installation ASME III, Code Class 1, 2 and 3 and ASME B31.1)
k.      Pipe Support Details
     APP-xxx(x)-PH  (Pipe Supports)
l.      ASME III Design Reports
     Piping and Pipe Hangers : ASME Section III final As-built design reports for piping (Unit Specific Design reports, P0R documents) and piping supports unit specific design reports.
     Equipment: Unit Specific Equipment (formerly vendor ) Design Report (VDR documents)
m.      Applicable AP1000 ®  Safeguards Information (See Note 1)
See above in General Section.
n.      Applicable AP1000 ®  Equipment Databases (See Note 1)
     The following will be provided: SPF data, WEMMEX, PDS model information, MEL.
o.      Master Equipment list
     MEL
p.      Plant Specific Heat Balance
     APP (And Unit)-MG01-VD  (Thermal Performance Heat Balance)
     APP-GS-M4C-100  (Turbine Heat Balance Diagram Calculations)

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q.      Applicable   Set point Basis Documents
     APP-xxx-M3C-5xx  (System Specification Calculation)
r.      Radiation analysis reports
     APP-xxxx-N5  (Radiation Zoning)
s.      Licensing planning and management database
     Licensing Change Matrix
t.      Ovation and Common Q Logic and graphics packages
     See Section B for I&C software delivery.
u.      Instrumentation datasheets, specifications, and installation details
     APP-xxx-J0-xxx  (I&C - Multipurpose)
     APP-xxx-J1  (I&C - Design Criteria)
     APP-xxx-J5  (I&C - Loop Diagrams/Termination Documents)
     APP-xxx-J8  (I&C - Installation Details)
     APP-xxxx-J2  (I&C - Instrument Locations)
     APP-xxx-J3  (I&C - Logic Diagrams, PBDs, Interlock sheets)
     APP-xxx-J1-100 series  (I&C - Design Criteria)
v.      MOV/AOV vendor data sheets and design information
     Various, as provided by the vendor
w.      Approved Design Change Packages (DCPs)
     APP-GW-GEE-XXXX  (Design Change Proposals), applicable to SV0, SV3 or SV4.
2.      Equipment
 
a.      Applicable   Design or Equipment Specifications (See Note 1)
     APP-xxx-Z0  (Functional Specifications)
     APP-xxx-Z0D  (Data Sheets)
     APP-xxx-Z0R  (Design Reports)
     APP-xxx-J1  (Automation Functional Specifications )
     APP-xxx-J4  (Application Functional Specifications)
     APP-xxx-PHP  (WECTEC Design Reports and Data Sheets)
b.      Outline Drawings
     APP-xxxx-V1  (Equipment - Outline Drawings)
c.      General Assembly Drawings and Equipment location Drawings
     APP-xxx-P3 (Equipment Locations)
     APP-xxx-P3X  (Equipment Locations)
     APP-xxx-E2  (Electrical Equipment Locations) APP-xxxx-P2  (General Arrangements)
     APP-xxx-P5  (Mounting Supports)
     APP-xxx-CE  (Embedment Drawings)
     APP-xxx-SHX  (Support Index Documents)
d.      Wiring Diagrams
     APP-xxx-V4 (Equipment - Wiring Diagrams)
     APP-xxx-E0  (AC Electrical - Multipurpose)
     APP-xxx-E5  (AC Electrical - Schematic Drawings or Documents)
     APP-xxx-E5K  (AC Electrical - Schematic Drawings or Documents - Engineering and Field Sketches)


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     APP-xxx-EW  (AC Electrical - Wire and Cable)
     APP-xxx-J8Y  (I&C - Installation Details - Document)
e.      Control Logic Drawings
     APP-xxx-J3  (I&C - Logic Diagrams, PBDs, Interlock sheets)
     APP-xxx-J1-100 series  (I&C - Design Criteria)
f.      Electronic Equipment Software
descriptions, versions and instructions
     APP-xxxx-GHY  (Infor. Mgt Syst and Info. Technology Document)
g.      Electronic Equipment Software Validation and Verification Packages
     APP-xxxx-T2R  (Test Result Reports)
h.      Equipment Qualification data packages
     APP-xxx-VBR  (EQ Summary Reports)
     APP-xxx-VDR  (EQ Test Reports and some Design Reports)
     APP-xxx-VQQ  (Quality Release and C of C)
i.      Environmental Reports (includes conclusions and summaries but not detailed test data)
     APP-xxx-VTR  (Test Reports)
     APP-xxx-VPR  (EQ Test Reports)

j.      Applicable Equipment Vendor Technical Manuals or Information Packages (See   Note 1)
     APP-xxx-VMM  (Vendor Manuals)
     APP-xxx-JED  (Instrument Vendor Catalog)
     APP-xxxx-J0M  (Technical Manual)
k.      Vendor Schedules for Manufacture and Delivery of Commodities (including modules and Shield Building panels)
     Schedule information  as available
l.      Hardware installation instructions
Would be in Vendor Manuals or specific installation procedures for Westinghouse provided components.
m.      Warranty related information (e.g., vendor warranty, warranty claims)
Would be in Vendor Manuals and provided by vendors.
n.      Combustible Loading Calculations & Schedules
     Fire Protection Analysis Report APP-xxxx-N4R  
     APP-xxxx-AF  (Fire Protection/Fire Boundaries)
3.      AP1000 ®  Building Drawings and Reports
 
a.      General Arrangement Drawings
     APP-xxxx-P2  (General Arrangements)
     APP-xxx-E6  (Electrical Hazard maps)
     APP-xxx-E9 (General Notes)
     APP-xxx-EB  (Bus Dusts)
     APP-xxx-EG  (Grounding)
     APP-xxx-EL  (Lighting)
     APP-xxxx-AF  (Fire Protection/Fire Boundaries)
b.      Concrete Outline Drawings
     APP-xxxx-CC(x)  (Concrete)

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c.      Rebar Drawings
     APP-xxxx-CR  (Concrete reinforcement)
     APP-xxxx-C3  (Key Concrete Reinforcement)
     APP-xxxx-C8  (Concrete Reinforcement Placing & Fabrication Drawings)
d.      Seismic Analysis Reports (results, not input calculation notes or models)
     APP-xxxx-VGR  (Equipment (formerly vendor) Seismic Report)
     APP-xxxx-VDR  (Equipment (formerly vendor) Design Report)
e.      Containment Penetration Drawings
     APP-xxxx-P0  (Piping Multipurpose-Penetrations)
     APP-xxxx-P0X  (Piping Multipurpose-Penetrations List)
     APP-xxxx-M0  (Mechanical Multipurpose-HVAC Duct Penetrations)
     APP-xxxx-M0X  (Mechanical Multipurpose-HVAC Duct Penetrations List)
     APP-ML05-V2-xx(x)  (Platework, Liners, and Penetration Sleeves)
     APP-MV50-V1-xxx  (Equipment - Outline Drawings)
     APP-MV50-V2-xxx  (Equipment - Assembly Drawings)
     APP-xxxx-E0  (Electrical Multipurpose- Penetrations)
     APP-xxxx-E0X  (Electrical Multipurpose- Penetrations List)
     APP-xxxx-V1  (Mechanical Multipurpose - Structure, Components Penetrations)
     APP-xxxx-V6  (Mechanical Multipurpose - Structure, Components Penetrations)
     APP-EY01  (AC Electrical Specialties, Penetrations)
     APP-EY02  (AC Electrical S p ecialties, Penetrations)
f.      Wall and Floor Penetration seal details and supporting test reports
     See above Penetration Details

g.      Embedment and Attachment Drawings
     APP-xxxx-CE(x ) (Concrete Embedded Metal)
h.      Raceway and Raceway Support Drawings
     APP-xxxx-ER  (Raceway (AC or DC))
     APP-xxxx-ERB  (Raceway (AC or DC) BOM)
     APP-xxxx-SH  (Hangers and Supports-Multipurpose)
     APP-xxxx-SH-Exxx  (Hangers and Supports-Multipurpose)
     APP-xxxx-S7  (Raceway/Duct/Instr. Location Drawings)

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i.      Cable and Conduit Lists including routing data (cable database)
     APP-xxx-E0X  (AC Electrical Multipurpose List)
     APP-xxxx-ERR-500 Series  (Raceway AC or DC Report )
     APP-xxx-EW  (AC Electrical - Wire and Cable)
     APP-xxxx-E0  (AC Electrical-Multipurpose)
     APP-AB01-xxxx  (Architectural Blockouts and Barriers)
     Database output from Cable Manager
j.      Cable Termination Details
     APP-xxx-EW  (AC Electrical - Wire and Cable)
     APP-xxx-E3  (AC Electrical - Single Line Diagrams)
     APP-xxx-E5  (AC Electrical - Schematic Drawings or Documents)
     APP-xxx-E9  (AC Electrical - Notes, Symbols and Details)
     APP-xxx-J5  (I&C - Loop Diagrams/Termination Documents)
     APP-xxx-DDY  (DC Distribution Panels Documents)
     APP-xxx-EAY  (Low Voltage Distribution Panel Documents)
k.      Structural Steel Frame Drawings
     APP-xxxx-SS(x)  (Structural Steel)
l.      Structural Modules Sub-Assembly Drawings
     APP-xx(x)-S5(x)  (Structural Sub-Module Documents)
     APP-xx(x)-S4(x)  (Structural Sub-Assembly Documents)
     APP-xx(x)-S8(x)  (Structural Installations Documents)
m.      Composite lay-out drawings
     APP-JC01-V1  (Equipment (formerly vendor) Outline drawing)
n.      Module Drawings
     See above item m.
o.      Instrument Tubing and Support Drawings
     APP-xxx-JTW  (Instrument and Tubing Pipes Work Packages)
p.      Plant 3D PDS Model files including WEMMEX
3D model is not a ‘quality record’, but is a provided as a quality tool to assist in plant management and operations. “As-Designed for Standard Plant”. Only applicable to Standard Plant Buildings – including WEMMEX data and attributes. Method of delivery and access throughout project to be defined jointly with Owner

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q.      Civil Drawings and Lists (e.g. joint sealers, roofing, building sealers. doors and frames, stairs, room finish, ceilings, elevators, masonry, membranes/barriers, embedments, blockouts, etc.)
     APP-xxxx-AG  (Architectural - General)
     APP-xxxx-AM  (Architectural - Masonry)
     APP-xxxx-AR  (Architectural-Rooms and Room Numbering)
     APP-xxxx-AT  (Architectural - Thermal/Moisture)
     APP-xxxx-AW  (Architectural - Woods, Plastics, Gypsum, Composites)
     APP-xxxx-A0  (Architectural - Multipurpose)
     APP-xxxx-A9  (Architectural - Notes, Symbols, and Details)
     APP-xxxx-AB  (Architectural - Blockouts and Barriers)
     APP-xxxx-AD  (Architectural - Doors, Hatches, and Windows)
r.      Building Drawings and Schedules (floors, roofs, walls, elevations, framing, columns, base plates, cranes/hoists, stairs, platforms, equipment support, etc.)
     see above
     APP-xxxx-AR  (Rooms and Room Numbering)
4.      Configuration management metadata including Design Debt from SmartPlant Foundation and Documentum
Metadata and document attributes in Documentum, EDMS documentum, and SmartPlant Foundation for SV0, SV3, and SV4.
5.      Cyber Security Identification, Assessments and Remediation
     APP-GW-Y5R-001 (Identification Report)
     APP-xxx-Y6R-001  (Assessments reports)
     APP-GW-Y8  (Cyber Security - Specifications)
     APP-GW-Y4  (Cyber Security -Drawings/Diagrams)
6.      China Lessons Learned for AP1000 ®
     Not a document or database.
7.      DCP database (information in Smart Plant Foundation)
     Metadata in SPF on DCPs.
8.      Applicable E&DCRs
     XXX-XXX-GEF   (E&DCRs applicable to SV0, SV3, and SV4)
9.      Safety analyses reports (e.g., LOCA analysis
     Reports - does not include calculations or methodologies as described in the initial note.
 
 
PROCUREMENT
Procurement Documents are various numbered documents. The documents that will meet those definitions will be provided.
1.      List of suppliers from the Westinghouse Qualified Suppliers List (QSL) and WECTEC (QRL)
The suppliers on these lists are limited to safety-related suppliers providing items or services to the Vogtle 3&4 project (see Section 13.5)

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2.      Source Verification, Supplier Audits & Reports
Pursuant to Section 13.5
3.      Site Receipt Inspection Procedures
 
4.      Handling, Shipping, and Storage Procedures  
 
5.      Equipment Technical Specifications and related drawings
 
6.      Vendor Contracts
 
7.      Vendor Documentation, Records, Reports, etc. as provided to Westinghouse by vendor
 
CONSTRUCTION
Documents are various numbered documents. The listed documents that will meet those definitions will be provided.
1.      Construction Execution Plan
 
2.      Site Plan
     APP-xxxx-X4  (Surveys)
     APP-xxxx-X2  (Site Plans & Prospective)
     XXX-xxxx-X9  (General Notes)
     XXX-xxxx-XD  (Site Drainage)
     XXX-xxxx-XE  (Excavation)
     XXX-xxxx-XF  (Fencing)
     XXX-xxxx-XR  (Rail)
     XXX-xxxx-XS  (Roads)
     XXX-xxxx-XP  (Site drawings)
     XXX-xxxx-XG  (Site grading drawings)
     XXX-xxxx-PL (Pipe Line Underground)
     XXX-xxxx-XP (Site Pilings and Caissons)
3.      Construction Specifications
 
4.      Applicable Construction Drawings (See Note 1)
 
5.      Safety Reports
 
6.      Safety Data Sheet
 
7.      Field Purchase Orders, Receipt & Audit Reports for permanent plant equipment
 
8.      Field Deficiency Reports
 
9.      Welding Records (PQR, PQAR and WPS)
 
10.      Field Engineering Procedures
 
11.      System Flushing Index & Reports
 
12.      Construction Testing Reports (included in Turnover Packages)
 
13.      Work packages including all phases of work
 

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14.      Equipment / System / Area Turnover Packages
 
15.      Construction Lifting, Handling & Erection Procedures
 
16.      Construction procedures (Fluor)
 
17.      Batch Plant Procedures
 
18.      Construction Test and Inspection Records
 
19.      Heavy Equipment Records (Operating procedures, inspection records, etc.)
 
20.      Boundary Identification Packages
 
21.      Lifting plans (e.g., CA01 lift plan)
 
22.      Heavy Lift Derrick Removal Plan
 
23.      Safe Load Plans and Supporting Calculations
 
24.      Civil Material & Property Reports
 
25.      Mechanical Property Records for Safety Related Components
 
26.      PM records (warehouse and installed pms)
 
27.      Mechanical, Civil, Electrical and I&C Installation and Inspection Procedures
 
28.      Occupancy Inspections & Reports
 
29.      Measuring and Test Equipment program documents and data
 
30.      Records to support environmental reporting
 
31.      Construction training materials
 
32.      Well water use records/logs (MU3 & MU4 and the Dewatering system)
 
33.      Construction Storm water Erosion, Sedimentation & Pollution Control(ES&PC) Plans for all NOI areas.
 
TESTING & STARTUP
 
1.      AP1000 ®  Standard Startup Site Administrative Manual
     SV0-GW-GBH-360  (Site Specific Commissioning Program)
     APP-GW-TSM-3XX  (Startup Administration Manual)
      APP-GW-GJP-150 (Operating Procedures Verification And Validation)
     APP-GW-GJP-152 (Operation Procedure Development, Verification And Approval Process)


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     APP-GW-GJP-100 (Writer’s Guideline For Operating Procedures)
     APP-GW-TSP-105 (Preparation of AP1000 ®  Startup & Operations Support Test Procedures and Specifications)
2.      AP1000 ®  Standard Pre Operational Testing Specifications and Procedures
     APP-XXX-T1-5XX (Test Specifications)
     APP-XXX-T1P-5XX  (Test Procedures)
     APP-XXX-T1D-XXX  (Testing Data Sheets)
     APP-XXX-T1R0-XXX  (Testing Requirements/Reports)
3.      AP1000 ®  Standard Structural Integrity Test Procedure
     APP -MV50-T1 (CV Structural Integrity Test Specification)
4.      AP1000 ®  Standard Integrated Leak Rate Test Procedure
     APP-CNS-GJP-801 (Type A - Integrated Leak Rate Testing Procedure)
5.      AP1000 ®  Standard Testing & Maintenance Procedures (Initial Start-up and Operations)
     APP -xxxx-T1P  (Testing Procedures)
     APP -xxxx-GJP  (General Operation Procedures)  
     APP-XXX-T1-6XX (Startup Test Specifications)
     APP-XXX-T1P-6XX  (Startup Test Procedures)  
     APP-XXX-T1-65X (Test Specifications)
     APP-XXX-T1P-65X  (Test Procedures)
6.      AP1000 ®  Standard Testing Acceptance Criteria (ITAAC) Closure Packages
     APP-XXX-ITH (ITAAC closure Plans)
     ITAAC Database information
     ITAAC Principle Closure Documents that are considered deliverables discussed in other parts of this table

7.      AP1000 ®  Standard Operating Procedures (e.g. Normal, Emergency)
     APP-GW-GJP-1XX  (General Operation Procedures)
     APP-GW-GJR-1XX   (General Operation Peports)  
     APP-GW-GJP -2XX  (Emergency Operation Procedures)
     APP-GW-GJR-2XX  (Emergency Operation Background)  
     APP-GW-GJP -3XX  (Abnormal Operation Procedures)
     App-GW-GJR-3XX  (Abnormal Operation Background)
      APP-XXX-GJP-40X (Alarm Response Procedures)  
     APP-XXX-GJP-10X (System Operating Procedures))  
     APP-XXX-GJP-8XX (Maintenance, Test, Inspection, & Surveillance Procedures)   
8.      Spare Parts Lists
     Not defined yet but will provide

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9.      Special Tools Lists
     Not defined yet but will provide
10.      Calibration Procedures
     APP-xxxx-GJP  (General Operation Procedures)
11.      Measuring and Test Equipment program documents and data
     Not defined yet but will provide
12.      Calibration, Startup and Performance Test Reports (including Calibration records)
     APP-xxxx-T1R  (Testing Requirements/Reports)
13.      Factory Acceptance Test reports
     Vendor Manuals
     APP-xxx-T2R  (Testing Report)
14.      Chemistry Specifications and Requirements
     APP-GW-GEM-200 Chemistry Manual
     APP-XXX-Z0 (Specifications)
     APP-GW-Z0-604  (Coatings for CV)
     APP-G1-X0-001  (Coatings Design Requirements)
15.      Digital Test Strategy
     Document to be identified later.
16.      Component Test Packages
     Would be in Work Packages or Construction documents.
17.      [RESERVED]
[RESERVED]
18.      Operator GAP Training Materials
     Document to be identified later.
19.      Punch Lists
     Document to be identified later.
20.      Special test instrumentation specs/requirements; data acquisition systems?
     Document to be identified later.
OTHER
Documents are various numbered documents. The listed documents that will meet those definitions will be provided.
1.      Project-specific CAP/ICAP records when closed
Pursuant to the interface agreed per 4.1(g)
2.      Simulator
Delivered
a.      Design – simulator drawing package and model requirements documents
 
b.      V&V records – simulator test reports
 
3.      Physical security (SES)
See General Section Item 5.
a.      Procurement documents
 
b.      Design documents, reports
 
4.      Aircraft Impact Assessment Reports
Document to be identified later.
5.      Cyber Security Project Governing Documents
See Engineering Section Item 5.
a.      Identification and Assessment Data
 
7. Human Factors Engineering (HFE) Plans and Reports
     APP-OCS-GEH  (Human Factors - General
 
 

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Engineering Plan)
     APP-OCS-GER  (Human Factors - General Engineering Report)

Note 1: “Applicable” being defined as that documentation for which the BMS-LGL-28, “Proprietary Information and Intellectual Property Management Policies and Procedures”, evaluation process permits delivery to Owners. Documents types that are not categorized as deliverable documents include models (computer, engineering and evaluation models), methods, inputs to methods, developmental or manufacturing test data, experience-based data, correlations and sensitivity studies.





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EXHIBIT C
RATES AND INVOICING

RATES AND REIMBURSABLE COSTS

1.
“Fee” shall mean the total of the amounts paid under Sections 3(e), 6, 7 and 13.
2.
This Agreement is a fully cost-reimbursable contract that covers the Services defined herein as well as those services that may be requested and/or directed by Owners in the future. The Parties agree that all direct and indirect costs and expenses of all Services or other items to be provided under the Agreement shall be fully paid for by Owners according to the terms of this Agreement and this Exhibit C.
3.
Domestic Labor :    Service Provider shall bill U.S. based services with three components: [***].
a.
[***]
b.
[***]
c.
[***]
d.
[***]
e.
Westinghouse shall be paid [***] on domestic labor costs (the total of each bare labor wage times its applicable labor multiplier) under this Agreement.
4.
Non-U.S. Based Labor :    Service Provider shall bill non-U.S. based services on a [***] as follows:
a.
[***] engineering labor shall be billed at [***].
b.
[***] engineering labor shall be billed at [***].
5.
Service Provider shall bill, and be reimbursed for, all project related travel expenses (incurred in accordance with its corporate Global Travel and Entertainment Policy), project related living allowances (incurred in accordance with its corporate US Domestic Assignment Procedure and Summary of VC Summer and Vogtle Domestic Assignment Package Terms and Conditions), and other direct costs as mutually agreed (to include but not be limited to reimbursement of project-specific insurance premiums and costs associated with and required transfers of regulatory permits), [***].
6.
For Westinghouse, Service Provider shall bill all third party costs (vendors, subcontractors, materials, services, etc.) on a cost-reimbursable basis and shall be paid a [***].

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7.
For WECTEC, Service Provider shall bill all third party costs (vendors, subcontractors, materials and services, etc.) on a cost-reimbursable basis, [***].
8.
Construction Equipment Rates
a.
For Service Provider owned construction equipment located on the Site as of the Effective Date, the Parties agree to a schedule of rates (included in Exhibit I (Rates for Leased Equipment)) based on [***]. Prior to the Effective Date, Owners will provide a schedule of Service Provider-owned construction equipment that Owners do not intend to use after the Effective Date which Owners may update from time to time throughout the term of this Agreement. Service Provider shall be responsible for demobilization of all Service Provider-owned equipment on Site after the Owners have informed Service Provider that Owners no longer intend to use this equipment; with the exception that for the Bigge Heavy Lift Derrick (HLD) crane, the Parties agree that:
i.
Owners shall be responsible to disassemble and load the HLD using Owner-provided craft and field non-manual staff and equipment;
ii.
Owners shall use best efforts to accomplish this demobilization as cost effectively as possible, will maintain demobilization-specific labor cost records, and will share these labor cost records with Service Provider;
iii.
Service Provider shall be responsible for the transportation arrangements and costs of the HLD components off-Site and their eventual disposition; and
iv.
[***]
b.
For leased construction equipment located on the Site as of the Effective Date, Owners will either assume Service Provider’s existing equipment rental subcontracts, will obtain replacement equipment from other vendors, or Service Provider will provide existing leased equipment on a cost pass-through basis. For subcontracts or leases not assumed by Owners, Service Provider or equipment vendor will be responsible for demobilization of leased equipment that is on the Site as of the Effective Date provided under such subcontracts or leases.
9.
[***].
10.
[***].
11.
[***]. Service Provider shall bill Owners for the Services performed under this Agreement to finish, update, develop, deliver, or provide the Deliverables in the same manner as for all other Services. The Parties agree to continue to negotiate

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separate agreements with commercially reasonable terms typical to the nuclear industry for products that the Parties mutually agree fall outside the scope of this Agreement. [***].
12.
[***]. Service Provider shall bill Owners for the Services performed under this Agreement to develop, provide access to, and deliver the Facility IP in the same manner as for all other Services.
13.
Incentives .    The Parties agree to pricing incentives that in the aggregate, permit Service Provider to earn an additional fee that in the aggregate, could total [***] of the amounts paid to Service Provider under this Agreement that is tied to the following performance incentives:
a.
Modules and engineered equipment and materials target cost savings sharing arrangement under which:
i.
The Parties will, prior to the Effective Date, agree to a target cost for costs to be incurred during the term of this Agreement for all Service Provider supplied modules and engineered equipment and materials.
ii.
The Parties acknowledge that the target cost may adjust during the term of this Agreement, and such adjusted target cost shall be applied for the purposes of this Exhibit. Prior to the Effective Date, the Parties will develop a mutually agreeable method for tracking such adjustments and re-establishing the target cost.
iii.
Upon completion of procurement activities for all Service Provider supplied modules and engineered equipment and materials:
1.
If Service Provider delivers all modules and engineered equipment and materials at a total cost [***] above the agreed target cost, Service Provider earns no cost savings sharing fee; or
2.
If Service Provider delivers all modules and engineered equipment and materials at a total cost [***] below the agreed modules and engineered equipment and materials target cost, Service Provider will earn cost savings sharing fee in an amount that is equal to the cost savings achieved that [***].
b.
Engineering target cost savings sharing arrangement. If Service Provider delivers all engineering services during the term of this Agreement at a total cost [***] below the agreed engineering target cost, Service Provider will earn cost savings sharing fee in an amount that is equal to the cost savings achieved that [***].

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c.
Engineering deliverables timeliness incentive fee ([***]), with specific deliverables and timeliness incentive fee dates and amounts to be mutually agreed.
d.
First fuel load milestone achievement fee ([***]) should first fuel load occur at or prior to the scheduled fuel load date identified by Owners at conclusion of the Transition Period.
14.
For services that are shared between the Vogtle and Summer AP1000 ® projects, Service Provider will apportion the billed amounts between the two projects.
15.
a.    Service Provider will receive an initial payment [***] of the Effective Date. The initial (and one-time) payment will approximate the first month’s estimated costs. A true up of the initial payment to actual costs will be performed [***] of the initial payment. The difference between the initial payment and the first month’s actual costs will be refunded (credited) to the Owners’ account within the [***] of the Agreement term. The amount of the initial payment that is not refunded (credited) to the Owners’ account [***] of the Agreement term will be paid back as follows:
[***];
[***]; and
[***].
If either party terminates the Amended and Restated Services Agreement, the Service Provider will pay any portion of the initial payment not already paid to Owners’ account within thirty (30) days.
b.    Service Provider will invoice once per month (by the 10th of the month) beginning in the first month of this Agreement.  Payments will be due within 30 days of invoice date.  For late payment, Service Provider shall be entitled to interest equal to the Prime Rate plus one percent (1%).
16.
Invoices will be accompanied by reasonable detailed supporting documentation. At Owners’ expense, Owners’ independent auditor will have the right to examine on Service Provider’s premises all reasonable information required by Owners to substantiate proper invoicing.
INVOICING

A.
Invoices . Invoices for Services performed in a calendar month shall be transmitted to Owners on or before the tenth (10 th ) day of the following month. Each invoice shall be accompanied by the following documentation sufficient to demonstrate Service

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Provider’s right to the amount of such payment: (i) employee summary billing information and costs tied to project work breakdown structure; (ii) detail for Service-Provider-owned equipment charges; (iii) invoices for rented equipment; and (iv) vendor invoices for material purchases, including material description per item, quantities per item, freight, sales taxes, the reason for the purchase and any additional similar information respecting the amount invoiced by the vendor.
B.
Owners shall be responsible for all sales and use tax associated with the Services to be provided under this Agreement. However, if Service Provider is required by law to make any tax payments associated with Services to be provided under this Agreement, costs associated with such payments shall be passed through to Owners with no fee, adders, multipliers or interest.
C.
Owners’ payment of an invoice or portion thereof does not constitute approval or acceptance of any item or cost in that invoice nor shall it be construed to relieve Service Provider of any of its obligations under this Agreement. Payment shall not waive Owners’ right to dispute an invoice.
D.
Payment Disputes . If Owners determine that invoiced amounts are not due and payable to Service Provider, Owners shall notify Service Provider of Owners’ objection to the invoice in writing, as provided in Article 19 (Dispute Resolution).  Owners shall continue to pay all invoices during the pendency of negotiations or dispute resolution; provided, however, that in recognition of Owners’ agreement to pay one hundred percent (100%) of all invoices, even disputed amounts, Service Provider agrees that a payment dispute shall not give Service Provider the right to stop work. Provided however, that failure to pay any invoice shall give Service Provider the right to stop work and to exercise its termination rights under the Agreement.
E.
Lien Waivers . In order to be valid, each invoice submitted by the Service Provider must be accompanied by interim lien waivers and releases, in the form and substance as provided by Owners, executed by the Service Provider with respect to the Services completed prior to the date of such invoice.
F.
Final Lien Release; Contractor’s Affidavit . In order to be valid, Service Provider’s invoice for the final payment from Owners under this Agreement must be accompanied by (i) lien releases and waivers executed by Service Provider in the form and substance as provided by Owners; and (ii) Service Provider’s affidavit in the form and substance as provided by Owners executed by Service Provider; provided, however, to the extent that one or more disputed claims is identified on the final lien releases and waivers form, then the Service Provider’s affidavit shall be provided contemporaneously with the resolution of such disputed claim(s).



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Exhibit D
FORM OF STAFF AUGMENTATION AGREEMENT


STAFF AUGMENTATION AGREEMENT
This STAFF AUGMENTATION AGREEMENT (“Agreement”), effective as of _____________ (the “Effective Date”) is entered into by and between Westinghouse Electric Company LLC , with offices in Cranberry Township, Pennsylvania (“Westinghouse”), WECTEC Global Project Services Inc. , with offices in Charlotte, North Carolina (“WECTEC” and collectively with Westinghouse, “Service Provider”), and GEORGIA POWER COMPANY , a Georgia corporation, for itself and as agent for OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA AND THE CITY OF DALTON , Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners, as Owners (collectively, the “Customer”). Both Customer and Service Provider are sometimes referred to herein individually as a “Party” and collectively as the “Parties”.

WITNESSETH
WHEREAS, Owners and Service Provider entered into an agreement on July 20, 2017 (“Services Agreement”) for Service Provider to provide services to Owners in connection with the development, design, procurement, construction and testing of two AP1000 ® nuclear units at the Vogtle Electric Generating Plant in Waynesboro, Georgia (the “Project”); and
WHEREAS, Customer and Service Provider desire to enter into an agreement under which seconded Service Provider personnel can be provided by Service Provider to work for Customer in order to support continued performance of work on the Project.
 
NOW THEREFORE, in consideration of the foregoing and the covenants herein recited, the Parties, intending to be legally and mutually bound, hereby agree as follows:

1.
DEFINITIONS

1.1.
Candidates shall mean any person referred to Customer by Service Provider to be considered as a potential Worker under this Agreement.
1.2.
Labor Rate shall mean the agreed hourly labor rate for the Worker in question.
1.3.
Owners shall mean Georgia Power Company; Oglethorpe Power Corporation (An Electric Membership Corporation); Municipal Electric Authority of Georgia; MEAG Power SPVJ, LLC; MEAG Power SPVM, LLC; MEAG Power SPVP, LLC; and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners.
1.4.
Secondment Services shall mean all work performed by Workers while seconded to Customer pursuant to this Agreement.
1.5.
Workers shall mean the personnel employed by Service Provider and seconded to Customer pursuant to this Agreement.

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2.
STAFF AUGMENTATION

2.1    Provision of Workers

A.
Customer may, from time to time, request from Service Provider Workers for Secondment Services to be performed. To request such Secondment Services, Customer shall issue a “Contract Labor Requisition Form” (a form of which is attached hereto as Attachment 1 ). The Contract Labor Requisition Form shall set forth any requirements for the Secondment Services to be performed including, but not limited to, the number of persons Customer believes are needed to perform the Secondment Services, the skill set, education, experience and qualifications of the Workers who would perform the Secondment Services, the specific types of Secondment Services to be performed, the expected duration of the Secondment Services, and the location (subject to Section 2.3B) where the Secondment Services would be performed. Customer may request specific Workers by name. Service Provider will use reasonable efforts to attempt to fulfill Customer’s request for specifically-named Workers.

B.
Service Provider shall then determine if it is able to fulfill, either fully or partially, Customer’s request. If Service Provider is unable to fulfill a Customer request, then Service Provider shall notify Customer within ten (10) days of the receipt of Customer’s request. If Service Provider is able to fully or partially complete Customer’s request, then Service Provider will complete the Contract Labor Requisition Form by providing information such as the names of the Candidates to perform the Secondment Services, the Candidates’ qualifications, the average salary for the function being performed, and estimated relocation costs (if any) and submit the completed Contract Labor Requisition Form to Customer within ten (10) days of the receipt of Customer’s request. Customer shall then review such completed requisition within five (5) business days of receipt and shall accept or reject, in full or in part, in writing, Service Provider’s completed requisition, as indicated on the Contract Labor Requisition Form for the designated Candidates. In the event any Candidate is rejected by Customer, Service Provider may submit a replacement Candidate within (5) business days for Customer’s acceptance or rejection within (5) business days. Customer shall accept or reject, in writing, any Candidate.

C.
If applicable, Service Provider shall be responsible for promptly gathering and transmitting to Customer all applications and supporting documentation for Candidates as necessary for Candidates to be evaluated by Customer to ensure compliance with NRC 10 C.F.R. Part 26, “Fitness for Duty Program” and related requirements, and Customer shall reimburse Service Provider for all associated reasonable, documented out-of-pocket expenses. Service Provider and Workers will adhere to Customer’s Fitness for Duty policy and all other Customer policies. Service Provider agrees to notify Customer of any Candidate or Worker who has been denied access or removed from activities within the scope of 10 C.F.R. Part 26 at any nuclear power plant for violation of a Fitness for Duty policy. Notwithstanding anything to the contrary herein, Customer may reject any Candidate or require Service Provider to immediately terminate or reassign any Worker for failure to qualify under or for violation of Customer’s Fitness for Duty policy.


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E.
Each Contract Labor Requisition Form issued by Customer for Secondment Services and accepted by Service Provider shall be governed by the terms and conditions of this Agreement and the Contract Labor Requisition Form. Each Contract Labor Requisition Form shall be independent of any previously issued or subsequently issued Contract Labor Requisition Form, unless specifically and expressly provided otherwise in a subsequently issued Contract Labor Requisition Form.

F.
If applicable, Service Provider shall be responsible for promptly gathering and transmitting to Customer all applications and supporting documentation for Workers as necessary for Candidates to be evaluated by Customer to ensure compliance with NRC 10 C.F.R. Part 26, “Fitness for Duty Program” and related requirements, and Customer shall reimburse Service Provider for all associated out-of-pocket expenses. Service Provider agrees to notify Customer of any Candidate or Worker who has been denied access or removed from activities within the scope of 10 C.F.R. Part 26 at any nuclear power plant for violation of a Fitness for Duty policy. Notwithstanding anything to the contrary herein, Customer may reject any Candidate or immediately terminate or reassign any Worker for failure to qualify under or for violation of Customer’s Fitness for Duty policy. Customer reserves the right, in preparation for the declaration of a protected area for the Project, to specify additional requirements with respect to Fitness for Duty and access authorization for such proposed protected area, with the consent of Service Provider (which consent will not be unreasonably withheld).

2.2    Revision to Requested Secondment Services
Should Customer choose to amend any of the requirements of the Secondment Services to be performed for a particular Contract Labor Requisition Form, then it shall issue a new Contract Labor Requisition Form.

2.3
Personnel
A.
Service Provider shall, for the Workers, pay all employment-related taxes, such as requirements for unemployment compensation, worker’s compensation for off-site activities, disability, required income and social security tax withholdings, and other legally mandated payments, for Workers provided by Service Provider. Customer shall have no liability or responsibility in this regard.
 
B.
Workers may be located at the Project site or at any other location agreed in writing by the Parties.

C.
Service Provider shall, for the Workers, handle all of the administration (including promptly obtaining any required work permits of any kind required for the Workers to perform the Secondment Services), medical needs/evacuation and travel in accordance with all appropriate laws and regulations. All required paperwork for any required Worker-related permits shall be promptly submitted by Service Provider or its Workers to ensure the timely access to the Project site in order to perform the Secondment Services. Service Provider shall not provide Workers who are foreign nationals as defined in 10 C.F.R. §810.3 without the

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prior written consent of Customer. When Service Provider provides Workers who are not U.S. Citizens or legal residents of the United States, Service Provider shall comply with all U.S. laws regarding foreign nationals working in the United States, including, if applicable, the laws and regulations concerning the transfer of nuclear-related technology (See 10 C.F.R. Part 810). All out-of-pocket expenses incurred by Service Provider in obtaining all necessary immigration documents, visas, work permits, medical needs and travel expenses necessary for the Workers to perform the Secondment Services for Customer shall be considered Reimbursable Costs. Service Provider shall include the estimated cost of such expenses in its monthly invoice submitted to Customer pursuant to Section 4. Customer shall pay such amount, and such amount shall be subject to true-up, in accordance with Section 4.

D.
Service Provider shall be solely responsible for all labor relations matters pertaining to all Workers described herein, including but not limited to, the selection, hiring, training, discipline, transfer, lay off, recall, promotion, reward, adjustment of grievances, compensation and retention in its employ of such personnel as Service Provider deems necessary in Service Provider’s reasonable judgment to fulfill its duties and obligations herein. Customer will not be involved in the labor relations of Service Provider and, with respect to all persons engaged by Service Provider as Workers, will not nor attempt to exercise any of the foregoing labor relations responsibilities.

E.
Customer and Service Provider shall assign coordinators for the purpose of providing local direction, decision-making and administration of this Agreement, as set forth in the table below:

Service Provider Corporate Coordinator:

[TBC]
Customer Corporate Coordinator:

[TBC]

 
 

The Service Provider Corporate Coordinator duties will include:
Receiving and responding to all Contract Labor Requisition Forms;
Actively participating in Customer’s strategic resource planning activities;
Being Customer’s primary point of contact for this Agreement; and
Providing reasonable and necessary assistance to resolve any payment/invoice discrepancies.

2.4
No Guarantee of Positions or Workers
The Parties agree that there is no guaranteed number of open positions, either expressed or implied, that will be requested by Customer. The Parties also agree that there is no guarantee that Service Provider will be able to fill any or all of Customer’s open positions.

2.5
Replacement of Workers
Customer shall have the right to request Service Provider to remove, replace or reassign any Worker for cause after notice of same. Upon receipt of Customer’s notice, Service Provider shall promptly comply with such notice, subject to compliance with applicable

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state and federal law and any relevant rules and regulations promulgated thereunder and, if available, provide replacement Candidates for Customer’s review and approval in accordance with Section 2.1.

2.6    Service Provider Remains Employer
Although Service Provider shall retain no right to direct, supervise or control the activities of Workers at the Project site, Workers shall remain at all times on Service Provider’s payroll and participate in Service Provider’s employee benefit programs, if eligible, and Service Provider may communicate with Workers for administrative purposes. Service Provider shall be responsible for the payment of Workers’ salaries or wages, payroll taxes and employee benefits, and for maintaining workers’ compensation insurance coverage for Workers. Service Provider shall indemnify, defend and hold Customer, Owners and their affiliates, and the respective officers, employees and agents thereof, harmless from and against any and all claims, losses, damages, liabilities, legal fees and expenses resulting from or arising in connection with any failure to pay such wages or benefits, or to withhold appropriate taxes as required hereby.

2.7
Responsibility for Work Product
Because Workers will be under the exclusive direction, supervision and control of Customer at the Project site, Service Provider shall have no liability to Customer for loss or damage arising out of or resulting from the activities of Workers at the Project site while seconded to Customer, including but not limited to, costs of re-performance or rework, injury to or death of persons, loss of or damage to property including property of Owners or others. Service Provider shall have no liability to Customer, Owners or others who may use or benefit from the work or Secondment Services of the Workers for any professional error or omission, workmanship deficiency, or direct or consequential losses or damages of any other kind arising from the activities of Workers at the Project site.

3.
RELATIONSHIPS WITH WORKERS
3.1
Independent Contractor Status
The Parties expressly intend and agree that Service Provider is acting as an independent contractor, and neither Service Provider nor any Worker is an agent or employee of Customer. Nothing in this Agreement shall be construed or implied to create a relationship of partners, agency, joint ventures or of employer and employee as between Service Provider and Customer. Further, neither Service Provider nor its personnel, agents, subcontractors nor Workers have any authority whatsoever, expressed or implied, by virtue of this Agreement, whereby such persons or entities are authorized to commit Customer, in any way, to perform in any manner or to pay money for purchased services or materials.

3.2
Service Provider Employees
The Parties agree that in the performance of this Agreement, the Workers shall remain solely as employees of Service Provider. Service Provider is responsible for the hiring, termination and administrative management, but not Project site management, of all such Workers. Customer shall not be obligated to provide Service Provider or the Workers with any of the rights and privileges established for Customer’s employees. If a secondment is terminated by Customer prior to the anticipated end of the secondment, then Customer shall be responsible for the costs to return such Worker to his or her point

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of origin and the costs to replace such terminated Worker, if required, and Customer shall reimburse Service Provider directly for all such costs.

3.3
Control of Work Sites
Customer shall at all times maintain full control of the work sites at the Project, including the direction of the Workers while the Workers are performing Secondment Services for Customer. Customer shall provide all necessary direction to Workers assigned to their respective work sites at the Project in order to properly complete the Secondment Services.

3.4    Day-to-Day Control
Workers shall be under the exclusive direction, supervision and control of Customer during such times as such Workers are seconded under this Agreement, and Service Provider shall retain no right to supervise, direct or control such Workers during such times. At no time during performance of specific or assigned tasks shall the Workers receive or act under instructions from Service Provider. The Workers shall comply with the applicable Project and office rules, regulations, and safety procedures and with all applicable laws and regulations including export control laws and regulations. If appropriate for the assignment, Customer shall be responsible for providing appropriate employee support functions and facilities such as office space that are similar to the facilities provided for other personnel similarly situated at that location and shall provide all needed office or site facilities, Information Systems & Technology computer and communication equipment, software, telephone, small tools, reprographics, supplies and support services for Workers working at the Project site.

3.5    Termination
In addition to the right to immediate dismissal under Section 2.5, Customer may terminate the secondment of any Worker at any time upon providing five (5) days’ advance notice to Service Provider or its local representative, if any.

4.
COMPENSATION

Pricing, rates and invoicing will be handled by the applicable terms in the Services Agreement.

5.
EQUIPMENT AND FACILITIES

5.1
Furnished Equipment
Customer shall, at no cost or expense to Service Provider, provide all necessary computers, mobile phones, office space, tools, equipment, patterns, scaffolding, rigging, supplies, materials, and protective clothing which are or may be required for the Workers to provide Secondment Services in accordance with the terms of this Agreement and the directions of Customer for so long as this Agreement is in effect.
 
5.2
    Work Practices
A.
Customer will cause the Workers to comply with the standard work practices established at the Project site and any other site at which the Workers are performing Secondment Services. Such standard work practices will be provided in writing to the Workers providing Secondment Services at the Project site. These standard work practices shall include, but not be limited to, safety policies

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and regulations, security and cyber security policies and regulations, Fitness for Duty, quality concerns, quality control, quality assurance, radiation protection and control, environmental compliance and regulatory compliance, communications, work hours, use of cafeteria, medical facilities (if any), dress codes, phones, faxes and copy machines. Customer shall promptly notify the Workers, in writing, of any changes in such policies and procedures that are relevant to the Workers.

B.
The Parties acknowledge that Workers’ movements through accessible areas of a facility or plant may require that authorized personnel escort individuals that have not been accorded unescorted access status. Workers who require unescorted access to Customer’s facilities will be screened by Customer in accordance with applicable regulatory and industry requirements.
6.
QUALITY REQUIREMENTS

6.1    Quality Assurance
Customer shall cause the Workers to perform Secondment Services in accordance with the Quality Assurance Program provided by Service Provider to Customer under the Services Agreement, the details of which shall be provided, in writing, to the Workers.

6.2
Procurement of Secondment Services Related to Digital Computer and Communication Systems and Networks

A.
Any Secondment Services furnished under this Agreement that are classified as cyber security related shall be subject to the controls of Customer’s Quality Assurance and cyber security programs. The details, policies and requirements of such program will be provided to Workers prior to performing cyber security related Secondment Services.

B.
When providing Secondment Services on critical digital assets (hardware, firmware, operating systems, or application software) at Customer’s or Owners’ facilities, each Worker agrees to abide by Customer’s cyber security program as follows:
1.
Before beginning permitted access to Customer’s network, each Worker shall be made aware of Customer’s cyber security program and must agree to abide by the relevant policies.
2.
To participate in Customer’s cyber security training programs or equivalent qualification from Service Provider.
3.
To adhere to the following Customer cyber security policies:
(a)
Configuration management of the Service Provider’s computers, to include virus protection, patch management, authentication requirements and secure internet connections.
(b)
Maintain secure transfer and storage of information and code while off-site.
(c)
Duty to protect confidentiality.
(d)
Software quality assurance (“SQA”) procedures.
(e)
Approved and disapproved software requirements tabulation.
(f)
Requirements and procedures for background investigations.

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7.
INSURANCE

7.1.
Customer and Service Provider Insurance
If applicable, the insurance requirements of the Services Agreement are incorporated herein.

7.2
Additional Insurance
Customer may require Service Provider at any time, and from time to time during the term of this Agreement, to obtain and maintain in force additional insurance with coverage or limits in addition to those otherwise mandated above. The cost of premiums for any such additional insurance shall be considered a Reimbursable Cost and shall be invoiced to Customer in accordance with the invoicing and payment-related provisions in the Services Agreement, including Exhibit C (Rates and Invoicing). Service Provider shall provide the estimated cost of premiums for any requested additional insurance to Customer in writing for approval and, if approved, Service Provider will include the premiums in its monthly invoice submitted to Customer pursuant to Section 4.

8.
TERM AND TERMINATION
8.1
Term    
Unless earlier terminated pursuant to Section 8.2, the term of this Agreement shall be effective on the Effective Date and be effective through the first to occur of (a) expiration of the term (as defined in the Services Agreement) of the Services Agreements and (b) termination of the Services Agreement.

8.2
Termination
Either Party may terminate this Agreement for convenience upon thirty (30) days’ advance-written notice to the other Party; provided that the term of this Agreement shall not extend beyond the date of termination of the Services Agreement.

8.3
Close-out
In the event of a termination of the secondment of any individual Worker by Customer, Service Provider shall comply promptly with instructions and directives contained in such notice regarding the demobilization of the Worker(s) as of the date of termination, as specified in the notice, and demobilization costs of such Worker(s) will be handled in accordance with the terms of the Services Agreement.

9.
RELEASE AND INDEMNITY

9.1
Customer Indemnity
Customer agrees to defend, indemnify and hold harmless, Service Provider and Workers from and against any and all third party claims, losses, damages, liabilities, legal fees and expenses, resulting from or arising in connection with the activities of Workers while on assignment pursuant to this Agreement and under the direction, supervision and control of Customer.

9.2
Indemnification Conditions
If any claim arises with respect to which the Service Provider believes it is entitled to indemnification, the Service Provider shall give written notice of such claim and a copy of such claim, process, and all legal pleadings with respect thereto (to the extent available

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to the Service Provider) to Customer within a reasonable period of time of being served with such claim, process, or legal pleading. Failure to give such notice in a timely manner shall not diminish the indemnification obligations of Customer except to the extent the failure or delay in giving such notice results in actual and material prejudice to Customer.

10.
CONFIDENTIAL INFORMATION AND INTELLECTUAL PROPERTY

10.1
Confidentiality of the Workers
Service Provider agrees that Customer may require Workers to execute non-disclosure agreements to protect Customer’s or others’ confidential information.

10.2
Confidentiality between the Parties
The provisions of Article 14 of the Services Agreement respecting the treatment of Confidential and Proprietary Information shall apply to all Secondment Services. Article 14 of the Services Agreement is expressly incorporated into this Agreement as if it were fully set out herein.

10.3     Ownership of Work Product and Intellectual Property
Without limiting either Party’s rights and obligations with respect to the “Confidential and Proprietary Information” (as defined in the Services Agreement), all drawings and other data prepared by any Workers shall be and remain the property of Customer, or its designee, and may be used for any and all present and future project or purposes Customer deems advisable without payment to Service Provider or such Worker of any sum in excess of the compensation specified herein and without any claim or right thereon by Service Provider or any Worker. Any and all inventions, discoveries and improvements which any Worker conceives of or makes, in whole or in part, working alone or jointly with others during the period of their secondment to Customer, which relate to Customer’s business or arise out of, or result from the Secondment Services performed by the Worker shall be the sole and exclusive property of Customer, or Customer’s designee. Service Provider hereby agrees to, and by these presents does, assign, transfer and convey to Customer, or to Customer’s designee, any such intellectual property rights in any invention, discoveries and improvements.

10.4     Survival
The terms and covenants of this Section 10 shall survive the termination or expiration of this Agreement.
11.
RIGHT OF ASSIGNMENT
Assignment of this Agreement is governed by the assignment terms in the Services Agreement.


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12.
DELAYS

12.1    Force Majeure
Except for Customer’s obligation to make payment to Service Provider, neither Customer nor Service Provider shall be considered in default in the performance of its obligations hereunder to the extent that the performance of any such obligation is prevented or delayed by any cause beyond its reasonable control, including acts of God, strikes or other labor disputes, fires, floods, hurricanes, earthquakes, wars and actions or inaction of governmental authorities.

12.2    Notice
In the event that either Customer or Service Provider shall become aware (hereinafter the “Delinquent Party”) of an actual or potential delay in the performance of all or any portion of its contractual obligations, such Delinquent Party shall promptly give notice thereof to the other Party. The Delinquent Party shall promptly take such measures as may be necessary to prevent or minimize such delay and shall promptly notify the other Party in writing of the measures intended to be taken.

13.
DISPUTE RESOLUTION
All disputes connected with, arising out of or relating to the subject matter of this Agreement, including concerning a breach hereof, the obligation of either Party hereunder, or the interpretation of any provision hereof, shall be subject to the procedure described in Article 19 of the Services Agreement. Article 19 of the Services Agreement is expressly incorporated into this Agreement as if it were fully set out herein.

14.
COMPLIANCE WITH LAWS

14.1
Compliance with Laws
Each Party hereto shall comply at all times with applicable executive orders and federal, state, municipal and local laws applicable to the location in which the Secondment Services or this Agreement is performed; as well as all applicable rules, orders, requirements and regulations thereunder.

14.2
NRC Regulations
Service Provider acknowledges that, in connection with its provision of Workers under this Agreement, it and its personnel, agents and subcontractors may be subject to laws, regulations and policies involving matters within the regulatory responsibility of the U.S. Nuclear Regulatory Commission (the “NRC”). These laws, regulations, and policies include Section 211 of the ERA, 10 C.F.R. § 50.7, the NRC’s May 14, 1996 Policy Statement of “Freedom of Employee in the Nuclear Industry to Raise Safety Concerns Without Fear of Retaliation” (61 Federal Register 24336), and the NRC’s “Final Safety Culture Policy Statement” (June 14, 2011). The Parties agree to abide by such laws, regulations and policies, agree to maintain a working environment where Workers are free to raise safety concerns, and agree to not harass, intimidate, take adverse employment action against, or otherwise retaliate against any Worker because they bring or have brought matters related to this Agreement or related to the facility or location to which they are assigned or similar matters to the attention of the NRC, any state authority possessing authority delegated from the NRC, the U.S. Department of Labor or to any representative of Customer or to any other person or third party.


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14.3
Additional NRC Requirements
The Parties acknowledge that certain provisions of the NRC’s Confirmatory Order issued on September 25, 2014 to the Chicago Bridge and Iron Company (the “Confirmatory Order”) may apply to Workers under this Agreement, and, if applicable, agree to adhere to applicable provisions of the Confirmatory Order.
  
14.4
Notice of Retaliation
During the term of this Agreement, each Party agrees to notify the other Party, promptly in writing, when such Party becomes aware of any instance in which any Worker, in connection with the provision of this Agreement, files a claim at the U.S. Department of Labor or with the NRC, or any other governmental authority possessing authority delegated from the NRC, alleging that the employee or Worker has been harassed, intimidated, retaliated against or otherwise discriminated against for having engaged in activities involving this Worker that are protected as described hereunder. Each Party further agrees to notify the other Party promptly in writing when it becomes aware of any investigation undertaken by the NRC’s Office of Investigation into activities under this Agreement and of the material progress of such an investigation. Each Party also agrees to notify the other Party promptly in writing of the material progress of the action involving such filed claim or allegation and any decision, whether preliminary or final, by the U.S. Department of Labor, the NRC or any other governmental authority possessing authority delegated from the NRC in any case involving such claim or allegation.

14.5
Non-Discrimination
Each Party hereto agrees that it will not discriminate against its employees, agents or subcontractors, applicants for employment or engagement in providing or accepting Workers hereunder or Candidates it considers for secondment in connection with the Secondment Services described herein based on race, marital status, religion, color, national origin, sex, age, disability or veteran status.

15.
WARRANTY

15.1    Warranty
Service Provider represents and warrants that all Workers furnished to Customer, in response to filling specific job descriptions within this Agreement have the professional qualifications requested by Customer as stated in the Contract Labor Requisition Form. Service Provider shall, conditioned upon the availability of qualified Workers, at its sole expense, promptly replace any Worker who does not meet the foregoing warranty. Notwithstanding the foregoing, Customer shall have the right to immediately dismiss any Worker who fails to perform requested work in accordance with accepted regulatory and professional standards applicable to the job classification for which the Worker was seconded.

