Southern Stock

Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Second Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Mr. Greg MacLeod, Director of Investor Relations. Please go ahead, sir.

Thank you, Christine. Good afternoon, and welcome to Southern Company's Second Quarter 2026 Earnings Call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and David Poroch, Chief Financial Officer.

Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q and subsequent securities filings.

In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com.

At this time, I'll turn the call over to Chris.

Thank you, Greg. Good afternoon, everyone, and thank you for joining us for today's update. As you can see from the materials that were released this morning, Southern Company continues to perform exceptionally well, which supports a very bright future. We reported strong adjusted earnings results for the second quarter with each of our businesses contributing to performance meaningfully above the estimate we provided last quarter.

The extraordinary economic development momentum and demand for power across our Southeast region that we've seen for the past several years continues particularly from data centers and other large-load customers, and our utilities are capturing this growth in a way that meaningfully benefits the customers and communities we are privy to serve and support our long-term outlook. In just the last quarter, there were 3 projects across the state Alabama Power added approximately 3 gigawatts, while Georgia Power signed a 3.2-gigawatt, 25-year contract for electric service with OpenAI for its recently announced site New Savannah, Georgia. This site, which is expected to take electric service in phases beginning in 2028 features 1 gigawatt of flexible demand response, helping to support reliable energy for all customers when demand is highest. Combined, these 4 projects representing 6 gigawatts of newly contracted customer load along with agreements previously signed brings our total contracts and large load agreements across our electric subsidiaries to over 17 gigawatts by the mid-2030s.

These projects are not just bringing in substantial construction work. They are creating thousands of permanent jobs and generating billions of dollars of investment for the local economies in our service territories, and we are proud to responsibly support this growth in a way that benefits the communities we serve.

In Alabama, the 3 new contracts were a clear confirmation of the continued economic development momentum building across all our electric service territories and our differentiated large load capabilities. Increasingly, our vertically integrated state-regulated model supports our ability to provide reliable power with speed and is an important differentiator for our new and existing customers.

Our success attracting significant growth is a testament to the benefits that this model affords all our customers. As a comprehensive one-stop shop for Power Solutions and economic development, our electric operating companies utilize long-range integrated system planning processes to coordinate timely development of generation, transmission and distribution assets through well-structured and transparent regulatory processes that are designed to serve the growth reliably. The Southeast, with its robust network of transportation and logistics infrastructure, diverse workforce and a constructive business climate continues to be highly attractive for all forms of economic development, including hyperscalers, data center developers and large industrial manufacturers.

Looking ahead, the opportunities for additional new large load and data center customer growth remains robust. New projects continue to be added to our prospective pipeline, large industrial and data center projects, which remains well above 75 gigawatts. We are encouraged by the continued progression a potential large load projects in varying stages of advanced development. Beyond the 17 gigawatts already contracted, there are an additional 8 gigawatts of projects in late stages including 3 gigawatts projected to be finalized in the near term.

Clearly, the benefits of our approach are resonating with both new customers and several repeat large-load customers during a time of increasing power demand. We are privileged to support this transformative growth.

David, I'll now turn the call over to you for an update on our financial performance.

Thanks, Chris. And good afternoon, everyone. For the second quarter of 2026, our adjusted EPS was $1.13 per share, $0.21 higher than the second quarter of 2025 and $0.13 above our estimate. The primary drivers of our performance for the current quarter compared to last year included increased usage and customer growth along with higher AFUDC from ongoing construction projects, higher earnings from equity method investments and tax-related impacts at our state-regulated electric utilities.

The improved results in the second quarter compared to the second quarter of 2025 were also supported by contributions from Southern Company Gas and some of our smaller complementary businesses, including PowerSource, where the distributed generation, backup generation and bridge power solutions markets continue to expand. This was partially offset by interest expense from higher debt balances and dilution from additional shares outstanding. A complete reconciliation of year-over-year earnings is included in the materials we released this morning.

Combined with our first quarter results, our adjusted EPS for the first half of the year is $2.46 and well above our year-to-date expectations.

With customer rates held stable at our 2 largest subsidiaries, this strong performance continues to be driven by increased sales and customer growth and strong execution across each of our regulated businesses and Southern Power. These results exemplify Southern Company's commit to delivering for customers and investors.

Looking towards the second half of the year, we anticipate this momentum continuing and now project our full year 2026 adjusted earnings to be near or at the top of our 2026 adjusted EPS guidance of $4.50 to $4.60. Our adjusted EPS estimate for the third quarter is $1.65 per share.

Turning now to retail electricity sales. Year-to-date weather normal retail electricity sales were 2.3% higher than the first half of 2025 consistent with the trends observed earlier this year. This represents the highest retail sales growth through June we've seen in nearly 2 decades.

Year-to-date, weather-normal retail electricity sales are higher across all customer classes bolstered by continued residential customer additions diverse industrial and manufacturing expansions and significantly increasing usage from data centers. Approximately 11,000 new electric residential customers were added in the quarter, bringing our net electric customer adds to over 40,000 in the last year. Manufacturing and reshoring trends, particularly in Alabama in the primary metals, stone clay glass and pipeline segments supported continued industrial strength. Weather normal commercial sales grew 7.4% in the second quarter, bringing year-to-date weather normal commercial sales to 6% higher than the first half of 2025.

Notably, data center usage was 55% higher compared to the second quarter of 2025 and is now up 49% year-to-date, primarily due to accelerating load ramps from our large-load customers.

System-wide, our data center load now exceeds 1.2 gigawatts, an increase of more than 500 megawatts over the prior year, and we expect this trend to continue accelerating as our 17 gigawatts of contracted demand comes online.

As Chris mentioned earlier, economic development activity in the Southeast continues to be strong. In the last quarter alone, announcements were made for nearly $14 billion of investment and more than 3,000 new jobs led by several new data center facilities in Alabama and a new Amazon warehouse in Georgia. The projects announced in the second quarter marked the second highest investment level ever recorded in our electric territories, underscoring the strength of regional trends in economic development and ultimately, help shape future growth opportunities.

Turning to our infrastructure build-out. The continued success of our operating territories and attracting significant new load is driving the need for additional new power generation and infrastructure across our Southeast region. Over the past several years, we work constructively with regulators to meet the demand of our growing system, securing approvals for 10 gigawatts of new company-owned generation resources, including thermal, battery and solar resources as well as hundreds of miles of new transmission lines. With the first 2 of several battery sites in service and benefiting customers and work on the 3 combustion turbines and plant gates advancing towards completion in the coming quarters, we continue to execute on the construction of our portfolio of new build generation projects. As our projected incremental load needs grow beyond our system's current and expected supply of generation capacity into the next decade, we remain well positioned to respond. Ongoing requests for proposals for RFPs at both Alabama Power and Georgia Power are underway for potential additional generation resources to help ensure that we can continue to provide reliable and affordable service to all customers.

These transparent and orderly processes are designed to facilitate the timely and cost-effective procurement of new generation needs in the early 2030s. To the extent the company-owned resources are selected through these active RFP processes and ultimately authorized by the respective PSCs, these new generation investments would represent substantial incremental investment upon our current base capital plan.

As future capital investment opportunities materialize, we remain committed to funding incremental capital investments in a credit-supportive manner. We continue to proactively address our identified equity needs to support our path towards 17% FFO to debt by 2029. In the second quarter, we sourced an additional $700 million of equity through our at-the-market or ATM program with forward contracts that settle at our discretion through 2028. Together with a significant amount of equity previously sourced, we have reduced our projected remaining equity need by 2030 to $1.1 billion.

Our proactive shareholder-friendly equity strategy, combined with our disciplined approach in the debt capital markets and access to low-cost DOE loans continues to position us well towards our goal of efficiently meeting our future financing needs and achieving our long-term credit objectives.

I'll now turn the call back over to Chris.

Thank you, David. We are truly in transformative time for the energy industry and our nation. And Southern Company has continually demonstrated that we are executing on this extraordinary growth in a way that protects and benefits customers and communities. Last week, the Southern Company electric system was proud to formally reinforce this commitment by joining the national rate payer protects and pledge alongside several other utilities. This pledge aligns with The Southern Company systems well-established approach to serving growth in a responsible manner while maintaining rate stability and reliability for millions of households and small businesses across the Southeast.

We are confident the approach we're taking will deliver lasting benefits as we deliver rate stability for our customers. Recall, the framework under which we approach contracting with large-load customers includes pricing with minimum bills to cover at least 100% of the incremental cost to serve. Large-load customers are paying their full share. We also include provisions with strong predictions in the form of termination payments, backed by significant high credit quality collateral requirements that provide an additional layer of security. This large-load contracting structure helps ensure investors and customers are protected while providing meaningful savings for existing customers.

With retail base rates held stable in both Georgia and Alabama until 2029 and significant customer benefits identified and committed to based on previously signed large load contracts, we are demonstrating that when growth is done right, everyone benefits.

Across our businesses, we continue to demonstrate exceptional execution and meaningful progress delivering on this growth. Southern Company has a bright future, especially when considering the strength of the Southeast economy, the likelihood of additional large-load contracts, incremental capital investment opportunities across our state-regulated utilities and our ability to capture value across the energy value chain through Southern Power, investments in Southeastern natural gas infrastructure and distributed and bridge power opportunities through complementary businesses like PowerSecure. This extraordinary growth continues to strengthen our business fundamentals and expand capital investment opportunities well into the next decade, and we continue to see momentum building in support of an improving growth outlook into the future.

The success we have had in the first half of the year positions us exceptionally well to deliver on our near-term objectives while reinforcing and strengthening our confidence in our long-term outlook and our goal to be towards the top half of our long-term earnings trajectory. Ultimately, this is a long-term business in which capital is deployed to serve customers for many decades. As we deliver for the communities we serve each and every day as we work towards our goal to provide sustainable long-term growth and outstanding financial integrity year after year, we are well positioned to continue executing with a discipline that is rooted in our long-standing commitment to our customers and investors alike.

As we conclude our prepared remarks today, I want to emphasize Southern Company's commitment to making the communities that we have the privilege to serve better off because we are there. as a partner to the communities and cities where we operate, we were proud to help support Atlanta's efforts over the last 2 months and hosting 8 FIFA World Cup matches on the world stage. The success was a culmination of years of hard work by local, regional and state leadership and included significant investment in local infrastructure to welcome hundreds of thousands of visitors to Atlanta. This event was an excellent showcase for the Southeastern United States and an opportunity to continue building upon the momentum that defines this region, which will have an impact that will resonate for decades to come.

Operator, we are now ready to take questions.

[Operator Instructions] Our first question comes from the line of Nick Campanella with Barclays.

I hope you're hearing me.

Nick, we can hear you, man.

All right. Just now that you have higher visibility on attracted megawatts load ramps, specifically '28 increased, 2030 increase by a few gigawatts here below, how does that incremental sales revenue and visibility, how does that impact your ability to maybe extend or stay out further and you're kind of committed to on the regulatory front? And just maybe you can kind of talk to that a little bit.

Let me start then I'll turn it to David. But as we said in our prepared remarks, we do expect to be at the top half of our long-term earnings trajectory. And so as we think about that, we think about the opportunity that provides for us in terms of meeting our long-term outlook. But clearly, as we think about the rate proceedings and regulatory proceedings, those are things that conversations will have with regulatory bodies. But as we have extended our rate stability focuses in both Georgia and Alabama, we think it creates optionality for us to continue to provide rate stability for our customers. David, anything you want to add?

Yes. Thanks, Chris. And Nick, great question. As we work through these processes with the success that we've had in signing these contracts, it does give us a great deal of flexibility in enhancing the benefits for customers. Clearly, we've got the ability to look for more generation capacity through the structure processes that we have in Alabama and Georgia. And like we've talked about in the past, we are probably about 1 gig or 2 away from, if you will, selling out the capacity that we had approved in Georgia last year. So now we're going to work through that process. And the success that we've had in signing these contracts really gives us some durability toward the future and additional confidence in being able to deliver on our goals well into the next decade.

And then maybe on the 3 gigawatts that you're finalizing -- in finalizing stages for, is that within the 2030 window? Or is it after it? And what are kind of the key milestones you still need to get through on those 3 gigs of finalizing?

Sure. No, for sure. Working through those contracts, those are likely to go into 2028 and beyond. So they'll like every other big data center project. Large-load customer have a ramp-up period. A couple of them that we're working on would initiate that ramp-up in 2028 and bring us into the next decade.

Our next question comes from the line of Shar Pourreza with Wells Fargo.

So just, Chris, on Southern Power, the existing tone agreements are going to start to roll off. I know there's obviously an opportunity to [indiscernible] capacity towards serving the hyperscalers. Can you maybe discuss how you're thinking about that opportunity set, have conversations with the hyperscalers begun with these assets? And would any opportunities be captured within your existing 75 gigawatt pipeline. I guess what does this mean to the plan, I guess, Yes?

Yes. And Shar, we've talked about this, I think, on a number of calls in terms of the opportunity as these contracts begin to roll off and to expire opportunity for recontracting. And so the team is now in the midst of having those conversations with a host of different counterparties that you understand our risk profile there in terms of making sure that they're creditworthy counterparties. But if you look at in terms of where they were contracted from a pricing standpoint in terms of where the market is today, we do see upside opportunities in those pricing opportunities that will contribute to the durability and the length of our long-term plan.

So we've talked about this a good bit with you guys. And so that's where we are, and we're going to continue to pursue this opportunity as we move down that path and as these contracts expire and the opportunities for recontracting positions itself.

Got it. And these wouldn't just be typical tolling agreements, that would be the energy and capacity side, I'm assuming under...

Correct. Correct. Yes.

Got it. Got it. And then I know, Chris, your favorite topic is new nuclear, right? So I guess, would sort of lessons learned between Unit 3 and 4 and sort of this big attention now to large-scale reactors. Should there be like any financial backing from the government and hyperscalers taking on some of the cost overrun risk. Is that something Southern would be interested in building, i.e., through the PAC10? Just any color on potentially participating in this consortium? Or are you just looking to license the blueprints?

And you've heard me talk a lot about the importance of new nuclear, helping this country meet this incredible moment that's in front of us. I mean I do think as we look into the 2030s, this country needs to have, particularly in the mid-30s, need to have some more nuclear units in operation. I have to give a great big shout out and complement to the Trump administration. I mean, there are a number of actions they have taken on the regulatory front with bringing groups together around long lead time items, just a lot of things that they're doing, and we have a lot of conversations with them about how to make this a reality.

I mean Southern is not going to be next, may be clear about that. But we're going to continue to work constructively and very -- I would say, pretty aggressive with this administration and with a lot of other parties to see how we can get this done because I do think it's important for -- from an energy policy standpoint, from the economy to meet this moment and meet this demand that we see in the marketplace today.

Just I guess the follow-up is, are you finding traction with the hyperscalers taking on cost overrun risk above budgeted amounts for these AP1000s?

I don't want to get ahead of kind of that firm conclusion. But yes, we're having conversations with them in terms of what role they can play in this conversation in this equation.

Our next question comes from the line of Carly Davenport with Goldman Sachs.

Maybe to start, you've talked in the past about the potential for upside on the capital plan related to FERC pipeline investments. Anything new on that front in terms of timing, especially as you think about the incremental RFPs that maybe could point to some incremental gas plant builds?

Sure, Carly. Thanks. Great question. Like we've talked about with the contracts that we're signing, the growth in the Southeast region, a strong economy, we definitely see opportunities in our FERC-related pipeline -- FERC regulated, I should say, pipeline investments. We've talked about some of those, but as the opportunities continue to grow, we do see the possibility of expanded opportunities in those investments that we currently hold. So really excited about those prospects. The RFPs that we've got in place and the processes that we have in our regulated jurisdictions will help inform that, but we see great potential in the Southeast to continue to grow those investments.

Carly, only thing I would add is that infrastructure, I mean, across the Southeast, and we -- you've heard us say it before, is needed to support this growth. That is here and for the growth that is to come. So there is more to be done here. We think there's a real opportunity for us in terms of all the pipeline expansion opportunities to align with the news that we have that are portrayed in our RFPs.

Got it. Okay. That's really helpful. And then just a follow-up on the RFPs that you have ongoing for the generation needs through 2032. Did those filings already contemplate some of the progression in the load pipeline that you've seen over the last quarter or so? And is there potential room for upside on even incremental to the incremental RFPs, if you think about the conversion of the pipeline?

Incremental to the incremental, I love that term. I have to think about how to use that. I appreciate that. But yes, the opportunities that we see there are well baked into the RFPs. We talked about our load forecast and the processes that we use to -- in a rather conservative way, project what that need could be. And as we continue to sign these contracts, that's really going to be the foundation for the RFPs that we have, both in Alabama and Georgia. And so there is certainly potential out there to go and procure more generation than we have identified right now. We just can't get ahead of the process. There's a thorough screening structure, good vetting and everybody is going to have an opportunity to participate in those processes.

