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<SEC-DOCUMENT>0000092122-00-500072.txt : 20001222
<SEC-HEADER>0000092122-00-500072.hdr.sgml : 20001222
ACCESSION NUMBER:		0000092122-00-500072
CONFORMED SUBMISSION TYPE:	U-1/A
PUBLIC DOCUMENT COUNT:		12
FILED AS OF DATE:		20001221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SOUTHERN CO
		CENTRAL INDEX KEY:			0000092122
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				580690070
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		U-1/A
		SEC ACT:		
		SEC FILE NUMBER:	070-09701
		FILM NUMBER:		792862

	BUSINESS ADDRESS:	
		STREET 1:		270 PEACHTREE ST
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30303
		BUSINESS PHONE:		4045065000

	MAIL ADDRESS:	
		STREET 1:		270 PEACHTREE STREET
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30303
</SEC-HEADER>
<DOCUMENT>
<TYPE>U-1/A
<SEQUENCE>1
<FILENAME>am4_9701.txt
<TEXT>

                                                              File No. 70-9701

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                 Amendment No. 4

                                       to

                                    FORM U-1

                           APPLICATION OR DECLARATION

                                      under

                 The Public Utility Holding Company Act of 1935

                              THE SOUTHERN COMPANY
                           270 Peachtree Street, N.W.
                             Atlanta, Georgia 30303

     ALABAMA POWER COMPANY                       MISSISSIPPI POWER COMPANY
     600 North 18th Street                            2992 West Beach
   Birmingham, Alabama 35291                    Gulfport, Mississippi 39501

     GEORGIA POWER COMPANY                      SAVANNAH ELECTRIC AND POWER
241 Ralph McGill Boulevard, N.E.                          COMPANY
     Atlanta, Georgia 30308                         600 East Bay Street
                                                  Savannah, Georgia 31401

       GULF POWER COMPANY                       SOUTHERN ELECTRIC GENERATING
        One Energy Place                                  COMPANY
    Pensacola, Florida 32520                       600 North 18th Street
                                                 Birmingham, Alabama 35291

               (Name of company or companies filing this statement
                  and addresses of principal executive offices)

                              THE SOUTHERN COMPANY

 (Name of top registered holding company parent of each applicant or declarant)

                Tommy Chisholm, Secretary and Assistant Treasurer
                              The Southern Company
                           270 Peachtree Street, N.W.
                             Atlanta, Georgia 30303


     William E. Zales, Jr.                  Michael W. Southern, Vice President,
 Vice President and Secretary                      Secretary and Treasurer
     Alabama Power Company                        Mississippi Power Company
     600 North 18th Street                            2992 West Beach
  Birmingham, Alabama 35291                      Gulfport, Mississippi 39501

Judy M. Anderson, Vice President             Kirby R. Willis, Vice President,
    and Corporate Secretary               Treasurer and Chief Financial Officer
     Georgia Power Company                 Savannah Electric and Power Company
241 Ralph McGill Boulevard, N.E.                   600 East Bay Street
     Atlanta, Georgia 30308                      Savannah, Georgia 31401

         Warren E. Tate                           William E. Zales, Jr.
    Secretary and Treasurer                 Secretary and Assistant Treasurer
       Gulf Power Company                  Southern Electric Generating Company
        One Energy Place                          600 North 18th Street
    Pensacola, Florida 32520                    Birmingham, Alabama 35291

                    (Names and address of agents for service)

        This Commission is requested to mail signed copies of all orders,
                         notices and communications to:

            W.L. Westbrook                     John D. McLanahan, Esq.
       Financial Vice President                  Troutman Sanders LLP
         The Southern Company                 600 Peachtree Street, N.E.
      270 Peachtree Street, N.W.                      Suite 5200
        Atlanta, Georgia 30303               Atlanta, Georgia 30308-2216

                           Walter M. Beale, Jr., Esq.
                               Balch & Bingham LLP
                            1901 Sixth Avenue North
                                   Suite 2600
                           Birmingham, Alabama 35203


<PAGE>



                              INFORMATION REQUIRED

         The statement on Form U-1 as initially filed in this proceeding is
hereby amended and restated in its entirety as follows:

Item 1.  Description of Proposed Transactions.

         The Southern Company ("Southern") is a registered holding company under
the Public Utility Holding Company Act of 1935, as amended (the "Act"). Southern
proposes to organize a new subsidiary company ("NewCo"). Upon obtaining
requisite regulatory authorizations, NewCo will undertake the construction and
ownership of certain electric power generation interconnected to the
transmission systems of Alabama Power Company ("Alabama"), Georgia Power Company
("Georgia"), Gulf Power Company ("Gulf"), Mississippi Power Company
("Mississippi"), Savannah Electric and Power Company ("Savannah")1 and Southern
Electric Generating Company ("SEGCO") 2 (collectively, the "Operating
Companies"), or to transmission systems interconnected to those of the Operating
Companies designed for serving the power requirements of the Operating Companies
and of other power purchasers in the region. 3 In addition, NewCo proposes to
invest in exempt wholesale generators ("EWGs"), the generation of which may not
be interconnected to transmission systems of the Operating Companies. NewCo will
not invest in foreign utility companies ("FUCOs") or foreign EWGs. Certain power
generation owned by NewCo may be integrated into the power generation owned by
the Operating Companies and operated on a central dispatch basis by Southern
Company Services, Inc. ("Services").


__________________________

1 Alabama, Georgia, Gulf, Mississippi and Savannah are public utility company
subsidiaries of Southern.

2 Alabama and Georgia each own 50% of the common stock of SEGCO and are each
entitled to 50% of the output of SEGCO.



                                       1
<PAGE>

         A.       Purpose of NewCo.

         It is proposed that NewCo will own substantial portions of the
generation for wholesale sales to third parties and to some or all of the
Operating Companies. NewCo will not engage in retail sales of electricity. The
wholesale sales of electricity are subject to approval by the Federal Energy
Regulatory Commission (the "FERC") under procedures promulgated under the
Federal Power Act, as amended (the "Federal Power Act"), designed to preserve
the integrity of state regulatory authority over retail electricity sales.

         Over the last few years, electric supply in the United States has been
dramatically transformed from a heavily regulated industry to one that is now
extremely fast paced and marked by unprecedented levels of customer choice and
competition. Southern is adapting to this new environment by forming NewCo. The
formation of NewCo reflects an organizational change which will focus on
wholesale generating assets in the Southeast. NewCo will facilitate Southern's
adaptation to that new business environment by consolidating the sort of
wholesale activities that are currently being conducted on a piecemeal basis by
the existing Operating Companies. The organizational change is expected to
produce efficiencies in at least three respects:

         (1) It will provide a structure to clearly separate assets that are
involved in wholesale transactions from retail ratemaking. Under the current
structure, an Operating Company is free to engage in wholesale transactions, and
the Operating Companies have done so for many years. Nevertheless, a significant
amount of time and effort is required by the state commissions (and their
staffs) and company management to ensure that the retail/wholesale operations

________________________


3 The Commission recently granted similar authority to another holding company
system. See Allegheny Energy, Inc. et al., Holding Company Act Release No.
27101, dated November 12, 1999.




                                       2
<PAGE>

are properly segregated from both an accounting and a ratemaking standpoint.
Establishing a separate company to handle those transactions in the future will
conclusively resolve any such concerns and will reduce (if not eliminate) the
need for jurisdictional separation studies or other such time consuming and
costly safeguards that are otherwise used for this purpose.

         (2) It will simplify the resource planning process for the existing
Operating Companies, which must now reconcile two different concepts of business
development. Under current retail regulation, each Operating Company has a
statutory duty to serve retail customers located in its service territory. To
meet that need, it procures resources to serve that projected load (including
reserves). In contrast, the customer choice available in the wholesale market
requires an entirely different planning process -- one that involves the
analysis of prospective arrangements, the rapid formulation of definitive bids
and the development of plants that are intended either to meet a delivery
deadline under a winning bid or to serve as a source of supply for future bids.
In short, the retail and wholesale markets require different approaches to
planning and decision making, and thus efficiencies would result from their
segregation.

         (3) It will expedite decision making. The above-described wholesale
power market now moves very quickly. Some of the current decision making
regarding wholesale power requires coordination among the dispersed management
structures of the individual Operating Companies. As a separate corporate
entity, NewCo will be in a position to make decisions in a time frame that is
more compatible with the requirements and expectations of the market.

         While the formation of NewCo offers the improvements and efficiencies
described above, it will in no way diminish the reliability of electric supply
in the Southeast. Regional reliability will be just as strong as it would have
been in the absence of this organizational change. Southern will continue to


                                       3
<PAGE>

develop and/or purchase supply resources to provide reliable service to its
wholesale and retail customers through the Operating Companies and also NewCo.

         B.       Formation and Capitalization of NewCo.

         Southern and the Operating Companies request the authority to complete
all steps necessary for the organization of NewCo, a limited liability company
or corporation, as a new subsidiary of Southern4 (see Exhibit A-1). Southern and
the Operating Companies further seek authority for the issuance by NewCo and the
acquisition by Southern of limited liability company interests or other equity
interests in NewCo.

         As described more fully in Item 1, Section E. Financing Authority,
Subsection 1 Equity Funding, Guarantee and Parent Support Authority herein, the
initial capitalization of NewCo may take the form of any combination of: (1)
purchases of or contributions in respect of limited liability company interests
or other forms of equity interests; (2) open account advances without interest;
(3) loans; and (4) Guarantees (as defined below) issued in support of securities
and other obligations of NewCo. Southern and NewCo will maintain the equity
component of NewCo's consolidated capitalization at or above 30%. Applicants
propose that NewCo be permitted to maintain a common equity component less than
30% and request that the Commission reserve jurisdiction over transactions that
would cause the common equity component of NewCo's consolidated capitalization
to fall below 30%.

_______________________________

4 An Operating Company may form a wholly-owned subsidiary which will acquire
certain assets described herein from such Operating Company and which will
subsequently be spun off to Southern and be merged into a limited liability
company or corporation to form NewCo.



                                       4
<PAGE>

         C. Transfer of Assets by the Operating Companies and Acquisition of
Assets by NewCo.

         Southern and the Operating Companies propose to transfer the following
asset and types of assets (collectively, the "Plant Sites and Generating
Equipment") to NewCo: Plant Dahlberg in Jackson County, Georgia; plants under
construction and/or undeveloped plant sites prior to their becoming utility
assets; and existing contracts for wholesale sales of electricity.

         Georgia Power Company, a public utility subsidiary of Southern Company,
is currently developing the Plant Dahlberg facility, an 800 MW simple-cycle
natural gas peaking facility located north of Athens, Georgia. The facility will
initially consist of 10 combustion turbine generating units. Units 1-8 entered
commercial operation during May through June 2000. Units 9 and 10 are scheduled
for commercial operation in the spring of 2001. Primary fuel for the units will
be natural gas, with No. 2 fuel oil backup. The facility is interconnected to
the Georgia Integrated Transmission System and the Southern Company electrical
control area via a 230 kV transmission line and is centrally dispatched as part
of the Southern control area. Plant Dahlberg will be transferred at the book
cost of Georgia Power Company, which was approximately $204 million at September
30, 2000, and is estimated to appreciate to $275 million, upon completion of
Units 9 and 10 in the spring of 2001.

         The Plant Sites and Generating Equipment will be transferred or sold to
NewCo in an amount equal to the net book value thereof. NewCo will pay cash
and/or issue promissory notes, secured by purchase money mortgages on the Plant
Sites and Generating Equipment, for the Plant Sites and Generating Equipment to
the respective Operating Company in complete consideration therefor. Promissory
notes would only be issued to the Operating Companies for a term not to exceed
five years and at interest rates equivalent to similar securities of a like


                                       5
<PAGE>

maturity, provided that such rate of interest fully compensates the Operating
Company for its cost of funds. After the transfer of the Plant Sites and
Generating Equipment, NewCo will assume responsibility for the construction and
ownership of the Plant Sites and Generating Equipment.

         NewCo will become an "electric utility company" as defined in Section
2(a)(3) of the Act.

         D. Intercompany Interchange Contract.

         By order issued June 15, 2000 under the Federal Power Act, the FERC
approved the participation of NewCo in the Intercompany Interchange Contract
dated as of February 17, 2000 among Alabama, Georgia, Gulf, Mississippi,
Savannah, NewCo and Services (the "Intercompany Interchange Contract"). The
Intercompany Interchange Contract is a wholesale power sale rate schedule and
coordination agreement subject to the jurisdiction of the FERC pursuant to
Section 205 of the Federal Power Act. The principal purpose of the Intercompany
Interchange Contract is to provide for the accounting for energy transfers among
the participants that result from the operation of their power generation on a
centrally dispatched basis (the "Pool").5 Under the Intercompany Interchange
Contract, each participant is deemed to retain its lowest cost energy resources
to serve its own load and its remaining resources are made available to the Pool
at a rate that recovers variable cost. Centralized dispatch results in a lower
energy cost than would be achieved through independent operation because the
participants can purchase from the Pool when doing so is less expensive than
using their own resources. Pooled power operations also reduce the reserve
requirements needed for reliable energy supply from those that would be required
on a single company stand alone basis.

__________________________

5 The Intercompany Interchange Contract also provides for the sharing of
reserves among the participants.



                                       6
<PAGE>

         E. Financing Authority.

         The applicants request authority to engage in the transactions
described below from time to time, as applicable, through June 30, 2005.

                  1. Equity Funding, Guarantee and Parent Support Authority.

         Southern seeks finance authority to fund the development and growth of
NewCo. Funding from Southern in an aggregate amount not to exceed $1.7 billion
may take the form of any combination of: (1) purchases of or contributions in
respect of limited liability company interests or other forms of equity
interests; (2) open account advances without interest; (3) loans; and (4)
Guarantees issued in support of securities and other obligations of NewCo. The
proceeds of such financings will be used to finance the operations of NewCo
authorized herein including the acquisition, construction and operation of power
generation facilities, fuel and power generation equipment procurement and
storage, and energy-related activities, including those authorized pursuant to
17 C.F.R. ss. 250.58, pertaining thereto.

         Guarantees may be utilized as credit support for NewCo. The increase in
guarantee authority is necessary if NewCo is expected to achieve its goal of
increasing operating income from non-rate-regulated businesses in the next few
years. Southern proposes to issue additional guarantees or provide other forms
of credit support or enhancements (collectively, "Guarantees") to, or for the
benefit of, NewCo. Guarantees may take the form of Southern agreeing to
guarantee, to undertake reimbursement obligations, to assume liabilities or to
assume other obligations with respect to, or to act as surety on, bonds, letters
of credit, evidences of indebtedness, equity commitments, performance and other
obligations undertaken by NewCo.



                                       7
<PAGE>

         The terms and conditions of the Guarantees will be established through
arms-length negotiations based upon current market conditions. Any Guarantee
issued will be without recourse to any of the Operating Companies.

         Southern also seeks authority to issue loans with a term not to exceed
two years to NewCo in order to provide liquidity to NewCo to facilitate cash
management. NewCo needs the flexibility to be able to obtain parent company
loans if the need arises in its business operations. Such loans will be at
interest rates and maturities designed to provide a return to Southern at its
effective cost of capital.

                  2. NewCo Independent Financing.

         In connection with its daily operations, financing the acquisition,
construction and operation of assets owned by it and its subsidiaries, and to
achieve its business goals, it will also be necessary for NewCo to obtain
independent financing. This financing is currently expected to take, without
limitation, the form of bank loans and/or bank credit support, project
financing, lease or sale/leaseback transactions,6 commercial paper programs,
preferred equity, preferred securities,7 debt secured by NewCo's assets or
unsecured debt, notes, debentures and other issuances of equity. In connection
with project financing of generating assets, NewCo may acquire securities or
other interests in project subsidiaries. In addition, NewCo proposes to incur
obligations in connection with the issuance and sale by public instrumentalities
of one or more series of revenue bonds. NewCo requests that the Commission


_______________________________

6 In connection with any lease or sale/leaseback transaction, NewCo may transfer
or sell its utility assets to a third party. NewCo will lease such assets from
the third party with an option to buy back the assets. Applicants request that
the Commission reserve jurisdiction over such transactions.

7 In connection with the issuance of preferred securities, NewCo will organize a
special purpose subsidiary (each, a "SPS") and may organize another special
purpose subsidiary for the purpose of complying with applicable state law. A SPS
will issue preferred securities to third parties and NewCo will acquire all of
the common equity or general partnership interests of the SPS. NewCo will
simultaneously issue debt securities to the SPS and may guarantee certain
payments with respect to the preferred securities.



                                       8
<PAGE>

authorize it to obtain financing in an aggregate amount not to exceed $2.5
billion, which is in addition to parent support, guarantees and other
commitments described in under Item 1, Section E. Financing Authority,
Subsection 1. Equity Funding, Guarantee and Parent Support Authority herein.

         The interest rate or other distribution rate for independent financings
will reflect rates obtained by companies with comparable credit quality. It is
expected that the rate will not exceed the highest of the following rates: (i)
400 basis points over U.S. Treasury securities, (ii) a gross spread over U.S.
Treasury securities that is consistent with similar securities having comparable
maturities, (iii) 200 basis points over the prime rate or (iv) 350 basis points
over LIBOR.

                  3. Dividend Authority.

         In order to manage its financial assets most efficiently, pursuant to
Rule 46, NewCo requests that the Commission reserve jurisdiction with respect to
authority for it and its subsidiaries to pay dividends to Southern out of
capital or unearned surplus to the extent permitted by the applicable law and
without impairing the rights of the holder of outstanding securities. This will
permit NewCo and its subsidiaries to avoid having excess unrestricted cash
trapped in subsidiaries.

         F. Proposed Service Agreements with Services and Operating Companies.

         Initially, Southern anticipates that NewCo will not have a significant
number of its own employees. It is likely that (1) personnel employed by
Services, a service company approved by the Commission under Section 13 of the
Act and Rule 88 thereunder (see The Southern Company et al., Holding Company Act
Release No. 14776, dated December 21, 1962), will provide a wide range of
services on an as-needed basis pursuant to a Service Agreement ("Service
Agreement") to be entered into between NewCo and Services and (2) personnel
employed by the Operating Companies will also provide services to NewCo pursuant


                                       9
<PAGE>

to Operating Agreements (the "Operating Agreements") between NewCo and each
Operating Company or other arrangements.

         The Service Agreement will take effect upon Commission approval thereof
and will be similar in all material respects to those service agreements which
Services has signed with each of the Operating Companies. Under the proposed
Service Agreement, Services will render to NewCo, at cost computed in accordance
with Rules 90 and 91 under the Act and other applicable rules and regulations,
various services including general executive and advisory services, power pool
operations, general engineering, design engineering, purchasing, accounting,
finance and treasury, taxes, insurance and pensions, corporate, rates,
budgeting, public relations, employee relations, systems and procedures and
other services with respect to business and operations. Services will account
for, allocate and charge its costs of the services provided on a full cost
reimbursement basis under a work order system consistent with the Uniform System
of Accounts for Mutual and Subsidiary Service Companies. The time that Services
employees spend working for NewCo will be billed to and paid by NewCo on a
monthly basis, based upon time records. Each company will maintain separate
financial records and detailed supporting records. The proposed form of Service
Agreement to be entered into is filed as Exhibit B-1.

         The Operating Agreements will provide that each Operating Company will
provide certain services relating to accounting matters and to the construction,
operation, maintenance and rehabilitation of assets owned by NewCo at cost to
NewCo. The proposed form of Operating Agreement is attached hereto as Exhibit
B-2.

         NewCo may also determine from time to time that it is efficient and
advantageous to have certain development activities performed by its own
employees and/or by unaffiliated third parties. Such arrangements with


                                       10
<PAGE>

unaffiliated third parties will be on a fee-for-service negotiated basis at
market rates.

         G. Formation of EWG Subsidiaries of NewCo.

         NewCo proposes to acquire securities or interests in the business of
one or more EWGs, as such term is defined in the Act (the "Exempt
Subsidiaries"), either directly or indirectly through project companies
("Intermediate Companies").