15.2    Sole and Exclusive Remedies
THE WARRANTIES SET FORTH HEREIN ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES WHETHER STATUTORY, EXPRESS OR IMPLIED(INCLUDING ALL WARRANTIES OF MERCHANTABILITY AND FITNESS FOR PURPOSE AND ALL WARRANTIES ARISING FROM COURSE OF DEALING OR USAGE OF TRADE). THE REMEDIES SET FORTH, FOR THE TIME AND IN THE MANNER PROVIDED ABOVE, SHALL BE CUSTOMER’S

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EXCLUSIVE REMEDIES FOR FAILURE OF SERVICE PROVIDER TO MEET ITS WARRANTY OBLIGATIONS, WHETHER BASED IN CONTRACT, IN TORT (INCLUDING NEGLIGENCE AND STRICT LIABILITY), OR OTHERWISE.

16.
TAXES
The rates and charges herein include all taxes except: any federal taxes imposed or increased (to the extent of the increase) after the Effective Date of this Agreement; any state or local sales, use, gross receipts, duty, value added, excise, or similar taxes now or hereafter imposed. All of the aforementioned taxes are not included in the price and will be the responsibility of Service Provider.

17.
MISCELLANEOUS
17.1
Notices
Any notices pursuant to default, cancellation, termination or otherwise required pursuant to this Agreement shall be sent by recognized overnight courier service, registered or certified mail, or via email with receipt confirmed in writing to the Parties at the addresses shown below:

If to Customer:
Georgia Power Company
Attn: ______________________
___________________________
___________________________
Email: _____________________

If to Service Provider:
Westinghouse Electric Company LLC
Attn: ______________________
___________________________
___________________________
Email: _____________________


WECTEC Global Project Services Inc.
Attn: ______________________
___________________________
___________________________
Email: _____________________

Either Party may change all or any part of its address for providing notices upon submitting such change to the other Party in accordance with the requirements of this Section.

17.2
Choice of Law
This Agreement shall be construed and interpreted in accordance with the laws of the State of New York, excluding its choice of law rules.

17.3
Limit of Liability
WITH THE EXCEPTION OF SERVICE PROVIDER’S INDEMNITY OBLIGATIONS UNDER SECTION 2.6 OF THIS AGREEMENT, SERVICE PROVIDER’S

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CUMULATIVE AGGREGATE LIABILITY TO CUSTOMER AND OWNERS FROM ANY AND ALL CAUSES ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT SHALL NOT EXCEED ONE MILLION DOLLARS ($1,000,000).

NEITHER CUSTOMER, OWNERS NOR SERVICE PROVIDER NOR THEIR AFFILIATES (NOR ANY OF SUCH PARTY’S OR AFFILIATE’S RESPECTIVE OFFICERS, AGENTS, SERVANTS, EMPLOYEES, SHAREHOLDERS, OR MEMBERS) WILL BE LIABLE TO THE OTHER PARTY OR THEIR AFFILIATES (NOR ANY OF THEIR RESPECTIVE OFFICERS, AGENTS, SERVANTS, EMPLOYEES, SHAREHOLDERS, OR MEMBERS) FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL LOSS OR DAMAGE WHATSOEVER, ARISING OUT OF THIS AGREEMENT, INCLUDING, BUT NOT BE LIMITED TO, LOSS OF USE OR OPPORTUNITY, LOST PROFITS, ANTICIPATED INCOME, COSTS OF CAPITAL, OR SIMILAR LOSS.

THE RELEASES FROM AND LIMITATIONS ON LIABILITY AND INDEMNITY OBLIGATIONS EXPRESSED IN THIS AGREEMENT SHALL APPLY EVEN IN THE EVENT OF THE FAULT OR NEGLIGENCE OF THE RELEASED OR INDEMNIFIED PARTY, AND WHETHER LIABILITY IS FOUNDED IN CONTRACT, TORT, STRICT LIABILITY, OR OTHER BASIS OF LIABILITY, AND SHALL EXTEND TO SUCH PARTY AND ITS AFFILIATES AND EACH OF THEIR RESPECTIVE SHAREHOLDERS, DIRECTORS, OFFICERS, EMPLOYEES AND AGENTS.
 
17.4
Entire Agreement; Binding Effect
The Parties hereto enter into this Agreement intending to be legally bound hereby. This Agreement represents the entire contract between the Parties with respect to the subject matter hereof. This Agreement may not be modified except by a modification, in writing, which has been executed by authorized representatives of both Customer and Service Provider. Any modifications to the contrary shall have no force and effect. This Agreement shall be binding upon the Parties hereto and their respective permitted successors and assigns.
  
17.5
No Waiver
The failure of either Party to enforce at any time any of the provisions of this Agreement shall in no way be construed as a waiver of such provision(s) or in any way affect the validity of this Agreement or any part hereof, or a Party’s rights and obligations hereunder, or the right of any Party to thereafter enforce each and every provision hereof.

17.6
Severability
Should any provision of this Agreement be found or adjudged to be unenforceable, the remaining provisions hereof shall remain in full force and effect.

17.7
Headings
The use of headings in this Agreement is for convenience of the Parties only and shall have no legal effect.

17.8
Publicity
Service Provider shall not make or permit the making of any public statements or announcements concerning this Agreement or the relationship of the Parties with respect

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to the Project, without the Customer’s prior written approval, which may be given or withheld in its sole discretion.

17.9
Survival
The provisions of this Agreement which by their nature survive acceptance, performance and termination or expiration of the Secondment Services, including, without limitation, the provisions concerning payment, indemnity, warranty, limitation of liability, confidentiality and trade secrets and proprietary rights, will remain in full force and in effect following termination, cancellation, completion or expiration of this Agreement.

17.10
Counterparts
This Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall be deemed to be one and the same agreement. A signed copy of this Agreement delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Agreement.
SIGNATURE PAGE FOLLOWS

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IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed in duplicate by their duly authorized representatives:

CUSTOMER:
SOUTHERN NUCLEAR OPERATING COMPANY, INC.
________________________________________
(sign here)
________________________________________
(print name)
________________________________________
TITLE ________________________________________
(date)
SERVICE PROVIDER:
WESTINGHOUSE ELECTRIC COMPANY LLC

________________________________________
(sign here)
________________________________________
(print name)
________________________________________
TITLE ________________________________________
(date)
 

WECTEC GLOBAL PROJECT SERVICES INC.

________________________________________
(sign here)
________________________________________
(print name)
________________________________________
TITLE ________________________________________
(date)


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ATTACHMENT 1

Contract Labor Requisition Form


CUSTOMER NAME:                                                      DATE OF REQUEST:             


JOB SITE:             

REQUESTED START DATE:                                       ANTICIPATED END DATE:             


NUMBER & TYPE OF WORKERS REQUESTED

Title
Number
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




TOTAL NUMBER OF WORKERS REQUESTED:             

Attachment 1 to Exhibit D– Page 1


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QUALIFICATIONS
Experience:
 
 
 
 
Skills:
 
 
 
 
Education:
 
 
 
 
 
Licenses & Other Requisite Qualifications:
 
 
 

SECONDMENT SERVICES TO BE PERFORMED (INCLUDING ANY DELEGATIONS OF AUTHORITY)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 




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EXHIBIT E
CONFIDENTIALITY AGREEMENT


THIS CONFIDENTIALITY AGREEMENT (this “Agreement”) is made as of the ___ day of _____________, 20__, by and between ___________________ (the “Disclosing Party’) and ________________ (the “Recipient”).

WHEREAS , the Disclosing Party is a party to an Amended and Restated Services Agreement, dated as of July 20, 2017, between Georgia Power Company, for itself and as agent for Owners 1 , with Westinghouse Electric Company LLC and WECTEC Global Project Services Inc. (together “Westinghouse”) under which Westinghouse will perform certain agreed-to services for Disclosing Party directed to the completion of the Vogtle 3 & 4 nuclear power plants (“Agreement”); and

WHEREAS , the Disclosing Party has been provided with certain confidential and/or proprietary information (“Confidential and Proprietary Information”) of Westinghouse or Owners, which the Disclosing Party desires to disclose to the Recipient as permitted in accordance with the provisions of the Agreement; and

WHEREAS , under the terms of the Agreement, the Disclosing Party and the Recipient are required to enter into this Agreement as a condition to disclosure of such Confidential and Proprietary Information to the Recipient.

NOW THEREFORE , for and in consideration of the premises and the mutual promises hereinafter set forth and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1.    Recipient shall maintain the confidentiality of all Confidential and Proprietary Information disclosed to it hereunder, and shall not use such Confidential and Proprietary Information for any purpose other than the purposes of Facility (and associated simulators) construction, testing, completion and defense of ITAACs, startup, trouble-shooting, response to plant events, inspection, evaluation of system or component performance, scheduling, investigations, operation, maintenance, training, repair, licensing, modification, decommissioning and compliance with laws or the requirements of governmental authorities (the “Purpose”).

_____________________
1 Owners are defined as Georgia Power Company, a Georgia Corporation, Oglethorpe Power Corporation (An Electric Membership Corporation), an electric membership corporation formed under the laws of the State of Georgia, Municipal Electric Authority of Georgia, a public body corporate and politic and an instrumentality of the State of Georgia, MEAG Power SPVJ, LLC, MEAG Power SPVM, LLC, MEAG Power SPVP, LLC, each a Georgia limited liability company, and The City of Dalton, Georgia, an incorporated municipality in the State of Georgia acting by and through its Board of Water, Light and Sinking Fund Commissioners. Southern Nuclear Operating Company, Inc. (“SNC”) is the licensed operator of Vogtle 3 and 4 and is Owners’ agent for the purposes of implementation and administration of the Services Agreement.


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2.    Recipient shall not transmit or further disclose such Confidential and Proprietary Information to any third party, including, without limitation, parent organizations of Recipient, sister organizations of Recipient, subsidiaries of Recipient, consultants of Recipient or subcontractors of Recipient.

3.    In the event that the Recipient or any of its representatives are requested or required in any proceeding or by any governmental authority to disclose any of the Confidential and Proprietary Information, the Recipient shall provide the Disclosing Party with prompt written notice of such request or requirement so that the Disclosing Party may seek a protective order or other appropriate remedy and/or waive compliance with the provisions of this Agreement. If, in the absence of a protective order or other remedy or the receipt of a waiver from the Disclosing Party, the Recipient or any of its representatives are nonetheless, in the written opinion of their counsel, legally compelled to disclose such information, it or its representatives may, without liability hereunder, disclose only that portion of the Confidential and Proprietary Information which such counsel advises the Recipient is legally required to be disclosed, provided that the Recipient exercises its best efforts to preserve the confidentiality of the Confidential and Proprietary Information, including, without limitation, by cooperating with the Disclosing Party to obtain an appropriate protective order or other reliable assurance that confidential treatment will be accorded the Confidential and Proprietary Information.
    
4.    Except where necessary in furtherance of the Purpose, Recipient shall not make any copy or in any way reproduce or excerpt such Confidential and Proprietary Information except as authorized by the Disclosing Party in writing prior to such reproduction or excerption. Any such copies or excerpts shall include all proprietary notices and designations. Upon the written request of the Disclosing Party, the Confidential and Proprietary Information provided hereunder and any such copies or excerpts thereof shall be returned to the Disclosing Party, or, at the sole option and request of the Disclosing Party, Recipient shall destroy such information and any such copies and/or excerpts and certify in writing to the Disclosing Party that such information has in fact been destroyed.

5.    Nothing herein shall apply to any information which is:

(a)
now generally known or readily available to the trade or public or which becomes so known or readily available without fault of the Recipient; or
(b)
rightfully possessed by the Recipient without restriction prior to its disclosure hereunder by the Disclosing Party; or
(c)
acquired from a third party without restriction, provided that the Recipient does not know, or have reason to know, or is not informed subsequent to disclosure by such third party and prior to disclosure by the Recipient that such information was acquired under an obligation of confidentiality.

6.    It is mutually understood that nothing herein shall be construed as granting or implying any right under any letters patent, or to use any Confidential and Proprietary Information claimed therein, or as permitting Recipient to unfairly obtain the right to use

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Confidential and Proprietary Information which becomes publicly known through an improper act or omission on its part.

7.    The Owners, Westinghouse and WECTEC make no warranty or representation whatsoever to the Recipient as to the sufficiency or accuracy of the Confidential and Proprietary Information provided hereunder, the ability of Recipient to use the Confidential and Proprietary Information for its intended purpose, or as to the result to be obtained therefrom.

8.    Neither the Owners, Westinghouse, WECTEC, nor their suppliers or subcontractors of any tier shall be liable with respect to or resulting from the use (or the results of such use) or misuse of any Confidential and Proprietary Information furnished hereunder.

9.    Nothing in this Agreement shall obligate the Disclosing Party to provide any specific information that it otherwise desires to withhold.

10.    Recipient agrees to fully comply with all laws and regulations with regard to the Confidential and Proprietary Information transmitted hereunder.

11.    Recipient shall not, at any time file, cause or authorize the filing of any patent application in any country in respect of any invention derived from the Confidential and Proprietary Information supplied hereunder.

12.    Recipient shall indemnify and hold the Disclosing Party harmless from and against all losses, liabilities, costs and expenses (including reasonable attorneys’ fees) arising out of or related to any disclosure of Confidential and Proprietary Information by Recipient in violation of this Agreement.

13.    Recipient shall not assign this Agreement. This Agreement shall be binding upon the Recipient and its successors and shall benefit and be enforceable by the Owners, Westinghouse or WECTEC and each of their respective successors and assigns.

14.    If any of the terms of this Agreement are violated by Recipient, the Owners, Westinghouse or WECTEC shall be entitled to an injunction to be issued by any court of competent jurisdiction, enjoining and restraining the Recipient, as well as damages and any costs of collection, including but not limited to attorneys’ and other professionals’ fees and related charges and interest.

15.    If any provision of this Agreement is held invalid in any respect, it shall not affect the validity of any other provision of this Agreement. If any provision of this Agreement is held to be unreasonable as to the time, scope or otherwise, it shall be construed by limiting and reducing it so as to be enforceable under then applicable law.

16.    This Agreement shall be governed in accordance with the laws of the State of New York without giving effect to any choice of law, provision, or rule (whether of New York or

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any other jurisdiction) that would cause the application of the laws of any jurisdiction other than New York.


IN WITNESS WHEREOF , the parties have hereto set their respective signatures to this Agreement.


DISCLOSING PARTY :


By:                                              
Name:                                          
Title:                                            
Address:                                       

RECIPIENT :


By:                                              
Name:                                         
Title:                                           
Address:                                      



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EXHIBIT F
FACILITY IP LICENSE IN THE EVENT OF A TRIGGERING EVENT
This FACILITY IP LICENSE IN THE EVENT OF A TRIGGERING EVENT (“Facility IP License”) is made as of July 20, 2017 (“Execution Date”), and becomes effective as of the Effective Date as defined in the Amended and Restated Services Agreement, by and between, on the one hand, GEORGIA POWER COMPANY, a Georgia corporation, for itself and as agent for Owners, as defined below, and, on the other hand, WESTINGHOUSE ELECTRIC COMPANY LLC, a Delaware limited liability company having a place of business in Cranberry, Pennsylvania (“WEC”), and WECTEC GLOBAL PROJECT SERVICES INC., a Louisiana corporation having a place of business in Charlotte, North Carolina (“WECTEC” and together with WEC, the “Service Provider”). Owners and Service Provider may be referred to individually as a “Party” and collectively as the “Parties.”

1. Definitions .
For purposes of this Facility IP License, the terms listed below shall have the meanings indicated beside them. Capitalized terms not otherwise defined below shall have the meanings ascribed to them in the Amended and Restated Services Agreement between the Parties of even date herewith (together with all Exhibits thereto, as amended or modified and as may be further amended or modified from time to time, the “Services Agreement”).
(a) “Facility IP” means all Intellectual Property (and associated deliverables, products, and other materials described in this definition) of Service Provider or its Affiliates, whether now existing or hereafter developed, in or covering the Facility (including all equipment, components, hardware, software and other deliverables) as delivered under the Services Agreement or under the EPC Agreement (including Intellectual Property, deliverables, products, and materials underlying, supporting, or used to create deliverables under the EPC Agreement or Services Agreement, regardless of whether the same have been or will be provided to Owners, but excluding products delivered by Service Provider’s fuels group to Owners under separate commercial agreements), required or reasonably necessary for Owners to design, construct, test, startup, license, complete, maintain, improve, and operate the Facility, to defend challenges on ITAACs or respond to other requests made by any Government Authority or pursuant to applicable Law, including (i) patents, trademarks (but excluding the Westinghouse name or any trademarks related to AP1000 ® ), copyrights, trade secrets, inventions, know-how, proprietary information, confidential information, documentation, materials and data; (ii) software required or reasonably necessary for Facility Purposes, including Service Provider (or its Affiliates)-owned and developed proprietary computer programs expressed in a source code language consisting of a full source language statement of programs and all related compiler command files, build scripts, complete maintenance documentation, application programming interfaces, graphical user interfaces, schematic diagrams and annotations which comprise the pre-coding detail design specifications, information management data bases (e.g., open item database, PCC outstanding issues list, DCP database, LAR database, ITAAC database), plans, designs, calculations and models (e.g., seismic models, structural models, stress analyses,

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hazards analyses – flooding, PRHA, probabilistic risk assessment, etc.), design basis information, computer source code for CYS monitoring system and all CYS design documents, cyber security databases (e.g., CDA identification database, LRM assessment database, cyber SharePoint site, etc.) and all cyber security supporting documentation, simulator designs; (iii) all AP1000 ® -related schematics, designs and information, included but not limited to AP1000 ® information referenced in the DCD or COL; and (iv) all other information, documentation, materials, data, technology, software and other property necessary to allow a reasonably skilled person to design, construct, test, license, startup, operate, improve, complete and maintain the Facility.
(b) “Intellectual Property” means any and all intellectual property rights existing from time to time under any Law including patent law, copyright law, semiconductor chip protection law, moral rights law, trade secret law, trademark law (together with all goodwill associated therewith (but excluding any rights to the Westinghouse name or any trademarks related to AP1000 ® )), unfair competition law, publicity rights law, or privacy rights law, and any and all other proprietary rights, and any and all applications, renewals, extensions and restorations of any of the foregoing, now or hereafter in force and effect worldwide. For purposes of this definition, rights under patent laws shall include rights under any and all United States patent applications (and patents issued therefrom) and patents (including letters patent and inventor’s certificates), including, without limitation, any provisionals, substitutions, extensions, supplementary patent certificates, reissues, renewals, divisions, continuations in part (or in whole), continued prosecution applications, requests for continued examination, and other similar filings or stages thereof provided for under the laws of the United States.
(c) “Owners” means Georgia Power Company, Oglethorpe Power Corporation (An Electric Membership Corporation), Municipal Electric Authority of Georgia, MEAG Power SPVJ, LLC, MEAG Power SPVM, LLC, MEAG Power SPVP, LLC, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners.
(d) “Software” or “software” means any computer programming code (such as computer programs, procedures, rules or routines embodied in computer programs, databases and related computer files) consisting of instructions or statement in a form readable by individuals (source code) or machines (object code) and related documentation and supporting materials therefor, in any form or medium, including electronic media. Software includes any bug fixes, error-correction releases, updates, upgrades, enhancements, modifications, changes, new versions and replacements therefor.
(e) “Triggering Event” means Service Provider’s complete failure to perform the Services under the Services Agreement for an uninterrupted period of at least fifteen (15) days, following written notice by Owners to Service Provider of such failure to perform the Services and after Service Provider has been granted reasonable opportunity and period of time under the circumstances (not to exceed sixty (60) days) to resume provision of the Services and fails to do so; provided, however, that Owners shall not be required to wait any period of time in the event Service Provider has publicly stated its abandonment of its obligations under the Services Agreement or Service Provider cannot provide any reasonable assurance that Service Provider will resume provision of the Services. As used herein, “complete failure” shall mean (a) failure

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by Service Provider to perform all of the Services requested by Owners (including delivery of Licensed IP (as that term is defined in Exhibit G (IP License) to the Services Agreement) and access to certain Facility IP) in accordance with the requirements of the Services Agreement coupled with either (x) failure to raise a good-faith claim that the Services conform to the Services Agreement or (y) failure, within fifteen (15) days of issuance of a final decision of the Panel concluding that the Services do not conform to the Services Agreement (issued per Article 19 of the Services Agreement), to perform the Services in accordance with such Panel decision; or (b) willful and complete abandonment or non-performance of all of the Services requested by Owners. Notwithstanding the foregoing, if Service Provider fails or ceases to perform only a portion of the Services (i.e., Service Provider fails or ceases to perform a particular type or category of Service which Service Provider agreed to perform in the Services Agreement, but continues to perform other Services), such failure or cessation shall be deemed a Triggering Event only as to the type or category of Services which Service Provider failed or ceased to perform, and Owners’ right to receive a copy of the then-existing Facility IP, Service Provider’s obligation to transfer a copy of the Facility IP, and Owners’ ability to exercise and enforce the license in and to the then-existing Facility IP shall only apply to that portion of the Facility IP applicable to and associated with the type or category of Service which Service Provider fails or ceases to provide, in order to fully enable Owners to self-perform or have a Third Party perform the Services without any support or technical assistance from Service Provider.
(f) “Use” means to access, use, copy, reproduce, modify, prepare derivative works, make, have made (including export and import in compliance with applicable US law), distribute, perform and display for Facility Purposes and in compliance with the provisions of this Facility IP License.
2.     Grant of License .

(a)    Service Provider hereby grants, agrees to grant, and shall cause to be granted to Owners, and their Affiliates, and employees of Affiliates, effective as of the Effective Date and exercisable solely in accordance with Section 3 below, a royalty-free, fully paid-up, non-exclusive, transferable (solely in connection with any sale or transfer of the Facility), irrevocable and perpetual license, all subject to Section 10 , under, in and to the Facility IP (as the same may exist at the time of a Triggering Event or later issue as a patent based on a patent application filed prior to the Triggering Event), to Use, and permit Third Parties to Use (all solely in accordance with Section 6 below), the Facility and all equipment, components, hardware, software and other deliverables, and the Facility IP (as the same may exist at the time of the Triggering Event or later issued as a patent based on a patent application filed prior to the Triggering Event), solely as necessary for Owners to design, construct, test, startup, license, complete, maintain, improve, and operate the Facility, and to complete and defend challenges on ITAAC or respond to other requests made by any Government Authority or pursuant to applicable Law, in all such cases without Service Provider’s support or technical assistance. Owners shall have the right to sublicense to Third Parties (subject to Section 6 below) the rights conferred upon Owners, provided that such sublicenses shall be limited to Use solely on Owners’ behalf and solely in connection with the Facility Purposes. The license rights granted by Service Provider to Owners pursuant to this Facility IP License do not include any rights in and to any

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Facility IP other than as specifically set forth in this Facility IP License, and do not include any right to use any Facility IP (i) with or for any facility other than the Facility (Vogtle Units 3 & 4), or (ii) for the manufacture or design of fuel assemblies for AP1000 ® reactors. The licenses granted herein are in addition to and not in lieu of any other licenses granted under the Services Agreement or other agreements between the Parties or between Service Provider and Owners. The restrictions set forth in this Facility IP License apply only to the license granted in this Facility IP License.

(b)    The license granted by Service Provider to Owners hereunder shall not prejudice the rights of Service Provider (or its Affiliates) to sell or license all or any portion of the Facility IP to others, or to use the Facility IP on an unfettered basis, shall not obligate Service Provider in any way to provide updates or improvements made to the Facility IP transferred to Owners after the date of the Triggering Event, and shall not obligate Service Provider in any way to file for or maintain intellectual property protections for any Service Provider intellectual property, including Facility IP (Owners are free to request Service Provider to pursue intellectual property protections for such Service Provider intellectual property at Owners’ expense), provided that the sale or license of any Facility IP by Service Provider or its Affiliates shall be subject to and not free and clear of this Facility IP License or any other licenses granted to Owners by Service Provider or otherwise adversely affect this Facility IP License Agreement including, without limitation, pursuant to section 363 of the Bankruptcy Code or other applicable Law.

3 .     Owners’ Ability to Exercise and Enforce License Rights .

(a)    Owners acknowledge and agree that, although this Facility IP License is attached to and made a part of the Services Agreement and the license to Facility IP granted by Service Provider pursuant to Section 2 is made effective as of the Effective Date, the rights and licenses granted by Service Provider to Owners hereunder shall not become exercisable or enforceable by Owners, and Owners hereby covenant not to exercise, enforce or use their rights to Facility IP granted pursuant to this Facility IP License, unless and until such time that a Triggering Event occurs and any Service Provider opportunity to cure as described in Section 1.(e) has been exhausted, it being understood that this covenant will not impact any rights that Owners may have under any other license. As such, Service Provider’s obligations under this Facility IP License shall not become enforceable by Owners, and Service Provider shall not be obligated by this Facility IP License Agreement to transfer or provide a copy of the Facility IP to Owners by virtue of the requirements of this Facility IP License, unless and until such time that the Triggering Event occurs and any Service Provider opportunity to cure as described in Section 1.(e) has been exhausted.

(b)    If the Services Agreement is terminated for convenience by Owners or due to Owners’ material breach (pursuant to Section 20.2 of the Services Agreement), the Facility IP license granted to Owners hereunder shall immediately terminate (or, if the Services Agreement is terminated for such reasons before the occurrence of the Triggering Event, shall never become exercisable by Owners); provided, however, that if a Triggering Event has occurred prior to Owners’ termination of the Services Agreement for convenience, this Facility IP License shall

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not terminate with respect to Owners’ license to Facility IP that was the subject of the Triggering Event.

4.     Triggering Event .

Upon the occurrence of the Triggering Event and if Service Provider is unable to cure as described in Section 1.(e) , Service Provider shall be obligated to promptly transfer to Owners a full and complete copy of the then-existing Facility IP in the file format(s) as they exist in Service Provider’s and its Affiliates’ systems and files, and Owners’ license with respect to the then existing Facility IP as described in Section 2 above, shall become immediately exercisable and enforceable by Owners. If Service Provider fails to perform a particular type or category of Services but continues to perform other types or categories of Services, such event will be considered a Triggering Event only as to the category of Service which Service Provider failed to perform. Accordingly, if Service Provider is unable to cure in this instance, Service Provider shall transfer a copy of the portion of the then-existing Facility IP corresponding to that category of Service which led to the Triggering Event and the terms herein shall apply to that licensed portion of Facility IP. Owners’ partial exercise of this Facility IP License shall not preclude or prejudice Owners from receiving or exercising any additional partial or full licenses of Facility IP pursuant to Sections 2 and 3 due to any additional Triggering Events.

5.     Assignment .

(a) Owners shall have the right to, and shall, assign this Facility IP License (including all the rights and obligations hereunder) to any purchaser of the Facility or their successor in connection with their ownership interest in the Facility.
(b) Owners’ consent shall not be required for WEC’s and WECTEC’s assignment of their rights and obligations under this Agreement in connection with an assignment of their rights and obligations under the Services Agreement in connection with the Bankruptcy Cases provided, however, that the rights of Owners under the Bankruptcy Code are preserved in all respects and WEC shall remain a party hereto and obligated hereunder unless the assignee in such a transaction also acquires substantially all of the Facility IP such that Owners’ rights under this Facility IP License are not adversely affected.
(c)      WEC shall ensure that any assignment, sale or exclusive license of any portion of this Facility IP License is subject to the rights and obligations of Section 2 and the covenant not to sue in Section 7(c) (but only with respect to IP Improvements of such Facility IP made by Owners as of or before such assignment, sale or exclusive license (“Covenant IP Improvements”)), and in a manner, by operation of law or otherwise, such that any further assignee, purchaser or exclusive licensee of such Facility IP takes such Facility IP subject to the rights and obligations of Section 2 and the covenant not to sue in Section 7(c) (with respect to Covenant IP Improvements). WEC shall also be entitled to assign to any assignee, purchaser or exclusive licensee of any portion of the Facility IP the right to enforce this Facility IP License against Owners, to the extent it relates to the Use or disclosure of Facility IP. In addition to the foregoing, WEC shall ensure that any assignment, sale, or exclusive license of its interest in and to its Facility IP, or any portion thereof,

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pursuant to which WEC divests possession of any portion of the Facility IP or is otherwise rendered unable to satisfy its obligations under Section 4 is subject to the assignee’s, purchaser’s or exclusive licensee’s agreement to be bound by the transfer obligations under Section 4 and the requirements of this sentence of Section 5 . WECTEC shall have the right to, and shall, assign this Facility IP License (including all the rights and obligations hereunder) to any assignee of the Services Agreement in connection with any assignment of such agreement and shall, in connection with any such assignment, ensure that the rights of Owners under the US Bankruptcy Code are preserved in all respects.
(d)      Assignment rights for third-party software shall be subject to the terms of the associated third-party software license and may require ratification by the Third Party. Any assignment or transfer in violation of this Facility IP License will be null and void. This Facility IP License and the rights and obligations of either Party hereto will be binding upon and will inure to the benefit of the Parties hereto and their respective successors and permitted assigns, including but not limited to any bankruptcy trustee appointed.
6.      Limitations on Sharing of Facility IP .

(a)    The right of Owners to share and/or subcontract the Facility IP (pursuant to Section 2 ), shall be subject to the limitations and conditions set forth in Section 3 with regard to the ability of Owners to exercise their rights in and to the Facility IP.

(b)    Owners must keep and maintain all Facility IP provided by Service Provider hereunder and marked “proprietary”, “confidential” or the like, as confidential and exercise at least the same degree of care to safeguard the confidentiality of the Facility IP as they do to safeguard their own proprietary or confidential information of equal importance, but not less than a reasonable degree of care, and may only share or disclose the Facility IP as necessary to exercise their rights hereunder, and subject to the following conditions: (i) any permitted sharing or disclosure by Owners of Facility IP shall be made subject to a written agreement which (A) restricts the use and disclosure thereof by the recipient in the same manner as Owners’ use and disclosure is restricted, (B) contains confidentiality obligations at least as protective as those contained in this Section 6 , and (C) names Service Provider as a third party beneficiary; (ii) Owners shall be responsible for any breach by such third party recipients of Facility IP of such written agreements of their non-use and non-disclosure obligations with respect to the Facility IP; and (iii) any sharing of Facility IP by Owners shall be limited to only those portions of the Facility IP which are necessary to be shared in order for Owners to exercise their rights under this Facility IP License.

(c)    The foregoing obligations of confidentiality in Section 6(b) shall not apply to any sharing or disclosure of Facility IP by Owners which is required by any Government Authority or pursuant to applicable Law (provided, however, Owners shall not disclose Facility IP to the U.S. Patent Office or any other Patent Office or patent authority as part of a patent application) provided that Owners: (i) use reasonable efforts to provide Service Provider with written notice of such request or demand as promptly as practicable under the circumstances so that Service Provider shall have an opportunity to seek an appropriate protective order or other appropriate

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remedy; (ii) furnish only that portion of the Facility IP which is, in the opinion of Owners’ counsel, legally required; and (iii) take, and cause their representatives to take, all other reasonable steps necessary to try to obtain confidential treatment for any such Facility IP required to be furnished.

(d) Nothing in this Facility IP License or in any disclosures made hereunder shall be construed as granting to Owners the right to file for any intellectual property right (patent, copyright, trademark, etc.) related to or incorporating Facility IP.

7.     Ownership of Facility IP and Improvements thereon .

(a) As between Service Provider and Owners, Service Provider shall own all right, title and interest in and to all Intellectual Property associated with the Facility IP provided hereunder.

(b) To the extent Owners create any modifications or derivative works in the Facility IP, Owners shall own all right, title and interest in and to all Intellectual Property associated with such modifications or derivative works. Owners’ Use of any such modifications or derivative works is limited to Facility Purposes.

(c) The Parties acknowledge that each Party may independently develop or have developed improvements to or derivative works of the Facility IP (hereinafter “IP Improvements”) that may infringe on the other Party’s Intellectual Property in its IP Improvements. Each Party intends that such development not block the other Party’s development activities, and, consequently: i) Service Provider covenants not to sue Owners, their Affiliates, or any Person authorized by Owners to Use such IP Improvements on Owners’ behalf, for infringement or misappropriation of the Service Provider’s Intellectual Property in such IP Improvements for Facility Purposes; and ii) Owners covenant not to sue Service Provider, its Affiliates, or any Person authorized by Service Provider to use such IP Improvements on Service Provider’s behalf, for infringement or misappropriation of the Owners’ Intellectual Property in such IP Improvements.

8 .     No Warranty Regarding Sufficiency of Facility IP .

Service Provider represents and warrants that it owns all rights, title and interest in and to the Facility IP (excluding Third-Party IP as provided in Section 10 below) or has the right to license Facility IP to Owners. Service Provider makes no representation whatsoever (and none is to be implied or relied upon by Owners) as to the sufficiency or accuracy of the Facility IP, the ability of Owners to use the Facility IP for its intended purpose, or the results to be obtained from such use, and Service Provider expressly disclaims any and all warranties associated with the Facility IP, including any implied warranty of fitness for a particular purpose or merchantability, and any warranty (express or implied) of title, non‑infringement, quality, usefulness, commercial utility, adequacy, compliance with any Law, domestic or foreign. For avoidance of doubt, the Facility IP is provided “as is,” and with all faults.


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9.      No Liability for Use of Facility IP .

Except to the extent Service Provider provides any Facility IP which knowingly infringes any third party Intellectual Property and fails to disclose such infringement prior to Owners’ Use thereof (in which case Service Provider shall fully indemnify and hold Owners harmless therefor), Service Provider shall not be liable with respect to or resulting from Owners’ use following a Triggering Event, or the results of such use, of any Facility IP licensed to Owners under this Facility IP License, and Owners shall be exclusively responsible and liable for, and shall defend, indemnify and hold harmless Service Provider (and its Affiliates, directors, officers, partners, employees, agents, consultants, contractors, advisors, and other representatives) from, any losses, claims or liability arising out of such use by Owners of Facility IP furnished hereunder or any errors therein or omissions therefrom.

10 .     Third Party Licenses .

To the extent any Intellectual Property included in the Facility IP licensed to Owners hereunder is owned by a Third Party and licensed to Service Provider (“ Third Party IP ”), Service Provider shall identify all such Third Party IP at the time of delivery of the Facility IP and provide Owners with copies of all relevant licenses, if permitted. The license of such Third Party IP to Owners hereunder shall be subject to all of the terms and conditions of the relevant agreement between the applicable Service Provider party and such Third Party pursuant to which such Third Party IP has been licensed to Service Provider, or if elected by Owners, Owners may negotiate new agreements with such third parties for the use of the Third Party IP. For the avoidance of doubt, Service Provider shall have no obligation to grant Owners any license or sublicense rights to any Third Party IP included in the Facility IP if such grant to Owners would result in (i) the violation of any agreement between Service Provider and the applicable Third Party, (ii) the loss or impairment of rights in any Facility IP (including such Third Party IP), or (iii) an obligation to pay royalties on the part of Service Provider or any of its Affiliates (unless, with respect to such Third Party IP subject to an obligation to pay royalties, Owners request such Third Party IP be included in the Facility IP and pay or otherwise reimburse Service Provider or its applicable Affiliates for all such royalties).

11.      Termination .

Service Provider may terminate this Facility IP License and the rights and licenses granted to Owners under this Facility IP License with immediate effect upon notice to Owners if Owners commit a material breach of this Facility IP License and fail to cure such breach within thirty (30) days after Service Provider provides written notice of such breach to Owners (or such later period as may be provided in Service Provider’s notice). As used in this Section 11, a “material breach” shall mean Owners have exercised the license in Section 2 prior to a Triggering Event, have shared the Facility IP in violation of Section 6 , or have exercised rights in the Facility IP not granted in this Facility IP License, in all such cases resulting in a materially adverse effect on Service Provider. A material breach does not include an exercise of rights to Facility IP granted to Owners under a separate license between the Parties. Except for the foregoing and as set forth in Section 3(b) , this Facility IP License may only otherwise be terminated upon mutual written

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agreement by Service Provider and Owners. Except to the extent Facility IP is otherwise licensed to Owners under a separate agreement, upon any termination permitted by this Section 11 , Owners must immediately cease all use of the Facility IP and return all Facility IP to Service Provider (and return or destroy all copies thereof); provided, however, that if Owners’ material breach only affects a portion of the Facility IP, then Owners’ rights shall only cease with respect to, and Owners shall only be obligated to return, that portion of the Facility IP that is affected by Owners’ material breach.

12.    Miscellaneous.
(a)     Dispute Resolution. In the event of any dispute under this Facility IP License, the Parties shall proceed in accordance with the dispute resolution process set forth in the Services Agreement, mutatis mutandis .
(b)     Applicable Law . This Facility IP License will be governed by Section 22.1 of the Services Agreement.
(c) Waiver . No Party will be deemed to have waived any provision of this Facility IP License unless such waiver is made explicit in writing and signed by the Party waiving such provision. No waiver will be deemed to be a continuing waiver unless so stated in writing.
(d) Amendment . No change, amendment, or modification of this Facility IP License will be binding upon the Parties unless such change, amendment, or modification is in writing and duly executed by the Parties.
(e) Severability . If any one or more of the provisions in this Facility IP License or any application of such provision is held to be invalid, illegal or unenforceable in any respect by a competent tribunal, the validity, legality and enforceability of the remaining provisions in this Facility IP License and all other applications of the remaining provisions shall not in any way be affected or impaired by such invalidity, illegality or unenforceability.
(f) Entire Agreement . This Facility IP License and the Services Agreement contains the entire agreement of the Parties, and there are no oral or written representations, understandings or agreements between the Parties respecting the subject matter of this Facility IP License that are not expressed herein.
(g) Notice . All notices and other communications hereunder shall be in writing and shall be delivered in accordance with the notice provisions contained in the Services Agreement.
(h) Other Licenses . Nothing in this Facility IP License is intended to reduce Owners’ rights to use, or Service Provider’s obligations to deliver and provide access to Facility IP in accordance with the requirements of the Services Agreement or any other licenses granted to Owners.
(i) Bankruptcy Code .

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(i) The Parties acknowledge and agree that the Facility IP is “intellectual property” as defined in Section 101(35A) of the United States Bankruptcy Code, codified as 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), that has been licensed hereunder in a contemporaneous exchange for value.
(ii) In the event this Facility IP License is rejected pursuant to applicable law in a case under the Bankruptcy Code, Owners may elect to retain their rights under this Facility IP License as provided in Section 365(n) of the Bankruptcy Code.
(j) Each of the Parties hereby acknowledges the existence, perfection and validity of the Secured Parties’ (as defined in the DIP Term Loan Facility defined below) liens on and security interests in the Facility IP as granted and authorized by the (1) Final Order (I) Authorizing Debtors To Obtain Senior Secured, Superpriority, Postpetition Financing (II) Granting Liens and Superpriority Claims Pursuant to Bankruptcy Code Sections 105, 362, 363, 364 and 507, Bankruptcy Rules 2002, 4001, 6004, and 9014 and Local Rule 4001-2 and (III) Granting Related Relief and (2) that certain Guarantee and Collateral Agreement (DIP Term Loan Facility), dated as of May 26, 2017, among the Westinghouse Electric Company LLC, Toshiba Nuclear Energy Holdings (UK) Limited, TSB Nuclear Energy Services Inc., each other Pledgor identified therein and Citibank, N.A. Docket No. 565 entered in the Bankruptcy Cases.

(k) Owners waive (i) any administrative claims allowable under 11 U.S.C. Section 503(b) arising from the performance of the EPC Agreement and (ii) any right of setoff they may have with respect to the EPC Agreement under the Bankruptcy Code or applicable nonbankruptcy law. Facility IP developed under the EPC Agreement is as-is, where-is and without warranty or indemnity.





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IN WITNESS WHEREOF, the Parties hereto have executed this Facility IP License as of the Execution Date.

GEORGIA POWER COMPANY, FOR ITSELF AND AS AGENT FOR OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, MEAG POWER SPVJ, LLC, MEAG POWER SPVM, LLC, MEAG Power SPVP, LLC and THE CITY OF DALTON, GEORGIA, ACTING BY AND THROUGH ITS BOARD OF WATER, LIGHT, AND SINKING FUND COMMISSIONERS
 
By: _/s/Chris Cummiskey                           
Name: Chris Cummiskey
Title: Executive Vice President - Georgia Power Company

Attest:    /s/Meredith M. Lackey             
Its: Senior Vice President, General Counsel & Corporate Secretary
 
      (CORPORATE SEAL)



   
WECTEC GLOBAL PROJECT
SERVICES INC.

By:   /s/David C. Durham                
Name: David C. Durham
Title: President

Attest:   /s/Patricia L. Crown         
Its:  Notary Public
        Patricia L. Crown
(CORPORATE SEAL)
WESTINGHOUSE ELECTRIC COMPANY LLC

By:   Jose E. Gurierrez              
Name: Jose E. Gurierrez
Title: President and CEO

Attest:   /s/Patricia L. Crown         
Its:  Notary Public
        Patricia L. Crown

      (CORPORATE SEAL)





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EXHIBIT G
IP LICENSE


This IP LICENSE (“IP License”) is made as of July 20, 2017 (“Execution Date”), and becomes effective as of the Effective Date as defined in the Amended and Restated Services Agreement, by and between, on the one hand, GEORGIA POWER COMPANY, a Georgia corporation, for itself and as agent for Owners, as defined below, and, on the other hand, WESTINGHOUSE ELECTRIC COMPANY LLC, a Delaware limited liability company having a place of business in Cranberry, Pennsylvania (“WEC”), and WECTEC GLOBAL PROJECT SERVICES INC., a Louisiana corporation having a place of business in Charlotte, North Carolina (“WECTEC” and together with WEC, the “Service Provider”). Owners and Service Provider may be referred to individually as a “Party” and collectively as the “Parties.”

1. Definitions. For purposes of this IP License, the terms listed below shall have the meanings indicated beside them. Capitalized terms not otherwise defined below shall have the meanings ascribed to them in the Amended and Restated Services Agreement between Owners and the Service Provider of even date herewith (together with all Exhibits thereto, as amended or modified and as may be further amended or modified from time to time, the “Services Agreement”).
(a)      “Configuration Data” means the Facility-specific data that is used in conjunction with the software, including without limitation, tuning and set point constants, graphical, pictorial and text files, that instantiate the software for the specific Facility environment.
(b)      “Facility IP” means all Intellectual Property (and associated deliverables, products, and other materials described in this definition) of Service Provider or its Affiliates, whether now existing or hereafter developed, in or covering the Facility (including all equipment, components, hardware, software and other deliverables) as delivered under the Services Agreement or under the EPC Agreement (including Intellectual Property, deliverables, products, and materials underlying, supporting, or used to create deliverables under the EPC Agreement or Services Agreement, regardless of whether the same have been or will be provided to Owners, but excluding products delivered by Service Provider’s fuels group to Owners under separate commercial agreements), required or reasonably necessary for Owners to design, construct, test, startup, license, complete, maintain, improve, and operate the Facility, to defend challenges on ITAACs or respond to other requests made by any Government Authority or pursuant to applicable Law, including (i) patents, trademarks (but excluding the Westinghouse name or any trademarks related to AP1000 ® ), copyrights, trade secrets, inventions, know-how, proprietary information, confidential information, documentation, materials and data; (ii) software required or reasonably necessary for Facility Purposes, including Service Provider (or its Affiliates)-owned and developed proprietary computer programs expressed in a source code language consisting of a full source language statement of programs and all related compiler command files, build scripts, complete maintenance documentation, application programming interfaces, graphical user

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interfaces, schematic diagrams and annotations which comprise the pre-coding detail design specifications, information management data bases (e.g., open item database, PCC outstanding issues list, DCP database, LAR database, ITAAC database), plans, designs, calculations and models (e.g., seismic models, structural models, stress analyses, hazards analyses – flooding, PRHA, probabilistic risk assessment, etc.), design basis information, computer source code for CYS monitoring system and all CYS design documents, cyber security databases (e.g., CDA identification database, LRM assessment database, cyber SharePoint site, etc.) and all cyber security supporting documentation, simulator designs; (iii) all AP1000 ® -related schematics, designs and information, included but not limited to AP1000 ® information referenced in the DCD or COL; and (iv) all other information, documentation, materials, data, technology, software and other property necessary to allow a reasonably skilled person to design, construct, test, license, startup, operate, improve, complete and maintain the Facility.
(c)      “Intellectual Property” means any and all intellectual property rights existing from time to time under any Law including patent law, copyright law, semiconductor chip protection law, moral rights law, trade secret law, trademark law (together with all goodwill associated therewith (but excluding any rights to the Westinghouse name or any trademarks related to AP1000 ® )), unfair competition law, publicity rights law, or privacy rights law, and any and all other proprietary rights, and any and all applications, renewals, extensions and restorations of any of the foregoing, now or hereafter in force and effect worldwide. For purposes of this definition, rights under patent laws shall be limited to rights under any and all United States patent applications (and patents issued therefrom) and patents (including letters patent and inventor’s certificates), including, without limitation, any provisionals, substitutions, extensions, supplementary patent certificates, reissues, renewals, divisions, continuations in part (or in whole), continued prosecution applications, requests for continued examination, and other similar filings or stages thereof provided for under the laws of the United States.
(d)      “Licensed Documentation” shall mean that portion of the Licensed IP that includes any (i) materials created by or on behalf of Service Provider or its licensors, or by Third Parties, that describe or relate to the functional, operational, or performance capabilities of any Licensed IP regardless of whether such materials be in written, printed, electronic or other format; and (ii) user, operator, system administration, technical, support and other manuals, including but not limited to functional specifications, help files, flow charts, logic diagrams, programming comments, and acceptance plans, if any.
(e)      “Licensed IP” means (i) that portion of the Facility IP delivered by Service Provider to Owners, or to which Owners are given access by Service Provider pursuant to the Services Agreement (the types of Licensed IP that will be delivered to Owners are identified in Exhibit B of the Services Agreement); (ii) that portion of the Facility IP delivered by Service Provider to Owners under the EPC Agreement; and (iii) any Intellectual Property that is not capable of being delivered (e.g., patent rights) but is required to enable Owners’ Use of Facility equipment, components, hardware, and software delivered under the EPC Agreement or the Services Agreement.
(f)      “Owners” means Georgia Power Company, Oglethorpe Power Corporation (An Electric Membership Corporation), Municipal Electric Authority of Georgia, MEAG Power

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SPVJ, LLC, MEAG Power SPVM, LLC, MEAG Power SPVP, LLC, and The City of Dalton, Georgia, acting by and through its Board of Water, Light and Sinking Fund Commissioners.
(g)      “Permitted Users” means Owners, their employees, and the employees of their Affiliates, when they are acting as agent for the Owners. Permitted Users shall also include (i) Owners’ engineers, seconded employees and staff augmentation contractors, where acting as agent for Owners, through multiple tiers, engaged by Owners, and (ii) Facility contractors and subcontractors engaged by Owners for work in connection with the Facility, in each case subject to the requirements of Article 14 of the Services Agreement.
(h)      “Software” or “software” means any computer programming code (such as computer programs, procedures, rules or routines embodied in computer programs, databases and related computer files) consisting of instructions or statements in a form readable by individuals (source code) or machines (object code) and related documentation and supporting materials therefor, in any form or medium, including electronic media. Software includes any bug fixes, error-correction releases, updates, upgrades, enhancements, modifications, changes, new versions and replacements therefor.
(i)      “Service Provider Software” means the Software provided to Owners by Service Provider or Service Provider’s Affiliates or licensors through Service Provider, in connection with the Services performed under the Services Agreement or work performed under the EPC Agreement that is required or reasonably necessary for Facility Purposes. Software includes:
(i)      base software ”, which consists of the programs and tools that provide basic Facility system functions. The base software may include tools used to develop control strategies (function blocks, standard control algorithms, rules, etc.), operator graphics (e.g., symbol libraries), and database entries;
(ii)      application software ”, which consists of the project-specific implementation of the Facility requirements using the objects and tools provided by the base software. The application software is specific to a particular Facility; and
(iii)      third-party software ”, which consists of that portion of the software which is developed and owned by a Third Party. Third-party software may include freeware.
(j)      “Use” means to access, use, copy, reproduce, modify, prepare derivative works, make, have made (including export and import in compliance with applicable US law), distribute, perform, and display for Facility Purposes and in compliance with the provisions of this IP License.
2. Licenses.
(a)      License . Service Provider hereby grants, agrees to grant, and shall cause to be granted to Owners and their Affiliates, a perpetual, irrevocable, fully paid-up, royalty-free, non-exclusive, transferable (solely in connection with any sale or transfer of the Facility) right and license under, in and to the Facility IP, to Use the Facility and all equipment, components,

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hardware, software and other deliverables as such are delivered or made available to Owners, including Service Provider Software, and in each case, solely for Facility Purposes. Owners shall have the right to sublicense to Permitted Users the rights conferred upon Owners, provided that such sublicenses shall be limited to Use solely on Owners’ behalf and solely for Facility Purposes. Third-party software which is furnished by Service Provider shall be subject to separate license agreements and/or registration requirements and limitations on copying and use, and Owners agree to be bound by the terms of any such license agreements to the extent Owners have been provided a copy of the same or as may be negotiated between Owners and each third-party software provider. The license rights granted by Service Provider to Owners pursuant to this IP License do not include any rights in and to any Facility IP other than as specifically set forth in this IP License, and do not include any right to use any Facility IP (i) with or for any facility other than the Facility (Vogtle Units 3 & 4), or (ii) for the manufacture or design of fuel assemblies for AP1000 reactors.
(b)      Service Provider shall provide all third-party software on a pass-through basis as further described herein. Notwithstanding anything to the contrary herein, and without limiting the license above, the license granted herein grants and shall grant Owners and the Permitted Users the rights to:
(i)      Use the Licensed IP for the Facility Purposes;
(ii)      adapt and otherwise modify the Licensed IP, including but not limited to the Service Provider’s base software and application software;
(iii)      make a reasonable number of copies of the Service Provider Software for back-up, archival, testing, installation, maintenance, operation or disaster-recovery purposes, provided that any copyright or other proprietary rights notices included in the Service Provider Software are also reproduced in such copies. The right to copy specific third-party software shall be governed by terms of the license agreement specific to such third-party software provided to Owners;
(iv)      install the Service Provider Software on replacement hardware and adapt and modify the Service Provider Software to be used on other hardware, provided that the Service Provider Software as installed on such hardware is solely used for the Facility Purposes. The right to install specific third-party software as described in this subsection (iv) shall be governed by terms of the license agreement specific to such third-party software provided to Owners;
(v)      make the Licensed IP accessible to, or otherwise disclose Licensed IP, to the Nuclear Regulatory Commission and other Government Authorities as required or requested for Facility Purposes subject to Section 6.3 of the Services Agreement; and
(vi)      Use and disclose, subject to Article 14 of the Services Agreement, the output and other information derived from the Licensed IP (whether such Licensed IP is deliverable or only accessible) in support of the Facility Purposes and as otherwise required to comply with applicable Laws or requirements of requests from Government Authorities.

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(c)      License Restrictions . Except as may be otherwise provided herein, Owners shall not alone or with the assistance of others use any Licensed IP other than for the Facility Purposes. Except for the licenses granted herein or as otherwise provided in the Services Agreement, all right, title, and interest in the Licensed IP shall remain with Service Provider or its licensors.
(d)      Licensed Documentation Reproduction and Distribution . Service Provider hereby grants, agrees to grant, and shall cause to be granted to Owners a perpetual, irrevocable, transferrable (solely in connection with any sale or transfer of the Facility), fully paid-up, royalty-free, non-exclusive right and license to modify and create derivative works, reproduce and distribute to Permitted Users Licensed Documentation solely for the Facility Purposes. Rights and obligations regarding the modification, reproduction and distribution of third-party software documents shall be as set forth in the applicable third-party software license. Rights and obligations regarding the modification, reproduction and distribution of any other third party documents included in Licensed Documentation shall be as specified by the owners of the third party documents.
(e)      Other Computer Programs . Nothing shall prohibit the Permitted Users from using the Facility equipment to run computer programs other than the software or from using the equipment for purposes other than operation of the Facility, it being understood that Service Provider shall not be responsible for any failure of the software or equipment as a result of such activities, or loading such computer programs on, or removing such computer programs from, the Facility equipment.
3. Representations and Warranties. Service Provider represents and warrants the following :
(a)      Licensing Rights . Service Provider owns all rights, title and interest in and to the Licensed IP (excluding third-party software, third-party software documentation or any other third party information or materials provided under the Services Agreement) or otherwise has the legal right to transfer, grant, sublicense, or, for third-party software, pass-through the rights and the licenses in the foregoing that are provided herein. In the event of a breach of this warranty, Service Provider shall obtain, at no additional cost to Owners, rights necessary for Owners to continue using the Licensed IP as contemplated by this IP License. For pass-through rights, third-party software and associated documentation shall be licensed directly from the third-party software developer to Owners as end user, and copies of all such licenses shall be provided to Owners. To the best of Service Provider’s knowledge, the Licensed IP is true, accurate and complete and represents all of the intellectual property to be provided to Owners under the Services Agreement, at the applicable time.
(b)      Media . The media on which the Licensed IP, including but not limited to software, is recorded shall be free from defects in material and workmanship for the Warranty Period set forth in (d) below. Service Provider will, at no additional charge, replace any defective media.

