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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>0000092122-01-500065.txt : 20010330
<SEC-HEADER>0000092122-01-500065.hdr.sgml : 20010330
ACCESSION NUMBER:		0000092122-01-500065
CONFORMED SUBMISSION TYPE:	10-K
PUBLIC DOCUMENT COUNT:		65
CONFORMED PERIOD OF REPORT:	20001231
FILED AS OF DATE:		20010329

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:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-03526
		FILM NUMBER:		1583368

	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

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			ALABAMA POWER CO
		CENTRAL INDEX KEY:			0000003153
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				630004250
		STATE OF INCORPORATION:			AL
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-03164
		FILM NUMBER:		1583369

	BUSINESS ADDRESS:	
		STREET 1:		600 N 18TH ST
		STREET 2:		P O BOX 2641
		CITY:			BIRMINGHAM
		STATE:			AL
		ZIP:			35291
		BUSINESS PHONE:		2052571000

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GEORGIA POWER CO
		CENTRAL INDEX KEY:			0000041091
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				580257110
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-06468
		FILM NUMBER:		1583370

	BUSINESS ADDRESS:	
		STREET 1:		241 RALPH MCGILL BOULEVARD
		CITY:			ATLANTA
		STATE:			GA
		ZIP:			30308
		BUSINESS PHONE:		4045066526

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			GULF POWER CO
		CENTRAL INDEX KEY:			0000044545
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				590276810
		STATE OF INCORPORATION:			ME
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	000-02429
		FILM NUMBER:		1583371

	BUSINESS ADDRESS:	
		STREET 1:		ONE ENERGY PLACE
		CITY:			PENSACOLA
		STATE:			FL
		ZIP:			32520-0102
		BUSINESS PHONE:		8504446111

	MAIL ADDRESS:	
		STREET 1:		ONE ENERGY PLACE
		CITY:			PENSACOLA
		STATE:			FL
		ZIP:			32520-0102

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			MISSISSIPPI POWER CO
		CENTRAL INDEX KEY:			0000066904
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				640205820
		STATE OF INCORPORATION:			MS
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-11229
		FILM NUMBER:		1583372

	BUSINESS ADDRESS:	
		STREET 1:		2992 W BEACH
		CITY:			GULFPORT
		STATE:			MS
		ZIP:			39501
		BUSINESS PHONE:		2288641211

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			SAVANNAH ELECTRIC & POWER CO
		CENTRAL INDEX KEY:			0000086940
		STANDARD INDUSTRIAL CLASSIFICATION:	ELECTRIC SERVICES [4911]
		IRS NUMBER:				580418070
		STATE OF INCORPORATION:			GA
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		10-K
		SEC ACT:		
		SEC FILE NUMBER:	001-05072
		FILM NUMBER:		1583373

	BUSINESS ADDRESS:	
		STREET 1:		600 BAY ST EAST
		CITY:			SAVANNAH
		STATE:			GA
		ZIP:			31401
		BUSINESS PHONE:		9122327171
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>year2000_10k.txt
<TEXT>


<PAGE>
===============================================================================
                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K

                (X) ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                   For the Fiscal Year Ended December 31, 2000
                                       OR
              ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
                     OF THE SECURITIES EXCHANGE ACT OF 1934
                        For the Transition Period from to

Commission         Registrant, State of Incorporation,      I.R.S. Employer
File Number          Address and Telephone Number          Identification No.

    1-3526          The Southern Company                     58-0690070
                    (A Delaware Corporation)
                    270 Peachtree Street, N.W.
                    Atlanta, Georgia 30303
                    (404) 506-5000

    1-3164          Alabama Power Company                    63-0004250
                    (An Alabama Corporation)
                    600 North 18th Street
                    Birmingham, Alabama 35291
                    (205) 257-1000

    1-6468          Georgia Power Company                    58-0257110
                    (A Georgia Corporation)
                    241 Ralph McGill Boulevard, N.E.
                    Atlanta, Georgia 30308
                    (404) 506-6526

    0-2429          Gulf Power Company                       59-0276810
                    (A Maine Corporation)
                    One Energy Place
                    Pensacola, Florida 32520
                    (850) 444-6111

    0-6849          Mississippi Power Company                64-0205820
                    (A Mississippi Corporation)
                    2992 West Beach
                    Gulfport, Mississippi 39501
                    (228) 864-1211

    1-5072          Savannah Electric and Power Company      58-0418070
                    (A Georgia Corporation)
                    600 East Bay Street
                    Savannah, Georgia 31401
                    (912) 644-7171

===============================================================================


<PAGE>







Securities registered pursuant to Section 12(b) of the Act:1

Each of the following classes or series of securities registered pursuant to
Section 12(b) of the Act is registered on the New York Stock Exchange.

Title of each class                                        Registrant

Common Stock, $5 par value                                 The Southern Company

Company obligated mandatorily  redeemable
preferred securities, $25 liquidation amount
7.75% Cumulative Quarterly Income Preferred Securities 2
7 1/8% Trust Originated Preferred Securities3
6.875% Cumulative Quarterly Income Preferred Securities4

                    ---------------------------------------------------

Class A preferred, cumulative, $25 stated capital         Alabama Power Company
5.20% Series          5.83% Series

Senior Notes
7 1/8% Series A         7% Series C
7% Series B           6.75% Series J

Company obligated mandatorily redeemable preferred securities, $25 liquidation
amount
7.375% Trust Preferred Securities5
7.60% Trust Originated Preferred Securities6

                     ---------------------------------------------------

Senior Notes                                             Georgia Power Company
6 7/8% Series A              6 5/8% Series D
6.60% Series B

Company obligated mandatorily redeemable
preferred securities, $25 liquidation amount
7.75% Trust Preferred Securities7        7.60% Trust Preferred Securities8
7.75% Cumulative Quarterly Income        6.85% Trust Preferred Securities10
        Preferred Securities9

             ------------------------------------------------------

===============================================================================
1 As of December 31, 2000.
2 Issued by Southern Company Capital Trust III and guaranteed by The Southern
   Company.
3 Issued by Southern Company Capital Trust IV and guaranteed by The Southern
   Company.
4 Issued by Southern Company Capital Trust V and guaranteed by The Southern
   Company.
5 Issued by Alabama Power Capital Trust I and guaranteed by Alabama Power
   Company.
6 Issued by Alabama Power Capital Trust II and guaranteed by Alabama Power
   Company.
7 Issued by Georgia Power Capital Trust I and guaranteed by Georgia Power
   Company.
8 Issued by Georgia Power Capital Trust II and guaranteed by Georgia Power
   Company.
9 Issued by Georgia Power Capital Trust III and guaranteed by Georgia Power
   Company.
10 Issued by Georgia Power Capital Trust IV and guaranteed by Georgia Power
   Company.


<PAGE>



Company obligated mandatorily redeemable                 Gulf Power Company
preferred securities, $25 liquidation amount
7.625% Cumulative Quarterly Income Preferred Securities11
7.00% Cumulative Quarterly Income Preferred Securities12

                  ------------------------------------------------------

Depositary preferred shares, each representing Mississippi Power Company
one-fourth of a share of preferred stock, cumulative, $100 par value
6.32% Series
6.65% Series

Company obligated mandatorily redeemable preferred securities, $25 liquidation
amount
7.75% Trust Originated Preferred Securities13

                    ---------------------------------------------------

Company obligated mandatorily redeemable     Savannah Electric and Power Company
preferred securities, $25 liquidation amount
6.85% Trust Preferred Securities14

Securities registered pursuant to Section 12(g) of the Act:15

Title of each class                                     Registrant

Preferred stock, cumulative, $100 par value          Alabama Power Company
4.20% Series                    4.60% Series          4.72% Series
4.52% Series                    4.64% Series          4.92% Series

Class A preferred, cumulative, $100,000 stated capital
Auction (1993 Series)

Class A preferred, cumulative, $100 stated capital
Auction (1988 Series)

           ----------------------------------------------------------

Preferred stock, cumulative, $100 stated value       Georgia Power Company
$4.60 Series (1954)

           ----------------------------------------------------------



===============================================================================
- --------
11 Issued by Gulf Power Capital Trust I and guaranteed by Gulf Power Company.
12 Issued by Gulf Power Capital Trust II and guaranteed by Gulf Power Company.
13 Issued by Mississippi Power Capital Trust I and guaranteed by Mississippi
    Power Company.
14 Issued by Savannah Electric Capital Trust I and guaranteed by Savannah
    Electric and Power Company.
15 As of December 31, 2000.


<PAGE>



Preferred stock, cumulative, $100 par value          Gulf Power Company
4.64% Series      5.44% Series
5.16% Series

                   ----------------------------------------------------------

Preferred stock, cumulative, $100 par value          Mississippi Power Company
4.40% Series         4.60% Series
4.72% Series         7.00% Series

                   ----------------------------------------------------------

  Indicate by check mark whether the registrants (1) have filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes X No___

  Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrants' knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. ( )

  Aggregate market value of voting stock held by non-affiliates of The Southern
Company at February 28, 2001: $21.1 billion. Each of such other registrants is a
wholly-owned subsidiary of The Southern Company. A description of registrants'
common stock follows:
<TABLE>
<CAPTION>

                                                   Description of                      Shares Outstanding
Registrant                                          Common Stock                      at February 28, 2001

<S>                                          <C>                                             <C>
The Southern Company                         Par Value $5 Per Share                          681,946,097
Alabama Power Company                        Par Value $40 Per Share                           5,608,955
Georgia Power Company                        No Par Value                                      7,761,500
Gulf Power Company                           No Par Value                                        992,717
Mississippi Power Company                    Without Par Value                                 1,121,000
Savannah Electric and Power Company          Par Value $5 Per Share                           10,844,635
</TABLE>

  Documents incorporated by reference: specified portions of The Southern
Company's Proxy Statement relating to the 2001 Annual Meeting of Stockholders
are incorporated by reference into PART III. In addition, specified portions of
the Information Statements of Alabama Power Company, Georgia Power Company, Gulf
Power Company and Mississippi Power Company relating to each of their respective
2001 Annual Meetings of Shareholders are incorporated by reference into PART
III.

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

===============================================================================



<PAGE>
<TABLE>
<CAPTION>
                                                           Table of Contents

                                                                                                                       Page
               PART I

Item 1          Business
<S>                                                                                                  <C>
                  Mirant Corporation (formerly Southern Energy, Inc.)............................  I-1
                  The SOUTHERN System............................................................  I-2
                  Integrated Southeast Utilities.................................................  I-2
                  Other Business.................................................................  I-2
                  Certain Factors Affecting the Industry.........................................  I-3
                  Construction Programs..........................................................  I-3
                  Financing Programs.............................................................  I-5
                  Fuel Supply....................................................................  I-6
                  Territory Served by the Integrated Southeast Utilities.........................  I-8
                  Competition....................................................................  I-11
                  Regulation.....................................................................  I-12
                  Rate Matters...................................................................  I-14
                  Employee Relations.............................................................  I-15
Item 2          Properties.......................................................................  I-17
Item 3          Legal Proceedings................................................................  I-21
Item 4          Submission of Matters to a Vote of Security Holders..............................  I-22
                Executive Officers of SOUTHERN...................................................  I-23
                Executive Officers of ALABAMA....................................................  I-24
                Executive Officers of GEORGIA....................................................  I-25
                Executive Officers of GULF.......................................................  I-26
                Executive Officers of MISSISSIPPI................................................  I-27

                PART II

Item 5          Market for Registrants' Common Equity and Related Stockholder Matters............  II-1
Item 6          Selected Financial Data..........................................................  II-2
Item 7          Management's Discussion and Analysis of Results of Operations
                  and Financial Condition........................................................  II-2
Item 7A         Quantitative and Qualitative Disclosures about Market Risk.......................  II-2
Item 8          Financial Statements and Supplementary Data......................................  II-3
Item 9          Changes in and Disagreements with Accountants on
                  Accounting and Financial Disclosure............................................  II-4

                PART III

Item 10         Directors and Executive Officers of the Registrants.............................   III-1
Item 11         Executive Compensation..........................................................   III-1
Item 12         Security Ownership of Certain Beneficial Owners and
                  Management....................................................................   III-1
Item 13         Certain Relationships and Related Transactions..................................   III-1

                PART IV

Item 14         Exhibits, Financial Statement Schedules, and Reports
                  on Form 8-K...................................................................   IV-1

</TABLE>
                                       i
<PAGE>

<TABLE>
<CAPTION>




                                   DEFINITIONS

 When used in Items 1 through 5 and Items 10 through 14, the following terms will have the meanings indicated.

 Term                                                             Meaning

 <S>                                                  <C>
 AEC...........................................       Alabama Electric Cooperative, Inc.
 AFUDC.........................................       Allowance for Funds Used During Construction
 ALABAMA.......................................       Alabama Power Company
 AMEA..........................................       Alabama Municipal Electric Authority
 Clean Air Act.................................       Clean Air Act Amendments of 1990
 Dalton........................................       City of Dalton, Georgia
 DOE...........................................       United States Department of Energy
 EMF...........................................       Electromagnetic field
 Energy Act....................................       Energy Policy Act of 1992
 Energy Solutions..............................       Southern Company Energy Solutions, Inc.
 Entergy Gulf States...........................       Entergy Gulf States Utilities Company
 EPA...........................................       United States Environmental Protection Agency
 FERC..........................................       Federal Energy Regulatory Commission
 FPC...........................................       Florida Power Corporation
 FP&L..........................................       Florida Power & Light Company
 GEORGIA.......................................       Georgia Power Company
 GULF..........................................       Gulf Power Company
 Holding Company Act...........................       Public Utility Holding Company Act of 1935, as amended
 IBEW..........................................       International Brotherhood of Electrical Workers
 integrated Southeast utilities................       ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH
 IPP...........................................       Independent power producer
 IRS...........................................       Internal Revenue Service
 JEA...........................................       Jacksonville Electric Authority
 MEAG..........................................       Municipal Electric Authority of Georgia
 MESH..........................................       Mobile Energy Services Holdings
 Mirant........................................       Mirant Corporation (formerly Southern Energy, Inc.)
 MISSISSIPPI...................................       Mississippi Power Company
 NRC...........................................       Nuclear Regulatory Commission
 OPC...........................................       Oglethorpe Power Corporation
 PSC...........................................       Public Service Commission
 RTO...........................................       Regional Transmission Organization
 RUS...........................................       Rural Utility Service (formerly Rural Electrification
                                                      Administration)
</TABLE>

                                       ii

<PAGE>
<TABLE>
<CAPTION>


                                   DEFINITIONS
                                   (continued)



 <S>                                                  <C>
 SAVANNAH......................................       Savannah Electric and Power Company
 SCS...........................................       Southern Company Services, Inc. (the system
                                                      service company)
 SEC...........................................       Securities and Exchange Commission
 SEGCO.........................................       Southern Electric Generating Company
 SEPA..........................................       Southeastern Power Administration
 SERC..........................................       Southeastern Electric Reliability Council
 SMEPA.........................................       South Mississippi Electric Power Association
 SOUTHERN......................................       The Southern Company
 Southern LINC.................................       Southern Communications Services, Inc.
 Southern Nuclear..............................       Southern Nuclear Operating Company, Inc.
 SOUTHERN system...............................       SOUTHERN, the integrated Southeast utilities, SEGCO,
                                                      Southern Nuclear, SCS, Southern LINC, Energy Solutions and other
                                                      subsidiaries
 Southern Telecom..............................       Southern Telecom, Inc.
 SPC...........................................       Southern Power Company
 TVA...........................................       Tennessee Valley Authority


</TABLE>

                                      iii
<PAGE>



                         CAUTIONARY STATEMENT REGARDING
                           FORWARD-LOOKING INFORMATION

   This Annual Report on Form 10-K contains forward-looking and historical
information. Forward-looking information includes, among other things,
statements concerning the strategic goals for SOUTHERN's new wholesale business
and also SOUTHERN's earnings per share and earnings growth goals. In some cases,
forward-looking statements can be identified by terminology such as "may,"
"will," "should," "expects," "plans," "anticipates," "believes," "estimates,"
"predicts," "potential" or "continue" or the negative of these terms or other
comparable terminology. The registrants caution that there are various important
factors that could cause actual results to differ materially from those
indicated in the forward-looking statements; accordingly, there can be no
assurance that such indicated results will be realized. These factors include
the impact of recent and future federal and state regulatory change, including
legislative and regulatory initiatives regarding deregulation and restructuring
of the electric utility industry and also changes in environmental and other
laws and regulations to which SOUTHERN and its subsidiaries are subject, as well
as changes in application of existing laws and regulations; current and future
litigation, including the pending EPA civil action against certain of the
integrated Southeast utilities and the race discrimination litigation against
certain of SOUTHERN's subsidiaries; the extent and timing of the entry of
additional competition in the markets of SOUTHERN's subsidiaries; potential
business strategies, including acquisitions or dispositions of assets or
businesses, which cannot be assured to be completed or beneficial; internal
restructuring or other restructuring options that may be pursued by SOUTHERN;
state and federal rate regulation in the United States and in foreign countries
in which SOUTHERN's subsidiaries operate; political, legal and economic
conditions and developments in the United States and in foreign countries in
which SOUTHERN's subsidiaries operate; financial market conditions and the
results of financing efforts; the impact of fluctuations in commodity prices,
interest rates and customer demand; weather and other natural phenomena; the
performance of projects undertaken by the non-traditional business and the
success of efforts to invest in and develop new opportunities; the timing and
acceptance of SOUTHERN's new product and service offerings; the ability of
SOUTHERN to obtain additional generating capacity at competitive prices;
developments in the California power markets, including, but not limited to,
governmental intervention, deterioration in the financial condition of
counterparties, default on receivables due, adverse results in current or future
litigation and adverse changes in the tariffs of the California Power Exchange
Corporation or the California Independent System Operator Corporation; and other
factors discussed elsewhere herein and in other reports filed from time to time
with the SEC.



                                       iv


<PAGE>

                                     PART I


Item 1.  BUSINESS

    SOUTHERN  was  incorporated  under the laws of Delaware on November 9, 1945.
SOUTHERN  is  domesticated  under the laws of  Georgia  and is  qualified  to do
business as a foreign  corporation under the laws of Alabama.  SOUTHERN owns all
the  outstanding  common  stock  of  ALABAMA,  GEORGIA,  GULF,  MISSISSIPPI  and
SAVANNAH,  each of which is an operating public utility company.  The integrated
Southeast  utilities supply electric service in the states of Alabama,  Georgia,
Florida,  Mississippi and Georgia,  respectively.  More  particular  information
relating to each of the integrated Southeast utilities is as follows:

      ALABAMA is a corporation  organized under the laws of the State of Alabama
      on November 10, 1927, by the consolidation of a predecessor  Alabama Power
      Company,  Gulf Electric Company and Houston Power Company. The predecessor
      Alabama   Power  Company  had  had  a  continuous   existence   since  its
      incorporation in 1906.

      GEORGIA  was  incorporated  under the laws of the State of Georgia on June
      26, 1930, and admitted to do business in Alabama on September 15, 1948.

      GULF is a corporation  which was organized  under the laws of the State of
      Maine on  November  2, 1925,  and  admitted  to do  business in Florida on
      January 15, 1926, in  Mississippi  on October 25, 1976,  and in Georgia on
      November 20, 1984.

      MISSISSIPPI was incorporated under the laws of the State of Mississippi on
      July 12,  1972,  was  admitted to do  business in Alabama on November  28,
      1972,  and  effective  December  21,  1972,  by the merger  into it of the
      predecessor  Mississippi  Power  Company,  succeeded  to the  business and
      properties  of the  latter  company.  The  predecessor  Mississippi  Power
      Company was incorporated  under the laws of the State of Maine on November
      24, 1924,  and was admitted to do business in  Mississippi on December 23,
      1924, and in Alabama on December 7, 1962.

      SAVANNAH is a corporation existing under the laws of the State of Georgia;
      its charter was granted by the Secretary of State on August 5, 1921.

    SOUTHERN  also  owns all the  outstanding  common  stock of  Southern  LINC,
Southern Nuclear, SCS, Energy Solutions,  Southern Telecom, SPC and other direct
and   indirect   subsidiaries.   Southern   LINC   provides   digital   wireless
communications  services to SOUTHERN's  integrated  Southeast utilities and also
markets these  services to the public  within the  Southeast.  Southern  Nuclear
provides  services to ALABAMA's and GEORGIA's  nuclear plants.  Energy Solutions
develops new business  opportunities  related to energy  products and  services.
Southern Telecom provides  wholesale fiber optic solutions to  telecommunication
providers in the Southeastern  United States.  SPC, formed in January 2001, will
be the primary growth engine for SOUTHERN's market-based energy business.

    ALABAMA and GEORGIA each own 50% of the  outstanding  common stock of SEGCO.
SEGCO owns  electric  generating  units with an aggregate  capacity of 1,019,680
kilowatts  at Plant  Gaston on the Coosa River near  Wilsonville,  Alabama,  and
ALABAMA  and GEORGIA are each  entitled  to  one-half  of SEGCO's  capacity  and
energy.  ALABAMA acts as SEGCO's  agent in the  operation  of SEGCO's  units and
furnishes  coal to SEGCO as fuel for its units.  SEGCO  also owns three  230,000
volt transmission lines extending from Plant Gaston to the Georgia state line at
which point connection is made with the GEORGIA transmission line system.

    Reference is also made to Note 12 to the financial statements of SOUTHERN in
Item 8 herein  for  additional  information  regarding  SOUTHERN's  segment  and
related information.

Mirant Corporation

Previously,  SOUTHERN owned all the outstanding common stock of Mirant. In April
2000,  SOUTHERN  announced an initial  public  offering of up to 19.9 percent of
Mirant  and its  intentions  to spin off the  remaining  ownership  of Mirant to
SOUTHERN's common  stockholders  within 12 months of the initial stock offering.
On October 2, 2000,  Mirant completed an initial public offering of 66.7 million
shares.  On February 19, 2001,  SOUTHERN's board of directors  approved the spin
off of the remaining ownership of 272 million Mirant shares to be completed in a
tax free distribution on April 2, 2001. As a result of the spin off,  SOUTHERN's
financial  statements and related information in Item 8 herein reflect Mirant as
discontinued operations.
                                      I-1

<PAGE>

The SOUTHERN System

Integrated Southeast Utilities


The transmission  facilities of each of the integrated  Southeast  utilities are
connected to the respective company's own generating plants and other sources of
power  and are  interconnected  with the  transmission  facilities  of the other
integrated  Southeast  utilities and SEGCO by means of  heavy-duty  high voltage
lines. (In the case of GEORGIA's  integrated  transmission  system, see Item 1 -
BUSINESS - "Territory Served by the Integrated Southeast Utilities" herein.)

    Operating   contracts   covering   arrangements  in  effect  with  principal
neighboring utility systems provide for capacity  exchanges,  capacity purchases
and  sales,   transfers  of  economy  energy  and  other  similar  transactions.
Additionally,  the  integrated  Southeast  utilities have entered into voluntary
reliability  agreements with the  subsidiaries of Entergy  Corporation,  Florida
Electric  Power  Coordinating  Group  and TVA and  with  Carolina  Power & Light
Company,  Duke Energy  Corporation,  South  Carolina  Electric & Gas Company and
Virginia   Electric  and  Power   Company,   each  of  which  provides  for  the
establishment  and periodic review of principles and procedures for planning and
operation of generation and transmission facilities, maintenance schedules, load
retention  programs,  emergency  operations,  and other  matters  affecting  the
reliability of bulk power supply. The integrated Southeast utilities have joined
with other  utilities in the Southeast  (including  those  referred to above) to
form the SERC to augment  further  the  reliability  and  adequacy of bulk power
supply.  Through the SERC, the integrated Southeast utilities are represented on
the National Electric Reliability Council.


    An intra-system  interchange agreement provides for coordinating  operations
of the power producing  facilities of the integrated Southeast utilities and the
capacities  available to such companies from non-affiliated  sources and for the
pooling of surplus energy  available for interchange.  Coordinated  operation of
the entire  interconnected  system is conducted  through a central  power supply
coordination  office  maintained  by SCS.  The  available  sources of energy are
allocated to the integrated  Southeast  utilities to provide the most economical
sources of power  consistent  with good  operation.  The resulting  benefits and
savings are apportioned among the integrated Southeast utilities.

    On December 20, 1999, the FERC issued its final rule on RTOs ("Order 2000").
The order  encouraged  utilities owning  transmission  systems to form RTOs on a
voluntary  basis.  Utilities  were  required  to make a filing  with the FERC by
October 16, 2000 explaining how they would respond to Order 2000 consistent with
this  requirement.  On October 16, 2000,  SOUTHERN  filed its RTO proposal.  The
proposal is for the formation of a for-profit company that would have control of
the bulk power transmission system of SOUTHERN and other participating utilities
in the  region.  Participants  would  have the option to either  maintain  their
ownership,  divest, sell or lease their transmission assets to the proposed RTO.
On March 14, 2001, the FERC rejected SOUTHERN's proposal on the grounds that the
limitation  of the  scope of  services  to new  wholesale  transmission  and the
provision of incentives  to passive  owners were  inconsistent  with Order 2000.
This order  requires a status report from SOUTHERN by May 14, 2001, but does not
establish a deadline for SOUTHERN to file a revised petition.  Reference is made
to each  registrant's  "Management's  Discussion and Analysis - Future  Earnings
Potential" in Item 7 for additional information.


    SCS has contracted with SOUTHERN, each integrated Southeast utility, Mirant,
various of the other  subsidiaries,  Southern  Nuclear and SEGCO to furnish,  at
cost and upon request,  the following  services:  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.  Energy
Solutions  and Southern  LINC have also secured  from the  integrated  Southeast
utilities certain services which are furnished at cost.

    Southern  Nuclear has contracts  with ALABAMA to operate the Farley  Nuclear
Plant,  and with  GEORGIA  to  operate  Plants  Hatch and  Vogtle.  See Item 1 -
BUSINESS - "Regulation - Atomic Energy Act of 1954" herein.

                                      I-2


<PAGE>


Other Business

Energy  Solutions  focuses on new and  existing  programs  to  enhance  customer
satisfaction,  efficiency and  stockholder  value.  Examples are: Good Cents, an
energy efficiency  program for electric utility customers;  Energy Services,  an
energy  solutions  consultant and contractor for industrial and large commercial
customers;  and Bill Payment  Protection,  an insurance  product that protects a
residential  customer  by paying  the  electric  bill in the event the  customer
becomes involuntarily unemployed, disabled, or goes on unpaid leave.

     In 1996,  Southern  LINC  began  serving  SOUTHERN's  integrated  Southeast
utilities and marketing its services to non-affiliates within the Southeast. Its
system covers  approximately  127,000 square miles and combines the functions of
two-way radio  dispatch,  cellular phone,  short text and numeric  messaging and
wireless data transfer.

    These continuing efforts to invest in and develop new business opportunities
offer the potential of earning returns which may exceed those of  rate-regulated
operations.  However,  these  activities  also involve a higher  degree of risk.
SOUTHERN  expects to make  substantial  investments over the period 2001-2003 in
these and other new businesses.

     In 1999,  MESH, a subsidiary  of SOUTHERN,  filed a petition for Chapter 11
bankruptcy relief in the U.S.  Bankruptcy Court. On August 4, 2000, MESH filed a
proposed plan of  reorganization  with the bankruptcy  court that was amended on
September  15, 2000.  The proposed plan of  reorganization  was again amended on
February 21, 2001.  Reference is made to Note 3 to the  financial  statements of
SOUTHERN in Item 8 herein for additional information relating to this matter.

Certain Factors Affecting the Industry


Various  factors  are  currently  affecting  the  electric  utility  industry in
general,  including  increasing  competition and the regulatory  changes related
thereto,  costs  required  to comply  with  environmental  regulations,  and the
potential for new business  opportunities  (with their associated risks) outside
of traditional rate-regulated operations. The effects of these and other factors
on the SOUTHERN  system are described  herein.  Particular  reference is made to
Item  1  -  BUSINESS  -  "Other  Business",   "Competition"  and  "Environmental
Regulation."   See  also   "Cautionary   Statement   Regarding   Forward-Looking
Information."


Construction Programs


The  subsidiary  companies  of SOUTHERN are engaged in  continuous  construction
programs to accommodate  existing and estimated future loads on their respective
systems.  Construction additions or acquisitions of property during 2001 through
2003 by the integrated Southeast utilities,  SEGCO, SCS, Southern LINC and other
subsidiaries are estimated as follows: (in millions)


 ------------------------------ -------- --------- ----------

                                   2001      2002      2003

                                -------- --------- ----------

 ALABAMA                         $  735    $  891     $ 625
 GEORGIA                          1,613     1,349       785
 GULF                               279        96        76
 MISSISSIPPI                         62        60        69
 SAVANNAH                            33        31        32
 SEGCO                               16        17        16
 SCS                                 29        21        21
 Southern LINC                       26        39        26
 Other                              111        60         1

 --------------------------- ----------- --------- ----------
 SOUTHERN system                 $2,904    $2,564    $1,651
 =========================== =========== ========= ==========

Included  in  these  estimated  totals  are  expenditures  for  construction  of
wholesale  generation  assets  that may be  transferred  to SPC.  Assuming  such
transfers  are made,  SPC's  projected  construction  program  expenditures  are
approximately  $1.2 billion in 2001,  $725 million in 2002,  and $452 million in
2003.

                                      I-3
<PAGE>
<TABLE>
<CAPTION>


Estimated construction costs in 2001 are expected to be apportioned approximately as follows: (in millions)



 ---------------------------- ---------------- --------------- ------------- ---------- ---------------- ----------------
                              SOUTHERN
                                system*        ALABAMA         GEORGIA       GULF       MISSISSIPPI             SAVANNAH
                              ---------------- --------------- ------------- ---------- ---------------- ----------------
<S>                               <C>              <C>             <C>        <C>            <C>               <C>
 New generation                   $  940           $169            $  596     $172           $ 3               $-
 Other generating
    facilities including
    associated plant
    substations                      682            181               433       35            10                 7
 New business                        368            129               188       22            19                10
 Transmission                        340            110               189       21            14                 6
 Joint line and substation            47              -                34       13             -                 -
 Distribution                        184             68                85       12            11                 8
 Nuclear fuel                         93             38                55        -             -                 -
 General plant                       250             40                33        4             5                 2
                              ---------------- --------------- ------------- ---------- ---------------- ----------------
                                  $2,904           $735            $1,613     $279           $62               $33
                              ================ =============== ============= ========== ================ ================
</TABLE>


   *Southern LINC, SCS, and other businesses plan capital  additions to general
plant in 2001 of $26 million, $29 million, and $111 million, respectively, while
SEGCO plans capital additions of $16 million to generating facilities. (See Item
1 - BUSINESS - "Other Business" herein.)

    The construction  programs are subject to periodic review and revision,  and
actual  construction costs may vary from the above estimates because of numerous
factors. These factors include: changes in business conditions;  acquisitions of
additional  generating  assets;  revised  load  growth  estimates;   changes  in
environmental  regulations;  changes  in  existing  nuclear  plants  to meet new
regulatory requirements; increasing costs of labor, equipment and materials; and
cost of capital.  In addition,  there can be no assurance  that costs related to
capital expenditures will be fully recovered.


    SOUTHERN  has  approximately  6,600  megawatts  of new  generating  capacity
scheduled  to be placed in service by 2003.  Approximately  4,400  megawatts  of
additional  new capacity will be dedicated to the wholesale  market and owned by
SPC.

    In 1991, the Georgia  legislature  passed legislation which requires GEORGIA
and  SAVANNAH  each to file an  Integrated  Resource  Plan for  approval  by the
Georgia  PSC.  Under  the plan  rules,  the  Georgia  PSC must  pre-certify  the
construction of new power plants and new purchase power contracts. (See Item 1 -
BUSINESS - "Rate Matters - Integrated Resource Planning" herein.)

    See Item 1 - BUSINESS - "Regulation - Environmental  Regulation"  herein for
information  with  respect  to  certain  existing  and  proposed   environmental
requirements  and Item 2 - PROPERTIES -  "Jointly-Owned  Facilities"  herein for
additional  information  concerning  ALABAMA's and GEORGIA's  joint ownership of
certain  generating  units and related  facilities  with certain  non-affiliated
utilities.


                                      I-4


<PAGE>


Financing Programs


The amount and timing of additional equity capital to be raised in 2001, as well
as subsequent years, will be contingent on SOUTHERN's investment  opportunities.
Equity capital can be provided from any combination of public offerings, private
placements, or SOUTHERN's stock plans.

    The  integrated  Southeast  utilities  plan to obtain the funds required for
construction  and other purposes from sources similar to those used in the past,
which were primarily from internal sources.  However, the type and timing of any
financings  -- if needed -- will  depend on  market  conditions  and  regulatory
approval.  Recently,  the  integrated  Southeast  utilities  have  relied on the
issuance  of  unsecured  debt and trust  preferred  securities,  in  addition to
unsecured  pollution control bonds issued for its benefit by public  authorities
to meet its  long-term  external  financing  requirements.  In years  past,  the
integrated  Southeast  utilities  issued first mortgage  bonds,  mortgage backed
pollution  control bonds and preferred stock to fund its external  requirements.
The amount  outstanding  of the latter  securities  has been declining in recent
years.


    If the  integrated  Southeast  utilities  were to  choose to issue new first
mortgage  bonds or  preferred  stock once again,  they would be required to meet
certain coverage requirements.

    Short-term  debt is  often  utilized  as  appropriate  at  SOUTHERN  and the
integrated Southeast utilities.

    The maximum amounts of short-term and term-loan  indebtedness  authorized by
the appropriate regulatory authorities are shown on the following table:

                      Amount          Outstanding at
                    Authorized       December 31, 2000
                   --------------    ---------------------
                             (in millions)

  ALABAMA            $  750 (1)           $    281
  GEORGIA             1,700 (2)                704
  GULF                   300(1)                 43
  MISSISSIPPI            350(1)                 56
  SAVANNAH               160(2)                 75
  SOUTHERN             2,000(1)                550

  ------------------ -------------- -- -------------------

Notes:


    (1) ALABAMA's authority is based on authorization  received from the Alabama
PSC,  which  expires  December 31, 2001.  No SEC  authorization  is required for
ALABAMA. GULF, MISSISSIPPI and SOUTHERN have received SEC authorization to issue
from time to time  short-term  and/or  term-loan  notes to banks and  commercial
paper to dealers in the amounts  shown through  December 31, 2003,  December 31,
2002 and March 31, 2008, respectively.

    (2) GEORGIA and SAVANNAH have received SEC  authorization to issue from time
to time short-term and term-loan notes to banks and commercial  paper to dealers
in the amounts  shown  through  December 31, 2002.  Authorization  for term-loan
indebtedness is also required by the Georgia PSC.  SAVANNAH  received  authority
from the Georgia PSC for $70 million in term loans expiring January 31, 2002.


    Reference is made to Note 8 to the financial statements for SOUTHERN, Note 4
to the financial statements for ALABAMA, GULF, MISSISSIPPI and SAVANNAH and Note
9 to the  financial  statements  for  GEORGIA in Item 8 herein  for  information
regarding the registrants' credit arrangements.

                                      I-5

<PAGE>


Fuel Supply

The integrated Southeast utilities' and SEGCO's supply of electricity is derived
predominantly  from coal.  The sources of generation  for the years 1998 through
2000 and the estimates for 2001 are shown below:
                                     Oil and
 ALABAMA               Coal    Nuclear    Hydro       Gas
                     --------- ---------- --------- ---------
            1998        72       18         8         2
            1999        72       20         5         3
            2000        72       19         3         6
            2001        70       16         5         9

 GEORGIA
            1998        73       22         3         2
            1999        75       22         1         2
            2000        76       21         1         2
            2001        75       21         3         1

 GULF
            1998        98       **        **         2
            1999        97       **        **         3
            2000        98       **        **         2
            2001        98       **        **         2


 MISSISSIPPI
            1998        80       **        **        20
            1999        81       **        **        19
            2000        83       **        **        17
            2001        78       **        **        22

 SAVANNAH
            1998        76       **        **        24
            1999        78       **        **        22
            2000        88       **        **        12
            2001        85       **        **        15

 SEGCO
            1998       100       **        **         *
            1999       100       **        **         *
            2000       100       **        **         *
            2001       100       **        **         *

 SOUTHERN system***
            1998       76        16         4         4
            1999       78        17         2         3
            2000       76        16         4         4
            2001       76        15         3         6
 ---------- ------- --------- ---------- --------- ---------
    *Less than 0.5%.
  **Not applicable.
***Amounts shown for the SOUTHERN system are weighted averages of the integrated
      Southeast utilities and SEGCO.

    The average costs of fuel in cents per net kilowatt-hour  generated for 1998
through 2000 are shown below:

                        1998           1999          2000
- ------------------- -------------- ------------- -------------


ALABAMA                 1.54           1.44          1.54
GEORGIA                 1.36           1.34          1.39
GULF                    1.69           1.60          1.68
MISSISSIPPI             1.62           1.65          1.80
SAVANNAH                2.33           2.20          2.28

SEGCO                   1.53           1.77          1.51
SOUTHERN
    System*             1.48           1.45          1.51

- ------------------- -------------- ------------- -------------

*      Amounts  shown for the  SOUTHERN  system  are  weighted  averages  of the
       integrated Southeast utilities and SEGCO.


     See SELECTED  FINANCIAL DATA in Item 6 herein for each registrant's  source
of energy supply.

                                      I-6

<PAGE>

    As of February 9, 2001, the integrated Southeast utilities had stockpiles of
coal on  hand  at  their  respective  coal-fired  plants  which  represented  an
estimated  23 days of  recoverable  supply for  bituminous  coal and 31 days for
sub-bituminous  coal. It is estimated that approximately 68 million tons of coal
will be consumed in 2001 by the integrated  Southeast utilities (including those
units  GEORGIA owns jointly with OPC,  MEAG and Dalton and operates for FP&L and
JEA and the units  ALABAMA  owns  jointly with AEC).  The  integrated  Southeast
utilities  currently have 60 coal  contracts.  These  contracts  cover remaining
terms of up to 12 years.  Approximately  15% of 2001 estimated coal requirements
will be purchased in the spot market. Additionally,  it has been determined that
approximately 34 normal full load days of recoverable supply is desirable at the
beginning  of the heavy burn  season  between  June 1 and  September  30 with 31
normal full load days being the average annual target.

    In 2000,  the weighted  average  sulfur content of all coal purchased by the
integrated  Southeast  utilities for use in the coal-fired  facilities was 0.77%
sulfur. This sulfur level, along with banked sulfur dioxide allowances,  allowed
the  integrated  Southeast  utilities  and SEGCO to remain  within limits as set
forth by Phase II of the Clean Air Act.  As more and more  strict  environmental
regulations  are proposed that impact the utilization of coal, the fuel mix will
be monitored to insure that sufficient  quantities of the proper type of coal or
natural  gas are in place to  remain  in  compliance  with  applicable  laws and
regulations.  See Item 1 - BUSINESS -  "Regulation -  Environmental  Regulation"
herein.


    Changes in fuel prices are generally  reflected in fuel  adjustment  clauses
contained  in rate  schedules.  See Item 1 -  BUSINESS  - "Rate  Matters  - Rate
Structure" herein.

    ALABAMA  and GEORGIA  have  numerous  contracts  covering a portion of their
nuclear fuel needs for uranium,  conversion  services,  enrichment  services and
fuel  fabrication.  These contracts have varying  expiration  dates and most are
short to medium term (less than 10 years).  Management  believes that sufficient
capacity  for nuclear  fuel  supplies  and  processing  exists to  preclude  the
impairment of normal  operations  of the SOUTHERN  system's  nuclear  generating
units.


    ALABAMA  and  GEORGIA  have  contracts  with  the DOE that  provide  for the
permanent  disposal of spent nuclear fuel. The DOE failed to begin  disposing of
spent fuel in January 1998, as required by the contracts,  and the companies are
pursuing legal remedies against the government for breach of contract. Effective
June 2000, an on-site dry storage  facility for Plant Hatch became  operational.
Sufficient  capacity  is  believed  to be  available  to  continue  dry  storage
operations at Plant Hatch through the life of the plant. Sufficient fuel storage
capacity currently is available at Plant Vogtle to maintain full-core  discharge
capability for both units into the year 2014.  Sufficient fuel storage  capacity
is available at Plant Farley to maintain  full-core  discharge  capability until
the  refueling  outage  scheduled  in 2006 for Farley  unit 1 and the  refueling
outage  scheduled  in 2008 for Farley unit 2.  Procurement  of on-site dry spent
fuel storage  capacity at Plant Farley is in progress,  with the intent to place
the capacity in operation as early as 2005.


    The Energy Act imposed upon utilities with nuclear plants, including ALABAMA
and GEORGIA,  obligations for the decontamination and decommissioning of federal
nuclear fuel  enrichment  facilities.  See Note 1 to  SOUTHERN's,  ALABAMA's and
GEORGIA's financial statements in Item 8 herein.

                                      I-7
<PAGE>



Territory Served by the Integrated Southeast Utilities


The  territory in which the  integrated  Southeast  utilities  provide  electric
service  comprises  most of the states of Alabama and Georgia  together with the
northwestern portion of Florida and southeastern Mississippi.  In this territory
there are non-affiliated  electric distribution systems which obtain some or all
of their power  requirements  either  directly or indirectly from the integrated
Southeast utilities.  The territory has an area of approximately  120,000 square
miles and an estimated population of approximately 11 million.

    ALABAMA is  engaged,  within the State of  Alabama,  in the  generation  and
purchase of electricity  and the  distribution  and sale of such  electricity at
retail in over  1,000  communities  (including  Anniston,  Birmingham,  Gadsden,
Mobile,  Montgomery  and  Tuscaloosa)  and at wholesale to 15  municipally-owned
electric  distribution  systems, 11 of which are served indirectly through sales
to AMEA,  and two rural  distributing  cooperative  associations.  ALABAMA  also
supplies  steam  service  in  downtown  Birmingham.   ALABAMA  also  sells,  and
cooperates with dealers in promoting the sale of, electric appliances.


    GEORGIA is engaged in the  generation  and purchase of  electricity  and the
distribution and sale of such electricity  within the State of Georgia at retail
in over 600 communities,  as well as in rural areas, and at wholesale  currently
to OPC, MEAG, the City of Dalton and the City of Hampton.


    GULF  is  engaged,  within  the  northwestern  portion  of  Florida,  in the
generation and purchase of  electricity  and the  distribution  and sale of such
electricity at retail in 71 communities  (including  Pensacola,  Panama City and
Fort  Walton  Beach),  as  well  as  in  rural  areas,  and  at  wholesale  to a
non-affiliated utility and a municipality.

    MISSISSIPPI is engaged in the generation and purchase of electricity and the
distribution  and sale of such energy  within the 23  counties  of  southeastern
Mississippi,   at  retail  in  123  communities  (including  Biloxi,   Gulfport,
Hattiesburg, Laurel, Meridian and Pascagoula), as well as in rural areas, and at
wholesale  to one  municipality,  six rural  electric  distribution  cooperative
associations and one generating and transmitting cooperative.

    SAVANNAH is engaged,  within a five-county area in eastern  Georgia,  in the
generation and purchase of  electricity  and the  distribution  and sale of such
electricity  at retail and, as a member of the SOUTHERN  system power pool,  the
transmission and sale of wholesale energy.


    For information  relating to kilowatt-hour  sales by classification for each
registrant,  reference is made to "Management's  Discussion and Analysis-Results
of Operations" in Item 7 herein.  Also, for information  relating to the sources
of  revenues  for the  SOUTHERN  system  and  each of the  integrated  Southeast
utilities, reference is made to Item 6 herein.


    A portion of the area served by the integrated  Southeast  utilities adjoins
the area served by TVA and its municipal and cooperative distributors. An Act of
Congress limits the distribution of TVA power,  unless  otherwise  authorized by
Congress,  to specified  areas or customers which generally were those served on
July 1, 1957.

    The  RUS  has  authority  to  make  loans  to  cooperative  associations  or
corporations  to enable them to provide  electric  service to customers in rural
sections  of the  country.  There  are  71  electric  cooperative  organizations
operating in the territory in which the integrated  Southeast  utilities provide
electric service at retail or wholesale.

    One of these,  AEC, is a generating  and  transmitting  cooperative  selling
power  to  several  distributing  cooperatives,   municipal  systems  and  other
customers in south Alabama and northwest Florida. AEC owns generating units with
approximately  840  megawatts  of  nameplate  capacity,  including  an undivided
ownership  interest in ALABAMA's  Plant  Miller Units 1 and 2. AEC's  facilities
were  financed  with  RUS  loans  secured  by  long-term   contracts   requiring
distributing cooperatives to take their requirements from AEC to the extent such
energy  is  available.  Two of the 14  distributing  cooperatives  operating  in
ALABAMA's  service  territory  obtain  a  portion  of their  power  requirements
directly from ALABAMA.
                                      I-8

<PAGE>

    Four electric cooperative associations,  financed by the RUS, operate within
GULF's service area. These  cooperatives  purchase their full  requirements from
AEC and SEPA (a federal power marketing agency).  A non-affiliated  utility also
operates  within GULF's  service area and purchases its full  requirements  from
GULF.


    ALABAMA and GULF have entered into  separate  agreements  with AEC involving
interconnection  between the  respective  systems.  The delivery of capacity and
energy from AEC to certain  distributing  cooperatives  in the service  areas of
ALABAMA and GULF is governed by the SOUTHERN/AEC  Network  Transmission  Service
Agreement.  The  rates  for this  service  to AEC are  based  on the  negotiated
agreement  on file  with the  FERC.  See Item 2 -  PROPERTIES  -  "Jointly-Owned
Facilities"  herein  for  details  of  ALABAMA's  joint-ownership  with AEC of a
portion of Plant Miller.

    MISSISSIPPI  has an  interchange  agreement  with SMEPA,  a  generating  and
transmitting  cooperative,  pursuant to which  various  services  are  provided,
including the furnishing of protective  capacity by MISSISSIPPI to SMEPA.  SMEPA
has a generating  capacity of 821 megawatts and a transmission  system estimated
to be 1,480 miles in length.

    There are 43 electric  cooperative  organizations  operating in, or in areas
adjoining,  territory in the State of Georgia in which GEORGIA provides electric
service at retail or wholesale.  Three of these organizations obtain their power
from TVA and one from other  sources.  Since July 1, 1975,  OPC has supplied the
requirements  of  the  remaining  39 of  these  cooperative  organizations  from
self-owned  generation  acquired from GEORGIA and, until September 1991, through
partial  requirements  purchases  from  GEORGIA.  GEORGIA  entered  into a power
coordination  agreement with OPC pursuant to which, effective in September 1991,
OPC ceased to be partial  requirements  wholesale customer of GEORGIA.  Instead,
OPC began the purchase of 1,250 megawatts of capacity from GEORGIA through 1999,
subject to  reduction  or  extension  by OPC, and may satisfy the balance of its
needs through purchases from others.  OPC decreased its purchases of capacity by
250  megawatts  each in September  1997,  1998 and 1999.  Under the amended 1995
Integrated  Resource  Plan  approved  by the  Georgia  PSC in  March  1997,  the
resources  associated with the decreased purchases by OPC in 1997, 1998 and 1999
will be used to meet the needs of GEORGIA's retail customers through 2004.
In April 1999, a new power supply agreement was implemented  between GEORGIA and
OPC.  Pursuant to this  agreement,  OPC will  purchase  250  megawatts  of steam
capacity  through March 2006, 250 megawatts of peaking  capacity  through August
2000,  and 125 megawatts of peaking  capacity from September 2000 through August
2001.

    There are 65  municipally-owned  electric  distribution systems operating in
the  territory in which the  integrated  Southeast  utilities  provide  electric
service at retail or wholesale.

    AMEA was organized under an act of the Alabama  legislature and is comprised
of 11  municipalities.  In 1986,  ALABAMA  entered  into a firm  power  purchase
contract with AMEA entitling AMEA to scheduled amounts of capacity (to a maximum
of 100  megawatts)  for a period of 15 years  commencing  September 1, 1986.  In
October 1991,  ALABAMA  entered into a second firm power purchase  contract with
AMEA entitling AMEA to scheduled amounts of additional capacity (to a maximum 80
megawatts)  for a  period  of 15  years  commencing  October  1,  1991.  In both
contracts,  the power is being sold to AMEA for its member  municipalities  that
previously  were served  directly by ALABAMA as wholesale  customers.  Under the
terms of the contracts, ALABAMA received payments from AMEA representing the net
present  value  of  the  revenues   associated  with  the  respective   capacity
entitlements.  See Note 6 to ALABAMA's financial statements in Item 8 herein for
further information on these contracts.


    Forty-eight   municipally-owned   electric   distribution  systems  and  one
county-owned   system  receive  their  requirements   through  MEAG,  which  was
established  by a state  statute in 1975.  MEAG serves these  requirements  from
self-owned  generation  facilities  acquired  from  GEORGIA and  purchases  from
others. In August 1997, a power coordination  agreement was implemented  between
GEORGIA and MEAG that replaced the partial requirements tariff pursuant to which
GEORGIA  previously sold wholesale energy to MEAG. Since 1977, Dalton has filled
its requirements  from generation  facilities  acquired from GEORGIA and through
partial requirements  purchases.  One  municipally-owned  electric  distribution
system's full requirements are served under a market-based  contract by GEORGIA.
(See Item 2 - PROPERTIES - "Jointly-Owned Facilities" herein.)

                                      I-9
<PAGE>

     GULF and  MISSISSIPPI  provide  wholesale  requirements  for one  municipal
system each.


     GEORGIA has entered  into  substantially  similar  agreements  with Georgia
Transmission Corporation (formerly OPC's transmission division), MEAG and Dalton
providing for the  establishment of an integrated  transmission  system to carry
the power and energy of each. The agreements require an investment by each party
in the integrated  transmission  system in proportion to its respective share of
the aggregate system load. (See Item 2 - PROPERTIES - "Jointly-Owned Facilities"
herein.)

     SCS, acting on behalf of ALABAMA,  GEORGIA, GULF, MISSISSIPPI and SAVANNAH,
also  has a  contract  with  SEPA  providing  for  the use of  those  companies'
facilities  at  government  expense  to  deliver  to  certain  cooperatives  and
municipalities,  entitled by federal  statute to  preference  in the purchase of
power  from  SEPA,  quantities  of  power  equivalent  to the  amounts  of power
allocated to them by SEPA from certain  United States  government  hydroelectric
projects.


    The retail service rights of all electric  suppliers in the State of Georgia
are regulated by the 1973 State  Territorial  Electric Service Act.  Pursuant to
the  provisions  of this Act, all areas within  existing  municipal  limits were
assigned  to the  primary  electric  supplier  therein  on March  29,  1973 (451
municipalities,  including Atlanta,  Columbus,  Macon, Augusta, Athens, Rome and
Valdosta,  to GEORGIA;  115 to electric  cooperatives;  and 50 to publicly-owned
systems).  Areas outside of such municipal  limits were either to be assigned or
to be declared open for customer choice of supplier by action of the Georgia PSC
pursuant to standards set forth in the Act. Consistent with such standards,  the
Georgia PSC has  assigned  substantially  all of the land area in the state to a
supplier.  Notwithstanding  such  assignments,  the Act  provides  that  any new
customer  locating  outside of 1973 municipal limits and having a connected load
of at least 900 kilowatts may receive  electric service from the supplier of its
choice. (See also Item 1 - BUSINESS - "Competition" herein.)

     Under and subject to the provisions of its franchises and  concessions  and
the 1973 State  Territorial  Electric  Service  Act,  SAVANNAH  has the full but
nonexclusive  right to serve the City of  Savannah,  the Towns of  Bloomingdale,
Pooler, Garden City, Guyton,  Newington,  Oliver, Port Wentworth,  Rincon, Tybee
Island,  Springfield,   Thunderbolt,  Vernonburg,  and  in  conjunction  with  a
secondary  supplier,  the Town of Richmond Hill. In addition,  SAVANNAH has been
assigned certain unincorporated areas in Chatham,  Effingham, Bryan, Bulloch and
Screven Counties by the Georgia PSC. (See also Item 1 - BUSINESS - "Competition"
herein.)


     Pursuant to the 1956 Utility Act, the Mississippi  PSC issued  "Grandfather
Certificates"  of public  convenience  and necessity to  MISSISSIPPI  and to six
distribution  rural  cooperatives  operating in southeastern  Mississippi,  then
served  in  whole  or in part by  MISSISSIPPI,  authorizing  them to  distribute
electricity in certain  specified  geographically  described areas of the state.
The  six  cooperatives  serve  approximately   300,000  retail  customers  in  a
certificated  area of approximately  10,300 square miles. In areas included in a
"Grandfather  Certificate,"  the utility holding such  certificate  may, without
further  certification,  extend  its lines up to five  miles;  other  extensions
within that area by such utility, or by other utilities,  may not be made except
upon a showing  of, and a grant of a  certificate  of,  public  convenience  and
necessity.  Areas included in such a certificate which are subsequently  annexed
to  municipalities  may continue to be served by the holder of the  certificate,
irrespective of whether it has a franchise in the annexing municipality.  On the
other hand,  the holder of the municipal  franchise may not extend  service into
such newly annexed area without authorization by the Mississippi PSC.


Long-Term Power Sales and Lease Agreements

Reference is made to Note 5 to the financial statements for SOUTHERN;  Note 6 to
the financial  statements for ALABAMA,  GULF and MISSISSIPPI,  and Note 7 to the
financial  statements  for  GEORGIA in Item 8 herein for  information  regarding
contracts  for the sales and lease of  capacity  and  energy to  non-territorial
customers.

                                      I-10
<PAGE>


Competition


     The electric utility industry in the United States is currently  undergoing
a period of dramatic change as a result of regulatory and  competitive  factors.
Among the  primary  agents of change  has been the  Energy  Act.  The Energy Act
allows  IPPs to  access  a  utility's  transmission  network  in  order  to sell
electricity  to other  utilities.  This enhances the incentive for IPPs to build
cogeneration  plants for a utility's large industrial and commercial  customers,
and sell energy  generation  to other  utilities.  Also,  electricity  sales for
resale rates are being driven down by wholesale transmission access and numerous
potential new energy  suppliers,  including  power  marketers  and brokers.  The
integrated  Southeast utilities are aggressively  working to maintain and expand
their share of wholesale sales in the Southeastern power markets.

     Although the Energy Act does not permit retail  customer  access,  it was a
major  catalyst for the current  restructuring  and  consolidation  taking place
within the  utility  industry.  Numerous  federal and state  initiatives  are in
varying stages to promote wholesale and retail competition.  Among other things,
these initiatives allow customers to choose their electricity provider.
Some  states  have  approved  initiatives  that  result in a  separation  of the
ownership  and/or  operation of generating  facilities from the ownership and/or
operation  of   transmission   and   distribution   facilities.   While  various
restructuring  and  competition  initiatives  have been  discussed  in  Alabama,
Florida,  Georgia,  and  Mississippi,  none have been enacted.  Enactment  would
require numerous issues to be resolved,  including  significant ones relating to
recovery of any stranded investments, full cost recovery of energy produced, and
other issues related to the current energy crisis in California.  As a result of
this crisis, many states have either  discontinued or delayed  implementation of
initiatives involving retail deregulation. The inability of a company to recover
its  investments,  including the regulatory  assets  described in Note 1 to each
registrant's  respective  financial  statements,  could have a material  adverse
effect on such  company's  financial  condition and results of  operations.  The
integrated  Southeast  utilities are attempting to minimize or reduce their cost
exposure.  Reference is made to Note 3 to the financial  statements for SOUTHERN
under "Alabama Power Rate Adjustment  Procedures" and "Georgia Power 1998 Retail
Rate Order" for information regarding these efforts.


     Reference is made to Item 1 - BUSINESS - "Integrated  Southeast  Utilities"
herein for information relating to an RTO filing with FERC.


     Continuing  to  be a  low-cost  producer  could  provide  opportunities  to
increase  market share and  profitability  in markets that evolve with  changing
regulation.  Conversely,  if the  integrated  Southeast  utilities do not remain
low-cost  producers and provide quality service,  then energy sales growth could
be limited,  and this could significantly  erode earnings.  Reference is made to
ALABAMA, GULF, MISSISSIPPI and SAVANNAH, "Management's Discussion and Analysis -
Future  Earnings   Potential"  in  Item  7  herein  for  further  discussion  of
competition.

     To  adapt  to a less  regulated,  more  competitive  environment,  SOUTHERN
continues  to  evaluate  and  consider  a  wide  array  of  potential   business
strategies.  These  strategies may include business  combinations,  acquisitions
involving  other  utility or  non-utility  businesses  or  properties,  internal
restructuring,  disposition  of certain  assets,  or some  combination  thereof.
Furthermore,  SOUTHERN may engage in other new business ventures that arise from
competitive and regulatory  changes in the utility  industry.  Pursuit of any of
the above strategies,  or any combination  thereof, may significantly affect the
business operations and financial condition of SOUTHERN.  (See Item 1 - BUSINESS
- - "Other Business" herein.)


     As a result of the foregoing factors,  SOUTHERN has experienced  increasing
competition  for  available   off-system  sales  of  capacity  and  energy  from
neighboring  utilities  and  alternative  sources of energy.  Additionally,  the
future  effect of  cogeneration  and  small-power  production  facilities on the
SOUTHERN system cannot currently be determined but may be adverse.

                                      I-11
<PAGE>



     ALABAMA  currently  has  cogeneration   contracts  in  effect  with  twelve
industrial  customers.  Under the terms of these  contracts,  ALABAMA  purchases
excess   generation  of  such   companies.   During  2000,   ALABAMA   purchased
approximately 104.9 million kilowatt-hours from such companies at a cost of $3.1
million.

     GEORGIA  currently has contracts in effect with eight small power producers
whereby  GEORGIA  purchases  their  excess  generation.   During  2000,  GEORGIA
purchased 11.6 million kilowatt-hours from such companies at a cost of $482,000.
GEORGIA has purchased  power  agreements for electricity  with two  cogeneration
facilities.  Payments  are subject to  reductions  for  failure to meet  minimum
capacity output. During 2000, GEORGIA purchased 698.3 million  kilowatt-hours at
a cost of $70.4  million from these  facilities.  Reference is made to Note 4 to
the financial statements for GEORGIA in Item 8 herein for information  regarding
purchased power commitments.

     GULF  currently  has  agreements in effect with four  industrial  customers
pursuant to which GULF  purchases  "as  available"  energy  from  customer-owned
generation.  During 2000,  GULF purchased 127 million  kilowatt-hours  from such
companies for $5.2 million.

     SAVANNAH  currently  has  cogeneration  contracts in effect with five large
customers.  Under  the  terms  of these  contracts,  SAVANNAH  purchases  excess
generation  of such  companies.  During 2000,  SAVANNAH  purchased  43.9 million
kilowatt-hours from such companies at a cost of $2.7 million.


     The competition for retail energy sales among competing suppliers of energy
is influenced by various factors, including price,  availability,  technological
advancements  and  reliability.  These factors are, in turn,  affected by, among
other  influences,   regulatory,  political  and  environmental  considerations,
taxation and supply.


     The integrated Southeast utilities have experienced, and expect to continue
to experience,  competition in their  respective  retail service  territories in
varying degrees as the result of  self-generation  (as described above) and fuel
switching  by  customers  and  other  factors.  (See also  Item 1 -  BUSINESS  -
"Territory Served by the Integrated  Southeast Utilities" herein for information
concerning suppliers of electricity operating within or near the areas served at
retail by the integrated Southeast utilities.)


Regulation

State Commissions


The  integrated  Southeast  utilities are subject to the  jurisdiction  of their
respective state regulatory commissions,  which have broad powers of supervision
and  regulation  over  public  utilities  operating  in the  respective  states,
including their rates, service regulations,  sales of securities (except for the
Mississippi  PSC) and, in the cases of the Georgia PSC and  Mississippi  PSC, in
part,  retail service  territories.  (See Item 1 - BUSINESS - "Rate Matters" and
"Territory Served by the Integrated Southeast Utilities" herein.)


Holding Company Act

SOUTHERN is registered as a holding  company under the Holding  Company Act, and
it and its subsidiary companies are subject to the regulatory provisions of said
Act,  including  provisions  relating to the issuance of  securities,  sales and
acquisitions  of securities and utility  assets,  services  performed by SCS and
Southern  Nuclear,  and the activities of certain of SOUTHERN's  special purpose
subsidiaries.


     While various  proposals  have been  introduced  in Congress  regarding the
Holding  Company  Act,  the  prospects  for  legislative  reform or  repeal  are
uncertain at this time.


Federal Power Act

The Federal Power Act subjects the integrated  Southeast  utilities and SEGCO to
regulation  by the FERC as  companies  engaged  in the  transmission  or sale at
wholesale of electric  energy in interstate  commerce,  including  regulation of
accounting policies and practices.

     ALABAMA and GEORGIA are also subject to the provisions of the Federal Power
Act or the earlier  Federal Water Power Act applicable to licensees with respect
to their hydroelectric developments. Among the hydroelectric projects subject to
licensing  by the FERC are 14 existing  ALABAMA  generating  stations  having an
aggregate  installed  capacity of 1,593,600  kilowatts  and 18 existing  GEORGIA
generating   stations  having  an  aggregate  installed  capacity  of  1,074,696
kilowatts.

                                      I-12
<PAGE>

     GEORGIA has started the  relicensing  process for the Middle  Chattahoochee
Project.  This project  consists of the Goat Rock,  Oliver,  and North Highlands
facilities.


     GEORGIA  and OPC also  have a  license,  expiring  in 2027,  for the  Rocky
Mountain  Plant, a pure pumped  storage  facility of 847,800  kilowatt  capacity
which  began  commercial   operation  in  1995.  (See  Item  2  -  PROPERTIES  -
"Jointly-Owned  Facilities"  herein  and  Note  3 to  SOUTHERN's  and  GEORGIA's
financial statements in Item 8 herein for additional information.)

     Licenses for all projects,  excluding those discussed above,  expire in the
period  2007-2033 in the case of ALABAMA's  projects and in the period 2005-2036
in the case of GEORGIA's projects.

     Upon or after the expiration of each license, the United States Government,
by act of Congress,  may take over the project,  or the FERC may  relicense  the
project  either to the original  licensee or to a new licensee.  In the event of
takeover or relicensing to another,  the original  licensee is to be compensated
in accordance with the provisions of the Federal Power Act, such compensation to
reflect the net investment of the licensee in the project,  not in excess of the
fair value of the property taken,  plus reasonable  damages to other property of
the licensee resulting from the severance therefrom of the property taken.

Atomic Energy Act of 1954

ALABAMA,  GEORGIA and  Southern  Nuclear are  subject to the  provisions  of the
Atomic Energy Act of 1954, as amended,  which vests jurisdiction in the NRC over
the construction and operation of nuclear reactors,  particularly with regard to
certain   public  health  and  safety  and  antitrust   matters.   The  National
Environmental  Policy Act has been construed to expand the  jurisdiction  of the
NRC to consider the environmental impact of a facility licensed under the Atomic
Energy Act of 1954, as amended.


     NRC  operating  licenses  currently  expire in June 2017 and March 2021 for
Plant Farley units 1 and 2, respectively, in August 2014 and June 2018 for Plant
Hatch units 1 and 2,  respectively,  and in January 2027 and  February  2029 for
Plant  Vogtle  units 1 and 2,  respectively.  On  February  29,  2000,  Southern
Nuclear, on behalf of GEORGIA,  filed a license renewal application with the NRC
for Plant  Hatch  units 1 and 2. If  approved,  the  operating  license  will be
extended to 2034.

     Reference is made to Notes 1 and 10 to SOUTHERN's, Notes 1 and 11 to
ALABAMA's and Notes 1 and 5 to GEORGIA's financial statements in Item 8 herein
for information on nuclear decommissioning costs and nuclear  insurance.
Additionally,  Note  3 to  GEORGIA's  financial  statements
contains  information  regarding  nuclear  performance  standards imposed by the
Georgia PSC that may impact retail rates.

Environmental Regulation

The  integrated  Southeast  utilities'  and  SEGCO's  operations  are subject to
federal,  state and local environmental  requirements which, among other things,
control  emissions of particulates,  sulfur dioxide and nitrogen oxides into the
air; the use, transportation, storage and disposal of hazardous and toxic waste;
and discharges of pollutants,  including thermal discharges,  into waters of the
United  States.  The integrated  Southeast  utilities and SEGCO expect to comply
with such  requirements,  which generally are becoming  increasingly  stringent,
through  technical  improvements,   the  use  of  appropriate   combinations  of
low-sulfur fuel and chemicals,  addition of  environmental  control  facilities,
changes  in  control  techniques  and  reduction  of  the  operating  levels  of
generating facilities.  Failure to comply with such requirements could result in
the complete shutdown of individual  facilities not in compliance as well as the
imposition of civil and criminal penalties.

     Reference  is  made  to  each  registrant's  "Management's  Discussion  and
Analysis"  in Item 7 herein  for a  discussion  of the  Clean  Air Act and other
environmental  legislation and proceedings,  including a pending lawsuit brought
on behalf of the EPA.

                                      I-13
<PAGE>



     The  integrated   Southeast   utilities'  and  SEGCO's   estimated  capital
expenditures for  environmental  quality control  facilities for the years 2001,
2002 and 2003 are as follows: (in millions)


 --------------------- --- ---------- ---------- -----------
                              2001        2002        2003
                           ---------- ---------- -----------

 ALABAMA                    $  76       $144      $  48
 GEORGIA                      345        302         48
 GULF                           7          7         14
 MISSISSIPPI                    2          4          -
 SAVANNAH                       2          1          4
 SEGCO                          1          1          1

 --------------------- --- ---------- ---------- -----------

     Total                   $433       $459       $115

 ===================== === ========== ========== ===========
     The foregoing estimates are included in the current construction  programs.
(See Item 1 - BUSINESS - "Construction Programs" herein.)

     Additionally,  each  integrated  Southeast  utility and SEGCO has  incurred
costs for environmental  remediation of various sites. Reference is made to each
registrant's  "Management's  Discussion  and  Analysis"  in  Item 7  herein  for
information regarding the registrants'  environmental remediation efforts. Also,
see Note 3 to SOUTHERN's and GEORGIA's financial statements in Item 8 herein for
information regarding the identification of sites that may require environmental
remediation by GEORGIA.

     The integrated  Southeast utilities and SEGCO are unable to predict at this
time  what  additional  steps  they may be  required  to take as a result of the
implementation of existing or future quality control requirements for air, water
and hazardous or toxic  materials,  but such steps could adversely affect system
operations and result in substantial additional costs.

     The outcome of the matters mentioned above under "Regulation" cannot now be
determined,  except that these  developments  may result in delays in  obtaining
appropriate  licenses for  generating  facilities,  increased  construction  and
operating costs, or reduced  generation,  the nature and extent of which,  while
not determinable at this time, could be substantial.

Rate Matters

Rate Structure

The rates and service  regulations  of the  integrated  Southeast  utilities are
uniform for each class of service  throughout  their  respective  service areas.
Rates for  residential  electric  service are  generally of the block type based
upon kilowatt-hours used and include minimum charges.

     Residential and other rates contain separate  customer  charges.  Rates for
commercial service are presently of the block type and, for large customers, the
billing demand is generally used to determine capacity and minimum bill charges.
These large  customers'  rates are  generally  based upon usage by the  customer
including those with special features to encourage off-peak usage. Additionally,
the  integrated  Southeast  utilities  are allowed by their  respective  PSCs to
negotiate the terms and compensation of service to large  customers.  Such terms
and  compensation  of  service,  however,  are  subject  to final PSC  approval.
ALABAMA,  GEORGIA and  SAVANNAH are allowed by state law to recover fuel and net
purchased energy costs through fuel cost recovery  provisions which are adjusted
to reflect  increases  or  decreases in such costs.  GULF  recovers  from retail
customers  costs  of  fuel,  net  purchased  power,   energy   conservation  and
environmental  compliance  through  provisions  which are  adjusted  to  reflect
increases or decreases  in such costs.  GULF's  recovery of these costs is based
upon an annual  projection  - any  over/under  recovery  during  such  period is
reflected  in  a  subsequent  annual  period  with  interest.  With  respect  to
MISSISSIPPI's  retail rates,  fuel and purchased  power costs are billed to such
customers under the fuel and energy adjustment  clause.  The adjustment  factors
for  MISSISSIPPI's  retail and wholesale rates are generally  levelized based on
the  estimated  energy  cost for the year,  adjusted  for any actual  over/under
collection from the previous year. Revenues are adjusted for differences between
recoverable fuel costs and amounts actually recovered in current rates.

Rate Proceedings

Reference is made to Note 3 to each registrant's  financial statements in Item 8
herein  for a  discussion  of rate  matters.  Reference  is also  made to GULF's
"Management's  Discussion  and Analysis - Future  Earnings  Potential" in Item 7
herein for a discussion of recent Florida PSC matters.

                                      I-14
<PAGE>

Integrated Resource Planning

GEORGIA and SAVANNAH filed a new  Integrated  Resource Plan with the Georgia PSC
on January 31, 2001.  The plans specify how GEORGIA and SAVANNAH each intends to
meet the future  electrical  needs of their  customers  through a combination of
demand-side and supply-side  resources.  The Georgia PSC must pre-certify  these
new resources.  Once certified,  all prudently  incurred  construction costs and
purchased power costs will be recoverable through rates.


      In July 1998,  the Georgia PSC  approved  GEORGIA's  and  SAVANNAH's  1998
Integrated Resource Plans as filed, with minor modifications. The approved plans
identify  resource  needs of  approximately  800  megawatts  to 1,200  megawatts
starting in the summer of 2002. As a result, GEORGIA and SAVANNAH issued a joint
request for  proposals  for their  collective  needs of 800  megawatts  to 1,200
megawatts for 2002 and 2003. The bids were evaluated against self-build options,
and a  certification  filing for the  selected  resources  was  approved  by the
Georgia PSC in March 2000.  The selected  resources  for retail needs in Georgia
are: (1) a 7-year  purchased  power  agreement with the West Georgia  Generating
Company for 310 megawatts starting in 2002, increasing to 465 megawatts in 2005,
and  terminating  at the end of  2009;  and  (2) a 7  1/2-year  purchased  power
agreement  for two 568  megawatt  combined  cycle  units to be  located at Plant
Wansley  starting in 2002 and  terminating  at the end of 2009.  SAVANNAH  has a
7-year  purchased  power  agreement  with GEORGIA for 200 megawatts of the 1,136
megawatt  addition at Plant Wansley  starting in 2002 and  terminating  in 2009.
After 2009, this capacity will be available to the wholesale market.


     On December 15, 2000,  GEORGIA filed a  certification  request for a 7-year
purchased power  agreement for 571 megawatts  starting in 2003 and 610 megawatts
starting in 2004 to be served from two combined  cycle units at Plant Goat Rock;
and 615  megawatts  in 2004 to be served  from a  combined  cycle  unit at Plant
Autaugaville.  In addition, GEORGIA is seeking certification for upgrades from 3
megawatts to 9 megawatts at Plant Goat Rock Hydro units 1 and 2.

    GEORGIA expects the Georgia PSC to approve the 2001 Integrated Resource Plan
and grant certification of the purchased power agreements in July 2001.

Environmental Cost Recovery Plans

GULF and MISSISSIPPI  both have retail rate mechanisms that provide for recovery
of environmental  compliance costs. For a description of these plans, see Note 3
to each of GULF's and MISSISSIPPI's financial statements in Item 8 herein.

Employee Relations

The  companies of the SOUTHERN  system had a total of 26,021  employees on their
payrolls at December 31, 2000.

 -------------------------------- --- -------------------------
                                             Employees
                                                 at
                                         December 31, 2000
                                      -------------------------

 ALABAMA                                          6,871
 GEORGIA                                          8,855
 GULF                                             1,327
 MISSISSIPPI                                      1,319
 SAVANNAH                                           554
 SCS                                              3,431
 Southern Nuclear                                 3,009
 Other                                              655

 -------------------------------- --- -------------------------
 Total                                           26,021
 ================================ === =========================

     The  integrated  Southeast  utilities have separate  agreements  with local
unions of the IBEW generally  covering wages,  working conditions and procedures
for handling  grievances and  arbitration.  These  agreements apply with certain
exceptions to operating, maintenance and construction employees.


     ALABAMA has agreements with the IBEW on a three-year  contract extending to
August  14,  2001.  Upon  notice  given  at least  60 days  prior to that  date,
negotiations  may be initiated  with respect to agreement  terms to be effective
after such date.

                                      I-15
<PAGE>


     GEORGIA  has  an  agreement  with  the  IBEW  covering  wages  and  working
conditions, which is in effect through June 30, 2002.


     GULF has an agreement with the IBEW on a three-year  contract  extending to
August 15, 2001.

     MISSISSIPPI  has  an  agreement  with  the  IBEW  on a  four-year  contract
extending to August 16, 2002.


     SAVANNAH has four-year  labor  agreements  with the IBEW and the Office and
Professional  Employees  International  Union  that  expire  April 15,  2003 and
December 1, 2003, respectively.


     Southern  Nuclear  has  agreements  with  the IBEW on  separate  three-year
contracts extending to August 15, 2001 for Plant Farley and to June 30, 2002 for
Plants  Hatch and  Vogtle.  Upon  notice  given at least 60 days  prior to these
dates,  negotiations  may be initiated  with  respect to  agreement  terms to be
effective after such dates.

     Southern  Nuclear also has an agreement with the United Plant Guard Workers
of America for security officers at Plant Hatch extending to September 30, 2001.
Upon  notice  given at least 60 days  prior to that  date,  negotiations  may be
initiated with respect to agreement terms to be effective after such date.


     The  agreements  also  subject  the  terms  of the  pension  plans  for the
companies discussed above to collective  bargaining with the unions at five-year
intervals.


                                      I-16

<PAGE>


Item 2.  PROPERTIES

Electric Properties - The Integrated Southeast Utilities


The integrated  Southeast utilities and SEGCO, at December 31, 2000, operated 34
hydroelectric  generating stations,  33 fossil fuel generating  stations,  three
nuclear generating stations and four combined  cycle/cogeneration  stations. The
amounts of capacity owned by each company are shown in the table below.


 ------------------------- -------------------------------------
                                    Nameplate
 Generating Station        Location              Capacity (1)
 ------------------------- ------------------- -----------------
                                   (Kilowatts)
 Fossil Steam
 Gadsden                   Gadsden, AL             120,000
 Gorgas                    Jasper, AL            1,221,250
 Barry                     Mobile, AL            1,525,000
 Greene County             Demopolis, AL           300,000 (2)
 Gaston Unit 5             Wilsonville, AL         880,000
 Miller                    Birmingham, AL        2,532,288 (3)
                                                 ---------
 ALABAMA Total                                   6,578,538
                                                 ---------

 Arkwright                 Macon, GA                160,000
 Atkinson                  Atlanta, GA              180,000
 Bowen                     Cartersville, GA       3,160,000
 Branch                    Milledgeville, GA      1,539,700
 Hammond                   Rome, GA                 800,000
 McDonough                 Atlanta, GA              490,000
 McManus                   Brunswick, GA            115,000
 Mitchell                  Albany, GA               170,000
 Scherer                   Macon, GA                750,924 (4)
 Wansley                   Carrollton, GA           925,550 (5)
 Yates                     Newnan, GA             1,250,000
                                                  ---------
 GEORGIA Total                                    9,541,174
                                                  ---------

 Crist                     Pensacola, FL          1,045,000
 Lansing Smith             Panama City, FL          305,000
 Scholz                    Chattahoochee, FL         80,000
 Daniel                    Pascagoula, MS           500,000 (6)
 Scherer Unit 3            Macon, GA                204,500 (4)
                                                -----------
 GULF Total                                       2,134,500
                                                  ---------

 Eaton                     Hattiesburg, MS           67,500
 Sweatt                    Meridian, MS              80,000
 Watson                    Gulfport, MS           1,012,000
 Daniel                    Pascagoula, MS           500,000 (6)
 Greene County             Demopolis, AL            200,000 (2)
                                                -----------
 MISSISSIPPI Total                                1,859,500
                                                -----------


 ---------------------------------------------- ----------------


 ------------------------- -----------------------------------------
                                    Nameplate
 Generating Station     Location                       Capacity
 ---------------------- ------------------------- ------------------
                                   (Kilowatts)
 McIntosh               Effingham County, GA           163,117
 Kraft                  Port Wentworth, GA             281,136
 Riverside              Savannah, GA                   102,278
                                                   -----------
 SAVANNAH Total                                        546,531
                                                   -----------

 Gaston Units 1-4       Wilsonville, AL

 SEGCO Total                                         1,000,000 (7)
                                                   -----------
 Total Fossil Steam                                 21,660,243
                                                   -----------


 Nuclear Steam
 Farley                 Dothan, AL

 ALABAMA Total                                       1,720,000
                                                   -----------
 Hatch                  Baxley, GA                     899,612 (8)
 Vogtle                 Augusta, GA                  1,060,240 (9)
                                                   -----------
 GEORGIA Total                                      1,959,852
                                                   ----------
 Total Nuclear Steam                                 3,679,852
                                                   -----------


 Combustion Turbines
 Greene County          Demopolis, AL

 ALABAMA Total                                         720,000
                                                   -----------

 Arkwright              Macon, GA                       30,580
 Atkinson               Atlanta, GA                     78,720
 Bowen                  Cartersville, GA                39,400
 Dahlberg               Athens, GA                     640,000
 Intercession City      Intercession City, FL           47,333 (10)
 McDonough              Atlanta, GA                     78,800
 McIntosh
   Units 1,2,3,4,7,8    Effingham County, GA           480,000
 McManus                Brunswick, GA                  481,700
 Mitchell               Albany, GA                     118,200
 Robins                 Warner Robins, GA              160,000
 Wilson                 Augusta, GA                    354,100
 Wansley                Carrollton, GA                  26,322 (5)
                                                   -----------
 GEORGIA Total                                       2,535,155
                                                     ---------


 Lansing Smith

   Unit A               Panama City, FL                 39,400
 Pea Ridge
   Units 1-3            Pea Ridge, FL                   14,250
                                                        ------
 GULF Total                                             53,650
                                                        ------


 Chevron Cogenerating

   Station              Pascagoula, MS                 147,292 (11)
 Sweatt                 Meridian, MS                    39,400
 Watson                 Gulfport, MS                    39,360
                                                     ---------
 MISSISSIPPI Total                                     226,052
                                                     ---------




 ------------------------------------------------- -----------------
                                      I-17

<PAGE>


 --------------------------- -------------------- -----------------
                                    Nameplate
 Generating Station          Location                 Capacity
 --------------------------- -------------------- -----------------
                                   (Kilowatts)

 Boulevard                   Savannah, GA             59,100
 Kraft                       Port Wentworth,
                               GA                     22,000
 McIntosh
 Units 5&6                   Effingham
                               County, GA             160,000
                                                      -------
 SAVANNAH Total                                       241,100
                                                      -------
                             241,100

 Gaston (SEGCO)              Wilsonville, AL           19,680 (7)
                                                  -----------
 Total Combustion Turbines                          3,795,637
                                                   ----------


 Cogeneration
 Washington County           Washington
                               County, AL             123,428
 GE Plastics Project         Burkeville, AL           104,800
 Theodore                    Theodore, AL             236,418
                                                  -----------
 ALABAMA Total                                        464,646
                                                  -----------

 Combined Cycle
 Barry                       Mobile, AL
 ALABAMA Total                                        535,212
                                                      -------

 Hydroelectric Facilities

 Weiss                       Leesburg, AL              87,750
 Henry                       Ohatchee, AL              72,900
 Logan Martin                Vincent, AL              128,250
 Lay                         Clanton, AL              177,000
 Mitchell                    Verbena, AL              170,000
 Jordan                      Wetumpka, AL             100,000
 Bouldin                     Wetumpka, AL             225,000
 Harris                      Wedowee, AL              135,000
 Martin                      Dadeville, AL            154,200
 Yates                       Tallassee, AL             32,000
 Thurlow                     Tallassee, AL             60,000
 Lewis Smith                 Jasper, AL               157,500
 Bankhead                    Holt, AL                  54,000
 Holt                        Holt, AL                  40,000
                                                  -----------
 ALABAMA Total                                      1,593,600
                                                   ----------


 --------------------------- -------------------- -----------------



 --------------------------- -------------------- -----------------
                                    Nameplate
 Generating Station          Location                 Capacity
 --------------------------- -------------------- -----------------


 Barnett Shoals

   (Leased)                  Athens, GA                 2,800
 Bartletts Ferry             Columbus, GA             173,000
 Goat Rock                   Columbus, GA              26,000
 Lloyd Shoals                Jackson, GA               14,400
 Morgan Falls                Atlanta, GA               16,800
 North Highlands             Columbus, GA              29,600
 Oliver Dam                  Columbus, GA              60,000
 Rocky Mountain              Rome, GA                 215,256 (12)
 Sinclair Dam                Milledgeville, GA         45,000
 Tallulah Falls              Clayton, GA               72,000
 Terrora                     Clayton, GA               16,000
 Tugalo                      Clayton, GA               45,000
 Wallace Dam                 Eatonton, GA             321,300
 Yonah                       Toccoa, GA                22,500
 6 Other Plants                                        18,080
                                                  -----------
 GEORGIA Total                                      1,077,736
                                                   ----------
 Total Hydroelectric Facilities                     2,671,336
                                                  -----------

 Total Generating Capacity                         32,806,926
                                                  ===========


 ------------------------------------------------ -----------------

Notes:
    (1)  For additional  information  regarding  facilities  jointly-owned  with
         non-affiliated  parties,  see  Item  2 -  PROPERTIES  -  "Jointly-Owned
         Facilities" herein.
    (2)  Owned by ALABAMA and MISSISSIPPI as
         tenants in common in the proportions of 60% and 40%, respectively.
    (3)  Excludes the capacity owned by AEC.
    (4)  Capacity  shown for GEORGIA is 8.4% of Units 1 and 2 and 75% of Unit 3.
         Capacity shown for GULF is 25% of Unit 3.
    (5)  Capacity shown is GEORGIA's portion (53.5%) of total plant capacity.
    (6)  Represents 50% of the plant which is owned as tenants in common by
         GULF and MISSISSIPPI.
    (7)  SEGCO is jointly-owned by ALABAMA and GEORGIA.  (See Item 1 - BUSINESS
         herein.)
    (8)  Capacity shown is GEORGIA's portion (50.1%) of total plant capacity.
    (9)  Capacity shown is GEORGIA's portion (45.7%) of total plant capacity.
   (10)  Capacity shown represents 33-1/3% of total plant capacity. GEORGIA owns
         a 1/3  interest in the unit with 100% use of the unit from June through
         September. FPC operates the unit.
   (11)  Generation is dedicated to a single industrial customer.
   (12)  Capacity shown is GEORGIA's portion (25.4%) of total plant capacity.
         OPC operates the plant.


                                      I-18
<PAGE>



     Except as discussed below under "Titles to Property," the principal  plants
and other  important units of the integrated  Southeast  utilities and SEGCO are
owned in fee by the  respective  companies.  It is the opinion of  management of
each such company that its operating  properties are  adequately  maintained and
are substantially in good operating condition.

     MISSISSIPPI owns a 79-mile length of 500-kilovolt  transmission  line which
is leased to Entergy Gulf  States.  The line,  completed  in 1984,  extends from
Plant Daniel to the  Louisiana  state line.  Entergy Gulf States is paying a use
fee over a forty-year  period covering all expenses and the  amortization of the
original $57 million cost of the line.  At December  31, 2000,  the  unamortized
portion of this cost was $34.8 million.