And so -- and also, I think it's worth reminding that as we regularly say, there's not placeholders in our capital plan. We don't get ahead of our regulators. And so obviously, you can see how the upside that we've talked about is not in our capital plan right now. So the RFPs that are open in Alabama, the RFPs that are open in Georgia, none of that is contemplated in our capital forecast at the moment.

One thing I would add, the open or contract in Georgia pushes us beyond our recently approved capacity by right around 1 gigawatt. So just making sure that was real clear in terms of where we are and what the upside opportunities are.

Our next question comes from the line of Steve D’Ambrisi with RBC Capital Markets.

Just had a quick one, kind of a follow-up on Carly's question actually. Just to put a little bit of finer point on it, is my understanding that any -- basically any new incremental load, especially large load in Alabama would drive basically incremental generation requirements. So obviously, you have the RFP outstanding. But if the load forecast is up 3 gigawatts in the quarter and then you're talking about OpenAI, at least 1 gigawatt, but I think the RFP is 2 to 6, but is a range beyond that as well. Like can you just frame is this 4 to 5-plus gigawatts of gen that we could put some type of capacity multiple on and try and estimate what the size is? Or -- obviously, I don't want to put the cart in front of the horse, but want to make sure we're level setting on what's in the plan and what the opportunity is?

Yes. Great question and really a good way to think about it. Appreciate your thought on not getting in front of the process. We're definitely focused on that. But I think the way you're thinking about it is directionally correct. We've got the newly signed contracts in Alabama. That's going to inform that. That's about 3 gigs right there, contracts signed. We're about 1 gig or so oversubscribed, if you will in Georgia based on what we've signed. And keep in mind, I think we've shared this in the past, maybe a decent rule of thumb to think about capital opportunities going forward is about $2 billion or so, a little bit above maybe related to 1 gig of new generating capacity, that kind of covers a broad range of different generating sources for us.

Okay. That's very helpful. And then just in terms of like the finalizing and late-stage pipelines that you continue to fill up. Obviously, you've seen great momentum and progression in kind of converting this. But again, like how do these finalizing gigawatts kind of filter into this RFP? And just like what's the time line for like when those loads would energize and when we have to think about resources to serve those? Just trying to like sequence it out here.

Sure. No. I mean those projects will vary project by project. And so as we finalize those agreements and they are certified and blessed by the commissions, they will factor those into the RFP process going forward to match up with the year in which those resources are, in fact, needed. And so as you -- as we kind of are in a position to inform as we finalize those contracts, that is information then that will be forthcoming. Once those contracts are finalized and the projects are approved and has also then as we provide you with an updated load forecast. So there are a couple of proceedings that will unveil how that all lines up and matches up with the needs and what the new opportunities are going forward.

And I might add, as we work through those processes, to the extent that the company is selected to provide that generation resource, we're going to probably start feathering in some spend also not currently contemplated in our projections in the sort of the '28 timeframe, and that will start to feather in as we build out that generation to come online in the '31, '32 time line.

Our next question comes from the line of Jeremy Tonet with JPMorgan.

Just wanted to pivot to Mississippi, if I could, for a minute here. And we've had recent stakeholder conversations in the state where it seems like the state is particularly receptive to incremental data center activity more than what we usually hear. And so I was just curious, I guess, your outlook there, if you could maybe talk a little bit more on the opportunity set and what you see maybe down the pipeline there?

As we have said before, we've talked, I guess, a number of quarters now about seeing this momentum migrate to the west. And you're clearly seeing that now in Alabama. You see success with 500 megawatts projects in Mississippi. And as we talk about our pipeline, that also reflects that ongoing activity -- increasing activity that we also see in the Mississippi territory.

Got it. And then just wanted to go to OpenAI again, with demand response there. Just wondering how is demand response fitting into your conversations with projects overall in the pipeline? How do you factor that into kind of your assumptions going forward?

Yes. So great question. And it does enter into all those conversations. And we'd like to see that continue along and stay flexible. It's 1 of the -- actually 1 of the great aspects that our 3 electric jurisdictions have where we're not limited to just a tariff. We can negotiate bilateral contracts that leverage the flexibility and the demands that these hyperscalers line and be able to price that right. So I think this is a great trend, and I'd like to see it continue, and it is a part of every conversation that we have.

One of the things I'd add there is that very early on in our conversations with hyperscalers, we begin to raise matters like technical requirements in terms of how their operations would impact the system, how would impact the grid and not just being a taker but having creating flexibility to provide benefits to the entire grid. So I think as we look at this broader conversation about data centers, and I think these things have got to be communicated more broadly in terms of the value and benefits and flexibility and how they are being supportive of the grid, as how they're being supportive of communities. I mean there's an incredibly positive narrative and story to be told here. We all have got to be, I think, a little more voice these benefits a little more stronger in terms of making sure that gets into the conversations about data centers as we hear all the conversations and the noise right now about what's going on. So just a great win-win, I think, for us as well as the customer.

Our next question comes from the line of Steve Fleishman with Wolfe Research.

So just -- could you just remind in Georgia for open AI and other customers who maybe aren't investment-grade credits or strong investment grade, how did the tariffs work from a credit standpoint [indiscernible] large-load tariffs?

Yes. So remember the -- if you will, the kind of 4 pillars under which we're negotiating structure these contracts in territories, you got long-term contracts and you hit it exactly the OpenAI contract is 25 years. Our minimum bills cover 100% of the incremental cost to serve. There's default provisions in there and those default payments are tied to collateral. And so we've got a lot of flexibility in terms of the forms of collateral that we can take from these counterparties. And if a [indiscernible] guarantee works for us, depending on the credit quality of the counterparty, we'll work with that. But in some instances, that they're not quite at the investment grade that we want to see, we'll look to lines of credit, we'll look to surety bonds, we'll look at other combinations. But at the end of the day, the collateral portfolio that we're going to take to back up these contracts, is going to be put us at about an A- or better position.

And keep in mind, you asked specifically about OpenAI, and that's about $28 billion of collateral that will be in the aggregate time full ramp. So I think we're in a really good spot for that. And keep in mind, that's -- we have the flexibility to determine what collateral is accepted to us -- acceptable to us and puts us in a position of about A- or better. So a combination of lines of credit, surety bonds in this particular case.

Okay. That's very clear. The RFPs, could you -- and I apologize if I missed this earlier, but just can you remind us just the time lines for finalizing answers and then approvals?

Sure. So the process is going to play out through most of the rest of the summer into the fall. I think by year-end, we should have a good idea of what projects were selected through the RFP process. And then once those projects are selected, that will move into a certification process that will take place much of -- throughout much of 2027. So latter part of 2027, we'll have good clarity as to what actually gets certified. And Alabama is in a fairly similar time line. So you can kind of count on both the proceedings in Georgia and Alabama, not exactly to run in parallel, but pretty close.

Okay. And then last question just on Georgia. Maybe you guys have clearly highlighted some of the benefits, both economic and customer rate benefits of the data centers. But then I think there's still been political noise there, particularly maybe more from the Democrats mix on data centers. Can you just give us maybe a little lay of the land there? And is there any kind of appreciation growing for some of the benefits to kind of offset some of this kind of pushback -- or reported alleged pushback?

Steve, I would say -- I would suggest you look at the OpenAI announcement in terms of how that plays out with that community as they highlighted the project, but they also highlighted along with us in terms of the rate stability that comes along -- and benefits that come along with the project, but also how they communicated kind of the economic community benefits that align with that project. Yes, I mean, there's noise all across the country about data centers. But I think there's no moratorium across the state. And yes, there may be some moratoriums in various counties. But I think you continue to see progress, activities, projects move forward in our territory. once again, I'll say we've got to do a better job. Hyperscalers need to do a better job of explaining the benefits and value and dispelling some of the misinformation that's out there on social media. But I say you continue to see the pipeline continue to remain very full and continue to grow, and you continue to see projects advance and projects get approved all across our territory.

I'm sorry, let me clarify one thing. I said you were asking specifically about OpenAI and collateral, and I was talking about the entire portfolio, so I apologize for that. The whole portfolio of the 17 gigs, we got about $21 billion of collateral. So -- and I recognize you were speaking specifically the OpenAI contract. So I just want to clarify that for you.

Our next question comes from the line of Andrew Weisel with Scotiabank.

Congrats on the OpenAI deal, certainly a massive project. I want to follow up on the gigawatt of demand response, I agree that that's a great resource. I know we've seen something similar in Michigan, but am I right that this is the first time you're doing something like that? And I know that the press release talks about long-term savings for customers. Have you quantified that? And is it more about accelerating speed to market for the data center? Or does the rest of the customer base see any benefits?

The rest of the customer base will see benefits across the entire project. I mean what we're doing is during peak load periods, doing high demand periods, we're able to save the peak. And so as we operate this economic system on a minute-by-minute, second-by-second basis, we're always looking to put online the most economical resource to meet and serve that load. And so that is tremendous value and benefits to the entire system, having that resource be flexible. So it's an incredible value and incredible benefit to the entire grid as we operate our system.

Okay. And was this the first time you've done that for a data center?

Yes.

Yes, it is.

Okay. Great. Hope to see more of it. Then secondly, on equity. I know you've been pretty active. You settled $2 billion of the ATM that was priced in 2025 and your -- you've priced $700 million that will settle through '28. Are you able to give any guidance on how to think about the pace of equity and when it will actually hit over the next few years? I know there's a lot of moving parts there. And I don't expect you to get too specific, but how should we think about the year-by-year dilution and whether it will be ratable or maybe accelerated? Any color there would be very helpful.

Yes. I think you said it really well. There's a lot of moving parts in terms of making the decisions on how to draw those equity commitments. And keep in mind, they're available to us really at a few days' notice. And so we have a great deal of flexibility to manage our liquidity over that period. But we generally want to shape that in terms of kind of mirroring, if you will, our capital outlays for the construction effort that we're going to have. But it also dovetails into the plan to get near 17% FFO to debt by 2029. And I think we've settled about $2 billion recently. And that, again, like I said, kind of helps us down the path of 17% FFO to debt.

And bottom line, we just -- we're going to continue to do this in the most shareholder-friendly manner that we can, protect the credit quality and continue to draw on this as needs and opportunities become available.

Our next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Look, I wanted to take this in the direction of rates, rate cases, et cetera. I mean, obviously, transposing this real ongoing success. How do you think about the opportunity here, Georgia and Alabama, but especially in Georgia, right? Obviously, there's a regular cadence to these cases. And obviously, there's a desire maybe at times to update tariffs and rate structure. But is there an opportunity to come back with a bigger rate credit here? I mean, obviously, the number, I think, from last year at this point was north of $0.5 billion. I mean is there a way to, again, do what you did before and effectively sidestep the revenue process here?

Julien, let me say, as you know, we don't get ahead of our regulators. We work very constructively with them kind of hand in hand. I mean our goal at all times is to keep rates as low as possible for our customers. And so we are thrilled with how we are delivering rate stability to our customers through '28. And so I mean, as we continue to sign these contracts, I mean, the conversation that we'll have and have other considerations about what's possible. But I'm not going to get ahead of any process or any conversation with the commission at this point in time.

But yes, the growth provides us incredible opportunities to benefit customers, but also to continue to deliver rate stability. I mean I was listening to a lot of commentary yesterday after the Fed decision, a lot of commentary about inflation and electric rates going up across the country. Electric rates are not going up in our territory. We're delivering rate stability to our customers, and that's something that we are thrilled and privileged to make available and provide to our customers, that benefit.

Stability is savings. One of the things I'll try to remind ourselves is that being flat or being frozen, there's real kind of nominal benefits in terms of savings for customers as we hold rates flat going forward.

Yes. No, I mean, Clearly, you have a demonstrated track record on that front. And then Alabama, how do you think about this growth transposing itself; a, in terms of the process, like how do you take this load growth and put it into rates? Again, I know you've got this rate CMP. I mean, in theory, that's how you bring on some of the new capacity, I think it for the incremental 3 gigs. And then separately, is there some sort of equivalent thought process on that statement in particular? I guess that your comments a little generic, too.

Yes, you got it. I mean they'll go through those traditional proceedings in terms of getting these projects and getting the load needed to be certified through the CMP process. And so as you know, they've made some changes in the structure and size of the commission. They're going to have a new Secretary of Energy in Alabama. They've just gone through processes of kind of I would say, codifying the procedures of how we are serving signing up these contracts. So Alabama, I think, has had a very orderly process about how to approve these contracts, but also then get these projects approved by the commission and get them in the rates as well as through the RFP process.

So what do we say 3 gigawatts adds to long-term benefits for customers. So great opportunities in Alabama.

Our next question comes from the line of Richard Sunderland with Truist Securities.

Just circling back to Southern Power, I know you had some updates last quarter on this front. Curious about kind of the tone and interest on the remaining upgrades and then the brownfield efforts, I think you tapped for an update later this year as well. Given the load trends, how is all that trending? And are you still thinking about having some sort of a Southern Power update this year?

Yes. Great question. We continue to evaluate those opportunities. I mean the conversations that we're having with our current counterparties as well as exploring opportunities with new counterparties at Southern Power are proving to be very fruitful. And we're looking forward to working through those. But keep in mind, the business model under which we operate Southern Power, right, we don't go and build something and see who shows up. So it's a very disciplined and structured process that we continue to engage in these conversations.

So there's a lot of great potential out there to not just reprice the contracts that will come rolling off into the next decade, but also take advantage of the announcements that we made last quarter in terms of those up rates. And as we continue to have those conversations and explore those opportunities with the current customers at Southern Power and potential new customers, then we'll have better clarity as to when and how we can execute on the additional upgrades that we alluded to.

But we look forward to giving you updates on the activities that's occurring that's under consideration at Southern Power. I think there's some real opportunities there.

That's great to hear. And then I guess turning back to the script, recognizing you called out the sales growth on the quarter and thinking about some of the data center load added to the system recently. Any learnings you'd highlight from some of that ramp in the sales trends? And I guess, in particular, how that might apply to your outlook for all this load growth and running that through to the EPS growth guidance as well?

No, I'd start by saying, I mean, one of the things we see is that we have to work very closely with these projects in terms of what their ramp rates are. They may not be what was projected when the projects were initially approved. But we work very closely with them in terms of kind of what those ramps will be. But once again, remember, the minimum bills that we have, I mean, we've kind of somewhat what we call decouple the revenue because we do have those minimum bills from an operational standpoint. We have to work very closely with them in terms of understanding what their ramp rates are in terms of what the system implications are. But the bottom line is the load is very real. And so we know it's -- may not be there initially, but we know that is coming.

And I might add that the customers that we've been serving for a number of years, we have learned so much from their experience that has helped us inform these new contracts that we're signing. And so like Chris mentioned, the protections that we put in place for customers and the company in terms of the minimum bills, that is really, we think, going to be a distinct advantage going forward that will protect our customers and the company in terms of that type of stability that we're trying to deliver. And we've crossed over the 1,000 megawatt line this particular quarter, and the growth has just been fantastic in that portfolio of data centers and large load customers that we're currently serving, really exciting.

Our next question comes from the line of Travis Miller with Morningstar.

Going back to the OpenAI project. I wonder if you could talk a little more about what made that location unique and why both you and OpenAI decided that, that location could handle a project of this size? And then secondly, build on that, are there other areas in your service territory? Or what are the other areas where a project of that size can be constructed and operational in such a short time?

Yes. I mean it's -- these projects in the processes of economic development, it's a lot of -- it's a lot of courting, a lot of evaluations of sites and locations and geography, topography, location to infrastructure -- electric infrastructure facilities and other energy resources being available. And so it's not a set criteria, but there's a lot of kind of investigation of sites to see what works for the projects that these companies want to construct. And so -- and we're glad when they work out.

We're also thrilled that we have a number of meaningful sites that are available for additional consideration across our entire service territory. I'm not going to give you kind of exactly where those sites are. I mean that's -- a lot of that's kind of protected, but know that we have additional opportunities for similar projects. I mean the Savannah area, the economy there is very strong with the [indiscernible] plant that is there and continues to grow and expand, the Port of Savannah that continues to kind of lead this country and activity from a shipping standpoint. So Savannah, Evvingham County, those areas have proven to be just wonderful sites for economic activity.

Understood. And one real quick one. In terms of meeting any future equity needs as you add to the CapEx, any interest in taking minority interest investment or another partner to meet some of those?

We look at a lot of different structures. But at the moment, we just don't see that as a need. Love the cards that we have, love the opportunities that we've had in terms of issuing the securities and the receptiveness in the marketplace. I just don't see that as a need for us at least for the foreseeable future.

And that will conclude today's question-and-answer session. Sir, are there any closing remarks?

Just let me thank everybody for joining us today. Let me conclude by saying this is an incredibly exciting first half of the year for Southern Company, and it sets us up for the rest of the year, but I also think it speaks to what a bright future we have. And so thank you for joining us today. Have a good rest of the day.

Thank you, sir. Ladies and gentlemen, this concludes the Southern Company Second Quarter 2026 Earnings Call. You may now disconnect.

Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company First Quarter 2026 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded.

I would now like to turn the call over to Mr. Greg MacLeod, Director of Investor Relations. Please go ahead, sir.

Thank you, Christine. Good afternoon, and welcome to Southern Company's First Quarter 2026 Earnings Call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and David Poroch, Chief Financial Officer.

Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q and subsequent securities filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com.

At this time, I'll turn the call over to Chris.

Thank you, Greg. Good afternoon, and thank you for joining us today. As you can see from the materials that we released this morning, we reported adjusted earnings results for the first quarter above our estimate, with year-over-year growth reflected across all our major businesses. That performance reflects premium execution and the strength of our strategy to serve the phenomenal growth we're seeing across the Southeast with reliable and affordable energy while delivering durable long-term value for shareholders.

We continue to see extraordinary growth and economic development opportunities as our service territories attract investment, people and jobs at a pace few regions can match. As we previously highlighted, a substantial portion of this growth is driven by projected demand from large load customers. The demand for power across our electric service territories has culminated in 23 gigawatts of contracted or late-stage load.

In just the last 2 months, we have signed contracts for another 1.9 gigawatts of customer load with high credit quality hyperscalers, bringing our fully contracted large load agreements to more than 11 gigawatts across our electric subsidiaries. These bilateral negotiated agreements are structured so that customers driving incremental demand cover the full share of the cost to serve them, helping to assure this growth benefits all customers.

We continue to execute on our plans to serve growth and our straightforward approach protects existing customers. We invest in line with demand to serve growth that enables us to deliver regular, predictable and sustainable results while providing meaningful benefits to the customers and communities we are privileged to serve. Southern Company continues to be uniquely positioned to do this because of our scale, our experience and our expertise, all supported by constructive long-standing regulatory frameworks.

At Southern Company, we are capitalizing on transformative growth opportunities while delivering energy reliability and rate stability as energy demands grow with base rates held stable in Alabama and Georgia until at least 2029, along with the recent filing to lower rates in Georgia, associated with the recovery of fuel and storm costs, we are demonstrating the value of this approach. Rate stability for our customers is a purposeful objective supported by our constructive orderly planning and procurement processes, cost management and thoughtful financing.

This same built-for-purpose approach also creates the potential for additional capital investment to serve incremental growth opportunities under established regulatory processes. We have routinely demonstrated as growth opportunities present themselves that Southern Company has the ability to convert these opportunities into value through enhanced operations and grid improving infrastructure investments for the benefit of customers and investors alike. The construction of many of these investments is well underway. In the last 2 months, Georgia Power achieved commercial operations for 2 battery energy storage systems, providing nearly 200 megawatts of capacity, representing an important step forward in advancing reliable, sustainable energy solutions across the state.

These projects are the first of several resources included within our 10-gigawatt portfolio of approved new generation resources that are in development to power the extraordinary projected growth in our region, including multiple battery systems and natural gas combustion turbines that are projected to be online later in 2026 and 2027.

Before I turn the call over to David for our financial update, I'd like to highlight the recently announced historic $26.5 billion in loan agreements with the Department of Energy that will benefit customers across Alabama and Georgia for decades. As we expect these loans to translate into meaningful long-term customer savings, while reducing pressure on our capital market needs. Over the approximately 30-year term of the DOE loans, this lower cost financing is projected to generate cumulative savings of $7 billion for customers.

David, I'll now turn the call over to you for a financial update.

Thanks, Chris, and good afternoon, everyone. For the first quarter of 2026, our adjusted EPS was $1.32 per share, $0.09 higher than the first quarter of 2025 and $0.12 above our estimate. The primary drivers of our performance for the quarter compared to last year were meaningful customer growth and increased usage, including from data centers at our state-regulated electric utilities.

Additionally, increased revenues in our gas utilities and higher energy-related revenues in our unregulated businesses, including Southern Power, were positive drivers in the first quarter. This was partially offset by higher financing costs and milder weather year-over-year compared to the first quarter of 2025. A complete reconciliation of year-over-year earnings is included in the materials we released this morning. Our adjusted EPS estimate for the second quarter is $1 per share.

Turning now to retail electricity sales. First quarter weather-normal retail electricity sales to all classes were 2.3% higher than the first quarter of 2025. This represents the highest total retail sales growth that we've seen in the first quarter in recent history. In fact, sales to all 3 customer classes were up year-over-year, including residential, where we saw 46,000 new customers added to our system as positive trends in net migration continue.

The commercial class grew 4.5% in the first quarter when adjusted for weather, bolstered by ongoing growth in data centers. Data center usage saw material expansion in the quarter, up 42% year-over-year, primarily due to accelerating usage ramps at large load facilities.

Our industrial sales grew 1.5% with particular strength in several segments, including robust activity at multiple steel manufacturers in Alabama. More broadly, the Southeast continues to stand out as one of the most attractive economic regions in the country, driven by a diverse mix of advanced manufacturing, technology and other energy-intensive industries.

In the first quarter alone, there were economic development announcements for over $7 billion of capital investment and the creation of nearly 4,000 permanent jobs in our region, including a global biopharmaceutical manufacturing project north of Atlanta, bringing $2 billion of investment and over 300 jobs to Georgia. This sustained high-quality growth reinforces why demand in this region of the country remains strong and visible, underscoring the region's tremendous opportunity for future growth.

Outside the Southeast, we continue to see momentum in our gas utilities, including a recently announced Hyundai investment in Illinois that is expected to bring 2,500 jobs and $500 million of investment to the Nicor Gas service territory. As we look ahead, the interest from large load customers in our electric service territories, which includes data centers and large manufacturers remains strong with a prospective pipeline of well over 75 gigawatts, and we continue to make incredible progress advancing projects through stages in our large load process to finality with executed contracts.

As Chris mentioned, over the past 2 months, Georgia Power signed 2 projects representing 1.9 gigawatts, pushing the cumulative amount of contracted large loads to over 11 gigawatts across Alabama, Georgia and Mississippi. These bilaterally negotiated contracts with pricing and terms designed to both protect and benefit existing customers also support our long-term financial outlook. We continue to see incredible momentum and tangible interest for power from large load customers and are in active late-stage discussions for another 12 gigawatts of contracted load through the mid-2030s, an increase of 2 gigawatts from what we shared last quarter.

Importantly, roughly 6 gigawatts or half of these late-stage gigawatts are expected to be finalized with executed contracts in the near term. In a little over 2 months, we've seen projects representing 12 gigawatts advance into the next stage in our large load process. The demonstrated progress we are making in attracting and signing new agreements with large load customers is exciting and continues to drive projected growth in our risk-adjusted load forecast, which ultimately helps inform future generation needs and generation requests for proposals or RFPs across our service territory.

For example, Georgia Power recently initiated the regulatory process for an all-source RFP to procure 2 to 6 gigawatts of new dispatchable generation resources, including from thermal generation, battery energy storage and renewables that are projected to be in service in 2032 and 2033. Generation procurement through RFPs deliver substantial value to customers and is a testament to the transparent and orderly processes in our vertically integrated state-regulated markets with long-range integrated resource planning. To the extent that company-owned resources are selected through Alabama Power and Georgia Power's active RFP processes and ultimately authorized by their respective PSC, these generation investments would represent substantial incremental investment above our current base capital plan.

Turning to Southern Power. We are moving forward to add 400 megawatts of additional capacity uprates through natural gas turbine upgrades in multiple existing facilities in Alabama and Georgia with commercial operation projected between 2029 and 2031. This incremental investment is projected to add approximately $700 million to our capital plan over the next several years. We continue to evaluate other growth investment opportunities at Southern Power, including an additional 300 megawatts of natural gas uprates as well as other new generation opportunities in both the Southeast and other markets to meet future demand.

Before I turn the call back over to Chris, I'd like to provide an update on our financing activities through the first quarter. We continue to proactively address equity needs that support our long -- our strong credit quality and path towards 17% FFO to debt by 2029. Over the last quarter, we sourced an incremental $500 million of equity through our at-the-market or ATM program with forward contracts that settle at our discretion by 2028.

Combined with the significant amount of equity previously sourced and including the incremental 700 megawatts of Southern -- I'm sorry, $700 million of Southern Power projected capital expenditures I mentioned earlier, we project a remaining need for equity or equity equivalents of approximately $1.8 billion through 2030 in support of our capital plan and long-term credit objectives. We are well positioned to continue financing our remaining equity needs in a credit supportive and shareholder-focused fashion.

I'll now turn the call back over to Chris.

Thank you, David. Last week, the Southern Company Board of Directors approved an increase of $0.08 per share in our annual common dividend, raising the annualized rate to $3.04 per share. This action marks our 25th consecutive annual increase, and this will now be 79 consecutive years, dating back to 1948, Southern Company has paid a dividend that is equal to or greater than the previous year. Increasing dividend 25 years in a row represents a historic milestone for the company and underscores our focus on premium risk-adjusted total shareholder return and our goal of delivering regular, predictable and sustainable value for our shareholders.

We are incredibly proud of our strong dividend track record, which continues to be an integral part of Southern Company's long-term value proposition. As we conclude our discussion today, our first quarter results reinforce a simple point. Our company is delivering. We're off to a strong start in 2026, and that momentum gives us confidence as we continue executing on our long-term goals. We're capturing growth, protecting customers and creating long-term value, and we're doing it in a disciplined, predictable way. With that foundation, we have a bright future ahead.

Thank you for joining us this afternoon and for your continued interest in Southern Company. Operator, we are now ready to take questions.

[Operator Instructions] Our first question comes from the line of Shar Pourreza with Wells Fargo.

Just on new nuclear, there seems to be sort of a consortium that's formed with utilities and hyperscalers maybe with some backstop by U.S. government around sort of new AP1000s. And it seems like there could be some views that hyperscalers would be willing to take on some of the cost inflation risk above budgeted amounts. One of your peers kind of highlighted that they wouldn't be surprised if the first deal was announced this year. Can you maybe comment on your views? Is Southern interested? Are you in the consortium? Just, I guess, some thoughts on new nuclear in light of the learning curves of Unit 3 versus Unit 4?

Yes, sure. I mean, a very, very good question. And let me at the outset say I am very excited to see all the actions that the Trump administration has taken to support the build and construction of new nuclear. I mean I've said it, you heard me say it many times with the growth that we see in this country, I think it's going to be important that we have -- make available new nuclear in this country to help and support and meet this demand.

I mean the Trump administration, I think, has taken some wonderful steps on the regulatory front. All the conversations that DOE is leading and having today about long lead times for supply chains, all of these issues are matters that we clearly have to address and get our arms around. All of these things can help mitigate risk associated with new construction. As you know, I mean, I said before, Southern Company is not at a place to make a commitment about building a new unit. We're going to continue to share the experiences that we gained from Vogtle Unit 3 and 4, sharing that here in this country and other places with other industries and other companies that are interested in moving forward.

But I'm very thrilled and very excited about the conversations and the commitments and the actions that are being taken, particularly around -- doing more around AP1000s with a group of companies. I'm glad to see this action and work being taken. Once again, be clear, we're not at a place for Southern Company in terms of making that kind of decision. But it's really exciting and real positive to see the work that's being led by this administration to support the development of new nuclear construction.

Got it. Perfect. And then just on Southern Power, obviously, there are a lot of opportunities there with existing tolling agreements that are going to start to roll off. I guess, have those renegotiation conversations started? But more importantly, are there any sort of conversations being held with potential hyperscalers with those assets? There seems to be more and more interest on the gas side. I'm just kind of curious there how you're thinking about that process.

So I guess I'd say the answer is yes and yes. I mean we're in the midst of some recontracting opportunities, and we've talked about kind of where we are and what we see in the 2030s. So yes, that work is underway. At the same time, with all the activity in the marketplace all across this country, we see there could be opportunities for Southern Power. So yes, they are having those conversations to see what's possible and what's doable.

They bring, I think, good construction support and good work that they have experienced all across this company with creditworthy counterparties. And so yes, I mean, there are conversations that they're having all across the sector to see what opportunities kind of fit our profile. But yes, I mean, let me end where I started. To your question, the answer are yes and yes. We're doing both.

Perfect. And then that's -- I would assume this is all upside to your 7% to 8%. You're not embedding any assumption around this.

Yes. I mean, once again, I mean, as we think about upside, Shar, we think about strengthening and durability. I mean, how do we kind of add length to our growth trajectory that we've laid out and things like Southern Power and additional large load projects that we're working on, all of those activities could support some additional capital investments, but it brings greater durability to our plan. And so that's kind of how we see all these upside opportunities.

Our next question comes from the line of Nick Campanella with Barclays.

So I guess you kind of answered it like what you've announced here, the incremental you see strengthening, lengthening the durability of the 7% to 8% CAGR. I guess just my question is just more on the load side and how you think that's affecting the reg strategy. I guess when I take a step back, you committed to these stay-outs late last year. And since then, you've kind of been making notable progress both on load visibility and usage ramp. So just how is that kind of creating or changing your philosophy around your regulatory strategy when you would actually go in and file again after these next stayouts? Are you kind of, I guess, ahead of plan on the load? And can that crystallize a further stay out for customers?

Yes, Nick, let me start, and I'll see what David wants to add. But I think the focus for us is more about rate stability. And so as we have structured these contracts with large loads to make sure they pay their full share and also making sure from collateral to making sure that from cancellation fees to minimum bills, the terms that we're looking to contract, all of that gives us protection, but also it supports our ability to make sure that we're protecting existing customers.

And so that gives us the opportunity for this kind of rate stability and freezes in Georgia through '28 and Alabama through '29. So as we do that work, all of that kind of supports, yes, the regulatory strategy, but more importantly, it supports our commitment to rate stability to our customers and making sure that all of our customers benefit from this growth that we're experiencing.

David, anything you want to add to that?

Yes, Chris. Nick, thanks. Great question. When we took this opportunity, we saw the road shaping up where these contracts were coming to fruition. The conversations we were having with these large load opportunities were really -- the momentum was building and we saw the opportunity to provide long-term stability for our customers, and it has really paid off quite well. These ramps are going exactly as we had thought. The opportunities that we came into with the DOE are further enhancing affordability and stability. Everything is just working out perfectly well with this opportunity and enhancing the benefits for customers.

Nick, does that get your question?

Yes. No, I appreciate it. And would you say just when you've set the -- when you made that commitment, are you in line with the plan on your load visibility or ahead of the plan? How would you characterize that, I guess?

We're in line. And yes, we're focused on getting to the top of the range and delivering what we say we're going to deliver. I mean that's one thing you can count on us to do. And so yes, we're delivering. And as we said in the opening remarks, we're delivering on what we said we were going to do. And so as we look at this great start to the start of the year, we're excited about where we are here in '26. But as we look long term, we feel very confident about the plan that we've laid out.

Okay. And then just my only follow-up was just as we think about wrapping in additional capital, I know you've given that sensitivity for incremental equity, but just thoughts on portfolio rotation at this time?

Yes. Nick, it's something that we've talked about regularly. We're always looking around. We are blessed to have the cards that we've been dealt and we love the portfolio. But if there's an opportunity out there where there's a better buyer -- I mean, a better owner of something, we're open to that. And if there's an opportunity for us to get in and buy something, we're open to that as well. It's got to be in the right circumstances, and we're always looking.

Our next question comes from the line of Julien Dumoulin-Smith with Jefferies.

Let me pick it up where my pal, Nick just left it off here. You've got $850 million of cumulative bill credits you guys have been talking about here. Is there a chance that, that number actually gets revised higher here as you just see this contracted large load number head higher, right? I mean, again, that was a snapshot as of a point in time. I imagine you could actually eventually be in a better position here on that point. I think it was partially what Nick was getting after.

Yes. Julien, you know we don't get ahead of our regulators, first of all. But clearly, as we continue to deliver these contracts in terms of how they're structured and how they provide additional benefits to existing customers and our focus on putting downward pressure on rates and bills for existing customers, we're always looking for those kind of opportunities. And so this deep focus that we have on rate stability and how we're using growth to support rate stability, clearly, as you laid out, that is a focus of ours.

I mean, as we talk about and we've signaled that I mean, Georgia Power is in the middle of storm recovery proceedings along with fuel recovery processes and how those 2 proceedings can provide benefits and lower bills for customers, that's kind of a major focus of ours as we think about rate stability as we do the work of signing these large load contracts as we focus on growth, as we manage this company, doing all we can to maintain rate stability but find opportunities to put downward pressure on rates for our customers. That is a keen principal focus of ours.

Awesome. Let me follow this up real quickly here because obviously, you're showing continued quarter-over-quarter success at the Southern corporate level on finalizing of contracts, right, as you show in that funnel chart, right, in your slide deck. But if I look at the 4Q '25 Georgia Power large load economic development report, it shows some degree of softening in contracted commitments here. And look, I just mean one needle. Is there something about Georgia versus your other states, maybe Alabama, where there's other states accelerating to offset Georgia? Again, there's a timing element here. Again, there's a lot of different numbers floating around, but I just want to make sure I'm understanding the core message here.