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(c)      Intellectual Property . Licensed IP and Licensed Documentation will not knowingly infringe, misappropriate, or otherwise violate any patent, trademark, service mark, copyright, trade secret or other proprietary right of any Third Party.
(d)      Performance.     The Licensed IP, including but not limited to the software and Configuration Data shall be treated in accordance with Article 10 of the Services Agreement mutatis mutandis ; provided, however, that Facility IP developed under the EPC Agreement shall be provided on an as-is, where-is basis and without warranty. In addition to re-performance under Article 10 of the Services Agreement (to the extent required thereby), Service Provider agrees to use commercially reasonable efforts during the term of the Services Agreement and subject to the terms and conditions therein, at Owners’ request and expense, to provide updates, corrections, replacements, repairs, and other work to ensure that Facility software, hardware, Configuration Data, or other physical deliverables meet Owners’ needs.
4. Intellectual Property Indemnity.
(a)      Service Provider shall indemnify, hold harmless, release and defend Owner Persons Indemnified from any action brought against Owners, their Affiliates or any of their respective Representatives, to the extent based on a claim that any Licensed IP or any part thereof furnished hereunder, or the use thereof as permitted under this IP License, constitutes an infringement of any United States patent or United States copyright, or misappropriation of any trade secret, trademark rights, proprietary rights or other intellectual property rights of any Third Party; provided, however, Owners shall promptly notify Service Provider of any such claim, suits and actions in writing and Service Provider shall pay all costs, expenses, settlements and/or judgments resulting therefrom.
(b)      If a claim of infringement or misappropriation is made, Service Provider may, and if the use of the Licensed IP developed by Service Provider or any part thereof furnished hereunder is held by a court of competent jurisdiction to constitute infringement or misappropriation of any United States copyright, trade secret, trademark rights, proprietary rights or other intellectual property rights of any Third Party, and its use by Owners is enjoined, Service Provider shall, at its option and its sole expense, either: (i) procure for Owners the right to continue using said Licensed IP, or part thereof; or (ii) replace or modify the same with non-infringing Licensed IP, to the extent reasonably possible without diminishing the capability and capacity of the Licensed IP, or part thereof. In the event the above alternatives are unavailable to Service Provider, then, with the approval of Owners, Service Provider shall seek alternate ways and means to provide such Services for which it is obligated under this Agreement so long as such alternate means are reasonably acceptable to Owners.
(c)      Notwithstanding the above, Service Provider shall not compromise or settle any claim, action, suit or proceeding in which Owners are named without Owners’ prior written consent, which consent shall not be unreasonably conditioned, delayed or withheld unless such settlement provides for the payment of money only by Service Provider and provides for a full, complete and unconditional (other than ceasing use of the applicable Licensed IP) release of Owners and each Permitted User.

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(d)      The foregoing indemnity shall not apply in situations where the Licensed IP is: (i) supplied pursuant to a design or drawing prepared by Owners wherein Service Provider has deviated from its normal course of performance; (ii) modified or combined by Owners or otherwise with items not furnished hereunder; or (iii) outside the scope of the Licensed Documentation and without the Service Provider’s approval or consent. In the event a suit or proceeding is brought against Service Provider as a result of such Owners’ actions, Owners will indemnify and save Service Provider harmless to the same extent as Service Provider has agreed to indemnify and save Owners harmless hereunder, except that the limitation of liability provision of Section 17.2 of the Services Agreement shall not apply.
(e)      This Section 4 is an exclusive statement relating to intellectual property indemnification regarding the Licensed IP. In no event shall Owners be entitled to duplicative recovery under this Section 4 and Section 16.4 of the Services Agreement.
(f)      Any indemnities associated with third-party software shall be governed by the terms of the license agreements associated with such third-party software. Where the third-party software is directly licensed to Owners by Third Parties, Service Provider shall have no obligation to indemnify Owners for any claims of infringement related to the use by Owner of such third-party software.
(g)      Service Provider’s liability under this Section 4 shall be subject to the limitation of liability provision of Section 17.2 of the Services Agreement.
5. Assignment.
(a)      Owners shall have the right to, and shall, assign this IP License (including all the rights and obligations hereunder) to any purchaser of the Facility or their successor in connection with their ownership interest in the Facility.
(b)      Owners’ consent shall not be required for WEC’s and WECTEC’s assignment of their rights and obligations under this IP License in connection with an assignment of their rights and obligations under the Services Agreement in connection with the Bankruptcy Cases provided, however, that the rights of Owners under the Bankruptcy Code are preserved in all respects and WEC shall remain a party hereto and obligated hereunder unless the assignee in such a transaction also acquires substantially all of the Facility IP such that Owners’ rights under this IP License are not adversely affected.
(c)      WEC shall ensure that any assignment, sale or exclusive license of any portion of the Facility IP is subject to the rights and obligations of Section 2 and the covenant not to sue in Section 6(c) (but only with respect to IP Improvements of such Facility IP made by Owners as of or before such assignment, sale or exclusive license (“Covenant IP Improvements”)), and in a manner, by operation of law or otherwise, such that any further assignee, purchaser or exclusive licensee of such Facility IP takes such Facility IP subject to the rights and obligations of Section 2 and the covenant not to sue in Section 6(c) (with respect to Covenant IP Improvements). WEC shall also be entitled to assign to any assignee, purchaser or exclusive licensee of any portion of the Facility IP the right to enforce this IP License against Owners, to the extent it relates to the

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Use or disclosure of Facility IP. In addition to the foregoing, WEC shall ensure that any assignment, sale, or exclusive license of its interest in and to its Facility IP, or any portion thereof, pursuant to which WEC divests possession of any portion of the Facility IP or is otherwise rendered unable to satisfy its obligations under Section 4 is subject to the assignee’s, purchaser’s or exclusive licensee’s agreement to be bound by the requirements of this sentence of Section 5. WECTEC shall have the right to, and shall, assign this IP License (including all the rights and obligations hereunder) to any assignee of the Services Agreement in connection with any assignment of such agreement and shall, in connection with any such assignment, ensure that the rights of Owners under the US Bankruptcy Code are preserved in all respects.
(d)      Assignment rights for third-party software shall be subject to the terms of the associated third-party software license and may require ratification by the Third Party. Any assignment or transfer in violation of this IP License will be null and void. This IP License and the rights and obligations of either Party hereto will be binding upon and will inure to the benefit of the Parties hereto and their respective successors and permitted assigns, including but not limited to any bankruptcy trustee appointed.

6. Ownership of Licensed IP and Improvements thereon.
(a)      As between Service Provider and Owners, Service Provider shall own all right, title and interest in and to all Intellectual Property associated with the Licensed IP provided hereunder.
(b)    To the extent Owners create any modifications or derivative works in the Licensed IP, Owners shall own all right, title and interest in and to all Intellectual Property associated with such modifications or derivative works. Owners’ Use of any such modifications or derivative works is limited to Facility Purposes.

(c)    The Parties acknowledge that each Party may independently develop or have developed improvements to or derivative works of the Licensed IP (hereinafter “IP Improvements”) that may infringe on the other Party’s Intellectual Property in its IP Improvements. Each Party intends that such development not block the other Party’s development activities, and, consequently: i) Service Provider covenants not to sue Owners, their Affiliates, or any Person authorized by Owners to Use such IP Improvements on Owners’ behalf, for infringement or misappropriation of the Service Provider’s Intellectual Property in such IP Improvements for Facility Purposes; and ii) Owners covenant not to sue Service Provider, its Affiliates, or any Person authorized by Service Provider to use such IP Improvements on Service Provider’s behalf, for infringement or misappropriation of the Owners’ Intellectual Property in such IP Improvements.

7. Miscellaneous.
(a) Dispute Resolution. In the event of any dispute under this IP License, the Parties shall proceed in accordance with the dispute resolution process set forth in the Services Agreement, mutatis mutandis .

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(b) Term . This IP License shall commence on the Effective Date and shall be coterminous with the Services Agreement; provided, upon any termination of this IP License, the perpetual licenses granted hereunder shall continue without interruption, and Sections 1, 4, 5, and 6 shall survive any such termination or expiration.
(c) Applicable Law . This IP License will be governed by Section 22.1 of the Services Agreement.
(d) Waiver . No Party will be deemed to have waived any provision of this IP License unless such waiver is made explicit in writing and signed by the Party waiving such provision. No waiver will be deemed to be a continuing waiver unless so stated in writing.
(e) Amendment . No change, amendment, or modification of this IP License will be binding upon the Parties unless such change, amendment, or modification is in writing and duly executed by the Parties.
(f) Severability . If any one or more of the provisions in this IP License or any application of such provision is held to be invalid, illegal or unenforceable in any respect by a competent tribunal, the validity, legality and enforceability of the remaining provisions in this IP License and all other applications of the remaining provisions shall not in any way be affected or impaired by such invalidity, illegality or unenforceability.
(g) Entire Agreement . This IP License and the Services Agreement contain the entire agreement of the Parties, and there are no oral or written representations, understandings or agreements between the Parties respecting the subject matter of this IP License that are not expressed herein.
(h) Notice . All notices and other communications hereunder shall be in writing and shall be delivered in accordance with the notice provisions contained in the Services Agreement.
(i) Other Licenses . Nothing in this IP License is intended reduce or expand Owners’ rights under any other licenses granted to Owners, except that the licenses granted hereunder supersede and replace any licenses granted under the EPC Agreement.
(j) Bankruptcy Code .
(i)      The Parties acknowledge and agree that the Licensed IP is “intellectual property” as defined in Section 101(35A) of the United States Bankruptcy Code, codified as 11 U.S.C. § 101 et seq. (the “Bankruptcy Code”), that has been licensed hereunder in a contemporaneous exchange for value.
(ii)      In the event this IP License is rejected pursuant to applicable law in a case under the Bankruptcy Code, Owners may elect to retain their rights under this IP License as provided in Section 365(n) of the Bankruptcy Code.
(k) Each of the Parties hereby acknowledges the existence, perfection and validity of the Secured Parties’ (as defined in the DIP Term Loan Facility defined below) liens on and

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security interests in the Facility IP as granted and authorized by the (1) Final Order (I) Authorizing Debtors To Obtain Senior Secured, Superpriority, Postpetition Financing (II) Granting Liens and Superpriority Claims Pursuant to Bankruptcy Code Sections 105, 362, 363, 364 and 507, Bankruptcy Rules 2002, 4001, 6004, and 9014 and Local Rule 4001-2 and (III) Granting Related Relief and (2) that certain Guarantee and Collateral Agreement (DIP Term Loan Facility), dated as of May 26, 2017, among the Westinghouse Electric Company LLC, Toshiba Nuclear Energy Holdings (UK) Limited, TSB Nuclear Energy Services Inc., each other Pledgor identified therein and Citibank, N.A., Docket No. 565 entered in the Bankruptcy Cases.
(l) Owners waive (i) any administrative claims allowable under 11 U.S.C. Section 503(b) arising from the performance of the EPC Agreement and (ii) any right of setoff they may have with respect to the EPC Agreement under the Bankruptcy Code or applicable nonbankruptcy law. Facility IP developed under the EPC Agreement is as-is, where-is and without warranty or indemnity.

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IN WITNESS WHEREOF, the Parties hereto have executed this IP License as of the Execution Date.

GEORGIA POWER COMPANY, FOR ITSELF AND AS AGENT FOR OGLETHORPE POWER CORPORATION (AN ELECTRIC MEMBERSHIP CORPORATION), MUNICIPAL ELECTRIC AUTHORITY OF GEORGIA, MEAG POWER SPVJ, LLC, MEAG POWER SPVM, LLC, MEAG Power SPVP, LLC and THE CITY OF DALTON, GEORGIA, ACTING BY AND THROUGH ITS BOARD OF WATER, LIGHT, AND SINKING FUND COMMISSIONERS
 
By: _/s/Chris Cummiskey                           
Name: Chris Cummiskey
Title: Executive Vice President - Georgia Power Company

Attest:    /s/Meredith M. Lackey             
Its: Senior Vice President, General Counsel & Corporate Secretary
 
      (CORPORATE SEAL)



   
WECTEC GLOBAL PROJECT
SERVICES INC.

By:   /s/David C. Durham                
Name: David C. Durham
Title: President

Attest:   /s/Patricia L. Crown         
Its:  Notary Public
        Patricia L. Crown
(CORPORATE SEAL)
WESTINGHOUSE ELECTRIC COMPANY LLC

By:   Jose E. Gurierrez              
Name: Jose E. Gurierrez
Title: President and CEO

Attest:   /s/Patricia L. Crown         
Its:  Notary Public
        Patricia L. Crown

      (CORPORATE SEAL)










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EXHIBIT H
SUBCONTRACTS AND PURCHASE ORDERS
A. Service Provider shall assume and assign to Owners or their designee, and Owners or their designee shall accept assignment of, the subcontracts and purchase orders listed below.
9
Purchase Order/
SAP
 
 
Contract
#
Subcontract
PO
Debtor
SubContractor/Vendor
Description/Title
1
132175F001086
WSPM004620
Stone & Webster Construction Inc
A&W OIL CO INC
Change Order to add Funding to PO 747595 for Lubricants for $25,000
2
132175F004697
WSPM009914
Stone & Webster Construction Inc
A&W OIL CO INC
PM Temp.Const.SG2565 Mobilux EP2 SG165 Multifak EP2,SG 564 XH 222,SG034 DTE24,SG034 DTE25,SG2427 DTELight,SG2382 ChevSRI
3
WVG3001455
WVG3001455
WECTEC Global Project Services, Inc.
A&W OIL CO INC
Mobilube HD Plus 85W-140 for Maintenance of the 220 ton Crane TI3
4
WVG3001314
WVG3001314
WECTEC Global Project Services, Inc.
A&W OIL CO INC
Grease for Turbine Island 3 220 Ton & 15 Ton Crane for PM to Start Up
5
132175F006084
WSPM004724
WECTEC Global Project Services, Inc.
AAA SIGN COMPANY INC
Electronic Sign Repair
6
132175F002381-A
WSPM004994
Stone & Webster Construction Inc
ABB ENTERPRISE SOFTWARE INC
VENTYX eSOMS Software
7
132175-EP01.01
WSPM015467
Stone & Webster Construction Inc
ABB INC
Turbine Generator Synchronization Control Panel
8
132176-EP01.01
WSPM015303
Stone & Webster Construction Inc
ABB INC
Turbine Generator Synchronization Control Panel
9
132175-C215.04
WSPM010031
Stone & Webster Construction Inc
AC CONTROLS CO INC
Butterfly Valves|
10
132176-C203.01
WSPM010032
Stone & Webster Construction Inc
AC CONTROLS CO INC
Threaded and Socket Weld Carbon Steel Valves|
11
132176-C215.01
WSPM010033
Stone & Webster Construction Inc
AC CONTROLS CO INC
Butterfly Valves|
12
J132175-C215.03
WSPM009810
Stone & Webster Construction Inc
AC CONTROLS CO INC
Valves|

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13
WVG3000470
WVG3000470
WECTEC Global Project Services, Inc.
AC CONTROLS CO INC
Material to be left in place and used for building 315 for RWS, work package SV0-RWS-PLW-ME0917
14
132175-C203.03
WSPM010030
Stone & Webster Construction Inc
AC CONTROLS CO INC
Threaded and Socket Weld Carbon Steel Valves |
15
WVG3001549
WVG3001549
WECTEC Global Project Services, Inc.
ACE INDUSTRIES INC
MAB Overhead Cranes Quarterly Inspection /
16
132175-E032.01
WSPM003359
WECTEC Global Project Services, Inc.
ADVANCED CABLE BUS INC
600V Cable Bus System
17
132175-C811.02
WSPM010831
Stone & Webster Construction Inc
ADVANCED PRODUCTS AND SYSTEMS
Dielectric Gaskets for CWS
18
J132175-J800.03
WSPM013367
Stone & Webster Construction Inc
AGGREGATES USA LLC
Aggregates
19
132175F000882
WSPM004632
Stone & Webster Construction Inc
AGGREKO LLC
Replacement Chiller for Batch Plant
20
132175F004441
WSPM010663
Stone & Webster Construction Inc
AH HARRIS AND SONS INC
Construction Aid Material Nonpermanent Plant. For Use By Iron Workers NI3.
21
J132175-FPR12-02618
WSPM010292
Stone & Webster Construction Inc
AH HARRIS AND SONS INC
Concrete surface Nuclear Island 3 Basemat pour.
22
WVG3000189
WVG3000189
Stone & Webster Construction Inc
AH HARRIS AND SONS INC
Temporary Construction Aid for BOP Carpenters
23
132175F005164
WSPM005013
WECTEC Global Project Services, Inc.
AIKEN TECHNICAL COLLEGE
Rental Space for 16 hours for Offsite Transition Meeting January 27th and 29th 2016
24
132175F000365
WSPM014774
Stone & Webster Construction Inc
AIR LIQUIDE INDUSTRIALS US LP
Batch Plant - Add Funds PO 759556-3P - Air Liquide
30
132175F005863
WSPM010198
WECTEC Global Project Services, Inc.
AIRGAS INC
Respirator Fit Test for HSE Field Testing
31
WVG3001009
WVG3001009
WECTEC Global Project Services, Inc.
AIRGAS INC
Industrial Hygiene - Airgas Order
35
WVG3000680
WVG3000680
WECTEC Global Project Services, Inc.
AIRGAS NATIONAL WELDERS
HSE - Industrial Hygiene Supplies for site wide use
36
132175F005891
WSPM010208
WECTEC Global Project Services, Inc.
AIRGAS USA LLC
MSA Replacement Sensors - Environmental Use
37
WVG3000539
WVG3000539
WECTEC Global Project Services, Inc.
AIRGAS USA LLC
Special Ferrules for Welding to Vertical Surfaces
38
132175F000041-2
WSPM010524
Stone & Webster Construction Inc
AIRWAYS FREIGHT CORPORATION
Airways Freight to provide door to door pick up and delivery 365 x 24
39
J132175-FPR13-02070
WSPM002109
Stone & Webster Construction Inc
AL PATTERSON INC
To Install the precast panels in the Auxiliary Building

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40
132175F000373
WSPM004653
Stone & Webster Construction Inc
ALERE TOXICOLOGY SERVICE INC
Change Attachment , FFD Special requirements for drug testing per NRC Regulations, to PO 681033-000 OP, Alere Toxicology Services, Inc
41
132175F000148
WSPM012396
Stone & Webster Construction Inc
ALLTEC LIFTING SYSTEMS LLC
Change Order to PO 849833 (Alltec Lifting Systems) 12 months extention on Rental
42
132175F001547
WSPM004667
Stone & Webster Construction Inc
ALLTEC LIFTING SYSTEMS LLC
Add additonal Funds to Alltec, PO 752386 on Lifting Beam and Plates
43
132175F002026
WSPM004436
Stone & Webster Construction Inc
ALLTEC LIFTING SYSTEMS LLC
Change Order to Extend Rental on Alltec Modular Lifting beam PO 745575 for 12 months
44
132175F003041
WSPM004469
Stone & Webster Construction Inc
ALLTEC LIFTING SYSTEMS LLC
CO to extend rental to Alltec Lifting Systems PO # 868741 for 12 months
45
132175000828 REL 007
WSPM013354
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET ORDER TRANSFER 831033 3P
46
132175F000828 REL 005
WSPM004641
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET ORDER REL 005
47
132175F000828 REL 006
WSPM004642
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET ORDER TRANSFER 831033 3P
48
132175F000828 REL 007
WSPM004643
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
N_6241203 - N_6241203-N/ACNN/A - Banner
49
132175F000828 REL 010
WSPM010364
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET RELEASE
50
132175F000828 REL 012
WSPM004644
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET ORDER RELEASE 012
51
132175F000828 REL 016
WSPM004645
Stone & Webster Construction Inc
ALUMA PANEL OF SC INC
BLANKET ORDER TRANSFER 831033 3P
52
132175F000828 REL 018
WSPM013395
WECTEC Global Project Services, Inc.
ALUMA PANEL OF SC INC
BLANKET ORDER RELEASE 018
53
132175F000828 REL 019
WSPM013394
WECTEC Global Project Services, Inc.
ALUMA PANEL OF SC INC
BLANKET ORDER RELEASE 019
54
132175F000828 REL 020
WSPM013393
WECTEC Global Project Services, Inc.
ALUMA PANEL OF SC INC
BLANKET ORDER TRANSFER 831033 3P
55
132175-C910.15
WSPM003468
Stone & Webster Construction Inc
AMERICAN PLASTIC PIPE AND SUPPLY LL
Corrugated HDPE Pipe
56
132175-C910.17
WSPM003467
Stone & Webster Construction Inc
AMERICAN PLASTIC PIPE AND SUPPLY LL
CWS, PWS, RWS, SDS, WWS, and YFS HDPE Piping and Fittings
57
132175-C910.19
WSPM010631
Stone & Webster Construction Inc
AMERICAN PLASTIC PIPE AND SUPPLY LL
HDPE Pipe and Fittings for U/G WLS

H-3



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



58
J132175-C910-05
WSPM002184
Stone & Webster Construction Inc
AMERICAN PLASTIC PIPE AND SUPPLY LL
HDPE Pipe and Fittings|
59
J132175-C910-07
WSPM002183
Stone & Webster Construction Inc
AMERICAN PLASTIC PIPE AND SUPPLY LL
HDPE PIPE
60
132175F004845
WSPM009887
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Temporary Construction Aid - NI4
61
132176-C913.07
WSPM003758
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Fiberglass Piping and Spider Supports for DOS
62
WVG3000788
WVG3000788
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
To be used for building bulkheads and bracing formwork
63
WVG3001320
WVG3001320
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
SS PLATE 4’X8’X1/8” THICK for CWS Pumps
64
WVG3001425
WVG3001425
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
temporary construction aid material to be used for fabrication shops-NOI-6 TI-3 LP Turbine Building overhead crane test frame
65
WVG3001434
WVG3001434
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Temporary construction aide material to be used to ensure anchorage shall not move for Unit 4 Turbine, work package SV4-2060-C0W-850000
66
WVG3001459
WVG3001459
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
BOP TEMPORARY CONSTRUCTION AID MATERIAL FOR TEST HEADER
67
WVG3001478
WVG3001478
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
CA37 Temporary Bracing
68
WVG4001245
WVG4001245
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Material to be left in place and used for fabrication of spring element plates for Unit 4 Turbine CA81 tabletop, work package SV4-2050-SSW-CV1823
69
WVG4001251
WVG4001251
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Material to be left in place and used for fabrication of beams (borrowed from Unit 3) and lateral bracing for Unit 4 Turbine CA81 tabletop, SV4-2050-SSW-CV1823
70
WVG4001253
WVG4001253
WECTEC Global Project Services, Inc.
AMERICAN STAINLESS & SUPPLY
Material to be left in place and used for fabrication of beams (borrowed from Unit 3) and lateral bracing for Unit 4 Turbine CA81 tabletop, SV4-2050-SSW-CV1823

H-4



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



71
132175-E102.03
WSPM005021
Stone & Webster Construction Inc
ANIXTER INC
Medium Voltage Power Cable
72
132175-EW82.01
WSPM001939
WECTEC Global Project Services, Inc.
ANIXTER INC
Non-Class 1E Fiber Optic Cable Connectors
73
132176-EW82.01
WSPM001263
WECTEC Global Project Services, Inc.
ANIXTER INC
Non-Class 1E Fiber Optic Cable Connectors
74
132175-G120.00
WSPM010363
Stone & Webster Construction Inc
APPLIED TECHNICAL SERVICES INC
Testing for Pressure Sensitive Tape
75
132175-J800.19
WSPM004550
Stone & Webster Construction Inc
APPLIED TECHNICAL SERVICES INC
Testing Of A490 Bolt From Unit 4 Turbine Building
76
132175-J800.22
WSPM004551
WECTEC Global Project Services, Inc.
APPLIED TECHNICAL SERVICES INC
Charpy V-notch Testing
77
879098-3P
WSPM004958
Stone & Webster Construction Inc
APPLIED TECHNICAL SERVICES INC
Additional Funding for PO 879098 for analysis for ATS swipe test PO. Additional funds will be added to cover future samples and the outstanding balance, total amount to be $37,000.00
78
WVG3000269
WVG3000269
Stone & Webster Construction Inc
APPLIED TECHNICAL SERVICES INC
Requisition for NDE services to be performed by ATS. Magnetic particle examination of closure nuts
79
WVG3000310
WVG3000310
WECTEC Global Project Services, Inc.
APPLIED TECHNICAL SERVICES INC
Add Funds ($150,000.00) to existing PO 866115
80
132175-MY50.00
WSPM003927
Stone & Webster Construction Inc
ARMSTRONG HUNT INC
Hot Water Unit Heaters and Duct Mounted Heating Coils
81
132176-MY50.00
WSPM003044
Stone & Webster Construction Inc
ARMSTRONG HUNT INC
Hot Water Unit Heaters and Duct Mounted Heating Coils
82
132175F000060-A
WSPM010689
Stone & Webster Construction Inc
ASCENDUM MACHINERY INC
Consumables For Equipment Example Bucket Cutting Edge
83
132175F002920
WSPM004412
Stone & Webster Construction Inc
ASCENDUM MACHINERY INC
Change Order to Extend Rental on PO 842430 From ASC Construction Equipment on Crawler Excavator for 12 months
84
132175F003088
WSPM004466
Stone & Webster Construction Inc
ASCENDUM MACHINERY INC
ASC VOLVO TO REPLACE MONITOR IN 480 EXCAVATOR DUE TO OPERATOR DAMAGE
85
4500714381
4500714381
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
PARTS
86
4500715367
4500715367
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
Parts Inv# P215045455

H-5



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



87
4500715709
4500715709
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
88
4500715755
4500715755
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
PARTS
89
4500715789
4500715789
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
90
4500715790
4500715790
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
91
4500716072
4500716072
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
92
4500716463
4500716463
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
93
4500716520
4500716520
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
94
4500716521
4500716521
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
Parts Inv# S215018628
95
4500716522
4500716522
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
Parts Inv# P215044857
96
4500716524
4500716524
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
Parts Inv# P215044856
97
4500716591
4500716591
WECTEC Contractors Inc
ASCENDUM MACHINERY INC
PARTS
98
4500717358
4500717358
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
99
4500717828
4500717828
WECTEC Global Project Services, Inc.
ASCENDUM MACHINERY INC
Equipment Repair Parts and Service
100
4500336244
4500336244
Westinghouse Electric Company LLC
ASCO
Three Way Compressed Air Solenoid Valves
101
132175F001876
WSPM004449
Stone & Webster Construction Inc
ASHLEY SLING INC
330198 Liebherr Crane Boom Hoist Cable
102
132175F003818
WSPM014122
Stone & Webster Construction Inc
ASHLEY SLING INC
UNIT# 330177 Liebherr Crane Boom Hoist Cable
103
132175F003836
WSPM014101
Stone & Webster Construction Inc
ASHLEY SLING INC
Splice and Rope For Use By Electricians In Nuclear Island 3.
104
WVG3000406
WVG3000406
Stone & Webster Construction Inc
ASHLEY SLING INC
TRANSFER OF FUNDS FROM 715426-3P
105
WVG3001132
WVG3001132
WECTEC Global Project Services, Inc.
ASHLEY SLING INC
1-1/4” x 4-1/2” HR125 SWIVEL HOIST RING 1016975 8000-240902
106
WVG3001103
WVG3001103
WECTEC Global Project Services, Inc.
ATCO STRUCTURES & LOGISTICS USA INC
to be used at fabrication shops in NOI-6 for buildings 4 ,5, 6 roofs

H-6



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



107
132175F003529
WSPM010419
Stone & Webster Construction Inc
ATLANTIC SUPPLY AND EQUIP CO INC
Temporary Construction - BOP
108
WVG3000927
WVG3000927
Stone & Webster Construction Inc
ATLAS VAN LINES INC
Transportation Service
109
WVG3000023
WVG3000023
WECTEC Global Project Services, Inc.
AUGUSTA COMMUNICATION
PM Check for Site Radio Network
110
WVG3000414
WSPM011030
WECTEC Global Project Services, Inc.
AUGUSTA COMMUNICATION
TRANSFER OF FUNDS FROM 967463-3P
111
132175-AM01.00
WSPM003325
WECTEC Global Project Services, Inc.
AUGUSTA CONCRETE BLOCK CO
Non-Safety Related Unit 3 Annex Building Masonry Walls
112
132175F002149A
WSPM004433
Stone & Webster Construction Inc
AUGUSTA ENGINE PARTS INC
N_SVC-ENGREPAIR - N_SVC-ENGREPAIR-N/ACNN
113
WVG3001427
WVG3001427
WECTEC Global Project Services, Inc.
AUGUSTA OVERHEAD DOOR SALES INC
TO BE LEFT IN PLACE AND USED FOR OVERHEAD DOOR AUXILIARY OUTPUT EXPANSION MODULE FOR GARAGE DOORS AT BLDG 315
114
630207-OP
WSPM004294
Stone & Webster Construction Inc
AUTOMATIC FIRE SYSTEMS AUGUSTA
Automatic Fire Systems
115
WVG3000600
WVG3000600
WECTEC Global Project Services, Inc.
AUTOMATIC FIRE SYSTEMS AUGUSTA
TEST AND INSPECTION SERVICE - 630207 TRANS
116
132175-G200A-01
WSPM003207
Stone & Webster Construction Inc
AVANTECH INC
FOB Jobsite (7828 River Road
117
620740
WSPM004297
Stone & Webster Construction Inc
B LAMAR MURRAY MD
Vogtle EPC-Unit 3 & Site
118
4500714190
4500714190
WECTEC Contractors Inc
B&M EQUIPMENT REPAIR AND CERTFCTN
Spare Parts
119
4500721297
4500721297
WECTEC Global Project Services, Inc.
B&M EQUIPMENT REPAIR AND CERTFCTN
Equipment Repair Parts and Service
120
4500721415
4500721415
WECTEC Global Project Services, Inc.
B&M EQUIPMENT REPAIR AND CERTFCTN
Equipment Repair Parts and Service
121
4500721417
4500721417
WECTEC Global Project Services, Inc.
B&M EQUIPMENT REPAIR AND CERTFCTN
Equipment Repair Parts and Service
122
4500696355
4500696355
Westinghouse Electric Company LLC
BARNHART CRANE & RIGGING CO
Jacking Hunches Load Test
123
4500714565
4500714565
WECTEC Contractors Inc
BASIS SOFTWARE INC
DAMAGE ASSESSMENT AND TESTING OF SN730
124
4500715840
4500715840
WECTEC Contractors Inc
BASIS SOFTWARE INC
PARTS
125
4500675306
4500675306
Westinghouse Electric Company LLC
BCP TECHNICAL SERVICES INC
Travel & Living

H-7



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



126
132175F002376
WSPM010238
Stone & Webster Construction Inc
BEASLEY FOREST PRODUCTS INC
Crane Mats for Site Support
127
132175F003292
WSPM010408
Stone & Webster Construction Inc
BEASLEY FOREST PRODUCTS INC
36 - 4’x1’x20’ oak crane mats for site support.
128
132175F003533
WSPM010425
Stone & Webster Construction Inc
BEASLEY FOREST PRODUCTS INC
8ea 1’x4’x8’ crane mats for MAB Up ender and 7ea 1’x4’x20’ crane mats for site support
129
132175F004249
WSPM015404
Stone & Webster Construction Inc
BEASLEY FOREST PRODUCTS INC
Crane Mats for site support, Ron Lewis. 9x5x5 = 4, 12x4x20 = 60.
130
132175F004638
WSPM004922
Stone & Webster Construction Inc
BEASLEY FOREST PRODUCTS INC
40 - 30’ Crane Mats, Site Support Ron Lewis.
131
132175F006023
WSPM010107
WECTEC Global Project Services, Inc.
BEASLEY FOREST PRODUCTS INC
Wood saddle to be used for temporary support of the MSR A/B at the MSR temporary staging area.
132
132175F000371
WSPM015492
Stone & Webster Construction Inc
BEST OFFICE SOLUTIONS LLC
Work Package/Blueprint Storage for MAB Documentum Office
134
132175F002428
WSPM004393
Stone & Webster Construction Inc
BEST OFFICE SOLUTIONS LLC
Office Supplies
135
132175F002721
WSPM010086
Stone & Webster Construction Inc
BEST OFFICE SOLUTIONS LLC
OSD&D TAGS
136
132175F003161
WSPM015457
Stone & Webster Construction Inc
BEST OFFICE SOLUTIONS LLC
Stud Weld Pre-Production Qualification Record (SWPPQR) Form
137
132175F003645
WSPM010275
Stone & Webster Construction Inc
BEST OFFICE SOLUTIONS LLC
GREEN ACCEPT TAGS
138
WSV3B00037
WSV3B00037
WECTEC Global Project Services, Inc.
BEST OFFICE SOLUTIONS LLC
Site copy paper/NTE $250,000.00 in 1 year
139
WVG3000038
WVG3000038
WECTEC Global Project Services, Inc.
BEST OFFICE SOLUTIONS LLC
Site Copy Paper/NTE - F000999-REL017
140
WVG3001061 - REL 020
WVG3001061
WECTEC Global Project Services, Inc.
BEST OFFICE SOLUTIONS LLC
Site Copy Paper/NTE $ 250,000.00 in 1 Year from APR 2016
141
WVG3001349
WVG3001349
WECTEC Global Project Services, Inc.
BEST OFFICE SOLUTIONS LLC
Site Copy Paper/NTE $ 250,000.00 in 1 Year
142
132175F001482
WSPM004601
Stone & Webster Construction Inc
BIG RED INC
Change Order to Extend Rental 24 months on T550RR Forklift, Big Red, Unit # 34307
143
132175F002053
WSPM004434
Stone & Webster Construction Inc
BIG RED INC
TAYLOR - BIG RED 360 FOR ADDITIONAL OPERATOR
144
132175F003281
WSPM004512
Stone & Webster Construction Inc
BIG RED INC
Rev 1 to PO 839969 extending rental on Big Red unit # 37958, XC350L forklift for 12 months

H-8



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



145
132175F004253
WSPM004870
Stone & Webster Construction Inc
BIG RED INC
Exchange Taylor Big Red TX-300 for a Taylor Big Red TX-350, Doug Smiths group.
146
132175F004791
WSPM009908
Stone & Webster Construction Inc
BIG RED INC
Taylor Big Red Forklift Forks Failed Inspection
147
132175F004984
WSPM004924
WECTEC Global Project Services, Inc.
BIG RED INC
REPLACE PO 888927, Big Red extending rent 2 years on unit # 38115.
148
132175F001312
WSPM004608
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
TENT END WALLS
149
132175F001521
WSPM009844
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
Removable Shelters for CA20 in NI3
150
132175F002814
WSPM004420
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
Big Top Tent Assembly *URGENT*
151
132175F003882
WSPM015505
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
BIG TOP TENT THAT WILL BE USED TO STORE TRANSFORMER PARTS
152
132175F004109
WSPM003342
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
Tents to be used for the pipe spool storage
153
132175F005682
WSPM004885
WECTEC Global Project Services, Inc.
BIG TOP MANUFACTURING INC
Replacement Parts for disappearing door on Big Top Tent at NOI-7
154
WVG3000564
WVG3000564
Stone & Webster Construction Inc
BIG TOP MANUFACTURING INC
Tent material to be used for level B storage for laydown areas
155
132175F001827
WSPM004453
Stone & Webster Construction Inc
BIGGE POWER CONSTRUCTORS
330198 LIEBHERR CRANE ENGINE PROBLEMS
156
132175F002544
WSPM004505
Stone & Webster Construction Inc
BIGGE POWER CONSTRUCTORS
330177 LIEBHERR CRANE MONITOR REPAIR
157
132175F003550
WSPM004459
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Furniture for New Buildings
158
132175F004668
WSPM004843
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Building 303 Cubical and Desk
159
132175F005112
WSPM004832
WECTEC Global Project Services, Inc.
BROWNS OFFICE CENTRE
Security Orientation Cards and Camera Cards
160
WVG3000266
WVG3000266
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
88 L Shaped Cubicles for field engineers, quality control inspectors, welding engineers, and design engineers.
161
WVG3000320
WVG3000320
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Tables & Chairs
162
WVG3000380
WVG3000380
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Elect Fab & Facilities

H-9



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



163
WVG3000518
WVG3000518
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Microwave & Refrig for 207, ASB, & Replacements
164
WVG3000542
WVG3000542
Stone & Webster Construction Inc
BROWNS OFFICE CENTRE
Furniture for Bldg 124
165
132175F003665
WSPM004463
Stone & Webster Construction Inc
C B EQUIPMENT INC
TRUCKS FOR WAREHOUSE USE
166
132175F004534
WSPM004815
Stone & Webster Construction Inc
C B EQUIPMENT INC
Trailer to replace unit # 67693.
167
132175F004698
WSPM004915
Stone & Webster Construction Inc
C B EQUIPMENT INC
Trailers for Site Support. 2 years rent.
168
132175F005070
WSPM004821
WECTEC Global Project Services, Inc.
C B EQUIPMENT INC
flatbed trailers for warehouse use issuing
169
132175F005313
WSPM004942
WECTEC Global Project Services, Inc.
C B EQUIPMENT INC
Warehouse deliveries
170
WVG3000718
WSPM007277
WECTEC Global Project Services, Inc.
C B EQUIPMENT INC
Three Refer Trailers to Conduct Ice and Water Distribution
171
132175F000108
WSPM010692
Stone & Webster Construction Inc
CARDIAC SCIENCE
Annual AED Service
172
132175F004127
WSPM004877
Stone & Webster Construction Inc
CAROL CRANE RIGGING AND
CO to PO 888352 Carol Crane Rigging, for steel crane mats. $2000 needed to cover rent thru 30 Aug 15, units will then be removed from rent.
173
132175-C203.04
WSPM015395
Stone & Webster Construction Inc
CAROTEK INC
Remaining Site Specific Valves
174
132175-C205.01
WSPM010287
Stone & Webster Construction Inc
CAROTEK INC
Check Valves for CWS
175
132175-PV53.00
WSPM000109
WECTEC Global Project Services, Inc.
CAROTEK INC
PV53-Plumbing and Specialty Valves for various NSR applications
176
132176-PV53.00
WSPM003035
WECTEC Global Project Services, Inc.
CAROTEK INC
PV53-Plumbing and Specialty Valves for various NSR applications
177
WVG3000948
WVG3000948
WECTEC Global Project Services, Inc.
CAROTEK INC
Material to be left in place and used for building 315, work package SV0-RWS-PLW-ME0917
178
132175F000855
WSPM014765
Stone & Webster Construction Inc
CARRIER COMMERCIAL SERVICE
Batch Plant - Blanket PO for Carrier Commercial Services
179
WVG3001260
WVG3001260
WECTEC Global Project Services, Inc.
CAVCO INC
To be left in place and used for bldg 315, Permanent Potable Water System Chem Add Skid (SV0-PWS-MS-501), work package SV0-PWS-01-CT001

H-10



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



180
132175F005787
WSPM004914
WECTEC Global Project Services, Inc.
CDW DIRECT
CISCO - IT Supplies (est. $125k)
181
132175-D100.15
WSPM013149
Stone & Webster Construction Inc
CHATHAM STEEL CORP
ZRS Pipe Support Material Building 315
182
132175-D220.17
WSPM010495
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Embed Plate Material
183
132175-D500.05 REL 1
WSPM011849
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Non-Safety Structural Steel
184
132175-D500.05-REL-008
WSPM010623
Stone & Webster Construction Inc
CHATHAM STEEL CORP
BLANKET RELEASE 008 STRUCTURAL STEEL
185
132175-D500.05-REL-014
WSPM010123
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
BLANKET RELEASE 014 STRUCTURAL STEEL
186
132175-D500.05-REL-019
WSPM003454
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
BLANKET RELEASE 019 STRUCTURAL STEEL
187
132175-D500.05-REL-020
WSPM000047
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
BLANKET RELEASE 020 STRUCTURAL STEEL
188
132175-D500.05-REL-022
WSPM000046
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
BLANKET RELEASE 022 STRUCTURAL STEEL
189
132175-D500.11
WSPM003378
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Structural Steel Non-Safety Related
190
132175-D500.17
WSPM011641
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Non-Safety Shims, Plates, and Hilti Anchors
191
132175-D500.20
WSPM001216
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Bearing Plates For Viscodampers In Turbine Building
192
132175F002560
WSPM014097
Stone & Webster Construction Inc
CHATHAM STEEL CORP
TEMPORARY CONSTRUCTION - New Weld Test Shop Steel
193
132175F002905-REL-009
WSPM011542
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
REL- 009 for Non-Safety Related Non-Safety
194
132175F002905-REL-011
WSPM001913
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
REL-011 for Non-Safety Related
195
132175F004345
WSPM010656
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Material Contamination Prevention during CA02 & CA20 Module Fit-up
196
132175F004486
WSPM004817
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Shims to be used for equipment installation
197
132175F004557
WSPM004839
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Construction aid material to be used for temporary use for the CA20 Platen modification, work package SV0-8200-MHW-CV7385

H-11



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



198
132175F005456
WSPM004933
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
Pipe to be used for spreader beams for CA03 installation
199
132176-D500.26
WSPM010410
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Damper Bearing Plates for Box Beams - Unit 4 - Turbine Building
200
J132175-FPR12-02522
WSPM010298
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Temp. constuction materials #4 condensers
201
J132175-FPR13-00751
WSPM004375
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Lifting/Rigging - Spreader bar pipe for miscellaneous lifts
202
J132176-FPR124-00016
WSPM010416
Stone & Webster Construction Inc
CHATHAM STEEL CORP
U4 Turbine Building Construction Aid Material
203
J132176-FPR134-00028
WSPM010265
Stone & Webster Construction Inc
CHATHAM STEEL CORP
Unit 4 Nuclear Island Permanent Construction Aids for Basemat
204
WVG3000183
WVG3000183
Stone & Webster Construction Inc
CHATHAM STEEL CORP
spreader pipe to be used for heavy lifts across site
205
WVG3000777
WVG3000777
WECTEC Global Project Services, Inc.
CHATHAM STEEL CORP
to be used on the unit 3-Initial Energization Temp Air for heating battery rooms
206
J132175-E101.01
WSPM009755
Stone & Webster Construction Inc
CHLORIDE INDUSTRIAL SYSTEMS
Double Throw Switch|
207
132175F001257
WSPM004611
Stone & Webster Construction Inc
CINTAS CORP
Add Funding to Cintas Blanket PO #700123 not to exceed $240,000 or 3 years
208
808831-3P
WSPM004360
Stone & Webster Construction Inc
CINTAS CORP
Add Funding to Blanket PO 808831 Cintas Tobacco Rd Not to Exceed $15,000.00 or 3 years.
209
854472-3P
WSPM004364
Stone & Webster Construction Inc
CINTAS CORP
Add Funding to Cintas Shredding PO 854472 not to Exceed $50,000 or 2 yrs
210
132175F002537
WSPM004507
Stone & Webster Construction Inc
CIT RAIL LLC
Extend Rental 12 months on PO-924069 Cit Rail (Progress Rail)
211
132175F004644
WSPM004841
WECTEC Global Project Services, Inc.
CMI
Est. Blanket PO for CMI, INC - not to exceed $4,000 or 3 years to pay Invoice 813383 and future Invoices
212
132175-J300.19-REL11
WSPM008629
WECTEC Global Project Services, Inc.
COASTAL CONSTRUCTION PRODUCTSINC
Release # 11 Xypex Admix C-500 NF
213
132175-J300.19-REL12
WSPM010855
WECTEC Global Project Services, Inc.
COASTAL CONSTRUCTION PRODUCTSINC
Release # 12 Xypex Patch N Plug (60 lb pails) SG:1705
214
132175F000833
WSPM004424
Stone & Webster Construction Inc
COCA COLA BOTTLING CO UNITED E
bottled water for craft

H-12



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



215
132175F002211
WSPM004430
Stone & Webster Construction Inc
COCA COLA BOTTLING CO UNITED E
Add Funding to PO 741021 Not to Exceed $150,000.00 or 2 yrs
216
WVG3000498
WVG3000498
WECTEC Global Project Services, Inc.
COCA COLA BOTTLING CO UNITED E
BOTTLED WATER
217
WVG3001094
WVG3001094
Stone & Webster Construction Inc
COCA COLA BOTTLING CO UNITED E
NTE Funding for Coke Cola for $75,000.00 or 3 months
218
132175F004562
WSPM004838
Stone & Webster Construction Inc
COMMAND ALKON
Batch Plant - Add funds to PO# 813458; Command Alkon.
219
132175F004100
WSPM010655
Stone & Webster Construction Inc
CONCRETE PUMP SUPPLY
2 - Shut off valve kits for boom tips, concrete pump trucks Robert Carr. 24 months rental.
220
WVG3000420
WVG3000420
WECTEC Global Project Services, Inc.
CONGER-ELSEA INC
CONSULTING SERVICES - CONGER & ELSEA INC
221
132175F003122
WSPM010062
Stone & Webster Construction Inc
CONSOLIDATED PIPE AND SUPPLY CO INC
McElroy Fusion Welder Certification
222
132175F004672
WSPM004844
Stone & Webster Construction Inc
CONSOLIDATED PIPE AND SUPPLY CO INC
Temporay Construction - McElroy Training Fittings
223
132175F004712
WSPM010608
Stone & Webster Construction Inc
CONSOLIDATED PIPE AND SUPPLY CO INC
Temporary construction aid -bulk material to be used as attachments for temporary lift frames, platen modification, and other functions in the MAB
224
WVG3001286
WVG3001286
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
Returning EF Fusion Machines for Calibrations Contact Jacob Matthes From Consolidated Pipe & Supply
225
132176-C121.07
WSPM003833
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
CAS and PGS System Underground Yard Pipe and Fittings Phase 6, 7, and 9
226
J132175-FPR12-02136
WSPM002173
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Construction Aids for U3 Containment Vessel Bottom Head
227
J132176-FPR124-00032
WSPM002098
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Construction Aids - U4 Nuclear Island Basemat, Mechanical
228
WSV3B00039
WSV3B00039
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
229
WVG3000591
WVG3000591
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
ADDITONAL NON-PERMANENT -NON SAFETY MATERIAL FOR TURBINE #3 FIRE PROTECTION SYSTEM
230
WVG3001016
WVG3001016
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Nonpermanent Plant. Construction Aid Material. For Use In Nuclear Island 4.