     The all-time maximum demand on the integrated Southeast utilities and SEGCO
was  31,359,000  kilowatts  and  occurred in August 2000.  This amount  excludes
demand  served by  capacity  retained  by MEAG and  Dalton and  excludes  demand
associated with power  purchased from OPC and SEPA by its preference  customers.
The reserve margin for the integrated Southeast utilities and SEGCO at that time
was 8.1%. For additional information on peak demands,  reference is made to Item
6 - SELECTED FINANCIAL DATA herein.

     ALABAMA and GEORGIA will incur significant costs in  decommissioning  their
nuclear  units  at the end of their  useful  lives.  (See  Item 1 -  BUSINESS  -
"Regulation - Atomic Energy Act of 1954" and Note 1 to SOUTHERN's, ALABAMA's and
GEORGIA's financial statements in Item 8 herein.)



Jointly-Owned Facilities

ALABAMA and GEORGIA have sold and GEORGIA has purchased  undivided  interests in
certain generating plants and other related facilities to or from non-affiliated
parties.  The percentages of ownership  resulting from these transactions are as
follows:

<TABLE>
<CAPTION>


                                  Total                                      Percentage Ownership
                                                 ---------------- -------- ------------ -------- --------- ------------ --------
                                 Capacity        ALABAMA          AEC      GEORGIA      OPC      MEAG      DALTON        FPC
                               --------------    ---------------- -------- ------------ -------- --------- ------------ --------
                               (Megawatts)
 Plant Miller
<S>                               <C>                <C>           <C>         <C>      <C>       <C>       <C>         <C>

    Units 1 and 2                  1,320             91.8%         8.2%           -%         -%       -%       -%           -%
 Plant Hatch                       1,796               -             -         50.1     30.0       17.7      2.2            -
 Plant Vogtle                      2,320               -             -         45.7     30.0       22.7      1.6            -
 Plant Scherer
   Units 1 and 2                   1,636               -             -          8.4     60.0       30.2      1.4            -
 Plant Wansley                     1,779               -             -         53.5     30.0       15.1      1.4            -
 Rocky Mountain                      848               -             -         25.4     74.6         -         -            -
 Intercession City, FL               142               -             -         33.3         -        -          -       66.7

 ----------------------------- -------------- -- ---------------- -------- ------------ -------- --------- ------------ --------
</TABLE>



     ALABAMA and GEORGIA have  contracted to operate and maintain the respective
units in which each has an interest (other than Rocky Mountain and  Intercession
City, as described below) as agent for the joint owners.

     In  addition,  GEORGIA has  commitments  regarding a portion of a 5 percent
interest  in Plant  Vogtle  owned by MEAG that are in effect  until the later of
retirement of the plant or the latest stated maturity  date of MEAG's bonds
issued to finance such  ownership  interest.  The payments for capacity are
required whether any capacity is available. The energy cost is a function  of
each  unit's  variable  operating  costs.  Except for the
portion of the  capacity  payments  related to the 1987 and 1990  write-offs  of
Plant  Vogtle  costs,  the cost of such  capacity  and  energy  is  included  in
purchased power from non-affiliates in GEORGIA's  Statements of Income in Item 8
herein.


                                      I-19
<PAGE>

Titles to Property

The  integrated  Southeast  utilities'  and SEGCO's  interests in the  principal
plants (other than certain pollution control facilities, one small hydroelectric
generating  station  leased by  GEORGIA  and the land on which  five  combustion
turbine  generators of MISSISSIPPI  are located,  which is held by easement) and
other  important  units of the  respective  companies  are  owned in fee by such
companies,  subject only to the liens of applicable  mortgage indentures (except
for SEGCO) and to  excepted  encumbrances  as defined  therein.  The  integrated
Southeast  utilities own the fee interests in certain of their principal  plants
as tenants in common.  (See Item 2 -  PROPERTIES  -  "Jointly-Owned  Facilities"
herein.)  Properties such as electric  transmission and  distribution  lines and
steam heating  mains are  constructed  principally  on  rights-of-way  which are
maintained  under franchise or are held by easement only. A substantial  portion
of lands  submerged  by  reservoirs  is held under  flood  right  easements.  In
substantially  all of its coal  reserve  lands,  SEGCO owns or will own the coal
only, with adequate rights for the mining and removal thereof.


                                      I-20
<PAGE>


Item 3.  LEGAL PROCEEDINGS

(1)     United States of America v. ALABAMA
       (United States District Court for the Northern District of Alabama)

       Reference is made to Note 3 to ALABAMA's  financial  statements in Item 8
       herein under the caption "Environmental Litigation."


 (2)   United States of America v. GEORGIA and SAVANNAH
       (United States District Court for the Northern District of Georgia)

       On March 27, 2001, the U.S. District Court granted the EPA's motion
       to amend its complaint to add the alleged violations at SAVANNAH's
       Plant Kraft and to add SAVANNAH as a defendant and denied
       the EPA's motion to add GULF and MISSISSIPPI as defendants due to lack
       of jurisdiction.

       Reference is made to Note 3 to GEORGIA's  financial  statements in Item 8
       herein under the caption "Environmental Litigation."


(3)    Cooper et al. v. GEORGIA, SOUTHERN, SCS and Energy Solutions
       (Superior Court of Fulton County, Georgia)

       Reference  is  made  to  Note 3 to  SOUTHERN's  and  GEORGIA's  financial
       statements  in Item 8  herein  under  the  caption  "Race  Discrimination
       Litigation."


(4)    GEORGIA has been designated as a potentially  responsible party under the
       Comprehensive Environmental Response, Compensation and Liability Act with
       respect to a site in Brunswick, Georgia.

       Reference  is  made  to  Note 3 to  SOUTHERN's  and  GEORGIA's  financial
       statements in Item 8 herein under the captions "Georgia Power Potentially
       Responsible  Party  Status"  and  "Other  Environmental   Contingencies,"
       respectively.


(5)    In re: Mobile Energy Services Company, LLC; In re: Mobile Energy
       Services Holdings, Inc.
       (U.S. Bankruptcy Court for the Southern District of Alabama).


       Reference is made to Note 3 to SOUTHERN's  financial statements in Item 8
       herein  under  the  caption   "Mobile  Energy   Services'   Petition  for
       Bankruptcy."

(6)     Gordon v. SOUTHERN et al.
       (United States District Court for the Southern District of California)

       Reference is made to Note 3 to SOUTHERN"s  financial statements in Item 8
       herein under the caption "California Electricity Markets Litigation."


(7)     Pier 23 Restaurant v. SOUTHERN et al.
       (United States District Court for the Northern District of California)

       Reference is made to Note 3 to SOUTHERN"s  financial statements in Item 8
       herein under the caption "California Electricity Markets Litigation."


     See Item 1 - BUSINESS - "Construction Programs," "Fuel Supply," "Regulation
- - Federal Power Act" and "Rate  Matters" as well as Note 3 to each  registrant's
financial  statements  in Item 8  herein  for a  description  of  certain  other
administrative and legal proceedings discussed therein.


     Additionally,  each of the integrated  Southeast  utilities,  SCS, Southern
Nuclear,  Energy  Solutions  and  Southern  LINC are,  in the  normal  course of
business,  engaged in litigation or administrative proceedings that include, but
are not limited to,  acquisition of property,  injuries and damages claims,  and
complaints by present and former employees.



                                      I-21

<PAGE>


Item 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

           ALABAMA

           ALABAMA held a special  meeting of shareholders on December 14, 2000,
           for the purpose of amending  its charter to provide to the holders of
           Preferred  Stock the right to vote at all  elections  of directors of
           ALABAMA.  The  amendment  was passed and the vote  tabulation  was as
           follows:
                                                   Shares
                                     For           Against           Abstain

           Common Stock           5,608,955               0                 0
           Preferred Stock        1,505,832         462,101           127,473
                                  ---------         -------           -------
                Total             7,114,787         462,101           127,473
                                  =========         =======           =======

           GEORGIA

           By unanimous written consent effective  December 14, 2000,  GEORGIA's
           common shareholder  authorized  amending GEORGIA's charter to provide
           to the holders of Preferred  Stock the right to vote at all elections
           of directors of GEORGIA. The vote tabulation was as follows:
                                                     Shares
                                       For           Against           Abstain

           Common Stock               7,761,500             0                 0

           GULF

           GULF held a special meeting of shareholders on December 14, 2000, for
           the  purpose of  amending  its  charter to provide to the  holders of
           Preferred  Stock the right to vote at all  elections  of directors of
           GULF.  The  amendment  was  passed  and the  vote  tabulation  was as
           follows:
                                                      Shares
                                      For             Against           Abstain

           Common Stock                992,717             0                 0
           Preferred Stock              26,842         1,321                21
                                   -----------         -----                --
                Total                1,019,559         1,321                21
                                   ===========         =====                ==

           MISSISSIPPI

           MISSISSIPPI  held a special  meeting of  shareholders on December 14,
           2000,  for the  purpose  of  amending  its  charter to provide to the
           holders  of  Preferred  Stock the right to vote at all  elections  of
           directors  of  MISSISSIPPI.  The  amendment  was  passed and the vote
           tabulation was as follows:
                                                 Shares
                                   For           Against           Abstain

           Common Stock           1,121,000             0                 0
           Preferred Stock          196,119        10,363            11,762
                                -----------        ------            ------
                Total             1,317,119        10,363            11,762
                                ===========        ======            ======


                                      I-22
<PAGE>


EXECUTIVE OFFICERS OF SOUTHERN

(Identification  of  executive  officers  of  SOUTHERN  is inserted in Part I in
accordance  with  Regulation  S-K, Item 401(b),  Instruction 3.) The ages of the
officers set forth below are as of December 31, 2000.


A. W. Dahlberg
Chairman and Director
Age 60
Elected  Director in 1985 and Chairman  effective March 1995 through March 2001,
and Chief Executive  Officer  effective March 1995 to March 2001. Also served as
President from January 1994 to June 1999.

H. Allen Franklin
President, Chief Executive Officer and Director
Age 56
Elected  Director in 1988 and Chief Executive  Officer  effective March 1, 2001.
Previously served as President and Chief Operating Officer of SOUTHERN from June
1999 to March 2001; and as President and Chief Executive Officer of GEORGIA from
January 1994 to June 1999.

Elmer B. Harris
Executive Vice President and Director
Age 61
Elected  Director in 1989 and  Executive  Vice  President  in 1991.  He also has
served as President and Chief Executive Officer of ALABAMA since 1989.

David M. Ratcliffe
Executive Vice President
Age 52
Elected in 1999. He also has served as President and Chief Executive  Officer of
GEORGIA  since  June  1999.  Previously  served  as  Executive  Vice  President,
Treasurer and Chief  Financial  Officer of GEORGIA from March 1998 to June 1999;
and as Senior Vice President of SOUTHERN from March 1995 to March 1998.

Stephen A. Wakefield
Senior Vice President and General Counsel
Age 60
Elected in 1997.  Previously,  he was a partner  at the law firm of Akin,  Gump,
Strauss, Hauer & Feld, LLP from July 1991 through August 1997.

Gale E. Klappa
Financial Vice President, Chief Financial Officer and Treasurer
Age 50
Elected effective March 1, 2001.  Previously served as
Chief Strategic  Officer of SOUTHERN from October 1999 to March 2001;  President
of  Mirant's  North  America  Group and Senior  Vice  President  of Mirant  from
December 1998 to October 1999; and as President and Chief  Executive  Officer of
Western Power Distribution,  a subsidiary of Mirant located in Bristol, England,
from September 1995 to December 1998.

Charles D. McCrary
Vice President
Age 49
Elected in 1998; serves as Chief Production  Officer for the SOUTHERN system. He
also has  served  as  Executive  Vice  President  of  GEORGIA  since  May  1998.
Previously,  he served as Executive  Vice President of ALABAMA from 1994 through
April 1998.

W. G. Hairston, III
Age 56
President and Chief Executive Officer of Southern Nuclear since 1993.

     The  officers of SOUTHERN  were  elected for a term  running  from the last
annual  meeting  of the  directors  (May 24,  2000) for one year  until the next
annual meeting or until their successors are elected and have qualified,  except
for Mr.  Franklin and Mr.  Klappa,  whose  elections  were effective on the date
indicated.


                                      I-23

<PAGE>


EXECUTIVE OFFICERS OF ALABAMA

(Identification  of  executive  officers  of  ALABAMA is  inserted  in Part I in
accordance  with  Regulation  S-K, Item 401(b),  Instruction 3.) The ages of the
officers set forth below are as of December 31, 2000.

Elmer B. Harris
President, Chief Executive Officer and Director
Age 61
Elected in 1989.  Served as President and Chief Executive Officer since 1989.
Elected Executive Vice President
of SOUTHERN in 1991.  Served as a Director of SOUTHERN since 1989.

Michael D. Garrett
Executive Vice President
Age 51
Elected in 1998.  Served as Executive Vice  President of Customer  Service since
January 2000.  Previously served as Executive Vice President of External Affairs
from March 1998 to January 2000; and Senior Vice  President of External  Affairs
from February 1994 to March 1998.

William B. Hutchins, III
Executive Vice President, Chief Financial Officer
and Treasurer
Age 57
Elected in 1991.  Served as Treasurer  since 1998 in addition to Executive  Vice
President and Chief Financial Officer since 1991.

C. Alan Martin
Executive Vice President
Age 52
Elected in 1999.  Served as Executive Vice  President of External  Affairs since
January 2000.  Previously served as Executive Vice President and Chief Marketing
Officer for SOUTHERN from 1998 to 1999;  and Vice  President of Human  Resources
for SOUTHERN from May 1995 to March 1998.


Jerry L. Stewart
Senior Vice President
Age 51
Elected in 1999.  Served as Senior Vice President of Fossil and Hydro Generation
since 1999. Previously served as Vice President of SCS from 1992 to 1999.

     The  officers  of ALABAMA  were  elected for a term  running  from the last
annual  meeting of the  directors  (April 28,  2000) for one year until the next
annual meeting or until their successors are elected and have qualified.


                                      I-24
<PAGE>


EXECUTIVE OFFICERS OF GEORGIA

(Identification  of  executive  officers  of  GEORGIA is  inserted  in Part I in
accordance  with  Regulation  S-K, Item 401(b),  Instruction 3.) The ages of the
officers set forth below are as of December 31, 2000.

David M. Ratcliffe
President, Chief Executive Officer and Director
Age 52
Elected as an  Executive  Officer  in 1998 and as  Director  in 1999.  Served as
President  and Chief  Executive  Officer since June 1999.  Previously  served as
Executive Vice President,  Treasurer and Chief Financial Officer of GEORGIA from
1998 to 1999;  and as Senior Vice President of SOUTHERN from March 1995 to March
1998.

William C. Archer, III
Executive Vice President
Age 52
Elected in 1995.  Served as Executive Vice President of External Affairs since
1995.  Previously served as Senior Vice President of External Affairs from
April 1995 to September 1995.

Thomas A. Fanning
Executive Vice President, Treasurer and
Chief Financial Officer
Age 43
Elected in 1999.  Previously  served as Senior Vice  President of SOUTHERN  from
June 1998 to June 1999; and Senior Vice President and Chief Information  Officer
for SOUTHERN from March 1995 to 1998.

Gene R. Hodges
Executive Vice President
Age 62
Elected in 1986.  Served as Executive Vice President of Customer Operations,
Power Delivery and Safety since 1992.


James K. Davis
Senior Vice President
Age 60
Elected in 1993.  Served as Senior Vice President of Corporate  Relations  since
1993, with Employee Relations being added to his responsibilities in 2000.

Robert H. Haubein
Senior Vice President
Age 60
Elected in 1992.  Served as Senior Vice  President of  Fossil/Hydro  Power since
1994.

Leonard J. Haynes
Senior Vice President
Age 50
Elected in 1998.  Served as Senior  Vice  President  of  Marketing  since  1998.
Previously  served as Vice  President of Retail Sales and Services  from October
1995 to November 1998.

Fred D. Williams
Senior Vice President
Age 56
Elected in 1992. Served as Senior Vice President of Resource Policy and Planning
since  1998.  Previously  served as Senior Vice  President  of  Wholesale  Power
Marketing from 1995 to 1998.

    The officers of GEORGIA were elected for a term running from the last annual
meeting  of the  directors  (May 17,  2000) for one year  until the next  annual
meeting or until their successors are elected and have qualified.

                                      I-25

<PAGE>


EXECUTIVE OFFICERS OF GULF

(Identification  of  executive  officers  of  GULF  is  inserted  in  Part  I in
accordance  with  Regulation  S-K, Item 401(b),  Instruction 3.) The ages of the
officers set forth below are as of December 31, 2000.

Travis J. Bowden
President, Chief Executive Officer and Director
Age 62
Elected in 1994.  Served as President and Chief Executive Officer since 1994.

Francis M. Fisher, Jr.
Vice President
Age 52
Elected  in 1989.  Served  as Vice  President  of Power  Delivery  and  Customer
Operations  since 1996.  Previously  served as Vice  President  of Employee  and
External Relations from 1989 to 1996.

John E. Hodges, Jr.
Vice President
Age 57
Elected in 1989.  Served as Vice  President of Marketing  and  Employee/External
Affairs since 1996.  Previously served as Vice President of Customer  Operations
from 1989 to 1996.

Ronnie R. Labrato
Comptroller and Chief Financial Officer
Age 47
Elected as an Executive  Officer in July 2000.  Previously  served as Controller
from 1992 to 2000.

Robert G. Moore
Vice President
Age 51
Elected in 1997.  Served as Vice President of Power  Generation and Transmission
of GULF and Vice  President of Fossil  Generation of SCS since 1997.  Previously
served as Plant  Manager  of Plant  Bowen at  GEORGIA  from March 1993 to August
1997.

Warren E. Tate
Secretary/Treasurer and
Regional Chief Information Officer
Age 58
Elected as an Executive Officer in July 2000. Served as Secretary/Treasurer  and
Regional Chief Information Officer since 1996.

    The  officers of GULF were  elected for a term  running from the last annual
meeting of the  directors  (July 28,  2000) for one year  until the next  annual
meeting or until their successors are elected and have qualified.

                                      I-26

<PAGE>


EXECUTIVE OFFICERS OF MISSISSIPPI

(Identification  of executive  officers of  MISSISSIPPI is inserted in Part I in
accordance  with  Regulation  S-K, Item 401(b),  Instruction 3.) The ages of the
officers set forth below are as of December 31, 2000.

Dwight H. Evans
President, Chief Executive Officer and Director
Age 52
Elected in 1995.  Previously  served as  Executive  Vice  President  of External
Affairs of GEORGIA from 1989 to 1995.

H. E. Blakeslee
Vice President
Age 60
Elected in 1984.  Served as Vice President of Customer Services and Retail
Marketing since 1984.

Don E. Mason
Vice President
Age 59
Elected in 1983.  Served as Vice President of External Affairs and Corporate
Services since 1983.

Michael W. Southern
Vice President, Secretary, Treasurer and
Chief Financial Officer
Age 48
Elected in 1995.  Served as Vice President, Secretary, Treasurer and Chief
Financial Officer since 1995.


Gene L. Ussery, Jr.
Vice President
Age 51
Elected in 2000. Served as Vice President of Power Generation and Delivery since
September  2000.  Previously  served as Northern  Cluster Manager at GEORGIA for
Plants Hammond, Bowen and  McDonough-Atkinson  from July 2000 to September 2000.
He served as Manager of Plant Bowen at GEORGIA from 1997 to 2000; and Manager of
Plant McDonough at GEORGIA from 1996 to 1997.

     The officers of  MISSISSIPPI  were elected for a term running from the last
annual  meeting of the  directors  (April 26,  2000) for one year until the next
annual meeting or until their successors are elected and have qualified,  except
for Mr. Ussery, whose election was effective on September 21, 2000.



                                      I-27

<PAGE>

                                     PART II

Item 5.    MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

      (a)  The common stock of SOUTHERN is listed and traded on the New York
           Stock Exchange. The stock is also traded on regional exchanges across
           the United States. High and low stock prices, per the New York Stock
           Exchange Composite Tape during each quarter for the past two years
           were as follows:

           ------------------------ ----------- --- --------------
                                       High              Low
                                    -----------     --------------
           2000

           First Quarter           $25-7/8            $20-3/8
           Second Quarter           27-7/8             21-11/16
           Third Quarter            35                 23-13/32
           Fourth Quarter           33-22/25           27-1/2

           1999

           First Quarter           $29-5/8            $23-1/4
           Second Quarter           29-3/16            22-3/4
           Third Quarter            28                 25
           Fourth Quarter           27-1/8             22-1/16

           -------------------- --------------- --- --------------


           There is no market for the other registrants' common stock, all of
           which is owned by SOUTHERN. On February 28, 2001, the closing price
           of SOUTHERN's common stock was $30.95.

      (b)  Number of SOUTHERN's common stockholders at December 31, 2000:
                                      160,116

           Each of the other registrants have one common stockholder, SOUTHERN.


      (c)  Dividends on each registrant's common stock are payable at the
           discretion of their respective board of directors.  The dividends
           on common stock declared by SOUTHERN and the integrated Southeast
           utilities to their stockholder(s) for the past two years were as
           follows: (in thousands)

           ------------------- --------- ------------- ----------
           Registrant          Quarter       2000          1999
           ------------------- --------- ------------- ----------

           SOUTHERN            First       $220,557     $233,879
                               Second       217,289      233,445
                               Third        217,289      228,690
                               Fourth       218,098      225,470

           ALABAMA             First        103,600       98,000
                               Second       105,200       98,400
                               Third        104,400       99,700
                               Fourth       103,900      103,500

           GEORGIA             First        136,500      133,100
                               Second       138,600      133,700
                               Third        137,600      135,500
                               Fourth       136,900      140,700

           GULF                First         14,600       15,000
                               Second        14,900       15,100
                               Third         14,800       15,300
                               Fourth        14,700       15,900

           MISSISSIPPI         First         13,600       13,800
                               Second        13,800       13,800
                               Third         13,700       14,000
                               Fourth        13,600       14,500

           SAVANNAH            First          6,100        6,200
                               Second         6,200        6,200
                               Third          6,000        6,300
                               Fourth         6,000        6,500
           ------------------- --------- ------------- ----------

    The dividend paid per share by SOUTHERN was 33.5(cent) for each quarter of
1999 and 2000. The dividend paid on SOUTHERN's common stock for the first
quarter of 2001 was 33.5(cent) per share.

    The amount of dividends on their common stock that may be paid by the
subsidiary registrants is restricted in accordance with their first mortgage
bond indenture.  The amounts of earnings retained in the business


                                      II-1
<PAGE>


and the amounts restricted against the payment of cash dividends on common
stock at December 31, 2000 were as follows:

 -------------------- ------------------ --- --------------
                          Retained            Restricted
                          Earnings              Amount
                      ------------------     --------------
                                  (in millions)

 ALABAMA                  $1,228                $   796
 GEORGIA                   1,788                    891
 GULF                        156                    127
 MISSISSIPPI                 173                    118
 SAVANNAH                    110                     68
 Consolidated              4,672                  2,000

 -------------------- ------------------ --- --------------

Item 6.    SELECTED FINANCIAL DATA

SOUTHERN.  Reference is made to information under the heading "Selected
Consolidated Financial and Operating Data," contained herein at pages II-41 and
II-42.

ALABAMA.  Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-74 and II-75.

GEORGIA.  Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-109 and II-110.

GULF.  Reference is made to information under the heading "Selected Financial
and Operating Data," contained herein at pages II-138 and II-139.

MISSISSIPPI.  Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-167 and II-168.

SAVANNAH.  Reference is made to information under the heading "Selected
Financial and Operating Data," contained herein at pages II-194 and II-195.

Item 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
         FINANCIAL CONDITION

SOUTHERN. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-8 through II-17.

ALABAMA. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-46 through II-54.

GEORGIA. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-79 through II-87.

GULF. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-114 through II-122.

MISSISSIPPI. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-143 through II-150.

SAVANNAH. Reference is made to information under the heading "Management's
Discussion and Analysis of Results of Operations and Financial Condition,"
contained herein at pages II-172 through II-178.


Item 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Reference is made to information in SOUTHERN's "Management's Discussion and
Analysis - Market Price Risk" and to Note 1 to SOUTHERN's financial statements
under the heading "Financial Instruments for Non-Trading Activities" contained
herein on pages II-13 through II-14 and II-28, respectively.


Reference is also made to "Management's Discussion and Analysis - Exposure to
Market Risks" in Item 7 of ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH
contained herein at pages II-51, II-83. II-118, II-146, and II-175,
respectively.


                                      II-2
<PAGE>

Item 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO 2000 FINANCIAL STATEMENTS
<TABLE>
<CAPTION>

                                                                                                             Page
The Southern Company and Subsidiary Companies:
<S>                                                                                                          <C>
Report of Independent Public Accountants................................................................     II-7
Consolidated Statements of Income for the Years Ended December 31, 2000, 1999 and 1998..................     II-18
Consolidated Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998..............     II-19
Consolidated Balance Sheets at December 31, 2000 and 1999...............................................     II-20
Consolidated Statements of Capitalization at December 31, 2000 and 1999.................................     II-22
Consolidated Statements of Common Stockholders' Equity for the Years Ended
 .....   December 31, 2000, 1999 and 1998................................................................     II-24
Consolidated Statements of Comprehensive Income for the Years Ended
 .....   December 31, 2000, 1999 and 1998................................................................     II-24
Notes to Financial Statements...........................................................................     II-25

ALABAMA:
Report of Independent Public Accountants  ..............................................................     II-45
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998...............................     II-55
Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...........................     II-56
Balance Sheets at December 31, 2000 and 1999 ...........................................................     II-57
Statements of Capitalization at December 31, 2000 and 1999 .............................................     II-59
Statements of Common Stockholder's Equity for the Years Ended
 .....    December 31, 2000, 1999 and 1998...............................................................     II-61
Notes to Financial Statements...........................................................................     II-62

GEORGIA:
Report of Independent Public Accountants................................................................     II-78
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998...............................     II-88
Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...........................     II-89
Balance Sheets at December 31, 2000 and 1999 ...........................................................     II-90
Statements of Capitalization at December 31, 2000 and 1999 .............................................     II-92
Statements of Common Stockholder's Equity for the Years Ended
 .....    December 31, 2000, 1999 and 1998...............................................................     II-94
Notes to Financial Statements...........................................................................     II-95

GULF:
Report of Independent Public Accountants................................................................     II-113
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998...............................     II-123
Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...........................     II-124
Balance Sheets at December 31, 2000 and 1999 ...........................................................     II-125
Statements of Capitalization at December 31, 2000 and 1999 .............................................     II-127
Statements of Common Stockholder's Equity for the Years Ended
 .....    December 31, 2000, 1999 and 1998...............................................................     II-128
Notes to Financial Statements...........................................................................     II-129

                                      II-3
<PAGE>


                                                                                                             Page
MISSISSIPPI:
Report of Independent Public Accountants................................................................     II-142
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998...............................     II-151
Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...........................     II-152
Balance Sheets at December 31, 2000 and 1999 ...........................................................     II-153
Statements of Capitalization at December 31, 2000 and 1999 .............................................     II-155
Statements of Common Stockholder's Equity for the Years Ended
 .....    December 31, 2000, 1999 and 1998...............................................................     II-157
Notes to Financial Statements...........................................................................     II-158

SAVANNAH:
Report of Independent Public Accountants................................................................     II-171
Statements of Income for the Years Ended December 31, 2000, 1999 and 1998...............................     II-179
Statements of Cash Flows for the Years Ended December 31, 2000, 1999 and 1998...........................     II-180
Balance Sheets at December 31, 2000 and 1999 ...........................................................     II-181
Statements of Capitalization at December 31, 2000 and 1999 .............................................     II-183
Statements of Common Stockholder's Equity for the Years Ended
 .....    December 31, 2000, 1999 and 1998...............................................................     II-184
Notes to Financial Statements...........................................................................     II-185
</TABLE>

Item 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
           ACCOUNTING AND FINANCIAL DISCLOSURE

None.


                                      II-4

<PAGE>

                              THE SOUTHERN COMPANY
                            AND SUBSIDIARY COMPANIES

                               FINANCIAL SECTION


                                      II-5



<PAGE>

MANAGEMENT'S REPORT
Southern Company and Subsidiary Companies 2000 Annual Report


The management of Southern Company has prepared -- and is responsible for -- the
consolidated financial statements and related information included in this
report. These statements were prepared in accordance with accounting principles
generally accepted in the United States and necessarily include amounts that are
based on the best estimates and judgments of management. Financial information
throughout this annual report is consistent with the financial statements.

   The company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the accounting records
reflect only authorized transactions of the company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

   The company's system of internal accounting controls is evaluated on an
ongoing basis by the company's internal audit staff. The company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

   The audit committee of the board of directors, composed of five independent
directors provides a broad overview of management's financial reporting and
control functions. Periodically, this committee meets with management, the
internal auditors, and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.

   Management believes that its policies and procedures provide reasonable
assurance that the company's operations are conducted according to a high
standard of business ethics.

   In management's opinion, the consolidated financial statements present
fairly, in all material respects, the financial position, results of operations,
and cash flows of Southern Company and its subsidiary companies in conformity
with accounting principles generally accepted in the United States.






/s/H. Allen Franklin
H. Allen Franklin
President and Chief Executive Officer



/s/Gale E. Klappa
Gale E. Klappa
Financial Vice President, Chief Financial Officer,
and Treasurer


                                  II-6
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Southern Company:

We have audited the accompanying consolidated balance sheets and consolidated
statements of capitalization of Southern Company (a Delaware corporation) and
subsidiary companies as of December 31, 2000 and 1999, and the related
consolidated statements of income, comprehensive income, common stockholders'
equity, and cash flows for each of the three years in the period ended December
31, 2000. These financial statements are the responsibility of the company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

   In our opinion, the consolidated financial statements (pages II-18 through
II-40)referred to above present fairly, in all material respects, the financial
position of Southern Company and subsidiary companies as of December 31, 2000
and 1999, and the results of their operations and their cash flows for each of
the three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.





/s/Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001


                                      II-7
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Southern Company and Subsidiary Companies 2000 Annual Report


RESULTS OF OPERATIONS
- ---------------------

OVERVIEW OF CONSOLIDATED EARNINGS

Southern Company's solid financial performance resulted in record earnings for
2000. Higher earnings were driven by both strong growth of selling electricity
in the Southeast and by the global subsidiary's competitive energy supply
business outside the Southeast. Reported earnings in both 2000 and 1999
reflected significant items not related to the normal day-to-day business
activities. After adjusting for these items, earnings per share for 2000 was
$2.13 compared with $1.90 in 1999. Earnings as reported and the details of
earnings as adjusted are shown in the following table.

   In April 2000, Southern Company announced an initial public offering of up to
19.9 percent of Mirant Corporation -- formerly Southern Energy, Inc. -- and its
intentions to spin off the remaining ownership of Mirant to Southern Company
stockholders within 12 months of the initial stock offering. On October 2, 2000,
Mirant completed an initial public offering of 66.7 million shares of common
stock.

   On February 19, 2001, Southern Company's board of directors approved the spin
off of the remaining ownership of 272 million Mirant shares to be completed in a
tax free distribution on April 2, 2001. As a result of the spin off, Southern
Company financial statements and related information reflect Mirant as
discontinued operations.

   A reconciliation of reported consolidated earnings, including discontinued
operations, to earnings as adjusted -- which exclude non-day to day business
items -- and the related explanations are as follows:

                             Consolidated         Earnings
                              Net Income          Per Share
                            ----------------   --------------
                             2000     1999       2000     1999
                             ---------------   ---------------
                               (in millions)
Earnings from --
  Continuing
    operations             $  994   $  915      $1.52     $1.33
  Discontinued
    operations                319      361        .49       .53
- ---------------------------------------------------------------
Earnings as reported        1,313    1,276       2.01      1.86
- ---------------------------------------------------------------
Mirant transition costs        80        -        .12         -
Mobile Energy
    write down                 10       69        .01       .10
Gain on asset sale              -      (78)         -      (.11)
Work force reductions           -       50          -       .07
Other                          (8)     (14)      (.01)     (.02)
- ---------------------------------------------------------------
Total adjustments              82       27        .12       .04
- ---------------------------------------------------------------
Earnings as adjusted       $1,395   $1,303      $2.13     $1.90
===============================================================

   Mirant's transition costs shown in the table include charges related to
becoming a public company and changes in their tax strategy in Asia.

   In 2000 and 1999, Southern Company recorded asset impairment charges related
to Mobile Energy Services -- see Note 3 to the financial statements. In 1999,
Mirant sold a portion of its business in the United Kingdom. Work force
reduction programs began in late 1999 for a German utility in which Mirant has
an ownership interest.

SOUTHERN COMPANY BUSINESS ACTIVITIES

Discussion of the results of operations is focused on the traditional business
of the integrated Southeast utilities. The remaining portion of Southern
Company's other business activities include telecommunications, energy products
and services, leveraged leasing activities, as well as the parent holding
company. The impact of these other business activities on the consolidated
results of operations is not significant. For more information, see Note 12.

Integrated Southeast Utilities

The five integrated Southeast utilities provide electric service in four states.
These utilities are Alabama Power, Georgia Power, Gulf Power, Mississippi Power,
and Savannah Electric. A condensed income statement for these companies is as
follows:

                                           Increase (Decrease)
                              Amount         From Prior Year
                              ------       --------------------
                                2000           2000       1999
 --------------------------------------------------------------
                                      (in millions)
Operating revenues            $9,860           $735      $(238)
- ---------------------------------------------------------------
Fuel                           2,564            236          7
Purchased power                  677            268         13
Other operation
  and maintenance              2,472             41          4
Depreciation
  and amortization             1,135             89       (277)
Taxes other than
  income taxes                   532             11         13
- ---------------------------------------------------------------
Total operating expenses       7,380            645       (240)
- ---------------------------------------------------------------
Operating income               2,480             90          2
Other income, net                (18)           (11)       (84)
- ---------------------------------------------------------------
Earnings before
  interest and taxes           2,462             79        (82)
Interest expenses
  and other                      650             15        (44)
Income taxes                     703             28        (28)
- ---------------------------------------------------------------
Net income                    $1,109          $  36     $  (10)
===============================================================


                                      II-8
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


Revenues

Operating revenues for the integrated Southeast utilities in 2000 and the amount
of change from the prior year are as follows:

                                           Increase (Decrease)
                              Amount         From Prior Year
                              -------      --------------------
                                2000           2000       1999
- ---------------------------------------------------------------
                                      (in millions)
Retail --
  Base revenues               $6,014           $174      $(262)
  Fuel cost recovery
    and other                  2,599            353         76
- ---------------------------------------------------------------
Total retail                   8,613            527       (186)
- ---------------------------------------------------------------
Sales for resale --
  Within service area            377             27        (24)
  Outside service area           600            127        (49)
- ----------------------------------------------------------------
Total sales for resale           977            154        (73)
Other operating
  revenues                       270             54         21
- ---------------------------------------------------------------
Operating revenues            $9,860           $735      $(238)
===============================================================
Percent change                                  8.1%      (2.5)%
- ---------------------------------------------------------------

   Base revenues increased $174 million in 2000 as a result of continued
customer growth in the traditional service area and the positive impact of
weather on energy sales. However, total base revenues of $5.8 billion in 1999
declined as a result of a Georgia Power rate reduction and recorded revenue
sharing in 1999. For additional information, see Note 3 to the financial
statements under "Georgia Power 1998 Retail Rate Order." Customer growth in the
Southeast somewhat offset the rate decrease.

   Electric rates include provisions to adjust billings for fluctuations in fuel
costs, the energy component of purchased power costs, and certain other costs.
Under these fuel cost recovery provisions, fuel revenues generally equal fuel
expenses -- including the fuel component of purchased energy -- and do not
affect net income. However, cash flow is affected by the economic loss from
untimely recovery of these receivables. Each company has filed or will be filing
for approval of new fuel rates to be more reflective of escalating fuel costs.

   Revenues from sales for resale within the service area were up as a result of
additional demand during the hot summer of 2000. Sales for resale revenues
within the service area were $350 million in 1999, down 6.5 percent from the
prior year. This sharp decline resulted primarily from supplying less
electricity under contractual agreements with certain wholesale customers in
1999.

   Energy sales for resale outside the service area are principally unit power
sales under long-term contracts to Florida utilities. Economy energy and energy
under short-term contracts are also sold for resale outside the service area.
Revenues from long-term unit power contracts have both a capacity and energy
component. Capacity revenues reflect the recovery of fixed costs and a return on
investment under the contracts. Energy is generally sold at variable cost. The
capacity and energy components of the unit power contracts were as follows:

                                    2000       1999       1998
- ---------------------------------------------------------------
                                          (in millions)
Capacity                            $177       $174       $196
Energy                               178        157        152
- ---------------------------------------------------------------
Total                               $355       $331       $348
===============================================================

   Capacity revenues in 2000 and 1999 varied slightly compared with the prior
year as a result of adjustments and true-ups related to contractual pricing. No
significant declines in the amount of capacity are scheduled until the
termination of the contracts in 2010.

Energy Sales

The changes in revenues for the traditional business in the Southeast are
influenced heavily by the amount of energy sold each year. Kilowatt-hour sales
for 2000 and the percent change by year were as follows:

                         Amount            Percent Change
   (billions of          ------     ---------------------------
   kilowatt-hours)        2000      2000        1999      1998
- ---------------------------------------------------------------
Residential               46.2       6.5%       (0.2)%    10.9%
Commercial                46.2       6.6         4.0       7.2
Industrial                56.7       1.0         1.6       2.1
Other                      1.0       2.7         1.6       3.1
                         -----
Total retail             150.1       4.3         1.7       6.2
Sales for resale --
  Within service area      9.6       1.5        (4.1)     (0.4)
  Outside service area    17.2      33.0        (0.4)     (5.6)
                         -----
Total                    176.9       6.4         1.2       4.7
===============================================================

   The rate of growth in 2000 total retail energy sales was very strong.
Residential energy sales reflected a substantial increase as a result of the
hotter-than-normal summer weather and the number of residential customers served
increased by 59,000 during the year. Commercial and industrial sales, both in


                                       II-9

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


2000 and 1999, continued to show slight gains in excess of the national
averages. This reflects the strength of business and economic conditions in
Southern Company's traditional service area in the southeastern United States.
The rate of increase in 1999 total retail energy sales was significantly lower
than in 1998. Residential energy sales experienced a decline as a result of
milder weather in 1999, which strongly affected the total retail sales increase
of 1.7 percent. Energy sales to retail customers are projected to increase at an
average annual rate of 2.1 percent during the period 2001 through 2011.

   Sales to customers outside the service area under long-term contracts for
unit power sales increased 21 percent in 2000 and increased 19 percent in 1999.
These changes in sales were influenced by weather and fluctuations in prices for
oil and natural gas, the primary fuel sources for utilities with which the
company has long-term contracts. However, these fluctuations in energy sales
under long-term contracts have minimal effects on earnings because the energy is
generally sold at variable cost.

Expenses

In 2000, operating expenses of $7.4 billion increased $645 million compared with
the prior year. The costs to produce electricity for the traditional business in
2000 increased by $498 million to meet higher energy demands. Non-production
operation and maintenance expenses increased $47 million in 2000. In 2000,
depreciation and amortization expenses increased $89 million of which $50
million resulted from the 1998 Georgia Power rate order as referred to earlier.

   In 1999, operating expenses of $6.7 billion decreased $240 million. This
decline was driven by a reduction of $277 million accelerated depreciation of
plant being recorded primarily as a result of the 1998 Georgia Power rate order.
The costs to produce electricity for the traditional business in the Southeast
for 1999 increased by $68 million to meet higher energy demands. All other
operation and maintenance expenses declined by $44 million.

   Fuel costs constitute the single largest expense for the integrated Southeast
utilities. The mix of fuel sources for generation of electricity is determined
primarily by system load, the unit cost of fuel consumed, and the availability
of hydro and nuclear generating units. The amount and sources of generation and
the average cost of fuel per net kilowatt-hour generated -- within the
traditional business service area -- were as follows:

                                    2000       1999       1998
- -------------------------------------------------------------------
Total generation
  (billions of kilowatt-hours)       174        165        164
Sources of generation
  (percent) --
    Coal                              78         78         77
    Nuclear                           16         17         16
    Hydro                              2          2          4
    Oil and gas                        4          3          3
Average cost of fuel per net
  kilowatt-hour generated
    (cents) --                      1.51       1.45       1.48
- -------------------------------------------------------------------

   In 2000, fuel and purchased power costs increased $504 million as a result of
10.6 billion more kilowatt-hours being sold than in 1999. Demand was met with
some 2.5 billion additional kilowatt-hours being purchased and using generation
with higher unit fuel cost than last year.

   Total fuel and purchased power costs of $2.7 billion in 1999 increased only
$20 million while total energy sales increased 2.0 billion kilowatt-hours
compared with the amounts recorded in 1998. Continued efforts to control energy
costs helped lower the average cost of fuel per net kilowatt-hour generated in
1999.

   Total interest charges and other financing costs in 2000 increased $15
million reflecting new generating units being constructed requiring some
external financing. Total interest charges and other financing costs in 1999
decreased $44 million from amounts reported in the previous year. The decline
reflected additional refinancing of debt in 1999.

Discontinued Operations

Mirant is a global energy company whose businesses include competitive
electricity distribution companies, independent power projects, and energy
trading and risk management companies.


                                      II-10


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   On February 19, 2001, Southern Company's board of directors approved the spin
off of Mirant, to be effective on April 2, 2001. As a result of this action,
Mirant's financial and related information is shown as discontinued operations.
All historical financial statements, footnotes, and related disclosures have
been reclassified to conform with the current year presentation.

   Earnings from discontinued operations are shown net of income taxes and
minority interest. Southern Company earnings per share as adjusted was $2.13 in
2000, of which Mirant's earnings as adjusted contributed approximately $0.60 per
share. On the same basis in 1999, Southern Company earnings per share was $1.90,
of which $0.47 was attributed to Mirant.

Effects of Inflation

Southern Company's traditional business of the integrated Southeast utilities is
subject to rate regulation and income tax laws that are based on the recovery of
historical costs. Therefore, inflation creates an economic loss because the
company is recovering its costs of investments in dollars that have less
purchasing power. While the inflation rate has been relatively low in recent
years, it continues to have an adverse effect on Southern Company because of the
large investment in utility plant with long economic lives. Conventional
accounting for historical cost does not recognize this economic loss nor the
partially offsetting gain that arises through financing facilities with
fixed-money obligations such as long-term debt and preferred securities. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.

Future Earnings Potential

The results of continuing operations for the past three years are not
necessarily indicative of future earnings potential. The level of Southern
Company's future earnings depends on numerous factors. The two major factors are
the ability of the regulated integrated Southeast utilities to achieve energy
sales growth while containing cost in a more competitive environment; and the
profitability of the new competitive market-based wholesale generating
facilities being added.

   The traditional business or the five Southeast utilities currently operate as
vertically integrated companies providing electricity to customers within the
traditional service area of the southeastern United States. Prices for
electricity provided to retail customers are set by state public service
commissions under cost-based regulatory principles. Retail rates and earnings
are reviewed and adjusted periodically within certain limitations based on
earned return on equity. See Note 3 to the financial statements for additional
information about these and other regulatory matters.

   Future earnings for the traditional business in the near term will depend
upon growth in energy sales, which is subject to a number of factors. These
factors include weather, competition, new short and long-term contracts with
neighboring utilities, energy conservation practiced by customers, the
elasticity of demand, and the rate of economic growth in the traditional service
area.

   The electric utility industry in the United States is continuing to evolve as
a result of regulatory and competitive factors. Among the primary agents of
change has been the Energy Policy Act of 1992 (Energy Act). The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. This enhances the
incentive for IPPs to build cogeneration plants for a utility's large industrial
and commercial customers and sell energy generation to other utilities. Also,
electricity sales for resale rates are affected by wholesale transmission access
and numerous potential new energy suppliers, including power marketers and
brokers.

   Although the Energy Act does not permit retail customer access, it was a
major catalyst for the current restructuring and consolidation taking place
within the utility industry. Numerous federal and state initiatives are in
varying stages to promote wholesale and retail competition. Among other things,
these initiatives allow customers to choose their electricity provider. Some
states have approved initiatives that result in a separation of the ownership
and/or operation of generating facilities from the ownership and/or operation of
transmission and distribution facilities. While various restructuring and
competition initiatives have been discussed in Alabama, Florida, Georgia, and
Mississippi, none have been enacted. Enactment would require numerous issues to
be resolved, including significant ones relating to recovery of any stranded
investments, full cost recovery of energy produced, and other issues related to
the current energy crisis in California. As a result of this crisis, many states

                                       II-11

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


have either discontinued or delayed implementation of initiatives involving
retail deregulation. The inability of a company to recover its investments,
including the regulatory assets described in Note 1 to the financial statements,
could have a material adverse effect on financial condition and results of
operations.

   Continuing to be a low-cost producer could provide opportunities to increase
market share and profitability in markets that evolve with changing regulation.
Conversely, if Southern Company's integrated Southeast utilities do not remain
low-cost producers and provide quality service, then energy sales growth could
be limited, and this could significantly erode earnings.

   To adapt to a less regulated, more competitive environment, Southern Company
continues to evaluate and consider a wide array of potential business
strategies. These strategies may include business combinations, acquisitions
involving other utility or non-utility businesses or properties, internal
restructuring, disposition of certain assets, or some combination thereof.
Furthermore, Southern Company may engage in other new business ventures that
arise from competitive and regulatory changes in the utility industry. Pursuit
of any of the above strategies, or any combination thereof, may significantly
affect the business operations and financial condition of Southern Company.

   On December 20, 1999, the Federal Energy Regulatory Commission (FERC) issued
its final rule on Regional Transmission Organizations (RTOs). The order
encouraged utilities owning transmission systems to form RTOs on a voluntary
basis. After participating in regional conferences with customers and other
members of the public to discuss the formation of RTOs, utilities were required
to make a filing with the FERC. Southern Company filed on October 16, 2000, a
proposal for the creation of an RTO. The proposal is for the formation of a
for-profit company that would have control of the bulk power transmission system
of Southern Company and any other participating utilities. Participants would
have the option to either maintain their ownership, divest, sell, or lease their
assets to the proposed RTO. If the FERC accepts the proposal as filed, the
creation of an RTO is not expected to have a material impact on Southern
Company's financial statements. The outcome of this matter cannot now be
determined.

   The Energy Act amended the Public Utility Holding Company Act of 1935 (PUHCA)
to allow holding companies to form exempt wholesale generators to sell power
largely free of regulation under PUHCA. These entities are able to own and
operate power generating facilities and sell power to affiliates -- under
certain restrictions.

   Southern Company is aggressively working to maintain and expand its share of
wholesale sales in the southeastern power markets. In January 2001, Southern
Company announced the formation of a new subsidiary -- Southern Power Company.
The new subsidiary will own, manage, and finance wholesale generating assets in
the Southeast. Southern Power will be the primary growth engine for Southern
Company's market-based energy business. Energy from its assets will be marketed
to wholesale customers under the Southern Company name. By 2005, plans call for
Southern Power to have developed or acquired more than 7,500 megawatts dedicated
to the competitive wholesale business. Within 10 years, the new wholesale
generating company's goal is to own more than 15,000 megawatts.

   In accordance with Financial Accounting Standards Board (FASB) Statement No.
87, Employers' Accounting for Pensions, Southern Company recorded non-cash
income of approximately $130 million in 2000. Pension plan income in 2001 is
expected to be less as a result of plan amendments. Future pension income is
dependent on several factors including trust earnings and changes to the plan.
For more information, see Note 2.

   Southern Company is involved in various matters being litigated. See Note 3
to the financial statements for information regarding material issues that could
possibly affect future earnings.

   Compliance costs related to current and future environmental laws and
regulations could affect earnings if such costs are not fully recovered. The
Clean Air Act and other important environmental items are discussed later under
"Environmental Matters."

   The staff of the SEC has questioned certain of the current accounting
practices of the electric utility industry -- including Southern Company's --
regarding the recognition, measurement, and classification in the financial
statements of decommissioning costs for nuclear generating facilities. In
response to these questions, the Financial Accounting Standards Board (FASB) is
reviewing the accounting for liabilities related to the retirement of long-lived

                                       II-12

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


assets, including nuclear decommissioning. If the FASB issues new accounting
rules, the estimated costs of retiring Southern Company's nuclear and other
facilities may be required to be recorded as liabilities in the Consolidated
Balance Sheets. Also, the annual provisions for such costs could change. Because
of the company's current ability to recover asset retirement costs through
rates, these changes would not have a significant adverse effect on results of
operations. See Note 1 to the financial statements under "Depreciation and
Nuclear Decommissioning" for additional information.

   The integrated Southeast utilities are subject to the provisions of FASB
Statement No. 71, Accounting for the Effects of Certain Types of Regulation. In
the event that a portion of a company's operations is no longer subject to these
provisions, the company would be required to write off related regulatory assets
and liabilities that are not specifically recoverable, and determine if any
other assets have been impaired. See Note 1 to the financial statements under
"Regulatory Assets and Liabilities" for additional information.

New Accounting Standard

In June 2000, FASB issued Statement No. 138, an amendment of Statement  No. 133,
Accounting for Derivative Instruments and Hedging Activities.  Statement No.
133, as amended, establishes accounting and reporting standards for derivative
instruments and for hedging activities.  Statement No. 133 requires that
certain derivative instruments be recorded in the balance sheet as either an
asset or liability measured at fair value, and that changes in the fair value
be recognized currently in earnings unless specific hedge accounting criteria
are met.

   Southern Company utilizes financial instruments to reduce its exposure to
changes in interest rates and foreign currency exchange rates. Southern Company
also enters into commodity related forward contracts to limit exposure to
changing prices on certain fuel purchases and electricity purchases and sales.

   Substantially all of these bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain of
these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

   Southern Company adopted Statement No. 133 effective January 1, 2001. The
cumulative effect of adoption was a reduction of approximately $300 million in
comprehensive income, which was all related to discontinued operations. The
impact on net income was immaterial. The application of the new rules is still
evolving and further guidance from FASB is expected, which could additionally
impact Southern Company's financial statements. Also, as wholesale energy
markets mature, the accounting for future transactions could be significantly
impacted by Statement No. 133, resulting in more volatility in net income and
comprehensive income.

FINANCIAL CONDITION
- ------------------

Overview

Southern Company's financial condition continues to remain strong. In 2000, the
integrated Southeast utilities' earnings were at the high end of their
respective allowed range of return on equity. Also, earnings from discontinued
operations made a solid contribution. These factors drove the reported
consolidated net income to a record $1.31 billion in 2000. The quarterly
dividend declared in January 2001 was 33 1/2 cents per share, or $1.34 annually.
Southern Company is committed to a goal of maintaining its current annual
dividend of $1.34 per share and to grow the dividend over time consistent with
earnings expectations. After the Mirant spin off, Southern Company's target
will be to grow earnings per share at an average annual rate of 3 to 5 percent.

   Gross property additions to utility plant from continuing operations were
$2.2 billion in 2000. The majority of funds needed for gross property additions
since 1997 has been provided from operating activities. The Consolidated
Statements of Cash Flows provide additional details.

Market Price Risk

Southern Company is exposed to market risks, including changes in interest
rates, currency exchange rates, and certain commodity prices. To manage the

                                       II-13

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


volatility attributable to these exposures, the company nets the exposures to
take advantage of natural offsets and enters into various derivative
transactions for the remaining exposures pursuant to the company's policies in
areas such as counterparty exposure and hedging practices. Generally, company
policy is that derivatives are to be used only for hedging purposes. Derivative
positions are monitored using techniques that include market valuation and
sensitivity analysis.

   The company's market risk exposures relative to interest rate changes have
not changed materially versus the previous reporting period. In addition, the
company is not aware of any facts or circumstances that would significantly
impact such exposures in the near-term.

   If the company sustained a 100 basis point change in interest rates for all
variable rate debt, the change would affect annualized interest expense by
approximately $23 million at December 31, 2000. Based on the company's overall
interest rate exposure at December 31, 2000, including derivative and other
interest rate sensitive instruments, a near-term 100 basis point change in
interest rates would not materially affect the consolidated financial
statements.

   Due to cost-based rate regulations, the integrated Southeast utilities have
limited exposure to market volatility in interest rates, commodity fuel prices,
and prices of electricity. To mitigate residual risks relative to movements in
electricity prices, the companies enter into fixed price contracts for the
purchase and sale of electricity through the wholesale electricity market.
Realized gains and losses are recognized in the income statement as incurred. At
December 31, 2000, exposure from these activities was not material to the
consolidated financial statements.

   For additional information, see Note 1 to the financial statements under
"Financial Instruments for Non-Trading Activities."

Capital Structure

During 2000, the integrated Southeast utilities sold, through public
authorities, $79 million of pollution control revenue bonds. In addition, senior
notes of $650 million were issued in 2000. The companies continued to reduce
financing costs by retiring higher-cost securities. Retirements of bonds and
senior notes, including maturities, totaled $298 million during 2000, $1.2
billion during 1999, and $1.7 billion during 1998. Retirements of preferred
stock totaled $86 million during 1999 and $239 million during 1998.

   In December 2000, Southern Company issued 28 million treasury shares of
common stock through a public offering. The offering raised $800 million and
was priced at $28.50 per share. The proceeds were used to reduce debt.

   In April 1999, Southern Company announced the repurchase of up to 50 million
shares of its common stock over a two-year period through open market or
privately negotiated transactions. Under this program, 50 million shares were
repurchased by February 2000 at an average price of $25.53. Funding for the
program was provided from Southern Company's commercial paper program. At the
close of 2000, the company's common stock market value was 33 1/4 per share,
compared with book value of $15.69 per share. The market-to-book value ratio was
212 percent at the end of 2000, compared with 170 percent at year-end 1999, and
207 percent at year-end 1998.

Capital Requirements for Construction

The construction program of Southern Company is budgeted at $2.9 billion for
2001, $2.6 billion for 2002, and $1.7 billion for 2003. Actual construction
costs may vary from this estimate because of changes in such factors as:
business conditions; environmental regulations; nuclear plant regulations; load
projections; the cost and efficiency of construction labor, equipment, and
materials; and the cost of capital. In addition, there can be no assurance that
costs related to capital expenditures will be fully recovered.

   Southern Company has approximately 6,300 megawatts of new generating capacity
scheduled to be placed in service by 2003. Approximately 4,100 megawatts of
additional new capacity will be dedicated to the wholesale market and owned by
Southern Power. Significant construction of transmission and distribution
facilities and upgrading of generating plants will be continuing for the
traditional business in the Southeast.


                                      II-14
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


Other Capital Requirements

In addition to the funds needed for the construction program, approximately $1.4
billion will be required by the end of 2003 for present improvement fund
requirements and maturities of long-term debt. Also, the subsidiaries will
continue to retire higher-cost debt and preferred stock and replace these
obligations with lower-cost capital if market conditions permit.

Environmental Matters

On November 3, 1999, the Environmental Protection Agency (EPA) brought a civil
action in the U.S. District Court against Alabama Power, Georgia Power, and the
system service company. The complaint alleges violations of the prevention of
significant deterioration and new source review provisions of the Clean Air Act
with respect to five coal-fired generating facilities in Alabama and Georgia.
The civil action requests penalties and injunctive relief, including an order
requiring the installation of the best available control technology at the
affected units. The EPA concurrently issued to the integrated Southeast
utilities a notice of violation related to 10 generating facilities, which
includes the five facilities mentioned previously. In early 2000, the EPA filed
a motion to amend its complaint to add the violations alleged in its notice of
violation, and to add Gulf Power, Mississippi Power, and Savannah Electric as
defendants. The complaint and notice of violation are similar to those brought
against and issued to several other electric utilities. These complaints and
notices of violation allege that the utilities had failed to secure necessary
permits or install additional pollution equipment when performing maintenance
and construction at coal burning plants constructed or under construction prior
to 1978. On August 1, 2000, the U.S. District Court granted Alabama Power's
motion to dismiss for lack of jurisdiction in Georgia and granted the system
service company's motion to dismiss on the grounds that it neither owned nor
operated the generating units involved in the proceedings. On January 12, 2001,
the EPA re-filed its claims against Alabama Power in federal district court in
Birmingham, Alabama. The EPA did not include the system service company in the
new complaint. Southern Company believes that its integrated utilities complied
with applicable laws and the EPA's regulations and interpretations in effect at
the time the work in question took place. The Clean Air Act authorizes civil
penalties of up to $27,500 per day per violation at each generating unit. Prior
to January 30, 1997, the penalty was $25,000 per day. An adverse outcome of this
matter could require substantial capital expenditures that cannot be determined
at this time and possibly require payment of substantial penalties. This could
affect future results of operations, cash flows, and possibly financial
condition if such costs are not recovered through regulated rates.

   In November 1990, the Clean Air Act Amendments of 1990 (Clean Air Act) were
signed into law. Title IV of the Clean Air Act -- the acid rain compliance
provision of the law -- significantly affected Southern Company. Specific
reductions in sulfur dioxide and nitrogen oxide emissions from fossil-fired
generating plants were required in two phases. Phase I compliance began in 1995
and some 50 generating units were brought into compliance with Phase I
requirements.

   Southern Company achieved Phase I sulfur dioxide compliance at the affected
plants by switching to low-sulfur coal, which required some equipment upgrades.
Construction expenditures for Phase I nitrogen oxide and sulfur dioxide
emissions compliance totaled approximately $300 million.

   Phase II sulfur dioxide compliance was required in 2000. Southern Company
used emission allowances and fuel switching to comply with Phase II
requirements. Also, equipment to control nitrogen oxide emissions was installed
on additional system fossil-fired units as necessary to meet Phase II limits and
ozone non-attainment requirements for metropolitan Atlanta through 2000.
Compliance for Phase II and initial ozone non-attainment requirements increased
total construction expenditures through 2000 by approximately $100 million.

   The one-hour ozone non-attainment standards for the Atlanta and Birmingham
areas have been set and must be implemented in May 2003. Seven generating plants
will be affected in the Atlanta area and two plants in the Birmingham area.
Additional construction expenditures for compliance with these new rules are
currently estimated at approximately $935 million.

   A significant portion of costs related to the acid rain and ozone
non-attainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.

                                       II-15

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


     In July 1997,  the EPA revised the national ambient air quality standards
for ozone and particulate matter. This revision made the standards significantly
more stringent. In the subsequent litigation of these standards, the U.S.
Supreme Court recently dismissed certain challenges but found the EPA's
implementation program for the new ozone standard  unlawful and remanded it to
the EPA. In addition,  the Federal District of Columbia Circuit Court of Appeals
will address other legal challenges to these standards in mid-2001. If the
standards are eventually upheld, implementation could be required by 2007 to
2010.

   In September 1998, the EPA issued the final regional nitrogen oxide reduction
rules to the states for implementation. Compliance is required by May 31, 2004.
The final rule affects 21 states, including Alabama and Georgia. Additional
construction expenditures for compliance with these new rules are currently
estimated at approximately $195 million.

   In December 2000, the EPA completed its utility studies for mercury and other
hazardous air pollutants (HAPS) and issued a determination that an emission
control program for mercury and, perhaps, other HAPS is warranted. The program
is to be developed over the next four years under the Maximum Achievable Control
Technology (MACT) provisions of the Clean Air Act. This determination is being
challenged in the courts. In January 2001, the EPA proposed guidance for the
determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls is expected
to take place around 2010. Litigation of the BART rules is probable in the near
future.

   Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

   The EPA and state environmental regulatory agencies are reviewing and
evaluating various other matters including: control strategies to reduce
regional haze; limits on pollutant discharges to impaired waters; water intake
restrictions; and hazardous waste disposal requirements. The impact of any new
standards will depend on the development and implementation of applicable
regulations.

   Southern Company must comply with other environmental laws and regulations
that cover the handling and disposal of hazardous waste. Under these various
laws and regulations, the subsidiaries could incur substantial costs to clean up
properties. The subsidiaries conduct studies to determine the extent of any
required cleanup costs and have recognized in their respective financial
statements costs to clean up known sites. These costs for Southern Company
amounted to $4 million in 2000, $4 million in 1999, and $6 million in 1998.
Additional sites may require environmental remediation for which the
subsidiaries may be liable for a portion or all required cleanup costs. See Note
3 to the financial statements for information regarding Georgia Power's
potentially responsible party status at a site in Brunswick, Georgia.

   Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of Southern Company's operations. The full impact of any such changes
cannot be determined at this time.

   Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect Southern Company. The impact of new legislation -- if
any -- will depend on the subsequent development and implementation of



                                       II-16
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


applicable regulations. In addition, the potential exists for liability as the
result of lawsuits alleging damages caused by electromagnetic fields.

Sources of Capital

The amount and timing of additional equity capital to be raised in 2001 -- as
well as in subsequent years -- will be contingent on Southern Company's
investment opportunities. Equity capital can be provided from any combination of
public offerings, private placements, or the company's stock plans.

   The integrated Southeast utilities plan to obtain the funds required for
construction and other purposes from sources similar to those used in the past,
which were primarily from internal sources. However, the type and timing of any
financings -- if needed -- will depend on market conditions and regulatory
approval. In recent years, financings primarily have utilized unsecured debt and
trust preferred securities.

   Southern Power will use both external funds and equity capital from Southern
Company to finance its construction program.

   To meet short-term cash needs and contingencies, Southern Company had at the
beginning of 2001 approximately $199 million of cash and cash equivalents and
$5.1 billion of unused credit arrangements with banks.

Cautionary Statement Regarding
Forward-Looking Information

Southern Company's 2000 Annual Report includes forward-looking statements in
addition to historical information. Forward-looking information includes, among
other things, statements concerning the strategic goals for Southern Company's
new wholesale business and also Southern Company's earnings per share and
earnings growth goals. In some cases, forward-looking statements can be
identified by terminology such as "may," "will," "should," "expects," "plans,"
"anticipates," "believes," "estimates," "predicts," "potential" or "continue" or
the negative of these terms or other comparable terminology. Southern Company
cautions that there are various important factors that could cause actual
results to differ materially from those indicated in the forward-looking
statements; accordingly, there can be no assurance that such indicated results
will be realized. These factors include the impact of recent and future federal
and state regulatory change, including legislative and regulatory initiatives
regarding deregulation and restructuring of the electric utility industry and
also changes in environmental and other laws and regulations to which Southern
Company and its subsidiaries are subject, as well as changes in application of
existing laws and regulations; current and future litigation, including the
pending EPA civil action against Georgia Power and potentially other of Southern
Company's subsidiaries and the race discrimination litigation against certain of
Southern Company's subsidiaries; the extent and timing of the entry of
additional competition in the markets of Southern Company's subsidiaries;
potential business strategies, including acquisitions or dispositions of assets
or businesses, which cannot be assured to be completed or beneficial; internal
restructuring or other restructuring options, that may be pursued by Southern
Company; state and federal rate regulation in the United States and in foreign
countries in which Southern Company's subsidiaries operate; political, legal and
economic conditions and developments in the United States and in foreign
countries in which Southern Company's subsidiaries operate; financial market
conditions and the results of financing efforts; the impact of fluctuations in
commodity prices, interest rates and customer demand; weather and other natural
phenomena; the performance of projects undertaken by the non-traditional
business and the success of efforts to invest in and develop new opportunities;
the timing and acceptance of Southern Company's new product and service
offerings; the ability of Southern Company to obtain additional generating
capacity at competitive prices; developments in the California power markets,
including, but not limited to, governmental intervention, deterioration in the
financial condition of counterparties, default on receivables due, adverse
results in current or future litigation and adverse changes in the tariffs of
the California Power Exchange Corporation or the California Independent System
Operator Corporation; and other factors discussed elsewhere herein and in other
reports (including Form 10-K) filed from time to time by Southern Company with
the SEC.

                                       II-17
<PAGE>


<TABLE>

CONSOLIDATED STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                                                                               2000                 1999              1998
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                              (in millions)
Operating Revenues:
<S>                                                                        <C>                    <C>               <C>
Retail sales                                                               $  8,613               $8,086            $8,272
Sales for resale                                                                977                  823               896
Other revenues                                                                  476                  408               331
- ----------------------------------------------------------------------------------------------------------------------------
Total operating revenues                                                     10,066                9,317             9,499
- ----------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Fuel                                                                          2,564                2,328             2,321
Purchased power                                                                 677                  409               396
Other operations                                                              1,862                1,839             1,852
Maintenance                                                                     852                  829               800
Depreciation and amortization                                                 1,171                1,139             1,340
Taxes other than income taxes                                                   536                  523               511
- ----------------------------------------------------------------------------------------------------------------------------
Total operating expenses                                                      7,662                7,067             7,220
- ----------------------------------------------------------------------------------------------------------------------------
Operating Income                                                              2,404                2,250             2,279
Other Income:
Interest income                                                                  51                   70               154
Other, net                                                                      (26)                 (55)              (53)
- ----------------------------------------------------------------------------------------------------------------------------
Earnings From Continuing Operations
  Before Interest and Income Taxes                                            2,429                2,265             2,380
- ----------------------------------------------------------------------------------------------------------------------------
Interest and Other:
Interest expense, net                                                           659                  556               558
Distributions on capital and preferred securities of subsidiaries               169                  175               141
Preferred dividends of subsidiaries                                              19                   20                25
- ----------------------------------------------------------------------------------------------------------------------------
Total interest and other                                                        847                  751               724
- ----------------------------------------------------------------------------------------------------------------------------
Earnings From Continuing Operations Before Income Taxes                       1,582                1,514             1,656
Income taxes                                                                    588                  599               670
- ----------------------------------------------------------------------------------------------------------------------------
Earnings From Continuing Operations                                             994                  915               986
Earnings from discontinued operations,
  net of income taxes of $86, $127,
  and $(121) for 2000, 1999, and 1998, respectively                             319                  361                (9)
- ----------------------------------------------------------------------------------------------------------------------------
Consolidated Net Income                                                    $  1,313               $1,276           $   977
============================================================================================================================
Common Stock Data:6
Basic and diluted earnings per share of common stock -
  Earnings per share from continuing operations                               $1.52                $1.33            $ 1.41
  Earnings per share from discontinued operations (Note 11)                    0.49                 0.53             (0.01)
- ----------------------------------------------------------------------------------------------------------------------------
Consolidated Basic and Diluted Earnings Per Share                             $2.01                $1.86             $1.40
============================================================================================================================
Average number of shares of common stock outstanding (in millions)              653                  685               697
Cash dividends paid per share of common stock                                 $1.34                $1.34            $ 1.34
- ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>

                                                                     II-18
<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                  2000                 1999              1998
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                                 (in millions)
Operating Activities:
<S>                                                                            <C>                  <C>              <C>
Consolidated net income                                                        $ 1,313              $ 1,276          $    977
Adjustments to reconcile consolidated net income
   to net cash provided from operating activities --
      Less income from discontinued operations (Note 11)                           319                  361                (9)
      Depreciation and amortization                                              1,337                1,216             1,530
      Deferred income taxes and investment tax credits                              97                   10                21
      Gain on asset sales                                                            5                   (2)              (20)
      Other, net                                                                   455                  888               (40)
      Changes in certain current assets and liabilities --
           Receivables, net                                                       (379)                (141)              (49)
           Fossil fuel stock                                                        78                  (41)              (24)
           Materials and supplies                                                  (15)                 (37)               10
           Accounts payable                                                        180                  (65)              103
           Other                                                                    66                  244              (200)
- -------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities of continuing operations             2,818                2,987             2,317
- -------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                                        (2,225)              (1,881)           (1,356)
Sales of property                                                                    -                    -                83
Other                                                                              (81)                (400)             (166)
- -------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities of continuing operations                 (2,306)              (2,281)           (1,439)
- -------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase (decrease) in notes payable, net                                         (275)                 831              (365)
Proceeds --
   Other long-term debt                                                            743                1,469             2,496
   Capital and preferred securities                                                  -                  250               435
   Preferred stock                                                                   -                    -               200
   Common stock                                                                    910                   24               234
Redemptions --
   First mortgage bonds                                                           (211)                (890)           (1,479)
   Other long-term debt                                                           (204)                (483)             (278)
   Capital and preferred securities                                                  -                 (100)                -
   Preferred stock                                                                   -                  (86)             (239)
   Common stock repurchased                                                       (415)                (862)             (125)
Payment of common stock dividends                                                 (873)                (921)             (933)
Other                                                                              (54)                 (76)             (155)
- -------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for)
  financing activities of continuing operations                                   (379)                (844)             (209)
- -------------------------------------------------------------------------------------------------------------------------------
Cash used for discontinued operations                                              (88)                 (20)             (534)
- -------------------------------------------------------------------------------------------------------------------------------
Net Increase (Decrease) in Cash and Cash Equivalents                                45                 (158)              135
Cash and Cash Equivalents at Beginning of Year                                     154                  312               177
- -------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year                                       $   199              $   154          $    312
===============================================================================================================================
Supplemental Cash Flow Information
  From Continuing Operations:
Cash paid during the year for --
   Interest (net of amount capitalized)                                           $802                 $684              $680
   Income taxes                                                                   $661                 $656              $757
- ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>

                                                                     II-19
<PAGE>

<TABLE>
CONSOLIDATED BALANCE SHEETS
At December 31, 2000 and 1999
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------
Assets                                                                                      2000                    1999
- -------------------------------------------------------------------------------------------------------------------------
                                                                                                   (in millions)
Current Assets:
<S>                                                                                    <C>                      <C>
Cash and cash equivalents                                                                $   199                 $   154
Special deposits                                                                               6                      22
Receivables, less accumulated provisions for uncollectible accounts
   of $22 in 2000 and $22 in 1999                                                          1,312                   1,043
Unrecovered retail fuel clause revenue                                                       418                     244
Fossil fuel stock, at average cost                                                           195                     274
Materials and supplies, at average cost                                                      508                     493
Other                                                                                        187                     132
- -------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                       2,825                   2,362
- -------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service                                                                                34,188                  32,702
Less accumulated depreciation                                                             14,350                  13,655
- -------------------------------------------------------------------------------------------------------------------------
                                                                                          19,838                  19,047
Nuclear fuel, at amortized cost                                                              215                     227
Construction work in progress                                                              1,569                   1,265
- -------------------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                                      21,622                  20,539
- -------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Nuclear decommissioning trusts, at fair value                                                690                     658
Net assets of discontinued operations (Note 11)                                            3,320                   2,913
Leveraged leases                                                                             596                     556
Other                                                                                        165                     156
- -------------------------------------------------------------------------------------------------------------------------
Total other property and investments                                                       4,771                   4,283
- -------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes                                                     957                     987
Prepaid pension costs                                                                        498                     368
Debt expense, being amortized                                                                 99                     104
Premium on reacquired debt, being amortized                                                  280                     302
Other                                                                                        310                     346
- -------------------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                                    2,144                   2,107
- -------------------------------------------------------------------------------------------------------------------------
Total Assets                                                                             $31,362                 $29,291
=========================================================================================================================
The accompanying notes are an integral part of these balance sheets.



                                                                     II-20
</TABLE>


<PAGE>

<TABLE>

CONSOLIDATED BALANCE SHEETS (continued)
At December 31, 2000 and 1999
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholders' Equity                                                            2000                    1999
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                        (in millions)
Current Liabilities:
<S>                                                                                          <C>                     <C>
Securities due within one year                                                               $    67                 $   329
Notes payable                                                                                  1,680                   1,955
Accounts payable                                                                                 869                     669
Customer deposits                                                                                140                     128
Taxes accrued --
   Income taxes                                                                                   88                     107
   Other                                                                                         208                     198
Interest accrued                                                                                 121                     139
Vacation pay accrued                                                                             119                     113
Other                                                                                            445                     391
- ----------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                      3,737                   4,029
- ----------------------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                                                   7,843                   7,251
- ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes                                                              4,074                   3,884
Deferred credits related to income taxes                                                         551                     640
Accumulated deferred investment tax credits                                                      664                     693
Employee benefits provisions                                                                     478                     465
Prepaid capacity revenues                                                                         58                      80
Other                                                                                            653                     430
- ----------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                                                   6,478                   6,192
- ----------------------------------------------------------------------------------------------------------------------------
Company or subsidiary obligated mandatorily redeemable
   capital and preferred securities (See accompanying statements)                              2,246                   2,246
- ----------------------------------------------------------------------------------------------------------------------------
Cumulative preferred stock of subsidiaries (See accompanying statements)                         368                     369
- ----------------------------------------------------------------------------------------------------------------------------
Common stockholders' equity (See accompanying statements)                                     10,690                   9,204
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholders' Equity                                                   $31,362                 $29,291
============================================================================================================================
Commitments and Contingent Matters (Notes 1, 2, 3, 5, 8, 9, and 10)
- ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these balance sheets.
</TABLE>

                                                                     II-21
<PAGE>

<TABLE>

CONSOLIDATED STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                                                                  2000             1999              2000              1999
- ----------------------------------------------------------------------------------------------------------------------------
                                                                      (in millions)                    (percent of total)
Long-Term Debt of Subsidiaries:
First mortgage bonds --
   Maturity                        Interest Rates
   --------                        --------------
<S>                               <C>                        <C>               <C>
   2000                            6.00%                      $      -          $   200
   2003                            6.13% to 6.63%                  325              325
   2004                            6.60%                            35               35
   2005                            6.07%                            10               10
   2006 through 2010               6.50% to 6.90%                   95               95
   2021 through 2025               6.88% to 9.00%                  635              646
   2026 through 2030               6.88%                            30               30
- ----------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                       1,130            1,341
- ----------------------------------------------------------------------------------------------------------------------------
Long-term notes payable --
   5.35% to 9.75% due 2001-2004                                    766              584
   5.38% to 8.58% due 2005-2008                                    744              964
   6.25% to 7.63% due 2009-2017                                    170              170
   6.38% to 8.12% due 2018-2038                                    793              801
   6.63% to 7.13% due 2039-2048                                  1,029            1,029
   Adjustable rates (5.79% to 7.75% at 1/1/01)
      due 2000-2005                                                734              148
- ----------------------------------------------------------------------------------------------------------------------------
Total long-term notes payable                                    4,236            3,696
- ----------------------------------------------------------------------------------------------------------------------------
Other long-term debt --
   Pollution control revenue bonds --
      Collateralized:
         4.38% to 6.75% due 2000-2026                              539              617
         Variable rates (4.73% to 5.05% at 1/1/01)
           due 2015-2025                                            90              120
      Non-collateralized:
         4.53% to 6.75% due 2015-2034                              406              263
         Variable rates (3.50% to 5.35% at 1/1/01)
           due 2011-2037                                         1,475            1,510
- ----------------------------------------------------------------------------------------------------------------------------
Total other long-term debt                                       2,510            2,510
- ----------------------------------------------------------------------------------------------------------------------------
Capitalized lease obligations                                       95               97
- ----------------------------------------------------------------------------------------------------------------------------
Unamortized debt (discount), net                                   (61)             (64)
- ----------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
   requirement -- $509 million)                                  7,910            7,580
Less amount due within one year                                     67              329
- ----------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year              7,843            7,251              37.1%             38.0%
- ----------------------------------------------------------------------------------------------------------------------------
 </TABLE>

                                                                     II-22



<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF CAPITALIZATION (continued)
At December 31, 2000 and 1999
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
                                                                 2000             1999              2000              1999
- ---------------------------------------------------------------------------------------------------------------------------
                                                                     (in millions)                    (percent of total)
Company or Subsidiary Obligated Mandatorily
   Redeemable Capital and Preferred Securities:
$25 liquidation value --
<S>                                                             <C>              <C>               <C>             <C>
   6.85% to 7.00%                                                 435              435
   7.13% to 7.38%                                                 297              297
   7.60% to 7.63%                                                 415              415
   7.75%                                                          649              649
   8.14% to 8.19%                                                 400              400
   Auction rate (6.52% at 1/1/01)                                  50               50
- ---------------------------------------------------------------------------------------------------------------------------
Total company or subsidiary obligated mandatorily
   redeemable capital and preferred securities (annual
   distribution requirement -- $169 million)                    2,246            2,246              10.6              11.8
- ---------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock of Subsidiaries:
$100 par or stated value --
   4.20% to 7.00%                                                  98               99
$25 par or stated value --
   5.20% to 5.83%                                                 200              200
Adjustable and auction rates -- at 1/1/01:
   5.14% to 5.25%                                                  70               70
- ---------------------------------------------------------------------------------------------------------------------------
Total cumulative preferred stock of subsidiaries
  (annual dividend requirement -- $19 million)                    368              369               1.7               1.9
- ---------------------------------------------------------------------------------------------------------------------------
Common Stockholders' Equity:
Common stock, par value $5 per share --
   Authorized -- 1 billion shares
   Issued   -- 2000:  701 million shares
            -- 1999:  701 million shares
   Treasury -- 2000:   19 million shares
            -- 1999:   35 million shares
   Par value                                                    3,503            3,503
   Paid-in capital                                              3,153            2,480
   Treasury, at cost                                             (545)            (919)
Retained earnings                                               4,672            4,232
Accumulated other comprehensive income
  from discontinued operations                                    (93)             (92)
- ---------------------------------------------------------------------------------------------------------------------------
Total common stockholders' equity                              10,690            9,204              50.6              48.3
- ---------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                          $21,147          $19,070             100.0%            100.0%
===========================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>


                                                                     II-23
<PAGE>

<TABLE>
CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>

                                                                                                      Accumulated
                                                                                                         Other
                                                                                                      Comprehensive
                                                           Common Stock                                  Income
                                                 -------------------------------------                    From
                                                  Par          Paid In                      Retained   Discontinued
                                                 Value         Capital       Treasury       Earnings    Operations       Total
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                 (in millions)

<S>                                            <C>             <C>         <C>              <C>        <C>           <C>
Balance at January 1, 1998                      $3,467          $2,331      $      -         $3,842     $     7       $  9,647
Net income                                           -               -             -            977           -            977
Other comprehensive income                           -               -             -              -           8              8
Stock issued                                        32             132            70              -           -            234
Stock repurchased, at cost                           -               -          (125)             -           -           (125)
Cash dividends                                       -               -             -           (933)          -           (933)
Other                                                -               -            (3)            (8)          -            (11)
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                     3,499           2,463           (58)         3,878          15          9,797
Net income                                           -               -             -          1,276           -          1,276
Other comprehensive income                           -               -             -              -        (107)          (107)
Stock issued                                         4              17             1              -           -             22
Stock repurchased, at cost                           -               -          (861)             -           -           (861)
Cash dividends                                       -               -             -           (921)          -           (921)
Other                                                -               -            (1)            (1)          -             (2)
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                     3,503           2,480          (919)         4,232         (92)         9,204
Net income                                           -               -             -          1,313           -          1,313
Other comprehensive income                           -               -             -              -          (1)            (1)
Stock issued                                         -               -           910              -           -            910
Stock repurchased, at cost                           -               -          (414)             -           -           (414)
Cash dividends                                       -               -             -           (873)          -           (873)
Other                                                -             673          (122)             -           -            551
- -------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                    $3,503          $3,153        $ (545)        $4,672      $  (93)       $10,690
===============================================================================================================================
</TABLE>

<TABLE>
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>

                                                                                  2000                 1999                1998
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                                   (in millions)

<S>                                                                            <C>                  <C>                 <C>
Consolidated Net Income                                                         $1,313               $1,276                $977
Other comprehensive income from discontinued operations,
   net of minority interest:
      Foreign currency translation adjustments                                     (2)                (165)                  12
      Less applicable income taxes (benefits)                                      (1)                 (58)                   4
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Comprehensive Income                                              $1,312               $1,169                 $985
===============================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>


                                                                II-24

<PAGE>

NOTES TO FINANCIAL STATEMENTS
Southern Company and Subsidiary Companies 2000 Annual Report


1. SUMMARY OF SIGNIFICANT ACCOUNTING
   POLICIES

General

Southern Company is the parent company of five integrated Southeast utilities, a
system service company, Southern Communications Services (Southern LINC),
Southern Company Energy Solutions, Southern Nuclear Operating Company (Southern
Nuclear), Mirant Corporation -- formerly Southern Energy, Inc. -- and other
direct and indirect subsidiaries. The integrated Southeast utilities -- Alabama
Power, Georgia Power, Gulf Power, Mississippi Power, and Savannah Electric --
provide electric service in four states. Contracts among the integrated
Southeast utilities -- related to jointly owned generating facilities,
interconnecting transmission lines, and the exchange of electric power -- are
regulated by the Federal Energy Regulatory Commission (FERC) and/or the
Securities and Exchange Commission (SEC). The system service company provides,
at cost, specialized services to Southern Company and subsidiary companies.
Southern LINC provides digital wireless communications services to the
integrated Southeast utilities and also markets these services to the public
within the Southeast. Southern Company Energy Solutions develops new business
opportunities related to energy products and services. Southern Nuclear provides
services to Southern Company's nuclear power plants. Mirant acquires, develops,
builds, owns, and operates power production and delivery facilities and provides
a broad range of energy-related services to utilities and industrial companies
in selected countries around the world. Mirant businesses include independent
power projects, integrated utilities, a distribution company, and energy trading
and marketing businesses outside the southeastern United States. As a result of
the approved spin off of Mirant, Southern Company's financial statements and
related information, both current and historical, reflect Mirant as discontinued
operations. For additional information, see Note 11.

   The financial statements reflect Southern Company's investments in the
subsidiaries on a consolidated basis. All material intercompany items have been
eliminated in consolidation. Certain prior years' data presented in the
consolidated financial statements have been reclassified to conform with the
current year presentation.

   Southern Company is registered as a holding company under the Public Utility
Holding Company Act of 1935 (PUHCA). Both the company and its subsidiaries are
subject to the regulatory provisions of the PUHCA. The integrated Southeast
utilities also are subject to regulation by the FERC and their respective state
public service commissions. The companies follow accounting principles generally
accepted in the United States and comply with the accounting policies and
practices prescribed by their respective commissions. The preparation of
financial statements in conformity with accounting principles generally accepted
in the U.S. requires the use of estimates, and the actual results may differ
from those estimates.

Regulatory Assets and Liabilities

The integrated Southeast utilities are subject to the provisions of Financial
Accounting Standards Board (FASB) Statement No. 71, Accounting for the Effects
of Certain Types of Regulation. Regulatory assets represent probable future
revenues associated with certain costs that are expected to be recovered from
customers through the ratemaking process. Regulatory liabilities represent
probable future reductions in revenues associated with amounts that are expected
to be credited to customers through the ratemaking process. Regulatory assets
and (liabilities) reflected in the Consolidated Balance Sheets at December 31
relate to the following:

                                           2000           1999
- ---------------------------------------------------------------
                                             (in millions)
Deferred income tax charges               $ 957          $ 987
Premium on reacquired debt                  280            302
Department of Energy assessments             46             52
Vacation pay                                 92             87
Postretirement benefits                      30             33
Deferred income tax credits                (551)          (640)
Accelerated amortization                   (220)           (85)
Storm damage reserves                       (34)           (29)
Other, net                                  116            144
- ---------------------------------------------------------------
Total                                     $ 716          $ 851
===============================================================

   In the event that a portion of a company's operations is no longer subject to
the provisions of FASB Statement No. 71, the company would be required to write
off related regulatory assets and liabilities that are not specifically
recoverable through regulated rates. In addition, the company would be required
to determine if any impairment to other assets exists, including plant, and
write down the assets, if impaired, to their fair value.


                                       II-25

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


Revenues and Fuel Costs

Revenues are recognized as services are rendered. Unbilled revenues are accrued
at the end of each fiscal period. Fuel costs are expensed as the fuel is used.
Electric rates for the integrated Southeast utilities include provisions to
adjust billings for fluctuations in fuel costs, the energy component of
purchased power costs, and certain other costs. Revenues are adjusted for
differences between recoverable fuel costs and amounts actually recovered in
current regulated rates.

   Southern Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts continued to average less than 1 percent of revenues.

   Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $136
million in 2000, $137 million in 1999, and $133 million in 1998. Alabama Power
and Georgia Power have contracts with the U.S. Department of Energy (DOE) that
provide for the permanent disposal of spent nuclear fuel. The DOE failed to
begin disposing of spent fuel in January 1998 as required by the contracts, and
the companies are pursuing legal remedies against the government for breach of
contract. Effective June 2000, an on-site dry storage facility for Plant Hatch
became operational. Sufficient capacity is believed to be available to continue
dry storage operations at Plant Hatch through the life of the plant. Sufficient
fuel storage capacity currently is available at Plant Vogtle to maintain
full-core discharge capability for both units into the year 2014. Sufficient
fuel storage capacity is available at Plant Farley to maintain full-core
discharge capability until the refueling outage scheduled in 2006 for Farley
Unit 1 and the refueling outage scheduled in 2008 for Farley Unit 2. Procurement
of on-site dry spent fuel storage capacity at Plant Farley is in progress, with
the intent to place the capacity in operation as early as 2005.

   Also, the Energy Policy Act of 1992 required the establishment of a Uranium
Enrichment Decontamination and Decommissioning Fund, which is funded in part by
a special assessment on utilities with nuclear plants. This assessment is being
paid over a 15-year period, which began in 1993. This fund will be used by the
DOE for the decontamination and decommissioning of its nuclear fuel enrichment
facilities. The law provides that utilities will recover these payments in the
same manner as any other fuel expense. Alabama Power and Georgia Power -- based
on its ownership interests -- estimate their respective remaining liability at
December 31, 2000, under this law to be approximately $25 million and $19
million. These obligations are recorded in the Consolidated Balance Sheets.

Depreciation and Nuclear Decommissioning

Depreciation of the original cost of plant in service is provided primarily by
using composite straight-line rates, which approximated 3.4 percent in both 2000
and 1999 and 3.3 percent in 1998. When property subject to depreciation is
retired or otherwise disposed of in the normal course of business, its original
cost -- together with the cost of removal, less salvage -- is charged to
accumulated depreciation. Minor items of property included in the original cost
of the plant are retired when the related property unit is retired. Depreciation
expense includes an amount for the expected costs of decommissioning nuclear
facilities and removal of other facilities.

   Georgia Power recorded accelerated amortization and depreciation amounting to
$135 million in 2000, $85 million in 1999, and $314 million in 1998. See Note 3
under "Georgia Power 1998 Retail Rate Order" for additional information.

   The Nuclear Regulatory Commission (NRC) requires all licensees operating
commercial power reactors to establish a plan for providing, with reasonable
assurance, funds for decommissioning. Alabama Power and Georgia Power have
external trust funds to comply with the NRC's regulations. Amounts previously
recorded in internal reserves are being transferred into the external trust
funds over periods approved by the respective state public service commissions.
The NRC's minimum external funding requirements are based on a generic estimate
of the cost to decommission the radioactive portions of a nuclear unit based on
the size and type of reactor. Alabama Power and Georgia Power have filed plans
with the NRC to ensure that -- over time -- the deposits and earnings of the
external trust funds will provide the minimum funding amounts prescribed by the
NRC.

   Site study cost is the estimate to decommission a specific facility as of the
site study year, and ultimate cost is the estimate to decommission a specific
facility as of its retirement date. The estimated costs of decommissioning --
both site study costs and ultimate costs -- based on the most current study as

                                       II-26

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


of December 31, 2000, for Alabama Power's Plant Farley and Georgia Power's
ownership interests in plants Hatch and Vogtle were as follows:

                                   Plant      Plant      Plant
                                  Farley      Hatch     Vogtle
- --------------------------------------------------------------
Site study basis (year)             1998       2000       2000
Decommissioning periods:
   Beginning year                   2017       2014       2027
   Completion year                  2031       2042       2045
- --------------------------------------------------------------
                                        (in millions)
Site study costs:
   Radiated structures              $629       $486       $420
   Non-radiated structures            60         37         48
- --------------------------------------------------------------
Total                               $689       $523       $468
==============================================================
                                        (in millions)
Ultimate costs:
   Radiated structures            $1,868     $1,004     $1,468
   Non-radiated structures           178         79        166
- --------------------------------------------------------------
Total                             $2,046     $1,083     $1,634
==============================================================

Significant assumptions:
   Inflation rate                    4.5%       4.7%       4.7%
   Trust earning rate                7.0        6.5        6.5
- --------------------------------------------------------------

   The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of changes in the assumed date of
decommissioning, changes in NRC requirements, or changes in the assumptions used
in making these estimates.

   Georgia Power has filed with the NRC an application requesting a 20-year
renewal of the licenses for both units at Plant Hatch, which would permit the
operation of both units until 2034.

   Annual provisions for nuclear decommissioning are based on an annuity method
as approved by the respective state public service commissions. The amount
expensed in 2000 and fund balances were as follows:

                                   Plant      Plant      Plant
                                  Farley      Hatch     Vogtle
- ---------------------------------------------------------------
                                        (in millions)
Amount expensed in 2000             $ 18       $ 19       $  9
Accumulated provisions:
   External trust funds,
      at fair value                 $314       $230       $146
   Internal reserves                  38         20         12
- ---------------------------------------------------------------
Total                               $352       $250       $158
===============================================================

     Alabama Power's decommissioning costs for ratemaking are based on the site
study. Effective January 1, 1999, the Georgia Public Service Commission (GPSC)
increased Georgia Power's annual provision for decommissioning expenses TO $28
million. This amount is based on the NRC generic estimate to decommission  the
radioactive portion of the facilities as of 1997. The estimates are $526 million
and $438 million for plants Hatch and Vogtle, respectively.  The ultimate costs
associated with the 1997 NRC minimum funding requirements are $1.1 billion and
$1.3  billion for plants Hatch and  Vogtle,  respectively.  Alabama  Power and
Georgia Power expect their respective state public service commissions to
periodically review and adjust, if necessary, the amounts collected in rates for
the anticipated cost of decommissioning.

Income Taxes

Southern Company uses the liability method of accounting for deferred income
taxes and provides deferred income taxes for all significant income tax
temporary differences. Investment tax credits utilized are deferred and
amortized to income over the average lives of the related property.

Property, Plant, and Equipment

Property, plant, and equipment is stated at original cost less regulatory
disallowances and impairments. Original cost includes: materials; labor; minor
items of property; appropriate administrative and general costs; payroll-related
costs such as taxes, pensions, and other benefits; and the estimated cost of
funds used during construction. The cost of funds used during construction was
$71 million in 2000, $36 million in 1999, and $19 million in 1998. The cost of
maintenance, repairs, and replacement of minor items of property is charged to
maintenance expense. The cost of replacements of property -- exclusive of minor
items of property -- is capitalized.

Leveraged Leases

Southern Company has several leveraged lease agreements -- ranging up to 30
years -- that primarily relate to energy generation, distribution, and
transportation assets. The investment income earned from these leveraged leases
is immaterial for all periods presented.


                                       II-27
<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


Impairment of Long-Lived Assets and Intangibles

Southern Company evaluates long-lived assets for impairment when events or
changes in circumstances indicate that the carrying value of such assets may not
be recoverable. The determination of whether an impairment has occurred is based
on an estimate of undiscounted future cash flows attributable to the assets, as
compared to the carrying value of the assets. If an impairment has occurred, the
amount of the impairment recognized is determined by estimating the fair value
of the assets and recording a provision for loss if the carrying value is
greater than the fair value. For assets identified as held for sale, the
carrying value is compared to the estimated fair value less the cost to sell in
order to determine if an impairment provision is required. Until the assets are
disposed of, their estimated fair value is reevaluated when circumstances or
events change.

Cash and Cash Equivalents

For purposes of the consolidated financial statements, temporary cash
investments are considered cash equivalents. Temporary cash investments are
securities with original maturities of 90 days or less.

Materials and Supplies

Generally, materials and supplies include the costs of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.

Comprehensive Income

Comprehensive income -- consisting of net income and foreign currency
translation adjustments, net of taxes -- is presented in the consolidated
financial statements. The objective of the statement is to report a measure of
all changes in common stock equity of an enterprise that result from
transactions and other economic events of the period other than transactions
with owners.

Financial Instruments for Non-Trading Activities

Southern Company uses derivative financial instruments to hedge exposures to
fluctuations in interest rates, foreign currency exchange rates, and certain
commodity prices. Gains and losses on qualifying hedges are deferred and
recognized either in income or as an adjustment to the carrying amount of the
hedged item when the transaction occurs.

   Southern Company is exposed to losses related to financial instruments in the
event of counterparties' nonperformance. The company has established controls to
determine and monitor the creditworthiness of counterparties in order to
mitigate the company's exposure to counterparty credit risk. The company is
unaware of any counterparties that will fail to meet their obligations.

   Southern Company has firm purchase commitments for equipment that require
payment in euros. As a hedge against fluctuations in the exchange rate for
euros, the company entered into forward currency swaps. The notional amount is
32 million euros maturing in 2001 through 2002. At December 31, 2000, the
unrecognized gain on these swaps was approximately $3 million.

   Other Southern Company financial instruments for which the carrying amount
did not equal fair value at December 31 were as follows:

                                       Carrying           Fair
                                         Amount          Value
- ------------------------------------------------------------------
                                            (in millions)
Long-term debt:
   At December 31, 2000                  $7,815         $7,702
   At December 31, 1999                   7,483          7,046
Capital and preferred securities:
   At December 31, 2000                   2,246          2,190
   At December 31, 1999                   2,246          1,942
- ------------------------------------------------------------------

   The fair values for long-term debt and capital and preferred securities were
based on either closing market price or closing price of comparable instruments.

2. Retirement Benefits

Southern Company has defined benefit, trusteed, pension plans that cover
substantially all employees. Southern Company provides certain medical care and
life insurance benefits for retired employees. Substantially all these employees
may become eligible for such benefits when they retire. The integrated Southeast
utilities fund trusts to the extent required by their respective regulatory
commissions. In late 2000, Southern Company adopted several pension and
postretirement benefits plan changes that had the effect of increasing benefits
to both current and future retirees. The effects of these changes will be to
increase annual pension and postretirement benefits costs by approximately
$28 million and $26 million, respectively.



                                       II-28

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   The measurement date for plan assets and obligations is September 30 for each
year. The following disclosures exclude discontinued operations.

Pension Plans

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:

                                                Projected
                                           Benefit Obligations
                                           ---------------------
                                             2000         1999
- ----------------------------------------------------------------
                                                (in millions)
Balance at beginning of year               $3,098       $3,084
Service cost                                   94           95
Interest cost                                 227          204
Benefits paid                                (145)        (143)
Actuarial (gain) loss                         (28)        (142)
- ----------------------------------------------------------------
Balance at end of year                     $3,246       $3,098
================================================================

                                                Plan Assets
                                             -------------------
                                             2000         1999
- ----------------------------------------------------------------
                                                (in millions)
Balance at beginning of year               $5,266       $4,646
Actual return on plan assets                1,030          771
Benefits paid                                (139)        (151)
- ----------------------------------------------------------------
Balance at end of year                     $6,157       $5,266
================================================================

   The accrued pension costs recognized in the Consolidated Balance
as follows:

                                             2000         1999
- ---------------------------------------------------------------
                                                (in millions)
Funded status                             $ 2,911      $ 2,168
Unrecognized transition obligation            (64)         (77)
Unrecognized prior service cost                97          106
Unrecognized net gain                      (2,446)      (1,829)
- ---------------------------------------------------------------
Prepaid asset recognized in the
   Consolidated Balance Sheets            $   498      $   368
===============================================================

   Components of the pension plans' net periodic cost were as follows:

                                    2000      1999      1998
- --------------------------------------------------------------
                                          (in millions)
Service cost                       $  94    $   95     $   86
Interest cost                        227       204        204
Expected return on
   plan assets                      (384)     (348)      (320)
Recognized net gain                  (64)      (41)       (47)
Net amortization                      (3)       (4)        (3)
- --------------------------------------------------------------
Net pension cost (income)          $(130)   $  (94)    $  (80)
==============================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                               Accumulated
                                           Benefit Obligations
                                           --------------------
                                             2000         1999
- ---------------------------------------------------------------
                                                (in millions)
Balance at beginning of year               $  980       $1,029
Service cost                                   18           21
Interest cost                                  76           68
Benefits paid                                 (43)         (36)
Actuarial (gain) loss                          21         (102)
- ---------------------------------------------------------------
Balance at end of year                     $1,052       $  980
===============================================================

                                                Plan Assets
                                             ------------------
                                             2000         1999
- ---------------------------------------------------------------
                                                (in millions)
Balance at beginning of year                 $395         $336
Actual return on plan assets                   47           36
Employer contributions                         59           60
Benefits paid                                 (42)         (37)
- ---------------------------------------------------------------
Balance at end of year                       $459         $395
===============================================================

   The accrued postretirement costs recognized in the Consolidated Balance
Sheets were as follows:

                                             2000         1999
- ---------------------------------------------------------------
                                                (in millions)
Funded status                               $(593)       $(585)
Unrecognized transition obligation            189          203
Unrecognized prior service cost                66            -
Unrecognized net loss (gain)                  (53)          10
Fourth quarter contributions                   35           26
- ---------------------------------------------------------------
Accrued liability recognized in the
   Consolidated Balance Sheets              $(356)       $(346)
===============================================================

   Components of the postretirement plans' net periodic cost were as follows:


                                    2000      1999       1998
- --------------------------------------------------------------
                                          (in millions)
Service cost                        $ 18      $ 21       $ 18
Interest cost                         76        68         68
Expected return on
   plan assets                       (34)      (26)       (21)
Recognized net gain                    -         2          2
Net amortization                      18        15         15
- --------------------------------------------------------------
Net postretirement cost             $ 78      $ 80       $ 82
==============================================================


                                       II-29

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   The weighted average rates assumed in the actuarial calculations
for both the pension plans and postretirement benefits were:

                                             2000         1999
- ---------------------------------------------------------------
Discount                                     7.50%        7.50%
Annual salary increase                       5.00         5.00
Long-term return on plan assets              8.50         8.50
- ---------------------------------------------------------------

   An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 7.29
percent for 2000, decreasing gradually to 5.50 percent through the year 2005,
and remaining at that level  thereafter.  An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
2000 as follows:

                                      1 Percent      1 Percent
                                      Increase        Decrease
- ---------------------------------------------------------------
                                            (in millions)
Benefit obligation                      $71                $63
Service and interest costs                6                  6
- ---------------------------------------------------------------

Employee Savings Plan

Southern Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were
$49 million, $46 million, and $43 million, respectively.

 3. CONTINGENCIES AND REGULATORY
    MATTERS

Georgia Power Potentially Responsible Party Status

In January 1995, Georgia Power and four other unrelated entities were notified
by the Environmental Protection Agency (EPA) that they have been designated as
potentially responsible parties under the Comprehensive Environmental Response,
Compensation, and Liability Act with respect to a site in Brunswick, Georgia. As
of December 31, 2000, Georgia Power had recorded approximately $5 million in
cumulative expenses associated with Georgia Power's agreed-upon share of the
removal and remedial investigation and feasibility study costs for this site.

   The final outcome of this matter cannot now be determined. However, based on
the nature and extent of Georgia Power's activities relating to the site,
management believes that the company's portion of any remaining remediation
costs should not be material to the financial statements.

Environmental Litigation

On November 3, 1999, the EPA brought a civil action in the U.S. District Court
against Alabama Power, Georgia Power, and the system service company. The
complaint alleges violations of the prevention of significant deterioration and
new source review provisions of the Clean Air Act with respect to five
coal-fired generating facilities in Alabama and Georgia. The civil action
requests penalties and injunctive relief, including an order requiring the
installation of the best available control technology at the affected units. The
Clean Air Act authorizes civil penalties of up to $27,500 per day, per violation
at each generating unit. Prior to January 30, 1997, the penalty was $25,000 per
day.

   The EPA concurrently issued to the integrated Southeast utilities a notice of
violation related to 10 generating facilities, which includes the five
facilities mentioned previously. In early 2000, the EPA filed a motion to amend
its complaint to add the violations alleged in its notice of violation, and to
add Gulf Power, Mississippi Power, and Savannah Electric as defendants. The
complaint and notice of violation are similar to those brought against and
issued to several other electric utilities. These complaints and notices of
violation allege that the utilities had failed to secure necessary permits or
install additional pollution equipment when performing maintenance and
construction at coal burning plants constructed or under construction prior to
1978. On August 1, 2000, the U.S. District Court granted Alabama Power's motion
to dismiss for lack of jurisdiction in Georgia and granted the system service
company's motion to dismiss on the grounds that it neither owned nor operated
the generating units involved in the proceedings. On January 12, 2001, the EPA
re-filed its claims against Alabama Power in federal district court in
Birmingham, Alabama. The EPA did not include the system service company in the
new complaint. Southern Company believes that its integrated utilities complied
with applicable laws and the EPA's regulations and interpretations in effect at
the time the work in question took place.


                                       II-30
<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash
flows, and possibly financial condition if such costs are not recovered through
regulated rates.

Mobile Energy Services' Petition for Bankruptcy

Mobile Energy Services Holdings (MESH), a subsidiary of Southern Company, is the
owner and operator of a facility that generates electricity, produces steam, and
processes black liquor as part of a pulp and paper complex in Mobile, Alabama.
On January 14, 1999, MESH filed a petition for Chapter 11 bankruptcy relief in
the U.S. Bankruptcy Court. This action was in response to Kimberly-Clark Tissue
Company's (Kimberly-Clark) announcement in May 1998 of plans to close its pulp
mill, effective September 1, 1999. The pulp mill had historically provided 50
percent of MESH's revenues.

   As a result of settlement discussions with Kimberly-Clark and MESH's
bondholders, Southern Company recorded in 1999 a $69 million after-tax write
down of its investment in MESH. Southern Company recorded an additional $10
million after-tax write down in 2000. At December 31, 2000, MESH had total
assets of $373 million and senior debt outstanding of $190 million of first
mortgage bonds and $72 million related to tax-exempt bonds. In connection with
the bond financings, Southern Company provided certain limited guarantees, in
lieu of funding debt service and maintenance reserve accounts with cash. As of
December 31, 2000, Southern Company had paid the full $41 million pursuant to
the guarantees. Southern Company continues to have guarantees outstanding of
certain potential environmental and other obligations of MESH that represent a
maximum contingent liability of $19 million at December 31, 2000. Mirant has
agreed to indemnify Southern Company for any future obligations incurred under
such guarantees.

   On August 4, 2000, MESH filed a proposed plan of reorganization with the
bankruptcy court. The proposed plan of reorganization was again amended on
February 21, 2001. Changes in circumstances since the filing of the amended plan
may require further modifications of the plan. Southern Company expects that
approval of a plan of reorganization would result in a termination of Southern
Company's ownership interest in MESH, but would not affect Southern Company's
continuing guarantee obligations described earlier. The final outcome of this
matter cannot now be determined.

California Electricity Markets Litigation

Five lawsuits have been filed in the superior courts of California alleging that
certain owners of electric generation facilities in California, including
Southern Company, engaged in various unlawful and anticompetitive acts that
served to manipulate wholesale power markets and inflate wholesale electricity
prices in California. Four of the suits seek class action status. One lawsuit
naming Southern Company, Mirant, and other generators as defendants alleges
that, as a result of the defendants' conduct, customers paid approximately $4
billion more for electricity than they otherwise would have and seeks an award
of treble damages, as well as other injunctive and equitable relief. The other
suits likewise seek treble damages and equitable relief. While two of the suits
name Southern Company as a defendant, it appears that the allegations, as they
may relate to Southern Company, are directed to activities of subsidiaries of
Mirant. One such suit names Mirant itself as a defendant. Southern Company has
notified Mirant of its claim for indemnification for costs associated with these
actions under the terms of the master separation agreement that governs the spin
off of Mirant. Mirant has undertaken the defense of all of the claims. The final
outcome of these lawsuits cannot now be determined.

Race Discrimination Litigation

On July 28, 2000, a lawsuit alleging race discrimination was filed by three
Georgia Power employees against Georgia Power, Southern Company, and the system
service company in the United States District Court for the Northern District of
Georgia. The lawsuit also raised claims on behalf of a purported class. The
plaintiffs seek compensatory and punitive damages in an unspecified amount, as
well as injunctive relief. On August 14, 2000, the lawsuit was amended to add
four more plaintiffs and a new defendant, Southern Company Energy Solutions,
Inc. The lawsuit is in the discovery phase. The final outcome of this matter
cannot now be determined.

Alabama Power Rate Adjustment Procedures

In November 1982, the Alabama Public Service Commission (APSC) adopted rates
that provide for periodic adjustments based upon Alabama Power's earned return


                                     II-31

<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


on end-of-period retail common equity. The rates also provide for adjustments to
recognize the placing of new generating facilities in retail service. Both
increases and decreases have been placed into effect since the adoption of these
rates. The rate adjustment procedures allow a return on common equity range of
13 percent to 14.5 percent and limit increases or decreases in rates to 4
percent in any calendar year. There is a moratorium on any periodic retail rate
increases (but not decreases) until July 2001.

   In December 1995, the APSC issued an order authorizing Alabama Power to
reduce balance sheet items -- such as plant and deferred charges -- at any time
the company's actual base rate revenues exceed the budgeted revenues. In April
1997, the APSC issued an additional order authorizing Alabama Power to reduce
balance sheet asset items. This order authorizes the reduction of such items up
to an amount equal to five times the total estimated annual revenue reduction
resulting from future rate reductions initiated by Alabama Power. In 1998,
Alabama Power -- in accordance with the 1995 rate order -- recorded $33 million
of additional amortization of premium on reacquired debt. Alabama Power did not
record any additional amounts in 2000 or 1999.

   The ratemaking procedures will remain in effect until the APSC votes to
modify or discontinue them.

Georgia Power 1998 Retail Rate Order

As required by the GPSC, Georgia Power filed a general rate case in 1998. On
December 18, 1998, the GPSC approved a three-year rate order for Georgia Power
ending December 31, 2001. Under the terms of the order, Georgia Power's earnings
will continue to be evaluated against a retail return on common equity range of
10 percent to 12.5 percent. Georgia Power's annual retail rates were decreased
by $262 million effective January 1, 1999, and by an additional $24 million
effective January 1, 2000. In addition, the order provided for $85 million
annually to be applied to accelerated amortization or depreciation of assets,
and up to an additional $50 million annually in 2000 and 2001 of any earnings
above the 12.5 percent return. In accordance with the rate order, Georgia Power
recorded accelerated amortization of $135 million and $85 million in 2000 and
1999, respectively. In May 2000, the GPSC ordered that these funds be maintained
in a regulatory liability account and ordered that interest be accrued on this
account at the prime rate. In 2000, interest of $10 million was recorded. These
amounts are reflected on the balance sheets in deferred credits and other
liabilities, other.

   Two-thirds of any additional earnings above the 12.5 percent return in any
year will be applied to rate reductions and the remaining one-third retained by
Georgia Power. In both 2000 and 1999, Georgia Power's return was above 12.5
percent, and accordingly, it recorded in 1999 $79 million of revenues to be
refunded to customers in 2000. In 2000, Georgia Power recorded $44 million as an
estimate of revenues to be refunded in 2001. Georgia Power is required to file a
general rate case on July 1, 2001. At that time, the GPSC is expected to
determine whether the rate order should be continued, modified, or discontinued.

4. JOINT OWNERSHIP AGREEMENTS

Alabama Power owns an undivided interest in units 1 and 2 of Plant Miller and
related facilities jointly with Alabama Electric Cooperative, Inc.

   Georgia Power owns undivided interests in plants Vogtle, Hatch, Scherer, and
Wansley in varying amounts jointly with Oglethorpe Power Corporation (OPC), the
Municipal Electric Authority of Georgia, the city of Dalton, Georgia, Florida
Power & Light Company (FP&L), and Jacksonville Electric Authority (JEA). In
addition, Georgia Power has joint ownership agreements with OPC for the Rocky
Mountain facilities and with Florida Power Corporation (FPC) for a combustion
turbine unit at Intercession City, Florida.

   At December 31, 2000, Alabama Power's and Georgia Power's ownership and
investment (exclusive of nuclear fuel) in jointly owned facilities with the
above entities were as follows:

                             Jointly Owned Facilities
                       ----------------------------------------
                         Percent     Amount of      Accumulated
                       Ownership    Investment     Depreciation
                       ----------  ----------------------------
                                         (in millions)
Plant Vogtle
   (nuclear)                45.7%       $3,301          $1,724
Plant Hatch
   (nuclear)                50.1           873             650
Plant Miller
   (coal)
   Units 1 and 2            91.8           743             312
Plant Scherer
   (coal)
   Units 1 and 2             8.4           112              53
Plant Wansley
   (coal)                   53.5           300             150
Rocky Mountain
   (pumped storage)         25.4           169              72
Intercession City
   (combustion turbine)     33.3            11               1
- ---------------------------------------------------------------



                                       II-32

<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   Alabama Power and Georgia Power have contracted to operate and maintain the
jointly owned facilities -- except for the Rocky Mountain project and
Intercession City -- as agents for their respective co-owners. The companies'
proportionate share of their plant operating expenses is included in the
corresponding operating expenses in the Consolidated Statements of Income.

5. LONG-TERM POWER SALES AND LEASE
   AGREEMENTS

The integrated Southeast utilities have long-term contractual agreements for the
sale and lease of capacity to certain non-affiliated utilities located outside
the system's service area. These agreements are firm and are related to specific
generating units. Because the energy is generally provided at cost under these
agreements, profitability is primarily affected by capacity revenues.

   Unit power from specific generating plants is currently being sold to FP&L,
FPC, and JEA. Under these agreements, approximately 1,500 megawatts of capacity
is scheduled to be sold annually unless reduced by FP&L, FPC, and JEA for the
periods after 2000 with a minimum of three years notice -- until the expiration
of the contracts in 2010. Capacity revenues from unit power sales amounted to
$177 million in 2000, $174 million in 1999, and $196 million in 1998.

   During 2000, Georgia Power and Mississippi Power entered into certain
operating leases for portions of their generating unit capacity. Capacity
revenues from these operating leases amounted to $20 million in 2000 and are
included in the financial statements as sales for resale. Minimum future
capacity revenues from noncancelable operating leases as of December 31, 2000
are as follows:

Year                                                   Amounts
- -----                                                -----------
                                                   (in millions)
2001                                                     $  53
2002                                                        66
2003                                                        66
2004                                                        66
2005                                                        27
2006 and thereafter                                        114
- ----------------------------------------------------------------
Total                                                     $392
================================================================

6. Income Taxes

At December 31, 2000, the tax-related regulatory assets and liabilities were
$957 million and $551 million, respectively. These assets are attributable to
tax benefits flowed through to customers in prior years and to taxes applicable
to capitalized interest. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits. The following tables and disclosures exclude
discontinued operations.

   Details of income tax provisions are as follows:

                                     2000       1999      1998
- ---------------------------------------------------------------
                                           (in millions)
Total provision for income taxes:
Federal --
   Current                          $ 421      $ 504     $ 548
   Deferred                            95         11        23
- ---------------------------------------------------------------
                                      516        515       571
- ---------------------------------------------------------------
State --
   Current                             71         85       102
   Deferred                             1         (1)       (3)
- ---------------------------------------------------------------
                                       72         84        99
- ---------------------------------------------------------------
Total                               $ 588      $ 599     $ 670
===============================================================

   The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:

                                                2000      1999
- ---------------------------------------------------------------
                                                 (in millions)
Deferred tax liabilities:
   Accelerated depreciation                   $3,199    $3,088
   Property basis differences                  1,105     1,175
   Other                                         650       444
- ---------------------------------------------------------------
Total                                          4,954     4,707
- ---------------------------------------------------------------
Deferred tax assets:
   Federal effect of state deferred taxes        111       113
   Other property basis differences              206       221
   Deferred costs                                190       102
   Pension and other benefits                    125       121
   Other                                         231       198
- ---------------------------------------------------------------
Total                                            863       755
- ---------------------------------------------------------------
Net deferred tax liabilities                   4,091     3,952
Portion included in current assets, net          (17)      (68)
- ---------------------------------------------------------------
Accumulated deferred income taxes
   in the Consolidated Balance Sheets         $4,074    $3,884
===============================================================

   In accordance with regulatory requirements, deferred investment tax credits
are amortized over the lives of the related property with such amortization
normally applied as a credit to reduce depreciation in the Consolidated
Statements of Income. Credits amortized in this manner amounted to $30 million

                                       II-33


<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


in 2000, $30 million in 1999, and $38 million in 1998. At December 31, 2000, all
investment tax credits available to reduce federal income taxes payable had been
utilized.

   The provision for income taxes differs from the amount of income taxes
determined by applying the applicable U.S. Federal statutory rate to earnings
before income taxes and preferred dividends of subsidiaries, as a result of the
following:

                                       2000      1999     1998
- ---------------------------------------------------------------
Federal statutory rate                 35.0%     35.0%    35.0%
State income tax,
     net of federal deduction           3.4       3.8      3.8
Non-deductible book
   depreciation                         1.7       1.9      4.0
Difference in prior years'
   deferred and current tax rate       (1.3)     (1.3)    (1.3)
Other                                  (2.1)     (0.3)    (1.6)
- ---------------------------------------------------------------
Effective income tax rate              36.7%     39.1%    39.9%
===============================================================

   Southern Company files a consolidated federal income tax return. Under a
joint consolidated income tax agreement, each subsidiary's current and deferred
tax expense is computed on a stand-alone basis.

7. Common Stock

Stock Issued and Repurchased

The amount and timing of additional equity capital to be raised in 2001 -- as
well as in subsequent years -- will be contingent on Southern Company's
investment opportunities. Equity capital may be provided from any combination of
public offerings, private placements, or the company's stock plans.

   In December 2000, Southern Company issued 28 million treasury shares of
common stock through a public offering. The offering, which included an
overallotment of 3 million shares, raised some $800 million and was priced at
$28.50 per share. The proceeds were used to repay short-term commercial paper.

   In April 1999, Southern Company's Board of Directors approved the repurchase
of up to 50 million shares of Southern Company's common stock over a two-year
period through open market or privately negotiated transactions. Under this
program, 50 million shares were repurchased by February 2000 at an average price
of $25.53. Funding for the program was provided from Southern Company's
commercial paper program.

Shares Reserved

At December 31, 2000, a total of 59 million shares was reserved for issuance
pursuant to the Southern Investment Plan, the Employee Savings Plan, the Outside
Directors Stock Plan, and the Performance Stock Plan.

Performance Stock Plan

The performance stock plan provides non-qualified stock options to a large
segment of Southern Company's employees ranging from line management to
executives. As of December 31, 2000, 5,744 current and former employees
participated in the plan. The maximum number of shares of common stock that may
be issued under the plan may not exceed 40 million. The prices of options
granted to date have been at the fair market value of the shares on the dates
of grant. Options granted to date become exercisable pro rata over a maximum
period of three years from the date of grant. Options outstanding will expire
no later than 10 years after the date of grant, unless terminated earlier by
the Southern Company Board of Directors in accordance with the plan. Stock
option activity in 1999 and 2000 for the plan is summarized below:

                                         Shares        Average
                                        Subject   Option Price
                                      To Option      Per Share
- ---------------------------------------------------------------
Balance at December 31, 1998          6,445,398         $22.77
Options granted                       2,108,818          26.56
Options canceled                        (28,630)         25.48
Options exercised                       (56,708)         19.51
- ---------------------------------------------------------------
Balance at December 31, 1999          8,468,878          23.73
Options granted                       6,977,038          23.25
Options canceled                       (226,597)         23.66
Options exercised                      (984,897)         21.63
- ---------------------------------------------------------------
Balance at December 31, 2000         14,234,422         $23.63
===============================================================
Shares reserved for future grants:
  At December 31, 1998               36,598,001
  At December 31, 1999               34,515,156
  At December 31, 2000               27,750,261
- ---------------------------------------------------------------
Options exercisable:
  At December 31, 1999                4,525,349
  At December 31, 2000                5,898,698
- ---------------------------------------------------------------

   Southern Company accounts for its stock-based compensation plans in
accordance with Accounting Principles Board Opinion No. 25. Accordingly, no
compensation expense has been recognized.


                                       II-34
<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   The following table summarizes information about options outstanding at
December 31, 2000:

                                      Price Range of Options
                                    --------------------------
                                     14-20      21-24    25-28
- --------------------------------------------------------------
Outstanding:
   Shares (in thousands)               430     10,217    3,587
   Average remaining
      life (in years)                  2.5        8.2      8.1
   Average exercise price           $17.36     $22.79   $26.77
Exerciseable:
   Shares (in thousands)               424      3,653    1,822
   Average exercise price           $17.64     $21.96   $26.84
- --------------------------------------------------------------

   The estimated fair values of stock options granted in 2000, 1999 and 1998
were derived using the Black-Scholes stock option pricing model. The following
table shows the assumptions and the weighted average fair values of stock
options:

                                     2000       1999      1998
- -----------------------------------------------------------------
Interest rate                         6.7%       5.8%      5.5%
Average expected life of
   stock options (in years)           4.0        3.7       3.7
Expected volatility of
   common stock                      20.9%      20.7%     19.2%
Expected annual dividends
   on common stock                  $1.34      $1.34     $1.34
Weighted average fair value
   of stock options granted         $3.36      $4.61     $4.27
- -----------------------------------------------------------------

   The pro forma impact on earnings of fair-value accounting for options granted
- -- as required by FASB Statement No. 123, Accounting for Stock-Based
Compensation -- is 1.2 cents per share in 2000 and less than 1 cent in both 1999
and 1998.

Diluted Earnings Per Share

For Southern Company, the only difference in computing basic and diluted
earnings per share is attributable to outstanding options under the Performance
Stock Plan. The effect of the stock options was determined using the treasury
stock method. Shares used to compute diluted earnings per share are as follows:

                                   Average Common Stock Shares
                                -------------------------------
                                2000         1999         1998
- ---------------------------------------------------------------
                                      (in thousands)
As reported shares           653,086      685,163      696,944
Effect of options              1,108          580          739
- ---------------------------------------------------------------
Diluted shares               654,194      685,743      697,683
===============================================================

Common Stock Dividend Restrictions

The income of Southern Company is derived primarily from equity in earnings of
its subsidiaries. At December 31, 2000, consolidated retained earnings included
$3.5 billion of undistributed retained earnings of the subsidiaries. Of this
amount, $2.0 billion was restricted against the payment by the subsidiary
companies of cash dividends on common stock under terms of bond indentures.

8. FINANCING

Capital and Preferred Securities

Company or subsidiary obligated mandatorily redeemable capital and preferred
securities have been issued by special purpose financing entities of Southern
Company and its subsidiaries. Substantially all the assets of these special
financing entities are junior subordinated notes issued by the related company
seeking financing. Each of these companies considers that the mechanisms and
obligations relating to the capital or preferred securities issued for its
benefit, taken together, constitute a full and unconditional guarantee by it of
the respective special financing entities' payment obligations with respect to
the capital or preferred securities. At December 31, 2000, capital securities of
$950 million and preferred securities of $1.3 billion were outstanding. Southern
Company guarantees the notes related to $950 million of capital or preferred
securities issued on its behalf.

Long-Term Debt Due Within One Year

A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:

                                               2000       1999
- --------------------------------------------------------------
                                                (in millions)
Bond improvement fund requirements              $11      $  14
Less:
   Portion to be satisfied by certifying
      property additions                         11          9
- --------------------------------------------------------------
Cash requirements                                 -          5
First mortgage bond maturities
   and redemptions                                -        200
Other long-term debt maturities                  67        124
- --------------------------------------------------------------
Total                                           $67       $329
==============================================================

   The first mortgage bond improvement fund requirements amount to 1 percent of
each outstanding series of bonds authenticated under the indentures prior to


                                       II-35

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


January 1 of each year, other than those issued to collateralize pollution
control revenue bonds and other obligations. The requirements may be satisfied
by depositing cash or reacquiring bonds, or by pledging additional property
equal to 166 2/3 percent of such requirements.

   With respect to the collateralized pollution control revenue bonds, the
integrated Southeast utilities have authenticated and delivered to trustees a
like principal amount of first mortgage bonds as security for obligations under
installment sale or loan agreements. The principal and interest on the first
mortgage bonds will be payable only in the event of default under the
agreements.

   Improvement fund requirements and/or serial maturities through 2005
applicable to other long-term debt are as follows: $67 million in 2001; $489
million in 2002; $479 million in 2003; $323 million in 2004; and $600 million in
2005.

Assets Subject to Lien

Each of Southern Company's subsidiaries is organized as a legal entity, separate
and apart from Southern Company and its other subsidiaries. The subsidiary
companies' mortgages, which secure the first mortgage bonds issued by the
companies, constitute a direct first lien on substantially all of the companies'
respective fixed property and franchises. There are no agreements or other
arrangements among the subsidiary companies under which the assets of one
company have been pledged or otherwise made available to satisfy obligations of
Southern Company or any of its other subsidiaries.

Bank Credit Arrangements

At the beginning of 2001, unused credit arrangements with banks totaled $5.1
billion, of which $3.2 billion expires during 2001, $1.0 billion during 2002,
and $900 million during 2003 and 2004. The following table outlines the credit
arrangements by company:

                                   Amount of Credit
                           -----------------------------------
                                                 Expires
                                               ---------------
                                                        2002 &
Company                   Total    Unused      2001     beyond
- -------                   ------------------------------------
                                     (in millions)
Alabama Power            $  925    $  925    $  535     $  390
Georgia Power             1,765     1,765     1,265        500
Gulf Power                  123       115       115          -
Mississippi Power           117       117       117          -
Savannah Electric            65        50        40         10
Southern Company          2,100     2,100     1,100      1,000
Other                        60        51        51          -
- --------------------------------------------------------------
Total                    $5,155    $5,123    $3,223     $1,900
==============================================================

   Approximately $2.9 billion of the credit facilities allows for term loans
ranging from one to three years. Most of the agreements include stated borrowing
rates but also allow for competitive bid loans.

   All of the credit arrangements require payment of commitment fees based on
the unused portion of the commitments or the maintenance of compensating
balances with the banks. These balances are not legally restricted from
withdrawal. Of the total $5.1 billion in unused credit, $2.1 billion, $1.65
billion, and $780 million are syndicated credit arrangements of Southern
Company, Georgia Power, and Alabama Power, respectively. These facilities also
require the payment of agent fees.

   A portion of the $5.1 billion unused credit with banks is allocated to
provide liquidity support to the companies' variable rate pollution control
bonds. The amount of variable rate pollution control bonds requiring liquidity
support as of December 31, 2000, was $1.6 billion.

   Southern Company, Alabama Power, and Georgia Power borrow through commercial
paper programs that have the liquidity support of committed bank credit
arrangements. In addition, the companies from time to time borrow under
uncommitted lines of credit with banks.

9. COMMITMENTS

Construction Program

Southern  Company is engaged in continuous construction programs, currently
estimated to total $2.9 billion in 2001, $2.6  billion in 2002,  and $1.7
billion in 2003. The construction programs are subject to periodic review
and revision, and actual construction costs may vary  from the above
estimates because of numerous factors. These factors include:  changes in
business conditions;  acquisition of additional generating assets; revised
load growth estimates;  changes in environmental regulations;  changes in
existing nuclear plants to meet new regulatory requirements;  increasing
costs of labor, equipment,  and materials; and cost of capital. At December
31, 2000, significant purchase commitments were outstanding in connection
with the construction program.  Southern Company has approximately  6,300
megawatts of additional generating capacity scheduled to be placed in
service by 2003.

   See Management's Discussion and Analysis under "Environmental Matters" for


                                       II-36

<PAGE>


NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report

information on the impact of the Clean Air Act Amendments of 1990 and other
environmental matters.

Fuel and Purchased Power Commitments

To supply a portion of the fuel requirements of the generating plants, Southern
Company has entered into various long-term commitments for the procurement of
fossil and nuclear fuel. In most cases, these contracts contain provisions for
price escalations, minimum purchase levels, and other financial commitments.
Also, Southern Company has entered into various long-term commitments for the
purchase of electricity. Total estimated long-term obligations at December 31,
2000, were as follows:

                                                     Purchased
Year                                    Fuel           Power
- ----                                 -------------------------
                                            (in millions)
2001                                 $ 2,481            $   81
2002                                   1,897                97
2003                                   1,711                99
2004                                   1,328                95
2005                                   1,055                95
2006 and thereafter                    3,764               693
- --------------------------------------------------------------
Total commitments                    $12,236            $1,160
==============================================================

Operating Leases

Southern Company has operating lease agreements with various terms and
expiration dates. These expenses totaled $42 million, $35 million, and $26
million for 2000, 1999, and 1998, respectively. At December 31, 2000, estimated
minimum rental commitments for noncancelable operating leases were as follows:

Year                                                   Amounts
- ----                                              ------------
                                                 (in millions)
2001                                                     $  57
2002                                                        71
2003                                                        71
2004                                                        68
2005                                                        64
2006 and thereafter                                        388
- --------------------------------------------------------------
Total minimum payments                                    $719
==============================================================

Guarantees

Southern Company has made separate guarantees to certain counterparties
regarding performance of contractual commitments by Mirant's trading and
marketing subsidiaries. At December 31, 2000, the total notional amount of
guarantees was $419 million and the estimated fair value of net contractual
commitments outstanding was approximately $259 million. Based upon a statistical
analysis of credit risk, Southern Company's potential exposure under these
contractual commitments would not materially differ from the estimated fair
value.

   At December 31, 2000, Southern Company had guaranteed $11 million related to
a Mirant purchase power agreement. The guarantee expires March 2001.
Southern Company also has guaranteed certain of Mirant's foreign currency swap
transactions. At December 31, 2000, notional amounts under these swaps were the
differences between (pound)44 million and $68 million and between DM370 million
and $206 million; however, due to favorable exchange ratesSouthern Company had
no exposure under these guarantees. The sterling and deutsche mark swaps expire
in 2002 and 2003, respectively.

   After the spin off, Mirant will pay Southern Company a monthly fee of 1
percent on the average aggregate maximum principal amount of all guarantees
outstanding until they are replaced or expire. Southern Company's guarantees
related to Mirant trading and marketing activities are limited to a maximum
of $425 million, with any guarantees since October 2, 2000 expiring no later
than October 2, 2001. Mirant must use reasonable efforts to release Southern
Company from all such support arrangements and will indemnify Southern Company
for any obligations incurred.

10. NUCLEAR INSURANCE

Under the Price-Anderson Amendments Act of 1988, Alabama Power and Georgia Power
maintain agreements of indemnity with the NRC that, together with private
insurance, cover third-party liability arising from any nuclear incident
occurring at the companies' nuclear power plants. The act provides funds up to
$9.5 billion for public liability claims that could arise from a single nuclear
incident. Each nuclear plant is insured against this liability to a maximum of
$200 million by private insurance, with the remaining coverage provided by a
mandatory program of deferred premiums that could be assessed, after a nuclear
incident, against all owners of nuclear reactors. A company could be assessed up
to $88 million per incident for each licensed reactor it operates, but not more
than an aggregate of $10 million per incident to be paid in a calendar year for
each reactor. Such maximum assessment, excluding any applicable state premium
taxes, for Alabama Power and Georgia Power -- based on its ownership and buyback
interests -- is $176 million and $178 million, respectively, per incident, but
not more than an aggregate of $20 million per company to be paid for each
incident in any one year.


                                       II-37

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


   Alabama Power and Georgia Power are members of Nuclear Electric Insurance
Limited (NEIL), a mutual insurer established to provide property damage
insurance in an amount up to $500 million for members' nuclear generating
facilities.

   Additionally, both companies have policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million primary
coverage. This excess insurance is also provided by NEIL.

   NEIL also covers the additional costs that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased costs of replacement power in an
amount up to $3.5 million per week -- starting 12 weeks after the outage -- for
one year and up to $2.8 million per week for the second and third years.

   Under each of the NEIL policies, members are subject to assessments if losses
each year exceed the accumulated funds available to the insurer under that
policy. The current maximum annual assessments for Alabama Power and Georgia
Power under the three NEIL policies would be $17 million and $19 million,
respectively.

   For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies shall be
dedicated first for the sole purpose of placing the reactor in a safe and stable
condition after an accident. Any remaining proceeds are to be applied next
toward the costs of decontamination and debris removal operations ordered by the
NRC, and any further remaining proceeds are to be paid either to the company or
to its bond trustees as may be appropriate under the policies and applicable
trust indentures.

   All retrospective assessments -- whether generated for liability, property,
or replacement power -- may be subject to applicable state premium taxes.

11. DISCONTINUED OPERATIONS

In April 2000, Southern Company announced an initial public offering of up to
19.9 percent of Mirant and its intentions to spin off the remaining ownership of
Mirant to Southern Company stockholders within 12 months of the initial stock
offering. On October 2, 2000, Mirant completed an initial public offering of
66.7 million shares of common stock priced at $22 per share. This represented
19.7 percent of the 338.7 million shares outstanding. As a result of the stock
offering, Southern Company recorded a $560 million increase in paid-in capital
with no gain or loss being recognized.

   On February 19, 2001, Southern Company's board of directors approved the
spin off of its remaining ownership of 272 million Mirant shares to be
completed in a tax free distribution on April 2, 2001. Shares from the spin off
will be distributed at a ratio of approximately 0.4 for every share of
Southern Company common stock held at record date.

   As a result of the spin off, Southern Company's December 31, 2000, financial
statements have been prepared with Mirant's results of operations and cash flows
shown as discontinued operations. All historical financial statements presented
and footnotes have been reclassified to conform to this presentation, with the
historical assets and liabilities of Mirant presented on the balance sheet as
net assets of discontinued operations.

   Summarized financial information for the discontinued operations is as
follows at December 31:

                                     2000       1999      1998
- ---------------------------------------------------------------
                                           (in millions)
Revenues                          $13,315     $2,265    $1,819
Income taxes                           86        127      (121)
Net income                            319        361        (9)
- ---------------------------------------------------------------

                                             2000         1999
- ---------------------------------------------------------------
                                                (in millions)
Current assets                           $  9,057     $  1,254
Total assets                               22,377       12,191
Current liabilities                         9,726        3,169
Total liabilities                          17,585        8,473
Minority and other interests                1,472          805
Net assets of
   discontinued operations                  3,320        2,913
- ---------------------------------------------------------------

12. SEGMENT AND RELATED INFORMATION

Southern Company's reportable business segment is the five integrated Southeast
utilities that provide electric service in four states. Net income and total
assets for discontinued operations are included in the reconciling eliminations
column. The all other category includes parent Southern Company, which does not

                                       II-38

<PAGE>

NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Report


allocate operating expenses to business segments. Also, this category includes
segments below the quantitative threshold for separate disclosure. These
segments include telecommunications, energy products and services, and leasing
and financing services. Intersegment revenues are not material. Financial data
for business segments and products and services are as follows:


<TABLE>

Business Segments
<CAPTION>

                                            Integrated
                                             Southeast                    All              Reconciling
Year                                         Utilities                  Other             Eliminations            Consolidated
- ----                                       ------------------------------------------------------------------------------------
                                                                               (in millions)
2000
- -----
<S>                                           <C>                     <C>                     <C>                      <C>
Operating revenues                            $  9,860                $   246                 $    (40)                $10,066
Depreciation and amortization                    1,135                     36                        -                   1,171
Interest income                                     43                      9                       (1)                     51
Interest expense                                   631                    197                        -                     828
Income taxes                                       703                   (115)                       -                     588
Segment net income (loss)                        1,109                   (115)                     319                   1,313
Total assets                                    26,917                  2,200                    2,245                  31,362
Gross property additions                         2,199                     26                        -                   2,225
- -------------------------------------------------------------------------------------------------------------------------------

                                            Integrated
                                             Southeast                    All              Reconciling
Year                                         Utilities                  Other             Eliminations            Consolidated
- ----                                       ------------------------------------------------------------------------------------
                                                                               (in millions)
1999
- -----
Operating revenues                             $ 9,125                $   221                 $    (29)               $  9,317
Depreciation and amortization                    1,046                     93                        -                   1,139
Interest income                                     64                     50                      (44)                     70
Interest expense                                   613                    155                      (37)                    731
Income taxes                                       675                    (76)                       -                     599
Segment net income (loss)                        1,073                   (154)                     357                   1,276
Total assets                                    25,336                  2,127                    1,828                  29,291
Gross property additions                         1,854                     27                        -                   1,881
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                II-39


<PAGE>

<TABLE>
NOTES (continued)
Southern Company and Subsidiary Companies 2000 Annual Eeport

<CAPTION>
                                            Integrated
                                             Southeast                    All              Reconciling
Year                                         Utilities                  Other             Eliminations            Consolidated
- -----                                      ------------------------------------------------------------------------------------
                                                                              (in millions)
1998
- ----
<S>                                           <C>                     <C>                      <C>                    <C>
Operating revenues                            $  9,363                $   167                  $   (31)               $  9,499
Depreciation and amortization                    1,323                     17                        -                   1,340
Interest income                                    150                     58                      (54)                    154
Interest expense                                   654                     99                      (54)                    699
Income taxes                                       703                    (33)                       -                     670
Segment net income (loss)                        1,083                    (97)                      (9)                    977
Total assets                                    24,420                  2,817                    1,486                  28,723
Gross property additions                         1,298                     58                        -                   1,356
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<TABLE>
Products and Services
<CAPTION>

                                                            Integrated Southeast Utilities Revenues
                                   --------------------------------------------------------------------------------------------
Year                               Retail                        Wholesale                   Other                       Total
- ----                               -------------------------------------------------------------------------------------------
                                                              (in millions)
<S>                               <C>                                <C>                      <C>                      <C>
2000                              $8,613                             $977                     $270                      $9,860
1999                               8,086                              823                      216                       9,125
1998                               8,272                              896                      195                       9,363
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>


<TABLE>

13. QUARTERLY FINANCIAL INFORMATION (UNAUDITED)

Summarized quarterly financial data for 2000 and 1999 -- including discontinued
operations for net income and earnings per share -- are as follows:
<CAPTION>

                                                                                   Per Common Share
                                                                   ----------------------------------------------------
                           Operating    Operating Consolidated                                          Price Range
Quarter Ended               Revenues       Income   Net Income    Earnings       Dividends          High          Low
- -------------              ------------------------------------   -----------------------------------------------------
                                        (in millions)
<S>                         <C>           <C>            <C>       <C>            <C>              <C>           <C>
March 2000                   $2,052        $  428         $245      $0.38          $0.335           25 7/8        20 3/8
June 2000                     2,522           598          342       0.52           0.335           27 7/8        21 11/16
September 2000                3,198         1,041          614       0.95           0.335           35            23 13/32
December 2000                 2,294           337          112       0.16           0.335           33 22/25      27 1/2

March 1999                   $1,920        $  408         $224      $0.32          $0.335           29 5/8        23 1/4
June 1999                     2,288           569          314       0.45           0.335           29 3/16       22 3/4
September 1999                3,050           981          615       0.90           0.335           28            25
December 1999                 2,059           292          123       0.19           0.335           27 1/8        22 1/16
- -----------------------------------------------------------------------------------------------------------------------
Southern Company's business is influenced by seasonal weather conditions.
</TABLE>


                                                                II-40
<PAGE>

<TABLE>

SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA 1996-2000
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
                                                                     2000           1999        1998       1997        1996
- -------------------------------------------------------------------------------------------------------------------------------

<S>                                                               <C>             <C>         <C>        <C>         <C>
Operating Revenues (in millions)                                  $10,066         $9,317      $9,499     $8,774      $8,675
Total Assets (in millions)                                        $31,362        $29,291     $28,723    $27,898     $26,352
Gross Property Additions (in millions)                             $2,225         $1,881      $1,356     $1,138      $1,064
Return on Average Common Equity (percent)                           13.20          13.43       10.04      10.30       12.53
Cash Dividends Paid Per Share of Common Stock                       $1.34          $1.34       $1.34      $1.30       $1.26
- -------------------------------------------------------------------------------------------------------------------------------
Consolidated Net Income (in millions):
   Continuing operations                                          $   994        $   915        $986       $990      $1,046
   Discontinued operations                                            319            361          (9)       (18)         81
- -------------------------------------------------------------------------------------------------------------------------------
   Total                                                           $1,313         $1,276        $977       $972      $1,127
===============================================================================================================================
Basic and Diluted Earnings Per Share of Common Stock:
   Continuing operations                                            $1.52          $1.33      $ 1.41     $ 1.45      $1.56
   Discontinued operations                                           0.49           0.53       (0.01)     (0.03)      0.12
- -------------------------------------------------------------------------------------------------------------------------------
   Total                                                            $2.01          $1.86      $ 1.40      $1.42      $1.68
===============================================================================================================================
Capitalization (in millions):
Common stock equity                                               $10,690       $  9,204    $  9,797   $  9,647    $  9,216
Preferred stock and securities                                      2,614          2,615       2,465      2,155       1,402
Long-term debt                                                      7,843          7,251       6,505      6,347       6,556
- -------------------------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year                       $21,147        $19,070     $18,767    $18,149     $17,174
===============================================================================================================================
Capitalization Ratios (percent):
Common stock equity                                                  50.6           48.3        52.2       53.2        53.7
Preferred stock and securities                                       12.3           13.7        13.1       11.9         8.2
Long-term debt                                                       37.1           38.0        34.7       34.9        38.1
- -------------------------------------------------------------------------------------------------------------------------------
Total excluding amounts due within one year                         100.0          100.0       100.0      100.0       100.0
===============================================================================================================================
Other Common Stock Data:
Book value per share (year-end)                                    $15.69         $13.82      $14.04     $13.91      $13.61
Market price per share:
   High                                                                35             29 5/8      31 9/16    26 1/4      25 7/8
   Low                                                                 20 3/8         22 1/16     23 15/16   19 7/8      21 1/8
   Close                                                               33 1/4         23 1/2      29 1/16    25 7/8      22 5/8
Market-to-book ratio (year-end) (percent)                           211.9          170.0       207.0      186.0       166.2
Price-earnings ratio (year-end) (times)                              16.5           12.6        20.8       18.2        13.5
Dividends paid (in millions)                                         $873           $921        $933       $889        $846
Dividend yield (year-end) (percent)                                   4.0            5.7         4.6        5.0         5.6
Dividend payout ratio (percent)                                      66.5           72.2        95.6       91.5        75.1
Shares outstanding (in thousands):
   Average                                                        653,087        685,163     696,944    685,033     672,590
   Year-end                                                       681,158        665,796     697,747    693,423     677,036
Stockholders of record (year-end)                                 160,116        174,179     187,053    200,508     215,246
- -------------------------------------------------------------------------------------------------------------------------------
Customers (year-end) (in thousands):
Residential                                                         3,398          3,339       3,277      3,220       3,157
Commercial                                                            527            513         497        479         464
Industrial                                                             14             15          15         16          17
Other                                                                   5              4           5          5           5
- -------------------------------------------------------------------------------------------------------------------------------
Total                                                               3,944          3,871       3,794      3,720       3,643
===============================================================================================================================
Employees (year-end)                                               26,021         26,269      25,206     24,682      25,034
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                                                II-41

<PAGE>

<TABLE>
SELECTED CONSOLIDATED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Southern Company and Subsidiary Companies 2000 Annual Report

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
                                                               2000           1999        1998       1997        1996
- -----------------------------------------------------------------------------------------------------------------------

Operating Revenues (in millions):
<S>                                                        <C>              <C>         <C>        <C>         <C>
Residential                                                $  3,367         $3,105      $3,163     $2,837      $2,894
Commercial                                                    2,922          2,743       2,763      2,595       2,559
Industrial                                                    2,292          2,237       2,267      2,139       2,136
Other                                                            32              1          79         76          76
- -----------------------------------------------------------------------------------------------------------------------
Total retail                                                  8,613          8,086       8,272      7,647       7,665
Sales for resale within service area                            377            350         374        376         409
Sales for resale outside service area                           600            473         522        510         429
- -----------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity                      9,590          8,909       9,168      8,533       8,503
Other revenues                                                  476            408         331        241         172
- -----------------------------------------------------------------------------------------------------------------------
Total                                                       $10,066         $9,317      $9,499     $8,774      $8,675
=======================================================================================================================
Kilowatt-Hour Sales (in millions):
Residential                                                  46,213         43,402      43,503     39,217      40,117
Commercial                                                   46,249         43,387      41,737     38,926      37,993
Industrial                                                   56,746         56,210      55,331     54,196      52,798
Other                                                           970            945         929        903         911
- -----------------------------------------------------------------------------------------------------------------------
Total retail                                                150,178        143,944     141,500    133,242     131,819
Sales for resale within service area                          9,579          9,440       9,847      9,884      10,935
Sales for resale outside service area                        17,190         12,929      12,988     13,761      10,777
- -----------------------------------------------------------------------------------------------------------------------
Total                                                       176,947        166,313     164,335    156,887     153,531
=======================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential                                                    7.29           7.15        7.27       7.23        7.21
Commercial                                                     6.32           6.32        6.62       6.67        6.74
Industrial                                                     4.04           3.98        4.10       3.95        4.04
Total retail                                                   5.74           5.62        5.85       5.74        5.81
Sales for resale                                               3.65           3.68        3.92       3.75        3.86
Total sales                                                    5.42           5.36        5.58       5.44        5.54
Average Annual Kilowatt-Hour
   Use Per Residential Customer                              13,702         13,107      13,379     12,296      12,824
Average Annual Revenue Per Residential Customer             $998.38        $937.81     $972.89    $889.50     $925.12
Plant Nameplate Capacity Owned (year-end) (megawatts)        32,807         31,425      31,161     31,146      31,076
Maximum Peak-Hour Demand (megawatts):
Winter                                                       26,370         25,203      21,108     22,969      22,631
Summer                                                       31,359         30,578      28,934     27,334      27,190
System Reserve Margin (at peak) (percent)                       8.1            8.5        12.8       15.0        14.0
Annual Load Factor (percent)                                   60.2           59.2        60.0       59.4        62.3
Plant Availability (percent):
Fossil-steam                                                   86.8           83.3        85.2       88.2        86.4
Nuclear                                                        90.5           89.9        87.8       88.8        89.7
- -----------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                           72.3           73.1        72.8       74.7        73.3
Nuclear                                                        15.1           15.7        15.4       16.5        16.7
Hydro                                                           1.5            2.3         3.9        4.3         4.1
Oil and gas                                                     4.0            2.8         3.3        1.7         1.5
Purchased power                                                 7.1            6.1         4.6        2.8         4.4
- -----------------------------------------------------------------------------------------------------------------------
Total                                                         100.0          100.0       100.0      100.0       100.0
=======================================================================================================================
</TABLE>

                                                                II-42
<PAGE>



                             ALABAMA POWER COMPANY

                               FINANCIAL SECTION

                                     II-43
<PAGE>



MANAGEMENT'S REPORT
Alabama Power Company 2000 Annual Report


The management of Alabama Power Company has prepared -- and is responsible for
- -- the financial statements and related information included in this report.
These statements were prepared in accordance with accounting principles
generally accepted in the United States and necessarily include amounts that are
based on the best estimates and judgments of management. Financial information
throughout this annual report is consistent with the financial statements.

    The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the accounting records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

    The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

    The audit committee of the board of directors, composed of independent
directors, provides a broad overview of management's financial reporting and
control functions. Periodically, this committee meets with management, the
internal auditors and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.

    Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.

    In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations and cash flows
of Alabama Power Company in conformity with accounting principles generally
accepted in the United States.





/s/Elmer B. Harris
Elmer B. Harris
President
and Chief Executive Officer



/s/William B. Hutchins, III
William B. Hutchins, III
Executive Vice President,
Chief Financial Officer, and Treasurer


                                       II-44

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANT


To Alabama Power Company:

We have audited the accompanying balance sheets and statements of capitalization
of Alabama Power Company (an Alabama corporation and a wholly owned subsidiary
of Southern Company) as of December 31, 2000 and 1999, and the related
statements of income, common stockholder's equity, and cash flows for each of
the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation.  We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the financial statements (pages II-55 through II-73)
referred to above present fairly, in all material respects, the financial
position of Alabama Power Company as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.




/s/Arthur Andersen LLP
Birmingham, Alabama
February 28, 2001



                                      II-45

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Alabama Power Company 2000 Annual Report


RESULTS OF OPERATIONS

Earnings

Alabama Power Company's 2000 net income after dividends on preferred stock was
$420 million, representing a $20 million (5 percent) increase from the prior
year. This improvement is primarily attributable to an increase in territorial
sales partially offset by increased non-fuel operating expenses.

    In 1999, earnings were $400 million, representing a 6 percent increase from
the prior year. This increase was due to a decrease in amortization related to
premiums paid to reacquire debt pursuant to an Alabama Public Service Commission
(APSC) order. See Note 3 to the financial statements under "Retail Rate
Adjustment Procedures" for additional details.

    The return on average common equity for 2000 was 13.58 percent compared to
13.85 percent in 1999, and 13.63 percent in 1998.

Revenues

Operating revenues for 2000 were $3.7 billion, reflecting an increase from 1999.
The following table summarizes the principal factors that have affected
operating revenues for the past two years:

                                            Increase (Decrease)
                                 Amount       From Prior Year
                           ----------------------------------------
                                   2000      2000            1999
- -------------------------------------------------------------------
                                        (in thousands)
Retail --
Base revenues                $2,108,939  $ 80,264        $ 10,022
Fuel cost recovery
  and other                     843,768    61,326          20,418
- -------------------------------------------------------------------
Total retail                  2,952,707    141,590         30,440
- -------------------------------------------------------------------
Sales for resale --
   Non affiliates               461,730    46,353         (33,596)
   Affiliates                   166,219    73,780         (11,123)
- -------------------------------------------------------------------
Total sales for resale          627,949   120,133         (44,719)
Other operating
   revenues                      86,805    20,264          13,380
- -------------------------------------------------------------------
Total operating
   revenues                  $3,667,461  $281,987        $  (899)
===================================================================
Percent change                               8.33%         (0.03)%
- --------------------------------------------------------------------

     Retail revenues of $3.0 billion in 2000 increased $142 million (5 percent)
from the prior year, compared with an increase of $30 million (1.1 percent) in
1999.  The primary contributors to the increase in revenues in 2000 were the
positive impact of weather on energy sales, continued economic growth in the
Company's service territory, and an increase in fuel revenues.  Fuel revenues
have no effect on net income because they represent the recording of revenues to
offset fuel expenses,  including the fuel component of purchased energy.  Fuel
rates billed to customers are designed to fully recover fluctuating fuel costs
over a period of time.  Higher natural gas prices and decreased hydro production
combined with increased costs of purchased power have resulted in a large
under-recovery of fuel costs at December 31, 2000.  Effective January 2001, the
Company's fuel rate was increased to address this under-recovery. The Company
expects to significantly reduce this balance over a three-year period.

                                       II-46
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


    The $20 million (30.5 percent) increase in other operating revenues in 2000
as compared to 1999 was due primarily to an increase in steam sales in
conjunction with the operation of the Company's co-generation facilities.

    Retail revenues in 1999 increased $30 million (1.1 percent) over 1998. The
predominant factors causing the rise in revenues in 1999 were continued growth
in the Company's service territory, as well as an increase in fuel revenues.
These increases were offset by the effect of milder temperatures in 1999 as
compared to 1998.

    Energy sales for resale outside the service area are predominantly unit
power sales under long-term contracts to Florida utilities. Economy energy and
energy sold under short-term contracts are also sold for resale outside the
service area. Revenues from long-term power contracts have both a capacity and
energy component. Capacity revenues reflect the recovery of fixed costs and a
return on investment under the contracts. Energy is generally sold at variable
cost. These capacity and energy components of the unit power contracts were as
follows:

                           2000         1999        1998
                  ---------------------------------------
                                   (in millions)

 Capacity                  $127         $122        $142
 Energy                     128          112         118
 --------------------------------------------------------
 Total                     $255         $234        $260
 ========================================================

    Capacity revenues from non-affiliates were relatively unchanged in 2000
compared to the prior year. Capacity revenues from non-affiliates in 1999
decreased 13.9 percent compared to 1998. This decrease was attributable to the
lowering of the equity return under formula rate contracts, as well as other
adjustments and true-ups related to contractual pricing.

    Revenues from sales to affiliated companies within the Southern electric
system, as well as purchases of energy, will vary from year to year depending on
demand and the availability and cost of generating resources at each company.
These transactions did not have a significant impact on earnings.

    Kilowatt-hour (KWH) sales for 2000 and the percent change by year were as
follows:

                                  KWH        Percent Change
                         --------------------------------------
                                 2000     2000        1999
                         --------------------------------------
                           (millions)

Residential                   16,772      6.8%       (0.6)%
Commercial                    12,989      5.5         3.4
Industrial                    22,101      0.7         1.7
Other                            206      2.3         2.3
                         ------------
Total retail                  52,068      3.8         1.4
Sales for resale -
   Non-affiliates             14,848     19.4         5.0
   Affiliates                  5,369      6.7       (15.8)
                         ------------
Total                         72,285      6.9%        0.5%
- ---------------------------------------------------------------

    The increases in 2000 and 1999 retail energy sales were primarily due to the
strength of business and economic conditions in the Company's service area. In
2000, residential energy sales experienced a 6.8 percent increase over the prior
year primarily as a result of warmer summer temperatures and cold winter weather
conditions compared to 1999. Assuming normal weather, sales to retail customers
are projected to grow approximately 2.9 percent annually on average during 2001
through 2005.

Expenses

In 2000, total operating expenses of $2.7 billion were up $235 million or 9.4
percent compared with the prior year. This increase was mainly due to a $183
million increase in fuel and purchased power costs, accompanied by a $23 million
increase in maintenance expenses.

    In 1999, total operating expenses of $2.5 billion decreased $13 million or
0.5 percent compared with 1998. This decline was mainly due to a $15 million net
decrease in fuel and purchased power costs and a $23 million decrease in
maintenance expense, offset by an increase in taxes other than income taxes of
$12 million.

                                       II-47

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


    Fuel costs constitute the single largest expense for the Company. The mix of
fuel sources for generation of electricity is determined primarily by system
load, the unit cost of fuel consumed, and the availability of hydro and nuclear
generating units. The amount and sources of generation and the average cost of
fuel per net KWH generated were as follows:

                                    --------------------------
                                     2000     1999       1998
                                    --------------------------
Total generation
    (billions of KWHs)                 65       63         63
Sources of generation
    (percent) --
      Coal                             72       72         72
      Nuclear                          19       20         18
      Hydro                             3        5          8
      Oil & Gas                         6        3          2
Average cost of fuel per net
    KWH generated
      (cents) --                     1.54     1.44       1.54
- --------------------------------------------------------------

    In 2000, total fuel and purchased power costs of $1.3 billion increased $183
million (16 percent), while total energy sales increased 4,658 million kilowatt
hours (6.9 percent) compared with the amounts recorded in 1999. Fuel and
purchased power costs in 1999 decreased $15 million (1 percent) compared to
1998.

    Purchased power consists of purchases from affiliates in the Southern
electric system and non-affiliated companies. Purchased power transactions among
the Company and its affiliates will vary from period to period depending on
demand, the availability, and the variable production cost of generating
resources at each company. During 2000, purchased power transactions among the
Company and non-affiliates increased $72 million (77 percent) due to higher
costs associated with these energy purchases and to offset decreased hydro
generation, which was down significantly compared to 1999 as a result of lower
stream flows.

    The 8.4 percent increase in maintenance expense in 2000 as compared to 1999
is primarily attributable to an increase in the maintenance of overhead
distribution lines and additional accruals to partially replenish the natural
disaster reserve. The 7.5 percent decrease in maintenance expenses in 1999 is
primarily attributable to a decrease in distribution expenses.

    Depreciation and amortization expense increased 4.9 percent in 2000 and 2.6
percent in 1999. These increases reflect additions to property, plant, and
equipment.

    Taxes other than income taxes increased $5 million (2.5 percent) in 2000 as
compared to 1999. This increase is attributable to increases in real and
personal property taxes and public utility license taxes.

    Total net interest and other charges increased $7 million (2.7 percent) in
2000. This increase results primarily from an increase in interest on long-term
debt offset by a decrease in other interest charges. Total net interest and
other charges decreased $38 million (12.3 percent) in 1999 primarily from a
decrease in the amortization of premiums on reacquired debt pursuant to an APSC
order. See Note 3 to the financial statements under "Retail Rate Adjustment
Procedures" for additional details.

Effects of Inflation

The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in utility plant with long economic lives. Conventional
accounting for historical cost does not recognize this economic loss nor the
partially offsetting gain that arises through financing facilities with
fixed-money obligations, such as long-term debt and preferred securities. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.

Future Earnings Potential

The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors. The major factor is the ability of the Company to achieve
energy sales growth while containing cost in a more competitive environment.

    The Company currently operates as a vertically integrated utility providing
electricity to customers within its traditional service area located in the


                                      II-48


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


state of Alabama. Prices for electricity provided by the Company to retail
customers are set by the APSC under cost-based regulatory principles.

    Future earnings for the traditional business in the near term will depend
upon growth in energy sales, which is subject to a number of factors. These
factors include weather, competition, new short and long-term contracts with
neighboring utilities, energy conservation practiced by customers, the
elasticity of demand, and the rate of economic growth in the Company's
traditional service area.

    The electric utility industry in the United States is continuing to evolve
as a result of regulatory and competitive factors. Among the primary agents of
change has been the Energy Policy Act of 1992 (Energy Act). The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. This enhances the
incentive for IPPs to build cogeneration plants for a utility's large industrial
and/or commercial customers and sell excess energy generation to other
utilities. Also, electricity sales for resale rates are affected by wholesale
transmission access and numerous potential new energy suppliers, including power
marketers and brokers.

   Although the Energy Act does not permit retail customer access, it was a
major catalyst for the current restructuring and consolidation taking place
within the utility industry. Numerous federal and state initiatives are in
varying stages to promote wholesale and retail competition. Among other things,
these initiatives allow customers to choose their electricity provider. Some
states have approved initiatives that result in a separation of the ownership
and/or operation of generating facilities from the ownership and/or operation of
transmission and distribution facilities. While various restructuring and
competition initiatives have been discussed in Alabama, none have been enacted.
In October 2000, the APSC completed a two-year study of electric industry
restructuring, concluding that (i) restructuring of the electric utility
industry in Alabama was not in the public interest and (ii) the APSC itself
would not mandate retail competition or electric industry restructuring without
enabling state legislation. Electric utility restructuring would require
numerous issues to be resolved, including significant ones relating to recovery
of any stranded investments, full cost recovery of energy produced, and other
issues related to the current energy crisis in California. As a result of this
crisis, many states have either discontinued or delayed implementation of
initiatives involving retail deregulation. The inability of the Company to
recover its investments, including the regulatory assets described in Note 1 to
the financial statements, could have a material adverse effect on the Company's
financial statements.

   Continuing to be a low-cost producer could provide opportunities to increase
market share and profitability in markets that evolve with changing regulation.
Conversely, if the Company does not remain a low-cost producer and provide
quality service, then energy sales growth could be limited, and this could
significantly erode earnings.

   On December 20, 1999, the Federal Energy Regulatory Commission (FERC) issued
its final rule on Regional Transmission Organizations (RTOs). The order
encouraged utilities owning transmission systems to form RTOs on a voluntary
basis. After participating in the regional conferences with customers and other
members of the public to discuss the formation of RTOs, utilities were required
to make a filing with the FERC. Southern Company and its integrated southeast
utility subsidiaries, including the Company, filed on October 16, 2000, a
proposal for the creation of an RTO. The proposal is for the formation of a
for-profit company that would have control of the bulk power transmission system
of the Company and any other participating utilities. Participants would have
the option to either maintain their ownership, divest, sell, or lease their
assets to the proposed RTO. If the FERC accepts the proposal as filed, the
creation of an RTO is not expected to have a material impact on the Company's
financial statements. The outcome of this matter cannot now be determined.

   The Energy Act amended the Public Utility Holding Company Act of 1935 (PUHCA)
to allow holding companies to form exempt wholesale generators to sell power
largely free of regulation under PUHCA. These entities are able to own and
operate power generating facilities and sell power to affiliates--under certain
restrictions.

   The Company is constructing 1,230 megawatts of wholesale generating
facilities in Autaugaville, Alabama to begin operation in 2003. Half of this
capacity has been certified by the APSC to serve the Company's retail customers

                                      II-49

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report



for seven years. The other half of the capacity will be sold into the wholesale
market and will not affect retail rates.

   Southern Company is aggressively working to maintain and expand its share of
wholesale sales in the southeastern power markets. In January 2001, Southern
Company announced the formation of a new subsidiary--Southern Power Company
(SPC). The new subsidiary will own, manage, and finance wholesale generating
assets in the Southeast. SPC will be the primary growth engine for Southern
Company's market-based energy business. Energy from its assets will be marketed
to wholesale customers under the Southern Company name.

   Currently, the Company plans to transfer the generating facilities under
construction in Autaugaville to SPC in 2001. The Company will enter into a
purchased power agreement for half of the capacity of these generating
facilities to serve its territorial customers.

    In accordance with Financial Accounting Standards Board (FASB) Statement No.
87, Employers' Accounting for Pensions, the Company recorded non-cash income of
approximately $54 million in 2000. Pension plan income in 2001 is expected to be
less as a result of plan amendments. Future pension income is dependent on
several factors including trust earnings and changes to the plan. For more
information, see Note 2.

    Rates to retail customers served by the Company are regulated by the APSC.
Rates for the Company can be adjusted periodically within certain limitations
based on earned retail rate of return compared with an allowed return. There is
a moratorium on any periodic retail rate increases (but not decreases) until
July 2001.

     In  December 1995,  the APSC issued an order authorizing the Company to
reduce balance sheet items -- such as plant and deferred charges -- at any time
the Company's actual base rate revenues exceed the budgeted revenues.  In April
1997,  the APSC issued an additional order authorizing the Company to reduce
balance sheet asset items.  This order authorizes the reduction of such items up
to an amount equal to five times the total estimated annual revenue reduction
resulting from future rate reductions initiated by the Company.

    In April 2000, the APSC approved an amendment to the Company's existing rate
structure to provide for the recovery of retail costs associated with certified
purchased power agreements. In November 2000, the APSC certified a seven-year
purchased power agreement pertaining to 615 megawatts of the Company's wholesale
generating facilities under construction in Autaugaville, Alabama, all of which
will be delivered in 2003. In addition, the APSC certified a seven-year
purchased power agreement with a third party for approximately 630 megawatts;
one half of the power will be delivered in 2003 while the remaining half is
scheduled for delivery in 2004.

    The Company is involved in various matters being litigated. See Note 3 to
the financial statements for information regarding material issues that could
possibly affect future earnings.

    Compliance costs related to current and future environmental laws and
regulations could affect earnings if such costs are not fully recovered. The
Clean Air Act and other important environmental items are discussed later under
"Environmental Matters."

    The staff of the Securities and Exchange Commission (SEC) has questioned
certain of the current accounting practices of the electric utility industry --
including the Company -- regarding the recognition, measurement, and
classification in the financial statements of decommissioning costs for nuclear
generating facilities. In response to these questions, the FASB is reviewing the
accounting for liabilities related to the retirement of long-lived assets,
including nuclear decommissioning. If the FASB issues new accounting rules, the
estimated costs of retiring the Company's nuclear and other facilities may be
required to be recorded as liabilities in the Balance Sheets. Also, the annual
provisions for such costs could change. Because of the Company's current ability
to recover asset retirement costs through rates, these changes would not have a
significant adverse effect on results of operations. See Note 1 to the financial
statements under "Depreciation and Nuclear Decommissioning" for additional
information.

    The Company is subject to the provisions of FASB Statement No. 71,
Accounting for the Effects of Certain Types of Regulation. In the event that a
portion of the Company's operations is no longer subject to these provisions,
the Company would be required to write off related regulatory assets and
liabilities that are not specifically recoverable, and determine if any other
assets have been impaired. See Note 1 to the financial statements under


                                       II-50

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report



"Regulatory Assets and Liabilities" for additional information.

New Accounting Standard

In June 2000,  FASB issued Statement No. 138, an amendment of Statement No.
133, Accounting for Derivative Instruments and Hedging Activities.
Statement No. 133,  as amended, establishes accounting and reporting
standards for derivative instruments and for hedging activities. Statement
No. 133 requires  that certain derivative instruments be recorded in the
balance sheet as either an asset or liability measured at fair value,  and
that changes in the fair value be recognized currently in earnings  unless
specific hedge accounting criteria are met.

   The Company utilizes financial instruments to reduce its exposure to changes
in foreign currency exchange rates. The Company also enters into commodity
related forward contracts to limit exposure to changing prices on certain fuel
purchases and electricity purchases and sales.

   Substantially all of the Company's bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain of
these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

   The Company adopted Statement No. 133 effective January 1, 2001, with no
material impact. The application of the new rules is still evolving and further
guidance from FASB is expected, which could additionally impact the Company's
financial statements.

Exposure to Market Risk

Due to cost-based rate regulation, the Company has limited exposure to market
volatility in interest rates, commodity fuel prices, and prices of electricity.
To mitigate residual risks relative to movements in electricity prices, the
Company enters into fixed price contracts for the purchase and sale of
electricity through the wholesale electricity market. Realized gains and losses
are recognized in the income statement as incurred. At December 31, 2000,
exposure from these activities was not material to the Company's financial
position, results of operations, or cash flows. Also, based on the Company's
overall interest rate exposure at December 31, 2000, a near-term 100 basis point
change in interest rates would not materially affect the financial statements.

FINANCIAL CONDITION

Overview

The Company's financial condition remained stable in 2000. This stability is the
continuation over recent years of growth in retail energy sales and cost control
measures combined with a significant lowering of the cost of capital, achieved
through the refinancing and/or redemption of higher-cost long-term debt and
preferred stock.

    The Company had gross property additions of $871 million in 2000. The
majority of funds needed for gross property additions for the last several years
have been provided from operating activities, principally from earnings and
non-cash charges to income such as depreciation and deferred income taxes. The
Statements of Cash Flows provide additional details.

Capital Structure

The Company's ratio of common equity to total capitalization -- including
short-term debt -- was 42.2 percent in 2000 and 42.4 percent in 1999 and 1998.

    During 2000, the Company issued $250 million of senior notes, the proceeds
of which were used primarily to repay short-term indebtedness.

Capital Requirements

Capital expenditures are estimated to be $735 million for 2001, $891 million for
2002, and $625 million for 2003. See Note 4 to the financial statements for
additional details.


   Actual construction costs may vary from estimates because of changes in such
factors as: business conditions; environmental regulations; nuclear plant
regulations; load projections; the cost and efficiency of construction labor,

                                       II-51

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


equipment, and materials; and the cost of capital. In addition, there can be no
assurance that costs related to capital expenditures will be fully recovered.

Other Capital Requirements

The Company will continue to retire higher-cost debt and preferred stock and
replace these obligations with lower-cost capital if market conditions permit.

Environmental Matters

In November 1990, the Clean Air Act Amendments (Clean Air Act) were signed into
law. Title IV of the Clean Air Act -- the acid rain compliance provision of the
law -- significantly affected the integrated Southeast utility subsidiaries of
Southern Company, including the Company. Specific reductions in sulfur dioxide
and nitrogen oxide emissions from fossil-fired generating plants were required
in two phases. Phase I compliance began in 1995 and some 50 generating plants
within the operating companies of Southern Company were brought into compliance
with Phase I requirements.

   Southern Company achieved Phase I sulfur dioxide compliance at the affected
plants by switching to low-sulfur coal, which required some equipment upgrades.
Construction expenditures for Phase I compliance totaled approximately $25
million for the Company.

    Phase II sulfur dioxide compliance was required in 2000. The Company used
emission allowances and fuel switching to comply with Phase II requirements.
Also, equipment to control nitrogen oxide emissions was installed on additional
system fossil-fired units as necessary to meet Phase II limits. Compliance with
Phase II increased total construction expenditures through 2000 by $63 million

    The one-hour ozone non-attainment standards for the Birmingham area have
been set and must be implemented in May 2003. Two generating plants will be
affected in the Birmingham area. Additional construction expenditures for
compliance with these new rules are currently estimated at approximately $230
million.

    In July 1997, the Environmental Protection Agency (EPA), revised the
national ambient air quality standards for ozone and particulate matter. This
revision made the standards significantly more stringent. In the subsequent
litigation of these standards, the U. S. Supreme Court recently dismissed
certain challenges but found the EPA's implementation program for the new ozone
standard unlawful and remanded it to the EPA. In addition, the Federal District
of Columbia Circuit Court of Appeals will address other legal challenges to
these standards in mid-2001. If the standards are eventually upheld,
implementation could be required by 2007 to 2010.

    In September 1998, the EPA issued the final regional nitrogen oxide
reduction rules to the states for implementation. Compliance is required by May
31, 2004. The final rule affects 21 states including Alabama. If standards and
rules for implementation are upheld, the additional construction expenditures
for compliance are estimated at approximately $189 million.

    A significant portion of costs related to the acid rain and ozone
non-attainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.

    On November 3, 1999, the EPA brought a civil action against the Company in
the U. S. District Court. The complaint alleges violations of the prevention of
significant deterioration and new source review provisions of the Clean Air Act
with respect to coal-fired generating facilities at the Company's Plants Miller,
Barry, and Gorgas. The civil action requests penalties and injunctive relief,
including an order requiring the installation of the best available control
technology at the affected units. The EPA concurrently issued a notice of
violation to the Company relating to these specific facilities, as well as
Plants Greene County and Gaston. In early 2000, the EPA filed a motion to amend
its complaint to add the violations alleged in its notice of violation. The
complaint and notice of violation are similar to those brought against and
issued to several other electric utilities. The complaint and notice of
violation allege that the Company had failed to secure necessary permits or
install additional pollution control equipment when performing maintenance and
construction at coal burning plants constructed or under construction prior to
1978. On August 1, 2000, the U.S. District Court granted the Company's motion to
dismiss for lack of jurisdiction in Georgia and granted the system service

                                       II-52


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


company's motion to dismiss on the grounds that it neither owned nor operated
the generating units involved in the proceedings. On January 12, 2001, the EPA
re-filed its claims against the Company in federal district court in Birmingham,
Alabama. The EPA did not include the system service company in the new
complaint. The Company believes that it complied with applicable laws and EPA
regulations and interpretations in effect at the time the work in question took
place. The Clean Air Act authorizes civil penalties of up to $27,500 per day per
violation at each generating unit. Prior to January 30, 1997, the penalty was
$25,000 per day. An adverse outcome of this matter could require substantial
capital expenditures that cannot be determined at this time and possibly require
payment of substantial penalties. This could affect future results of
operations, cash flows, and possibly financial condition if such costs are not
recovered through regulated rates.

    In December 2000, the EPA completed its utility studies for mercury and
other hazardous air pollutants (HAPS) and issued a determination that an
emission control program for mercury and perhaps, other HAPS is warranted. The
program is to be developed over the next four years under the Maximum Achievable
Control Technology (MACT) provisions of the Clean Air Act. This determination is
being challenged in the courts. In January 2001, the EPA proposed guidance for
the determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls would likely
be required around 2010. Litigation of the BART rules is probable in the near
future.

    Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

   The EPA and state environmental regulatory agencies are reviewing and
evaluating various other matters including: control strategies to reduce
regional haze; limits on pollutant discharges to impaired waters; water intake
restrictions; and hazardous waste disposal requirements. The impact of any new
standards will depend on the development and implementation of applicable
regulations.

    The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur substantial costs to clean up properties.
The Company conducts studies to determine the extent of any required cleanup
costs and will recognize in the financial statements costs to clean up known
sites. The Company has not incurred any cleanup costs to date.

   Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of any such changes
cannot be determined at this time.

   Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Company. The impact of new legislation -- if any
- -- will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.