                  1. Use of Intermediate Companies.

         Intermediate Companies would be special purpose subsidiaries formed to
exclusively engage in activities to facilitate the consummation of investments
in EWGs. They may also engage in development activities.8 Intermediate Companies
may acquire interests in, finance the acquisition of and hold the securities of
EWGs. Intermediate Companies would enhance the ability of NewCo to respond
quickly to investment opportunities. An Intermediate Company may be organized at
the time of the making of bids or proposals to acquire an interest in any EWG or
at any time thereafter in order to facilitate the bidding and subsequent
consummation of an acquisition of an interest in an EWG.

         Southern also proposes that an Intermediate Company may issue equity
securities and debt securities to persons other than NewCo or Southern (and with
respect to which there will be no recourse to Southern), including banks,
insurance companies and other financial institutions, exclusively for the
purpose of financing (including any refinancing) investments in EWGs.

_____________________________

8 Development activities will include project due diligence and design review;
market studies; site inspection; preparation of bid proposals, including, in
connection therewith, posting of bid bonds, cash deposits or the like;
application for required permits and/or regulatory approvals; acquisition of
site options and options on other necessary rights; negotiation and execution of
contractual commitments with owners of existing facilities, equipment vendors,
construction firms, power purchasers, thermal "host" users, fuel suppliers and
other project contractors; negotiation of financing commitments with lenders and
equity co-investors; and such other preliminary development activities as may be
required in preparation for the acquisition or financing of a project.



                                       11
<PAGE>

                  2. Investment in Intermediate Companies and Exempt
         Subsidiaries.

         The Intermediate Companies may issue securities to Southern and/or
NewCo, and Southern and/or NewCo may acquire the securities. The investment by
Southern or NewCo in the Exempt Subsidiaries may take the form of capital stock
or shares, debt securities, trust certificates, capital contributions, open
account advances without interest and partnership interests or other equity or
participation interests, bid bonds or other credit support to secure obligations
incurred by NewCo and/or Intermediate Companies in connection with Exempt
Subsidiary investments or of NewCo's undertaking to contribute equity to an
Intermediate Company. Southern and NewCo propose, from time to time through June
30, 2005, to (1) guarantee the indebtedness or other obligations of one or more
Exempt Subsidiaries; (2) assume the liabilities of one or more Exempt
Subsidiaries; and/or (3) enter into guarantees and letters of credit
reimbursement agreements in support of equity contribution obligations or
otherwise in connection with project development activities for one or more
Exempt Subsidiaries. Guarantees and credit support are also described under Item
1, Section E. Financing Authority, Subsection 1. Equity Funding, Guarantee and
Parent Support Authority herein.

         Investments may be made from Southern to NewCo and/or Intermediate
Companies directly or indirectly. Any open account advance made by Southern will
have a maturity of not more than one year.

         Southern requests approval to enter into reimbursement agreements with
banks to support letters of credit delivered as security for Southern's or
NewCo's equity contribution obligation to an Intermediate Company or otherwise
in connection with an Intermediate Company's or Exempt Subsidiary's project
development activities.

                                       12
<PAGE>

         The investment in Intermediate Companies and Exempt Subsidiaries is
included in the $4.2 billion authority requested in Item 1, Section E. Financing
Authority herein.

                  3. Rule 53 and Rule 58 Compliance.

         Southern will report all "aggregate investment" as defined under Rule
53 of the Act on a consolidated basis. In addition, to the extent that Southern
provides funds to NewCo that are used to invest in an energy-related company
(within the meaning of Rule 58 under the Act), the amount of the investment will
be included in the calculation of "aggregate investment" required under Rule 58.

         H. NewCo to Sign Income Tax Allocation Agreement.

         In accordance with Rule 45 of the Act, NewCo will participate in the
Income Tax Allocation Agreements, as amended, by signing an amendment to such
agreements.

         I. Reporting Requirements.

         Southern proposes that a single consolidated quarterly report be filed
by Southern pursuant to Rule 24, with respect to all activities of Southern and
its subsidiaries authorized in this file. The format of the report shall
continue to include the following:

                  Item (1) A copy of the balance sheet and income statements as
                  of and for the period ending on the last day of such quarter
                  for direct subsidiaries of Southern that hold the securities
                  of EWGs, including, without limitation, NewCo.

                  Item (2) A narrative description of NewCo's activities during
                  the quarter just ended organized by business category (project
                  development, project related services and other) and, within
                  each category, a description of new developments by project
                  type (e.g., EWGs, energy related activities, etc.).

                  Item (3) Amounts and forms of: (i) guarantees of, and similar
                  provisions and arrangements concerning, performance and
                  undertaking of other obligations by NewCo or any subsidiary of
                  NewCo; and (ii) indemnifications of and with respect to
                  persons acting as sureties on bonds or other obligations on


                                       13
<PAGE>

                  behalf of NewCo or any subsidiary of NewCo which Southern has
                  agreed to grant in the event a bid by any of the foregoing is
                  accepted.

                  Item (4) Amounts and forms of: (i) guarantees of, and similar
                  provisions and arrangements concerning, performance and
                  undertaking of other obligations by NewCo or any subsidiary of
                  NewCo which Southern has granted and are currently effective;
                  and (ii) indemnification's of and with respect to persons
                  acting as sureties on bonds or other obligations on behalf of
                  NewCo or any subsidiary of NewCo which Southern has granted
                  and are currently effective.

                  Item (5) A description of services and goods obtained from
                  associate companies, including services to NewCo, specifying
                  the type of service, the number of personnel from each
                  associate company providing services during the quarter and
                  the total dollar value of such services.

                  Item (6) A description of services and goods provided to
                  associate companies and NewCo which identifies the recipient
                  company, the charge to the associate and whether the charge
                  was computed at cost, market or pursuant to another method,
                  which method shall be specified.

                  Item (7) A chart showing, as of the end of such quarterly
                  period, all associate companies of Southern that are EWGs,
                  Intermediate Subsidiaries, Special Purpose Subsidiaries and
                  Energy-Related Companies; Southern's direct or indirect
                  investment in each such entity; the aggregate direct and
                  indirect investment by Southern in all such entities; and
                  Southern's percentage equity ownership in each such entity,
                  together with a statement indicating by category the type of
                  entity or person (i.e., domestic corporation, foreign
                  corporation, foreign government or natural persons) owning the
                  equity interests in each such entity that are not held
                  directly or indirectly by Southern.

Item 2.  Fees, Commissions and Expenses.

         The fees, commissions and expenses paid or incurred or to be paid or
incurred in connection with the proposed transactions are estimated not to
exceed $100,000.

                                       14
<PAGE>

Item 3.  Applicable Statutory Provisions.

         The applicants consider that Sections 6, 7, 9, 10, 11, 12 and 13 of the
Act and Rules 43, 44, 45, 46, 53, 54, 58, 88, 90 and 91 under the Act are
applicable to the proposed transactions.

         To the extent that other sections of the Act or the Commission rules
thereunder are deemed to be applicable to the transactions described herein,
such sections and rules should be considered to be set forth in this Item 3.

         Section 9(a)(1) provides that unless the acquisition has been approved
by the Commission under Section 10, it shall be unlawful for any registered
holding company or any subsidiary company thereof "to acquire, directly or
indirectly, any securities or utility assets or any other interest in any
business."

         Applicants believe that the proposed transactions described herein
which are subject to Section 9(a) of the Act satisfy the standards of Section 10
of the Act.

         Applicants also believe that the consideration to be paid in connection
with the transactions described herein is fair and reasonable.

         Applicants believe that the transactions described in Item 1 do not
unduly complicate the capital structure of the Southern system and are in the
public interest and in the interest of investors and consumers. Applicants also
believe that the transactions described in Item 1 will tend toward the proper
functioning of the Southern system in a deregulated wholesale market and, as a
consequence, toward the economical and efficient development of an integrated
public utility system. The request that NewCo and its subsidiaries be permitted
to pay dividends from unearned surplus is consistent with Commission precedent.
See Conectiv, Inc., Holding Company Act Release No. 27079 (September 27, 1999.)



                                       15
<PAGE>

         The transactions described in Item 1 are, in the context of
deregulation in the wholesale electrical generation market, "reasonably
incidental, or economically necessary and appropriate to" the operations of a
registered electric utility holding company system such as Southern. See The
Southern Company, Holding Company Act Release No. 26211, dated December 30,
1994. These transactions will enable the Southern system to offer competitive
generation in the wholesale market, thus they tend toward the economical and
efficient development of an integrated public utility system.

         The various transfers of assets and equity securities and the formation
of NewCo described in Item 1 would not result in the existence of any company in
the holding company system that would unduly or unnecessarily complicate the
structure, or unfairly or inequitably distribute voting power among security
holders, of the Southern system. The creation of the new subsidiary is necessary
to adapt to competition in the wholesale generation industry and will contribute
to the efficient operation of Southern's integrated power supply system. Plant
Dahlberg operates as part of that system. As noted in Item 1, the transfers and
the formation of new subsidiary will allow the Operating Companies to continue
to serve the needs of their requirements customers while gearing Southern for
competition in a deregulated wholesale generation market, will allow NewCo to
manage and operate its generating assets with due regard to market
considerations and will increase the flexibility for financing activities on
cost-effective terms that reflect the costs of capital for each area of business
activity. After all transfers and actions described in Item 1 are completed,
redundant organizational structures will not remain. As described in Item 1
hereof, Southern will achieve a number of operating, financial and managerial
benefits from forming NewCo that are consistent with and will contribute to the
efficient operation of an integrated utility system. See WPL Holdings Inc.,


                                       16
<PAGE>

Holding Company Act Release No. 25377, dated September 18, 1991. Accordingly,
approval is warranted under Section 10 of the Act.

         Rule 54 Analysis: The proposed transactions are also subject to Rule
54, which provides that, in determining whether to approve an application which
does not relate to any EWG or FUCO, the Commission shall not consider the effect
of the capitalization or earnings of any such EWG or FUCO which is a subsidiary
of a registered holding company if the requirements of Rule 53(a), (b) and (c)
are satisfied.

         Southern currently meets all of the conditions of Rule 53(a), except
for clause (1). At September 30, 2000, Southern's "aggregate investment," as
defined in Rule 53(a)(1), in EWGs and FUCOs was approximately $2.565 billion, or
about 58.14% of Southern's "consolidated retained earnings," also as defined in
Rule 53(a)(1), for the four quarters ended September 30, 2000 ($4.412 billion).
With respect to Rule 53(a)(1), however, the Commission has determined that
Southern's financing of investments in EWGs and FUCOs in an amount greater than
the amount that would otherwise be allowed by Rule 53(a)(1) would not have
either of the adverse effects set forth in Rule 53(c). See The Southern Company,
Holding Company Act Release No. 26501, dated April 1, 1996 (the "Rule 53(c)
Order"); and Holding Company Act Release No. 26646, dated January 15, 1997
(order denying request for reconsideration and motion to stay).

         In addition, Southern has complied and will continue to comply with the
record-keeping requirements of Rule 53(a)(2), the limitation under Rule 53(a)(3)
on the use of Operating Company personnel to render services to EWGs and FUCOs,
and the requirements of Rule 53(a)(4) concerning the submission of copies of
certain filings under the Act to retail rate regulatory commissions. Further,
none of the circumstances described in Rule 53(b) has occurred.

                                       17
<PAGE>

         Moreover, even if the effect of the capitalization and earnings of EWGs
and FUCOs in which Southern has an ownership interest upon the Southern holding
company system were considered, there would be no basis for the Commission to
withhold or deny approval for the proposal made in this Application-Declaration.
The action requested in the instant filing would not, by itself, or even
considered in conjunction with the effect of the capitalization and earnings of
Southern's EWGs and FUCOs, have a material adverse effect on the financial
integrity of the Southern system, or an adverse impact on Southern's
public-utility subsidiaries, their customers, or the ability of State
commissions to protect such public-utility customers.

         The Rule 53(c) Order was predicated, in part, upon an assessment of
Southern's overall financial condition which took into account, among other
factors, Southern's consolidated capitalization ratio and the recent growth
trend in Southern's retained earnings. As of December 31, 1995, the most recent
fiscal year preceding the Rule 53(c) Order, Southern's consolidated
capitalization consisted of 49.3% equity (including mandatorily redeemable
preferred securities) and 50.7% debt (including $1.68 billion of long-term,
non-recourse debt and short-term debt related to EWGs and FUCOs). Southern's
consolidated capitalization as of September 30, 2000 was 40.4% equity,9 59.6%
debt including all non-recourse debt, and 55.7% equity and 44.3% debt excluding
all non-recourse debt. On a pro forma basis, taking into consideration the
transactions contemplated hereby, such ratios are 40.4% and 59.6%, respectively,
for equity and debt. The common equity component of Southern's pro forma
consolidated capitalization includes $11.080 billion of common stock equity,
representing 32.5% of capitalization and $2.688 billion principal amount of

______________________________

9 Excluding preferred stock and preferred securities from the equity component
of Southern's consolidated capitalization, the equity component was 31.4% of
total capitalization.



                                       18
<PAGE>

preferred stock and preferred securities representing 7.9% of capitalization.

         Since the date of the Rule 53(c) Order, there has been a reduction in
Southern's consolidated equity capitalization ratio; however, it remains within
acceptable ranges and limits of rating agencies for strong investment grade
corporate credit ratings. In addition, the affiliated operating companies, which
have a significant influence on the Southern corporate rating, continue to show
strong financial statistics as measured by the rating agencies. The following
table presents the senior secured ratings history for each as rated by S&P,
Moody's and Fitch:

- ------------- ---------- --------- --------- --------- --------- ---------
Company       Agency     1995      1996      1997      1998      199910
- ------------- ---------- --------- --------- --------- --------- ---------
- ------------- ---------- --------- --------- --------- --------- ---------
Alabama       S&P        A+        A+        A+        A+        A+
              Moody's    A1        A1        A1        A1        A1
              Fitch      A+        AA-       AA-       AA-       AA-
- ------------- ---------- --------- --------- --------- --------- ---------
- ------------- ---------- --------- --------- --------- --------- ---------
Georgia       S&P        A+        A+        A+        A+        A+
              Moody's    A1        A1        A1        A1        A1
              Fitch      AA-       AA-       AA-       AA-       AA-
- ------------- ---------- --------- --------- --------- --------- ---------
- ------------- ---------- --------- --------- --------- --------- ---------
Gulf          S&P        A+        A+        AA-       AA-       AA-
              Moody's    A1        A1        A1        A1        A1
              Fitch      A+        AA-       AA-       AA-       AA-
- ------------- ---------- --------- --------- --------- --------- ---------
- ------------- ---------- --------- --------- --------- --------- ---------
Mississippi   S&P        A+        A+        AA-       AA-       AA-
              Moody's    Aa3       Aa3       Aa3       Aa3       Aa3
              Fitch      AA-       AA-       AA-       AA-       AA-
- ------------- ---------- --------- --------- --------- --------- ---------
- ------------- ---------- --------- --------- --------- --------- ---------
Savannah      S&P        A+        A+        AA-       AA-       AA-
              Moody's    A1        A1        A1        A1        A1
              Fitch      Not rated Not rated Not rated Not rated Not rated
- ------------- ---------- --------- --------- --------- --------- ---------

         Southern's consolidated retained earnings grew on average approximately
5.9% per year over the last five years. Excluding the $111 million one-time
windfall profits tax imposed on SWEB in 1997, the $221 million write down of

_______________________________________


10 In April 2000, Moody's and Duff & Phelps (now known as Fitch) reaffirmed
their ratings; however, S&P placed the ratings of Southern and its affiliates on
credit watch with negative implications.


                                       19
<PAGE>

assets in 1998, the $69 million write down of the Mobile Energy investment in
1999 and the $78 million gain on the sale of the SWEB supply business in 1999,
the average growth would be 7.4%. In 1999, consolidated retained earnings
increased $354 million, or 9.1%. Southern's interests in EWGs and FUCOs have
made a positive contribution to earnings over the four calendar years ending
after the Rule 53(c) Order.

         Accordingly, since the date of the Rule 53(c) Order, the capitalization
and earnings attributable to Southern's investments in EWGs and FUCOs has not
had an adverse impact on Southern's financial integrity.

Item 4.  Regulatory Approval.

         No state commission has jurisdiction with respect to the subject
transactions and, assuming that the Commission authorizes and approves all
aspects of the subject transactions (including the accounting therefor), no
other Federal commission has jurisdiction with respect thereto except that
NewCo's participation in the Intercompany Interchange Contract and any wholesale
sales of electric power will be subject to FERC jurisdiction under the Federal
Power Act.

Item 5.  Procedure.

         The applicants hereby request that the Commission's order be issued as
soon as the rules allow. The applicants hereby waive a recommended decision by a
hearing officer or other responsible officer of the Commission, consent that the
Division of Investment Management may assist in the preparation of the
Commission's decision and/or order in this matter, unless such Division opposes
the transactions proposed herein, and request that there be no 30-day waiting


                                       20
<PAGE>

period between the issuance of the Commission's order and the date on which it
is to become effective.

Item 6.  Exhibits and Financial Statements.

         The following exhibits and financial statements are filed as a part of
this Application/Declaration:

         (a) Exhibits

                  A-1- Proposed Certificate of Incorporation of NewCo.

                  A-2- Proposed By-Laws of NewCo.

                  B-1- Form of Service Agreement.

                  B-2- Form of Operating Agreement.

                  C  - Not applicable.

                  D-1- Approval of the FERC regarding NewCo's participation in
                       the Intercompany Interchange Agreement.

                  E  - Not applicable.

                  F-1- Opinion of Troutman Sanders LLP, counsel to Southern.

                  F-2- Opinion of Balch & Bingham LLP, counsel to Alabama.

                  F-3- Opinion of Troutman Sanders LLP, counsel to Georgia.

                  F-4- Opinion of Beggs & Lane, counsel to Gulf.

                  F-5- Opinion of Eaton and Cottrell, P.A., counsel to
                       Mississippi.

                  F-6- Opinion of Troutman Sanders LLP, counsel to Savannah.

                  G  - Form of Notice. (Previously filed).

                                       21
<PAGE>

         (b) Financial Statements

         Consolidated balance sheet of The Southern Company and its subsidiaries
at September 30, 2000. (Designated in the Southern Company's Form 10-Q for the
quarter ended September 30, 2000, File No. 1-3536.)

         Consolidated statements of income and cash flows for The Southern
Company and its subsidiaries for the six months ended September 30, 2000.
(Designated in The Southern Company's Form 10-Q for the quarter ended September
30, 2000, File No. 1-3536.)

Item 7.  Information as to Environmental Effects.

         (a) The issuance of an order by the Commission with respect to the
proposed transactions will not constitute a major federal action significantly
affecting the quality of the human environment.

         (b) No other federal agency has prepared or is preparing an
environmental impact statement with regard to the proposed transactions.


                                       22
<PAGE>

                                   SIGNATURES

         Pursuant to the requirements of the Public Utility Holding Company Act
of 1935, the undersigned companies have duly caused this amendment to be signed
on their behalf by the undersigned thereunto duly authorized.

Date:  December 21, 2000            THE SOUTHERN COMPANY


                                    By:  /s/Tommy Chisholm
                                             Tommy Chisholm
                                             Corporate Secretary and Assistant
                                             Treasurer

                                    ALABAMA POWER COMPANY


                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary

                                    GEORGIA POWER COMPANY

                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary

                                    GULF POWER COMPANY


                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary



                                       23
<PAGE>

                                    MISSISSIPPI POWER COMPANY


                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary

                                    SAVANNAH ELECTRIC AND POWER COMPANY


                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary

                                    SOUTHERN ELECTRIC GENERATING COMPANY


                                    By: /s/Wayne Boston
                                             Wayne Boston
                                             Assistant Secretary

                                       24
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>2
<FILENAME>exa1_9701.txt
<DESCRIPTION>EXHIBIT A-1
<TEXT>

                                                                     Exhibit A-1

                          CERTIFICATE OF INCORPORATION

                                       OF

                                  [NEWCO, INC.]

                                       I.

         The name of the corporation is [Newco, Inc.] (the "Corporation").


                                       II.

         The initial registered office of the Corporation in the State of
Delaware shall be located at [1013 Centre Road, Wilmington, New Castle County,
Delaware 19805]. The initial registered agent of the Corporation at such address
shall be [Corporation Service Company].

                                      III.

         The purpose or purposes for which the Corporation is organized shall be
to engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.