H-13



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



231
WVG3001029
WVG3001029
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
material to be left in place and used for cable tray welded supports, work package SV3-2053-SHW-861955
232
WVG3001285
WVG3001285
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
I Beams for PM Labeling Conex Redi Roof to be Finished
233
WVG4001244
WVG4001244
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Material Left in Place Annex 4. Angle Iron due to E&DCR APP-SS01-GEF-850151
234
132175-C121.06
WSPM003279
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
CAS and PGS System Underground Yard Pipe and Fittings Phase 4 & 5
235
132175-C125.04
WSPM010056
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Stainless Steel Laterals for WRS and WLS
236
132175-C812.00A REL 11
WSPM004581
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
237
132175-C812.00A REL 8
WSPM004580
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
238
132175-C812.00A REL 9
WSPM004579
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
239
132175-C812.00A RELEASE 1
WSPM004578
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
240
132175-C812.00A RELEASE 2
WSPM004577
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Bolts Safety Class D-RTNSS - Blanket Order
241
132175-C812.00A RELEASE 3
WSPM004576
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
B31.1 Gaskets Safety Class D RTNSS - Blanket Order
242
132175-C812.00A RELEASE 5
WSPM004592
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
DDP Jobsite (7828 River Road
243
132175-C812.00A RELEASE 7
WSPM004593
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
XAAABAAPAK - I18644270 - Gasket, CL 150
244
132175-D100.11
WSPM003451
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
CA Module Material
245
132175-D500.18
WSPM003375
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Structural Steel for CA20 Module
246
132175-D500.30
WSPM003374
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Caps For Detector Well Assemblies In CA04 & Pipe Sleeve For CA01
247
132175F000212
WSPM010529
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Consumables for Training and Qualifying Remote Machine Welders
248
132175F000633
WSPM010592
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
SONOTUBES AND PIPES

H-14



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



249
132175F001056
WSPM003290
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Fabrication of rebar trusses to support top mat reinforcement Work Package Number SV3-4030-CCW-CV2187
250
132175F003614
WSPM010437
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Non-permanent Fire Protection system for unit 3. Non-safety material.
251
132175F003833
WSPM010333
Stone & Webster Construction Inc
CONSOLIDATED POWER SUPPLY
Temporary Construction Aid Material for CA20-71, 72, 73 & CA20-22B, 25 Assembly Bracing
252
132175F004964
WSPM013667
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Construction Aid Material For Use In Nuclear Island 3 Steel Fab Shop.
253
132175F005456A
WSPM004947
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Pipe to be used for spreader beams for CA03
254
132175F005552
WSPM004934
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Material for Weld Test Shop (Nightshift MAB Weld Testing)
255
132176-D500.45
WSPM009752
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Structural Steel For Unit 4 Mechanical Modules
256
WVG3000429
WVG3000429
WECTEC Global Project Services, Inc.
CONSTRUCTION EQUIPMENT PARTS INC
Batch Plant Consumables
257
WVG3000848
WVG3000848
WECTEC Global Project Services, Inc.
CONSTRUCTION EQUIPMENT PARTS INC
Batch Plant Materials
258
WVG3001108
WVG3001108
WECTEC Global Project Services, Inc.
CONSTRUCTION EQUIPMENT PARTS INC
Lubricator and Boot Gum Rubber
259
132175F000569-A
WSPM010583
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Parts for Trucks
260
132175F001011-B
WSPM009986
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Flapper Valves and Springs
261
132175F002100
WSPM010168
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Mixer Truck Parts
262
132175F002133
WSPM010174
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Switches for trucks
263
132175F002316
WSPM010114
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Relief valves for truck water tanks
264
132175F002361
WSPM004396
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Lights, Fold Back Chute, and Ball Joint for trucks
265
132175F002425
WSPM010241
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Rollers for trucks
266
132175F002449
WSPM010250
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Reverse lights and chutes for trucks
267
132175F002580
WSPM010193
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Decals, pump, and gaskets for turcks

H-15



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



268
132175F002999-002-REL
WSPM010421
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Continental
269
132175F002999-006-REL
WSPM004472
WECTEC Global Project Services, Inc.
CONTINENTAL MFG CO INC
Batch Plant - Continental (To Establish Blanket PO)
270
132175F003233
WSPM004510
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - Emergency Unloading Kit
271
132175F004885
WSPM009913
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
Batch Plant - truck lights
272
132175F005382
WSPM009727
WECTEC Global Project Services, Inc.
CONTINENTAL MFG CO INC
Batch Plant Order Control Cables
273
WVG3000230
WVG3000230
Stone & Webster Construction Inc
CONTINENTAL MFG CO INC
BO 2999 - Rel 11 Batch Plant - Continental
274
132175F003746
WSPM010336
Stone & Webster Construction Inc
CRAIGS CONSTRUCTION SPECIALTIES INC
Rebar chairs for support in Containment Vessel NI3.
275
132175F000521
WSPM013401
Stone & Webster Construction Inc
CRANE INSTITUTE OF AMERICA INC
Certified Mobile Crane Inspector Training On-Site for June 24th-27th
276
132175F001805
WSPM004456
Stone & Webster Construction Inc
CRUISE SECURITY SYSTEMS INC
Add Funding to existing PO607592 for Cruise Security Systems, Inc.
277
132175-V170.01
WSPM003906
Stone & Webster Construction Inc
CUMMINS INC
Non-Class 1E 480V Standby Diesel Generator
278
132175F001636
WSPM009779
Stone & Webster Construction Inc
DELTA RIGGING AND TOOLS INC
For use for the CA01 sub-modules
279
132175F003211
WSPM010620
Stone & Webster Construction Inc
DELTA RIGGING AND TOOLS INC
General handling equipment for the entire site
280
132175F006036
WSPM010012
WECTEC Global Project Services, Inc.
DELTA RIGGING AND TOOLS INC
Hoist - Chain 10Ton w/ 20’ Load & 30’ Pull Chain
281
WVG3000014
WVG3000014
WECTEC Global Project Services, Inc.
DELTA RIGGING AND TOOLS INC
10 TON CHAIN FALLS FOR RIGGING
282
WVG3001162
WVG3001162
WECTEC Global Project Services, Inc.
DELTA RIGGING AND TOOLS INC
HOIST EQUIPMENT FOR CWS PUMPS
283
132175F003626
WSPM010640
Stone & Webster Construction Inc
DILLON SUPPLY CO
Constrution aid material to be used in the ZFS Ductbank, Work Package SV0-ZFS-ERW-EL5909
284
132175F003653
WSPM010442
Stone & Webster Construction Inc
DILLON SUPPLY CO
Tagging ASME III Piping
285
132175F003781
WSPM004491
Stone & Webster Construction Inc
DILLON SUPPLY CO
REMOVABLE FORMWORK CONSTRUCTION AID FOR THE ELCTRICAL CABLE TRAY SUPPORTS AT THE 315 BUILDING. WORK PACKAGE SV0-0000-CCW-CV1583

H-16



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



286
132175F003804
WSPM010300
Stone & Webster Construction Inc
DILLON SUPPLY CO
For Cleaning Rust from Piping
287
132175F003919
WSPM010619
Stone & Webster Construction Inc
DILLON SUPPLY CO
Mechanical Module Valve Removal/Storage
288
132175F004082
WSPM010638
Stone & Webster Construction Inc
DILLON SUPPLY CO
For Rigging Forms
289
132175F004585
WSPM004920
Stone & Webster Construction Inc
DILLON SUPPLY CO
Louvers to be used for the tents
290
132175F004597
WSPM010601
Stone & Webster Construction Inc
DILLON SUPPLY CO
Temporary Construction - BOP
291
132175F004622
WSPM010602
Stone & Webster Construction Inc
DILLON SUPPLY CO
Temporary Construction - BOP Plumbing
292
132175F004629
WSPM010549
Stone & Webster Construction Inc
DILLON SUPPLY CO
SHIPPING SUPPLIES FOR M&TE CALIBRATION LAB
293
132175F004798
WSPM013317
Stone & Webster Construction Inc
DILLON SUPPLY CO
Temporary Construction Aid - TI4
294
132175F004827
WSPM004931
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
Temporary Construction Aid - Ice Machine reinstallation
295
132175F005131
WSPM009952
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
to be used for changes to the security post #1
296
132175F005416
WSPM009729
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
Temporary Construction - Testing For Nuclear Island 3 Piping Group
297
132175F005739
WSPM009805
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
Temporary Construction - Turbine Island 4 - Expansion Joints
298
132175F005775
WSPM010130
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
To be used at security post #1 to replace the damaged unit
299
J132175-FPR13-01107
WSPM002110
Stone & Webster Construction Inc
DILLON SUPPLY CO
Ex-Core conduit installation, No pkg yet, Construction Aid Material
300
WVG3000179
WVG3000179
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
Drawing clamps to be used in everyday work in Nuclear Island 3.
301
WVG3001301
WVG3001301
WECTEC Global Project Services, Inc.
DILLON SUPPLY CO
Non-Safety, Non-permanent plant material needed for Turbine overhead crane test frame-Plate - A36 1” X 6’ X 8’, QA Category III, Safety Class E, Storage Level D
302
132175F000304
WSPM013210
Stone & Webster Construction Inc
DIRECTV
To add additional funds to PO #660182-0P Direct TV
303
WVG3000468
WVG3000468
Stone & Webster Construction Inc
DIVERSIFIED INFORMATION SOURCES INC
INVESTIGATION SERVICE - 725612 3P TRANSFER

H-17



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



304
804026-3M
WSPM004358
Stone & Webster Construction Inc
DOCTORS HOSPITAL CENTER FOR OCC MED
Review Medical Questionaire
305
808756 3P
WSPM004359
Stone & Webster Construction Inc
DOCTORS HOSPITAL CENTER FOR OCC MED
Services for Audiograms and Hepatitis B
306
WVG3000301
WVG3000301
WECTEC Global Project Services, Inc.
DOCTORS HOSPITAL CENTER FOR OCC MED
Replace PO 808756 and add funds in the amount of $10,000.00
307
WVG3000473
WSPM015494
Stone & Webster Construction Inc
DOCTORS HOSPITAL CENTER FOR OCC MED
SPECIMEN COLLECTION - 844709 3P TRANSFER
308
132175-C121.04
WSPM004575
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
B31.1 Pipe and Fittings for Building 315
309
132175-C121.09
WSPM013106
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Carbon-Steel Piping and Accessories for YFS Pump
310
132175-C125.03
WSPM013105
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Piping and Fittings for the WRS and WLS Systems
311
132175-D220.09
WSPM011848
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Non-Safety Related Embed Plates
312
132175-D500.09
WSPM003379
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Structural Steel & Fasteners for Cat II/SC-D
313
132175-D500.13
WSPM003376
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Safety Related Anchors and Plates
314
132175-D500.38
WSPM003370
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Unit 3 Annex Building Headed Anchor Nelson Studs
315
132175-JT02.02 RELEASE 1
WSPM010069
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Non Class 1E Instrument Tubing
316
132176-D500.27
WSPM003198
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Nelson Studs and Ferrules for Unit 4 CA04 Module
317
132176-D500.46
WSPM003195
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Miscellaneous Structural Steel for Cat II/SC-D Applications
318
WVG3000858
WVG3000858
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Material to be left in place and used for fastening electrical cable trays to supports within the Unit 3 Turbine Building, work package SV3-2020-ERW-EL4488
322
J132175-G280.01
WSPM002107
Stone & Webster Construction Inc
E BEAUDREY AND CIE
Condenser Tube Cleaning Equipment|
323
J132176-G280.01
WSPM002276
Stone & Webster Construction Inc
E BEAUDREY AND CIE
Condenser Tube Cleaning Equipment|
324
J132175-J800B-00
WSPM009759
Stone & Webster Construction Inc
EARTHTEC INC
Nuclear Island MSE Wall Design and Materials Construction Su
325
132176-PY02.01
WSPM003034
Stone & Webster Construction Inc
EATON HYDRAULICS LLC
CDS Basket Strainers

H-18



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



326
132175-C900.02
WSPM015655
WECTEC Global Project Services, Inc.
ELEMENT MATERIALS TECHNOLOGY
Welding Procedure Qualification Testing Services
327
132176-MS10.00
WSPM000923
Stone & Webster Construction Inc
ELLIS & WATTS GLOBAL INDUSTRIES INC
MS10 Air Handling Units
328
132176-MS14.00
WSPM010395
Stone & Webster Construction Inc
ELLIS & WATTS GLOBAL INDUSTRIES INC
MS14 - Containment Recirculation Fan Coil Units
329
689076
WSPM004313
Stone & Webster Construction Inc
ELSOHLY LABORATORIES INC
Blind Quality control urine specimens
330
WVG3000601
WVG3000601
Stone & Webster Construction Inc
ELSOHLY LABORATORIES INC
BLIND QC SAMPLES - 689076 OP TRANS
331
132175F000572
WSPM004635
Stone & Webster Construction Inc
EMERGENCY EQUIPMENT SERVICE INC
Emergency Equipment Service - Establish New PO in SmartPlant Old PO 762134
332
J132175-K219-01
WSPM013366
Stone & Webster Construction Inc
ENDRESS AND HAUSER INC
Radar/Ultrasonic Level XMTRS
333
J132175-K305.02
WSPM009819
Stone & Webster Construction Inc
ENDRESS AND HAUSER INC
YFS Differential Pressure Transmitter (Tank Level)|
334
J132175-K416.01
WSPM009818
Stone & Webster Construction Inc
ENDRESS AND HAUSER INC
RTD Thermowell
335
132175-C802.07
WSPM004584
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Safety Class E Fasteners for the ASS, CDS, SWS, and TCS Systems
336
132175-C811.00A REL 1
WSPM004582
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Gaskets
337
132175-C910.20
WSPM003266
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
HDPE Pipe and Fittings - Building 304
338
132175F002044
WSPM004435
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Pipe for Weld Test
339
132175F004277
WSPM004875
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Temporary Construction - Testing
340
132175F004381
WSPM004860
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Temporary Construction - BOP - Testing/Plumbing
341
132175F004453
WSPM011192
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Pro Heat stiffener bars
342
132175F004755
WSPM011193
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Temporary Construction Aid - Shim Material for Tanks
343
132176-C913.01
WSPM003760
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Fire Protection System (FPS) Ductile Iron Piping and Fittings
344
132175-C913.01
WSPM003264
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Fire Protection System (FPS) Ductile Iron Piping and Fittings

H-19



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



345
132175-D100.10
WSPM003252
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Material for Fabrication of RWS Pipe Supports for Building 315
346
132175-D500.06 REL 002
WSPM003453
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
D500.06-010 - I17542563 - Channel, A36
347
132175-D500.06 REL 003
WSPM003452
Stone & Webster Construction Inc
ENERGY AND PROCESS CORP
Safety Related Miscellaneous Structural Steel Blanket
348
132175-D500.06 REL 005
WSPM003384
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Misc. Structural Steel
349
132175-D500.06-REL 006
WSPM003383
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
D500.06-019 - I17542572 - Tube - Square,
350
132175-D500.06-REL 007
WSPM003382
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Miscellaneous Structual Steel
351
132175-D500.06-REL 008
WSPM003381
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Miscellaneous Structual Steel
352
132175-D500.06-REL 010
WSPM003380
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related MiscMiscellaneous Structual Steel
353
132175-D500.06-REL 011
WSPM001223
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Misc. Structual Steel
354
132175-D500.06-REL-013
WSPM001222
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Safety Related Misc. Structual Steel
355
WSV3B00034
WSV3B00034
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
Release 14- Safety Related Misc. Structual Steel
356
132175-C913.06
WSPM010070
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Fiberglass Piping and Fittings for ZRS and DOS
357
132175-D500.48
WSPM003367
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Structural and Misc Steel for WWS Oil Separator
358
132175F003251
WSPM003086
Stone & Webster Construction Inc
ENGINEERED FLOW LLC
New Jockey Pump Rotation Check & Controller Setup After Installation
359
4500722495
4500722495
WECTEC Global Project Services, Inc.
ENGLEWOOD ELECTRICAL SUPPLY CO
Equipment Repair Parts and Service
360
132175F004756
WSPM013752
Stone & Webster Construction Inc
ENVIRONMENTAL EXPRESS INC
Commissioning - Bridge Lab Test Equipment
361
132175F004812
WSPM009915
Stone & Webster Construction Inc
ENVIRONMENTAL EXPRESS INC
COMMISSIONING WTR TREATMENT LAB - CONSUMABLES
362
132175F004813
WSPM009920
Stone & Webster Construction Inc
ENVIRONMENTAL EXPRESS INC
Commissioning - Water Treatment Lab Test Equipment
363
132175F004814
WSPM003817
WECTEC Global Project Services, Inc.
ENVIRONMENTAL EXPRESS INC
Commissioning - Water Treatment Lab Test
364
WVG3000088
WVG3000088
WECTEC Global Project Services, Inc.
ENVIRONMENTAL EXPRESS INC
Water Quality Lab Turbidimeter Sample Cells for testing .

H-20



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



365
WVG3001242
WVG3001242
WECTEC Global Project Services, Inc.
ER TECHNOLOGIES
TRAINING FOR SCBA
366
132175-G260.03
WSPM010230
Stone & Webster Construction Inc
EVOQUA WATER TECHNOLOGIES LLC
RWS Intake Screening System
367
WVG3000070
WVG3000070
Stone & Webster Construction Inc
EXAKTIME INNOVATIONS INC
ExacTime Time Keeping System
368
132175-C802.02
WSPM004585
Stone & Webster Construction Inc
FASTENAL CO INC
Fasteners for Pumphouse
369
132175-C802.11
WSPM011167
Stone & Webster Construction Inc
FASTENAL CO INC
WLS & WRS System Gaskets, Tubing Fittings and Nuts
370
132175-C802.12
WSPM011168
Stone & Webster Construction Inc
FASTENAL CO INC
Turbine Building Spare Materials
371
132175-D500.32
WSPM003373
Stone & Webster Construction Inc
FASTENAL CO INC
Fasteners for Unit 3 Turbine Building
372
132175-D500.36
WSPM003371
Stone & Webster Construction Inc
FASTENAL CO INC
Fasteners for Annex Building
373
132175F001329
WSPM004606
Stone & Webster Construction Inc
FASTENAL CO INC
Formwork for NI 3 (Jerry Steffey)
374
132175F001333
WSPM003052
Stone & Webster Construction Inc
FASTENAL CO INC
Construction Aides; Please mark Boxes III-E
375
132175F001691
WSPM004403
Stone & Webster Construction Inc
FASTENAL CO INC
Batch Plant - Hardware - nuts,bolts,washers,lock-washers
376
132175F002471
WSPM004411
Stone & Webster Construction Inc
FASTENAL CO INC
Temporary Construction - Plumbing - BOP
377
132175F003501
WSPM004527
Stone & Webster Construction Inc
FASTENAL CO INC
Construction Aid
378
132175F003921
WSPM011190
Stone & Webster Construction Inc
FASTENAL CO INC
Construction aid material to be used for the MAB End Wall Removal Screw, work package SV-847-SSW-TP1813
379
132175F004008
WSPM011191
Stone & Webster Construction Inc
FASTENAL CO INC
CA01 Module Leakchase Piping Temporary Supports
380
132175F004066
WSPM004852
Stone & Webster Construction Inc
FASTENAL CO INC
Temporary Electrical Material (Fasteners)
381
132175F004446
WSPM010488
Stone & Webster Construction Inc
FASTENAL CO INC
Temporary Fasteners for the CA05 Module Platen
382
132175F004716
WSPM004917
Stone & Webster Construction Inc
FASTENAL CO INC
Temporary Construction Aid - BOP
383
132175F004783
WSPM011194
Stone & Webster Construction Inc
FASTENAL CO INC
BOLTS AND WASHERS FOR ASSEMBLY OF READY ROOFS
384
132175F004886
WSPM004929
Stone & Webster Construction Inc
FASTENAL CO INC
Nonpermanent Plant Construction Aid Material. For use by reinforcing iron workers NI3.

H-21



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



385
132175F004901A
WSPM004928
Stone & Webster Construction Inc
FASTENAL CO INC
Nonpermanent Plant Construction Aid Material. Fasteners For Use In Nuclear Island 4 By Carpenters.
386
132175F005074
WSPM009950
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Temporary Construction Aid - Turbine Island 4 - Use: Setting pumps and removed after completed
387
132175F005220
WSPM009957
WECTEC Global Project Services, Inc.
FASTENAL CO INC
*HOT ITEM* TEMPORARY CONST AID - FULLY THREADED METRIC CAP SCREWS FOR TI-4 START UP PUMPS
388
132175F005271
WSPM004944
WECTEC Global Project Services, Inc.
FASTENAL CO INC
U-bolts For Temporary Pipe Support. Nonpermanent Plant.
389
132175F005292
WSPM011195
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Construction Aid Material. Nonpermanent Plant. Containment NI3.
390
132175F005329
WSPM011164
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Construction Aids For Embeds, Containment NI3. Nonpermanent Plant.
391
132175F005493
WSPM004899
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Non-permanent plant construction aid.
392
132175F005567
WSPM004893
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Nonpermanent Plant Construction Aid Material. Fasteners For Use By The Carpenters NI3.
393
132175F005602
WSPM004880
WECTEC Global Project Services, Inc.
FASTENAL CO INC
1/2” Cable for Tent tie down across site due to wind
394
132175F005773
WSPM002963
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Touch up coatings on non-safety related conduit (work package SV4-CA20-ERW-EL6714)
395
132175F005789
WSPM004705
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Magnets for securing safety netting/Micellaneous items to modules (Night Shift)
396
132175F005791
WSPM011897
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Material to be left in place and used for repairing sheet metal and flashing at the 315 building pumphouse, work package SV0-0000-SSW-CV7453
397
132176-C802.13
WSPM004728
Stone & Webster Construction Inc
FASTENAL CO INC
Turbine Building and Condenser Spare Materials

H-22



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



398
132176F000019
WSPM003134
Stone & Webster Construction Inc
FASTENAL CO INC
Unit 4 turbine building construction aid materials for el 100’-0”
399
132176F000033
WSPM003133
Stone & Webster Construction Inc
FASTENAL CO INC
Install for repair/rework of damaged studs in accordance with EDCR SV0-SS01-GEF-000037. Turbine Building Units 4
400
132176F000064
WSPM011154
Stone & Webster Construction Inc
FASTENAL CO INC
U-Bolts
401
J132175-FPR12-02393
WSPM010470
Stone & Webster Construction Inc
FASTENAL CO INC
Installation for 300 series bldgs YFS
402
J132175-FPR12-02397
WSPM010415
Stone & Webster Construction Inc
FASTENAL CO INC
Installation for 300 series buildings PWS
403
WVG3000155
WVG3000155
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Material to be left in place and used for repairing sheet metal and flashing at the 315 building pumphouse (used for 132175F005791), wp SV0-0000-SSW-CV7453
404
WVG3001252
WVG3001252
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Temporary Construction Aide to be Abandoned in Concrete, for Nuclear Island 3 Carpenters to secure embeds to rebar.
405
WVG3001280
WVG3001280
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Material to complete redi roof for labeling conex for PM
406
WVG3001325
WVG3001325
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Non Permanent plant construction aide to be used in Unit 3 CA20 module to aide in installation of nelson studs.
407
WVG3001332
WVG3001332
WECTEC Global Project Services, Inc.
FASTENAL CO INC
BOP TEMPORARY CONSTRUCTION AID USED FOR THE SES CV-2055
408
WVG3001336
WVG3001336
WECTEC Global Project Services, Inc.
FASTENAL CO INC
spray foam for NI4-craft tents
409
WVG3001350
WVG3001350
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Material to complete Redi Roof for labeling connex for PM
410
WVG3001370
WVG3001370
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Material needed to build valve stands for CRSP
411
WVG3001380
WVG3001380
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Fasteners. Construction Aid Mateiral. Nonpermanent Plant. NI3 Carpenters.

H-23



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



412
WVG3001388
WVG3001388
WECTEC Global Project Services, Inc.
FASTENAL CO INC
BOP TEMPORARY CONSTRUCTION AID FOR UNIT 4 WWS SYSTEM SV4-MT71-00-85001
413
WVG3001389
WVG3001389
WECTEC Global Project Services, Inc.
FASTENAL CO INC
BOP TEMPORARY CONSTRUCTION AID FOR UNIT 4 WWS SYSTEM SV4-MT71-00-85001
414
WVG3001403
WVG3001403
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Annex 3 Temporary Construction Aide
415
WVG3001441
WVG3001441
WECTEC Global Project Services, Inc.
FASTENAL CO INC
BOP TEMPORARY CONSTRUCITON AID MATERIAL USED FOR CONCRETE FORMS ON STAINLESS STEEL EMBEDS
416
WVG3001457
WVG3001457
WECTEC Global Project Services, Inc.
FASTENAL CO INC
BOP TEMPORARY CONSTRUCTION AID MATERIAL WP# CV-6004
417
WVG3001460
WVG3001460
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Carpenters Consumable Material
418
WVG3001469
WVG3001469
WECTEC Global Project Services, Inc.
FASTENAL CO INC
OFF-SITE WAREHOUSE/EQUIPMENT CLEANING FOR PM GROUP
419
WVG3001470
WVG3001470
WECTEC Global Project Services, Inc.
FASTENAL CO INC
Flat Washers for use by the carpenters in Nuclear Island 3. Nonpermanent Plant.
420
WVG3001479
WVG3001479
WECTEC Global Project Services, Inc.
FASTENAL CO INC
TI 4 TEMPORARY CONSTRUCTION AIDE
421
WVG3001492
WVG3001492
WECTEC Global Project Services, Inc.
FASTENAL CO INC
WASHER -FLAT 1” X2” OD THRU HARDENED PLAIN STEEL F436
422
WVG3001509
WVG3001509
WECTEC Global Project Services, Inc.
FASTENAL CO INC
THESE ARE USED ON THE ROOF PACKAGES.
423
WVG3001511
WVG3001511
WECTEC Global Project Services, Inc.
FASTENAL CO INC
TI3 CARPENTERS ROOF PACKAGES
424
844635-3M
WSPM004362
Stone & Webster Construction Inc
FERRELLGAS LP
Funding to be added to PO 844635 (Ferrell Gas), Donny Johnson
425
4500663963
4500663963
Westinghouse Electric Company LLC
FICKESS PUMPS
Gear Type Positive Displacement Pumps
426
132175F005411
WSPM003574
WECTEC Global Project Services, Inc.
FIRE TECHNOLOGY LLC
FIRE TECH LLC TO PERFORM (2) 5YR INTERN. TANK INSPEC.SPEC #SV0-MT40-Z0-002. ID# MT40A & MT40B NEAR 315 BLDG.

H-24



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



427
J132175-FPR13-02089
WSPM015354
Stone & Webster Construction Inc
FISCHER ENGINEERING CO
Weld coupons for Welder Qualification
428
WVG3001275
WVG3001275
WECTEC Global Project Services, Inc.
FISCHER ENGINEERING CO
WELD TEST COUPONS
429
132175F001561
WSPM009940
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
PM Group Testing set up for Deionized water **RUSH PER HUGH BOURQUE***
430
132175F001631
WSPM009761
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
Chemicals for the water quality lab **** rush Hugh Bourque ****
431
132175F002461
WSPM010052
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
Water Quality Consumabels PM Group
432
132175F003988A
WSPM010657
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
Water Lab Consumables - Electrode Filling Solution
433
132175F004445
WSPM004866
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
ULTRA TAPE FOR TEMPORARY ACTIVITIES PM ACTIVITES
434
132175F004561
WSPM009922
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
WATER LAB EQUIPMENT (METERS, CONDUCTIVITY PROBE AND MODULES)
435
132175F004651
WSPM009906
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
Commissioning - Water Treatment Lab Equipment
436
132175F005192
WSPM009961
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
Graduated Cylinders water lab
437
132175F005244A
WSPM009728
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
PM Water Quality Lab Supplies Pipette tips 100 to1000 microlite P/N 21R685 and stir bars
438
132175F005267
WSPM009730
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
WQL SUPPLIES weigh. dishes, cond cell pipette 10-100
439
132175F005328
WSPM009724
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
WQL Supplies, Timer, Hotplate, ATC Probe
440
132175F005498
WSPM010196
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
SG 893 2-propanol,SG 2498 Stoddard Solvent PM Temp. Const. activities fasteners on ACC/ SSC’s @ Wboro WH. WP# SV3-PXS-MT-02A
441
WVG3000873
WVG3000873
Stone & Webster Construction Inc
FISHER SCIENTIFIC CO LLC
2” and 3” White , Blue Stripe tape for PM Activities
442
WVG3001344
WVG3001344
WECTEC Global Project Services, Inc.
FISHER SCIENTIFIC CO LLC
3” White, Blue Stripe Tape for CRSP to retape VPCI during walk downs
443
132175F003770-A
WSPM015406
Stone & Webster Construction Inc
FLEETPRIDE
Batch Plant - photoeye, tubing, solenoid

H-25



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



444
132175-P110.05
WSPM003924
WECTEC Global Project Services, Inc.
FLOWSERVE PUMP DIVISION
Inspection / Refurbishment Services for RWS and CWS Pumps and Motors
445
J132175-P810.02
WSPM009809
Stone & Webster Construction Inc
FLOWSERVE PUMP DIVISION
RWS Well Water Make-up Pump
446
J132175-P810.03
WSPM010147
Stone & Webster Construction Inc
FLOWSERVE PUMP DIVISION
River Water & Screen Wash Pumps|
447
J132175-P110.01
WSPM009820
Stone & Webster Construction Inc
FLOWSERVE US INC
RWS Well Water Transfer Pumps
448
132175F001649
WSPM004458
Stone & Webster Construction Inc
FORTRANS INC
Batch Plant - Increase funding PO# 714067 - Fortrans - For one Year
449
132175F003116
WSPM010098
Stone & Webster Construction Inc
FORTRANS INC
Batch Plant - pH Sensors
450
132175F003131
WSPM010097
Stone & Webster Construction Inc
FORTRANS INC
Batch Plant - PLC for pH System
451
J132175-D700.01
WSPM010150
Stone & Webster Construction Inc
GAFFEY
Crane Rail Procurement
452
132175-EW06.01
WSPM015608
Stone & Webster Construction Inc
GENERAL CABLE INDUSTRIES
Class 1E Low Voltage CRDM and DRPI Cables
453
132175-EW21.01
WSPM015640
Stone & Webster Construction Inc
GENERAL CABLE INDUSTRIES
Instrumentation and Thermocouple Extension Cables
454
132175-EW60.01
WSPM015641
Stone & Webster Construction Inc
GENERAL CABLE INDUSTRIES
Class 1E Control Cables
455
132176-EW21.01
WSPM015642
Stone & Webster Construction Inc
GENERAL CABLE INDUSTRIES
Instrumentation and Thermocouple Extension Cables
456
132176-EW60.01
WSPM015644
Stone & Webster Construction Inc
GENERAL CABLE INDUSTRIES
Class 1E Control Cables
458
132175F001078
WSPM004622
Stone & Webster Construction Inc
GENERAL EQUIPMENT AND SUPPLY
Establish a Blanket PO for Refurbishment of Site Equipment: Print Shacks, Fire Cabinets & Gang Boxes
459
132175F003970
WSPM004669
Stone & Webster Construction Inc
GENERAL EQUIPMENT AND SUPPLY
Rebar bender to be used to allow ANnex Construction to field fabricate/bend rebar due to extensive E&DCR issues
460
132175F005560
WSPM004896
WECTEC Global Project Services, Inc.
GENERAL EQUIPMENT AND SUPPLY
REBAR BENDER 2 YEAR RENTAL FOR USE AT ANNEX 3/4 TRANSFORMER 3/4 AND DIESEL GENERATORS. ASSIST IN FIELD FABRICATION/BEND REBAR
461
132175F005616
WSPM004882
WECTEC Global Project Services, Inc.
GENERAL EQUIPMENT AND SUPPLY
ROD CHOMPER FOR ANNEX 3/4 - TRANSFORMER 3/4 - FABRICATION OF REBAR 2 YEAR RENTAL

H-26



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



462
132175F005715
WSPM004891
WECTEC Global Project Services, Inc.
GENERAL EQUIPMENT AND SUPPLY
Temporary Construction - BOP - Circulating Water System
463
WVG3000751
WVG3000751
Stone & Webster Construction Inc
GENERAL EQUIPMENT AND SUPPLY
Rebar Equipment for Fabrication Shop
464
WVG3001340
WVG3001340
WECTEC Global Project Services, Inc.
GENERAL EQUIPMENT AND SUPPLY
Required Equipment for sheet metal fab shop. (Safety issue)
465
132175-PY55.00
WSPM003914
Stone & Webster Construction Inc
GENERAL RUBBER CORPORATION
PY55 - Non-Metallic Expansion Joints
466
132176-PY55.00
WSPM003141
Stone & Webster Construction Inc
GENERAL RUBBER CORPORATION
PY55 - Non-Metallic Expansion Joints
467
WVG3000410
WVG3000410
WECTEC Global Project Services, Inc.
GEORGIA POWER CO
TRANSFER OF FUNDS FROM 885042-3P
468
4500721598
4500721598
WECTEC Global Project Services, Inc.
GERALD JONES FORD LINCOLN
Equipment Repair Parts and Service
469
132175-E108.01
WSPM003355
Stone & Webster Construction Inc
GEXPRO
Well Water Cable Tray|
470
132175-E112.03
WSPM003354
Stone & Webster Construction Inc
GEXPRO
Fittings|
479
132175F001339
WSPM004604
Stone & Webster Construction Inc
GEXPRO
Gexpro Min/Max Warehouse Services
512
WVG3001317
WVG3001317
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for HVAC thermostat to control temperature in various rooms for bldg 315
513
WVG3001341
WVG3001341
WECTEC Global Project Services, Inc.
GEXPRO
NI4 Scaffold Consumables
514
WVG3001502
WVG3001502
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 3 transformer yard, work package SV3-ZAS-ERW-EL3254
515
WVG3001508
WVG3001508
WECTEC Global Project Services, Inc.
GEXPRO
MATERIAL NEEDED FOR BOXES AND DOORS.
517
WVG3000869
WVG3000869
WECTEC Global Project Services, Inc.
GEXPRO
BOP TEMPORARY CONSTRUCTION AID FOR BATHRROOMS/ USE ON ENTIRE SITE
518
WVG3001025
WVG3001025
WECTEC Global Project Services, Inc.
GEXPRO
MATERIAL LEFT IN PLACE ANNEX 3 CONDUIT INSTALLATION FOR BATTERY MONITORS IE WP SV3-4031-ERW-861316,861317,861318 & 861319

H-27



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



519
WVG3001206
WVG3001206
WECTEC Global Project Services, Inc.
GEXPRO
Crimp Tool Force Gauge, Panduit (Huskie)
520
WVG3001266
WVG3001266
WECTEC Global Project Services, Inc.
GEXPRO
HVAC area heater to be left in place for ZRS diesel generator room for building 315
521
WVG3001284
WVG3001284
WECTEC Global Project Services, Inc.
GEXPRO
20”X24”X4” PLEATED PRE-FILTER 91-956
522
WVG3001288
WVG3001288
WECTEC Global Project Services, Inc.
GEXPRO
120 VOLT LED LIGHTING TO ILLUMINATE SHELVING IN SHOP IN THE 184 BLDG.
523
WVG3001307
WVG3001307
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 3 ELS Transformer Yard Lighting, work package SV3-0000-ELW-EL7683
524
WVG3001324
WVG3001324
WECTEC Global Project Services, Inc.
GEXPRO
Integrated Head Package (IHP) Consumables
525
WVG3001327
WVG3001327
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for selector switch to control HVAC fans and louvers for bldg 315
526
WVG3001351
WVG3001351
WECTEC Global Project Services, Inc.
GEXPRO
Material left in place. Replacement Multiple Switch Contactors on PWS Skid Building 315 WP# SV0-PWS-EWW-EL3561 / SV0-010-EWW-861550
527
WVG3001352
WVG3001352
WECTEC Global Project Services, Inc.
GEXPRO
(IHP) AIR COMPRESSOR ELECTRICAL CONNECTION
528
WVG3001356
WVG3001356
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for dowel in rebar into concrete for the Unit 3 WWRB housekeeping pad per design, work package SV3-WWS-CCW-CV3367
529
WVG3001360
WVG3001360
WECTEC Global Project Services, Inc.
GEXPRO
to be used for bldg 315 temporary well pump 3 & 4 VFD, work package SV0-RWS-T4Y-001
530
WVG3001365
WVG3001365
WECTEC Global Project Services, Inc.
GEXPRO
To be used for bldg 315, relay to control HVAC fans and louvers
531
WVG3001372
WVG3001372
WECTEC Global Project Services, Inc.
GEXPRO
Temporary Construction Aid - Annex 3 Sikaflex to seal formwork & concrete placement WP# SV3-

H-28



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
4051-CCW-CV8905, SV3-4041-CCW-CV3182
532
WVG3001381
WVG3001381
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 3 ELS Transformer Yard Lighting, work package SV0-0000-ELW-EL7397
533
WVG3001395
WVG3001395
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for caulking the gap seals for IE rooms 20501, 20502 and 20503, work package SV3-2050-SSW-CV8966
534
WVG3001398
WVG3001398
WECTEC Global Project Services, Inc.
GEXPRO
VpCI 126 BAGS FOR PM SCHEDULED ACTIVITYS
535
WVG3001399
WVG3001399
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for bldg 315, SV0-ZRS-JD-MCP001, work package SV0-EDS-11-IT002
536
WVG3001400
WVG3001400
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for BLDG 315 SV0-ZRS-JD-MCP001, work package SV0-JQ70-JDB-800000
537
WVG3001420
WVG3001420
WECTEC Global Project Services, Inc.
GEXPRO
Equipment for M&TE
538
WVG3001443
WVG3001443
WECTEC Global Project Services, Inc.
GEXPRO
Mechanical Modules (R251, R261, R219 & KB33) Grounding Clamps for Cable Trays
539
WVG3001489
WVG3001489
WECTEC Global Project Services, Inc.
GEXPRO
fLOOR SWEEP ROY FIELDING PTT: 395
540
WVG3001495
WVG3001495
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 3 ELS Transformer Yard Lighting, work package SV0-0000-ELW-EL7397
541
WVG3001497
WVG3001497
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 3 Transformer yard, work package SV3-0000-ELW-EL7397
542
WVG4001241
WVG4001241
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 4 ZAS transformer yard lighting, work package SV0-0000-EGW-EL3556
543
WVG4001250
WVG4001250
WECTEC Global Project Services, Inc.
GEXPRO
Material to be left in place and used for Unit 4 ELS Transformer Yard Lighting, work package SV4-0000-

H-29



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
EL-001
544
WSV3B00033
WSV3B00033
WECTEC Global Project Services, Inc.
GEXPRO
132175-E112.06-REL-022 Non-Safety Electrical Blanket Order
545
WSV3A00003
WSV3A00003
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for replacement of SV0-PWS-JE-LT506B, work package SV0-YFS-01-IT002/SV0-YFS-01-IT003
546
WSV3M00010
WSV3M00010
WECTEC Global Project Services, Inc.
GEXPRO
to be left in place and used for yard fire water tank temperture transmitter, work package SV0-YFS-01-1T001
548
132175F005235
WSPM004946
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
HEPA Filters for PAPR’s
549
132175F005336
WSPM004938
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Annex 3 / Transformer Blue Recycling Tilt Trash Bin
550
132175F005767
WSPM010121
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
sink and shelves used for cleaning station in bldg.142A and batch patch
551
132175F006003
WSPM010209
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Totes to carry work packages. NI3 Structural group.
552
132175F006018
WSPM010210
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
KEY BOX-12-1/64”H X 8-3/16”WX 2 3/4” D-40 KEY CAP. STEEL FOR TURBINE #3 ELECTRICIANS
553
132175F006021
WSPM010211
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Locks to be used for equipment clearance and tagging during the initial test program
554
132175F006022
WSPM010022
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Temporary Construction - Bolting @ Building 315 - BOP
555
WVG3000013
WVG3000013
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Band saw coolant for cutting metal
556
WVG3000219
WVG3000219
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Computer Presentation Workstation
557
WVG3000355
WVG3000355
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Replacement Brush Heads, Cart Trash Bag
558
WVG3000391
WVG3000391
Stone & Webster Construction Inc
GLOBAL EQUIPMENT CO INC - INDL
Material to be used as temporary supply and return for the climate control of installed permanent plant equipment
559
WVG3000699
WVG3000699
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
Annex 3 Night Shift - Heaters used in Battery Rooms

H-30



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



560
WVG3000789
WVG3000789
WECTEC Global Project Services, Inc.
GLOBAL EQUIPMENT CO INC - INDL
to be used on the Unit 3 Initial Energization Temp Air for heating battery rooms
561
132175F004659
WSPM010547
Stone & Webster Construction Inc
GRAPHIC PRODUCTS INC
labeling materials for Preventive Maintenance temporay Construction activities
562
132175F005614
WSPM009786
WECTEC Global Project Services, Inc.
GRAPHIC PRODUCTS INC
PM Labeling team to labeling supplies to label material at the 315 Bldg. in prep to turn bldg over the SNC .
563
132175-ER01.02
WSPM002959
Stone & Webster Construction Inc
GRAYBAR ELECTRIC COMPANY INC
Non-Class 1E Cable Tray and Fittings for Mechanical Modules
564
132176-ER01.02
WSPM003960
Stone & Webster Construction Inc
GRAYBAR ELECTRIC COMPANY INC
Non-Class 1E Cable Tray and Fittings for Mechanical Modules
565
132175F000828 REL 027
WSPM004646
WECTEC Global Project Services, Inc.
GRIMCO INC
BLANKET ORDER TRANSFER 831033 3P
566
132175F000828 REL 029
WSPM004647
WECTEC Global Project Services, Inc.
GRIMCO INC
BLANKET ORDER TRANSFER 831033 3P
567
132175F005362
WSPM009721
WECTEC Global Project Services, Inc.
GRIMCO INC
Plexi-Glass, Paint Shop, Robert Hutto.
568
132175-E054.03
WSPM010277
Stone & Webster Construction Inc
GUTOR Electronic LLC
UPS Systems for RWI & TSC
569
4500712914
4500712914
WECTEC Contractors Inc
H&E EQUIPMENT SERVICES INC
Spare Parts
570
4500714034
4500714034
WECTEC Contractors Inc
H&E EQUIPMENT SERVICES INC
Spare Parts
571
4500714077
4500714077
WECTEC Contractors Inc
H&E EQUIPMENT SERVICES INC
Spare Parts
572
4500721413
4500721413
WECTEC Global Project Services, Inc.
H&E EQUIPMENT SERVICES INC
Equipment Repair Parts and Service
573
4500722095
4500722095
WECTEC Global Project Services, Inc.
H&E EQUIPMENT SERVICES INC
Equipment Repair Parts and Service
574
4500722207
4500722207
WECTEC Global Project Services, Inc.
H&E EQUIPMENT SERVICES INC
Equipment Repair Parts and Service
575
WVG3001500
WVG3001500
WECTEC Global Project Services, Inc.
H&E EQUIPMENT SERVICES INC
Parts for unit 102079 hydraulic valve repair
576
132175F004675
WSPM010791
Stone & Webster Construction Inc
H&H FLEET LLC
H&H Fleet Specialist, for service and repairs of Freightliner Trucks on rent from Charlie Brown Trucking, Blanket PO. $100,000.
577
132175-PL03.01
WSPM010449
Stone & Webster Construction Inc
HANSON PRESSURE PIPE INC
Shop Fabricated 120” Pipe and Supports

H-31



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



578
132176-PL03.01
WSPM010454
Stone & Webster Construction Inc
HANSON PRESSURE PIPE INC
Shop Fabricated 120” Pipe and Supports
579
WVG3000408
WVG3000408
WECTEC Global Project Services, Inc.
HARTFORD STEAM BOILER INSPC & INSR
TRANSFER OF FUNDS FROM 661204-OP
580
784064
WSPM004355
Stone & Webster Construction Inc
HAT D TRANSPORTATION CO
Add Funds to PO# 784064
581
132175F001704
WSPM004400
Stone & Webster Construction Inc
HAT D TRANSPORTATION CO
Batch Plant - Increase funding PO 784064 - Hat D - Pigs - one year
582
132175F003943
WSPM004493
Stone & Webster Construction Inc
HAT D TRANSPORTATION CO
Batch Plant - Add Funds to PO 892531 - Hat D - Balance due on rental
583
132175F000240
WSPM004658
Stone & Webster Construction Inc
HAVENS LEASING LLC
Batch Plant - Add funds to PO for Pig rental - PO 775650
584
132175F003002
WSPM010011
Stone & Webster Construction Inc
H&E
MANITOWOC 16000 DASH LIGHTS
585
132175F004958
WSPM004925
WECTEC Global Project Services, Inc.
H&E
PO covering $100,000 for crane parts, H&E Equipment Services, 10710 Nations Ford Rd, Charlotte NC 28273. POC Mickey Caldwell 704-504-2870.
586
4500721414
4500721414
WECTEC Global Project Services, Inc.
H&E
Equipment Repair Parts and Service
587
4500721416
4500721416
WECTEC Global Project Services, Inc.
H&E
Equipment Repair Parts and Service
588
4500722494
4500722494
WECTEC Global Project Services, Inc.
H&E
Equipment Repair Parts and Service
589
132175F001194
WSPM011108
Stone & Webster Construction Inc
HERC RENTALS INC
Breaking Concrete at Unit 3, Hyd. Hammer #1200 Rental for one Month
590
132175F002406
WSPM004389
Stone & Webster Construction Inc
HERC RENTALS INC
Add Funds to PO for Parts and Labor on PO 814259 Repair of Unit 094320007 Wacker from Hertz
591
132175F004097
WSPM004853
Stone & Webster Construction Inc
HERC RENTALS INC
4 light plants to re-place units # 62062, 63198, 63246, 63269. Rental for 36 months.
592
132175F004182
WSPM004874
Stone & Webster Construction Inc
HERC RENTALS INC
Requesting $1540.20 for damage to Genie 32’ platform lift Ser# GS3214A-135726.
593
132175F004188
WSPM004873
Stone & Webster Construction Inc
HERC RENTALS INC
Requesting $3,401.28 for damages to Hertz 85’ boom lift, Ser#

H-32



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
0300162565.
594
132175F004567
WSPM004837
Stone & Webster Construction Inc
HERC RENTALS INC
Request $9,216.22 for site damage to Hertz 135’ boom lift Equip # 481-95-0027.
595
132175F004610
WSPM003071
Stone & Webster Construction Inc
HERC RENTALS INC
CLEANING BEFORE AND AFTER POURS ANNEX 3 AND TRANSFORMER AREA
596
132175F005562
WSPM010129
WECTEC Global Project Services, Inc.
HERC RENTALS INC
Temporary Construction Equipment Rental Excavation for Balance of Plant
597
132175F005564
WSPM004895
WECTEC Global Project Services, Inc.
HERC RENTALS INC
PO for ongoing Hertz JLG Training (started March 15, 2016)
598
132175F005893-REL-18
WSPM004714
WECTEC Global Project Services, Inc.
HERC RENTALS INC
HERTZ DIESEL HEATERS
599
132175F005893-REL-19
WSPM010614
WECTEC Global Project Services, Inc.
HERC RENTALS INC
HEATING AND AIR UNIT FOR CONCRETE COMPLEX
600
132175F006002
WSPM004719
WECTEC Global Project Services, Inc.
HERC RENTALS INC
Flexible HVAC Duct needed from Herc Rentals for a/c heating units Area(s) of the Plant to be used: NI3 AND NI4, AND 20” X 500’ of the Duct will be used for the new hire conex /ready roof building where the python safety tethering is done
601
4500714189
4500714189
WECTEC Contractors Inc
HERC RENTALS INC
Spare Parts
602
4500717517
4500717517
WECTEC Contractors Inc
HERC RENTALS INC
PARTS
603
WVG3005893-REL-17
WVG3005893
WECTEC Global Project Services, Inc.
HERC RENTALS INC
Heaters for the MAB
604
132175-J600.04 REL 5
WSPM007258
WECTEC Global Project Services, Inc.
HILTI CORP
Safety Related Hilti Product Blanket Order Release
605
132175-D500.52
WSPM011171
WECTEC Global Project Services, Inc.
HILTI INC
Hilti Material for Building 315
606
132175F004477
WSPM010487
Stone & Webster Construction Inc
HILTI INC
Replacement Battery & Charger for PS200 Hilti Rebar Finder
607
132175F006027
WSPM010026
WECTEC Global Project Services, Inc.
HILTI INC
HILTI X-SCAN PS 1000-B REBAR SCANNER NEEDED BY TURBINE #3 PIPEFITTERS
608
132175-J600.04 REL 2
WSPM010077
WECTEC Global Project Services, Inc.
HILTI INC
Safety Related Hilti Product Blanket Order Release
609
132175-J600.04 REL 3
WSPM010290
WECTEC Global Project Services, Inc.
HILTI INC
Safety Related Hilti Product Blanket Order Release

H-33



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



610
132175-J600.04 REL 4
WSPM007193
WECTEC Global Project Services, Inc.
HILTI INC
Safety Related Hilti Products Release
611
J132176-FPR134-00029
WSPM010263
Stone & Webster Construction Inc
HILTI INC
Construction Aid Anchors Unit 4 NI Mudmat
612
WVG3000210
WVG3000210
WECTEC Global Project Services, Inc.
HILTI INC
Temporary Anchor Bolts for securing unit 4 CA03 Module panels
613
WVG3000508
WVG3000508
Stone & Webster Construction Inc
HILTI INC
CA03 Module Temporary Anchor Bolts
614
WVG3000852
WVG3000852
WECTEC Global Project Services, Inc.
HILTI INC
PERMANENT PLANT MATERIAL FOR THE 315 BLDG
615
WVG4000267
WVG4000267
WECTEC Global Project Services, Inc.
HILTI INC
Material left in place for Unit 4 Turbine Building at 120’ elevation for securing the DTS-MS-04A equipment in place, work package SV4-2040-CEW-CV5843
616
WVG3000678
WVG3000678
WECTEC Global Project Services, Inc.
H-MAC SYSTEMS INC
Equipment to be used on the Unit 3 Initial Energization Temp Air for Battery Rooms
617
132175F004475
WSPM005009
Stone & Webster Construction Inc
HOIST AND CRANE SYSTEMS INC
Hoist and Crane Systems, request $50,000 for annual inspections of overhead cranes in 167 and 184 Bldg.
618
132175F004475A
WSPM004868
Stone & Webster Construction Inc
HOIST AND CRANE SYSTEMS INC
Hoist and Crane Systems, request $50,000 for annual inspections of overhead cranes in 167 and 184 Bldg.
619
826508-3P
WSPM004964
Stone & Webster Construction Inc
HOIST AND CRANE SYSTEMS INC
The Commissioning, Inspection, Testing and Annual Inspection of the 2-3 Ton Overhead Cranes in the 184 Bldg
620
132175F006009
WSPM010076
WECTEC Global Project Services, Inc.
HOLLOWAY HOUSTON INC
lifting of the Containment Vessel Cover(s) for Unit 3 & Unit 4
621
132175F006052
WSPM010206
WECTEC Global Project Services, Inc.
HOLLOWAY HOUSTON INC
Rental of 800T G2160 Wide body shackle to be used for the lifting of CA20
622
132175-EF04.01
WSPM002948
WECTEC Global Project Services, Inc.
HOSE-MCCANN COMMUNICATIONS
Sound Power Phone Equipment
623
132176-EF04.01
WSPM003113
WECTEC Global Project Services, Inc.
HOSE-MCCANN COMMUNICATIONS
Sound Power Phone Equipment

H-34



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



624
WVG3001482
WVG3001482
WECTEC Global Project Services, Inc.
HSG CONSTRUCTORS LLC
BOP TEMPORARY CONSTRUCTION AID MATERIAL FOR TRANSFORMER UNIT 4 WP# 850019
625
132175F000671
WSPM010563
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Unit 3 Turbine Building Grounding Terminations Material
626
132175F000807
WSPM009895
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Material for SES Ductbank from Northeast of Diesel to North of Transformer Area
627
132175F000831
WSPM010568
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
MAB Electrical Supplies
628
132175F000911
WSPM009896
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Phase 2 ZFS and ZBS Ductbank Material
629
132175F001430
WSPM009935
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Permanent Plant Materials for Systems CWS/RWS duct banks
630
132175F001784
WSPM003592
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Washdown Heaters
631
132175F001858
WSPM009824
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
For use in the NOI 25 tents
632
132175F002950
WSPM010009
Stone & Webster Construction Inc
HUNT ELECTRIC SUPPLY CO INC
Temporary Power Site Wide
633
132175F005259
WSPM004945
WECTEC Global Project Services, Inc.
HUNT ELECTRIC SUPPLY CO INC
Modules Temporary Lighting
634
J132175-C107.02
WSPM009756
Stone & Webster Construction Inc
HYDRO CONDUIT CORP
Reinforced Concrete Pipe|
635
J132175-C107.03
WSPM002189
Stone & Webster Construction Inc
HYDRO CONDUIT CORP
Reinforced Concrete Pipe
636
J132175-C107-01
WSPM002190
Stone & Webster Construction Inc
HYDRO CONDUIT CORP
Reinforced Concrete Pipe Class III, Class V|
637
132175F002278
WSPM010053
Stone & Webster Construction Inc
HYTORC
For Setting WATERBOXES/Temp For Boilers
638
132175F005637
WSPM003630
WECTEC Global Project Services, Inc.
HYTORC
HYTORC TOOLS NEEDED FOR THE CONNECTIONS OF TI4 CONDENSER WATER-BOXES AND ASSOCIATED 120” CROSSOVER PIPING
639
132175F001943
WSPM004444
Stone & Webster Construction Inc
I & I SLING INC
Extension of inspection / certification services for rigging from I&I Slings with additional funds added to BPO 857339
640
132175F002252
WSPM015071
Stone & Webster Construction Inc
I & I SLING INC
Rigging Sling for Modules

H-35



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



641
132175F003694
WSPM004484
Stone & Webster Construction Inc
INDUSTRIAL RUBBER AND SUPPLY
Temporary Material For Flushing The Water Lines
642
132175F001013-REL001
WSPM010112
Stone & Webster Construction Inc
INFORMATION AND COMPUTING SVCS INC
Est. Blanket PO for ICS - Employee Badges not to exceed $80,000 or 2 years
643
132175F001013-REL002
WSPM010484
Stone & Webster Construction Inc
INFORMATION AND COMPUTING SVCS INC
Est. Blanket PO for ICS - Employee Badges not to exceed $80,000 or 2 years
644
132175F001013-REL003
WSPM009978
WECTEC Global Project Services, Inc.
INFORMATION AND COMPUTING SVCS INC
Est. Blanket PO for ICS - Employee Badges not to exceed $80,000 or 2 years
645
132175F004847
WSPM015455
Stone & Webster Construction Inc
INFORMATION AND COMPUTING SVCS INC
Equential Clocks for Operation Needs
646
132175F005110
WSPM004831
WECTEC Global Project Services, Inc.
INFORMATION AND COMPUTING SVCS INC
Ribbon and Cleaner kits for Badge Printers ZXP3 and P120i
647
132175F005724
WSPM004905
WECTEC Global Project Services, Inc.
INTEGRASERV INC
to be used for labeling of received material in warehouse
648
132175F000606
WSPM015391
Stone & Webster Construction Inc
INTERGRAPH SOLUTIONS GROUP
Training for Onsite SEG Civil Eng.
649
132175F002608
WSPM004499
Stone & Webster Construction Inc
INTERGRAPH SOLUTIONS GROUP
GT Strudl Training Courses for Field Rigging Engineers
650
WVG3001144
WVG3001144
WECTEC Global Project Services, Inc.
INTERTEK TECHINCAL SERVICES INC
Module - 3rd Party Inspection / Labor Surveillance
651
132175F005721
WSPM004906
WECTEC Global Project Services, Inc.
JACKIE B LOVETT TRUCKING CO INC
Payment of invoice for Lovett Trucking
652
WVG3000427
WVG3000427
Stone & Webster Construction Inc
JACKIE B LOVETT TRUCKING CO INC
Premium for Excess Liability Insurance Coverage - Jackie B. Lovett Trucking Co. Inc
653
700135-3M
WSPM004316
Stone & Webster Construction Inc
JANPRO OF SOUTHEAST GEORGIA
Extend PO700135 Jan Pro, add additional funding and not to exceed order
654
132175F002514
WSPM010192
Stone & Webster Construction Inc
L B FOSTER RAIL TECHNOLOGIES CORP
HLD Rail Lubricant
655
WVG3000966
WVG3000966
Stone & Webster Construction Inc
LAKESIDE REFRIGERATION
Lakeside Refrigeration Services
656
132175F000815
WSPM010566
Stone & Webster Construction Inc
LANDRUM SUPPLY CO
TEMPORARY CONSTRUCTION - Lift Station Pump
657
132175F001090
WSPM009869
Stone & Webster Construction Inc
LANDRUM SUPPLY CO
TEMPORARY CONSTRUCTION - Batch Plant Condensate Pumps
658
132175F001990
WSPM010164
Stone & Webster Construction Inc
LANDRUM SUPPLY CO
TEMPORARY CONSTRUCTION - Sump Pumps

H-36



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



659
132175F004104
WSPM010637
Stone & Webster Construction Inc
LANDRUM SUPPLY CO
Construction Aid - BOP Plumbers
660
132175F004922
WSPM009893
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - Building 304 Plumbing
661
132175F005095
WSPM009976
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction Aid - Building 304 Plumbing
662
132175F005523
WSPM009750
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - BOP - Plumbing - 120 building/Batch Plant
663
132175F005689
WSPM004888
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - BOP Plumbing & Testing
664
132175F005896
WSPM010136
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - BOP - Batch Plant - Ice House and Demin Skid
665
132175F005940
WSPM002998
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - Grinder Pump - Sanitary Sewer
666
132175F005952
WSPM010197
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - BOP - Plumbing for Site Restrooms
667
132175F006082
WSPM010214
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
Temporary Construction - Plumbing for BOP
668
WVG3000714
WVG3000714
WECTEC Global Project Services, Inc.
LANDRUM SUPPLY CO
BOP TEMPORARY CONSTRUCTION AID FOR USE AT 129 Bathroom Trailer
669
132175-C202A
WSPM003274
Stone & Webster Construction Inc
LANIER MUNICIPAL SUPPLY CO INC
Yard Fire System Valves
670
132175F005409
WSPM003575
WECTEC Global Project Services, Inc.
LEICA GEOSYSTEMS INC
Site Survey Support
671
4500715839
4500715839
WECTEC Contractors Inc
LEICA GEOSYSTEMS INC
PARTS
672
132175F000532
WSPM004563
Stone & Webster Construction Inc
LIFTING GEAR HIRE CORP
Skid Pan - Scaffolds
673
132175F000782
WSPM009868
Stone & Webster Construction Inc
LIFTING GEAR HIRE CORP
(3) Skip Pans for Unit 3, Jim Schaible
674
132175F003082
WSPM004467
Stone & Webster Construction Inc
LIFTING GEAR HIRE CORP
Skip Pans for Annex and Transformer Unit 3
675
132175F003124
WSPM004477
Stone & Webster Construction Inc
LIFTING GEAR HIRE CORP
Removing Elevated Scrap Trash/Waste During Construction Davis/Peel
676
132175F005654
WSPM014720
WECTEC Global Project Services, Inc.
LIFTING GEAR HIRE CORP
Rental equipment for CA03 Installation, work package SV3-CA03-MHH-005
677
WVG3000737
WVG3000737
Stone & Webster Construction Inc
LIFTING GEAR HIRE CORP
Rental of air skate load module system, steel gantries and

H-37



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
associated rigging equipment to be used for skidding the (8) CWS pumps into bldg 184
678
132175-D800.03
WSPM003366
WECTEC Global Project Services, Inc.
LIGHTNING LIFT PRODUCTS
Portable Scissor Lift
680
WVG4001238
WVG4001238
WECTEC Global Project Services, Inc.
LINCOLN STRUCTURAL SOLUTIONS
Material to be left in place and used for installation of TB05 (CA81) for Unit 4 Turbine building, work package SV4-2050-SSW-CV1823
681
WVG3000122
WVG3000122
Stone & Webster Construction Inc
LINE EQUIPMENT SALES CO INC
Electrical PPE Testing - Line Equipment Sales - NTE $2,500.00
682
132175F001286
WSPM004610
Stone & Webster Construction Inc
LOWE SPECIALIZED TRANSPORT LLC
TRAILERS
683
132175F002837
WSPM004416
Stone & Webster Construction Inc
LOWE SPECIALIZED TRANSPORT LLC
FLATBED TRAILERS MUST BE DOT READY-FOR WAREHOUSE ISSUING-DURATION OF 24 MONTHS
684
132175-PY30.02
WSPM000107
WECTEC Global Project Services, Inc.
MACKSON INC
Single Stage Orifice Plate (PY30) for Various NSR Applications
685
132175-PY31.01
WSPM000106
WECTEC Global Project Services, Inc.
MACKSON INC
Multi-Stage Orifices (PY31) for Various NSR Applications
686
132176-PY30.02
WSPM000837
WECTEC Global Project Services, Inc.
MACKSON INC
Single Stage Orifice Plate (PY30) for Various NSR Applications
687
132176-PY31.01
WSPM000836
WECTEC Global Project Services, Inc.
MACKSON INC
Multi-Stage Orifices (PY31) for Various NSR Applications
688
WSV3B00038
WSV3B00038
WECTEC Global Project Services, Inc.
MACKSON INC
B31.1 Bolts Safety Class D - Blanket Order Release
689
132175-SS01.48
WSPM010856
WECTEC Global Project Services, Inc.
MACKSON NUCLEAR LLC
Structural Steel Materials for Anchor Plate Fabrication
690
4500675740
4500675740
Westinghouse Electric Company LLC
MANGIAROTTI SpA
Instrumented Cover Invoicing
691
132175F005485
WSPM004900
WECTEC Global Project Services, Inc.
MAR COR PURIFICATION INC
Water Quality lab no bldg no# PM temp.const. activity. mar cor polisher sys. for sampling- parts, Installation service “as ordered for VC Summer 132177F010401 “
692
132175F005578
WSPM004948
WECTEC Global Project Services, Inc.
MAR COR PURIFICATION INC
Faucet-PVC 3/8” Deck Mount by Mar Cor to be used w/ DI Polishing system for the water Quality Lab
693
132175F005861
WSPM004709
WECTEC Global Project Services, Inc.
MAR COR PURIFICATION INC
UV Disinfection unit for the DI Polishing system for Water Quality Lab vendor will install on site .

