Southern Company (SO) 10-K risk factor changes: FY2023 vs FY2022

Laws and regulations govern the terms and conditions of the services the Southern Company system offers, protection of critical electric infrastructure assets, transmission planning, reliability, pipeline safety, interaction with wholesale [removed: markets,] [added: markets] and [added: retail customers, and] relationships with affiliates, among other matters.

Such regulators, in a future rate proceeding, may alter the timing or amount of certain costs for which recovery is allowed or modify the current authorized rate of [removed: return.][added: return; rate refunds may also be required.]

Also, while a small percentage of transmission [removed: revenues] [added: costs] are [removed: collected] [added: recovered] through wholesale electric tariffs, the majority are [removed: collected] [added: recovered] through retail rates.

Changes in regulation, the imposition of additional regulations, changes in [added: application of existing regulations and in] enforcement practices of regulators, or penalties imposed for noncompliance with existing laws or regulations could influence the operating environment of the Southern Company system and may result in substantial costs.

The EPA and certain states have also adopted and continue to propose regulations governing the disposal and management of CCR at power plant [removed: sites.][added: sites under the Resource Conservation and Recovery Act and applicable state laws.]

[removed: The cost estimates for AROs] related to [removed: the disposal of CCR are based on information using various assumptions related to] closure and post-closure costs, timing of future cash outlays, inflation and discount rates, and the potential compliance methods.

The traditional electric operating companies will continue to periodically update their ARO cost [removed: estimates.][added: estimates and those updates could be material.]

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

[added: This litigation has included, but is not] limited to, claims for damages alleged to have been caused by CO2 and other emissions, CCR, releases of regulated substances, alleged exposure to regulated substances, and/or requests for injunctive relief in connection with such matters.

Additionally, costs associated with GHG legislation, regulation, and emission reduction goals could be [removed: significant.][added: significant and there is no assurance such costs would be fully recovered through regulated rates or PPAs.]

The Southern Company system has [removed: robust] processes for identifying, assessing, and responding to climate-related risks, including a scenario planning process that is used to inform resource planning decisions in the states in which the traditional electric operating companies operate.

This process relies on information [added: and assumptions] from internal and external sources, which may or may not be accurate in predicting future outcomes.

[removed: However, the] [added: The] ultimate impact will depend on various factors, such as state adoption and implementation of requirements, natural gas prices, the development, deployment, and advancement of relevant energy technologies, the ability to recover costs through existing ratemaking provisions, and the outcome of pending and/or future legal challenges.

However, such demand may be tempered by legislation limiting the use of natural gas in certain [removed: situations, such as] [added: circumstances, including use in] new [removed: construction.][added: construction and certain household appliances.]

Additionally, efforts to electrify the [removed: transportation] [added: transportation, building,] and [removed: building] [added: other] sectors may result in higher electric demand and negatively impact natural gas demand.

[removed: Future] [added: In addition, future] GHG constraints, including those related to methane emissions, designed to minimize emissions from natural gas could likewise result in increased costs to the Southern Company system and affect the demand for natural gas as well as the prices charged to customers and the competitive position of natural gas.

[removed: The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio including] low-carbon and carbon-free resources and energy efficiency resources; [added: customer demand for carbon-free energy;] continuing to transition the Southern Company system's generating fleet and making the necessary related investments in transmission and distribution systems; continuing research and development with a particular focus on technologies that lower GHG emissions, including methods of removing carbon from the atmosphere; and constructively engaging with policymakers, regulators, investors, customers, and other stakeholders to support outcomes leading to a net zero future.

See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters – [removed: Global Climate Issues"] [added: Environmental Laws and Regulations – Greenhouse Gases"] in Item 7 herein for additional information.

There are many risks that could affect these matters, including operator error or failure of equipment or processes, accidents, operating limitations that may be imposed by environmental or other regulatory requirements or in connection with joint owner arrangements, labor disputes, physical attacks, fuel or material supply interruptions and/or shortages, transmission disruption or capacity constraints, including with respect to the Southern Company system's and third parties' transmission, storage, and transportation facilities, inability to maintain reliability consistent with customer expectations as the traditional electric operating companies and Southern Power transition their generating fleets in support of the Southern Company system's net zero goal, compliance with mandatory reliability standards, including mandatory cyber security standards, implementation of new technologies, technology system failures, cyber intrusions, environmental events, such as spills or releases, supply chain disruptions, inflation, and catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, [added: wars,] political unrest, or other similar occurrences.

Alabama Power owns, and contracts for the operation of, two nuclear units and Georgia Power holds undivided interests in, and contracts for the operation of, [removed: four] [added: five] existing nuclear units.

The [removed: six] [added: seven] existing units are operated by Southern Nuclear and represented approximately [removed: 22% and] 27% [added: and 29%] of the total KWHs generated by Alabama Power and Georgia Power, respectively, in the year ended December 31, [removed: 2022.][added: 2023.]

In addition, Southern Nuclear, on behalf of Georgia Power and the other Vogtle Owners, is managing the construction and start-up of Plant Vogtle [removed: Units 3 and] [added: Unit] 4.

In addition, if a [removed: serious] [added: major] nuclear incident were to occur, it could result in substantial costs to Alabama Power or Georgia Power and Southern Company.

A major incident at a nuclear facility anywhere in the world could cause the NRC to [removed: delay or prohibit construction of new nuclear units or] require additional safety [removed: measures at new and existing units.][added: measures.]

[removed: Transporting] [added: Generation, transmission,] and [removed: storing] [added: distribution of electricity and transportation and storage of] natural gas [removed: involves] [added: involve] risks that may result in accidents and other operating risks and costs.

[added: The] Southern Company [removed: Gas'] [added: system's electric generation, transmission, and distribution and] natural gas distribution and storage activities involve a variety of inherent hazards and operating risks, such as [removed: leaks,] accidents, explosions, [removed: and] [added: fires,] mechanical problems, [removed: which could result in serious injury, loss] [added: discharges or releases] of [removed: life, significant damage to property, environmental pollution,] [added: toxic or hazardous substances or gases,] and [removed: impairment of its operations.][added: other environmental risks.]

The location of [added: electric generation, transmission, and distribution infrastructure and natural gas] pipelines and underground natural gas storage facilities near populated areas could increase the level of damage [added: and liability] resulting from [removed: these risks.][added: any incidents.]

Additionally, [added: electric generation, transmission, and distribution infrastructure and natural gas] pipelines and underground natural gas storage facilities are subject to various state and other regulatory requirements.

[removed: These risks] [added: The risk of physical attack] may escalate during periods of heightened geopolitical tensions.

Because of the critical nature of the infrastructure and the technology systems' inherent vulnerability to disability or failures due to hacking, viruses, denial of service, ransomware, acts of war or terrorism, or other types of data security breaches, the [removed: Southern Company system faces] [added: Registrants face] a heightened risk of cyberattack.

However, the Registrants cannot guarantee that security efforts will [added: have the maturity to] detect or prevent breaches, operational incidents, or other breakdowns of technology systems and network [removed: infrastructure and cannot provide any assurance that such incidents will not have a material adverse effect in the future.][added: infrastructure.]

The [removed: Registrants'] [added: Registrants do not fully assess the security maturity of all] third-party service providers [added: and such third-party service providers] could fail to establish adequate risk management and information security measures with respect to their [removed: systems.][added: systems and/or could fail to timely notify the Registrants of an information security incident.]

Internal or external [removed: cyber attacks] [added: cyberattacks] may [added: have wide-reaching impacts due to incomplete segmentation among network assets and/or reliance of segmented networks on a disrupted network,] inhibit the affected Registrant's ability to fulfill critical business functions, including energy delivery service failures, compromise sensitive and other data, violate privacy laws, and lead to customer dissatisfaction.

Disruption in the supply and/or delivery of fuel as a result of matters such as transportation delays, weather, labor relations, [added: natural disasters, cyber or physical attacks, other] force majeure events, or environmental regulations affecting fuel suppliers could limit the ability of the traditional electric operating companies and Southern Power to operate certain facilities, which could result in higher fuel and operating costs, and the ability of Southern Company Gas to serve its natural gas customers.

[removed: The] Southern [removed: Company system is dependent upon] [added: Power and the traditional electric operating companies purchase] natural gas as a fuel source for [removed: its] [added: their] power generation [removed: needs, which has] [added: needs and] the [removed: potential] [added: natural gas distribution utilities purchase natural gas for sale] to [removed: impact, among other things, the traditional electric operating companies' and Southern Power's costs of generation.][added: their customers.]

Most of Southern Power's generating capacity has been sold to purchasers under PPAs with Southern Power's top three customers comprising approximately [removed: 22%] [added: 19%] of Southern Power's total revenues for the year ended December 31, [removed: 2022.][added: 2023.]

If [removed: one of these Registrants] [added: a Registrant] is unable to replace expiring PPAs with an acceptable new revenue contract, it may be required to sell the power produced by the facility at wholesale prices and be exposed to market fluctuations and risks, or the affected site may temporarily or permanently cease operations.

Additionally, these technology and customer-induced changes to the [removed: electric generation] [added: Subsidiary Registrants'] business models could change the risk profile of the Southern Company system's historical capital investments.

Events such as an aging workforce without appropriate replacements, increased cost or reduced supply of labor, mismatch of skill sets to future needs, or unavailability of contract resources may lead to operating challenges such as lack of resources, loss of knowledge, and a lengthy time period associated with skill development, including workforce needs associated with [removed: major] construction projects and ongoing operations.

The Southern Company system may be subject to [added: continuing] workforce trends occurring in the United States triggered by decisions of employees to leave the workforce and/or their employer [removed: at] [added: in] higher rates [added: during recent years] as compared to prior years and challenges competing with other employers offering more flexible or fully-remote work options.

The outcome of any such proceeding could be impacted by a variety of factors, including the level of opposition from intervenors, potential impacts to customers, and past or future changes in the political, regulatory, economic, or legislative environment.

Transmission planning and the resulting grid improvements could be impacted by FERC policy changes as well as North American Electric Reliability Corporation planning standard changes.

The IRA, among other items, imposes a 15% corporate minimum tax on book income and is subject to the issuance of additional guidance by the U.S. Treasury Department and the IRS.

Any rate recovery by the traditional electric operating companies or the natural gas distribution utilities will be determined pursuant to the regulatory processes of the FERC, state PSCs, or other applicable state regulatory agencies.

There is no assurance, however, that such tax expense will be recoverable through the applicable regulatory process.

The cost estimates for AROs related to the disposal of CCR are based on information using various assumptions

The SEC has proposed new rules relating to the disclosure of climate-related matters.

If the proposed rules, or similar rules, are enacted, the Registrants could incur increased costs to comply with these new rules and could face increased risk of litigation related to disclosures made pursuant to the rules.

For example, Nicor Gas' regulator, the Illinois Commission, has ordered a "future of natural gas" proceeding to explore the recommendations involved with decarbonization of the gas distribution system in Illinois.

The strategy to achieve these goals also relies on continuing to pursue a diverse portfolio including

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

There can be no guarantee that the Southern Company system will achieve these goals.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

These incidents could result in serious injury, loss of life, significant damage to property, environmental pollution, and disruption of the Southern Company system's operations.

Transmission and distribution infrastructure can be vulnerable to physical attack because it is often unmanned, widely dispersed, and located in isolated areas.

Remote working arrangements also increase the Registrants' data security risks.

Additionally, the Registrants' field workforces use mobile technology, which have fewer security measures than the Registrants' wired networks.

Portions of the Registrants' system data, architecture, and other materials may also be disclosed, either intentionally or unintentionally, to third parties and the public by regulators, employees, contractors, and vendors.

This system information may be used by malicious actors to understand the Registrants' systems to prepare for a cyberattack.

In addition, unpatched software or network vulnerabilities, including those resulting from the use of end-of-life operating systems, could be leveraged by an attacker.

In particular, certain actors, such as nation-state and state-sponsored actors, can deploy significant resources and employ sophisticated methods to plan and carry out attacks.

Risk of these attacks may escalate during periods of heightened geopolitical tensions, such as those caused by the war in Ukraine and conflicts in the Middle East.

This is especially true in the event the Registrants are targeted by a sophisticated attacker with significant resources, such as a nation-state or state-sponsored actor.

Further, the Registrants do not have security visibility into all operational technology communications and processes, do not maintain completely exhaustive inventories of assets and applications, and do not centrally manage or monitor all technologies, applications, and environments, which could negatively affect preparation for, investigation of, or response to an information security incident.

Accordingly, the Registrants cannot provide any assurance that information security incidents will not have a material adverse effect in the future.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Coal deliveries continued to be delayed early in 2023, which has largely been attributed to labor shortages in the railroad industry.

Service levels improved over the course of 2023 and deliveries returned to normal levels by the end of 2023.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

The Southern Company system is also subject to risks associated with the failure to adequately manage contract resources.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

In

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Accordingly, the price of natural gas affects, among other things, Southern Power's and the traditional electric operating companies' costs of generation and the natural gas distribution utilities' cost of natural gas.

Natural gas remains a volatile commodity.

Slight supply and demand imbalances can quickly result in significant price moves both up and down.

These price movements may be short-lived, but the impacts can be pronounced.

Natural gas supplies, primarily from the Permian and Haynesville regions, have continued to grow; however, this growth has been accompanied by LNG export growth.

Forward curves project prices will remain in the range of mid-to high- $3 per mmBtu, approaching $4 per mmBtu, through 2030; however, short-term price volatility is expected and future prices could be materially impacted by various factors, including unexpected geopolitical events as well as government policies related to natural gas infrastructure development, production, and exports.

An economic downturn could be caused by a variety of factors, including wars, geopolitical instability, acts of terrorism, political or financial crises, pandemic health events, or cyclical economic factors.

Rate refunds may also be required.

Transmission planning could be impacted by FERC policy changes.

This litigation has included, but is not

Each year, the Southern Company system develops scenarios which look out over a 30-year horizon.

In 2022, scenarios included a wide range of fuel prices, load growth, and CO2 prices starting between $0 and $50 per metric ton of CO2 emitted and escalating over the 30-year horizon.

Additionally, these risks may escalate during periods of heightened geopolitical tensions.

The robust growth in supply allowed natural gas prices to moderate and remain below $3 per mmBtu in recent years; however, demand increases beginning in 2021 and continuing in 2022 resulted in price increases and high volatility.

The Henry Hub price averaged $6.38 per mmBtu in 2022.

Current forecasts for 2023 are approximately $3.30.