Sources of Capital

The Company plans to obtain the funds required for construction and other
purposes from sources similar to those used in the past, which were primarily
from internal sources. However, the type and timing of any financings - if
needed - will depend on market conditions and regulatory approval. In recent
years, financings primarily have utilized unsecured debt and trust preferred
securities.


                                       II-53

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Alabama Power Company 2000 Annual Report


    As required by the Nuclear Regulatory Commission and as ordered by the APSC,
the Company has established external trust funds for nuclear decommissioning
costs. In 1994, the Company also established an external trust fund for
postretirement benefits as ordered by the APSC. The cumulative effect of funding
these items over a long period will diminish internally funded capital and may
require capital from other sources. For additional information concerning
nuclear decommissioning costs, see Note 1 to the financial statements under
"Depreciation and Nuclear Decommissioning."

Cautionary Statement Regarding Forward-Looking
Information

This Annual Report includes forward-looking statements in addition to historical
information. Forward-looking information includes, among other things,
statements concerning projected retail sales growth and scheduled completion of
new generation. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology.  The Company cautions that
there are various important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements; accordingly,
there can be no assurance that such indicated results will be realized. These
factors include the impact of recent and future federal and state regulatory
change, including legislative and regulatory initiatives regarding deregulation
and restructuring of the electric utility industry and also changes in
environmental and other laws and regulations to which the Company is subject,
as well as changes in application of existing laws and regulations;  current
and future litigation, including the pending EPA civil action against the
Company; the extent and timing of the entry of additional competition in the
markets of the Company;  potential business strategies, including acquisitions
or dispositions of assets or businesses, which cannot be assured to be
completed or beneficial; internal restructuring or other restructuring options,
that may be pursued by the Company; state and federal rate  regulation in the
United  States;  political, legal and economic conditions and developments in
the United States;  financial market conditions and the results of financing
efforts;  the impact of fluctuations in commodity prices, interest rates and
customer demand; weather and other natural phenomena; the ability of the
Company to obtain additional generating capacity at competitive prices; and
other factors discussed elsewhere herein and in other reports (including Form
10-K) filed from time to time by the Company with the SEC.



                                       II-54

<PAGE>

<TABLE>

STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Alabama Power Company 2000 Annual Report
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------
                                                                                 2000                1999               1998
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                          (in thousands)
Operating Revenues:
<S>                                                                        <C>                 <C>                <C>
Retail sales                                                               $2,952,707          $2,811,117         $2,780,677
Sales for resale --
  Non-affiliates                                                              461,730             415,377            448,973
  Affiliates                                                                  166,219              92,439            103,562
Other revenues                                                                 86,805              66,541             53,161
- -----------------------------------------------------------------------------------------------------------------------------
Total operating revenues                                                    3,667,461           3,385,474          3,386,373
- -----------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
  Fuel                                                                        963,275             855,632            900,309
  Purchased power --
    Non-affiliates                                                            164,881              93,204             92,998
    Affiliates                                                                184,014             180,563            150,897
  Other                                                                       538,529             531,696            527,954
Maintenance                                                                   301,046             277,724            300,383
Depreciation and amortization                                                 364,618             347,574            338,822
Taxes other than income taxes                                                 209,673             204,645            193,049
- -----------------------------------------------------------------------------------------------------------------------------
Total operating expenses                                                    2,726,036           2,491,038          2,504,412
- -----------------------------------------------------------------------------------------------------------------------------
Operating Income                                                              941,425             894,436            881,961
Other Income (Expense):
Interest income                                                                38,167              55,896             68,553
Equity in earnings of unconsolidated subsidiaries (Note 5)                      3,156               2,650              5,271
Other, net                                                                     (7,909)            (24,861)           (37,050)
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Before Interest and Income Taxes                                     974,839             928,121            918,735
- -----------------------------------------------------------------------------------------------------------------------------
Interest and Other:
Interest expense, net                                                         251,663             245,235            285,940
Distributions on preferred securities of subsidiary (Note 8)                   25,549              24,662             22,354
- -----------------------------------------------------------------------------------------------------------------------------
Total interest and other, net                                                 277,212             269,897            308,294
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes                                                  697,627             658,224            610,441
Income taxes (Note 7)                                                         261,555             241,880            218,575
- -----------------------------------------------------------------------------------------------------------------------------
Net Income                                                                    436,072             416,344            391,866
Dividends on Preferred Stock                                                   16,156              16,464             14,643
- -----------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock                              $  419,916          $  399,880         $  377,223
=============================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>

                                                                II-55

<PAGE>
<TABLE>

STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Alabama Power Company 2000 Annual Report
<CAPTION>

- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                    2000                 1999                1998
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                              (in thousands)
Operating Activities:
<S>                                                                            <C>                  <C>                 <C>
Net income                                                                     $ 436,072            $ 416,344           $ 391,866
Adjustments to reconcile net income
  to net cash provided from operating activities --
       Depreciation and amortization                                             412,998              403,332             425,167
       Deferred income taxes and investment tax credits, net                      66,166               29,039              79,430
       Other, net                                                                (37,703)             (12,661)            (66,739)
       Changes in certain current assets and liabilities --
          Receivables, net                                                      (125,652)              33,509              49,747
          Fossil fuel stock                                                       23,967               (1,344)             (9,052)
          Materials and supplies                                                 (10,662)             (17,968)             11,932
          Accounts payable                                                       107,702              (38,556)             26,583
          Energy cost recovery, retail                                           (69,190)             (97,869)            (95,427)
          Other                                                                   23,336                5,930              (9,803)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities                                      827,034              719,756             803,704
- ----------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                                        (870,581)            (809,044)           (610,132)
Other                                                                            (49,414)             (72,218)            (52,940)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                                          (919,995)            (881,262)           (663,072)
- ----------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase (decrease) in notes payable, net                                        184,519               96,824            (306,882)
Proceeds --
  Other long-term debt                                                           250,000              751,650           1,462,990
  Preferred securities                                                                 -               50,000                   -
  Preferred stock                                                                      -                    -             200,000
  Capital contributions from parent company                                      204,371              204,347              30,000
Redemptions --
  First mortgage bonds                                                          (111,009)            (470,000)           (771,108)
  Other long-term debt                                                            (5,987)            (104,836)           (107,776)
  Preferred stock                                                                      -              (50,000)            (88,000)
Payment of preferred stock dividends                                             (16,110)             (15,788)            (15,596)
Payment of common stock dividends                                               (417,100)            (399,600)           (367,100)
Other                                                                               (951)             (15,864)            (66,869)
- ----------------------------------------------------------------------------------------------------------------------------------
Net cash provided from financing activities                                       87,733               46,733             (30,341)
- ----------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                                           (5,228)            (114,773)            110,291
Cash and Cash Equivalents at Beginning of Period                                  19,475              134,248              23,957
- ----------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                      $ 14,247             $ 19,475           $ 134,248
==================================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the period for --
  Interest (net of amount capitalized)                                          $237,066             $229,305            $234,360
  Income taxes (net of refunds)                                                  175,303              170,121             188,942
- ----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.

</TABLE>





                                                                II-56



<PAGE>
<TABLE>

BALANCE SHEETS
At December 31, 2000 and 1999
Alabama Power Company 2000 Annual Report
<CAPTION>

- ---------------------------------------------------------------------------------------------------------------------------------
Assets                                                                                          2000                     1999
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                                       (in thousands)
Current Assets:
<S>                                                                                      <C>                      <C>
Cash and cash equivalents                                                                $    14,247               $   19,475
Receivables --
  Customer accounts receivable                                                               337,870                  265,900
  Under-recovered retail fuel clause revenue                                                 237,817                  168,627
  Other accounts and notes receivable                                                         60,315                   42,137
  Affiliated companies                                                                        95,704                   40,083
  Accumulated provision for uncollectible accounts                                            (6,237)                  (4,117)
Refundable income taxes                                                                            -                   17,997
Fossil fuel stock, at average cost                                                            60,615                   84,582
Materials and supplies, at average cost                                                      178,299                  167,637
Other                                                                                         52,624                   46,011
- ---------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                       1,031,254                  848,332
- ---------------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service                                                                                12,431,575               11,783,078
Less accumulated provision for depreciation                                                5,107,822                4,901,384
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                           7,323,753                6,881,694
Nuclear fuel, at amortized cost                                                               94,050                  106,836
Construction work in progress                                                                744,974                  715,153
- ---------------------------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                                       8,162,777                7,703,683
- ---------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Equity investments in unconsolidated subsidiaries (Note 5)                                    38,623                   34,891
Nuclear decommissioning trusts                                                               313,895                  286,653
Other                                                                                         13,612                   12,156
- ---------------------------------------------------------------------------------------------------------------------------------
Total other property and investments                                                         366,130                  333,700
- ---------------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes (Note 7)                                            345,550                  330,405
Prepaid pension costs                                                                        268,259                  213,971
Debt expense, being amortized                                                                  8,758                    9,563
Premium on reacquired debt, being amortized                                                   76,020                   83,895
Department of Energy assessments                                                              24,588                   27,685
Other                                                                                         95,772                   97,470
- ---------------------------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                                      818,947                  762,989
- ---------------------------------------------------------------------------------------------------------------------------------
Total Assets                                                                             $10,379,108               $9,648,704
=================================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>







                                                                II-57



<PAGE>
<TABLE>

BALANCE SHEETS
At December 31, 2000 and 1999
Alabama Power Company 2000 Annual Report
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity                                                         2000                     1999
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                    (in thousands)
Current Liabilities:
<S>                                                                                  <C>                      <C>
Securities due within one year (Note 10)                                              $       844               $  100,943
Notes payable                                                                             281,343                   96,824
Accounts payable --
  Affiliated                                                                              124,534                   91,315
  Other                                                                                   209,205                  140,842
Customer deposits                                                                          36,814                   31,704
Taxes accrued --
  Income taxes                                                                             65,505                  100,569
  Other                                                                                    19,471                   18,295
Interest accrued                                                                           33,186                   26,365
Vacation pay accrued                                                                       31,711                   30,112
Other                                                                                      97,743                   84,267
- ------------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                                 900,356                  721,236
- ------------------------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                                            3,425,527                3,190,378
- ------------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 7)                                              1,401,424                1,240,344
Deferred credits related to income taxes (Note 7)                                         222,485                  265,102
Accumulated deferred investment tax credits                                               249,280                  260,367
Employee benefits provisions                                                               84,816                   82,298
Prepaid capacity revenues (Note 6)                                                         58,377                   79,703
Other                                                                                     176,559                  155,901
- ------------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                                            2,192,941                2,083,715
- ------------------------------------------------------------------------------------------------------------------------------
Company obligated mandatorily redeemable preferred
  securities of subsidiary trusts holding company junior
  subordinated notes (See accompanying statements) (Note 8)                               347,000                  347,000
- ------------------------------------------------------------------------------------------------------------------------------
Cumulative preferred stock (See accompanying statements)                                  317,512                  317,512
- ------------------------------------------------------------------------------------------------------------------------------
Common stockholder's equity (See accompanying statements)                               3,195,772                2,988,863
- ------------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity                                            $10,379,108               $9,648,704
==============================================================================================================================
The accompanying notes are an integral part of these balance sheets.


</TABLE>





                                                                II-58
<PAGE>
<TABLE>

STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Alabama Power Company 2000 Annual Report
<CAPTION>


- ----------------------------------------------------------------------------------------------------------------------------------
                                                                           2000             1999            2000             1999
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                (in thousands)              (percent of total)
Long-Term Debt:
First mortgage bonds --
       Maturity                           Interest Rates
       --------                           --------------
       <S>                                <C>                        <C>              <C>                    <C>              <C>
       March 1, 2000                      6.00%                      $        -       $  100,000
       2023 through 2024                  7.30% - 9.00%                 488,991          500,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                              488,991          600,000
- ----------------------------------------------------------------------------------------------------------------------------------
Senior notes --
       5.35% due November 15, 2003                                      156,200          156,200
       7.850% due May 15, 2003                                          250,000                -
       7.125% due August 15, 2004                                       250,000          250,000
       5.49% due November 1, 2005                                       225,000          225,000
       7.125% due October 1, 2007                                       200,000          200,000
       5.375% due October 1, 2008                                       160,000          160,000
       6.25% to 7.125% due 2010-2048                                  1,202,581        1,207,622
- ----------------------------------------------------------------------------------------------------------------------------------
Total senior notes                                                    2,443,781        2,198,822
- ----------------------------------------------------------------------------------------------------------------------------------
Other long-term debt --
     Pollution control revenue bonds --
       Collateralized:
         5.50% due 2024                                                  24,400           24,400
         Variable rates (4.73% to 5.05% at 1/1/01)
           due 2015-2017                                                 89,800           89,800
       Non-collateralized:
         6.69% due 2021                                                  65,000                -
         Variable rates (3.50% to 5.30% at 1/1/01)
           due 2021-2028                                                360,940          425,940
- ----------------------------------------------------------------------------------------------------------------------------------
Total other long-term debt (Note 9)                                     540,140          540,140
- ----------------------------------------------------------------------------------------------------------------------------------
Capitalized lease obligations                                             4,165            5,111
- ----------------------------------------------------------------------------------------------------------------------------------
Unamortized debt premium (discount), net                                (50,706)         (52,752)
- ----------------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
  requirement -- $179.6 million)                                      3,426,371        3,291,321
Less amount due within one year                                             844          100,943
- ----------------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year                  $3,425,527       $3,190,378           46.9%            46.6%
- ----------------------------------------------------------------------------------------------------------------------------------

</TABLE>





                                                                II-59


<PAGE>
<TABLE>

STATEMENTS OF CAPITALIZATION (continued)
At December 31, 2000 and 1999
Alabama Power Company 2000 Annual Report

<CAPTION>

- ----------------------------------------------------------------------------------------------------------------------------------
                                                                           2000             1999            2000             1999
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)             (percent of total)
Company Obligated Mandatorily
  Redeemable Preferred Securities:  (Note 8)
$25 liquidation value --
<S>                                                                 <C>               <C>
  7.375%                                                             $   97,000       $   97,000
  7.60%                                                                 200,000          200,000
Auction rate (6.52% at 1/1/01)                                           50,000           50,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $25.6 million)                347,000          347,000             4.8              5.1
- ----------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$100 par or stated value --
  4.20% to 4.92%                                                         47,512           47,512
$25 par or stated value --
  5.20% to 5.83%                                                        200,000          200,000
Auction rates -- at 1/1/01
  5.14% to 5.25%                                                         70,000           70,000
- ----------------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $16.5 million)                    317,512          317,512             4.4              4.6
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stockholder's Equity:
Common stock, par value $40 per share --
  Authorized  - 6,000,000 shares
  Outstanding - 5,608,955 shares in 2000 and 1999
  Par value                                                             224,358          224,358
  Paid-in capital                                                     1,743,363        1,538,992
  Premium on Preferred Stock                                                 99               99
Retained earnings                                                     1,227,952        1,225,414
- ----------------------------------------------------------------------------------------------------------------------------------
Total common stockholder's equity                                     3,195,772        2,988,863            43.9             43.7
- ----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                                 $7,285,811       $6,843,753          100.0%            100.0%
==================================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>







                                                                II-60


<PAGE>

<TABLE>
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Alabama Power Company 2000 Annual Report

<CAPTION>

- ---------------------------------------------------------------------------------------------------------------------------
                                                                                 Premium on
                                                     Common         Paid-In      Preferred      Retained
                                                      Stock         Capital        Stock        Earnings        Total
- ---------------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)

<S>                                                <C>           <C>                  <C>      <C>              <C>
Balance at January 1, 1998                          $224,358      $1,304,645           $99      $1,221,467       $2,750,569
Net income after dividends on preferred stock              -               -             -         377,223          377,223
Capital contributions from parent company                  -          30,000             -               -           30,000
Cash dividends on common stock                             -               -             -        (367,100)        (367,100)
Other                                                      -               -             -          (6,625)          (6,625)
- ----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                         224,358       1,334,645            99       1,224,965        2,784,067
Net income after dividends on preferred stock              -               -             -         399,880          399,880
Capital contributions from parent company                  -         204,347             -               -          204,347
Cash dividends on common stock                             -               -             -        (399,600)        (399,600)
Other                                                      -               -             -             169              169
- ----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                         224,358       1,538,992            99       1,225,414        2,988,863
Net income after dividends on preferred stock              -               -             -         419,916          419,916
Capital contributions from parent company                  -         204,371             -               -          204,371
Cash dividends on common stock                             -               -             -        (417,100)        (417,100)
Other                                                      -               -             -            (278)            (278)
- ----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                        $224,358      $1,743,363           $99      $1,227,952       $3,195,772
============================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>








                                                                II-61
<PAGE>



NOTES TO FINANCIAL STATEMENTS
Alabama Power Company 2000 Annual Report

1.   SUMMARY OF SIGNIFICANT ACCOUNTING
     POLICIES

General

Alabama Power Company (the Company) is a wholly owned subsidiary of Southern
Company, which is the parent company of five integrated Southeast utilities, a
system service company (SCS), Southern Communications Services (Southern LINC),
Southern Company Energy Solutions, Southern Nuclear Operating Company (Southern
Nuclear), Mirant Corporation--formerly Southern Energy, Inc.-- and other direct
and indirect subsidiaries. The integrated Southeast utilities --Alabama Power
Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company,
and Savannah Electric and Power Company-- provide electric service in four
states. Contracts among the integrated Southeast utilities - related to
jointly-owned generating facilities, interconnecting transmission lines, and the
exchange of electric power -- are regulated by the Federal Energy Regulatory
Commission (FERC) and/or the Securities and Exchange Commission (SEC). SCS
provides, at cost, specialized services to Southern Company and its subsidiary
companies. Southern LINC provides digital wireless communications services to
the integrated Southeast utilities and also markets these services to the public
within the Southeast. Southern Company Energy Solutions develops new business
opportunities related to energy products and services. Southern Nuclear provides
services to Southern Company's nuclear power plants. Mirant acquires, develops,
builds, owns, and operates power production and delivery facilities and provides
a broad range of energy-related services to utilities and industrial companies
in selected countries around the world. Mirant businesses include independent
power projects, integrated utilities, a distribution company, and energy trading
and marketing businesses outside the southeastern United States.

    Southern Company is registered as a holding company under the Public Utility
Holding Company Act of 1935 (PUHCA). Both Southern Company and its subsidiaries
are subject to the regulatory provisions of the PUHCA. The Company is also
subject to regulation by the FERC and the Alabama Public Service Commission
(APSC). The Company follows accounting principles generally accepted in the
United States and complies with the accounting policies and practices prescribed
by its respective regulatory commissions. The preparation of financial
statements in conformity with accounting principles generally accepted in the
United States requires the use of estimates, and the actual results may differ
from those estimates.

   Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.

Related-Party Transactions

The Company has an agreement with SCS under which the following services are
rendered to the Company at cost: general and design engineering, purchasing,
accounting and statistical, finance and treasury, tax, information resources,
marketing, auditing, insurance and pension administration, human resources,
systems and procedures, and other services with respect to business and
operations and power pool transactions. Costs for these services amounted to
$187 million, $218 million, and $201 million during 2000, 1999, and 1998,
respectively.

   The Company also has an agreement with Southern Nuclear to operate Plant
Farley and provide the following nuclear-related services at cost: general
executive and advisory services; general operations, management and technical
services; administrative services including procurement, accounting,
statistical, and employee relations; and other services with respect to business
and operations. Costs for these services amounted to $148 million, $135 million,
and $137 million during 2000, 1999, and 1998, respectively.

Regulatory Assets and Liabilities

The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues associated with
certain costs that are expected to be recovered from customers through the
ratemaking process. Regulatory liabilities represent probable future reductions
in revenues associated with amounts that are expected to be credited to
customers through the ratemaking process.

                                       II-62


<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report

   Regulatory assets and (liabilities) reflected in the Balance Sheets at
December 31 relate to the following:

                                               2000        1999
                                         -----------------------
                                              (in millions)
Deferred income tax charges                   $ 346       $ 330
Deferred income tax credits                    (222)       (265)
Premium on reacquired debt                       76          84
Department of Energy assessments                 25          28
Vacation pay                                     32          30
Natural disaster reserve                        (18)        (19)
Other, net                                       30          59
- ----------------------------------------------------------------
Total                                         $ 269       $ 247
================================================================

    In the event that a portion of the Company's operations is no longer subject
to the provisions of FASB Statement No. 71, the Company would be required to
write off related regulatory assets and liabilities that are not specifically
recoverable through regulated rates. In addition, the Company would be required
to determine if any impairment to other assets exists, including plant, and
write down the assets, if impaired, to their fair values.

Revenues and Fuel Costs

The Company currently operates as a vertically integrated utility providing
electricity to retail customers within its traditional service area located
within the state of Alabama, and to wholesale customers in the southeast.
Revenues are recognized as services are rendered. Unbilled revenues are accrued
at the end of each fiscal period. Fuel revenues have no effect on net income
because they represent the recording of revenues to offset fuel expenses,
including the fuel component of purchased energy. Fuel rates billed to customers
are designed to fully recover fluctuating fuel costs over a period of time.
Higher natural gas prices and decreased hydro production combined with increased
costs of purchased power have resulted in a large under-recovery of fuel costs
at December 31, 2000. Effective January 2001, the Company's fuel rate was
increased to address this under-recovery. The Company expects to significantly
reduce this balance over a three-year period.

    The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts continue to average less than 1 percent of revenues.

    Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $61
million in 2000, $63 million in 1999, and $59 million in 1998.

    The Company has a contract with the U.S. Department of Energy (DOE) that
provides for the permanent disposal of spent nuclear fuel. The DOE failed to
begin disposing of spent fuel in January 1998 as required by the contract, and
the Company is pursuing legal remedies against the government for breach of
contract. Sufficient fuel storage capacity is available at Plant Farley to
maintain full-core discharge capability until the refueling outage scheduled in
2006 for Farley Unit 1 and the refueling outage scheduled in 2008 for Farley
Unit 2. Procurement of on-site dry spent fuel storage capacity at Plant Farley
is in progress, with the intent to place the capacity in operation as early as
2005.

    Also, the Energy Policy Act of 1992 required the establishment of a Uranium
Enrichment Decontamination and Decommissioning Fund, which is funded in part by
a special assessment on utilities with nuclear plants. This assessment is being
paid over a 15-year period, which began in 1993. This fund will be used by the
DOE for the decontamination and decommissioning of its nuclear fuel enrichment
facilities. The law provides that utilities will recover these payments in the
same manner as any other fuel expense. The Company estimates its remaining
liability under this law to be approximately $25 million at December 31, 2000.
This obligation is recognized in the accompanying Balance Sheets.

Depreciation and Nuclear Decommissioning

Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.2 percent in 2000, 1999 and 1998. When property subject to depreciation is
retired or otherwise disposed of in the normal course of business, its cost --
together with the cost of removal, less salvage -- is charged to accumulated
provision for depreciation. Minor items of property included in the original
cost of the plant are retired when the related property unit is retired.
Depreciation expense includes an amount for the expected cost of decommissioning
nuclear facilities and removal of other facilities.

                                       II-63

<PAGE>
NOTES (continued)
Alabama Power Company 2000 Annual Report


    The Nuclear Regulatory Commission (NRC) requires all licensees operating
commercial nuclear power reactors to establish a plan for providing, with
reasonable assurance, funds for decommissioning. The Company has established
external trust funds to comply with the NRC's regulations. Amounts previously
recorded in internal reserves are being transferred into the external trust
funds over periods approved by the APSC. The NRC's minimum external funding
requirements are based on a generic estimate of the cost to decommission the
radioactive portions of a nuclear unit based on the size and type of reactor.
The Company has filed plans with the NRC to ensure that -- over time -- the
deposits and earnings of the external trust funds will provide the minimum
funding amounts prescribed by the NRC.

    Site study cost is the estimate to decommission the facility as of the site
study year, and ultimate cost is the estimate to decommission the facility as of
retirement date. The estimated costs of decommissioning -- both site study costs
and ultimate costs - based on the most current study for Plant Farley were as
follows:


  Site study basis (year)                           1998

  Decommissioning periods:
      Beginning year                                2017
      Completion year                               2031
  -------------------------------------------------------------
                                                (in millions)
  Site study costs:
      Radiated structures                          $  629
      Non-radiated structures                          60
  -------------------------------------------------------------
  Total                                            $  689
  =============================================================
                                                (in millions)
  Ultimate costs:
      Radiated structures                          $1,868
      Non-radiated structures                         178
  -------------------------------------------------------------
  Total                                            $2,046
  =============================================================

    The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of changes in the assumed date of
decommissioning, changes in NRC requirements, or changes in the assumptions used
in making estimates.

    Annual provisions for nuclear decommissioning are based on an annuity method
as approved by the APSC. The amount expensed in 2000 and fund balances as of
December 31, 2000 were:

                                                (in millions)
  Amount expensed in 2000                            $ 18
  ----------------------------------------------------------

  Accumulated provisions:
      External trust funds, at fair value            $314
      Internal reserves                                38
  ----------------------------------------------------------
  Total                                              $352
  ==========================================================

    All of the Company's decommissioning costs are approved for recovery by the
APSC through the ratemaking process. Significant assumptions include an
estimated inflation rate of 4.5 percent and an estimated trust earnings rate of
7.0 percent. The Company expects the APSC to periodically review and adjust, if
necessary, the amounts collected in rates for the anticipated cost of
decommissioning.

Income Taxes

The Company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property.

Allowance For Funds Used During Construction
 (AFUDC)

AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The amount of AFUDC capitalized was $43 million in 2000,
$23 million in 1999, and $9 million in 1998. The composite rate used to
determine the amount of allowance was 9.6 percent in 2000, 8.8 percent in 1999,
and 9.0 percent in 1998. AFUDC, net of income tax, as a percent of net income
after dividends on preferred stock was 8.4 percent in 2000, 4.7 percent in 1999,
and 1.8 percent in 1998.

                                       II-64

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


Property, Plant, and Equipment

Property, plant, and equipment is stated at original cost. Original cost
includes: materials; labor; minor items of property; appropriate administrative
and general costs; payroll-related costs such as taxes, pensions, and other
benefits; and the estimated cost of funds used during construction. The cost of
maintenance, repairs and replacement of minor items of property is charged to
maintenance expense. The cost of replacements of property --exclusive of minor
items of property -- is capitalized.

Financial Instruments

The Company uses derivative financial instruments to hedge exposures to
fluctuations in foreign currency exchange rates and certain commodity prices.
Gains and losses on qualifying hedges are deferred and recognized either in
income or as an adjustment to the carrying amount of the hedged item when the
transaction occurs.

    The Company is exposed to losses related to financial instruments in the
event of counterparties' nonperformance. The Company has established controls to
determine and monitor the creditworthiness of counterparties in order to
mitigate the Company's exposure to counterparty credit risk. The Company is
unaware of any counterparties that will fail to meet their obligations.

    The Company has firm purchase commitments for equipment that require payment
in euros. As a hedge against fluctuations in the exchange rate for euros, the
Company entered into forward currency swaps. The notional amount is 16 million
euros maturing in 2001 through 2002. At December 31, 2000, the unrecognized gain
on these swaps was approximately $1 million.

    Other Company financial instruments for which the carrying amount did not
equal fair value at December 31 are as follows:


                                       Carrying         Fair
                                        Amount         Value
                                      -------------------------
                                             (in millions)

 Long-term debt:
   At December 31, 2000                 $3,422         $3,375
   At December 31, 1999                  3,286          3,045
 Preferred Securities:
   At December 31, 2000                    347            344
   At December 31, 1999                    347            299
 --------------------------------------------------------------

   The fair value for long-term debt and preferred securities was based on
either closing market prices or closing prices of comparable instruments.

Cash and Cash Equivalents

For purposes of the financial statements, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.

Materials and Supplies

Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.

Natural Disaster Reserve

In accordance with an APSC order the Company has established a Natural Disaster
Reserve. The Company is allowed to accrue $250 thousand per month, until the
maximum accumulated provision of $32 million is attained. Higher accruals to
restore the reserve to its authorized level are allowed whenever the balance in
the reserve declines below $22.4 million. At December 31, 2000, the reserve
balance was $18 million.

2.   RETIREMENT BENEFITS

The Company has defined benefit, trusteed, pension plans that cover
substantially all employees. The Company provides certain medical care and life
insurance benefits for retired employees. Substantially all employees may become
eligible for such benefits when they retire. The Company funds trusts to the

                                       II-65

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


extent deductible under federal income tax regulations or to the extent required
by the APSC and FERC.

    In late 2000, the Company adopted several pension and postretirement benefit
plan changes that had the effect of increasing benefits to both current and
future retirees. The effects of these changes will be to increase annual pension
and postretirement benefits cost by approximately $8 million and $12 million,
respectively.

    The measurement date for plan assets and obligations is September 30 of each
year. The weighted average rates assumed in the actuarial calculations for both
the pension and postretirement benefit plans were:

                                          2000        1999
- ------------------------------------------------------------
Discount                                  7.50%       7.50%
Annual salary increase                    5.00        5.00
Long-term return on plan assets           8.50        8.50
- ------------------------------------------------------------

Pension Plan

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:

                                            Projected
                                       Benefit Obligations
                                    ---------------------------
                                            2000        1999
- ---------------------------------------------------------------
                                             (in millions)
Balance at beginning of year                $873        $868
Service cost                                  22          23
Interest cost                                 64          57
Benefits paid                                (51)        (51)
Actuarial gain and
    employee transfers                        (8)        (24)
- ---------------------------------------------------------------
Balance at end of year                      $900        $873
===============================================================

                                           Plan Assets
                                    ---------------------------
                                            2000        1999
- ---------------------------------------------------------------
                                            (in millions)
Balance at beginning of year              $1,647      $1,461
Actual return on plan assets                 302         245
Benefits paid                                (51)        (51)
Employee transfers                            23          (8)
- ---------------------------------------------------------------
Balance at end of year                    $1,921      $1,647
===============================================================

      The accrued pension costs recognized in the Balance Sheets were as
follows:

                                              2000       1999
- ---------------------------------------------------------------
                                              (in millions)
Funded status                               $1,021      $ 774
Unrecognized transition obligation             (21)       (25)
Unrecognized prior service cost                 33         36
Unrecognized net actuarial gain               (765)      (571)
- ---------------------------------------------------------------
Prepaid asset recognized in the
    Balance Sheets                          $  268      $ 214
===============================================================

    Components of the pension plans' net periodic cost were as follows:

                                         2000      1999      1998
- ------------------------------------------------------------------
                                            (in millions)
Service cost                             $ 23    $  23       $ 22
Interest cost                              64       57         59
Expected return on plan assets           (119)    (109)      (102)
Recognized net actuarial gain             (20)     (14)       (16)
Net amortization                           (2)      (2)        (2)
- ------------------------------------------------------------------
Net pension income                       $(54)   $ (45)      $(39)
==================================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                           Accumulated
                                        Benefit Obligations
                                    ---------------------------
                                            2000      1999
- ----------------------------------------------------------------
                                            (in millions)
Balance at beginning of year                $264       $278
Service cost                                   4          5
Interest cost                                 19         18
Benefits paid                                (12)       (10)
Actuarial gain and
    employee transfers                       (11)       (27)
- ---------------------------------------------------------------
Balance at end of year                      $264       $264
===============================================================

                                              Plan Assets
                                    ---------------------------
                                            2000       1999
- ---------------------------------------------------------------
                                             (in millions)
Balance at beginning of year                $161       $137
Actual return on plan assets                  25         18
Employer contributions                        18         16
Benefits paid                                (12)       (10)
- ---------------------------------------------------------------
Balance at end of year                      $192       $161
===============================================================

                                       II-66

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


      The accrued postretirement costs recognized in the Balance Sheets
were as follows:

                                              2000       1999
- ---------------------------------------------------------------
                                              (in millions)
Funded status                                 $(72)     $(103)
Unrecognized transition obligation              49         53
Unrecognized net actuarial gain                (35)       (12)
Fourth quarter contributions                     4          8
- ---------------------------------------------------------------
Accrued liability recognized in the
    Balance Sheets                           $(54)      $ (54)
===============================================================

    Components of the plans' net periodic cost were as follows:

                                         2000    1999     1998
- ---------------------------------------------------------------
                                            (in millions)
Service cost                             $  4    $  5      $ 5
Interest cost                              19      18       18
Expected return on plan assets            (13)    (11)      (9)
Net amortization                            4       4        4
- ---------------------------------------------------------------
Net postretirement cost                  $ 14    $ 16      $18
===============================================================

    An additional assumption used in measuring the accumulated postretirement
benefit obligations was a weighted average medical care cost trend rate of 7.29
percent for 2000, decreasing gradually to 5.50 percent through the year 2005,
and remaining at that level thereafter. An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
2000 as follows:

                                     1 Percent     1 Percent
                                      Increase      Decrease
- ---------------------------------------------------------------
                                           (in millions)
Benefit obligation                      $15          $14
Service and interest costs                1            1
===============================================================

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The Company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were $11
million, $10 million, and $10 million, respectively.

Work Force Reduction Programs

The Company has incurred costs for work force reduction programs totaling $2.6
million, $5.6 million and $19.4 million for the years 2000, 1999 and 1998,
respectively. These costs were deferred and are being amortized in accordance
with regulatory treatment. The unamortized balance of these costs was $1.4
million at December 31, 2000.

3.  CONTINGENCIES AND REGULATORY
    MATTERS

Environmental Litigation

On November 3, 1999, the Environmental Protection Agency (EPA), brought a civil
action against the Company in the U. S. District Court. The complaint alleges
violations of the prevention of significant deterioration and new source review
provision of the Clean Air Act with respect to coal-fired generating facilities
at the Company's Plants Miller, Barry and Gorgas. The civil action requests
penalties and injunctive relief, including an order requiring the installation
of the best available control technology at the affected units. The Clean Air
Act authorizes civil penalties of up to $27,500 per day, per violation at each
generating unit. Prior to January 30, 1997, the penalty was $25,000 per day.

   The EPA concurrently issued to the Company a notice of violation relating to
these specific facilities, as well as Plants Greene County and Gaston. In early
2000, the EPA filed a motion to amend its complaint to add the violations
alleged in its notice of violation. The complaint and the notice of violation
are similar to those brought against and issued to several other electric
utilities. The complaint and the notice of violation allege that the Company
failed to secure necessary permits or install additional pollution control
equipment when performing maintenance and construction at coal burning plants
constructed or under construction prior to 1978. On August 1, 2000, the U.S.
District Court granted the Company's motion to dismiss for lack of jurisdiction
in Georgia and granted SCS's motion to dismiss on the grounds that it neither
owned nor operated the generating units involved in the proceedings. On January
12, 2001, the EPA re-filed its claims against the Company in federal district
court in Birmingham, Alabama. The EPA did not include SCS in the new complaint.
The Company believes that it complied with applicable laws and the EPA's


                                       II-67
<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


regulations and interpretations in effect at the time the work in question took
place.

   An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash
flows, and possibly financial condition if such costs are not recovered through
regulated rates.

Retail Rate Adjustment Procedures

The APSC has adopted rates that provide for periodic adjustments based upon the
Company's earned return on end-of-period retail common equity. The rates also
provide for adjustments to recognize the placing of new generating facilities
into retail service. Both increases and decreases have been placed into effect
since the adoption of these rates. The rate adjustment procedures allow a return
on common equity range of 13.0 percent to 14.5 percent and limit increases or
decreases in rates to 4 percent in any calendar year. There is a moratorium on
any periodic retail rate increases (but not decreases) until July 2001.

    In December 1995, the APSC issued an order authorizing the Company to reduce
balance sheet items -- such as plant and deferred charges -- at any time the
Company's actual base rate revenues exceed the budgeted revenues. In April 1997,
the APSC issued an additional order authorizing the Company to reduce balance
sheet asset items. This order authorizes the reduction of such items up to an
amount equal to five times the total estimated annual revenue reduction
resulting from future rate reductions initiated by the Company. In 1998, the
Company - in accordance with the 1995 rate order - recorded $33 million of
additional amortization of premium on reacquired debt. The Company did not
record any additional amounts in 2000 or 1999.

    In April 2000, the APSC approved an amendment to the Company's existing rate
structure to provide for the recovery of retail costs associated with certified
purchased power agreements. In November 2000, the APSC certified a seven-year
purchased power agreement pertaining to 615 megawatts of the Company's wholesale
generating facilities under construction in Autaugaville, Alabama, all of which
will be delivered in 2003. In addition, the APSC certified a seven-year
purchased power agreement with a third party for approximately 630 megawatts;
one half of the power will be delivered in 2003 while the remaining half is
scheduled for delivery in 2004.

    The Company's ratemaking procedures will remain in effect until the APSC
votes to modify or discontinue them.

4.   FINANCING AND COMMITMENTS

Construction Program

To the extent possible, the Company's construction program is expected to be
financed primarily from internal sources. Short-term debt is often utilized and
the amounts available are discussed below. The Company may issue additional
long-term debt and preferred securities for debt maturities, redeeming
higher-cost securities, and meeting additional capital requirements.

    The Company currently estimates property additions to be $735 million in
2001, $891 million in 2002, and $625 million in 2003.

    The Company is constructing 1,230 megawatts of wholesale generating
facilities in Autaugaville, Alabama to begin operation in 2003. Half of this
capacity has been certified by the APSC to serve the Company's retail customers
for seven years. The other half of the capacity will be sold into the wholesale
market and will not affect retail rates. During 2001, the Company plans to
transfer these generating facilities to Southern Power Company (SPC), the new
wholesale subsidiary formed by Southern Company. If the Company transfers
wholesale generation assets to SPC as planned, construction expenditures for the
years 2001 through 2003 will be $598 million, $591 million and $583 million,
respectively.

    During 2001, the Company expects to complete the replacement of the steam
generators at Plant Farley, as well as the construction of new generating
capacity at Plant Barry. In addition, significant construction will continue
related to transmission and distribution facilities and the upgrading of
generating plants, including the expenditures necessary to comply with
environmental regulation.

    The capital budget is subject to periodic review and revision, and actual
capital costs incurred may vary from estimates because of changes in such
factors as: business conditions; environmental regulations; nuclear plant

                                     II-68

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


regulations; load projections; the cost and efficiency of construction labor,
equipment, and materials; and the cost of capital. In addition, there can be no
assurance that costs related to capital expenditures will be fully recovered.

Financing

The ability of the Company to finance its capital budget depends on the amount
of funds generated internally and the funds it can raise by external financing.
The Company plans to obtain the funds required for construction and other
purposes from sources similar to those used in the past, which were primarily
from internal sources. However, the type and timing of any financings - if
needed - will depend on market conditions and regulatory approval. In recent
years, financings primarily have utilized unsecured debt and trust preferred
securities.

Bank Credit Arrangements

The Company maintains committed lines of credit in the amount of $925 million
(including $418 million of such lines which are dedicated to funding purchase
obligations relating to variable rate pollution control bonds). Of these lines,
$535 million expire at various times during 2001 and $390 million expire in
2004. In certain cases, such lines require payment of a commitment fee based on
the unused portion of the commitment or the maintenance of compensating balances
with the banks. Because the arrangements are based on an average balance, the
Company does not consider any of its cash balances to be restricted as of any
specific date. Moreover, the Company borrows from time to time pursuant to
arrangements with banks for uncommitted lines of credit.

    At December 31, 2000, the Company had regulatory approval to have
outstanding up to $750 million of short-term borrowings.

Assets Subject to Lien

The Company's mortgage, as amended and supplemented, securing the first mortgage
bonds issued by the Company, constitutes a direct lien on substantially all of
the Company's fixed property and franchises.

Purchased Power Commitments

The Company has entered into various long-term commitments for the purchase of
electricity. Estimated total long-term obligations at December 31, 2000 were as
follows:

Year                                             Commitments
- ----                                           ---------------
                                                (in millions)
2001                                               $   -
2002                                                   -
2003                                                  16
2004                                                  34
2005                                                  37
2006 and beyond                                      180
- -----------------------------------------------------------
Total commitments                                  $ 267
===========================================================

Fuel Commitments

To supply a portion of the fuel requirements of its generating plants, the
Company has entered into various long-term commitments for the procurement of
fossil and nuclear fuel. In most cases, these contracts contain provisions for
price escalations, minimum purchase levels and other financial commitments.
Total estimated long-term obligations at December 31, 2000, were as follows:

Year                                             Commitments
- ----                                           ---------------
                                                (in millions)
2001                                               $  998
2002                                                  841
2003                                                  722
2004                                                  669
2005                                                  525
2006 - 2024                                         2,287
- -----------------------------------------------------------
Total commitments                                  $6,042
===========================================================

                                       II-69

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


Operating Leases

The Company has entered into coal rail car rental agreements with various terms
and expiration dates. These expenses totaled $20.9 million in 2000, $17.8
million in 1999, and $5.8 million in 1998. At December 31, 2000, estimated
minimum rental commitments for noncancellable operating leases were as follows:


Year                                          Commitments
- ----                                         -------------
                                               (in millions)
2001                                             $ 22.2
2002                                               21.6
2003                                               21.2
2004                                               18.2
2005                                               15.5
2006 - 2017                                        44.7
- -----------------------------------------------------------
Total minimum payments                           $143.4
===========================================================

5.   JOINT OWNERSHIP AGREEMENTS

The Company and Georgia Power Company own equally all of the outstanding capital
stock of Southern Electric Generating Company (SEGCO), which owns electric
generating units with a total rated capacity of 1,020 megawatts, together with
associated transmission facilities. The capacity of these units is sold equally
to the Company and Georgia Power Company under a contract which, in substance,
requires payments sufficient to provide for the operating expenses, taxes,
interest expense and a return on equity, whether or not SEGCO has any capacity
and energy available. The term of the contract extends automatically for
two-year periods, subject to either party's right to cancel upon two year's
notice. The Company's share of expenses totaled $85 million in 2000, $92 million
in 1999 and $74 million in 1998, and is included in "Purchased power from
affiliates" in the Statements of Income.

    In addition, the Company has guaranteed unconditionally the obligation of
SEGCO under an installment sale agreement for the purchase of certain pollution
control facilities at SEGCO's generating units, pursuant to which $24.5 million
principal amount of pollution control revenue bonds are outstanding. Georgia
Power Company has agreed to reimburse the Company for the pro rata portion of
such obligation corresponding to its then proportionate ownership of stock of
SEGCO if the Company is called upon to make such payment under its guaranty.

    At December 31, 2000, the capitalization of SEGCO consisted of $51 million
of equity and $78 million of long-term debt on which the annual interest
requirement is $5.3 million. SEGCO paid dividends totaling $5.1 million in 2000,
$4.3 million in 1999, and $8.7 million in 1998, of which one-half of each was
paid to the Company. SEGCO's net income was $5.9 million, $5.4 million, and $7.5
million for 2000, 1999 and 1998, respectively.

    The Company's percentage ownership and investment in jointly-owned
generating plants at December 31, 2000, is as follows:

                             Total
                            Megawatt         Company
    Facility (Type)         Capacity        Ownership
 ---------------------    ------------    -------------
 Greene County                500            60.00%   (1)
    (coal)
 Plant Miller
    Units 1 and 2           1,320            91.84%   (2)
    (coal)
 -----------------------------------------------------------
(1)  Jointly owned with an affiliate, Mississippi Power Company.
(2)  Jointly owned with Alabama Electric Cooperative, Inc.


                             Company         Accumulated
       Facility             Investment       Depreciation
 ---------------------    --------------    ---------------
                                    (in millions)
 Greene County                $100               $ 46
 Plant Miller
    Units 1 and 2              743                312
 ----------------------------------------------------------

6.   LONG-TERM POWER SALES AGREEMENTS

General

The Company and the other integrated utility subsidiaries of Southern Company
have entered into long-term contractual agreements for the sale of capacity and
energy to certain non-affiliated utilities located outside the system's service
area. These agreements -- expiring at various dates discussed below -- are firm
and pertain to capacity related to specific generating units. Because the energy
is generally sold at cost under these agreements, profitability is primarily
affected by revenues from capacity sales. The Company's capacity revenues
amounted to $127 million in 2000, $122 million in 1999, and $142 million in
1998.

    Unit power from Plant Miller is being sold to Florida Power Corporation
(FPC), Florida Power & Light Company (FP&L), and Jacksonville Electric Authority
(JEA). Under these agreements, approximately 1,235 megawatts of capacity are
                                       II-70

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report



scheduled to be sold through 2001. Thereafter, these sales will remain at that
approximate level -- unless reduced by FP&L, FPC, and JEA for the periods after
2001 with a minimum of three years notice -- until the expiration of the
contracts in 2010. No notices of cancellation have been received.

Alabama Municipal Electric Authority (AMEA)
Capacity Contracts

In August 1986, the Company entered into a firm power sales contract with AMEA
entitling AMEA to scheduled amounts of capacity (to a maximum 100 megawatts) for
a period of 15 years commencing September 1, 1986 (1986 Contract). In October
1991, the Company entered into a second firm power sales contract with AMEA
entitling AMEA to scheduled amounts of additional capacity (to a maximum 80
megawatts) for a period of 15 years commencing October 1, 1991 (1991 Contract).
In both contracts the power will be sold to AMEA for its member municipalities
that previously were served directly by the Company as wholesale customers.
Under the terms of the contracts, the Company received payments from AMEA
representing the net present value of the revenues associated with the
respective capacity entitlements, discounted at effective annual rates of 9.96
percent and 11.19 percent for the 1986 and 1991 contracts, respectively. These
payments are being recognized as operating revenues and the discounts are being
amortized to other interest expense as scheduled capacity is made available over
the terms of the contracts.

     In order to secure AMEA's advance payments and the Company's performance
obligation under the contracts, the Company issued and delivered to an escrow
agent first mortgage bonds representing the maximum amount of liquidated damages
payable by the Company in the event of a default under the contracts. No
principal or interest is payable on such bonds unless and until a default by the
Company occurs. As the liquidated damages decline under the contracts, a portion
of the bonds equal to the decreases is returned to the Company. At December 31,
2000, $61.3 million of such bonds were held by the escrow agent under the
contracts.

7.   INCOME TAXES

At December 31, 2000, the tax-related regulatory assets and liabilities were
$346 million and $222 million, respectively. These assets are attributable to
tax benefits flowed through to customers in prior years and to taxes applicable
to capitalized interest. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.

    Details of the income tax provisions are as follows:

                                      2000       1999       1998
                                 --------------------------------
                                           (in millions)
Total provision for income taxes:
Federal --
 Current                              $168       $194       $123
 Deferred                               60         24         72
- -----------------------------------------------------------------
                                       228        218        195
- -----------------------------------------------------------------
State --
  Current                               27         19         16
  Deferred                               7          5          7
- ------------------------------------------------------ ----------
                                        34         24         23
- -----------------------------------------------------------------
Total                                 $262       $242       $218
=================================================================

    The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:


                                                   2000     1999
                                               ------------------
                                                  (in millions)
Deferred tax liabilities:
    Accelerated depreciation                      $ 992     $884
    Property basis differences                      405      419
    Fuel cost adjustment                             93       65
    Premium on reacquired debt                       30       31
    Pensions                                         75       60
    Other                                            12       11
- -----------------------------------------------------------------
Total                                             1,607    1,470
- -----------------------------------------------------------------
Deferred tax assets:
    Capacity prepayments                            18        24
    Other deferred costs                            14        25
    Postretirement benefits                         24        22
    Unbilled revenue                                23        13
    Other                                           81        63
- -----------------------------------------------------------------
Total                                              160       147
- -----------------------------------------------------------------
Net deferred tax liabilities                     1,447     1,323
Portion included in current liabilities, net      (46)       (83)
- -----------------------------------------------------------------
Accumulated deferred income taxes
    in the Balance Sheets                       $1,401    $1,240
=================================================================

                                       II-71

<PAGE>

NOTES (continued)
Alabama Power Company 2000 Annual Report


    Deferred investment tax credits are amortized over the lives of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $11 million in 2000, 1999, and 1998. At December 31, 2000, all
investment tax credits available to reduce federal income taxes payable had been
utilized.

    A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:

                                      2000     1999     1998
                                     --------------------------
Federal statutory rate                35.0%    35.0%    35.0%
State income tax,
  net of federal deduction             3.1      2.4      2.5
Non-deductible book
  depreciation                         1.4      1.6      1.5
Differences in prior years'
  deferred and current tax rates      (1.3)    (1.3)    (1.6)
Other                                 (0.7)    (0.9)    (1.6)
- ---------------------------------------------------------------
Effective income tax rate             37.5%    36.8%    35.8%
===============================================================

    Southern Company files a consolidated federal and certain state income tax
returns. Under a joint consolidated income tax agreement, each subsidiary's
current and deferred tax expense is computed on a stand-alone basis.

8.   COMPANY OBLIGATED MANDATORILY
     REDEEMABLE PREFERRED SECURITIES

Statutory business trusts formed by the Company, of which the Company owns all
the common securities, have issued mandatorily redeemable preferred securities
as follows:

              Date of                                 Maturity
               Issue    Amount      Rate     Notes      Date
            ---------------------------------------------------
                       (millions)           (millions)
Trust I       1/1996    $ 97    7.375%      $100      3/2026
Trust II      1/1997     200    7.60         206     12/2036
Trust III     2/1999      50    Auction       52      2/2029

    Substantially all of the assets of each trust are junior subordinated notes
issued by the Company in the respective approximate principal amounts set forth
above. The distribution rate of Trust III's auction rate securities was 6.52% at
January 1, 2001.

    The Company considers that the mechanisms and obligations relating to the
preferred securities, taken together, constitute a full and unconditional
guarantee by the Company of the Trusts' payment obligations with respect to the
preferred securities.

    The Trusts are subsidiaries of the Company and, accordingly, are
consolidated in the Company's financial statements.

9.   OTHER LONG-TERM DEBT

Pollution control obligations represent installment purchases of pollution
control facilities financed by funds derived from sales by public authorities of
revenue bonds. The Company is required to make payments sufficient for the
authorities to meet principal and interest requirements of such bonds. With
respect to $114.2 million of such pollution control obligations, the Company has
authenticated and delivered to the trustees a like principal amount of first
mortgage bonds as security for its obligations under the installment purchase
agreements.  No principal or interest on these first mortgage bonds is payable
unless and until a default occurs on the installment purchase agreements.

   In May 2000, the Company issued $250 million of unsecured senior notes. The
proceeds of this issuance were used to repay short-term indebtedness. All of the
Company's senior notes are, in effect, subordinated to all secured debt of the
Company, including its first mortgage bonds.

   The estimated aggregate annual maturities of capitalized lease obligations
through 2005 are as follows: $0.8 million in 2001, $0.9 million in 2002, $0.9
million in 2003, $1.0 million in 2004 and $0.1 million in 2005.

10.   SECURITIES DUE WITHIN ONE YEAR

A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:

                                          2000          1999
                                        ------------------------
                                              (in thousands)
  First mortgage bond maturities
     and redemptions                      $  -      $100,000
  Other long-term debt maturities
     (Note 9)                              844           943
  -------------------------------------------------------------
  Total long-term debt due within
     one year                             $844      $100,943
  =============================================================


   The annual first mortgage bond improvement fund requirement is 1 percent
of the aggregate principal amount of bonds of each series authenticated, so long

                                       II-72

<PAGE>


NOTES (continued)
Alabama Power Company 2000 Annual Report


as a portion of that series is outstanding, and may be satisfied by the deposit
of cash and/or reacquired bonds, the certification of unfunded property
additions, or a combination thereof.

11.   NUCLEAR INSURANCE

Under the Price-Anderson Amendments Act of 1988 (the Act), the Company maintains
agreements of indemnity with the NRC that, together with private insurance,
cover third-party liability arising from any nuclear incident occurring at Plant
Farley. The Act provides funds up to $9.5 billion for public liability claims
that could arise from a single nuclear incident. Plant Farley is insured against
this liability to a maximum of $200 million by private insurance, with the
remaining coverage provided by a mandatory program of deferred premiums which
could be assessed, after a nuclear incident, against all owners of nuclear
reactors. The Company could be assessed up to $88 million per incident for each
licensed reactor it operates but not more than an aggregate of $10 million per
incident to be paid in a calendar year for each reactor. Such maximum
assessment, excluding any applicable state premium taxes, for the Company is
$176 million per incident but not more than an aggregate of $20 million to be
paid for each incident in any one year.

    The Company is a member of Nuclear Electric Insurance Limited (NEIL), a
mutual insurer established to provide property damage insurance in an amount up
to $500 million for members' nuclear generating facilities.

    Additionally, the Company has policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million primary
coverage. This excess insurance is also provided by NEIL.

    NEIL also covers the additional cost that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased costs of replacement power in an
amount up to $3.5 million per week (starting 12 weeks after the outage) for one
year and up to $2.8 million per week for the second and third years.

    Under each of the NEIL policies, members are subject to assessments if
losses each year exceed the accumulated funds available to the insurer under
that policy. The current maximum annual assessments for the Company under the
three NEIL policies would be $17 million.

    For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies shall be
dedicated first for the sole purpose of placing the reactor in a safe and stable
condition after an accident. Any remaining proceeds are to be applied next
toward the costs of decontamination and debris removal operations ordered by the
NRC, and any further remaining proceeds are to be paid either to the Company or
to its bond trustees as may be appropriate under the policies and applicable
trust indentures.

    All retrospective assessments, whether generated for liability, property or
replacement power may be subject to applicable state premium taxes.

12.   COMMON STOCK DIVIDEND
      RESTRICTIONS

The Company's first mortgage bond indenture contains various common stock
dividend restrictions that remain in effect as long as the bonds are
outstanding. At December 31, 2000, retained earnings of $796 million were
restricted against the payment of cash dividends on common stock under terms of
the mortgage indenture.

13.   QUARTERLY FINANCIAL INFORMATION
      (Unaudited)

Summarized quarterly financial data for 2000 and 1999 are as follows:

                                                     Net Income
                                                       After
                                                     Dividends
       Quarter            Operating    Operating    on Preferred
        Ended              Revenues      Income        Stock
- --------------------    -----------------------------------------
                                     (in millions)

March 2000                  $  746           $172         $ 68
June 2000                      900            229          103
September 2000               1,137            390          209
December 2000                  884            151           40

March 1999                  $  714           $162         $ 63
June 1999                      823            209           93
September 1999               1,116            388          201
December 1999                  733            136           43
- -----------------------------------------------------------------

The Company's business is influenced by seasonal weather conditions.


                                       II-73

<PAGE>

<TABLE>

SELECTED FINANCIAL AND OPERATING DATA 1996-2000
Alabama Power Company 2000 Annual Report
<CAPTION>


- ---------------------------------------------------------------------------------------------------------------------------------
                                                           2000            1999            1998            1997            1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S>                                                  <C>             <C>             <C>             <C>             <C>
Operating Revenues (in thousands)                    $3,667,461      $3,385,474      $3,386,373      $3,149,111      $3,120,775
Net Income after Dividends
  on Preferred Stock (in thousands)                    $419,916        $399,880        $377,223        $375,939        $371,490
Cash Dividends
  on Common Stock (in thousands)                       $417,100        $399,600        $367,100        $339,600        $347,500
Return on Average Common Equity (percent)                 13.58           13.85           13.63           13.76           13.75
Total Assets (in thousands)                         $10,379,108      $9,648,704      $9,225,698      $8,812,867      $8,733,846
Gross Property Additions (in thousands)                $870,581        $809,044        $610,132        $451,167        $425,024
- ---------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity                                  $3,195,772      $2,988,863      $2,784,067      $2,750,569      $2,714,277
Preferred stock                                         317,512         317,512         317,512         255,512         340,400
Company obligated mandatorily
  redeemable preferred securities                       347,000         347,000         297,000         297,000          97,000
Long-term debt                                        3,425,527       3,190,378       2,646,566       2,473,202       2,354,006
- ---------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)        $7,285,811      $6,843,753      $6,045,145      $5,776,283      $5,505,683
================================================================================================================================-
Capitalization Ratios (percent):
Common stock equity                                        43.9            43.7            46.1            47.6            49.3
Preferred stock                                             4.4             4.6             5.3             4.4             6.2
Company obligated mandatorily
  redeemable preferred securities                           4.8             5.1             4.9             5.2             1.7
Long-term debt                                             46.9            46.6            43.7            42.8            42.8
- ---------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)             100.0           100.0           100.0           100.0           100.0
================================================================================================================================-
Security Ratings:
First Mortgage Bonds -
    Moody's                                                  A1              A1              A1              A1              A1
    Standard and Poor's                                       A              A+              A+              A+              A+
    Fitch                                                  AA-*             AA-             AA-             AA-             AA-
Preferred Stock -
    Moody's                                                  a2              a2              a2              a2              a2
    Standard and Poor's                                    BBB+              A-               A               A               A
    Fitch                                                    A*               A               A              A+              A+
Unsecured Long-Term Debt -
    Moody's                                                  A2              A2              A2              A2               -
    Standard and Poor's                                       A               A               A               A               -
    Fitch                                                   A+*              A+              A+              A+               -
================================================================================================================================-
Customers (year-end):
Residential                                           1,132,410       1,120,574       1,106,217       1,092,161       1,073,559
Commercial                                              193,106         188,368         182,738         177,362         171,827
Industrial                                                4,819           4,897           5,020           5,076           5,100
Other                                                       745             735             733             728             732
- ---------------------------------------------------------------------------------------------------------------------------------
Total                                                 1,331,080       1,314,574       1,294,708       1,275,327       1,251,218
================================================================================================================================-
Employees (year-end):                                     6,871           6,792           6,631           6,531           6,865
- ---------------------------------------------------------------------------------------------------------------------------------
*Effective 1/22/01 the Fitch Security Ratings for First Mortgage Bonds, Preferred Stock, and
 Unsecured Long-Term Debt are A+, A-, and A respectively.

</TABLE>



                                                                II-74

<PAGE>
<TABLE>


SELECTED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Alabama Power Company 2000 Annual Report
<CAPTION>



- -----------------------------------------------------------------------------------------------------------------------------------
                                                             2000            1999            1998            1997            1996
- -----------------------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
<S>                                                   <C>              <C>            <C>               <C>             <C>
Residential                                           $ 1,222,509      $1,145,646     $ 1,133,435       $ 997,507       $ 998,806
Commercial                                                854,695         807,098         779,169         724,148         696,453
Industrial                                                859,668         843,090         853,550         775,591         759,628
Other                                                      15,835          15,283          14,523          13,563          13,729
- -----------------------------------------------------------------------------------------------------------------------------------
Total retail                                            2,952,707       2,811,117       2,780,677       2,510,809       2,468,616
Sales for resale  - non-affiliates                        461,730         415,377         448,973         431,023         391,669
Sales for resale  - affiliates                            166,219          92,439         103,562         161,795         216,620
- -----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity                3,580,656       3,318,933       3,333,212       3,103,627       3,076,905
Other revenues                                             86,805          66,541          53,161          45,484          43,870
- -----------------------------------------------------------------------------------------------------------------------------------
Total                                                  $3,667,461      $3,385,474      $3,386,373      $3,149,111      $3,120,775
==================================================================================================================================-
Kilowatt-Hour Sales (in thousands):
Residential                                            16,771,821      15,699,081      15,794,543      14,336,408      14,593,761
Commercial                                             12,988,728      12,314,085      11,904,509      11,330,312      10,904,476
Industrial                                             22,101,407      21,942,889      21,585,117      20,727,912      19,999,258
Other                                                     205,827         201,149         196,647         180,389         192,573
- -----------------------------------------------------------------------------------------------------------------------------------
Total retail                                           52,067,783      50,157,204      49,480,816      46,575,021      45,690,068
Sales for resale  - non-affiliates                     14,847,533      12,437,599      11,840,910      12,329,480       9,491,237
Sales for resale  - affiliates                          5,369,474       5,031,781       5,976,099       8,993,326      10,292,066
- -----------------------------------------------------------------------------------------------------------------------------------
Total                                                  72,284,790      67,626,584      67,297,825      67,897,827      65,473,371
==================================================================================================================================-
Average Revenue Per Kilowatt-Hour (cents):
Residential                                                  7.29            7.30            7.18            6.96            6.84
Commercial                                                   6.58            6.55            6.55            6.39            6.39
Industrial                                                   3.89            3.84            3.95            3.74            3.80
Total retail                                                 5.67            5.60            5.62            5.39            5.40
Sales for resale                                             3.11            2.91            3.10            2.78            3.07
Total sales                                                  4.95            4.91            4.95            4.57            4.70
Residential Average Annual
  Kilowatt-Hour Use Per Customer                           14,875          14,097          14,370          13,254          13,705
Residential Average Annual
  Revenue Per Customer                                  $1,084.26       $1,028.76       $1,031.21         $922.21         $937.95
Plant Nameplate Capacity
  Ratings (year-end) (megawatts)                           12,122          11,379          11,151          11,151          11,151
Maximum Peak-Hour Demand (megawatts):
Winter                                                      9,478           8,863           7,757           8,478           8,413
Summer                                                     11,019          10,739          10,329           9,778           9,912
Annual Load Factor (percent)                                 59.3            59.7            62.9            62.7            61.3
Plant Availability (percent):
Fossil-steam                                                 89.4            80.4            85.6            86.3            86.6
Nuclear                                                      88.3            91.0            80.2            88.8            90.5
- -----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                         63.0            64.1            65.3            65.7            67.0
Nuclear                                                      16.9            17.8            16.3            17.9            18.5
Hydro                                                         2.9             4.7             6.9             7.5             7.1
Oil and gas                                                   4.9             1.1             1.5             0.7             0.4
Purchased power -
  From non-affiliates                                         4.6             4.5             3.3             2.4             2.4
  From affiliates                                             7.7             7.8             6.7             5.8             4.6
- -----------------------------------------------------------------------------------------------------------------------------------
Total                                                       100.0           100.0           100.0           100.0           100.0
==================================================================================================================================-
</TABLE>

                                                                II-75

<PAGE>


                             GEORGIA POWER COMPANY

                               FINANCIAL SECTION

                                     II-76




<PAGE>
MANAGEMENT'S REPORT
Georgia Power Company 2000 Annual Report

The management of Georgia Power Company has prepared this annual report and is
responsible for the financial statements and related information. These
statements were prepared in accordance with accounting principles generally
accepted in the United States and necessarily include amounts that are based on
the best estimates and judgments of management. Financial information throughout
this annual report is consistent with the financial statements.

     The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the accounting records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls based upon the recognition that the cost of the
system should not exceed its benefits. The Company believes that its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

     The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

     The audit committee of the board of directors, which is composed of three
independent directors, provides a broad overview of management's financial
reporting and control functions. At least three times a year this committee
meets with management, the internal auditors, and the independent public
accountants to ensure that these groups are fulfilling their obligations and to
discuss auditing, internal control and financial reporting matters. The internal
auditors and the independent public accountants have access to the members of
the audit committee at any time.

     Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted with a high standard of
business ethics.

     In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations and cash flows
of Georgia Power Company in conformity with accounting principles generally
accepted in the United States.




/s/  David M. Ratcliffe
David M. Ratcliffe
President and Chief
   Executive Officer



/s/  Thomas A. Fanning
Thomas A. Fanning
Executive Vice President,
   Treasurer and Chief
   Financial Officer



                                       II-77
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Georgia Power Company:

We have audited the accompanying balance sheets and statements of capitalization
of Georgia Power Company (a Georgia corporation and a wholly owned subsidiary of
Southern Company) as of December 31, 2000 and 1999, and the related statements
of income, common stockholder's equity, and cash flows for each of the three
years in the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements (pages II-88 through II-108)
referred to above present fairly, in all material respects,  the financial
position of Georgia Power Company as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.





/s/  Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                       II-78
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Georgia Power Company 2000 Annual Report

RESULTS OF OPERATIONS

Earnings

Georgia Power Company's 2000 earnings totaled $559 million, representing an $18
million (3.3 percent) increase over 1999. This earnings increase is primarily
due to higher retail and wholesale sales and continued control of operating
expenses, partially offset by additional accelerated amortization of regulatory
assets allowed under the second year of a Georgia Public Service Commission
(GPSC) three-year retail rate order. Georgia Power Company's 1999 earnings
totaled $541 million, representing a $29 million (5.1 percent) decrease from
1998. This earnings decrease was primarily due to the recognition of interest
income in 1998 as a result of the resolution of tax issues with the Internal
Revenue Service (IRS). Earnings in 1999 from normal operations increased due
primarily to lower accelerated depreciation under the GPSC retail rate order,
sales growth, and decreased financing costs, partially offset by retail rate
reductions under the new order and lower wholesale revenues.

Revenues

Operating revenues in 2000 and the amount of change from the prior year are as
follows:


                                               Increase (Decrease)
                                                 From Prior Year
                                      Amount  ----------------------
                                      2000      2000         1999
                                      ----    -----------------------
Retail -                                           (in millions)
   Base revenues                     $3,119     $ 84        $(292)
   Fuel cost recovery                 1,198      183           44
- ---------------------------------------------------------------------
Total retail                          4,317      267         (248)
- ---------------------------------------------------------------------
Sales for resale -
   Non-affiliates                       298       88          (49)
   Affiliates                            96       20           (5)
- ---------------------------------------------------------------------
Total sales for resale                  394      108          (54)
- ---------------------------------------------------------------------
Other operating revenues                160       39           21
- -------------------------------------------------------- ------------
Total operating revenues             $4,871     $414        $(281)
=====================================================================
Percent change                                   9.3%        (5.9)%
- ---------------------------------------------------------------------

     Retail base revenues of $3.1 billion in 2000 increased
$84 million (2.8 percent) primarily due to a 4.9 percent increase in sales.
Under the GPSC retail rate order, the Company recorded $44 million of revenue
subject to refund for estimated earnings above 12.5 percent retail return on
common equity in 2000. Refunds will be made to customers in 2001. Retail base
revenues of $3.0 billion in 1999 decreased $292 million (8.8 percent) primarily
due to retail rate reductions under the GPSC retail rate order. Pursuant to the
GPSC retail rate order, in 1999 the Company also recorded $79 million of revenue
subject to refund for estimated earnings above 12.5 percent retail return on
common equity. Revenue subject to refund is reflected in "Base revenues" in the
chart above. The $79 million in refunds were made to customers in 2000. See Note
3 to the financial statements under "Retail Rate Order" for additional
information.

     Electric rates include provisions to adjust billings for fluctuations in
fuel costs, the energy component of purchased power costs, and certain other
costs. Under these fuel cost recovery provisions, fuel revenues generally equal
fuel expenses -- including the fuel component of purchased energy -- and do not
affect net income. However cash flow is affected by the untimely recovery of
these receivables. As of December 31, 2000, the Company had $132 million in
underrecovered fuel costs. The Company currently plans to make a filing with the
GPSC in early 2001 to establish a new fuel rate in order to better reflect
current fuel cost and to collect the current underrecovered balance.

     Wholesale revenues from sales to non-affiliated utilities increased in 2000
and decreased in 1999 as follows:

                                  2000       1999      1998
                                -------------------------------
                                        (in millions)
Outside service area -
   Long-term contracts           $  55      $  55     $  51
   Other sales                     162         74        93
Inside service area                 81         81       115
- ---------------------------------------------------------------
Total                             $298       $210      $259
===============================================================

     Revenues from long-term contracts outside the service area remained
constant in 2000 and increased slightly in 1999 due to increased energy sales.
See Note 7 to the financial statements for further information regarding these
sales. Revenues from other sales outside the service area primarily represent
wholesale sales from Plant Dahlberg which went into service during 2000 and
increases in power marketing activities. These activities include the purchase
and resale of energy. Consequently, changes in revenues are generally offset by
corresponding changes in purchased power expense from non-affiliates. Wholesale

                                       II-79

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report

revenues from customers within the service area remained constant in 2000 but
decreased in 1999 primarily due to a decrease in revenues under a power supply
agreement with Oglethorpe Power Corporation (OPC).

     Revenues from sales to affiliated companies within the Southern electric
system, as well as purchases of energy, will vary from year to year depending on
demand and the availability and cost of generating resources at each company.
These transactions do not have a significant impact on earnings.

     Other operating revenues in 2000 increased $39 million (33 percent)
primarily due to increased revenues from the transmission of electricity and
gains on the sale of generating plant emission allowances. Under a GPSC order,
$28 million of the gains on emission allowance sales in 2000 were used to
reduce recoverable fuel costs and as such, did not affect earnings. In 1999,
other operating revenues increased $21 million or (21 percent) from the
previous year due primarily to increased revenues from the rental of electric
equipment and property.

     Kilowatt-hour (KWH) sales for 2000 and the percent change by year were as
follows:

                                         Percent Change
                                      ----------------------
                           2000
                           KWH          2000       1999
                         --------- ------------------------
                           (in billions)
Residential                   20.7       6.6%      (0.4)%
Commercial                    25.6       8.1        3.7
Industrial                    27.5       0.9        0.1
Other                          0.6       3.2        1.5
                            ---------
Total retail                  74.4       4.9        1.1
                            ---------
Sales for resale -
   Non-affiliates              6.5      27.7      (21.4)
   Affiliates                  2.4      35.6      (11.9)
                            ---------
Total sales for resale         8.9      29.8      (19.1)
                            ---------
Total sales                   83.3       7.1       (1.0)
                            =========

- ------------------------------------------------------------

     Residential and commercial sales increased 6.6 percent and 8.1 percent,
respectively, due to warmer summer temperatures and colder winter weather.
Strong regional economic growth was also a factor in the increase in commercial
sales. Industrial sales remained fairly constant. In 1999, residential sales
decreased 0.4 percent due to moderate summer temperatures, while commercial
sales increased 3.7 percent due to strong regional economic growth. Industrial
sales remained fairly constant.

Expenses

Fuel costs constitute the single largest expense for the Company. The mix of
fuel sources for generation of electricity is determined primarily by system
load, the unit cost of fuel consumed, and the availability of hydro and nuclear
generating units. The amount and sources of generation and the average cost of
fuel per net KWH generated were as follows:

                                      2000    1999       1998
                                    -----------------------------
Total generation
   (billions of KWH)                  73.6      69.3     69.1
Sources of generation
   (percent) --
     Coal                             75.8      75.5     73.3
     Nuclear                          21.2      21.6     21.6
     Hydro                             0.8       1.0      2.6
     Oil and gas                       2.2       1.9      2.5
Average cost of fuel per net
   KWH generated
     (cents) --                       1.39      1.34     1.36
- -----------------------------------------------------------------

     Fuel expense increased 10.7 percent in 2000 due to an increase in
generation to meet higher energy demands, a decrease in generation from hydro
plants, and a higher average cost of fuel. Fuel expense increased 0.3 percent in
1999 due to a slight increase in fossil and nuclear generation and a decrease in
generation from hydro plants, partially offset by a lower average cost of fuel.

     Purchased power expense in 2000 increased $206 million (53 percent) over
the prior year due to higher retail energy demands and power marketing
activities. The majority of the increase was offset by increases in retail fuel
revenues and power marketing revenues and therefore did not affect earnings. As
discussed above, the expense associated with energy purchased for power
marketing activities is generally offset by revenue when resold. Purchased power
expense decreased slightly in 1999.

     Other operation and maintenance expenses in 2000 increased slightly over
those in 1999. Increased line maintenance, customer assistance and sales expense
and additional severance costs were partially offset by decreased generating
plant maintenance and decreased employee benefit provisions. Other operation and

                                       II-80
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


maintenance expenses increased 1.6 percent in 1999 primarily due to increased
generating plant maintenance, partially offset by a reduction in the charges
related to the implementation of a customer service system in 1998, decreased
year 2000 readiness costs, and decreased employee benefit provisions.

     Depreciation and amortization increased $66 million in 2000 due to $50
million of additional accelerated amortization of regulatory assets required
under the second year of the GPSC retail rate order and increased plant in
service. Depreciation and amortization decreased $261 million in 1999 primarily
due to higher depreciation charges recognized in 1998 under the prior GPSC
accounting order and the completion in 1998 of the amortization of deferred
Plant Vogtle costs.

     Interest income decreased $3 million in 2000 primarily due to decreased
interest on temporary cash investments. Interest income decreased in 1999
primarily due to the 1998 recognition of $73 million in interest income
resulting from the resolution of tax issues with the IRS and the State of
Georgia. Other, net decreased in 2000 due to an increase in charitable
contributions. In 1999, other, net decreased due primarily to increased bad debt
expense related to consumer energy efficiency improvement financing.

     Interest expense, net increased in 2000 due to the issuance of an
additional $300 million in senior notes during 2000. Interest expense, net
decreased in 1999 due primarily to the refinancing or retirement of securities.
The Company refinanced or retired $179 million and $775 million of securities in
2000 and 1999, respectively. Distributions on preferred securities of subsidiary
companies decreased $7 million in 2000 due to the redemption of $100 million of
preferred securities in December 1999. Distributions on preferred securities of
subsidiary companies increased $11 million in 1999 due to the issuance of
additional mandatorily redeemable preferred securities in January 1999.

Effects of Inflation

The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in utility plants with long economic life. Conventional
accounting for historical cost does not recognize this economic loss nor the
partially offsetting gain that arises through financing facilities with
fixed-money obligations such as long-term debt and preferred securities. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.

FUTURE EARNINGS POTENTIAL

The results of operations for the past three years are not necessarily
indicative of future earnings. The level of future earnings depends on numerous
factors including regulatory matters and energy sales.

     The Company currently operates as a vertically integrated utility providing
electricity to customers within its traditional service area located in the
State of Georgia. Prices for electricity provided by the Company to retail
customers are set by the GPSC under cost-based regulatory principles.

     On January 1, 1999, the Company began operating under a new three-year
retail rate order. The Company's earnings are evaluated against a retail return
on common equity range of 10 percent to 12.5 percent, with required rate
reductions of $262 million on an annual basis effective in 1999 and an
additional $24 million effective in 2000. The order provides for $85 million in
each year, plus up to $50 million of any earnings above the 12.5 percent return
during the second and third years, to be applied to accelerated amortization or
depreciation of assets. Two-thirds of any additional earnings above the 12.5
percent return will be applied to rate reductions, with the remaining one-third
retained by the Company. Pursuant to the GPSC retail rate order, in 2000 and
1999, the Company recorded $85 million in accelerated amortization of regulatory
assets. In 2000, the Company also recorded the additional $50 million of
accelerated amortization. The accelerated amortization is recorded in a
regulatory liability account as mandated by the GPSC. In addition, the Company
recorded $44 million and $79 million of revenue subject to refund for estimated
earnings above 12.5 percent in 2000 and 1999, respectively. Refunds applicable
to 1999 were made to customers in 2000. The Company will file a general rate
case on July 2, 2001 in response to which the GPSC would be expected to

                                       II-81
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


determine whether the retail rate order should be continued, modified, or
discontinued. See Note 3 to the financial statements under "Retail Rate Order"
for additional information.

     Growth in energy sales is subject to a number of factors which
traditionally have included changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, weather,
competition, initiatives to increase sales to existing customers, and the rate
of economic growth in the Company's service area. Assuming normal weather,
retail sales growth from 2000 is projected to be approximately 2.4 percent
annually on average during 2001 through 2003.

     The Company has entered into purchase power agreements which will result in
higher capacity and operating and maintenance payments in future years. See Note
4 to the financial statements under "Purchased Power Commitments" for additional
information.

     The Company is constructing two 566 megawatt combined cycle units at Plant
Wansley to begin operation in 2002. These units have been certified by the GPSC
to serve the Company's retail customers for approximately seven years. Savannah
Electric will have the rights to 200 megawatts of capacity from these units for
the same seven-year period.

     The Company is also constructing a 571 megawatt combined cycle unit at
Plant Goat Rock to begin operation in 2002, and a 610 megawatt combined cycle
unit at Plant Goat Rock to begin operation in 2003. The power from these units
will initially be sold into the wholesale market when they begin operation. The
Company has filed with the GPSC for certification of these units to begin
serving the Company's retail customers in 2003 and 2004, respectively, for a
term of seven years each.

     In addition to seeking certification of Plant Goat Rock, the Company is
also seeking certification of a seven year commitment to 615 megawatts beginning
in 2004 at Plant Autaugaville to serve its retail customers. Plant Autaugaville
is currently under construction by Alabama Power.

     Further, the Company is constructing Plant Dahlberg, a ten unit, 800
megawatt combustion turbine peaking power plant that will serve the wholesale
market. Units one through eight began operation in May 2000; units nine and ten
are expected to begin operation in June 2001. The Company has entered into
wholesale contracts to sell all 800 megawatts of capacity. These contracts cover
substantially all of the output of the plant for the first five years. Because
these units are dedicated to the wholesale market, retail rates will not be
affected.

     The Company is aggressively working to maintain and expand its share of
wholesale sales in the Southeastern power markets. In January 2001, Southern
Company announced the formation of a new subsidiary, Southern Power Company
(SPC). SPC will own, manage, and finance wholesale generating assets in the
Southeast. Energy from its assets will be marketed to wholesale customers under
the Southern Company name. The current plan is for Georgia Power and Alabama
Power to transfer Plant Dahlberg and the units under construction at Plants
Wansley, Goat Rock, and Autaugaville to SPC in 2001. The Company will enter into
purchased power capacity agreements with SPC for power from the units at Plants
Wansley, Goat Rock, and Autaugaville to serve the Company's retail customers.

     In accordance with Financial Accounting Standards Board (FASB) Statement
No. 87, Employers' Accounting for Pensions, the Company recorded non-cash income
of approximately $59 million in 2000. Pension plan income in 2001 is expected to
be less as a result of plan amendments. Future pension income is dependent on
several factors including trust earnings and changes to the plan. For additional
information see Note 2 to the financial statements.

     Compliance costs related to current and future environmental laws,
regulations, and litigation could affect earnings if such costs are not fully
recovered. See "Environmental Issues" for further discussion of these matters.

     The electric utility industry in the United States is continuing to evolve
as a result of regulatory and competitive factors. Among the primary agents of
change has been the Energy Policy Act of 1992 (Energy Act). The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. Although the Energy Act


                                       II-82
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


does not permit retail customer access, it was a major catalyst for the current
restructuring and consolidation taking place within the utility industry.

     On December 20, 1999, the Federal Energy Regulatory Commission (FERC)
issued its final rule on Regional Transmission Organizations (RTOs). The order
encouraged utilities owning transmission systems to form RTOs on a voluntary
basis. After participating in regional conferences with customers and other
members of the public to discuss the formation of RTOs, utilities were required
to make a filing with the FERC. On October 16, 2000, Southern Company and its
five integrated Southeast utilities, including the Company, filed with the FERC
a proposal for the creation of an RTO. The proposal is for the formation of a
for-profit company that would have control of the bulk power transmission system
of participating utilities. Participants would have the option to either
maintain their ownership, divest, sell, or lease their assets to the proposed
RTO. If the FERC accepts the proposal as filed, the creation of the RTO is not
expected to have a material impact on the financial statements of the Company.
However, the ultimate outcome of this matter cannot now be determined.

     The Company continues to compete with other electric suppliers within the
state. In Georgia, most new retail customers with at least 900 kilowatts of
connected load may choose their electricity supplier. Numerous federal and state
initiatives are in varying stages to promote wholesale and retail competition
across the nation. Among other things, these initiatives allow customers to
choose their electricity provider. As these initiatives materialize, the
structure of the utility industry could radically change. Some states have
approved initiatives that result in a separation of the ownership and/or
operation of generating facilities from the ownership and/or operation of
transmission and distribution facilities. While the GPSC has held workshops to
discuss retail competition and industry restructuring, there has been no
proposed or enacted legislation to date in Georgia. Enactment would require
numerous issues to be resolved, including significant ones relating to
transmission pricing and recovery of costs. The GPSC continues its assessment of
the range of potential stranded costs. The inability of the Company to recover
all its costs, including the regulatory assets described in Note 1 to the
financial statements, could have a material effect on the financial condition of
the Company. The Company is attempting to reduce regulatory assets through the
GPSC retail rate order. See Note 3 to the financial statements under "Retail
Rate Order" for additional information.

     The Company is subject to the provisions of FASB Statement No. 71,
Accounting for the Effects of Certain Types of Regulation. In the event that a
portion of the Company's operations is no longer subject to these provisions,
the Company would be required to write off related regulatory assets and
liabilities that are not specifically recoverable, and determine if any other
assets have been impaired. See Note 1 to the financial statements under
"Regulatory Assets and Liabilities" for additional information.

     The staff of the Securities and Exchange Commission (SEC) has questioned
certain of the current accounting practices of the electric utility industry -
including the Company's - regarding the recognition, measurement, and
classification in the financial statements of decommissioning costs for nuclear
generating facilities. In response to these questions, the FASB is reviewing the
accounting for liabilities related to the retirement of long-lived assets,
including nuclear decommissioning. If the FASB issues new accounting rules, the
estimated costs of retiring the Company's nuclear and other facilities may be
required to be recorded as liabilities in the Balance Sheets. Also, the annual
provisions for such costs could change. Because of the Company's current ability
to recover asset retirement costs through rates, these changes would not have a
significant adverse effect on results of operations. See Note 1 to the financial
statements under "Depreciation and Nuclear Decommissioning" for additional
information.

Exposure to Market Risks

Due to cost-based rate regulation, the Company currently has limited exposure to
market volatility in interest rates, commodity fuel prices and prices of
electricity. (See the discussion above for potential changes in industry
structure.) To mitigate residual risks relative to movements in electricity
prices, the Company enters into fixed price contracts for the purchase and sale
of electricity through the wholesale electricity market. Realized gains and
losses are recognized in the income statement as incurred. At December 31, 2000,
exposure from these activities was not material to the Company's financial
position, results of operations, or cash flows. Also, based on the Company's
overall interest rate exposure at December 31, 2000, a near-term 100 basis point

                                       II-83
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


change in interest rates would not materially affect the financial statements.

New Accounting Standard

In June 2000, the FASB issued Statement No. 138, an amendment of Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities. Statement
No. 133, as amended, establishes accounting and reporting standards for
derivative instruments and for hedging activities. Statement No. 133 requires
that certain derivative instruments be recorded in the balance sheet as either
an asset or liability measured at fair value and that changes in the fair value
be recognized currently in earnings unless specific hedge accounting criteria
are met.

     Substantially all of the Company's bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain of
these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

     The Company adopted the provisions of Statement No. 133 effective January
1, 2001. The impact on net income was immaterial. The application of the new
rules is still evolving and further guidance from the FASB is expected, which
could additionally impact the Company's financial statements.

FINANCIAL CONDITION

Plant Additions

In 2000, gross utility plant additions were $1.1 billion. These additions were
primarily related to transmission and distribution facilities, the purchase of
nuclear fuel, and the construction of additional combustion turbine and combined
cycle units. The funds needed for gross property additions are currently
provided from operations, short-term and long-term debt, and capital
contributions from Southern Company. The Statements of Cash Flows provide
additional details.

Financing Activities

In 2000, the Company's financing costs increased due to the issuance of new debt
during the year. New issues during 1998 through 2000 totaled $1.5 billion and
retirement or repayment of higher-cost securities totaled $1.7 billion.

     Special purpose subsidiaries of the Company have issued mandatorily
redeemable preferred securities. See Note 9 to the financial statements under
"Preferred Securities" for additional information.

     Composite financing rates for long-term debt, preferred stock, and
preferred securities for the years 1998 through 2000, as of year-end, were as
follows:


                                   2000       1999        1998
                                ----------------------------------
Composite interest rate
   on long-term debt               5.90%       5.48%      5.64%
Composite preferred
   stock dividend rate             4.60        4.60       5.52
Composite preferred
   securities dividend rate        7.49        7.49       7.89
- ------------------------------------------------------------------

Liquidity and Capital Requirements

Cash provided from operations decreased by $135 million in 2000, primarily due
to higher fuel and purchased power expenses related to increased energy demands.