                                       IV.

         The Corporation shall be authorized to issue [One Thousand (1,000)]
shares of [$.01] par value capital stock, all of which shall be designated
"Common Stock." The shares of Common Stock shall have unlimited voting rights
and shall be entitled to receive all of the net assets of the Corporation upon
dissolution or liquidation.

                                       V.

         The affairs of the Corporation shall be managed by a Board of Directors
and as otherwise provided in the Bylaws of the Corporation. The initial Board of
Directors of the corporation shall consist of ____________ members, whose names
are as follows:

The mailing address of the directors is ________________________________.

                                       VI.

         The Corporation shall have perpetual duration.

                                      VII.

         The Board of Directors of the Corporation shall have the power to
adopt, amend and repeal the Bylaws of the Corporation.

                                      VIII.

         To the fullest extent that the General Corporation Law of Delaware, as
it exists on the date hereof or as it may hereafter be amended, permits the
limitation or elimination of the liability of directors, no director of the
Corporation shall be personally liable to the Corporation or its stockholders
for monetary damages for breach of duty of care or other duty as a director. No
amendment to or repeal of this Article shall apply to or have any effect on the
liability or alleged liability of any director of the Corporation for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal.

                                       IX.

         The name and address of the Incorporator of the Corporation is
_______________.





                                    ------------------------------------------
                                    --------------------
                                    Incorporator
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>3
<FILENAME>exa2_9701.txt
<DESCRIPTION>EXHIBIT A-2
<TEXT>

                                                                     Exhibit A-2



                                  B Y L A W S

                                       OF

                                  [NEWCO, INC.]


                                    ARTICLE I

                                     OFFICES

         Section 1. The registered office shall be in the City of Wilmington,
County of New Castle, State of Delaware.

         Section 2. The corporation may also have offices at such other places
both within and without the State of Delaware as the board of directors may from
time to time determine or the business of the corporation may require.


                                   ARTICLE II

                            MEETINGS OF STOCKHOLDERS

         Section 1. All meetings of the stockholders for the election of
directors shall be held at such place as may be fixed from time to time by the
board of directors, or at such other place either within or without the State of
Delaware as shall be designated from time to time by the board of directors and
stated in the notice of the meeting. Meetings of stockholders for any other
purpose may be held at such time and place, within or without the State of
Delaware, as shall be stated in the notice of the meeting or in a duly executed
waiver of notice thereof.

         Section 2. Annual meetings of stockholders shall be held at such date
and time as shall be designated from time to time by the board of directors and
stated in the notice of the meeting, at which they shall elect by a plurality
vote a board of directors, and transact such other business as may properly be
brought before the meeting.

         Section 3. Written notice of the annual meeting stating the place, date
and hour of the meeting shall be given to each stockholder entitled to vote at
such meeting not less than ten (10) nor more than sixty (60) days before the
date of the meeting.

         Section 4. The officer who has charge of the stock ledger of the
corporation shall prepare and make, at least ten days before every meeting of
stockholders, a complete list of the stockholders entitled to vote at the
meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of the
meeting, or, if not so specified, at the place where the meeting is to be held.
The list shall also be produced and kept at the time and place of the meeting
during the whole time thereof, and may be inspected by any stockholder who is
present.

         Section 5. Special meetings of the stockholders, for any purpose or
purposes, unless otherwise prescribed by statute or by the certificate of
incorporation, may be called by the president and shall be called by the
president or secretary at the request in writing of a majority of the board of
directors, or at the request in writing of stockholders owning a majority in
amount of the entire capital stock of the corporation issued and outstanding and
entitled to vote. Such request shall state the purpose or purposes of the
proposed meeting.

         Section 6. Written notice of a special meeting stating the place, date
and hour of the meeting and the purpose or purposes for which the meeting is
called, shall be given not less than ten (10) nor more than sixty (60) days
before the date of the meeting, to each stockholder entitled to vote at such
meeting.

         Section 7. Business transacted at any special meeting of stockholders
shall be limited to the purposes stated in the notice.

         Section 8. The holders of a majority of the stock issued and
outstanding and entitled to vote thereat, present in person or represented by
proxy, shall constitute a quorum at all meetings of the stockholders for the
transaction of business except as otherwise provided by statute or by the
certificate of incorporation. If, however, such quorum shall not be present or
represented at any meeting of the stockholders, the stockholders entitled to
vote thereat, present in person or represented by proxy, shall have power to
adjourn the meeting from time to time, without notice other than announcement at
the meeting, until a quorum shall be present or represented. At such adjourned
meeting at which a quorum shall be present or represented any business may be
transacted that might have been transacted at the meeting as originally
notified. If the adjournment is for more than thirty days, or if after the
adjournment a new record date is fixed for the adjourned meeting, a notice of
the adjourned meeting shall be given to each stockholder of record entitled to
vote at the meeting.

         Section 9. When a quorum is present at any meeting, the vote of the
holders of a majority of the stock having voting power present in person or
represented by proxy shall decide any question brought before such meeting,
unless the question is one upon which by express provision of the statutes or of
the certificate of incorporation a different vote is required, in which case
such express provision shall govern and control the decision of such question.

         Section 10. Unless otherwise provided in the certificate of
incorporation or in an agreement among stockholders as permitted under the
General Corporation Law of the State of Delaware (the "Delaware Corporation
Law"), each stockholder shall at every meeting of the stockholders be entitled
to one vote in person or by proxy for each share of the capital stock having
voting power held by such stockholder, but no proxy shall be voted on after
three years from its date, unless the proxy provides for a longer period.

         Section 11. Unless otherwise provided in the certificate of
incorporation, any action required to be taken at any annual or special meeting
of stockholders of the corporation, or any action that may be taken at any
annual or special meeting of such stockholders, may be taken without a meeting,
without prior notice and without a vote, if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Prompt notice of the taking of the corporate action
without a meeting by less than unanimous written consent shall be given to those
stockholders who have not consented in writing.


                                   ARTICLE III

                                    DIRECTORS

         Section 1. The number of directors which shall constitute the whole
board shall be not less than one (1) nor more than [twenty (20)]. The initial
board shall consist of _____ (_) directors. Thereafter, within the limits above
specified, the number of directors shall be determined by resolution of the
board of directors or by the stockholders at the annual meeting. The directors
shall be elected at the annual meeting of the stockholders, except as provided
in Section 2 of this Article, and each director elected shall hold office until
his successor is elected and qualified. Directors need not be stockholders.

         Section 2. Vacancies and newly created directorships resulting from any
increase in the authorized number of directors may be filled by a majority of
the directors then in office, though less than a quorum, or by a sole remaining
director, and the directors so chosen shall hold office until the next annual
election and until their successors are duly elected and shall qualify, unless
sooner displaced. If there are no directors in office, then an election of
directors may be held in the manner provided by statute. If, at the time of
filling any vacancy or any newly created directorship, the directors then in
office shall constitute less than a majority of the whole board (as constituted
immediately prior to any such increase), the Court of Chancery may, upon
application of any stockholder or stockholders holding at least ten percent of
the total number of the shares at the time outstanding having the right to vote
for such directors, summarily order an election to be held to fill any such
vacancies or newly created directorships, or to replace the directors chosen by
the directors then in office.

         Section 3. The business of the corporation shall be managed by or under
the direction of its board of directors, which may exercise all such powers of
the corporation and do all such lawful acts and things as are not by statute or
by the certificate of incorporation or by these bylaws directed or required to
be exercised or done by the stockholders.


                       MEETINGS OF THE BOARD OF DIRECTORS

         Section 4. The board of directors of the corporation may hold meetings,
both regular and special, either within or without the State of Delaware.

         Section 5. The first meeting of each newly elected board of directors
shall be held at such time and place as shall be fixed by the vote of the
stockholders at the annual meeting and no notice of such meeting shall be
necessary to the newly elected directors in order legally to constitute the
meeting, provided a quorum shall be present. In the event of the failure of the
stockholders to fix the time or place of such first meeting of the newly elected
board of directors, or in the event such meeting is not held at the time and
place so fixed by the stockholders, the meeting may be held at such time and
place as shall be specified in a notice given as hereinafter provided for
special meetings of the board of directors, or as shall be specified in a
written waiver signed by all of the directors.

         Section 6. Regular meetings of the board of directors may be held
without notice at such time and at such place as shall from time to time be
determined by the board.

         Section 7. Special meetings of the board may be called by the president
on two days' notice to each director, either personally or by mail or by
telegram; special meetings shall be called by the president or secretary in like
manner and on like notice on the written request of two directors unless the
board consists of only one director; in which case special meetings shall be
called by the president or secretary in like manner and on like notice on the
written request of the sole director.

         Section 8. At all meetings of the board, a majority of the directors
shall constitute a quorum for the transaction of business and the act of a
majority of the directors present at any meeting at which there is a quorum
shall be the act of the board of directors, except as may be otherwise
specifically provided by statute or by the certificate of incorporation. If a
quorum shall not be present at any meeting of the board of directors, the
directors present thereat may adjourn the meeting from time to time, without
notice other than announcement at the meeting, until a quorum shall be present.

         Section 9. Unless otherwise restricted by the certificate of
incorporation or these bylaws, any action required or permitted to be taken at
any meeting of the board of directors or of any committee thereof may be taken
without a meeting, if all members of the board or committee, as the case may be,
consent thereto in writing, and the writing or writings are filed with the
minutes of proceedings of the board or committee.

         Section 10. Unless otherwise restricted by the certificate of
incorporation or these bylaws, members of the board of directors, or any
committee designated by the board of directors, may participate in a meeting of
the board of directors, or any committee, by means of conference telephone or
similar communications equipment by means of which all persons participating in
the meeting can hear each other, and such participation in a meeting shall
constitute presence in person at the meeting.


                             COMMITTEES OF DIRECTORS

         Section 11. The board of directors may, by resolution passed by a
majority of the whole board, designate one or more committees, each committee to
consist of one or more of the directors of the corporation. The board may
designate one or more directors as alternate members of any committee, who may
replace any absent or disqualified member at any meeting of the committee.

         Any such committee, to the extent provided in the resolution of the
board of directors, shall have and may exercise all the powers and authority of
the board of directors in the management of the business and affairs of the
corporation, and may authorize the seal of the corporation to be affixed to all
papers that may require it; but no such committee shall have the power or
authority in reference to amending the certificate of incorporation (except that
a committee may, to the extent authorized in the resolution or resolutions
providing for the issuance of shares of stock adopted by the board of directors
as provided in the Delaware Corporation Law, Section 151(a), fix any of the
preferences or rights of such shares relating to dividends, redemption,
dissolution, any distribution of assets of the corporation or the conversion
into, or the exchange of such shares for, shares of any other class or classes
or any other series of stock of the corporation), adopting an agreement of
merger or consolidation, recommending to the stockholders the sale, lease or
exchange of all or substantially all of the corporation's property and assets,
recommending to the stockholders a dissolution of the corporation or a
revocation of a dissolution, or amending the bylaws of the corporation; and,
unless the resolution or the certificate of incorporation expressly so provides,
no such committee shall have the power or authority to declare a dividend or to
authorize the issuance of stock or to adopt a certificate of ownership and
merger. Such committee or committees shall have such name or names as may be
determined from time to time by resolution adopted by the board of directors.

         Section 12. Unless otherwise specifically permitted by the board of
directors, the provisions of these bylaws that govern meetings, actions without
meetings, notice and waiver of notice and quorum and voting requirements of the
board of directors, shall apply to meetings of committees and their members as
well.


                            COMPENSATION OF DIRECTORS

         Section 13. Unless otherwise restricted by the certificate of
incorporation or these bylaws, the board of directors shall have the authority
to fix the compensation of directors. The directors may be paid their expenses,
if any, of attendance at each meeting of the board of directors and may be paid
a fixed sum for attendance at each meeting of the board of directors or a stated
salary as director. No such payment shall preclude any director from serving the
corporation in any other capacity and receiving compensation therefor. Members
of special or standing committees may be allowed like compensation for attending
committee meetings.


                              REMOVAL OF DIRECTORS

         Section 14. Unless otherwise restricted by the certificate of
incorporation or by law, any director of the entire board of directors may be
removed, with or without cause, by the holders of a majority of shares entitled
to vote at an election of directors.


                                   ARTICLE IV

                                     NOTICES

         Section 1. Whenever, under the provisions of the statutes or of the
certificate of incorporation or of these bylaws, notice is required to be given
to any director or stockholder, it shall not be construed to mean personal
notice, but such notice may be given in writing, by mail, addressed to such
director or stockholder, at his address as it appears on the records of the
corporation, with postage thereon prepaid, and such notice shall be deemed to be
given at the time when the same shall be deposited in the United States mail.
Notice to directors may also be given by telegram, facsimile or email.

         Section 2. Whenever any notice is required to be given under the
provisions of the statutes or of the certificate of incorporation or of these
bylaws, a waiver thereof in writing, signed by the person or persons entitled to
said notice, whether before or after the time stated therein, shall be deemed
equivalent thereto.


                                    ARTICLE V

                                    OFFICERS

         Section 1. The officers of the corporation shall be chosen by the board
of directors and shall be at a minimum a president, secretary and treasurer. The
board of directors may also choose one or more vice-presidents, assistant
secretaries and assistant treasurers. Any number of offices may be held by the
same person, unless the certificate of incorporation or these bylaws otherwise
provides.

         Section 2. The board of directors at its first meeting after each
annual meeting of stockholders shall choose a president, one or more
vice-presidents, a secretary and a treasurer.

         Section 3. The board of directors may appoint such other officers and
agents as it shall deem necessary who shall hold their offices for such terms
and shall exercise such powers and perform such duties as shall be determined
from time to time by the board.

         Section 4. The salaries of all officers and agents of the corporation
shall be fixed by the board of directors.

         Section 5. The officers of the corporation shall hold office until
their successors are chosen and qualified. Any officer elected or appointed by
the board of directors may be removed at any time by the affirmative vote of a
majority of the board of directors. Any vacancy occurring in any office of the
corporation shall be filled by the board of directors.

         Section 6. Each officer of the corporation shall have the authority to
execute and deliver any and all applications and filings as are necessary to be
filed with federal, state and local regulatory agencies on behalf of the
corporation.


                                  THE PRESIDENT

         Section 7. The president shall be the chief executive officer of the
corporation, shall preside at all meetings of the stockholders and the board of
directors, shall have general and active management of the business of the
corporation and shall see that all orders and resolutions of the board of
directors are carried into effect.

         Section 8. The president shall execute bonds, mortgages and other
contracts requiring a seal, under the seal of the corporation, except where
required or permitted by law to be otherwise signed and executed and except
where the signing and execution thereof shall be expressly delegated by the
board of directors to some other officer or agent of the corporation.


                               THE VICE-PRESIDENTS

         Section 9. In the absence of the president or in the event of his
inability or refusal to act, the vice-president (or in the event there be more
than one vice-president, the vice-presidents in the order designated by the
directors, or in the absence of any designation, then in the order of their
election) shall perform the duties of the president, and when so acting, shall
have all the powers of, and be subject to, all the restrictions upon the
president. The vice-presidents shall perform such other duties and have such
other powers as the board of directors may from time to time prescribe.


                      THE SECRETARY AND ASSISTANT SECRETARY

         Section 10. The secretary shall attend all meetings of the board of
directors and all meetings of the stockholders and record all the proceedings of
the meetings of the corporation and of the board of directors in a book to be
kept for that purpose and shall perform like duties for the standing committees
when required. He shall give, or cause to be given, notice of all meetings of
the stockholders and special meetings of the board of directors, and shall
perform such other duties as may be prescribed by the board of directors or
president, under whose supervision he shall be. He shall have custody of the
corporate seal of the corporation and he, or an assistant secretary, shall have
authority to affix the same to any instrument requiring it and when so affixed,
it may be attested by his signature or by the signature of such assistant
secretary. The board of directors may give general authority to any other
officer to affix the seal of the corporation and to attest the affixing by his
signature.

         Section 11. The assistant secretary, or if there be more than one, the
assistant secretaries in the order determined by the board of directors (or if
there be no such determination, then in the order of their election) shall, in
the absence of the secretary or in the event of his inability or refusal to act,
perform the duties and exercise the powers of the secretary and shall perform
such other duties and have such other powers as the board of directors may from
time to time prescribe.


                     THE TREASURER AND ASSISTANT TREASURERS

         Section 12. The treasurer shall have the custody of the corporate funds
and securities and shall keep full and accurate accounts of receipts and
disbursements in books belonging to the corporation and shall deposit all moneys
and other valuable effects in the name and to the credit of the corporation in
such depositories as may be designated by the board of directors.

         Section 13. The treasurer shall disburse the funds of the corporation
as may be ordered by the board of directors, taking proper vouchers for such
disbursements, and shall render to the president and the board of directors, at
its regular meetings, or when the board of directors so requires, an account of
all his transactions as treasurer and of the financial condition of the
corporation.

         Section 14. If required by the board of directors, he shall give the
corporation a bond (which shall be renewed every six years) in such sum and with
such surety or sureties as shall be satisfactory to the board of directors for
the faithful performance of the duties of his office and for the restoration to
the corporation, in case of his death, resignation, retirement or removal from
office, of all books, papers, vouchers, money and other property of whatever
kind in his possession or under his control belonging to the corporation.

         Section 15. The assistant treasurer, or if there shall be more than
one, the assistant treasurers in the order determined by the board of directors
(or if there be no such determination, then in the order of their election)
shall, in the absence of the treasurer or in the event of his inability or
refusal to act, perform the duties and exercise the powers of the treasurer and
shall perform such other duties and have such other powers as the board of
directors may from time to time prescribe.


                                   ARTICLE VI

                             CERTIFICATES FOR SHARES

         Section 1. The shares of the corporation shall be represented by a
certificate or shall be uncertificated. Certificates shall be signed by, or in
the name of the corporation by, the chairman or vice-chairman of the board of
directors, or the president or a vice-president and the treasurer or an
assistant treasurer, or the secretary or an assistant secretary of the
corporation.

         Within a reasonable time after the issuance or transfer of
uncertificated stock, the corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to the Delaware Corporate Law, Sections 151, 156,
202(a) or 218(a) or a statement that the corporation will furnish without charge
to each stockholder who so requests the powers, designations, preferences and
relative participating, optional or other special rights of each class of stock
or series thereof and the qualifications, limitations or restrictions of such
preferences and/or rights.

         Section 2. Any of or all the signatures on a certificate may be by
facsimile. In case any officer, transfer agent or registrar who has signed or
whose facsimile signature has been placed upon a certificate shall have ceased
to be such officer, transfer agent or registrar before such certificate is
issued, it may be issued by the corporation with the same effect as if he were
such officer, transfer agent or registrar at the date of issue.


                                LOST CERTIFICATES

         Section 3. The board of directors may direct a new certificate or
certificates or uncertificated shares to be issued in place of any certificate
or certificates theretofore issued by the corporation alleged to have been lost,
stolen or destroyed, upon the making of an affidavit of that fact by the person
claiming the certificate of stock to be lost, stolen or destroyed. When
authorizing such issue of a new certificate or certificates or uncertificated
shares, the board of directors may, in its discretion and as a condition
precedent to the issuance thereof, require the owner of such lost, stolen or
destroyed certificate or certificates, or his legal representative, to advertise
the same in such manner as it shall require and/or to give the corporation a
bond in such sum as it may direct as indemnity against any claim that may be
made against the corporation with respect to the certificate alleged to have
been lost, stolen or destroyed.


                                TRANSFER OF STOCK

         Section 4. Upon surrender to the corporation or the transfer agent of
the corporation of a certificate for shares duly endorsed or accompanied by
proper evidence of succession, assignation or authority to transfer, it shall be
the duty of the corporation to issue a new certificate to the person entitled
thereto, cancel the old certificate and record the transaction upon its books.
Upon receipt of proper transfer instructions from the registered owner of
uncertificated shares such uncertificated shares shall be cancelled and issuance
of new equivalent uncertificated shares or certificated shares shall be made to
the person entitled thereto and the transaction shall be recorded upon the books
of the corporation.