Forward market prices for 2024 and beyond indicate expectations, absent unforeseen developments, that prices will modestly increase.

With the majority of natural gas production being from shale gas formations, any limitation on shale gas production would be expected to have a material impact on the supply availability as well as the cost of natural gas.

In addition, new demand, in particular exports to Mexico and those from LNG facilities, has grown significantly and is having greater impact on the traditional electric operating companies' and Southern Power's natural gas markets.

The railroad industry has been experiencing labor shortages, which has led to delays in coal deliveries.

While inflation in the United States had been relatively low in recent years, its impact became more significant during 2021 and continued in 2022.

Uncertainty around inflationary impacts continues to increase in the near-term outlook for economic activity.

The impacts of the COVID-19 pandemic continue.

The effects of the continued COVID-19 pandemic and related global, federal, state, and local responses could include new or extended disruptions to capital markets, further reduced labor availability and productivity, and new or prolonged reductions in economic activity.

These effects could have a variety of adverse impacts on the Registrants, including, but not limited to, new or prolonged reductions in demand for energy, particularly from commercial and industrial customers, impairment of goodwill or long-lived assets, reductions in investments recorded at fair value, further increases in costs of necessary equipment, and further challenges to the development, construction, and/or operation of the Subsidiary Registrants' facilities, including electric

generation, transmission, and distribution assets, the performance of necessary corporate and customer service functions, and access to funds from financial institutions and capital markets.

The effects of the COVID-19 pandemic also could further disrupt or delay construction, testing, supervisory, and support activities at Plant Vogtle Units 3 and 4, as discussed in Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein.

construction and start-up of Plant Vogtle Units 3 and 4.

Also see Note 2 to the financial statements under "Alabama Power – Certificates of Convenience and Necessity" in Item 8 herein for information regarding Alabama Power's construction of Plant Barry Unit 8.

Power, and the natural gas distribution and underground storage facilities of Southern Company Gas, which is likely to negatively impact revenue.

In addition, Southern Company, Southern Company Gas, and Southern Power may provide capital

Additionally, since a portion of the Registrants' and Southern Company Gas Capital's indebtedness bears interest at variable rates based on LIBOR, uncertainty related to its announced phase out and alternative reference rates may adversely affect financing costs.

Any replacement benchmark rates may be relatively new, fundamentally different from LIBOR, and/or more volatile than other benchmark or market rates.

SOFR has been identified as the current replacement benchmark rate for LIBOR in the United States, although the SOFR market is not yet fully developed.

| [Southern Company [removed: Gas](#i4edb778c706f4f2e83351ad068238e9e_196)] [added: Gas](#ie194576fbf7048efb201674f596620b9_190)] | | | [removed: II-[32](#i4edb778c706f4f2e83351ad068238e9e_196)] [added: II-[34](#ie194576fbf7048efb201674f596620b9_190)] | | |

| [Future Earnings [removed: Potential](#i4edb778c706f4f2e83351ad068238e9e_199)] [added: Potential](#ie194576fbf7048efb201674f596620b9_193)] | | | [removed: II-[38](#i4edb778c706f4f2e83351ad068238e9e_199)] [added: II-[39](#ie194576fbf7048efb201674f596620b9_193)] | | |

| [Financial Condition and [removed: Liquidity](#i4edb778c706f4f2e83351ad068238e9e_256)] [added: Liquidity](#ie194576fbf7048efb201674f596620b9_250)] | | | [removed: II-[53](#i4edb778c706f4f2e83351ad068238e9e_256)] [added: II-[55](#ie194576fbf7048efb201674f596620b9_250)] | | |

This section generally discusses [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] items and year-to-year comparisons between [removed: 2022] [added: 2023] and [removed: 2021.][added: 2022.]

Discussions of [removed: 2020] [added: 2021] items and year-to-year comparisons between [removed: 2021] [added: 2022] and [removed: 2020] [added: 2021] that are not included in this Annual Report on Form 10-K can be found in Item 7 of each Registrant's Annual Report on Form 10-K for the year ended December 31, [removed: 2021,] [added: 2022,] which was filed with the SEC on February [removed: 16, 2022.][added: 15, 2023.]

| [Overview](#ie194576fbf7048efb201674f596620b9_109) | | | II-[3](#ie194576fbf7048efb201674f596620b9_109) | | |

| [Results of Operations](#ie194576fbf7048efb201674f596620b9_136) | | | II-[9](#ie194576fbf7048efb201674f596620b9_136) | | |

| [Southern Company](#ie194576fbf7048efb201674f596620b9_139) | | | II-[9](#ie194576fbf7048efb201674f596620b9_139) | | |

| [Alabama Power](#ie194576fbf7048efb201674f596620b9_151) | | | II-[19](#ie194576fbf7048efb201674f596620b9_151) | | |

| [Georgia Power](#ie194576fbf7048efb201674f596620b9_154) | | | II-[23](#ie194576fbf7048efb201674f596620b9_154) | | |

| [Mississippi Power](#ie194576fbf7048efb201674f596620b9_172) | | | II-[28](#ie194576fbf7048efb201674f596620b9_172) | | |

| [Southern Power](#ie194576fbf7048efb201674f596620b9_175) | | | II-[32](#ie194576fbf7048efb201674f596620b9_175) | | |

| [Accounting Policies](#ie194576fbf7048efb201674f596620b9_214) | | | II-[48](#ie194576fbf7048efb201674f596620b9_214) | | |

| [Overview](#i4edb778c706f4f2e83351ad068238e9e_112) | | | II-[3](#i4edb778c706f4f2e83351ad068238e9e_112) | | |

| [Results of Operations](#i4edb778c706f4f2e83351ad068238e9e_142) | | | II-[7](#i4edb778c706f4f2e83351ad068238e9e_142) | | |

| [Southern Company](#i4edb778c706f4f2e83351ad068238e9e_145) | | | II-[7](#i4edb778c706f4f2e83351ad068238e9e_145) | | |

| [Alabama Power](#i4edb778c706f4f2e83351ad068238e9e_157) | | | II-[17](#i4edb778c706f4f2e83351ad068238e9e_157) | | |

| [Georgia Power](#i4edb778c706f4f2e83351ad068238e9e_160) | | | II-[21](#i4edb778c706f4f2e83351ad068238e9e_160) | | |

| [Mississippi Power](#i4edb778c706f4f2e83351ad068238e9e_178) | | | II-[26](#i4edb778c706f4f2e83351ad068238e9e_178) | | |

| [Southern Power](#i4edb778c706f4f2e83351ad068238e9e_181) | | | II-[30](#i4edb778c706f4f2e83351ad068238e9e_181) | | |

| [Accounting Policies](#i4edb778c706f4f2e83351ad068238e9e_220) | | | II-[46](#i4edb778c706f4f2e83351ad068238e9e_220) | | |

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

See FUTURE EARNINGS POTENTIAL herein for a discussion of [removed: the] many factors that could impact the Registrants' future results of operations, financial condition, and liquidity.

[removed: The approved changes] [added: Changes] in [removed: the Rate ECR factor] [added: fuel rates] have no significant effect on [removed: Alabama] [added: Southern Company's or Georgia] Power's net [removed: income,] [added: income] but do impact the related operating cash flows.

At December 31, [removed: 2022,] [added: 2023,] Alabama Power accrued [removed: $166] [added: $52] million to [removed: the] [added: its reliability] reserve.

On November [removed: 1, 2022,] [added: 9, 2023,] the Alabama PSC approved [removed: an increase] [added: a decrease] to Rate ECR of approximately [removed: $500] [added: $126] million [removed: annually] [added: annually,] effective with December [removed: 2022] [added: 2023] billings.

On December 1, [removed: 2022,] [added: 2023,] Alabama Power submitted calculations [added: to the Alabama PSC] for Rate CNP Compliance for [removed: 2023] [added: 2024,] which resulted in an annual revenue [removed: increase] [added: decrease] of approximately [removed: $255] [added: $23] million, or [removed: 3.7%,] [added: 0.3%,] effective with January [removed: 2023 billings, primarily due to updated depreciation rates.][added: 2024 billings.]

[removed: During 2022,] [added: On November 1, 2023,] Alabama Power [removed: continued construction of] [added: placed] Plant Barry Unit [removed: 8, which is expected to be placed in service] [added: 8] in [removed: November 2023.][added: service.]

For the year ended December 31, [removed: 2022,] [added: 2023,] Alabama Power's weighted common equity return exceeded 6.15%, resulting in Alabama Power establishing a current regulatory liability of [removed: $62 million.][added: $15 million for Rate RSE refunds, which will be refunded to customers through bill credits in April 2024.]

[removed: Construction continues on] [added: Georgia Power placed] Plant Vogtle [removed: Units] [added: Unit] 3 [added: in service on July 31, 2023] and [added: continues construction on Plant Vogtle Unit] 4 [removed: (with] [added: (each with] electric generating capacity of approximately 1,100 [removed: MWs each),] [added: MWs),] in which [removed: Georgia Power currently] [added: it] holds a 45.7% ownership interest.

Georgia Power's share of the total project capital cost forecast to complete Plant Vogtle Units 3 and 4, including contingency, through the [removed: end of the] second quarter [removed: 2023 and the first quarter 2024, respectively,] [added: 2024] is [removed: $10.6] [added: $10.8] billion.

On [removed: August 3, 2022,] [added: July 20, 2023, Southern Nuclear announced that all Unit 4 ITAACs had been submitted to] the [added: NRC, and, on July 28, 2023, the] NRC published its 103(g) finding that the [removed: acceptance] [added: accepted] criteria in the combined license for Unit [removed: 3] [added: 4] had been met, which allowed nuclear fuel to be loaded and start-up testing to begin.

Fuel load for Unit [removed: 3] [added: 4] was completed on [removed: October 17, 2022.][added: August 19, 2023.]

The projected schedule for Unit [removed: 3 primarily] [added: 4 significantly] depends on the progression of [removed: final component] [added: start-up] and pre-operational [removed: testing and start-up,] [added: testing,] which may be impacted by [removed: further equipment, component, and/or] [added: equipment or] other operational [removed: challenges.][added: failures.]

[removed: After considering] [added: Considering] the [removed: timeframe and duration of hot functional and other testing and recent experience with Unit 3 start-up and] [added: remaining] pre-operational testing, Unit 4 is [removed: now] projected to be placed in service during [removed: late fourth quarter 2023 or] the [removed: first] [added: second] quarter 2024.

Any further delays could result in [added: a] later in-service [removed: dates] [added: date] and cost increases.

After considering the significant level of uncertainty that [removed: exists] [added: existed] regarding the future recoverability of these costs since the ultimate outcome of these matters [removed: is] [added: was] subject to the outcome of [removed: future] assessments by management, as well as Georgia PSC decisions in [removed: future] [added: the related] regulatory proceedings, Georgia Power recorded [added: total] pre-tax charges to income [added: of $1.1 billion ($0.8 billion after tax)] in [added: 2018; $149 million ($111 million after tax) and $176 million ($131 million after tax) in] the second quarter [removed: 2022,] [added: and] the [added: fourth quarter 2020, respectively; $48 million ($36 million after tax), $460 million ($343 million after tax), $264 million ($197 million after tax), and $480 million ($358 million after tax) in the first quarter 2021, the second quarter 2021, the] third quarter [removed: 2022,] [added: 2021,] and the fourth quarter [removed: 2022 of] [added: 2021, respectively; and] $36 million ($27 million after tax), $32 million ($24 million after tax), and $148 million ($110 million after [removed: tax), respectively, for the increases] [added: tax)] in the [removed: total project capital cost forecast.][added: second quarter 2022, the third quarter 2022, and the fourth quarter 2022, respectively.]

[added: In September 2022,] Georgia Power and [removed: the other Vogtle Owners do not agree on the starting dollar amount for the determination of cost increases subject] [added: MEAG Power reached an agreement] to [added: resolve a dispute regarding] the cost-sharing and tender provisions of the Global Amendments (as defined in Note 2 to the financial statements under [removed: Georgia] [added: "Georgia] Power – Nuclear Construction – Joint Owner Contracts").

[removed: On] [added: In] September [removed: 29,] 2022, Georgia Power and MEAG Power reached an agreement to resolve [removed: their] [added: a] dispute regarding the [removed: proper interpretation of the] cost-sharing and tender provisions of the Global [removed: Amendments.][added: Amendments (as defined in Note 2 to the financial statements under "Georgia Power – Nuclear Construction – Joint Owner Contracts").]

Georgia Power recorded pre-tax charges [removed: (credits)] to income [removed: in the fourth quarter 2021, the second quarter 2022, the third quarter 2022, and] [added: through] the fourth quarter 2022 of [removed: approximately $440 million ($328 million after tax), $16 million ($12 million after tax), $(102) million ($(76) million after tax), and $53] [added: $407] million [removed: ($40] [added: ($304] million after [removed: tax), respectively,] [added: tax)] associated with the cost-sharing [removed: and tender] provisions of the Global Amendments, including the settlement with MEAG Power.

[removed: A total of $407 million associated with these provisions is] [added: These charges are] included in the total project capital cost forecast and will not be recovered from retail customers.

The ultimate impact of these matters on the construction schedule [added: for Plant Vogtle Unit 4] and project capital cost forecast [removed: and related cost recovery] for Plant Vogtle Units 3 and 4 cannot be determined at this time.

[removed: - Decertification and retirement of] [added: Georgia Power submitted its NOPP to the Georgia Environmental Protection Division (EPD) indicating plans to retire] Plant Wansley Units 1 and 2 (926 MWs based on 53.5% ownership), which occurred [removed: on] [added: in] August [removed: 31,] 2022, [added: Plant Bowen Units 1] and [added: 2 (1,400 MWs), and] Plant Scherer Unit 3 (614 MWs based on 75% ownership) [removed: by] [added: on or before the compliance date of] December 31, [removed: 2028, as well as the][added: 2028.]

See Note [removed: 7] [added: 2] to the financial statements under [removed: "SEGCO"] [added: "Georgia Power"] for additional information.

On [removed: June 7, 2022,] [added: February 6, 2024,] the Mississippi PSC approved Mississippi Power's [removed: annual retail PEP filing for 2022, resulting in an annual] [added: request to] increase [removed: in] [added: retail fuel] revenues [removed: of approximately] [added: by] $18 [removed: million, or 1.9%,] [added: million annually] effective with the first billing cycle of [removed: April 2022.][added: March 2024.]