I think it's more about timing, but also, I think it's the other message that we've been communicating that we're seeing this activity migrate to the West. As we continue to see increasing activity in Alabama, yes, I mean, there is some churn in Georgia. But I would say the fire is still very hot in Georgia, but we're also witnessing greater activity in Alabama and Mississippi as well. But I think you can also look at that kind of pipeline number, still 75 gigawatts that I think reflects kind of all the activity that we see. The churn is more speculative, but I think you also continue to see kind of more hyperscale activity across the territory.

Yes, Julien, one thing to think about as well is recall the rules under which we're negotiating these contracts in Georgia and the need for these potential customers to demonstrate their commitment by posting collateral, that's really shaking a lot of the potentials out of there that are more speculative in nature and leaving Georgia Power to really work with a high-quality portfolio of potential customers in which we're choosing to contract. So I think what you're seeing really is a refinement of that and not a degradation at all. Actually, I'd maybe characterize it as a strengthening of that portfolio, if anything.

Strengthening in Georgia, nonetheless.

Very strong in Georgia, yes, yes.

Yes, 100%.

Our next question comes from the line of Carly Davenport with Goldman Sachs.

Maybe just one follow-up on the uprate opportunities at Southern Power on the gas fleet. I know you announced some of those today, and then it seems like there's another 300 megawatts on the table. Any sense you could give us on kind of timing in evaluating that opportunity? And is that sort of the extent of the uprate opportunity you see on the gas fleet at Southern Power?

From an uprate perspective, that really covers the whole fleet if we work through the rest of those opportunities. In terms of timing, we're working through that. That could be over probably the course of the next year or so. But yes, we set out a plan to explore opportunities to really uprate each one of the existing generation facilities within the Southern Power Company.

Yes. Carly, that construction is scheduled to begin this year in 2026. So this is kind of very immediate work that's about -- that will be done.

Got it. Okay. Great. And then maybe just to touch base on Georgia. Obviously, 2 seats up on the PSC for election this year. Just curious if you could kind of provide your latest thoughts just on the setup in terms of the focus areas of the candidates you've heard thus far? And just any views on kind of latest temperature in Georgia around affordability and development?

Yes. So as you know, I mean, there's -- the primary elections on May 19. If there are runoffs, they will be June 16. So yes, there's a lot of conversation that everybody is on the campaign trail, a lot of conversations about data centers and large load customers and things like rate stability. So I mean, all those issues are being debated on the campaign trail, and we'll see how that plays out in terms of the results of the election.

I mean one of the things that I'd just love to add in that regard, I mean, Southern Company has been around for over 100 years. And we've seen a lot of twists and turns politically. But with the experience that we've had and the ability to navigate whichever way the politics go from one side or the other, we, I think, have a tremendous history of being able to work with both parties of whoever is in office. And we feel comfortable and confident that because of the work we do across our communities and our employees live and work there, the commitments we have to the state, we're very confident about our abilities to continue to have a constructive regulatory environment no matter how these elections turn out.

Our next question comes from the line of Steve D’Ambrisi with RBC.

Just had a quick one. There's -- it seems like there's a pretty significant acceleration in like the pace of how you're moving these large loads into late stage and finalizing. And just there's a lot of numbers of gigawatts that are thrown around. So you added 2 and then you've expanded finalizing in late stage to 12.

Just how does that interplay with the 2 to 6 gigawatts like the sizing of the RFP that you're currently working on? And just like to the extent we see -- I just want to make sure I level set to understand like what adding 2 gigawatts to the contracted pipeline means or how much of the new RFP that eats up and then what any incremental signings mean for subsequent RFPs or if that makes sense?

Well, yes. No, it does. It speaks to kind of updates in the load forecast in terms of a result of the work that we're seeing and the demands that we're seeing from large loads, but also I don't want to take for granted the other large manufacturing opportunities that we see across the state. I mean there is a -- I mean, as we talked about, I mean, there's a lot of investment. There are a lot of people. There are a lot of jobs. There's a lot of capital and a lot of interest in our states. And what you see in that RFP is a reflection of that increase in load forecast.

The other thing I'd say to you, and we don't take it for granted, and we try to communicate this very carefully, but also just very proud of the fact, as you look at our structure, this vertically integrated structure that we have in terms of the orderly processes and the certainty that we can have with these bilateral negotiations in terms of understanding what these customers need and our ability to respond and to align with their needs is really, say, paying off, delivering.

And that's what you see through this RFP, but that's what you also see in this pipeline in this funnel that we speak to in terms of we highlight the work that we're doing, the activity that we're doing. And we're seeing, I guess, a new phrase we're using called repeat buyers. They find success and say, okay, you can deliver. Let's come back and get a little bit more. And so it gives us the reason to be very bullish about the robust activity and demand that we see in our territory.

Okay. That's really helpful. And then just a couple of the earlier questions were about accelerating the loads and what it means for affordability. But can you just talk a little bit about the fact that it seems like you guys are pricing these so that minimum bills cover the incremental cost to serve. And so to the extent you have ramp rates exceeding or coming -- exceeding minimum bills and coming close to what is actually projected by the hyperscalers, what that means for customer rates and what the timeline would be to discuss that with regulators?

Yes. Let me start, and then David, I'll kick it to you. I know there's been language out there about incremental. I mean I think for us, you've got to think more about full in terms of making sure they cover their full share. And as a result of doing that, that provides existing -- provides benefits to existing customers. And that allows us to even have consideration about things like maintaining rate stability and freezes and those kind of things and putting downward pressure on existing customers' rates.

By having -- by negotiating with these customers to make sure they're covering their full cost, growth provides an opportunity to provide benefits to existing customers. I mean growth is a wonderful value and benefit and contributor to what we've been able to do and what we've been able to deliver to all of our customers and particularly to our existing customers.

Yes. And Steve, you may also want to think about, I think, a differentiating factor in our contracts is the minimum bill that is established within the contract, and it is designed to recover all of the cost introduced into the system, like Chris said. But we're not, if you will, held captive to a variable pricing methodology in order to recover those costs. It's all embedded within the minimum bill. So you could think about it as basically writing a call option to the network.

And we recover our costs through that minimum bill, not through the variable pricing and making sure that the customer achieves their ramp rates. It's really a very thoughtful design, I think, a differentiating factor around the country, and it's really helping to protect our customers and provide the stability and downward pressure on rates going forward.

Our next question comes from the line of Nick Amicucci with Evercore ISI.

Yes, perfect timing there. So actually, David, I wanted to kind of hone in on that a little bit. Just the -- I guess, the attractiveness/the ability of you guys to kind of leverage the notion of virtual power plants and just kind of leveraging all of your asset base just being that you guys are fully integrated and the attractiveness of that to kind of just expediting this -- the time to power type of mechanism.

What's your question?

Yes. If you could just kind of comment on that and just kind of frame that. Is that part of the appetite, part of the attraction for you guys just to be able to expedite the process of time to power through that -- those types of mechanisms?

I think, I mean great observation. And you used the term vertically integrated. And I think that really does help us greatly in terms of marketing these contracts and having these conversations. The counterparty knows exactly where all of their generation is going to come from, where their transmission infrastructure is going to come from, where the distribution infrastructure is necessary to come from. And so we've been very transparent with our customers through these conversations to make sure that they understand the cost makeup, understand how it's going to happen, when it's going to happen, and we've been able to deliver on that.

So you kind of answered maybe your own question, and I'd point you back to the vertically integrated model under which we work and the transparent structured regulatory processes in which we go through to establish the approval for the capital that we're able to deploy and the resources that we bring to serve these contracts.

Great. No, that's helpful. And then if we kind of think about to just kind of the incremental growth kind of going forward and just the availability of -- just within the supply chain and turbine availability, obviously, you guys had kind of somewhat front-run these higher prices. So as we think about it, it seems like you guys are able to ring-fence a lot of the costs. But just like contemplating the generation source and generation asset kind of going forward, just how you guys are thinking about cost mitigating just the pricing increases that we've seen on if it's natural gas or something else, just kind of how we can kind of get that into a rate base and feel comfortable about it.

Let me say, and we talked earlier about size and scale. And that is one of the benefits that we bring to this period of time in terms of having these relationships, having worked with OEMs, having worked with turbine suppliers for years. And so we're in line. We have our positions, and we're having ongoing conversations with suppliers to make sure they understand what our needs are and we understand where they are and making sure that we're -- that this partnership is being valuable for both parties in terms of not only delivery of units, but also in terms of pricing.

And so I think in this marketplace, I do think scale matters, relationship matters, having history and experience also brings value. And I think we're bringing all of those characteristics to bear as we operate and function in this incredible transformative period.

Our next question comes from the line of Andrew Weisel with Scotiabank.

My first question is about the Georgia RFP. Apologies if I missed it, but what would be the timing of when the process is completed? And relative to that, when you'd have visibility into the company-owned resources and therefore, when we might see the CapEx update? I think you said it could be substantial incremental investment.

And then related, I think you said the in-service dates would be for 2032, 2033. Could there be appetite for something sooner in the case that demand might materialize earlier? Or is the process specific to that timing?

I hate to disappoint you, but you're going to hold your breath until the end of the year before we get through that process. So it's kind of a year-long process. And of course, we're not going to get ahead of our regulators and the overall process. So that's the first question. The second question was...

Could there be in-service dates sooner than 2032, 2033. Like in other words, I know a lot of -- you're pointing to new gas with those dates, but I know it's all resource.

Not tied to this RFP. Not for this one.

Not for this one. We'll go through the selection process through the rest of this year, and then that will lead to a certification process that will take us pretty much through 2027. And then to the extent that we work through that process and any of our proposals are selected, that would lead toward initiating spend probably in 2028 with those deliveries in '32, '33. And I think we've talked about this in the past. It's probably a decent rule of thumb for maybe 1 gig of company-owned resources might be 2-plus-ish of incremental CapEx in the latter part of the planning horizon and into the next decade.

Yes. And as you know, we're building some 10 gigawatts now that gets us through end of this decade and then the RFP that was certified at the end of last year, that kind of gets us into the early parts of the 2030s. So once again, that speaks to kind of the very orderly processes and planning processes that we have across our company.

Very helpful. Okay. Then just to clarify on the equity outlook. First, the $26.5 billion of DOE loan guarantees, am I right that, that would reduce traditional debt dollar for dollar without impacting the equity? Is that the right way to think about it? And then it looks like an incremental $300 million of equity relates to $700 million from the Southern Power gas uprates. What would be the timing of that? I think the uprates are for '29 to '31. So should I think of the equity being in the later years of the plan?

And just to clarify, if you do move forward with the additional 300 megawatts, would that require additional equity? Or is that sort of included? Sorry, I guess that was sort of a 3-for-1.

Yes, that's a multiparter. So first, yes, the DOE loans, that definitely helps our capital markets needs pretty much takes care of us for at least the foreseeable future. Great pricing helps with liquidity and at Georgia and Alabama, recall. Now you talked about Southern Power up rates. And yes, we're continuing along with that sort of 40% equity proportion as we grow that -- those capital opportunities. So that is incremental. That's what we talked about now.

And keeping us in line with that 17% FFO to debt as we explore those other opportunities beyond the $700 million we talked about today would likely carry about a 40% ongoing equity proportion. And we'll explore whatever opportunities are available to us at the time and take advantage of market circumstances. But I think it's a good rule of thumb to continue to expect about 40% of incremental capital to be funded through equity.

Our next question comes from the line of Richard Sunderland with Truist.

Just one for me. Recognizing the progress on the Southern Power uprates and the 300 megawatts to go. Just curious about sort of the overall development arc here given that progress on the uprates. Is it sort of tracking the expectations you laid out on the 4Q update? And how you think about the timing for more visibility into the, say, brownfield greenfield development there?

Yes. I think it's been -- it's tracking as we expected. The interest is very strong on both the recontracting opportunities that we have in negotiations with existing customers. Clearly, from a brownfield standpoint, we're in early-stage considerations of those possibilities. So I think probably later in the year, we'll be in a better position to give you kind of more update on kind of where all that stands. But as we said before earlier, we're executing on what we've highlighted. And so we're moving through the plan, I think, very orderly and delivering as we have outlined. But we'll keep you posted as we see results as projects begin to bear fruition.

Our next question comes from the line of David Arcaro with Morgan Stanley.

Wondering if you could speak to the supply chain and just where you stand currently in terms of access to some of the tight areas like turbines and labor, what you're seeing there?

It's -- in this current market, it's not anything you can take for granted. I would tell you, though, once again, I speak to the size and scale of our company and the relationships that we have with these suppliers. The headline would be we're very well positioned, okay? But still, that is not something we can sleep on. We have to continue to work it, whether it's turbines, whether it's transformers, whether it's wire, cable, you name it. That is something our supply chain organization continues to be very aggressive in terms of focused on.

We do have -- as we look at RFPs, we do have the turbines identified to support those RFPs. Also, you mentioned labor. We've had a long history of working with labor. We have, I think, an incredible relationship whether it's building trades, other organizations, labor organizations. And we continue to update them in terms of what our needs are, our construction schedules and kind of the skills that will be needed. And that relationship, those relationships, I think, will bear fruits from us because you got to expect there's going to be some tightness in the labor market.

And so I think those relationships will be very, very important. I mean I go back to doing the Vogtle construction at peak periods, we had some 10,000 laborers on the site. And all that we went through, through that project, I think, further enhance the relationship that we have with labor. We continue to be involved with them. We continue to have conversations about what's coming down the road and what our needs will be. I think those relationships will pay off very well for us in a very constrained environment.

So that would be my answer there. So it's about coordination, but it's also about a lot of our experience in terms of what we've done and the work we've done, things we've built. So I feel good about where we are, but we got to keep getting better there. We got to keep working it.

Got it. Yes, I appreciate that. Very helpful. And then I just wanted to maybe double check. So when would new generation be needed, I guess, as you sign more large load contracts? Like how do we think about the next round of an all-source RFP? Is there a certain level of gigawatts that you'd expect to trigger that for another round here or more just a matter of time?

So I think I mentioned earlier on the call, I mean we're in the midst now of building 10 gigawatts that will support activities and demand through the end of the decade. The RFP that was certified in Georgia end of last year would take us through the early stages of the 2030s. And then this RFP looks more at 2032, 2033 time frame, somewhere between another 2 gigawatts, 6 gigawatts.

I mean, so we're lining up pretty well in terms of matching up with the needs that we're seeing across the economy and across the market. Alabama is also active from an RFP standpoint. So I feel pretty good about how we're matching up with the demand and load forecast to meet those needs between now and the mid-30s.

Our next question comes from the line of Paul Fremont with Ladenburg Thalmann.

A really strong result for the quarter. I just wanted to pursue a little bit Southern Power. Can you give us a sense of how much of that capacity is currently contracted today?

We've set numbers up in the mid-90s in terms of what's contracted, but we know many of those contracts go through in the mid-30s, but we signaled before, but there may be some early review of some of those contracts and early negotiations in terms of potential recontracting. And then there will be the opportunity to actually have new conversations about some of that capacity being made available. So it puts us in a pretty strong position as we see pricing opportunities. But kind of -- once again, I think we're -- Southern Power is in a real strong position, recognizing the demand that's currently in the marketplace and what they're seeing around pricing.

And then when I look at the 400 megawatts, should I assume that you've already contracted for that capacity? Or would -- or is it likely that when it's built, you will contract for it?

No, we're in -- you mean the 400 megawatts that we announced, the uprates?

Yes, the uprates. The 400 megawatts of uprates.

Yes, those are ongoing conversations, fairly late stage. We'll be wrapping those up in the relatively near future, but those conversations are well in hand.

So likely, by the time it's built, it will be contracted.

That is clearly our expectation. I mean...

And then I would assume -- sorry.

Paul, are you still there?

Yes, yes.

You finished up your question. You would assume what?

I would assume then that part of the decision on the 300 megawatts would basically be assessed based on your ability to potentially contract that additional amount as well?

Yes. And think about it consistent with the way we've run Southern Power over the years is we're always looking at high credit quality counterparties, typically load serving, maybe other investor-owned utilities, EMCs, munis. But yes, we definitely do not build it and see who shows up.

And then last question for me. The price per kW seems pretty close to what it would cost to build at least a new CT, if not all that far off from a new CCGT. So in terms of your consideration of new build, would that also likely revolve around your ability to contract the plant before it's completed?

Yes, for sure. I mean new build or the uprates, same operating philosophy, long-term strategy, long-term creditworthy counterparties. And it just fits in the business model that we've held to for years and would continue to execute in that same fashion.

Yes. We said before, we don't take merchant risk. We're not in the merchant business. So everything is...

And then most likely in your service territory that the party that you're contracting with is probably another utility like a co-op or something like that?

Yes, that's typically the case. That's right.

And that will conclude today's question-and-answer session. Sir, are there any closing remarks?