H-38



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



694
132175F000245
WSPM003726
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
#57 Stone to be used as construction aid material for bedding, backfill and leveling of manholes and duct bank associated with Phase 1 undergrounds-Work Package SV3-ECS-CCW-CV1902
695
132175F000352-004-REL
WSPM009876
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
GABC Stone for site support, Blanket Order, Rick Prohaska, 132175F000352 Release 4
696
132175F000352-005-REL
WSPM009878
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
697
132175F000352-006-REL
WSPM009881
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
698
132175F000352-007-REL
WSPM009988
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
699
132175F000352-008-REL
WSPM009990
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
700
132175F000352-009-REL
WSPM009939
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
701
132175F000352-010-REL
WSPM009768
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
702
132175F000352-011-REL
WSPM009773
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
703
132175F000352-012-REL
WSPM009776
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
704
132175F000352-013-REL
WSPM009825
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
705
132175F000352-014-REL
WSPM009839
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
706
132175F000352-015-REL
WSPM010167
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
707
132175F000352-016-REL
WSPM010173
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
708
132175F000352-017-REL
WSPM010177
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
709
132175F000352-020-REL
WSPM010181
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
710
132175F000352-021-REL
WSPM010047
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
711
132175F000352-022-REL
WSPM010057
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration

H-39



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



712
132175F000352-023-REL
WSPM010021
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
713
132175F000352-024-REL
WSPM010004
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
714
132175F000352-025-REL
WSPM010008
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
715
132175F000352-026-REL
WSPM010099
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
716
132175F000352-027-REL
WSPM010100
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
717
132175F000352-028-REL
WSPM010101
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
718
132175F000352-029-REL
WSPM010106
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
719
132175F000352-030-REL
WSPM010060
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
720
132175F000352-031-REL
WSPM010065
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
721
132175F000352-032-REL
WSPM010357
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
722
132175F000352-033-REL
WSPM010359
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
723
132175F000352-034-REL
WSPM010360
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
724
132175F000352-035-REL
WSPM010362
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
725
132175F000352-036-REL
WSPM010366
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
726
132175F000352-037-REL
WSPM010370
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
727
132175F000352-038-REL
WSPM010371
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
728
132175F000352-039-REL
WSPM010373
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
729
132175F000352-040-REL
WSPM010439
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
730
132175F000352-041-REL
WSPM010274
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
731
132175F000352-042-REL
WSPM010282
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration

H-40



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



732
132175F000352-043-REL
WSPM010283
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
733
132175F000352-044-REL
WSPM010285
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
734
132175F000352-045-REL
WSPM010622
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
735
132175F000352-046-REL
WSPM010636
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
736
132175F000352-047-REL
WSPM010639
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
737
132175F000352-048-REL
WSPM010650
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
738
132175F000352-049-REL
WSPM010652
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
739
132175F000352-050-REL
WSPM010654
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
740
132175F000352-051-REL
WSPM003722
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
741
132175F000352-052-REL
WSPM010537
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
742
132175F000352-053-REL
WSPM009983
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
743
132175F000352-055-REL
WSPM009855
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
744
132175F000352-056-REL
WSPM009856
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
745
132175F000352-058-REL
WSPM009787
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
746
132175F000352-059-REL
WSPM009790
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
747
132175F000352-061-REL
WSPM010140
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
748
132175F000352-062-REL
WSPM010207
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
749
132175F000929
WSPM004630
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
NOI 25 - GABC Additional Laydown
750
132175F00352-019-REL
WSPM003708
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
751
132175F005521
WSPM003566
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
GAB for Building 305, Rick Prohaska
752
J132175-FPR13-00148
WSPM002115
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Aggregate - Road Base

H-41



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



753
J132175-FPR13-00547
WSPM004372
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Aggregate - Road Base
754
J132175-FPR13-00597
WSPM004373
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
GABC - Aggregate - Road Base
755
J132175-FPR13-00657
WSPM004374
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Aggregate #57 Stone
756
J132175-FPR14-00048
WSPM002108
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Aggregate - #57 Stone
757
J1321760003-FPR124-00017
WSPM002275
Stone & Webster Construction Inc
MARTIN MARIETTA MATERIALS
Crusher Run - No Particles Greater Than 1-1/2” - Per GDOT Section 815,
758
WVG3000039
WVG3000039
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
#57 stone for BOP-Cable Trench Sys & FPS backfill, F000245-REL021
759
WVG3000095
WVG3000095
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
GABC - 132175F000352-063-REL
760
WVG3000126
WVG3000126
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB - 132175F000352-REL 064
761
WVG3000285
WVG3000285
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB (132175F000352-REL065)
762
WVG3000386
WVG3000386
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
#57 stone to be used for site support, Rick Prohaska, 132175F000245
763
WVG3000387
WVG3000387
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
764
WVG3000526
WVG3000526
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
765
WVG3000723
WVG3000723
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration
766
WVG3000884
WVG3000884
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
57 stone for site support-utility installation, 132175F000245Rick Prohaska
767
WVG3001126
WVG3001126
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order F000352 REL 069 for GAB for project duration
768
WVG3001129
WVG3001129
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order F000352 REL 070 for GAB for project duration
769
WVG3001354
WVG3001354
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
#57 stone for SES/Security Infrastructure installation, blanket order, Rick Prohaska, 132175F000245

H-42



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



770
WVG3001447
WVG3001447
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order F000352 REL 071 for GAB for project duration
771
WVG3001535
WVG3001535
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
REL 072 to “Blanket Order” 132175F000352 for GAB for project duration
772
WVG3001694
WVG3001694
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
#57 stone for phased underground utility installation, Rick Prohaska, BPO 132175F000245 REL 025 WVG3001694
773
WVG3001733
WVG3001733
WECTEC Global Project Services, Inc.
MARTIN MARIETTA MATERIALS
Blanket Order for GAB for project duration 132175F000352 REL 073
774
WVG3000738
WVG3000738
Stone & Webster Construction Inc
MATHESON TRI GAS INC
Matheson Tri Gas Transferring JDE PO 801955-3P to SPMAT
775
WVG3000740
WVG3000740
WECTEC Global Project Services, Inc.
MATHESON TRI GAS INC
Open funds from F000365 transfer to new PO (Air Liquide to Matheson Tri Gas)
776
WVG300738A
WVG300738A
Stone & Webster Construction Inc
MATHESON TRI GAS INC
Matheson Tri Gas Transferring JDE PO 801955-3P to
777
132175-MH40.01
WSPM003996
Stone & Webster Construction Inc
MAZZELLA LIFTING TECHNOLOGIES INC
MH40 Monorail Hoists and Trolleys
778
132176-MH40.01
WSPM003992
Stone & Webster Construction Inc
MAZZELLA LIFTING TECHNOLOGIES INC
MH40 Monorail Hoists and Trolleys
779
WVG3000030
WVG3000030
WECTEC Global Project Services, Inc.
MAZZELLA LIFTING TECHNOLOGIES INC
equipment to be used for general rigging in the MAB-needed for CA01-07 upending, work package SV4-CA01-MHH-023
780
WVG3000249
WVG3000249
WECTEC Global Project Services, Inc.
MAZZELLA LIFTING TECHNOLOGIES INC
Equipment to be used for offloading materials at the 322 and 307 bldgs to supports RMS and PMS equipment
781
WVG3000849
WVG3000849
WECTEC Global Project Services, Inc.
MAZZELLA LIFTING TECHNOLOGIES INC
CRANE CABLE - 28MM DY34 MAX RLANG HPTP X 3050’ FOR MANITIWOC 16000 CRAWLER
782
132175F005536
WSPM004939
WECTEC Global Project Services, Inc.
MCDONOUGH CONSTRUCTION RENTALS INC
2 YEAR RENTAL - CONSTRUCTION ELEVATOR INSTALLED EAST SIDE OF TI3 & TI 4 BETWEEN COLUMNS 13-14 FOR PERSONAL & EQUIPMENT TRANSPORTATION
783
132175F002436
WSPM004409
Stone & Webster Construction Inc
MCGINTY GORDON & ASSOCIATES
Southeastern Rail Consulting Insurnace Renewal for 2014-2015

H-43



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



784
132175-C121.03
WSPM010305
Stone & Webster Construction Inc
MRC GLOBAL US INC
Transformer Pad Pipes and Caps
785
132175-C121.13
WSPM010061
Stone & Webster Construction Inc
MRC GLOBAL US INC
Casing Piping for PWS and YFS for Building 303
786
132175F001738
WSPM009850
Stone & Webster Construction Inc
MRC GLOBAL US INC
*URGENT* PIPE CAPS
787
132175F001782
WSPM011020
Stone & Webster Construction Inc
MRC GLOBAL US INC
Temporary Construction - Plumbing/Compressed Air
788
132175F003698
WSPM011061
Stone & Webster Construction Inc
MRC GLOBAL US INC
Construction Aid
789
132175F005184
WSPM009944
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction - Plumbing
790
132175F005195
WSPM009946
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction - BOP Testing
791
132175F005268
WSPM009725
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction Aid - BOP Plumbing
792
132175F005544
WSPM009754
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Nonpermanent Plant Material For Testing Purposes. NI3 Pipefitters.
793
132175F005581
WSPM009854
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction Grinder Pump Material Building 120 Restrooms
794
WVG3000059
WVG3000059
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
caps and plugs for material storage at the warehouse
795
WVG3000353
WVG3000353
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Hot Item Please Expedite If Possible. Plugs for CA20 attachment brackets. FME. Nonpermanent Plant.
796
WVG3001128
WVG3001128
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP CONSTRUCTION AID
797
WVG3001243
WVG3001243
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction Aid for Dewatering on Entire Site
798
WVG3001269
WVG3001269
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP TEMPORARY CONSTRCTION AID MATERIAL
799
132175-C913B.01
WSPM003263
Stone & Webster Construction Inc
MRC GLOBAL US INC
Underground Pipe Casings
800
132175-PL03.02
WSPM010461
Stone & Webster Construction Inc
MRC GLOBAL US INC
Victaulic Piping for CAS System
801
132176-PL03.02
WSPM010462
Stone & Webster Construction Inc
MRC GLOBAL US INC
Victaulic Piping for CAS System
802
WVG3001382
WVG3001382
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
TI3 PIPE - FOR TEMP ARGON HEADER - DANNY TAPLEY PTT 154

H-44



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



803
WVG3001391
WVG3001391
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP TEMPORARY CONSTRUCTION AID FOR UNIT RESTROOMS ON THE ENTIRE SITE
804
WVG3001392
WVG3001392
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP TEMPORARY CONSTRUCTION AID FOR BATHRROM/ ICEHOUSE/& BATCH PLANT
805
WVG3001397
WVG3001397
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
(IHP) Integrated Head Package FME Covers
806
WVG3001451
WVG3001451
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
TI3 PIPE TEMP ARGON HEADER DANNY PTT 154/TREY PTT 910
807
WVG3001468
WVG3001468
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
TI3 SS FITTINGS TEMP ARGON HEADER. DANNY TAPLEY PTT 154 / TREY PTT 910
808
132175F004416
WSPM004862
Stone & Webster Construction Inc
MCMASTER CARR SUPPLY CO
Safeguards Area
809
132175-FPR14-00247
WSPM006980
Stone & Webster Construction Inc
MERRILLS INVESTIGATIONS
Drug Detection by Canine
810
132175F005807
WSPM003011
WECTEC Global Project Services, Inc.
MFE RENTALS INC
Hardness Tester, Krautkramer MIC 10
811
132175F000369
WSPM010532
Stone & Webster Construction Inc
MID AMERICA POWERED VEHICLES CORP
CLUB CAR XRT950 PARTS
812
WVG3001249
WVG3001249
Stone & Webster Construction Inc
MID SOUTH LUMBER CO
Lumber for Construction Aids for Unit 4 Annex
813
132176-MS90.01
WSPM000919
Stone & Webster Construction Inc
MILTON CAT
Ancillary Diesel Generators
814
132175F000699
WSPM004640
Stone & Webster Construction Inc
MOBILE MINI INC
(2) Conex’s for Rebar Bender Area
815
WVG3000162
WVG3000162
Stone & Webster Construction Inc
MOBILE MINI INC
BPO to Cover All New and Existing Mobile Minis
816
132175F000530
WSPM010587
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business Items Needed until Blanket PO is placed in SmartPlant
817
132175F000576-REL001
WSPM004636
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - Est. Blanket PO in Smart Plant Replace old JDE PO 878886-3P
818
132175F000576-REL002
WSPM004637
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - Est. Blanket PO in Smart Plant Replace old JDE PO 878886-3P

H-45



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



819
132175F000576-REL004
WSPM010048
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - Est. Blanket PO in Smart Plant Replace old JDE PO 878886-3P
820
132175F000576-REL012
WSPM010480
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - Est. Blanket PO in Smart Plant Replace old JDE PO 878886-3P
821
132175F005778
WSPM004913
WECTEC Global Project Services, Inc.
MODERN BUSINESS
office furniture
822
132175F005871-B
WSPM004710
WECTEC Global Project Services, Inc.
MODERN BUSINESS
Consumables
823
WVG3000116
WVG3000116
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - 132175F000576-REL019
824
WVG3000259
WVG3000259
Stone & Webster Construction Inc
MODERN BUSINESS
BPO 132175F000576 Marker Boards
825
WVG3000485
WVG3000485
Stone & Webster Construction Inc
MODERN BUSINESS
124 War Room
826
WVG3000636
WVG3000636
Stone & Webster Construction Inc
MODERN BUSINESS
Modern Business - Est. Blanket PO in Smart Plant Replace old JDE PO 878886-3P
827
WVG3000706
WVG3000706
Stone & Webster Construction Inc
MODERN BUSINESS
Stackable Chairs for RM 4 @ Tobacco Road
828
132175F004321
WSPM004810
Stone & Webster Construction Inc
MODSPACE
Building 165A
829
132175F001451
WSPM010001
Stone & Webster Construction Inc
MOORE MEDICAL LLC
Medical Supplies from MooreMedical
830
132175F001502
WSPM004600
Stone & Webster Construction Inc
MOORE MEDICAL LLC
Medical Supplies from Moore Medical (2)
831
J132175-FPR14-00040
WSPM013574
Stone & Webster Construction Inc
MORRIS AND ASSOCIATES INC
Professional Services Agreement
832
132175F004372
WSPM015080
Stone & Webster Construction Inc
MR GOLF CARTS INC
Golf chart for Dan Elder, Weld Training. 1 month rental.
833
WVG3000156
WVG3000156
Stone & Webster Construction Inc
MR GOLF CARTS INC
BPO to Cover All New and Existing Mr. Golf Cart Rentals
834
132175-C121.15
WSPM015662
Stone & Webster Construction Inc
MRC GLOBAL US INC
Miscellaneous Pipe and Fittings for U/G Phase 3 and 8 CWS, and Building 315 PWS and RWS
835
132175F001135
WSPM012071
Stone & Webster Construction Inc
MRC GLOBAL US INC
Modification of Grout Pump Outlet
836
132175F001241
WSPM012072
Stone & Webster Construction Inc
MRC GLOBAL US INC
PIPE CAPS
837
132175F002994
WSPM015232
Stone & Webster Construction Inc
MRC GLOBAL US INC
Non-safety, temporary material for Hydro on the mechanical modules

H-46



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



838
132175F004324
WSPM012133
Stone & Webster Construction Inc
MRC GLOBAL US INC
Temporary Construction Aid - BOP - Plumbing
839
132175F005276
WSPM015669
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction-Plumbing-BOP
840
132175F005323
WSPM015670
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction - BOP Plumbing - Building 120
841
132175F005693
WSPM011313
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Temporary Construction - BOP - Batch Plant Valves
842
WVG3000383
WVG3000383
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Material for 184 Valve Recovery
843
WVG3000703
WVG3000703
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP/PLUMBING,TESTING/BATCH PLANT/ ICE HOUSE
844
WVG3000833
WVG3000833
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
TEMP. FIRE PROTECTION SYSTEM-TURBINE#4
845
WVG3001024
WVG3001024
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
TUBING -PVC CLEAR VINYL FOR TI#3 CARPENTERS
846
WVG3001267
WVG3001267
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
Material to be left in place and used for welded cable tray supports, wok package SV3-2039-SHW-860272
847
WVG3001496
WVG3001496
WECTEC Global Project Services, Inc.
MRC GLOBAL US INC
BOP TEMPORARY CONSTRUCTION AID MATERIAL FOR HYDRO TESTING
848
132175F000968
WSPM004626
Stone & Webster Construction Inc
MSC INDUSTRIAL SUPPLY CO INC (PA &
Batch Plant - Limit Switches for Ice House
849
132175F005240
WSPM009963
WECTEC Global Project Services, Inc.
MSC INDUSTRIAL SUPPLY CO INC (PA &
Drum Plug Socket
850
WVG3000630
WVG3000630
WECTEC Global Project Services, Inc.
MULTISCOPE DOCUMENT SOLUTIONS INC
New printers to be used for Vogtle Construction Support Buildings.
851
132175-C121.08
WSPM013218
Stone & Webster Construction Inc
MUNS SERVICES LLC
WWS Piping for the Transformer Area - Phase 2 Construction
852
132175-C904.01
WSPM015092
Stone & Webster Construction Inc
MURRAY SUPPLY CO LLC
Standard Plant Equipment & Floor Drains
853
132175-C904.02
WSPM004586
Stone & Webster Construction Inc
MURRAY SUPPLY CO LLC
Floor and Equipment Drain Screws and Drains
854
132175-PV50.02
WSPM011812
WECTEC Global Project Services, Inc.
MURRAY SUPPLY CO LLC
PV50.02 - NFPA Code Valves (NS)
855
132175-PV50.03
WSPM000110
WECTEC Global Project Services, Inc.
MURRAY SUPPLY CO LLC
NFPA Code Valves (Datasheets PV50-Z0D-130, 132, 134, 136, 138)

H-47



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



856
132176-MB70.00
WSPM003934
Stone & Webster Construction Inc
MURRAY SUPPLY CO LLC
MB70 - Hot Water Heaters
857
132176-PV50.02
WSPM011686
WECTEC Global Project Services, Inc.
MURRAY SUPPLY CO LLC
PV50.02 - NFPA Code Valves (NS)
858
132176-PV50.03
WSPM000841
WECTEC Global Project Services, Inc.
MURRAY SUPPLY CO LLC
NFPA Code Valves
863
132175F004959
WSPM009884
WECTEC Global Project Services, Inc.
NELSON STUD WELDING INC
Equipment for thur decking stud welding
864
WVG3000213
WVG3000213
WECTEC Global Project Services, Inc.
NELSON STUD WELDING INC
ANNEX 3 NELSON TOOLS TO BE USED ON HILTI GIRDER SUP STEEL WELD STUDS WPSV3-2053-SHW-EL7841
865
WVG3000214
WVG3000214
WECTEC Global Project Services, Inc.
NELSON STUD WELDING INC
TURBINE 3 NELSON TOOLS TO BE USED ON HILTI MI-120 GIRDER SUP STEEL WP SV3-2052-SHW-860953
866
WVG3000255
WVG3000255
Stone & Webster Construction Inc
NELSON STUD WELDING INC
ANNEX 3 NELSON TOOLS TO BE USED ON HILTI MI-120 GIRDER SUP STEEL SV3-2053-SHW-EL7841
867
132175F005842
WSPM010216
WECTEC Global Project Services, Inc.
NEW PIG CORPORATION
Environmental Spill Supplies
868
WVG3000284
WVG3000284
WECTEC Global Project Services, Inc.
NEW PIG CORPORATION
HSE - Environmental Spill Supplies
869
WVG3000535
WVG3000535
WECTEC Global Project Services, Inc.
NEW PIG CORPORATION
HSE - Environmental - New Pig Supplies
870
WVG3000996
WVG3000996
Stone & Webster Construction Inc
NEW PIG CORPORATION
Material to be used for spills at the warehouse
871
WVG3001330
WVG3001330
WECTEC Global Project Services, Inc.
NEWCO INC
PT Kits for Module Welding
872
132175F000524
WSPM010176
Stone & Webster Construction Inc
NORTON SANDBLASTING EQUIPMENT
PAINT BOOTH
873
132175F004269
WSPM004869
Stone & Webster Construction Inc
NORTON SANDBLASTING EQUIPMENT
Van Air Blast Pak FD-400 Air Dryer, Bernie Wiggington, Paint Shop. 3 years rental.
874
132175-ER01.01
WSPM002958
Stone & Webster Construction Inc
NOVA MACHINE PRODUCTS CORP
Cable Tray and Fittings
875
132175-ER01.05
WSPM002960
Stone & Webster Construction Inc
NOVA MACHINE PRODUCTS CORP
Class 1E Cable Tray and Fittings

H-48



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



876
132175F005710
WSPM000272
WECTEC Global Project Services, Inc.
NOVA MACHINE PRODUCTS CORP
Material to be left in place and used to replace hardware that has been damaged or removed and to be used as surplus. Work package SV3-2060-SUW-CV0193
877
132176-C811.04
WSPM008009
WECTEC Global Project Services, Inc.
NOVA MACHINE PRODUCTS CORP
Replacement Gaskets for Condenser Waterbox
878
132176-D500.31
WSPM003197
Stone & Webster Construction Inc
NOVA MACHINE PRODUCTS CORP
Washers For CA04 Unit 4 Source Range Detectors
879
132176-ER01.01
WSPM003104
Stone & Webster Construction Inc
NOVA MACHINE PRODUCTS CORP
Cable Tray and Fittings
880
132176-ER01.05
WSPM003959
Stone & Webster Construction Inc
NOVA MACHINE PRODUCTS CORP
Class 1E Cable Tray and Fittings
881
132175F001317
WSPM005463
Stone & Webster Construction Inc
OCCUPATIONAL HEALTH AND DYNAMICS
DoseBadge Dosimeter Annual Calibration & Reader Calibration
882
WVG3000860
WVG3000860
WECTEC Global Project Services, Inc.
OCCUPATIONAL HEALTH AND DYNAMICS
HSE/IH - OHD doseBadge Noise Dosimeter Annual Calibration
883
WVG3000050
WVG3000050
WECTEC Global Project Services, Inc.
OFFICE FURNITURE WAREHOUSE OF PITTS
Bldg. 171
884
J132175-J500.01
WSPM002102
Stone & Webster Construction Inc
OLDCASTLE PRECAST
Precast Manholes and Trenches for RWS Well Water Bldg 315|
885
132175-J500.07
WSPM003746
Stone & Webster Construction Inc
OLDCASTLE PRECAST INC
Cooling Tower Precast Drop Inlets
886
J132175-J500.04
WSPM009785
Stone & Webster Construction Inc
OLDCASTLE PRECAST INC
Precast Drop Inlet
887
J132175-J500-01
WSPM002103
Stone & Webster Construction Inc
OLDCASTLE PRECAST INC
Precast Drop Inlet|
888
132175F001025
WSPM004624
Stone & Webster Construction Inc
PAC-VAN INC
Storage at NI 3 for Steve Wallace
889
132175F001122
WSPM004618
Stone & Webster Construction Inc
PAC-VAN INC
Connex’s for Preventive Maintenance Group Storage Supplies
890
132175F001585
WSPM004425
Stone & Webster Construction Inc
PAC-VAN INC
Steve Scott Storage Conexes
891
132175F001908-A
WSPM004447
Stone & Webster Construction Inc
PAC-VAN INC
NO17 module fabrication
892
WVG3000163
WVG3000163
Stone & Webster Construction Inc
PAC-VAN INC
BPO to Cover All New and Existing PacVans
893
132175F004865
WSPM005011
WECTEC Global Project Services, Inc.
PANNIER CORP
Pannier Service Repair PM labeling Embossing equipment

H-49



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



894
132175F005646
WSPM004884
WECTEC Global Project Services, Inc.
PARTNERS IN LEADERSHIP LLC
Two day self tracking training: The Oz Principle Accountability Training Integration Meeting at Plant Vogtle 3 & 4
895
132175-C717A-00
WSPM003267
Stone & Webster Construction Inc
PATTERSON PUMP CO
Fire Pump Skids
896
4500654771
4500654771
Westinghouse Electric Company LLC
PCR HOLDINGS INC
Weight Equivalency Cacl. for SB
897
Lease
Lease
Wectec LLC
Peach Orchard Center, LLC
2215 Tobacco Rd, Augusta GA, 30906-8111
898
132175F003651
WSPM010696
Stone & Webster Construction Inc
PEDRICK TOOL AND MACHINE CO INC
Equipment
899
132175F001815
WSPM004455
Stone & Webster Construction Inc
PENN TOOL
Batch Plant - Grease fittings for trucks
900
132175F001894
WSPM003514
Stone & Webster Construction Inc
PENN TOOL
#4400 WO GRUBB 16000 SERVICE FILTERS
901
132175F003099
WSPM004465
Stone & Webster Construction Inc
PENN TOOL
Lloyd’s of London to witness the proof load test of (2) Enerpac 400Te pull cylinders and (1) Enerpac 800Te pull cylinder
902
132175F003334
WSPM010446
Stone & Webster Construction Inc
PENN TOOL
MAB Safety Harness Storage
903
132175F003463
WSPM010618
Stone & Webster Construction Inc
PENN TOOL
FME Cabinets for Module ASME Piping
904
132175F003786
WSPM011989
Stone & Webster Construction Inc
PENN TOOL
Enerpac open PO to allow field services, maintenance and training activities
905
132175F003973
WSPM004845
Stone & Webster Construction Inc
PENN TOOL
To replace load cell connectors on the EVO-W units, in connection with 132175F003786
906
132175F004268
WSPM003331
Stone & Webster Construction Inc
PENN TOOL
Repair and re-load test jacks
907
132175F004684
WSPM009925
WECTEC Global Project Services, Inc.
PENN TOOL
Temporary Construction Aid - NI3 - Auxilary & Containment Buildings
908
132175F004713
WSPM004916
Stone & Webster Construction Inc
PENN TOOL
CLOSING SEAMS, LEAK PROOFING THE FORM WALLS AT TRANSFORMER AREA TEMP CONSTRUCTION AID
909
132175F004932
WSPM009888
WECTEC Global Project Services, Inc.
PENN TOOL
Temporary Construction Aid - Civil Required
910
132175F005167
WSPM009967
WECTEC Global Project Services, Inc.
PENN TOOL
Temporary Construction Aid - Water Removal

H-50



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



911
132175F005354
WSPM009807
WECTEC Global Project Services, Inc.
PENN TOOL
SITE SURVEY SUPPORT
912
132175F005501
WSPM004898
WECTEC Global Project Services, Inc.
PENN TOOL
Temporary Construction - NI4 Piping
913
132175F005606
WSPM004881
WECTEC Global Project Services, Inc.
PENN TOOL
Allen-Bradley software for commissioning PLCs
914
WVG3000007
WVG3000007
WECTEC Global Project Services, Inc.
PENN TOOL
Material to be used for temporary use on Unit 3 ductwork for testing and balancing
915
WVG3000861
WVG3000861
Stone & Webster Construction Inc
PENN TOOL
Black Cartridges for Sign Shop
916
WVG3000928
WVG3000928
Stone & Webster Construction Inc
PENN TOOL
Water Line Support Unit 3 & 4
917
132175F000078-A
WSPM010507
Stone & Webster Construction Inc
PENSKE TRUCK LEASING CO LP
TRUCK AND TRAILER TO MOVE MATERIAL FROM PARKING LOT AND NOI7
918
132175F001481
WSPM004602
Stone & Webster Construction Inc
PENSKE TRUCK LEASING CO LP
Replace and Repair Incident Damage to Penske Truck, PO 893675, Unit 100515
919
WVG3000349
WVG3000349
WECTEC Global Project Services, Inc.
PH TOOL LLC
NDE Equipment-UT Calibration Blocks
920
132175F005794
WSPM007121
WECTEC Global Project Services, Inc.
PINNER CLINIC PA
Est. Blanket PO for Pinner Clinic - Medical Reviewing Official MRO - not to exceed $300,000 or 2 years
921
132175F000386
WSPM004651
Stone & Webster Construction Inc
PORTABLE REFRIGERATION STORAGE INC
Change Order to (2) Extend Refrig. Connex from Portable Refrigeration Unit #’s CRLU810767 & CRLU910782, PO 719626 for 24 Months
922
132175F000392
WSPM004650
Stone & Webster Construction Inc
PORTABLE REFRIGERATION STORAGE INC
(3) Refrigeration Connex’s for NI 4 Bottom Head for Safety Related Grout Storage
923
132175F001303
WSPM004609
Stone & Webster Construction Inc
PORTABLE REFRIGERATION STORAGE INC
TEMP CONTROLLED CONNEX FOR MEMBRANE STORAGE
924
132175F002839
WSPM004415
Stone & Webster Construction Inc
PORTABLE REFRIGERATION STORAGE INC
Change Order to Extend Rental for 12 months on 20’ Refrigerated Conex from Portable Refrigeration Storage PO 685924
925
132175F002917
WSPM004506
Stone & Webster Construction Inc
PORTABLE REFRIGERATION STORAGE INC
Change Order to Extend Rental 12 Months on PO 680016 from Portable Refigeration Storage

H-51



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



926
132175F004965
WSPM009980
WECTEC Global Project Services, Inc.
POWERHOUSE EQUIPMENT AND ENGRNG
2 - RL-50 Portable Boiler room trailers, Concrete group Robert Carr. 4 months rent.
927
132175F000078
WSPM004661
Stone & Webster Construction Inc
PREMIER TRAILER LEASING INC
TRUCK AND TRAILER TO MOVE MATERIAL FROM PARKING LOT AND NOI7
928
132175F000942
WSPM009987
Stone & Webster Construction Inc
PREMIER TRAILER LEASING INC
TRUCKS AND TRAILERS FOR WAREHOUSE
929
WVG3000417
WVG3000417
Stone & Webster Construction Inc
PREMIER TRAILER LEASING INC
TRANSFER OF FUNDS FROM 890968-3P
930
132175F005125
WSPM004833
WECTEC Global Project Services, Inc.
PRIVATE PROFESSIONAL SERVICES INC
Add Funding to PO 831563-000 3P - Private Professional Services Inc not to exceed 3 years or $60,000
931
WVG3000290
WVG3000290
WECTEC Global Project Services, Inc.
PROJECT TIME AND COST HOLDINGS INC
CONSULTANT SERVICES TO BE PERFORMED FROM THE CHARLOTTE OFFICE
932
4500716562
4500716562
WECTEC Contractors Inc
PUBLIC WORKS EQUIPMENT AND SUPPLY
PARTS
934
132175F003273
WSPM010355
Stone & Webster Construction Inc
QUALITY INDUSTRIAL DISTRIBUTION
Batch Plant - Shop Air Fittings
938
132175F003612
WSPM004462
Stone & Webster Construction Inc
REED ICE CO INC
ICE, for site support
939
4500602717
4500602717
Westinghouse Electric Company LLC
REFRIGERATION SALES CORP
Pump,Vacuum,Rotary Vane, w 60Hz Motor
940
132175-K308-01
WSPM009760
Stone & Webster Construction Inc
REGALBROWN INC
Pressure Switch
941
132175F000118
WSPM010685
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Replacement parts - Plant 1 Roller
942
132175F000136
WSPM010686
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Replacement Parts for Wash Pit
943
132175F000451
WSPM010505
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Oil/Air filters for Plants and shop
944
132175F000623
WSPM014140
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Valve parts for plant
945
132175F001732
WSPM009774
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Chute Seals
946
132175F001817
WSPM009823
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Blower filters
947
132175F001835
WSPM009828
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Solenoid Valves for Agg Gates

H-52



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



948
132175F002029
WSPM010163
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Inner and outer seal
949
132175F002151
WSPM004432
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Parts for Plant water meters
950
132175F002871
WSPM004414
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Plant - Glue, Boot, Hold Down Roller
951
132175F002944
WSPM010093
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Belt Wiper, grease fittings
952
132175F002997-001-REL
WSPM010103
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
953
132175F002997-003-REL
WSPM010354
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
954
132175F002997-007-REL
WSPM010435
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
955
132175F002997-008-REL
WSPM010279
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
956
132175F002997-009-REL
WSPM010624
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
957
132175F002997-010-REL
WSPM010629
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
958
132175F002997-011-REL
WSPM010697
Stone & Webster Construction Inc
REXCON LLC
BPO RELEASE 11 - F004144 & F004206
959
132175F002997-012-REL
WSPM010660
Stone & Webster Construction Inc
REXCON LLC
BLANKET RELEASE 12
960
132175F002997-013-REL
WSPM010661
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
961
132175F002997-014-REL
WSPM010491
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon
962
132175F002997-015-REL
WSPM010494
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
963
132175F002997-016-REL
WSPM010548
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
964
132175F002997-018-REL
WSPM009900
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
965
132175F002997-024-REL
WSPM004473
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant - Rexcon (To Establish Blanket PO)
966
132175F004490
WSPM010486
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Air Coupling, Jack
967
132175F004605
WSPM010594
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Water Hose, Limit Switch
968
WVG3000193
WVG3000193
Stone & Webster Construction Inc
REXCON LLC
Batch Plant - Rexcon PO 2997 REL

H-53



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
027 (To Establish Blanket PO)
969
WVG3000511
WVG3000511
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant - Rexcon BPO 2997 REL 30
970
WVG3000590
WVG3000590
WECTEC Global Project Services, Inc.
REXCON LLC
5” Butterfly Valves for Batch Plant
971
WVG3000598
WVG3000598
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant - Rexcon BPO 2997 REL 31
972
WVG3000609
WVG3000609
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant - Rexcon BPO 2997 REL 32
973
WVG3000622
WVG3000622
WECTEC Global Project Services, Inc.
REXCON LLC
Coupling and Gaskets - Batch Plant
974
WVG3000664
WVG3000664
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant - Rexcon BPO 2997 REL 33
975
WVG3000867
WVG3000867
WECTEC Global Project Services, Inc.
REXCON LLC
Batch Plant Dust Bag 8”x114”
976
132175F001444
WSPM015657
Stone & Webster Construction Inc
RFID MERGER CORPHOTHEAD TECH INC
HOT Guard Biosensor
977
WVG3001262
WVG3001262
WECTEC Global Project Services, Inc.
RICHMOND SUPPLY CO
to be left in place and used for bldg 315 potable water system chem add skid (SV0-PWS-MS-501), work package SV0-PWS-01-CT001
978
WVG3001428
WVG3001428
WECTEC Global Project Services, Inc.
RICHMOND SUPPLY CO
Material left in place for installation on PWS Jockey Pump, 0-PWS-MP503, suction in place of crack installed instrument, SV0-PWS-01-IT001 (REPLACEMENT)
979
132175-JE02.00
WSPM010131
WECTEC Global Project Services, Inc.
ROSEMOUNT INC
SV0-PWS-JE-FT510 Transmitter Replacement
982
132175-AS20.01
WSPM003324
Stone & Webster Construction Inc
SAFARILAND LLC
Security Equipment - GPs, DFPs, and BREs
983
132176-AS20.01
WSPM002986
Stone & Webster Construction Inc
SAFARILAND LLC
Gun Ports, Defensive Fighting Positions and Bullet Restistant Enclosures.
984
WVG3000734
WVG3000734
Stone & Webster Construction Inc
SAFETY-KLEEN
Rental Parts Washer with Service (Safety-Kleen) Revision to 132175F001923
985
132175F003068
WSPM004468
Stone & Webster Construction Inc
SATELLITE SHELTERS INC
Assuming Lease from SNC for Building 187 to CBI Starting 3-1-15
986
132175F004643
WSPM004840
Stone & Webster Construction Inc
SATELLITE SHELTERS INC
5-Plex for CBI - Paintings and Coatings

H-54



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



987
132175-J300.12
WSPM003799
Stone & Webster Construction Inc
SEFA GROUP INC
Fly Ash for Concrete
988
132175F002881
WSPM010095
Stone & Webster Construction Inc
SERVICE INDUSTRIAL SUPPLY CO
Duct Tape - Nuclear Grade
989
132175-EJ02.01
WSPM010064
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Non-Class 1E Junction Boxes
990
132175-EL01.02
WSPM002957
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Lighting Controller System & Equipment
991
132175-ER02.01
WSPM010375
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Conduit and Fittings
992
132175F001158
WSPM011182
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Material for NI 3 Electricians
993
132175F002081
WSPM011184
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
ITEMS TO PROVIDE TEMPORARY POWER TO THE NORTH END OF TB-4
994
132175F003020
WSPM004470
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Temporary Power Site Wide
995
132175-SH21.01
WSPM011173
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Cable Tray Supports
996
132176-EJ02.01
WSPM003111
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Non Class 1E Junction Boxes
997
132176-ER02.01
WSPM003958
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Conduit and Fittings
998
132176-SH21.01
WSPM012195
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Cable Tray Supports
999
J132175-E112.05
WSPM002177
Stone & Webster Construction Inc
SHEALY ELECTRICAL WHOLESALERS INC.
Rigid Galvanized Steel Conduit
1000
132175F005642
WSPM009795
WECTEC Global Project Services, Inc.
SHERWIN WILLIAMS
Construction aid material to be used for temporary use for Unit 3 Turbine Building coating of supplemental steel, work package SV3-2053-SHW-EL7843
1001
132175F004072
WSPM003344
Stone & Webster Construction Inc
SIKA CORPORATION
Concrete admixture: Hydration Stabilizer/vertical pumping aid for the batch plant
1002
132175-J300.03B
WSPM003143
Stone & Webster Construction Inc
SIKA CORPORATION
Admixtures for Concrete|
1003
844736-3P
WSPM004363
Stone & Webster Construction Inc
SIKA CORPORATION
Batch Plant - Add funds to PO # 844736-3P
1004
132175F001653
WSPM004405
Stone & Webster Construction Inc
SILICON STUD WELDING PRODUCTS
REPLACEMENT AND ADDITIONAL STUD WELDING PARTS

H-55



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1005
714750
WSPM010552
Stone & Webster Construction Inc
SNIDER TIRE INC
Change Order to Add Funds to PO 714750 Snider for material and service
1006
WVG3001537
WVG3001537
WECTEC Global Project Services, Inc.
SNIDER TIRE INC
Replacement Tires for Site Rented Big Red Forklift at WW
1007
132175-AD02.02
WSPM003330
WECTEC Global Project Services, Inc.
SOMMER USA INC
Non-Safety Related Hollow Metal Doors and associated hardware for Vogtle Unit 3
1008
132175-PV38.01
WSPM012094
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 101
1009
132175-PV38.02
WSPM012095
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 102
1010
132175-PV38.03
WSPM010347
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 103
1011
132176-PV38.01
WSPM012142
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 101
1012
132176-PV38.02
WSPM012143
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 102
1013
132176-PV38.03
WSPM010350
WECTEC Global Project Services, Inc.
SOUTH CAROLINA FLUID TECH LLC
PV38 Automatic Vent Valves - DS 103
1014
132175F001699
WSPM004401
Stone & Webster Construction Inc
SOUTHEAST COASTAL CONSULTING INC
Add Addtiional Funds ($50K) for PO 735956 Southeastern Rail Consulting
1015
132175F001699A
WSPM004398
WECTEC Global Project Services, Inc.
SOUTHEAST COASTAL CONSULTING INC
Add Addtiional Funds for PO 735956
1016
798815 - 3M
WSPM004357
Stone & Webster Construction Inc
SOUTHERN LINC
PTT SERVICES AND EQUIPMENT
1017
132175-K035A.01
WSPM010157
Stone & Webster Construction Inc
SOUTHWELL CORP
WASTE WATER COMPOSITE SAMPLER
1018
132175F003673
WSPM004483
Stone & Webster Construction Inc
SPIDER SAFETY INC
Load test and inspection on Spider baskets for MAB
1019
132175F003745
WSPM010335
Stone & Webster Construction Inc
SPIDER SAFETY INC
Suspension Brackets, Spider. For MAB Spider baskets.
1020
132175F003798
WSPM010337
Stone & Webster Construction Inc
SPIDER SAFETY INC
Suspension Brackets, Spider. For MAB Spider baskets.
1021
132175F005142
WSPM009984
WECTEC Global Project Services, Inc.
SPIDER SAFETY INC
Scaffold baskets for beta hoist system
1022
132175-PY40.00
WSPM010456
Stone & Webster Construction Inc
SPIRAX SARCO INC
PY40 Steam Traps
1023
132176-PY40.00
WSPM010458
Stone & Webster Construction Inc
SPIRAX SARCO INC
PY40 Steam Traps

H-56



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1024
132175F000168
WSPM010511
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
VEST FOR SUPERVISORS
1025
132175F000179
WSPM010530
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Employee Incentatives
1026
132175F000362
WSPM010498
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Safety Vest
1027
132175F000712
WSPM010558
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Employee Incentatives
1028
132175F000809
WSPM010569
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Safety Vests
1029
132175F000870
WSPM009764
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
VEST FOR SUPERVISORS
1030
132175F001081
WSPM009871
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Fire Watch Vest
1031
132175F001655
WSPM009782
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
VEST FOR SUPERVISORS
1032
132175F001723
WSPM009783
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Security Safety Vests w/ labeling
1033
132175F002300
WSPM010251
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Vests
1034
132175F002806-REL002
WSPM009903
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Blanket Order for Sportex - Employee Incentatives
1035
132175F003213
WSPM010436
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Security Safety Vests w/ Labeling
1036
132175F003584
WSPM010443
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Safety Committee Vests
1037
132175F004457
WSPM010490
Stone & Webster Construction Inc
SPORTEX APPAREL OF ARIZONA
Sportex - ERT Rescue Bags
1038
132175F005089
WSPM009951
WECTEC Global Project Services, Inc.
SPORTEX APPAREL OF ARIZONA
ERT Vests
1039
WVG3000648
WVG3000648
WECTEC Global Project Services, Inc.
SPORTEX APPAREL OF ARIZONA
HSE-PPE VESTS “HSE/SAFETY” ADDTL SIZES NEEDED
1040
132175-H700.03
WSPM003146
Stone & Webster Construction Inc
SSM INDUSTRIES INC
HVAC Ductwork - CA20, R104, and R161
1041
132175-MA01.00
WSPM003788
Stone & Webster Construction Inc
SSM INDUSTRIES INC
Centrifugal and Propeller Fans
1042
132175-MD01.00
WSPM003787
Stone & Webster Construction Inc
SSM INDUSTRIES INC
Nonsafety-Related Dampers
1043
132176-MA01.00
WSPM003935
Stone & Webster Construction Inc
SSM INDUSTRIES INC
Centrifugal and Propeller Fans

H-57



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1044
132176-MD01.00
WSPM003933
Stone & Webster Construction Inc
SSM INDUSTRIES INC
Nonsafety-Related Dampers
1045
WVG3001245
WVG3001245
WECTEC Global Project Services, Inc.
SSM INDUSTRIES INC
MATERIAL LEFT IN PLACE ANNEX 3 BENT PLATE CMU WALLS WP# SV3-4030-AMW-850000
1046
132175F005669
WSPM013179
WECTEC Global Project Services, Inc.
STAPLES CONTRACT AND COMMERCIAL
stamp to be used for the ITAAC group to retrofit ITAAC screening forms of 750 work packages to satisfy CAR 2016-1916
1047
132175F005790
WSPM013177
WECTEC Global Project Services, Inc.
STAPLES CONTRACT AND COMMERCIAL
To be used for the Welding Departmental Printers to generate weld data sheets for project construction
1048
4500645824
4500645824
Westinghouse Electric Company LLC
STEVENSON & ASSOCIATES
Vogtle Option 3
1049
132175-J800.14
WSPM003794
Stone & Webster Construction Inc
STIRLING LLOYD PRODUCTS INC
Nuclear Island Waterproofing Membrane Material|
1050
WVG3000168
WVG3000168
WECTEC Global Project Services, Inc.
STRAIGHTPOINT INC
Recalibration and repair of load cells for general site use
1051
132175-PY02.00
WSPM010258
Stone & Webster Construction Inc
SURE FLOW EQUIPMENT INC
Inline Piping Strainers, ANSI/ASME B31.1
1052
132175-PY03.00
WSPM010301
Stone & Webster Construction Inc
SURE FLOW EQUIPMENT INC
Inline Piping Temporary Strainers ASME B31.1
1053
132176-PY02.00
WSPM010259
Stone & Webster Construction Inc
SURE FLOW EQUIPMENT INC
Inline Piping Strainers, ANSI/ASME B31.1
1054
132176-PY03.00
WSPM010302
Stone & Webster Construction Inc
SURE FLOW EQUIPMENT INC
Inline Piping Temporary Strainers ASME B31.1
1055
Lease
Lease
Wectec LLC
Synergy Group, LLC
321 Mills Road, Waynesboro, GA, 30830
1056
132175-EY20.01
WSPM003152
Stone & Webster Construction Inc
TE CONNECTIVITY
Cable Splices and Terminations
1057
132176-EY20.01
WSPM003943
Stone & Webster Construction Inc
TE CONNECTIVITY
Cable Splices and Terminations
1058
132175-C913.00
WSPM003265
Stone & Webster Construction Inc
TEAM INDUSTRIES INC
WLS Double Contained Piping
1059
132175F002357
WSPM010610
Stone & Webster Construction Inc
TECHNICAL DIAGNOSTIC SERVICES INC
DOBLE Protective Relaying Test Equipment
1060
132175F002489
WSPM010612
Stone & Webster Construction Inc
TECHNICAL DIAGNOSTIC SERVICES INC
EGIL - Circuit Breaker Analyzer
1061
132175F002539
WSPM010541
Stone & Webster Construction Inc
TECHNICAL DIAGNOSTIC SERVICES INC
HVINC - High Voltage Portable

H-58



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
HIPOT Tester
1062
132175F002553
WSPM010542
Stone & Webster Construction Inc
TECHNICAL DIAGNOSTIC SERVICES INC
Hipotronics - DC High Potential Tester
1063
132175F003429
WSPM010420
Stone & Webster Construction Inc
TECHNICAL DIAGNOSTIC SERVICES INC
Commissioning - Stroboscope
1064
132175F005719
WSPM004892
WECTEC Global Project Services, Inc.
TELVENT DTN LLC
Web based programs used to monitor and track weather on or around the site (i.e. Phase 1, 2, 3)
1065
WVG3000476
WVG3000476
WECTEC Global Project Services, Inc.
TELVENT DTN LLC
TELVENT WEATHER SENTRY - 876587 3P TRANSFER
1066
132176-E030.01
WSPM003189
Stone & Webster Construction Inc
THE CALVERT CO INC
Vogtle Unit 4 Iso Phase Bus Duct MPA-E030-00 |
1067
132176-E031.01
WSPM010224
Stone & Webster Construction Inc
THE CALVERT CO INC
Vogtle Unit 4 Non Seg Phase Bus Duct MPA-E031-00|
1068
4500657834
4500657834
Westinghouse Electric Company LLC
THE HILLIARD CORP
Lube Oil Mist Eliminator
1069
886652
WSPM004368
WECTEC Global Project Services, Inc.
THOMPSON PUMP AND MFG CO PT
Change Order to Add additional Funds for 2 months on Pump Rental from Thompson Pump PO 886652
1071
132175-C120.00 - REL 1
WSPM004564
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
RELEASE 1 BPO B31.1 Pipe and Fittings
1072
132175-C120.00 REL 10
WSPM004565
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1073
132175-C120.00 REL 11
WSPM010632
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1074
132175-C120.00 REL 12
WSPM004566
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1075
132175-C120.00 REL 14
WSPM004567
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1076
132175-C120.00 REL 15
WSPM010698
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1077
132175-C120.00 REL 16
WSPM004568
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1078
132175-C120.00 REL 17
WSPM009968
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1079
132175-C120.00 REL 18
WSPM009982
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1080
132175-C120.00 REL 19
WSPM004569
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1081
132175-C120.00 REL 2
WSPM004570
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order

H-59



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1082
132175-C120.00 REL 20
WSPM004571
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1083
132175-C120.00 REL 21
WSPM003232
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1084
132175-C120.00 REL 22
WSPM003233
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1085
132175-C120.00 REL 23
WSPM003234
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe & Fittings Blanket Release
1086
132175-C120.00 REL 24
WSPM010068
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe & Fitting Blanket Order Release
1087
132175-C120.00 REL 25
WSPM000582
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe & Fitting Blanket Order Release
1088
132175-C120.00 REL 26
WSPM007806
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe & Fitting Blanket Order Release
1089
132175-C120.00 REL 7
WSPM004572
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1090
132175-C120.00 REL 9
WSPM010278
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1091
132175-C120.00 RELEASE 4
WSPM004573
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe and Fittings - Blanket Order
1092
132175-C124.02
WSPM004589
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
Alloy Steel Pipe for Condenser C S-83 Replacement
1093
132175-C125.05
WSPM004588
Stone & Webster Construction Inc
TIOGA PIPE SUPPLY CO INC
Stainless Steel Material for the Mechanical Modules and WWS Collection Basin
1094
WSV3B00036
WSV3B00036
WECTEC Global Project Services, Inc.
TIOGA PIPE SUPPLY CO INC
B31.1 Pipe & Fitting Blanket Order Release
1095
132175F002240
WSPM012075
Stone & Webster Construction Inc
TOOLHOUND INC
Barcode Tags for Tools
1096
132175F004501
WSPM015198
Stone & Webster Construction Inc
TOOLHOUND INC
BARCODES FOR CBI OWNED TOOLS
1097
WVG3001305
WVG3001305
WECTEC Global Project Services, Inc.
TOOLHOUND INC
Tool room One Team barcodes
1098
132175F000406
WSPM004649
Stone & Webster Construction Inc
TOTAL STORAGE SERVICES LLC
40 foot connex for storing hydro equipment
1099
132175F000901
WSPM014764
Stone & Webster Construction Inc
TOTAL STORAGE SERVICES LLC
Conex for Facilities General Storage
1100
132175F001108
WSPM004619
Stone & Webster Construction Inc
TOTAL STORAGE SERVICES LLC
Tool Storage
1101
132175F002274
WSPM004426
Stone & Webster Construction Inc
TOTAL STORAGE SERVICES LLC
Storage Conex Annex 3
1102
132175F005686
WSPM004887
WECTEC Global Project Services, Inc.
TOWER 3 GOLF
Management Training-Leadership Alignment Workshop