On [removed: July 15, 2022,] [added: October 27, 2023, the FERC approved a settlement agreement filed by] Mississippi Power [removed: filed a] [added: and Cooperative Energy on July 31, 2023 related to Mississippi Power's July 2022] request [removed: with the FERC] for a $23 million increase in annual wholesale base revenues under the MRA tariff.

See Note 2 to the financial statements under [removed: "Mississippi Power"] [added: "Alabama Power – Rate CNP Depreciation"] for additional information.

With the inclusion of investments associated with facilities under construction, as well as other capacity and energy contracts, Southern Power's average investment coverage ratio at December 31, [removed: 2022] [added: 2023] was [removed: 96%] [added: 97%] through [removed: 2027] [added: 2028] and [removed: 90%] [added: 89%] through [removed: 2032,] [added: 2033,] with an average remaining contract duration of approximately 12 years.

See Note [removed: 15] [added: 2] to the financial statements under "Southern Company Gas" for additional information.

On December [removed: 20, 2022,] [added: 19, 2023,] the Georgia PSC approved Atlanta Gas Light's annual GRAM filing, which resulted in an annual [added: base] rate increase of $53 million effective January 1, [removed: 2023.][added: 2024.]

In striving to achieve attractive risk-adjusted returns while providing cost-effective energy to approximately [removed: 8.8] [added: 8.9] million electric and gas utility customers collectively, the traditional electric operating companies and Southern Company Gas continue to focus on several key performance indicators.

[removed: See RESULTS OF OPERATIONS – "Southern] [added: Southern] Company Gas [removed: – Operating Metrics" for additional information] [added: also continues to focus] on [removed: Southern Company Gas'] [added: several] operating metrics, including Heating Degree Days, customer count, and volumes of natural gas sold.

Consolidated net income attributable to Southern Company was [removed: $3.5] [added: $4.0] billion in [removed: 2022,] [added: 2023,] an increase of [removed: $1.1 billion,] [added: $452 million,] or [removed: 47.3%,] [added: 12.8%,] from [removed: 2021.][added: 2022.]

The increase was primarily due to [added: lower non-fuel operations and maintenance costs, an increase in retail electric revenues associated with rates and pricing,] a [removed: $1.1 billion] decrease in [added: income tax expense, a decrease in] after-tax charges related to the construction of Plant Vogtle Units 3 and 4, [removed: increases in retail electric revenues associated with rates and pricing, warmer weather, primarily] [added: an increase] in [removed: the second quarter 2022, and sales growth, and increases] [added: other revenues, an increase] in natural gas revenues from [removed: base] rate increases and continued infrastructure replacement, [added: and a goodwill impairment charge in 2022 at PowerSecure,] partially offset by higher [removed: non-fuel operations and maintenance costs] [added: depreciation] and [added: amortization,] higher interest [removed: expense.][added: expense, and a decrease in retail electric revenues associated with milder weather in 2023 compared to 2022.]

Basic EPS was [removed: $3.28] [added: $3.64] in [removed: 2022] [added: 2023] and [removed: $2.26] [added: $3.28] in [removed: 2021.][added: 2022.]

Diluted EPS, which factors in additional shares related to stock-based compensation, was [removed: $3.26] [added: $3.62] in [removed: 2022] [added: 2023] and [removed: $2.24] [added: $3.26] in [removed: 2021.][added: 2022.]

EPS for [removed: 2022] [added: 2023] and [removed: 2021] [added: 2022] was negatively impacted by [removed: $0.04] [added: $0.06] and [removed: $0.01] [added: $0.04] per share, respectively, as a result of increases in the average shares outstanding.

Dividends paid per share of common stock were [removed: $2.70] [added: $2.78] in [removed: 2022] [added: 2023] and [removed: $2.62] [added: $2.70] in [removed: 2021.][added: 2022.]

In January [removed: 2023,] [added: 2024,] Southern Company declared a quarterly dividend of [removed: 68] [added: 70] cents per share.

For [removed: 2022,] [added: 2023,] the dividend payout ratio was [removed: 82%] [added: 76%] compared to [removed: 116%] [added: 82%] for [removed: 2021.][added: 2022.]

| | | | [added: 2023 | | |] 2022 | | | [added: 2021] | | | [removed: 2021] | | | [added: 2023 | | | 2022 | | | 2021 | | |]

On March 24, 2023, Alabama Power filed Rate CNP New Plant with the Alabama PSC to recover costs associated with the acquisition of the Central Alabama Generating Station.

The filing reflected an annual increase in retail revenues of $78 million, or 1.1%, effective with June 2023 billings.

Through May 2023, Alabama Power recovered substantially all costs associated with the Central Alabama Generating Station through Rate RSE, offset by revenues from a power sales agreement.

On May 24, 2023, the Central Alabama Generating Station was placed into retail service.

On December 1, 2023, Alabama Power filed Rate CNP New Plant with the Alabama PSC to recover costs associated with Plant Barry Unit 8.

The filing reflected an annual increase in retail revenues of $91 million, or 1.4%, effective with January 2024 billings.

On June 14, 2023, the Alabama PSC issued an order approving modifications to Alabama Power's Renewable Generation Certificate.

The modifications authorized Alabama Power to procure an additional 2,400 MWs of renewable capacity and energy by June 14, 2029 and to market the related energy and environmental attributes to customers and other third parties.

The modifications also increased the size of allowable renewable projects from 80 MWs to 200 MWs and increased the annual approval limit from 160 MWs to 400 MWs.

On July 11, 2023, the Alabama PSC issued an order authorizing Alabama Power to expand the existing authority of its reliability reserve to include certain production-related expenses that are intended to maintain reliability in between scheduled generating unit maintenance outages.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

On August 18, 2023, Alabama Power notified the Alabama PSC of its intent to use a portion of its reliability reserve balance in 2023.

During the fourth quarter 2023, Alabama Power used $75 million of the reliability reserve for reliability-related transmission, distribution, and generation expenses and nuclear production-related expenses.

On October 3, 2023, the Alabama PSC issued an order modifying its December 2022 order related to excess federal accumulated deferred income taxes and authorizing Alabama Power to (i) flow back in 2023 approximately $24 million of certain federal excess accumulated deferred income taxes resulting from the Tax Cuts and Jobs Act of 2017 and (ii) make available any remaining balance of excess accumulated deferred income taxes at the end of 2023 for the benefit of customers in 2024 and/or 2025.

At December 31, 2023, the remaining balance was $81 million, of which approximately $67 million and $14 million will flow back in 2024 and 2025, respectively, for the benefit of customers.

Hot functional testing for Unit 4 was completed on May 1, 2023.

On October 6, 2023, Georgia Power announced that during start-up and pre-operational testing for Unit 4, Southern Nuclear identified a motor fault in one of four reactor coolant pumps (RCPs).

This RCP was replaced with an on-site spare RCP from inventory.

On February 1, 2024, Georgia Power announced that during start-up and pre-operational testing for Unit 4, Southern Nuclear identified, and has remediated, vibrations associated with certain piping within the cooling system.

On February 14, 2024, Unit 4 achieved self-sustaining nuclear fission, commonly referred to as initial criticality.

In addition, any findings related to the root cause of the motor fault on the single Unit 4 RCP could require engineering changes or remediation related to the other seven Unit 3 and Unit 4 RCPs.

As of December 31, 2023, based on completion of construction work and the assessment of start-up and pre-operational testing remaining, Southern Nuclear has an estimated $36 million for construction contingency remaining in the estimate to complete.

This contingency is projected to be allocated in the future to address any further Unit 4 schedule extensions or remediation of other issues discovered during start-up testing.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

On October 5, 2023 and October 17, 2023, Georgia Power reached agreements with OPC and Dalton, respectively, to resolve its respective dispute with each of OPC and Dalton regarding the cost-sharing and tender provisions of the Global Amendments.

Under the terms of the agreements with OPC and Dalton, among other items, (i) each of OPC and Dalton retracted its exercise of the tender option and will retain its full ownership interest in Plant Vogtle Units 3 and 4, (ii) Georgia Power made payments immediately after execution of the agreements of $308 million and $17 million to OPC and Dalton, respectively, representing payment for a portion of each of OPC's and Dalton's costs of construction for Plant Vogtle Units 3 and 4 previously incurred, (iii) Georgia Power will pay a portion of each of OPC's and Dalton's further costs of construction for Plant Vogtle Units 3 and 4 as such costs are incurred and with no further adjustment for force majeure costs, which payments will be in an aggregate amount of approximately $105 million and $6 million for OPC and Dalton, respectively, based on the current project capital cost forecast, and (iv) Georgia Power will pay 66% of each of OPC's and Dalton's costs of construction with respect to any amounts above the current project capital cost forecast, with no further adjustment for force majeure costs.

Based on the current project capital cost forecast and the settlements with OPC and Dalton described above, Georgia Power recorded a pre-tax charge to income of approximately $160 million ($120 million after tax) in the third quarter 2023.

*Plant Vogtle Units 3 and 4 Rate and Prudency Proceedings*

In compliance with a Georgia PSC order approved in 2021, Georgia Power increased annual retail base rates by $318 million effective August 1, 2023 based on the in-service date of July 31, 2023 for Unit 3.

On December 19, 2023, the Georgia PSC voted to approve the application to adjust rates to include reasonable and prudent Plant Vogtle Units 3 and 4 costs (Application) as modified by the related stipulated agreement (Prudency Stipulation) among Georgia Power, the staff of the Georgia PSC, and certain intervenors.

Under the terms of the approved Prudency Stipulation, Georgia Power will recover $7.562 billion in total construction and capital costs and associated retail rate base items of $1.02 billion, which includes AFUDC financing costs above $4.418 billion (the Georgia PSC-certified amount) up to $7.562 billion.

Georgia Power will also recover projected operations and maintenance expenses, depreciation expense, nuclear decommissioning accruals, and property taxes, net of projected PTCs.

After considering construction and capital costs already in retail base rates of $2.1 billion and $362 million of associated retail rate base items (approved by the Georgia PSC in 2021) and upon achieving commercial operation of Unit 4, Georgia Power will include in retail rate base the remaining $5.462 billion of construction and capital costs as well as $656 million of associated retail rate base items.

Under the Prudency Stipulation, if commercial operation for Unit 4 is not achieved by March 31, 2024, Georgia Power's ROE used to determine the NCCR tariff and calculate AFUDC will be reduced to zero, which will result in an estimated negative impact to earnings of approximately $30 million per month until the month following the date commercial operation for Unit 4 is achieved.

Annual retail base revenues will increase approximately $729 million and the average retail base rates will be adjusted by approximately 5% (net of the elimination of the NCCR tariff described above) effective the first day of the month after Unit 4 achieves commercial operation.

The approval of the Application and the Prudency Stipulation resolves all issues for determination by the Georgia PSC regarding the reasonableness, prudence, and cost recovery for the remaining Plant Vogtle Units 3 and 4 construction and capital costs not already in retail base rates.

As a result of the Georgia PSC's approval of the Prudency Stipulation, Georgia Power recorded a pre-tax credit to income of approximately $228 million ($170 million after tax) in the fourth quarter 2023 to recognize CWIP costs previously charged to income, which are now recoverable through retail rates.

Associated AFUDC on these costs was also recognized.

See Note 2 to the financial statements under "Georgia Power – Nuclear Construction – Regulatory Matters" for additional information.

*Rate Plans*

On July 12, 2022, the Alabama PSC approved the following items:

- Alabama Power's petition for a certificate of convenience and necessity authorizing Alabama Power to complete the acquisition of the Calhoun Generating Station.

The transaction closed on September 30, 2022 and the related costs are being recovered through Rate CNP New Plant, which reflected an increase in annual revenues of $34 million, or 0.6%, effective with November 2022 billings.

- An increase to Rate ECR effective with August 2022 billings, which resulted in an increase of approximately $310 million annually.

- Modifications to Rate NDR.

- An accounting order authorizing Alabama Power to create a reliability reserve separate from the NDR and transition the previous Rate NDR authority related to reliability expenditures to the reliability reserve.

Alabama Power may make accruals to the reliability reserve if the NDR balance exceeds $35 million.

On September 23, 2022, the FERC authorized Alabama Power to use updated depreciation rates from its 2021 depreciation study effective January 2023.

The updated depreciation rates are expected to result in an approximately $500 million increase in annual depreciation expense.

The approved changes in the Rate ECR factor have no significant effect on Alabama Power's net income, but do impact operating cash flows related to fuel cost recovery.

On December 6, 2022, the Alabama PSC approved Rate CNP Depreciation, which allows Alabama Power to recover changes in depreciation resulting from updates to certain depreciation rates.

Rate CNP Depreciation will result in an annual revenue increase of approximately $318 million, or 4.6%, effective with January 2023 billings.

In addition, the Alabama PSC directed Alabama Power to accelerate the amortization of a regulatory liability associated with excess federal accumulated deferred income taxes, which is being returned to customers through bill credits of up to approximately $318 million in 2023 to offset the impact of the Rate CNP Depreciation increase.

The Alabama PSC will determine the treatment of any remaining excess federal accumulated deferred income taxes at a future date.

At December 31, 2022, associated project expenditures totaled approximately $518 million.

On February 7, 2023, the Alabama PSC directed Alabama Power to issue the 2022 refund to customers through bill credits in August 2023.

On July 29, 2022, Southern Nuclear announced that all Unit 3 ITAACs had been submitted to the NRC.

In early 2023, during the start-up and pre-operational testing for Unit 3, Southern Nuclear identified and is remediating certain equipment and component issues.

As a result, Unit 3 is projected to be placed in service during May or June 2023.

The projected schedule for Unit 4 primarily depends on potential impacts arising from Unit 4 testing activities overlapping with Unit 3 start-up and commissioning; maintaining overall construction productivity and production levels, particularly in subcontractor scopes of work; and maintaining appropriate levels of craft laborers.

During 2022, established construction contingency and additional costs totaling $307 million were assigned to the base capital cost forecast for costs primarily associated with schedule extensions, construction productivity, the pace of system turnovers, additional craft and support resources, procurement for Units 3 and 4, and the equipment and component issues identified during Unit 3 start-up and pre-operational testing.

During 2022, Georgia Power also increased its total project capital cost forecast by $125 million to replenish construction contingency and $9 million for construction monitoring costs, which were approved for recovery by the Georgia PSC in its nineteenth VCM order.