                               FIXING RECORD DATE

         Section 5. In order that the corporation may determine the stockholders
entitled to notice of or to vote at any meeting of stockholders or any
adjournment thereof, or to express consent to corporate action in writing
without a meeting, or entitled to receive payment of any dividend or other
distribution or allotment of any rights, or entitled to exercise any rights in
respect of any change, conversion or exchange of stock or for the purpose of any
other lawful action, the board of directors may fix, in advance, a record date,
which shall not be more than sixty (60) nor less than ten (10) days before the
date of such meeting, nor more than sixty (60) days prior to any other action. A
determination of stockholders of record entitled to notice of or to vote at a
meeting of stockholders shall apply to any adjournment of the meeting; provided,
however, that the board of directors may fix a new record date for the adjourned
meeting.


                             REGISTERED STOCKHOLDERS

         Section 6. The corporation shall be entitled to recognize the exclusive
right of a person registered on its books as the owner of shares to receive
dividends, and to vote as such owner, and to hold liable for calls and
assessments a person registered on its books as the owner of shares, and shall
not be bound to recognize any equitable or other claim to or interest in such
share or shares on the part of any other person, whether or not it shall have
express or other notice thereof, except as otherwise provided by the laws of
Delaware.


                                   ARTICLE VII

                                 INDEMNIFICATION

         Section 1. Each person who is or was a director of the corporation or
officer or employee of the corporation holding one or more positions of
management through and inclusive of managers (but not positions below the level
of such managers) (such positions being hereinafter referred to as "Management
Positions") and who was or is a party or was or is threatened to be made a party
to any threatened, pending or completed claim, action, suit or proceeding,
whether civil, criminal, administrative or investigative, by reason of the fact
that he is or was a director of the corporation or officer or employee of the
corporation holding one or more Management Positions, or is or was serving at
the request of the corporation as a director (or the equivalent), alternate
director, officer, employee, agent or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
shall be indemnified by the corporation as a matter of right against any and all
expenses (including attorneys' fees) actually and reasonably incurred by him and
against any and all claims, judgments, fines, penalties, liabilities and amounts
paid in settlement actually incurred by him in defense of such claim, action,
suit or proceeding, including appeals, to the full extent permitted by
applicable law. The indemnification provided by this section shall inure to the
benefit of the heirs, executors and administrators of such person.

         Section 2. Expenses (including attorneys' fees) incurred by a director
of the corporation or officer or employee of the corporation holding one or more
Management Positions with respect to the defense of any such claim, action, suit
or proceeding may be advanced by the corporation prior to the final disposition
of such claim, action, suit or proceeding, as authorized by the board of
directors in the specific case, upon receipt of an undertaking by or on behalf
of such person to repay such amount unless it shall ultimately be determined
that such person is entitled to be indemnified by the corporation under these
bylaws or otherwise; provided, however, that the advancement of such expenses
shall not be deemed to be indemnification unless and until it shall ultimately
be determined that such person is entitled to be indemnified by the corporation.

         Section 3. The corporation may purchase and maintain insurance at the
expense of the corporation on behalf of any person who is or was a director,
officer, employee or agent of the corporation, or any person who is or was
serving at the request of the corporation as a director (or the equivalent),
alternate director, officer, employee, agent or trustee of another corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise,
against any liability or expense (including attorneys' fees) asserted against
him and incurred by him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to indemnify him
against such liability or expense under these bylaws or otherwise.

         Section 4. Without limiting the generality of the foregoing provisions,
no present or future director or officer of the corporation, or his heirs,
executors or administrators, shall be liable for any act, omission, step or
conduct taken or had in good faith, which is required, authorized or approved by
any order or orders issued pursuant to the Public Utility Holding Company Act of
1935, as amended, the Federal Power Act, as amended, or any federal or state
statute or municipal ordinance regulating the corporation or its parent by
reason of their being holding or investment companies, public utility companies,
public utility holding companies or subsidiaries of public utility holding
companies. In any action, suit or proceeding based on any act, omission, step or
conduct, as in this paragraph described, the provisions hereof shall be brought
to the attention of the court. In the event that the foregoing provisions of
this paragraph are found by the court not to constitute a valid defense on the
grounds of not being applicable to the particular class of plaintiff, each such
director and officer, and his heirs, executors and administrators, shall be
reimbursed for, or indemnified against, all expenses and liabilities incurred by
him or imposed on him, in connection with, or arising out of, any such action,
suit or proceeding based on any act, omission, step, or conduct taken or had in
good faith as in this paragraph described. Such expenses and liabilities shall
include judgments, court costs and attorneys' fees.

         Section 5. The foregoing rights shall not be exclusive of any other
rights to which any such director or officer or employee may otherwise be
entitled and shall be available whether or not the director or officer or
employee continues to be a director or officer or employee at the time of
incurring any such expenses and liabilities.

         Section 6. If any word, clause or provision of the bylaws or any
indemnification made under this Article VII hereof shall for any reason be
determined to be invalid, the provisions of the bylaws shall not otherwise be
affected thereby but shall remain in full force and effect. The masculine
pronoun, as used in the bylaws, means the masculine and feminine wherever
applicable.


                                  ARTICLE VIII

                               GENERAL PROVISIONS

                                    DIVIDENDS

         Section 1. Dividends upon the capital stock of the corporation, subject
to the provisions of the certificate of incorporation, if any, may be declared
by the board of directors at any regular or special meeting, pursuant to law.
Dividends may be paid in cash, in property or in shares of the capital stock,
subject to the provisions of the certificate of incorporation.

         Section 2. Before payment of any dividend, there may be set aside out
of any funds of the corporation available for dividends such sum or sums as the
directors from time to time, in their absolute discretion, think proper as a
reserve or reserves to meet contingencies, or for equalizing dividends, or for
repairing or maintaining any property of the corporation, or for such other
purpose as the directors shall think conducive to the interest of the
corporation, and the directors may modify or abolish any such reserve in the
manner in which it was created.


                                ANNUAL STATEMENT

         Section 3. The board of directors shall present at each annual meeting,
and at any special meeting of the stockholders when called for by vote of the
stockholders, a full and clear statement of the business and condition of the
corporation.


                                     CHECKS

         Section 4. All checks or demands for money and notes of the corporation
shall be signed by such officer or officers or such other person or persons as
the board of directors may from time to time designate.


                                   FISCAL YEAR

         Section 5. The fiscal year of the corporation shall be fixed by
resolution of the board of directors.


                                      SEAL

         Section 6. The corporate seal shall have inscribed thereon the name of
the corporation, the year of its organization and the words "Corporate Seal,
Delaware". The seal may be used by causing it or a facsimile thereof to be
impressed or affixed or reproduced or otherwise.


                                   ARTICLE IX

                                   AMENDMENTS

         Section 1. These bylaws may be altered, amended or repealed or new
bylaws may be adopted by the stockholders or by the board of directors, when
such power is conferred upon the board of directors by the certificate of
incorporation, at any regular meeting of the stockholders or of the board of
directors or at any special meeting of the stockholders or of the board of
directors if notice of such alteration, amendment, repeal or adoption of new
bylaws be contained in the notice of such special meeting. If the power to
adopt, amend or repeal bylaws is conferred upon the board of directors by the
certificate of incorporation, it shall not divest or limit the power of the
stockholders to adopt, amend or repeal bylaws.


         I hereby certify that the foregoing Bylaws were duly adopted by the
Board of Directors of the Corporation on , 2000.


                                                 Secretary


[SEAL]

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>4
<FILENAME>exb1_9701.txt
<DESCRIPTION>EXHIBIT B-1
<TEXT>

                                                                     Exhibit B-1

                                SERVICE AGREEMENT

         THIS AGREEMENT, made and entered into as of   __________ 1, 2001,
between SOUTHERN COMPANY SERVICES, INC., a corporation organized under the
laws of the State of Alabama (hereinafter sometimes referred to as the
"Service Company") and [NEWCO], a ________________ organized under the laws of
the State of Delaware (hereinafter sometimes  referred to as "Client Company");

                                   WITNESSETH:

         THAT, WHEREAS, Service Company is willing to provide Client Company
certain services upon request by Client Company; and

         WHEREAS, Client Company wishes to obtain such services from Service
Company;

         NOW, THEREFORE, in consideration of the premises and of the mutual
agreements herein, the parties hereto agree as follows:

         1.       Agreement to Furnish Services

         Service Company agrees to furnish to Client Company, upon the terms and
conditions hereinafter set forth, such of the services described in Article 2
hereof, at such times, for such periods and in such manner as Client Company may
from time to time require.

         2.       Description of Services

         Service Company will, as and to the extent required for Client Company,
keep itself and its personnel available and competent to render to Client
Company, the following services:

                  A.       Power Pool Operations

                  The maintenance of a central dispatching office to coordinate
         the bulk power supply, if any, of Client Company and other client
         companies working with their Operating Committee, with the objective of
         reducing power costs and improving service reliability; and in
         connection with the foregoing to act as Client Company's agent pursuant
         to the intercompany interchange contract; to prepare the intercompany
         billing under such contract; to assist in negotiating and administering
         power purchase contracts on behalf of Client Company and other client
         companies; to make studies of power costs for use in hearings before

<PAGE>

         regulatory Commissions; to make studies of present and future load
         characteristics and of future requirements for additional generating
         and transmission facilities; and, where appropriate, to prepare reports
         related to these activities.

                  B.       General Executive and Advisory Services

                  To advise and assist the officers and employees of Client
         Company in connection with various phases of its business and
         operations, including particularly but not exclusively, those phases
         which involve coordination of planning or operation between Client
         Company and other client companies or otherwise have a direct effect
         not only on Client Company but also on the Southern System or other
         members thereof.

                  C.       General Engineering

                  The maintenance of an organization staffed and equipped to
         perform for Client Company general engineering work, including system
         production and transmission studies, preparation and analysis of
         electrical apparatus specifications, distribution studies and
         standards, civil engineering and hydraulic studies and problems, fuel
         supply studies, advice and assistance in connection with analyses of
         operations and operating and construction budgets. The members of this
         group will keep informed as to improvements and developments in the art
         of generation, transmission and distribution of electricity through
         frequent contacts with the manufacturers of electrical equipment,
         through membership in the various national and regional engineering
         societies and through participation in the committee work of such
         societies and trade associations of the utility industry. Service
         Company will make available to Client Company the information thus
         gained with respect to such developments.

                  D.       Design Engineering

                  To perform detailed design work for Client Company for
         fossil-fueled generating plants, hydroelectric generating plants,


                                       2

<PAGE>

         transmission lines and substations and otherwise as required by Client
         Company; to make available to Client Company and other client companies
         as required, the services of a specialist or specialists on various
         phases of plant operation; and also to make available as required,
         inspection and supervision personnel for generating plant, transmission
         line and substation and other construction and operation.

                  E.       Purchasing

                  To render services to Client Company in connection with
         purchasing, including the coordination of group purchasing, and to
         supply expediting services. All requests for bids shall be made by and
         purchases confirmed in the name of Client Company or of Service Company
         as agent therefor, and all contracts of purchase shall be likewise
         made.

                  F.       Accounting

                  To advise and assist Client Company in connection with the
         installation of new accounting systems and similar problems,
         appearances before regulatory commissions, requirements of Federal and
         State regulatory bodies with respect to accounting, studies of
         accounting procedures and practices to improve efficiency, book entries
         resulting from unusual financial transactions, internal audits,
         employment of independent auditors, preparation and analyses of
         financial and operating reports and other statistical matters relating
         to Client Company and other client companies, analyses of securities of
         other utility companies, preparation of annual reports to stockholders,
         regulatory commissions, insurance companies and others, standardization
         of accounting and statistical forms in the interest of economy, and
         other accounting and statistical matters.

                  G.       Finance and Treasury

                  To advise and assist Client Company on (a) financing matters,
         including determination of types and times of sale of long and
         short-term securities, refunding studies, sinking fund problems, and
         (b) all treasury matters, including banking problems and investment of

                                       3

<PAGE>

         surplus funds, and (c) maintenance of books of accounts and other
         related corporate records.

                  H.       Taxes

                  To advise and assist Client Company in connection with tax
         matters, including preparation of Federal and State income and other
         tax returns and of protests, claims and briefs where necessary, tax
         accruals, and other matters in connection with Client Company's taxes.

                  I.       Insurance and Pensions

                  To advise and assist Client Company in connection with
         insurance and pension matters, including contracts with insurers,
         trustees and actuaries and the placing of blanket and group policies
         covering Client Company and other client companies, and other insurance
         problems as required.

                  J.       Corporate

                  To advise and assist Client Company in connection with its
         corporate affairs, including assistance and suggestions in connection
         with the preparation of petitions and applications for the issuance of
         securities, contracts for the sale or underwriting of securities,
         preparation of schedules of steps required in connection with major
         financial and other corporate matters and the consummation thereof, and
         the preparation of various documents required in connection therewith,
         contacts with trustees, transfer agents and registrars; maintenance of
         minutes of directors' and stockholders' meetings and other proceedings
         and of other related corporate records; and also arrangements for
         stockholders' meetings, including notices, proxies and records thereof
         and for other types of meetings relating to its securities.

                                       4

<PAGE>

                  K.       Rates

                  To study comparative rate levels for various classes of
         service, in different areas and for different operating conditions, and
         keep in touch with trends in rate design, and to make such information
         available to Client Company; to advise Client Company on matters
         relating to rates and valuation, the design of new and improved rate
         schedules, and their effect upon Client Company's revenues, the cost of
         competitive services, earning trends, the desirability of rate changes,
         rate audits, service rules and regulations, commodity and tax clauses,
         minimum charges, metering problems, special industrial contracts,
         resale rates and rural extension plans; and to assist Client Company in
         the preparation of petitions and applications required in connection
         with rate changes.

                  L.       Budgeting

                  To advise and assist Client Company in matters involving the
         preparation and development of construction and operating budgets, cash
         and cost forecasts, and budgetary controls.

                  M.       Business Promotion and Public Relations

                  To advise and assist Client Company in area development
         activities, in the development of residential, commercial and
         industrial sales programs, in the preparation and use of advertising,
         and in the determination and carrying out of public information
         programs, including those arising out of regulatory and legislative
         matters.

                  N.       Employee Relations

                  To furnish Client Company with advisory services in connection
         with employee relations matters, including recruitment, employee
         placement, training, compensation, safety, labor relations and health,
         welfare and employee benefits.

                  O.       Systems and Procedures

                  To advise and assist Client Company in the formation of good
         operating practices and methods of procedure, the standardization of
         forms, the purchase, rental and use of mechanical and electronic data

                                       5

<PAGE>

         processing, computing and communications equipment, in conducting
         economic research and planning and in the development of special
         economic studies.

                  P. Wholesale Power Purchase and Sale

                  To render services to Client Company in connection with the
         purchase and sale of electric power on the wholesale market, including
         the purchase and sale of transportation and transmission capacity in
         connection with power generation and delivery and the negotiation and
         administration of derivative transactions, including without limitation
         those entered into pursuant to master swap agreements; to make studies
         and, where appropriate, prepare reports on present and future
         requirements and abilities concerning the purchase and sale of electric
         power for resale; and to perform other services in connection with such
         sales and purchase as are required.

                  Q. Other Services

                  To render advice and assistance in connection with such other
         matters as Client Company may request and Service Company may be able
         to perform with respect to Client Company's business and operations

3.       Compensation of Service Company

         As compensation for such services rendered to it by Service Company,
Client Company hereby agrees to pay to Service Company the cost of such
services. Bills will be rendered for the amount of such cost on or before the
10th day of the succeeding month and will be payable on or before the 20th day
of such month. Cost of services to be paid by Client Company shall include
direct charges and Client Company's pro rata share of certain of Service
Company's costs, determined as set forth below:

                                       6

<PAGE>

                  A.       Direct Charges

                  To the extent that the costs incurred by Service Company in
         connection with services rendered by it to Client Company can be
         identified and related to a particular transaction, direct charges will
         be made by Service Company against Client Company.

                  B.       Prorated Charges

                  Such costs incurred by Service Company each month as cannot be
         charged by Service Company directly to the companies for which it
         performs services will be distributed among such companies in a fair
         and equitable manner as set forth in the Southern Company Services,
         Inc. Cost Allocation Manual which is incorporated herein by reference.
         The Service Company may revise the Cost Allocation Manual from time to
         time, subject to the approval of the Client Company and to any
         necessary regulatory approval, and the revised Cost Allocation Manual
         shall be incorporated herein by reference upon the effective date of
         the revision.

         4.       Companies to be Served

         Service Company agrees that during the term hereof it will render
services as required by companies in the Southern System and that all such
companies will compensate Service Company as provided in Section 3 hereof.

         5.       Appointment of Service Company as Agent

         Client Company hereby appoints Service Company to act as its agent in
the performance of the services furnished pursuant to Sections 2 and 4. Such
authorization shall include, without limitation, the rights and authority to
perform, negotiate, execute and administer agreements pursuant to which Client
Company will (i) purchase and sell electric power for resale, (ii) purchase and
sell fuels and related services in connection with power generation, (iii)
purchase and sell utility equipment and facilities and related services, (iv)
purchase and sell transportation and transmission capacity in connection with
power generation and delivery, (v) engage in derivative transactions, including

                                       7

<PAGE>

(without limitation) those entered into pursuant to master swap agreements (the
"Contracts"), and (vi) purchase and sell other goods and services. Service
Company's agency with respect to the Contracts shall include without limitation
the right to collect payments required under such Contracts, to advance payments
on Client Company's behalf, and to accept and give notices and other
communications on behalf of Client Company. .

         6.       Effective Date - Term - Cancellation

         After execution by the parties hereto this agreement shall become
 effective as of 1, 2001, subject to receipt of any required regulatory
 approval, and shall remain in
effect until terminated by mutual agreement of said parties.

         It is also understood and agreed that nothing herein shall be construed
to release the officers and directors of Client Company from the obligation to
perform their respective duties, or to limit the exercise of their powers in
accordance with the provisions of law or otherwise, and this agreement shall be
cancelled to the extent and from the time that performance hereunder may
conflict with any rule, regulation or order of the Securities and Exchange
Commission adopted before or after the execution hereof.

         7. Limitation of Liability.

         As between Client Company and Service Company, Client Company will be
solely responsible for all liabilities, obligations, and performance under any
Contract executed pursuant to this Agreement, whether or not Service Company's
role as agent for Client Company is disclosed to the other party to such
contract. Service Company will not warrant or guaranty or otherwise be
secondarily liable for performance by Client Company under any Contract or under
any other agreement the Client Company may enter in relation to such Contract,
including (without limitation) subcontracts, purchase orders and other similar
agreements. Client Company shall defend, hold harmless, and indemnify Service
Company against any claim made by any third party in connection with the subject
matter of such Contract.

                                       8

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this agreement to be
executed by their duly authorized officers and their respective seals to be
affixed as of the day and year first above written.

                                                SOUTHERN COMPANY SERVICES, INC.