     The Company estimates that construction expenditures for the years 2001
through 2003 will total $1.6 billion, $1.3 billion, and $0.8 billion,
respectively. If the Company transfers wholesale generation assets to SPC in
2001 as contemplated, construction expenditures for the years 2001 through 2003
will total $1.0 billion, $0.9 billion, and $0.7 billion, respectively.
Investments in additional combustion turbine and combined cycle generating
units, transmission and distribution facilities, enhancements to existing
generating plants, and equipment to comply with environmental requirements are
planned.

     Cash requirements for redemptions announced and maturities of long-term
debt are expected to total $581 million during 2001 through 2003.

     As a result of requirements by the Nuclear Regulatory Commission, the
Company has established external trust funds for the purpose of funding nuclear


                                       II-84

<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


decommissioning costs. The amount to be funded is $30 million each year in 2001,
2002, and 2003. For additional information concerning nuclear decommissioning
costs, see Note 1 to the financial statements under "Depreciation and Nuclear
Decommissioning."

Sources of Capital

The Company expects to meet future capital requirements primarily using funds
generated from operations and equity funds from Southern Company and, if needed,
by the issuance of new debt and equity securities, term loans, and short-term
borrowings. To meet short-term cash needs and contingencies, the Company had
approximately $1.8 billion of unused credit arrangements with banks at the
beginning of 2001. See Note 9 to the financial statements under "Bank Credit
Arrangements" for additional information.

     Recently, the Company has relied on the issuance of unsecured debt and
trust preferred securities, in addition to unsecured pollution control bonds
issued for its benefit by public authorities, to meet its long-term external
financing requirements. In years past, the Company issued first mortgage bonds,
mortgage backed pollution control bonds and preferred stock to fund its external
requirements. The amount outstanding of the later securities has been steadily
declining during the last four years.

     If the Company were to choose to issue new first mortgage bonds or
preferred stock once again, it would be required to meet certain coverage
requirements.

ENVIRONMENTAL ISSUES

Clean Air Act

In November 1990, the Clean Air Act Amendments of 1990 (Clean Air Act) were
signed into law. Title IV of the Clean Air Act -- the acid rain compliance
provision of the law -- significantly affected Southern Company's subsidiaries,
including the Company. Specific reductions in sulfur dioxide and nitrogen oxide
emissions from fossil-fired generating plants are required in two phases. Phase
I compliance began in 1995 and some 50 generating units within Southern
Company's subsidiaries were brought into compliance with Phase I requirements.

     Southern Company's subsidiaries, including the Company, achieved Phase I
sulfur dioxide compliance at the affected units by switching to low-sulfur coal,
which required some equipment upgrades. Construction expenditures for the
Company's Phase I compliance totaled approximately $167 million.

     Phase II sulfur dioxide compliance was required in 2000. Southern Company's
subsidiaries, including the Company, used emission allowances and fuel switching
to comply with Phase II requirements. Also, equipment to control nitrogen oxide
emissions was installed on additional system fossil-fired units as necessary to
meet Phase II limits and ozone non-attainment requirements for metropolitan
Atlanta through 2000. Compliance for Phase II and initial ozone non-attainment
requirements increased total construction expenditures for the Company through
2000 by approximately $39 million.

     The one-hour ozone non-attainment standards for the Atlanta area have been
set and must be implemented in May 2003. Seven generating plants will be
affected in the Atlanta area. Additional construction expenditures for the
Company's compliance with these new rules are currently estimated at
approximately $705 million.

     A significant portion of costs related to the acid rain and ozone
non-attainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.

                                       II-85


<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report

Environmental Protection Agency Litigation

On November 3, 1999, the EPA brought a civil action in the U.S. District Court
for the Northern District of Georgia. The complaint alleges violations of the
prevention of significant deterioration and new source review provisions of the
Clean Air Act with respect to coal-fired generating facilities at the Company's
Bowen and Scherer plants. The civil action requests penalties and injunctive
relief, including an order requiring the installation of the best available
control technology at the affected units. The EPA concurrently issued a notice
of violation to the Company relating to these two plants. In early 2000, the EPA
filed a motion to amend its complaint to add the violations alleged in its
notice of violation. The complaint and the notice of violation are similar to
those brought against and issued to several other electric utilities. The
complaint and the notice of violation allege that the Company failed to secure
necessary permits or install additional pollution equipment when performing
maintenance and construction at coal burning plants constructed or under
construction prior to 1978. The Company believes that it complied with
applicable laws and the EPA's regulations and interpretations in effect at the
time the work in question took place. The Clean Air Act authorizes civil
penalties of up to $27,500 per day per violation at each generating unit. Prior
to January 30, 1997, the penalty was $25,000 per day. An adverse outcome of this
matter could require substantial capital expenditures that cannot be determined
at this time and possibly require payment of substantial penalties. This could
affect future results of operations, cash flows, and possibly financial
condition unless such costs can be recovered through regulated rates.

Other Environmental Issues

In July 1997, the EPA revised the national ambient air quality standards for
ozone and particulate matter. This revision made the standards significantly
more stringent. In the subsequent litigation of these standards, the U.S.
Supreme Court recently dismissed certain challenges but found the EPA's
implementation program for the new ozone standard unlawful and remanded it to
the EPA. In addition, the Federal District of Columbia Circuit Court of Appeals
will address other legal challenges to these standards in mid-2001. If the
standards are eventually upheld, implementation could be required by 2007 to
2010.

     In September 1998, the EPA issued the final regional nitrogen oxide
reduction rules to the states for implementation. Compliance is required by May
31, 2004. The final rule affects 21 states, including Georgia.

     In December 2000, the EPA completed its utility study for mercury and other
hazardous air pollutants (HAPS) and issued a determination that an emission
control program for mercury and, perhaps, other HAPS is warranted. The program
is to be developed over the next four years under the Maximum Achievable Control
Technology (MACT) provisions of the Clean Air Act. This determination is being
challenged in the courts. In January 2001, the EPA proposed guidance for the
determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls would likely
be required around 2010. Litigation of the BART rules is probable in the near
future.

     Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

     The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur costs to clean up properties currently or
previously owned. The Company conducts studies to determine the extent of any
required clean-up costs and has recognized in the financial statements costs to
clean up known sites. These costs for the Company amounted to $4 million, $4
million, and $6 million in 2000, 1999, and 1998, respectively. Additional sites
may require environmental remediation for which the Company may be liable for a
portion of or all required clean-up costs. See Note 3 to the financial
statements under "Other Environmental Contingencies" for information regarding
the Company's potentially responsible party status at a site in Brunswick,
Georgia, and the status of sites listed on the State of Georgia's hazardous site
inventory.



                                       II-86
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Georgia Power Company 2000 Annual Report


     The EPA and state environmental regulatory agencies are reviewing and
evaluating various matters including: control strategies to reduce regional
haze; limits on pollutant discharges to impaired waters; water intake
restrictions; and hazardous waste disposal requirements. The impact of any new
standards will depend on the development and implementation of applicable
regulations.

     Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of any such changes
cannot be determined at this time.

     Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Company. The impact of new legislation -- if any
- -- will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION

The Company's 2000 Annual Report contains forward-looking and historical
information. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. The Company cautions that there
are various important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements; accordingly,
there can be no assurance that such indicated results will be realized. These
factors include the impact of recent and future federal and state regulatory
change, including legislative and regulatory initiatives regarding deregulation
and restructuring of the electric utility industry and also changes in
environmental and other laws and regulations to which the Company is subject, as
well as changes in application of existing laws and regulations; current and
future litigation, including the pending EPA civil action and the race
discrimination litigation against the Company; the extent and timing of the
entry of additional competition in the Company's markets; potential business
strategies, including acquisitions or dispositions of assets or businesses,
which cannot be assured to be completed or beneficial; internal restructuring or
other restructuring options, that may be pursued by the Company; state and
federal rate regulation in the United States; political, legal and economic
conditions and developments in the United States; financial market conditions
and the results of financing efforts; the impact of fluctuations in commodity
prices, interest rates and customer demand; weather and other natural phenomena;
the ability of the Company to obtain additional generating capacity at
competitive prices; and other factors discussed elsewhere herein and in other
reports (including Form 10-K) filed from time to time by the Company with the
SEC.



                                       II-87

<PAGE>
<TABLE>
<CAPTION>
STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Georgia Power Company 2000 Annual Report


- ------------------------------------------------------------------------------------------------------------
                                                              2000                 1999                1998
- ------------------------------------------------------------------------------------------------------------
                                                                             (in thousands)
Operating Revenues:
<S>                                                     <C>                  <C>                 <C>
Retail sales                                            $4,317,338           $4,050,088          $4,298,217
Sales for resale --
  Non-affiliates                                           297,643              210,104             259,234
  Affiliates                                                96,150               76,426              81,606
Other revenues                                             159,487              120,057              99,196
- ------------------------------------------------------------------------------------------------------------
Total operating revenues                                 4,870,618            4,456,675           4,738,253
- ------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
Fuel                                                     1,017,878              919,876             917,119
Purchased power --
  Non-affiliates                                           356,189              214,573             229,960
  Affiliates                                               239,815              174,989             161,003
Other                                                      795,458              784,359             819,589
Maintenance                                                404,189              411,983             358,218
Depreciation and amortization                              619,094              552,966             813,802
Taxes other than income taxes                              204,527              202,853             204,623
Write down of Rocky Mountain plant                               -                    -              33,536
- ------------------------------------------------------------------------------------------------------------
Total operating expenses                                 3,637,150            3,261,599           3,537,850
- ------------------------------------------------------------------------------------------------------------
Operating Income                                         1,233,468            1,195,076           1,200,403
Other Income (Expense):
Interest income                                              2,629                5,583              79,578
Equity in earnings of unconsolidated subsidiaries            3,051                2,721               3,735
Other, net                                                 (50,495)             (47,986)            (38,277)
- ------------------------------------------------------------------------------------------------------------
Earnings Before Interest and Income Taxes                1,188,653            1,155,394           1,245,439
- ------------------------------------------------------------------------------------------------------------
Interest Charges and Other:
Interest expense, net                                      208,868              194,869             216,313
Distributions on preferred securities of subsidiaries       59,104               65,774              54,327
- ------------------------------------------------------------------------------------------------------------
Total interest charges and other, net                      267,972              260,643             270,640
- ------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes                               920,681              894,751             974,799
Income taxes                                               360,587              351,639             398,632
- ------------------------------------------------------------------------------------------------------------
Net Income                                                 560,094              543,112             576,167
Dividends on Preferred Stock                                   674                1,729               5,939
- ------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock            $ 559,420            $ 541,383           $ 570,228
============================================================================================================
The accompanying notes are an integral part of these statements.


</TABLE>







                                                                     II-88

<PAGE>
<TABLE>
<CAPTION>



STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Georgia Power Company 2000 Annual Report

- -------------------------------------------------------------------------------------------------------------------------------
                                                                          2000                  1999                  1998
- -------------------------------------------------------------------------------------------------------------------------------
                                                                                            (in thousands)
Operating Activities:
<S>                                                                  <C>                   <C>                   <C>
Net income                                                           $ 560,094             $ 543,112             $ 576,167
Adjustments to reconcile net income to net
     cash provided from operating activities --
         Depreciation and amortization                                 712,960               663,878               867,637
         Deferred income taxes and investment tax credits, net         (28,961)              (34,930)              (93,005)
         Other, net                                                    (51,501)              (42,179)               40,396
         Changes in certain current assets and liabilities --
            Receivables, net                                          (108,621)               21,665               (25,453)
            Fossil fuel stock                                           26,835               (22,165)               (8,066)
            Materials and supplies                                      (9,715)              (10,417)               (3,090)
            Accounts payables                                           64,412                13,095                47,862
            Energy cost recovery, retail                               (95,235)              (26,862)               (7,649)
            Other                                                       (9,092)               90,788                 6,997
- -------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities                          1,061,176             1,195,985             1,401,796
- -------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                            (1,078,163)             (790,464)             (499,053)
Other                                                                   (5,450)              (27,454)               67,031
- -------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                              (1,083,613)             (817,918)             (432,022)
- -------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase (decrease) in notes payable, net                               67,598               295,389               (25,378)
Proceeds --
     Senior notes                                                      300,000               100,000               495,000
     Pollution control bonds                                            78,725               238,000                89,990
     Preferred securities                                                    -               200,000                     -
     Capital contributions from parent company                         301,514               155,777                   235
Retirements --
     First mortgage bonds                                             (100,000)             (404,000)             (558,250)
     Pollution control bonds                                           (78,725)             (235,000)              (89,990)
     Preferred securities                                                    -              (100,000)                    -
     Preferred stock                                                      (383)              (36,231)             (106,064)
Capital distributions to parent company                                      -                     -              (270,000)
Payment of preferred stock dividends                                      (751)                 (984)               (9,137)
Payment of common stock dividends                                     (549,600)             (543,000)             (536,600)
Other                                                                   (1,231)              (29,630)              (26,641)
- -------------------------------------------------------------------------------------------------------------------------------
Net cash provided from (used for) financing activities                  17,147              (359,679)           (1,036,835)
- -------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                                 (5,290)               18,388               (67,061)
Cash and Cash Equivalents at Beginning of Year                          34,660                16,272                83,333
- -------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Year                               $29,370               $34,660               $16,272
- -------------------------------------------------------------------------------------------------------------------------------
Supplemental Cash Flow Information:
Cash paid during the year for --
     Interest (net of amount capitalized)                            $ 265,373             $ 247,050             $ 269,524
     Income taxes (net of refunds)                                     392,310               394,457               480,318
- -------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.


</TABLE>



                                                                     II-89

<PAGE>
<TABLE>
<CAPTION>

BALANCE SHEETS
At December 31, 2000 and 1999
Georgia Power Company 2000 Annual Report

- ------------------------------------------------------------------------------------------------------------------------------------
Assets                                                                                             2000                     1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                          (in thousands)
Current Assets:
<S>                                                                                            <C>                      <C>
Cash and cash equivalents                                                                      $ 29,370                 $ 34,660
Receivables --
  Customer accounts receivable                                                                  465,249                  401,773
  Unrecovered retail fuel clause revenue                                                        131,623                   36,388
  Other accounts and notes receivable                                                           156,143                  102,544
  Affiliated companies                                                                           13,312                   16,006
  Accumulated provision for uncollectible accounts                                               (5,100)                  (7,000)
Fossil fuel stock, at average cost                                                               99,463                  126,298
Materials and supplies, at average cost                                                         263,609                  253,894
Other                                                                                            97,515                   63,990
- ------------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                          1,251,184                1,028,553
- ------------------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service                                                                                   16,469,706               15,798,624
Less accumulated provision for depreciation                                                   6,914,512                6,538,574
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                              9,555,194                9,260,050
Nuclear fuel, at amortized cost                                                                 120,570                  119,288
Construction work in progress (Note 4)                                                          652,264                  425,975
- ------------------------------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                                         10,328,028                9,805,313
- ------------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments:
Equity investments in unconsolidated subsidiaries (Note 4)                                       25,485                   25,024
Nuclear decommissioning trusts                                                                  375,666                  371,914
Other                                                                                            33,829                   33,766
- ------------------------------------------------------------------------------------------------------------------------------------
Total other property and investments                                                            434,980                  430,704
- ------------------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes (Note 8)                                               565,982                  590,893
Prepaid pension costs                                                                           205,113                  145,801
Debt expense, being amortized                                                                    53,748                   55,824
Premium on reacquired debt, being amortized                                                     173,610                  184,331
Other                                                                                           120,964                  120,441
- ------------------------------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                                       1,119,417                1,097,290
- ------------------------------------------------------------------------------------------------------------------------------------
Total Assets                                                                                $13,133,609              $12,361,860
====================================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>


                                                                     II-90
<PAGE>
<TABLE>
<CAPTION>

BALANCE SHEETS
At December 31, 2000 and 1999
Georgia Power Company 2000 Annual Report

- ---------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity                                          2000                     1999
- ---------------------------------------------------------------------------------------------------------------
                                                                                     (in thousands)
Current Liabilities:
<S>                                                                  <C>                      <C>
Securities due within one year (Note 9)                              $       1,808            $     155,772
Notes payable                                                              703,839                  636,241
Accounts payable --
  Affiliated                                                               117,168                   76,591
  Other                                                                    397,550                  346,785
Customer deposits                                                           78,540                   74,695
Taxes accrued --
  Income taxes                                                               5,151                    7,914
  Other                                                                    137,511                  127,414
Interest accrued                                                            47,244                   58,665
Vacation pay accrued                                                        38,865                   38,143
Other                                                                      153,400                  153,767
- ---------------------------------------------------------------------------------------------------------------
Total current liabilities                                                1,681,076                1,675,987
- ---------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                             3,041,939                2,688,358
- ---------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 8)                               2,182,783                2,202,565
Deferred credits related to income taxes (Note 8)                          247,067                  267,083
Accumulated deferred investment tax credits (Note 8)                       352,282                  367,114
Employee benefits provisions                                               177,444                  181,529
Other                                                                      397,655                  236,812
- ---------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                             3,357,231                3,255,103
- ---------------------------------------------------------------------------------------------------------------
Company obligated mandatorily redeemable preferred
  securities of subsidiary trusts holding company junior
  subordinated notes (See accompanying statements)                         789,250                  789,250
- ---------------------------------------------------------------------------------------------------------------
Cumulative preferred stock (See accompanying statements)                    14,569                   14,952
- ---------------------------------------------------------------------------------------------------------------
Common stockholder's equity (See accompanying statements)                4,249,544                3,938,210
- ---------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity                             $13,133,609              $12,361,860
===============================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>

                                                                     II-91

<PAGE>
<TABLE>
<CAPTION>

STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Georgia Power Company 2000 Annual Report

- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                  2000               1999        2000        1999
- ----------------------------------------------------------------------------------------------------------------------------------
                                                                                       (in thousands)           (percent of total)
Long-Term Debt:
First mortgage bonds --
     Maturity                       Interest Rates
     --------                       --------------
     <S>                            <C>                                     <C>                <C>
     March 1, 2000                  6.00%                                   $       -          $       100,000
     April 1, 2003                  6.625%                                          200,000            200,000
     August 1, 2003                 6.35%                                            75,000             75,000
     2005                           6.07%                                            10,000             10,000
     2008                           6.875%                                           50,000             50,000
     2025                           7.70%                                            57,000             57,000
- ----------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                                          392,000            492,000
- ----------------------------------------------------------------------------------------------------------------
Senior notes -- (Note 9)
     Variable rate (6.71375% at 1/1/01) due February 22, 2002                       300,000            -
     5.50% due December 1, 2005                                                     150,000            150,000
     6.60% due December 31, 2038                                                    200,000            200,000
     6.625% due March 31, 2039                                                      100,000            100,000
     6.875% due December 31, 2047                                                   145,000            145,000
- ----------------------------------------------------------------------------------------------------------------
Total senior notes payable                                                          895,000            595,000
- ----------------------------------------------------------------------------------------------------------------
Other long-term debt -- (Note 9)
     Pollution control revenue bonds --
     Maturity                       Interest Rates
     --------                       -------------
     2000                           4.375%                                          -                   50,000
     2005                           5.00%                                            57,000             57,000
     2011                           Variable (5.10% at 1/1/01)                       10,450             10,450
     2018-2019                      6.00% to 6.25%                                   13,100             13,100
     2021-2025                      5.40% to 6.75%                                  308,660            337,385
     2022-2025                      Variable (4.85% to 5.35% at 1/1/01)             622,075            622,075
     2026-2030                      Variable (5.00% to 5.10% at 1/1/01)             206,180            206,180
     2030                           4.53%                                            78,725            -
     2032-2034                      Variable (5.0% to 5.30% at 1/1/01)              140,000            140,000
     2034                           5.25% to 5.45%                                  238,000            238,000
- ----------------------------------------------------------------------------------------------------------------
Total other long-term debt                                                        1,674,190          1,674,190
- ----------------------------------------------------------------------------------------------------------------
Capital lease obligations (Note 9)                                                   85,179             85,851
- ----------------------------------------------------------------------------------------------------------------
Unamortized debt discount, net                                                       (2,622)            (2,911)
- ----------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
     requirement -- $179.6 million)                                               3,043,747          2,844,130
Less amount due within one year (Note 9)                                              1,808            155,772
- -----------------------------------------------------------------------------------------------------------------------------------
Total long-term debt excluding amount due within one year                   $     3,041,939    $     2,688,358   37.6 %      36.2 %
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>



                                                                     II-92
<PAGE>
<TABLE>
<CAPTION>

STATEMENTS OF CAPITALIZATION (continued)
At December 31, 2000 and 1999
Georgia Power Company 2000 Annual Report

- -----------------------------------------------------------------------------------------------------------------------------------
                                                                         2000               1999              2000        1999
- -----------------------------------------------------------------------------------------------------------------------------------
                                                                              (in thousands)                (percent of total)
Company Obligated Mandatorily
   Redeemable Preferred Securities (Note 9):
     <S>                                                          <C>                <C>
     $25 liquidation value -- 6.85%                                $       200,000    $       200,000
     $25 liquidation value -- 7.60%                                        175,000            175,000
     $25 liquidation value -- 7.75%                                        189,250            189,250
     $25 liquidation value -- 7.75%                                        225,000            225,000
- -----------------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $59.1 million)                   789,250            789,250          9.7        10.6
- -----------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock, without par value:
     Authorized -- 55,000,000 shares
     Outstanding -- 145,689 shares at December 31, 2000
     Outstanding -- 149,520 shares at December 31, 1999
         $100 stated value --
            4.60%                                                           14,569             14,952
- -----------------------------------------------------------------------------------------------------------------------------------
Total cumulative preferred stock (annual dividend
     requirement -- $0.7 million)                                           14,569             14,952          0.2         0.2
- -----------------------------------------------------------------------------------------------------------------------------------
Common Stockholder's Equity:
Common stock, without par value --
     Authorized -- 15,000,000 shares
     Outstanding --  7,761,500 shares                                      344,250            344,250
Paid-in capital                                                          2,117,497          1,815,983
Premium on preferred stock                                                      40                 40
Retained earnings (Note 9)                                               1,787,757          1,777,937
- -----------------------------------------------------------------------------------------------------------------------------------
Total common stockholder's equity (See accompanying statements)          4,249,544          3,938,210         52.5        53.0
- -----------------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                               $     8,095,302    $     7,430,770        100.0 %     100.0 %
- -----------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>


                                                                     II-93


<PAGE>

<TABLE>
<CAPTION>
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Georgia Power Company 2000 Annual Report

- --------------------------------------------------------------------------------------------------------------------------------

                                                                                   Premium on
                                                     Common          Paid-In       Preferred       Retained
                                                     Stock           Capital         Stock         Earnings          Total
- --------------------------------------------------------------------------------------------------------------------------------
                                                                                 (in thousands)

<S>                                                   <C>             <C>                <C>        <C>             <C>
Balance at January 1, 1998                             $344,250        $1,929,971         $160       $1,745,347      $4,019,728
Net income after dividends on preferred stock                 -                 -            -          570,228         570,228
Capital distributions to parent company                       -          (270,000)           -                -        (270,000)
Capital contributions from parent company                     -               235            -                -             235
Cash dividends on common stock                                -                 -            -         (536,600)       (536,600)
Preferred stock transactions, net                             -                 -           (2)             583             581
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                            344,250         1,660,206          158        1,779,558       3,784,172
Net income after dividends on preferred stock                 -                 -            -          541,383         541,383
Capital contributions from parent company                     -           155,777            -                -         155,777
Cash dividends on common stock                                -                 -            -         (543,000)       (543,000)
Preferred stock transactions, net                             -                 -         (118)              (4)           (122)
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                            344,250         1,815,983           40        1,777,937       3,938,210
Net income after dividends on preferred stock                 -                 -            -          559,420         559,420
Capital contributions from parent company                     -           301,514            -                -         301,514
Cash dividends on common stock                                -                 -            -         (549,600)       (549,600)
- --------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                           $344,250        $2,117,497          $40       $1,787,757      $4,249,544
================================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>




                                                                     II-94

<PAGE>


NOTES TO FINANCIAL STATEMENTS
Georgia Power Company 2000 Annual Report


1.  SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

General

The Company is a wholly owned subsidiary of Southern Company, which is the
parent company of five integrated Southeast utilities, Southern Company Services
(SCS), the system service company, Southern Communications Services (Southern
LINC), Mirant Corporation (formerly Southern Energy), Southern Nuclear Operating
Company (Southern Nuclear), Southern Company Energy Solutions, and other direct
and indirect subsidiaries. The integrated Southeast utilities (Alabama Power
Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company,
and Savannah Electric and Power Company) provide electric service in four
states. Contracts among the integrated Southeast utilities -- related to jointly
owned generating facilities, interconnecting transmission lines, and the
exchange of electric power -- are regulated by the Federal Energy Regulatory
Commission (FERC) or the Securities and Exchange Commission (SEC). SCS provides,
at cost, specialized services to Southern Company and subsidiary companies.
Southern LINC provides digital wireless communications services to the
subsidiary companies and also markets these services to the public within the
Southeast. Southern Company Energy Solutions develops new business opportunities
related to energy products and services. Southern Nuclear provides services to
Southern Company's nuclear power plants. Mirant Corporation acquires, develops,
builds, owns, and operates power production and delivery facilities and provides
a broad range of energy-related services to utilities and industrial companies
in selected countries around the world. Mirant Corporation's businesses include
independent power projects, integrated utilities, a distribution company, and
energy trading and marketing businesses outside the Southeastern United States.

     Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The Company
is also subject to regulation by the FERC and the Georgia Public Service
Commission (GPSC). The Company follows accounting principles generally accepted
in the United States and complies with the accounting policies and practices
prescribed by the respective regulatory commissions. The preparation of
financial statements in conformity with accounting principles generally accepted
in the United States requires the use of estimates, and the actual results may
differ from these estimates.

     Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.

Related-Party Transactions

The Company has an agreement with SCS under which the following services are
rendered to the Company at cost: general and design engineering, purchasing,
accounting and statistical, finance and treasury, tax, information resources,
marketing, auditing, insurance and pension, human resources, systems and
procedures, and other services with respect to business and operations and power
pool operations. Costs for these services amounted to $269 million, $253
million, and $251 million during 2000, 1999, and 1998, respectively.

     The Company has an agreement with Southern Nuclear under which the
following nuclear-related services are rendered to the Company at cost: general
executive and advisory services; general operations, management and technical
services; administrative services including procurement, accounting and
statistical, employee relations, and systems and procedures services; strategic
planning and budgeting services; and other services with respect to business and
operations. Costs for these services amounted to $281 million, $270 million, and
$269 million during 2000, 1999, and 1998, respectively.

Regulatory Assets and Liabilities

The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues associated with
certain costs that are expected to be recovered from customers through the
ratemaking process. Regulatory liabilities represent probable future reductions
in revenues associated with amounts that are expected to be credited to
customers through the ratemaking process. Pursuant to the terms of the GPSC
retail rate order, the Company recorded $135 million and $85 million in 2000 and
1999, respectively, of accelerated cost recovery of regulatory assets which have

                                      II-95

<PAGE>

NOTES (continued)
Georgia Power Company 2000 Annual Report

been recorded on the balance sheet as a regulatory liability. See Note 3 under
"Retail Rate Order" for additional information. Regulatory assets and
(liabilities) reflected in the Company's Balance Sheets at December 31 relate to
the following:


                                              2000      1999
                                        ----------------------
                                              (in millions)
Deferred income taxes                        $ 566      $ 591
Deferred income tax credits                   (247)      (267)
Premium on reacquired debt                     174        184
Corporate building lease                        55         54
Vacation pay                                    49         47
Postretirement benefits                         30         33
Department of Energy assessments                21         24
Deferred nuclear outage costs                   28         26
Accelerated cost recovery                     (220)       (85)
Interest, accelerated cost recovery            (10)         -
Other, net                                      23          3
- ---------------------------------------------------------------
Total                                        $ 469      $ 610
===============================================================

     In the event that a portion of the Company's operations is no longer
subject to the provisions of Statement No. 71, the Company would be required to
write off related regulatory assets and liabilities that are not specifically
recoverable through regulated rates. In addition, the Company would be required
to determine if any impairment to other assets exists, including plant, and
write down the assets, if impaired, to their fair value.

Revenues and Fuel Costs

The Company currently operates as a vertically integrated utility providing
electricity to retail customers within its traditional service area located
within the state of Georgia, and to wholesale customers in the Southeast.

     Revenues are recognized as services are rendered. Unbilled revenues are
accrued at the end of each fiscal period. Fuel costs are expensed as the fuel is
used. The Company's fuel cost recovery mechanism includes provisions to adjust
billings for fluctuations in fuel costs, the energy component of purchased power
costs, and certain other costs. Revenues are adjusted for differences between
recoverable fuel costs and amounts actually recovered in current rates.

     The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts averaged less than 1 percent of revenues.

     Fuel expense includes the amortization of the cost of nuclear fuel and a
charge, based on nuclear generation, for the permanent disposal of spent nuclear
fuel. Total charges for nuclear fuel included in fuel expense amounted to $75
million in 2000, $74 million in 1999, and $74 million in 1998. The Company has a
contract with the U.S. Department of Energy (DOE) that provides for the
permanent disposal of spent nuclear fuel. The DOE failed to begin disposing of
spent fuel in January 1998 as required by the contracts, and the Company is
pursuing legal remedies against the government for breach of contract. Effective
June 2000, the on-site dry storage facility for Plant Hatch became operational.
Sufficient capacity is believed available to continue dry storage operations at
Plant Hatch through the life of the plant. Sufficient fuel storage capacity
currently is available at Plant Vogtle to maintain full-core discharge
capability for both units into the year 2014.

     Also, the Energy Policy Act of 1992 required the establishment of a Uranium
Enrichment Decontamination and Decommissioning Fund, which is to be funded in
part by a special assessment on utilities with nuclear plants. The assessment
will be paid over a 15-year period, which began in 1993. This fund will be used
by the DOE for the decontamination and decommissioning of its nuclear fuel
enrichment facilities. The law provides that utilities will recover these
payments in the same manner as any other fuel expense. The Company -- based on
its ownership interests -- estimates its remaining liability under this law at
December 31, 2000 to be approximately $19 million. This obligation is recorded
in the accompanying Balance Sheets.

Depreciation and Nuclear Decommissioning

Depreciation of the original cost of depreciable utility plant in service is
provided primarily by using composite straight-line rates, which approximated
3.3 percent in 2000 and 1999, and 3.2 percent in 1998. In addition, pursuant to
a GPSC retail rate order, the Company recorded accelerated depreciation of
electric plant of $304 million in 1998. Total accelerated depreciation recorded
under the GPSC retail rate order was $467 million. These charges are recorded in
the accumulated provision for depreciation. When property subject to
depreciation is retired or otherwise disposed of in the normal course of


                                      II-96
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report

business, its original cost -- together with the cost of removal, less salvage
- -- is charged to accumulated depreciation. Minor items of property included in
the original cost of the plant are retired when the related property unit is
retired. Depreciation expense includes an amount for the expected costs of
decommissioning nuclear facilities and removal of other facilities.

     Nuclear Regulatory Commission (NRC) regulations require all licensees
operating commercial power reactors to establish a plan for providing, with
reasonable assurance, funds for decommissioning. The Company has established
external trust funds to comply with the NRC's regulations. Amounts previously
recorded in internal reserves are being transferred into the external trust
funds over a set period of time as ordered by the GPSC. Earnings on the trust
funds are considered in determining decommissioning expense. The NRC's minimum
external funding requirements are based on a generic estimate of the cost to
decommission the radioactive portions of a nuclear unit based on the size and
type of reactor. The Company has filed plans with the NRC to ensure that -- over
time -- the deposits and earnings of the external trust funds will provide the
minimum funding amounts prescribed by the NRC.

     The Company periodically conducts site-specific studies to estimate the
actual cost of decommissioning its nuclear generating facilities. Site study
cost is the estimate to decommission the facility as of the site study year, and
ultimate cost is the estimate to decommission the facility as of its retirement
date. The estimated site study costs based on the most current study and
ultimate costs assuming an inflation rate of 4.7 percent for the Company's
ownership interests are as follows:



                                           Plant     Plant
                                           Hatch     Vogtle
                                         --------------------
Site study basis (year)                      2000      2000

Decommissioning periods:
   Beginning year                            2014      2027
   Completion year                           2042      2045
- -------------------------------------------------------------
                                            (in millions)
Site study costs:
   Radiated structures                       $486      $420
   Non-radiated structures                     37        48
- -------------------------------------------------------------
Total                                        $523      $468
=============================================================
                                            (in millions)
Ultimate costs:
   Radiated structures                     $1,004    $1,468
   Non-radiated structures                     79       166
- -------------------------------------------------------------
Total                                      $1,083    $1,634
=============================================================

     The decommissioning cost estimates are based on prompt dismantlement and
removal of the plant from service. The actual decommissioning costs may vary
from the above estimates because of changes in the assumed date of
decommissioning, changes in the NRC requirements, changes in the assumptions
used in making the estimates, changes in regulatory requirements, changes in
technology, and changes in costs of labor, materials, and equipment. The Company
has filed with the NRC an application requesting a 20-year renewal of the
licenses for both units at Plant Hatch which would permit the operation of both
units until 2034.

     Annual provisions for nuclear decommissioning expense are based on an
annuity method as approved by the GPSC. The amounts expensed in 2000 and fund
balances as of December 31, 2000 were:


                                             Plant       Plant
                                             Hatch       Vogtle
- ----------------------------------------------------------------
                                              (in millions)
  Amount expensed in 2000                   $   19      $   9
================================================================
                                              (in millions)
  Accumulated provisions:
   External trust funds, at fair value        $230       $146
   Internal reserves                            20         12
- ----------------------------------------------------------------
  Total                                       $250       $158
================================================================

     Effective January 1, 1999, the GPSC increased the annual provision for
decommissioning expenses to $28 million from $20 million in 1998. This amount
is based on the NRC generic estimate to decommission the radioactive


                                       II-97
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


portion of the facilities as of 1997 of $526 million and $438 million for
Plants Hatch and Vogtle, respectively. The ultimate costs associated with the
1997 NRC minimum funding requirements are $1.1 billion and $1.3 billion for
Plants Hatch and Vogtle, respectively. Significant assumptions include an
estimated inflation rate of 3.6 percent and an estimated trust earnings rate
of 6.5 percent. The Company expects the GPSC to periodically review and adjust,
if necessary, the amounts collected in rates for the anticipated cost of
decommissioning.

Income Taxes

The Company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property.

Allowance for Funds Used During Construction (AFUDC)

AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new regulated facilities. While cash is
not realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. For the years 2000, 1999, and 1998, the average AFUDC
rates were 6.74 percent, 5.61 percent, and 6.71 percent, respectively. AFUDC,
net of taxes, as a percentage of net income after dividends on preferred stock,
was less than 2.0 percent for 2000, 1999 and 1998.

Property, Plant, and Equipment

Property, plant, and equipment is stated at original cost, less regulatory
disallowances and impairments. Original cost includes: materials; labor;
payroll-related costs such as taxes, pensions, and other benefits; and the cost
of funds used during construction. The cost of maintenance, repairs, and
replacement of minor items of property is charged to maintenance expense. The
cost of replacements of property (exclusive of minor items of property) is
capitalized.

Cash and Cash Equivalents

For purposes of the financial statements, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.

Financial Instruments

The Company has a firm commitment that requires payment in euros. As a hedge
against fluctuations in the exchange rate for euros, the Company entered into
forward currency swaps. The notional amount is 15.9 million euros maturing in
2001 through 2002. At December 31, 2000, the unrecognized gain on these swaps
was approximately $1.3 million.

     The Company's financial instruments for which the carrying amounts did not
approximate fair value at December 31 were as follows:

                                        Carrying      Fair
                                         Amount       Value
                                      ------------------------
Long-term debt:                             (in millions)
  At December 31, 2000                    $2,959      $2,912
  At December 31, 1999                    $2,758      $2,604
Preferred securities:
  At December 31, 2000                      $789        $761
  At December 31, 1999                      $789        $680
- --------------------------------------------------------------

     The fair values for securities were based on either closing market prices
or closing prices of comparable instruments.

Materials and Supplies

Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.

2.  RETIREMENT BENEFITS

The Company has defined benefit, trusteed pension plans that cover substantially
all employees. The Company provides certain medical care and life insurance
benefits for retired employees. Substantially all these employees may become
eligible for such benefits when they retire. The Company funds postretirement
trusts to the extent required by the GPSC and FERC. In late 2000, the Company
adopted several pension and postretirement benefits plan changes that had the

                                       II-98


<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


effect of increasing benefits to both current and future retirees. The effects
of these changes will be to increase annual pension and postretirement benefits
costs by approximately $10 million and $6 million, respectively. The measurement
date for plan assets and obligations is September 30 of each year.

     The weighted average rates assumed in the actuarial calculations for both
the pension and postretirement benefit plans were:

                                                2000      1999
- -----------------------------------------------------------------
Discount                                       7.50%      7.50%
Annual salary increase                         5.00       5.00
Expected long-term return on plan   assets     8.50       8.50
- -----------------------------------------------------------------

Pension Plan

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:

                                             Projected
                                        Benefit Obligations
                                     ---------------------------
                                         2000          1999
- ----------------------------------------------------------------
                                           (in millions)
Balance at beginning of year             $1,205        $1,217
Service cost                                 32            33
Interest cost                                88            80
Benefits paid                               (58)          (57)
Actuarial gain and
     employee transfers                     (14)          (68)
- ----------------------------------------------------------------
Balance at end of year                   $1,253        $1,205
================================================================


                                            Plan Assets
                                     ---------------------------
                                         2000          1999
- ----------------------------------------------------------------
                                           (in millions)
Balance at beginning of year             $2,107        $1,859
Actual return on plan assets                385           313
Benefits paid                               (58)          (57)
Employee transfers                           30            (8)
- ----------------------------------------------------------------
Balance at end of year                   $2,464        $2,107
================================================================


     The accrued pension costs recognized in the Balance Sheets were as follows:

                                             2000      1999
- ---------------------------------------------------------------
                                              (in millions)
Funded status                              $ 1,211     $  902
Unrecognized transition obligation             (26)       (30)
Unrecognized prior service cost                 38         41
Unrecognized net actuarial gain             (1,018)      (767)
- ---------------------------------------------------------------
Prepaid asset recognized in the
      Balance Sheets                        $  205     $  146
===============================================================

     Components of the plan's net periodic cost were as follows:

                                        2000   1999     1998
- ---------------------------------------------------------------
                                            (in millions)
Service cost                           $   32  $   33   $   30
Interest cost                              88      80       82
Expected return on plan assets           (151)   (137)    (127)
Recognized net actuarial gain             (27)    (17)     (20)
Net amortization                           (1)     (1)      (1)
- ---------------------------------------------------------------
Net pension income                     $  (59) $  (42)  $  (36)
===============================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                            Accumulated
                                         Benefit Obligations
                                     ---------------------------
                                         2000          1999
- ----------------------------------------------------------------
                                           (in millions)
Balance at beginning of year              $438          $464
Service cost                                 7             8
Interest cost                               36            30
Benefits paid                              (21)          (19)
Actuarial gain and
     employee transfers                    (28)          (45)
Amendments                                  63             -
- ----------------------------------------------------------------
Balance at end of year                    $495          $438
================================================================


                                       II-99
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


                                            Plan Assets
                                     ---------------------------
                                         2000          1999
- ----------------------------------------------------------------
                                           (in millions)
Balance at beginning of year              $177          $150
Actual return on plan assets                12            11
Employer contributions                      30            35
Benefits paid                              (21)          (19)
- ----------------------------------------------------------------
Balance at end of year                    $198          $177
================================================================

    The accrued postretirement costs recognized in the Balance Sheets were as
follows:

                                             2000      1999
- ---------------------------------------------------------------
                                              (in millions)
Funded status                               $ (297)    $ (261)
Unrecognized transition obligation             113        122
Unrecognized prior service cost                 60          -
Unrecognized gain                              (13)         -
Unrecognized net actuarial loss                  -         10
Fourth quarter contributions                    27         14
- ---------------------------------------------------------------
Accrued liability recognized in the
      Balance Sheets                        $ (110)    $(115)
===============================================================

    Components of the plans' net periodic cost were as follows:

                                         2000   1999     1998
- ---------------------------------------------------------------
                                            (in millions)
Service cost                           $    7  $   8    $   7
Interest cost                              36     30       32
Expected return on plan assets            (16)   (10)      (9)
Recognized net actuarial loss               -      1        1
Net amortization                           12      9        9
- ------------------------------------------------------ --------
Net postretirement cost                $   39  $  38      $40
===============================================================

      An additional assumption used in measuring the accumulated postretirement
benefit obligations was a weighted average medical care cost trend rate of 7.29
percent for 2000, decreasing gradually to 5.50 percent through the year 2005,
and remaining at that level thereafter. An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
2000 as follows:


                                     1 Percent     1 Percent
                                      Increase      Decrease
- ---------------------------------------------------------------
                                           (in millions)
Benefit obligation                      $ 39         $  34
Service and interest costs                 3             3
===============================================================

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The Company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were $15
million, $15 million, and $14 million, respectively.

3. CONTINGENCIES & REGULATORY MATTERS

Retail Rate Order

On December 18, 1998, the GPSC approved a three-year retail rate order for the
Company ending December 31, 2001. Under the terms of the order, earnings are
evaluated against a retail return on common equity range of 10 percent to 12.5
percent. Retail rates were decreased by $262 million on an annual basis
effective January 1, 1999, and by an additional $24 million effective January 1,
2000. The order further provides for $85 million in each year, plus up to $50
million of any earnings above the 12.5 percent return during the second and
third years, to be applied to accelerated amortization or depreciation of
assets. Two-thirds of any additional earnings above the 12.5 percent return will
be applied to rate reductions, with the remaining one-third retained by the
Company. Pursuant to the order, in 2000 and 1999, the Company recorded $85
million each year in accelerated amortization of regulatory assets. In 2000, the
Company also recorded the additional $50 million of accelerated amortization.
The accelerated amortization is recorded in a regulatory liability account and,
as mandated by the GPSC, the Company recorded $10 million of interest on the
amounts in the regulatory liability account. In addition, the Company recorded
$44 million and $79 million of revenue subject to refund for estimated earnings
above 12.5 percent retail return on common equity in 2000 and 1999,
respectively. Refunds applicable to 1999 were made to customers in 2000. The
estimated 2000 refund is included in other current liabilities on the Balance
Sheet. The Company will file a general rate case on July 2, 2001, in response to


                                       II-100
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


which the GPSC would be expected to determine whether the rate order should be
continued, modified, or discontinued.

Environmental Protection Agency (EPA) Litigation

On November 3, 1999, the EPA brought a civil action in the U.S. District Court
for the Northern District of Georgia. The complaint alleges violations of the
prevention of significant deterioration and new source review provisions of the
Clean Air Act with respect to coal-fired generating facilities at the Company's
Bowen and Scherer plants. The civil action requests penalties and injunctive
relief, including an order requiring the installation of the best available
control technology at the affected units beginning at the point of the alleged
violations. The Clean Air Act authorizes civil penalties of up to $27,500 per
day, per violation at each generating unit. Prior to January 30, 1997, the
penalty was $25,000 per day.

     The EPA concurrently issued a notice of violation to the Company relating
to these two plants. In early 2000, the EPA filed a motion to amend its
complaint to add the violations alleged in its notice of violation. The
complaint and the notice of violation are similar to those brought against and
issued to several other electric utilities. The complaint and the notice of
violation allege that the Company failed to secure necessary permits or install
additional pollution equipment when performing maintenance and construction at
coal burning plants constructed or under construction prior to 1978. The Company
believes that it complied with applicable laws and the EPA's regulations and
interpretations in effect at the time the work in question took place.

     An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash
flows, and possibly financial condition unless such costs can be recovered
through regulated rates.

Other Environmental Contingencies

In January 1995, the Company and four other unrelated entities were notified by
the EPA that they have been designated as potentially responsible parties under
the Comprehensive Environmental Response, Compensation and Liability Act with
respect to a site in Brunswick, Georgia. As of December 31, 2000, the Company
has recognized approximately $5 million in cumulative expenses associated with
the Company's agreed upon share of removal and remedial investigation and
feasibility study costs for this site. The final outcome of this matter cannot
now be determined. However, based on the nature and extent of the Company's
activities relating to the site, management believes that the Company's portion
of any remaining remediation costs should not be material to the financial
statements.

     In compliance with the Georgia Hazardous Site Response Act of 1993, the
State of Georgia was required to compile an inventory of all known or suspected
sites where hazardous wastes, constituents, or substances have been disposed of
or released in quantities deemed reportable by the State. In developing this
list, the State identified several hundred properties throughout the State,
including 34 sites which may require environmental remediation that were either
previously or are currently owned by the Company. The majority of these sites
are electrical power substations and power generation facilities. The Company
has remediated ten electrical substations on the list at a cumulative cost of
approximately $3 million through December 31, 2000. The State has removed from
the list three power generation facilities following the assessment which
indicated no remediation was necessary. In addition, the Company has recognized
approximately $27.5 million in cumulative expenses through December 31, 2000 for
the assessment of the remaining sites on the list and the anticipated clean-up
cost for 14 sites that the Company plans to remediate. Any additional costs of
remediating the remaining sites cannot presently be determined until such
studies are completed for each site and the State determines whether remediation
is required. If all listed sites were required to be remediated, the Company
could incur expenses of up to approximately $5 million in additional clean-up
costs and construction expenditures of up to approximately $37 million to
develop new waste management facilities or install additional pollution control
devices.

Nuclear Performance Standards

The GPSC has adopted a nuclear performance standard for the Company's nuclear
generating units under which the performance of Plants Hatch and Vogtle is
evaluated every three years. The performance standard is based on each unit's
capacity factor as compared to the average of all comparable U.S. nuclear units

                                       II-101
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


operating at a capacity factor of 50 percent or higher during the three-year
period of evaluation. Depending on the performance of the units, the Company
could receive a monetary award or penalty under the performance standards
criteria.

     In January 1997, the GPSC approved a performance award of approximately
$11.7 million for performance during the 1993-1995 period. This award was
collected through the retail fuel cost recovery provision and recognized in
income over the 36-month period ending in December 1999. In February 2000, the
GPSC approved a performance award of approximately $7.8 million for performance
during the 1996-1998 period. This award is being collected through the retail
fuel cost recovery provision and recognized in income over a 36-month period
that began in January 2000, as mandated by the GPSC.

Race Discrimination Litigation

On July 28, 2000, a lawsuit alleging race discrimination was filed by three
Georgia Power employees against the Company, Southern Company, and SCS in the
United States District Court for the Northern District of Georgia. The lawsuit
also raised claims on behalf of a purported class. The plaintiffs seek
compensatory and punitive damages in an unspecified amount, as well as
injunctive relief. On August 14, 2000, the lawsuit was amended to add four more
plaintiffs and a new defendant, Southern Company Energy Solutions, Inc. The
lawsuit is in the discovery stage. The final outcome of this case cannot now be
determined.

4.  COMMITMENTS

Construction Program

The Company is constructing Plant Dahlberg, a ten unit, 800 megawatt combustion
turbine peaking power plant. Units one through eight began operation in May
2000; units nine and ten are expected to begin operation in June 2001. The
Company is also constructing a 571 megawatt combined cycle unit and a 610
megawatt combined cycle unit at Plant Goat Rock that will begin operation in
2002 and in 2003, respectively, and an addition of two 566 megawatt combined
cycle units at Plant Wansley, to begin operation in 2002. During 2001, the
Company plans to transfer the units at Plants Dahlberg, Goat Rock, and Wansley
at net book value to Southern Power Company (SPC), a new subsidiary formed by
Southern Company. Significant construction of transmission and distribution
facilities, and projects to upgrade and extend the useful life of generating
plants and to remain in compliance with environmental requirements will
continue. The Company currently estimates property additions to be approximately
$1.6 billion in 2001, $1.3 billion in 2002, and $0.8 billion in 2003. If the
Company transfers wholesale generation assets to SPC in 2001 as contemplated,
construction expenditures for the years 2001 through 2003 will total $1.0
billion, $0.9 billion, and $0.7 billion, respectively.

     The construction program is subject to periodic review and revision, and
actual construction costs may vary from estimates because of numerous factors,
including, but not limited to, changes in business conditions, load growth
estimates, environmental regulations, and regulatory requirements.

Fuel Commitments

To supply a portion of the fuel requirements of its generating plants, the
Company has entered into various long-term commitments for the procurement of
fossil and nuclear fuel. In most cases, these contracts contain provisions for
price escalations, minimum purchase levels, and other financial commitments.
Total estimated long-term fossil and nuclear fuel commitments at December 31,
2000 were as follows:


                                                 Minimum
Year                                           Obligations
- ----                                        -----------------
                                               (in millions)
2001                                              $1,006
2002                                                 625
2003                                                 586
2004                                                 430
2005                                                 342
2006 and beyond                                      873
- -------------------------------------------------------------
Total minimum obligations                         $3,862
=============================================================

     Additional commitments for coal and for nuclear fuel will be required in
the future to supply the Company's fuel needs.

Purchased Power Commitments

The Company and an affiliate, Alabama Power Company, own equally all of the
outstanding capital stock of Southern Electric Generating Company (SEGCO), which


                                       II-102
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


owns electric generating units with a total rated capacity of 1,020 megawatts,
as well as associated transmission facilities. The capacity of the units has
been sold equally to the Company and Alabama Power Company under a contract
which, in substance, requires payments sufficient to provide for the operating
expenses, taxes, debt service, and return on investment, whether or not SEGCO
has any capacity and energy available. The term of the contract extends
automatically for two-year periods, subject to either party's right to cancel
upon two year's notice. The Company's share of expenses included in purchased
power from affiliates in the Statements of Income is as follows:

                                2000       1999       1998
                             ---------------------------------
                                     (in millions)
Energy                           $57         $51        $45
Capacity                          30          29         30
- --------------------------------------------------------------
Total                            $87         $80        $75
==============================================================
Kilowatt-hours                 3,835       3,338      3,146
- --------------------------------------------------------------

    The Company has commitments regarding a portion of a 5 percent interest in
Plant Vogtle owned by Municipal Electric Authority of Georgia (MEAG) that are in
effect until the latter of the retirement of the plant or the latest stated
maturity date of MEAG's bonds issued to finance such ownership interest. The
payments for capacity are required whether or not any capacity is available. The
energy cost is a function of each unit's variable operating costs. Except as
noted below, the cost of such capacity and energy is included in purchased power
from non-affiliates in the Company's Statements of Income. Capacity payments
totaled $58 million, $57 million, and $56 million in 2000, 1999, and 1998,
respectively. The current projected Plant Vogtle capacity payments are:


Year                                         Capacity Payments
                                          ----------------------
                                              (in millions)
2001                                              $   59
2002                                                  58
2003                                                  58
2004                                                  55
2005                                                  55
2006 and beyond                                      539
- ----------------------------------------------------------------
Total capacity payments                           $  824
================================================================

    Portions of the payments noted above relate to costs in excess of Plant
Vogtle's allowed investment for ratemaking purposes. The present value of these
portions was written off in 1987 and 1990.

     The Company has entered into other various long-term commitments for the
purchase of electricity. Estimated total long-term obligations at December 31,
2000 were as follows:

Year                                        Other Obligations
                                          ----------------------
                                              (in millions)
2001                                              $  22
2002                                                 39
2003                                                 41
2004                                                 40
2005                                                 40
2006 and beyond                                     154
- ----------------------------------------------------------------
Total other obligations                            $336
================================================================

Operating Leases

The Company has entered into coal rail car rental agreements with various terms
and expiration dates. These expenses totaled $16 million for 2000, $11 million
for 1999, and $13 million for 1998. At December 31, 2000, estimated minimum
rental commitments for these noncancelable operating leases were as follows:

Year                                      Minimum Obligations
                                       --------------------------
                                             (in millions)
2001                                            $  15
2002                                               15
2003                                               15
2004                                               16
2005                                               14
2006 and beyond                                   102
- -----------------------------------------------------------------
Total minimum obligations                       $ 177
=================================================================


5.  NUCLEAR INSURANCE

Under the Price-Anderson Amendments Act of 1988, the Company maintains
agreements of indemnity with the NRC that, together with private insurance,
cover third-party liability arising from any nuclear incident occurring at the
Company's nuclear power plants. The Act provides funds up to $9.5 billion for
public liability claims that could arise from a single nuclear incident. Each
nuclear plant is insured against this liability to a maximum of $200 million by
private insurance, with the remaining coverage provided by a mandatory program


                                       II-103
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


of deferred premiums that could be assessed, after a nuclear incident, against
all owners of nuclear reactors. The Company could be assessed up to $88 million
per incident for each licensed reactor it operates but not more than an
aggregate of $10 million per incident to be paid in a calendar year for each
reactor. Such maximum assessment for the Company, excluding any applicable state
premium taxes -- based on its ownership and buyback interests -- is $178 million
per incident but not more than an aggregate of $20 million to be paid for each
incident in any one year.

     The Company is a member of Nuclear Electric Insurance Limited (NEIL), a
mutual insurer established to provide property damage insurance in an amount up
to $500 million for members' nuclear generating facilities.

     Additionally, the Company has policies that currently provide
decontamination, excess property insurance, and premature decommissioning
coverage up to $2.25 billion for losses in excess of the $500 million primary
coverage. This excess insurance is also provided by NEIL.

     NEIL also covers the additional costs that would be incurred in obtaining
replacement power during a prolonged accidental outage at a member's nuclear
plant. Members can be insured against increased costs of replacement power in an
amount up to $3.5 million per week -- starting 12 weeks after the outage -- for
one year and up to $2.8 million per week for the second and third years.

     Under each of the NEIL policies, members are subject to assessments if
losses each year exceed the accumulated funds available to the insurer under
that policy. The current maximum annual assessments for the Company under the
three NEIL policies would be $19 million.

     For all on-site property damage insurance policies for commercial nuclear
power plants, the NRC requires that the proceeds of such policies should be
dedicated first for the sole purpose of placing the reactor in a safe and stable
condition after an accident. Any remaining proceeds are to be applied next
toward the costs of decontamination and debris removal operations ordered by the
NRC, and any further remaining proceeds are to be paid either to the Company or
to its bond trustees as may be appropriate under the policies and applicable
trust indentures.

     All retrospective assessments, whether generated for liability, property,
or replacement power, may be subject to applicable state premium taxes.

6.  JOINT OWNERSHIP AGREEMENTS

Except as otherwise noted, the Company has contracted to operate and maintain
all jointly owned generating facilities. The Company jointly owns the Rocky
Mountain pumped storage hydroelectric plant with Oglethorpe Power Company who is
the operator of the plant. The Company also jointly owns Plant McIntosh with
Savannah Electric and Power Company who operates the plant. The Company and
Florida Power Corporation (FPC) jointly own a combustion turbine unit
(Intercession City) operated by FPC.

     The Company includes its proportionate share of plant operating expenses in
the corresponding operating expenses in the Statements of Income.

     At December 31, 2000, the Company's percentage ownership and investment
(exclusive of nuclear fuel) in jointly owned facilities in commercial operation
were as follows:

                               Company                  Accumulated
Facility (Type)               Ownership    Investment   Depreciation
- --------------------------------------------------------------------
                                                (in millions)
Plant Vogtle (nuclear)           45.7%      $3,301*        $1,724
Plant Hatch (nuclear)            50.1          873            650
Plant Wansley (coal)             53.5          300            150
Plant Scherer (coal)
   Units 1 and 2                  8.4          112             53
   Unit 3                        75.0          545            207
Plant McIntosh
 Common Facilities               75.0           19              2
   (combustion-turbine)
Rocky Mountain                   25.4          169*            72
  (pumped storage)
Intercession City                33.3           11              1
  (combustion-turbine)
- --------------------------------------------------------------------

     * Investment net of write-offs.

7.  LONG-TERM POWER SALES AND LEASE
    AGREEMENTS

The Company and the other integrated Southeast utilities of Southern Company
have long-term contractual agreements for the sale of capacity and energy to
non-affiliated utilities located outside the system's service area. These

                                       II-104
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


agreements consist of firm unit power sales pertaining to capacity from specific
generating units. Because energy is generally sold at cost under these
agreements, it is primarily the capacity revenues that affect the Company's
profitability.

     The Company's capacity revenues were as follows:

               Year      Revenues      Capacity
               -------------------------------------
                      (in millions) (megawatts)
               2000        $  30           124
               1999           32           162
               1998           32           162
               -------------------------------------

     Unit power from specific generating plants is being sold to Florida Power &
Light Company, FPC, and Jacksonville Electric Authority. Under these agreements,
approximately 102 megawatts of capacity is scheduled to be sold annually for
periods after 2000 with a minimum of three years notice until the expiration of
the contracts in 2010.

     During 2000, the Company entered into certain operating leases for portions
of its generating unit capacity. Minimum future capacity revenues from
noncancelable operating leases as of December 31, 2000 were as follows:

Year                                      Minimum Obligations
                                       --------------------------
                                             (in millions)
2001                                            $  41
2002                                               45
2003                                               45
2004                                               45
2005                                                5
2006 and beyond                                     -
- -----------------------------------------------------------------
Total minimum obligations                        $181
=================================================================

8.  INCOME TAXES

At December 31, 2000, tax-related regulatory assets were $566 million and
tax-related regulatory liabilities were $247 million. The assets are
attributable to tax benefits flowed through to customers in prior years and to
taxes applicable to capitalized interest. The liabilities are attributable to
deferred taxes previously recognized at rates higher than current enacted tax
law and to unamortized investment tax credits.

     Details of the federal and state income tax provisions are as follows:


                                     2000      1999      1998
                                  -------------------------------
Total provision for income taxes:        (in millions)
Federal:
   Current                          $ 342       $333      $415
   Deferred                           (34)       (34)      (87)
   Deferred investment tax
     credits                            -          -         7
- -----------------------------------------------------------------
                                      308        299       335
- -----------------------------------------------------------------
State:
   Current                             48         54        77
   Deferred                            (5)        (6)      (13)
   Deferred investment tax
     credits                           10          5         -
- -----------------------------------------------------------------
Total                                $361       $352      $399
=================================================================

     The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:

                                                  2000      1999
                                              ------------------------
                                                   (in millions)
Deferred tax liabilities:
   Accelerated depreciation                   $  1,755    $1,766
   Property basis differences                      683       729
   Other                                           243       155
- ------------------------------------------------------------------
Total                                            2,681     2,650
- ------------------------------------------------------------------
Deferred tax assets:
   Other property basis differences                189       200
   Federal effect of state deferred taxes           91        93
   Other deferred costs                            208       109
   Other                                            37        48
- ------------------------------------------------------------------
Total                                              525       450
- ------------------------------------------------------------------
Net deferred tax liabilities                     2,156     2,200
Portion included in current assets                  27         3
- ------------------------------------------------------------------
Accumulated deferred income taxes
   in the Balance Sheets                      $  2,183    $2,203
==================================================================

     Deferred investment tax credits are amortized over the life of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $15 million in 2000 and 1999, and $22 million in 1998. At December
31, 2000, all investment tax credits available to reduce federal income taxes
payable had been utilized.


                                       II-105

<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


     A reconciliation of the federal statutory tax rate to the effective income
tax rate is as follows:

                                       2000     1999     1998
                                     --------------------------
Federal statutory rate                  35%      35%      35%
State income tax, net of
   federal deduction                     4        4        4
Non-deductible book
   depreciation                          2        2        6
Other                                   (2)      (2)      (4)
- ---------------------------------------------------------------
Effective income tax rate               39%      39%      41%
===============================================================

     Southern Company and its subsidiaries file a consolidated federal income
tax return. Under a joint consolidated income tax agreement, each subsidiary's
current and deferred tax expense is computed on a stand-alone basis.

9.  CAPITALIZATION

First Mortgage Bond Indenture Restrictions

The Company's first mortgage bond indenture contains various restrictions that
remain in effect as long as the bonds are outstanding. At December 31, 2000,
$891 million of retained earnings and paid-in capital was unrestricted for the
payment of cash dividends or any other distributions under terms of the mortgage
indenture. If additional first mortgage bonds are issued, supplemental
indentures in connection with those issues may contain more stringent
restrictions than those currently in effect. The Company has no restrictions on
the amount of indebtedness it may incur.

Preferred Securities

Statutory business trusts formed by the Company, of which the Company owns all
the common securities, have issued mandatorily redeemable preferred securities
as follows:


              Date of                                 Maturity
               Issue     Amount      Rate    Notes      Date
            ---------------------------------------------------
                       (millions)           (millions)
Trust I       8/1996      $225.00  7.75%     $232      6/2036
Trust II      1/1997       175.00  7.60       180     12/2036
Trust III     6/1997       189.25  7.75       195      3/2037
Trust IV      2/1999       200.00  6.85       206      3/2029

     Substantially all of the assets of each trust are junior subordinated notes
issued by the Company in the respective approximate principal amounts set forth
above.

     The Company considers that the mechanisms and obligations relating to the
preferred securities, taken together, constitute a full and unconditional
guarantee by the Company of the Trusts' payment obligations with respect to the
preferred securities.

     The Trusts are subsidiaries of the Company, and accordingly are
consolidated in the Company's financial statements.

Pollution Control Bonds

The Company has incurred obligations in connection with the sale by public
authorities of tax-exempt pollution control revenue bonds. The Company has
authenticated and delivered to trustees an aggregate of $378.8 million of its
first mortgage bonds outstanding at December 31, 2000, which are pledged as
security for its obligations under pollution control revenue contracts. No
interest on these first mortgage bonds is payable unless and until a default
occurs on the installment purchase or loan agreements.

Senior Notes

In February 2000 and February 2001, the Company issued unsecured senior notes.
The proceeds of these issues were used to redeem higher cost long-term debt and
to reduce short-term borrowing. The senior notes are, in effect, subordinated to
all secured debt of the Company, including its first mortgage bonds.

Bank Credit Arrangements

At the beginning of 2001, the Company had unused credit arrangements with banks
totaling $1.8 billion, of which $1.3 billion expires at various times during
2001, and $500 million expires at April 24, 2003.

     Of the total $1.8 billion in unused credit, $1.65 billion is a syndicated
credit arrangement with $1.15 billion expiring April 20, 2001, and $500 million
expiring April 24, 2003. Upon expiration, the $1.15 billion agreement provides
the option of converting borrowings into two-year term loans. Both agreements
contain stated borrowing rates but also allow for competitive bid loans. In



                                       II-106
<PAGE>
NOTES (continued)
Georgia Power Company 2000 Annual Report


addition, the agreements require payment of commitment fees based on the unused
portions of the commitments. Annual fees are also paid to the agent bank.

     Approximately $115 million of the $1.3 billion arrangements expiring during
2001 allow for two-year term loans executable upon the expiration date of the
facilities. All of the arrangements include stated borrowing rates but also
allow for negotiated rates. These agreements also require payment of commitment
fees based on the unused portion of the commitments or the maintenance of
compensating balances with the banks. These balances are not legally restricted
from withdrawal.

     This $1.8 billion in unused credit arrangements provides liquidity support
to the Company's variable rate pollution control bonds. The amount of variable
rate pollution control bonds outstanding requiring that liquidity support as of
December 31, 2000 was $979 million.

     In addition, the Company borrows under uncommitted lines of credit with
banks and through a $750 million commercial paper program that has the liquidity
support of committed bank credit arrangements. Average compensating balances
held under these committed facilities were not material in 2000.

Other Long-Term Debt

Assets acquired under capital leases are recorded in the Balance Sheets as
utility plant in service, and the related obligations are classified as
long-term debt. At December 31, 2000 and 1999, the Company had a capitalized
lease obligation for its corporate headquarters building of $87 million with an
interest rate of 8.1 percent. The lease agreement provides for payments that are
minimal in early years and escalate through the first 21 years of the lease. For
ratemaking purposes, the GPSC has treated the lease as an operating lease and
has allowed only the lease payments in cost of service. The difference between
the accrued expense and the lease payments allowed for ratemaking purposes is
being deferred as a cost to be recovered in the future as ordered by the GPSC.
At December 31, 2000 and 1999, the interest and lease amortization deferred on
the Balance Sheets are $55 million and $54 million, respectively.

Assets Subject to Lien

The Company's mortgage dated as of March 1, 1941, as amended and supplemented,
securing the first mortgage bonds issued by the Company, constitutes a direct
lien on substantially all of the Company's fixed property and franchises.

Securities Due Within One Year

A summary of the improvement fund requirements and scheduled maturities and
redemptions of securities due within one year at December 31 is as follows:

                                                2000     1999
                                             -------------------
                                               (in millions)
Bond improvement fund requirements               $ -    $    5
Capital lease - current portion                    2         1
First mortgage bond maturities
   and redemptions                                 -       100
Pollution control bond maturities
     and redemptions                               -        50
- ---------------------------------------------------------------
Total long-term debt                              $2      $156
===============================================================

     The Company's first mortgage bond indenture includes an improvement fund
requirement that amounts to 1 percent of each outstanding series of bonds
authenticated under the indenture prior to January 1 of each year, other than
those issued to collateralize pollution control obligations. The requirement may
be satisfied by June 1 of each year by depositing cash, reacquiring bonds, or by
pledging additional property equal to 1 2/3 times the requirement.

Redemption of Securities

The Company plans to continue, to the extent possible, a program of redeeming or
replacing debt and preferred securities in cases where opportunities exist to
reduce financing costs. Issues may be repurchased in the open market or called
at premiums as specified under terms of the issue. They may also be redeemed at
face value to meet improvement fund requirements, to meet replacement provisions
of the mortgage, or through use of proceeds from the sale of property pledged
under the mortgage.

                                       II-107
<PAGE>

NOTES (continued)
Georgia Power Company 2000 Annual Report

10. QUARTERLY FINANCIAL DATA
   (UNAUDITED)

Summarized quarterly financial information for 2000 and 1999 is as follows:


                                                       Net Income
                                                         After
                          Operating     Operating     Dividends on
     Quarter Ended        Revenues       Income      Preferred Stock
- ---------------------------------------------------------------------
                                        (in millions)
                         --------------------------------------------
March 2000                 $   992         $223           $ 94
June 2000                    1,221          311            148
September 2000               1,545          537            283
December 2000                1,113          162             34


March 1999                 $   931         $224          $  92
June 1999                    1,092          299            138
September 1999               1,466          557            296
December 1999                  968          115             15
- ---------------------------------------------------------------------

     Under the GPSC retail rate order, the Company recorded $135 million and $85
million of accelerated amortization in 2000 and 1999, respectively, which were
recorded monthly as an operating expense. The fourth quarter December 1999
operating income has been restated to reflect the accelerated amortization as an
operating expense rather than as amortization of premium on reacquired debt. See
Note 3 to the financial statements under "Retail Rate Order" for additional
information.

     The Company's business is influenced by seasonal weather conditions.






                                       II-108

<PAGE>
<TABLE>
<CAPTION>

SELECTED FINANCIAL AND OPERATING DATA 1996-2000
Georgia Power Company 2000 Annual Report


- --------------------------------------------------------------------------------------------------------------------------------
                                                           2000            1999            1998            1997            1996
- --------------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>              <C>             <C>             <C>             <C>
Operating Revenues (in thousands)                    $4,870,618      $4,456,675      $4,738,253      $4,385,717      $4,416,779
Net Income after Dividends
  on Preferred Stock (in thousands)                    $559,420        $541,383        $570,228        $593,996        $580,327
Cash Dividends
  on Common Stock (in thousands)                       $549,600        $543,000        $536,600        $520,000        $475,500
Return on Average Common Equity (percent)                 13.66           14.02           14.61           14.53           13.73
Total Assets (in thousands)                         $13,133,609     $12,361,860     $12,033,618     $12,573,728     $13,006,635
Gross Property Additions (in thousands)              $1,078,163        $790,464        $499,053        $475,921        $428,220
- --------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stockholder's equity                          $4,249,544      $3,938,210      $3,784,172      $4,019,728      $4,154,281
Preferred stock                                          14,569          14,952          15,527         157,247         464,611
Company obligated mandatorily
  redeemable preferred securities                       789,250         789,250         689,250         689,250         325,000
Long-term debt                                        3,041,939       2,688,358       2,744,362       2,982,835       3,200,419
- --------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)        $8,095,302      $7,430,770      $7,233,311      $7,849,060      $8,144,311
================================================================================================================================
Capitalization Ratios (percent):
Common stockholder's equity                                52.5            53.0            52.3            51.2            51.0
Preferred stock                                             0.2             0.2             0.2             2.0             5.7
Company obligated mandatorily
  redeemable preferred securities                           9.7            10.6             9.5             8.8             4.0
Long-term debt                                             37.6            36.2            38.0            38.0            39.3
- --------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)             100.0           100.0           100.0           100.0           100.0
================================================================================================================================
Security Ratings:
First Mortgage Bonds -
  Moody's                                                    A1              A1              A1              A1              A1
  Standard and Poor's                                         A              A+              A+              A+              A+
  Fitch                                                     AA-             AA-             AA-             AA-             AA-
Preferred Stock -
  Moody's                                                    a2              a2              a2              a2              a2
  Standard and Poor's                                      BBB+              A-               A               A               A
  Fitch                                                       A              A+              A+              A+              A+
Unsecured Long-Term Debt -
  Moody's                                                    A2              A2              A2              A2              A2
  Standard and Poor's                                         A               A               A               A               A
  Fitch                                                      A+              A+              A+              A+              A+
================================================================================================================================
Customers (year-end):
Residential                                           1,669,566       1,632,450       1,596,488       1,561,675       1,531,453
Commercial                                              237,977         229,524         221,180         211,672         205,087
Industrial                                                8,533           8,958           9,485           9,988          10,424
Other                                                     3,159           3,060           3,034           2,748           2,645
- --------------------------------------------------------------------------------------------------------------------------------
Total                                                 1,919,235       1,873,992       1,830,187       1,786,083       1,749,609
================================================================================================================================
Employees (year-end):                                     8,855           8,961           8,371           8,354          10,346
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                                                  II-109

<PAGE>

<TABLE>
<CAPTION>

SELECTED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Georgia Power Company 2000 Annual Report


- ------------------------------------------------------------------------------------------------------------------------------
                                                       2000            1999            1998            1997            1996
- ------------------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
<S>                                               <C>              <C>            <C>             <C>             <C>
Residential                                       $ 1,535,684      $1,410,099     $ 1,486,699     $ 1,326,787     $ 1,371,033
Commercial                                          1,620,466       1,527,880       1,591,363       1,493,353       1,486,586
Industrial                                          1,154,789       1,143,001       1,170,881       1,110,311       1,118,633
Other                                                   6,399         (30,892)         49,274          47,848          47,060
- ------------------------------------------------------------------------------------------------------------------------------
Total retail                                        4,317,338       4,050,088       4,298,217       3,978,299       4,023,312
Sales for resale  - non-affiliates                    297,643         210,104         259,234         282,365         281,580
Sales for resale  - affiliates                         96,150          76,426          81,606          38,708          35,886
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity            4,711,131       4,336,618       4,639,057       4,299,372       4,340,778
Other revenues                                        159,487         120,057          99,196          86,345          76,001
- ------------------------------------------------------------------------------------------------------------------------------
Total                                              $4,870,618      $4,456,675      $4,738,253      $4,385,717      $4,416,779
==============================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential                                        20,693,481      19,404,709      19,481,486      17,295,022      17,826,451
Commercial                                         25,628,402      23,715,485      22,861,391      21,134,346      20,823,073
Industrial                                         27,543,265      27,300,355      27,283,147      26,701,685      26,191,831
Other                                                 568,906         551,451         543,462         538,163         536,057
- ------------------------------------------------------------------------------------------------------------------------------
Total retail                                       74,434,054      70,972,000      70,169,486      65,669,216      65,377,412
Sales for resale  - non-affiliates                  6,463,723       5,060,931       6,438,891       6,795,300       7,868,342
Sales for resale  - affiliates                      2,435,106       1,795,243       2,038,400       1,706,699       1,180,207
- ------------------------------------------------------------------------------------------------------------------------------
Total                                              83,332,883      77,828,174      78,646,777      74,171,215      74,425,961
==============================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential                                              7.42            7.27            7.63            7.67            7.69
Commercial                                               6.32            6.44            6.96            7.07            7.14
Industrial                                               4.19            4.19            4.29            4.16            4.27
Total retail                                             5.80            5.71            6.13            6.06            6.15
Sales for resale                                         4.43            4.18            4.02            3.78            3.51
Total sales                                              5.65            5.57            5.90            5.80            5.83
Residential Average Annual
  Kilowatt-Hour Use Per Customer                       12,520          12,006          12,314          11,171          11,763
Residential Average Annual
  Revenue Per Customer                                $929.11         $872.47         $939.73         $857.01         $904.70
Plant Nameplate Capacity
  Ratings (year-end) (megawatts)                       15,114          14,474          14,437          14,437          14,367
Maximum Peak-Hour Demand (megawatts):
Winter                                                 12,014          11,568          11,959          10,407          10,410
Summer                                                 14,930          14,575          13,923          13,153          12,914
Annual Load Factor (percent)                             61.6            58.9            58.7            57.4            62.2
Plant Availability (percent):
Fossil-steam                                             86.1            84.3            86.0            85.8            85.2
Nuclear                                                  91.5            89.3            91.6            88.8            89.3
- ------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                     62.3            63.0            62.3            64.3            60.4
Nuclear                                                  17.4            18.0            18.3            18.8            18.2
Hydro                                                     0.7             0.9             2.2             2.2             2.2
Oil and gas                                               1.8             1.6             2.2             0.6             0.5
Purchased power -
  From non-affiliates                                     8.1             6.6             6.5             2.7             5.6
  From affiliates                                         9.7             9.9             8.5            11.4            13.1
- ------------------------------------------------------------------------------------------------------------------------------
Total                                                   100.0           100.0           100.0           100.0           100.0
==============================================================================================================================
</TABLE>

                                                                  II-110




<PAGE>

                               GULF POWER COMPANY

                               FINANCIAL SECTION


                                     II-111

<PAGE>

MANAGEMENT'S REPORT
Gulf Power Company 2000 Annual Report


The management of Gulf Power Company has prepared -- and is responsible for --
the financial statements and related information included in this report. These
statements were prepared in accordance with accounting principles generally
accepted in the United States and necessarily include amounts that are based on
the best estimates and judgments of management. Financial information throughout
this annual report is consistent with the financial statements.

   The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the accounting records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

   The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

   The audit committee of the board of directors, composed of independent
directors provides a broad overview of management's financial reporting and
control functions. Periodically, this committee meets with management, the
internal auditors, and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.

   Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.

   In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Gulf Power Company in conformity with accounting principles generally
accepted in the United States.



/s/Travis J. Bowden
Travis J. Bowden
President
and Chief Executive Officer


/s/Ronnie R. Labrato
Ronnie R. Labrato
Comptroller
and Chief Financial Officer

                                       II-112

<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Gulf Power Company:

We have audited the accompanying balance sheets and statements of capitalization
of Gulf Power Company (a Maine corporation and a wholly owned subsidiary of
Southern Company) as of December 31, 2000 and 1999, and the related statements
of income, common stockholder's equity, and cash flows for each of the three
years in the period ended December 31, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

   We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

   In our opinion, the financial statements (pages II-123 through II-137)
referred to above present fairly, in all material respects, the financial
position of Gulf Power Company as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.





/s/Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                       II-113

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Gulf Power Company 2000 Annual Report


RESULTS OF OPERATIONS

Earnings

Gulf Power Company's 2000 net income after dividends on preferred stock was
$51.8 million, a decrease of $1.9 million from the previous year. In 1999,
earnings were $53.7 million, down $2.8 million when compared to 1998. The
decrease in earnings in 2000, as well as 1999, was primarily a result of higher
expenses than in the prior year.

Revenues

Operating revenues increased in 2000 when compared to 1999. The following table
summarizes the change in operating revenues for the past two years:

                                             Increase (Decrease)
                                 Amount        From Prior Year
                             -------------------------------------
                                  2000         2000        1999
                             -------------------------------------
                                         (in thousands)
Retail --
   Base Revenues              $336,103       $3,771      $2,469
   Regulatory cost
     recovery and other        226,059       45,631       1,173
- ------------------------------------------------------------------
Total retail                   562,162       49,402       3,642
- ------------------------------------------------------------------
Sales for resale--
   Non-affiliates               66,890        4,537         461
   Affiliates                   66,995          885      23,468
- ------------------------------------------------------------------
Total sales for resale         133,885        5,422      23,929
Other operating
   revenues                     18,272      (14,604)     (3,990)
- ------------------------------------------------------------------
Total operating
   revenues                   $714,319      $40,220     $23,581
==================================================================
Percent change                                  6.0%        3.6%
- ------------------------------------------------------------------

   Retail revenues of $562.2 million in 2000 increased $49.4 million, or 9.6
percent, from the prior year due primarily to the recovery of higher fuel and
purchased power costs. Retail base rate revenues increased $3.8 million due to
increased customer growth and hotter than normal weather, offset by a $10
million permanent annual rate reduction and $6.9 million of revenues subject to
refund based upon the current retail revenue sharing plan (See Note 3 to the
financial statements under "Retail Revenue Sharing Plan" for further
information). Retail revenues for 1999 increased $3.6 million, or 0.7 percent,
when compared to 1998 due primarily to an increase in the number of retail
customers served by the Company.

   The 2000 increase in regulatory cost recovery and other retail revenues over
1999 is primarily attributable to higher fuel and purchased power costs. The
1999 increase in regulatory cost recovery and other retail revenues over 1998 is
primarily attributable to the recovery of increased purchased power capacity
costs. "Regulatory cost recovery and other" includes the following:  recovery
provisions for fuel expense and the energy component of purchased power costs;
energy conservation costs; purchased power capacity costs; and environmental
compliance costs. The recovery provisions generally equal the related expenses
and have no material effect on net income. See Notes 1 and 3 to the financial
statements under "Revenues and Regulatory Cost Recovery Clauses" and
"Environmental Cost Recovery," respectively, for further information.

   Sales for resale were $133.9 million in 2000, an increase of $5.4 million, or
4.2 percent, over 1999 primarily due to additional energy sales. Revenues from
sales to utilities outside the service area under long-term contracts consist of
capacity and energy components. Capacity revenues reflect the recovery of fixed
costs and a return on investment under the contracts. Energy is generally sold
at variable cost. The capacity and energy components under these long-term
contracts were as follows:

                             2000         1999          1998
                     ----------------------------------------
                        (in thousands)
Capacity                  $20,270      $19,792       $22,503
Energy                     21,922       20,251        14,556
- -------------------------------------------------------------
Total                     $42,192      $40,043       $37,059
=============================================================

   Capacity revenues increased slightly in 2000 due to the recovery of higher
operating expenses experienced during the year. Capacity revenues had been
declining in prior years due to the decreasing net investment related to these
sales. This downward trend accelerated during 1999 as a result of a reduction in
the authorized rate of return on the equity component of the investment.

   Sales to affiliated companies vary from year to year depending on demand and
the availability and cost of generating resources at each company. These sales
have little impact on earnings.

   Other operating revenues decreased in 2000 and in 1999 due primarily to the
retail recovery clause adjustments for the difference between recoverable costs
and the amounts actually reflected in current rates. See Notes 1 and 3 to the
financial statements under "Revenues and Regulatory Cost Recovery Clauses" and
"Environmental Cost Recovery," respectively, for further discussion.


                                       II-114

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


Energy Sales

   Kilowatt-hour sales for 2000 and the percent changes by year were as follows:

                             KWH      Percent Change
                     ----------------------------------
                             2000     2000      1999
                     ----------------------------------
                       (millions)
Residential                 4,790      7.1%      0.8%
Commercial                  3,379      4.9       3.6
Industrial                  1,925      4.3       0.7
Other                          19      0.0       0.0
                         --------
Total retail               10,113      5.8       1.7
Sales for resale
   Non-affiliates           1,705      9.2      16.4
   Affiliates               1,917    (23.7)     42.9
                         --------
Total                      13,735      0.7       9.0
=======================================================

   In 2000, total retail energy sales increased when compared to 1999 due
primarily to an increase in the total number of customers and hotter than normal
weather. Total retail energy sales increased in 1999 when compared to 1998 due
to increases in the number of customers. See "Future Earnings Potential" for
information on the Company's initiatives to remain competitive and to meet
conservation goals set by the Florida Public Service Commission (FPSC).

   An increase in energy sales for resale to non-affiliates of 9.2 percent in
2000 when compared to 1999 is primarily related to unit power sales under
long-term contracts to other Florida utilities and bulk power sales under
short-term contracts to other non-affiliated utilities. Energy sales to
affiliated companies vary from year to year depending on demand and
availability and cost of generating resources at each company.

Expenses

Total operating expenses in 2000 increased $39.5 million, or 7.1 percent, over
the amount recorded in 1999 due primarily to higher fuel and purchased power
expenses. In 1999, total operating expenses increased $26.8 million, or 5.1
percent, compared to 1998 due primarily to higher fuel, purchased power, and
maintenance expenses offset by lower other operation expenses.

   Fuel expenses in 2000, when compared to 1999, increased $6.7 million, or 3.2
percent, due primarily to an increase in average fuel costs. In 1999, fuel
expenses increased $11.5 million, or 5.9 percent, when compared to 1998. The
increases were the result of increased generation resulting from a higher demand
for energy.

   The amount and sources of generation and the average cost of fuel per net
kilowatt-hour generated were as follows:

                                          2000       1999       1998
                                      -------------------------------
Total generation
   (millions of kilowatt-hours)         12,866     13,095     11,986
Sources of generation
   (percent)
   Coal                                   98.2       97.4       98.0
   Oil and gas                             1.8        2.6        2.0
Average cost of fuel per net
   kilowatt-hour generated
   (cents)--                              1.68       1.60       1.69
- ---------------------------------------------------------------------

   Purchased power expenses increased in 2000 by $25.5 million, or 44.7 percent,
over 1999 and purchased power expenses for 1999 increased over 1998 by $13.2
million, or 30.2 percent, due primarily to a higher demand for energy in both
years.

   Depreciation and amortization expense increased $2.3 million, or 3.5 percent,
in 2000 when compared to 1999, due to an increase in depreciable property and
the amortization of a portion of a regulatory asset, which was allowed in the
current retail revenue sharing plan. The $5.5 million, or 9.2 percent, increase
in 1999 compared to 1998 was due primarily to a reduction in the amortization of
gains from the 1998 sale of emission allowances.

   Interest on long-term debt, which is included in "Interest expense",
increased $1.2 million, or 5.8 percent, in 2000 when compared to 1999 due
primarily to the issuance of $50 million of senior notes in August 1999. In 1999
interest on long-term debt increased $1.7 million, or 8.4 percent, when compared
to 1998 due primarily to the maturity of two first mortgage bond series in 1998
which were replaced by senior notes at a slightly higher interest rate, and the
issuance of $50 million of senior notes in August 1999.

Effects of Inflation

The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its cost of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in

                                       II-115

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


recent years, it continues to have an adverse effect on the Company because of
the large investment in utility plant with long economic lives. Conventional
accounting for historical cost does not recognize this economic loss nor the
partially offsetting gain that arises through financing facilities with
fixed-money obligations, such as long-term debt and preferred securities. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.

Future Earnings Potential

The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors. The major factor is the ability to achieve energy sales growth
while containing cost in a more competitive environment.

   In accordance with Financial Accounting Standards Board (FASB) Statement No.
87, Employers' Accounting for Pensions, the Company recorded non-cash income of
approximately $5.8 million in 2000. Pension income in 2001 is expected to be
less as a result of plan amendments. Future pension income is dependent on
several factors including trust earnings and changes to the plan.

   The Company currently operates as a vertically integrated utility providing
electricity to customers within its traditional service area located in
northwest Florida. Prices for electricity provided by the Company to retail
customers are set by the FPSC.