Georgia Power may request the Georgia PSC to evaluate those expenditures for rate recovery during

the prudence review following the Unit 4 fuel load pursuant to the twenty-fourth VCM stipulation described in Note 2 to the financial statements under "Georgia Power – Nuclear Construction – Regulatory Matters."

The other Vogtle Owners notified Georgia Power that they believe the project capital cost forecast approved by the Vogtle Owners on February 14, 2022 triggered the tender provisions.

On June 17, 2022 and July 26, 2022, OPC and Dalton, respectively, notified Georgia Power of their purported exercises of their tender options.

Georgia Power did not accept these purported tender exercises.

On June 18, 2022, OPC and MEAG Power each filed a separate lawsuit against Georgia Power in the Superior Court of Fulton County, Georgia seeking a declaratory judgment that the starting dollar amount is $17.1 billion and that the cost-sharing and tender provisions have been triggered.

On July 25, 2022 and July 28, 2022, Georgia Power filed its answers in the lawsuits filed by MEAG Power and OPC, respectively, and included counterclaims seeking a declaratory judgment that the starting dollar amount is $18.38 billion and that costs related to force majeure events are excluded prior to calculating the cost-sharing and tender provisions and when calculating Georgia Power's related financial obligations.

On September 26, 2022, Dalton filed complaints in each of these lawsuits.

On October 4, 2022, MEAG Power and Georgia Power filed a notice of settlement and voluntary dismissal of the pending litigation described above, including Georgia Power's counterclaim, and, on October 6, 2022, Dalton dismissed its related complaint.

The settlement with MEAG Power does not resolve the separate pending litigation with OPC, including Dalton's associated complaint, described above.

Georgia Power may be required to record further pre-tax charges to income of up to approximately $345 million associated with the cost-sharing and tender provisions of the Global Amendments for OPC and Dalton based on the current project capital cost forecast.

Georgia Power's ownership interest in Plant Vogtle Units 3 and 4 continues to be 45.7%.

Georgia Power believes the increases in the total project capital cost forecast through December 31, 2022 will trigger the tender provisions, but Georgia Power disagrees with OPC and Dalton on the tender provisions trigger date.

Valid notices of tender from OPC and Dalton would require Georgia Power to pay 100% of their respective remaining shares of the costs necessary to complete Plant Vogtle Units 3 and 4.

Georgia Power's incremental ownership interest will be calculated and conveyed to Georgia Power after Plant Vogtle Units 3 and 4 are placed in service.

*2022 ARP*

On December 20, 2022, the Georgia PSC voted to approve the 2022 ARP, including estimated net rate increases totaling $216 million, $377 million, and $403 million effective January 1, 2023, January 1, 2024, and January 1, 2025, respectively.

On July 21, 2022, the Georgia PSC approved Georgia Power's triennial IRP (2022 IRP), as modified by a stipulated agreement among Georgia Power, the staff of the Georgia PSC, and certain intervenors and as further modified by the Georgia PSC.

Southern Nuclear operates and provides services to the Southern Company system's nuclear power plants and is currently managing construction [removed: of] and [removed: developing] [added: start-up of] Plant Vogtle [removed: Units 3 and] [added: Unit] 4, which [removed: are] [added: is] co-owned by Georgia Power.

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

[removed: On] [added: In] November [removed: 9,] 2022, the Southeast Energy Exchange Market (SEEM) began service.

Alabama Power and Georgia Power each have agreements with Southern Nuclear to operate the Southern Company system's existing nuclear plants, Plants Farley, Hatch, and [removed: Vogtle.][added: Vogtle (Units 1, 2, and 3).]

In addition, Georgia Power has an agreement with Southern Nuclear to develop, license, construct, and operate Plant Vogtle [removed: Units 3 and] [added: Unit] 4.

At December 31, [removed: 2022,] [added: 2023,] Southern Power's generation fleet, which is owned in part with various partners, totaled [removed: 12,501] [added: 12,498] MWs of nameplate capacity in commercial operation (including [removed: 5,121] [added: 5,118] MWs of nameplate capacity owned by its subsidiaries).

A majority of Southern Power's partnerships in renewable facilities allow for the sharing of cash distributions and tax benefits at differing percentages, with Southern Power being the controlling partner and thus consolidating the assets and operations of [removed: the partnerships.]

At December 31, [removed: 2022,] [added: 2023,] Southern Power had eight tax equity partnership arrangements where the tax equity [added: investors receive substantially all of the tax benefits from the facilities, including ITCs and PTCs.]

With the inclusion of investments associated with facilities under construction, as well as other capacity and energy contracts, Southern Power's average investment coverage ratio at December 31, [removed: 2022] [added: 2023] was [removed: 96%] [added: 97%] through [removed: 2027] [added: 2028] and [removed: 90%] [added: 89%] through [removed: 2032,] [added: 2033,] with an average remaining contract duration of approximately 12 years.

For the year ended December 31, [removed: 2022,] [added: 2023,] approximately [removed: 44%] [added: 41%] of contracted MWs were with AAA to A- or equivalent rated counterparties, [removed: 43%] [added: 47%] were with BBB+ to BBB- or equivalent rated counterparties, and [removed: 11%] [added: 10%] were with unrated entities that either have ratemaking authority or have posted collateral to cover potential credit exposure.

Southern Company Gas also has an "all other" non-reportable segment that includes segments below the quantitative threshold for separate [removed: disclosure, including storage operations and subsidiaries that fall below the quantitative threshold for separate] disclosure.

See Note 15 to the financial statements under "Southern Company Gas" in Item 8 herein for information regarding Southern Company Gas' recent [removed: dispositions, including the sale of Sequent and the sale and pending sale of the remaining facilities within the storage operations business.][added: dispositions.]

Gas distribution operations, the largest segment of Southern Company Gas' business, operates, constructs, and maintains [removed: 77,591] [added: approximately 77,900] miles of natural gas pipelines and 14 storage facilities, with total capacity of 157 Bcf, to provide natural gas to residential, commercial, and industrial customers.

[removed: information on Southern Company Gas's pipeline investments, see] [added: See] Note [removed: 7] [added: 2] to the financial statements under "Southern Company [removed: Gas"] [added: Gas – Natural Gas Cost Recovery"] in Item 8 [removed: herein.][added: herein for additional information.]

Gas marketing services is comprised of SouthStar, which serves approximately [removed: 622,000] [added: 665,000] natural gas commodity customers, markets gas to residential, commercial, and industrial customers and offers energy-related products that provide natural gas price stability and utility bill management in competitive markets or markets that provide for customer choice.

In [removed: 2023,] [added: 2024,] the Southern Company system's construction program is expected to be apportioned approximately as follows:

| | | | Southern Company system(a)(b) | | | Alabama Power | | | Georgia [removed: Power(a)] [added: Power] | | | Mississippi [removed: Power(a)] [added: Power] | | |

| New generation | | | $ | [removed: 1.2] [added: 1.1] | | $ | [removed: 0.1] [added: —] | | $ | [removed: 1.1] [added: 1.0] | | $ | — | |

| Environmental compliance(c) | | | 0.1 | | | [removed: 0.1] [added: —] | | | 0.1 | | | — | | |

| Generation maintenance | | | [removed: 1.2] [added: 1.3] | | | 0.5 | | | [removed: 0.6] [added: 0.7] | | | 0.1 | | |

| Distribution | | | [removed: 1.6] [added: 1.7] | | | [removed: 0.4] [added: 0.5] | | | 1.1 | | | 0.1 | | |

| Southern Power(d) | | | [removed: 0.1] [added: 0.3] | | | | | | | | | | | |

| Other subsidiaries | | | [removed: 0.2] [added: 0.1] | | | | | | | | | | | |

These estimated expenditures do not include [removed: any] potential compliance costs associated with any future regulation of CO2 emissions from fossil fuel-fired electric generating units or [added: the proposed ELG Supplemental Rule, or] costs associated with closure and monitoring of ash ponds and landfills in accordance with the CCR Rule and the related state rules.

(d)Does not include approximately [removed: $0.5] [added: $0.8] billion for planned acquisitions and placeholder growth, which may vary materially due to market opportunities and Southern Power's ability to execute its growth strategy.

Estimated costs for [removed: 2023] [added: 2024] total [removed: $672] [added: $728] million for Southern Company, primarily consisting of [removed: $330] [added: $346] million for Alabama Power, [removed: $295] [added: $338] million for Georgia Power, and [removed: $21] [added: $24] million for Mississippi Power.

See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 herein for additional information, including estimated expenditures for construction, environmental compliance, and closure and monitoring of ash ponds and landfills for the years [removed: 2024] [added: 2025] through [removed: 2027.][added: 2028.]

See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION – "Southern Company – Electricity Business – Fuel and Purchased Power Expenses" and MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATION under "Fuel and Purchased Power Expenses" for each of the traditional electric operating companies in Item 7 herein for information regarding the electricity generated and the average cost of fuel in cents per net KWH generated for the years [removed: 2021] [added: 2022] and [removed: 2022.][added: 2023.]

For [removed: 2023,] [added: 2024,] SCS has contracted for [removed: 659] [added: 620] Bcf of natural gas supply under agreements with remaining terms up to [removed: 11] [added: 10] years.

The traditional electric operating companies have agreements in place from which they expect to receive substantially all of their [removed: 2023] [added: 2024] coal burn requirements.

Alabama Power and Georgia Power have multiple contracts covering their nuclear fuel needs for uranium, conversion services, enrichment services, and fuel fabrication with remaining terms [removed: ranging from one] [added: up] to [removed: 12] [added: 11] years.

[removed: Procurement] [added: Southern Company Gas' procurement] plans for natural gas supply and transportation to serve regulated utility customers are reviewed and approved by the regulatory agencies in the states where [removed: Southern Company Gas] [added: it] operates.

[added: |] Southern Company Gas [added: | | | 4,800 | | |]

[added: Southern Company Gas] purchases natural gas supplies in the open market by contracting with producers and marketers and, for Atlanta Gas Light and Chattanooga Gas, under asset management agreements approved by the applicable state regulatory agency.

[removed: Southern Company Gas also contracts] for transportation and storage services from interstate pipelines that are regulated by the FERC.

See Note [removed: 15] [added: 2] to the financial statements under [removed: "Southern Company Gas"] [added: "Alabama Power – Rate CNP New Plant"] in Item 8 herein for additional [removed: information on the sale of Sequent.][added: information.]

As of December 31, [removed: 2022,] [added: 2023,] the territory had an area of approximately 116,000 square miles and an estimated population of approximately 17 million.

The following table provides the number of retail customers served by customer classification for the traditional electric operating companies at December 31, [removed: 2022:][added: 2023:]

As of December 31, [removed: 2022,] [added: 2023,] there were 62 electric cooperative distribution systems operating in the territories in which the traditional electric operating companies provide electric service at retail or wholesale.

As of December 31, [removed: 2022,] [added: 2023,] PowerSouth owned generating units with more than 1,600 MWs of nameplate capacity, including an undivided 8.16% ownership interest in Alabama Power's Plant Miller Units 1 and 2.

On July 14, 2023, the U.S. Court of Appeals for the District of Columbia Circuit vacated certain FERC orders related to SEEM and remanded the proceeding to the FERC.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Transmission | | | 1.7 | | | 0.3 | | | 1.4 | | | — | | |

| General plant | | | 1.6 | | | 0.7 | | | 0.9 | | | 0.1 | | |

| | | | 7.8 | | | 2.1 | | | 5.4 | | | 0.3 | | |

| Total(a) | | | $ | 10.0 | | $ | 2.1 | | $ | 5.4 | | $ | 0.3 | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

See "Natural Gas" herein for information on the natural gas market.

Natural gas remains a volatile commodity.

Slight supply and demand imbalances can quickly result in significant price moves both up and down.

These price movements may be short-lived, but the impacts can be pronounced.

Natural gas supplies, primarily from the Permian and Haynesville regions, have continued to grow; however, this growth has been accompanied by LNG export growth.

Forward curves project prices will remain in the range of mid-to high- $3 per mmBtu, approaching $4 per mmBtu, through 2030; however, short-term price volatility is expected and future prices could be materially impacted by various factors, including unexpected geopolitical events as well as government policies related to natural gas infrastructure development, production, and exports.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

With the exception of Atlanta Gas Light, the natural gas distribution utilities are authorized by the relevant regulatory agencies in the states in which they serve to use natural gas cost recovery mechanisms that adjust rates to reflect changes in the wholesale cost of natural gas and ensure recovery of all costs prudently incurred in purchasing natural gas for customers.

| Residential | | | 1,328 | | | 2,406 | | | 157 | | | 3,890 | | |

| Commercial | | | 207 | | | 329 | | | 34 | | | 570 | | |

| Total(*) | | | 1,541 | | | 2,754 | | | 192 | | | 4,487 | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Total | | | | | | 4,374 | | | 77.9 | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

The original Harris Dam project license expired on November 30, 2023 and, on December 13, 2023, the FERC issued an annual license for the continued operation of the Harris Dam project.

The Harris Dam project will operate under annual licenses until a new long-term license is issued, which is expected by the first half of 2025.

Although the projects are not operational, the closure of the projects is subject to the closure requirements to be enforced in accordance with future FERC surrender orders.

Subsequent to December 31, 2023, the FERC authorized Georgia Power to continue operation of the Lloyd Shoals project under the terms and conditions of the prior license until the issuance of a subsequent license.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

In addition, each year the Southern Company system engages in a scenario planning process, developing scenarios which look out over a 30-year horizon.

In 2023, scenarios included a wide range of fuel prices, load growth, and CO2 prices starting between $0 and $50 per metric ton of CO2 emitted and escalating over the 30-year horizon.

On October 27, 2023, Georgia Power filed an updated IRP (2023 IRP Update) with the Georgia PSC, which sets forth a plan to support the recent increase in the state of Georgia's projected energy needs since the 2022 IRP.

Georgia Power expects the Georgia PSC to render a final decision on the 2023 IRP Update on April 16, 2024.

The ultimate outcome of this matter cannot be determined at this time.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| | | | At December 31, 2023(*) | | |

| SCS | | | 4,200 | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

The FERC's orders related to SEEM have been appealed.

investors receive substantially all of the tax benefits from the facilities, including ITCs and PTCs.

Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' other businesses also included wholesale gas services.

Gas pipeline investments also includes a 20% ownership interest in the PennEast Pipeline project, which was cancelled in September 2021.