No. Again, let me thank you guys for joining us, and we're excited about the growth we're experiencing, and we're excited about the operations of our company. I'll end where I started. We believe we have a bright future ahead. And so thank you for joining us today on this first quarter earnings call. Everybody, stay safe. Have a good day.

Thank you, sir. Ladies and gentlemen, this concludes The Southern Company First Quarter 2026 Earnings Call. You may now disconnect.

Good afternoon. My name is Sherry, I will be your conference operator today. At this time, I would like to welcome everyone to Southern Company Fourth quarter 2025 Earnings Call. [Operator Instructions].

I would now like to turn the conference over to Mr. Greg MacLeod, Director of Investor Relations. Please go ahead, sir.

Thanks, Sherry. Good afternoon, and welcome to Southern Company's Fourth Quarter 2025 Earnings Call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and David Poroch, Chief Financial Officer. Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements including those discussed in our Form 10-K and subsequent securities filings.

In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com.

At this time, I'll turn the call over to Chris.

Thank you, Greg. Good afternoon, and thank you for joining us today. 2025 was an outstanding year for Southern Company, and the operational and financial results we delivered are a testament to the dedication of our nearly 30,000 teammates across this company. We achieved adjusted earnings at the very top of our EPS guidance range in 2025, and it is clear that our commitment to putting customers and communities first, while leading the way to a stronger, more resilient energy future is delivering exceptional value to our customers and investors.

And this terrific execution across all aspects of our plan over the last year has substantially strengthened our outlook for 2026 and beyond, ultimately driving higher long-term earnings expectations.

David, I'll now turn the call over to you for more details on our financial performance for 2025.

Thanks, Chris, and good afternoon, everyone. As you can see from the materials we released this morning, our reported strong adjusted earnings per share of $4.30 for 2025, which, as Chris mentioned earlier, was the very top of our 2025 guidance range and represents 6% growth from adjusted earnings the prior year and 9% average annual growth from 2023. This also represents adjusted earnings results at the top of or above our annual guidance range for the 11th year in a row.

Combined with delivering improving credit metrics and a remarkable dividend track record over the last 8 years, including dividend increases every year for the past 24 years, we are delivering on our objectives of regular, predictable and sustainable financial results and superior risk-adjusted long-term returns for investors.

The primary drivers for our performance compared to 2024 were continued investment in our state-regulated utilities, customer growth and increased usage in our electric businesses and growth from wholesale, electric and other revenue sources. These positive drivers were partially offset by higher operations and maintenance expenses, depreciation and amortization and interest costs. A complete reconciliation of our quarterly and annual adjusted earnings is included in the materials we released this morning.

Turning now to electricity sales. Weather-normalized total retail electricity sales for the year were up 1.7% compared to 2024. The electric sales growth in 2025 is substantially higher than the growth we've seen in recent history. To put this in perspective, 1.7% year-over-year retail sales growth in 2025 is more than double the cumulative growth we saw over the last decade.

Each of our electric operating companies saw positive weather normal sales growth for the year, with Georgia Power growing 2.5% from 2024. In fact, all 3 customer classes were up for the year, demonstrating a strong and resilient economy in our Southeast service territories. Commercial sales were particularly strong, led by increased usage from existing and new large load data center customers, which were up 17% year-over-year for the second year in a row.

2025 was another strong year for residential customer growth with the addition of 39,000 new electric -- new residential electric customers and 25,000 new customers across our natural gas distribution businesses. Electricity sales to industrial customers also demonstrated continued strength, growing 1.4% in 2025 over the prior year with 4 of our largest industrial customer segments showing gains, including the primary metals, lumber, paper and transportation segments. These trends across all 3 customer classes highlight the broad strength we continue to observe across our electric service territories.

Chris, I will now turn the call back over to you to kick off our long-term business update.

Thank you, David. Looking back, I'm convinced that 2025 will stand out as a transformative year for Southern Company. One in which we achieved milestones that will propel the future rig business and customers for generations to come. We are in the midst of a watershed moment for the energy industry and our nation. And Southern Company is extraordinarily positioned to capture and serve growth in a way that delivers value for both customers and investors.

Economic development activity at our utilities is robust and provides a tremendous foundation for sustainable growth. Over the past year, more than 120 companies either made the decision to locate new facilities or announced expanded operations in our electric and gas service territories. These projects are expected to support over 21,000 new jobs, further highlighting the economic strength of the regions we proudly serve.

Our companies have proven to be attractive partners for a diverse mix of new customers, including the large technology companies known as hyperscalers, who have made significant investments in our service territories. In addition to data centers, some of the larger announcements over the past year were in the manufacturing, automotive, aerospace and metals industry, with familiar names that include General Electric, U.S. steel, Duracell and Mercedes-Benz.

Our model is continuing to prove well suited to serve customers' growing needs while also enabling our local communities to thrive. Recall, our 3 electric utilities, Alabama Power, Georgia Power and Mississippi Power operate in vertically integrated markets, where we provide a one-stop shop for customers because we own the generation, transmission and distribution networks to reliably serve their needs even at significant scale for large float customers.

The orderly, transparent and constructive regulatory processes in which our utilities operate are designed to reliably and sustainably serve growth while helping to ensure that all customers benefit from that growth. And this design is proven and effective. We are demonstrating the value of this approach through approvals for a significant investment in energy infrastructure, while also proving providing rate stability over the next several years and into the next decade.

Our scale, balance sheet strength and wherewithal in large construction projects further bolster the necessary execution that would be critical for this ongoing expansion. Our 4 gas utilities, also known as local distribution companies, or LDCs, proudly serve over 4 million customers across Illinois, Georgia, Virginia and Tennessee.

This summer will mark the 10-year anniversary of the acquisition of what is now called Southern Company Gas. Since that acquisition, Southern Company Gas has exceeded all of our expectations, and we're extremely proud to have at it these growing businesses. These 4 state-regulated LDCs have continued to work constructively to make significant investments in safety-related pipeline replacements and other modernization efforts, which have combined to triple their authorized rate base since the acquisition, while increasing customer value.

As we look to future growth opportunities, it's important to recognize that our LDCs operate in 3 of the top data center markets in the country. and are active in discussions with several large customers on solutions to directly or indirectly serve this potential growth.

Southern Power, our competitive power business has an industry-leading portfolio of assets with both technology and geographic diversity. Substantially, all its assets are under long-term contracts with creditworthy counterparties, and we don't take meaningful commodity risk in these contracts. In total, Southern Power's portfolio has over 13 gigawatts of capacity across 55 generating facilities in 15 states including over 7 gigawatts of natural gas generation in the Southeast.

The budgeting need for reliable, dispatchable energy provides significant opportunities for Southern Power. First, as contracts on our existing natural gas fleet come up for renewal beginning in the early 2030s and becoming more meaningful in the mid-2030s and there are significant opportunities for improved upside pricing.

The market demand for capacity has increased pricing roughly 2 to 3x higher than where many of these assets are currently contracted. And by 2030, Southern Power has an opportunity to remarket approximately 1,000 megawatts of natural gas generation capacity.

Second, we're in late-stage discussions to move forward what operates of up to an additional 700 megawatts of capacity for Southern Power's legacy natural gas fleet to meet future projected market demand.

And lastly, Southern Power is exploring opportunities to add new natural gas generation at its existing plant sites in the Southeast as well as options for new generation resources in other markets to serve data centers and other large load customers. We are very pleased to have successfully developed this incredibly valued business as it represents a tremendous opportunity to support sustainable growth well into the next decade.

We are also excited about the growth opportunities we're seeing at some of our smaller subsidiaries, including PowerSecure and Southern Telecom. PowerSecure specializes in providing utility and energy solutions, including Bridge Power to commercial, industrial and load serving customers and it is uniquely positioned to grow as demand for customer-sided solutions increases, including in response to extreme weather events, utility distributed energy resource programs and bring your own generation mandates.

Southern Telecom, in partnership with our electric utilities deploys fiber optic infrastructure that serves as an important and attractive additional product offering enhancing the appeal to data-intensive customers to locate in our Southeastern service territory.

David, I'll now turn the call back over to you to discuss our strategy and incredible portfolio support the durability of our further strengthened financial outlook.

Thanks, Chris. Starting with our sales forecast, we project retail electric sales to grow at least 3% across our 3 electric operating companies in 2026. On average, from 2026 through 2030, we project annual electricity sales growth of 10%, an increase of 2 percentage points from our prior long-term sales projections.

Georgia Power's total retail electric sales growth is projected to be approximately 13% over the same period. Our long-term sales forecast is supported by robust interest from a wide range of large load customers including hyperscalers and as we continue to see momentum grow in Alabama and Mississippi, our total large load pipeline has increased to over 75 gigawatts. This tangible interest and growing momentum have materialized into 26 signed contracts, representing 10 gigawatts of fully contracted electric service agreements today, which is 2 gigawatts higher than what we reported last quarter and 4 gigawatts higher than a year ago.

These 26 customer projects, nearly all of which are currently under construction include load ramps totaling 8 gigawatts by the end of our 5-year planning horizon, ultimately ramping up to 10 gigawatts beyond 2030.

Importantly, in addition to these signed contracts, we are in late-stage discussions for another 10 gigawatts of load, 3 gigawatts of which are working through final reviews and are highly likely to progress to an executed contract in the near term. Based on the timing of the associated load ramps for the projects in our risk-adjusted forecast, including the contracts we have signed, we project sales growth and the associated revenues to accelerate into 2027 with an even more pronounced expansion in 2028.

Considering the composition and strength of our large load pipeline, we project commercial sales, which currently comprise roughly 1/3 of our total retail sales to more than double, growing roughly 20% annually through the end of the decade. The framework and methodology under which we approach contracting with large load customers are, we believe, one of the best in the industry and are uniquely designed to benefit and protect existing customers and investors.

Across all our electric jurisdictions, our regulatory frameworks allow for bilaterally negotiated contracts for large load customers rather than the use of a standard tariff. This provides each utility with the necessary flexibility to appropriately price large load customers in a manner designed to more than cover the incremental cost to serve them, helping to ensure this growth can immediately benefit existing customers.

Our contracts include a robust set of terms and conditions. Contracts carry minimum terms of at least 15 years for data centers with some going out even further. Over the term of the contract, there are fixed or minimum build provisions similar to take-or-pay structures that factor in the customers requested load ramps and are designed to cover at least 100% of the annual incremental cost to serve, including the necessary generation and transmission investments incremental O&M and our cost of capital.

These contracts also include strong protections in the form of termination payments tied to the incremental cost to serve over the life of the remaining contract with significant collateral requirements tied to the termination payments, to provide additional layer of security and protection for our retail customers and investors.

Our disciplined approach to pricing these large load contracts is already translating into significant benefits and tangible savings for existing customers, largely as a result of their ability to sustainably capture growth Georgia Power and Alabama Power, our 2 largest subsidiaries worked constructively last year with each of their public service commissions to implement multiyear rate stabilization agreements.

As we deploy significant capital to serve this extraordinary projected growth, we're working with our public service commissions to help ensure existing customers benefit as this growth serves to support rate stability.

In December, as a part of its certification process for new generation, Georgia Power was able to quantify at least approximately $1.7 billion of benefits that will help to lower cost to serve existing customers from 2029 through 2031. This customer benefit is directly attributable to the value created by our approach to contracting and serving new large load customers.

Recall, our approach to large load contracts include minimum build provisions designed to offset other costs throughout our business, ultimately providing savings to customers while helping to ensure that we deliver on our financial commitments.

Combined with continued constructive regulatory outcomes in our states, our unique approach to serving projected growth from large load and data center customers is delivering mutual benefits to all stakeholders. In addition to our recent large load customer outcomes, earlier this week, Georgia Power made filings for its storm and fuel cost recoveries that, if approved, would collectively lower rates for customers starting this summer.

Turning to our capital plan. Our base capital investment forecast is $81 billion over the next 5 years, 95% of which is at our state-regulated utilities. This represents an $18 billion or approximately 30% increase from our forecast just 1 year ago. The main drivers of this capital plans increase are related to new generation facilities, most of which were announced or approved in 2025 and the approved Integrated Resource Plan, or IRP, in Georgia, which included incremental investments in existing infrastructure.

These investments include uprates for more capacity at existing natural gas and nuclear facilities as well as modernization of hydroelectric dams. Through 2030, we expect to invest roughly $42 billion or over half of our total 5-year capital plan to reliably serve projected growth through the combination of new generation, enhancements to existing generation assets and expansions of our transmission and interstate pipeline systems.

Our capital investment plan supports projected long-term state-regulated average annual rate base growth of approximately 9%, a 2% increase from our forecast 1 year ago. Our base capital investment forecast reflects an approach to capital planning that is consistent with our approach in the past, we do not include capital placeholders nor do we include potential capital investments, which remain subject to regulatory processes.

Beyond our base forecast, there are several opportunities for our capital plan to continue to grow. For example, Alabama Power and Georgia Power have either begun or expected to begin request for proposal or RFP processes to procure generation resource needs forecasted in the early to mid-2030s.

These RFPs could represent several gigawatts of additional new generation. In addition, as we've highlighted before, there are also potential natural gas pipeline investments, either through our FERC-regulated interstate pipelines or through midstream-like investments at our LDCs to directly or indirectly serve projected growing energy needs.

Similarly, we have not included the opportunities Chris mentioned earlier for Southern Power in our base capital plan. Ultimately, based on our traditional disciplined planning methodologies combined with the additional opportunities we see to serve projected growth as we get more line of sight on specific projects, it is reasonable to expect that our capital forecast could continue to increase.

The updated financing and equity plan we provided supports our base capital plan and continues to fund the business in a credit supportive manner. Preserving our long -- preserving our strong investment-grade credit ratings continues to be a priority as we believe that to be a premium equity investment, a company must also be a high-quality credit.

There is no greater evidence of our commitment to credit quality than our actions in 2025 to proactively address $9 billion of equity needs -- in addition to our internal equity plans and issuances of junior subordinated notes, which received 50% equity treatment from the rating agencies our recent actions included pricing $4 billion of equity through our at-the-market or ATM program with forward contracts that settle through 2026.

Additionally, in November, we issued $2 billion of equity units through a mandatory convertible, which will settle in shares in 2028. Importantly, in our forecast, nearly all $9 billion of the equity we have already addressed, is expected to be issued or settled by 2028.

Consistent with our increased capital investment plan, we project the remaining need for equity or equity equivalents of approximately $2 billion through 2030 to continue supporting our long-term credit objectives. We plan to remain proactive in our approach as we seek to sustain or improve upon current credit metric profile. Roughly 15% FFO to debt through 2027 as we continue to deploy significant capital investment to serve our forecasted growth.

Beyond 2027, improved projected cash flows from large load customers and the broad growth we project across our businesses, along with the completion of several large capital projects in our base plan, credit metrics are projected to improve and ultimately position us to achieve credit metrics consistent with our continued objective of approximately 17% FFO to debt by 2029.

To the extent incremental capital opportunities materialize, our credit quality objectives will remain consistent. Accordingly, we would expect to finance incremental capital investment above our current plan with approximately 40% equity or equity equivalents. We expect to continue to be flexible and to use the same shareholder-focused discipline we have demonstrated historically when it comes to sourcing incremental equity or equity equivalents.

As I mentioned earlier, we have a remarkable dividend track record as Southern Company has paid a dividend that is greater than or equal to the previous year for 78 consecutive years, with consecutive increases over each of the last 24 years. For decades, our dividend has been an integral part of our value proposition for shareholders.

While future dividend increases are subject to approval by our Board of Directors, we project continued modest increases in the dividend over the next several years. This should serve to lower our dividend payout ratio into the low to mid-60% range in the latter portion of our forecast horizon.

As we balance our equity needs, we fund the growth we are projecting. At that point, subject to Board approval, we will be in a position to reevaluate the pace of dividend growth, potentially increasing the rate at which we grow annual dividends to shareholders.

Turning now to our earnings guidance for 2026 and beyond. Our adjusted earnings per share guidance range for 2026 is $4.50 to $4.60 per share. Our adjusted guidance range represents 7% growth from the top and bottom of our 2025 adjusted EPS guidance range. The estimate for adjusted EPS for the first quarter is $1.20.

As we've highlighted today, execution and the achievements across our businesses over the prior year have meaningfully strengthened our outlook. And we are positioned for exceptional growth. Over the next 3 years, we expect to grow adjusted earnings per share 8% to 9% from 2026 through 2028.

In recognition of the timing visibility and confidence associated with projected growth during this period, we are establishing initial guidance ranges for each of these years. In addition to the 2026 range I provided, our initial guidance range for 2027 is adjusted earnings per share of $4.85 to $4.95, which represents approximately 8% growth from 2026. For 2028, we project adjusted earnings per share to grow approximately 9% from 2027, resulting in an initial guidance range of $5.25 and $5.45.