                                                By:

                                                Its:

Attest:


Secretary

                                     [NEWCO]


                                               By:

                                               Its:

Attest:


Secretary


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>5
<FILENAME>exb2_9701.txt
<DESCRIPTION>EXHIBIT B-2
<TEXT>

                                                                     Exhibit B-2

                               OPERATING AGREEMENT

                                     between

                                     [OPCO]

                                       and

                                     [NEWCO]




<PAGE>
<TABLE>
<CAPTION>



                                                  TABLE OF CONTENTS

<S>                                                                                                             <C>
ARTICLE 1         Definitions.....................................................................................2
                  -----------
         1.1      Entitlement to Output...........................................................................2
         1.2      Generation Facility.............................................................................3
         1.3      Governmental Authority..........................................................................3
         1.4      Legal Requirements..............................................................................3
         1.5      New Investment Services.........................................................................3
         1.6      Operating Services..............................................................................4
         1.7      Operation and Maintenance Services..............................................................4
         1.8      Prudent Utility Practice........................................................................4

ARTICLE 2         [OPCO]'s Authority and Responsibility with Respect to Operationof the Generation Facilities.....5
                  -------------------------------------------------------------------------------------------
         2.1      Responsibility of [OPCO]........................................................................5
         2.2      Authorization of [OPCO].........................................................................5
                  2.2.1    Plant Operation and Maintenance........................................................6
                           (a)      Staff and Personnel...........................................................6
                           (b)      Licenses and Permits for Generation Facilities................................7
                           (c)      Reductions in Capacity and Outages at Each Plant..............................7
                           (d)      Events About Which Owner is to be Notified....................................8
                           (e)      No Changes to Transmission or Distribution Facilities.........................8
                           (f)      Operation in Accordance with Operating Plan...................................8
                           (g)      Points of Interconnection.....................................................9
                  2.2.2    New Investment Services................................................................9
                  2.2.3    Fuel Services..........................................................................9
         2.3      Retirement of Generating Facility...............................................................9
         2.4      Authority to Act as Agent for Owner and Right of Third Parties
                   to Rely on Agency.............................................................................10
         2.5      Assignment of Contracts; Liability and Allocation of Risks.....................................10
                  2.5.1    Contracts with Third Parties..........................................................10
                  2.5.2    Acceptance of Contract Provisions.....................................................10
                  2.5.3    Enforcement of Rights Under Contracts.................................................11
         2.6      Cooperation of Owner...........................................................................12
         2.7      [OPCO] Interface Procedure.....................................................................12
         2.8      Plans and Budgets..............................................................................12
                  2.8.1    Strategic Plan........................................................................13
                           (a)      Five-year Operating and Planned Outage Schedule..............................13
                           (b)      Availability and Performance Goals...........................................14
                           (c)      Planned Mandatory Projects...................................................14
                           (d)      Planned Improvement Projects.................................................14
                           (e)      Authorized Level of Staffing.................................................14
                  2.8.2    Fuel Plan.............................................................................15
                  2.8.3    Operating Budget......................................................................15
                                        2

<PAGE>

             2.8.4    Capital Budget........................................................................15
             2.8.5    Fuel Budget...........................................................................15
         2.9      Information and Reports........................................................................16
                  2.9.1    Generation Facility Data..............................................................16
                  2.9.2    Generation Facility Budget Reports....................................................16
                  2.9.3    Generation Facility Strategic Plan Reports............................................16
                  2.9.4    Audit Reports.........................................................................16
                  2.9.5    Correspondence to and from Regulatory Agencies........................................16
                  2.9.6    Responses to Owner Inquiries..........................................................17
         2.10     Plant tours....................................................................................17
         2.11     Management Audit...............................................................................17

ARTICLE 3         Entitlement to Output..........................................................................17
                  ---------------------
         3.1      Entitlement to Output..........................................................................17
         3.2      Determination of Output-Responsibility for Station Service and Losses..........................18

ARTICLE 4         Charges, Billing and Audit.....................................................................18
                  --------------------------
         4.1      Cost of Operation and Maintenance..............................................................18
         4.2      New Investment Costs...........................................................................19
         4.3      Fuel Costs.....................................................................................19
         4.4      Other Costs Required by Legal Requirements.....................................................19
         4.5      Revision.......................................................................................19
         4.6      Billing........................................................................................20
         4.7      Payment........................................................................................20
         4.8      General Accounting Matters.....................................................................20
         4.9      Right to Inspect Records.......................................................................20
         4.10     Disputed Invoice...............................................................................21

ARTICLE 5         Advancement of Funds...........................................................................21
                  --------------------
         5.1      Advancement of Funds...........................................................................21

ARTICLE 6         Taxes..........................................................................................22
                  -----
         6.1      Taxes..........................................................................................22

ARTICLE 7         Compliance with Provisions of Permits and Requirements of Governmental
                  ----------------------------------------------------------------------
                  Agencies.......................................................................................22
                  --------
         7.1      Compliance with Provisions of Permits and Requirements of Governmental
                  Agencies.......................................................................................22

ARTICLE 8         Confidentiality of Information.................................................................22
                  ------------------------------
         8.1      Confidentiality of Information.................................................................22

ARTICLE 9         Damage to Persons or Property; Penalties; Fines................................................23
                  -----------------------------------------------
         9.1      Applicability of Article.......................................................................23

                                       3

<PAGE>

         9.2      Absence of Warranty............................................................................23
         9.3      Liabilities to Third Parties and Owner.........................................................23
         9.4      Willful Misconduct.............................................................................25
         9.5      Limitation of Liability........................................................................25
         9.6      Severability...................................................................................26

ARTICLE 10        Insurance......................................................................................26
                  ---------
         10.1     Parties' Obligations Generally.................................................................26
         10.2     Commercial Liability Insurance.................................................................27
         10.3     Workmen's Compensation Insurance...............................................................27
         10.4     Additional Insurance...........................................................................28
         10.5     Waiver of Subrogation - Allocation and Payment of Premium......................................28

ARTICLE 11        Term...........................................................................................28
                  ----
         11.1     Term...........................................................................................28

ARTICLE 12        Remedies.......................................................................................29
                  --------
         12.1     Termination....................................................................................29
                  12.1.1   ......................................................................................29
                  12.1.2.........................................................................................30
                  12.1.3.........................................................................................30

ARTICLE 13        Miscellaneous..................................................................................30
                  -------------
         13.1     No Partnership or Joint Venture................................................................30
         13.2     Owner's Designated Representatives.............................................................31
         13.3     [OPCO]'s Designated Representative.............................................................31
         13.4     Depreciation...................................................................................31
         13.5     Holidays, Business Days........................................................................31
         13.6     Owner's Services to be Furnished at Cost.......................................................31
         13.7     Entire Agreement...............................................................................31
         13.8     Amendments.....................................................................................32
         13.9     Notices........................................................................................32
         13.10    Captions.......................................................................................32
         13.11    Counterparts...................................................................................33
         13.12    No Waiver......................................................................................33
         13.13    Singular and Plural............................................................................33
         13.14    Third Party Beneficiaries......................................................................33
         13.15    Severability...................................................................................33

ARTICLE 14        Successors and Assigns.........................................................................33
                  ----------------------
         14.1     ...............................................................................................34
ARTICLE 15        Governing Law..................................................................................34
                  -------------
         15.1     ...............................................................................................34

                                       4

<PAGE>







                               OPERATING AGREEMENT
                                     between
                                     [OPCO]
                                       and
                                     [NEWCO]


         THIS AGREEMENT is made and entered into this _____ day of ___________
200__ (the "Effective Date") by and between [OPCO] ("___") and [NEWCO]["Owner"].

                              W I T N E S S E T H:

         WHEREAS, [OPCO] and Owner are each a wholly-owned subsidiary of The
Southern Company ("Southern"), a registered holding company under the Public
Utility Holding Company Act of 1935 (the "1935 Act"); and

         WHEREAS, Owner owns certain generation stations, plants and other
generation facilities (collectively, "Generation Facilities" or individually,
the "Generation Facility") within the service territory of [OPCO], and may
construct or acquire additional Generation Facilities in the future, which
Generating Facilities are set forth and generally described on Schedule I
hereto, as it may from time to time be hereafter amended or supplemented without
the necessity of an amendment to this Agreement; and

         WHEREAS, Owner intends to sell on the wholesale market the electric
power generated by such facilities; and

         WHEREAS, [OPCO] owns and operates generation stations, plants and other
related generation facilities and has developed the expertise and experience to
efficiently and economically operate such facilities; and


<PAGE>


         WHEREAS, Owner believes that in order to more efficiently and
economically provide for the operation, maintenance, repair, and rehabilitation
of its Generation Facilities, such activities should be conducted and
coordinated by [OPCO]; and
         WHEREAS, Owner desires that [OPCO] undertake the operation,
maintenance, repair and rehabilitation of its Generation Facilities identified
on Schedule I, subject to the receipt of any necessary regulatory approvals, and
[OPCO] has agreed to do so under the terms and conditions set forth below.
         NOW THEREFORE, in consideration of these premises, the parties,
intending to be legally bound, do hereby agree as follows:

                                    ARTICLE 1

                                   Definitions

         As used herein, the following terms and phrases shall have,
respectively, the following meanings:
                  1.1 "Fuel Services" shall mean work related to supplying and
         managing all necessary fuels for the Generating Facilities including,
         without limitation, planning, procurement, contract administration,
         fuel quality assurance, and all activities relating to procurement,
         transportation, installation, monitoring, repairing, storage,
         reprocessing and disposal of fuel for the Generating Facilities,
         related materials and waste products.


<PAGE>


                  1.2 "Generation Facility" shall mean, and refer to,
         respectively, each of the fossil fuel, hydro-electric and pumped
         storage generation stations, plants and other related generation
         facilities owned by Owner and located within the service territory of
         [OPCO]; provided, however, that should activities concerning a
         Generation Facility be undertaken with respect to one unit of such
         station, plant or facility, the phrase "Generation Facility" shall mean
         and refer to that unit and related common facilities.
                  1.3 "Governmental Authority" shall mean any local, state,
         regional or federal legislative, regulatory, administrative, legal,
         judicial or executive agency, commission, department or other entity
         and any person acting on behalf of any such entity.
                  1.4 "Legal Requirements" shall mean all laws, codes,
         ordinances, orders, judgments, decrees, injunctions, licenses, rules,
         permits, approvals, written agreements, regulations and requirements of
         or issued by every Governmental Authority having jurisdiction over the
         matter in question, whether federal, regional, state or local, which
         may be applicable to [OPCO], or to Owner, or to any Generation Facility
         or any of the real or personal property comprising the Generation
         Facilities, or to services to be provided to Owner hereunder, or the
         use, occupancy, possession, operation, maintenance, construction,
         retirement, acquisition, installation, alteration, replacement
         reconstruction or disposal of any one or more of the Generation
         Facilities or any part thereof.
                  1.5 "New Investment Services" shall mean work for the
         Generation Facilities relating to the planning, design, licensing,
         acquisition, construction, completion, renewal, improvement, addition,
         repair, replacement or enlargement of any Unit of Property (as
         described in the Federal Energy Regulatory Commission's "Units of
         Property for Use in Accounting for Additions and Retirements of
         Electric Plants"), under circumstances where expenditures for such work
         are to be capitalized in accordance with the Electric Plant
         Instructions of the Uniform System of Accounts prescribed for Class A
         and B utilities by the Federal Energy Regulatory Commission.


<PAGE>


                  1.6  "Operating Services" shall mean Fuel Services, New
         Investment Services, and Operation and Maintenance Services.

                  1.7 "Operation and Maintenance Services" shall mean work for
         Owner relating to the possession,  management,  control,
         start-up, operation, availability, production of energy, maintenance,
         improvement, renewal, replacement, and shutdown including, but not
         limited to, any planning, design, engineering, labor, procurement of
         materials and supplies, materials management, quality assurance,
         training, security, and environmental protection, together with
         maintaining or obtaining licenses and regulatory approvals related
         thereto, governmental affairs or regulatory relationships, and all
         other activity required for the safe and reliable operation of the
         Generation Facilities or that may be required to comply with Legal
         Requirements.

                  1.8 "Prudent Utility Practice" shall mean at a particular time
         any of the practices, methods and acts engaged in or approved by a
         significant portion of the electric utility industry prior to such
         time, or any of the practices, methods and acts which, in the exercise
         of reasonable judgment in light of the facts known at the time the
         decision was made, could have been expected to accomplish the desired
         result at the lowest reasonable cost consistent with good business
         practices, reliability, safety and expedition. "Prudent Utility
         Practice" is not intended to be limited to the optimum practice, method
         or act to the exclusion of all others, but rather to be a spectrum of
         possible practices, methods or acts having due regard for, among other
         things, manufacturers' warranties and the requirements of governmental
         agencies of competent jurisdiction.

                                    ARTICLE 2

         [OPCO]'s Authority and Responsibility with Respect to Operation of the
Generation Facilities


<PAGE>



         2.1 Responsibility of [OPCO]. [OPCO], consistent with such written
guidelines as may be jointly developed with Owner, shall provide and be
responsible for (i) the operation and maintenance of the Generation Facilities
within its service territory in a safe and reliable manner in accordance with
all Legal Requirements and with Prudent Utility Practice, (ii) the generation of
power and energy at the Generation Facilities to the credit of and for the
benefit of the Owner as economically as is reasonably practicable, (iii) the
repair and rehabilitation of the Generation Facilities as may, from time to
time, be necessary, appropriate or reasonably practicable and advisable and (iv)
as and to the extent deemed by Owner to be necessary or appropriate, the
construction of new or additional non-nuclear generation facilities for Owner.
[OPCO] also shall make such further changes and additions to and retirements
from the Generation Facilities in its service territory as shall be consistent
with such operation, maintenance, repair and rehabilitation. Such services and
construction may be provided by [OPCO] through its own personnel or, in part, by
others, including without limitation affiliate personnel, under contractual or
other arrangements, including the use of Owner's personnel under the direction
and supervision of [OPCO].


<PAGE>


         2.2 Authorization of [OPCO]. In furtherance of the foregoing, Owner
authorizes [OPCO], and [OPCO] agrees to provide, Operation and Maintenance
Services, New Investment Services, and Fuel Services for the Generation
Facilities. Owner hereby authorizes [OPCO] to take all actions that, in the
discretion and judgment of [OPCO] consistent with Prudent Utility Practice, are
deemed necessary or advisable in providing these Operating Services. Owner
hereby authorizes [OPCO], as operator, to take any and all action necessary to
comply with all Legal Requirements and to take all action necessary to fulfill
any requirements for the safe and reliable operation of the Generation
Facilities. The authority vested in [OPCO] shall include, but not be limited to,
the authority to incur costs, liabilities, and obligations, to purchase
equipment, materials and supplies, to perform and arrange for performance of
work, to select and retain contractors, engineers, consultants,
architect-engineers, attorneys, accountants and other firms or persons, and to
take all actions in connection with the Generation Facilities that are within
the scope set forth above. Without limiting the foregoing, the authority vested
in [OPCO] shall include the following:
                  2.2.1. Plant Operation and Maintenance. [OPCO] shall have the
         authority to possess, operate and maintain the Generation Facilities in
         accordance with policies and decisions established and made by Owner.
         Subject to the provisions of this Agreement, [OPCO] shall in accordance
         with Prudent Utility Practice endeavor to achieve reliable performance
         of each Generation Facility, to maximize the capacity and availability
         factors and minimize forced outage rates and durations at each
         Generation Facility and to produce busbar costs as low as reasonably
         possible.


<PAGE>


                           (a) Staff and Personnel. Subject to the provisions of
                  Section 2.8.1 respecting Strategic Plans, [OPCO] shall have
                  the authority to select, hire, compensate, control and
                  discharge (when deemed appropriate by [OPCO]) those persons,
                  firms or corporations which are required to satisfy its
                  obligations under this Agreement. [OPCO] shall keep Owner
                  informed of any plans to change either the [OPCO] officer
                  responsible for any of Owner's Generation Facilities or the
                  [OPCO] manager of such Generation Facility. Any input from
                  Owner on such plans will be considered by [OPCO], but [OPCO]'s
                  decisions on personnel matters shall be final. [OPCO] shall
                  also consider any positive or negative comments from Owner
                  regarding the performance of any of [OPCO]'s officers or
                  managers, but management decisions on whether to take
                  personnel or salary administration actions shall be made
                  solely by [OPCO].
                           (b) Licenses and Permits for Generation Facilities.
                  [OPCO] is authorized to obtain and maintain compliance with
                  all licenses, approvals and permits for each Generation
                  Facility from Governmental Authorities required for operation
                  and maintenance of the Generation Facility.
                           (c) Reductions in Capacity and Outages at Each Plant.
                  Owner recognizes that, in the course of operating the
                  Generation Facilities, it may be necessary to decide whether
                  to operate the Generation Facilities at less than full power
                  or to terminate or suspend such operations altogether in light
                  of technical, legal, regulatory, safety, economic, power
                  system, testing, or other considerations. [OPCO] recognizes
                  the need to minimize periods of reduced capacity or outages at
                  the Generation Facilities that could have an adverse effect on
                  Owner's power supply system or its cost of providing reliable
                  electric service. [OPCO] will endeavor to consult with Owner
                  concerning any operating conditions which are expected to
                  result in capacity reductions of fifty percent (50%) or more
                  at a Generation Facility or outages at a unit of any
                  Generation Facility, and [OPCO] will only take those actions
                  when they determine they are prudent and necessary from an
                  operating standpoint.


<PAGE>


                           (d) Events About Which Owner is to be Notified. In
                  the event of an occurrence at a Generation Facility of any
                  unplanned outage, any significant extension of a planned
                  outage, any unplanned reduction in the capacity of a unit for
                  an extended period, or any event at a Generation Facility or
                  any regulatory action which is likely to attract substantial
                  media attention or to affect substantially the operation of
                  the Generation Facility, [OPCO] shall inform Owner as soon as
                  practical, or in accordance with guidelines acceptable to
                  Owner, after the occurrence of such event.
                           (e) No Changes to Transmission or Distribution
                  Facilities. In order that the safe operation of the Generation
                  Facilities is assured, Owner shall not effect any operating or
                  physical changes to its transmission and distribution
                  facilities which may adversely affect the safe operation of
                  the Generation Facilities without prior consultation with and
                  the concurrence of [OPCO].
                           (f) Operation in Accordance with Operating Plan. Each
                  Generation Facility shall be operated in accordance with
                  Prudent Utility Practice and pursuant to an operating plan
                  developed and updated regularly by [OPCO] and Owner and in
                  accordance with Owner's obligations, if any, under any
                  interconnection agreements, power pooling arrangements or
                  other applicable arrangements, as such obligations may
                  presently exist or may hereafter be modified from time to
                  time, including the obligations, if any, of Owner to maintain
                  the design integrity of each Generation Facility under the
                  requirements of the Southeast Electric Reliability Council and
                  the National Electric Reliability Council.


<PAGE>


                       (g) Point of Interconnection. The point of
                  interconnection between any Generation Facility and [OPCO]'s
                  or a third party's transmission system and the extent of
                  [OPCO]'s operational responsibility therefor shall be
                  determined from time to time by Owner and [OPCO].

                  2.2.2. New Investment Services. [OPCO] shall have
         responsibility for all New Investment Services. [OPCO] is authorized to
         enter into such arrangements as it deems appropriate for the Generation
         Facilities and to make all decisions regarding the completion of New
         Investment projects. All equipment, materials and supplies included in
         the New Investment projects for each Generation Facility shall be
         acquired in the name of Owner and shall be the property of Owner.
                  2.2.3. Fuel Services.  [OPCO] shall have  responsibility  for
         Fuel Services.  [OPCO] is authorized to enter into such
         arrangements as it deems  appropriate and to make all decisions
         regarding fuel and fuel services.  All fuel shall be procured
         in the name of Owner.
         2.3 Retirement of Generating Facility. Owner shall retain the exclusive
authority to determine when the economic life of the Generation Facility has
ended and thereupon to retire the Generation Facility from commercial operation.
Owner retains the authority to determine whether such Generation Facility should
be placed in standby status or operated at reduced output for economic reasons
or Owner's need for the capacity or energy of the Generation Facility. Upon
Owner informing [OPCO], [OPCO] shall take such action as may be necessary to
reduce operation of the Generation Facility or to terminate operation and place
the Generation Facility or unit in a safe shutdown condition. [OPCO] shall also
take such steps as may be necessary to decommission and dispose of and
thereafter maintain, to the extent necessary, the Generation Facility or any
unit thereof designated for retirement.


<PAGE>


         2.4 Authority to Act as Agent for Owner and Right of Third Parties to
Rely on Agency. In the conduct of the authority vested in [OPCO] in Sections 2.1
and 2.2 above, Owner hereby designates and authorizes [OPCO] to act as its
attorney-in-fact and agent for such purposes, including without limitation
authority to enter into and administer contracts on behalf of Owner for
procurement of material, equipment or services and authority to administer
contracts entered into by Owner with respect to the Generation Facilities. As
relates to all third parties, the designation of [OPCO] as agent shall be
binding on Owner. [OPCO] accepts such appointment as agent of Owner. Upon
request from [OPCO], Owner shall provide written confirmation of this agency
relationship to third parties.

        2.5 Assignment of Contracts; Liability and Allocation of Risks.

                  2.5.1 Contracts with Third Parties. Upon request from [OPCO]
         to Owner, Owner shall assign and transfer to [OPCO] those contracts
         with third parties relating to the operation of each Generation
         Facility. Prior to assignment and transfer of such contracts, [OPCO]
         may request Owner to appoint [OPCO] as agent for administration of any
         such contracts. After receipt of any such assignment, transfer or
         authorization to administer, [OPCO] shall have the exclusive
         responsibility for the administration and enforcement thereof in
         accordance with the terms thereof.