For additional

| Transmission | | | 1.5 | | | 0.4 | | | 1.1 | | | 0.1 | | |

| General plant | | | 1.0 | | | 0.4 | | | 0.5 | | | 0.1 | | |

| | | | 6.9 | | | 2.0 | | | 4.6 | | | 0.3 | | |

| Total(a) | | | $ | 9.1 | | $ | 2.0 | | $ | 4.6 | | $ | 0.3 | |

Advances in natural gas drilling in shale producing regions of the United States have resulted in historically high supplies of natural gas.

Demand increases beginning in 2021 and continuing in 2022 resulted in price increases and high volatility, which has been exacerbated by pipeline constraints and increased exports.

The Henry Hub price averaged $6.38 per mmBtu in 2022.

Current forecasts for 2023 are approximately $3.30.

Forward market prices for 2024 and beyond indicate expectations, absent unforeseen developments, that prices will modestly increase.

The potential for price increases, similar to those in 2022, and high volatility remains.

| Residential | | | 1,320 | | | 2,367 | | | 157 | | | 3,844 | | |

| Commercial | | | 206 | | | 326 | | | 34 | | | 566 | | |

| Total(*) | | | 1,533 | | | 2,713 | | | 192 | | | 4,437 | | |

Alabama Power has power supply agreements with PowerSouth to provide 100 MWs of year-round capacity service from November 1, 2020 through February 28, 2023, 200 MWs of year-round capacity service through January 31, 2024, and 200 MWs of winter-only capacity service through December 31, 2023.

| Total | | | | | | 4,358 | | | 77.6 | | |

The current Harris Dam project license will expire on November 30, 2023.

Both projects together represent 1,520 KWs of Georgia Power's hydro fleet capacity.

In 2012, the NRC issued combined construction and operating licenses (COLs) for Plant Vogtle Units 3 and 4.

Receipt of the COLs allowed full construction to begin.

On August 3, 2022, the NRC published its 103(g) finding that the acceptance criteria in the COL for Unit 3 had been met, which allowed nuclear fuel to be loaded and start-up testing to begin.

Historically, these wholesale customers have acted as a group and any changes in contractual relationships for one customer are likely to be followed by the other wholesale customers.

On July 12, 2022, the Alabama PSC approved a CCN authorizing Alabama Power to complete the acquisition of the Calhoun Generating Station.

The transaction closed on September 30, 2022.

During 2022, Alabama Power continued construction of Plant Barry Unit 8, which is expected to be placed in service in November 2023.

See Note 2 to the financial statements under "Alabama Power – Certificates of Convenience and Necessity" in Item 8 herein for additional information.

| | | | At December 31, 2022(*) | | |

| SCS | | | 4,000 | | |

The Southern Company system continues to provide essential services to customers while adapting to the impacts of the COVID-19 pandemic.

The Southern Company system has implemented applicable safety and health guidelines issued by federal, state, and local officials, and established protocols for required work on customer premises.

To date, these procedures have been effective in maintaining the Southern Company system's critical operations, while also emphasizing employee, customer, and community safety.

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

For the Fiscal Year Ended December 31, [removed: 2022][added: 2023]

Aggregate market value of The Southern Company's common stock held by non-affiliates of The Southern Company at June 30, [removed: 2022: $75.8] [added: 2023: $76.6] billion.

| Registrant | | | | | | Description of Common Stock | | | | | | Shares Outstanding at January 31, [removed: 2023] [added: 2024] | | |

| The Southern Company | | | | | | Par Value $5 Per Share | | | | | | [removed: 1,088,907,919] [added: 1,091,015,113] | | |

Documents incorporated by reference: specified portions of The Southern Company's Definitive Proxy Statement on Schedule 14A relating to the [removed: 2023] [added: 2024] Annual Meeting of Stockholders are incorporated by reference into PART III.

| | | | [Cautionary Statement Regarding Forward-Looking [removed: Information](#i4edb778c706f4f2e83351ad068238e9e_13)] [added: Information](#ie194576fbf7048efb201674f596620b9_13)] | | | [removed: [vi](#i4edb778c706f4f2e83351ad068238e9e_13)] [added: [vi](#ie194576fbf7048efb201674f596620b9_13)] | | |

| [Item [removed: 1](#i4edb778c706f4f2e83351ad068238e9e_19)] [added: 1](#ie194576fbf7048efb201674f596620b9_19)] | | | [removed: [Business](#i4edb778c706f4f2e83351ad068238e9e_19)] [added: [Business](#ie194576fbf7048efb201674f596620b9_19)] | | | [removed: I-[1](#i4edb778c706f4f2e83351ad068238e9e_19)] [added: I-[1](#ie194576fbf7048efb201674f596620b9_19)] | | |

| | | | [The Southern Company [removed: System](#i4edb778c706f4f2e83351ad068238e9e_22)] [added: System](#ie194576fbf7048efb201674f596620b9_22)] | | | [removed: I-[1](#i4edb778c706f4f2e83351ad068238e9e_22)] [added: I-[1](#ie194576fbf7048efb201674f596620b9_22)] | | |

| | | | [Construction [removed: Programs](#i4edb778c706f4f2e83351ad068238e9e_31)] [added: Programs](#ie194576fbf7048efb201674f596620b9_31)] | | | [removed: I-[4](#i4edb778c706f4f2e83351ad068238e9e_31)] [added: I-[4](#ie194576fbf7048efb201674f596620b9_31)] | | |

| | | | [Financing [removed: Programs](#i4edb778c706f4f2e83351ad068238e9e_34)] [added: Programs](#ie194576fbf7048efb201674f596620b9_34)] | | | [removed: I-[5](#i4edb778c706f4f2e83351ad068238e9e_34)] [added: I-[4](#ie194576fbf7048efb201674f596620b9_34)] | | |

| | | | [Fuel [removed: Supply](#i4edb778c706f4f2e83351ad068238e9e_37)] [added: Supply](#ie194576fbf7048efb201674f596620b9_37)] | | | [removed: I-[5](#i4edb778c706f4f2e83351ad068238e9e_37)] [added: I-[5](#ie194576fbf7048efb201674f596620b9_37)] | | |

| | | | [Territory Served by the Southern Company [removed: System](#i4edb778c706f4f2e83351ad068238e9e_43)] [added: System](#ie194576fbf7048efb201674f596620b9_43)] | | | [removed: I-[6](#i4edb778c706f4f2e83351ad068238e9e_43)] [added: I-[6](#ie194576fbf7048efb201674f596620b9_43)] | | |

| | | | [Rate [removed: Matters](#i4edb778c706f4f2e83351ad068238e9e_61)] [added: Matters](#ie194576fbf7048efb201674f596620b9_61)] | | | [removed: I-[11](#i4edb778c706f4f2e83351ad068238e9e_61)] [added: I-[11](#ie194576fbf7048efb201674f596620b9_61)] | | |

| | | | [Human [removed: Capital](#i4edb778c706f4f2e83351ad068238e9e_76)] [added: Capital](#ie194576fbf7048efb201674f596620b9_76)] | | | [removed: I-[13](#i4edb778c706f4f2e83351ad068238e9e_76)] [added: I-[13](#ie194576fbf7048efb201674f596620b9_76)] | | |

| [Item [removed: 1A](#i4edb778c706f4f2e83351ad068238e9e_79)] [added: 1A](#ie194576fbf7048efb201674f596620b9_79)] | | | [Risk [removed: Factors](#i4edb778c706f4f2e83351ad068238e9e_79)] [added: Factors](#ie194576fbf7048efb201674f596620b9_79)] | | | [removed: I-[15](#i4edb778c706f4f2e83351ad068238e9e_79)] [added: I-[15](#ie194576fbf7048efb201674f596620b9_79)] | | |

| [Item [removed: 1B](#i4edb778c706f4f2e83351ad068238e9e_82)] [added: 1B](#ie194576fbf7048efb201674f596620b9_82)] | | | [Unresolved Staff [removed: Comments](#i4edb778c706f4f2e83351ad068238e9e_82)] [added: Comments](#ie194576fbf7048efb201674f596620b9_82)] | | | [removed: I-[26](#i4edb778c706f4f2e83351ad068238e9e_82)] [added: I-[26](#ie194576fbf7048efb201674f596620b9_82)] | | |

| [Item [removed: 2](#i4edb778c706f4f2e83351ad068238e9e_85)] [added: 2](#ie194576fbf7048efb201674f596620b9_85)] | | | [removed: [Properties](#i4edb778c706f4f2e83351ad068238e9e_85)] [added: [Properties](#ie194576fbf7048efb201674f596620b9_85)] | | | [removed: I-[27](#i4edb778c706f4f2e83351ad068238e9e_85)] [added: I-[29](#ie194576fbf7048efb201674f596620b9_85)] | | |

| [Item [removed: 3](#i4edb778c706f4f2e83351ad068238e9e_91)] [added: 3](#ie194576fbf7048efb201674f596620b9_91)] | | | [Legal [removed: Proceedings](#i4edb778c706f4f2e83351ad068238e9e_91)] [added: Proceedings](#ie194576fbf7048efb201674f596620b9_91)] | | | [removed: I-[34](#i4edb778c706f4f2e83351ad068238e9e_91)] [added: I-[36](#ie194576fbf7048efb201674f596620b9_91)] | | |

| [Item [removed: 4](#i4edb778c706f4f2e83351ad068238e9e_94)] [added: 4](#ie194576fbf7048efb201674f596620b9_94)] | | | [Mine Safety [removed: Disclosures](#i4edb778c706f4f2e83351ad068238e9e_94)] [added: Disclosures](#ie194576fbf7048efb201674f596620b9_94)] | | | [removed: I-[34](#i4edb778c706f4f2e83351ad068238e9e_94)] [added: I-[36](#ie194576fbf7048efb201674f596620b9_94)] | | |

| | | | [Information about Our Executive Officers – Southern [removed: Company](#i4edb778c706f4f2e83351ad068238e9e_97)] [added: Company](#ie194576fbf7048efb201674f596620b9_97)] | | | [removed: I-[35](#i4edb778c706f4f2e83351ad068238e9e_97)] [added: I-[37](#ie194576fbf7048efb201674f596620b9_97)] | | |

| [Item [removed: 5](#i4edb778c706f4f2e83351ad068238e9e_106)] [added: 5](#ie194576fbf7048efb201674f596620b9_103)] | | | [Market for Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#i4edb778c706f4f2e83351ad068238e9e_106)] [added: Securities](#ie194576fbf7048efb201674f596620b9_103)] | | | [removed: II-[1](#i4edb778c706f4f2e83351ad068238e9e_106)] [added: II-[1](#ie194576fbf7048efb201674f596620b9_103)] | | |

| [Item [removed: 7](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: 7](#ie194576fbf7048efb201674f596620b9_106)] | | | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: Operations](#ie194576fbf7048efb201674f596620b9_106)] | | | [removed: II-[2](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: II-[2](#ie194576fbf7048efb201674f596620b9_106)] | | |

| [Item [removed: 7A](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: 7A](#ie194576fbf7048efb201674f596620b9_106)] | | | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: Risk](#ie194576fbf7048efb201674f596620b9_106)] | | | [removed: II-[2](#i4edb778c706f4f2e83351ad068238e9e_109)] [added: II-[2](#ie194576fbf7048efb201674f596620b9_106)] | | |

| [Item [removed: 8](#i4edb778c706f4f2e83351ad068238e9e_349)] [added: 8](#ie194576fbf7048efb201674f596620b9_343)] | | | [Financial Statements and Supplementary [removed: Data](#i4edb778c706f4f2e83351ad068238e9e_349)] [added: Data](#ie194576fbf7048efb201674f596620b9_343)] | | | [removed: II-[71](#i4edb778c706f4f2e83351ad068238e9e_349)] [added: II-[72](#ie194576fbf7048efb201674f596620b9_343)] | | |

| [Item [removed: 9](#i4edb778c706f4f2e83351ad068238e9e_745)] [added: 9](#ie194576fbf7048efb201674f596620b9_721)] | | | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#i4edb778c706f4f2e83351ad068238e9e_745)] [added: Disclosure](#ie194576fbf7048efb201674f596620b9_721)] | | | [removed: II-[256](#i4edb778c706f4f2e83351ad068238e9e_745)] [added: II-[255](#ie194576fbf7048efb201674f596620b9_721)] | | |

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| [Item [removed: 9C](#i4edb778c706f4f2e83351ad068238e9e_748)] [added: 9C](#ie194576fbf7048efb201674f596620b9_724)] | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#i4edb778c706f4f2e83351ad068238e9e_748)] [added: Inspections](#ie194576fbf7048efb201674f596620b9_724)] | | | [removed: [II-](#i4edb778c706f4f2e83351ad068238e9e_745)[256](#i4edb778c706f4f2e83351ad068238e9e_745)] [added: [II-](#ie194576fbf7048efb201674f596620b9_721)[255](#ie194576fbf7048efb201674f596620b9_721)] | | |

| [Item [removed: 10](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: 10](#ie194576fbf7048efb201674f596620b9_745)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: Governance](#ie194576fbf7048efb201674f596620b9_745)] | | | [removed: III-[1](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: III-[1](#ie194576fbf7048efb201674f596620b9_745)] | | |

| [Item [removed: 11](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: 11](#ie194576fbf7048efb201674f596620b9_745)] | | | [Executive [removed: Compensation](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: Compensation](#ie194576fbf7048efb201674f596620b9_745)] | | | [removed: III-[1](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: III-[1](#ie194576fbf7048efb201674f596620b9_745)] | | |

| [Item [removed: 12](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: 12](#ie194576fbf7048efb201674f596620b9_745)] | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder [removed: Matters](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: Matters](#ie194576fbf7048efb201674f596620b9_745)] | | | [removed: III-[1](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: III-[1](#ie194576fbf7048efb201674f596620b9_745)] | | |

| [Item [removed: 13](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: 13](#ie194576fbf7048efb201674f596620b9_745)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: Independence](#ie194576fbf7048efb201674f596620b9_745)] | | | [removed: III-[1](#i4edb778c706f4f2e83351ad068238e9e_769)] [added: III-[1](#ie194576fbf7048efb201674f596620b9_745)] | | |

| [Item [removed: 14](#i4edb778c706f4f2e83351ad068238e9e_775)] [added: 14](#ie194576fbf7048efb201674f596620b9_751)] | | | [Principal Accountant Fees and [removed: Services](#i4edb778c706f4f2e83351ad068238e9e_775)] [added: Services](#ie194576fbf7048efb201674f596620b9_751)] | | | [removed: III-[2](#i4edb778c706f4f2e83351ad068238e9e_775)] [added: III-[2](#ie194576fbf7048efb201674f596620b9_751)] | | |

| [Item [removed: 15](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: 15](#ie194576fbf7048efb201674f596620b9_757)] | | | [Exhibits and Financial Statement [removed: Schedules](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: Schedules](#ie194576fbf7048efb201674f596620b9_757)] | | | [removed: IV-[1](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: IV-[1](#ie194576fbf7048efb201674f596620b9_757)] | | |

| [Item [removed: 16](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: 16](#ie194576fbf7048efb201674f596620b9_757)] | | | [Form 10-K [removed: Summary](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: Summary](#ie194576fbf7048efb201674f596620b9_757)] | | | [removed: IV-[1](#i4edb778c706f4f2e83351ad068238e9e_781)] [added: IV-[1](#ie194576fbf7048efb201674f596620b9_757)] | | |

| Vogtle Owners | | | Georgia Power, [removed: Oglethorpe Power Corporation,] [added: OPC,] MEAG Power, and Dalton | | |

Forward-looking statements include, among other things, statements concerning [removed: the potential and expected effects of the continued COVID-19 pandemic,] regulated rates, the strategic goals for the business, customer and sales growth, economic conditions, [added: including inflation,] cost recovery and other rate actions, projected equity ratios, current and proposed environmental regulations and related compliance plans and estimated expenditures, GHG emissions reduction goals, pending or potential litigation matters, access to sources of capital, projections for the qualified pension plans, postretirement benefit plans, and nuclear decommissioning trust fund contributions, financing activities, completion dates and costs of construction projects, matters related to the abandonment of the Kemper IGCC, [removed: completion of announced dispositions,] filings with state and federal regulatory authorities, federal and state income tax benefits, estimated sales and purchases under power sale and purchase agreements, and estimated construction plans and expenditures.