H-60



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1103
132175F001320
WSPM010003
Stone & Webster Construction Inc
TPM INC
Staples for Printers
1104
132175-H100.08
WSPM001921
WECTEC Global Project Services, Inc.
TRACHTE LLC
Fire Protection Deluge Valve Houses
1105
132175F003567
WSPM015298
Stone & Webster Construction Inc
TRANSCAT INC
Commissioning - Digital Hydrometer
1106
132175-J500.09
WSPM003748
Stone & Webster Construction Inc
TRENWA INC
Trench System for Security System
1107
132175F005231A
WSPM009960
WECTEC Global Project Services, Inc.
TRI TOOL INC
Equipment to Support Main Steam Piping
1108
J132175-FPR12-01717-00
WSPM002174
Stone & Webster Construction Inc
TRIFAST SYSTEMS INC
Concrete Anchors for RWS Pumphouse Ductbank
1109
132175-J600.03
WSPM003796
Stone & Webster Construction Inc
TRIO FASTENERS INC
Anchor Bolts & Embeds (Area 315 And Make-Up Wells 3 & 4)
1110
132175F004540
WSPM004813
Stone & Webster Construction Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
Request $25,000 for Truck Parts Specalist of Augusta INC, for parts assoicated with site owned equipment.
1111
4500715821
4500715821
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1112
4500715912
4500715912
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1113
4500716067
4500716067
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1114
4500716528
4500716528
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1115
4500716570
4500716570
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1116
4500716615
4500716615
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS
1117
4500717463
4500717463
WECTEC Contractors Inc
TRUCK PARTS SPECIALISTS OF AUGUSTA
PARTS

H-61



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1118
132175F001960
WSPM004442
Stone & Webster Construction Inc
TUCKER SECURITY AND FIRE INC
Add funding to PO 844086 $2000.00
1119
132175F005149
WSPM009955
WECTEC Global Project Services, Inc.
TYFLOT INC
FME Plugs For Use By The Pipefitters Nuclear Island 3.
1120
132175F005191
WSPM009945
WECTEC Global Project Services, Inc.
TYFLOT INC
FME Covers For Pipefitters NI3.
1121
132175F005308
WSPM005014
WECTEC Global Project Services, Inc.
ULINE
TURBINE 3 BARRICADE CONES, CONTACT ERIC PTT 646
1122
132175-EF60.01
WSPM000865
WECTEC Global Project Services, Inc.
UNITED CONTROLS INTERNATIONAL
Local Communication Panels
1123
132176-EF60.01
WSPM001156
WECTEC Global Project Services, Inc.
UNITED CONTROLS INTERNATIONAL
Local Communication Panels
1124
132175F005892
WSPM004712
WECTEC Global Project Services, Inc.
UNIVERSITY OCCUPATIONAL HEALTH CENT
Open PO for Fit for Duty Evaluations - University Occupational
1125
WVG3001031
WVG3001031
WECTEC Global Project Services, Inc.
UPS FREIGHT
Vogtle Freight Shipments-UPS Freight Blanket PO, Brandlow Ludlow
1126
132175-EG01.02
WSPM010459
Stone & Webster Construction Inc
VALLEN
GS Material
1127
132175-EL01.04
WSPM010330
Stone & Webster Construction Inc
VALLEN
Lighting Dimming Control System
1128
132175F000205
WSPM010578
Stone & Webster Construction Inc
VALLEN
Methyl Ethyl Ketone & Methylene Chloride
1129
132175F000863
WSPM005031
Stone & Webster Construction Inc
VALLEN
Sqwincher Sqweeze Pops
1130
132175F000956
WSPM015523
Stone & Webster Construction Inc
VALLEN
To Clean the Turbine Casings
1131
132175F001811
WSPM009734
Stone & Webster Construction Inc
VALLEN
Carboy Stopcock, Rectangular Carboy Stopcock, Total Chlorine Test Kit, & Ph Paper
1132
132175F001982
WSPM009851
Stone & Webster Construction Inc
VALLEN
MSA Filters
1133
132175F001995
WSPM005183
Stone & Webster Construction Inc
VALLEN
Ice Melt
1134
132175F002660
WSPM010055
Stone & Webster Construction Inc
VALLEN
Temporary Construction Aid for Pipefitters in NI-3 for Dewatering in Aux Bldg.
1135
132175F003072
WSPM010102
Stone & Webster Construction Inc
VALLEN
Temporary Construction - Insulators

H-62



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1136
132175F003283
WSPM010353
Stone & Webster Construction Inc
VALLEN
Non Permant Plant: Construction Aid Material for NI-3 Pipefitters Testing Pipe Dept.
1137
132175F003372
WSPM010361
Stone & Webster Construction Inc
VALLEN
Test Lab- Anti-Seize
1138
132175F004598
WSPM010544
Stone & Webster Construction Inc
VALLEN
SG 2093 HUMIDITY INDICATOR CARDS- Preventive Maintenace Temporary Construction Activities
1139
132175F004870
WSPM009916
Stone & Webster Construction Inc
VALLEN
Batch Plant - pressure reducing valve, wash down nozzle, spray WD40
1140
132175F005042
WSPM009931
WECTEC Global Project Services, Inc.
VALLEN
Gas Detector Tubes
1141
132175F005087
WSPM009972
WECTEC Global Project Services, Inc.
VALLEN
Construction Aid Non Permanent Turbine 3 WP CDS-ME2E-PLW-ME5687
1142
132175F005186
WSPM009956
WECTEC Global Project Services, Inc.
VALLEN
150WATT HALOGEN BULBS FOR BATCH PLANT
1143
132175F005253
WSPM009747
WECTEC Global Project Services, Inc.
VALLEN
Brackets for Eye Wash Stations
1144
132175F005341
WSPM009726
WECTEC Global Project Services, Inc.
VALLEN
3M Particulate Filters P100
1145
132175F005649
WSPM009797
WECTEC Global Project Services, Inc.
VALLEN
Temporary Construction - Plant Maintenance Group
1146
132175F005869
WSPM010134
WECTEC Global Project Services, Inc.
VALLEN
Temporary Construction - Plumbing/Testing - BOP
1147
132175-FPR12-02341-00
WSPM003211
Stone & Webster Construction Inc
VALLEN
Erico Tap & Run Weld Material
1148
132176-E111.02
WSPM003188
Stone & Webster Construction Inc
VALLEN
Turbine Building Elevation 82’-9” and Auxiliary Building Ele
1149
132176-EG01.01
WSPM010296
Stone & Webster Construction Inc
VALLEN
Grounding System Material
1150
132176-EL01.04
WSPM010066
Stone & Webster Construction Inc
VALLEN
Lighting Dimming Control System
1151
J132175-E111.03
WSPM002179
Stone & Webster Construction Inc
VALLEN
Non Class 1 E Ground Cable|
1152
WVG3000058
WVG3000058
WECTEC Global Project Services, Inc.
VALLEN
IH SUPPLIES - HSE FIELD
1153
WVG3000250
WVG3000250
WECTEC Global Project Services, Inc.
VALLEN
Material to be used to support commissioning and testing of instrumentation in buildings like the

H-63



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
315, 303, Annex, Aux, Turbine, and Containment
1154
WVG3000251
WVG3000251
WECTEC Global Project Services, Inc.
VALLEN
Material to be used to support commissioning and testing of instrumentation in buildings like the 315, 303, Annex, Aux, Turbine, and Containment
1155
WVG3000775
WVG3000775
WECTEC Global Project Services, Inc.
VALLEN
to be used for forms and embeds in the Aux building
1156
WVG3001295
WVG3001295
WECTEC Global Project Services, Inc.
VALLEN
Emergency Respiratory Protection Supplies, Equipment & Services to Support Training for & Rescues with Self-Contained Breathing Apparatus & Supplied Air Breathing Apparatus
1157
132175F002381
WSPM004395
Stone & Webster Construction Inc
VENTYX ENERGY LLC
Ventyx eSOMS Software
1158
132175-Q111.00
WSPM003913
Stone & Webster Construction Inc
VITAL FUEL SYSTMS
Diesel Fuel Tank, Pump, Piping, and Dispenser Station
1159
WVG3001259
WVG3001259
WECTEC Global Project Services, Inc.
VITAL FUEL SYSTMS
Material to be left in place and used for bldg 315 ZRS diesel fuel storage tank Critical LoLo Level Switch, work paclage SV0-ZRS-04-IT001
1160
132175-AD03.01
WSPM003329
Stone & Webster Construction Inc
WALZ AND KRENZER INC
CA20 Watertight Doors
1163
132175F005018
WSPM004825
WECTEC Global Project Services, Inc.
WESTSIDE MEDICAL CENTER
Add Funds to PO 689073 for Westside Medical not to exceed $200,000 or 1 yr.
1164
132175F003228
WSPM013727
Stone & Webster Construction Inc
WHITAKER LABORATORY INC
Batch Plant - Add funds to PO# 689063
1165
132175F003303
WSPM004513
Stone & Webster Construction Inc
WILLIAMS SCOTSMAN INC
CO to PO 633767 extending rental 12 months on 60X24 Mod Box(Williams Scotsman)
1166
132175-C127.02
WSPM009751
WECTEC Global Project Services, Inc.
WOLSELEY INDUSTRIAL GROUP
Copper Tubing and Fittings for Annex PWS Bulk Order
1167
132175F000482
WSPM013403
Stone & Webster Construction Inc
WOLSELEY INDUSTRIAL GROUP
Temporary Piping supplies-Tyrone Davis
1168
132175F004235
WSPM013321
Stone & Webster Construction Inc
WOLSELEY INDUSTRIAL GROUP
Temporary Construction Aid - BOP Plumbing
1169
132175F004309
WSPM004811
Stone & Webster Construction Inc
WOLSELEY INDUSTRIAL GROUP
Temporary Construction Aid - NI4

H-64



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
Testing
1170
132175F005404
WSPM013315
WECTEC Global Project Services, Inc.
WOLSELEY INDUSTRIAL GROUP
Temporary Construction Aid - BOP - Plumbing/Plant Air
1171
132176F000005
WSPM010694
Stone & Webster Construction Inc
WOLSELEY INDUSTRIAL GROUP
Unit 4 Turbine Building Elevation 82’-9” to Elevation 94’-0” Construction Aid Materials
1172
WVG3000568
WVG3000568
WECTEC Global Project Services, Inc.
WOLVERINE FIRE PROTECTION CO
FIRE PROTECTION DESIGN - 739840 3P TRANS
1173
WVG3000415
WVG3000415
WECTEC Global Project Services, Inc.
WOW BUSINESS SERVICES
TRANSFER OF FUNDS FROM 978644-3P
1174
132175F000542
WSPM010564
Stone & Webster Construction Inc
WW GRAINGER INC
GREEN ACCEPT TAGS
1175
132175F001291
WSPM013387
Stone & Webster Construction Inc
WW GRAINGER INC
GREEN ACCEPT TAGS/RED HOLD TAGS/RED RISK RELEASE TAGS
1176
132175F003073
WSPM011188
Stone & Webster Construction Inc
WW GRAINGER INC
Commissioning - FLIR Infrared Imagers
1177
132175F004590
WSPM010543
Stone & Webster Construction Inc
WW GRAINGER INC
Desiccant material for Preventive Maintence Temporary Construction activities-SG 1908 for 16 unit and no SDS required for the 2 unit desiccant
1178
132175F005086
WSPM009971
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Humidty Control in Level A Storage
1179
132175F005244
WSPM009722
WECTEC Global Project Services, Inc.
WW GRAINGER INC
PM Water Quality Lab Supplies Pipette tips 100 to1000 microlite P/N 21R685 and stir bars
1180
132175F005356
WSPM009723
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Drager Tubes
1181
132175F005566
WSPM004894
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Magnifying glasses for Labeling team to read drawings and tags for the Perm plant Temporary const. equipment labeling
1182
132175F005781
WSPM010126
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Confined Space Modules Work
1183
WVG3000078
WVG3000078
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Turbidity Meter for Water Quality Lab activities,
1184
WVG3000202
WVG3000202
WECTEC Global Project Services, Inc.
WW GRAINGER INC
PM Temporary Construction Activities, Wood Screws for Wboro Warehouse to build crates and dunnage

H-65



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1185
WVG3000265
WVG3000265
WECTEC Global Project Services, Inc.
WW GRAINGER INC
MAB Emergency Notification Tool
1186
WVG3000287
WVG3000287
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Bondo for Formwork Repair in Precast Yard
1187
WVG3000955
WVG3000955
WECTEC Global Project Services, Inc.
WW GRAINGER INC
Temp Const. Activities Consumable
1188
WVG3000985
WVG3000985
WECTEC Global Project Services, Inc.
WW GRAINGER INC
To be used for rebar fabrication shops in NOI-6/7/8/9/10
1189
132175F005158-REL-001
WSPM009959
WECTEC Global Project Services, Inc.
YAK MAT LLC
RELEASE 001 YAK Mat LLC, POC: Chad West 912-551-2207. For crane mats.
1190
132175F005158-REL-002
WSPM009801
WECTEC Global Project Services, Inc.
YAK MAT LLC
BLANKET RELEASE FOR CRANE MATS
1191
WVG3001529
WVG3001529
WECTEC Global Project Services, Inc.
YAK MAT LLC
Timber crane mats to be used as a load spreading footing for new Liebherr LR-11350 crawler crane
1192
132175F000763
WSPM015065
Stone & Webster Construction Inc
YANCEY BROTHERS CO
BRADCO TRENCHER CHAIN AND TEETH SPARE
1193
132175F001532
WSPM009941
Stone & Webster Construction Inc
YANCEY BROTHERS CO
YANCEY TO R AND R FORKLIFT TIRE ON TH514
1194
132175F002565
WSPM004503
Stone & Webster Construction Inc
YANCEY BROTHERS CO
TH514 SER# 0TBW00765 Yancey To Repair Tilt Cylinder Damage
1195
132175F002931
WSPM004394
Stone & Webster Construction Inc
YANCEY BROTHERS CO
SERVICES FOR DGU INSTALLATION
1196
132175F003772
WSPM004490
Stone & Webster Construction Inc
YANCEY BROTHERS CO
Request $355.07 to replace missing Hitch pins from TH-514 forklifts.
1197
132175F004219
WSPM004872
Stone & Webster Construction Inc
YANCEY BROTHERS CO
Request $172.31 for repair of Yancey TH-514 Ser# 0MWC00267 ignition switch caused by site danmage. See attached invoice.
1198
132175F004539
WSPM004814
Stone & Webster Construction Inc
YANCEY BROTHERS CO
Request $25,000 for service and parts assoicated with site damaged rental equipment from YANCEY.
1199
WVG3000906
WVG3000906
Stone & Webster Construction Inc
YANCEY BROTHERS CO
Repair Carriage/Coupler Assemby and Windshield - Forklift totaling $17,080.00
1200
132175-D100.17
WSPM014779
Stone & Webster Construction Inc
YEAROUT INDUSTRIAL LLC
CA03 Module Material
1201
132175-K105.01
WSPM014776
Stone & Webster Construction Inc
YOKOGAWA CORP OF AMERICA
FLOW PITOT TUBE W/INTEGRAL TRANSMITTER

H-66



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



1202
132175-MY51.00
WSPM003926
WECTEC Global Project Services, Inc.
CHROMALOX INC
MY51 Electric Heaters
1203
132176-MY51.00
WSPM003043
WECTEC Global Project Services, Inc.
CHROMALOX INC
MY51 Electric Heaters
1204
132176-C202.15
132176-C202.15
WECTEC Global Project Services, Inc.
Lanier Municipal Supply Co Inc
Post Indicator Valves for FPS
1205
4500446434
4500446434
Westinghouse Electric Company LLC
COMPOSITE COOLING SOLUTIONS
Induced Draft Cooling Tower Package
1207
132176-EW31.01
132176-EW31.01
WECTEC Global Project Services, Inc.
CABLELAN NUCLEAR
FIBER OPTIC CABLE
1208
132175-EW31.01
132175-EW31.01
WECTEC Global Project Services, Inc.
CABLELAN NUCLEAR
Fiber Optic Cable
1209
132175-J800.26
132175-J800.26
WECTEC Global Project Services, Inc.
APPLIED TECHNICAL SERVICES INC
 
1210
132175-MY51.01
132175-MY51.01
WECTEC Global Project Services, Inc.
Indeeco
Unit Heaters
1211
132176-MY51.01
132176-MY51.01
WECTEC Global Project Services, Inc.
Indeeco
Unit Heaters
1212
132175F000097
132175F000097
WECTEC Global Project Services, Inc.
Landrum Supply Co
Ice House Drinking Water System
1213
132175F000302
N/A
WECTEC Global Project Services, Inc.
New PIG
FOR DONNY JOHNSON-WAREHOUSE STORAGE
1214
132175F005955A
WSPM015196
WECTEC Global Project Services, Inc.
Toolhound Inc.
Barcodes for Tools and Scanner

B.    Service Provider shall assume the subcontracts and purchase orders listed below but will not assign the subcontracts and purchase orders to Owners. Instead, Service Provider will amend the subcontracts and purchase orders listed below to include Owners or their designee as an additional party with all rights, claims, and defenses as are possessed by Service Provider under the terms of the subcontract or purchase order.


 
Purchase Order/
SAP
 
 
Contract
 
Subcontract
PO
Debtor
SubContractor/Vendor
Description/Title
1
4500645097
4500645097
Westinghouse Electric Company LLC
3SPACE INC
2411401 Vogtle Tank Measurement Support
2
4500408960
4500408960
Westinghouse Electric Company LLC
ABB INC
Main Generator Circuit Breaker
3
4500458067
4500458067
Westinghouse Electric Company LLC
ABB INC
Neutral Grounding Transformer

H-67



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



4
132175-G230.04
WSPM003206
WECTEC Global Project Services, Inc.
AECON INDUSTRIAL
ASME III Mechanical Modules
5
132176-G230.04
WSPM003940
WECTEC Global Project Services, Inc.
AECON INDUSTRIAL
ASME III Mechanical Modules
6
4500379569
4500379569
Westinghouse Electric Company LLC
ALFA LAVAL
SFS Heat Exchangers
7
4500693387
4500693387
Westinghouse Electric Company LLC
ALLIED RUBBER AND SUPPLY
Mechanical Connections/Quick Disconnects
8
4500371102
4500371102
Westinghouse Electric Company LLC
AMER INDUSTRIAL TECHNOLOGIES, INC.
Fuel Transfer Tube
9
4500385789
4500385789
Westinghouse Electric Company LLC
AMER INDUSTRIAL TECHNOLOGIES, INC.
VES Air Tank Package
10
4500666213
4500666213
Westinghouse Electric Company LLC
AMERICAN TANK & VESSEL INC
PCS Passive Containment Cooling Ancillary Water Storage Tank
11
4500666219
4500666219
Westinghouse Electric Company LLC
AMERICAN TANK & VESSEL INC
CVS Boric Acid Tank
12
132175-C651.04
WSPM010358
Stone & Webster Construction Inc
ANVIL INTERNATIONAL INC
YFS And RWS Pipe Support Material
13
132175-C651.07
WSPM009746
WECTEC Global Project Services, Inc.
ANVIL INTERNATIONAL INC
Non-Safety Related Pipe Support Material
14
132175-PH03.01A
WSPM004557
WECTEC Global Project Services, Inc.
ANVIL INTERNATIONAL INC
Shop Fabricated ASME B31.1 Supports - PH03.01A
15
132176-PH03.01A
WSPM004737
WECTEC Global Project Services, Inc.
ANVIL INTERNATIONAL INC
Shop Fabricated ASME B31.1 Supports - PH03.01A
16
4500636703
4500636703
Westinghouse Electric Company LLC
ARINC INC
Delivery to Site - SV3
17
4500440120
4500440120
Westinghouse Electric Company LLC
ASTRO AUTOMATION INC
New RCC Handling Tool
18
4500629276
4500629276
Westinghouse Electric Company LLC
ASTRO AUTOMATION INC
Reactor Coolant Pump/Motor Maintenance Cart
19
4500633087
4500633087
Westinghouse Electric Company LLC
ASTRO AUTOMATION INC
Reactor Coolant Pump/Motor Maintenance Cart
20
4500696026
4500696026
Westinghouse Electric Company LLC
ASTRO AUTOMATION INC
RCP Casing Stand Storage Disassembly
21
4500336213
4500336213
Westinghouse Electric Company LLC
AT&F ADVANCED METALS
WLS Vapor Condenser
22
4500336026
4500336026
Westinghouse Electric Company LLC
AT&F NUCLEAR
SV4 Waste Holdup & Mon Tank MT3L
23
4500665080
4500665080
Westinghouse Electric Company LLC
AT&F NUCLEAR
PXS ph Adjustment Baskets

H-68



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



25
4500649171
4500649171
Westinghouse Electric Company LLC
AT&F NUCLEAR
Stilling Well
26
132175-MS05.00
WSPM003991
WECTEC Global Project Services, Inc.
ATLAS COPCO COMPRESSORS LLC
Air Compressor, Air Dryer and Receiver Packages for Instrument Air and Services Subsystems
27
132176-MS05.00
WSPM003388
WECTEC Global Project Services, Inc.
ATLAS COPCO COMPRESSORS LLC
Air Compressor, Air Dryer and Receiver Packages for Instrument Air and Services Subsystems
28
4500387738
4500387738
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
RNS Normal RHR Heat Exchangers
29
4500371040
4500371040
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
SV3 Heat Exchanger, CVS Letdown, ME2S
30
4500433682
4500433682
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
Containment Piping Penetrations with Flued Heads
31
4500687086
4500687086
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
High Pressure Cartridge Filters (Reactor Coolant Filters)
32
4500644157
4500644157
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
MV60 Seismic Repair- Return to Storage
33
4500654412
4500654412
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
Authorized Inspection charge at site
34
4500656014
4500656014
Westinghouse Electric Company LLC
ATLAS INDUSTRIAL MFG CO
Degasifier Column, Vertical (re-rated)
35
4400127848
4400127848
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
Pressure Heater Controller for SV3.
36
4400131010
4400131010
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
VOGTLE 3 MCR/RSR TRANSFER PANEL
37
4400131012
4400131012
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
VOGTLE 4 MCR/RSR TRANSFER PANEL
38
4400131013
4400131013
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
VOGTLE 3 OCS PRINTER STANDS
39
4400131014
4400131014
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
VOGTLE 3 WALL PANEL INFORMATION SYSTEM
40
4400133271
4400133271
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
INVOICE 480-JI-00742
41
4400133649
4400133649
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
SV4 PHC & Spares
42
4400134340
4400134340
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
Vogtle - Packaging, Container Loading
43
4400136330
4400136330
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
SV4 OCS Printer Stands
44
4400136331
4400136331
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
VS3 OCS Printer Stands

H-69



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



45
4400138050
4400138050
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
AP1000 DRPI System and Install kits Vogt
46
4400152032
4400152032
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
Vogtle Unit 3 PLS Batch 1 FCN Parts
47
4400152556
4400152556
Westinghouse Electric Company LLC
BENTLEY WORLD PACKAGING LTD
AP1000 PMS VOGTLE UNIT 4
48
4500414207
4500414207
Westinghouse Electric Company LLC
BEST LINE EQUIPMENT
Auxiliary Building Inspection Platform
49
4500379105
4500379105
Westinghouse Electric Company LLC
BHI, INC
Containment Piping Penetrations with Flued Heads
54
4500673868
4500673868
Westinghouse Electric Company LLC
CAMERON MEASUREMENT SYSTEMS PA
AP1000 JE25 Ultrasonic Flowmeters
55
4500368833
4500368833
Westinghouse Electric Company LLC
CAMERON MEASUREMENT SYSTEMS PA
Feedwater Ultrasonic Flow Measurement  Package
56
132175-MS11.00
WSPM003867
WECTEC Global Project Services, Inc.
CAMFIL
Air Filtration Units
57
132176-MS11.00
WSPM003048
WECTEC Global Project Services, Inc.
CAMFIL
Air Filtration Units
58
132175-CR01.03
WSPM003257
WECTEC Global Project Services, Inc.
CAROLINA FABRICATORS INC
Welded Hoop Ties at Wall 11
59
132175-D500.49
WSPM007807
WECTEC Global Project Services, Inc.
CAROLINA FABRICATORS INC
Steel Grating For 300 Series Transformers
60
132175-SS01.47
WSPM010615
WECTEC Global Project Services, Inc.
CAROLINA FABRICATORS INC
Personnel Hatch Penetration Seal Rings
61
132176-CR01.03
WSPM003751
WECTEC Global Project Services, Inc.
CAROLINA FABRICATORS INC
Welded Hoop Ties at Wall 11
62
132176-SS01.47
WSPM010852
WECTEC Global Project Services, Inc.
CAROLINA FABRICATORS INC
Personnel Hatch Penetration Seal Rings
63
132175-C121.01-00
WSPM004574
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Carbon Steel Pipe
64
132175-C601.01
WSPM004587
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated ASME B31.1 Piping
65
132175-C601.03
WSPM004529
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Equipment Module Piping
66
132175-C601.04
WSPM010233
Stone & Webster Construction Inc
CB&I LAURENS INC
Fabrication of R365 Module
67
132175-C601.08
WSPM004530
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated Piping for ASME III Modules

H-70



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



68
132175-C607.01-00
WSPM004598
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Pipe Spools|
69
132175-C607.02
WSPM004597
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Pipe Sleeves|
70
132176-C601.01
WSPM004908
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated ASME B31.1 Piping
71
132176-C601.03
WSPM004909
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Equipment Module Piping
72
132176-C601.04
WSPM003764
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Fabrication of R365 Module
73
132176-C601.08
WSPM004910
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated ASME III Piping for ASME III Mechanical Modules
74
132176-C607.01-00
WSPM010144
Stone & Webster Construction Inc
CB&I LAURENS INC
Pipe Spools|
75
132176-C607.02
WSPM004911
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Pipe Sleeves|
76
J132175-C121.02
WSPM002188
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Steel Pipe, Fittings|
77
J132175-C125.01-00
WSPM002187
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
SS Pipe|
78
J132175-C601.02
WSPM004370
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated ASME III Piping|
79
J132176-C121.01
WSPM010143
Stone & Webster Construction Inc
CB&I LAURENS INC
Carbon Steel Pipe
80
J132176-C601.02
WSPM004376
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
Shop Fabricated ASME III Piping|
81
WVG3000605
WVG3000605
WECTEC Global Project Services, Inc.
CB&I LAURENS INC
DELIVERY MILESTONES - 972280 OP TRANS
82
4500328462
4500328462
Westinghouse Electric Company LLC
CCI AG
IRWST and Containment Recirculation Screens
83
4500425679
4500425679
Westinghouse Electric Company LLC
CCI AG
Main Steam Power Operated Relief Valves (MSPORV)
85
4500412721
4500412721
Westinghouse Electric Company LLC
CCI AG
Feedwater Control Valves (FCV)
86
4500662064
4500662064
Westinghouse Electric Company LLC
CHALMERS & KUBECK INC
Steam Generators
87
4500625876
4500625876
Westinghouse Electric Company LLC
CHERRY ENGINEERING INC
Engineering Services
88
4500340787
4500340787
Westinghouse Electric Company LLC
CHROMALOX, INC.
Recirculation Heaters - PCS
89
132175-CE01.01
WSPM003262
WECTEC Global Project Services, Inc.
CIVES STEEL CO
EMBEDS - Aux Bldg 66’6” to 82’6” (A2-CS-X, CE01, SV3)

H-71



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



90
132175-D100.16 RELEASE 1
WSPM003450
WECTEC Global Project Services, Inc.
CIVES STEEL CO
Fabrication & Commodities for Vogtle Units 3 & 4
91
132175-D100.16 RELEASE 2
WSPM003449
WECTEC Global Project Services, Inc.
CIVES STEEL CO
Fabrication & Commodities for Vogtle Units 3 & 4
92
132175-D500.12
WSPM003377
WECTEC Global Project Services, Inc.
CIVES STEEL CO
Leak Chase Material
93
132176-CE01.01
WSPM003757
WECTEC Global Project Services, Inc.
CIVES STEEL CO
Safety Related Embeds/Anchors (A1, A2, A3, A4, A5, A6, AA1, C2, C3, C4-CS-X) CE01
94
4500460933
4500460933
Westinghouse Electric Company LLC
CLARK COOPER DIVISION OF MAGNATROL
Solenoid Operated Globe Valves (B16.34 Exclusion)
95
132175-CE01.04-REL 1
WSPM007198
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
Safety-Related Embed Plates and Miscellaneous Steel
96
132175-CE01.04-REL 2
WSPM007197
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
Safety-Related Embed Plates and Miscellaneous Steel
97
132175-MY04.01
WSPM003928
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
VFS Debris Screen, ASME Section III, Class 3
98
132176-CE01.04-REL 1
WSPM007219
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
Safety-Related Embed Plates and Miscellaneous Steel
99
132176-CE01.04-REL 2
WSPM007218
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
Safety-Related Embed Plates and Miscellaneous Steel
100
132176-MY04.01
WSPM003045
WECTEC Global Project Services, Inc.
CONSOLIDATED PIPE AND SUPPLY CO INC
VFS Debris Screen, ASME Section III, Class 3
101
4500642121
4500642121
Westinghouse Electric Company LLC
CONSOLIDATED POWER SUPPLY
Bar,Alloy 690,14.5” Dia,ASME III-NB
102
132175-CE01.04-REL 3
WSPM011054
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety-Related Embed Plates and Miscellaneous Steel
103
132175-CR01.06
WSPM003256
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety Related Mechanical Splices for Reinforcing Steel, Conforming to APP-CR01-Z0-010
104
132175-D100.07
WSPM004534
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Pipe Support Shim Material
105
132175-PL02.03 REL 1
WSPM013516
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
ASME III Piping Materials Blanket
106
132175-PL02.08
WSPM010897
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Fabrication of ASME III Piping Spools
107
132176-CE01.04-REL 3
WSPM011055
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety-Related Embed Plates and Miscellaneous Steel
108
132176-PL02.08
WSPM010895
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Fabrication of ASME III Piping

H-72



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
Spools
109
132175-CE01.04-REL 4
WSPM015721
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety-Related Embed Plates and Miscellaneous Steel
110
132176-CE01.04-REL 4
WSPM015722
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety-Related Embed Plates and Miscellaneous Steel
111
132176-CR01.06
WSPM003740
WECTEC Global Project Services, Inc.
CONSOLIDATED POWER SUPPLY
Safety Related Mechanical Splices for Reinforcing Steel, Conforming to APP-CR01-Z0-010
112
4500315746
4500315746
Westinghouse Electric Company LLC
CONTROL COMPONENTS INC.
Pressure Regulating Globe Valves, ASME B16.34
113
4500312904
4500312904
Westinghouse Electric Company LLC
CRANE NUCLEAR INC
Ball and Plug Valves, ASME Boiler and  Pressure Vessel Code Section III Class 2 and  3
114
4500365224
4500365224
Westinghouse Electric Company LLC
CRANE NUCLEAR INC
Motor Operated Gate and Globe Valves, ASME B16.34
116
4500608832
4500608832
Westinghouse Electric Company LLC
CRANE NUCLEAR INC
3” & Larger Manually Operated Gate, Globe, & Check Vlvs, ASME B16.34
117
4500414861
4500414861
Westinghouse Electric Company LLC
CRANE NUCLEAR INC
Ball and Plug Valves, ASME B16.34
118
4500322834
4500322834
Westinghouse Electric Company LLC
CRANE NUCLEAR INC
Three-Way ASME B16.34 Valves
119
4500265132
4500265132
Westinghouse Electric Company LLC
CURTISS WRIGHT EMCORP
RCS Reactor Coolant Pumps - ASME Section III
120
4500700854
4500700854
Westinghouse Electric Company LLC
CURTISS-WRIGHT FLOW CTRL QUALTECH
Tank,Collection,CCS,Relief Vlv Discharge
121
4500700859
4500700859
Westinghouse Electric Company LLC
CURTISS-WRIGHT FLOW CTRL QUALTECH
Tank,Collection,CCS,Relief Vlv Discharge
123
4500700868
4500700868
Westinghouse Electric Company LLC
CURTISS-WRIGHT FLOW CTRL QUALTECH
Containment Flood-up Weirs
124
4500710537
4500710537
Westinghouse Electric Company LLC
CURTISS-WRIGHT FLOW CTRL QUALTECH
Aux Bldg Expansion Gap Radiation Shield
125
4500325875
4500325875
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
SFS Spent Fuel System Cooling Pumps
126
4500611385
4500611385
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
SV3- MP2U BAST Recirc Pump
127
4500330217
4500330217
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
WLS Reactor Coolant Drain Tank Pumps
128
4500336294
4500336294
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
WLS Degasifier Separator Pumps
129
4500656834
4500656834
Westinghouse Electric
CURTISS-WRIGHT
1” & 2” Manually Operated Globe

H-73



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Company LLC
NUCLEAR DIVISION
and Check Valves, ASME Sec III Cl 1, 2, & 3
130
4500328840
4500328840
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
3” & Larger Man Operated Gate, Globe and Check Vlvs, ASME Sec III Cl 1,2,3
131
4500695579
4500695579
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
1” & 2” Manually Operated Globe and Check Valves, ASME B16.34
132
4500695586
4500695586
Westinghouse Electric Company LLC
CURTISS-WRIGHT NUCLEAR DIVISION
1” & 2” Manually Operated Globe and Check Valves, ASME B16.34
134
4500703315
4500703315
Westinghouse Electric Company LLC
DIETERICH STANDARD INC
JE79 Load Change Evaluation
135
4500264977
4500264977
Westinghouse Electric Company LLC
DOOSAN HEAVY INDUSTRIES &
Steam Generators
136
4500264953
4500264953
Westinghouse Electric Company LLC
DOOSAN HEAVY INDUSTRIES &
Reactor Vessel Equipment
137
4500365096
4500365096
Westinghouse Electric Company LLC
DRESSER CONSOLIDATED
Main Steam Safety Valves (MSSV)
138
4500658075
4500658075
Westinghouse Electric Company LLC
DRS CONSOLIDATED CONTROLS INC
Switch,Transfer,3-Phase,4-Pole,208/120 V
139
4500426690
4500426690
Westinghouse Electric Company LLC
DRS CONSOLIDATED CONTROLS INC
Vogtle 3 Preamplifiers (8)
140
132175-D100.CA004
WSPM003448
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Select CH & CS Module Fabrication
141
132175-JT01.01
WSPM011809
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
ASME III Tubing
142
132175-SH22.02
WSPM003912
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
ELECTRICAL CONDUIT AND JUNCTION BOX SUPPORTS
143
132175-SH25.01
WSPM003911
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Seismic Category I Cable Tray Supports
144
132175-SH25.02
WSPM009833
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Seismic Category I Cable Tray Supports
145
132176-D100.CA004
WSPM003739
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Select CH & CS Module Fabrication
146
132176-SH22.02
WSPM003140
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Electrical Conduit and Junction Box Supports
147
132176-SH25.01
WSPM003139
WECTEC Global Project Services, Inc.
DUBOSE NATIONAL ENERGY SERVICES INC
Cat I Cable Tray Supports
148
132176-SH25.02
WSPM009834
Stone & Webster Construction Inc
DUBOSE NATIONAL ENERGY SERVICES INC
Seismic Category I Cable Tray Supports
149
4500666297
4500666297
Westinghouse Electric Company LLC
E.S. FOX LIMITED
CHANGE NOTICE ITEMS WITH QUALITY

H-74



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CONFIDENTIAL TRADE SECRET INFORMATION



150
4500666464
4500666464
Westinghouse Electric Company LLC
E.S. FOX LIMITED
Immersion Heater
151
4500644922
4500644922
Westinghouse Electric Company LLC
EAGLE EYE POWER SOLUTIONS LLC
Automatic Battery Monitors
152
4500691866
4500691866
Westinghouse Electric Company LLC
EAGLE EYE POWER SOLUTIONS LLC
Automatic Battery Monitors
153
4500678038
4500678038
Westinghouse Electric Company LLC
EATON CORP
Non-Class 1E Fused Transfer Switch Boxes
154
4500678040
4500678040
Westinghouse Electric Company LLC
EATON CORP
AC Distribution Panels
155
4500674897
4500674897
Westinghouse Electric Company LLC
EATON CORP
Non-1E Dry Type Transformers for Power and Lighting
156
132175-DF02.01
WSPM001413
WECTEC Global Project Services, Inc.
EATON CORP
Non 1E Fused Transfer Switch Boxes
157
132175-DS02.01
WSPM009993
Stone & Webster Construction Inc
EATON CORP
Non 1E 250 VDC Switchboards
158
132175-E028.02
WSPM003362
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Dry-Type Transformers
159
132175-E028.03
WSPM003361
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Liquid Immersed Transformers for Step-Up Operation
160
132175-EA02.01
WSPM002955
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E AC Distribution Panels for EDS
161
132175-EB02.02
WSPM002953
WECTEC Global Project Services, Inc.
EATON CORP
Non-Segregated Phase Bus Duct for Electric Auxiliary Boiler
162
132175-EC01.01
WSPM002952
WECTEC Global Project Services, Inc.
EATON CORP
Motor Control Centers
163
132175-ED01.01
WSPM002949
WECTEC Global Project Services, Inc.
EATON CORP
480Y/277 VAC and 208Y/120 VAC Distribution Panels
164
132175-EK01.01
WSPM010306
Stone & Webster Construction Inc
EATON CORP
Non-Class 1E Low Voltage Load Centers and Bus Duct
165
132175-ES01.01
WSPM002961
WECTEC Global Project Services, Inc.
EATON CORP
Medium Voltage Switchgear
166
132175-ET30.01
WSPM010299
Stone & Webster Construction Inc
EATON CORP
General Purpose Dry Type Transformer
167
132175-EY11.01
WSPM003153
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Disconnect Switches
168
132176-DF02.01
WSPM001169
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Fused Transfer Switch Boxes
169
132176-DS02.01
WSPM003190
WECTEC Global Project Services, Inc.
EATON CORP
Non 1E 250 VDC Switchboards

H-75



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



170
132176-EA02.01
WSPM003186
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E AC Distribution Panels for EDS
171
132176-EB02.02
WSPM003116
WECTEC Global Project Services, Inc.
EATON CORP
Non-Segregated Phase Bus Duct for Electric Auxiliary Boiler
172
132176-ED01.01
WSPM003114
WECTEC Global Project Services, Inc.
EATON CORP
480Y/277 VAC and 208Y/120 VAC Distribution Panels
173
132176-ET30.01
WSPM010269
Stone & Webster Construction Inc
EATON CORP
General Purpose Dry Type Transformer
174
132176-EY11.01
WSPM003944
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Disconnect Switches
175
J132175-E051.01-00
WSPM002181
WECTEC Global Project Services, Inc.
EATON CORP
Non Class 1E Low Voltage Secondary Unit Substations
176
J132175-E052.01-00
WSPM002180
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E 480 V Motor Control Centers|
177
132176-EC01.01
WSPM003115
WECTEC Global Project Services, Inc.
EATON CORP
Motor Control Centers
178
132176-EK01.01
WSPM003110
WECTEC Global Project Services, Inc.
EATON CORP
Non-Class 1E Low Voltage Load Centers and Bus Duct
179
132176-ES01.01
WSPM003955
WECTEC Global Project Services, Inc.
EATON CORP
Medium Voltage Switchgear
180
4500406021
4500406021
Westinghouse Electric Company LLC
EBARA CORPORATION
SWS Service Water Pumps (Vertical Wetpit)
181
4500372318
4500372318
Westinghouse Electric Company LLC
EBARA CORPORATION
FWS Startup Feedwater Pumps (Horizontal Multi-Stage Centrifugal)
182
4500406266
4500406266
Westinghouse Electric Company LLC
EBARA CORPORATION
CCS Component Cooling Water Pumps
184
4500402050
4500402050
Westinghouse Electric Company LLC
EFACEC USA INC
Three-Winding Unit Auxiliary Transformers
185
4500629261
4500629261
Westinghouse Electric Company LLC
ELLIS & WATTS GLOBAL INDUSTRIES INC
Safety Related Ductwork and Expansion Joints
186
4500682178
4500682178
Westinghouse Electric Company LLC
ELLIS & WATTS GLOBAL INDUSTRIES INC
PSS Delay Coils
187
4500630741
4500630741
Westinghouse Electric Company LLC
ELLIS & WATTS GLOBAL INDUSTRIES INC
IRWST Vent and Overflow Weir Covers
189
132175-MS10.00
WSPM001587
WECTEC Global Project Services, Inc.
ELLIS & WATTS GLOBAL INDUSTRIES INC
MS10 Air Handling Units
190
132175-MS14.00
WSPM010393
Stone & Webster Construction Inc
ELLIS & WATTS GLOBAL INDUSTRIES INC
MS14 - Containment Recirculation Fan Coil Units
191
4500628794
4500628794
Westinghouse Electric Company LLC
EMERSON PROCESS MANAGEMENT
Engineer (Days)
192
4500702350
4500702350
Westinghouse Electric
EMERSON PROCESS
ALL SV3 BATCH 1A DDS PARTS

H-76



CONFIDENTIAL& PROPRIETARY
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Company LLC
MANAGEMENT
 
193
4500702389
4500702389
Westinghouse Electric Company LLC
EMERSON PROCESS MANAGEMENT
ALL SV4 BATCH 1A DDS PARTS
194
132175-PH02.04
WSPM003922
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
ASME III Subsection NF Support Materials
195
132175-PL02.02
WSPM004558
WECTEC Global Project Services, Inc.
ENERGY AND PROCESS CORP
ASME III Cat. I/B Piping Materials for SFS System, Module CA01
196
4500416495
4500416495
Westinghouse Electric Company LLC
ENERGY STEEL AND SUPPLY CO
Reactor Coolant System Support Components      Includes: RV, SG, PZR
197
4500427657
4500427657
Westinghouse Electric Company LLC
ENERGY STEEL AND SUPPLY CO
Reactor Coolant System Support Components      Includes: RV, SG, PZR
199
132175-C607.04
WSPM015711
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Fabrication of ASME B31.1 Embedded Pipe Spools
200
132175-CE01.05
WSPM007262
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Safety-Related Embed Plates and Miscellaneous Steel
201
132176-CE01.05
WSPM007295
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Safety-Related Embed Plates and Miscellaneous Steel
202
J132176-C607.04
WSPM015713
WECTEC Global Project Services, Inc.
ENERGY STEEL AND SUPPLY CO
Fabrication of ASME B31.1 Embedded Pipe Spools
203
4500461828
4500461828
Westinghouse Electric Company LLC
ENERSYS
Non-1E Batteries
204
4500383567
4500383567
Westinghouse Electric Company LLC
ENERSYS DELAWARE INC
Class 1E Battery Cells
205
4500703454
4500703454
Westinghouse Electric Company LLC
ENERSYS DELAWARE INC
Non-1E Batteries
207
4500430528
4500430528
Westinghouse Electric Company LLC
EVOQUA WATER TECHNOLOGIES LLC
BDS Electrodeionization Packages
208
132175-MS08.00
WSPM003989
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
CORS
209
132175-MS09.00
WSPM003988
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
Demin Water Treatment
210
132175-MS19.00
WSPM003866
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
Condensate Polishing Package Unit 3
211
132175-MS30.01
WSPM010466
Stone & Webster Construction Inc
EVOQUA WATER TECHNOLOGIES LLC
Turbine Island Chemical Feed System
212
132176-MS08.00
WSPM003386
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
CORS
213
132176-MS09.00
WSPM003385
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
Demin Water Treatment

H-77



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



214
132176-MS19.00
WSPM003047
WECTEC Global Project Services, Inc.
EVOQUA WATER TECHNOLOGIES LLC
Condensate Polishing Package Unit4|
215
132176-MS30.01
WSPM010467
Stone & Webster Construction Inc
EVOQUA WATER TECHNOLOGIES LLC
Turbine Island Chemical Feed System
217
4500332459
4500332459
Westinghouse Electric Company LLC
FARRIS ENGINEERING SERVICES
Auxiliary Relief Valves, ASME B16.34
219
4500411181
4500411181
Westinghouse Electric Company LLC
FISHER CONTROLS INTERNATIONAL INC
Air Operated Globe Valves, ASME Sec III Class 1, 2, & 3
220
4500327665
4500327665
Westinghouse Electric Company LLC
FISHER CONTROLS INTL INC
Air Operated Globe Valves, ASME Sec III Class 1, 2, & 3
221
4500338991
4500338991
Westinghouse Electric Company LLC
FISHER CONTROLS INTL INC
Passive Residual Heat Removal Discharge Valves
222
4500352002
4500352002
Westinghouse Electric Company LLC
FISHER CONTROLS INTL INC
Three-Way ASME B16.34 Valves
223
4500371190
4500371190
Westinghouse Electric Company LLC
FISHER CONTROLS INTL INC
Pressurizer Spray Valves
224
132175-MP05.01
WSPM001595
WECTEC Global Project Services, Inc.
FLOWSERVE - NC
MP05.01 Replacement Parts
225
4500328269
4500328269
Westinghouse Electric Company LLC
FLOWSERVE CORP
CVS Makeup Pumps
226
4500328256
4500328256
Westinghouse Electric Company LLC
FLOWSERVE CORP
RNS Centrifugal Normal RHR Pumps
227
4500326442
4500326442
Westinghouse Electric Company LLC
FLOWSERVE CORP - COOKEVILLE TN
Ball and Plug Valves, ASME B16.34
228
4500328752
4500328752
Westinghouse Electric Company LLC
FLOWSERVE CORP - COOKEVILLE TN
Ball and Plug Valves, ASME B16.34
229
4500319052
4500319052
Westinghouse Electric Company LLC
FLOWSERVE CORP - RALEIGH NC
Motor Operated Globe and Gate Valves, ASME Section III, Class 1, 2, & 3
230
4500316051
4500316051
Westinghouse Electric Company LLC
FLOWSERVE CORP - RALEIGH NC
3” & Larger Man Operated Gate, Globe and Check Vlvs, ASME Sec III Cl 1,2,3
231
4500327443
4500327443
Westinghouse Electric Company LLC
FLOWSERVE CORP - RALEIGH NC
Main Steam Isolation Valves (MSIV)
232
4500325750
4500325750
Westinghouse Electric Company LLC
FLOWSERVE CORP - RALEIGH NC
Feedwater Isolation Valves (FWIV)
233
4500328691
4500328691
Westinghouse Electric Company LLC
FLOWSERVE CORP - RALEIGH NC
Feedwater Check Valves (FWCV)
235
4500332338
4500332338
Westinghouse Electric Company LLC
FLOWSERVE CORP - SPRINGVILLE UT
Air Operated Globe Valves, ASME B16.34
236
4500344391
4500344391
Westinghouse Electric
FLOWSERVE CORP -
PCS Recirculation Pumps

H-78



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CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
Company LLC
VERNON CA
 
237
4500405443
4500405443
Westinghouse Electric Company LLC
FLOWSERVE CORP - VERNON CA
PCS Recirculation Pumps
238
4500354708
4500354708
Westinghouse Electric Company LLC
FLUID HANDLING LLC
SV3 Heat Exchanger, CVS Pump, ME2Q
239
4500331052
4500331052
Westinghouse Electric Company LLC
GARDNER DENVER INC
Liquid Ring Vacuum Pumps (WLS Degasifier Vacuum Pumps)
241
132175-K206.00
WSPM001688
WECTEC Global Project Services, Inc.
GENERAL ATOMICS
Building 305 Radiation Monitors (Area & P/I/G)
242
132175-CR01.07 REL 1
WSPM003255
WECTEC Global Project Services, Inc.
GERDAU INC
Mechanical Splices
243
132175F001701
WSPM011183
Stone & Webster Construction Inc
GERDAU INC
NI-4 Threading Parts for Arnie Uranga
244
132175F001709
WSPM009738
Stone & Webster Construction Inc
GERDAU INC
Chaser for Rodbusters Lenton Chaser set pitt1.25mm art.nr.14900 company Erico
245
132175F002964
WSPM004521
Stone & Webster Construction Inc
GERDAU INC
Training for the rebar threader
246
132175F003565
WSPM010427
Stone & Webster Construction Inc
GERDAU INC
Caps From Gerdau For Thread Protection Nuclear Island Rebar Fab Shop
247
132175F003655
WSPM010444
Stone & Webster Construction Inc
GERDAU INC
Nonpermanent Plant Equiptment For Use On Unit 3 Shield Building. Cadweld Equiptment/No Filler. Per E&DCR SV0-CR01-GEF-000499
248
132175F004067
WSPM010634
Stone & Webster Construction Inc
GERDAU INC
Rebar Threading Machine Replacement Parts. Nuclear Island 3 Rebar Fab Shop.
249
132175F004769
WSPM009901
Stone & Webster Construction Inc
GERDAU INC
Rebar Threading Machine Replacement Parts. Nuclear island 3 Rebar Fab Shop.
250
132175F005480
WSPM009743
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar caps to protect threading at rebar fab shop NI3.
251
132175F005709
WSPM009804
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar Caps For Thread Protection. Nuclear Island 3 Rebar Fab Shop.
252
132175-J400.00
WSPM003744
WECTEC Global Project Services, Inc.
GERDAU INC
Non-Safety Related Rebar and Couplers
253
132176-CR01.04 REL 1
WSPM001207
WECTEC Global Project Services, Inc.
GERDAU INC
Reinforcing Steel (Safety Class C) - Bulk Supply
254
132176-CR01.04-REL02
WSPM003750
WECTEC Global Project Services, Inc.
GERDAU INC
Stock Reinforcing Blanket Purchase Agreement Release #2

H-79



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CONFIDENTIAL TRADE SECRET INFORMATION



255
132176-CR01.04-REL03
WSPM011073
WECTEC Global Project Services, Inc.
GERDAU INC
Stock Bar Release #3
256
132176-J400.00
WSPM003938
WECTEC Global Project Services, Inc.
GERDAU INC
Safety Related Rebar Unit 4
257
J132175-J400A-00
WSPM002104
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar Billets|
258
WVG3000018
WVG3000018
WECTEC Global Project Services, Inc.
GERDAU INC
Thread Chasers For Rebar Threading Machine Nuclear Island 3.
259
WVG3000160
WVG3000160
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar Caps Nuclear Island 3. For Thread Protection.
260
WVG3000206
WVG3000206
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar thread protectors. Nuclear Island 3 Rebar Fab Shop.
261
WVG3000658
WVG3000658
WECTEC Global Project Services, Inc.
GERDAU INC
Rebar thread chasers for rebar threader machine. Fab shop in Nuclear Island 3.
262
WVG3000659
WVG3000659
Stone & Webster Construction Inc
GERDAU INC
Nonpermanent Plant. Construction Aid Material. Nuclear Island 3.
263
WVG3001363
WVG3001363
WECTEC Global Project Services, Inc.
GERDAU INC
to be used for operations of rebar fabrication-safety requirements, used in NOI 6 fabrication shops
264
WVG3001375
WVG3001375
WECTEC Global Project Services, Inc.
GERDAU INC
To be used for operations of rebar fabrication-safety requirement in NOI-6 fabrication shop
265
WVG3001379
WVG3001379
WECTEC Global Project Services, Inc.
GERDAU INC
to be used for operations of rebar fabrication-safety requirement in NOI-6 fabrication shop
266
WVG3001516
WVG3001516
WECTEC Global Project Services, Inc.
GERDAU INC
temporary construction aid to be used in NOI-6 Fabrication Shops, required in operations of the rebar fabrication process.
267
4500620847
4500620847
Westinghouse Electric Company LLC
GRAHAM CORP
RCS Air Ejector Package
268
132175-D100.CA005
WSPM003447
WECTEC Global Project Services, Inc.
GREENBERRY FABRICATION
CA Module Fabrication
269
132175-SS01.39
WSPM000236
WECTEC Global Project Services, Inc.
GREENBERRY FABRICATION
The CH Structural Modules
270
132176-D100.CA005
WSPM003738
WECTEC Global Project Services, Inc.
GREENBERRY FABRICATION
CA Module Fabrication
271
132176-SS01.39
WSPM000829
WECTEC Global Project Services, Inc.
GREENBERRY FABRICATION
The CH Structural Modules

H-80



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



272
4500352740
4500352740
Westinghouse Electric Company LLC
GSE POWER SYSTEMS INC
LSS #1 RFT
274
4500426010
4500426010
Westinghouse Electric Company LLC
GUTOR Electronic LLC
Class 1E Battery Chargers
275
4500456642
4500456642
Westinghouse Electric Company LLC
GUTOR Electronic LLC
Non-1E Battery Chargers
276
4500665006
4500665006
Westinghouse Electric Company LLC
GUTOR Electronic LLC
Non-1E Battery Chargers
277
4500328271
4500328271
Westinghouse Electric Company LLC
HAYWARD TYLER PUMP CO
BDS Stm Gen Drain & Recirc Pump
278
4500359753
4500359753
Westinghouse Electric Company LLC
HOLTEC INTERNATIONAL
Spent Fuel Storage Racks
279
4500449508
4500449508
Westinghouse Electric Company LLC
HOLTEC INTERNATIONAL
Spent Fuel Storage Racks
280
4500450369
4500450369
Westinghouse Electric Company LLC
HOLTEC INTERNATIONAL
Spent Fuel Storage Racks
281
4500459598
4500459598
Westinghouse Electric Company LLC
HOLTEC INTERNATIONAL
Spent Fuel Storage Racks
282
4500652956
4500652956
Westinghouse Electric Company LLC
HYDRATIGHT OPERATION INC
SG Manhole Stud Bolt Tensioner
283
4500365480
4500365480
Westinghouse Electric Company LLC
HYUNDAI HEAVY INDUSTRIES
Feedwater Pump Packages
284
4500654220
4500654220
Westinghouse Electric Company LLC
IHI CORPORATION
Material Consulting Fee
285
4500655276
4500655276
Westinghouse Electric Company LLC
IHI CORPORATION
SV3 Design, Mfg., & Documentation Cost
286
4500705328
4500705328
Westinghouse Electric Company LLC
IHI CORPORATION
Review of Work Package
287
132175-D100.SB008
WSPM003458
WECTEC Global Project Services, Inc.
IHI CORPORATION
Shield Building Conical Roof
288
132176-D100.SB008
WSPM003200
WECTEC Global Project Services, Inc.
IHI CORPORATION
Shield Building Conical Roof
289
132175-MP10.01
WSPM003995
WECTEC Global Project Services, Inc.
ITT GOULDS PUMPS INC
MP10 Pumps MP1G/R/S/T
290
132176-MP10.01
WSPM003391
WECTEC Global Project Services, Inc.
ITT GOULDS PUMPS INC
MP10 Pumps MP1G/R/S/T
291
132176-PH02.02
WSPM003041
WECTEC Global Project Services, Inc.
JAMES C WHITE CO INC
ASME III Tube Track
292
132175-MS02.01
WSPM003994
WECTEC Global Project Services, Inc.
JOHNSON CONTROL CO
Low Capacity (Air Cooled) Chiller
293
132175-MS02.02
WSPM003993
WECTEC Global Project Services, Inc.
JOHNSON CONTROL CO
High Capacity (Air Cooled) Chiller

H-81



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



294
132176-MS02.01
WSPM003390
WECTEC Global Project Services, Inc.
JOHNSON CONTROL CO
Low Capacity (Air Cooled) Chiller
295
132176-MS02.02
WSPM003389
WECTEC Global Project Services, Inc.
JOHNSON CONTROL CO
High Capacity (Air Cooled) Chiller
296
4500416132
4500416132
Westinghouse Electric Company LLC
JOHNSON MARCH SYSTEMS INC
CVS Zinc Injection Package
297
4500371506
4500371506
Westinghouse Electric Company LLC
JOHNSON MARCH SYSTEMS INC
WGS Sample Package
298
4500617215
4500617215
Westinghouse Electric Company LLC
JOHNSON MARCH SYSTEMS INC
Hydrogen Injection Package
299
4500698668
4500698668
Westinghouse Electric Company LLC
JOHNSON MARCH SYSTEMS INC
Panel,Electrohydraulic Control
300
4500626302
4500626302
Westinghouse Electric Company LLC
KTA TATOR INC
Paint Appl Insp Serv Vgtle 4 IIS SPS Cab
301
4500629435
4500629435
Westinghouse Electric Company LLC
KTA TATOR INC
Paint Appl Insp Serv Vgtle 4 IIS SPS Cab
302
4500630383
4500630383
Westinghouse Electric Company LLC
KTA TATOR INC
Paint Appl Insp Serv for Vogtle Unit 4
303
132175-E153.00
WSPM002968
WECTEC Global Project Services, Inc.
LEIDOS ENGINEERING LLC
Engineering Services for Verification & Validation of Standard Plant EFS Design
304
4500379788
4500379788
Westinghouse Electric Company LLC
LHE Co., Ltd.
ME3A Design Analysis Report
305
4500423270
4500423270
Westinghouse Electric Company LLC
LISEGA INC - USA
Reactor Coolant System Support Components      Includes: RV, SG, PZR
306
4500435151
4500435151
Westinghouse Electric Company LLC
LISEGA INC - USA
Reactor Coolant System Support Components      Includes: RV, SG, PZR
307
132175-C651.03
WSPM010092
Stone & Webster Construction Inc
LISEGA INC - USA
Pipe Support Materials NS related Cat III/E
308
132175-C651.06
WSPM004596
WECTEC Global Project Services, Inc.
LISEGA INC - USA
Lisega Pipe Strap KB04 Mod. WGS Aux
309
132175-PH02.01
WSPM004555
WECTEC Global Project Services, Inc.
LISEGA INC - USA
ASME III Section NF Pipe Supports
310
132175-PH02.03 REL 1
WSPM001655
WECTEC Global Project Services, Inc.
LISEGA INC - USA
ASME III NF Support Material Blanket
311
132175-PH03.01
WSPM004556
WECTEC Global Project Services, Inc.
LISEGA INC - USA
Shop Fabricated ASME B31.1 Pipe Supports - PH03
312
132175-SH60.01
WSPM004665
WECTEC Global Project
LISEGA INC - USA
WEC Safety Class C Pipe Whip

H-82



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
Services, Inc.
 