<PAGE>


                  2.5.2 Acceptance of Contract Provisions. [OPCO] in such
         contracts with third parties may agree to certain matters including,
         but not limited to, limitations on the liability of such contractors
         for work performed or materials furnished, restrictions on warranties,
         agreements to indemnify the contractors from liability and other
         provisions. Owner waives any claims against [OPCO] for entering into
         such contracts or agreeing to the provisions thereof. Owner also
         recognizes that a number of [OPCO]'s contracts relating to the
         Generation Facilities may contain provisions that require [OPCO] to
         obtain from Owner agreements by Owner that it will be bound by all of
         the requirements for financial protection, waivers, releases,
         indemnifications, limitations of liability and further transfers or
         assignments that bind [OPCO] under such contracts. Owner agrees to be
         bound by the requirements for financial protection, waivers, releases,
         indemnification, limitation of liability and further transfers or
         assignments that bind [OPCO] as they now exist or may exist in the
         future with respect to all contracts relating to the Generation
         Facilities.
                  2.5.3 Enforcement of Rights Under Contracts. Owner covenants
         that, without the written consent of [OPCO], Owner will not threaten
         suit or bring suit against third parties or otherwise make any claim
         under any contract or arrangement relating to any of the Generation
         Facilities or Operating Services, and Owner recognizes that [OPCO] has
         complete and exclusive authority with respect to such matters. If Owner
         desires for suit to be threatened or brought or otherwise for any claim
         to be made, or desires that such action contemplated by [OPCO] shall
         not be taken, Owner shall, by written notice to [OPCO], request it so
         to act or refrain from acting. Upon [OPCO]'s receipt of such notice
         Owner and [OPCO] shall arrange for consultation within ten (10) working
         days thereafter on the questions raised, or such lesser period of time
         as [OPCO], in its sole discretion, shall specify in the light of
         circumstances requiring a more expeditious determination. [OPCO] shall
         not make its determination until after such consultation, but such
         determination by [OPCO] shall be final and binding.


<PAGE>


         2.6 Cooperation of Owner. Owner agrees that it will take all necessary
action in a prompt manner to execute any agreements with respect to the
provision of Operation and Maintenance Services, New Investment Services, and
Fuel Services for the Generation Facilities as and when requested by [OPCO] to
permit [OPCO] to carry out its authority and responsibilities pursuant to this
Article 2. [OPCO] may request Owner to furnish services or assistance,
materials, supplies, licenses, offices and real property rights including,
without limitation, power supply services, transmission and distribution system
repair, replacement, construction and maintenance, accounting services,
maintenance personnel, security services, and other personnel, services or
assistance as [OPCO] may require with respect to any one or more Generation
Facilities. Any such items which Owner agrees to furnish to [OPCO] shall be
provided at cost.
         2.7 [OPCO] Interface Procedure. [OPCO] and Owner will jointly establish
and maintain an [OPCO] Interface Procedure to govern the working relationships
between the two companies. The [OPCO] Interface Procedure shall contain
procedures by which Owner can maintain an overview of Generation Facility
operations, procedures for administering this Operating Agreement through
designated executive points of contact, and procedures to define interfaces for
support services and assistance provided by Owner pursuant to Section 2.6
hereof.


<PAGE>


         2.8 Plans and Budgets. Strategic Plans, Fuel Plans, Operating Budgets,
Capital Budgets and Fuel Budgets shall be submitted to Owner by [OPCO] as
provided in Paragraphs 2.8.1 through 2.8.5 below. The contents of these plans
and budgets shall conform to the requirements and guidelines established
pursuant to the [OPCO] Interface Procedure. Owner shall approve or disapprove
each such plan or budget within thirty (30) days after its submittal. In the
event Owner disapproves a plan or budget, Owner shall inform [OPCO] of the basis
for such disapproval. [OPCO] shall then modify such plan or budget as required
to make it acceptable to Owner and shall resubmit it for approval; provided,
however, that in no event shall [OPCO] be required to submit plans or budgets
which would cause [OPCO] to operate a Generation Facility in violation of any
Legal Requirements or in a manner that fails to provide reasonable assurance of
health and safety to employees. [OPCO] shall attempt to provide Operating
Services in accordance with such approved plans and within the aggregate annual
amount of such budgets. Notwithstanding the foregoing, [OPCO] makes no
representation, warranty or promise of any kind as to accuracy of any such plan
or budget, or that any attempt referred to in the preceding sentence will be
successful, and in no event shall Owner be relieved of its responsibility to pay
costs incurred by [OPCO] as required in Article 4 hereof.
                  2.8.1 Strategic Plan. A Strategic Plan for each Generating
         Facility shall be submitted to Owner by [OPCO] no later than July 1 of
         each year. Owner may separately approve or disapprove individual
         projects which are classified as planned improvement projects pursuant
         to Paragraph (d) below, but shall otherwise approve or disapprove each
         Strategic Plan in its entirety. Strategic Plans may cover one or more
         Generation Facilities. Each Strategic Plan shall identify key
         assumptions to be used in the preparation of budgets and forecasts,
         including:
                           (a) Five-year Operating and Planned Outage Schedule.
                  This section shall identify the scheduled operating cycles and
                  planned outages for maintenance and other work during the
                  succeeding five years. The schedule shall describe in
                  reasonable detail the time and duration of each planned outage
                  and the maintenance and other work planned to be performed
                  during such outage.


<PAGE>


                           (b)  Availability and Performance  Goals.  This
                  section shall contain overall  performance  goals which have
                  been established by [OPCO] for the Generation Facility for
                  the current year.
                           (c) Planned Mandatory Projects. A mandatory project
                  is any project with a total estimated cost in excess of one
                  million dollars ($1,000,000) or such other amount as Owner may
                  establish, including but not limited to any upgrade,
                  replacement, addition or program, which is needed in order to
                  support normal operations in accordance with Prudent Utility
                  Practice or in order to comply with regulatory or safety
                  requirements. The associated schedule and estimated annual
                  funding requirements shall be included.
                           (d) Planned Improvement Projects. An improvement
                  project is any project with a total estimated cost in excess
                  of one million dollars ($1,000,000) or such other amount as
                  Owner may establish, including but not limited to any upgrade,
                  replacement, addition, or program, which is not mandatory as
                  defined in (c) above. Examples of such projects include
                  efforts to improve performance of a Generation Facility or
                  conditions, such as improved Generation Facility capacity or
                  efficiency, enhanced working conditions, and appearance. The
                  associated schedule and estimated annual funding requirements
                  shall be included.


<PAGE>


                           (e) Authorized Level of Staffing. This section shall
                  provide the current authorized number of permanent staff
                  positions which are assigned to the Generation Facility and
                  its offsite support. Such number of positions shall be broken
                  down by functional areas (e.g., operations, maintenance,
                  administrative, technical, corporate support), shall include
                  positions which are located either on-site or off-site, and
                  shall include all positions regardless of the actual employer.
                  This section shall also show any estimates of planned changes
                  in such authorized number of positions over the succeeding
                  five years.
                  2.8.2 Fuel Plan. A five-year Fuel Plan for each Generation
         Facility shall be submitted to Owner by September 15 of each year.
         Owner shall approve or disapprove each Fuel Plan within thirty days
         after submittal. Each Fuel Plan shall describe in reasonable detail
         plans for procurement and utilization of fuel for the Generation
         Facility and information on disposal of waste products. A Fuel Plan may
         cover one or more Generation Facilities.
                  2.8.3 Operating Budget. By September 1 of each year, [OPCO]
         shall submit to Owner a written Operating Budget showing the estimated
         costs of operating and maintaining Owner's Generation Facilities during
         the next calendar year, with a forecast of budget requirements for the
         succeeding four calendar years. Each budget shall be supported by
         detail reasonably adequate for the purpose of review by Owner.
                  2.8.4 Capital Budget. By September 1, of each year, [OPCO]
         shall submit to Owner a written Capital Budget estimate of capital
         expenditures for each of Owner's Generation Facilities for the next
         calendar year, with a forecast of budget requirements for the
         succeeding four calendar years. Each budget shall be supported by
         detail reasonably adequate for the purpose of review by Owner.


<PAGE>


                  2.8.5 Fuel Budget. By September 15 of each year, [OPCO] shall
         submit to Owner a written Fuel Budget estimate of fuel expenditures for
         each of Owner's Generation Facilities for the next calendar year, with
         a forecast of budget requirements for the succeeding four calendar
         years. Each budget shall be supported by detail reasonably adequate for
         the purpose of review by Owner.

         2.9 Information and Reports.  [OPCO] shall furnish to Owner the
         following information and reports:

                  2.9.1 Generation Facility Data. At the time of submittal of
         each Strategic Plan, [OPCO] shall also furnish a comparison of the
         performance of each Generation Facility with other generating
         facilities using performance indicators in common use in the electric
         utility industry or as may be specified by Owner.
                  2.9.2 Generation Facility Budget Reports. [OPCO] shall furnish
         monthly data showing actual costs for operation and maintenance,
         capital expenditures, and direct fuel expenditures with comparisons to
         the respective budgets. This report will normally be provided by the
         end of the succeeding month.
                  2.9.3 Generation Facility Strategic Plan Reports. At least
         quarterly, [OPCO] shall furnish data showing actual performance for
         each unit at each Generation Facility compared to goals contained in
         the Strategic Plan for the Generation Facility.
                  2.9.4 Audit Reports. [OPCO] shall make available for review by
         Owner copies of financial or accounting reports concerning Owner's
         Generation Facilities containing the results of audits by or for
         Southern Company Services, Inc., or any affiliate or subsidiary of The
         Southern Company, or by any regulatory agency.
                  2.9.5 Correspondence to and from Regulatory Agencies. At the
         request of Owner, [OPCO] shall furnish to Owner copies of
         correspondence to and from regulatory agencies concerning one or more
         of Owner's Generation Facilities.


<PAGE>


                  2.9.6 Responses to Owner Inquiries. In addition to the
         obligation of [OPCO] to provide the information as explicitly required
         herein, [OPCO] shall respond to reasonable written or verbal requests
         from Owner for information not otherwise specifically provided for
         herein.
         2.10 Plant Tours. Owner shall have the right to have its
representatives and guests visit its Generation Facilities, to tour the
facilities, and observe activities at the Generation Facilities; provided that
such visits or tours will not interfere with the operation of the Generation
Facilities, or the security or safety of such facilities. Owner shall assure
that its representatives and guests comply with all applicable rules and
regulations in effect at a Generation Facility whether imposed by Governmental
Authority or by [OPCO].
         2.11 Management Audit. Owner shall have the right to conduct a
management audit, at its own cost, of [OPCO]'s performance hereunder either by
Owner officers and employees or through their duly authorized agents or
representatives. [OPCO] shall cooperate with Owner in the conducting of such
audit and, subject to applicable Legal Requirements and the requirements of
vendors, give Owner reasonable access to all contracts, records and other
documents relating to the Generating Facilities. Following any such management
audit, [OPCO] shall respond to the findings of such audit if requested to do so
by Owner. Management audits by Owner shall be scheduled so as to minimize the
number of audits required and so as to not to exceed one management audit in any
consecutive twelve-month period.

                                    ARTICLE 3
                              Entitlement to Output


<PAGE>


         3.1 Entitlement to Output. Owner shall be entitled to all of the output
from its Generation Facilities at the time generation in such units occurs.
Subject to [OPCO]'s primary responsibility for safe operation of the Generation
Facilities, Owner shall have the right to schedule and dispatch the capacity and
energy needed from the facilities, and [OPCO] shall use its best efforts to
honor such schedule.
         3.2 Determination of Output-Responsibility for Station Service and
Losses. Output of each Generation Facility shall be the gross generation of the
facility, less station service requirements, and less adjustments for losses
experienced. Owner shall be responsible for providing all off-site electric
power required at the Generation Facility whenever the station service and
losses exceed the gross generation of the Generation Facility.

                                    ARTICLE 4
                      Costs, Billing, Accounting and Audit


<PAGE>


         4.1 Cost of Operation and Maintenance. Owner shall pay to [OPCO] all
direct costs incurred by [OPCO] relating to Operation and Maintenance Services
for the Generation Facilities (including all costs identified in Section 9.3)
and any costs incurred by [OPCO] as a consequence of termination hereunder).
Such costs shall include all payments made to [OPCO] employees (including
payment of wages, salaries, workmen's compensation and other benefits) relating
to work performed by such employees while on the premises of any of the
Generation Facilities. [OPCO] and Owner acknowledge that all such payments made
to [OPCO] employees, relating to work performed by such employees while on
Generation Facility premises, are effectively made by Owner, since Owner is
responsible for such payments and they are made from funds placed on deposit by
Owner for those purposes. Owner shall also pay to [OPCO] the Generation Facility
allocated share of other of [OPCO]'s costs. Allocation of costs to Operation and
Maintenance Services shall be performed in the manner described in the [OPCO]
Cost Allocation Manual which is incorporated herein by reference. [OPCO] may
revise the Cost Allocation Manual from time to time, in accordance with Legal
Requirements, and the revised Cost Allocation Manual shall be incorporated
herein by reference upon the effective date of the revision.
         4.2 New Investment Costs. Owner shall pay to [OPCO] all costs incurred
by [OPCO] relating to New Investment Services for the Generation Facilities,
including obligations incurred to third parties, direct costs of [OPCO]
associated with such New Investment Services and the Generation Facilities
allocated share of [OPCO]'s other costs associated with such activities.
Allocation of costs to New Investment Services shall be performed in the manner
described in the [OPCO] Cost Allocation Manual referred to in Section 4.1
hereof.
         4.3 Fuel Costs. Owner shall pay to [OPCO] all direct costs incurred by
[OPCO] relating to Fuel Services for the Generation Facilities and the
Generation Facilities allocated share of other of [OPCO]'s costs. Allocation of
costs to Fuel Costs shall be performed in the manner described in the [OPCO]
Cost Allocation Manual referred to in Section 4.1 hereof.
         4.4 Other Costs Required by Legal Requirements. Owner shall pay to
[OPCO] all direct costs incurred by [OPCO] and the Generation Facilities
allocated share of other of [OPCO]'s costs associated with any other activities
of [OPCO] relative to the Generation Facilities that are required to meet Legal
Requirements.


<PAGE>


           4.5 Revision. Should [OPCO] undertake to perform services for any
other affiliated company or for any non-affiliated company where the cost to
[OPCO] of providing such services affects the cost of [OPCO] to provide
Operating Services pursuant to this Agreement, [OPCO] shall discuss the matter
and reach agreement with Owner respecting the need for or the terms of any
amendment of this Section 4 as may be appropriate to assure the continued
fairness of the determination of the responsibility for costs payable to [OPCO]
hereunder.
         4.6 Billing. [OPCO] shall render to Owner a monthly billing statement
no later than the fifteenth (15th) day of each month detailing costs incurred
for Operation and Maintenance Services during the preceding month pursuant to
Section 4.1; costs incurred for New Investment Services during the preceding
month pursuant to Section 4.2; costs incurred for Fuel Services during the
preceding month pursuant to Section 4.3; and the other costs incurred during the
preceding month pursuant to Section 4.4.
         4.7 Payment. The obligation to make payments as specified herein shall
continue notwithstanding the capability (or lack of capability) of the
Generation Facilities to produce power for any reason.
         4.8 General Accounting Matters. Determinations by [OPCO] on all
accounting matters related to the transactions contemplated by this Agreement
will be in accordance with Generally Accepted Accounting Principles and the
Securities and Exchange Commission's Uniform System of Accounts for Mutual and
Subsidiary Service Companies, utilizing the accrual method of accounting, unless
otherwise specifically provided in this Agreement or mutually agreed by [OPCO]
and Owner or as prescribed by other regulatory agencies having jurisdiction, as
in effect from time to time.


<PAGE>


         4.9 Right to Inspect Records. During normal business hours and subject
to conditions consistent with the conduct by [OPCO] of its regular business
affairs and responsibilities, [OPCO] will provide Owner or any auditor utilized
by Owner and reasonably acceptable to [OPCO], or any nationally recognized
accounting firm retained by Owner, access to [OPCO]'s books, records, and other
documents directly related to the performance of [OPCO]'s obligations under this
Agreement and, upon request, copies thereof, which pertain to (a) costs
applicable to Operation and Maintenance Services, New Investment Services, Fuel
Services, and Other Costs for Owner's Generation Facilities to the extent
necessary to enable Owner to verify the costs which have been billed to Owner
pursuant to the provisions of this Agreement; (b) compliance with all
environmental Legal Requirements; and (c) matters relating to the design,
construction and operation and retirement of Owner's Generation Facilities in
proceedings before any Governmental Authority.
         4.10 Disputed Invoice. In the event Owner shall question any statement
rendered by [OPCO] in accordance with the provisions of Section 4.1 hereof,
Owner shall nevertheless promptly pay amounts called for by [OPCO] under Section
4.1 hereof but such payment shall not be deemed to prevent Owner from claiming
an adjustment of any statement rendered.

                                    ARTICLE 5
                              Advancement of Funds


<PAGE>


         5.1 [OPCO] shall prepare forecasts, in such frequency, form and detail
as Owner shall direct, of the funds required to pay [OPCO]'s anticipated costs
of the services to be provided to Owner and the dates on which payment of such
costs shall become due. Owner shall advance funds to [OPCO] in such amounts and
at such times determined on the basis of such forecasts, to enable [OPCO] to pay
its costs of services on or before payment of such costs shall be due. Such
advances shall be made by deposits or bank transfers to accounts of [OPCO] with
such financial institutions as [OPCO] shall designate. Any excess funds in such
accounts shall be invested by [OPCO] in accordance with prudent cash management
practices and all investment income and appreciation received on such funds
shall be credited against the cost of service provided to Owner.

                                    ARTICLE 6
                                      Taxes

         6.1 Owner shall report, file returns with respect to, be responsible
for and pay all real property, franchise, business or other taxes, except
payroll and sales or use taxes, arising out of or relating to its ownership of
the Generation Facilities.

                                    ARTICLE 7
                      Compliance with Provisions of Permits
                    and Requirements of Governmental Agencies

         7.1 Owner and [OPCO] shall cooperate in taking whatever action may be
necessary to comply with the terms and provisions of all permits and licenses
for the Generation Facilities and with all applicable lawful requirements of any
federal, state or local agency or regulatory body having jurisdiction in or over
the Generation Facilities.

                                    ARTICLE 8
                         Confidentiality of Information


<PAGE>


         8.1 Each party to this Agreement may, from time to time, come into
possession of information of the other parties that is either confidential or
proprietary. Any party having any such information which is known to be
considered by any other party as either confidential or proprietary will not
reproduce, copy, use or disclose (except when required by a Governmental
Authority) any such information in whole or in part for any purpose without the
written consent of the other party. In disclosing confidential or proprietary
information to a Governmental Authority, the disclosing party shall cooperate
with the other party in minimizing the amount of such information furnished. At
the specific request of the other party, the disclosing party will endeavor to
secure the agreement of such Governmental Authority to maintain specified
portions of such information in confidence. Public dissemination of information
by the furnishing party before or after it is furnished shall constitute a
termination of the confidentiality requirement as to that specific information.

                                    ARTICLE 9
                 Damage to Persons or Property; Penalties; Fines

         9.1 Applicability of Article. Since [OPCO] is undertaking its
responsibilities hereunder (i) at cost and (ii) in order to assist Owner in
meeting its responsibilities with respect to its Generation Facilities, the
following provisions shall be applicable to loss or damage to the property of
any or all of the parties hereto (including Generation Facilities property) or
of third parties, or injuries to or loss of life by any person, including
employees of the parties hereto, and to penalties or fines assessed with respect
to the Generation Facilities:
         9.2 Absence of Warranty. [OPCO] does not warrant that its performance
of Operating Services will meet the standards set forth in Sections 2.1 and 2.2
hereof, and its sole obligation if it fails to meet such standards is to
reperform at the request of Owner the deficient work at cost payable by Owner in
a manner that complies with such standards. Owner acknowledges that such
services are not subject to any warranty of any nature, express or implied,
including, without limitation, any warranty of merchantability or fitness for a
particular purpose.