- the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle [removed: Units 3 and] [added: Unit] 4 (which includes components based on new technology that only within the last [removed: few] [added: several] years began initial operation in the global nuclear industry at this [removed: scale) and Plant Barry Unit 8,] [added: scale),] due to current and/or future challenges which include, but are not limited to, changes in labor costs, availability, and productivity; challenges with the management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; the impacts of inflation; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems or any remediation related thereto; design and other licensing-based compliance [removed: matters including, for Plant Vogtle Unit 4, inspections and the timely submittal by Southern Nuclear of the ITAAC documentation and the related investigations, reviews, and approvals by the NRC necessary to support NRC authorization to load fuel;] [added: matters;] challenges with start-up activities, including major equipment failure, or system integration; and/or operational performance; [removed: continued] challenges related to [removed: the COVID-19] pandemic [removed: or future pandemic] health events; continued public and policymaker support for projects; environmental and geological conditions; delays or increased costs to interconnect facilities to transmission grids; and increased financing costs as a result of changes in [removed: market] interest rates or as a result of project delays;

- the ability to overcome or mitigate the current [added: challenges, or] challenges [added: yet to be identified,] at Plant Vogtle [removed: Units 3 and] [added: Unit] 4, as described in Note 2 to the financial statements under "Georgia Power – Nuclear Construction" in Item 8 herein, that could further impact the cost and schedule for the project;

- legal proceedings and regulatory approvals and actions related to [added: past and ongoing] construction projects, [removed: such as Plant Vogtle Units 3 and 4 and Plant Barry Unit 8,] including PSC approvals and FERC [removed: and NRC] actions;

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| | | | [Definitions](#ie194576fbf7048efb201674f596620b9_10) | | | [ii](#ie194576fbf7048efb201674f596620b9_10) | | |

| | | | [PART I](#ie194576fbf7048efb201674f596620b9_16) | | | | | |

| | | | [Competition](#ie194576fbf7048efb201674f596620b9_49) | | | I-[8](#ie194576fbf7048efb201674f596620b9_49) | | |

| | | | [Seasonality](#ie194576fbf7048efb201674f596620b9_55) | | | I-[9](#ie194576fbf7048efb201674f596620b9_55) | | |

| | | | [Regulation](#ie194576fbf7048efb201674f596620b9_58) | | | I-[9](#ie194576fbf7048efb201674f596620b9_58) | | |

| [Item 1C](#ie194576fbf7048efb201674f596620b9_6422) | | | [Cybersecurity](#ie194576fbf7048efb201674f596620b9_6422) | | | I-[26](#ie194576fbf7048efb201674f596620b9_6422) | | |

| | | | [PART II](#ie194576fbf7048efb201674f596620b9_100) | | | | | |

| [Item 6](#ie194576fbf7048efb201674f596620b9_103) | | | [Reserved](#ie194576fbf7048efb201674f596620b9_103) | | | [II-1](#ie194576fbf7048efb201674f596620b9_103) | | |

| [Item 9B](#ie194576fbf7048efb201674f596620b9_724) | | | [Other Information](#ie194576fbf7048efb201674f596620b9_724) | | | II-[255](#ie194576fbf7048efb201674f596620b9_724) | | |

| | | | [PART III](#ie194576fbf7048efb201674f596620b9_745) | | | | | |

| | | | [PART IV](#ie194576fbf7048efb201674f596620b9_754) | | | | | |

| | | | [Signatures](#ie194576fbf7048efb201674f596620b9_766) | | | | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| IRA | | | Inflation Reduction Act | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| SAVE | | | Steps to Advance Virginia's Energy, an infrastructure replacement program at Virginia Natural Gas | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| | | | [Definitions](#i4edb778c706f4f2e83351ad068238e9e_10) | | | [ii](#i4edb778c706f4f2e83351ad068238e9e_10) | | |

| | | | [PART I](#i4edb778c706f4f2e83351ad068238e9e_16) | | | | | |

| | | | [Competition](#i4edb778c706f4f2e83351ad068238e9e_49) | | | I-[8](#i4edb778c706f4f2e83351ad068238e9e_49) | | |

| | | | [Seasonality](#i4edb778c706f4f2e83351ad068238e9e_55) | | | I-[9](#i4edb778c706f4f2e83351ad068238e9e_55) | | |

| | | | [Regulation](#i4edb778c706f4f2e83351ad068238e9e_58) | | | I-[9](#i4edb778c706f4f2e83351ad068238e9e_58) | | |

| | | | [PART II](#i4edb778c706f4f2e83351ad068238e9e_103) | | | | | |

| [Item 6](#i4edb778c706f4f2e83351ad068238e9e_106) | | | [Reserved](#i4edb778c706f4f2e83351ad068238e9e_106) | | | [II-1](#i4edb778c706f4f2e83351ad068238e9e_106) | | |

| [Item 9B](#i4edb778c706f4f2e83351ad068238e9e_748) | | | [Other Information](#i4edb778c706f4f2e83351ad068238e9e_748) | | | II-[256](#i4edb778c706f4f2e83351ad068238e9e_748) | | |

| | | | [PART III](#i4edb778c706f4f2e83351ad068238e9e_769) | | | | | |

| | | | [PART IV](#i4edb778c706f4f2e83351ad068238e9e_778) | | | | | |

| | | | [Signatures](#i4edb778c706f4f2e83351ad068238e9e_808) | | | | | |

| ASC | | | Accounting Standards Codification | | |

| Atlantic Coast Pipeline | | | Atlantic Coast Pipeline, LLC, a joint venture to construct and operate a natural gas pipeline in which Southern Company Gas held a 5% interest through March 24, 2020 | | |

| Jefferson Island | | | Jefferson Island Storage and Hub, L.L.C, which owns a natural gas storage facility in Louisiana consisting of two salt dome caverns; a subsidiary of Southern Company Gas through December 1, 2020 | | |

| LOCOM | | | Lower of weighted average cost or current market price | | |

| MGP | | | Manufactured gas plant | | |

| MWH | | | Megawatt hour | | |

| Pivotal LNG | | | Pivotal LNG, Inc., through March 24, 2020, a wholly-owned subsidiary of Southern Company Gas | | |

| WACOG | | | Weighted average cost of gas | | |

- the notices of tender by OPC and Dalton of a portion of their ownership interests in Plant Vogtle Units 3 and 4 to Georgia Power, including related litigation;

- the replacement of LIBOR with an alternative reference rate;

- the potential effects of the continued COVID-19 pandemic, including, but not limited to, those described in Item 1A "Risk Factors" herein;

I-26

[Table of Contents](#i4edb778c706f4f2e83351ad068238e9e_7) [Index to Financial Statements](#i4edb778c706f4f2e83351ad068238e9e_349)

Cybersecurity is a critical component of Southern Company's risk management program.

The Southern Company system has implemented a cybersecurity program to assess, identify, and manage risks from cybersecurity threats that may result in material adverse effects on the Southern Company system's ability to fulfill critical business functions, including energy delivery service failures, and on the confidentiality, integrity, and availability of the Southern Company system's information systems.

Governance and Oversight of Cybersecurity Risk

Board of Directors

The Southern Company Board of Directors (Board), along with certain committees (primarily the Audit Committee of the Board) oversees the Southern Company system's enterprise risk management process.

The Board devotes significant time and attention to overseeing cybersecurity risk, and the Southern Company system's approach to cybersecurity governance establishes oversight throughout the enterprise.

The Board has delegated the primary responsibility to oversee cybersecurity matters to the Business Security and Resiliency Committee (BSRC) of the Board.

Having a committee like the BSRC, focused on and dedicated to security, is a strong governance practice.

Comprised solely of independent members of the Board, the BSRC is charged with oversight of risks related to cybersecurity, physical security, and operational resiliency.

The BSRC

I-26

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

includes directors with an understanding of cyber issues.

The BSRC meets at every regular Board meeting and when needed in the event of a specific threat or emerging issue.

The Chair of the BSRC regularly reports to the Board in connection with key matters the BSRC considered.

The BSRC routinely receives presentations on a range of topics, including the threat environment and vulnerabilities and risks, policies, practices, technology trends, and regulatory developments, from the Chief Information Security Officer (CISO) and the legal organization and, as needed, the Chief Information Officer (CIO).

The CISO reports to the BSRC at each regular committee meeting.

Protocols have been established by which certain cybersecurity incidents are escalated internally and, where appropriate, reported to the BSRC, and ongoing updates regarding any such incident are provided until it has been resolved.

See "Incident Response" herein.

Management

The Southern Company system has implemented a cross-functional, risk-based, "defense-in-depth" approach to preventing, detecting, identifying, mitigating, responding to, and recovering from cybersecurity threats and incidents, while also implementing controls and procedures that provide for the prompt escalation of certain cybersecurity incidents so that decisions regarding the public disclosure and reporting of such incidents can be made by management in a timely manner.

Overall network efforts are led by the CISO and the Technology Security Organization (TSO), the organization responsible for implementing, monitoring, and maintaining cybersecurity practices across the Southern Company system, and aided by the Executive Vice President of Operations and the Energy Management System and Generation organization.

The CISO meets regularly with the CIO and the Chief Executive Officer and reports regularly to committees of the Board to discuss risk management measures implemented to identify and mitigate data protection and cybersecurity risks.

Security and resiliency are emphasized through business assurance, enterprise risk management, and incident response plans designed to identify, evaluate, and remediate incidents when they occur.

Among other things, the Cybersecurity Incident Response Plan (CIRP) establishes a team comprised of the CISO, the Deputy CISO, the Director of the Digital Defense Center, and members of the legal and compliance organizations to evaluate emerging cyber threats and escalate to executive management and business units as appropriate.

Plans, policies, and technologies are regularly updated and training exercises and crisis management preparedness activities are conducted to test effectiveness.

The CISO works closely with the legal and compliance organizations, as well as the relevant business units, to help ensure broad oversight of and compliance with legal, regulatory, and contractual cybersecurity requirements.

The CISO has extensive cybersecurity knowledge and skills gained from over 30 years of work experience within the Southern Company system.

The CISO receives reports on cybersecurity threats from a variety of sources both internally and externally on an ongoing basis and regularly reviews risk management measures implemented to identify and mitigate cybersecurity risks.

Briefings to the Board on cybersecurity matters include annual briefings to the Audit Committee and the Operations, Environmental, and Safety Committee in addition to briefings to the BSRC at each of its regular meetings (at least five times annually).

Internal Cybersecurity Team

The TSO, led by the CISO, is responsible for the implementation, monitoring, and maintenance of the cybersecurity and data protection practices across the Southern Company system.

The Southern Company system also relies on a Data Privacy and Protection team in the compliance organization, as well as the internal audit organization, to work with the TSO on data protection policies and practices.

Multiple experienced information security leaders with internal and external security experience responsible for various parts of the business report to the CISO, each of whom is supported by a team of trained cybersecurity professionals.

In addition to these internal cybersecurity capabilities, external auditors and security companies are regularly engaged to assist with assessing, testing, identifying, and managing cybersecurity, including through penetration testing, vulnerability testing, and other technical evaluations.

Risk Management and Strategy

Although many of the networks are segmented, overall network security is a centralized shared service across the Southern Company system, led by the TSO and the CISO.

Recognizing that no single technology, process, or business control can effectively prevent or mitigate all risks related to cyber threats, multiple technologies, processes, and controls, all working independently but as part of a cohesive strategy, are employed to reduce risk.

Southern Company system exposure and defenses are regularly tested through auditing, penetration testing, vulnerability testing, and other exercises designed to assess effectiveness.

The Southern Company system emphasizes both security and resiliency through business assurance and incident response plans designed to identify, evaluate, and remediate incidents when they occur.