Restraints
313
132175-SS01.34
WSPM003907
WECTEC Global Project Services, Inc.
LISEGA INC - USA
Non-Safety Related Structural Steel Support for Turbine Generator Systems & Aux. Equipment (CRV#1,2,3,4,5,6; MSV/CV#1,2,3,4 and MSR A/B)
314
132176-PH02.01
WSPM004736
WECTEC Global Project Services, Inc.
LISEGA INC - USA
ASME III Section NF Pipe Supports
315
132176-PH03.01
WSPM004735
WECTEC Global Project Services, Inc.
LISEGA INC - USA
Shop Fabricated ASME B31.1 Supports PH03 Large Bore and Small Bore, Seismic and Non Seismic
316
132176-SH60.01
WSPM004676
WECTEC Global Project Services, Inc.
LISEGA INC - USA
WEC Safety Class C Pipe Whip Restraints
317
132176-SS01.34
WSPM003136
WECTEC Global Project Services, Inc.
LISEGA INC - USA
Non-Safety Related Structural Steel Support for Turbine Generator Systems & Aux. Equipment (CRV#1,2,3,4,5,6; MSV/CV#1,2,3,4 and MSR A/B)
318
132175-PY25.01
WSPM003915
WECTEC Global Project Services, Inc.
MACKSON INC
Single Stage, ASME III, Class 1, 2, and 3 Orifices
319
132176-PY25.01
WSPM003033
WECTEC Global Project Services, Inc.
MACKSON INC
Single Stage, ASME III, Class 1, 2, and 3 Orifices
320
132175-C121.12
WSPM015259
Stone & Webster Construction Inc
MACO INC
Fabricated Piping and Loose Materials in Accordance with Shop Fab Piping Spec SV3-GW-P0-007
321
132175-C124.01
WSPM004590
WECTEC Global Project Services, Inc.
MACO INC
Alloy Steel Piping and Fittings for ZRS Diesel Exhaust
322
132175-C810.04
WSPM009793
WECTEC Global Project Services, Inc.
MACO INC
Replacement Anchor Bolt Material for Iso Phase Bus Pedestal
323
132175-CE50.03
WSPM000120
WECTEC Global Project Services, Inc.
MACO INC
Non-Safety Embeds & Misc. Steel Items
324
132175-D220.10
WSPM004531
Stone & Webster Construction Inc
MACO INC
CA Module Lift Frames
325
132175-D220.13
WSPM003455
WECTEC Global Project Services, Inc.
MACO INC
Non-Safety Embedded Plates
326
132175-D500.33
WSPM003372
WECTEC Global Project Services, Inc.
MACO INC
Concrete Chairs For Shield Wall
327
132175-D500.41
WSPM003369
WECTEC Global Project Services, Inc.
MACO INC
Steel, Guardrail, Ladders, Grating For WWRB
328
132175-D500.43
WSPM003368
WECTEC Global Project
MACO INC
Fully Assembled Stair, Grating, And

H-83



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
Services, Inc.
 
Steel Beam For Building 315
329
132175F000631A
WSPM004638
Stone & Webster Construction Inc
MACO INC
Module Wall Fit-up
330
132175F004826
WSPM003815
Stone & Webster Construction Inc
MACO INC
Equipment to be used to support the HP Upper/Lower casings for machining repairs
331
132175F005408
WSPM004936
Stone & Webster Construction Inc
MACO INC
Lifting lugs for Turbine Building roof trusses
332
132175F005909
WSPM002999
Stone & Webster Construction Inc
MACO INC
CA01-07 lifting attachment
333
132175F006016
WSPM004720
Stone & Webster Construction Inc
MACO INC
load testing lifting lugs to be used for CA20 installation, work package SV4-CA20-MHH-040
334
132175F006056
WSPM004723
Stone & Webster Construction Inc
MACO INC
Spacer/Shim to be used for temporary use and placed in the RV closure head during the build
335
132176-C121.11
WSPM004907
WECTEC Global Project Services, Inc.
MACO INC
Fabricated Piping & Loose Piping Materials intended for Cat III/SC-E Applications
336
132176-C913.02
WSPM004729
WECTEC Global Project Services, Inc.
MACO INC
Cast Iron Pipe Materials for Unit 4 SDS and Copper Tubing Materials for PWS
337
132176-CE50.03
WSPM003752
WECTEC Global Project Services, Inc.
MACO INC
Non-Safety Embeds & Misc. Steel Items
338
132176-D220.14
WSPM003199
WECTEC Global Project Services, Inc.
MACO INC
Non-Safety Related Embed Plates
339
132176-D500.41
WSPM003196
WECTEC Global Project Services, Inc.
MACO INC
Steel, Guardrail, Ladders, Grating For WWRB
340
132176F000091
WSPM003132
WECTEC Global Project Services, Inc.
MACO INC
Construction aid material to be embedded and left in place and used for course 1 shield building supports, work package SV4-1208-SCW-CV6994
341
132176-FPR134-00074
WSPM003942
WECTEC Global Project Services, Inc.
MACO INC
HYDRO SUPPORT STEEL
342
WVG3001298
WVG3001298
WECTEC Global Project Services, Inc.
MACO INC
Material left in place at Annex 3 Pour Stop WP # SV3-4002-SSW-CV3906
343
WVG3001408
WVG3001408
WECTEC Global Project Services, Inc.
MACO INC
Non-Safety, Non-Permanent plant material needed for Turbine overhead crane test frame-Plate-

H-84



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
 
 
A36 1”x 6” x 8”, QA Category III, Safety Class E, Storage Level D
344
WVG3001471
WVG3001471
WECTEC Global Project Services, Inc.
MACO INC
Load testing of Turbine Island 220 ton O/H crane
345
WVG3001485
WVG3001485
WECTEC Global Project Services, Inc.
MACO INC
TEST WEIGHT BASKET FOR 220 Ton CRANE FOR TI3 MOYA NELSON EXT: 3145
346
4500706639
4500706639
Westinghouse Electric Company LLC
MAGNETROL INTERNATIONAL INC
AP1000 JE27 Radar Level Instruments
347
4500274213
4500274213
Westinghouse Electric Company LLC
MANGIAROTTI SpA
PXS Passive RHR Heat Exchanger
348
4500656971
4500656971
Westinghouse Electric Company LLC
MANGIAROTTI SpA
Pipe Anchors in Brk Exclusion Zone of NI
349
4500278950
4500278950
Westinghouse Electric Company LLC
MANGIAROTTI SpA
PXS Core Makeup Tanks
350
4500273232
4500273232
Westinghouse Electric Company LLC
MANGIAROTTI SpA
PXS Accumulator Tanks
351
4500274162
4500274162
Westinghouse Electric Company LLC
MANGIAROTTI SpA
Pressurizer
352
4500624591
4500624591
Westinghouse Electric Company LLC
MCFARLAND-TRITAN
Lube Oil Jacking Pump Packages
353
132175-MS07.01
WSPM003990
WECTEC Global Project Services, Inc.
MILTON CAT
Diesel Fuel Oil Transfer Packages
354
132175-MS40.01
WSPM003929
WECTEC Global Project Services, Inc.
MILTON CAT
Standby Diesel Generator Units|
355
132176-MS07.01
WSPM003387
WECTEC Global Project Services, Inc.
MILTON CAT
Diesel Fuel Oil Transfer Packages
356
132176-MS40.01
WSPM003046
WECTEC Global Project Services, Inc.
MILTON CAT
Standby Diesel Generator Units|
357
4500430408
4500430408
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (CONAX NUCLEAR)
Electrical Penetration Assembly
358
4500605776
4500605776
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (CONAX NUCLEAR)
Containment Vessel
359
4500372803
4500372803
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (IST) CORP
STND SFTY SR MOD EXCORE DETECTOR ASSY
360
4500670690
4500670690
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (IST) CORP
Standard Safety Quadaxial Cable - Brown
361
4500709430
4500709430
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (IST) CORP
AP1000 PR Instrument Well Cap
362
4500709431
4500709431
Westinghouse Electric Company LLC
MIRION TECHNOLOGIES (IST) CORP
AP1000 PR Instrument Well Cap

H-85



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



363
4500642248
4500642248
Westinghouse Electric Company LLC
MOYNO
SV3 WSS Resin Transfer Pump, Pos Disp
364
4500721996
4500721996
Westinghouse Electric Company LLC
NEAL BROTHERS CHARLESTON
Transport & Packaging: PV32/PV33 Valves
365
4500630397
4500630397
Westinghouse Electric Company LLC
NEUGART USA
Reactor Coolant Pump/Motor Maintenance Cart
366
132175-D100.SB003
WSPM003460
WECTEC Global Project Services, Inc.
NEWPORT NEWS INDUSTRIAL CORP
Shield Building
367
132175-D100.SB005
WSPM003459
WECTEC Global Project Services, Inc.
NEWPORT NEWS INDUSTRIAL CORP
Shield Building Air Inlet and Tension Ring
368
132176-D100.SB003
WSPM010835
Stone & Webster Construction Inc
NEWPORT NEWS INDUSTRIAL CORP
Shield Building
369
132176-D100.SB005
WSPM003201
WECTEC Global Project Services, Inc.
NEWPORT NEWS INDUSTRIAL CORP
Shield Building Air Inlet and Tension Ring
370
4500622774
4500622774
Westinghouse Electric Company LLC
NOOK INDUSTRIES INC
Reactor Coolant Pump/Motor Maintenance Cart
371
4500419315
4500419315
Westinghouse Electric Company LLC
NOVA MACHINE PRODUCTS CORP
Spent Fuel Rack Insert for BPRA
372
4500657904
4500657904
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE49 ElectroMagnetic Flowmeters
373
4500660133
4500660133
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE26 N1E Ultrasonic Level Sensors
374
4500665052
4500665052
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE23 Inline Flow Transmitters
375
4500669105
4500669105
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE52 Pressure & dP Transmitters
376
4500670621
4500670621
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE36 Process Analyzers
377
4500673034
4500673034
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
AP1000 JE38 Local Process Indicators
378
4500673562
4500673562
Westinghouse Electric Company LLC
OBAYASHI CORP
AP1000 Strategic Planning Team
379
132175-D100.12 RELEASE 1
WSPM014780
WECTEC Global Project Services, Inc.
OFI CUSTOM METAL FABRICATION
Plates For Unassembled OLPs For Civil Modules
380
132175-SS01.00
WSPM003909
WECTEC Global Project Services, Inc.
OWEN INDUSTRIES INC
Safety Related Structural Steel and Steel Decking, Vogtle Unit 3 [Auxiliary and Containment Bldg]
381
132176-SS01.00
WSPM003137
WECTEC Global Project Services, Inc.
OWEN INDUSTRIES INC
Safety Related Structural Steel and Steel Decking, Vogtle Unit 4 [Auxiliary and Containment Bldg]
382
4500332554
4500332554
Westinghouse Electric
PALL CORP - TECH SRVCS
High Pressure Cartridge Filters

H-86



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
Company LLC
 
(Reactor Coolant Filters)
383
4500343791
4500343791
Westinghouse Electric Company LLC
PALL CORP - TECH SRVCS
Vogtle 3 - Filter Cartridges
384
4500623272
4500623272
Westinghouse Electric Company LLC
PANELMATIC INC
Engineering Services JR03 Design Changes
385
4500718033
4500718033
Westinghouse Electric Company LLC
PANELMATIC INC
Console,Security Station,CAS
401
4500646466
4500646466
Westinghouse Electric Company LLC
PCI ENERGY SERVICES
PXS Core Makeup Tanks
402
4500710153
4500710153
Westinghouse Electric Company LLC
PCI ENERGY SERVICES LLC
ASME Work for IHP
403
4500435333
4500435333
Westinghouse Electric Company LLC
PENN STATE TOOL & DIE CORP
Wet Annular Burnable Absorber Handling Tool
404
4500455598
4500455598
Westinghouse Electric Company LLC
PENN STATE TOOL & DIE CORP
Fuel Transfer Tube
405
4500616610
4500616610
Westinghouse Electric Company LLC
PENTAIR EQUIPMENT PROTECTION
DOOR ASSY, R HNG, PANTONE 421C, NP
406
4500371198
4500371198
Westinghouse Electric Company LLC
PENTAIR VALVES & CONTROLS US LP
Auxiliary Relief Valves, ASME B16.34
407
4500340946
4500340946
Westinghouse Electric Company LLC
PENTAIR VALVES AND CONTROLS US LP
Auxiliary Relief Valves, ASME Section III Classes 2 and 3
408
4500408943
4500408943
Westinghouse Electric Company LLC
PENTAIR VALVES AND CONTROLS US LP
Vacuum Breaker Vlvs, 1”, CL 150, SST, Fl
409
4500341043
4500341043
Westinghouse Electric Company LLC
PENTAIR VALVES AND CONTROLS US LP
Vacuum Breaker Valves, ASME B16.34
410
4500365094
4500365094
Westinghouse Electric Company LLC
PENTAIR VALVES AND CONTROLS US LP
Pressurizer Safety Valves
411
132175-MS60.01
WSPM001583
WECTEC Global Project Services, Inc.
PRECISION BOILERS LLC
Electric Auxiliary Boiler Package
412
4500283276
4500283276
Westinghouse Electric Company LLC
PRECISION CUSTOM COMPONENTS
Reactor Internals
413
132175-MD27.00
WSPM010255
Stone & Webster Construction Inc
PREFERRED METAL TECHNOLOGIES INC
MD27 Safety-Related Gravity/Relief Dampers
414
132176-MD27.00
WSPM010254
Stone & Webster Construction Inc
PREFERRED METAL TECHNOLOGIES INC
MD27 Safety-Related Gravity/Relief Dampers
415
4500312913
4500312913
Westinghouse Electric Company LLC
PREMIER TECHNOLOGY INC
Integrated Head Package
417
4500692319
4500692319
Westinghouse Electric Company LLC
PREMIER TECHNOLOGY INC
Reactor Cavity Seal Ring
418
4500630606
4500630606
Westinghouse Electric Company LLC
PREMIER TECHNOLOGY INC
Reactor Vessel Internals Lifting Rig

H-87



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



420
4500714777
4500714777
Westinghouse Electric Company LLC
PRYSMIAN COMMUNICATIONS CABLES
CABLE, FIBER OPTIC 24X50/125UM MM BLK
421
4500612168
4500612168
Westinghouse Electric Company LLC
QUALTECH NP
Spent Fuel System Gates
422
4500708614
4500708614
Westinghouse Electric Company LLC
RDF CORP
AP1000 JE32 Resistance Temp Detectors
423
4500639279
4500639279
Westinghouse Electric Company LLC
REMOTE OCEAN SYSTEMS INC
FHS Underwater Camera Equipment
424
4500616098
4500616098
Westinghouse Electric Company LLC
ROLLS-ROYCE CIVIL NUCLEAR CANADA LT
Filter Transfer Casks
426
4500436941
4500436941
Westinghouse Electric Company LLC
RUMSEY ELECTRIC CO
Electrical Protection Relay Panels
427
4500319424
4500319424
Westinghouse Electric Company LLC
SAMSHIN LIMITED
1” & 2” Manually Operated Globe and Check Valves, ASME Sec III Cl 1, 2, & 3
428
4500418139
4500418139
Westinghouse Electric Company LLC
SAMSHIN LIMITED
Motor Operated Gate and Globe Valves, ASME B16.34
429
4500309569
4500309569
Westinghouse Electric Company LLC
SAMSHIN LIMITED
1” & 2” Manually Operated Globe and Check Valves, ASME B16.34
430
4500325899
4500325899
Westinghouse Electric Company LLC
SAMSHIN LIMITED
3” & Larger Manually Operated Gate, Globe, & Check Vlvs, ASME B16.34
434
4500409603
4500409603
Westinghouse Electric Company LLC
SENIOR FLEXONICS PATHWAYS
Containment Piping Penetrations with Flued Heads
435
4500674167
4500674167
Westinghouse Electric Company LLC
SENIOR FLEXONICS PATHWAYS
Joint,Expansion,10”,SST
436
4500674873
4500674873
Westinghouse Electric Company LLC
SENIOR FLEXONICS PATHWAYS
Applicable Document Revisions
437
132176-PY20.00
WSPM010307
Stone & Webster Construction Inc
SENIOR FLEXONICS PATHWAYS
PY20 Metallic Expansion Joints
438
4500347757
4500347757
Westinghouse Electric Company LLC
SENTRY EQUIPMENT CORP
WGS Gas Cooler
439
4500404005
4500404005
Westinghouse Electric Company LLC
SENTRY EQUIPMENT CORP
Resin Sampler Package
440
4500378131
4500378131
Westinghouse Electric Company LLC
SENTRY EQUIPMENT CORP
PSS Grab Sampling Unit
441
4500312932
4500312932
Westinghouse Electric Company LLC
SHARPSVILLE CONTAINER
Chemical Feed Tank
442
4500315960
4500315960
Westinghouse Electric Company LLC
SHARPSVILLE CONTAINER
WGS Delay Bed

H-88



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



443
4500282878
4500282878
Westinghouse Electric Company LLC
SIEMENS INDUSTRY INC
RCP Variable Frequency Drives, 6.9 kV, 60 Hz Input
444
4500412943
4500412943
Westinghouse Electric Company LLC
SIEMPELKAMP NUCLEAR SERVICES
Hydrogen Recombiners
445
4500663496
4500663496
Westinghouse Electric Company LLC
SPRAYING SYSTEMS CO
Spent Fuel Pool Spray Nozzles
446
4500298889
4500298889
Westinghouse Electric Company LLC
SPX CORP COPES VULCAN OPERATION
Squib Valve
447
4500688697
4500688697
Westinghouse Electric Company LLC
STANEX, LLC
Structural Stability Analysis
448
132175-SS01.02
WSPM003908
WECTEC Global Project Services, Inc.
STEELFAB INC
Non-Safety Related Structural Steel and Decking
449
132176-SS01.02
WSPM010256
Stone & Webster Construction Inc
STEELFAB INC
Non-Safety Related Structural Steel and Decking
450
4500630430
4500630430
Westinghouse Electric Company LLC
STRAINSERT CO
Reactor Coolant Pump/Motor Maintenance Cart
451
132176-MP10.00
WSPM010411
Stone & Webster Construction Inc
SULZER PUMPS US INC
Turbine Building Closed Cooling Water System (TCS) Pumps (MP1H)
452
4500367194
4500367194
Westinghouse Electric Company LLC
SWAGELOK CAPITAL PROJECTS COMPANY
Instrumentation Valves, Safety Related
453
4500459975
4500459975
Westinghouse Electric Company LLC
SWAGELOK CAPITAL PROJECTS COMPANY
Needle Valves
454
4500370661
4500370661
Westinghouse Electric Company LLC
SWAGELOK CAPITAL PROJECTS COMPANY
Mechanical Connections/Quick Disconnects
455
4500601068
4500601068
Westinghouse Electric Company LLC
SWAGELOK CAPITAL PROJECTS COMPANY
Mechanical Connections/Quick Disconnects
456
132175-JT01.02
WSPM007192
Stone & Webster Construction Inc
SWAGELOK NORTH CAROLINA
ASME III Tube Fittings
457
132175-JZ01.01
WSPM003790
WECTEC Global Project Services, Inc.
SWAGELOK NORTH CAROLINA
Instrumentation Valve Manifolds, ASME Section III, Class 2 and 3 for Various Systems
458
132176-JT01.02
WSPM007241
Stone & Webster Construction Inc
SWAGELOK NORTH CAROLINA
ASME III Tube Fittings
459
132176-JZ01.01
WSPM003936
WECTEC Global Project Services, Inc.
SWAGELOK NORTH CAROLINA
Instrumentation Valve Manifolds, ASME Section III, Class 2 and 3 for Various Systems
460
4500449494
4500449494
Westinghouse Electric Company LLC
TAYCO ENGINEERING INC
Hydrogen Igniters
461
4500608824
4500608824
Westinghouse Electric Company LLC
THE CALVERT CO INC
SV3 Repl. EB04 Gaskets and Adhesive Mat.

H-89



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



462
4500639965
4500639965
Westinghouse Electric Company LLC
THE HILLIARD CORP
Oil Flushing Unit
463
4500269770
4500269770
Westinghouse Electric Company LLC
TIOGA PIPE SUPPLY CO INC
Reactor Coolant Loop Piping
464
4500318727
4500318727
Westinghouse Electric Company LLC
TOSHIBA AMERICA NUCLEAR ENERGY CORP
Main Step-up Transformers
465
4500416115
4500416115
Westinghouse Electric Company LLC
TRANSCO PRODUCTS INC
Metal Reflective Insulation (SGs, RCPs, PZR, RCL Pipe) To be installed by Vendor
466
4500416114
4500416114
Westinghouse Electric Company LLC
TRANSCO PRODUCTS INC
RV Head Metal Reflective Ins. (includes IHP and RV Flange Ins.) To be installed by Vendor
467
4500416113
4500416113
Westinghouse Electric Company LLC
TRANSCO PRODUCTS INC
Metal Reflective Insulation (Other than MN01, MN03, MN20) To be installed by Vendor
468
4500416112
4500416112
Westinghouse Electric Company LLC
TRANSCO PRODUCTS INC
RV Insulation System (also called Reactor Cavity Insulation) To be installed by Vendor
469
4500318072
4500318072
Westinghouse Electric Company LLC
TRANTER INC
WLS Liquid Seal Water Heat Exchangers
470
4500409669
4500409669
Westinghouse Electric Company LLC
TRI NUCLEAR CORP
Skimmer / Strainers
471
4500695504
4500695504
Westinghouse Electric Company LLC
TRICO WELDING CO
Reactor Coolant Pump/Motor Maintenance Cart
472
4500682637
4500682637
Westinghouse Electric Company LLC
TRICO WELDING CO
Reactor Upper Internals Storage Stand
473
4500680745
4500680745
Westinghouse Electric Company LLC
TRICO WELDING CO
FOOT,LEVELING,IGA LIFT RIG, - Vogtle
474
4500326440
4500326440
Westinghouse Electric Company LLC
TSM TECH CO LTD
BDS Steam Generator Blowdown Heat Exchangers
475
4500340572
4500340572
Westinghouse Electric Company LLC
TSM TECH CO LTD
CVS Mixed Bed and Cation Demineralizers
476
4500452899
4500452899
Westinghouse Electric Company LLC
TSM TECH CO LTD
   Reactor Coolant Depressurization Sparger
477
4500707362
4500707362
Westinghouse Electric Company LLC
TURNER INDUSTRIES GROUP LLC
AP1000 Services for Program Stand-Up
478
132175-PL02.05
WSPM007191
WECTEC Global Project Services, Inc.
TURNER INDUSTRIES GROUP LLC
Shop Fabrication of ASME III Piping Subassemblies
479
132176-PL02.05
WSPM007240
WECTEC Global Project Services, Inc.
TURNER INDUSTRIES GROUP LLC
Shop Fabrication of ASME III Piping Subassemblies

H-90



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



480
4500656664
4500656664
Westinghouse Electric Company LLC
TW METALS
PXS Core Makeup Tanks
481
4500428822
4500428822
Westinghouse Electric Company LLC
VAL FAB INC
SV3Tank, Batching, Boric Acid, CVS, 60hz
482
4500325905
4500325905
Westinghouse Electric Company LLC
VAL FAB INC
SV4 WLS Degasifier Separator MV7J
483
4500375201
4500375201
Westinghouse Electric Company LLC
VAL FAB INC
Spent Resin Tanks (with Internal Eductors and Screens)
484
4500374238
4500374238
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Solenoid-Operated Globe Valves, ASME Section III Classes 1, 2, and 3
486
4500433665
4500433665
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Pressure Regulating Globe Valves, ASME Section III Classes 2 and 3
487
4500602331
4500602331
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Solenoid-Operated Globe Valves, ASME B16.34
489
4500677839
4500677839
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Cavitating Venturis
491
4500677834
4500677834
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Letdown Orifice
492
4500676913
4500676913
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Plug-Resistant Orifices, ASME Section III
494
4500640482
4500640482
Westinghouse Electric Company LLC
VALCOR ENGINEERING CORP
Safety-Related Eductors
496
132175-D100.CA011
WSPM003465
WECTEC Global Project Services, Inc.
VIGOR
CA01 Book II Component Fabrication
497
132175-D100.CA015
WSPM003464
WECTEC Global Project Services, Inc.
VIGOR
Select CH Modules Fabrication
498
132175-D100.CB002
WSPM003462
WECTEC Global Project Services, Inc.
VIGOR
CB20 Module Design Package
499
132175-G230.M06
WSPM010862
WECTEC Global Project Services, Inc.
VIGOR
Non-Safety Related Mechanical Modules
500
132176-D100.CA011
WSPM010674
Stone & Webster Construction Inc
VIGOR
CA20 Module Fabrication
501
132176-D100.CA015
WSPM003736
WECTEC Global Project Services, Inc.
VIGOR
Select CH Modules Fabrication
502
132176-D100.CB002
WSPM003742
WECTEC Global Project Services, Inc.
VIGOR
CB20 Module Design Package
503
132176-G230.M06
WSPM010863
WECTEC Global Project Services, Inc.
VIGOR
Non-Safety Related Mechanical Modules
504
4500455911
4500455911
Westinghouse Electric Company LLC
VIRGINIA TRANSFORMER
Excitation Transformer

H-91



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



505
4500313659
4500313659
Westinghouse Electric Company LLC
WARREN RUPP INC
Air-Operated (Pneumatic) Double Diaphragm Pumps (22 pumps - not listed individually)
506
4500467904
4500467904
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
JE02 Press / Diff. Press Transmitters
507
4500668665
4500668665
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
AP1000 JE03 Primary Temperature Elements
508
4500698276
4500698276
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
AP1000 JE47 HVAC Specialty Instruments
509
4500712520
4500712520
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
AP1000 JE47 HVAC Specialty Instruments
510
4500713925
4500713925
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
AP1000 JE47 HVAC Specialty Instruments
511
4500655653
4500655653
Westinghouse Electric Company LLC
WEED INSTRUMENT DBA ULTRA ELECTRONI
Thermowell,4.5”,RTD,SS,ASME III-Class 3
512
4500370608
4500370608
Westinghouse Electric Company LLC
WEIR VALVE & CONTROLS USA INC
Fuel Transfer Tube Gate Valve
514
4500309727
4500309727
Westinghouse Electric Company LLC
WEIR VALVE & CONTROLS USA INC
Butterfly Valves, ASME Section III Classes 2 and 3
515
4500419078
4500419078
Westinghouse Electric Company LLC
WEIR VALVE & CONTROLS USA INC
Air Operated Globe Valves, ASME Sec III Class 1, 2, & 3
517
4500319090
4500319090
Westinghouse Electric Company LLC
WEIR VALVE & CONTROLS USA INC
Butterfly Valves, ASME B16.34
518
4500377559
4500377559
Westinghouse Electric Company LLC
WEIR VALVE & CONTROLS USA INC
Extraction Steam Non-Return Valves
519
132175-VW01.00-RELEASE1
WSPM004664
Stone & Webster Construction Inc
WELDSTAR
ASME III Weld Filler Material, Weldstar Blanket Order
520
4500693471
4500693471
Westinghouse Electric Company LLC
WESCO DISTRIBUTION INC
Plate,Mounting, ET03 Trans, NGR Mod.
530
132175-DF01.01
WSPM003365
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Fused Transfer Switch Boxes
531
132175-DF03.01
WSPM003364
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Spare Battery Term Boxes (DF03 - Aux)
532
132175-DS01.01
WSPM003363
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E 250 VDC Switchboards
533
132175-EA01.01
WSPM002965
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Distribution Panels, 1E, 120 & 208 VAC 60Hz
534
132175-EA03.01
WSPM002954
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Fuse Panels, 1E, 120 VAC 60Hz
535
132175-EJ01.01
WSPM002950
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Junction Boxes

H-92



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



536
132176-DF01.01
WSPM003193
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Fused Transfer Switch Boxes
537
132176-DF03.01
WSPM003192
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Spare Battery Term Boxes (DF03 - Aux)
538
132176-DS01.01
WSPM003191
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E 250 VDC Switchboards
539
132176-EA01.01
WSPM003187
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Distribution Panels, 1E, 120 & 208 VAC 60Hz
540
132176-EA03.01
WSPM003185
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Fuse Panels, 1E, 120 VAC 60Hz
541
132176-EJ01.01
WSPM003112
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Class 1E Junction Boxes
542
132176-G230.M07
WSPM001256
WECTEC Global Project Services, Inc.
WESTINGHOUSE ELECTRIC CO LLC
Non-Safety Related Mechanical Modules
543
132175-MS90.01
WSPM001582
WECTEC Global Project Services, Inc.
MILTON CAT
Ancillary Diesel Generators
544
132176-JT01.01
132176-JT01.01
WECTEC Global Project Services, Inc.
Dubose National Energy Services INC
ASME III Tubing
545
4500332480
4500332480
Westinghouse Electric Company LLC
Swagelok
Vogtle Project, Units 3 and 4, PV47, Instrumentation Valves, Non-Safety Related
546
4500672734
4500672734
Westinghouse Electric Company LLC
Ben Franklin Design
Restrictor Plate Assembly Panels and Parts
547
4500700158
4500700158
Westinghouse Electric Company LLC
PCI Energy Services
UT INSP. OF NF SUPPORTS AT VOGTLE 3-4
548
4500677532
4500677532
Westinghouse Electric Company LLC
PREMIER TECHNOLOGY INC
Premier - Vogtle - VH01- SGTIS-U Refurbishment
549
132175-C802.09
132175-C802.09
WECTEC Global Project Services, Inc.
Mackson
B31.1 Bolts Safety D
550
132175-D500.50
132175-D500.50
WECTEC Global Project Services, Inc.
HILTI INC
Hilti H-D Supports
551
132175-FPR12-01836-1
WSPM013138
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
552
132175-FPR12-01836-10
WSPM004541
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
553
132175-FPR12-01836-11
WSPM004542
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
554
132175-FPR12-01836-2
WSPM010271
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
555
132175-FPR12-01836-4
WSPM004543
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal

H-93



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



556
132175-FPR12-01836-5
WSPM004544
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
557
132175-FPR12-01836-7
WSPM004546
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
558
132175-FPR12-01836-8
WSPM004547
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
559
132175-FPR12-01836-9
WSPM004548
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
560
132175-FPR12-01834-00
132175-FPR12-01834-00
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Metal
561
4500411985
4500411985
Westinghouse Electric Company LLC
GA PORTS AUTHORITY
Shield Building Logistics
564
4500708616
4500708616
Westinghouse Electric Company LLC
NEFAB PACKAGING NORTH EAST LLC
Crating, skids and packaging
567
4500635130
4500635130
Westinghouse Electric Company LLC
DUVAL PRECISION GRINDING INC
Grind alignment plate
568
4500608147
4500608147
Westinghouse Electric Company LLC
INDUSTRIAL TESTING LAB SERV
Cleaning procedure testing
569
4500663124
4500663124
Westinghouse Electric Company LLC
B&G MANUFACTURING CO INC
Fasteners
570
4500671102
4500671102
Westinghouse Electric Company LLC
FH PETERSON MACHINE CORP
OSV Machine
571
4500677611
4500677611
Westinghouse Electric Company LLC
FLETCH’S SANDBLASTING
Header Piping End Frame Coating
576
4500723822
4500723822
Westinghouse Electric Company LLC
ENERGY AND PROCESS CORP
Shim R.S.
577
4500723651
4500723651
Westinghouse Electric Company LLC
KAUFMAN CO
Air Tank Paint Part A
578
4500721313
4500721313
Westinghouse Electric Company LLC
NEFAB PACKAGING NORTH EAST LLC
SCS COLUMNS SKID & BOX
579
4500650880
4500650880
Westinghouse Electric Company LLC
DUBOSE NATIONAL ENERGY SERVICES INC
Washer
580
4500395458
4500395458
Westinghouse Electric Company LLC
NUCRANE MANUFACTURING LLC
Update PO 4500395458 (U4)
581
4500395460
4500395460
Westinghouse Electric Company LLC
NUCRANE MANUFACTURING LLC
Cask Crane Unit 3 Rework per PIN 4
582
4500422058
4500422058
Westinghouse Electric Company LLC
NUCRANE MANUFACTURING LLC
NuCrane PINs 1&2, Vogtle 15 Ton U4
583
4500430190
4500430190
Westinghouse Electric Company LLC
NUCRANE MANUFACTURING LLC
VOG HH U3 Rework per PIN 001
584
4500600930
4500600930
Westinghouse Electric
NUCRANE
NuCrane VG U4 20T Pin 0006

H-94



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
 
 
Company LLC
MANUFACTURING LLC
(45006000930)
588
4500722525
4500722525
Westinghouse Electric Company LLC
STRAINSERT CO
PIN; LOAD CELL, UPPER BLOCK, AUX HOIST,
590
4500723050
4500723050
Westinghouse Electric Company LLC
ARROW TANK AND ENGINEERING CO INC
Storage of PR-10-0360-U3
600
4500698454
4500698454
Westinghouse Electric Company LLC
INDEPENDENT PACKING SERVICES
Preventative Maintenance for Polar
601
4500707952
4500707952
Westinghouse Electric Company LLC
INDEPENDENT PACKING SERVICES
Polar Rail Crating Labor
602
4500718445
4500718445
Westinghouse Electric Company LLC
INDEPENDENT PACKING SERVICES
Crating Labor for VOG3 Polar Crane
604
4500719569
4500719569
Westinghouse Electric Company LLC
INDEPENDENT PACKING SERVICES
On-Site Packaging
608
4500723299
4500723299
Westinghouse Electric Company LLC
INDUSTRIAL PAINTING SPECIALIST
Blast and Paint girder A
610
4500723864
4500723864
Westinghouse Electric Company LLC
INDEPENDENT PACKING SERVICES
On-Site Packaging
611
J132175-FPR12-01834-00
WSPM010400
WECTEC Global Project Services, Inc.
LINCOLN ELECTRIC COMPANY
ASME III Weld Filler Material
612
132175-C825.S03
WSPM004594
Stone & Webster Construction Inc
LINCOLN ELECTRIC COMPANY
ASME III WELD MATERIAL
613
4500719651
4500719651
Westinghouse Electric Company LLC
LYNX TECHNOLOGY PARTNERS INC
CDKSM-1Yr
614
4500400518
4500400518
Westinghouse Electric Company LLC
SHAW NUCLEAR SERVICES INC
procurement of R365 for Vogtle
615
4500404540
4500404540
Westinghouse Electric Company LLC
SHAW NUCLEAR SERVICES INC
Procurement of Q240 for Vogtle
616
4500406088
4500406088
Westinghouse Electric Company LLC
SHAW NUCLEAR SERVICES INC
Vogtle  - Transfer of Q305 Design Doc.
617
4500419771
4500419771
Westinghouse Electric Company LLC
SHAW NUCLEAR SERVICES INC
Procurement of Q223 for Vogtle
618
4500419776
4500419776
Westinghouse Electric Company LLC
SHAW NUCLEAR SERVICES INC
Procurement of Q233 for Vogtle
619
4500388070
4500388070
Westinghouse Electric Company LLC
DRS CONSOLIDATED CONTROLS INC
Vogtle 3 Phase Reference Sensors (4)
620
132175-D500.25
132175-D500.25
WECTEC Global Project Services, Inc.
Chatham Steel Corporation
Stainless Steel Plate For KB10 Module
621
132175-D500.21
132175-D500.21
WECTEC Global Project Services, Inc.
Consolidated Power Supply a Div of
Replacement Plates for OLP’s in CA20 Module
622
132176-G230.01
WSPM010836
WECTEC Global Project Services, Inc.
Precision Boilers LLC
Electric Auxiliary Boiler Package|

H-95



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



623
132175-G230.01
WSPM010833
WECTEC Global Project Services, Inc.
Precision Boilers LLC
Electric Auxiliary Boiler Package|
624
4500699704
4500699704
Westinghouse Electric Company LLC
SARGENT & LUNDY
Fixed Labor Rate 11 Pers.
625
132175-PY51.00
132175-PY51.00
WECTEC Global Project Services, Inc.
Senior Flexonics
Flexible Hoses
626
132176-PY51.00
132176-PY51.00
WECTEC Global Project Services, Inc.
Senior Flexonics
Flexible Hoses
627
132176-D100.CA010
132176-D100.CA010
WECTEC Global Project Services, Inc.
Specialty Maintenance & Construction Inc
CA20 Module Fabrication
628
4500467735
4500467735
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
Testing
629
4500710159
4500710159
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
JE26 Ultrasonic Testing
630
4500715247
4500715247
Westinghouse Electric Company LLC
NUCLEAR LOGISTICS INC
JE27 Testing
631
789426
789426
CB&I, Inc.
WECTEC Global Project Services, Inc.
MC Parts






H-96



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



EXHIBIT I

RATES FOR LEASED EQUIPMENT
WESTINGHOUSE CONSTRUCTION EQUIPMENT
 
EQUIPMENT DAILY RATE PRICING SHEET
 
APRIL 2017
 
 
 
 
 
Rate Group
Rate Group Description
Daily
Rate
A01
GRPLR HYDR ROTATING DRUM/DEBRIS (320)
 [***]
A03
SHEARS HYDR - 200 TON (320)
 [***]
A05
CONCRETE CRUSHER
 [***]
A06
HYDRAULIC HO-RAM (320)
 [***]
A13
EVERGREEN BUCKET SCALE FOR LOADER
 [***]
A17
PULL BEHIND BOX GRADER
 [***]
A18
ROOT RAKE FOR D6 DOZER
 [***]
A19
DISK HARROW
 [***]
A21
BROOM ATTACHMENT FOR L120
 [***]
A23
MATERIAL HANDLING ARM
 [***]
A24
‘14’ SNOW BLADE FOR WHEEL LOADER
 [***]
A27
60” TILT BUCKET FOR 320
 [***]
A28
HYDRAULIC BROOM FOR CAT 287C
 [***]
A31
SCRAP MAGNET, 46”
 [***]
B40
CONSTR & BREATHING AIR COMPRESSORS
 [***]
B57
AIR COMPRESSOR - 1-50 CFM SCROLL
 [***]
B60
AIR COMPRESSOR, QSI 1000
 [***]
B61
AIR TANK - 660 GALLON
 [***]
B62
AIR TANK - 2000 GALLON
 [***]
C01
BAR SPREADER
 [***]
C02
MAN BASKET FOR CRANE
 [***]
C06
AIR COMPRESSOR 185 CFM
 [***]
C08
AIR COMPRESSOR 375 CFM
 [***]
C09
AIR COMPRESSOR, ELEC 215 CFM
 [***]
C12
DETECTOR, HOLIDAY
 [***]
C21
FORKLIFT - WAREHOUSE 5K-6K#
 [***]
C24
CRANE, 17 TON TRUCK MOUNT
 [***]
C25
LUFFING JIB
 [***]
C27
CRANE, 8.2 TON CARRY DECK
 [***]
C28
CRANE, 15 TON ROUGH TERRAIN
 [***]

I-1


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



C29
CRANE, 15 TON CARRY DECK
 [***]
C33
CRANE, 60 TON ROUGH TERRAIN
 [***]
C39
90 TON ROUGH TERRAIN CRANE
 [***]
C40
CRANE, 150 TON ROUGH TERRAIN
 [***]
C41
CRANE, 130 TON ROUGH TERRAIN
 [***]
C42
CRANE, 220 TON LATTICE BOOM
 [***]
C43
CRANE, 300 TON LATTICE BOOM
 [***]
C47
WELDER 400 AMP DIESEL
 [***]
C53
COMPACTOR
 [***]
C55
PIPE THREADER
 [***]
C57
BRIDGE CRANE
 [***]
C64
BUS, SHORT, 14 PASSENGER
 [***]
C68
BUS PASSENGER
 [***]
C69
CAR
 [***]
C70
EXECUTIVE VEHICLE
 [***]
C71
SPOTTING TRACTOR 93 COMMANDO
 [***]
C76
SHUTTLE BUS
 [***]
C81
OPTICAL LEVEL
 [***]
C84
DUAL DRUM AIR WINCH, 10K
 [***]
C86
CABLE TUGGER, 10K # PNEUMATIC WINCH
 [***]
C87
LASER ALIGNMENT SYSTEM
 [***]
C88
PORTABLE METAL BUILDING
 [***]
C90
INSPECTION SYSTEM PROBE
 [***]
C99
BENDER, CUTTER
 [***]
E00
BACKHOE/90HP/4WD/EXT
 [***]
E01
BACKHOE/90HP/2WD/EXT
 [***]
E03
DOZER/90HP/STD
 [***]
E04
DOZER/110HP/LGP
 [***]
E05
DOZER/140HP/LGP
 [***]
E07
DOZER/75HP/XL
 [***]
E08
DOZER/185HP/LGP
 [***]
E10
GRADER/215HP/14’ BLADE
 [***]
E12
EXCAVATOR/8METRIC TON
 [***]
E13
EXCAVATOR/20 METRIC TON
 [***]
E14
EXCAVATOR/30 METRIC TON
 [***]
E15
EXCAVATOR/REMOTE CONTROL BROKK 400
 [***]
E16
FORKLIFT/HI REACH/10-12K
 [***]
E18
DUMP/OFF ROAD/30 TON
 [***]
E19
DUMP/OFF ROAD/35 TON
 [***]

I-2


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



E21
WHEEL LOADER/3.5 YD
 [***]
E26
WHEEL LOADER/5-7 YD
 [***]
E28
TRACKMOBILE
 [***]
E29
WATER TRUCK/OFF ROAD/5-7K
 [***]
E31
VIB SOIL COMPACTOR/84”
 [***]
E34
33” REMOVE TRENCH COMPACTOR
 [***]
E36
KUBOTA TRACTOR
 [***]
E37
15 TON FORKLIFT
 [***]
E38
INDUSTRIAL FORKLIFT 9000#
 [***]
E39
MINI TRACK LOADER
 [***]
E41
SRAIGHT MAST FORKLIFT 26 TON
 [***]
E42
SELF-CONTAINED BROOM
 [***]
E43
60” ZERO TURN MOWER
 [***]
E46
STREET SWEEPER, TRUCK MOUNTED
 [***]
E51
275HP AG TRACTOR W/DISC
 [***]
F06
AIR STRIPPER, LOW PROFILE
 [***]
F11
CLARIFIER LAMELLA TRLR MOUNTED
 [***]
F15
FILTER LIQUID DUAL CELL SKID
 [***]
F16
FILTER LIQUID SINGLE CELL SKID
 [***]
F19
FILTER LIQUID IN-LINE BAG
 [***]
F20
PORTABLE POOL - 12000 GAL
 [***]
F24
KNOCKOUT TANK
 [***]
F25
FILTER VAPOR PHASE CARBON (DUAL CELL)
 [***]
F26
FILTER VAPOR PHASE CARBON (SINGLE CELL)
 [***]
F28
VAPOR PHASE CARBON CELL, 2000#
 [***]
F33
SOIL VAPOR EXTRACTION <25 HP SKID (SVE)
 [***]
F34
SOIL VAPOR EXTRACTION 25 HP SKID (SVE)
 [***]
F35
SOIL VAPOR EXTRACTION 75 HP SKID (SVE)
 [***]
F46
COOLING TOWER
 [***]
F48
6 LINE BAG FILTER
 [***]
F49
FILTER LIQUID 2000# CAPACITY
 [***]
G03
GENERATOR 50-75 KW
 [***]
G08
GENERATOR 75-100 KW
 [***]
G09
GENERATOR, 40-50KW
 [***]
H36
PRESSURE LOGGER
 [***]
H37
RUGGED READER LOAD-UP
 [***]
H39
MOTION RUGGEDIZED DATA COLLECTOR
 [***]
H40
HAND-HELD WATER SURVEYOR
 [***]
H42
YSI 600 SONDE D/H WATER SURVEYOR
 [***]

I-3


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



H43
YSI 6820/6920 SONDE D/H WATER SURVEYOR
 [***]
H44
WATER SURVEYOR W/BLUETOOTH
 [***]
H48
ULTRA SONIC FLOW METER
 [***]
J06
FERROSCAN SYSTEM FOR REBAR
 [***]
J07
GCS 900 GPS FOR EXCAVATOR
 [***]
J09
REPEATER FOR GPS SYSTEM
 [***]
J10
RTK 900 BASE AND ROVER
 [***]
J11
GPS ROVER
 [***]
J12
GCS 900 GPS MACHINE CONTROL
 [***]
J16
HAND HELD GPS LOW ACCURACY
 [***]
J17
HAND HELD GPS HIGH ACCURACY
 [***]
J18
HAND HELD GPS GIS ACCURACY
 [***]
J20
HIGH RESOLUTION METAL DETECTOR
 [***]
J21
TOTAL ROBOTIC SURVEY STATION
 [***]
J26
TOTAL SURVEY SYSTEM
 [***]
J27
LASER LEVEL
 [***]
J28
PIPE LASER
 [***]
J30
3D SCANNER W/LDAR
 [***]
J40
MAGNETOMETER, UNDERWATER
 [***]
K06
FIT TESTER 8020 PORTACOUNT
 [***]
K07
PUF AIR SAMPLER
 [***]
K08
TSP AIR SAMPLER
 [***]
K09
PM10 AIR SAMPLER
 [***]
K11
LAPEL AIR SAMPLER
 [***]
K12
AIR FLOW CALIBRATOR
 [***]
K15
MERCURY ANALYZER - JEROME
 [***]
K17
MERCURY ANALYZER - RA915 LUMEX
 [***]
K20
AEROSOL MONITOR
 [***]
K21
HEAT STRESS MONITOR
 [***]
K45
LANDTECH METER
 [***]
K46
GEM 5000 W/GPS
 [***]
K50
PHOTOIONIZATION DETECTOR
 [***]
K51
DOSIMETER
 [***]
K54
LEL 4 GAS METER
 [***]
K55
PASSIVE 4 GAS LEL METER
 [***]
K60
4 GAS METER W/PID
 [***]
K65
ORGANIC VAPOR ANALYZER
 [***]
K67
OPTICAL EMISSION SPECTROMETER
 [***]
K68
FID W/PID
 [***]

I-4


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



K72
400K PSI TENSILE TESTER
 [***]
K73
600K PSI TENSILE TESTER
 [***]
L05
VACUUM TRUCK - 2000 GAL
 [***]
L25
VACUUM UNIT-1500 GAL OSHA
 [***]
M01
BARREL SHREDDER
 [***]
M08
PUGMILL 100-200 TON/HR
 [***]
M09
CEMENT SILO
 [***]
N26
NUCLEAR PLATE SOURCE
 [***]
N27
NUCLEAR BUTTON SOURCE
 [***]
N28
NUCLEAR DISC SOURCE
 [***]
N30
2-CHANNEL ALPHA/BETA W/PROBE
 [***]
N35
1-CHANNEL SCALER/RATEMETER
 [***]
N37
HDHLD AND BENCH FRISKER
 [***]
N38
GAMMA SCINTILLATION SURVEYOR
 [***]
N41
ALPHA/BETA SAMPLE COUNTER
 [***]
N43
LOW VOL PUMPS 14-115 LPM
 [***]
N44
LAB AUTO LO BKGRD ALPHA/BETA
 [***]
N45
GAMA SPECTROMETER
 [***]
N52
XRF TRI-SOURCE ANALYZER
 [***]
O05
TRIPLE REEL CABLE TRAILER
 [***]
O07
CABLE REEL TRAILER
 [***]
O08
FUSION WELDER 412
 [***]
O09
KUBOTA RTV1140, 4 SEATER
 [***]
O10
KUBOTA RTV900
 [***]
O11
SMALL ATV
 [***]
O12
PULLER, ELEC WIRING, TRAILER MOUNTED
 [***]
O13
CABLE ROLLER
 [***]
O15
FUSION MACHINE 618
 [***]
O16
FUSION MACHINE 28
 [***]
O19
LIGHT PLANT
 [***]
O20
MOBILE LIGHT TOWER, 27K WATT
 [***]
O24
ROD ROOM
 [***]
O25
CONCRETE PIPE PULLER
 [***]
O27
40’ WELD TEST CONTAINER
 [***]
O28
40 FOOT RESTROOM
 [***]
O29
ORBITAL WELDING CONTAINERS
 [***]
O30
6 ZONE HEAT STRESS RELIEF UNIT
 [***]
O31
SPOT COOLERS
 [***]
O32
12 ZONE HEAT STRESS RELIEF
 [***]