Longer term, we expect adjusted earnings to grow approximately 7% to 8% from our 2028 guidance range. This projected earnings growth trajectory provides for an average annual adjusted earnings growth profile of 8% from the 2026 guidance midpoint to 2030. We expect this outlook to be durable supported by a large and growing portfolio of large load contracts, a robust capital investment plan and visibility on an efficient equity and debt financing plan that is designed to support credit quality and customer rate stability.

With the potential for continued momentum on growth above our base plan and the incremental capital deployment opportunities that would be required to serve it as well as the success -- we expect to -- in repricing portions of Southern Power's capacity through the next decade, we believe there could ultimately be upside to our long-term outlook beyond what we laid out today.

With that, I'll now turn it back over to Chris for closing remarks.

Thank you, David. We are clearly in a phase of execution. The planned large-scale build-out across our electric system in the Southeast over the next several years is tremendous and southern company's experience, expertise and scale support the necessary execution. We secured the labor and equipment for these projects through early EPC agreements and reservation payments well in advance on our leveraging relationships across our vast supply chain.

We have unique experience with large construction projects, recently completing the only 2 new Nuclear units in 3 decades, showing we can do hard things. The lessons learned from completing Plant Vogtle unit 3 and 4 along with other recent generation projects have helped inform our robust set of project controls and tools to assist our team's efforts and help ensure we are well positioned for timely execution.

Our focus on operational excellence extends into every facet of how we serve customers, including for even the most extreme weather conditions. Over the last 2 months, the daily lives of Megan across the Eastern United States, including those in the territories we are poised to serve have been impacted by extreme cold weather temperatures and severe weather conditions.

I'm incredibly proud of the way Southern Company's electric and gas teams safely performed under these harsh conditions for our 9 million customers. Events such as Winston Farm in January, where our systems serve the second highest winter peak electric load of over 39,000 megawatts demonstrate the value that our vertically integrated system brings to our customers and the importance of continued strategic investments and the resilience and expansion of energy infrastructure.

Our team's exceptional performance providing reliable energy and quick response to service interruptions throughout these events also speaks to the thorough preparation and commitment of our employees. Innovations such as recently deployed AI tools that helped our leaders preposition crews to be ready to safely and quickly respond and self-healing networks that allow transmission and distribution lines to isolate outages and reroute power highlight the value that our continued infrastructure investments provide to accelerate restoration efforts and support delivery of the energy on which our customers depend.

Our energy leading innovation, our focus on resilience and our deep commitment to the people and communities we are privileged to serve are but a few key drivers of why Southern Company was recently recognized as the #1 electric and gas utility in Fortune Magazine's list of most admired companies for 2026. In honor, we are proud to receive and a standard we endeavor to earn each and every day.

As we conclude our discussion today, I want to emphasize how excited we are about the future here at Southern Company. We are experiencing incredible growth, and we are making investments in all parts of our business to recognize the value of the extraordinary opportunities in front of us, while ensuring that rate stability and reliability and value to customers remains our top priorities.

Southern Company was built to serve growing economies and to foster economic prosperity in the territories we serve. I am proud of how we are leading the way with this mission and working to ensure that enduring impact from this extraordinary growth opportunities is unquestionably positive for all stakeholders.

While the size and velocity of this growth is arguably unprecedented, the discipline and customer-focused approaches investors expect from our company remain evident in both our outlook and our execution. Whether it's the long-term stability of our customer rates, the economic benefits we are capturing for existing customers, our measured risk-adjusted approach to load forecasting the high priority we place on balance sheet strength and credit quality or our focus on the long-term durability of EPS guidance. We endeavor every day to be the premier must-own utility, and to deliver regular, predictable and sustainable results and superior risk-adjusted returns to investors over the long term.

Thank you for joining us this afternoon, and thank you for your continued interest in Southern Company. Operator, we are now ready to take questions.

[Operator Instructions]. Our first question is from Nick Campanella with Barclays.

Thanks for all the updates. I appreciate it. So I guess, you've always been a pretty conservative company and you've taken 5% to 7% to 7% to 8%. I know it takes a lot to go there. Appreciate the new outlook. Maybe just wondering how you're kind of trending in the beyond '28 time frame at the base level, just acknowledging your comments that you kind of said that the Southern Power of repricing might put you higher maybe at the top end. So is this plan really built for the midpoint in '29 and 2030? And what would kind of put you lower or higher in the range based on the range of outcomes?

Nick, I mean I think we got to go back to your initial comment, I mean, you know us. I mean, you know how disciplined we are, you know how thoughtful we are in terms of setting expectations. And so as we look forward in terms of the execution around these 10 gigawatts of projects and what we see, the 3 gigawatts in final stages of 7 gigawatts in late stages and looking at the pipeline of some 75 gigawatts. I mean that gave us confidence to make the changes in the adjustments that we've announced today.

And not only here through '26, but as we speak to additional growth in '27 and '28, I mean, this work -- this activity we see supports what we've outlined. I mean we've also announced the economic expansion that we see all across the company, 120 companies locating in our territory, 21,000 jobs the 17% year-over-year data center growth. Sales growth this year of 1.7% and what we've spoken to going into the latter part of the decade.

So we see the strength we see -- as we talked about, the potential upside from Southern Power. So yes, I mean, we are very confident and we -- as we talked about earlier, in years past, it was important for us to see the durability a long-term focus for us that we thought was necessary to make this adjustment.

And I might add on to that, that we put guidance expectations out there, and they're a target for us to go get. And be pretty disappointed if we didn't achieve near the top end of that. Now 2028 is a long way out. But we do see opportunities out there that provide upside and there's potential to be higher.

And then maybe just as we think about the 3 gigawatts that you highlighted on the load side, which seems to be much more near term, just would that be served entirely with gas and can we do the math and what that CapEx would be, if it's all new build? Or how are you kind of thinking about sourcing the generation for that?

It continues to support our all-of-the-above strategy. Clearly, I mean, I think there's -- as we talked about in our plan, there's a lot of gas in the plan, but you're going to continue to see battery energy storage. I mean, some of the opportunities that we have mean we'll look at all the resources in terms of how we meet this growth opportunity going forward from an all-in above approach.

Our next question is from Steve Fleishman with Wolfe Research.

So thanks for the very extensive update. And a couple of questions. So first on the -- you mentioned the 3 gigawatts that are in late stage. -- highly likely. Just would those impact the current plan or would they come on afterwards? Just how do we think about the timing of the investment for that. Is that part of your kind of potential upsides comment?

Yes, Steve, those contracts -- I mean they're very near term, and they're working through our counterparties approval process, board approvals, all that. So we see those contracts being signed imminently. And they are baked into our forecast today. Keep in mind, these have ramp rates that move out beyond our planning horizon right now, but they are baked in.

And keep in mind, we also have a very conservative risk-adjusted approach to modeling our loads and those load models then drive into our revenue expectations and projections, which bake into our plan. So they're in there, but they do go beyond, they do extend beyond our planning horizon. And they just help us with the confidence in what we're trying to achieve.

Okay. So just maybe I didn't understand this. So the current plan that you laid out through 2030 includes the 10 gigawatts that are signed plus this 3 gigawatts that are highly likely?

Correct.

Okay. And -- but that's it. The stuff beyond that is not included.

Correct. Yes.

All right. Good. And then when you talk about the upside to the growth rate, is that within the plan to 2030? Or is it thinking like beyond 2030 or both? Can you kind of talk about Southern Power and a lot of those drivers. I think you talked about kind of 2030 and beyond.

Yes, Steve, great observation. It really is kind of both. I mean we see the opportunity to grow at that 7% to 8% trajectory beyond 2030. I can't necessarily commit that that's indefinite, but it certainly goes beyond our planning horizon right now. And everything we see in front of us with the contracts that are near term, the contracts that we've signed, what we've been able to accomplish on the regulatory front, just give us a lot of confidence in where we're looking.

Okay. Two other quick questions. First, just on the data center growth in Georgia. Just there's been, I think, generally more noise in a lot of states, but also in Georgia on data center siting and zoning. Just how do you feel about the 13 gigawatts, I guess, in your plan on that? Are they all pretty much zoned and the like. And how are you thinking about that issue?

Those 13 -- I think the 10 gig are under construction. So we feel very confident about the projects -- the numbers we're talking about. -- across Georgia, Alabama and Mississippi. We feel good about those projects. And yes, there's a lot of conversation, but these projects continue to advance and progress across our states.

Our next question is from Julien Dumoulin-Smith with Jefferies.

I'll pick it up where Steve left off, honestly. As you said, it's reasonable to expect CapEx increases, right? You've alluded to this Alabama Power RFP for 31 and 32. Georgia Power's own further RFP for 32 and 33. Can you speak to what you're seeing the leading edge on those rather than talking about the demand side, let's talk about the procurement side and try to feather that against how you would think about that increase in CapEx even through 2030. What's the total scope -- and then also you may be in light of the latest quarterly large load update, I think that increased by 15 gigawatts in the latest update, I think, from last week. How does that impact the scope of that RFP when you think about what could credibly get done here?

Yes, Julian, great question. The portfolio grows across all 3 of our electric -- the opportunities grow across all 3 of our electric companies -- and last couple of quarters, we talked about growing momentum, conversations spreading to the west, and we're really seeing that. What you noticed in the Georgia Power large load update is just normal churn coming in and out of the pipeline.

And we actually look at that being really healthy in terms of getting the highest opportunities to contract to the top of the list. And as we get closer in terms of contracting in these negotiations, our counterparties really start to refine and sharpen their pencils about what their needs really are. And so yes, I think you pointed out a good observation that, that kind of short end of that pipeline is contracted a little bit. But that really brings more precision to us, and we're really pretty excited about getting those better opportunities to the front of the line.

In terms of opportunities beyond what we have in the capital plan, if you think about a rough rule of thumb, I would think you could probably maybe estimate $2 billion for a gig of incremental generation I think that's kind of what we're seeing in the marketplace and what our expectations might be.

Yes, that's pretty sizable in turn then. And then maybe if I can, right, the release last week flagged the potential divid in the near term, right? The energization ramp, if you will, for 28 29, a slight downtick in that period of time. what exactly are customers doing? Are they deferring initial energization dates? Are they starting at lower utilization? Are they restructuring the ramp profile? And then maybe in terms of earnings impact, you guys provided this latest update how do like the minimum build protections in your contracts potentially insulate earnings from these what seem like every quarter, some slight fluctuations in the near years of this ramp?

There's a lot in there, Julien. Let's start to unpack some of that. So in terms of the way we design the contracts, we talked about the minimum bills and what that looks like. And so we have the opportunity to negotiate exactly what our counterparties ask of us. And like I mentioned before, as you make your way through the pipeline and we start having conversations about your needs and have those negotiations, counterparties are really sharpening their pencils about what they need.

Keep in mind, as we have those conversations, counterparties are also posting collateral. So they're really having to put up some assets backing up their asks. And so that kind of motivates people to sharpen their pencils as well. And so in terms of what we see out in the future, we look through these things moving through our pipeline and are really excited about the ability to close on these contracts.

And Joe, one thing I'd add. One of the things we're experiencing as we see this existing data centers come online, we're learning about their profiles, their ramp rates. And so like I said in the past 2 years, we've seen 17% year-over-year. I mean, so we're learning how this is playing out. And that factors into the plan, but we know it will be -- it may be variable to some extent. But it's a great learning that we're experiencing through these existing data centers that we already have online.

And those learnings really drive into how we shape the outlook and how we formulate the load forecast and that translates into how we drive our revenue expectations.

Our next question is from Carly Davenport with Goldman Sachs.

Maybe just on the data center outlook in Georgia and just some of the noise around affordability, there's been some legislation introduced on moratoriums or other regulations around data centers. So could you just provide your views on how much do you think some of those pieces of legislation have and if it's kind of coming up in any of your conversations with prospective customers.

Yes. I mean there's a lot of conversations and activity around data centers all across the country, as you know very well. The thing that we're excited about here is that the projects continue to advance. The pipeline continues to grow. We continue to bring these data centers online, continue to reach agreements with projects that we've talked about with projects that are in final stages in late stages. The momentum here will continue.

Yes, I think there will be continued conversations around what will be the impact on pricing. I think we have to continue to tell the story about the benefits to all existing customers because of these projects. And also, the things that I also get excited about some of the data center partners that we have, they're involvement in the communities across the state, making charitable investments in these communities to show the benefits that they bring to those communities.

So I think support for communities, also how we price these projects in terms of support for lower cost and also the value they bring. I mean those are the stories we got to tell. And I think -- we'll continue to see strong support across our territories for these projects.

Got it. Great. And then I think you had mentioned in your prepared just some opportunities on on-site or sort of bridge Power Solutions at PowerSecure. Could you talk just a little bit about demand for those types of solutions that you're seeing in your conversations and maybe what you think the duration of that opportunity set could be?

Carly, a couple of things there. I mean, I think it's a combination of the conversations that we're in the midst of, but also I think as you look across the entire sector across the country, where there may be a need for temporary power. And so these bridge solutions I think will provide great value for these customers, but also these resources can provide some degree of resiliency in later stages as well.

So we think in the near term, there will be continued opportunities for breed solutions in the market as we see it today.

Our next question is from Stephen D’'Ambrisi with RBC Capital Markets.

Just had a couple of quick ones. Just on the Southern Power opportunity. Can you give a little -- it sounded like you said that you have a potential to recontract a gigawatt and capacity prices have moved up 2 to 3x. Can you just give us a little flavor on like what the all like energy plus capacity or how impactful that could be? Because it looks like on the slide in 2035, you opened up a pretty significant amount, almost 4 gigs. And so I just want to understand kind of what that opportunity could be. And then had a follow up on the gas expansion and what the hurdle is there?

Sure. Steve, it's David here. I'll take a crack at that. Yes, as we look into the next decade, we do see opportunities rising up through the portfolio as these contracts come up for renewal, we're seeing data points and examples in the marketplace that similar capacity is being recontracted at 2 to 3x the rate at which we're in right now. And we're seeing examples in the marketplace around 20, maybe $25 a kilowatt month.

So I think that might be a good rule of thumb to think about what that opportunity can look like out in the future for us.

Okay. That's really helpful. Sorry, is that 2025 incremental? Or is that -- that's the..

That's the price.

Yes. Okay. Perfect. And that's what we're seeing. Yes. And then just on the evaluating new gas expansion at 6 brownfield sites, just can you talk to, I guess, how big that could be? And then what effectively you'd be looking for and your ability to potentially marry those expansions with some of your data center off-takers or provide AOG solutions? Or just what that opportunity set looks like for you guys?

I mean we're not going to change the risk profile of Southern Power. We're going to have a long-term contract agreement with a creditworthy counterparty. And right now, we're just looking at evaluating some 6 brownfield sites in the Southeast, for potential new gas development. And so that's kind of in kind of a very disciplined way how we will approach this as we always do. Once again, you guys know us. You know how we work, how we run this company. And so that risk profile will not change. So we'll be evaluating the market. We're working with customers, understanding their needs, and we will make decisions accordingly.

Our next question is from Jeremy Tonet with JPMorgan.

Just wanted to come back, if I could, towards the guidance? And what are some of the parameters that drive the high and the low end? Specifically here, just ROE and equity ratio assumptions? Any color, I guess, what drives the low end there? Or just how we should think about some of those factors?

Yes. No, good question. In building these expectations that we've communicated today, our disciplined approach, we run through exhaustive scenarios, all kinds of different expectations and outcomes. -- to try to create bounding exercises, if you will, that we feel good about achieving. And so we've got some durability in there to be able to get to certainly the 7% range. And again, like I said earlier, it's a long ways out, but we do feel good about what we see in terms of the contracts that we're signing in terms of the in-migration of population into our service territories, customer growth and expansion, some of the things that Chris mentioned in the prepared remarks around investment coming into the state, whether it be businesses expanding or relocating into our service territories. All those aspects give us good visibility and durability into those projections.

And then some of the things we talked about create upside to achieve top end or perhaps even expand that band in the future.

Got it. That's very helpful. And I just want to follow up maybe a little bit more with the the affordability questions there. It seems like there's so much growth in front of you. Just wondering how that could impact build trajectory going forward? -- possible downward pressure there? And any other thoughts you could share on the '29 and '30 period for how bill trajectory might look?

And you've heard a lot from us on our focus on rate stability in both Georgia and Alabama in terms of rate stability through '27 and through '28. And then once again, I think as you look at how we price these projects, how we do our large projects, the opportunities we have for downward pressure on rates for existing customers is a real opportunity that we'll take advantage of. I mean, so we see the opportunity to continue rate stability as we move into the future. And so that's our focus, making sure we continue to provide value to our customers from a service standpoint, but also making sure we have this real disciplined focus on rate stability now and into the future.

Our next question is from Andrew Weisel with Scotiabank.

Just a quick one from me. I think you mentioned the potential to accelerate the dividend growth. Could you elaborate, I think that's new commentary from you. I don't remember hearing you talked about that before. Maybe just a little bit more detail on why you talk about that and what you'd be looking for out of it and when?