At December 31, [removed: 2022,] [added: 2023,] the traditional electric operating companies, Southern Power, and SEGCO owned and/or operated the generating facilities listed in the table below.

| Alabama [removed: Power(b)] [added: Power] | | | | | | | | | | | |

| Barry Units 6 [removed: and 7] [added: through 8] | | | Mobile, AL | | | [removed: 1,070,424] [added: 1,706,424] | | | | | |

| Total Natural Gas | | | | | | [removed: 4,323,424] [added: 4,959,424] | | | | | |

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

| Total Alabama Power Generating Capacity | | | | | | [removed: 12,306,377] [added: 12,942,377] | | | | | |

| Vogtle Units 1 [removed: and 2] [added: through 3] (45.7%) | | | Augusta, GA | | | [removed: 1,060,240] [added: 1,613,667] | | | | | |

| Rocky Mountain (25.4%) | | | Rome, GA | | | 229,362 | | | [removed: (c)] [added: (b)] | | |

| Total Georgia Power Generating Capacity | | | | | | [removed: 13,592,964] [added: 14,146,391] | | | | | |

| Chevron Cogenerating Station | | | Pascagoula, MS | | | 147,292 | | | [removed: (d)] [added: (c)] | | |

| Total Mississippi Power Generating Capacity | | | | | | [removed: 3,516,374] [added: 3,517,874] | | | | | |

| Total Wind | | | | | | 2,534,580 | | | [removed: (e)] [added: (d)] | | |

| Total Solar | | | | | | 2,395,460 | | | [removed: (f)] [added: (e)] | | |

| Garland | | | Kern County, CA | | | 88,000 | | | [removed: (g)] [added: (f)] | | |

| Tranquillity | | | Fresno County, CA | | | 72,000 | | | [removed: (g)] [added: (f)] | | |

| Total Battery Storage | | | | | | [removed: 163,500] [added: 160,000] | | | | | |

| Red Lion and Brookside | | | New Castle and Newark, DE | | | 27,500 | | | [removed: (i)] [added: (g)] | | |

| Total Southern Power Generating Capacity | | | | | | [removed: 12,501,380] [added: 12,497,880] | | | | | |

| Total SEGCO Generating Capacity | | | | | | 1,019,680 | | | [removed: (j)] [added: (h)] | | |

| Natural Gas | | | | | | [removed: 21,844,446] [added: 22,480,446] | | | | | |

| Total Southern Company System Generating Capacity | | | | | | [removed: 42,936,775] [added: 44,124,202] | | | | | |

[removed: (c)Operated] [added: (b)Operated] by OPC.

[removed: (d)Generation] [added: (c)Generation] is dedicated to a single industrial customer.

[removed: (e)Southern] [added: (d)Southern] Power [removed: owns 100% of Glass Sands and] is [removed: also] the controlling partner in a non-tax equity partnership for Beech Ridge [removed: II.][added: II and also owns 100% of Glass Sands.]

Southern Power is the controlling partner in tax equity partnerships owning Cactus Flats, [removed: Wildhorse Mountain,] [added: Deuel Harvest,] Reading, Skookumchuck, and [removed: Deuel Harvest] [added: Wildhorse Mountain] (additionally for [removed: Skookumchuck and] Deuel [removed: Harvest,] [added: Harvest and Skookumchuck,] a noncontrolling interest in Southern Power's remaining equity is owned by another partner).

[removed: (f)Southern] [added: (e)Southern] Power owns a 67% equity interest in SP Solar (a limited partnership indirectly owning all of Southern Power's solar facilities, except the [removed: Roserock and] Gaskell West I [added: and Roserock] solar facilities).

Southern Power [removed: owns 100% of Roserock and] is [removed: also] the controlling partner in a tax equity partnership owning Gaskell West [removed: I.][added: I and also owns 100% of Roserock.]

[removed: (g)Southern] [added: (f)Southern] Power is the controlling partner in a tax equity partnership owning the Garland and Tranquillity battery energy storage facilities.

[removed: (i)Southern] [added: (g)Southern] Power has two noncontrolling interest partners that own approximately 10 MWs of the facility.

[removed: (j)Alabama] [added: (h)Alabama] Power and Georgia Power each own 50% of the outstanding common stock of SEGCO, an operating public utility company.

Entergy Gulf States Louisiana, LLC is paying a use fee [removed: through 2024] covering all expenses and the amortization of the [removed: original cost.][added: capitalized costs through the expiration of the agreement between the parties on May 31, 2024.]

At December 31, [removed: 2022,] [added: 2023,] the unamortized portion was approximately $1 million.

[removed: On] [added: In] July [removed: 12,] 2022, the co-owners executed a revised operating agreement.

In [removed: 2022,] [added: 2023,] the maximum demand on the traditional electric operating companies, Southern Power Company, and SEGCO was [removed: 37,035,000] [added: 36,919,000] KWs and occurred on [removed: June 15, 2022, which was also the maximum all-time demand.][added: August 14, 2023.]

[removed: This amount excludes] [added: These amounts exclude] demand served by capacity retained by MEAG Power, OPC, and SEPA.

The reserve margin for the traditional electric operating companies, Southern Power Company, and SEGCO in [removed: 2022] [added: 2023] was [removed: 20%.][added: 19%.]

Alabama Power, Georgia Power, and Mississippi Power at December 31, [removed: 2022] [added: 2023] had undivided interests in certain generating plants and other related facilities with non-affiliated parties.

| Plant Vogtle Units 1 [removed: and 2] [added: through 3] | | | | | | [removed: 2,320] [added: 3,531] | | | | | | — | | | | | | — | | | | | | 45.7 | | | | | | — | | | | | | 30.0 | | | | | | 22.7 | | | | | | 1.6 | | | | | | — | | |

In addition, Georgia Power has commitments, in the form of capacity purchases totaling [removed: $41] [added: $39] million, regarding a portion of a 5% interest in the original cost of Plant Vogtle Units 1 and 2 owned by MEAG Power that are in effect until the later of the retirement of the plant or the latest stated maturity date of MEAG Power's bonds issued to finance such ownership interest.

At December 31, [removed: 2022,] [added: 2023,] Southern Company Gas' gas distribution operations segment owned [removed: 77,591] [added: approximately 77,900] miles of underground distribution and transmission mains, which are located on easements or rights-of-way that generally provide for perpetual use.

| Total Nuclear | | | | | | 2,513,279 | | | | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Walnut Grove | | | Walnut Grove, MS | | | 1,500 | | | | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| *Solar* | | | | | | | | | | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Nuclear | | | | | | 4,233,279 | | | | | |

| Solar | | | | | | 2,773,006 | | | | | |

| Battery Storage | | | | | | 160,000 | | | | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Mississippi Power did not exercise an option to purchase its co-owner's ownership interest for $1 on January 15, 2024.

The all-time maximum demand of 37,035,000 KWs occurred on June 15, 2022.

I-34

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

I-35

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

I-27

| Total Nuclear | | | | | | 1,959,852 | | | | | |

I-28

| Millikan | | | Orange County, CA | | | 2,000 | | | (h) | | |

| Wildcat | | | Palm Springs, CA | | | 1,500 | | | (h) | | |

| Nuclear | | | | | | 3,679,852 | | | | | |

| Solar | | | | | | 2,771,506 | | | | | |

| Battery Storage | | | | | | 163,500 | | | | | |

(b)Plant Gadsden, a 120-MW natural gas steam plant, was retired on December 31, 2022.

(h)Subsequent to December 31, 2022, Southern Power, as the Class A member, sold its equity method investment in the facility.

Mississippi Power has the option to purchase its co-owner's ownership interest for $1 on January 15, 2024, provided that Mississippi Power exercises the option no later than 120 days prior to that date.

The ultimate outcome of this matter cannot be determined at this time.

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

*(Identification of executive officers of Southern Company is inserted in Part I in accordance with Regulation S-K, Item 401) The ages of the officers set forth below are as of December 31, [removed: 2022.*][added: 2023.*]

First elected in [removed: 2003.][added: 2023.]

[removed: Chairman and] [added: President since March 2023,] Chief Executive Officer since [removed: December 2010] [added: May 2023,] and [removed: President] [added: Chairman] since [removed: August 2010.][added: December 2023.]

Age [removed: 52][added: 57]

Previously served as Executive Vice President, Chief Financial Officer, and Treasurer of Georgia Power from January 2021 to September 2021, [added: and] Executive Vice President and Chief Financial Officer of Southern Company Gas from January 2019 to January [removed: 2021, and Treasurer of Southern Company and Senior Vice President and Treasurer of SCS from October 2015 to January 2019.][added: 2021.]

Age [removed: 56][added: 49]

Previously served as Executive Vice President for Operations of SCS from June 2018 to April [removed: 2021, President, Chief Executive Officer, and Director of Gulf Power from July 2012 through December 2018, and Chairman of Gulf Power's Board of Directors from July 2015 through December 2018.][added: 2021.]

Age [removed: 48][added: 57]

[removed: Greene(1)][added: Greene]

Chairman, President, and Chief Executive Officer of Southern Company Gas since [removed: June 2018.][added: April 2023.]

Previously served as Executive Vice [removed: President] [added: President, Chief Legal Officer,] and Chief [removed: Operating] [added: Compliance] Officer of Southern Company from March 2014 [removed: through June 2018.][added: to March 2023.]

Kerr [removed: II(1)][added: II]

Executive Vice [removed: President, Chief Legal Officer,] [added: President] and Chief [removed: Compliance] [added: Legal] Officer

Age [removed: 58][added: 61]

Executive Vice [removed: President, Chief Legal Officer (formerly known as General Counsel),] [added: President] and Chief [removed: Compliance] [added: Legal] Officer since [removed: March 2014.][added: April 2023.]

[removed: Kuczynski(2)][added: Kuczynski]

[removed: Chairman, President,] [added: Chairman] and Chief Executive Officer of Southern Nuclear

[removed: Chairman, President,] [added: Chairman] and Chief Executive Officer of Southern Nuclear since July 2011.

Age [removed: 63][added: 55]

Previously served as Executive Vice President of Customer and Employee Services of Alabama Power from June 2020 to January 2023, Senior Vice President of Employee Services and Labor Relations of Alabama Power from June 2018 to June 2020, [added: and] Executive Vice President and Chief Administrative Officer of Southern Company Gas and President of AGL Services Company from September 2018 to June [removed: 2020, and Vice President of Human Resources of Alabama Power from December 2015 to June 2018.][added: 2020.]

[removed: Spainhour(1)][added: Spainhour]

[removed: Currently serving] [added: Previously served] as [added: Chief Compliance Officer of Southern Company from April 2023 to January 2024,] Senior Vice President, General Counsel, Corporate Secretary, and Chief Compliance Officer of Georgia Power [removed: since] [added: from] June 2020 [removed: and] [added: to March 2023,] Senior Vice President and General Counsel – East of SCS [removed: since] [added: from] July [added: 2020 to March 2023, and Senior Vice President and General Counsel of SCS from December 2016 to July] 2020.

[removed: Womack(1)][added: Womack]

[removed: Chairman] [added: Chairman, President,] and Chief Executive Officer of Georgia Power since [removed: June 2021 and President of Georgia Power since November 2020.][added: April 2023.]

Previously served as [added: Chairman and Chief] Executive [added: Officer of Georgia Power from June 2021 to March 2023, President of Georgia Power from November 2020 to March 2023, and Executive] Vice President and President of External Affairs of Southern Company from January 2009 to October 2020.

Each officer listed above was elected at the annual meeting (or by written consent in lieu of the annual meeting) of the board of directors of the applicable company, to serve until the next such annual meeting or until his or her successor is elected and qualified, except for Mr. [removed: Peoples who was elected on January 4, 2023 and Mr. Spainhour] [added: Womack] who was elected [added: as Chairman] on [removed: February 6,] [added: December 11,] 2023.

Previously served as Chairman, President, and Chief Executive Officer of Southern Company Gas from June 2018 to March 2023.

I-37

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Previously served as President of Southern Nuclear from July 2011 through March 2023.

Age 59

I-38

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

I-34

Thomas A.

Fanning(1)

Director of Southern Company Gas since July 2016.

I-35

Executive Vice President, Chief Legal Officer, and Chief Compliance Officer *(effective April 1, 2023)*

First elected effective April 1, 2023.

Previously served as Senior Vice President and General Counsel of SCS from December 2016 to July 2020.

(1)Mr. Womack has been appointed President of Southern Company and elected as a member of the Board of Directors of Southern Company, each effective March 31, 2023.

Mr. Womack also has been appointed Chief Executive Officer of Southern Company effective immediately following the conclusion of Southern Company's 2023 Annual Meeting of Stockholders.

Mr. Fanning will relinquish the role of President upon Mr. Womack's assumption of the role on March 31, 2023 and assume the role of Executive Chairman of Southern Company upon Mr. Womack's assumption of the role of Chief Executive Officer.

In addition, effective March 31, 2023, Ms. Greene has been named Chair of the Board of Directors, Chief Executive Officer, and President of Georgia Power and Mr. Kerr has been named Chairman of the Board of Directors, Chief Executive Officer, and President of Southern Company Gas, and effective April 1, 2023, Mr. Spainhour has been named Executive Vice President, Chief Legal Officer, and Chief Compliance Officer of Southern Company.

(2)Mr. Kuczynski has resigned, effective March 31, 2023, from his position as President of Southern Nuclear.

Mr. Kuczynski will remain Chairman and Chief Executive Officer of Southern Nuclear.

(a)(2) Number of Southern Company's common stockholders of record at January 31, [removed: 2023: 99,521][added: 2024: 95,412]

Dividends paid per share of common stock were [removed: $2.70] [added: $2.78] in [removed: 2022] [added: 2023] and [removed: $2.62] [added: $2.70] in [removed: 2021.][added: 2022.]

In January [removed: 2023,] [added: 2024,] Southern Company declared a quarterly dividend of [removed: 68] [added: 70] cents per share.