<PAGE>


          9.3 Liabilities to Third Parties and Owner. (a) To the fullest extent
provided by law, all liability to third parties other than liability for Willful
Misconduct as defined in 9.4 below, whether arising in contract (including
breach of warranty), tort (including fraud, negligence, product liability,
breach of fiduciary duty or any other theory of tort liability), under the laws
of real property or otherwise, or as a result of fines or other penalties
imposed by any Governmental Authority, that results from or is in any way
connected with the provision of Operation and Maintenance Services, New
Investment Services, or Fuel Services for the Generation Facilities shall be
borne by Owner in their entirety. Owner shall indemnify and hold harmless
[OPCO], its agents servants, directors, employees, affiliates and insurers (the
"Indemnified Parties") from and against any and all claims, losses, damages,
expenses and costs of any kind, including without limitation attorneys fees,
costs of investigation and court costs, other than those attributable to Willful
Misconduct of [OPCO], as defined in Section 9.4 hereof, whether direct or
indirect, on account of or by reason of bodily injuries (including death) to any
person or persons or property damage arising out of or occurring in connection
with the provision of Operation and Maintenance Services, New Investment
Services, or Fuel Services for the Generation Facilities, whether or not such
claims, losses, damages, expenses or costs were caused by or alleged to have
been caused by or contributed to by the active, passive, affirmative, sole or
concurrent negligence or by breach of any statutory or other duty (whether
non-delegable or otherwise) of any of the Indemnified Parties.


<PAGE>


         Except for consequences of Willful Misconduct, Owner and its
affiliates, servants, employees, agents and insurers hereby release, acquit and
forever discharge the Indemnified Parties, to the fullest extent permitted by
applicable law, from any and all damages, claims, causes of action, damage to
property of Owner or expenses of whatever kind or nature, that are in any manner
connected with the provision of any Operating Services or the performance and
prosecution of any project or work by any of the Indemnified Parties for or on
behalf of Owner for its Generation Facilities, whether arising in tort
(including fraud, negligence, strict liability, breach of fiduciary duty or any
other theory of tort liability), contract (including breach of warranty), under
the laws of real property or otherwise, or as a result of any fine or other
penalty imposed by any Governmental Authority. This release shall be effective
whether or not such claims, causes of action, damages, or expenses were caused
or alleged to have been caused by or contributed to by the active, passive,
affirmative, sole or concurrent negligence or by breach of any statutory or
other duty (whether non-delegable or otherwise) of any of the Indemnified
Parties.
          9.4 Willful Misconduct. As used in this Agreement, the term "Willful
Misconduct" shall mean any act or omission by any of the Indemnified Parties
that is performed or omitted consciously with actual knowledge that such conduct
is likely to result in damage or injury to persons or property; provided,
however, that any such act or omission, if performed or omitted by an
Indemnified Party, shall not be deemed Willful Misconduct unless an officer of
[OPCO] at or above the level of Vice President shall have expressly authorized
such act or omission. [OPCO] shall exercise reasonable and customary supervision
or control over the activities of its agents, servants, or employees, and its
affiliates, so as to minimize the potential for adverse willful actions by such
agents, servants or employees or affiliates; provided, however, that failure of
[OPCO] to prevent such adverse willful actions shall not itself be considered
Willful Misconduct. Liability attributable solely to Willful Misconduct shall be
borne by [OPCO], subject to the limitation of liability in Section 9.5 below.


<PAGE>


         9.5 Limitation of Liability. Notwithstanding Sections 9.3 and 9.4
hereof, Owner agrees that in no event shall any of the Indemnified Parties be
liable to Owner for any indirect, special, punitive, incidental or consequential
damages including, without limitation, (1) loss of profits or revenues, (2)
damages suffered as a result of the loss of the use of Owner's power system,
Generation Facilities or equipment, (3) cost of purchase of replacement power
(including any differential in fuel or power costs), or (4) cost of capital with
respect to any claim based on or in any way connected with this Agreement
whether arising in contract (including breach of warranty), tort (including
fraud, negligence, strict liability, breach of fiduciary duty or any other
theory of tort liability), under the laws of real property or any other legal or
equitable theory of law, or as a result of any fine or other penalty imposed by
any Governmental Authority. Owner shall release, acquit, forever discharge,
indemnify, and hold harmless the Indemnified Parties from and against any claim
by any customer of Owner, or any other third party, for any direct, indirect,
special, punitive, incidental or consequential damages arising out of any
performance or failure to perform under this Agreement. The provisions of this
Section 9.5 shall apply to the fullest extent permitted by law.
         9.6 Severability. In the event that any particular application of any
of the limitations of liability contained in this Article 9 should be finally
adjudicated to be void as a violation of the public policy of the State of
________________, then such limitation of liability shall not apply with respect
to such application to the extent (but only to the extent) required in order for
such limitation of liability not to be void as a violation of such public
policy, and such limitations of liability shall remain in full force and effect
with respect to all other applications to the fullest extent permitted by law.

                                   ARTICLE 10
                                    Insurance

<PAGE>



         10.1 Parties' Obligations Generally. During the term of this Agreement
Owner and [OPCO] shall make reasonable efforts to procure and maintain in force
such physical damage and loss, public liability, workers' compensation,
officers' liability and other insurance as Owner may deem appropriate with
respect to all losses, damages, liability and claims arising out of Owner's
ownership of its Generation Facilities and [OPCO]'s operation thereof and the
provision of Operating Services hereunder. All such insurance policies shall
identify [OPCO] and Owner as additional insureds thereunder as their interests
may appear, and shall contain a waiver of subrogation clause in favor of [OPCO]
and Owner to the extent of the applicable limits of such policies. The aggregate
cost of all insurance, applicable to each Generation Facility and procured by
[OPCO] pursuant to this Agreement, and any payment by [OPCO] of any deductible,
self-insured retention, or co-payment in connection with any policy claim
arising out of [OPCO's] performance of this Agreement shall be included in the
costs of Operating Services. [OPCO] will take steps to meet the requirements of
such insurance policies and cooperate with Owner to furnish information,
establish procedures, erect or change physical facilities and otherwise meet the
requirements of the insurers to maintain coverage in effect and to collect
claims that may be made under such insurance. In the event that any of the
insurance described in this Article 10 is canceled by a party, that party shall
give written notice of such cancellation to the other party at least sixty (60)
days prior to the effective date of such cancellation.
         10.2 Commercial Liability Insurance. [OPCO] will carry insurance to
cover the legal obligations to pay damages because of bodily injury or property
damage. The limit and the deductible of such coverage shall be the appropriate
amounts as determined by [OPCO].


<PAGE>


         10.3 Workmen's Compensation Insurance. [OPCO] shall qualify as a
self-insurer in ________________ and with the U.S. Department of Labor for
purposes of the U.S. Longshoreman's and Harbor Worker's Act, but will provide an
umbrella policy to cover benefits in excess of its assumed liability for
workmen's compensation, the Longshoreman's and Harbor Worker's Act, and
employers liability. The Owner and [OPCO] acknowledge that, pursuant to the
terms of this Agreement, all premiums for [OPCO]'s workmen's compensation
insurance and all payments to [OPCO] employees, including workmen's compensation
benefits, relating to work performed by such employees while on the premises of
a Generation Facility, are effectively made by the Owner, since such premiums
and payments constitute direct charges incurred by [OPCO] in relation to the
performance of Operating Services for such Generation Facility. It is the intent
of Owner and [OPCO] that for purposes of workmen's compensation Owner not be
exposed to greater liability by virtue of this Agreement than Owner would have
if it had utilized Owner employees to perform Operating Services.
         10.4 Additional Insurance. In the event Owner at any time or from time
to time shall have elected to participate in supplemental insurance programs to
cover other risks arising from the ownership and operation of a Generation
Facility, including the extra costs of replacement power, the costs of such
protection shall be borne by Owner.
         10.5 Waiver of Subrogation - Allocation and Payment of Premium. Each
insurance policy obtained by a party hereto shall contain waivers of subrogation
against the other party, if obtainable from the insurer. The aggregate cost of
all insurance, applicable to the Generation Facilities and procured by [OPCO]
pursuant to this Agreement, shall be considered an Operating Cost. In the event
that any of the foregoing insurance policies is canceled by a party, that party
shall give written notice of such cancellation to the other party sixty (60)
days prior to the effective date of such cancellation.


<PAGE>


                                   ARTICLE 11
                                      Term

         11.1 Term. The term of this Agreement shall commence on the Effective
Date, subject nevertheless to any applicable rules, regulations or approvals of
any regulatory authority whose approval is required. This Agreement shall expire
(i) when all Generation Facilities have been retired and each site has been
returned to a condition acceptable to Owner, all in compliance with Legal
Requirements; (ii) upon termination pursuant to Section 12.1; or (c) upon mutual
agreement of the parties. In no event, however, shall this Agreement terminate
as to Owner unless all necessary regulatory approvas for transfer of
responsibility for all Generation Facilities of Owner have been obtained.
Owner's obligation to make payments to [OPCO] under this Agreement that have not
been satisfied prior to the expiration of the term of this Agreement shall
survive such expiration of the term.

                                   ARTICLE 12
                                    Remedies

         12.1 Termination. In the event Owner determines that it is in its
interest to do so, or [OPCO] determines that it is in [OPCO]'s interest to do
so, either [OPCO] or Owner may at will terminate this Agreement as provided
below. Except as may be otherwise provided in Section 12.2 and Article 9 hereof,
this right of termination shall be Owner's sole and exclusive remedy, legal or
equitable, for any failure by [OPCO] at any time to perform its duties,
responsibilities, obligations, or functions under this Agreement, or for any
other breach by [OPCO] of this Agreement. The procedure for exercise of this
right of termination shall be as follows:


<PAGE>


                  12.1.1 Owner shall give written notice to [OPCO] of Owner's
         determination to terminate this Agreement or [OPCO] shall give written
         notice to Owner of its determination to terminate this Agreement. It is
         recognized that no termination can be accomplished until all necessary
         regulatory approval has been obtained to transfer the operating
         responsibility for the Generation Facilities to Owner. Following the
         giving of such notice, the parties agree to cooperate, in good faith,
         to accomplish the transfer of operating responsibility in a prompt
         manner.
                  12.1.2 During the period between the giving of the notice of
         determination to terminate, and the date on which such transfer of
         operating responsibility is accomplished, [OPCO] agrees to continue the
         provision of Operating Services for the Generation Facilities.


<PAGE>


                  12.1.3 Upon receipt of all necessary governmental
         authorization for transfer of operating responsibility for each
         Generation Facility from [OPCO] to Owner, this Agreement shall
         terminate. Except as may otherwise be provided in Section 12.2 and
         Article 9 hereof, Owner hereby agrees that from and after such
         termination Owner shall indemnify and forever hold [OPCO] , its
         servants, directors, employees, affiliates and its agents harmless from
         and against any and all liability, costs, expenses (including
         reasonable attorneys' fees) and judgments, which may thereafter be
         experienced by [OPCO], which are in any way related to, arise out of or
         are in connection with the activities of [OPCO], its agents, servants,
         directors, employees and affiliates under this Agreement (whether the
         cause occurred before or after termination), and Owner further waives
         any claim Owner may have against [OPCO], its officers, directors,
         employees, affiliates and agents for damage to property of Owner, that
         arose out of or in connection with the activities of [OPCO], its
         officers, directors, employees, affiliates and agents under this
         Agreement. The indemnification and waiver contained herein shall
         survive termination and shall be specifically enforceable by [OPCO]
         against Owner.

                                   ARTICLE 13
                                  Miscellaneous

         13.1 No Partnership or Joint Venture. Nothing in this Agreement shall
be deemed to create or constitute a partnership, joint venture or association
among the parties hereto or any of them, the sole purpose of this Agreement
being limited to providing for the orderly and efficient operation, maintenance,
repair, upgrade, rehabilitation, renewal, replacement, additions and
construction of the Generation Facilities.
         13.2 Owner's Designated Representatives. Owner hereby designates its
President as Owner's Representative, who shall receive notices and
communications from [OPCO] under the provisions of this Agreement and who shall
send to the designated Representative of [OPCO] all notices and communications
under the provisions of this Agreement.
         13.3 [OPCO]'s Designated Representative, [OPCO] hereby designates its
President as the [OPCO] Representative, who shall receive notices and
communications from Owner's Representative under the provisions of this
Agreement and who shall send to Owner's Representative all notices and
communications concerning the provisions of this Agreement.
         13.4 Depreciation. Owner shall determine the basis and method it will
use for purposes of depreciation and other matters where investment in
Generation Facilities property is relevant.


<PAGE>


         13.5 Holidays, Business Days. Any obligations to perform under this
Agreement, including payment obligations, which shall become due on a
non-business day shall become due upon the next business day. The term "business
day" shall mean any day other than a day on which banking institutions in the
City of __________, ________________ are authorized by law to close.

         13.6 Owner's Services to be Furnished at Cost. To the extent that Owner
may, from time to time, provide goods or services to [OPCO], [OPCO] shall pay
for such goods and services at Owner's cost determined as herein provided, which
payments shall thereupon be treated as Generation Facilities costs under Article
4.
         13.7 Entire Agreement. This Agreement constitutes the entire
understanding among the parties hereto, superseding any and all previous
understandings, oral or written, pertaining to the subject matter contained
herein. No party hereto has relied or will rely upon any verbal or written
representation or verbal or written information made or given to such party by
any representative of the other party or anyone on its behalf.
         13.8 Amendments. This Agreement may not be amended, modified, or
terminated, nor may any obligation hereunder be waived verbally, and no such
amendment, modification, termination or waiver shall be effective for any
purpose unless it is in writing, and signed by both parties hereto, and all
necessary regulatory approvals have been obtained.
         13.9 Notices. Any notice, request, consent or other communication
permitted or required by this Agreement shall be in writing and shall be deemed
given when deposited in the United States Mail, first class postage prepaid, and
addressed as follows:

         If to [OPCO]:              [OPCO]
                                    =====================
                                    Attention: President

         If to Owner:               [NEWCO]
                                    ========================
                                    Attention: President


<PAGE>



         Unless a different officer or address shall have been designated by
the respective party by notice in writing.
         13.10  Captions.  The  descriptive  captions of the various  Articles,
Sections and  Paragraphs of this  Agreement  have been
inserted for convenience of reference only and shall in no way modify or
restrict any of the terms and provisions hereof.
         13.11  Counterparts.  This  Agreement  may be  executed simultaneously
in two or more  counterparts,  each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument.
         13.12 No Waiver. Failure of any party to enforce any rights or to
require performance of any other party of any of the provisions of this
Agreement shall not release any party of any of its obligations under this
Agreement and shall not be deemed a waiver of any rights of the parties to
insist on performance thereof, or of any of the parties' rights or remedies
hereunder, and in no way shall affect the validity of these terms and conditions
or any part thereof, or the right of any party thereafter to enforce every
provision hereof.
         13.13 Singular and Plural. Throughout this Agreement, whenever any word
in the singular number is used, it shall include the plural unless the context
otherwise requires; and whenever the plural number is used, it shall include the
singular unless the context otherwise requires..........
         13.14 Third Party Beneficiaries. This Agreement is for the benefit of
Owner and [OPCO], and no person or entity other than Owner and [OPCO] is or
shall be entitled to bring any action to enforce any provision of this Agreement
against anyone.


<PAGE>


         13.15 Severability. Should any provision of this Agreement be held to
be invalid or unenforceable by a court of competent jurisdiction, the remaining
provisions shall remain in full force and effect, provided that deletion of the
invalid or unenforceable provision does not materially affect the agreement of
the parties contained herein.

                                   ARTICLE 14
                             Successors and Assigns

         14.1 This Agreement and all of the terms and conditions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, that neither this Agreement nor any
of [OPCO]'s obligations hereunder shall be assignable by [OPCO], in whole or in
part, without the express written consent of Owner. Any mortgage indenture
trustee which shall foreclose on substantially all of the electric generation
properties of Owner may, at such trustee's own election, be deemed to be a
successor and assign of Owner under this Agreement.

                                   ARTICLE 15
                                  Governing Law

         15.1  This  Agreement  shall  be  construed  in  accordance   with,
and  to  be  governed  by,  the  laws  of  the  State  of _______________.

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and by their duly authorized representatives as of the day and year
first above written.
                                            [OPCO]




<PAGE>


                   By________________________________________
                             President


                 [NEWCO]


                 By
                   -----------------------------------------------
                              President



<PAGE>

                                   SCHEDULE 1

                           NEWCO GENERATING FACILITIES



GENERATING STATION         .................LOCATION
- ------------------                          --------




</TABLE>
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>6
<FILENAME>exd1_9701.txt
<DESCRIPTION>EXHIBIT D-1
<TEXT>

                                                                     Exhibit D-1

*1 Commission Opinions, Orders and Notices

Southern Company Services, Inc.

Docket Nos. ER00-1655-000 and ER00-1655-001

Order Accepting for Filing Proposed Market-Based Rates and Amended Intercompany
Interchange Contract as Modified

(Issued June 15, 2000)

Before Commissioners: James J. Hoecker, Chairman; William L. Massey, Linda
Breathitt, and Curt H (acute)ebert, Jr.

  In this order, we accept for filing, without hearing or suspension, the
revised Market- Based Rate Power Sales Tariff (Market Rate Tariff) and the
amended and restated Intercompany Interchange Contract (IIC) filed by Southern
Company Services, Inc. (SCSI).

Background

  On February 18, 2000, as amended on May 8, 2000, SCSI, as agent for Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power
Company, and Savannah Electric and Power Company (Operating Companies), filed an
amended and restated IIC. In its filing, SCSI requests authority to include
under the amended and restated IIC a new operating company that SCSI is forming,
New Operating Company (NewCo). [FN1] SCSI states that NewCo is being created to
consolidate wholesale activities that are currently being conducted on a
piecemeal basis by the existing Operating Companies.
  SCSI also proposes to revise the IIC to incorporate all previous Commission-
approved amendments into a single "restated" contract and to simplify and
modernize the contract. SCSI's proposed substantive changes to the IIC include:
(1) creating a new definition for Assignable Energy to differentiate purchases
made for the benefit of all the Operating Companies from those made to meet a
specific need involving less than all of the Operating Companies; (2)
incorporating a method to adjust the costs to individual Operating Companies in
instances where a purchase benefits the system as a whole but adversely impacts
an individual Operating Company; (3) allowing all Operating Companies to satisfy
their opportunity sale obligations for system sales at the same average system
rate; and (4) eliminating a provision specifying that operating and maintenance
expenses otherwise classified as variable would be treated as fixed whenever a
generating unit was projected to run at less than a 10 percent annual capacity
factor (Ten Percent Rule).
  In addition, SCSI proposes to revise its Market Rate Tariff to include NewCo
among the companies authorized to sell under its terms. [FN2] Furthermore, SCSI
has submitted amendments to its Code of Conduct to reflect the addition of
NewCo. SCSI requests an effective date of April 18, 2000 for the amended IIC and
the Market Rate Tariff with the exception of the elimination of the Ten Percent
Rule, for which the effective date requested is the date that a Commission order
is issued accepting the filing without any refund obligation.

Notice and Interventions

  Notice of SCSI's initial filing was published in the Federal Register, 65 Fed.
Reg. 11,296 (2000), with comments, protests and motions to intervene due on or
before March 10, 2000.
  *2 On March 10, 2000, Oglethorpe Power Corporation (Oglethorpe) and the Board
of Water, Light and Sinking Fund Commissioners of the City of Dalton, Georgia
(Dalton Utilities) filed timely motions to intervene. Dalton Utilities states
that it is not clear what role NewCo will play in the future supply of electric
power under existing wholesale agreements between SCSI and customers. Dalton
Utilities argues that no action on this filing by the Commission should
pre-determine the rights of customers under existing wholesale agreements
without the consent of such customers. On March 13, 2000, the Municipal Electric
Authority of Georgia (MEAG) filed an untimely motion to intervene, raising
nosubstantive issues. On March 27, 2000, SCSI filed a letter stating that the
rights of the parties are defined under the existing wholesale agreements and
that these rights would not be affected (one way or the other) by this filing.
  On April 14, 2000, a deficiency letter was issued by the Director, Division of
Tariffs and Rates-East, concerning SCSI's filing. On May 8, 2000, SCSI filed a
supplement to its original filing. Notice of SCSI's supplemental filing was
published in the Federal Register, 65 Fed. Reg. 31,306, with comments, protests
and motions to intervene due on or before May 22, 2000. No additional comments
or interventions were filed.