Sure. Sure. Thanks, Andrew. As we mentioned before, just historically, we believe that the dividend is a very important part of our value proposition. And obviously, in conjunction with our Board, who obviously has to approve every dividend that we offer. We would look to kind of grow -- our earnings would grow into that rate and at some point, we want to be able to revisit that and maybe look around the 60%-ish window of dividend payout ratios. But again, that's out on the horizon and just something to think about. But again, like I mentioned before, it's integral to the long-term value proposition that we see in our stock.

Our next question is from Shahriar Purreza with Wells Fargo.

It's actually Alex on for Shar. I just want to touch on the 13 gigs that you mentioned that you have in the plan. Can you just remind us what the minimum take is for those contracts? And is that assumed in your current plan? So I guess if you look at it, if customers were to ramp and take on more power over time, would that be accretive to the current plan?

Sure. Good question. Yes, keep in mind, these -- all these contracts have minimum bills associated with them that are designed to recover 100% of the cost that we incur to serve -- but you're absolutely right. To the extent that ramps are achieved sooner and maybe go beyond the contract, there is upside to that. that pricing is sort of at the marginal cost once we get beyond the minimum take. But we do feel really good about the way we structure these contracts to protect everybody.

And Andrew, just adding on, I mean, and you hear us talk a lot about durability. What you mentioned provides greater durability to drive plan going forward. And so those are real upside opportunities as we look into the future.

Got it. That's very helpful. I guess just shifting gears here, just look at the regulatory side, obviously, given growth that you're seeing in Georgia, the rate freezes in place to least 2029. So -- do you see any opportunity where you can extend that rate freeze beyond 2028? And if you could just remind us, do you have to file something with the commission prior to the end of the current terms? Just want to get a sense on what that potentially looks like.

Yes. Yes, Georgia has to file in '28, and we're not going to get ahead of that process. But as we continue to look at the opportunity with the growth that's in front of us, how we price these large load contracts to make sure it provides benefits to existing customers. We think there are real opportunities to continue to have this deep focus on rate stability. And that's something that we're going to continue to be focused on and continue to make sure we pay attention to in terms of providing value to our customers. So yes, that's a major principal focus of us as we look into the future.

Our next question is from Nick Amicucci with Evercore ISI.

Nick? A couple of quick ones for me. So I just wanted to look -- I was kind of drilling down on Slide 39. So it seems like the vast majority of kind of the increased capital investment plan is associated with new generation. And just kind of in the context of Carly's question before when we're thinking about the bridge solutions. Should we be considering some potential upside just on the transmission side as we kind of think of these new generation assets maybe kind of being a stand-alone asset currently just to get to meet the ramp rate and then kind of connecting it at a later term into the broader grid?

There's a lot of options at play in that business. And we stand ready to really take care of whatever the needs are of the customer. And that's kind of part of the beauty that our 3 electric companies are operating in is not necessarily being bound by a static tariff that they have the ability to bilateral negotiations to get exactly what the customer needs when they need it and probably have the ability to partner with -- to bring that -- those services to bear. So yes, your question is dead on. And we want to go and explore those opportunities all over the country.

Yes. And as we said, I mean, the bridge solutions are very complementary -- and yes, I mean, they also I mean, as we said, I mean, they're at Southern Power and Power secure, those are potential upsides to the plan.

Great. Great. That makes sense. And then just as we kind of think about -- we've talked -- we've spoken kind of ad nauseam here about kind of the minimum take on the contracts and kind of the pricing surrounding these large load contracts. Any kind of insight as to because I know those last through the duration of the contract. Just any kind of insight into the typical time frames that you guys are seeing on duration? Is there a minimum there that you guys are seeking -- or is there some type of appetite for -- from kind of the counterparties just on longer duration versus or duration?

Yes, great question. And as we're negotiating these things, we're pretty much pegging to a 15-year window or longer. We want to make sure that we've got durability and lasting relationship as we sign these contracts.

Our next question is from Paul Fremont with Ladenburg Thalmann.

Congratulations on a good showing here. First question, I think, is just a point of clarification. The gas plants on Slide 21, those are all for your regulated utilities, right? So those -- none of that is -- includes Southern Power.

Correct.

You are correct, Paul. Yes.

Okay. So I guess, you talked about 700 megawatts of upgrades and incremental construction would that take place in the 31 through 35 time frame? Or when would that take place?

Yes. Yes, those are where the opportunities are that we're considering right now, and they'll stretch out over a little bit of a period of time. And those are -- keep in mind, those were some of the upside opportunities that Chris had mentioned related to Southern Power. And they're not included in our plan at the moment.

Okay. So that would be incremental and it could come in as early as '29 -- and if you did it, it would be fully contracted when it was completed, right?

Consistent with the business models not changing in Southern Power.

And then -- is it safe to say that those contracts would most likely be with like co-ops and other power companies versus, let's say, selling directly to data centers?

Yes, that's a very safe bet.

Yes, it would definitely be a creditworthy counterparty.

Okay. Great. And then do you need regulatory approval if you get some of the additional contracts that you're talking about and you need, let's say, that incremental 3 gigawatts of generation, does that need to go through commission approval.

Well, we mentioned that there's -- that all of that would be subject to review Keep in mind, we just closed in December on 10 gigawatts at Georgia Power. And then we kind of referred to 2 proceedings that just are beginning and then we expect to start between Alabama and Georgia, that will probably take us through 2026 and likely see conclusion in 2027.

Okay. And then last question for me. Any sense on who's going to -- which Republican is going to run for Pride -- more on the commission?

We're not political pronosticators. We have no idea. What we do is we work with whoever is there. And we look forward to -- thank you.

Our final question is from Travis Miller with Morningstar.

This is a follow-up to answer most of my questions. So the 28 and 29 projects in particular generation project you outlined, what's the status of the gas supply and then for the battery 1 battery components? And then in addition, anything beyond 2030, what -- are those going to be constraints potentially?

It's all secured.

Even the physical is secured or just financially.

It is physically secure.

And that will conclude today's question-and-answer session. Sir, are there any closing remarks?

Again, let me say things -- thank you very much for your continued interest in Southern Company. Have a great day.

Thank you. Ladies and gentlemen, this concludes the Southern Company's Fourth Quarter 2020 Earnings Call. You may now disconnect.

Good afternoon. My name is Diego, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Third Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded.

I will now turn the call over to Greg MacLeod, Director, Investor Relations. Thank you. Please go ahead, sir.

Thanks, Diego. Good afternoon, and welcome to The Southern Company's Third quarter 2025 earnings call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and David Poroch, Chief Financial Officer.

Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Qs and subsequent securities filings.

In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com.

At this time, I'll turn the call over to Chris.

Thank you, Greg, and good afternoon to everyone, and we thank you for joining us for today's update. Southern Company continues to perform exceptionally well. As you can see from the materials that we released this morning, we reported strong adjusted earnings results for the third quarter, meaningfully above the estimate provided last quarter, and we expect to deliver on our financial objectives for 2025. And I have to say Southern Company has an incredibly bright future ahead.

Our state-regulated electric and gas utilities continue to provide long-term value to the more than 9 million customers across the Southeast and beyond with reliable and affordable energy. The vertically integrated markets in which our electric utilities operate continue to provide transparent and orderly processes and have consistently supported our ability to meet the needs of our growing economies and electric demand while providing premier reliability and resilient service day in and day out. We've done all of this while keeping customers' rates more than 10% below the national average. Further, the rate plan extension at Georgia Power, which freezes base rates until at least 2029, excluding the recovery of storm-related costs, is a testament to the benefits of a constructive regulatory framework and our focus on balancing growth and affordability.

Customers continue to be at the center of everything we do. Our focus on the customer underpins our disciplined approach to forecasting, pricing, contracting and deploying resources to serve this once-in-a-generation growth opportunity. And we continue to execute on those plans for the benefits of all of our customers. Over the last 2 months, we have 4 contracts with large load customers across Georgia and Alabama, representing over 2 gigawatts of demand. Consistent with our approach across Southern Company, these contracts include pricing and terms that are designed to pay for the incremental cost to serve new customer demand while also benefiting and protecting existing customers, helping to ensure growth does not come at the expense of affordability.

I will now turn the call over to David to give an update on our financial performance.

Thanks, Chris, and good afternoon, everyone. For the third quarter of 2025, our adjusted EPS was $1.60 per share, $0.10 above our estimate and $0.17 higher than the third quarter of 2024. The primary drivers for our performance for the quarter compared to last year were continued investment in our state-regulated utilities, along with strong customer growth and increased customer usage. These positive drivers were partially offset by milder than normal year-over-year weather, higher depreciation and amortization and higher interest costs.

For the 9 months ended September 30, 2025, our adjusted EPS was $3.76 compared to adjusted earnings of $3.56 for the same period in 2024. Year-to-date, revenue grew at our state-regulated electrics, partially influenced by customer growth and higher usage, which has added $0.12 year-over-year. A complete reconciliation of year-over-year earnings is included in the materials we released this morning.

Our adjusted EPS estimate for the fourth quarter is $0.54 per share, which, combined with our year-to-date performance, would represent full year adjusted earnings at the top of our 2025 annual guidance range of $4.30 per share.

Turning now to retail electricity sales. Year-to-date weather-normal retail electricity sales were 1.8% higher compared to the first 3 quarters of 2024. Year-over-year weather-normal retail electricity sales, which are on pace for the highest annual increase since 2010, excluding the pandemic, demonstrate growth across all 3 customer classes. In the third quarter alone, the commercial sector grew 3.5% on a weather-normal basis compared to the third quarter of 2024. This growth was driven partially by increased sales to existing and new customers -- and new data centers, which were up 17%. Weather-normal residential sales also showed strong growth and were 2.7% higher than in the third quarter of 2024, bolstered by the addition of roughly 12,000 new electric customers in the quarter, substantially higher than historical trends.

Electricity sales to individual customers also demonstrated continued strength, growing 1.5% in the quarter compared to the prior year. Year-to-date, all of our largest industrial customer segments are up year-over-year, including primary metals, paper and transportation segments, which were each up 4% or higher through the first 3 quarters.

Economic development activity across our electric service territories remains robust with 22 companies making announcements to either establish or expand operations in our service territories during the third quarter, generating nearly 5,000 potential new jobs and representing expected capital investments totaling approximately $2.8 billion. Clearly, between robust customer growth, increasing customer usage in the commercial and industrial segments and the flourishing economic development activity in our service territories, the economy in the Southeast remains strong and extremely well positioned.

Transitioning to our financing, I'd like to take an -- I'd like to give an update on our activities for the quarter, including the progress made addressing our future equity needs. In the third quarter, we issued $4 billion of long-term debt across Alabama Power, Georgia Power, Southern Company Gas and Southern Power. The quality and credit strength of our subsidiaries continues to draw a robust investor interest. Strong demand for our subsidiary securities ultimately translates into lower interest costs, which will provide benefits to customers at our regulated subsidiaries over the long term. With these issuances, combined with what we issued in the first half of the year, we have fully satisfied our long-term debt financing needs for 2025 at each of our subsidiaries.

On the equity financing front, we continue to be opportunistic in our proactive approach and have made significant progress on our plans to source equity in a disciplined and credit-supportive manner. This approach reflects our steadfast commitment to credit quality, including our strong investment-grade credit ratings across all 3 major rating agencies. We plan to continue utilizing equity or equity equivalents in support of our path towards 17% FFO to debt within our planning horizon. Recall this long-term credit quality objective is intended to provide cushion to the quantitative credit metric targets provided by the rating agencies.

As a reminder, on our July earnings call, we highlighted a cumulative equity need of $9 billion through 2029 to fund our $76 billion capital investment plan in a credit supportive manner. Since our last earnings call, we priced an additional $1.8 billion of equity through forward sales agreements under our at-the-market or ATM program. These forward equity contracts contain final settlement dates that extend through mid-2027 with the ability to call sooner if we choose. This progress and flexibility it provides significantly reduces risk in our financing plans. When considering these ATM forward sales, other hybrid security issuances and past and projected issuances under our internal equity plans, we have solidified over $7 billion of our $9 billion equity need through 2029. We are extremely well positioned to address the remaining amounts in a shareholder-friendly manner.

Looking ahead and as we continue to take steps to require strong customer protections and credit provisions, our pipeline of large load data centers and manufacturers continues to be robust. Across our electric subsidiaries, the total pipeline remains more than 50 gigawatts of potential incremental load by mid-2030s. Recall that our disciplined approach to forecasting assumes that only a fraction of this load pipeline materializes. As Chris mentioned earlier, in just the last 2 months, we have 4 contracts across Southern Company system that represent over 2 gigawatts of load. As you can see, projects within our pipeline are maturing into executed contracts, which, along with their associated load ramps over the next several years, solidifies a substantial portion of our total forecasted electric sales growth of 8% annually through 2029, including average annual growth at Georgia Power of 12% through the same period.

Across Alabama, Georgia and Mississippi, we now have contracts in place with large load customers, representing 7 gigawatts through 2029, which ultimately ramp to 8 gigawatts in the 2030s, and we are in advanced discussions for several more gigawatts of load.

I'll now turn the call back over to Chris for further insights into the progress we are making on our plans.

Thank you, David. As David noted, we have made great progress with signing new large load contracts. Just last month, as a part of Georgia Power's ongoing RFP certification proceedings, Georgia Power filed an update to its load forecast. This update forecast continues to project the capacity need consistent with the 10 gigawatts of capacity resources being requested, which include 5 natural gas combined cycle units and 11 battery energy storage facilities. These proceedings are scheduled to have a final determination by the commission by the end of this year.

Separately, Alabama Power, following approvals from the Alabama Public Service Commission and the Federal Energy Regulatory Commission has completed the acquisition of the 900-megawatt Lindsay Hill natural gas generating facility to serve projected long-term capacity needs in the state. In addition, construction continues on approximately 2.5 gigawatts of new generation in both Georgia and Alabama, which includes 3 natural gas combustion turbines and 7 battery storage facilities, all of which are projected to go online over the next 2 years.

Further, the South System 4 expansion at Southern Natural Gas within our Southern Company Gas subsidiary continues to move forward and will provide a valuable resource in serving the projected growth in our service territories. It is clear that we continue to make great progress executing on our plan as we deliver exceptional value to customers and investors.

Consistent with our past practice and representative of our continued discipline, we expect to provide a complete update to our long-term plan during our fourth quarter 2025 earnings call this coming February. As always, this update will include refreshes to our 5-year capital investment outlook, sales forecast and financing plans as well as our 2026 and long-term EPS guidance. Consistent with our comments throughout 2025, as a part of that communication, we expect to provide additional clarity on our long-term earnings trajectory, which, as we've highlighted before, could translate into increasing the base from where our long-term EPS growth starts, which could be potentially as early as 2027.

We have delivered exceptional operational and solid financial results through the first 3 quarters of the year. Just this week, Southern Company was named to Newsweek's World's Most Trustworthy Companies for 2025 list and was the highest ranked energy company in the United States on that list. Recognized companies were identified in an independent survey, and our inclusion at the top of this list is a testament to the hard work and unwavering commitment of our employees to uphold our values and operate each day at the highest standards of integrity, transparency and accountability. We are honored by this recognition, and I am incredibly proud of our team and the execution across all of our businesses.

In conclusion, we're extraordinarily well positioned to finish the year strong. We have the team, we have the experience and the scale to capture and execute on the exciting opportunities in front of us. We really have a bright and exciting future ahead.

Operator, we're now ready to take questions.

[Operator Instructions] And our first question comes from Steve Fleishman with Wolfe Research.

I have no idea how I got on the list for questions because I didn't ask one, but I appreciate that. I didn't have any questions.

And your next question comes from Carly Davenport with Goldman Sachs.

Maybe to start just on the kind of load growth outlook in Georgia, I guess, as you continue to lock in contracts under the new tariff structure there, can you talk a little bit about the reception from customers to the new structure and also how you approach the minimum bill components and ensure cost recovery from investments to support that load?

Yes. Sure. Carly, thanks. Great question. Like we've talked about, we've moved into a mode working underneath the -- at least the Georgia, working underneath the Georgia Public Service Commission, new rules that came into place in the spring. And what we're finding is customers totally get it. They understand that these are long-term commitments that we are making to deploy resources to serve their needs. And I think these rules have really helped bring the more credit quality, more serious counterparties up to the front of the line. And we've just made great strides in structuring these contracts.

And with these contracts, the ones that we've signed now, have brought to the table are great protections for customers and our investors. The minimum bills cover all of our costs, whether or not the meter spins. And once they hit their ramps and they start moving up, it's just very beneficial for the company and for our customers. So we're really happy with the education effort that we've been able to accomplish over the past year. And that's kind of the indicator as to why, to some extent, these contracts have taken a minute to get resolved just because we're taking them along the journey of the structure and the need to be able to protect customers going forward through these contracts.