   Future earnings in the near term will depend upon growth in energy sales,
which is subject to a number of factors. Traditionally, these factors have
included weather, competition, changes in contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in the Company's service area. In early 1999, the FPSC
staff and the Company became involved in discussions primarily related to
reducing the Company's authorized rate of return. On October 1, 1999, the Office
of Public Counsel, the Coalition for Equitable Rates, the Florida Industrial
Power Users Group, and the Company jointly filed a petition to resolve the
issues. The stipulation included a reduction to retail base rates of $10 million
annually and provides for revenues to be shared within set ranges for 1999
through 2002. Customers receive two-thirds of any revenue within the sharing
range and the Company retains one-third. Any revenue above this range is
refunded to the customers. The stipulation also included authorization for the
Company, at its discretion, to accrue up to an additional $5 million to the
property insurance reserve and $1 million to amortize a regulatory asset related
to the corporate office. The Company also filed a request to prospectively
reduce its authorized ROE range from 11 to 13 percent to 10.5 to 12.5 percent in
order to help ensure that the FPSC would approve the stipulation. The FPSC
approved both the stipulation and the ROE request with an effective date of
November 4, 1999. The Company is currently planning to seek additional rate
relief to recover costs related to the Smith Unit 3 combined cycle facility
currently under construction and scheduled to be placed in-service in June of
2002.

   For calendar year 2000, the Company's retail revenue range for sharing was
$352 million to $368 million. Actual retail revenues in 2000 were $362.4 million
and the Company recorded revenues subject to refund of $6.9 million. The
estimated refund with interest was reflected in customer billings in February
2001. For calendar year 2001, the Company's retail revenue range for sharing is
$358 million to $374 million. For calendar year 2002, there are specified
sharing ranges for each month from the expected in-service date of Smith Unit 3
until the end of the year. The sharing plan will expire at the earlier of the
in-service date of Smith Unit 3 or December 31, 2002.

   The electric utility industry in the United States is continuing to evolve as
a result of regulatory and competitive factors. Among the primary agents of
change has been the Energy Policy Act of 1992 (Energy Act). The Energy Act
allows independent power producers (IPPs) to access a utility's transmission
network in order to sell electricity to other utilities. This enhances the
incentive for IPPs to build cogeneration plants for a utility's large industrial
and commercial customers and sell energy generation to other utilities. Also,
electricity sales for resale rates are being driven down by wholesale
transmission access and numerous potential new energy suppliers, including power
marketers and brokers. The Company is aggressively working to maintain and
expand its share of wholesale sales in the southeastern power markets.

   In 2000, Florida's Governor appointed a 17 member study commission to look at
the state's electric industry, studying issues ranging from current and future
reliability of electric and natural gas supply, electric industry retail and
wholesale competition, environmental impacts of energy supply, conservation, and

                                       II-116

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


tax issues. The commission's final report and recommendations are due to the
Governor and legislature by December 1, 2001. The commission submitted an
interim report to the state legislature that involves introducing more
competition into the wholesale production of electricity in Florida. If approved
by the legislature, the proposal would require utilities to turn over generating
assets to an unregulated affiliate company over a 6-year transition period. The
proposal would allow out of state companies to build merchant facilities and to
bid on new generation needs. The effects of any proposed changes cannot
presently be determined, but could have a material effect on the Company's
financial statements.

   Although the Energy Act does not permit retail customer access, it was a
major catalyst for the current restructuring and consolidation taking place
within the utility industry. Numerous federal and state initiatives are in
varying stages to promote wholesale and retail competition. Among other things,
these initiatives allow customers to choose their electricity provider. Some
states have approved initiatives that result in a separation of the ownership
and/or operation of generating facilities from the ownership and/or operation of
transmission and distribution facilities. While various restructuring and
competition initiatives have been discussed in Florida, none have been enacted.
Enactment would require numerous issues to be resolved, including significant
ones relating to recovery of any stranded investments, full cost recovery of
energy produced, and other issues related to the current energy crisis in
California. As a result of this crisis, many states have either discontinued or
delayed implementation of initiatives involving retail deregulation. The
inability of a company to recover its investments, including the regulatory
assets described in Note 1 to the financial statements, could have a material
adverse effect on financial condition and results of operations.

   Continuing to be a low-cost producer could provide opportunities to increase
market share and profitability in markets that evolve with changing regulation.
Conversely, if the Company does not remain a low-cost producer and provide
quality service, then energy sales growth could be limited, and this could
significantly erode earnings.

   In 1996, the FPSC approved a new optional Commercial/Industrial Service Rider
(CISR), which is applicable to the rate schedules for the Company's largest
existing and potential customers who are able to show they have viable
alternatives to purchasing the Company's energy services. The CISR, approved as
a pilot program, provides the flexibility needed to enable the Company to offer
its services in a more competitive manner to these customers. The publicity of
the CISR ruling, increased competitive pressures, and general awareness of
customer choice pilots and proposals across the country have stimulated interest
on the part of customers in custom tailored offerings. The Company has
participated in one-on-one discussions with many of these customers, and has
negotiated and executed two Contract Service Agreements within the CISR pilot
program. The pilot program was scheduled to end in 2000; however, on February 6,
2001 the FPSC approved the Company's request to remove the original 48 month
limitation and allow the program to continue.

    Every five years the FPSC establishes numeric demand side management goals.
The Company proposed numeric goals for the ten-year period from 2000 to 2009.
The proposed goals consisted of the total, cost-effective winter and summer peak
demand (kilowatts) and annual energy (kilowatt-hour) savings reasonably
achievable from demand side management for the residential and
commercial/industrial classes. The Company submitted its 2001 Demand Side
Management Plan to the FPSC on December 29, 2000. The plan describes the
proposed programs the Company will employ to reach the numeric goals. The plan
relies heavily on innovative pricing and energy efficient construction.

    On December 20, 1999, the Federal Energy Regulatory Commission (FERC) issued
its final rule on Regional Transmission Organizations (RTOs). The order
encouraged utilities owning transmission systems to form RTOs on a voluntary
basis. After participating in regional conferences with customers and other
members of the public to discuss the formation of RTOs, utilities were required
to make a filing with the FERC. Southern Company and its integrated utility
subsidiaries, including the Company, filed on October 16, 2000, a proposal for
the creation of an RTO. The proposal is for the formation of a for-profit
company that would have control of the bulk power transmission system of the
Company and any other participating utilities. Participants would have the
option to either maintain their ownership or divest, sell, or lease their assets
to the proposed RTO. If the FERC accepts the proposal as filed, the creation of

                                       II-117

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


an RTO is not expected to have a material impact on the Company's financial
statements. The outcome of this matter cannot now be determined.

   The Energy Act amended the Public Utility Holding Company Act of 1935 (PUHCA)
to allow holding companies to form exempt wholesale generators to sell power
largely free of regulation under PUHCA. These entities are able to own and
operate power generating facilities and sell power to affiliates -- under
certain restrictions.

    Southern Company is aggressively working to maintain and expand its share of
wholesale sales in the southeastern power markets. In January 2001, Southern
Company announced the formation of a new subsidiary -- Southern Power Company.
The new subsidiary will own, manage, and finance wholesale generating assets in
the Southeast. Southern Power will be the primary growth engine for Southern
Company's market-based energy business. Energy from its assets will be marketed
to wholesale customers under the Southern Company name.

   Compliance costs related to current and future environmental laws and
regulations could affect earnings if such costs are not fully recovered. The
Clean Air Act and other important environmental items are discussed later under
"Environmental Matters." Also, Florida legislation adopted in 1993 that provides
for recovery of prudent environmental compliance costs is discussed in Note 3 to
the financial statements under "Environmental Cost Recovery."

   The Company is subject to the provisions of FASB Statement No. 71, Accounting
for the Effects of Certain Types of Regulation. In the event that a portion of
the Company's operations is no longer subject to these provisions, the Company
would be required to write off related regulatory assets and liabilities that
are not specifically recoverable, and determine if any other assets have been
impaired. See Note 1 to the financial statements under "Regulatory Assets and
Liabilities" for additional information.

Exposure to Market Risks

Due to cost-based rate regulation, the Company has limited exposure to market
volatility in interest rates and prices of electricity. To mitigate residual
risks relative to movements in electricity prices, the Company enters into fixed
price contracts for the purchase and sale of electricity through the wholesale
electricity market. Realized gains and losses are recognized in the income
statements as incurred. At December 31, 2000, exposure from these activities was
not material.

New Accounting Standard

In June 2000, FASB issued Statement No. 138, an amendment of Statement
No. 133, Accounting for Derivative Instruments and Hedging Activities.
Statement No. 133, as amended, establishes accounting and reporting
standards for derivative instruments and for hedging activities. Statement
No. 133 requires that certain derivative instruments be recorded in the
balance sheet as either an asset or liability measured at fair value, and
that changes in the fair value be recognized currently in earnings unless
specific hedge accounting criteria are met.

   The Company may utilize financial instruments to reduce its exposure to
changes in interest rates depending on market conditions. The Company also
enters into commodity related forward contracts to limit exposure to changing
prices on certain fuel purchases and electricity purchases and sales.

   Substantially all of these bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain of
these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

   The Company adopted Statement No. 133 effective January 1, 2001. The impact
on net income was immaterial. The application of the new rules is still evolving
and further guidance from FASB is expected, which could additionally impact the
Company's financial statements. Also, as wholesale energy markets mature, future
transactions could result in more volatility in net income and comprehensive
income.

                                       11-118

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Gulf Power Company 2000 Annual Report


Financial Condition

Overview

The Company's financial condition continues to be very solid. During 2000, gross
property additions were $95.8 million. Funds for the property additions were
provided by operating activities. See the Statements of Cash Flows for further
details.

Financing Activities

In 2000, there were no issuances or retirements of long-term debt. In 1999, the
Company sold $50 million of senior notes and long-term bank notes totaling $27
million were retired. See the Statements of Cash Flows for further details.

   Composite financing rates for the years 1998 through 2000 as of year end were
as follows:

                                       2000      1999      1998
                                    -----------------------------
Composite interest rate on
   long-term debt                       6.2%      6.0%      6.1%
Composite rate on
   trust preferred securities           7.3%      7.3%      7.3%
Composite preferred stock
   dividend rate                        5.1%      5.1%      5.1%
- -----------------------------------------------------------------

   The composite interest rate on long-term debt increased in 2000 due to higher
interest rates on variable rate pollution control bonds.


Capital Requirements for Construction

The Company's gross property additions, including those amounts related to
environmental compliance, are budgeted at $451 million for the three years
beginning in 2001 ($279 million in 2001, $96 million in 2002, and $76 million in
2003). These amounts include $199.2 million for the years 2001 and 2002 for the
estimated cost of a 574 megawatt combined cycle gas generating unit and related
interconnections to be located in the eastern portion of the Company's service
area. The unit is expected to have an in-service date of June 2002. The
remaining property additions budget is primarily for maintaining and upgrading
transmission and distribution facilities and generating plants. Actual
construction costs may vary from this estimate because of changes in such
factors as the following: business conditions; environmental regulations; load
projections; the cost and efficiency of construction labor, equipment, and
materials; and the cost of capital. In addition, there can be no assurance that
costs related to capital expenditures will be fully recovered.

Other Capital Requirements

The Company will continue to retire higher-cost debt and preferred securities
and replace these securities with lower-cost capital as market conditions and
terms of the instruments permit.

Environmental Matters

In November 1990, the Clean Air Act Amendments of 1990 (Clean Air Act) was
signed into law. Title IV of the Clean Air Act -- the acid rain compliance
provision of the law -- significantly affected the Company. Specific reductions
in sulfur dioxide and nitrogen oxide emissions from fossil-fired generating
plants were required in two phases. Phase I compliance began in 1995. As a
result of a systemwide compliance strategy, some 50 generating units of Southern
Company were brought into compliance with Phase I requirements.

   Southern Company achieved Phase I sulfur dioxide compliance at the affected
plants by switching to low-sulfur coal, which required some equipment upgrades.
Construction expenditures for Phase I nitrogen oxide and sulfur dioxide
emissions compliance totaled approximately $300 million for Southern Company,
including approximately $42 million for the Company.

   Phase II sulfur dioxide compliance was required in 2000. Southern Company
used emission allowances and fuel switching to comply with Phase II
requirements. Also, equipment to control nitrogen oxide emissions was installed
on additional system fossil-fired units as necessary to meet Phase II limits and
ozone non-attainment requirements for metropolitan Atlanta through 2000.
Compliance for Phase II and initial ozone non-attainment requirements increased
Southern Company's total construction expenditures through 2000 by approximately
$100 million. Phase II compliance did not have a material impact on Gulf Power.

   A significant portion of costs related to the acid rain and ozone
nonattainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.


                                       II-119

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


   In 1993, the Florida Legislature adopted legislation that allows a utility to
petition the FPSC for recovery of prudent environmental compliance costs that
are not being recovered through base rates or any other recovery mechanism. The
legislation is discussed in Note 3 to the financial statements under
"Environmental Cost Recovery." Substantially all of the costs for the Clean Air
Act and other new environmental legislation discussed below are expected to be
recovered through the Environmental Cost Recovery Clause.

   In July 1997, the EPA revised the national ambient air quality standards for
ozone and particulate matter. This revision made the standards significantly
more stringent. In the subsequent litigation of these standards, the U.S.
Supreme Court recently dismissed certain challenges but found the EPA's
implementation program for the new ozone standard unlawful and remanded it to
the EPA. In addition, the Federal District of Columbia Circuit Court of Appeals
will address other legal challenges to these standards in mid-2001. If the
standards are eventually upheld, implementation could be required by 2007 to
2010.

   In September 1998, the EPA issued the final regional nitrogen oxide reduction
rule to the states for implementation. Compliance is required by May 31, 2004.
The final rule affects 21 states, including Georgia. See Note 5 to the financial
statements under "Joint Ownership Agreements" related to the Company's ownership
interest in Georgia Power's Plant Scherer Unit No. 3.

   In December 2000, the EPA completed its utility study for mercury and other
hazardous air pollutants (HAPS) and issued a determination that an emission
control program for mercury and, perhaps, other HAPS is warranted. The program
is to be developed over the next four years under the Maximum Achievable Control
Technology (MACT) provisions of the Clean Air Act. This determination is being
challenged in the courts. In January 2001, the EPA proposed guidance for the
determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls will likely
be required around 2010. Litigation of the BART rules is probable in the near
future.

   Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

   The EPA and state environmental regulatory agencies are also reviewing and
evaluating various other matters including: nitrogen oxide emission control
strategies for ozone non-attainment areas; additional controls for hazardous air
pollutant emissions; and hazardous waste disposal requirements. The impact of
any new standards will depend on the development and implementation of
applicable regulations.

   On November 3, 1999, the EPA brought a civil action in the U.S. District
Court against Alabama Power, Georgia Power, and the system service company. The
complaint alleges violations of the prevention of significant deterioration and
new source review provisions of the Clean Air Act with respect to five
coal-fired generating facilities in Alabama and Georgia. The civil action
requests penalties and injunctive relief, including an order requiring the
installation of the best available control technology at the affected units. The
EPA concurrently issued to the integrated Southeast utilities a notice of
violation related to 10 generating facilities, including the five facilities
mentioned previously and the Company's Plants Crist and Scherer. See Note 5 to
the financial statements under "Joint Ownership Agreements" related to the
Company's ownership interest in Georgia Power's Plant Scherer Unit No. 3. In
early 2000, the EPA filed a motion to amend its complaint to add the violations
alleged in its notice of violation, and to add Gulf Power, Mississippi Power,
and Savannah Electric as defendants. The complaint and notice of violation are
similar to those brought against and issued to several other electric utilities.
These complaints and notices of violation allege that the utilities had failed
to secure necessary permits or install additional pollution equipment when
performing maintenance and construction at coal burning plants constructed or
under construction prior to 1978. On August 1, 2000, the U.S. District Court

                                       11-120


<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


granted Alabama Power's motion to dismiss for lack of jurisdiction in Georgia
and granted the system service company's motion to dismiss on the grounds that
it neither owned nor operated the generating units involved in the proceedings.
On January 12, 2001, the EPA re-filed its claims against Alabama Power in
federal district court in Birmingham, Alabama. The EPA did not include the
system service company in the new complaint. Southern Company believes that its
integrated utilities complied with applicable laws and the EPA's regulations and
interpretations in effect at the time the work in question took place. The Clean
Air Act authorizes civil penalties of up to $27,500 per day per violation at
each generating unit. Prior to January 30, 1997, the penalty was $25,000 per
day. An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash
flows, and possibly financial condition if such costs are not recovered through
regulated rates.

   The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur substantial costs to clean up properties.
The Company conducts studies to determine the extent of any required cleanup
costs and has recognized in the financial statements costs to clean up known
sites. For additional information, see Note 3 to the financial statements under
"Environmental Cost Recovery."

   Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of any such changes
cannot be determined at this time.

    Compliance with possible additional legislation related to global climate
change, electric and magnetic fields, and other environmental health concerns
could significantly affect the Company. The impact of new legislation -- if any
- -- will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electric and magnetic fields.

Sources of Capital

At December 31, 2000, the Company had approximately $4.4 million of cash and
cash equivalents and $53.5 million of unused committed lines of credit with
banks to meet its short-term cash needs. Refer to the Statements of Cash Flows
for details related to the Company's financing activities. See Note 4 to the
financial statements under "Bank Credit Arrangements" for additional
information.

   The Company historically has relied on issuances of first mortgage bonds and
preferred stock, in addition to pollution control revenue bonds issued for its
benefit by public authorities, to meet its long-term external financing
requirements. Recently, the Company's financings have consisted of unsecured
debt and trust preferred securities. The Company has no restrictions on the
amounts of unsecured indebtedness it may incur. However, in order to issue first
mortgage bonds or preferred stock, the Company is required to meet certain
coverage requirements specified in its mortgage indenture and corporate charter.
The Company's ability to satisfy all coverage requirements is such that it could
issue new first mortgage bonds and preferred stock to provide sufficient funds
for all anticipated requirements.

Cautionary Statement Regarding Forward-Looking
Information

The Company's 2000 Annual Report contains forward looking and historical
information. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. The Company cautions that there
are various important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements; accordingly,
there can be no assurance that such indicated results will be realized. These
factors include the impact of recent and future federal and state regulatory
change, including legislative and regulatory initiatives regarding deregulation
and restructuring of the electric utility industry and also changes in
environmental and other laws and regulations to which the Company is subject, as
well as changes in application of existing laws and regulations; current and
future litigation, including the pending EPA civil action; the extent and timing
of the entry of additional competition in the markets of the Company; potential
business strategies, including acquisitions or dispositions of assets or

                                       11-121
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Gulf Power Company 2000 Annual Report


businesses, which cannot be assured to be completed or beneficial; internal
restructuring or other restructuring options, that may be pursued by the
registrants; state and federal rate regulation in the United States; political,
legal and economic conditions and developments in the United States; financial
market conditions and the results of financing efforts; the impact of
fluctuations in commodity prices, interest rates and customer demand; weather
and other natural phenomena; the ability of the Company to obtain additional
generating capacity at competitive prices; and other factors discussed elsewhere
herein and in other reports (including Form 10-K) filed from time to time by the
Company with the SEC.

                                       II-122

<PAGE>

<TABLE>
STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Gulf Power Company 2000 Annual Report

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
                                                                              2000                 1999                1998
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                         (in thousands)
Operating Revenues:
<S>                                                                        <C>                  <C>                 <C>
Retail sales                                                               $562,162             $512,760            $509,118
Sales for resale --
  Non-affiliates                                                             66,890               62,354              61,893
  Affiliates                                                                 66,995               66,110              42,642
Other revenues                                                               18,272               32,875              36,865
- -----------------------------------------------------------------------------------------------------------------------------
Total operating revenues                                                    714,319              674,099             650,518
- -----------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
  Fuel                                                                      215,744              209,031             197,462
  Purchased power --
    Non-affiliates                                                           73,846               46,332              29,369
    Affiliates                                                                8,644               10,703              14,445
  Other                                                                     117,146              114,670             119,011
Maintenance                                                                  56,281               57,830              57,286
Depreciation and amortization                                                66,873               64,589              59,129
Taxes other than income taxes                                                55,904               51,782              51,462
- -----------------------------------------------------------------------------------------------------------------------------
Total operating expenses                                                    594,438              554,937             528,164
- -----------------------------------------------------------------------------------------------------------------------------
Operating Income                                                            119,881              119,162             122,354
Other Income (Expense):
Interest income                                                               1,137                1,771                 931
Other, net                                                                   (4,126)              (1,357)             (2,339)
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Before Interest and Income Taxes                                   116,892              119,576             120,946
- -----------------------------------------------------------------------------------------------------------------------------
Interest and Other:
Interest expense, net                                                        28,085               26,861              25,556
Distributions on preferred securities of subsidiary                           6,200                6,200               6,034
- -----------------------------------------------------------------------------------------------------------------------------
Total interest charges and other, net                                        34,285               33,061              31,590
- -----------------------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes                                                 82,607               86,515              89,356
Income taxes (Note 7)                                                        30,530               32,631              32,199
- -----------------------------------------------------------------------------------------------------------------------------
Net Income                                                                   52,077               53,884              57,157
Dividends on Preferred Stock                                                    234                  217                 636
- -----------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock                              $ 51,843             $ 53,667            $ 56,521
=============================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>









                                                                11-123




<PAGE>

<TABLE>
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Gulf Power Company 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                                                                              2000                 1999                1998
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                        (in thousands)
Operating Activities:
<S>                                                                      <C>                  <C>                 <C>
Net income                                                               $  52,077            $  53,884           $  57,157
Adjustments to reconcile net income
  to net cash provided from operating activities --
        Depreciation and amortization                                       69,915               68,721              69,633
        Deferred income taxes and investment tax credits, net              (12,516)              (6,609)             (4,684)
        Other, net                                                          10,686                3,735               3,463
        Changes in certain current assets and liabilities --
          Receivables, net                                                 (20,212)             (10,484)             11,308
          Fossil fuel stock                                                 13,101               (5,656)             (4,917)
          Materials and supplies                                             1,055               (2,063)                609
          Accounts payable                                                  15,924               (2,023)                823
          Provision for rate refund                                          7,203                    -                   -
          Other                                                             12,521                7,030             (18,471)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities                                149,754              106,535             114,921
- ----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                                   (95,807)             (69,798)            (69,731)
Other                                                                       (4,432)              (8,856)              5,990
- ----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                                    (100,239)             (78,654)            (63,741)
- ----------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase (decrease) in notes payable, net                                  (12,000)              23,500             (15,500)
Proceeds --
   Other long-term debt                                                          -               50,000              50,000
   Preferred securities                                                          -                    -              45,000
   Capital contributions from parent company                                12,222                2,294                 522
Retirements --
   First mortgage bonds                                                          -                    -             (45,000)
   Other long-term debt                                                     (1,853)             (27,074)             (8,326)
   Preferred stock                                                               -                    -              (9,455)
Payment of preferred stock dividends                                          (234)                (271)               (792)
Payment of common stock dividends                                          (59,000)             (61,300)            (67,200)
Other                                                                          (22)                (246)             (4,167)
- ----------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities                                     (60,887)             (13,097)            (54,918)
- ----------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                                    (11,372)              14,784              (3,738)
Cash and Cash Equivalents at Beginning of Period                            15,753                  969               4,707
- ----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                $  4,381            $  15,753            $    969
============================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the period for --
   Interest (net of amount capitalized)                                    $32,277              $27,670             $28,044
   Income taxes (net of refunds)                                            42,252               29,462              38,782
- ----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.


</TABLE>



                                                                11-124



<PAGE>

<TABLE>
BALANCE SHEETS
At December 31, 2000 and 1999
Gulf Power Company 2000 Annual Report
<CAPTION>

- ------------------------------------------------------------------------------------------------------------------------------
Assets                                                                                       2000                     1999
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                                    (in thousands)
Current Assets:
<S>                                                                                   <C>                     <C>
Cash and cash equivalents                                                              $    4,381               $   15,753
Receivables --
  Customer accounts receivable                                                             69,820                   55,108
  Other accounts and notes receivable                                                       2,179                    4,325
  Affiliated companies                                                                     15,026                    7,104
  Accumulated provision for uncollectible accounts                                         (1,302)                  (1,026)
Fossil fuel stock, at average cost                                                         16,768                   29,869
Materials and supplies, at average cost                                                    29,033                   30,088
Regulatory clauses under recovery                                                           2,112                   11,611
Other                                                                                       6,543                    5,354
- ------------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                      144,560                  158,186
- ------------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service                                                                              1,892,023                1,853,664
Less accumulated provision for depreciation                                               867,260                  821,970
- ------------------------------------------------------------------------------------------------------------------------------
                                                                                        1,024,763                1,031,694
Construction work in progress                                                              71,008                   34,164
- ------------------------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                                    1,095,771                1,065,858
- ------------------------------------------------------------------------------------------------------------------------------
Other Property and Investments                                                              4,510                    1,481
- ------------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes (Note 7)                                          15,963                   25,264
Prepaid pension costs (Note 2)                                                             23,491                   17,734
Debt expense, being amortized                                                               2,392                    2,526
Premium on reacquired debt, being amortized                                                15,866                   17,360
Other                                                                                      12,943                   20,086
- ------------------------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                                    70,655                   82,970
- ------------------------------------------------------------------------------------------------------------------------------
Total Assets                                                                           $1,315,496               $1,308,495
==============================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>






                                                                II-125

<PAGE>

<TABLE>

BALANCE SHEETS
At December 31, 2000 and 1999
Gulf Power Company 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity                                                       2000                     1999
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                  (in thousands)
Current Liabilities:
<S>                                                                                    <C>                      <C>
Notes payable                                                                          $ 43,000                 $ 55,000
Accounts payable --
  Affiliated                                                                             17,558                   14,878
  Other                                                                                  38,153                   22,581
Customer deposits                                                                        13,474                   12,778
Taxes accrued --
  Income taxes                                                                            3,864                    4,889
  Other                                                                                   8,749                    7,707
Interest accrued                                                                          8,324                    9,255
Provision for rate refund                                                                 7,203                        -
Vacation pay accrued                                                                      4,512                    4,199
Regulatory clauses over recovery                                                          6,848                    3,125
Other                                                                                     1,584                    1,836
- ----------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                               153,269                  136,248
- ----------------------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                                            365,993                  367,449
- ----------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 7)                                              155,074                  162,776
Deferred credits related to income taxes (Note 7)                                        38,255                   49,693
Accumulated deferred investment tax credits                                              25,792                   27,712
Employee benefits provisions                                                             34,507                   31,735
Other                                                                                    25,992                   21,333
- ----------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                                            279,620                  293,249
- ----------------------------------------------------------------------------------------------------------------------------
Company obligated mandatorily redeemable preferred
  securities of subsidiary trusts holding company junior
  subordinated notes (See accompanying statements)                                       85,000                   85,000
- ----------------------------------------------------------------------------------------------------------------------------
Preferred stock (See accompanying statements)                                             4,236                    4,236
- ----------------------------------------------------------------------------------------------------------------------------
Common stockholder's equity (See accompanying statements)                               427,378                  422,313
- ----------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity                                           $1,315,496               $1,308,495
============================================================================================================================
The accompanying notes are an integral part of these balance sheets.


</TABLE>





                                                                II-126


<PAGE>
<TABLE>

STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Gulf Power Company 2000 Annual Report

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                          2000              1999             2000              1999
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                               (in thousands)                (percent of total)
Long Term Debt:
First mortgage bonds --
       Maturity                           Interest Rates
       --------                           -------------
       <S>                               <C>                         <C>               <C>                   <C>               <C>
       July 1, 2003                       6.125%                      $ 30,000          $ 30,000
       November 1, 2006                   6.50%                         25,000            25,000
       January 1, 2026                    6.875%                        30,000            30,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                              85,000            85,000
- ------------------------------------------------------------------------------------------------------------------------------------
Long-term notes payable --
  7.50% due June 30, 2037                                               20,000            20,000
  6.70% due June 30, 2038                                               48,073            49,926
  7.05% due August 15, 2004                                             50,000            50,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total long-term notes payable                                          118,073           119,926
- ------------------------------------------------------------------------------------------------------------------------------------
Other long-term debt --
     Pollution control revenue bonds --
      Collateralized:
       5.25% to 6.30% due 2006-2026                                    108,700           108,700
       Variable rates (3.70% at 1/1/00)
        due 2024                                                             -            20,000
      Non-collateralized:
       Variable rates (5.10% to 5.30% at 1/1/01)
        due 2022-2024                                                   60,930            40,930
- ------------------------------------------------------------------------------------------------------------------------------------
Total other long-term debt                                             169,630           169,630
- ------------------------------------------------------------------------------------------------------------------------------------
Unamortized debt premium (discount), net                                (6,710)           (7,107)
- ------------------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
  requirement -- $23.2 million)                                        365,993           367,449            41.5%             41.8%
- ------------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$100 par value, 4.64% to 5.44%                                           4,236             4,236
- ------------------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $0.2 million)                      4,236             4,236             0.5%              0.5%
- ------------------------------------------------------------------------------------------------------------------------------------
Company Obligated Mandatorily
  Redeemable Preferred Securities:
$25 liquidation value --
  7.00%                                                                 45,000            45,000
  7.63%                                                                 40,000            40,000
- ------------------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $6.2 million)                 85,000            85,000             9.6%              9.7%
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stockholder's Equity:
Common stock, without par value --
  Authorized and outstanding -
    992,717 shares in 2000 and 1999                                     38,060            38,060
  Paid-in capital                                                      233,476           221,254
  Premium on preferred stock                                                12                12
Retained earnings                                                      155,830           162,987
- ------------------------------------------------------------------------------------------------------------------------------------
Total common stockholder's equity                                      427,378           422,313            48.4%             48.0%
- ------------------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                                  $882,607          $878,998           100.0%            100.0%
====================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>







                                                                11-127


<PAGE>
<TABLE>

STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Gulf Power Company 2000 Annual Report

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------

                                                                                        Premium on
                                                             Common        Paid-In       Preferred      Retained
                                                             Stock         Capital         Stock        Earnings          Total
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      (in thousands)

<S>                                                         <C>            <C>                <C>        <C>              <C>
Balance at January 1, 1998                                   $38,060        $218,438           $12        $172,208         $428,718
Net income after dividends on preferred stock                      -               -             -          56,521           56,521
Capital contributions from parent company                          -             522             -               -              522
Cash dividends on common stock                                     -               -             -         (57,200)         (57,200)
Other                                                              -               -             -            (909)            (909)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                                  38,060         218,960            12         170,620          427,652
Net income after dividends on preferred stock                      -               -             -          53,667           53,667
Capital contributions from parent company                          -           2,294             -               -            2,294
Cash dividends on common stock                                     -               -             -         (61,300)         (61,300)
Balance at December 31, 1999                                  38,060         221,254            12         162,987          422,313
- ------------------------------------------------------------------------------------------------------------------------------------
Net income after dividends on preferred stock                      -               -             -          51,843           51,843
Capital contributions from parent company                          -          12,222             -               -           12,222
Cash dividends on common stock                                     -               -             -         (59,000)         (59,000)
- ------------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                                 $38,060        $233,476           $12        $155,830         $427,378
====================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>




                                                                II-128
<PAGE>

NOTES TO FINANCIAL STATEMENTS
Gulf Power Company 2000 Annual Report


1.  SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

General

Gulf Power Company is a wholly owned subsidiary of Southern Company, which is
the parent company of five integrated Southeast utilities, Southern Company
Services (SCS), Southern Communications Services (Southern LINC), Southern
Company Energy Solutions, Mirant Corporation (Mirant) - formerly Southern
Energy, Inc., -- Southern Nuclear Operating Company (Southern Nuclear), and
other direct and indirect subsidiaries. The integrated Southeast utilities --
Alabama Power, Georgia Power, Gulf Power, Mississippi Power, and Savannah
Electric -- provide electric service in four states. Gulf Power Company provides
electric service to the northwest panhandle of Florida. Contracts among the
integrated Southeast utilities -- related to jointly owned generating
facilities, interconnecting transmission lines, and the exchange of electric
power --are regulated by the Federal Energy Regulatory Commission (FERC) and/or
the Securities and Exchange Commission (SEC). The system service company
provides, at cost, specialized services to Southern Company and subsidiary
companies. Southern LINC provides digital wireless communications services to
the operating companies and also markets these services to the public within the
Southeast. Southern Company Energy Solutions develops new business opportunities
related to energy products and services. Southern Nuclear provides services to
Southern Company's nuclear power plants. Mirant acquires, develops, builds,
owns, and operates power production and delivery facilities and provides a broad
range of energy-related services to utilities and industrial companies in
selected countries around the world. Mirant businesses include independent power
projects, integrated utilities, a distribution company, and energy trading and
marketing businesses outside the southeastern United States.

   Southern Company is registered as a holding company under the Public Utility
Holding Company Act of 1935 (PUHCA). Both Southern Company and its subsidiaries
are subject to the regulatory provisions of the PUHCA. The Company is also
subject to regulation by the FERC and the Florida Public Service Commission
(FPSC). The Company follows accounting principles generally accepted in the
United States and complies with the accounting policies and practices prescribed
by the FPSC and the FERC. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires the
use of estimates, and the actual results may differ from those estimates.

   Certain prior years' data presented in the financial statements have been
reclassified to conform with current year presentation.

Related-Party Transactions

The Company has an agreement with SCS under which the following services are
rendered to the Company at cost: general and design engineering, purchasing,
accounting and statistical, finance and treasury, tax, information resources,
marketing, auditing, insurance and pension administration, human resources,
systems and procedures, and other services with respect to business and
operations and power pool operations. Costs for these services amounted to $44
million, $43 million, and $40 million during 2000, 1999, and 1998, respectively.

Regulatory Assets and Liabilities

The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are expected to be credited
to customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to the following:

                                              2000          1999
                                        --------------------------
                                             (in thousands)
Deferred income tax charges              $  15,963      $ 25,264
Deferred loss on reacquired
  debt                                      15,866        17,360
Environmental remediation                    7,638         5,745
Vacation pay                                 4,512         4,199
Regulatory clauses under (over)
   recovery, net                            (4,736)        8,486
Accumulated provision for
   rate refunds                             (7,203)            -
Accumulated provision for
   property damage                          (8,731)       (5,528)
Deferred income tax credits                (38,255)      (49,693)
Other, net                                  (1,074)       (1,255)
- ------------------------------------------------------------------
Total                                    $ (16,020)     $  4,578
==================================================================


                                     II-129

<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


   In the event that a portion of the Company's operations is no longer subject
to the provisions of FASB Statement No. 71, the Company would be required to
write off related regulatory assets and liabilities that are not specifically
recoverable through regulated rates. In addition, the Company would be required
to determine any impairment to other assets, including plant, and write down the
assets, if impaired, to their fair value.

Revenues and Regulatory Cost Recovery Clauses

The Company currently operates as a vertically integrated utility providing
electricity to retail customers within its service area located in northwest
Florida and to wholesale customers in the Southeast.

   Revenues are recognized as services are rendered. Unbilled revenues are
accrued at the end of each fiscal period.

   Fuel costs are expensed as the fuel is used. The Company's retail electric
rates include provisions to annually adjust billings for fluctuations in fuel
costs, the energy component of purchased power costs, and certain other costs.
The Company also has similar retail cost recovery clauses for energy
conservation costs, purchased power capacity costs, and environmental compliance
costs. Revenues are adjusted monthly for differences between recoverable costs
and amounts actually reflected in current rates.

   The Company has a diversified base of customers and no single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts averaged significantly less than 1 percent of revenues.

Depreciation and Amortization

Depreciation of the original cost of plant in service is provided primarily by
using composite straight-line rates, which approximated 3.8 percent in 2000,
1999, and 1998. When property subject to depreciation is retired or otherwise
disposed of in the normal course of business, its cost -- together with the cost
of removal, less salvage -- is charged to the accumulated provision for
depreciation. Minor items of property included in the original cost of the plant
are retired when the related property unit is retired. Also, the provision for
depreciation expense includes an amount for the expected cost of removal of
facilities.

Income Taxes

The Company uses the liability method of accounting for income taxes and
provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property. The Company is included
in the consolidated federal income tax return of Southern Company.

Property, Plant, and Equipment

Property, plant, and equipment is stated at original cost. Original cost
includes: materials; labor; minor items of property; appropriate administrative
and general costs; payroll-related costs such as taxes, pensions, and other
benefits; and the estimated cost of funds used during construction. The cost of
maintenance, repairs, and replacement of minor items of property is charged to
maintenance expense. The cost of replacements of property (exclusive of minor
items of property) is charged to utility plant.

Cash and Cash Equivalents

Temporary cash investments are considered cash equivalents. Temporary cash
investments are securities with original maturities of 90 days or less.

Financial Instruments

The Company's financial instruments for which the carrying amount did not equal
fair value at December 31 were as follows:

                                       Carrying          Fair
                                         Amount         Value
                                   ---------------------------
                                          (in thousands)
Long-term debt:
   At December 31, 2000                $365,993      $364,697
   At December 31, 1999                $367,449      $349,791
Capital trust preferred
securities:
   At December 31, 2000                 $85,000       $80,988
   At December 31, 1999                 $85,000       $69,092
- --------------------------------------------------------------

   The fair values for long-term debt and preferred securities were based on
either closing market prices or closing prices of comparable instruments.


                                       II-130
<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


Materials and Supplies

Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
installed.

Provision for Injuries and Damages

The Company is subject to claims and suits arising in the ordinary course of
business. As permitted by regulatory authorities, the Company provides for the
uninsured costs of injuries and damages by charges to income amounting to $1.2
million annually. The expense of settling claims is charged to the provision to
the extent available. The accumulated provision of $1.2 million and $1.8 million
at December 31, 2000 and 1999, respectively, is included in other current
liabilities in the accompanying Balance Sheets.

Provision for Property Damage

The Company provides for the cost of repairing damages from major storms and
other uninsured property damages. This includes the full cost of major storms
and other damages to its transmission and distribution lines and the cost of
uninsured damages to its generation and other property. The expense of such
damages is charged to the provision account. At December 31, 2000 and 1999, the
accumulated provision for property damage was $8.7 million and $5.5 million,
respectively. The FPSC approved annual accrual to the accumulated provision for
property damage is $3.5 million, with a target level for the accumulated
provision account between $25.1 and $36.0 million. The FPSC has also given the
Company the flexibility to increase its annual accrual amount above $3.5 million
at the Company's discretion. The Company accrued $3.5 million in 2000, $5.5
million in 1999, and $6.5 million in 1998 to the accumulated provision for
property damage. The Company charged $0.3 million, $1.6 million, and $4.2
million against the provision account in 2000, 1999, and 1998 respectively.

2.  RETIREMENT BENEFITS

The Company has a defined benefit, trusteed, non-contributory pension plan that
covers substantially all regular employees. The Company provides certain medical
care and life insurance benefits for retired employees. Substantially all
employees may become eligible for these benefits when they retire. Trusts are
funded to the extent required by the Company's regulatory commissions. In late
2000, the Company adopted several pension and postretirement benefit plan
changes that had the effect of increasing benefits to both current and future
retirees. The effects of these changes will be to increase the Company's annual
pension and postretirement benefits costs by approximately $1.2 million and $0.6
million, respectively. The measurement date for plan assets and obligations is
September 30 for each year.

Pension Plan

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:
                                            Projected
                                       Benefit Obligations
                                    ---------------------------
                                           2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $141,967      $143,012
Service cost                              4,282         4,490
Interest cost                            10,394         9,440
Benefits paid                            (6,973)       (6,862)
Actuarial gain and
    employee transfers, net                (689)       (8,113)
- ---------------------------------------------------------------
Balance at end of year                 $148,981      $141,967
===============================================================


                                           Plan Assets
                                    ---------------------------
                                           2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $241,485      $212,934
Actual return on plan assets             43,833        35,971
Benefits paid                            (6,973)       (6,862)
Employee transfers                        4,921          (558)
- ---------------------------------------------------------------
Balance at end of year                 $283,266      $241,485
===============================================================

   The accrued pension costs recognized in the Balance Sheets were as follows:

                                           2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Funded status                          $ 134,286     $ 99,518
Unrecognized transition
    obligation                           (3,602)       (4,323)
Unrecognized prior
    service cost                          4,121         4,495
Unrecognized net gain                  (111,314)      (81,956)
- ---------------------------------------------------------------
Prepaid asset recognized
      in the Balance Sheets            $ 23,491      $ 17,734
===============================================================


                                       II-131
<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


    Components of the pension plan's net periodic cost were as follows:

                               2000          1999         1998
- -------------------------------------------------------------------
Service cost                $  4,282     $  4,490      $  4,107
Interest cost                 10,394        9,440         9,572
Expected return on
  plan assets                (17,504)     (15,968)      (14,827)
Recognized net gain           (2,582)      (1,579)       (1,891)
Net amortization                (347)        (347)         (347)
- -------------------------------------------------------------------
Net pension income          $ (5,757)    $ (3,964)     $ (3,386)
===================================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                            Accumulated
                                        Benefit Obligations
                                    ---------------------------
                                           2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year            $48,010       $49,303
Service cost                                896         1,087
Interest cost                             3,515         3,261
Benefits paid                            (1,462)       (1,177)
Actuarial gain and
 employee transfers, net                   (934)       (4,464)
- ---------------------------------------------------------------
Balance at end of year                  $50,025       $48,010
===============================================================


                                            Plan Assets
                                    ---------------------------
                                        2000           1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year          $11,196        $ 9,603
Actual return on plan assets            2,079          1,525
Employer contributions                  1,575          1,245
Benefits paid                          (1,462)        (1,177)
- ---------------------------------------------------------------
Balance at end of year                $13,388        $11,196
===============================================================

    The accrued postretirement costs recognized in the Balance Sheets were as
follows:

                                          2000          1999
- ---------------------------------------------------------------
                                         (in thousands)
Funded status                         $(36,638)     $(36,814)
Unrecognized transition
  obligation                             4,368          4,723
Unrecognized prior
  service cost                           2,582          2,741
Unrecognized net loss                      496          2,620
Fourth quarter contributions               316            300
- ---------------------------------------------------------------
Accrued liability recognized
  in the Balance Sheets               $(28,876)      $(26,430)
===============================================================

    Components of the postretirement plan's net periodic cost were
as follows:

                                     2000        1999      1998
- ----------------------------------------------------------------
Service cost                       $  896      $1,087    $  946
Interest cost                       3,515       3,261     3,123
Expected return on
  plan assets                        (901)       (794)     (717)
Transition obligation                 355         356       356
Prior service cost                    159         159       119
Recognized net loss                    13         264       128
- ----------------------------------------------------------------
Net postretirement cost            $4,037      $4,333    $3,955
================================================================

   The weighted average rates assumed in the actuarial calculations for
both the pension plan and postretirement benefits were:

                                       2000       1999
- --------------------------------------------------------
Discount                               7.50%      7.50%
Annual salary increase                 5.00%      5.00%
Long-term return on plan
assets                                 8.50%      8.50%
- --------------------------------------------------------

    An additional assumption used in measuring the accumulated postretirement
benefit obligations was a weighted average medical care cost trend rate of 7.3
percent for 2000, decreasing gradually to 5.5 percent through the year 2005, and
remaining at that level thereafter.

                                       II-132

<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


An annual increase or decrease in the assumed medical care cost trend rate of 1
percent would affect the accumulated benefit obligation and the service and
interest cost components at December 31, 2000 as follows (in thousands):

                                     1 Percent     1 Percent
                                      Increase      Decrease
- ---------------------------------------------------------------
Benefit obligation                    $3,187          $2,874
Service and interest costs              $278            $247
===============================================================

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The Company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were $2.2
million, $2.0 million, and $2.0 million, respectively.

Work Force Reduction Programs

The Company recorded costs related to work force reduction programs of $0.6
million in 2000, $0.2 million in 1999, and $2.8 million in 1998. The Company has
also incurred its pro rata share for the costs of affiliated companies'
programs. The costs related to these programs were $1.2 million for 2000, $0.6
million for 1999, and $0.2 million for 1998. The Company has expensed all costs
related to these work force reduction programs.

3.   CONTINGENCIES AND REGULATORY
     MATTERS

Environmental Cost Recovery

In 1993, the Florida Legislature adopted legislation for an Environmental Cost
Recovery Clause (ECRC), which allows a utility to petition the FPSC for recovery
of all prudent environmental compliance costs that are not being recovered
through base rates or any other recovery mechanism. Such environmental costs
include operation and maintenance expense, emission allowance expense,
depreciation, and a return on invested capital.

   In 1994, the FPSC approved the Company's initial petition under the ECRC for
recovery of environmental costs. During 2000, 1999, and 1998, the Company
recorded ECRC revenues of $9.9 million, $11.5 million, and $8.0 million,
respectively.

   At December 31, 2000, the Company's liability for the estimated costs of
environmental remediation projects for known sites was $7.6 million. These
estimated costs are expected to be expended from 2001 through 2006. These
projects have been approved by the FPSC for recovery through the ECRC discussed
above. Therefore, the Company recorded $1.2 million in current assets and
current liabilities and $6.4 million in deferred assets and deferred liabilities
representing the future recoverability of these costs.

Environmental Litigation

On November 3, 1999, the Environmental Protection Agency (EPA) brought a civil
action in the U.S. District Court against Alabama Power, Georgia Power, and SCS.
The complaint alleges violations of the prevention of significant deterioration
and new source review provisions of the Clean Air Act with respect to five
coal-fired generating facilities in Alabama and Georgia. The civil action
requests penalties and injunctive relief, including an order requiring the
installation of the best available control technology at the affected units. The
Clean Air Act authorizes civil penalties of up to $27,500 per day, per violation
at each generating unit. Prior to January 30, 1997, the penalty was $25,000 per
day.

   The EPA concurrently issued to the integrated Southeast utilities a notice of
violation related to 10 generating facilities, including the five facilities
mentioned previously and the Company's Plants Crist and Scherer. See Note 5
under "Joint Ownership Agreements" related to the Company's ownership interest
in Georgia Power's Plant Scherer Unit No. 3. In early 2000, the EPA filed a
motion to amend its complaint to add the violations alleged in its notice of
violation, and to add Gulf Power, Mississippi Power, and Savannah Electric as
defendants. The complaint and notice of violation are similar to those brought
against and issued to several other electric utilities. These complaints and
notices of violation allege that the utilities had failed to secure necessary
permits or install additional pollution equipment when performing maintenance
and construction at coal burning plants constructed or under construction prior
to 1978. The Company believes that its integrated utilities complied with
applicable laws and the EPA's regulations and interpretations in effect at the
time the work in question took place.

   An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash


                                       II-133
<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


flows, and possibly financial condition if such costs are not recovered through
regulated rates.

Retail Revenue Sharing Plan

In early 1999, the FPSC staff and the Company became involved in discussions
primarily related to reducing the Company's authorized rate of return. On
October 1, 1999, the Office of Public Counsel, the Coalition for Equitable
Rates, the Florida Industrial Power Users Group, and the Company jointly filed a
petition to resolve the issues. The stipulation included a reduction to retail
base rates of $10 million annually and provides for revenues to be shared within
set ranges for 1999 through 2002. Customers receive two-thirds of any revenue
within the sharing range and the Company retains one-third. Any revenue above
this range is refunded to the customers. The stipulation also included
authorization for the Company, at its discretion, to accrue up to an additional
$5 million to the property insurance reserve and $1 million to amortize a
regulatory asset related to the corporate office. The Company also filed a
request to prospectively reduce its authorized ROE range from 11 to 13 percent
to 10.5 to 12.5 percent in order to help ensure that the FPSC would approve the
stipulation. The FPSC approved both the stipulation and the ROE request with an
effective date of November 4, 1999. The Company is currently planning to seek
additional rate relief to recover costs related to the Smith Unit 3
combined cycle facility scheduled to be placed in-service in June of 2002.

   For calendar year 2000, the Company's retail revenue range for sharing was
$352 million to $368 million to be shared between the Company and its retail
customers on the one-third/two-thirds basis. Actual retail revenues in 2000 were
$362.4 million and the Company recorded revenues subject to refund of $6.9
million. The estimated refund with interest of $0.3 million was reflected in
customer billings in February 2001. In addition to the refund the Company
amortized $1 million of the regulatory assets related to the corporate office.
For calendar year 2001, the Company's retail revenue range for sharing is $358
million to $374 million. For calendar year 2002, there are specified sharing
ranges for each month from the expected in-service date of Smith Unit 3 until
the end of the year. The sharing plan will expire at the earlier of the
in-service date of Smith Unit 3 or December 31, 2002.

4. FINANCING AND COMMITMENTS

Construction Program

The Company is engaged in a continuous construction program, the cost of which
is currently estimated to total $279 million in 2001, $96 million in 2002, and
$76 million in 2003. The construction program is subject to periodic review and
revision, and actual construction costs may vary from the above estimates
because of numerous factors. These factors include changes in business
conditions; revised load growth estimates; changes in environmental regulations;
increasing costs of labor, equipment, and materials; and cost of capital. At
December 31, 2000, significant purchase commitments were outstanding in
connection with the construction program. The Company has budgeted $199.2
million for the years 2001 and 2002 for the estimated cost of a 574 megawatt
combined cycle gas generating unit to be located in the eastern portion of its
service area. The unit is expected to have an in-service date of June 2002. The
Company's remaining construction program is related to maintaining and upgrading
the transmission, distribution, and generating facilities.

Bank Credit Arrangements

At December 31, 2000, the Company had $61.5 million of lines of credit with
banks subject to renewal June 1 of each year, of which $53.5 million remained
unused. In addition, the Company has two unused committed lines of credit
totaling $61.9 million that were established for liquidity support of its
variable rate pollution control bonds. In connection with these credit lines,
the Company has agreed to pay commitment fees and/or to maintain compensating
balances with the banks. The compensating balances, which represent
substantially all of the cash of the Company except for daily working funds and
like items, are not legally restricted from withdrawal. In addition, the Company
has bid-loan facilities with seven major money center banks that total $130
million, of which $35 million was committed at December 31, 2000.

Assets Subject to Lien

The Company's mortgage, which secures the first mortgage bonds issued by the
Company, constitutes a direct first lien on substantially all of the Company's
fixed property and franchises.


                                       II-134

<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


Fuel Commitments

To supply a portion of the fuel requirements of its generating plants, the
Company has entered into contract commitments for the procurement of fuel. In
some cases, these contracts contain provisions for price escalations, minimum
purchase levels, and other financial commitments. Total estimated obligations at
December 31, 2000 were as follows:

   Year                                           Fuel
   ---------                                 ----------------
                                              (in millions)
   2001                                                 $139
   2002                                                   91
   2003                                                   90
   2004                                                   92
   2005                                                   93
   2006-2024                                             473
   -------------------------------------------------------------
   Total commitments                                    $978
   =============================================================


Lease Agreements

In 1989, the Company and Mississippi Power jointly entered into a twenty-two
year operating lease agreement for the use of 495 aluminum railcars. In 1994, a
second lease agreement for the use of 250 additional aluminum railcars was
entered into for twenty-two years. Both of these leases are for the
transportation of coal to Plant Daniel. At the end of each lease term, the
Company has the option to renew the lease. In 1997, three additional lease
agreements for 120 cars each were entered into for three years, with a monthly
renewal option for up to an additional nine months.

   The Company, as a joint owner of Plant Daniel, is responsible for one half of
the lease costs. The lease costs are charged to fuel inventory and are allocated
to fuel expense as the fuel is used. The Company's share of the lease costs
charged to fuel inventories was $2.1 million in 2000 and $2.8 million in 1999.
The annual amounts for 2001 through 2005 are expected to be $1.9 million, $1.9
million, $1.9 million, $2.0 million, and $2.0 million, respectively, and after
2005 are expected to total $13.8 million.

5.  JOINT OWNERSHIP AGREEMENTS

The Company and Mississippi Power jointly own Plant Daniel, a steam-electric
generating plant located in Jackson County, Mississippi. In accordance with the
operating agreement, Mississippi Power acts as the Company's agent with respect
to the construction, operation, and maintenance of the plant.

   The Company and Georgia Power jointly own Plant Scherer Unit No. 3. Plant
Scherer is a steam-electric generating plant located near Forsyth, Georgia. In
accordance with the operating agreement, Georgia Power acts as the Company's
agent with respect to the construction, operation, and maintenance of the unit.

   The Company's pro rata share of expenses related to both plants is included
in the corresponding operating expense accounts in the Statements of Income.

   At December 31, 2000, the Company's percentage ownership and its investment
in these jointly owned facilities were as follows:

                                      Plant Scherer     Plant
                                       Unit No. 3       Daniel
                                      (coal-fired)   (coal-fired)
                                     -----------------------------
                                            (in thousands)
Plant In Service                        $185,778(1)    $232,074
Accumulated Depreciation                 $70,207       $118,504
Construction Work in Progress               $252         $2,006

Nameplate Capacity (2)
   (megawatts)                               205            500
Ownership                                     25%            50%
- ------------------------------------------------------------------

(1)  Includes net plant acquisition adjustment.
(2)  Total megawatt nameplate capacity:
       Plant Scherer Unit No. 3:  818
       Plant Daniel:  1,000

6.  LONG-TERM POWER SALES AGREEMENTS

The Company and the other operating affiliates have long-term contractual
agreements for the sale of capacity to certain non-affiliated utilities located
outside the system's service area. The unit power sales agreements are firm and
pertain to capacity related to specific generating units. Because the energy is
generally sold at cost under these agreements, profitability is primarily
affected by revenues from capacity sales. The capacity revenues from these sales
were $20.3 million in 2000, $19.8 million in 1999, and $22.5 million in 1998.

                                       II-135

<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


Capacity revenues increased slightly in 2000 due to the recovery of higher
operating expenses experienced during the year.

   Unit power from specific generating plants of Southern Company is currently
being sold to Florida Power Corporation (FPC), Florida Power & Light Company
(FP&L), and Jacksonville Electric Authority (JEA). Under these agreements, 209
megawatts of net dependable capacity were sold by the Company during 2000. Sales
will increase slightly to 210 megawatts per year in 2001 and remain close to
that level, unless reduced by FP&L, FPC, and JEA for the periods after 2001 with
a minimum of three years notice, until the expiration of the contracts in 2010.

7.  INCOME TAXES

At December 31, 2000, the tax-related regulatory assets to be recovered from
customers were $16.0 million. These assets are attributable to tax benefits
flowed through to customers in prior years and to taxes applicable to
capitalized allowance for funds used during construction. At December 31, 2000,
the tax-related regulatory liabilities to be credited to customers were $38.3
million. These liabilities are attributable to deferred taxes previously
recognized at rates higher than current enacted tax law and to unamortized
investment tax credits.

   Details of the federal and state income tax provisions are as follows:

                                      2000         1999        1998
                                ------------------------------------
                                          (in thousands)
Total provision for income taxes:
Federal--
   Current                         $37,250      $33,973     $31,746
   Deferred                        (11,159)     (6,107)     (4,467)
- --------------------------------------------------------------------
                                    26,091       27,866      27,279
- --------------------------------------------------------------------
State--
   Current                           5,796        5,267       5,137
   Deferred                         (1,357)       (502)       (217)
- --------------------------------------------------------------------
                                     4,439        4,765       4,920
- --------------------------------------------------------------------
Total                              $30,530      $32,631     $32,199
====================================================================

   The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:

                                                2000            1999
                                          ---------------------------
                                                (in thousands)
Deferred tax liabilities:
   Accelerated depreciation                 $172,646        $168,662
   Other                                      14,262          24,272
- ---------------------------------------------------------------------
Total                                        186,908         192,934
- ---------------------------------------------------------------------
Deferred tax assets:
   Federal effect of state deferred taxes      8,703           9,293
   Postretirement benefits                     9,205           8,456
   Other                                      14,742          12,526
- ---------------------------------------------------------------------
Total                                         32,650          30,275
- ---------------------------------------------------------------------
Net deferred tax liabilities                 154,258         162,659
Less current portion, net                       (816)           (117)
- ---------------------------------------------------------------------
Accumulated deferred income
   taxes in the Balance Sheets              $155,074        $162,776
=====================================================================

   Deferred investment tax credits are amortized over the lives of the related
property with such amortization normally applied as a credit to reduce
depreciation and amortization in the Statements of Income. Credits amortized in
this manner amounted to $1.9 million in 2000, 1999, and 1998. At December 31,
2000, all investment tax credits available to reduce federal income taxes
payable had been utilized.

   A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:

                                       2000     1999     1998
                                    ----------------------------
Federal statutory rate                   35%      35%      35%
State income tax,
   net of federal deduction               4        4        4
Non-deductible book
   depreciation                           1        1        1
Difference in prior years'
   deferred and current tax rate         (2)      (2)      (2)
Other, net                               (1)       -       (2)
- ----------------------------------------------------------------
Effective income tax rate                37%      38%      36%
================================================================

   The Company and the other subsidiaries of Southern Company file a
consolidated federal tax return. Under a joint consolidated income tax
agreement, each subsidiary's current and deferred tax expense is computed on a
stand-alone basis.

                                       II-136

<PAGE>

NOTES (continued)
Gulf Power Company 2000 Annual Report


8.  COMPANY OBLIGATED MANDATORILY
    REDEEMABLE PREFERRED SECURITIES

In January 1997, Gulf Power Capital Trust I (Trust I), of which the Company owns
all of the common securities, issued $40 million of 7.625 percent mandatorily
redeemable preferred securities. Substantially all of the assets of Trust I are
$41 million aggregate principal amount of the Company's 7.625 percent junior
subordinated notes due December 31, 2036.

   In January 1998, Gulf Power Capital Trust II (Trust II), of which the Company
owns all of the common securities, issued $45 million of 7.0 percent mandatorily
redeemable preferred securities. Substantially all of the assets of Trust II are
$46 million aggregate principal amount of the Company's 7.0 percent junior
subordinated notes due December 31, 2037.

   The Company considers that the mechanisms and obligations relating to the
preferred securities, taken together, constitute a full and unconditional
guarantee by the Company of payment obligations with respect to the preferred
securities of Trust I and Trust II. Trust I and Trust II are subsidiaries of the
Company, and accordingly are consolidated in the Company's financial statements.

9.  SECURITIES DUE WITHIN ONE YEAR

At December 31, 2000, the Company had an improvement fund requirement of
$850,000. The first mortgage bond improvement fund requirement amounts to 1
percent of each outstanding series of bonds authenticated under the indenture
prior to January 1 of each year, other than those issued to collateralize
pollution control revenue bond obligations. The requirement may be satisfied by
depositing cash, reacquiring bonds, or by pledging additional property equal to
1 and 2/3 times the requirement.

10.  COMMON STOCK DIVIDEND
     RESTRICTIONS

The Company's first mortgage bond indenture contains various common stock
dividend restrictions, which remain in effect as long as the bonds are
outstanding. At December 31, 2000, retained earnings of $127 million were
restricted against the payment of cash dividends on common stock under the terms
of the mortgage indenture.

11.  QUARTERLY FINANCIAL DATA (Unaudited)

Summarized quarterly financial data for 2000 and 1999 are as follows:

                                                         Net Income
                                                    After Dividends
                         Operating     Operating       on Preferred
Quarter Ended             Revenues        Income              Stock
- --------------------------------------------------------------------
                                     (in thousands)
March 2000                $138,498       $16,007             $4,653
June 2000                  182,120        30,505             12,927
September 2000             232,533        52,614             26,438
December 2000              161,168        20,755              7,825

March 1999                $134,506       $15,665            $ 4,799
June 1999                  166,815        29,253             13,226
September 1999             218,264        54,429             28,582
December 1989              154,514        19,815              7,060
- --------------------------------------------------------------------

   The Company's business is influenced by seasonal weather conditions and the
timing of rate changes, among other factors.


                                       II-137

<PAGE>
<TABLE>

SELECTED FINANCIAL AND OPERATING DATA 1996-2000
Gulf Power Company 2000 Annual Report

<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------------
                                                              2000            1999            1998            1997            1996
- -----------------------------------------------------------------------------------------------------------------------------------
<S>                                                       <C>             <C>             <C>             <C>             <C>
Operating Revenues (in thousands)                         $714,319        $674,099        $650,518        $625,856        $634,365
Net Income after Dividends
  on Preferred Stock (in thousands)                        $51,843         $53,667         $56,521         $57,610         $57,845
Cash Dividends
  on Common Stock (in thousands)                           $59,000         $61,300         $57,200         $64,600         $58,300
Return on Average Common Equity (percent)                    12.20           12.63           13.20           13.33           13.27
Total Assets (in thousands)                             $1,315,496      $1,308,495      $1,267,901      $1,265,612      $1,308,366
Gross Property Additions (in thousands)                    $95,807         $69,798         $69,731         $54,289         $61,386
- -----------------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity                                       $427,378        $422,313        $427,652        $428,718        $435,758
Preferred stock                                              4,236           4,236           4,236          13,691          65,102
Company obligated mandatorily
  redeemable preferred securities                           85,000          85,000          85,000          40,000               -
Long-term debt                                             365,993         367,449         317,341         296,993         331,880
- -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)             $882,607        $878,998        $834,229        $779,402        $832,740
===================================================================================================================================
Capitalization Ratios (percent):
Common stock equity                                           48.4            48.0            51.3            55.0            52.3
Preferred stock                                                0.5             0.5             0.5             1.8             7.8
Company obligated mandatorily
  redeemable preferred securities                              9.6             9.7            10.2             5.1               -
Long-term debt                                                41.5            41.8            38.0            38.1            39.9
- -----------------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)                100.0           100.0           100.0           100.0           100.0
===================================================================================================================================
Security Ratings:
First Mortgage Bonds -
     Moody's                                                    A1              A1              A1              A1              A1
     Standard and Poor's                                        A+             AA-             AA-             AA-              A+
     Fitch                                                    AA-*             AA-             AA-             AA-             AA-
Preferred Stock -
     Moody's                                                    a2              a2              a2              a2              a2
     Standard and Poor's                                      BBB+              A-               A               A               A
     Fitch                                                      A*               A              A+              A+              A+
Unsecured Long-Term Debt -
     Moody's                                                    A2              A2              A2              A2               -
     Standard and Poor's                                         A               A               A               A               -
     Fitch                                                     A+*              A+              A+              A+               -
===================================================================================================================================
Customers (year-end):
Residential                                                321,731         315,240         307,077         300,257         291,196
Commercial                                                  47,666          47,728          46,370          44,589          43,196
Industrial                                                     280             267             257             267             278
Other                                                          442             316             268             264             162
- -----------------------------------------------------------------------------------------------------------------------------------
Total                                                      370,119         363,551         353,972         345,377         334,832
===================================================================================================================================
Employees (year-end):                                        1,327           1,339           1,328           1,328           1,384
- -----------------------------------------------------------------------------------------------------------------------------------
*Effective 1/22/01 the Fitch Security Ratings for First Mortgage Bonds,
  Preferred Stock, and Unsecured Long-Term Debt are A+, A-, and A respectively.
</TABLE>




                                                                II-138
<PAGE>

<TABLE>
SELECTED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Gulf Power Company 2000 Annual Report

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
                                                         2000            1999            1998            1997            1996
- ------------------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
<S>                                                 <C>              <C>            <C>             <C>             <C>
Residential                                         $ 308,728        $277,311       $ 276,208       $ 277,609       $ 285,498
Commercial                                            181,584         165,871         160,960         164,435         164,181
Industrial                                             76,539          67,404          69,850          77,492          78,994
Other                                                  (4,689)          2,174           2,100           2,083           2,056
- ------------------------------------------------------------------------------------------------------------------------------
Total retail                                          562,162         512,760         509,118         521,619         530,729
Sales for resale  - non-affiliates                     66,890          62,354          61,893          63,697          63,201
Sales for resale  - affiliates                         66,995          66,110          42,642          16,760          17,762
- ------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity              696,047         641,224         613,653         602,076         611,692
Other revenues                                         18,272          32,875          36,865          23,780          22,673
- ------------------------------------------------------------------------------------------------------------------------------
Total                                                $714,319        $674,099        $650,518        $625,856        $634,365
==============================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential                                         4,790,038       4,471,118       4,437,558       4,119,492       4,159,924
Commercial                                          3,379,449       3,222,532       3,111,933       2,897,887       2,808,634
Industrial                                          1,924,749       1,846,237       1,833,575       1,903,050       1,808,086
Other                                                  18,730          19,296          18,952          18,101          17,815
- ------------------------------------------------------------------------------------------------------------------------------
Total retail                                        0,112,966       9,559,183       9,402,018       8,938,530       8,794,459
Sales for resale  - non-affiliates                  1,705,486       1,561,972       1,341,990       1,531,179       1,534,097
Sales for resale  - affiliates                      1,916,526       2,511,983       1,758,150         848,135         709,647
- ------------------------------------------------------------------------------------------------------------------------------
Total                                               3,734,978      13,633,138      12,502,158      11,317,844      11,038,203
==============================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential                                              6.45            6.20            6.22            6.74            6.86
Commercial                                               5.37            5.15            5.17            5.67            5.85
Industrial                                               3.98            3.65            3.81            4.07            4.37
Total retail                                             5.56            5.36            5.41            5.84            6.03
Sales for resale                                         3.70            3.15            3.37            3.38            3.61
Total sales                                              5.07            4.70            4.91            5.32            5.54
Residential Average Annual
  Kilowatt-Hour Use Per Customer                       14,992          14,318          14,577          13,894          14,457
Residential Average Annual
  Revenue Per Customer                                $966.26         $888.01         $907.35         $936.30         $992.17
Plant Nameplate Capacity
  Ratings (year-end) (megawatts)                        2,188           2,188           2,188           2,174           2,174
Maximum Peak-Hour Demand (megawatts):
Winter                                                  2,154           2,085           2,040           1,844           2,136
Summer                                                  2,285           2,161           2,146           2,032           1,961
Annual Load Factor (percent)                             55.4            55.2            55.3            55.5            51.4
Plant Availability Fossil-Steam (percent):               85.2            87.2            87.6            91.0            91.8
- ------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                     87.8            89.8            89.2            87.1            87.8
Oil and gas                                               1.6             2.5             2.0             0.4             0.5
Purchased power -
  From non-affiliates                                     7.6             5.9             5.5             3.5             2.7
  From affiliates                                         3.0             1.8             3.3             9.0             9.0
- ------------------------------------------------------------------------------------------------------------------------------
Total                                                   100.0           100.0           100.0           100.0           100.0
==============================================================================================================================
</TABLE>





                                                                II-139



<PAGE>
                            MISSISSIPPI POWER COMPANY

                                FINANCIAL SECTION



                                     II-140

<PAGE>

MANAGEMENT'S REPORT
Mississippi Power Company 2000 Annual Report


The management of Mississippi Power Company has prepared -- and is responsible
for -- the financial statements and related information included in this report.
These statements were prepared in accordance with accounting principles
generally accepted in the United States and necessarily include amounts that are
based on best estimates and judgments of management. Financial information
throughout this annual report is consistent with the financial statements.

    The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that the accounting records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based upon recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

    The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

    The audit committee of the board of directors, composed of four independent
directors, provides a broad overview of management's financial reporting and
control functions. Periodically, this committee meets with management, the
internal auditors, and the independent public accountants to ensure that these
groups are fulfilling their obligations and to discuss auditing, internal
controls, and financial reporting matters. The internal auditors and independent
public accountants have access to the members of the audit committee at any
time.

    Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.

    In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Mississippi Power Company in conformity with accounting principles generally
accepted in the United States.



/s/Dwight H. Evans
Dwight H. Evans
President and Chief Executive Officer


/s/Michael W. Southern
Michael W. Southern
Vice President, Secretary, Treasurer and
Chief Financial Officer


                                        II-141


<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Mississippi Power Company:

We have audited the accompanying balance sheets and statements of capitalization
of Mississippi Power Company (a Mississippi corporation and a wholly owned
subsidiary of Southern Company) as of December 31, 2000 and 1999, and the
related statements of income, common stockholder's equity, and cash flows for
each of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

    We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

    In our opinion, the financial statements (pages 11-151 through II-166)
referred to above present fairly, in all material respects, the financial
position of Mississippi Power Company as of December 31, 2000 and 1999, and the
results of its operations and its cash flows for each of the three years in the
period ended December 31, 2000, in conformity with accounting principles
generally accepted in the United States.





/s/Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                       II-142

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
Mississippi Power Company 2000 Annual Report


RESULTS OF OPERATIONS

Earnings

Mississippi Power Company's 2000 net income after dividends on preferred stock
of $55 million increased $0.2 million over 1999 earnings of $54.8 million, which
were $0.3 million less than 1998 earnings of $55.1 million.

Revenues

Operating revenues for the Company in 2000 and the changes from the prior year
are as follows:

                                             Increase (Decrease)
                               Amount          From Prior Year
                               ------       ----------------------
                                2000            2000          1999
                            ---------------------------------------
                                         (in millions)
  Retail --
    Base Revenues           $287,253       $ (5,854)      $ 17,462
    Fuel cost recovery
      and other              211,298         34,971          9,405
  ----------------------------------------------------------------
  Total retail               498,551         29,117         26,867
  ----------------------------------------------------------------
  Sales for resale --
    Non-affiliates           145,931         14,927         9,779
    Affiliates               27,915           8,469          1,161
  ----------------------------------------------------------------
  Total sales for resale     173,846         23,396         10,940
  Other operating
    revenues                  15,205          2,085             66
  ----------------------------------------------------------------
  Operating revenues        $687,602        $54,598       $ 37,873
  ==================================================================
  Percent change                               8.6%            6.4%
  ------------------------------------------------------------------

    Total retail revenues for 2000 increased approximately 6.2 percent when
compared to 1999. The increase resulted primarily from continued growth in the
service area, a positive impact of weather and additional fuel revenues. Retail
revenues for 1999 reflected a 6.1 percent increase over the prior year due to
the continued growth in the service area, increased fuel revenues, and a true-up
of the unbilled revenue estimate.

    Fuel revenues generally represent the direct recovery of fuel expense
including purchased power. Therefore, changes in recoverable fuel expenses are
offset with corresponding changes in fuel revenues and have no effect on net
income.

    Energy sales to non-affiliates include economy sales and amounts sold under
short-term contracts. Sales for resale to non-affiliates are influenced by those
utilities' own customer demand, plant availability, and the cost of their
predominant fuels.

    Included in sales for resale to non-affiliates are revenues from rural
electric cooperative associations and municipalities located in southeastern
Mississippi. Energy sales to these customers increased 10.9 percent in 2000 and
10.2 percent in 1999, with the related revenues rising 10.8 percent and 12.1
percent, respectively. The customer demand experienced by these utilities is
determined by factors very similar to those of the Company. Revenues from other
sales outside the service area increased in 2000 and 1999 primarily due to power
marketing activities. These increases were offset by increases in purchased
power from non-affiliates and, as a result, had no significant effect on net
income.

    Sales to affiliated companies within the Southern Company electric system
will vary from year to year depending on demand and the availability and cost of
generating resources at each company. These sales have no material impact on
earnings.

    Below is a breakdown of kilowatt-hour sales for 2000 and the percent change
for the last two years:

                           2000               Percent Change
                       -------------    ---------------------------
                            KWH              2000       1999
                                        ---------------------------
                       (in millions)
 Residential             2,286               1.7%        -
 Commercial              2,883               1.3         8.5%
 Industrial              4,376              (0.7)       18.2
 Other                      41               2.5         0.8
                       -------
 Total retail            9,586               0.5        10.4
 Sales for
    Resale --
     Non-affiliates      3,675              12.9         3.1
     Affiliates            453             (16.2)       (2.2)
                       -------
 Total                  13,714               2.8         8.0
 ==================================================================

    Total retail kilowatt-hour sales increased slightly in 2000 when compared to
1999 sales, which included an unbilled revenue true-up of approximately 3.5
percent. The increase primarily resulted from the continued growth in the
service area and the positive impact of weather. Excluding the impact of the
unbilled revenue true-up, all retail customer classes experienced growth in 2000


                                       II-143
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report


due to the positive impact of weather, increased tourism, and continued growth
in the service area. In 1999, increased tourism and strong growth impacted
commercial sales, while industrial sales were impacted by increased production
by several larger industrial customers, including one which was shut down in
1998 by Hurricane Georges.

Expenses

Total operating expenses were $565 million in 2000 reflecting an increase of $52
million or 10.1 percent over the prior year. The increase was due primarily to
higher fuel and purchased power expenses. In 1999, total operating expenses
increased by 6.9 percent over the prior year due primarily to higher fuel
expenses.

    Fuel costs are the single largest expense for the Company. Fuel expenses for
2000 and 1999 increased 10.7 percent and 10.3 percent, respectively. The
increase for each year was due to increased generation and a higher average cost
of fuel. The increased generation was due to higher demand for energy across the
Southern Company electric system.

    In 2000, expenses related to purchased power from non-affiliates increased
40.0 percent, while expenses related to purchased power from affiliates
increased 64.7 percent which, in total, resulted in a 51 percent increase when
compared to 1999. This increase consisted mostly of energy purchased for power
marketing activities which was resold to non-affiliated third parties and had no
significant effect on net income. Sales and purchases among the Company and its
affiliates will vary from period to period depending on demand and the
availability and variable production cost of each generating unit in the
Southern Company electric system.

    The amount and sources of generation and the average cost of fuel per net
kilowatt-hour generated were as follows:

                                      2000     1999        1998
                                    -----------------------------
Total generation
  (millions of kilowatt
      hours)                        11,688   11,599      10,610
Sources of generation
   (percent) --
     Coal                              83        81          80
     Gas                               17        19          20
Average cost of fuel per net
   kilowatt-hour generated
    (cents) --                       1.80      1.65        1.62
- -----------------------------------------------------------------

    Other operation expenses decreased 8.2 percent in 2000 primarily due to a
decrease in administrative and general expenses. In 1999, other operation
expense increased 13.9 percent primarily due to the amortization of costs
associated with the workforce reduction plan and higher distribution expenses.
Maintenance expense in 2000 increased due to additional scheduled maintenance,
while maintenance expense in 1999 decreased due to reduced scheduled
maintenance. In 2000, depreciation expenses increased slightly due to growth in
plant investment and a new composite depreciation rate, which became effective
January 2000. Comparisons of taxes other than income taxes for 2000 and 1999
show increases of 1.7 percent and 4.2 percent, respectively, due to higher
municipal franchise taxes resulting from higher retail revenues. Interest on
long-term debt increased in 2000 due to higher interest rates and increased debt
outstanding.

Effects of Inflation

The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in utility plant with long economic lives. Conventional
accounting for historical costs does not recognize this economic loss or the
partially offsetting gain that arises through financing facilities with



                                      II-144
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report


fixed-money obligations, such as long-term debt and preferred securities. Any
recognition of inflation by regulatory authorities is reflected in the rate of
return allowed.

Future Earnings Potential

The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of the Company's future
earnings depends on numerous factors ranging from weather to energy sales growth
to a less regulated and more competitive environment. Expenses are subject to
constant review and cost control programs. The Company is also maximizing the
utility of invested capital and minimizing the need for additional capital by
refinancing, managing the size of its fuel stockpile, raising generating plant
availability and efficiency, and aggressively controlling its construction
budget.

    The Company currently operates as a vertically integrated utility providing
electricity to customers within its traditional service area located in
southeastern Mississippi. Prices for electricity provided by the Company to
retail customers are set by the Mississippi Public Service Commission (MPSC)
under cost-based regulatory principles. The Federal Energy Regulatory Commission
(FERC) regulates the Company's wholesale rate schedules, power sales contracts
and transmission facilities.

    Operating revenues will be affected by any changes in rates under the
Performance Evaluation Plan (PEP) -- the Company's performance based ratemaking
plan -- and the Environmental Compliance Overview Plan (ECO Plan). PEP has
proven to be a stabilizing force on electric rates, with only moderate changes
in rates taking place. The ECO Plan provides for recovery of costs (including
costs of capital) associated with environmental projects approved by the MPSC,
most of which are required to comply with Clean Air Act Amendments of 1990
(Clean Air Act) regulations. The ECO Plan is operated independently of PEP.
Compliance costs related to the Clean Air Act could affect earnings if such
costs cannot be recovered. The Company's 2000 ECO Plan filed in January 2000 was
approved as filed, and resulted in a slight decrease in customer prices. The
Company filed its 2001 ECO Plan in January 2001 and, if approved as filed, it
will result in a slight increase in customer prices. Refer to Note 3 to the
financial statements under "Litigation and Regulatory Matters" for additional
information. The Clean Air Act and other important environmental items are
discussed later under "Environmental Matters."

    Future earnings in the near term will depend upon growth in energy sales,
which is subject to a number of factors. These factors include weather,
competition, changes in contracts with neighboring utilities, energy
conservation practiced by customers, the elasticity of demand, and the rate of
economic growth in the Company's service area. The Company anticipates somewhat
slower growth in energy sales as the tourism industry stabilizes within its
service area. In addition to tourism, the healthcare and retail trade sectors
will provide most of the anticipated energy growth for the commercial class of
customers, while shipbuilding, chemicals and the U.S. government will provide
much of the basis for anticipated growth in the industrial sector.

    The electric utility industry in the United States is currently undergoing a
period of dramatic change as a result of regulatory and competitive factors.
Among the primary agents of change has been the Energy Policy Act of 1992
(Energy Act). The Energy Act allows independent power producers (IPPs) to access
a utility's transmission network in order to sell electricity to other
utilities. This enhances the incentive for IPPs to build cogeneration plants for
a utility's large industrial and commercial customers and sell energy generation
to other utilities. Also, electricity sales for resale rates are affected by
wholesale transmission access and numerous potential new energy suppliers,
including power marketers and brokers.

    Although the Energy Act does not permit retail transmission access, it was a
major catalyst for the current restructuring and consolidation taking place
within the utility industry. Numerous federal and state initiatives are in
various stages to promote wholesale and retail competition. Among other things,
these initiatives allow customers to choose their electricity provider. As these
initiatives materialize, the structure of the utility industry could radically
change. In May 2000, the MPSC ordered that its docket reviewing restructuring of
the electric industry in the State of Mississippi be suspended. The MPSC found
that retail competition may not be in the public interest at this time, and
ordered that no further formal hearings would be held on this subject. It found
that the current regulatory structure produced reliable low cost power and
"should not be changed without clear and convincing demonstration that change


                                       II-145
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report


would be in the public interest." The MPSC will continue to monitor retail and
wholesale restructuring activities throughout the United States and reserves its
right to order further formal hearings on the matter should new evidence
demonstrate that retail competition would be in the public interest and all
customers could receive a reduction in the total cost of their electric service.
If the MPSC decides to hold future restructuring hearings on this matter,
enactment would require numerous issues to be resolved, including significant
ones relating to transmission, prices, and recovery of any stranded costs. The
inability of the Company to recover its investment, including regulatory assets,
could have a material adverse effect on the financial condition of the Company.

    The Company is attempting to minimize or reduce its cost exposure. The
Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operation is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities that are not specifically recoverable, and
determine if any other assets have been impaired. See Note 1 to the financial
statements under "Regulatory Assets and Liabilities" for additional information.

    Continuing to be a low-cost producer could provide significant opportunities
to increase market share and profitability in markets that evolve with changing
regulation. Conversely, unless the Company remains a low-cost producer and
provides quality service, the Company's energy sales growth could be limited,
and this could significantly erode earnings.

    On December 20, 1999, the Federal Energy Regulatory Commission (FERC) issued
its final ruling on Regional Transmission Organizations (RTOs). The order
encourages utilities owning transmission systems to form RTOs on a voluntary
basis. After participating in regional conferences with customers and other
members of the public to discuss the formation of RTOs, utilities were required
to make a filing with the FERC. On October 16, 2000, Southern Company and its
integrated utilities including the Company filed a proposal for the creation of
an RTO. The proposal is for the formation of a for-profit company that would
have control of the bulk power transmission system of the Company and any other
participating utilities. Participants would have the option to either maintain
their ownership or divest, sell, or lease their assets to the proposed RTO. If
the FERC accepts the proposal as filed, the creation of an RTO is not expected
to have a material impact on the Company's financial statements. The outcome of
this matter cannot now be determined.

    The Energy Act amended the Public Utility Holding Company Act of 1935
(PUHCA) to allow holding companies to form exempt wholesale generators to sell
power largely free of regulation under PUHCA. These entities are able to own and
operate power generating facilities and sell power to affiliates - under certain
restrictions.

    Southern Company is aggressively working to maintain and expand its share of
wholesale sales in the southeastern power markets. In January 2001, Southern
Company announced the formation of a new subsidiary - Southern Power Company.
The new subsidiary will own, manage, and finance wholesale generating assets in
the Southeast. Southern Power will be the primary growth engine for Southern
Company's market-based energy business. Energy from its assets will be marketed
to wholesale customers under the Southern Company name.

    In accordance with FASB Statement No. 87, Employers' Accounting for
Pensions, the Company recorded non-cash pension income of approximately $4.2
million in 2000. Pension income in 2001 is expected to be less as a result of
plan amendments. Future pension income is dependent on several factors including
trust earnings and changes to the plan. For more information, see Note 2.

    The Company is involved in various matters being litigated. See Note 3 to
the financial statements for information regarding material issues that could
possibly affect future earnings.

    Compliance costs related to current and future environmental laws and
regulations could affect earnings if such costs are not fully recovered. The
Clean Air Act and other important environmental items are discussed later under
"Environmental Matters."

Exposure to Market Risks

Due to cost-based rate regulations, the Company has limited exposure to market
volatility in interest rates, commodity fuel prices, and prices of electricity.


                                       II-146

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report


To mitigate residual risks relative to movements in electricity prices, the
Company enters into fixed price contracts for the purchase and sale of
electricity through the wholesale electricity market. Realized gains and losses
are recognized in the income statements as incurred. At December 31, 2000,
exposure from these activities was not material to the Company's financial
statements. Also, based on the Company's overall interest rate exposure at
December 31, 2000, a near-term 100 basis point change in interest rates would
not materially affect the financial statements.

New Accounting Standard

In June 2000, FASB issued Statement No. 138, an amendment of Statement
No. 133,  Accounting for Derivative Instruments and Hedging Activities.
Statement No. 133,  as amended, establishes accounting and reporting
standards for derivative instruments and for hedging activities. Statement
No. 133 requires that certain derivative instruments  be recorded in the
balance sheet as either an asset or liability measured at fair value, and
that changes in the fair value be recognized currently in earnings unless
specific hedge accounting criteria are met.

    Substantially all of the Company's bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain of
these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

    The Company adopted Statement No. 133 effective January 1, 2001. The impact
on net income was immaterial. The application of the new rules is still evolving
and further guidance from FASB is expected, which could additionally impact the
Company's financial statements. Also, as wholesale energy markets mature, future
transactions could result in more volatility in net income and comprehensive
income.

FINANCIAL CONDITION

Overview

The principal change in the Company's financial condition during 2000 was the
addition of approximately $81 million to utility plant. Funding for these
additions and other capital requirements were derived primarily from operations.
The Statements of Cash Flows provide additional details.

Financing Activity

In March 2000, the Company issued $100 million of floating rate senior notes due
March 28, 2002. The proceeds were used to prepay bank loans of $45 million
maturing in November 2001 and $5 million maturing in October 2002. The balance
of the $100 million was used to repay a portion of the Company's outstanding
short-term debt. The Company plans to continue, to the extent possible, a
program to retire higher-cost debt and replace these securities with lower-cost
capital. See the Statements of Cash Flows for further details.

    Composite financing rates increased for the year 2000 when compared to 1998
and 1999. As of year-end , the composite rates were as follows:

                                    2000     1999     1998
                                 ----------------------------
 Composite interest rate on
     long-term debt                 6.41%    6.19%    6.14%

 Composite preferred stock
     dividend rate                  6.33%    6.33%    6.33%

 Composite interest rate on
     preferred securities           7.75%    7.75%    7.75%
 ------------------------------------------------------------

    In 1999, the Company signed an Agreement for Lease and a Lease Agreement
with Escatawpa Funding, Limited Partnership ("Escatawpa"), that calls for the
Company to design and construct, as agent for Escatawpa, a 1,064 megawatt
natural gas combined cycle facility. It is anticipated that the total project
will cost approximately $400 million, and upon project completion in mid 2001,
the Company intends to lease the facility for an initial term of approximately
10 years. It is anticipated that the annual lease payments will approximate $32
million during the initial term.