I-5


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



O33
40’ TIME KEEPING ALLEY
 [***]
O35
10 TON GANTRY CRANE
 [***]
O36
CONDUIT BENDER
 [***]
O38
CONDUIT BENDER W/TABLE 2-4 INCH
 [***]
O40
4” PVC SOCKET WELDER
 [***]
O41
6-8” PIPE LIFTING BAR SET
 [***]
O42
PORTABLE ROOF 40X40
 [***]
O43
MODULAR CONTROL DUAL
 [***]
O44
MODULAR CONTROL SINGLE
 [***]
O45
PORTABLE ROOF 40X20
 [***]
O47
12 ZONE HEAT STRESS W/DIGITAL RECORDER
 [***]
O50
8 PACK LINCOLN V275 CC
 [***]
O51
6-PAK WELDER
 [***]
O52
4-PAK WELDER
 [***]
O53
WELDER, 400-500 AMP CC/CV
 [***]
O60
MAN RETRIEVEL SYSTEM
 [***]
O71
415 POWER SUPPLY
 [***]
O72
M227 POWER SUPPLY
 [***]
O73
M15 WELD HEAD
 [***]
O74
M52 WELD HEAD
 [***]
O75
M81 WELD HEAD
 [***]
O76
TORCH NGT W/OPTICS AND VIDEO
 [***]
O78
2”-5” GUIDE RING
 [***]
O79
8.625” GUIDE RING
 [***]
O80
10.75” GUIDE RING
 [***]
O81
12.75” GUIDE RING
 [***]
O82
16” GUIDE RING
 [***]
O83
20” GUIDE RING
 [***]
O84
24” GUIDE RING
 [***]
O85
28” GUIDE RING
 [***]
O86
30” GUIDE RING
 [***]
O87
36” GUIDE RING
 [***]
O88
48” GUIDE RING
 [***]
O90
14” GUIDE RING
 [***]
O91
34” GUIDE RING
 [***]
O92
M415-DV VISION SYS
 [***]
O94
FIRE EXTINGUISHER TRAINING SYSTEM
 [***]
O95
CONCRETE BUGGY
 [***]
O96
52” GUIDE RING
 [***]

I-6


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



O97
ADJ WELD HEAD FRONT-END
 [***]
O98
12 ZONE HEAT STRESS W/REMOTE
 [***]
P01
GROUT PUMP 5CY/HR VERSA PUMP
 [***]
P56
4X3 HIGH PRESSURE PUMP
 [***]
P60
STEAMER W/TRAILER
 [***]
P72
TRASH PUMP - 6 IN
 [***]
Q10
PICK-UP TRUCK - GUAM
 [***]
Q19
DUMP TRUCK (3 CU YDS) - GUAM
 [***]
Q61
WELDER, 400 AMP DIESEL - GUAM
 [***]
Q62
AIR COMPRESSOR, 185 CFM
 [***]
Q80
DECON/OFFICE TRAILER - GUAM
 [***]
Q82
TOOL & STORAGE TRAILER - GUAM
 [***]
S01
FREIGHT/PERSONNEL ELEVATOR
 [***]
S16
TELESCOPIC BELT CONVEYOR
 [***]
S20
PRIMARY BATCH PLANT
 [***]
S21
SECONDARY BATCH PLANT
 [***]
S23
VOGTLE - HLD125
 [***]
S30
PIPE PREP MACHINE, 4-8”
 [***]
S31
PIPE PREP MACHINE, 6-12”
 [***]
S32
PIPE PREP MACHINE, 10-16”
 [***]
S33
PIPE PREP MACHINE, 18-24”
 [***]
S34
PIPE PREP MACHINE, 22-28”
 [***]
S35
PIPE PREP MACHINE, 30-36”
 [***]
S36
HYDRAULIC POWER UNIT
 [***]
S37
COUNTERBORE MODULE, 4-20”
 [***]
S38
COUNTERBORE MODULE, 24-28”
 [***]
S39
COUNTERBORE MODULE, 28-36”
 [***]
S40
PORTABLE END PREP MACHINE
 [***]
S41
END PREP LATHE
 [***]
S42
GMAW ROBOTIC WELD SYSTEM
 [***]
S43
GTAW LEAK CHASE WELD SYSTEM
 [***]
S44
70 FT. WELD TRACK SYSTEM
 [***]
S45
POWER DRILL SYSTEM, MULTI-AXLE
 [***]
S46
NEXT GEN WELD SYSTEM
 [***]
S47
BACKING BAR HOLDING SYSTEM
 [***]
S48
WELD COUPON CUTTER
 [***]
S49
HYD WRAP AROUND BENDER
 [***]
S50
RMTS GRINDER ATTACHMENT
 [***]
S51
GROUT MIXER
 [***]

I-7


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



S52
WELD COUPON STATION
 [***]
S53
GTAW LEAK CHASE TORCH HEAD
 [***]
T04
FIELD ANALYTICAL TRAILER
 [***]
T08
DECON/OFFICE TRAILER 28’
 [***]
T09
DECON/OFFICE TRAILER 45’
 [***]
T10
SECURED PARTS STORAGE CONTAINER
 [***]
T11
TOOL AND STORAGE TRLR, <24’
 [***]
T13
TOOL AND STORAGE TRLR, 40’-48’
 [***]
T14
DROP DECK TRAILER
 [***]
T15
TRANSPORT TRAILER, 30-35 TON
 [***]
T16
LOWBOY TRAILER
 [***]
T21
FLATBED TRAILER, HIGH CAPACITY
 [***]
T22
FLATBED TRAILER, LOW CAPACITY
 [***]
T26
ICE TRAILER
 [***]
T28
LUBE TRAILER
 [***]
T29
5TH WHEEL DOLLY TRAILER
 [***]
T30
48’-70’ EXP DROP DECK TRAILER
 [***]
T31
POWER PACK FOR GOLDHOFER
 [***]
T32
CONNEX GROUND LEVEL OFFICE 40’
 [***]
T33
CONNEX GROUND LEVEL OFFICE 20’
 [***]
T34
WELL DEVELOPMENT TRAILER
 [***]
T35
MOBILE SHOP/PIPE TRAILER, 18’
 [***]
T37
UXO DIVE TRAILER
 [***]
T39
6 LINE TRAILER FOR GOLDHOFER
 [***]
T40
UPENDER TRAILER
 [***]
T41
CEMENT STORAGE TRAILER, 4100 CU FT
 [***]
T42
WIRE ROPE SPOOLING TRAILER
 [***]
T43
TAG TRAILER, 20 TON
 [***]
T44
POWER PACK, 210HP FOR GOLDHOFER
 [***]
U77
DIGITAL REPEATER
 [***]
U78
REPEATER STATION
 [***]
U79
HAND-HELD RADIO 10 PACK
 [***]
U80
HAND-HELD RADIO
 [***]
U82
REMOTE FIRING DEVICE
 [***]
V02
OVER-THE-ROAD DISL TRCTR
 [***]
V04
TRUCK - ONE TON STAKE
 [***]
V05
TRUCK - TWO TON STAKE
 [***]
V06
DUMP TRUCK (5-10 CU YDS)
 [***]
V07
DUMP TRUCK (11-15 CU YDS)
 [***]

I-8


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



V08
HYDRO EXCAVATOR, TRUCK MOUNTED
 [***]
V11
COMPACT PICK-UP TRUCK
 [***]
V12
PICK-UP TRUCK
 [***]
V13
PICK-UP - 4WD
 [***]
V15
SPORT UTILITY VEHICLE
 [***]
V16
WATER TRUCK, 1500-2000 GAL
 [***]
V17
WATER TRUCK, 3000-4000 GAL
 [***]
V18
CARGO VAN
 [***]
V19
VAN
 [***]
V21
FUEL TRUCK
 [***]
V22
TRUCK FUEL/LUBE
 [***]
V23
UTILITY TRUCK
 [***]
V24
AIR QUALITY VEHICLE
 [***]
V26
ETA - AMBULANCE
 [***]
V32
PICK-UP TRUCK, CREW CAB 4X2
 [***]
V33
PICK-UP TRUCK, CREW CAB 4X4
 [***]
V34
STEP VAN
 [***]
V35
SERVICE BODY TRUCK
 [***]
V36
PROJECT MAINTENANCE TRUCK
 [***]
V37
CRANE MAINTENANCE TRUCK
 [***]
V49
TANDEM AXLE FLATBED TRUCK
 [***]
V50
TANDEM AXLE YARD TRUCK
 [***]
V52
ONE-TON DIESEL DUALY
 [***]
V53
47 METER BOOM TRUCK PUMP
 [***]
V54
61 METER BOOM TRUCK PUMP
 [***]
V55
CONCRETE MIXER TRUCK
 [***]
V56
63 METER BOOM TRUCK PUMP
 [***]
V57
70 METER BOOM TRUCK PUMP
 [***]
V60
SNOW PLOW TRUCK, 4X4
 [***]
W15
DEWATERING PRESS - BASF
 [***]
W16
PQ EXCELL ICPMS SYSTEM - QATS
 [***]
W17
ICA 61-E SPECTOMETER - QATS
 [***]
W18
TEKMAR - QATS
 [***]
W24
EXPLOSION PROOF REFRIGERATOR - QATS
 [***]
W26
PWC STANDARD PANEL VAN
 [***]
W27
PWC 1 1/2 TON STAKE BED TRUCK
 [***]
W28
PWC 3/4 TON PICKUP TRUCK
 [***]
W29
PWC 1/2 TON PICKUP TRUCK
 [***]
W30
PWC 1/4 TON PICKUP TRUCK
 [***]

I-9


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



W31
PWC 1 TON HD UTILITY BODY TRUCK
 [***]
W32
PWC FORKLIFT
 [***]
X30
JON BOAT
 [***]
X56
COMMAND TRAILER
 [***]
Y05
DRILL RIG - AF6
 [***]
Y10
FUSION WELDING TRAILER - SOLID WASTE
 [***]
Y18
PICK-UP - 4WD - SOLID WASTE
 [***]
Y22
UTILITY TRUCK - SOLID WASTE
 [***]
Y23
COMPACT PICK-UP TRUCK 4WD - SW
 [***]
Y31
LANDTEC METER GEM 500 - SOLID WASTE
 [***]
Y36
TOOL & STORAGE TRAILER >50’
 [***]
Y56
824 FUSION WELDER W/GEN & TRLR
 [***]
Y57
12/36 FUSION MACHINE
 [***]
Y58
2-8” FUSION WELDER
 [***]
Y59
6-18” FUSION WELDER
 [***]




I-10


CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION




EXHIBIT J-1
DAVIS-BACON ACT REQUIRED PROVISIONS
ARTICLE 34.      SECTION (a) MINIMUM WAGES, ETC.
(1)      Minimum wages.
(i) All laborers and mechanics employed or working upon the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), will be paid unconditionally and not less often than once a week, and without subsequent deduction or rebate on any account (except such payroll deductions as are permitted by regulations issued by the Secretary of Labor under the Copeland Act (29 CFR part 3)), the full amount of wages and bona fide fringe benefits (or cash equivalents thereof) due at time of payment computed at rates not less than those contained in the wage determination of the Secretary of Labor which is attached hereto and made a part hereof, regardless of any contractual relationship which may be alleged to exist between the contractor and such laborers and mechanics.
Contributions made or costs reasonably anticipated for bona fide fringe benefits under section 1 (b)(2) of the Davis-Bacon Act on behalf of laborers or mechanics are considered wages paid to such laborers or mechanics, subject to the provisions of paragraph (a)(l)(iv) of this section; also, regular contributions made or costs incurred for more than a weekly period (but not less often than quarterly) under plans, funds, or programs which cover the particular weekly period, are deemed to be constructively made or incurred during such weekly period. Such laborers and mechanics shall be paid the appropriate wage rate and fringe benefits on the wage determination for the classification of work actually performed, without regard to skill, except as provided in Sec. 5.5(a)(4) [paragraph (a)(4) below]. Laborers or mechanics performing work in more than one classification may be compensated at the rate specified for each classification for the time actually worked therein: Provided, That the employer’s payroll records accurately set forth the time spent in each classification in which work is performed. The wage determination (including any additional classification and wage rates conformed under paragraph (a)(l)(ii) of this section) and the Davis-Bacon poster (WH-1321) shall be posted at all times by the contractor and its subcontractors at the site of the work in a prominent and accessible place where it can be easily seen by the workers.
(ii)(A) The contracting officer shall require that any class of laborers or mechanics, including helpers, which is not listed in the wage determination and which is to be employed under the contract shall be classified in conformance with the wage determination. The contracting officer shall approve an additional classification and wage rate and fringe benefits therefore only when the following criteria have been met:
(1)      The work to be performed by the classification requested is not performed by a classification in the wage determination; and

Exhibit J-1 Page 1



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



(2)      The classification is utilized in the area by the construction industry; and
(3)      The proposed wage rate, including any bona fide fringe benefits, bears a reasonable relationship to the wage rates contained in the wage determination.
(ii)(B) If the contractor and the laborers and mechanics to be employed in the classification (if known), or their representatives, and the contracting officer agree on the classification and wage rate (including the amount designated for fringe benefits where appropriate), a report of the action taken shall be sent by the contracting officer to the Administrator of the Wage and Hour Division, Employment Standards Administration, U.S. Department of Labor, Washington, DC 20210. The Administrator, or an authorized representative, will approve, modify, or disapprove every additional classification action within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary.
(ii)(C) In the event the contractor, the laborers or mechanics to be employed in the classification or their representatives, and the contracting officer do not agree on the proposed classification and wage rate (including the amount designated for fringe benefits, where appropriate), the contracting officer shall refer the questions, including the views of all interested parties and the recommendation of the contracting officer, to the Administrator for determination. The Administrator, or an authorized representative, will issue a determination within 30 days of receipt and so advise the contracting officer or will notify the contracting officer within the 30-day period that additional time is necessary.
(ii)(D) The wage rate (including fringe benefits where appropriate) determined pursuant to paragraphs (a)(1)(ii) (B) or (C) of this section, shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed in the classification.
(iii) Whenever the minimum wage rate prescribed in the contract for a class of laborers or mechanics includes a fringe benefit which is not expressed as an hourly rate, the contractor shall either pay the benefit as stated in the wage determination or shall pay another bona fide fringe benefit or an hourly cash equivalent thereof.
(iv) If the contractor does not make payments to a trustee or other third person, the contractor may consider as part of the wages of any laborer or mechanic the amount of any costs reasonably anticipated in providing bona fide fringe benefits under a plan or program, Provided, That the Secretary of Labor has found, upon the written request of the contractor, that the applicable standards of the Davis-Bacon Act have been met. The Secretary of Labor may require the contractor to set aside in a separate account assets for the meeting of obligations under the plan or program.
(2)      Withholding.
The Department of Energy (“DOE”) shall upon its own action or upon written request of an authorized representative of the Department of Labor withhold or cause to be withheld

Exhibit J-1 Page 2



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



from the contractor under this contract or any other Federal contract with the same prime contractor, or any other federally-assisted contract subject to Davis-Bacon prevailing wage requirements, which is held by the same prime contractor, so much of the accrued payments or advances as may be considered necessary to pay laborers and mechanics, including apprentices, trainees, and helpers, employed by the contractor or any subcontractor the full amount of wages required by the contract. In the event of failure to pay any laborer or mechanic, including any apprentice, trainee, or helper, employed or working on the site of the work (or under the United States Housing Act of 1937 or under the Housing Act of 1949 in the construction or development of the project), all or part of the wages required by the contract, DOE may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds until such violations have ceased.
(3)      Payrolls and basic records.
(i) Payrolls and basic records relating thereto shall be maintained by the contractor during the course of the work and preserved for a period of three years thereafter for all laborers and mechanics working at the site of the work (or under the United States Housing Act of 1937, or under the Housing Act of 1949, in the construction or development of the project). Such records shall contain the name, address, and social security number of each such worker, his or her correct classification, hourly rates of wages paid (including rates of contributions or costs anticipated for bona fide fringe benefits or cash equivalents thereof of the types described in section 1(b)(2)(B) of the Davis-Bacon Act), daily and weekly number of hours worked, deductions made and actual wages paid. Whenever the Secretary of Labor has found under 29 CFR 5.5(a)(1)(iv) that the wages of any laborer or mechanic include the amount of any costs reasonably anticipated in providing benefits under a plan or program described in section 1(b)(2)(B) of the Davis-Bacon Act, the contractor shall maintain records which show that the commitment to provide such benefits is enforceable, that the plan or program is financially responsible, and that the plan or program has been communicated in writing to the laborers or mechanics affected, and records which show the costs anticipated or the actual cost incurred in providing such benefits. Contractors employing apprentices or trainees under approved programs shall maintain written evidence of the registration of apprenticeship programs and certification of trainee programs, the registration of the apprentices and trainees, and the ratios and wage rates prescribed in the applicable programs.
(ii)(A) The contractor shall submit weekly for each week in which any contract work is performed a copy of all payrolls to the DOE) if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit the payrolls to the applicant, sponsor, or owner, as the case may be, for transmission to DOE. The payrolls submitted shall set out accurately and completely all of the information required to be maintained under 29 CFR 5.5(a)(3)(i), except that full social security numbers and home addresses shall not be included on weekly transmittals. Instead the payrolls shall only need to include an individually identifying number for each employee (e.g., the last four digits of

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the employee’s social security number). The required weekly payroll information may be submitted in any form desired. Optional Form WH-347 is available for this purpose from the Wage and Hour Division Web site at http://www.dol.gov/esa/whd/forms/wh347instr.htm or its successor site. The prime contractor is responsible for the submission of copies of payrolls by all subcontractors. Contractors and subcontractors shall maintain the full social security number and current address of each covered worker, and shall provide them upon request to DOE if the agency is a party to the contract, but if the agency is not such a party, the contractor will submit them to the applicant, sponsor, or owner, as the case may be, for transmission to DOE, the contractor, or the Wage and Hour Division of the Department of Labor for purposes of an investigation or audit of compliance with prevailing wage requirements. It is not a violation of this section for a prime contractor to require a subcontractor to provide addresses and social security numbers to the prime contractor for its own records, without weekly submission to the sponsoring government agency (or the applicant, sponsor, or owner).
(ii)(B) Each payroll submitted shall be accompanied by a “Statement of Compliance,” signed by the contractor or subcontractor or his or her agent who pays or supervises the payment of the persons employed under the contract and shall certify the following:
(1)      That the payroll for the payroll period contains the information required to be provided under Sec. 5.5 (a)(3)(ii) of Regulations, 29 CFR part 5, the appropriate information is being maintained under Sec. 5.5 (a)(3)(i) of Regulations, 29 CFR part 5, and that such information is correct and complete;
(2)      That each laborer or mechanic (including each helper, apprentice, and trainee) employed on the contract during the payroll period has been paid the full weekly wages earned, without rebate, either directly or indirectly, and that no deductions have been made either directly or indirectly from the full wages earned, other than permissible deductions as set forth in Regulations, 29 CFR part 3;
(3)      That each laborer or mechanic has been paid not less than the applicable wage rates and fringe benefits or cash equivalents for the classification of work performed, as specified in the applicable wage determination incorporated into the contract.
(ii)(C) The weekly submission of a properly executed certification set forth on the reverse side of Optional Form WH-347 shall satisfy the requirement for submission of the “Statement of Compliance” required by paragraph (a)(3)(ii)(B) of this section.
(ii)(D) The falsification of any of the above certifications may subject the contractor or subcontractor to civil or criminal prosecution under section 1001 of title 18 and section 231 of title 31 of the United States Code.
(iii) The contractor or subcontractor shall make the records required under paragraph (a)(3)(i) of this section available for inspection, copying, or transcription by authorized representatives of DOE or the Department of Labor, and shall permit such representatives

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to interview employees during working hours on the job. If the contractor or subcontractor fails to submit the required records or to make them available, the Federal agency may, after written notice to the contractor, sponsor, applicant, or owner, take such action as may be necessary to cause the suspension of any further payment, advance, or guarantee of funds. Furthermore, failure to submit the required records upon request or to make such records available may be grounds for debarment action pursuant to 29 CFR 5.12.
(4)      Apprentices and trainees
(i) Apprentices. Apprentices will be permitted to work at less than the predetermined rate for the work they performed when they are employed pursuant to and individually registered in a bona fide apprenticeship program registered with the U.S. Department of Labor, Employment and Training Administration, Office of Apprenticeship Training, Employer and Labor Services, or with a State Apprenticeship Agency recognized by the Office, or if a person is employed in his or her first 90 days of probationary employment as an apprentice in such an apprenticeship program, who is not individually registered in the program, but who has been certified by the Office of Apprenticeship Training, Employer and Labor Services or a State Apprenticeship Agency (where appropriate) to be eligible for probationary employment as an apprentice. The allowable ratio of apprentices to journeymen on the job site in any craft classification shall not be greater than the ratio permitted to the contractor as to the entire work force under the registered program. Any worker listed on a payroll at an apprentice wage rate, who is not registered or otherwise employed as stated above, shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any apprentice performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. Where a contractor is performing construction on a project in a locality other than that in which its program is registered, the ratios and wage rates (expressed in percentages of the journeyman’s hourly rate) specified in the contractor’s or subcontractor’s registered program shall be observed. Every apprentice must be paid at not less than the rate specified in the registered program for the apprentice’s level of progress, expressed as a percentage of the journeymen hourly rate specified in the applicable wage determination. Apprentices shall be paid fringe benefits in accordance with the provisions of the apprenticeship program. If the apprenticeship program does not specify fringe benefits, apprentices must be paid the full amount of fringe benefits listed on the wage determination for the applicable classification. If the Administrator determines that a different practice prevails for the applicable apprentice classification, fringes shall be paid in accordance with that determination. In the event the Office of Apprenticeship Training, Employer and Labor Services, or a State Apprenticeship Agency recognized by the Office, withdraws approval of an apprenticeship program, the contractor will no longer be permitted to utilize apprentices at less than the applicable predetermined rate for the work performed until an acceptable program is approved.

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(ii) Trainees. Except as provided in 29 CFR 5.16, trainees will not be permitted to work at less than the predetermined rate for the work performed unless they are employed pursuant to and individually registered in a program which has received prior approval, evidenced by formal certification by the U.S. Department of Labor, Employment and Training Administration. The ratio of trainees to journeymen on the job site shall not be greater than permitted under the plan approved by the Employment and Training Administration. Every trainee must be paid at not less than the rate specified in the approved program for the trainee’s level of progress, expressed as a percentage of the journeyman hourly rate specified in the applicable wage determination. Trainees shall be paid fringe benefits in accordance with the provisions of the trainee program. If the trainee program does not mention fringe benefits, trainees shall be paid the full amount of fringe benefits listed on the wage determination unless the Administrator of the Wage and Hour Division determines that there is an apprenticeship program associated with the corresponding journeyman wage rate on the wage determination which provides for less than full fringe benefits for apprentices. Any employee listed on the payroll at a trainee rate who is not registered and participating in a training plan approved by the Employment and Training Administration shall be paid not less than the applicable wage rate on the wage determination for the classification of work actually performed. In addition, any trainee performing work on the job site in excess of the ratio permitted under the registered program shall be paid not less than the applicable wage rate on the wage determination for the work actually performed. In the event the Employment and Training Administration withdraws approval of a training program, the contractor will no longer be permitted to utilize trainees at less than the applicable predetermined rate for the work performed until an acceptable program is approved.
(iii) Equal employment opportunity. The utilization of apprentices, trainees and journeymen under this part shall be in conformity with the equal employment opportunity requirements of Executive Order 11246, as amended, and 29 CFR part 30.
(5)      Compliance with Copeland Act requirements.
The contractor shall comply with the requirements of 29 CFR part 3, which are incorporated by reference in this contract.
(6)      Subcontracts.
The contractor or subcontractor shall insert in any subcontracts the clauses contained in 29 CFR 5.5(a)(1) through (10) and such other clauses as DOE may by appropriate instructions require, and also a clause requiring the subcontractors to include these clauses in any lower tier subcontracts. The prime contractor shall be responsible for the compliance by any subcontractor or lower tier subcontractor with all the contract clauses in 29 CFR 5.5.

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(7)      Contract termination: debarment.
A breach of the contract clauses in 29 CFR 5.5 may be grounds for termination of the contract, and for debarment as a contractor and a subcontractor as provided in 29 CFR 5.12.
(8)      Compliance with Davis-Bacon and Related Acts requirements.
All rulings and interpretations of the Davis-Bacon and Related Acts contained in 29 CFR parts 1, 3, and 5 are herein incorporated by reference in this contract.
(9)      Disputes concerning labor standards.
Disputes arising out of the labor standards provisions of this contract shall not be subject to the general disputes clause of this contract. Such disputes shall be resolved in accordance with the procedures of the Department of Labor set forth in 29 CFR parts 5, 6, and 7. Disputes within the meaning of this clause include disputes between the contractor (or any of its subcontractors) and the contracting agency, the U.S. Department of Labor, or the employees or their representatives.
(10)      Certification of eligibility.
(i) By entering into this contract, the contractor certifies that neither it (nor he or she) nor any person or firm who has an interest in the contractor’s firm is a person or firm ineligible to be awarded Government contracts by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
(ii) No part of this contract shall be subcontracted to any person or firm ineligible for award of a Government contract by virtue of section 3(a) of the Davis-Bacon Act or 29 CFR 5.12(a)(1).
(iii) The penalty for making false statements is prescribed in the U.S. Criminal Code, 18 U.S.C. 1001.




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EXHIBIT J-2
DAVIS-BACON ACT WAGE DETERMINATION(S)
1.
For all construction (as defined in DOL regulations at 29 CFR 5.2 to include installation where appropriate, hereinafter “construction”) under this Agreement and subcontracts hereunder, incorporate the following “Heavy” wage determination schedule and conformances: GA90 Modification 0 (1/03/14), found at: http://www.wdol.gov/wdol/scafiles/davisbacon/GA90.dvb, and attached hereto as Exhibit J-3 .
2.
For all construction under this Agreement and subcontracts hereunder, on sheltered enclosures with walk-in access for the purpose of housing persons, machinery, equipment, incorporate the following “Building” wage determination schedule: GA126 Modification 1 (1/17/14) found at http://www.wdol.gov/wdol/scafiles/davisbacon/GA126.dvb, and attached hereto as Exhibit J-4 .
3.
For all construction under this Agreement and subcontracts hereunder, on paved roads and other paved surfaces, please use GA7 Modification 0 (1/3/14) “Highway” schedule found at http://www.wdol.gov/wdol/scafiles/davisbacon/GA7.dvb, and attached hereto as Exhibit J-5 .


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EXHIBIT J-3
HEAVY WAGE DETERMINATION
General Decision Number: GA140090 01/03/2014 GA90
Superseded General Decision Number: GA20130090
State: Georgia
Construction Type: Heavy
Heavy Construction, Includes Water and Sewer Lines, and Heavy Construction on Treatment Plant Sites and Industrial Sites (Refineries, Power Plants, Chemical and Manufacturing Plants, Paper Mills, Etc.)
Counties: Burke, McDuffie and Richmond Counties in Georgia.
Modification Number
Publication Date
0
01/03/2014
* ELEC1579-002 10/01/2013
 
Rates
 
Fringes
ELECTRICIAN
$
23.00

 
11.40

ENGI0474-029 07/01/2013
BURKE & RICHMOND COUNTIES
 
Rates
 
Fringes
POWER EQUIPMENT OPERATOR:
 
 
 
Crane: 119 Tons and Under
$
24.55

 
12.30
Crane: 120 to 249 Tons
$
25.55

 
12.30
Crane: 250 to 499 Tons
$
26.55

 
12.30
Crane: 500 Tons and Larger
$
27.55

 
12.30
Mechanic
$
24.55

 
12.30


ENGI0926-032 07/01/2013
MCDUFFIE COUNTY

Exhibit J-3 Page 1



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Rates
 
Fringes
POWER EQUIPMENT OPERATOR:
 
 
 
Crane, Mechanic
$
27.88

 
10.13
 
 
 
 


SUGA2012-108 08/11/2012
 
Rates
 
Fringes
CARPENTER (Form Work Only)
$
15.44

 
0.00
CARPENTER, Excludes Form Work
$
14.76

 
0.00
CEMENT MASON/CONCRETE FINISHER
$
16.96

 
0.00
IRONWORKER, REINFORCING
$
13.30

 
1.66
LABORER: Common or General
$
9.84

 
0.00
LABORER: Pipelayer
$
9.48

 
0.00
OPERATOR: Backhoe/Excavator/Trackhoe
$
12.80

 
0.00
OPERATOR: Bulldozer
$
14.58

 
0.00
OPERATOR: Grader/Blade
$
20.24

 
0.00
OPERATOR: Loader
$
16.59

 
4.13
OPERATOR: Piledriver
$
18.72

 
2.06
OPERATOR: Roller
$
12.04

 
0.69
TRUCK DRIVER: Dump Truck
$
12.79

 
0.00
TRUCK DRIVER: Lowboy Truck
$
17.28

 
1.84


WELDERS - Receive rate prescribed for craft performing operation to which welding is incidental.


Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29CFR 5.5 (a) (1) (ii)).

Exhibit J-3 Page 2



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The body of each wage determination lists the classification and wage rates that have been found to be prevailing for the cited type(s) of construction in the area covered by the wage determination. The classifications are listed in alphabetical order of “identifiers” that indicate whether the particular rate is union or non-union.
Union Identifiers
An identifier enclosed in dotted lines beginning with characters other than “SU” denotes that the union classification and rate have found to be prevailing for that classification. Example: PLUM0198-005 07/01/2011. The first four letters , PLUM, indicate the international union and the four-digit number, 0198, that follows indicates the local union number or district council number where applicable , i.e., Plumbers Local 0198. The next number, 005 in the example, is an internal number used in processing the wage determination. The date, 07/01/2011, following these characters is the effective date of the most current negotiated rate/collective bargaining agreement which would be July 1, 2011 in the above example.
Union prevailing wage rates will be updated to reflect any changes in the collective bargaining agreements governing the rates.
0000/9999: weighted union wage rates will be published annually each January.
Non-Union Identifiers
Classifications listed under an “SU” identifier were derived from survey data by computing average rates and are not union rates; however, the data used in computing these rates may include both union and non-union data. Example: SULA2004-007 5/13/2010. SU indicates the rates are not union majority rates, LA indicates the State of Louisiana; 2004 is the year of the survey; and 007 is an internal number used in producing the wage determination. A 1993 or later date, 5/13/2010, indicates the classifications and rates under that identifier were issued as a General Wage Determination on that date.
Survey wage rates will remain in effect and will not change until a new survey is conducted.


WAGE DETERMINATION APPEALS PROCESS
1.) Has there been an initial decision in the matter? This can be:
an existing published wage determination
a survey underlying a wage determination
a Wage and Hour Division letter setting forth a position on a wage determination matter

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a conformance (additional classification and rate) ruling
On survey related matters, initial contact, including requests for summaries of surveys, should be with the Wage and Hour Regional Office for the area in which the survey was conducted because those Regional Offices have responsibility for the Davis-Bacon survey program. If the response from this initial contact is not satisfactory, then the process described in 2.) and 3.) should be followed.
With regard to any other matter not yet ripe for the formal process described here, initial contact should be with the Branch of Construction Wage Determinations. Write to:
Branch of Construction Wage Determinations
Wage and Hour Division
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
2.) If the answer to the question in 1.) is yes, then an interested party (those affected by the action) can request review and reconsideration from the Wage and Hour Administrator (See 29 CFR Part 1.8 and 29 CFR Part 7). Write to:
Wage and Hour Administrator
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
The request should be accompanied by a full statement of the interested party’s position and by any information (wage payment data, project description, area practice material, etc.) that the requestor considers relevant to the issue.
3.) If the decision of the Administrator is not favorable, an interested party may appeal directly to the Administrative Review Board (formerly the Wage Appeals Board). Write to:
Administrative Review Board
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
4.) All decisions by the Administrative Review Board are final.


END OF GENERAL DECISION

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DOL6214.JPG
Ms. Nikky Ude
Department of Energy
1000 Independence Avenue, SW
Washington, DC 20585

Nikky.Ude@hq.doe.gov
RE:
Project No.: Units 3 and 4 of Vogtle Electric Plant
Wage Decision No.: GA140090 Mod. 0
Location: Burke County, GA
WHD Number: 4790
Dear Ms. Ude:
This is in response to your request proposing the additional classifications and wage rates to the above wage decision in accordance with 29 CFR 5.5(a)(1)(ii).
PROPOSED CLASSIFCATIONS
 
PROPOSED HOURLY RATE
 
FRINGE BENEFITS
Asbestos Worker/Insulator
 
$23.92
 
$12.04
Millwright
 
$26.95
 
$11.55
Sprinkler Fitter
 
$25.99
 
$15.87
Mechanic Services
 
$18.21
 
$12.35
Machinist
 
$26.95
 
$11.55
Well Driller
 
$24.55
 
$12.35
The request for Mechanic Services is not approved because the work to be performed by this classification may be performed by a classification already included in the wage decision [see 29 C.F.R., section 5.5(a)(1)(ii)(A)(1)]. The appropriate classification is Mechanic at a rate of $24.55 per hour plus $12.30 in fringe benefits and shall be paid to all workers performing work in the classification under this contract from the first day on which work is performed.
The Machinist is not subject as the Davis-Bacon Act provides that prevailing wages are to be paid to all mechanics and laborers employed directly upon the site of work. The regulations [see 29 C.F.R., section 5.2(1)] define the site of work as limited to the physical place or places where the construction called for in the contract will remain when work on it is completed and other adjacent or nearby property used in the construction.
The remaining classifications and wage rates are approved and the wage rates proposed must be paid to all workers performing work within the classifications under this contract from the first day work is performed.

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Your request has been conformed consistent with All Agency Memorandum 213 (http://www.wdol.gov/aam/aam213.pdf) which describes the conformance process in detail and the basis on which your proposed rate was denied. Any requests for appeal of the conformance decision must be made within thirty (30) days from the date of this letter. If you have any questions or concerns regarding this conformance decision, please contact the undersigned at the telephone or email address listed below.
Sincerely,

/s/ T. Holmes for     
Kenneth Reinshuttle
Section Chief
Davis Bacon Branch
Wage & Hour Division
202.693.1016
reinshuttle.ken@dol.gov



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EXHIBIT J-4
BUILDING WAGE DETERMINATION
General Decision Number: GA140126 01/17/2014 GA126
Superseded General Decision Number: GA20130126
State: Georgia
Construction Type:    Building
County: Burke County in Georgia.
Modification Number
Publication Date
0
01/03/2014
1
01/17/2014
BOIL0026-001 01/01/2013
 
Rates
 
Fringes
BOILERMAKER
$
24.91

 
19.69
 
 
 
 


* ELEV0032-001 01/01/2014
 
Rates
 
Fringes
ELEVATOR MECHANIC
$
36.96

 
26.785+a+b
 
 
 
 
PAID HOLIDAYS:
a. New Year’s Day, Memorial Day, Independence Day, Labor Day, Vetern’s Day, Thanksgiving Day, the Friday after Thanksgiving, and Christmas Day.
b. Employer contributes 8% of regular hourly rate to vacation pay credit for employee who has worked in business more than 5 years; 6% for less than 5 years’ service.


ENGI0474-003 07/01/2013

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Rates
 
Fringes
POWER EQUIPMENT OPERATOR:
 
 
 
Backhoe/Excavator, Bobcat/Skid Steer/Skid Loader, Bulldozer, Forklift
(under 15 tons), and Loader
$
22.72

 
12.30
Crane (over 10 tons) and Forklift
(15 tons and over)
$
24.55

 
12.30
Crane (over 120 tons)
$
25.55

 
12.30
Crane (over 250 tons)
$
26.55

 
12.30
Oiler
$
20.38

 
12.30

PLUM0150-006 10/01/2012
 
Rates
 
Fringes
PLUMBER/PIPEFITTER
$
22.94

 
12.71

SHEE0085-003 08/01/2012
 
Rates
 
Fringes
SHEET METAL WORKER (Including HVAC Duct Installation; Excluding Metal Roof Installation)
$
28.34

 
11.55

SUGA2012-033 08/11/2012
 
Rates
 
Fringes
BRICKLAYER
$
16.00

 
0.00
CARPENTER, Includes Drywall Hanging and
Metal Stud Installation
$
15.28

 
0.00
CEMENT MASON/CONCRETE FINISHER
$
16.58

 
0.00
DRYWALL FINISHER/TAPER
$
17.00

 
0.00
ELECTRICIAN
$
19.71

 
3.60
HVAC MECHANIC (Installation of HVAC
Unit Only, Excludes Installation of
HVAC Pipe and Duct)
$
18.00

 
3.89
IRONWORKER, REINFORCING
$
17.94

 
0.00
IRONWORKER, STRUCTURAL
$
20.00

 
0.35
LABORER: Common or General
$
10.25

 
0.32
LABORER: Mason Tender – Brick
$
9.00

 
0.00
LABORER: Pipelayer
$
12.00

 
0.23

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Rates
 
Fringes
OPERATOR: Grader/Blade
$
17.52

 
0.00
PAINTER: Brush, Roller and Spray
$
16.00

 
1.62
ROOFER (Installation of Metal Roofs Only)
$
15.02

 
0.00
ROOFER, Excludes Installation of Metal Roofs
$
10.76

 
0.00
TILE FINISHER
$
10.31

 
0.00
TILE SETTER
$
19.50

 
0.00
TRUCK DRIVER: Dump Truck
$
12.70

 
0.00
TRUCK DRIVER: Lowboy Truck
$
17.41

 
0.00
 
 
 
 


WELDERS - Receive rate prescribed for craft performing operation to which welding is incidental.


Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29CFR 5.5 (a) (1) (ii)).


The body of each wage determination lists the classification and wage rates that have been found to be prevailing for the cited type(s) of construction in the area covered by the wage determination. The classifications are listed in alphabetical order of “identifiers” that indicate whether the particular rate is union or non-union.
Union Identifiers
An identifier enclosed in dotted lines beginning with characters other than “SU” denotes that the union classification and rate have found to be prevailing for that classification. Example: PLUM0198-005 07/01/2011. The first four letters , PLUM, indicate the international union and the four-digit number, 0198, that follows indicates the local union number or district council number where applicable , i.e., Plumbers Local 0198. The next number, 005 in the example, is an internal number used in processing the wage determination. The date, 07/01/2011, following these characters is the effective date of the most current negotiated rate/collective bargaining agreement which would be July 1, 2011 in the above example.
Union prevailing wage rates will be updated to reflect any changes in the collective bargaining agreements governing the rates.
0000/9999: weighted union wage rates will be published annually each January.

Exhibit J-4 Page 3



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



Non-Union Identifiers
Classifications listed under an “SU” identifier were derived from survey data by computing average rates and are not union rates; however, the data used in computing these rates may include both union and non-union data. Example: SULA2004-007 5/13/2010. SU indicates the rates are not union majority rates, LA indicates the State of Louisiana; 2004 is the year of the survey; and 007 is an internal number used in producing the wage determination. A 1993 or later date, 5/13/2010, indicates the classifications and rates under that identifier were issued as a General Wage Determination on that date.
Survey wage rates will remain in effect and will not change until a new survey is conducted.


WAGE DETERMINATION APPEALS PROCESS
1.) Has there been an initial decision in the matter? This can be:
an existing published wage determination
a survey underlying a wage determination
a Wage and Hour Division letter setting forth a position on a wage determination matter
a conformance (additional classification and rate) ruling
On survey related matters, initial contact, including requests for summaries of surveys, should be with the Wage and Hour Regional Office for the area in which the survey was conducted because those Regional Offices have responsibility for the Davis-Bacon survey program. If the response from this initial contact is not satisfactory, then the process described in 2.) and 3.) should be followed.
With regard to any other matter not yet ripe for the formal process described here, initial contact should be with the Branch of Construction Wage Determinations. Write to:
Branch of Construction Wage Determinations
Wage and Hour Division
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
2.) If the answer to the question in 1.) is yes, then an interested party (those affected by the action) can request review and reconsideration from the Wage and Hour Administrator (See 29 CFR Part 1.8 and 29 CFR Part 7). Write to:

Exhibit J-4 Page 4



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Wage and Hour Administrator
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
The request should be accompanied by a full statement of the interested party’s position and by any information (wage payment data, project description, area practice material, etc.) that the requestor considers relevant to the issue.
3.) If the decision of the Administrator is not favorable, an interested party may appeal directly to the Administrative Review Board (formerly the Wage Appeals Board). Write to:
Administrative Review Board
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
4.) All decisions by the Administrative Review Board are final.


END OF GENERAL DECISION



Exhibit J-4 Page 5



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



EXHIBIT J-5
HIGHWAY WAGE DETERMINATION
General Decision Number: GA140007 01/03/2014 GA7
Superseded General Decision Number: GA20130007
State: Georgia
Construction Type: Highway
Counties: Burke, Columbia, Glascock, Hancock, Jefferson, Jenkins, Lincoln, McDuffie, Richmond, Taliaferro, Warren, Washington and Wilkes Counties in Georgia.
HIGHWAY CONSTRUCTION PROJECTS
Modification Number
Publication Date
0
01/03/2014
SUGA2011-007 03/07/2011
 
Rates
 
Fringes
CARPENTER
$
11.45

 
 
CEMENT MASON/CONCRETE FINISHER
$
11.36

 
 
LABORER
 
 
 
Asphalt Raker
$
11.00

 
 
Asphalt Screed Person
$
10.50

 
 
Common or General
$
8.93

 
 
Form Setter
$
10.35

 
 
Guardrail Erector
$
13.50

 
 
Milling Machine Ground Person
$
10.00

 
 
Pipe Layer
$
10.20

 
 
POWER EQUIPMENT OPERATOR:
 
 
 
Asphalt Distributor
$
14.10

 
 
Asphalt Paver/Spreader
$
12.00

 
 
Backhoe/Excavator
$
10.80

 
 
Bulldozer
$
11.60

 
 
Compactor
$
10.00

 
 
Crane/Dragline
$
17.50

 
 
Front End Loader
$
10.70

 
 
Material Transfer Vehicle (Shuttle Buggy)
$
11.30

 
 

Exhibit J-5 Page 1



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



 
Rates
 
Fringes
Mechanic
$
12.75

 
 
Milling Machine
$
11.50

 
 
Motorgrader Fine Grade
$
14.55

 
 
Motorgrader/Blade
$
16.00

 
 
Roller
$
10.00

 
 
Water Truck
$
11.25

 
 
TRUCK DRIVER
 
 
 
26,000 GVW & Under
$
10.79

 
 
26,001 GVW & Over
$
12.75

 
 

WELDERS - Receive rate prescribed for craft performing operation to which welding is incidental.

Unlisted classifications needed for work not included within the scope of the classifications listed may be added after award only as provided in the labor standards contract clauses (29CFR 5.5 (a) (1) (ii)).

The body of each wage determination lists the classification and wage rates that have been found to be prevailing for the cited type(s) of construction in the area covered by the wage determination. The classifications are listed in alphabetical order of “identifiers” that indicate whether the particular rate is union or non-union.
Union Identifiers
An identifier enclosed in dotted lines beginning with characters other than “SU” denotes that the union classification and rate have found to be prevailing for that classification. Example: PLUM0198-005 07/01/2011. The first four letters , PLUM, indicate the international union and the four-digit number, 0198, that follows indicates the local union number or district council number where applicable , i.e., Plumbers Local 0198. The next number, 005 in the example, is an internal number used in processing the wage determination. The date, 07/01/2011, following these characters is the effective date of the most current negotiated rate/collective bargaining agreement which would be July 1, 2011 in the above example.
Union prevailing wage rates will be updated to reflect any changes in the collective bargaining agreements governing the rates.
0000/9999: weighted union wage rates will be published annually each January.

Exhibit J-5 Page 2



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



Non-Union Identifiers
Classifications listed under an “SU” identifier were derived from survey data by computing average rates and are not union rates; however, the data used in computing these rates may include both union and non-union data. Example: SULA2004-007 5/13/2010. SU indicates the rates are not union majority rates, LA indicates the State of Louisiana; 2004 is the year of the survey; and 007 is an internal number used in producing the wage determination. A 1993 or later date, 5/13/2010, indicates the classifications and rates under that identifier were issued as a General Wage Determination on that date.
Survey wage rates will remain in effect and will not change until a new survey is conducted.


WAGE DETERMINATION APPEALS PROCESS
1.) Has there been an initial decision in the matter? This can be:
an existing published wage determination
a survey underlying a wage determination
a Wage and Hour Division letter setting forth a position on a wage determination matter
a conformance (additional classification and rate) ruling
On survey related matters, initial contact, including requests for summaries of surveys, should be with the Wage and Hour Regional Office for the area in which the survey was conducted because those Regional Offices have responsibility for the Davis-Bacon survey program. If the response from this initial contact is not satisfactory, then the process described in 2.) and 3.) should be followed.
With regard to any other matter not yet ripe for the formal process described here, initial contact should be with the Branch of Construction Wage Determinations. Write to: Branch of Construction Wage Determinations
Wage and Hour Division
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
2.) If the answer to the question in 1.) is yes, then an interested party (those affected by the action) can request review and reconsideration from the Wage and Hour Administrator (See 29 CFR Part 1.8 and 29 CFR Part 7). Write to:

Exhibit J-5 Page 3



CONFIDENTIAL& PROPRIETARY
CONFIDENTIAL TRADE SECRET INFORMATION



Wage and Hour Administrator
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
The request should be accompanied by a full statement of the interested party’s position and by any information (wage payment data, project description, area practice material, etc.) that the requestor considers relevant to the issue.
3.) If the decision of the Administrator is not favorable, an interested party may appeal directly to the Administrative Review Board (formerly the Wage Appeals Board). Write to:
Administrative Review Board
U.S. Department of Labor
200 Constitution Avenue, N.W.
Washington, DC 20210
4.) All decisions by the Administrative Review Board are final.


END OF GENERAL DECISION



Exhibit J-5 Page 4




Exhibit 31(a)1
THE SOUTHERN COMPANY
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
I, Thomas A. Fanning, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of The Southern 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.

Date:  August 1, 2017
 
/s/Thomas A. Fanning
 
 
Thomas A. Fanning
 
 
Chairman, President and
Chief Executive Officer
 




Exhibit 31(a)2
THE SOUTHERN COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Art P. Beattie, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of The Southern 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.
Date:  August 1, 2017

 
/s/Art P. Beattie
 
 
Art P. Beattie
 
 
Executive Vice President and Chief Financial Officer
 




Exhibit 31(b)1

ALABAMA POWER COMPANY

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Mark A. Crosswhite, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Alabama 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.

Date:  August 1, 2017
 
/s/Mark A. Crosswhite
 
 
Mark A. Crosswhite
 
 
Chairman, President and Chief Executive Officer
 




Exhibit 31(b)2
ALABAMA POWER COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Philip C. Raymond, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Alabama 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.
 
Date:  August 1, 2017

 
/s/Philip C. Raymond
 
 
Philip C. Raymond
 
 
Executive Vice President, Chief Financial Officer
and Treasurer
 




Exhibit 31(c)1
GEORGIA POWER COMPANY

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, W. Paul Bowers, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Georgia 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.
 

Date:  August 1, 2017

 
/s/W. Paul Bowers
 
 
W. Paul Bowers
 
 
Chairman, President and Chief Executive Officer
 




Exhibit 31(c)2
GEORGIA POWER COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, W. Ron Hinson, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Georgia 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.

Date:  August 1, 2017
 
/s/W. Ron Hinson
 
 
W. Ron Hinson
 
 
Executive Vice President, Chief Financial Officer and Treasurer
 




Exhibit 31(d)1
GULF POWER COMPANY

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, S. W. Connally, Jr., certify that:

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.


Date:  August 1, 2017

 
/s/S. W. Connally, Jr.
 
 
S. W. Connally, Jr.
 
 
Chairman, President and Chief Executive Officer
 




Exhibit 31(d)2
GULF POWER COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Xia Liu, certify that:

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.

Date:  August 1, 2017

 
/s/Xia Liu
 
 
Xia Liu
 
 
Vice President, Chief Financial Officer, and Treasurer
 




Exhibit 31(e)1

MISSISSIPPI POWER COMPANY

CERTIFICATION OF CHIEF EXECUTIVE OFFICER


I, Anthony L. Wilson, certify that:

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)
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.

 
Date:  August 1, 2017
 
/s/Anthony L. Wilson
 
 
Anthony L. Wilson
 
 
Chairman, President and
 Chief Executive Officer
 




Exhibit 31(e)2
MISSISSIPPI POWER COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Moses H. Feagin, certify that:

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)
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.


Date:  August 1, 2017

 
/s/Moses H. Feagin
 
 
Moses H. Feagin
 
 
Vice President, Treasurer and
Chief Financial Officer
 





Exhibit 31(f)1
SOUTHERN POWER COMPANY
CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Joseph A. Miller, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Southern 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.

Date:   August 1, 2017

 
/s/Joseph A. Miller
 
 
Joseph A. Miller
 
 
Chairman, President and Chief Executive Officer
 




Exhibit 31(f)2
SOUTHERN POWER COMPANY

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, William C. Grantham, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Southern 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.
 
 
Date:  August 1, 2017

 
/s/William C. Grantham
 
 
William C. Grantham
 
 
Senior Vice President, Treasurer and Chief
Financial Officer
 




Exhibit 31(g)1
SOUTHERN COMPANY GAS

CERTIFICATION OF CHIEF EXECUTIVE OFFICER

I, Andrew W. Evans, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Southern Company Gas;
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.
 

Date:  August 1, 2017

 
/s/Andrew W. Evans
 
 
Andrew W. Evans
 
 
Chairman, President and Chief Executive Officer
 




Exhibit 31(g)2
SOUTHERN COMPANY GAS

CERTIFICATION OF CHIEF FINANCIAL OFFICER

I, Elizabeth W. Reese, certify that:

1.
I have reviewed this quarterly report on Form 10-Q of Southern Company Gas;
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.

Date:  August 1, 2017
 
/s/Elizabeth W. Reese
 
 
Elizabeth W. Reese
 
 
Executive Vice President and
Chief Financial Officer
 




Exhibit 32(a)









CERTIFICATION

18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of The Southern Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of The Southern Company for the quarter ended June 30, 2017, 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 The Southern Company for the quarter ended June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of The Southern Company.


 
/s/Thomas A. Fanning
 
Thomas A. Fanning
 
Chairman, President and
Chief Executive Officer
 
 
 
/s/Art P. Beattie
 
Art P. Beattie
 
Executive Vice President and
Chief Financial Officer


August 1, 2017




Exhibit 32(b)








CERTIFICATION
 
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Alabama Power Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Alabama Power Company for the quarter ended June 30, 2017, 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 Alabama Power Company for the quarter ended June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Alabama Power Company.


 
/s/Mark A. Crosswhite
 
Mark A. Crosswhite
 
Chairman, President and Chief Executive Officer
 
 
 
/s/Philip C. Raymond
 
Philip C. Raymond
 
Executive Vice President,
Chief Financial Officer and Treasurer


August 1, 2017








Exhibit 32(c)







CERTIFICATION
 
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Georgia Power Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Georgia Power Company for the quarter ended June 30, 2017, 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 Georgia Power Company for the quarter ended June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Georgia Power Company.


 
/s/W. Paul Bowers
 
W. Paul Bowers
 
Chairman, President and Chief Executive Officer
 
 
 
/s/W. Ron Hinson
 
W. Ron Hinson
 
Executive Vice President, Chief Financial Officer and Treasurer


August 1, 2017







Exhibit 32(d)






CERTIFICATION

18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Gulf Power Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Gulf Power Company for the quarter ended June 30, 2017, 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 Gulf Power Company for the quarter ended June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Gulf Power Company.


 
/s/S. W. Connally, Jr.
 
S. W. Connally, Jr.
 
Chairman, President and Chief Executive Officer
 
 
 
/s/Xia Liu
 
Xia Liu
 
Vice President, Chief Financial Officer, and Treasurer


August 1, 2017






Exhibit 32(e)






CERTIFICATION
 
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Mississippi Power Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Mississippi Power Company for the quarter ended June 30, 2017, 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 June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Mississippi Power Company.


 
/s/Anthony L. Wilson
 
Anthony L. Wilson
 
Chairman, President and Chief Executive Officer
 
 
 
/s/Moses H. Feagin
 
Moses H. Feagin
 
Vice President, Treasurer and
Chief Financial Officer


August 1, 2017





Exhibit 32(f)





CERTIFICATION
 
18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Southern Power Company for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Southern Power Company for the quarter ended June 30, 2017, 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 June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Southern Power Company.


 
/s/Joseph A. Miller
 
Joseph A. Miller
 
Chairman, President and Chief Executive Officer
 
 
 
/s/William C. Grantham
 
William C. Grantham
 
Senior Vice President, Treasurer and
Chief Financial Officer


August 1, 2017






Exhibit 32(g)







CERTIFICATION

18 U.S.C. SECTION 1350
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002


In connection with the accompanying Quarterly Report on Form 10-Q of Southern Company Gas for the quarter ended June 30, 2017, we, the undersigned, hereby certify pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to the best of our individual knowledge and belief, that:

(1)
such Quarterly Report on Form 10-Q of Southern Company Gas for the year ended June 30, 2017, 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 Company Gas Company for the year ended June 30, 2017, fairly presents, in all material respects, the financial condition and results of operations of Southern Company Gas.


 
/s/Andrew W. Evans
 
Andrew W. Evans
 
Chairman, President and Chief Executive Officer
 
 
 
/s/Elizabeth W. Reese
 
Elizabeth W. Reese
 
Executive Vice President and
Chief Financial Officer


August 1, 2017