Great. Really helpful. And then maybe the follow-up, just on the Georgia regulatory environment, just with the upcoming certifications and potential for incremental needs on the generation side for approval. How are you thinking about potential impacts from the PSC election and those processes as you think about the longer-term plan?

Yes, Carly, let's start with the election question first. Elections in Georgia for the 2 commission seats, they will be held next Tuesday. We've had a couple of weeks of early voting. I mean one of the things we talk a lot about in all of our states is that we have an incredibly long history of working constructively with whomever is in those seats. And the 5 seats that are occupied in Georgia, they've always brought different views and perspectives. And so we expect that will, in fact, be the same. And so we'll work with whomever is there. And as those positions are filled, I mean, they keep the citizens in mind as well as we keep our customers in mind. So we have a lot of alignment there. So we've always constructively worked with whomever has been elected in those seats.

Do you want to add further?

And Carly, you asked about status and kind of where we are. Recall that in September, Georgia Power filed an updated load forecast and testimony. And that load forecast, using the same methodologies as several months ago, discounting forecasted load and risk adjusting that, supported the need for the whole 10 gigawatts that we're requesting. And that process is ongoing. So we're going to have staff and other interveners file their testimony in the next couple of weeks, I think. And we're scheduled to get a ruling from the commission, I think it's December 19, latter part of December. But all that should be wrapped up, and we'll see the results before year-end.

Your next question comes from Julien Dumoulin-Smith with Jefferies.

Chris, can we talk about the rebasing? You use the same language again about as early as '27. And a lot of folks are very curious to understand what the metrics that you're looking at, whether it's operational or regulatory or just frankly, incremental signed data center deals to get you comfortable to make it more of a firmer time line for that rebasing. Any thoughts that you'd observe here on how you're thinking about that time line?

Julien, I mean, I think we've said. I mean there's not kind of an exact list. I mean there are a lot of things that we're going to look at to make that decision. I mean how is the economy performing, what's happening with interest rates? I mean where are we with large load contracts? I mean just a number of factors, I think, that has to go into that consideration to give us the confidence and certainty to make that kind of decision. And so I mean, as we said before, I mean, clearly, there's a lot more meat on the bone in terms of where we are and how that decision needs to be made. But yes, I mean, that's something we'll work through, and we'll give you more clarity on that in our February call for next year.

Awesome. Excellent. And a little bit more of a nitpicky question. The $9 billion of equity you guys talked about here a second ago, in theory, if you were to get this incremental $5 billion, how do you think about that being reflected in that $9 billion?

The upside that we discussed in the second quarter call, Julien, you mean?

Yes. That's all in there, right?

No. Actually, the upside to the extent that the Georgia Public Service Commission approves all of our request, we had talked about that being about another $4 billion of incremental capital. And that's likely to be financed kind of in that neighborhood of about 40% equity going forward. So once we get clarity on that, we'll be able to execute on that plan.

And there's a little rounding out there, right, between the $4 billion and the $5 billion with gas, I think it is, if I understand all the number?

You're exactly right, Julien. The $4 billion relates specifically to the remainder at request at the Georgia Public Service Commission. And we've talked about opportunities within our FERC-regulated jurisdictions in the gas infrastructure business, and that's about $1 billion. So you're exactly on point.

Your next question comes from Shar Pourreza with Wells Fargo.

So just real quick on -- let me just shift gears to Southern Power. I mean, obviously, there is a lot of opportunities there, and you've got existing tolling agreements that start to expire. I guess. I guess, is there -- how do we think about just the assets, the value of the assets, the pricing environment? Have conversations started? And are there opportunities to renegotiate these tolls ahead of the expirations, just given the value of the assets?

Yes. So like we've talked about, we've got a very large portion of these contracts under long term -- of these assets under long-term contracts, about 95% or so through 2029. And you're absolutely right. There's -- where those opportunities exist, we're -- toward the end of those contracts, we'll start having some conversations to renegotiate those and renew those where appropriate. And we're looking at a couple of live data points, right, in our -- in the RFP that was recently approved in Georgia. Southern Power on a competitive bid basis won 2 PPAs that go into effect in the early 2030s. And those are repriced about 2 -- almost 3x kind of where they sit today. So assuming that, that market holds, we see great opportunity out in the future as those contracts lay off and then we can renegotiate those and recommit those assets in the future.

Got it. Okay. Perfect. And then just lastly, just obviously, you guys talked about the amount of gas that's needed in the Southeast. Just around the SNG pipeline expansion, any thoughts on timing there? How are the conversations going with the counterparties?

The SNG expansion is going well on track. I think we've talked about that being about a $3 billion investment, 100% dollars. We're a 50% owner of that. And so that project is going as scheduled, and we expect great interest in contracting that capacity. That pipe runs kind of, if you will, through our backyard, and we see that pipe being able to just serve our needs as well as a number of other needs through the -- around the adjoining states. So looking forward to getting that project taken care of.

Okay. Perfect. And then just lastly, if I could just slip one quick one on the equity question. Chris, there's been obviously some pretty healthy transactions that have been done around partial asset sales. Some of your peers have done it. They have been successful. It's been accretive. But just want to get a sense on have you considered sort of other avenues versus these equity or equity-like instruments and even can some parts of Southern Power be opportunities there? We're just focusing on equity and equity-like.

Shar, we don't comment on kind of speculative transactions or rumors or kind of these broad questions. We're always looking to see who is the best owner of a given asset. And that's something that we'll always look around corners and make those kinds of decisions. And I think it's a little bit premature. But yes, I mean, that's something that we'll always give deep considerations to. We like our cards. We like the portfolio that we have. But I mean, there's some things we'll always take a look at.

Your next question comes from Anthony Crowdell with Mizuho Securities.

Two easy ones, 2 softballs. You talked about on the fourth quarter call, you're going to give us a capital refresh and, I guess, potentially an update on the EPS CAGR. And I think you mentioned, I don't want to put words in your mouth about maybe talking about the base starting in '27. My question is, do we get -- will we also get 2027 guidance on the fourth quarter call?

Anthony, we've been talking about this opportunity for a good little while. And as we've seen this kind of momentum around developing these contracts come to fruition, it is pretty unique. And those contracts that we've talked about are kind of coming into play in the latter part of our planning horizon. So we do expect to be able to share some clarity on that. Like Chris talked about, a lot of things are in the mix. And as we move forward in getting these contracts taken care of, we'll be able to share what that clarity looks like in February.

Great. And then just last question. And I apologize I have the timing wrong. I believe from your last call to this call I believe Moody's put the holding company on a negative outlook. Your equity needs had already announced before. Does that negative outlook or maybe change the view of maybe pulling forward or the timing of that remainder $2 billion of equity?

Yes. No. We've got what we believe is a really good path to get towards 17% FFO to debt. And let's remember, the fundamental belief at Southern that a premium equity starts with being a high-quality credit. And so it's important that we're going to retain these ratings that we have. And we'd look to be able to build cushion toward that 16% threshold. That's our downgrade threshold. So our path is getting closer to 17%. And we see these qualitative factors and quantitative factors improving. The executing on the equity issuances is really encouraging, bringing these contracts to fruition is encouraging. And we're just going to continue to be proactive and disciplined in this approach. And we're going to continue to share our progress with the rating agencies to make sure that they're aware of where we're getting -- where we're going towards 17% over the planning horizon.

Your next question comes from Jeremy Tonet with JPMorgan.

Just wanted to -- just one quick question here with regards to nuclear. I think Southern has talked in the past the importance of nuclear development for the future of the country. And we've seen support from the federal government start to move things forward in different parts of the country. Just wondering if there's any specific actions out there, support from the federal government or are there entities that would make expanding Vogtle or pursuing SMR more attractive to Southern?

First of all, let me say I was incredibly excited about the actions that the administration took with Westinghouse and Cameco and Brookfield in terms of that collaboration. I mean, I think all of those things are very important to bring forth new nuclear in this country. And with this incredibly growing demand, I think it's so important that we take the steps necessary to build new units in this country. And so between the action taken announced yesterday, a couple of days ago as well as the President's executive orders on the regulatory side, all those things, I think, are very important and very instrumental in helping support the development of new nuclear in this country because as you look at bringing these new units on, these units could have 60- to 80-year lives.

And so that will take us in -- meet the current future demand, but also demand into the next century. So this is incredibly important to recognize the steps in the leadership role that the government must take to address risk and find ways to help mitigate that risk. So I think it's incredibly important and really excited about the steps that are being taken by this administration.

Your next question comes from Andrew Weisel with Scotiabank.

Forgive me, I'm not sure if I heard an answer to that last question. Does all of that federal government activity change your appetite? I appreciate the industry commentary, but what about your appetite?

Not at this time.

Okay. But that wasn't my original question. My original question was on Slide 9, I'm interested. So you showed the demand from large load customers for 2029 and then the mid-30s. What strikes me is it's a fairly small change, only 1 incremental gigawatt is contracted and 1 additional gigawatt of committed. How much of that would you say is the same projects ramping up their demand versus an incremental project or projects coming online between those years? And then to what degree would you say the small increase is conservatism or risk adjusting or however you want to call it? It just seems like a fairly small delta relative to the trends and commentary.

Yes. No, I get where you're coming from. What we wanted to try to display in this chart, so I appreciate your question, is that the entire 7 gigs on the 2029 column is included in the 2030 column. And so what we're trying to reflect there is ramp-up, timing and our expectations and projections based on the contracts that we have as well as in the committed section, that's reflective of the conversations that we've been having and the modeling that we've been doing through the negotiations. And so those ramp-ups do take a minute and those are projected to kind of be over about a 5-year period. It's a little different from contract to contract because obviously, these are tailor-made contracts, bilateral negotiations, not necessarily at all a unique large load tariff. And so these are tailor-made and reflect our expectations around the ramp-up.

And your next question comes from David Arcaro with Morgan Stanley.

So looking at the 10 gigawatt large load contracted or committed numbers by 2029, I guess, I was just wondering if there's still a further opportunity to add on more gigawatts there to bring on more large load by the 2029 time frame? Or are you seeing system constraints or limits in terms of absorbing additional data centers in the near term?

I think the ability to bring on more is out there. I mean so the answer to your question is, yes, there's more capacity, more opportunity. And yes, we are in advanced discussions, in advanced considerations with other large load companies in terms of looking at more possibilities. So yes, there are more upside opportunities for the latter part of this decade.

Yes. Okay. Got it. Got it. And then I was just wondering if you could -- could you characterize just maybe the plan for the next set of RFPs? Just looking forward for future generation needs, what years would those be representing in terms of when they come into service? And then when would you be potentially considering bringing forth those RFPs to take in the bids?

Sure. So remember, that '25 IRP stipulation allowed for another all-source RFP to begin as early as 2026. And at the moment, we don't really have any size or parameters. We're just working through that and assessing our needs. We need to get through the processes in place at the moment, and then we'll look to the future. And that could be in the early 2030s, maybe 2032-ish, but we'll have to wait and see how that plays out, and we'll have more clarity next year. But we're really encouraged by the conversations that we've been having and the momentum continues to build, not just in Georgia, but around the service territories.

Your next question comes from Angie Storozynski with Seaport.

So my first question about contract-based gas fired new build. So in the past, you guys were saying that you're still waiting to see demand or interest in like fully loaded economics for gas-fired new build for Southern Power. And I'm wondering if we've already achieved that point? Or is it still a waiting period?

For recontracting at Southern Power? I just want to make sure I understand the question.

No, so like building a brand new combined cycles for a hyperscaler or whoever under a long-term contract by Southern Power meeting your return expectations? If you've already seen offers at levels that you would consider interesting?

We continue to evaluate. And recall, I think we talked about it probably several times in the past that Southern Power, we run with a pretty high filter. We have high credit quality counterparties, long term in nature, locking up the capacity, no fuel risk. So as we find those opportunities that fit into that box, we'll definitely pursue them. And at the moment, we're just still evaluating.

So the answer is no, you haven't seen them or you're still sort of debating if the terms are attractive?

Yes, we're evaluating and having some conversations around that.

Okay. And then second thing, and I know you have answered this question a couple of times already on this call about the nuclear new build. But it's -- and we keep hearing, especially from Westinghouse, right, that they are seeing interest in nuclear new build from large regulated utility operators in the U.S. And I know that it could be just preliminary discussions, but I mean, the Southeast seems to come up quite a bit. I mean I'm looking at the map. There are a few options here. So I'm just wondering, is it just, as I said, preliminary discussions? Or is it -- you wouldn't be the first one seemingly given what's happening in South Carolina. But how should we brace for any potential announcements from you?

Yes. I mean I can't speak for others, but I'll speak for Southern Company. We are not there yet to make an announcement about a new nuclear plant. As we said many times in the past, we want to make sure that all risks are mitigated before we make that kind of decision. I'm excited about all the activity that's occurring around the country with considerations about new nuclear. But until we find a way to get all the risks mitigated, I mean, that's not a decision that we're going to make. But we're going to continue to work with the administration, work with other government agencies to talk about the importance and the role that new nuclear can play in meeting this growing demand. But being perfectly clear, no, we're not in a position to make that decision at this point until we find ways to make sure all risks are mitigated.

Your next question comes from Paul Fremont with Ladenburg Thalmann.

First question is, I just want to understand the difference between contracted and committed. Is that just an ESA versus an LOA? Or what's the distinction there?

Sure. So let's maybe start with the contract. I mean that's a signed agreement, hopefully pretty relatively self-explanatory. We've got a commitment to deliver based on the terms and conditions negotiated and parties have signed off and we're moving forward. The RFS, request for service, that's going through the process that we've described in the past, where you kind of start with an entity looking across the states, maybe they've selected Georgia. We start having conversations with them. We start getting through -- they're going to -- within the state of Georgia, as an example, they're going to pick Georgia Power versus other providers. That takes us to a new level of conversation. More collateral is posted. The process gets more involved. Engineering studies are happening.

And so the commitment then is as we're negotiating terms and conditions, pricing, ramp-ups and other needs, that's kind of like your last phase before you're getting into actually signing a contract. So committed is very far down the road, and we're working through Ts and Cs, finalizing engineering studies and on the verge of signing contracts.

Okay. So that's sort of like finalizing agreements. Can you -- would you be able to characterize then how many gigawatts would be in advanced stage negotiations? I think some of your peers provide that third layer of breakout.

Yes. So in that bucket, we're probably in the neighborhood 12-ish gigs. I mean it's fairly dynamic and it's across the system.

Great. And then sort of last question for me. You are targeting or you're guiding to 8% sales growth. What year would you expect to sort of achieve that level of sales growth?

That's in the latter part of the horizon. I think we've talked about 2029 is the target for that, and we grow into that over time.

Your next question comes from Travis Miller with Morningstar.

I'm back. So keeping with the large load popular topic here. If I run through those numbers that you broke out in terms of projects and gigawatts, it looks like average projects somewhere less than 0.5 gigawatt, maybe 300 to 500 megawatts. One, I was wondering if that's kind of a fair assessment of what you're seeing out there? And then, two, what is the extra 50 gigawatts or the next stage look like? We've heard some utilities talking about gigawatt projects, tech companies talking about multiple gigawatt projects. So I wonder if you could characterize the current customers and then the next step?

Okay. Yes. Thank you. So yes, I wouldn't do just the straight math. I mean these are wide ranging. We've got some on the 100 megawatts of the scale, and then we've got a couple at the north of 1 gigawatt. And so they are really all over the place. And like we've talked about, I mean, each one of these are tailor-made contracts for their own specific needs. So I'd suggest resisting the simple math.

Okay. That's helpful there. And then the 50 gigawatts or the next stage, 40 or so gigawatts incremental, what are you seeing from those coming into the system requesting...

Like, like the whole pipeline. As we've talked about, those are in various stages. And as we build our forecast, we pretty heavily discount all of that through the various layers, if you will, of the contracting process. So yes, 50 gigawatts -- north of 50 gigawatts is the universe in which we're evaluating right now. And we have talked about a small portion of that coming to fruition as a contract.

Okay. But still the same kind of range in terms of actual project, 100 megawatts to north of 1 gigawatts?

Yes. Yes, exactly.

Okay. And then do these tend to be greenfield or brownfield? Are they expansions, whether it's manufacturing or data center? Are they expansion projects or greenfield projects typically?

Both. Yes, it's really all over the place. I mean we've got industrial customers making announcements that they're expanding their capacity here in our service territories. We've got new businesses relocating or starting up. And then the data centers, some are expanding. I think we mentioned, I think, in our prepared comments that the portfolio of data centers that we're serving today have grown at 17% year-over-year in the quarter. So really excited about what we're seeing in both the portfolio that we're serving today and the process of contracting and the diversity that those customers are bringing to the system.

And that will conclude today's question-and-answer session. Sir, are there any closing remarks?

Again, let me thank everybody for joining us today on our call. And as we said before, we have a bright future, and we're looking forward to what's ahead. So thank you very much, and have a great day.

Thank you, sir. Ladies and gentlemen, this concludes The Southern Company Third Quarter 2025 Earnings Call. You may now disconnect.