                                       II-147
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report


Capital Structure

At year-end 2000, the Company's ratio of common equity to total capitalization,
excluding long-term debt due within one year, decreased from 50.2 percent in
1999, to 48.1 percent.

Capital Requirements for Construction

The Company's projected construction expenditures for the next three years total
$191 million ($62 million in 2001, $60 million in 2002, and $69 million in
2003). The major emphasis within the construction program will be on the upgrade
of existing facilities.

    Revisions to projected construction expenditures may be necessary because of
factors such as changes in business conditions, revised load projections, the
availability and cost of capital, changes in environmental regulations, and
alternatives such as leasing.

Other Capital Requirements

In addition to the funds required for the Company's construction program,
approximately $135 million will be required by the end of 2003 for present
sinking fund requirements and maturities of long-term debt. The Company plans to
continue, when economically feasible, to retire higher cost debt and preferred
stock and replace these obligations with lower-cost capital if market conditions
permit.

Environmental Matters

On November 3, 1999, the Environmental Protection Agency (EPA), brought a civil
action in the U.S. District Court against Alabama Power Company, Georgia Power
Company and the system service company. The complaint alleges violations of the
prevention of significant deterioration and new source review provisions of the
Clean Air Act with respect to five coal-fired generating facilities in Alabama
and Georgia. The civil action requests penalties and injunctive relief,
including an order requiring the installation of the best available control
technology at the affected units. The EPA concurrently issued to the integrated
Southeast utilities a notice of violation related to 10 generating facilities,
which includes the five facilities mentioned previously, and the Company's
plants Watson and Greene County. In early 2000, the EPA filed a motion to amend
its complaint to add the violations alleged in its notice of violation, and to
add Gulf Power, Savannah Electric, and the Company as defendants. The complaint
and notice of violation are similar to those brought against and issued to
several other electric utilities. These complaints and notices of violation
allege that the utilities had failed to secure necessary permits or install
additional pollution equipment when performing maintenance and construction at
coal burning plants constructed or under construction prior to 1978. On August
1, 2000, the U.S. District Court granted Alabama Power's motion to dismiss for
lack of jurisdiction in Georgia and granted the system service company's motion
to dismiss on the grounds that it neither owned nor operated the generating
units involved in the proceedings. On January 12, 2001, the EPA re-filed its
claims against Alabama Power in federal district court in Birmingham, Alabama.
The EPA did not include SCS in the new complaint. The Company believes that it
complied with applicable laws and the EPA's regulations and interpretations in
effect at the time the work in question took place. The Clean Air Act authorizes
civil penalties of up to $27,500 per day per violation at each generating unit.
Prior to January 30, 1997, the penalty was $25,000 per day. An adverse outcome
of this matter could require substantial capital expenditures that cannot be
determined at this time and possibly require payment of substantial penalties.
This could affect future results of operations, cash flows and possibly
financial condition unless such costs can be recovered through regulated rates.

    In November 1990, the Clean Air Act Amendments of 1990 (Clean Air Act) were
signed into law. Title IV of the Clean Air Act -- the acid rain compliance
provision of the law -- significantly affected Southern Company. Specific
reductions in sulfur dioxide and nitrogen oxide emissions from fossil-fired
generating plants were required in two phases. Phase I compliance began in 1995.
As a result of a systemwide compliance strategy, some 50 generating units of
Southern Company were brought into compliance with Phase I requirements.

    Southern Company achieved Phase I sulfur dioxide compliance at the affected
plants by switching to low-sulfur coal, which required some equipment upgrades.
Construction expenditures for Phase I nitrogen oxide and sulfur dioxide
emissions compliance totaled approximately $300 million for Southern Company,
including approximately $65 million for the Company.



                                       II-148
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report



    Phase II sulfur dioxide compliance was required in 2000. Southern Company
used emission allowances and fuel switching to comply with Phase II
requirements. Also, equipment to control nitrogen oxide emissions was installed
on additional system fossil-fired units as necessary to meet Phase II limits and
ozone non-attainment requirements for metropolitan Atlanta through 2000.
Compliance for Phase II and initial ozone non-attainment requirements increased
the Company's total construction expenditures through 2000 by approximately $100
million. Phase II compliance did not have a material impact on the Company.

    The Company's ECO Plan is designed to allow recovery of costs of compliance
with the Clean Air Act, as well as other environmental statutes and regulations.
The MPSC reviews environmental projects and the Company's environmental policy
through the ECO Plan. Under the ECO Plan, any increase in the annual revenue
requirement is limited to 2 percent of retail revenues. The Company's management
believes that the ECO Plan provides for recovery of the Clean Air Act costs. See
Note 3 to the financial statements under "Environmental Compliance Overview
Plan" for additional information.

    A significant portion of costs related to the acid rain and ozone
non-attainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.

    In July 1997, the EPA revised the national ambient air quality standards for
ozone and fine particulate matter. This revision made the standards
significantly more stringent. In the subsequent litigation of these standards,
the U.S. Supreme Court recently dismissed certain challenges but found the EPA's
implementation program for the new ozone standard unlawful and remanded it to
the EPA. In addition, the Federal District of Columbia Circuit Court of Appeals
will address other legal challenges to these standards in mid-2001. A decision
is expected in the spring of 2001. If the standards are eventually upheld,
implementation could be required by 2007 to 2010.

    In September 1998, the EPA issued the final regional nitrogen oxide
reduction rules to the states for implementation. Compliance is required by May
31, 2004. The final rules affect 21 states that at present do not include
Mississippi. The EPA is presently evaluating whether or not to bring an
additional 15 states including Mississippi, under this regional nitrogen oxide
rule.

    In December 2000, the EPA completed its utility study for mercury and other
hazardous air pollutants (HAPS) and issued a determination that an emission
control program for mercury and, perhaps, other HAPS is warranted. The program
is to be developed over the next four years under the Maximum Achievable Control
Technology (MACT) provisions of the Clean Air Act. This determination is being
challenged in the courts. In January 2001, the EPA proposed guidance for the
determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls would likely
be required around 2010. Litigation of the BART rules is probable in the near
future.

    Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

    The EPA and state environmental regulatory agencies are reviewing and
evaluating various matters including: emission control strategies for ozone
non-attainment areas; additional controls for hazardous air pollutant emissions;
and hazardous waste disposal requirements. The impact of any new standards will
depend on the development and implementation of applicable regulations.

    The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur costs to clean up properties currently or
previously owned. Upon identifying potential sites, the Company conducts
studies, when possible, to determine the extent of any required cleanup costs.

                                       II-149

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS  (continued)
Mississippi Power Company 2000 Annual Report



Should remediation be determined to be probable, reasonable estimates of costs
to clean up such sites are developed and recognized in the financial statements.

    Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; and the Endangered
Species Act. Changes to these laws could affect many areas of the Company's
operations. The full impact of any such changes cannot be determined at this
time.

    Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Company. The impact of new legislation -- if any
- -- will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for lawsuits alleging damages
caused by electromagnetic fields or other environmental concerns. The likelihood
or outcome of such potential lawsuits cannot be determined at this time.

Sources of Capital

To meet short-term cash needs and contingencies, the Company had at December 31,
2000 approximately $7.5 million of cash and cash equivalents and approximately
$117 million of unused committed credit agreements. The Company had $56 million
of short-term notes payable outstanding at year-end 2000.

    It is anticipated that the funds required for construction and other
purposes, including compliance with environmental regulations, will be derived
from sources similar to those used in the past. These sources were primarily the
issuance of first mortgage bonds and preferred securities, in addition to
pollution control revenue bonds issued for the Company's benefit by public
authorities. The Company also issued unsecured debt in 1998.

    The Company has no restrictions on the amounts of unsecured indebtedness it
may incur. However, the Company is required to meet certain coverage
requirements specified in its mortgage indenture and corporate charter to issue
new first mortgage bonds and preferred stock. The Company's coverage ratios are
high enough to permit, at present interest rate levels, any foreseeable security
sales. The amount of securities which the Company will be permitted to issue in
the future will depend upon market conditions and other factors prevailing at
that time.

Cautionary Statement Regarding Forward-Looking
Information

This Annual Report includes forward-looking statements in addition to historical
information. Forward-looking information includes, among other things,
statements concerning projected sales growth and scheduled completion of new
generation. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential," or "continue" or the negative
of these terms or other comparable terminology. The Company cautions that there
are various important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements; accordingly,
there can be no assurance that such indicated results will be realized. These
factors include the impact of recent and future federal and state regulatory
change, including legislative and regulatory initiatives regarding deregulation
and restructuring of the electric utility industry and also changes in
environmental and other laws and regulations to which the Company is subject, as
well as changes in application of existing laws and regulations; current and
future litigation, including the pending EPA civil action against the Company;
the extent and timing of the entry of additional competition in the markets of
the Company; potential business strategies, including acquisitions or
dispositions of assets or businesses, which cannot be assured to be completed or
beneficial; internal restructuring or other restructuring options, that may be
pursued by the Company; state and federal rate regulation in the United States;
political, legal and economic conditions and developments in the United States;
financial market conditions and the results of financing efforts; the impact of
fluctuations in commodity prices, interest rates and customer demand; weather
and other natural phenomena; the ability of the Company to obtain additional
generating capacity at competitive prices; and other factors discussed elsewhere
herein and in other reports (including Form 10-K) filed from time to time by the
Company with the SEC.


                                       II-150

<PAGE>
<TABLE>

STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Mississippi Power Company 2000 Annual Report
<CAPTION>

- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                   2000                 1999                1998
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                             (in thousands)
Operating Revenues:
<S>                                                                            <C>                  <C>                 <C>
Retail sales                                                                   $498,551             $469,434            $442,567
Sales for resale --
  Non-affiliates                                                                145,931              131,004             121,225
  Affiliates                                                                     27,915               19,446              18,285
Other revenues                                                                   15,205               13,120              13,054
- ---------------------------------------------------------------------------------------------------------------------------------
Total operating revenues                                                        687,602              633,004             595,131
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
  Fuel                                                                          191,127              172,686             156,539
  Purchased power --
   Non-affiliates                                                                56,082               40,080              33,872
   Affiliates                                                                    51,057               31,007              36,037
  Other                                                                         115,055              125,291             109,993
Maintenance                                                                      52,750               47,085              50,404
Depreciation and amortization                                                    50,275               49,206              47,450
Taxes other than income taxes                                                    48,686               47,893              45,965
- ---------------------------------------------------------------------------------------------------------------------------------
Total operating expenses                                                        565,032              513,248             480,260
- ---------------------------------------------------------------------------------------------------------------------------------
Operating Income                                                                122,570              119,756             114,871
Other Income (Expense):
Interest income                                                                     347                  189                 863
Other, net                                                                         (647)               1,675               2,498
- ---------------------------------------------------------------------------------------------------------------------------------
Earnings Before Interest and Income Taxes                                       122,270              121,620             118,232
- ---------------------------------------------------------------------------------------------------------------------------------
Interest Expense and Other:
Interest expense, net                                                            28,101               27,969              23,746
Distributions on preferred securities of subsidiary                               2,712                2,712               2,712
- ---------------------------------------------------------------------------------------------------------------------------------
Total interest charges and other, net                                            30,813               30,681              26,458
- ---------------------------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes                                                     91,457               90,939              91,774
Income taxes                                                                     34,356               34,117              34,664
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income                                                                       57,101               56,822              57,110
Dividends on Preferred Stock                                                      2,129                2,013               2,005
- ---------------------------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock                                  $ 54,972             $ 54,809            $ 55,105
=================================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>







                                                                II-151


<PAGE>
<TABLE>

STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Mississippi Power Company 2000 Annual Report
<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------
                                                                               2000                 1999                1998
- -----------------------------------------------------------------------------------------------------------------------------
                                                                                         (in thousands)
Operating Activities:
<S>                                                                        <C>                  <C>                 <C>
Net income                                                                 $ 57,101             $ 56,822            $ 57,110
Adjustments to reconcile net income
  to net cash provided from operating activities --
       Depreciation and amortization                                         54,638               53,427              51,517
       Deferred income taxes and investment tax credits, net                    752               (4,143)             11,620
       Other, net                                                            (1,747)               5,531             (12,175)
       Changes in certain current assets and liabilities --
          Receivables, net                                                   (3,231)             (39,304)             (5,486)
          Fossil fuel stock                                                  14,577               (9,379)             (5,767)
          Materials and supplies                                             (1,056)              (1,903)                717
          Accounts payable                                                    1,309                1,391                (389)
          Other                                                               2,952               14,206              (4,061)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities                                 125,295               76,648              93,086
- -----------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                                    (81,211)             (75,888)            (68,231)
Other                                                                        (9,153)               1,009                (324)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                                      (90,364)             (74,879)            (68,555)
- -----------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase (decrease) in notes payable, net                                    (1,500)              44,500              13,000
Proceeds --
   Other long-term debt                                                     100,000               59,400             103,520
   Capital contributions from parent company                                 12,659                2,028                  85
Retirements --
   First mortgage bonds                                                           -                    -             (75,000)
   Other long-term debt                                                     (81,405)             (50,456)            (13,020)
   Preferred stock                                                                -                    -                 (87)
Payment of preferred stock dividends                                         (2,129)              (2,013)             (2,005)
Payment of common stock dividends                                           (54,700)             (56,100)            (51,700)
Other                                                                          (498)                (282)             (2,429)
- -----------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities                                      (27,573)              (2,923)            (27,636)
- -----------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                                       7,358               (1,154)             (3,105)
Cash and Cash Equivalents at Beginning of Period                                173                1,327               4,432
- -----------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                 $  7,531            $     173            $  1,327
=============================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the period for --
   Interest (net of amount capitalized)                                     $30,570              $25,486             $26,133
   Income taxes (net of refunds)                                             28,418               39,729              26,847
- -----------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.
</TABLE>







                                                                II-152


<PAGE>

<TABLE>

BALANCE SHEETS
At December 31, 2000 and 1999
Mississippi Power Company 2000 Annual Report
<CAPTION>

- ----------------------------------------------------------------------------------------------------------------------------
Assets                                                                                     2000                     1999
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                                  (in thousands)
Current Assets:
<S>                                                                                  <C>                      <C>
Cash and cash equivalents                                                            $    7,531               $      173
Receivables --
  Customer accounts receivable                                                           72,064                   61,274
  Other accounts and notes receivable                                                    21,843                   23,490
  Affiliated companies                                                                   10,071                   16,097
  Accumulated provision for uncollectible accounts                                         (571)                    (697)
Fossil fuel stock, at average cost                                                       11,220                   25,797
Materials and supplies, at average cost                                                  21,694                   20,638
Other                                                                                     8,320                   10,013
- ----------------------------------------------------------------------------------------------------------------------------
Total current assets                                                                    152,172                  156,785
- ----------------------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service                                                                            1,665,879                1,601,399
Less accumulated provision for depreciation                                             652,891                  626,841
- ----------------------------------------------------------------------------------------------------------------------------
                                                                                      1,012,988                  974,558
Construction work in progress                                                            60,951                   68,721
- ----------------------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                                  1,073,939                1,043,279
- ----------------------------------------------------------------------------------------------------------------------------
Other Property and Investments                                                            2,268                    1,389
- ----------------------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes                                                 13,860                   21,557
Prepaid pension costs                                                                     6,724                    2,488
Debt expense, being amortized                                                             4,628                    4,355
Premium on reacquired debt, being amortized                                               7,168                    8,154
Other                                                                                    14,312                   13,129
- ----------------------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                                  46,692                   49,683
- ----------------------------------------------------------------------------------------------------------------------------
Total Assets                                                                         $1,275,071               $1,251,136
============================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>





                                                                II-153

<PAGE>

<TABLE>
BALANCE SHEETS
At December 31, 2000 and 1999
Mississippi Power Company 2000 Annual Report

<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity                                                      2000                     1999
- ---------------------------------------------------------------------------------------------------------------------------
                                                                                                 (in thousands)
Current Liabilities:
<S>                                                                                <C>                      <C>
Securities due within one year                                                      $       20               $   30,020
Notes payable                                                                           56,000                   57,500
Accounts payable --
  Affiliated                                                                            10,715                   17,002
  Other                                                                                 48,146                   43,105
Customer deposits                                                                        5,274                    3,749
Taxes accrued --
  Income taxes                                                                           8,769                    6,865
  Other                                                                                 36,799                   35,534
Interest accrued                                                                         4,482                    6,733
Vacation pay accrued                                                                     5,701                    5,218
Other                                                                                    7,003                    7,497
- ---------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                              182,909                  213,223
- ---------------------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                                           370,511                  321,802
- ---------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes                                                      139,909                  139,564
Deferred credits related to income taxes                                                25,603                   34,765
Accumulated deferred investment tax credits                                             23,481                   24,695
Employee benefits provisions                                                            34,671                   34,268
Workforce reduction plan                                                                 9,734                   11,272
Other                                                                                   16,546                   12,770
- ---------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                                           249,944                  257,334
- ---------------------------------------------------------------------------------------------------------------------------
Company obligated mandatorily redeemable preferred
  securities of subsidiary trust holding company junior
  subordinated notes (See accompanying statements)                                      35,000                   35,000
- ---------------------------------------------------------------------------------------------------------------------------
Preferred stock (See accompanying statements)                                           31,809                   31,809
- ---------------------------------------------------------------------------------------------------------------------------
Common stockholder's equity (See accompanying statements)                              404,898                  391,968
- ---------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity                                          $1,275,071               $1,251,136
===========================================================================================================================
The accompanying notes are an integral part of these balance sheets.


</TABLE>




                                                                II-154

<PAGE>

<TABLE>
STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Mississippi Power Company 2000 Annual Report

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
                                                                    2000              1999             2000              1999
- ------------------------------------------------------------------------------------------------------------------------------
                                                                         (in thousands)                (percent of total)
Long-Term Debt:
First mortgage bonds --
       Maturity                           Interest Rates
       --------                           --------------
       <S>                                <C>                   <C>               <C>                   <C>             <C>
       June 1, 2023                       7.45%                 $ 35,000          $ 35,000
       March 1, 2004                      6.60%                   35,000            35,000
       December 1, 2025                   6.875%                  30,000            30,000
- ------------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                       100,000           100,000
- ------------------------------------------------------------------------------------------------------------------------------
Long-term notes payable --
       6.05% due May 1, 2003                                      35,000            35,000
       6.75% due June 30, 2038                                    53,179            54,564
       Adjustable rates (6.61% to 6.78% at 1/1/01)
         due 2000-2002                                           100,000            80,000
- ------------------------------------------------------------------------------------------------------------------------------
Total long-term notes payable                                    188,179           169,564
- ------------------------------------------------------------------------------------------------------------------------------
Other long-term debt --
       Pollution control revenue bonds --
         Collateralized:
           5.65% to 5.80% due 2007-2023                                -            26,785
          Variable rates (3.90% at 1/1/01)
            due 2020-2025                                              -            10,600
         Non-collateralized:
           5.65% to 5.80% due 2007-2023                           26,765
           Variable rates (3.90% to 5.20% at 1/1/01)
             due 2020-2028                                        56,820            46,220
- ------------------------------------------------------------------------------------------------------------------------------
Total other long-term debt                                        83,585            83,605
- ------------------------------------------------------------------------------------------------------------------------------
Unamortized debt premium (discount), net                          (1,233)           (1,347)
- ------------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
  requirement -- $23.8 million)                                  370,531           351,822
Less amount due within one year                                       20            30,020
- ------------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year             $370,511          $321,802            43.9%             41.2%
- ------------------------------------------------------------------------------------------------------------------------------


</TABLE>


                                                                II-155
<PAGE>

<TABLE>
STATEMENTS OF CAPITALIZATION (continued)
At December 31, 2000 and 1999
Mississippi Power Company 2000 Annual Report
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
                                                                     2000              1999             2000              1999
- -------------------------------------------------------------------------------------------------------------------------------
                                                                           (in thousands)               (percent of total)
Company Obligated Mandatorily
  Redeemable Preferred Securities:(Note 8)
$25 liquidation value --
<S>                                                              <C>               <C>                  <C>             <C>
  7.75%                                                          $ 35,000          $ 35,000
- -------------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $2.7 million)            35,000            35,000              4.2               4.5
- -------------------------------------------------------------------------------------------------------------------------------
Cumulative Preferred Stock:
$100 par value
  4.40% to 7.00%                                                   31,809            31,809
- -------------------------------------------------------------------------------------------------------------------------------
Total (annual dividend requirement -- $2.0 million)                31,809            31,809              3.8               4.1
- -------------------------------------------------------------------------------------------------------------------------------
Common Stockholder's Equity:
Common stock, without par value --
  Authorized  - 1,130,000 shares
  Outstanding - 1,121,000 shares in 2000 and 1999                  37,691            37,691
   Paid-in capital                                                194,161           181,502
   Premium on preferred stock                                         326               326
Retained earnings                                                 172,720           172,449
- -------------------------------------------------------------------------------------------------------------------------------
Total common stockholder's equity                                 404,898           391,968             48.1              50.2
- -------------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                             $842,218          $780,579           100.0%            100.0%
===============================================================================================================================
The accompanying notes are an integral part of these statements.
</TABLE>


                                                                II-156

<PAGE>

<TABLE>

STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Mississippi Power Company 2000 Annual Report

<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------

                                                                                    Premium on
                                                       Common         Paid-In       Preferred      Retained
                                                        Stock         Capital         Stock        Earnings          Total
- -----------------------------------------------------------------------------------------------------------------------------
                                                                               (in thousands)

<S>                                                  <C>            <C>               <C>         <C>              <C>
Balance at January 1, 1998                            $37,691        $179,389          $327        $170,417         $387,824
Net income after dividends on preferred stock               -               -             -          55,105           55,105
Capital contributions from parent company                   -              85             -               -               85
Cash dividends on common stock                              -               -             -         (51,700)         (51,700)
Other                                                       -               -            (1)            (82)             (83)
- -----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                           37,691         179,474           326         173,740          391,231
Net income after dividends on preferred stock               -               -             -          54,809           54,809
Capital contributions from parent company                   -           2,028             -               -            2,028
Cash dividends on common stock                              -               -             -         (56,100)         (56,100)
- -----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                           37,691         181,502           326         172,449          391,968
Net income after dividends on preferred stock               -               -             -          54,972           54,972
Capital contributions from parent company                   -          12,659             -               -           12,659
Cash dividends on common stock                              -               -             -         (54,700)         (54,700)
Other                                                       -               -             -              (1)              (1)
- ----------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000                          $37,691        $194,161          $326        $172,720         $404,898
=============================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>
                                                                II-157

<PAGE>

NOTES TO FINANCIAL STATEMENTS
Mississippi Power Company 2000 Annual Report


1.  SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

General

Mississippi Power Company is a wholly owned subsidiary of Southern Company,
which is the parent company of five integrated Southeast utilities, a system
service company (SCS), Southern Communications Services (Southern LINC),
Southern Company Energy Solutions, Southern Nuclear Operating Company (Southern
Nuclear), Mirant Corporation -- formerly Southern Energy, Inc. -- and other
direct and indirect subsidiaries. The integrated Southeast utilities -- Alabama
Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power
Company, and Savannah Electric and Power Company -- provide electric service in
four states. Contracts among the integrated Southeast utilities -- related to
jointly owned generating facilities, interconnecting transmission lines, and the
exchange of electric power -- are regulated by the Federal Energy Regulatory
Commission (FERC) and/or the Securities and Exchange Commission (SEC). SCS
provides, at cost, specialized services to Southern Company and subsidiary
companies. Southern LINC provides digital wireless communications services to
the integrated Southeast utilities and also markets these services to the public
within the Southeast. Southern Company Energy Solutions develops new business
opportunities related to energy products and services. Southern Nuclear provides
services to Southern Company's nuclear power plants. Mirant acquires, develops,
builds, owns, and operates power production and delivery facilities and provides
a broad range of energy-related services to utilities and industrial companies
in selected countries around the world. Mirant businesses include independent
power projects, integrated utilities, a distribution company, and energy trading
and marketing businesses outside the southeastern United States.

    Southern Company is registered as a holding company under the Public Utility
Holding Company Act of 1935 (PUHCA). Both the Company and its subsidiaries are
subject to the regulatory provisions of the PUHCA. The Company is also subject
to regulation by the FERC and the Mississippi Public Service Commission (MPSC).
The Company follows accounting principles generally accepted in the United
States and complies with the accounting policies and practices prescribed by the
respective commissions. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires the
use of estimates, and the actual results may differ from those estimates.

    Prior years' data presented in the financial statements have been
reclassified to conform with the current year presentation.

Related-Party Transactions

The Company has an agreement with SCS under which the following services are
rendered to the Company at cost: general and design engineering, purchasing,
accounting and statistical, finance and treasury, tax, information resources,
marketing, auditing, insurance and pension administration, human resources,
systems and procedures, and other services with respect to business and
operations and power pool operations. Costs for these services amounted to $46.2
million, $45.5 million, and $43.9 million during 2000, 1999, and 1998,
respectively.

Regulatory Assets and Liabilities

The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are expected to be credited
to customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to the following:

                                             2000         1999
                                       -------------------------
                                             (in thousands)
Deferred income tax charges              $ 13,860     $ 21,557
Vacation pay                                5,701        5,218
Premium on reacquired debt                  7,168        8,154
Property damage reserve                    (3,519)      (3,082)
Deferred income tax credits               (25,603)     (34,765)
Other, net                                   (505)        (349)
- ----------------------------------------------------------------
Total                                    $ (2,898)    $ (3,267)
================================================================

                                       II-158

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


    In the event that a portion of the Company's operations is no longer subject
to the provisions of FASB Statement No. 71, the Company would be required to
write off related regulatory assets and liabilities that are not specifically
recoverable through regulated rates. In addition, the Company would be required
to determine if any impairment to other assets exists, including plant, and
write down the assets, if impaired, to their fair value.

Revenues and Fuel Costs

The Company currently operates as a vertically integrated utility providing
electricity to retail customers within its traditional service area located
within the state of Mississippi, and to wholesale customers in the Southeast.

    Revenues are recognized as services are rendered. Unbilled revenues are
accrued at the end of each fiscal period. The Company's retail and wholesale
rates include provisions to adjust billings for fluctuations in fuel costs, the
energy component of purchased power costs, and certain other costs. Retail rates
also include provisions to adjust billings for fluctuations in costs for ad
valorem taxes and certain qualifying environmental costs. Revenues are adjusted
for differences between actual allowable amounts and the amounts included in
rates.

    The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts continued to average less than 1 percent of revenues.

Depreciation

Depreciation of the original cost of plant in service is provided primarily by
using composite straight-line rates, which approximated 3.5 percent in 2000 and
3.3 percent in 1999 and 1998. When property subject to depreciation is retired
or otherwise disposed of in the normal course of business, its original cost --
together with the cost of removal, less salvage -- is charged to accumulated
depreciation. Minor items of property included in the original cost of the plant
are retired when the related property unit is retired. Depreciation expense
includes an amount for the expected cost of removal of facilities.

Income Taxes

The Company uses the liability method of accounting for deferred income taxes
and provides deferred income taxes for all significant income tax temporary
differences. Investment tax credits utilized are deferred and amortized to
income over the average lives of the related property.

Property, Plant and Equipment

Property, plant, and equipment is stated at original cost. Original cost
includes: materials; labor; minor items of property; appropriate administrative
and general costs; payroll-related costs such as taxes, pensions, and other
benefits; and the estimated cost of funds used during construction, if
applicable. The cost of maintenance, repairs, and replacement of minor items of
property is charged to maintenance expense except for the maintenance of coal
cars and a portion of the railway track maintenance, which are charged to fuel
stock. The cost of replacements of property -- exclusive of minor items of
property -- is capitalized.

Cash and Cash Equivalents

For purposes of the Statements of Cash Flows, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.

Financial Instruments

The Company's financial instruments for which the carrying amount did not equal
fair value at December 31 were as follows:

                                       Carrying          Fair
                                         Amount         Value
                                   ---------------------------
                                          (in millions)
Long-term debt:
At December 31, 2000                      $371          $362
At December 31, 1999                      $353          $334
Capital trust preferred
  securities:
At December 31, 2000                       $35           $34
At December 31, 1999                       $35           $30
- --------------------------------------------------------------

    The fair values for long-term debt and preferred securities were based on
either closing market price or closing price of comparable instruments.

                                       11-159
<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


Materials and Supplies

Generally, materials and supplies include the cost of transmission,
distribution, and generating plant materials. Materials are charged to inventory
when purchased and then expensed or capitalized to plant, as appropriate, when
used or installed.

Provision for Property Damage

The Company is self-insured for the cost of storm, fire, and other uninsured
casualty damage to its property, including transmission and distribution
facilities. As permitted by regulatory authorities, the Company accrues for the
cost of such damage by charging expense and crediting an accumulated provision.
The cost of repairing damage resulting from such events that individually exceed
$50 thousand is charged to the accumulated provision. In 1999, an order from the
MPSC increased the maximum Property Damage Reserve from $18 million to $23
million and allows an annual accrual of up to $4.6 million. In 2000, the Company
provided for such costs by charges to income of $3.5 million. In 1999 and 1998,
the Company provided for such costs by charges to income of $4.4 million and
$1.5 million, respectively. As of December 31, 2000, the accumulated provision
amounted to $3.5 million.

2.  RETIREMENT BENEFITS

The Company has defined benefit, trusteed, pension plans that cover
substantially all employees. The Company provides certain medical care and life
insurance benefits for retired employees. Substantially all these employees may
become eligible for such benefits when they retire. The Company funds trusts to
the extent deductible under federal income tax regulations or the extent
required by regulatory authorities. In late 2000, the Company adopted several
pension and postretirement benefits plan changes that had the effect of
increasing benefits to both current and future retirees. The effects of these
changes will be to increase annual pension and postretirement benefits costs by
approximately $1.3 and $0.4 million, respectively. The measurement date for plan
assets and obligations is September 30 for each year.

Pension Plan

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:

                                                    Projected
                                              Benefit Obligations
                                           --------------------------
                                                   2000         1999
- ---------------------------------------------------------------------
                                                   (in thousands)
Balance at beginning of year                   $139,930     $142,807
Service cost                                      4,272        4,415
Interest cost                                    10,196        9,377
Benefits paid                                    (7,593)      (8,050)
Actuarial gain and employee
    transfers                                    (1,419)      (8,619)
- ---------------------------------------------------------------------
Balance at end of year                         $145,386     $139,930
=====================================================================

                                                  Plan Assets
                                           --------------------------
                                                   2000         1999
- ---------------------------------------------------------------------
                                                   (in thousands)
Balance at beginning of year                    $221,487    $198,100
Actual return on plan assets                      39,737      33,216
Benefits paid                                     (7,593)     (8,050)
Employee transfers                                 3,017      (1,779)
- ---------------------------------------------------------------------
Balance at end of year                          $256,648    $221,487
=====================================================================

    The accrued pension costs recognized in the Balance Sheets were as follows:

                                                   2000         1999
- ---------------------------------------------------------------------
                                                   (in thousands)
Funded status                                  $111,263     $ 81,557
Unrecognized transition obligation               (3,269)      (3,814)
Unrecognized prior service cost                   4,577        4,991
Unrecognized net gain                          (105,847)     (80,246)
- ---------------------------------------------------------------------
Prepaid asset recognized in the
    Balance Sheets                             $  6,724     $  2,488
=====================================================================

                                       II-160

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report



    Components of the plans' net periodic cost were as follows:

                                       2000       1999        1998
- ------------------------------------------------------------------
                                          (in thousands)
Service cost                       $  4,272   $  4,415    $  3,848
Interest cost                        10,196      9,377       9,613
Expected return on
 plan assets                        (15,910)   (14,681)   (13,817)
Recognized net gain                  (2,663)    (1,721)    (1,956)
Net amortization                       (131)      (131)      (131)
- ------------------------------------------------------------------
Net pension income                 $ (4,236)  $ (2,741)   $(2,443)
==================================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                             Accumulated
                                         Benefit Obligations
                                     ----------------------------
                                             2000           1999
- -----------------------------------------------------------------
                                           (in thousands)
Balance at beginning of year              $45,390        $47,260
Service cost                                  830            982
Interest cost                               3,309          3,105
Benefits paid                              (2,628)        (2,256)
Actuarial gain and
  employee transfers                       (1,949)        (3,701)
- -----------------------------------------------------------------
Balance at end of year                    $44,952        $45,390
=================================================================


                                             Plan Assets
                                     ----------------------------
                                             2000           1999
- ------------------------------------------------------------------
                                           (in thousands)
Balance at beginning of year              $14,998        $12,779
Actual return on plan assets                2,511          1,818
Employer contributions                      2,961          2,657
Benefits paid                              (2,627)        (2,256)
- -----------------------------------------------------------------
Balance at end of year                    $17,843        $14,998
=================================================================

    The accrued postretirement costs recognized in the Balance Sheets were as
follows:

                                                   2000         1999
- ----------------------------------------------------------------------
                                                (in thousands)
Funded status                                  $(27,109)    $(30,392)
Unrecognized transition obligation                4,275        4,621
Unrecognized net gain                            (6,632)      (3,406)
Fourth quarter contributions                      1,065          931
- ----------------------------------------------------------------------
Accrued liability recognized in the
  Balance Sheets                               $(28,401)    $(28,246)
======================================================================

    Components of the plans' net periodic cost were as follows:

                                       2000         1999       1998
- --------------------------------------------------------------------
                                          (in thousands)
Service cost                        $   830      $   981     $  806
Interest cost                         3,309        3,105      3,162
Expected return on
    plan assets                      (1,235)      (1,100)      (989)
Net amortization                        346          346        346
- --------------------------------------------------------------------
Net postretirement cost             $ 3,250      $ 3,332     $3,325
====================================================================

    The weighted average rates assumed in the actuarial calculations for both
the pension plans and postretirement benefits were:

                                               2000       1999
 ---------------------------------------------------------------
 Discount                                      7.50%      7.50%
 Annual salary increase                        5.00       5.00
 Long-term return on plan assets               8.50       8.50
 ---------------------------------------------------------------

                                       II-161

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report



    An additional assumption used in measuring the accumulated postretirement
benefit obligation was a weighted average medical care cost trend rate of 7.29
percent for 2000, decreasing gradually to 5.50 percent through the year 2005 and
remaining at that level thereafter. An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
2000 as follows:

                                      1 Percent      1 Percent
                                       Increase      Decrease
- -----------------------------------------------------------------
                                           (in thousands)
Benefit obligation                      $2,669         $2,396
Service and interest costs                 242            215
- -----------------------------------------------------------------

Workforce Reduction Program

In 1997, approximately one hundred employees of the Company accepted the terms
of a workforce reduction plan. The cost incurred in connection with this
voluntary plan was approximately $18 million. The MPSC approved the deferral and
amortization of these program costs over a period not to exceed 60 months
beginning no later than July 1998. As of December 31, 1999, the cost was fully
amortized.

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The Company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were $2.3
million, $2.2 million, and $2.1 million, respectively.

3. LITIGATION AND REGULATORY MATTERS

Environmental Litigation

On November 3, 1999, the Environmental Protection Agency (EPA) brought a civil
action in the U.S. District Court against Alabama Power Company, Georgia Power
Company and SCS. The complaint alleges violations of the prevention of
significant deterioration and new source review provisions of the Clean Air Act
with respect to five coal-fired generating facilities in Alabama and Georgia.
The civil action requests penalties and injunctive relief, including an order
requiring the installation of the best available control technology at the
affected units. The Clean Air Act authorizes civil penalties of up to $27,500
per day per violation at each generating unit. Prior to January 30, 1997, the
penalty was $25,000 per day.

     The EPA concurrently issued to the integrated Southeast utilities a notice
of violation related to 10 generating facilities, which includes the five
facilities mentioned previously, and the Company's plants Watson and Greene
County. In early 2000, the EPA filed a motion to amend its complaint to add the
violations alleged in its notice of violation, and to add Gulf Power, Savannah
Electric and the Company as defendants. The complaint and notice of violation
are similar to those brought against and issued to several other electric
utilities. These complaints and notices of violation allege that the utilities
had failed to secure necessary permits or install additional pollution equipment
when performing maintenance and construction at coal burning plants constructed
or under construction prior to 1978. On August, 1, 2000, the U.S. District Court
granted Alabama Power's motion to dismiss for lack of jurisdiction in Georgia
and granted SCS's motion to dismiss on the grounds that it neither owned nor
operated the generating units involved in the proceedings. On January 12, 2001,
the EPA re-filed its claims against Alabama Power in federal district court in
Birmingham, Alabama. The EPA did not include SCS in the new complaint. The
Company believes that it complied with applicable laws and the EPA's regulations
and interpretations in effect at the time the work in question took place. An
adverse outcome of this matter could require substantial capital expenditures
that cannot be determined at this time and possibly require payment of
substantial penalties. This could affect future results of operations, cash
flows and possibly financial condition unless such costs can be recovered
through regulated rates.

Retail Rate Adjustment Plans

The Company's retail base rates are set under a Performance Evaluation Plan
(PEP) approved by the MPSC in 1994. PEP was designed with the objective that the
plan would reduce the impact of rate changes on the customer and provide
incentives for the Company to keep customer prices low. PEP includes a mechanism
for sharing rate adjustments based on the Company's ability to maintain low
rates for customers and on the Company's performance as measured by three

                                       II-162

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


indicators that emphasize price and service to the customer. PEP provides for
semiannual evaluations of the Company's performance-based return on investment.
Any change in rates is limited to 2 percent of retail revenues per evaluation
period. PEP will remain in effect until the MPSC modifies or terminates the
plan. There were no PEP retail revenue changes for 2000, 1999, or 1998.

Environmental Compliance Overview Plan

The MPSC approved the Company's Environmental Compliance Overview Plan (ECO
Plan) in 1992. The ECO Plan establishes procedures to facilitate the MPSC's
overview of the Company's environmental strategy and provides for recovery of
costs (including costs of capital) associated with environmental projects
approved by the MPSC. Under the ECO Plan, any increase in the annual revenue
requirement is limited to 2 percent of retail revenues. However, the ECO Plan
also provides for carryover of any amount over the 2 percent limit into the next
year's revenue requirement. The Company conducts studies, when possible, to
determine the extent of any required environmental remediation. Should such
remediation be determined to be probable, reasonable estimates of costs to clean
up such sites are developed and recognized in the financial statements. The
Company recovers such costs under the ECO Plan as they are incurred, as provided
for in the Company's 1995 ECO Plan Order. The Company filed its 2001 ECO Plan in
January and, if approved as filed, it will result in a slight increase in
customer prices.

Approval for New Capacity

In January 1998, the Company was granted a Certificate of Public Convenience and
Necessity by the MPSC to build approximately 1,064 megawatts of combined cycle
generation at the Company's Plant Daniel site, to be placed in service by June
2001. In December 1998, the Company requested approval to transfer the ownership
rights under the certificate to Escatawpa Funding, Limited Partnership
("Escatawpa"), which will lease the facility to the Company (see Note 4,
Financing and Commitments). In September 2000, the Company and the Mississippi
Public Utilities Staff entered, and the MPSC in October 2000 approved, a new
stipulation that modifies a January 1999 stipulation and order covering cost
allocation. The 1999 stipulation and MPSC order would have excluded the new
capacity from retail ratebase and would have assigned the Company's existing
generating facilities entirely to the retail jurisdiction. The new stipulation
and MPSC order allocates a pro-rata share of the new capacity along with the
Company's existing generating capacity to the retail jurisdiction.

4.  FINANCING AND COMMITMENTS

Construction Program

The Company is engaged in continuous construction programs, the costs of which
are currently estimated to total $62 million in 2001, $60 million in 2002, and
$69 million in 2003. The construction program is subject to periodic review and
revision, and actual construction costs may vary from the above estimates
because of numerous factors. These factors include changes in business
conditions; revised load growth estimates; changes in environmental regulations;
increasing costs of labor, equipment and materials; and cost of capital.
Significant construction will continue related to transmission and distribution
facilities, and the upgrading of generating plants.

Financing

In 1999, the Company signed an Agreement for Lease and a Lease Agreement with
Escatawpa, that calls for the Company to design and construct, as agent for
Escatawpa, a 1,064 megawatt natural gas combined cycle facility. It is
anticipated that the total project will cost approximately $400 million, and
upon project completion in mid 2001, the Company intends to lease the facility
for an initial term of approximately 10 years. It is anticipated that the annual
lease payments will approximate $32 million during the initial term.

Bank Credit Arrangements

At December 31, 2000, the Company had total committed credit agreements with
banks for approximately $117 million. At year-end 2000, the unused portion of
these committed credit agreements was approximately $117 million. These credit
agreements expire at various dates in 2001. Some of these agreements allow
short-term borrowings to be converted into term loans, payable in 12 equal
quarterly installments, with the first installment due at the end of the first
calendar quarter after the applicable termination date or at an earlier date at
the Company's option. In connection with these credit arrangements, the Company

                                       II-163

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


agrees to pay commitment fees based on the unused portions of the commitments or
to maintain compensating balances with the banks. At December 31, 2000, the
Company had $56 million of short-term borrowings outstanding.

Assets Subject to Lien

The Company's mortgage indenture dated as of September 1, 1941, as amended and
supplemented, which secures the first mortgage bonds issued by the Company,
constitutes a direct first lien on substantially all of the Company's fixed
property and franchises.

Lease Agreements

In 1984, the Company and Entergy Corp. (formerly Gulf States Utilities) entered
into a forty-year transmission facilities agreement whereby Entergy began paying
a use fee to the Company covering all expenses relative to ownership and
operation and maintenance of a 500 kV line, including amortization of its
original $57 million cost. For the three years ended 2000, use fees collected
under this agreement, net of related expenses, amounted to approximately $3
million each year, and are included within Other Income in the Statements of
Income.

    In 1989, the Company entered into a twenty-two year operating lease
agreement for the use of 495 aluminum railcars. In 1994, a second lease
agreement for the use of 250 additional aluminum railcars was also entered into
for twenty-two years. The Company has the option to purchase the 745 railcars at
the greater of lease termination value or fair market value, or to renew the
leases at the end of the lease term. In 1997, a third lease agreement for the
use of 360 railcars was also entered into for three years, with a monthly
renewal option for up to an additional nine months. All of these leases,
totaling 1,105 railcars, were for the transport of coal to Plant Daniel.

    Gulf Power, as joint owner of Plant Daniel, is responsible for one half of
the lease cost. The Company's share (50%) of the leases, charged to fuel stock,
was $2.1 million in 2000, $2.8 million in 1999, and $2.8 million in 1998. The
Company's annual lease payments for 2001 through 2005 will average approximately
$2.0 million and after 2005, lease payments total in aggregate approximately $14
million.

Fuel

To supply a portion of the fuel requirements of its generating plants, the
Company has entered into various long-term commitments for the procurement of
fuel. In most cases, these contracts contain provisions for price escalations,
minimum production levels, and other financial commitments.

    Total estimated obligations at December 31, 2000 were as follows:

Year                                                Fuel
- ----                                                ----
                                                (in millions)
2001                                            $  294
2002                                               332
2003                                               313
2004                                               137
2005                                                95
2006 - 2024                                        131
Total commitments                               $1,302

    Additional commitments for fuel will be required in the future to supply the
Company's fuel needs.

5.  JOINT OWNERSHIP AGREEMENTS

The Company and Alabama Power own as tenants in common Units 1 and 2 at Plant
Greene County located in Alabama. Additionally, the Company and Gulf Power own
as tenants in common Units 1 and 2 at Plant Daniel located in Mississippi.

    At December 31, 2000, the Company's percentage ownership and investment in
these jointly owned facilities were as follows:

                                               Company's
 Generating           Total      Percent        Gross       Accumulated
    Plant            Capacity   Ownership     Investment    Depreciation
 ---------         ----------   ---------  -------------    ------------
                   (Megawatts)                      (in thousands)
 Greene
   County
   Units 1 and 2      500         40%          $63,346         $32,762

 Daniel
  Units 1 and 2     1,000         50%         $230,853        $115,472

 -----------------------------------------------------------------------

    The Company's share of plant operating expenses is included in the
corresponding operating expenses in the Statements of Income.

                                       II-164
<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


 6. LONG-TERM CAPACITY SALES AND LEASE
    AGREEMENTS

The Company and the other utility affiliates of Southern Company have long-term
contractual agreements for the sale of capacity and energy to certain
non-affiliated utilities located outside the system's service area. Because the
energy is generally sold at cost under these agreements, profitability is
primarily affected by revenues from capacity sales. The Company's capacity
revenues under these agreements were not material during the periods reported.

    During 2000, the Company entered into a 10 year capacity lease that begins
in mid 2001. The minimum capacity lease revenue that the Company will receive
will average approximately $21 million per year over the 10 year period.

7.  INCOME TAXES

At December 31, 2000, the tax-related regulatory assets and liabilities were $14
million and $26 million, respectively. These assets are attributable to tax
benefits flowed through to customers in prior years and to taxes applicable to
capitalized interest. These liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.

    Details of the federal and state income tax provisions are shown below:

                                     2000        1999       1998
                                ----------------------------------
                                           (in thousands)
 Total provision for
    income taxes
 Federal --
    Current                       $28,934     $33,379    $20,500
    Deferred                          622      (3,973)     9,442
 -----------------------------------------------------------------
                                   29,556      29,406     29,942
 -----------------------------------------------------------------
 State --
    Current                         4,670       4,881      2,544
    Deferred                          130        (170)     2,178
 -----------------------------------------------------------------
                                    4,800       4,711      4,722
 -----------------------------------------------------------------
 Total                            $34,356     $34,117    $34,664
 =================================================================

    The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities are as follows:

                                        2000             1999
                                   -----------------------------
                                           (in thousands)
 Deferred tax liabilities:
    Accelerated depreciation        $151,278         $154,698
    Basis differences                  8,559            8,967
    Other                             24,136           23,108
 ---------------------------------------------------------------
 Total                               183,973          186,773
 ---------------------------------------------------------------
 Deferred tax assets:
    Other property
     basis differences                17,147           21,003
    Pension and
     other benefits                    9,528            9,608
    Property insurance                 3,558            3,419
    Unbilled fuel                      5,727            4,846
    Other                              9,669           11,071
 ---------------------------------------------------------------
 Total                                45,629           49,947
 ---------------------------------------------------------------
 Net deferred tax
    liabilities                      138,344          136,826
 Portion included in
    current assets, net                1,565            2,738
 ---------------------------------------------------------------
 Accumulated deferred
    income taxes in the
    Balance Sheets                  $139,909         $139,564
 ===============================================================

    Deferred investment tax credits are amortized over the lives of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $1.2 million in 2000, 1999, and 1998. At December 31, 2000, all
investment tax credits available to reduce federal income taxes payable had been
utilized.

    A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:

                                    2000       1999          1998
                                 ----------------------------------
 Federal statutory rate             35.0%      35.0%         35.0%
 State income tax, net of
    federal deduction                3.4        3.4           3.3
 Non-deductible book
    depreciation                      .6         .7            .5
 Other                              (1.5)      (1.6)         (1.0)
 ------------------------------------------------------------------
 Effective income tax rate          37.5%      37.5%         37.8%
 ==================================================================

                                       II-165

<PAGE>

NOTES (continued)
Mississippi Power Company 2000 Annual Report


    Southern Company files a consolidated federal income tax return. Under a
joint consolidated income tax agreement, each subsidiary's current and deferred
tax expense is computed on a stand-alone basis.

8. COMPANY OBLIGATED MANDATORILY
   REDEEMABLE PREFERRED SECURITIES

In February 1997, Mississippi Power Capital Trust I (Trust I), of which the
Company owns all the common securities, issued $35 million of 7.75 percent
mandatorily redeemable preferred securities. Substantially all of the assets of
Trust I are $36 million aggregate principal amount of the Company's 7.75 percent
junior subordinated notes due February 15, 2037.

    The Company considers that the mechanisms and obligations relating to the
preferred securities, taken together, constitute a full and unconditional
guarantee by the Company of the Trusts' payment obligations with respect to the
preferred securities.

    Trust I is a subsidiary of the Company, and accordingly is consolidated in
the Company's financial statements.

9.  LONG-TERM DEBT DUE WITHIN ONE YEAR

A summary of the improvement fund requirements and scheduled maturities and
redemptions of long-term debt due within one year is as follows:

                                                2000       1999
                                             ---------------------
                                                (in thousands)
 Bond improvement fund requirement            $1,000     $1,000
 Less: Portion to be satisfied by
       certifying property additions           1,000      1,000
 ---------------------------------------------------------------
 Cash sinking fund requirement                     -          -
 Current portion of other long-term debt           -     30,000
 Pollution control bond cash
    sinking fund requirements                     20         20
 ---------------------------------------------------------------
 Total                                           $20    $30,020
 ===============================================================

    The first mortgage bond improvement fund requirement is one percent of each
outstanding series authenticated under the indenture of the Company prior to
January 1 of each year, other than first mortgage bonds issued as collateral
security for certain pollution control obligations. The requirement must be
satisfied by June 1 of each year by depositing cash or reacquiring bonds, or by
pledging additional property equal to 166-2/3 percent of such requirement.

10. COMMON STOCK DIVIDEND RESTRICTIONS

The Company's first mortgage bond indenture and the corporate charter contain
various common stock dividend restrictions. At December 31, 2000, approximately
$118 million of retained earnings was restricted against the payment of cash
dividends on common stock under the most restrictive terms of the mortgage
indenture or corporate charter.

11. QUARTERLY FINANCIAL DATA (UNAUDITED)

Summarized quarterly financial data for 2000 and 1999 are as follows:

                                                         Net Income
                                                    After Dividends
                         Operating     Operating       On Preferred
Quarter Ended             Revenues        Income              Stock
- --------------------------------------------------------------------
                                     (in thousands)
March 2000                $134,705       $18,593             $6,722
June 2000                  176,028        28,130             12,232
September 2000             220,119        53,943             28,762
December 2000              156,750        21,904              7,256

March 1999                $122,435       $18,122             $7,193
June 1999                  158,590        31,289             14,953
September 1999             201,594        51,609             27,313
December 1999              150,385        18,736              5,350
- --------------------------------------------------------------------

    The Company's business is influenced by seasonal weather conditions and the
timing of rate changes.

                                       II-166


<PAGE>
<TABLE>

SELECTED FINANCIAL AND OPERATING DATA 1996-2000
Mississippi Power Company 2000 Annual Report

<CAPTION>

- -----------------------------------------------------------------------------------------------------------------------------
                                                        2000            1999            1998            1997            1996
- -----------------------------------------------------------------------------------------------------------------------------
<S>                                                 <C>             <C>             <C>             <C>             <C>
Operating Revenues (in thousands)*                  $687,602        $633,004        $595,131        $543,588        $544,029
Net Income after Dividends
  on Preferred Stock (in thousands)                  $54,972         $54,809         $55,105         $54,010         $52,723
Cash Dividends
  on Common Stock (in thousands)                     $54,700         $56,100         $51,700         $49,400         $43,900
Return on Average Common Equity (percent)              13.80           14.00           14.15           14.00           13.90
Total Assets (in thousands)                       $1,275,071      $1,251,136      $1,189,605      $1,166,829      $1,142,327
Gross Property Additions (in thousands)              $81,211         $75,888         $68,231         $55,375         $61,314
- -----------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity                                 $404,898        $391,968        $391,231        $387,824        $383,734
Preferred stock                                       31,809          31,809          31,809          31,896          74,414
Company obligated mandatorily
  redeemable preferred securities                     35,000          35,000          35,000          35,000               -
Long-term debt                                       370,511         321,802         292,744         291,665         326,379
- -----------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)       $842,218        $780,579        $750,784        $746,385        $784,527
=============================================================================================================================
Capitalization Ratios (percent):
Common stock equity                                     48.1            50.2            52.1            52.0            48.9
Preferred stock                                          3.8             4.1             4.2             4.3             9.5
Company obligated mandatorily
  redeemable preferred securities                        4.2             4.5             4.7             4.7               -
Long-term debt                                          43.9            41.2            39.0            39.0            41.6
- -----------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)          100.0           100.0           100.0           100.0           100.0
=============================================================================================================================
Security Ratings:
First Mortgage Bonds -
     Moody's                                             Aa3             Aa3             Aa3             Aa3             Aa3
     Standard and Poor's                                  A+             AA-             AA-             AA-              A+
     Fitch                                               AA-             AA-             AA-             AA-             AA-
Preferred Stock -
     Moody's                                              a1              a1              a1              a1              a1
     Standard and Poor's                                BBB+              A-               A               A               A
     Fitch                                                 A               A              A+              A+              A+
=============================================================================================================================
Customers (year-end):
Residential                                          158,253         157,592         156,530         156,650         154,630
Commercial                                            32,372          31,837          31,319          31,667          30,366
Industrial                                               517             546             587             642             639
Other                                                    206             202             200             200             200
- -----------------------------------------------------------------------------------------------------------------------------
Total                                                191,348         190,177         188,636         189,159         185,835
=============================================================================================================================
Employees (year-end):                                  1,319           1,328           1,230           1,245           1,363
- -----------------------------------------------------------------------------------------------------------------------------
* 1999 data includes the true-up of the unbilled revenue estimates.


</TABLE>


                                                                II-167

<PAGE>

<TABLE>
SELECTED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Mississippi Power Company 2000 Annual Report

<CAPTION>


- ----------------------------------------------------------------------------------------------------------------------------------
                                                             2000            1999            1998            1997            1996
- ----------------------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands)*:
<S>                                                     <C>              <C>             <C>             <C>             <C>
Residential                                             $ 170,729        $159,945        $157,642        $138,608        $137,055
Commercial                                                163,552         153,936         145,677         134,208         131,734
Industrial                                                159,705         151,244         135,039         140,233         141,324
Other                                                       4,565           4,309           4,209           4,193           4,013
- ----------------------------------------------------------------------------------------------------------------------------------
Total retail                                              498,551         469,434         442,567         417,242         414,126
Sales for resale  - non-affiliates                        145,931         131,004         121,225         105,141          99,596
Sales for resale  - affiliates                             27,915          19,446          18,285          10,143          21,830
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity                  672,397         619,884         582,077         532,526         535,552
Other revenues                                             15,205          13,120          13,054          11,062           8,477
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                    $687,602        $633,004        $595,131        $543,588        $544,029
==================================================================================================================================
Kilowatt-Hour Sales (in thousands)*:
Residential                                             2,286,143       2,248,255       2,248,915       2,039,042       2,079,611
Commercial                                              2,883,197       2,847,342       2,623,276       2,407,520       2,315,860
Industrial                                              4,376,171       4,407,445       3,729,166       3,981,875       3,960,243
Other                                                      41,153          40,091          39,772          40,508          39,297
- ----------------------------------------------------------------------------------------------------------------------------------
Total retail                                            9,586,664       9,543,133       8,641,129       8,468,945       8,395,011
Sales for resale  - non-affiliates                      3,674,621       3,256,175       3,157,837       2,895,182       2,726,993
Sales for resale  - affiliates                            452,611         539,939         552,142         478,884         693,510
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                  13,713,896      13,339,247      12,351,108      11,843,011      11,815,514
==================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents)*:
Residential                                                  7.47            7.11            7.01            6.80            6.59
Commercial                                                   5.67            5.41            5.55            5.57            5.69
Industrial                                                   3.65            3.43            3.62            3.52            3.57
Total retail                                                 5.20            4.92            5.12            4.93            4.93
Sales for resale                                             4.21            3.96            3.76            3.42            3.55
Total sales                                                  4.90            4.65            4.71            4.50            4.53
Residential Average Annual
  Kilowatt-Hour Use Per Customer *                         14,445          14,301          14,376          13,132          13,469
Residential Average Annual
  Revenue Per Customer *                                $1,078.76       $1,017.42       $1,007.68         $892.68         $887.66
Plant Nameplate Capacity
  Ratings (year-end) (megawatts)                            2,086           2,086           2,086           2,086           2,086
Maximum Peak-Hour Demand (megawatts):
Winter                                                      2,305           2,125           1,740           1,922           2,030
Summer                                                      2,593           2,439           2,339           2,209           2,117
Annual Load Factor (percent)                                 59.3            59.6            58.0            59.1            60.7
Plant Availability Fossil-Steam (percent):                   92.6            91.0            90.0            92.4            91.8
- ----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                         67.8            69.4            66.5            70.5            70.4
Oil and gas                                                  13.5            15.9            14.5            12.5            12.0
Purchased power -
  From non-affiliates                                         7.7             6.2             8.0             3.0             6.5
  From affiliates                                            11.0             8.5            11.0            14.0            11.1
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                       100.0           100.0           100.0           100.0           100.0
==================================================================================================================================
* 1999 data includes the true-up of the unbilled revenue estimates.

</TABLE>


                                                                II-168

<PAGE>

                       SAVANNAH ELECTRIC AND POWER COMPANY

                               FINANCIAL SECTION


                                     II-169
<PAGE>

MANAGEMENT'S REPORT
Savannah Electric and Power Company 2000 Annual Report


The management of Savannah Electric and Power Company has prepared--and is
responsible for--the financial statements and related information included in
this report. These statements were prepared in accordance with accounting
principles generally accepted in the United States and necessarily include
amounts that are based on the best estimates and judgments of management.
Financial information throughout this annual report is consistent with the
financial statements.

     The Company maintains a system of internal accounting controls to provide
reasonable assurance that assets are safeguarded and that accounting records
reflect only authorized transactions of the Company. Limitations exist in any
system of internal controls, however, based on a recognition that the cost of
the system should not exceed its benefits. The Company believes its system of
internal accounting controls maintains an appropriate cost/benefit relationship.

     The Company's system of internal accounting controls is evaluated on an
ongoing basis by the Company's internal audit staff. The Company's independent
public accountants also consider certain elements of the internal control system
in order to determine their auditing procedures for the purpose of expressing an
opinion on the financial statements.

     The audit committee of the board of directors, composed of five independent
directors who are not employees, provides a broad overview of management's
financial reporting and control functions. Periodically, this committee meets
with management, the internal auditors and the independent public accountants to
ensure that these groups are fulfilling their obligations and to discuss
auditing, internal controls and financial reporting matters. The internal
auditors and the independent public accountants have access to the members of
the audit committee at any time.

     Management believes that its policies and procedures provide reasonable
assurance that the Company's operations are conducted according to a high
standard of business ethics.

     In management's opinion, the financial statements present fairly, in all
material respects, the financial position, results of operations, and cash flows
of Savannah Electric and Power Company in conformity with accounting principles
generally accepted in the United States.






/s/G. Edison Holland, Jr.                    /s/K. R. Willis
G. Edison Holland, Jr.                       K. R. Willis
President                                    Vice President,
and Chief Executive Officer                  Treasurer, Chief Financial Officer
                                             and Assistant Secretary


                                       11-170
<PAGE>

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Savannah Electric and Power Company:

We have audited the accompanying balance sheets and statements of capitalization
of Savannah Electric and Power Company (a Georgia corporation and a wholly owned
subsidiary of Southern Company) as of December 31, 2000 and 1999, and the
related statements of income, common stockholder's equity, and cash flows for
each of the three years in the period ended December 31, 2000. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.

     We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

     In our opinion, the financial statements (pages II-179 through II-193)
referred to above present fairly, in all material respects, the financial
position of Savannah Electric and Power Company as of December 31, 2000 and
1999, and the results of its operations and its cash flows for each of the
three years in the period ended December 31, 2000, in conformity with
accounting principles generally accepted in the United States.






/s/Arthur Andersen LLP
Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001


                                       II-171
<PAGE>




MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
Savannah Electric and Power Company 2000 Annual Report


RESULTS OF OPERATIONS
- --------------------

Earnings

Savannah Electric and Power Company's net income after dividends on preferred
stock for 2000 totaled $23.0 million, representing no significant change from
the prior year.

     In 1999, earnings were $23.1 million, representing a $0.6 million, or 2.4
percent decrease from the prior year. This was principally due to lower
non-operating revenues.

Revenues

Total operating revenues for 2000 were $295.7 million, reflecting a 17.5 percent
increase when compared to 1999. The following table summarizes the factors
affecting operating revenues for the past two years:

                                                 Increase (Decrease)
                                                   From Prior Year
                                            -------------------------
                                      Amount
                                       2000       2000         1999
                               --------------------------------------
                                          (in thousands)
    Retail --
       Base Revenues               $161,807    $ 9,272      $   376
       Fuel cost recovery
         and other                  120,815     31,085         (438)
    -----------------------------------------------------------------
    Total retail                    282,622     40,357          (62)
    -----------------------------------------------------------------
    Sales for resale --
       Non-affiliates                 4,748      1,353       (1,153)
       Affiliates                     4,974        823        1,135
    -----------------------------------------------------------------
    Total sales for resale            9,722      2,176          (18)
    -----------------------------------------------------------------
    Other operating revenues          3,374      1,591       (2,781)
    -----------------------------------------------------------------
    Total operating revenues       $295,718    $44,124      $(2,861)
    =================================================================
    Percent change                                17.5%        (1.1)%
    -----------------------------------------------------------------

     Retail revenues increased 16.7 percent or $40.4 million in 2000 as compared
to 1999. The primary contributors to the increase were continued growth in the
Company's service territory, the positive impact of weather on energy sales, and
an increase in fuel revenues.

     Electric rates include provisions to adjust billings for fluctuations in
fuel costs, the energy component of purchased power costs, and certain other
costs. Under these fuel recovery provisions, fuel revenues generally equal fuel
expenses--including the fuel component of purchased energy--and do not affect
net income. However, cash flow is affected by the economic loss from untimely
recovery of these receivables. The Company currently plans to make a filing with
the Georgia Public Service Commission (GPSC) in early 2001 to establish a new
fuel rate in order to better reflect current fuel cost and to collect the
current under-recovered balance.

     Revenues from sales to utilities outside the service area under long-term
contracts consist of capacity and energy components. Revenues from these sales
were not material to the financial statements.

     Sales to affiliated companies within the Southern electric system vary from
year to year depending on demand and the availability and cost of generating
resources at each company. These energy sales do not have a significant impact
on earnings.

Energy Sales

Changes in revenues are influenced heavily by the amount of energy sold each
year. Kilowatt-hour (KWH) sales for 2000 and the percent change by year were as
follows:

                           KWH            Percent Change
                       -------------    -------------------
                           2000           2000      1999
                       -------------    -------------------
                       (in millions)
Residential                 1,671          5.8%      2.6%
Commercial                  1,369          6.3       4.2
Industrial                    800         12.2     (20.7)
Other                         137          2.5       1.1
                          -------
Total retail                3,977          7.1      (2.5)
Sales for resale --
  Non-affiliates               77         50.3      (3.3)
  Affiliates                   89         15.1      31.8
                         --------
Total                       4,143          7.8%     (2.0)%
===========================================================

     Total retail energy sales in 2000 reflected increases in all customer
classes. Industrial energy sales increased 12.2 percent reflecting the
re-opening of an industrial facility under new ownership. Residential and
commercial sales also increased reflecting weather related demand and customer
growth.

     In 1999, total retail energy sales were down by 2.5 percent from the prior
year reflecting reduced energy sales of 20.7 percent to industrial customers due
to the shut-down of one industrial customer's facilities in late 1998 and

                                       II-172

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


completed construction of a steam turbine unit by another industrial customer.
These reductions were partially mitigated by increased energy sales of 2.6
percent and 4.2 percent to residential and commercial customers, respectively.

Expenses

Total operating expenses for 2000 were $245.0 million, an increase of $42.0
million from the prior year due primarily to increases in purchased power from
both affiliates and non-affiliates and generation fuel expense. The increase in
fuel expense is attributable to an increase in generation and higher fuel costs.
Purchased power increased due principally to higher energy costs. Other
operation expense was higher reflecting increased benefit expenses. Maintenance
expense increased from 1999 reflecting higher power delivery and power
generation maintenance costs to support improved customer reliability and unit
availability, respectively. Depreciation and amortization increased reflecting
additional depreciation charges related to the GPSC accounting order. See Note 3
to the financial statements for additional information on the GPSC's 1998
accounting order.

     In 1999, total operating expenses were $203.0 million reflecting a slight
increase of $1.4 million from the prior year. This increase was due primarily to
increases in purchased power from non-affiliates and depreciation and
amortization. Purchased power from non-affiliates increased due principally to
higher demand for energy and increased costs associated with these power
purchases. Depreciation and amortization increased reflecting additional
depreciation charges related to the GPSC's accounting order.

     Fuel and purchased power costs constitute the single largest expense for
the Company. The mix of energy supply is determined primarily by system load,
the unit cost of fuel consumed, and the availability of units.

     The amount and sources of energy supply and the total average cost of
energy supply were as follows:

                                          2000     1999     1998
                                       --------------------------
Total energy supply
   (millions of KWHs)                    4,286    4,039    4,182
Sources of energy supply
   (percent) --
     Coal                                   52       45       42
     Oil                                     2        2        1
     Gas                                     5       10       12
     Purchased Power                        41       43       45
Total average cost of
   energy supply (cents)                  3.09     2.44     2.35
- -----------------------------------------------------------------

Effects of Inflation

The Company is subject to rate regulation and income tax laws that are based on
the recovery of historical costs. Therefore, inflation creates an economic loss
because the Company is recovering its costs of investments in dollars that have
less purchasing power. While the inflation rate has been relatively low in
recent years, it continues to have an adverse effect on the Company because of
the large investment in utility plant with long economic lives. Conventional
accounting for historical cost does not recognize this economic loss nor the
partially offsetting gain that arises through financing facilities with
fixed-money obligations such as long-term debt and trust preferred securities.
Any recognition of inflation by regulatory authorities is reflected in the rate
of return allowed.

Future Earnings Potential

The results of operations for the past three years are not necessarily
indicative of future earnings potential. The level of future earnings depends on
numerous factors ranging from energy sales growth to a less regulated, more
competitive environment.

     The Company currently operates as a vertically integrated utility providing
electricity to customers within the traditional service area of southeastern
Georgia. Prices for electricity provided by the Company to retail customers are
set by the GPSC. Prices for electricity relating to jointly owned generating
facilities, interconnecting transmission lines, and the exchange of electric
power are set by the Federal Energy Regulatory Commission (FERC).

                                       II-173

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


     Future earnings in the near term will depend upon growth in energy sales,
which is subject to a number of factors. These factors include weather,
competition, new short and long-term contracts with neighboring utilities,
energy conservation practiced by customers, the elasticity of demand, and the
rate of economic growth in the Company's service area.

     Georgia Power is currently constructing two 566 megawatt combined cycle
units at Plant Wansley to begin operation in 2002. The GPSC has certified the
Company's purchase of capacity from these units to serve its retail customers
for approximately seven years.

     The electric utility industry in the United States is currently undergoing
a period of dramatic change as a result of regulatory and competitive factors.
Among the primary agents of change has been the Energy Policy Act of 1992
(Energy Act). The Energy Act allows independent power producers (IPPs) to access
the Company's transmission network in order to sell electricity to other
utilities. This enhances the incentive for IPPs to build cogeneration plants for
industrial and commercial customers and sell energy generation to other
utilities. Also, electricity sales for resale rates are affected by wholesale
transmission access and numerous potential new energy suppliers, including power
marketers and brokers. The Company is positioning the business to meet the
challenge of this major change in the traditional practice of selling
electricity.

     Although the Energy Act does not permit retail customer access, it was a
major catalyst for the current restructuring and consolidation taking place
within the utility industry. Numerous federal and state initiatives are in
varying stages to promote wholesale and retail competition. Among other things,
these initiatives allow customers to choose their electricity provider. As these
initiatives materialize, the structure of the utility industry could radically
change. Some states have approved initiatives that result in a separation of the
ownership and/or operation of generating facilities from the ownership and/or
operation of transmission and distribution facilities. While the GPSC has held
workshops to discuss retail competition and industry restructuring, there has
been no proposed or enacted legislation to date in Georgia. Enactment would
require numerous issues to be resolved, including significant ones relating to
transmission pricing and recovery of costs. The GPSC continues its assessment of
the range of potential stranded costs. The inability of the Company to recover
its investments, including the regulatory assets described in Note 1 to the
financial statements, could have a material adverse effect on the financial
condition and results of operation. The Company is attempting to minimize or
reduce its cost exposure.

     Continuing to be a low-cost producer could provide opportunities to
increase market share and profitability in markets that evolve with changing
regulation. Conversely, if the Company does not remain a low-cost producer and
provide quality service, then energy sales growth could be limited, and this
could significantly erode earnings.

     Rates to retail customers served by the Company are regulated by the GPSC.
As part of the Company's rate settlement in 1992, it was informally agreed that
the Company's earned rate of return on common equity should be 12.95 percent. In
1998, the GPSC issued a four-year accounting order settling its review of the
Company's earnings. See Note 3 to the financial statements for additional
information.

     On December 20, 1999, FERC issued its final rule on Regional Transmission
Organizations (RTOs). The order encouraged utilities owning transmission systems
to form RTOs on a voluntary basis. After participating in regional conferences
with customers and other members of the public to discuss the formation of RTOs,
utilities were required to make a filing. On October 16, 2000, Southern Company
and its integrated utility subsidiaries, including the Company, filed with FERC
a proposal for the creation of an RTO. The proposal is for the formation of a
for-profit company that would have control of the bulk power transmission system
of Southern Company and any other participating utilities. Participants would
have the option to maintain their ownership, divest, sell, or lease their assets
to the proposed RTO. If the FERC accepts the proposal as filed, the creation of
an RTO is not expected to have a material impact on Southern Company's financial
statements. The outcome of this matter cannot now be determined.

     The Energy Act amended the Public Utility Holding Company Act of 1935
(PUCHA) to allow holding companies to form exempt wholesale generators to sell
power largely free of regulation under PUCHA. These entities are able to own and



                                       II-174

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


operate power generating facilities and sell power to affiliates--under certain
restrictions.

     Southern Company is aggressively working to maintain and expand its share
of wholesale sales in the southeastern power markets. In January 2001, Southern
Company announced formation of a new subsidiary--Southern Power Company. The new
subsidiary will own, manage, and finance wholesale generating assets in the
Southeast. Energy from its assets will be marketed to wholesale customers under
the Southern Company name.

     Compliance costs related to current and future environmental laws and
regulations could affect earnings if such costs are not fully recovered. The
Clean Air Act and other important environmental items are discussed under
"Environmental Matters."

     The Company is subject to the provisions of Financial Accounting Standards
Board (FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. In the event that a portion of the Company's operations is no longer
subject to these provisions, the Company would be required to write off related
regulatory assets and liabilities that are not specifically recoverable, and
determine if any other assets have been impaired. See Note 1 to the financial
statements under "Regulatory Assets and Liabilities" for additional information.

New Accounting Standard

In June 2000, FASB issued Statement No. 138, an amendment of Statement No.
133, Accounting for Derivative Instruments and Hedging Activities. Statement No.
133, as amended, establishes accounting and reporting standards for derivative
instruments and for hedging activities.  Statement No. 133 requires that certain
derivative instruments be recorded in the balance sheet as either an asset or
liability measured at fair value, and that changes in the fair value be
recognized currently in earnings unless specific hedge accounting criteria are
met.

     The Company enters into commodity related forward contracts to limit
exposure to changing prices on electricity purchases and sales.

     Substantially all of the Company's bulk energy purchases and sales meet the
definition of a derivative under Statement No. 133. In many cases, these
transactions meet the normal purchase and sale exception and the related
contracts will continue to be accounted for under the accrual method. Certain
of these instruments qualify as cash flow hedges resulting in the deferral of
related gains and losses in other comprehensive income until the hedged
transactions occur. Any ineffectiveness will be recognized currently in net
income. However, others will be required to be marked to market through current
period income.

     The Company adopted Statement No. 133 effective January 1, 2001. The impact
on net income was immaterial to the Company. The application of the new rules is
still evolving and further guidance from FASB is expected, which could further
impact the Company's financial statements. Also, as wholesale energy markets
mature, future transactions could result in more volatility in net income and
comprehensive income.

FINANCIAL CONDITION
- ------------------

Overview

The principal change in the Company's financial condition in 2000 was the
addition of $27.3 million to utility plant. The funds needed for gross property
additions are currently provided from operating activities, principally from
earnings and non-cash charges to income such as depreciation and deferred income
taxes and from financing activities. See Statements of Cash Flows for additional
information.

Exposure to Market Risks

Due to cost-based regulation, the Company has limited exposure to market
volatility in interest rate, commodity fuel prices, and prices of electricity.
To mitigate residual risks relative to movements in electricity prices, the
Company enters into fixed price contracts for the purchase and sale of
electricity through the wholesale electricity market. At December 31, 2000,
exposure from these activities was not material to the Company's financial
statements. Also, based on the Company's overall interest rate exposure at
December 31, 2000, a near-term 100 basis point change in interest rates would
not materially affect the financial statements.


                                       II-175

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


Capital Structure

As of December 31, 2000, the Company's capital structure consisted of 52.7
percent common stockholders' equity, 12.1 percent trust preferred securities,
and 35.2 percent long-term debt, excluding amounts due within one year. The
Company's long-term financial objective for capitalization ratios is to maintain
a capital structure of common stockholders' equity at 48 percent, preferred
securities at 10 percent and debt at 42 percent.

     Maturities and retirements of long-term debt were $0.4 million in 2000,
$16.2 million in 1999, and $30.4 million in 1998.

     Included in the 1999 maturities and retirements is the purchase by the
Company of all $15 million outstanding of its 7 7/8% Series First Mortgage Bonds
due May 1, 2025.

     The composite interest rates and dividend rates for the years 1998 through
2000 as of year-end were as follows:

                                      2000       1999       1998
                                  -------------------------------
Composite interest rates
   on long-term debt                   6.6%       6.4%       6.5%
Trust preferred securities
   dividend rate                       6.9%       6.9%       6.9%
- -----------------------------------------------------------------

Capital Requirements for Construction

The Company's projected construction expenditures for the next three years total
$95.9 million ($32.5 million in 2001, $31.5 million in 2002, and $31.9 million
in 2003). Actual construction costs may vary from this estimate because of
factors such as changes in: business conditions; environmental regulations; load
projections; the cost and efficiency of construction labor, equipment and
materials; and the cost of capital. In addition, there can be no assurance that
costs related to capital expenditures will be fully recovered. Construction and
upgrading of new and existing transmission and distribution facilities and
upgrading of generating plants will be continuing.

Other Capital Requirements

In addition to the funds needed for the construction program, approximately
$51.8 million will be needed by the end of 2003 for maturities of long-term debt
and present sinking fund requirements.

Environmental Matters

On November 3, 1999, the Environmental Protection Agency (EPA) brought a civil
action in the U.S. District Court against Alabama Power, Georgia Power, and the
system service company. The complaint alleges violations of the prevention of
significant deterioration and new source review provisions of the Clean Air Act
with respect to five coal-fired generating facilities in Alabama and Georgia.
The civil action requests penalties and injunctive relief, including an order
requiring the installation of the best available control technology at the
affected units. The EPA concurrently issued to Southern Company's integrated
Southeast utilities a notice of violation related to 10 generating facilities,
which includes the five facilities mentioned previously and the Company's Plant
Kraft. In early 2000, the EPA filed a motion to amend its complaint to add the
violations alleged in its notice of violation, and to add Gulf Power,
Mississippi Power, and Savannah Electric as defendants. The complaint and notice
of violation are similar to those brought against and issued to several other
electric utilities. These complaints and notices of violation allege that the
utilities had failed to secure necessary permits or install additional pollution
equipment when performing maintenance and construction at coal burning plants
constructed or under construction prior to 1978. On August 1, 2000, the U.S.
District Court granted Alabama Power's motion to dismiss for lack of
jurisdiction in Georgia and granted the system service company's motion to
dismiss on the grounds that it neither owned nor operated the generating units
involved in the proceedings. On January 12, 2001, the EPA re-filed its claims
against Alabama Power in federal district court in Birmingham, Alabama. The EPA
did not include the system service company in the new complaint. Southern
Company believes that its integrated utilities complied with applicable laws and
the EPA's regulations and interpretations in effect at the time the work in
question took place. The Clean Air Act authorizes civil penalties of up to
$27,500 per day per violation at each generating unit. Prior to January 30,
1997, the penalty was $25,000 per day. An adverse outcome of this matter could



                                       II-176
<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


require substantial capital expenditures that cannot be determined at this time
and possibly require payment of substantial penalties. This could affect future
results of operations, cash flows, and possibly financial condition if such
costs are not recovered through regulated rates.

     In November 1990, the Clean Air Act Amendments of 1990 (Clean Air Act) were
signed into law. Title IV of the Clean Air Act--the acid rain compliance
provision of the law--significantly affected the Company and other subsidiaries
of Southern Company. Specific reductions in sulfur dioxide and nitrogen oxide
emissions from fossil-fired generating plants were required in two phases. Phase
I compliance began in 1995 and some 50 generating units of Southern Company were
brought into compliance with Phase I requirements.

     Southern Company achieved Phase I sulfur dioxide compliance at the affected
plants by switching to low-sulfur coal, which required some equipment upgrades.
The construction expenditures for Phase I nitrogen oxide and sulfur dioxide
emissions compliance totaled approximately $2 million for Savannah Electric.

     Phase II sulfur dioxide compliance was required in 2000. Southern Company
used emission allowances and fuel switching to comply with Phase II
requirements. No significant dollars for Phase II compliance have been spent by
Savannah Electric.

     A significant portion of costs related to the acid rain and ozone
non-attainment provisions of the Clean Air Act is expected to be recovered
through existing ratemaking provisions. However, there can be no assurance that
all Clean Air Act costs will be recovered.

     In July 1997,  the EPA revised the national ambient air quality standards
for ozone and particulate matter. This revision made the standards significantly
more stringent.  In the subsequent litigation of these standards,  the U.S.
Supreme Court recently dismissed certain challenges but found the EPA's
implementation program for the new ozone standard unlawful and remanded it to
the EPA. In addition, the Federal District of Columbia Circuit Court of Appeals
will address other legal challenges to these standards in mid-2001.  If the
standards are eventually upheld, implementation could be required by 2007 to
2010.

     In September 1998, the EPA issued the final regional nitrogen oxide
reduction rules to the states for implementation. Compliance is required by May
31, 2004. The final rule affects 21 states, including Georgia. This rule remains
involved in litigation in the federal courts.

     In December 2000, the EPA completed its utility studies for mercury and
other hazardous air pollutants (HAPS) and issued a determination that an
emission control program for mercury and, perhaps, other HAPS is warranted. The
program is to be developed over the next four years under the Maximum Achievable
Control Technology (MACT) provisions of the Clean Air Act. This determination is
being challenged in the courts. In January 2001, the EPA proposed guidance for
the determination of Best Available Retrofit Technology (BART) emission controls
under the Regional Haze Regulations. Installation of BART controls is expected
to take place around 2010. Litigation of the BART rules is probable in the near
future.

     Implementation of the final state rules for these initiatives could require
substantial further reductions in nitrogen oxide, sulfur dioxide, mercury, and
other HAPS emissions from fossil-fired generating facilities and other
industries in these states. Additional compliance costs and capital expenditures
resulting from the implementation of these rules and standards cannot be
determined until the results of legal challenges are known, and the states have
adopted their final rules. Reviews by the new administration in Washington, D.C.
add to the uncertainties associated with BART guidance and the MACT
determination for mercury and other HAPS.

     The EPA and state environmental regulatory agencies are reviewing and
evaluating various other matters including: control strategies to reduce
regional haze; limits on pollutant discharges to impaired waters; water intake
restrictions; and hazardous waste disposal requirements. The impact of any new
standards will depend on the development and implementation of applicable
regulations.

     The Company must comply with other environmental laws and regulations that
cover the handling and disposal of hazardous waste. Under these various laws and
regulations, the Company could incur substantial costs to clean up properties.


                                       II-177

<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS (continued)
Savannah Electric and Power Company 2000 Annual Report


The Company conducts studies to determine the extent of any required cleanup
costs and will recognize in the financial statements costs to clean up known
sites.

     Several major pieces of environmental legislation are being considered for
reauthorization or amendment by Congress. These include: the Clean Air Act; the
Clean Water Act; the Comprehensive Environmental Response, Compensation, and
Liability Act; the Resource Conservation and Recovery Act; the Toxic Substances
Control Act; and the Endangered Species Act. Changes to these laws could affect
many areas of the Company's operations. The full impact of any such changes
cannot be determined at this time.

     Compliance with possible additional legislation related to global climate
change, electromagnetic fields, and other environmental and health concerns
could significantly affect the Company. The impact of new legislation--if
any--will depend on the subsequent development and implementation of applicable
regulations. In addition, the potential exists for liability as the result of
lawsuits alleging damages caused by electromagnetic fields.

Sources of Capital

At December 31, 2000, the Company had $50.1 million of unused short-term and
revolving credit arrangements with banks to meet its short-term cash needs and
to provide additional interim funding for the Company's construction program.
Revolving credit arrangements total $20 million, of which $10 million expires
April 30, 2003 and $10 million expires December 31, 2003.

     It is anticipated that the funds required for construction and other
purposes, including compliance with environmental regulation, will be derived
from sources similar to those used in the past. These sources were primarily
from the issuances of first mortgage bonds, other long-term debt, and preferred
stock, in addition to pollution control revenue bonds issued for the Company's
benefit by public authorities, to meet long-term external financing
requirements. Recently, the Company's financings have consisted of unsecured
debt and trust preferred securities. The Company is required to meet certain
earnings coverage requirements specified in its mortgage indenture and corporate
charter to issue new first mortgage bonds and preferred stock. The Company's
coverage ratios are sufficiently high to permit, at present interest rate
levels, any foreseeable security sales. There are no restrictions on the amount
of unsecured indebtedness allowed. The amount of securities which the Company
will be permitted to issue in the future will depend upon market conditions and
other factors prevailing at that time.

Cautionary Statement Regarding Forward-Looking
Information

This Annual Report includes forward-looking statements in addition to historical
information. In some cases, forward-looking statements can be identified by
terminology such as "may," "will," "should," "expects," "plans," "anticipates,"
"believes," "estimates," "predicts," "potential" or "continue" or the negative
of these terms or other comparable terminology. The Company cautions that there
are various important factors that could cause actual results to differ
materially from those indicated in the forward-looking statements; accordingly,
there can be no assurance that such indicated results will be realized. These
factors include the impact of recent and future federal and state regulatory
change, including legislative and regulatory initiatives regarding deregulation
and restructuring of the electric utility industry and also changes in
environmental and other laws and regulations to which the Company is subject, as
well as changes in application of existing laws and regulations; current and
future litigation, including the pending EPA civil action against the Company;
the extent and timing of the entry of additional competition in the markets of
the Company; potential business strategies, including acquisitions or
dispositions of assets or businesses, which cannot be assured to be completed or
beneficial; internal restructuring or other restructuring options that may be
pursued by the Company; state and federal rate regulation in the United States;
political, legal and economic conditions and developments in the United States;
financial market conditions and the results of financing efforts; the impact of
fluctuations in commodity prices, interest rates and customer demand; weather
and other natural phenomena; the ability of the Company to obtain additional
generating capacity at competitive prices; and other factors discussed elsewhere
herein and in other reports (including Form 10-K) filed from time to time by the
Company with the SEC.