[Table of [removed: Contents](#i4edb778c706f4f2e83351ad068238e9e_7)] [added: Contents](#ie194576fbf7048efb201674f596620b9_7)] [Index to Financial [removed: Statements](#i4edb778c706f4f2e83351ad068238e9e_349)][added: Statements](#ie194576fbf7048efb201674f596620b9_343)]

| [The Southern Company and Subsidiary [removed: Companies:](#i4edb778c706f4f2e83351ad068238e9e_355)] [added: Companies:](#ie194576fbf7048efb201674f596620b9_349)] | | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_358)] [added: Firm](#ie194576fbf7048efb201674f596620b9_352)] | | | [removed: II-[72](#i4edb778c706f4f2e83351ad068238e9e_358)] [added: II-[73](#ie194576fbf7048efb201674f596620b9_352)] | | |

| [Consolidated Statements of Income for the Years Ended December [removed: 31,] [added: 31,](#ie194576fbf7048efb201674f596620b9_355) [2023,] 2022, [removed: 2021,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_361)] [added: 2021](#ie194576fbf7048efb201674f596620b9_355)] | | | [removed: II-[76](#i4edb778c706f4f2e83351ad068238e9e_361)] [added: II-[75](#ie194576fbf7048efb201674f596620b9_355)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December [removed: 31,] [added: 31,](#ie194576fbf7048efb201674f596620b9_358) [2023,] 2022, [removed: 2021,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_364)] [added: 2021](#ie194576fbf7048efb201674f596620b9_358)] | | | [removed: II-[77](#i4edb778c706f4f2e83351ad068238e9e_364)] [added: II-[76](#ie194576fbf7048efb201674f596620b9_358)] | | |

| [Consolidated Statements of Cash Flows for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_367) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_361) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_367)] [added: 2021](#ie194576fbf7048efb201674f596620b9_361)] | | | [removed: II-[78](#i4edb778c706f4f2e83351ad068238e9e_367)] [added: II-[77](#ie194576fbf7048efb201674f596620b9_361)] | | |

| [Consolidated Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_370) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_364) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_370)] [added: 2022](#ie194576fbf7048efb201674f596620b9_364)] | | | [removed: II-[79](#i4edb778c706f4f2e83351ad068238e9e_370)] [added: II-[78](#ie194576fbf7048efb201674f596620b9_364)] | | |

| [Consolidated Statements of Stockholders' Equity for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_373) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_367) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_373)] [added: 2021](#ie194576fbf7048efb201674f596620b9_367)] | | | [removed: II-[81](#i4edb778c706f4f2e83351ad068238e9e_373)] [added: II-[80](#ie194576fbf7048efb201674f596620b9_367)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_379)] [added: Firm](#ie194576fbf7048efb201674f596620b9_373)] | | | [removed: II-[82](#i4edb778c706f4f2e83351ad068238e9e_379)] [added: II-[81](#ie194576fbf7048efb201674f596620b9_373)] | | |

| [Statements of Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_382) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_376) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_382)] [added: 2021](#ie194576fbf7048efb201674f596620b9_376)] | | | [removed: II-[84](#i4edb778c706f4f2e83351ad068238e9e_382)] [added: II-[83](#ie194576fbf7048efb201674f596620b9_376)] | | |

| [Statements of Comprehensive Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_385) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_379) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_385)] [added: 2021](#ie194576fbf7048efb201674f596620b9_379)] | | | [removed: II-[84](#i4edb778c706f4f2e83351ad068238e9e_385)] [added: II-[83](#ie194576fbf7048efb201674f596620b9_379)] | | |

| [Statements of Cash Flows for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_388) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_382) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_388)] [added: 2021](#ie194576fbf7048efb201674f596620b9_382)] | | | [removed: II-[85](#i4edb778c706f4f2e83351ad068238e9e_388)] [added: II-[84](#ie194576fbf7048efb201674f596620b9_382)] | | |

| [Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_391) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_385) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_391)] [added: 2022](#ie194576fbf7048efb201674f596620b9_385)] | | | [removed: II-[86](#i4edb778c706f4f2e83351ad068238e9e_391)] [added: II-[85](#ie194576fbf7048efb201674f596620b9_385)] | | |

| [Statements of Common Stockholder's Equity for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_394) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_388) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_394)] [added: 2021](#ie194576fbf7048efb201674f596620b9_388)] | | | [removed: II-[88](#i4edb778c706f4f2e83351ad068238e9e_394)] [added: II-[87](#ie194576fbf7048efb201674f596620b9_388)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_400)] [added: Firm](#ie194576fbf7048efb201674f596620b9_394)] | | | [removed: II-[89](#i4edb778c706f4f2e83351ad068238e9e_400)] [added: II-[88](#ie194576fbf7048efb201674f596620b9_394)] | | |

| [Statements of Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_403) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_397) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_403)] [added: 2021](#ie194576fbf7048efb201674f596620b9_397)] | | | [removed: II-[92](#i4edb778c706f4f2e83351ad068238e9e_403)] [added: II-[90](#ie194576fbf7048efb201674f596620b9_397)] | | |

| [Statements of Comprehensive Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_406) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_400) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_406)] [added: 2021](#ie194576fbf7048efb201674f596620b9_400)] | | | [removed: II-[92](#i4edb778c706f4f2e83351ad068238e9e_406)] [added: II-[90](#ie194576fbf7048efb201674f596620b9_400)] | | |

| [Statements of Cash Flows for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_409) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_403) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_409)] [added: 2021](#ie194576fbf7048efb201674f596620b9_403)] | | | [removed: II-[93](#i4edb778c706f4f2e83351ad068238e9e_409)] [added: II-[91](#ie194576fbf7048efb201674f596620b9_403)] | | |

| [Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_412) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_406) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_412)] [added: 2022](#ie194576fbf7048efb201674f596620b9_406)] | | | [removed: II-[94](#i4edb778c706f4f2e83351ad068238e9e_412)] [added: II-[92](#ie194576fbf7048efb201674f596620b9_406)] | | |

| [Statements of Common Stockholder's Equity for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_415) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_409) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_415)] [added: 2021](#ie194576fbf7048efb201674f596620b9_409)] | | | [removed: II-[96](#i4edb778c706f4f2e83351ad068238e9e_415)] [added: II-[94](#ie194576fbf7048efb201674f596620b9_409)] | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_421)] [added: Firm](#ie194576fbf7048efb201674f596620b9_415)] | | | [removed: II-[97](#i4edb778c706f4f2e83351ad068238e9e_421)] [added: II-[95](#ie194576fbf7048efb201674f596620b9_415)] | | |

| [Statements of Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_424) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_418) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_424)] [added: 2021](#ie194576fbf7048efb201674f596620b9_418)] | | | [removed: II-[99](#i4edb778c706f4f2e83351ad068238e9e_424)] [added: II-[97](#ie194576fbf7048efb201674f596620b9_418)] | | |

| [Statements of Comprehensive Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_427) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_421) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_427)] [added: 2021](#ie194576fbf7048efb201674f596620b9_421)] | | | [removed: II-[99](#i4edb778c706f4f2e83351ad068238e9e_427)] [added: II-[97](#ie194576fbf7048efb201674f596620b9_421)] | | |

| [Statements of Cash Flows for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_430) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_424) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_430)] [added: 2021](#ie194576fbf7048efb201674f596620b9_424)] | | | [removed: II-[100](#i4edb778c706f4f2e83351ad068238e9e_430)] [added: II-[98](#ie194576fbf7048efb201674f596620b9_424)] | | |

| [Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_433) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_427) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_433)] [added: 2022](#ie194576fbf7048efb201674f596620b9_427)] | | | [removed: II-[101](#i4edb778c706f4f2e83351ad068238e9e_433)] [added: II-[99](#ie194576fbf7048efb201674f596620b9_427)] | | |

| [Statements of Common Stockholder's Equity for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_436) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_430) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_436)] [added: 2021](#ie194576fbf7048efb201674f596620b9_430)] | | | [removed: II-[103](#i4edb778c706f4f2e83351ad068238e9e_436)] [added: II-[101](#ie194576fbf7048efb201674f596620b9_430)] | | |

| [Southern Power and Subsidiary [removed: Companies:](#i4edb778c706f4f2e83351ad068238e9e_439)] [added: Companies:](#ie194576fbf7048efb201674f596620b9_433)] | | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_442)] [added: Firm](#ie194576fbf7048efb201674f596620b9_436)] | | | [removed: II-[104](#i4edb778c706f4f2e83351ad068238e9e_442)] [added: II-[102](#ie194576fbf7048efb201674f596620b9_436)] | | |

| [Consolidated Statements of [removed: Income] [added: Cash Flows] for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_445) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_445) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_445)] [added: 2021](#ie194576fbf7048efb201674f596620b9_445)] | | | [removed: II-[106](#i4edb778c706f4f2e83351ad068238e9e_445)] [added: II-[106](#ie194576fbf7048efb201674f596620b9_445)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_448) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_442) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_448)] [added: 2021](#ie194576fbf7048efb201674f596620b9_442)] | | | [removed: II-[107](#i4edb778c706f4f2e83351ad068238e9e_448)] [added: II-[105](#ie194576fbf7048efb201674f596620b9_442)] | | |

| [Consolidated Statements of Cash Flows for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_451) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_466) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_451)] [added: 2021](#ie194576fbf7048efb201674f596620b9_466)] | | | [removed: II-[108](#i4edb778c706f4f2e83351ad068238e9e_451)] [added: II-[115](#ie194576fbf7048efb201674f596620b9_466)] | | |

| [Consolidated Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_454) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_448) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_454)] [added: 2022](#ie194576fbf7048efb201674f596620b9_448)] | | | [removed: II-[109](#i4edb778c706f4f2e83351ad068238e9e_454)] [added: II-[107](#ie194576fbf7048efb201674f596620b9_448)] | | |

| [Consolidated Statements of Stockholders' Equity for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_457) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_451) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_457)] [added: 2021](#ie194576fbf7048efb201674f596620b9_451)] | | | [removed: II-[111](#i4edb778c706f4f2e83351ad068238e9e_457)] [added: II-[109](#ie194576fbf7048efb201674f596620b9_451)] | | |

| [Southern Company Gas and Subsidiary [removed: Companies:](#i4edb778c706f4f2e83351ad068238e9e_460)] [added: Companies:](#ie194576fbf7048efb201674f596620b9_454)] | | | | | |

| [Report of Independent Registered Public Accounting [removed: Firm](#i4edb778c706f4f2e83351ad068238e9e_463)] [added: Firm](#ie194576fbf7048efb201674f596620b9_457)] | | | [removed: II-[112](#i4edb778c706f4f2e83351ad068238e9e_463)] [added: II-[110](#ie194576fbf7048efb201674f596620b9_457)] | | |

| [Consolidated Statements of Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_466) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_439) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_466)] [added: 2021](#ie194576fbf7048efb201674f596620b9_439)] | | | [removed: II-[116](#i4edb778c706f4f2e83351ad068238e9e_466)] [added: II-[104](#ie194576fbf7048efb201674f596620b9_439)] | | |

| [Consolidated Statements of Comprehensive Income for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_469) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_463) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_469)] [added: 2021](#ie194576fbf7048efb201674f596620b9_463)] | | | [removed: II-[116](#i4edb778c706f4f2e83351ad068238e9e_469)] [added: II-[114](#ie194576fbf7048efb201674f596620b9_463)] | | |

| [Consolidated Statements of [removed: Cash Flows] [added: Common Stockholder's Equity] for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_472) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_472) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_472)] [added: 2021](#ie194576fbf7048efb201674f596620b9_472)] | | | [removed: II-[117](#i4edb778c706f4f2e83351ad068238e9e_472)] [added: II-[118](#ie194576fbf7048efb201674f596620b9_472)] | | |

| [Consolidated Balance Sheets at December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_475) [2022] [added: 31,](#ie194576fbf7048efb201674f596620b9_469) [2023] and [removed: 2021](#i4edb778c706f4f2e83351ad068238e9e_475)] [added: 2022](#ie194576fbf7048efb201674f596620b9_469)] | | | [removed: II-[118](#i4edb778c706f4f2e83351ad068238e9e_475)] [added: II-[116](#ie194576fbf7048efb201674f596620b9_469)] | | |

| [Consolidated Statements of [removed: Common Stockholder's Equity] [added: Income] for the Years Ended December [removed: 31,](#i4edb778c706f4f2e83351ad068238e9e_478) [2022, 2021,] [added: 31,](#ie194576fbf7048efb201674f596620b9_460) [2023, 2022,] and [removed: 2020](#i4edb778c706f4f2e83351ad068238e9e_478)] [added: 2021](#ie194576fbf7048efb201674f596620b9_460)] | | | [removed: II-[120](#i4edb778c706f4f2e83351ad068238e9e_478)] [added: II-[114](#ie194576fbf7048efb201674f596620b9_460)] | | |

[removed: | [Combined Notes to Financial Statements](#i4edb778c706f4f2e83351ad068238e9e_481) | | | II-[121](#i4edb778c706f4f2e83351ad068238e9e_481) | | |][added: COMBINED NOTES TO FINANCIAL STATEMENTS]

| [Combined Notes to Financial Statements](#ie194576fbf7048efb201674f596620b9_475) | | | II-[119](#ie194576fbf7048efb201674f596620b9_475) | | |

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the Audit Committee of Southern Company's Board of Directors and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved especially challenging, subjective,

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

or complex judgments.

Accounting for the economics of rate regulation may impact multiple financial statement line items and disclosures.

We also tested the effectiveness of management's controls over the initial recognition of regulatory assets or liabilities.

- We tested certain incurred costs recorded as regulatory assets or liabilities during the period for completeness and accuracy.

- We obtained representation from management regarding the likelihood of recoverability of incurred costs and potential refund or future reduction in rates to assess management's assertions about the likelihood of recovery, refund, or a future reduction in rates.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

For the Years Ended December 31, 2023, 2022, and 2021

| \-Receivables | | | 482 | | | | | | (771) | | | | | | (77) | | |

| \-Retail fuel cost under recovery | | | 686 | | | | | | (100) | | | | | | (4) | | |

| Change in construction payables, net | | | 18 | | | | | | 203 | | | | | | (124) | | |

| LTSA credits utilized from the sale of spare parts | | | 23 | | | | | | — | | | | | | — | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Customer accounts | | | 2,030 | | | | | | 2,128 | | |

| Under recovered fuel clause revenues | | | 696 | | | | | | 10 | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

| Natural gas cost over recovery | | | 214 | | | | | | — | | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

For the Years Ended December 31, 2023, 2022, and 2021

| Consolidated net income (loss) | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | — | | | | | | 3,976 | | | | | | — | | | | | | | | | | | | (127) | | | | | | 3,849 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Balance at December 31, 2023 | | | 1,092 | | | | | | (1) | | | | | | $ | 5,423 | | | | | $ | 13,775 | | | | | $ | (59) | | | | | $ | 12,482 | | | | | $ | (177) | | | | | | | | | | | $ | 3,781 | | | | | $ | 35,225 | |

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Accounting for the economics of rate regulation may impact multiple financial statement line items and disclosures.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

Auditing these judgments, which include assumptions about the outcome of future decisions by the Commissions, required specialized knowledge of accounting for rate regulations and the rate setting process due to its inherent complexities.

Our audit procedures related to the impact of rate regulation on certain assets and liabilities included the following, among others:

We also tested the effectiveness of management's controls over the initial recognition of regulatory assets or liabilities.

- We tested certain incurred costs recorded as regulatory assets or liabilities during the period for completeness and accuracy.

- We obtained representation from management regarding the likelihood of recoverability of incurred costs and potential refund or future reduction in rates to assess management's assertions about the likelihood of recovery, refund, or a future reduction in rates.

[Table of Contents](#ie194576fbf7048efb201674f596620b9_7) [Index to Financial Statements](#ie194576fbf7048efb201674f596620b9_343)

For the Years Ended December 31, 2023, 2022, and 2021

For the Years Ended December 31, 2023, 2022, and 2021