Discussion

  Procedural Matters
  Pursuant to Rule 214 of the Commission's Rules of Practice and Procedure, 18
C.F.R. s 385.214 (1999), the timely, unopposed motions to intervene of
Ogelthorpe and Dalton Utilities serve to make them parties to this proceeding.
  We will grant the untimely, unopposed motion to intervene of MEAG given its
interest in this proceeding and the absence of any undue prejudice or delay.
  Intercompany Interchange Contract
  SCSI states that NewCo will aggregate into one business unit the wholesale
activities currently performed on a piecemeal basis by each of the Operating
Companies. SCSI emphasizes that the addition of NewCo will simplify the resource
planning and decisionmaking process, while maintaining the benefits and burdens
of participation in the wholesale markets, as if the existing Operating
Companies had done so directly. SCSI describes the addition of NewCo as one of
several ministerial changes that have no substantive effect on rates, practices
or procedures under the IIC.
  SCSI's statements make clear that NewCo will stand in the shoes of the
existing Operating Companies, i.e., it will simplify the existing wholesale
activities without any change in how costs and revenues from wholesale
transactions are shared by the existing Operating Companies. Accordingly, we
will accept SCSI's addition of NewCo, as well as the other changes to the IIC.
Because these statements are not in the IIC, we will direct SCSI to amend the
IIC within 30 days of the date of this order to make clear that the existing
Operating Companies will continue to share the costs and revenues from NewCo's
wholesale transactions just as if the sales were made by the existing Operating
Companies themselves. [FN3] Accordingly, we will accept the amended IIC for
filing, to become effective as of April 18, 2000, except for the provision
eliminating the Ten Percent Rule, which will become effective upon issuance of
this order.
  *3 Market-Based Rates
  The Commission allows power sales at market-based rates if the seller and its
affiliates do not have, or have adequately mitigated market power in generation
and transmission and cannot erect other barriers to entry. In order for the
affiliate of a transmission-owning public utility to demonstrate the absence or
mitigation of market power, the public utility must have on file with the
Commission an open access transmission tariff for the provision of comparable
services. The Commission also considers whether there is evidence of affiliate
abuse or reciprocal dealing. [FN4]
  As we explain below, we find that SCSI's proposal to include NewCo among those
authorized to sell under the Market Rate Tariff meets these standards.
Accordingly, we will accept the revision to the Market Rate Tariff for filing
without suspension or hearing, to become effective on the date of commencement
of service by NewCo.
  1. Generation Market Power
  The Commission has recently evaluated the generation dominance of the
applicant and its affiliates in Docket No. ER99-2670-000. [FN5] Our analysis
indicated that the market shares of installed and uncommitted capacity of SCSI
do not exceed levels the Commission has found to be acceptable, [FN6] and there
are no material changes in circumstances that would warrant a different
conclusion here.
  Accordingly, we find that NewCo meets the Commission's generation market power
standard for approval of market-based rates.
  2. Transmission Market Power
  When an affiliate of a transmission-owning public utility seeks authorization
to charge market-based rates, the Commission has required the public utility to
have an open access transmission tariff on file before granting such
authorization. [FN7] The Southern Company's Operating Companies have filed an
open access pro forma compliance transmission tariff in Docket No. OA96-27- 000.
[FN8]
  Accordingly, we find that NewCo meets the Commission's transmission market
power standard for approval of market-based rates.
  3. Other Barriers to Entry/Reciprocal Dealing
  We are satisfied with SCSI's explanation that there are no other barriers to
entry or reciprocal dealing considerations of concern here.
  4. Affiliate Abuse
  SCSI states that NewCo will not sell power to, or purchase power from, any
affiliated entity with a franchised service territory unless the Commission
first approves such a transaction in a separate order under Section 205 of the
Federal Power Act (FPA), 16 U.S.C. s 824d (1994).
  In addition, SCSI states that it has amended its Code of Conduct, which has
been previously accepted by the Commission, [FN9] to reflect the addition of
NewCo as a system company. The amended Code of Conduct satisfies the
Commission's affiliate abuse requirements for the separation of personnel, the
pricing of non- power goods and services and the requirement concerning the
sharing of all market information.
  *4 With these safeguards, we are satisfied with SCSI's explanation that there
are no affiliate abuse considerations of concern here.
  Waivers, Authorizations and Reporting Requirements
  We will grant NewCo the following waivers, consistent with those granted to
other entities with market-based rate authorization: (1) waiver of the
accounting and related reporting requirements of Parts 41, 101 and 141 of the
Commission's regulations, with the exception of 18 C.F.R. ss 141.14, .15 (1999);
(2) permission to make abbreviated filings under Part 45; (3) waiver of the
requirements of Subpart B and C of Part 35, except Sections 35.12(a), 35.13(b),
35.15 and 35.16; and (4) blanket approval for issuances of securities or
assumptions of liabilities pursuant to Part 34 of the Commission's regulations.
  Consistent with procedures we have adopted in other cases, NewCo may file
umbrella service agreements for short-term power sales (one year or less) within
30 days of the date of commencement of short-term service, to be followed by
quarterly transaction summaries of specific sales. [FN10] For long- term
transactions (longer than one year), NewCo must submit the actual individual
service agreement for each transaction within 30 days of the date of
commencement of service.
  To ensure the clear identification of filings,and in order to facilitate the
orderly maintenance of the Commission's files and public access to documents,
long-term transaction service agreements should not be filed with the short-
term transaction summaries.
  Additionally, we will direct NewCo to inform the Commission promptly of any
change in status that would reflect a departure from the characteristics the
Commission has relied upon in approving market-based pricing. These include, but
are not limited to: (1) ownership of generation or transmission facilities or
inputs to electric power production other than fuel supplies; or (2) affiliation
with any entity not disclosed in the filing that owns generation or transmission
facilities or inputs to electric power production, or affiliation with any
entity that has a franchised service area. [FN11] Alternatively, NewCo may elect
to report such changes with the updated market analysis it will be required to
file every three years. [FN12]

The Commission orders:
  (A) SCSI's revised Market Rate Tariff is hereby accepted for filing, without
suspension or hearing, to become effective on the date of commencement of
service of NewCo.
  (B) SCSI is hereby directed to revise the IIC as discussed in the body of this
order within 30 days of the date of this order.
  (C) SCSI's amended and restated IIC is hereby accepted for filing, without
suspension or hearing, to become effective on April 18, 2000 except for the
provision eliminating the Ten Percent Rule, which will become effective upon
issuance of this order.
  (D) NewCo is hereby directed to inform the Commission of the date of
commencement of service within 10 days of that date.
  *5 (E) NewCo's request for waiver of Parts 41, 101, and 141 of the
Commission's regulations is hereby granted, as discussed in the body of this
order.
  (F) Within 30 days of the date of this order, any person desiring to be heard
or to protest the Commission's blanket approval of issuances of securities or
assumptions of liabilities by NewCo should file a motion to intervene or protest
with the Federal Energy Regulatory Commission, 888 First Street, NE.,
Washington, D.C. 20426, in accordance with Rules 211 and 214 of the Commission's
Rules of Practice and Procedure, 18 C.F.R. ss 385.211 and 385.214 (1999).
  (G) Absent a request to be heard within the period set forth in Ordering
Paragraph (F) above, NewCo is hereby authorized to issue securities and assume
obligations or liabilities as guarantor, indorser, surety, or otherwise in
respect of any security of another person; provided that such issue or
assumption is for some lawful object within the corporate purpose of NewCo,
compatible with the public interest, and reasonably necessary or appropriate for
such purposes.
  (H) Until further order of this Commission, the full requirements of Part 45
of the Commission's regulations, except as noted below, are hereby waived with
respect to any person now holding or who may hold an otherwise proscribed
interlocking directorate involving NewCo. Any such person instead shall file a
sworn application providing the following information:
    (1) the full name and business address; and
    (2) all jurisdictional interlocks, identifyingthe affected companies and the
positions held by that person.
  (I) The Commission reserves the right to modify this order to require a
further showing that neither public nor private interests will be adversely
affected by continued Commission approval of NewCo's issuances of securities or
assumptions of liabilities, or by the continued holding of any affected
interlocks.
  (J) NewCo's request for waiver of the provisions of Subparts B and C of Part
35 of the Commission's regulations, with the exception of Sections 35.12(a),
35.13(b), 35.15 and 35.16, is hereby granted.
  (K) NewCo is hereby directed to conform to the filing and reporting
requirements specified in this order. The first quarterly report of transactions
undertaken by NewCo under its market-based power sales tariff will be due within
30 days of the calender quarter in which service commences.
  (L) NewCo is hereby directed to file an updated market analysis within three
years of the date of this order, and every three years thereafter.
  (M) NewCo is hereby directed to inform the Commission promptly of any change
in status that would reflect a departure from the characteristics the Commission
has relied upon in approving market-based pricing. Alternatively, as discussed
in the body of this order, NewCo may elect to report any such changes every
three years with the updated market analysis filed pursuant to Ordering
Paragraph (L) above. NewCo shall notify the Commission of which option it elects
in the first quarterly report filed pursuant to Ordering Paragraph (K) above.
  *6 (N) SCSI is hereby informed of the following rate schedule designations:

Southern Company Services, Inc.

Docket No. ER00-1655-000

Rate Schedule Designations

Effective Date: Date of Commencement of Service of NewCo

Designation-Description

(1) FERC Electric Tariff, First Revised Volume No. 4 Original Sheet Nos. 1-7
(Supersedes Original Volume No. 4)-Market- Based Rate Tariff and Code of
Conduct

Effective Date: April 18, 2000

(2) Rate Schedule FERC No. 138 (Supersedes Rate Schedule FERC No. 65, as
supplemented)-Amended and Restated Intercompany Interchange Contract and
Allocation Methodology and Rate Manual

  FN1      SCSI notes that NewCo is subject to regulatory approval from the
Securities and Exchange Commission (SEC). However, this approval has not yet
been obtained. Upon receipt of SEC approval, SCSI states that a submittal to
this Commission will be made to reflect the formal name of NewCo.

  FN2      SCSI also proposes to revise its Market Rate Tariff (Sections 6.1 and
6.2) to adopt the prime rate published in the Wall Street Journal as the
applicable interest rate. Further, SCSI has filed to update Section 1.4 of its
Market Rate Tariff to reflect the change from separate Point-to-Point and
Network Transmission Tariffs to the single Open Access Transmission Tariff
required by Order No. 888. See Promoting Wholesale Competition Through Wholesale
Open Access Non-Discriminatory Transmission Services by Public Utilities;
Recovery of Stranded Costs by Public Utilities and Transmitting Utilities,
FERCStatutes and Regulations, Regulations Preambles January 1991- June 1996 P
31,036 (1996) (Order No. 888),  order on reh'g, FERC Statutes and Regulations P
31,048 (1997) (Order No. 888-A), order on reh'g, 81 FERC P 61,248 (1997) (Order
No. 888-B), order on reh'g, 82 FERC P 61,046 (1998) (Order No. 888-C).

  FN3      See SCSI transmittal letter at 3-4; SCSI supplemental response at 6-
7.

  FN4      E.g., Progress Power Marketing, Inc., 76 FERC P 61,155, at p. 61,919
(1996), letter order approvingsettlement, 79 FERC P 61,149 (1997); Northwest
Power Marketing Company, L.L.C., 75 FERC P 61,281, at p. 61,889 (1996); accord
Heartland Energy Services, Inc. et al., 68 FERC P 61,223, at pp. 62,060-63
(1994) (Heartland).

  FN5      Southern Operating Companies, letter order issued May 28, 1999.

  FN6      See, e.g., Louisiana Energy and Power Authority v. FERC, 141 F.3d 364
(D.C. Cir. 1998).

  FN7      See Order No. 888, FERC Statutes and Regulations at pp. 31,656-57;
accord Southern Company Services, Inc., 71 FERC P 61,392, at p. 62,536 (1995);
Heartland, 68 FERC at pp. 62,059-60.

  FN8      Allegheny Power Systems, Inc., et al., 77 FERC P 61,266 (1996),
clarified, 80 FERC P 61,143 (1997).

  FN9      SEI Wisconsin, L.L.C., Docket No ER99-669-001, letter order, issued
February 26, 1999.

  FN10     See Cataula Generating Company, L.P., 79 FERC P 61,261, at p. 62,134
(1997); Kincaid Generation, L.L.C., 78 FERC P 61,082, at pp. 61,300-01 (1997);
see also Southern Company Services, Inc., 75 FERC P 61,130, at pp. 61,444-45,
clarified, 75 FERC P 61,353 (1996).

  FN11     See, e.g., Morgan Stanley Capital Group, 69 FERC P 61,175, at p.
61,695 (1994), order on reh'g, 72 FERC P 61,082 (1995); InterCoast Power
Marketing Company, 68 FERC P 61,248, at p. 62,134, clarified, 68 FERC P 61,324
(1994).

  FN12     We reserve the right to require such an analysis at any time.
Federal Energy Regulatory Commission
91 FERC P 61,259, 2000 WL 773047 (F.E.R.C.)
END OF DOCUMENT
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>7
<FILENAME>exf1_9701.txt
<DESCRIPTION>EXHIBIT F-1
<TEXT>

                                                                   Exhibit F-1

                              Troutman Sanders LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., suite 5200
                             Atlanta, Georgia 30308
                                  404-885-3000

                                December 21, 2000


Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:

         We are familiar with the statement on Form U-1, as amended, referred to
above relating to the proposal by The Southern Company ("Southern") to, among
other things, form and acquire the stock of and make capital contributions to
NewCo (as defined in such statement on Form U-1), which would then undertake the
construction and ownership of certain electric power generation.

         We are of the opinion that Southern is validly organized and duly
existing as a corporation under the laws of the State of Delaware and that, upon
incorporation and organization of NewCo pursuant to the laws of its jurisdiction
of incorporation and upon the issuance of your order herein and in the event
that the proposed transactions are consummated in accordance with such statement
on Form U-1 and such order:

         (a) all state laws applicable to the proposed transactions by Southern
will have been complied with;

         (b) any guarantees of NewCo's indebtedness by Southern will be valid
and binding obligations of Southern in accordance with their terms; and

         (c) the consummation of the proposed transactions will not violate the
legal rights of the holders of any securities issued by Southern or any
associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                             /s/Troutman Sanders LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>8
<FILENAME>exf2_9701.txt
<DESCRIPTION>EXHIBIT F-2
<TEXT>

                                                                    Exhibit F-2

                               Balch & Bingham LLP
                             1901 Sixth Avenue North
                                   Suite 2600
                            Birmingham, Alabama 35202
                                 (205) 251-8100


                                December 21, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:


         We are familiar with the statement on Form U-1, as amended, referred to
above and, as counsel to Alabama Power Company ("Alabama"), are furnishing this
opinion with respect to the proposed transactions contemplated in connection
with the formation of NewCo (as defined in such statement on Form U-1) as
described in such statement on Form U-1.

         We are of the opinion that Alabama is validly organized and duly
existing as a corporation under the laws of the State of Alabama and that, upon
the issuance of your order herein and in the event that the proposed
transactions are consummated in accordance with such statement on Form U-1 and
such order:

         (a) all state laws applicable to the proposed transactions by Alabama
will have been complied with; and

         (b) the consummation of the proposed transactions by Alabama will not
violate the legal rights of the holders of any securities issued by Alabama or
any associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                                Very truly yours,

                             /s/Balch & Bingham LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>9
<FILENAME>exf3_9701.txt
<DESCRIPTION>EXHIBIT F-3
<TEXT>

                                                                   Exhibit F-3


                              Troutman Sanders LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., suite 5200
                             Atlanta, Georgia 30308
                                  404-885-3000

                                December 21, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:


         We are familiar with the statement on Form U-1, as amended, referred to
above and, as counsel to Georgia Power Company ("Georgia"), are furnishing this
opinion with respect to the proposed transactions contemplated in connection
with the formation of NewCo (as defined in such statement on Form U-1) as
described in such statement on Form U-1.

         We are of the opinion that Georgia is validly organized and duly
existing as a corporation under the laws of the State of Georgia and that, upon
the issuance of your order herein and in the event that the proposed
transactions are consummated in accordance with such statement on Form U-1 and
such order:

         (a) all state laws applicable to the proposed transactions by Georgia
will have been complied with; and

         (b) the consummation of the proposed transactions by Georgia will not
violate the legal rights of the holders of any securities issued by Georgia or
any associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                                Very truly yours,

                             /s/Troutman Sanders LLP
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>10
<FILENAME>exf4_9701.txt
<DESCRIPTION>EXHIBIT F-4
<TEXT>

                                                                   Exhibit F-4

                                  Beggs & Lane
                          Seventh Floor Blount Building
                              3 West Garden Street
                            Pensacola, Florida 32501
                                 (850) 432-2451

                                December 21, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:


         We are familiar with the statement on Form U-1, as amended, referred to
above and, as counsel to Gulf Power Company ("Gulf"), are furnishing this
opinion with respect to the proposed transactions contemplated in connection
with the formation of NewCo (as defined in such statement on Form U-1) as
described in such statement on Form U-1.

         We are of the opinion that Gulf is validly organized and duly existing
as a corporation under the laws of the State of Maine and that, upon the
issuance of your order herein and in the event that the proposed transactions
are consummated in accordance with such statement on Form U-1 and such order:

         (a) all state laws applicable to the proposed transactions by Gulf will
have been complied with; and

         (b) the consummation of the proposed transactions by Gulf will not
violate the legal rights of the holders of any securities issued by Gulf or any
associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                                Very truly yours,

                                 /s/Beggs & Lane
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>11
<FILENAME>exf5_9701.txt
<DESCRIPTION>EXHIBIT F-5
<TEXT>

                                                                   Exhibit F-5

                            Eaton and Cottrell, P.A.
                            1310 Twenty Fifth Avenue
                           Gulfport, Mississippi 39501
                                 (228) 864-9900

                                December 21, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:


         We are familiar with the statement on Form U-1, as amended, referred to
above and, as counsel to Mississippi Power Company ("Mississippi"), are
furnishing this opinion with respect to the proposed transactions contemplated
in connection with the formation of NewCo (as defined in such statement on Form
U-1) as described in such statement on Form U-1.

         We are of the opinion that Mississippi is validly organized and duly
existing as a corporation under the laws of the State of Mississippi and that,
upon the issuance of your order herein and in the event that the proposed
transactions are consummated in accordance with such statement on Form U-1 and
such order:

         (a) all state laws applicable to the proposed transactions by
Mississippi will have been complied with; and

         (b) the consummation of the proposed transactions by Mississippi will
not violate the legal rights of the holders of any securities issued by
Mississippi or any associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                                Very truly yours,

                           /s/Eaton and Cottrell, P.A.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>12
<FILENAME>exf6_9701.txt
<DESCRIPTION>EXHIBIT F-6
<TEXT>

                                                                   Exhibit F-6


                              Troutman Sanders LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., suite 5200
                             Atlanta, Georgia 30308
                                  404-885-3000

                                December 21, 2000

Securities and Exchange Commission
450 Fifth Street, N.W.

Washington, D.C.  20549


         Re:      Statement on Form U-1 of The Southern Company, et al.
                  (File No. 70-9701)


Ladies and Gentlemen:


         We are familiar with the statement on Form U-1, as amended, referred to
above and, as counsel to Savannah Electric and Power Company ("Savannah"), are
furnishing this opinion with respect to the proposed transactions contemplated
in connection with the formation of NewCo (as defined in such statement on Form
U-1) as described in such statement on Form U-1.

         We are of the opinion that Savannah is validly organized and duly
existing as a corporation under the laws of the State of Georgia and that, upon
the issuance of your order herein and in the event that the proposed
transactions are consummated in accordance with such statement on Form U-1 and
such order:

         (a) all state laws applicable to the proposed transactions by Savannah
will have been complied with; and

         (b) the consummation of the proposed transactions by Savannah will not
violate the legal rights of the holders of any securities issued by Savannah or
any associate company thereof.

         We hereby consent to the use of this opinion in connection with the
above-referenced statement on Form U-1.

                                Very truly yours,

                             /s/Troutman Sanders LLP
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----