                                       II-178

<PAGE>

<TABLE>
STATEMENTS OF INCOME
For the Years Ended December 31, 2000, 1999, and 1998
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
                                                                 2000                 1999                1998
- ---------------------------------------------------------------------------------------------------------------
                                                                           (in thousands)
Operating Revenues:
<S>                                                          <C>                  <C>                 <C>
Retail sales                                                 $282,622             $242,265            $242,327
Sales for resale --
  Non-affiliates                                                4,748                3,395               4,548
  Affiliates                                                    4,974                4,151               3,016
Other revenues                                                  3,374                1,783               4,564
- ---------------------------------------------------------------------------------------------------------------
Total operating revenues                                      295,718              251,594             254,455
- ---------------------------------------------------------------------------------------------------------------
Operating Expenses:
Operation --
  Fuel                                                         57,177               50,530              53,021
  Purchased power --
    Non-affiliates                                             25,229               14,398               9,460
    Affiliates                                                 50,111               33,398              35,687
  Other                                                        54,829               51,802              50,321
Maintenance                                                    19,334               16,333              18,711
Depreciation and amortization (Note 3)                         25,240               23,841              22,032
Taxes other than income taxes                                  13,116               12,690              12,342
- ---------------------------------------------------------------------------------------------------------------
Total operating expenses                                      245,036              202,992             201,574
- ---------------------------------------------------------------------------------------------------------------
Operating Income                                               50,682               48,602              52,881
Other Income (Expense):
Interest income                                                   252                  169                 384
Other, net                                                      1,086                  798                (432)
- ---------------------------------------------------------------------------------------------------------------
Earnings Before Interest and Income Taxes                      52,020               49,569              52,833
- ---------------------------------------------------------------------------------------------------------------
Interest and Other:
Interest expense, net                                          12,737               11,938              11,855
Distributions on preferred securities of subsidiary             2,740                2,740                 167
- ---------------------------------------------------------------------------------------------------------------
Total interest and other, net                                  15,477               14,678              12,022
- ---------------------------------------------------------------------------------------------------------------
Earnings Before Income Taxes                                   36,543               34,891              40,811
Income taxes (Note 5)                                          13,574               11,808              15,101
- ---------------------------------------------------------------------------------------------------------------
Net Income                                                     22,969               23,083              25,710
Dividends on Preferred Stock                                        -                    -               2,066
- ---------------------------------------------------------------------------------------------------------------
Net Income After Dividends on Preferred Stock                $ 22,969             $ 23,083            $ 23,644
===============================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>







                                                           II-179




<PAGE>
<TABLE>


STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2000, 1999, and 1998
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                      2000                 1999                1998
- ------------------------------------------------------------------------------------------------------------------------------------
                                                                                                (in thousands)
Operating Activities:
<S>                                                                                <C>                  <C>                 <C>
Net income                                                                         $22,969              $23,083             $25,710
Adjustments to reconcile net income
  to net cash provided from operating activities --
       Depreciation and amortization                                                26,639               25,454              23,531
       Deferred income taxes and investment tax credits, net                           728               (3,353)              7,011
       Other, net                                                                    3,835                  (47)                (89)
       Changes in certain current assets and liabilities --
          Receivables, net                                                         (23,260)              (5,999)             (9,875)
          Fossil fuel stock                                                            (31)              (2,125)                221
          Materials and supplies                                                      (542)              (1,906)                484
          Accounts payable                                                           8,881                1,133                 470
          Other                                                                     (4,674)               1,731              (4,859)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash provided from operating activities                                         34,545               37,971              42,604
- ------------------------------------------------------------------------------------------------------------------------------------
Investing Activities:
Gross property additions                                                           (27,290)             (29,833)            (18,071)
Other                                                                               (1,835)              (1,715)              1,617
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used for investing activities                                             (29,125)             (31,548)            (16,454)
- ------------------------------------------------------------------------------------------------------------------------------------
Financing Activities:
Increase in notes payable, net                                                      11,100               34,300                   -
Proceeds --
   Other long-term debt                                                                  -                    -              30,000
   Preferred securities                                                                  -                    -              40,000
   Capital contributions from parent company                                         1,478                1,099                   -
Retirements --
   First mortgage bonds                                                                  -              (15,800)            (30,000)
   Other long-term debt                                                               (251)                (481)               (478)
   Preferred stock                                                                       -                    -             (35,000)
Payment of preferred stock dividends                                                     -                    -              (2,556)
Payment of common stock dividends                                                  (24,300)             (25,200)            (23,500)
Other                                                                                    -                  250              (4,798)
- ------------------------------------------------------------------------------------------------------------------------------------
Net cash used for financing activities                                             (11,973)              (5,832)            (26,332)
- ------------------------------------------------------------------------------------------------------------------------------------
Net Change in Cash and Cash Equivalents                                             (6,553)                 591                (182)
Cash and Cash Equivalents at Beginning of Period                                     6,553                5,962               6,144
- ------------------------------------------------------------------------------------------------------------------------------------
Cash and Cash Equivalents at End of Period                                         $     -              $ 6,553             $ 5,962
====================================================================================================================================
Supplemental Cash Flow Information:
Cash paid during the period for --
   Interest (net of amount capitalized)                                            $13,329              $14,212             $12,198
   Income taxes (net of refunds)                                                    19,939               12,647               9,666
- ------------------------------------------------------------------------------------------------------------------------------------
The accompanying notes are an integral part of these statements.

</TABLE>







                                                           II-180



<PAGE>
<TABLE>
BALANCE SHEETS
At December 31, 2000 and 1999
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------
Assets                                                                          2000                     1999
- -----------------------------------------------------------------------------------------------------------------
                                                                                       (in thousands)
Current Assets:
<S>                                                                         <C>                      <C>
Cash and cash equivalents                                                   $      -                 $  6,553
Receivables --
  Customer accounts receivable                                                28,189                   20,752
  Unrecovered retail fuel clause revenue                                      39,632                   21,089
  Other accounts and notes receivable                                          1,412                    3,505
  Affiliated companies                                                           738                    1,195
  Accumulated provision for uncollectible accounts                              (407)                    (237)
Fossil fuel stock, at average cost                                             7,140                    7,109
Materials and supplies, at average cost                                        8,944                    8,402
Prepaid taxes                                                                  8,651                    2,434
Other                                                                            377                      435
- -----------------------------------------------------------------------------------------------------------------
Total current assets                                                          94,676                   71,237
- -----------------------------------------------------------------------------------------------------------------
Property, Plant, and Equipment:
In service (Note 7)                                                          829,270                  804,096
Less accumulated provision for depreciation                                  382,030                  360,639
- -----------------------------------------------------------------------------------------------------------------
                                                                             447,240                  443,457
Construction work in progress                                                  6,782                    6,561
- -----------------------------------------------------------------------------------------------------------------
Total property, plant, and equipment                                         454,022                  450,018
- -----------------------------------------------------------------------------------------------------------------
Other Property and Investments                                                 2,066                    1,506
- -----------------------------------------------------------------------------------------------------------------
Deferred Charges and Other Assets:
Deferred charges related to income taxes (Note 5)                             12,404                   16,063
Cash surrender value of life insurance for deferred compensation plans        17,954                   16,305
Prepaid pension costs (Note 2)                                                     -                    1,201
Debt expense, being amortized                                                  3,003                    3,155
Premium on reacquired debt, being amortized                                    7,575                    8,385
Other                                                                          2,527                    2,348
- -----------------------------------------------------------------------------------------------------------------
Total deferred charges and other assets                                       43,463                   47,457
- -----------------------------------------------------------------------------------------------------------------
Total Assets                                                                $594,227                 $570,218
=================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>






                                                           II-181

<PAGE>
<TABLE>
BALANCE SHEETS
At December 31, 2000 and 1999
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Liabilities and Stockholder's Equity                                                     2000                     1999
- --------------------------------------------------------------------------------------------------------------------------
                                                                                                (in thousands)
Current Liabilities:
<S>                                                                                 <C>                      <C>
Securities due within one year (Note 7)                                              $ 30,698                 $    704
Notes payable                                                                          45,400                   34,300
Accounts payable --
  Affiliated                                                                           16,153                    4,632
  Other                                                                                 7,738                   11,118
Customer deposits                                                                       5,696                    5,426
Taxes accrued --
  Income taxes                                                                          3,450                    3,046
  Other                                                                                 1,435                    3,013
Interest accrued                                                                        4,541                    3,237
Vacation pay accrued                                                                    2,276                    2,142
Other                                                                                   7,973                    5,742
- --------------------------------------------------------------------------------------------------------------------------
Total current liabilities                                                             125,360                   73,360
- --------------------------------------------------------------------------------------------------------------------------
Long-term debt (See accompanying statements)                                          116,902                  147,147
- --------------------------------------------------------------------------------------------------------------------------
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes (Note 5)                                             79,756                   80,318
Deferred credits related to income taxes (Note 5)                                      16,038                   19,687
Accumulated deferred investment tax credits (Note 5)                                   10,616                   11,280
Deferred compensation plans                                                            11,968                   10,624
Employee benefits provisions (Note 2)                                                   8,127                    7,805
Other                                                                                  10,466                    5,150
- --------------------------------------------------------------------------------------------------------------------------
Total deferred credits and other liabilities                                          136,971                  134,864
- --------------------------------------------------------------------------------------------------------------------------
Company obligated mandatorily redeemable preferred
  securities of subsidiary trusts holding company junior
  subordinated notes (See accompanying statements) (Note 6)                            40,000                   40,000
- --------------------------------------------------------------------------------------------------------------------------
Common stockholder's equity (See accompanying statements)                             174,994                  174,847
- --------------------------------------------------------------------------------------------------------------------------
Total Liabilities and Stockholder's Equity                                           $594,227                 $570,218
==========================================================================================================================
The accompanying notes are an integral part of these balance sheets.

</TABLE>



                                                           II-182



<PAGE>
<TABLE>
STATEMENTS OF CAPITALIZATION
At December 31, 2000 and 1999
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
                                                                   2000              1999             2000              1999
- -----------------------------------------------------------------------------------------------------------------------------
                                                                        (in thousands)                (percent of total)
Long-Term Debt (Note 7):
First mortgage bonds --
       Maturity                           Interest Rates
       --------                           --------------
       <S>                               <C>                  <C>               <C>
       July 1, 2003                       6.375%               $ 20,000          $ 20,000
       May 1, 2006                        6.90%                  20,000            20,000
       July 1, 2023                       7.40%                  24,200            24,200
- -----------------------------------------------------------------------------------------------------------------------------
Total first mortgage bonds                                       64,200            64,200
- -----------------------------------------------------------------------------------------------------------------------------
Long-term notes payable --
     6.88% due June 1, 2001                                      10,000            10,000
     6.625% due March 17, 2015                                   30,000            30,000
     Adjustable rates (6.71% to 6.86% at 1/1/01)
       due 2001                                                  20,000            20,000
- -----------------------------------------------------------------------------------------------------------------------------
Total long-term notes payable                                    60,000            60,000
- -----------------------------------------------------------------------------------------------------------------------------
Other long-term debt --
     Pollution control revenue bonds --
       Non-collateralized:
         Variable rates (5.10% at 1/1/01)
          due 2016-2037                                          17,955            17,955
- -----------------------------------------------------------------------------------------------------------------------------
Total other long-term debt                                       17,955            17,955
- -----------------------------------------------------------------------------------------------------------------------------
Capitalized lease obligations                                     5,445             5,696
- -----------------------------------------------------------------------------------------------------------------------------
Total long-term debt (annual interest
  requirement -- $9.8 million)                                  147,600           147,851
Less amount due within one year (Note 7)                         30,698               704
- -----------------------------------------------------------------------------------------------------------------------------
Long-term debt excluding amount due within one year             116,902           147,147            35.2%             40.7%
- -----------------------------------------------------------------------------------------------------------------------------
Company Obligated Mandatorily
  Redeemable Preferred Securities (Note 6):
$25 liquidation value --
  6.85%                                                          40,000            40,000
- -----------------------------------------------------------------------------------------------------------------------------
Total (annual distribution requirement -- $2.7 million)          40,000            40,000            12.1              11.0
- -----------------------------------------------------------------------------------------------------------------------------
Common Stockholder's Equity (Note 8):
Common stock, par value $5 per share --
  Authorized  - 16,000,000 shares
  Outstanding - 10,844,635 shares in 2000 and 1999
  Par value                                                      54,223            54,223
  Paid-in capital                                                11,265             9,787
Retained earnings                                               109,506           110,837
- -----------------------------------------------------------------------------------------------------------------------------
Total common stockholder's equity                               174,994           174,847            52.7              48.3
- -----------------------------------------------------------------------------------------------------------------------------
Total Capitalization                                           $331,896          $361,994           100.0%            100.0%
=============================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>




                                                           II-183


<PAGE>

<TABLE>
STATEMENTS OF COMMON STOCKHOLDER'S EQUITY
For the Years Ended December 31, 2000, 1999, and 1998
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------


                                                                  Common           Paid-In           Retained
                                                                   Stock           Capital           Earnings            Total
- ---------------------------------------------------------------------------------------------------------------------------------
                                                                                    (in thousands)

<S>                                                             <C>                 <C>             <C>                <C>
Balance at January 1, 1998                                       $54,223             $8,688          $112,720           $175,631
Net income after dividends on preferred stock                          -                  -            23,644             23,644
Cash dividends on common stock                                         -                  -           (23,500)           (23,500)
Other                                                                  -                  -                90                 90
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1998                                      54,223              8,688           112,954            175,865
Net income after dividends on preferred stock                          -                  -            23,083             23,083
Capital contributions from parent company                              -              1,099                 -              1,099
Cash dividends on common stock                                         -                  -           (25,200)           (25,200)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 1999                                      54,223              9,787           110,837            174,847
Net income after dividends on preferred stock                          -                  -            22,969             22,969
Capital contributions from parent company                              -              1,478                 -              1,478
Cash dividends on common stock                                         -                  -           (24,300)           (24,300)
- ---------------------------------------------------------------------------------------------------------------------------------
Balance at December 31, 2000 (Note 8)                            $54,223            $11,265          $109,506           $174,994
=================================================================================================================================
The accompanying notes are an integral part of these statements.

</TABLE>





                                                           II-184
<PAGE>


NOTES TO FINANCIAL STATEMENTS
Savannah Electric and Power Company 2000 Annual Report

1.  SUMMARY OF SIGNIFICANT ACCOUNTING
    POLICIES

General

Savannah Electric and Power Company (the Company) is a wholly owned subsidiary
of Southern Company, which is the parent company of five integrated Southeast
utilities, a system service company (SCS), Southern Communications Services
(Southern LINC), Southern Company Energy Solutions, Southern Nuclear Operating
Company (Southern Nuclear), Mirant Corporation--formerly Southern Energy,
Inc.--and other direct and indirect subsidiaries. The integrated Southeast
utilities provide electric service in four states. Contracts among the
integrated Southeast utilities--related to jointly owned generating facilities,
interconnecting transmission lines, and the exchange of electric power--are
regulated by the Federal Energy Regulatory Commission (FERC) and/or the
Securities and Exchange Commission. SCS provides, at cost, specialized services
to Southern Company and subsidiary companies. Southern LINC provides digital
wireless communications services to the integrated Southeast utilities and also
markets these services to the public within the Southeast. Southern Company
Energy Solutions develops new business opportunities related to energy products
and services. Southern Nuclear provides services to Southern Company's nuclear
power plants. Mirant acquires, develops, builds, owns and operates power
production and delivery facilities, and provides a broad range of energy-related
services to utilities and industrial companies in selected countries around the
world. Mirant businesses include independent power projects, integrated
utilities, a distribution company, and energy trading and marketing businesses
outside the southeastern United States.

     Southern Company is registered as a holding company under the Public
Utility Holding Company Act of 1935 (PUHCA). Both Southern Company and its
subsidiaries are subject to the regulatory provisions of the PUHCA. The Company
also is subject to regulation by the FERC and the Georgia Public Service
Commission (GPSC). The Company follows accounting principles generally accepted
in the United States and complies with the accounting policies and practices
prescribed by the GPSC. The preparation of financial statements in conformity
with accounting principles generally accepted in the United States requires the
use of estimates, and the actual results may differ from those estimates.

     Certain prior years' data presented in the financial statements has been
reclassified to conform with the current year presentation.

Related-Party Transactions

The Company has an agreement with SCS under which the following services are
rendered to the Company at cost: general and design engineering, purchasing,
accounting and statistical, finance and treasury, tax, information resources,
marketing, auditing, insurance and pension, human resources, systems and
procedures, and other administrative services with respect to business and
operations and power pool operations. Costs for these services amounted to $15.1
million, $16.0 million, and $15.3 million during 2000, 1999, and 1998,
respectively.

Regulatory Assets and Liabilities

The Company is subject to the provisions of Financial Accounting Standards Board
(FASB) Statement No. 71, Accounting for the Effects of Certain Types of
Regulation. Regulatory assets represent probable future revenues to the Company
associated with certain costs that are expected to be recovered from customers
through the ratemaking process. Regulatory liabilities represent probable future
reductions in revenues associated with amounts that are expected to be credited
to customers through the ratemaking process. Regulatory assets and (liabilities)
reflected in the Balance Sheets at December 31 relate to:

                                            2000          1999
                                     --------------------------
                                             (in thousands)
Deferred income tax charges              $12,404      $ 16,063
Premium on reacquired debt                 7,575         8,385
Deferred income tax credits              (16,038)      (19,687)
Storm damage reserves                     (2,733)       (1,392)
Accelerated depreciation                  (5,500)       (3,000)
- ---------------------------------------------------------------
Total                                    $(4,292)     $    369
===============================================================

     In the event that a portion of the Company's operations is no longer
subject to the provisions of FASB Statement No. 71, the Company would be
required to write off related regulatory assets and liabilities that are not
specifically recoverable through regulated rates. In addition, the Company would
be required to determine if any impairment to other assets exists, including
plant, and write down the assets, if impaired, to their fair value.


                                       II-185


<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report


Revenues and Fuel Costs

The Company currently operates as a vertically integrated utility providing
electricity to retail customers within its traditional service area of
southeastern Georgia and to wholesale customers in the Southeast.

    Revenues are recognized as services are rendered. Unbilled revenues are
accrued at the end of each fiscal period. Fuel costs are expensed as the fuel is
used. Electric rates for the Company include provisions to adjust billings for
fluctuations in fuel costs, the energy component of purchased power costs, and
certain other costs. Revenues are adjusted for differences between recoverable
fuel costs and amounts actually recovered in current regulated rates.

    The Company has a diversified base of customers. No single customer or
industry comprises 10 percent or more of revenues. For all periods presented,
uncollectible accounts averaged less than 1 percent of revenues.

    In 2000, the GPSC approved an increase of slightly over one-third of a cent
per kilowatt hour in the Company's fuel cost recovery rate. An increase of
slightly over three-tenths of a cent per kilowatt-hour was approved in 1999.

    The Company currently plans to make a filing with the GPSC in early 2001 to
establish a new fuel rate in order to better reflect current fuel costs and to
collect the current under-recovered balance.

Depreciation and Amortization

Depreciation of the original cost of plant in service is provided primarily by
using composite straight-line rates, which approximated 3.0 percent in 2000 and
1999, and 2.9 percent in 1998. When property subject to depreciation is retired
or otherwise disposed of in the normal course of business, its cost--together
with the cost of removal, less salvage--is charged to the accumulated provision
for depreciation. Minor items of property included in the original cost of the
plant are retired when the related property unit is retired. Depreciation
expense includes an amount for the expected cost of removal of certain
facilities. In 1998, 1999 and 2000, the Company recorded accelerated
depreciation of $1.0 million, $2.0 million and $2.5 million respectively, in
accordance with the GPSC's 1998 rate order. See Note 3 to the financial
statements for more information.

Income Taxes

The Company, which is included in the consolidated federal income tax return
filed by Southern Company, uses the liability method of accounting for deferred
income taxes and provides deferred income taxes for all significant income tax
temporary differences. Investment tax credits utilized are deferred and
amortized to income over the average lives of the related property.

Allowance for Funds Used During Construction
  (AFUDC)

AFUDC represents the estimated debt and equity costs of capital funds that are
necessary to finance the construction of new facilities. While cash is not
realized currently from such allowance, it increases the revenue requirement
over the service life of the plant through a higher rate base and higher
depreciation expense. The composite rates used by the Company to calculate AFUDC
were 6.87 percent in 2000, 6.26 percent in 1999 and 8.00 percent in 1998.

Property, Plant and Equipment

Property, plant and equipment is stated at original cost less regulatory
disallowances and impairments. Original cost includes: materials; labor; minor
items of property; appropriate administrative and general costs; payroll-related
costs such as taxes, pensions, and other benefits, and the estimated cost of
funds used during construction. The cost of maintenance, repairs, and
replacement of minor items of property is charged to maintenance expense. The
cost of replacements of property exclusive of minor items of property is
capitalized.

Cash and Cash Equivalents

For purposes of the financial statements, temporary cash investments are
considered cash equivalents. Temporary cash investments are securities with
original maturities of 90 days or less.

Materials and Supplies

Generally, materials and supplies include the costs of transmission,
distribution, and generating plant materials. Materials are charged to inventory

                                       II-186

<PAGE>


NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report

when purchased and then expensed or capitalized to plant, as appropriate, when
installed.

Financial Instruments

The Company's financial instruments for which the carrying amounts did not equal
fair value at December 31 were as follows:

                                      Carrying           Fair
                                        Amount          Value
                                    --------------------------
                                          (in millions)
Long-term debt:
    At December 31, 2000                 $142             $140
    At December 31, 1999                 $142             $136
Trust preferred securities:
    At December 31, 2000                  $40              $36
    At December 31, 1999                  $40              $31

     The fair values for long-term debt and trust preferred securities were
based on either closing market prices or closing prices of comparable
instruments.


2.  RETIREMENT BENEFITS

The Company has defined benefit, trusteed, non-contributory pension plans that
cover substantially all employees. The Company provides certain medical care and
life insurance benefits for retired employees. Substantially all these employees
may become eligible for such benefits when they retire. The Company funds trusts
to the extent required by the GPSC. The measurement date for plan assets and
obligations is September 30 of each year.

     In late 2000, the Company adopted several pension and postretirement
benefit plan changes that had the effect of increasing benefits to both current
and future retirees. The effects of these changes will be to increase annual
pension and postretirement benefits costs by approximately $0.5 million and $0.3
million, respectively.

Pension Plans

Changes during the year in the projected benefit obligations and in the fair
value of plan assets were as follows:

                                            Projected
                                       Benefit Obligations
                                    ---------------------------
                                          2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $59,961       $59,207
Service cost                             1,742         1,746
Interest cost                            4,380         3,893
Benefits paid                           (3,210)       (3,414)
Actuarial (gain) loss and
    employee transfers                   1,802        (1,856)
Amendments                                 219           385
- ---------------------------------------------------------------
Balance at end of year                 $64,894       $59,961
===============================================================

                                           Plan Assets
                                    ---------------------------
                                          2000          1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $54,480       $49,630
Actual return on plan assets            10,493         8,168
Benefits paid                           (3,210)       (3,414)
Employee transfers                         117            96
- ---------------------------------------------------------------
Balance at end of year                 $61,880       $54,480
===============================================================

     The accrued pension costs recognized in the Balance Sheets were as follows:

                                         2000           1999
- ---------------------------------------------------------------
                                         (in thousands)
Funded status                         $(3,014)       $(5,481)
Unrecognized transition
  obligation                               89            178
Unrecognized prior service              2,929          2,996
  cost
Unrecognized net loss (gain)           (1,127)         3,508
- ---------------------------------------------------------------
(Accrued liability) prepaid
  asset recognized in the
  Balance Sheets                      $(1,123)        $1,201
===============================================================

                                       II-187

<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report



      Components of the plans' net periodic cost were as follows:

                                    2000       1999       1998
- -----------------------------------------------------------------
                                          (in thousands)
Service cost                      $1,742     $1,746     $1,495
Interest cost                      4,380      3,893      3,806
Expected return on plan
  assets                          (4,174)    (4,063)    (3,992)
Recognized net loss                    -        152          2
Net amortization                     376        352        334
- -----------------------------------------------------------------
Net pension cost                  $2,324     $2,080     $1,645
=================================================================

Postretirement Benefits

Changes during the year in the accumulated benefit obligations and in the fair
value of plan assets were as follows:

                                           Accumulated
                                        Benefit Obligations
                                    ---------------------------
                                        2000           1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $22,904       $23,556
Service cost                               376           404
Interest cost                            1,865         1,549
Benefits paid                             (963)         (756)
Actuarial gain and
  employee transfers                    (1,367)       (1,849)
Amendments                               3,309             -
- ---------------------------------------------------------------
Balance at end of year                 $26,124       $22,904
===============================================================


                                           Plan Assets
                                    ---------------------------
                                        2000           1999
- ---------------------------------------------------------------
                                          (in thousands)
Balance at beginning of year           $5,254        $3,803
Actual return on plan assets              606           476
Employer contributions                  2,013         1,731
Benefits paid                            (963)         (756)
- ---------------------------------------------------------------
Balance at end of year                 $6,910        $5,254
===============================================================

    The accrued postretirement costs recognized in the Balance Sheets
were as follows:

                                        2000           1999
- ---------------------------------------------------------------
                                           (in thousands)
Funded status                       $(19,214)      $(17,650)
Unrecognized transition
  obligation                           5,925          6,419
Unamortized prior service cost         3,185              -
Unrecognized net loss                  1,701          3,311
Fourth quarter contributions           1,493          1,336
- ---------------------------------------------------------------
Accrued liability recognized in
  the Balance Sheets                $ (6,910)      $ (6,584)
===============================================================

    Components of the postretirement plans' net periodic cost
were as follows:

                                        2000     1999      1998
- ----------------------------------------------------------------
                                            (in thousands)
Service cost                          $  376   $  404     $  348

Interest cost                          1,865    1,549      1,528
Expected return on plan assets          (429)    (345)      (276)
Recognized net loss                       66      152        104
Net amortization                         618      494        494
- ----------------------------------------------------------------
Net postretirement cost               $2,496   $2,254     $2,198
================================================================

    The weighted average rates assumed in the actuarial calculations for both
the pension and postretirement benefit plans were:

                                          2000         1999
- ---------------------------------------------------------------
Discount                                  7.50%        7.50%
Annual salary increase                    5.00         5.00
Long-term return on plan assets           8.50         8.50
- ---------------------------------------------------------------

      An additional assumption used in measuring the accumulated postretirement
benefit obligations was a weighted average medical care cost trend rate of 7.29
percent for 2000, decreasing gradually to 5.50 percent through the year 2005,
and remaining at that level thereafter. An annual increase or decrease in the
assumed medical care cost trend rate of 1 percent would affect the accumulated
benefit obligation and the service and interest cost components at December 31,
2000 as follows:

                                       II-188
<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report



                                     1 Percent     1 Percent
                                      Increase      Decrease
- ---------------------------------------------------------------
                                          (in thousands)
Benefit obligation                     $1,417        $1,598
Service and interest costs                110           140
===============================================================

     The Company has a supplemental retirement plan for certain executive
employees. The plan is unfunded and payable from the general funds of the
Company. The Company has purchased life insurance on participating executives,
and plans to use these policies to satisfy this obligation.

Employee Savings Plan

The Company also sponsors a 401(k) defined contribution plan covering
substantially all employees. The Company provides a 75 percent matching
contribution up to 6 percent of an employee's base salary. Total matching
contributions made to the plan for the years 2000, 1999, and 1998 were $0.9
million, $0.9 million, and $0.8 million, respectively.

3.   CONTINGENCIES AND REGULATORY
     MATTERS

Environmental Litigation

On November 3, 1999, the EPA brought a civil action in the U.S. District Court
against Alabama Power, Georgia Power, and the system service company. The
complaint alleges violations of the prevention of significant deterioration and
new source review provisions of the Clean Air Act with respect to five
coal-fired generating facilities in Alabama and Georgia. The civil action
requests penalties and injunctive relief, including an order requiring the
installation of the best available control technology at the affected units. The
Clean Air Act authorizes civil penalties of up to $27,500 per day, per violation
at each generating unit. Prior to January 30, 1997, the penalty was $25,000 per
day.

   The EPA concurrently issued to the integrated Southeast utilities a notice of
violation related to 10 generating facilities, which includes the five
facilities mentioned previously and the Company's Plant Kraft. In early 2000,
the EPA filed a motion to amend its complaint to add the violations alleged in
its notice of violation, and to add Gulf Power, Mississippi Power, and Savannah
Electric as defendants. The complaint and notice of violation are similar to
those brought against and issued to several other electric utilities. These
complaints and notices of violation allege that the utilities had failed to
secure necessary permits or install additional pollution equipment when
performing maintenance and construction at coal burning plants constructed or
under construction prior to 1978. On August 1, 2000, the U.S. District Court
granted Alabama Power's motion to dismiss for lack of jurisdiction in Georgia
and granted the system service company's motion to dismiss on the grounds that
it neither owned nor operated the generating units involved in the proceedings.
On January 12, 2001, the EPA re-filed its claims against Alabama Power in
federal district court in Birmingham, Alabama. The EPA did not include the
system service company in the new complaint. Southern Company believes that its
integrated utilities complied with applicable laws and the EPA's regulations and
interpretations in effect at the time the work in question took place.

     An adverse outcome of this matter could require substantial capital
expenditures that cannot be determined at this time and possibly require payment
of substantial penalties. This could affect future results of operations, cash
flows, and possibly financial condition if such costs are not recovered through
regulated rates.

Retail Regulatory Matters

Rates to retail customers served by the Company are regulated by the GPSC. As
part of the Company's rate settlement in 1992, it was informally agreed that the
Company's earned rate of return on common equity should be 12.95 percent.

     In 1998, the GPSC approved a four-year accounting order for the Company.
Under this order, the Company will reduce the electric rates of its small
business customers by approximately $11 million over four years. The Company
will also expense an additional $1.95 million in storm damage accruals and
accrue an additional $8 million in depreciation on generating assets over the
term of the order. The additional depreciation will be accumulated in a
regulatory liability account to be available to mitigate any potential stranded
costs. In addition, the Company has discretionary authority to provide up to an


                                       II-189
<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report


additional $0.3 million per year in storm damage accruals and up to an
additional $4.0 million in depreciation expense over the four years. Total storm
damages accrued under the order were $1.5 million in both 2000 and 1999 and
$0.75 million in 1998. No discretionary depreciation was recorded in the last
three years. Over the term of the order, the Company is precluded from asking
for a rate increase except upon significant changes in economic conditions, new
laws, or regulations. There is a quarterly monitoring of the Company's earnings
performance.

4.   COMMITMENTS

Construction Program

The Company is engaged in a continuous construction program, currently estimated
to total $32.5 million in 2001, $31.5 million in 2002, and $31.9 million in
2003. The construction program is subject to periodic review and revision, and
actual construction costs may vary from the above estimates because of numerous
factors. These factors include: changes in business conditions; revised load
growth estimates; changes in environmental regulations; increasing costs of
labor, equipment, and materials; and changes in cost of capital. The Company
does not have any traditional baseload generating plants under construction.
However, construction related to new and upgrading of existing transmission and
distribution facilities and the upgrading of generating plants will continue.

     To the extent possible, the Company's construction program is expected to
be financed from internal sources and from the issuance of additional long-term
debt and capital contributions from Southern Company.

     The amounts of long-term debt and trust preferred securities that can be
issued in the future will be contingent on market conditions, the maintenance of
adequate earnings levels, regulatory authorizations, and other factors.

Bank Credit Arrangements

At the end of 2000, unused credit arrangements with four banks totaled $50.1
million and expire at various times during 2001.

     The Company has revolving credit arrangements of $20 million, of which $10
million expires April 30, 2003 and $10 million expires December 31, 2003. One of
these agreements allows short-term borrowings to be converted into term loans,
payable in 12 equal quarterly installments, with the first installment due at
the end of the first calendar quarter after the applicable termination date or
at an earlier date at the Company's option.

     In connection with these credit arrangements, the Company agrees to pay
commitment fees based on the unused portions of the commitments.

Assets Subject to Lien

As amended and supplemented, the Company's Indenture of Mortgage, which secures
the first mortgage bonds issued by the Company, constitutes a direct first lien
on substantially all of the Company's fixed property and franchises. A second
lien for $10 million of bank debt is secured by a portion of the Plant Kraft
property and a second lien for $34 million in bank notes is secured by a portion
of the Plant McIntosh property.

Fuel and Purchased Power Commitments

To supply a portion of the fuel requirements of its generating plants, the
Company has entered into long-term commitments for the procurement of fuel. In
most cases, these contracts contain provisions for price escalations, minimum
purchase levels, and other financial commitments. The Company has fuel
commitments of $44 million and $8 million for 2001 and 2002, respectively.

     The company has entered into various long-term commitments for the purchase
of electricity. Estimated total long-term obligations at December 31, 2000 were
as follows:

Year                                             Commitments
- ----                                            -------------
                                                (in thousands)
2001                                              $      0
2002                                                 9,627
2003                                                13,245
2004                                                13,261
2005                                                13,277
2006 and beyond                                     53,283
- ---------------------------------------------------------------
Total commitments                                 $102,693
===============================================================

                                       II-190


<PAGE>
NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report


Operating Leases

The Company has rental agreements with various terms and expiration dates.
Rental expenses totaled $0.4 million for 2000, $0.5 million for 1999, and $1.1
million for 1998.

     At December 31, 2000, estimated future minimum lease payments for
noncancelable operating leases were as follows:

                                               Rental
                                            Commitments
                                         --------------------
                                           (in thousands)
2001                                             $433
2002                                              433
2003                                              433
2004                                              433
2005                                              433
2006 and thereafter                            $5,379
- -------------------------------------------------------------

5.   INCOME TAXES

At December 31, 2000, tax-related regulatory assets and liabilities were $12.4
million and $16.0 million, respectively. The assets are attributable to tax
benefits flowed through to customers in prior years and to taxes applicable to
capitalized interest. The liabilities are attributable to deferred taxes
previously recognized at rates higher than current enacted tax law and to
unamortized investment tax credits.

     Details of income tax provisions are as follows:

                                        2000      1999       1998
- ------------------------------------------------------------------
                                          (in thousands)
Total provision for income taxes
Federal --
   Currently payable                 $11,102   $12,968    $ 6,763
   Deferred                               75    (3,329)     5,812
- ------------------------------------------------------------------
                                      11,177     9,639     12,575
- ------------------------------------------------------------------
State --
   Currently payable                   1,744     2,193      1,327
   Deferred                              653       (24)     1,199
- ------------------------------------------------------------------
                                       2,397     2,169      2,526
- -----------------------------------------------------------------
Total                                $13,574   $11,808    $15,101
==================================================================

   The tax effects of temporary differences between the carrying amounts of
assets and liabilities in the financial statements and their respective tax
bases, which give rise to deferred tax assets and liabilities, are as follows:

                                                2000       1999
                                            --------------------
                                                (in thousands)
Deferred tax liabilities:
   Accelerated depreciation                  $76,901    $76,282
   Property basis differences                  5,904      6,917
   Other                                      17,807     12,031
- ----------------------------------------------------------------
Total                                        100,612     95,230
- ----------------------------------------------------------------
Deferred tax assets:
   Pension and other benefits                  9,744      6,965
   Other                                       7,662      5,777
- ----------------------------------------------------------------
Total                                         17,406     12,742
- ----------------------------------------------------------------
Net deferred tax liabilities                  83,206     82,488
Portions included in current assets, net      (3,450)    (2,170)
- ----------------------------------------------------------------
Accumulated deferred income taxes
   in the Balance Sheets                     $79,756    $80,318
================================================================

     Deferred investment tax credits are amortized over the lives of the related
property with such amortization normally applied as a credit to reduce
depreciation in the Statements of Income. Credits amortized in this manner
amounted to $ 0.7 million in 2000, 1999 and 1998. At December 31, 2000, all
investment tax credits available to reduce federal income taxes payable had been
utilized.

     A reconciliation of the federal statutory income tax rate to the effective
income tax rate is as follows:

                                        2000     1999       1998
                                    -----------------------------
 Federal statutory tax rate               35%      35%       35%
 State income tax, net of
    federal income tax benefit             4        4         4
 Other                                    (2)      (5)       (2)
 ----------------------------------------------------------------
 Effective income tax rate                37%      34%       37%
 ================================================================

     Southern Company files a consolidated federal income tax return. Under a
joint consolidated income tax agreement, each subsidiary's current and deferred
tax expense is computed on a stand-alone basis.


                                       II-191
<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report


6.   TRUST PREFERRED SECURITIES

In December 1998, Savannah Electric Capital Trust I, of which the Company owns
all of the common securities, issued $40 million of 6.85% mandatorily redeemable
preferred securities. Substantially all of the assets of the Trust are $40
million aggregate principal amount of the Company's 6.85% junior subordinated
notes due December 31, 2028.

     The Company considers that the mechanisms and obligations relating to the
trust preferred securities, taken together, constitute a full and unconditional
guarantee by the Company of payment obligations with respect to the preferred
securities of Savannah Electric Capital Trust I.

     Savannah Electric Capital Trust I is a subsidiary of the Company, and
accordingly is consolidated in the Company's financial statements.

7.   LONG-TERM DEBT AND LONG-TERM DEBT
     DUE WITHIN ONE YEAR

The Company's Indenture related to its First Mortgage Bonds is unlimited as to
the authorized amount of bonds which may be issued, provided that required
property additions, earnings and other provisions of such Indenture are met.

     Maturities and retirements of long-term debt were $0.4 million in 2000,
$16.2 million in 1999 and $30.4 million in 1998. Included in the 1999 maturities
and retirements is the purchase by the Company of all $15 million outstanding of
its 7 7/8% Series First Mortgage Bonds due May 1, 2025.

     Assets acquired under capital leases are recorded as utility plant in
service, and the related obligation is classified as other long-term debt.
Leases are capitalized at the net present value of the future lease payments.
However, for ratemaking purposes, these obligations are treated as operating
leases, and as such, lease payments are charged to expense as incurred.

     A summary of the sinking fund requirements and scheduled maturities and
redemptions of long-term debt due within one year at December 31 is as follows:

                                                  2000        1999
                                              ---------------------
                                                  (in thousands)
Bond sinking fund requirement                  $   642        $650
Less:
  Portion to be satisfied by
    certifying property additions                  642         650
- -------------------------------------------------------------------
Cash sinking fund requirement                        -           -
Other long-term debt maturities                 30,698         704
- -------------------------------------------------------------------
Total                                          $30,698        $704
===================================================================

     The first mortgage bond improvement (sinking) fund requirements amount to 1
percent of each outstanding series of bonds authenticated under the Indenture
prior to January 1 of each year, other than those issued to collateralize
pollution control and other obligations. The requirements may be satisfied by
depositing cash or reacquiring bonds, or by pledging additional property equal
to 1 2/3 times the requirements.

     The sinking fund requirements of first mortgage bonds were satisfied by
certifying property additions in 2000 and by cash redemptions in 1999. It is
anticipated that the 2001 requirement will be satisfied by certifying property
additions. Sinking fund requirements and/or maturities through 2005 applicable
to long-term debt are as follows: $30.7 million in 2001; $0.6 million in 2002;
$20.5 million in 2003; $0.5 million in 2004; and $0.4 million in 2005.

8.   COMMON STOCK DIVIDEND
     RESTRICTIONS

The Company's Indenture contains certain limitations on the payment of cash
dividends on common stock. At December 31, 2000, approximately $68 million of
retained earnings was restricted against the payment of cash dividends on common
stock under the terms of the Indenture.


                                       II-192

<PAGE>

NOTES (continued)
Savannah Electric and Power Company 2000 Annual Report


9.    QUARTERLY FINANCIAL INFORMATION
      (UNAUDITED)

Summarized quarterly financial data for 2000 and 1999 are as follows (in
thousands):

                                                     Net Income After
                        Operating     Operating        Dividends on
Quarter Ended            Revenues      Income         Preferred Stock
- ---------------------------------------------------------------------

March 2000                $52,390      $ 6,583          $ 1,643
June 2000                  72,780       14,100            6,287
September 2000             98,849       24,060           12,351
December 2000              71,699        5,939            2,688

March 1999                $47,098      $ 5,315          $ 1,209
June 1999                  61,692       12,173            5,268
September 1999             91,849       26,759           13,705
December 1999              50,955        4,355            2,901
- ---------------------------------------------------------------------

     The Company's business is influenced by seasonal weather conditions and a
seasonal rate structure, among other factors.

     The quarterly operating income information above has been reclassified to
reflect the Company's current presentation of income tax expense.



                                     11-193
<PAGE>
<TABLE>
SELECTED FINANCIAL AND OPERATING DATA 1996-2000
Savannah Electric and Power Company 2000 Annual Report
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
                                                       2000            1999            1998            1997            1996
- ----------------------------------------------------------------------------------------------------------------------------
<S>                                                <C>             <C>             <C>             <C>             <C>
Operating Revenues (in thousands)                  $295,718        $251,594        $254,455        $226,277        $234,074
Net Income after Dividends
  on Preferred Stock (in thousands)                 $22,969         $23,083         $23,644         $23,847         $23,940
Cash Dividends
  on Common Stock (in thousands)                    $24,300         $25,200         $23,500         $20,500         $19,600
Return on Average Common Equity (percent)             13.13           13.16           13.45           13.71           14.08
Total Assets (in thousands)                        $594,227        $570,218        $555,799        $547,352        $544,900
Gross Property Additions (in thousands)             $27,290         $29,833         $18,071         $18,846         $28,950
- ----------------------------------------------------------------------------------------------------------------------------
Capitalization (in thousands):
Common stock equity                                $174,994        $174,847        $175,865        $175,631        $172,284
Preferred stock                                           -               -               -          35,000          35,000
Company obligated mandatorily
  redeemable preferred securities                    40,000          40,000          40,000               -               -
Long-term debt                                      116,902         147,147         163,443         142,846         164,406
- ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)      $331,896        $361,994        $379,308        $353,477        $371,690
============================================================================================================================
Capitalization Ratios (percent):
Common stock equity                                    52.7            48.3            46.4            49.7            46.4
Preferred stock                                           -               -               -             9.9             9.4
Company obligated mandatorily
  redeemable preferred securities                      12.1            11.0            10.5               -               -
Long-term debt                                         35.2            40.7            43.1            40.4            44.2
- ----------------------------------------------------------------------------------------------------------------------------
Total (excluding amounts due within one year)         100.0           100.0           100.0           100.0           100.0
============================================================================================================================
Security Ratings:
First Mortgage Bonds -
   Moody's                                               A1              A1              A1              A1              A1
   Standard and Poor's                                   A+             AA-             AA-             AA-              A+
Preferred Stock -
   Moody's                                               a2              a2              a2              a2              a2
   Standard and Poor's                                 BBB+              A-               A               A               A
============================================================================================================================
Customers (year-end):
Residential                                         115,646         112,891         110,437         109,092         106,657
Commercial                                           15,727          15,433          15,328          14,233          13,877
Industrial                                               75              67              63              64              65
Other                                                   444             417             377           1,129           1,097
- ----------------------------------------------------------------------------------------------------------------------------
Total                                               131,892         128,808         126,205         124,518         121,696
============================================================================================================================
Employees (year-end):                                   554             533             542             535             571
- ----------------------------------------------------------------------------------------------------------------------------

</TABLE>





                                                           II-194
<PAGE>
<TABLE>


SELECTED FINANCIAL AND OPERATING DATA 1996-2000 (continued)
Savannah Electric and Power Company 2000 Annual Report

<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
                                                             2000            1999            1998            1997            1996
- ----------------------------------------------------------------------------------------------------------------------------------
Operating Revenues (in thousands):
<S>                                                      <C>             <C>             <C>             <C>             <C>
Residential                                              $129,520        $112,371        $109,393        $ 96,587        $101,607
Commercial                                                102,116          88,449          86,231          78,949          80,494
Industrial                                                 40,839          32,233          37,865          35,301          37,077
Other                                                      10,147           9,212           8,838           8,621           8,804
- ----------------------------------------------------------------------------------------------------------------------------------
Total retail                                              282,622         242,265         242,327         219,458         227,982
Sales for resale  - non-affiliates                          4,748           3,395           4,548           3,467           1,998
Sales for resale  - affiliates                              4,974           4,151           3,016           2,052           3,130
- ----------------------------------------------------------------------------------------------------------------------------------
Total revenues from sales of electricity                  292,344         249,811         249,891         224,977         233,110
Other revenues                                              3,374           1,783           4,564           1,300             964
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                    $295,718        $251,594        $254,455        $226,277        $234,074
==================================================================================================================================
Kilowatt-Hour Sales (in thousands):
Residential                                             1,671,089       1,579,068       1,539,792       1,428,337       1,456,651
Commercial                                              1,369,448       1,287,832       1,236,337       1,156,078       1,141,218
Industrial                                                800,150         713,448         900,012         881,261         838,753
Other                                                     135,824         132,555         131,142         124,490         126,215
- ----------------------------------------------------------------------------------------------------------------------------------
Total retail                                            3,976,511       3,712,903       3,807,283       3,590,166       3,562,837
Sales for resale  - non-affiliates                         77,481          51,548          53,294          94,280          91,610
Sales for resale  - affiliates                             88,646          76,988          58,415          54,509          41,808
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                   4,142,638       3,841,439       3,918,992       3,738,955       3,696,255
==================================================================================================================================
Average Revenue Per Kilowatt-Hour (cents):
Residential                                                  7.75            7.12            7.10            6.76            6.98
Commercial                                                   7.46            6.87            6.97            6.83            7.05
Industrial                                                   5.10            4.52            4.21            4.01            4.42
Total retail                                                 7.11            6.52            6.36            6.11            6.40
Sales for resale                                             5.85            5.87            6.77            3.71            3.84
Total sales                                                  7.06            6.50            6.38            6.02            6.31
Residential Average Annual
  Kilowatt-Hour Use Per Customer                           14,593          14,100          14,061          13,231          13,771
Residential Average Annual
  Revenue Per Customer                                  $1,131.08       $1,003.39         $998.94         $894.73         $960.58
Plant Nameplate Capacity
  Ratings (year-end) (megawatts)                              788             788             788             788             788
Maximum Peak-Hour Demand (megawatts):
Winter                                                        724             719             582             625             666
Summer                                                        878             875             846             802             811
Annual Load Factor (percent)                                 53.4            51.2            54.9            54.3            53.1
Plant Availability Fossil-Steam (percent):                   78.5            72.8            72.9            93.7            77.6
- ----------------------------------------------------------------------------------------------------------------------------------
Source of Energy Supply (percent):
Coal                                                         51.6            44.6            41.6            34.4            27.7
Oil and gas                                                   6.9            12.3            12.9             5.2             3.1
Purchased power -
  From non-affiliates                                         7.7             5.3             3.4             1.4             2.1
  From affiliates                                            33.8            37.8            42.1            59.0            67.1
- ----------------------------------------------------------------------------------------------------------------------------------
Total                                                       100.0           100.0           100.0           100.0           100.0
==================================================================================================================================

</TABLE>



                                     II-195




<PAGE>

                                    PART III


Items 10, 11, 12 and 13 for SOUTHERN are incorporated by reference to ELECTION
OF DIRECTORS in SOUTHERN's definitive Proxy Statement relating to the 2001
Annual Meeting of Stockholders.

     Additionally, Items 10, 11, 12 and 13 for ALABAMA, GEORGIA, GULF and
MISSISSIPPI are incorporated by reference to the Information Statements of
ALABAMA, GEORGIA, GULF and MISSISSIPPI relating to each of their respective 2001
Annual Meetings of Shareholders.

     The ages of directors and executive officers in Item 10 set forth below are
as of December 31, 2000.

ITEM 10.        DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Identification of directors of SAVANNAH.

G. Edison Holland, Jr.
President and Chief Executive Officer
Age 48
Served as Director since 7-15-97

Gus H. Bell (1)
Age 63
Served as Director since 7-20-99

Archie H. Davis (1)
Age 59
Served as Director since 2-18-97

Walter D. Gnann (1)
Age 65
Served as Director since 5-17-83

Robert B. Miller, III (1)
Age 55
Served as Director since 5-17-83

Arnold M. Tenenbaum (1)
Age 64
Served as Director since 5-17-77

(1)    No position other than Director.

Each of the above is currently a director of SAVANNAH, serving a term running
from the last annual meeting of SAVANNAH's stockholder (May 17, 2000) for one
year until the next annual meeting or until a successor is elected and
qualified.


     There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he or she was or is to be
selected as a director or nominee, other than any arrangements or understandings
with directors or officers of SAVANNAH acting solely in their capacities as
such.

Identification of executive officers of SAVANNAH.

G. Edison Holland, Jr.
President, Chief Executive Officer and Director
Age 48
Served as Executive Officer since 7-15-97

Anthony R. James
Vice President - Power Generation
Age 50
Served as Executive Officer since 7-27-00

W. Miles Greer
Vice President - Customer Operations and
External Affairs
Age 57
Served as Executive Officer since 11-20-85

Kirby R. Willis
Vice President, Treasurer, Chief Financial Officer
and Assistant Corporate Secretary
Age 49
Served as Executive Officer since 1-1-94

     Each of the above is currently an executive officer of SAVANNAH, serving a
term running from the meeting of the directors held on July 27, 2000 for the
ensuing year.

      There are no arrangements or understandings between any of the individuals
listed above and any other person pursuant to which he was or is to be selected
as an officer, other than any arrangements or understandings with officers of
SAVANNAH acting solely in their capacities as such.

Identification of certain significant employees.
           None.

                                     III-1
<PAGE>



Family relationships.
           None.

Business experience.

G. Edison Holland, Jr. - President and Chief Executive Officer since 1997.  He
previously served as Vice President of Power
Generation/Transmission and Corporate Counsel of GULF from 1995 to 1997.
Served as a partner in the law firm of Beggs & Lane from 1979 to 1997.
Director of SunTrust Bank of Savannah.

Gus H. Bell, III - President and Chief Executive Officer of Hussey, Gay, Bell
and DeYoung, Inc., (specializing in environmental, industrial, structural,
architectural and civil engineering), Savannah, Georgia.  Director of SunTrust
Bank of Savannah.

Archie H. Davis - President and Chief Executive Officer of The Savannah
Bancorp and The Savannah Bank, N.A., Savannah, Georgia.
Member of the Board of Directors of Thomaston Mills, Thomaston, Georgia.

Walter D. Gnann - President of Walt's TV, Appliance and Furniture Co., Inc.,
Springfield, Georgia.

Robert B. Miller, III - President of American Building Systems, Inc., Savannah,
Georgia.

Arnold M. Tenenbaum - President and Director of Chatham Steel Corporation.
Director of First Union Bank of Georgia, First Union Bank of Savannah and
Cerulean Corporation.

W. Miles Greer - Vice President - Customer Operations and External Affairs since
1998. He previously served as Vice President of Marketing and Customer Service
from 1994 to 1998. Responsible for customer services, transmission and
distribution, engineering, system operation and external affairs.


Anthony R. James - Vice President - Power Generation and Senior Production
Officer since 2000. He also serves as Central Cluster Manager at GEORGIA's Plant
Scherer. Responsible for operations and maintenance of Plants Kraft, Riverside
and McIntosh.

Kirby R. Willis - Vice President, Treasurer and Chief Financial Officer since
1994 and Assistant Corporate Secretary effective 1998. Responsible primarily for
accounting, financial, labor relations, corporate services, corporate
compliance, environmental and safety activities.

Involvement in certain legal proceedings.
         None

Section 16(a) Beneficial Ownership Reporting
Compliance.

No late filers.

                                     III-2

<PAGE>

Item 11.        EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth information
concerning any Chief Executive Officer and the four most highly compensated
executive officers of SAVANNAH serving during 2000.
<TABLE>
<CAPTION>

                                              ANNUAL COMPENSATION                         LONG-TERM COMPENSATION
                                                                                  Number of
                                                                                  Securities   Long-
Name                                                                              Underlying   Term
and                                                            Other Annual       Stock        Incentive    All Other
Principal                                                      Compensation       Options      Payouts      Compensation
Position               Year         Salary($)    Bonus($)      ($)1               (Shares)      ($)2        ($)3
- ------------------------------------------------------------------------------------------------------------------------

<S>                      <C>        <C>          <C>               <C>           <C>           <C>             <C>
G. Edison
   Holland, Jr.
President,               2000       295,812      243,263           24,438        25,667               -        15,453
Chief Executive          1999       254,914       42,626           21,588         8,375         166,052        13,392
Officer, Director        1998       233,330       26,019           17,309         7,951         128,608         8,246

Anthony R. James4        2000       175,048      161,442                -        12,752               -         7,582
Vice President,          1999             -            -                -             -               -             -
                         1998             -            -                -             -               -             -

W. Miles Greer           2000       177,013      100,923              601        13,416               -        16,982
Vice President           1999       168,713       21,322            1,874         6,130          79,476        15,150
                         1998       160,207       16,054               13         4,901          69,000        13,179

Kirby R. Willis
Vice President,          2000       162,279       97,394            4,908         8,785               -        12,159
Chief Financial          1999       156,068       19,546              259         5,028          79,476        11,767
Officer, Treasurer       1998       155,236       15,554               13         4,748          69,000        10,581

Lewis A. Jeffers5        2000       142,850       96,835           2,856          7,543              -         7,245
Vice President           1999       134,538       19,023              379         3,809          63,146         6,972
                         1998             -            -                -             -               -             -

</TABLE>
1 Tax reimbursement by SAVANNAH on certain personal benefits, including
membership fees of $11,669 for Mr. Holland, Jr. in 1998.
2 Payouts made in 1999
and 2000 for the four-year performance periods ending December 31, 1998 and
1999, respectively.
3 SAVANNAH contributions to the Employee Savings Plan (ESP),
Employee Stock Ownership Plan (ESOP), Supplemental Benefit Plan (SBP) or
Above-market earnings on deferred compensation (AME) and tax sharing benefits
paid to participants who elected receipt of dividends on SOUTHERN's common stock
held in the ESP are as follows:
<TABLE>
<CAPTION>

Name                                    ESP                ESOP           SBP or AME      ESP Tax Benefit Sharing
- ----                                    ---                ----           ----------      -----------------------
<S>                                   <C>                 <C>             <C>                         <C>
G. Edison Holland, Jr.                $6,853              $810            $7,790                      $489
Anthony R. James                       6,772               810                 -                         -
W. Miles Greer                         7,525               810             8,647                         -
Kirby R. Willis                        5,954               810             5,395                         -
Lewis A. Jeffers                       6,435               810                 -                         -
</TABLE>
4 Mr. James was named an executive officer effective July 27, 2000.
5 Mr. Jeffers was named an executive officer of SAVANNAH effective November 2,
1999 and transferred to ALABAMA effective June 24, 2000.

                                     III-3
<PAGE>

                           STOCK OPTION GRANTS IN 2000

Stock Option Grants. The following table sets forth all stock option grants to
the named executive officers of SAVANNAH during the year ending December 31,
2000.

<TABLE>
<CAPTION>

                                   Individual Grants                                         Grant Date Value

                              # of           % of Total
                              Securities     Options Exercise
                              Underlying     Granted to       or
                              Options        Employees in     Base Price      Expiration     Grant Date
   Name                       Granted6       Fiscal Year7     ($/Sh)6         Date6          Present Value($)8
   -----------------------------------------------------------------------------------------------------------------

   SAVANNAH

<S>                             <C>               <C>             <C>         <C>                   <C>
   G. Edison Holland, Jr.       25,667            0.4             23.25       02/18/2010            147,842
   Anthony R. James             12,752            0.2             23.25       02/18/2010             73,452
   W. Miles Greer               13,416            0.2             23.25       02/18/2010             77,276
   Kirby R. Willis               8,785            0.1             23.25       02/18/2010             50,602
   Lewis A. Jeffers              7,543            0.1             23.25       02/18/2010             43,448


</TABLE>
6 Performance Stock Plan grants were made on February 18, 2000, and vest
annually at a rate of one-third on the anniversary date of the grant. Grants
fully vest upon termination as a result of death, total disability, or
retirement and expire five years after retirement, three years after death or
total disability, or their normal expiration date if earlier. The exercise
price is the average of the high and low fair market value of SOUTHERN's common
stock on the date granted. Options may be transferred to family members,
family trusts, and family limited partnerships.
7 A total of 6,977,038 stock options were granted in 2000.
8 Value was calculated using the Black-Scholes option valuation model. The
actual value, if any, ultimately realized depends on the market value of
SOUTHERN's common stock at a future date. Significant assumptions are shown
below:
<TABLE>
<CAPTION>

                                                     Risk-free         Dividend              Discount for forfeiture risk:
                                   Volatility      rate of return    opportunity     Term       before     after
                                                                                               vesting    vesting
- -------------------------------------------------------------------------------------------------------------------
<S>                                  <C>                <C>              <C>        <C>          <C>      <C>
     Black-Scholes Assumptions       22.14%             6.52%            50%        10 years     7.79%    12.40%


These assumptions reflect the effects of cash dividend equivalents paid to
participants under the Performance Dividend Plan assuming targets are met.
</TABLE>

                                     III-4

<PAGE>


      AGGREGATED STOCK OPTION EXERCISES IN 2000 AND YEAR-END OPTION VALUES

Aggregated Stock Option Exercises. The following table sets forth information
concerning options exercised during the year ending December 31, 2000 by the
named executive officers and the value of unexercised options held by them as of
December 31, 2000.
<TABLE>
<CAPTION>

                                                                        Number of
                                                                        Securities             Value of
                                                                        Underlying             Unexercised
                                                                        Unexercised            In-the-Money
                                                                        Options at             Options at
                                                                        Fiscal                 Fiscal
                                                                        Year-End (#)           Year-End($)9

                         Shares Acquired           Value                Exercisable/           Exercisable/
Name                     on Exercise (#)           Realized($)10         Unexercisable          Unexercisable
- -------------------------------------------------------------------------------------------------------------

SAVANNAH

<S>                           <C>                    <C>                 <C>    <C>          <C>     <C>
G. Edison Holland, Jr.        18,323                 220,862             32,261/33,900       325,274/310,486
Anthony R. James                   -                       -              8,456/17,259        77,991/157,055
W. Miles Greer                 8,654                  76,354             10,235/19,136        93,074/171,646
Kirby R. Willis                4,038                  37,604             13,574/13,720       128,819/120,111
Lewis A. Jeffers                   -                       -              1,270/10,082          8,493/92,410



9 This column represents the excess of the fair market value of SOUTHERN's common
stock of $33.25 per share, as of December 31, 2000, above the exercise price of
the options. The Exercisable column reports the "value" of options that are
vested and therefore could be exercised. The Unexercisable column reports the
"value" of options that are not vested and therefore could not be exercised as
of December 31, 2000.

10 The "Value Realized" is ordinary income, before taxes, and represents the
amount equal to the excess of the fair market value of the shares at the time of
exercise above the exercise price.
</TABLE>
                                    III-5


<PAGE>


                  DEFINED BENEFIT OR ACTUARIAL PLAN DISCLOSURE

Pension Plan Table. The following table sets forth the estimated annual pension
benefits payable at normal retirement age under SOUTHERN's qualified Pension
Plan, as well as non-qualified supplemental benefits, based on the stated
compensation and years of service with the SOUTHERN system for Messrs. Holland,
James and Jeffers. Compensation for pension purposes is limited to the average
of the highest three of the final 10 years' compensation -- base salary plus the
excess of annual and long-term incentive compensation over 25 percent of base
salary (reported under column titled "Salary", "Bonus", and "Long-Term Incentive
Payouts" in the Summary Compensation Table on page III-3).

         The amounts shown in the table were calculated according to the final
average pay formula and are based on a single life annuity without reduction for
joint and survivor annuities (although married employees are required to have
their pension benefits paid in one of various joint and survivor annuity forms,
unless the employee elects otherwise with the spouse's consent) or computation
of the Social Security offset which would apply in most cases. This offset
amounts to one-half of the estimated Social Security benefit (primary insurance
amount) in excess of $3,900 per year times the number of years of accredited
service, divided by the total possible years of accredited service to normal
retirement age.
<TABLE>
<CAPTION>

                                           Years of Accredited Service

Remuneration             15         20           25           30          35            40
- ------------             -----------------------------------------------------------------

    <S>              <C>         <C>         <C>          <C>           <C>          <C>
    $  100,000       $ 25,500    $ 34,000    $ 42,500     $ 51,000      $ 59,500     $ 68,000
       300,000         76,500     102,000     127,500      153,000       178,500      204,000
       500,000        127,500     170,000     212,500      255,000       297,500      340,000
       700,000        178,500     238,000     297,500      357,000       416,500      476,000
       900,000        229,500     306,000     382,500      459,000       535,500      612,000
     1,100,000        280,500     374,000     467,500      561,000       654,500      748,000
     1,300,000        331,500     442,000     552,500      663,000       773,500      884,000

</TABLE>

         As of December 31, 2000, the applicable compensation levels and years
of accredited service for SAVANNAH's named executives are presented in the
following table:

                                        Compensation            Accredited
            Name                           Level             Years of Service

            G. Edison Holland, Jr.9      $431,348                     17
            Anthony R. James              246,604                     21
            W. Miles Greer10              237,392                     16
            Kirby R. Willis               225,952                     26
            Lewis A. Jeffers              197,400                     21


9 The number of accredited years of service includes 9 years and 3 months
credited to Mr. Holland pursuant to a supplemental pension agreement.

10 The number of accredited years of service includes 7 years and 6 months
credited to Mr. Greer pursuant to a supplemental pension agreement.

                                     III-6


<PAGE>


         Effective January 1, 1998, SAVANNAH merged its pension plan into the
SOUTHERN Pension Plan. SAVANNAH also has in effect a supplemental executive
retirement plan for certain of its executive employees. The plan is designed to
provide participants with a supplemental retirement benefit, which, in
conjunction with social security and benefits under SOUTHERN's qualified pension
plan, will equal 70 percent of the highest three of the final 10 years' average
annual earnings (excluding incentive compensation).

         The following table sets forth the estimated combined annual pension
benefits under SOUTHERN's pension and SAVANNAH's supplemental executive
retirement plans in effect during 2000 which are payable to Messrs Greer and
Willis, upon retirement at the normal retirement age after designated periods of
accredited service and at a specified compensation level.

                                            Years of Accredited Service
       Remuneration                  15                 25               35
- --------------------------           --                 --               --

          $150,000                  105,000           105,000          105,000
           180,000                  126,000           126,000          126,000
           210,000                  147,000           147,000          147,000
           260,000                  182,000           182,000          182,000
           280,000                  196,000           196,000          196,000
           300,000                  210,000           210,000          210,000
           350,000                  245,000           245,000          245,000
           400,000                  280,000           280,000          280,000
           430,000                  301,000           301,000          301,000
           460,000                  322,000           322,000          322,000

Compensation of Directors.

         Standard Arrangements. The following table presents compensation paid
to the directors during 2000 for service as a member of the board of directors
and any board committee(s), except that employee directors received no fees or
compensation for service as a member of the board of directors or any board
committee. At the election of the director, all or a portion of the cash
retainer may be payable in SOUTHERN's common stock, and all or a portion of the
total fees may be deferred under the Deferred Compensation Plan until membership
on the board is terminated.

Cash Retainer Fee          $10,000
Stock Retainer Fee         50 shares per quarter

Meeting Fees:
$750 for each Board or Committee meeting attended

         Effective January 1, 1997, the Outside Directors Pension Plan (the
"Plan") was terminated and benefits payable under the Plan were frozen.
Non-employee directors serving as of January 1, 1997 were given a one-time
election to receive a Plan benefit buy-out equal to the actuarial present value
of future Plan benefits or receive benefits under the terms of the Plan at the
annual retainer rate in effect on December 31, 1996. Directors who elected to
receive the benefit buy-out were required to defer receipt of that amount under
the Deferred Compensation Plan until termination from board membership.
Directors who elected to continue to participate under the terms of the Plan are
entitled to benefits upon retirement from the board on the retirement date
designated in the respective companies' by-laws. The annual benefit payable is
based upon length of service and varies from 75 percent of the annual retainer
in effect on December 31, 1996 if the participant has at least 60 months of
service on the board of one or more system companies, to 100 percent if the
participant has at least 120 months of such service. Payments will continue for
the greater of the lifetime of the participant or 10 years.

                                     III-7

<PAGE>

         Other Arrangements. No director received other compensation for
services as a director during the year ending December 31, 2000 in addition to
or in lieu of that specified by the standard arrangements specified above.

Employment Contracts and Termination of Employment and Change in Control
Arrangements.
- ------------------------------------------------------------------------

SAVANNAH has adopted SOUTHERN's Change in Control Plan which is applicable to
certain of its officers, and has entered into individual change in control
agreements with its most highly compensated executive officers. If an executive
is involuntarily terminated, other than for cause, within two years following a
change in control of SOUTHERN the agreements provide for:

o lump sum payment of two or three times annual compensation,
o up to five years' coverage under group health and life insurance plans,
o immediate vesting of all stock options, stock appreciation rights, and
    restricted stock previously granted,
o payment of any accrued long-term and short-term bonuses and dividend
    equivalents, and
o payment of any excise tax liability incurred as a
    result of payments made under any individual agreements.

A SOUTHERN change in control is defined under the agreements as:

o  acquisition of at least 20 percent of the SOUTHERN's stock,
o  a change in the majority of the members of the SOUTHERN's board of
    directors,
o  a merger or other business combination that results in SOUTHERN's
   shareholders immediately before the merger owning less than 65 percent of
   the voting power after the merger, or
o  a sale of substantially all the assets of SOUTHERN.

A change in control of SAVANNAH is defined under the agreements as:

o acquisition of at least 50 percent of SAVANNAH's stock,
o a merger or other business combination unless SOUTHERN controls the
   surviving entity or
o a sale of substantially all the assets of SAVANNAH.

     If a change in control affects only a subsidiary of SOUTHERN, these
payments would only be made to executives of the affected subsidiary who are
involuntarily terminated as a result of that change in control.

     SOUTHERN also has amended its short- and long-term incentive plans to
provide for pro-rata payments at not less than target-level performance if a
change in control occurs and the plans are not continued or replaced with
comparable plans.

Report on Repricing of Options.

         None.

Compensation Committee Interlocks and Insider Participation.

         None.
                                     III-8

<PAGE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Beneficial Owners.  SOUTHERN is the beneficial
owner of 100% of the outstanding common stock of SAVANNAH.
<TABLE>
<CAPTION>

- ----------------------------------------------------------------------------------------------------------
                                   Amount and
                            Name and Address                 Nature of                       Percent
                            of Beneficial                    Beneficial                      of
Title of Class              Owner                            Ownership                       Class
- ----------------------------------------------------------------------------------------------------------

<S>                                                                                            <C>
Common Stock                The Southern Company                                               100%
                            270 Peachtree Street, N.W.
                            Atlanta, Georgia 30303

                            Registrant:
                            SAVANNAH                            10,844,635
</TABLE>

Security Ownership of Management. The following table shows the number of shares
of SOUTHERN common stock owned by the SAVANNAH's directors, nominees and
executive officers as of December 31, 2000. It is based on information furnished
by the directors, nominees and executive officers. The shares owned by all
directors, nominees and executive officers as a group constitute less than one
percent of the total number of shares outstanding on December 31, 2000.

Name of Directors,
Nominees and                                       Number of Shares
Executive Officers         Title of Class     Beneficially Owned (1) (2)
- ------------------         --------------     --------------------------

Gus H. Bell, III           SOUTHERN Common                     246
Archie H. Davis            SOUTHERN Common                     495
Walter D. Gnann            SOUTHERN Common                   2,689
G. Edison Holland, Jr.     SOUTHERN Common                  43,848
Robert B. Miller, III      SOUTHERN Common                   1,770
Arnold M. Tenenbaum        SOUTHERN Common                   1,124
Anthony R. James           SOUTHERN Common                  25,065
W. Miles Greer             SOUTHERN Common                  18,605
Kirby R. Willis            SOUTHERN Common                  23,240

The directors, nominees
and executive officers
as a group                 SOUTHERN Common                 117,083



(1)  As used in this table, "beneficial ownership" means the sole or shared
     power to vote, or to direct the voting of, a security and/or investment
     power with respect to a security (i.e., the power to dispose of, or to
     direct the disposition of, a security).

(2)  The shares shown include shares of SOUTHERN common stock of which
     certain directors and executive officers have the right to acquire
     beneficial ownership within 60 days pursuant to the Executive
     Stock Plan and/or Performance Stock Plan, as follows: Mr. Greer,
     14,707 shares; Mr. Holland, 40,817 shares; Mr. James 12,707
     shares, and Mr. Willis, 16,503 shares.

                                     III-9
<PAGE>


Changes in control. SOUTHERN and SAVANNAH know of no arrangements which may at a
subsequent date result in any change in control.


ITEM 13.        CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Transactions with management and others.

     Mr. Archie Davis is President of The Savannah Bank, N.A., Savannah,
Georgia.  During 2000, this bank furnished a number of regular banking
services in the ordinary course of business to SAVANNAH.  SAVANNAH intends to
maintain normal banking relations with the aforesaid bank in the future.

Certain business relationships.
           None.

Indebtedness of management.
           None.

Transactions with promoters.
           None.




                                     III-10
<PAGE>
                                     PART IV



Item 14.      EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a) The following documents are filed as a part of this report on this Form
10-K:

     (1) Financial Statements:

         Reports of Independent Public Accountants on the financial statements
         for SOUTHERN and Subsidiary Companies, ALABAMA, GEORGIA, GULF,
         MISSISSIPPI and SAVANNAH are listed under Item 8 herein.

         The financial statements filed as a part of this report for SOUTHERN
         and Subsidiary Companies, ALABAMA, GEORGIA, GULF, MISSISSIPPI and
         SAVANNAH are listed under Item 8 herein.

     (2) Financial Statement Schedules:

         Reports of Independent Public Accountants as to Schedules for SOUTHERN
         and Subsidiary Companies, ALABAMA, GEORGIA, GULF, MISSISSIPPI and
         SAVANNAH are included herein on pages IV-12 through IV-17.

         Financial Statement Schedules for SOUTHERN and Subsidiary Companies,
         ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH are listed in the
         Index to the Financial Statement Schedules at page S-1.

     (3) Exhibits:

         Exhibits for SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI and SAVANNAH
         are listed in the Exhibit Index at page E-1.


(b)  Reports on Form 8-K during the fourth quarter of 2000 were as follows:


     SOUTHERN filed Current Reports on Form 8-K:

     Date of event:        November 27, 2000
     Items reported:       Items 5 and 7

     Date of event:        December 6, 2000
     Items reported:       Items 5 and 7


                                      IV-1
<PAGE>


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     THE SOUTHERN COMPANY

     By:   H. Allen Franklin, President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

     H. Allen Franklin
     President and
     Chief Executive Officer
     (Principal Executive Officer)

     Gale E. Klappa
     Financial Vice President, Chief Financial Officer and
     Treasurer
     (Principal Financial Officer)

     W. Dean Hudson
     Vice President, Comptroller and Chief Accounting Officer
     (Principal Accounting Officer)


                          Directors:
    Daniel P. Amos                L. G. Hardman III
    Dorrit J. Bern                Donald M. James
    Thomas F. Chapman             Zack T. Pate
    H. Allen Franklin             Gerald J. St. Pe'



     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     ALABAMA POWER COMPANY

     By:   Elmer B. Harris, President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

     Elmer B. Harris
     President, Chief Executive Officer and Director
     (Principal Executive Officer)

     William B. Hutchins, III
     Executive Vice President, Chief Financial Officer and Treasurer
     (Principal Financial Officer)

     Art P. Beattie
     Vice President and Comptroller
     (Principal Accounting Officer)

                          Directors:
    Whit Armstrong                     John T. Porter
    H. Allen Franklin                  Robert D. Powers
    R. Kent Henslee                    Andreas Renschler
    Carl E. Jones, Jr.                 C. Dowd Ritter
    James K. Lowder                    James H. Sanford
    Wallace D. Malone, Jr.             John Cox Webb, IV
    Thomas C. Meredith                 James W. Wright
    William V. Muse


     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

                                      IV-2
<PAGE>


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     GEORGIA POWER COMPANY

     By:   David M. Ratcliffe, President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

     David M. Ratcliffe
     President, Chief Executive Officer and Director
     (Principal Executive Officer)

     Thomas A. Fanning
     Executive Vice President, Chief Financial Officer
     and Treasurer
     (Principal Financial Officer)

     Cliff S. Thrasher
     Vice President, Comptroller and Chief Accounting Officer
     (Principal Accounting Officer)

                          Directors:
     Daniel P. Amos               James R. Lientz, Jr.
     Juanita P. Baranco           G. Joseph Prendergast
     William A. Fickling, Jr.     William Jerry Vereen
     H. Allen Franklin            Carl Ware
     L. G. Hardman III            E. Jenner Wood, III



     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     GULF POWER COMPANY

     By:   Travis J. Bowden, President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

     Travis J. Bowden
     President, Chief Executive Officer and Director
     (Principal Executive Officer)

     Ronnie R. Labrato
     Comptroller and Chief Financial Officer
     (Principal Financial and Accounting Officer)

                        Directors:
     Fred C. Donovan, Sr.       W. Deck Hull, Jr.
     H. Allen Franklin          Barbara H. Thames


     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

                                      IV-3
<PAGE>


Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     MISSISSIPPI POWER COMPANY

     By:   Dwight H. Evans, President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

     Dwight H. Evans
     President, Chief Executive Officer and Director
     (Principal Executive Officer)

     Michael W. Southern
     Vice President, Secretary, Treasurer and
     Chief Financial Officer
     (Principal Financial and Accounting Officer)

                         Directors:
      Robert S. Gaddis          George A. Schloegel
      Linda T. Howard           Philip J. Terrell
      Aubrey K. Lucas           Gene Warr
      Malcolm Portera

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized. The signature of the
undersigned company shall be deemed to relate only to matters having reference
to such company and any subsidiaries thereof.

     SAVANNAH ELECTRIC AND POWER COMPANY

     By:   G. Edison Holland, Jr., President and
           Chief Executive Officer

     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the registrant and
in the capacities and on the dates indicated. The signature of each of the
undersigned shall be deemed to relate only to matters having reference to the
above-named company and any subsidiaries thereof.

      G. Edison Holland, Jr.
      President, Chief Executive Officer and Director
      (Principal Executive Officer)

      Kirby R. Willis
      Vice President, Treasurer and
      Chief Financial Officer
      (Principal Financial and Accounting Officer)

                        Directors:
     Gus H. Bell, III         Robert B. Miller, III
     Archie H. Davis          Arnold M. Tenenbaum
     Walter D. Gnann


     By:   Wayne Boston
           (Wayne Boston, Attorney-in-fact)

     Date: March 28, 2001


                                      IV-4
<PAGE>


Exhibit 21.       Subsidiaries of the Registrants.*

                                                         Jurisdiction of
Name of Company                                          Organization
- ----------------------------------------------------- -- ---------------------

The Southern Company                                     Delaware
         Southern Company Capital Trust I                Delaware
         Southern Company Capital Trust II               Delaware
         Southern Company Capital Trust III              Delaware
         Southern Company Capital Trust IV               Delaware
         Southern Company Capital Trust V                Delaware
         Southern Company Capital Trust VI               Delaware
         Southern Company Capital Trust VII              Delaware
         Southern Company Capital Trust VIII             Delaware
         Southern Company Capital Trust IX               Delaware
Alabama Power Company                                    Alabama
         Alabama Power Capital Trust I                   Delaware
         Alabama Power Capital Trust II                  Delaware
         Alabama Power Capital Trust III                 Delaware
         Alabama Power Capital Trust IV                  Delaware
         Alabama Power Capital Trust V                   Delaware
         Alabama Property Company                        Alabama
         Southern Electric Generating Company            Alabama
Georgia Power Company                                    Georgia
         Georgia Power Capital Trust I                   Delaware
         Georgia Power Capital Trust II                  Delaware
         Georgia Power Capital Trust III                 Delaware
         Georgia Power Capital Trust IV                  Delaware
         Georgia Power Capital Trust V                   Delaware
         Georgia Power Capital Trust VI                  Delaware
         Georgia Power L.P. Holdings Corp.               Georgia
                  Georgia Power Capital, L.P.            Delaware
         Piedmont-Forrest Corporation                    Georgia
         Southern Electric Generating Company            Alabama
Gulf Power Company                                       Maine
         Gulf Power Capital Trust I                      Delaware
         Gulf Power Capital Trust II                     Delaware
         Gulf Power Capital Trust III                    Delaware
Mississippi Power Company                                Mississippi
         Mississippi Power Capital Trust I               Delaware
         Mississippi Power Capital Trust II              Delaware
         Mississippi Power Capital Trust III             Delaware
Savannah Electric and Power Company                      Georgia
         Savannah Electric Capital Trust I               Delaware

- ----------------------------------------------------- -- ---------------------

*This information is as of December 31, 2000. In addition, the list omits
certain subsidiaries pursuant to paragraph (b)(21)(ii) of Regulation S-K Item
601.

                                      IV-5
<PAGE>








                              ARTHUR ANDERSEN LLP

                                                                  Exhibit 23(a)





                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





      As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of The
Southern Company and its subsidiaries and the related financial statement
schedule, included in this Form 10-K, into The Southern Company's previously
filed Registration Statement File Nos. 2-78617, 33-3546, 33-30171, 33-54415,
33-57951, 33-58371, 33-60427, 333-09077, 333-44127, 333-44261, 333-64871 and
333-31808.





/s/ Arthur Andersen LLP
Atlanta, Georgia
March 22, 2001



                                      IV-6

<PAGE>

                             ARTHUR ANDERSEN LLP

                                                                   Exhibit 23(b)




                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





      As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of Alabama
Power Company and the related financial statement schedule, included in this
Form 10-K, into Alabama Power Company's previously filed Registration Statement
File No. 333-67453.




/s/  Arthur Andersen LLP
Birmingham, Alabama
March 22, 2001




                                      IV-7


<PAGE>




                                                                  Exhibit 23(c)

                              ARTHUR ANDERSEN LLP



                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





      As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of Georgia
Power Company and the related financial statement schedule, included in this
Form 10-K, into Georgia Power Company's previously filed Registration Statement
File No. 333-75193.





/s/ Arthur Andersen LLP
Atlanta, Georgia
March 22, 2001





                                      IV-8

<PAGE>




                                                                Exhibit 23(d)
                              ARTHUR ANDERSEN LLP




                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





      As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of Gulf Power
Company and the related financial statement schedule, included in this Form
10-K, into Gulf Power Company's previously filed Registration Statement File
Nos. 33-50165 and 333-42033.




/s/  Arthur Andersen LLP
Atlanta, Georgia
March 22, 2001



                                      IV-9
<PAGE>



                              ARTHUR ANDERSEN LLP
                                                                Exhibit 23(e)




                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





     As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of
Mississippi Power Company and the related financial statement schedule, included
in this Form 10-K, into Mississippi Power Company's previously filed
Registration Statement File No. 333-45069.





/s/  Arthur Andersen LLP
Atlanta, Georgia
March 22, 2001



                                     IV-10

<PAGE>




                               ARTHUR ANDERSEN LLP
                                                                Exhibit 23(f)





                    CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS





      As independent public accountants, we hereby consent to the incorporation
of our reports dated February 28, 2001 on the financial statements of Savannah
Electric and Power Company and the related financial statement schedule,
included in this Form 10-K, into Savannah Electric and Power Company's
previously filed Registration Statement File No. 333-46171.




/s/  Arthur Andersen LLP
Atlanta, Georgia
March 22, 2001


                                     IV-11

<PAGE>



                              ARTHUR ANDERSEN LLP







REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To The Southern Company:

    We have audited in accordance with auditing standards generally accepted in
the United States, the consolidated financial statements of The Southern Company
and its subsidiaries included in this Form 10-K, and have issued our report
thereon dated February 28, 2001. Our audits were made for the purpose of forming
an opinion on those statements taken as a whole. The schedule listed under Item
14(a)(2) herein as it relates to The Southern Company and its subsidiaries (page
S-2) is the responsibility of The Southern Company's management and is presented
for purposes of complying with the Securities and Exchange Commission's rules
and is not part of the basic consolidated financial statements. This schedule
has been subjected to the auditing procedures applied in the audits of the basic
consolidated financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic consolidated financial statements taken as a whole.




/s/ Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001



                                     IV-12
<PAGE>




                              ARTHUR ANDERSEN LLP









REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To Alabama Power Company:

    We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements of Alabama Power Company included in
this Form 10-K, and have issued our report thereon dated February 28, 2001. Our
audits were made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed under Item 14(a)(2) herein as it relates to
Alabama Power Company (page S-3) is the responsibility of Alabama Power
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.




/s/  Arthur Andersen LLP
Birmingham, Alabama
February 28, 2001



                                     IV-13
<PAGE>





                              ARTHUR ANDERSEN LLP








REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To Georgia Power Company:

      We have audited in accordance with auditing standards generally accepted
in the United States, the financial statements of Georgia Power Company included
in this Form 10-K, and have issued our report thereon dated February 28, 2001.
Our audits were made for the purpose of forming an opinion on those statements
taken as a whole. The schedule listed under Item 14(a)(2) herein as it relates
to Georgia Power Company (page S-4) is the responsibility of Georgia Power
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.




/s/  Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                     IV-14
<PAGE>



                              ARTHUR ANDERSEN LLP










REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To Gulf Power Company:

    We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements of Gulf Power Company included in
this Form 10-K, and have issued our report thereon dated February 28, 2001. Our
audits were made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed under Item 14(a)(2) herein as it relates to Gulf
Power Company (page S-5) is the responsibility of Gulf Power Company's
management and is presented for purposes of complying with the Securities and
Exchange Commission's rules and is not part of the basic financial statements.
This schedule has been subjected to the auditing procedures applied in the
audits of the basic financial statements and, in our opinion, fairly states in
all material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.




/s/  Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                     IV-15
<PAGE>



                              ARTHUR ANDERSEN LLP










REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To Mississippi Power Company:

    We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements of Mississippi Power Company
included in this Form 10-K, and have issued our report thereon dated February
28, 2001. Our audits were made for the purpose of forming an opinion on those
statements taken as a whole. The schedule listed under Item 14(a)(2) herein as
it relates to Mississippi Power Company (page S-6) is the responsibility of
Mississippi Power Company's management and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic financial statements. This schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.




/s/  Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001

                                     IV-16
<PAGE>





                              ARTHUR ANDERSEN LLP







REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS AS TO SCHEDULE


To Savannah Electric and Power Company:

    We have audited in accordance with auditing standards generally accepted in
the United States, the financial statements of Savannah Electric and Power
Company included in this Form 10-K, and have issued our report thereon dated
February 28, 2001. Our audits were made for the purpose of forming an opinion on
those statements taken as a whole. The schedule listed under Item 14(a)(2)
herein as it relates to Savannah Electric and Power Company (page S-7) is the
responsibility of Savannah Electric and Power Company's management and is
presented for purposes of complying with the Securities and Exchange
Commission's rules and is not part of the basic financial statements. This
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, fairly states in all
material respects the financial data required to be set forth therein in
relation to the basic financial statements taken as a whole.




/s/  Arthur Andersen LLP
Atlanta, Georgia
February 28, 2001




                                     IV-17
<PAGE>

                     INDEX TO FINANCIAL STATEMENT SCHEDULES

Schedule                                                                 Page

II     Valuation and Qualifying Accounts and Reserves
        2000, 1999 and 1998
         The Southern Company and Subsidiary Companies................   S-2
         Alabama Power Company........................................   S-3
         Georgia Power Company........................................   S-4
         Gulf Power Company...........................................   S-5
         Mississippi Power Company....................................   S-6
         Savannah Electric and Power Company..........................   S-7

    Schedules I through V not listed above are omitted as not applicable or not
required. Columns omitted from schedules filed have been omitted because the
information is not applicable or not required.

                                      S-1
<PAGE>

<TABLE>
<CAPTION>


                  THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                        (Stated in Thousands of Dollars)

                                                                           Additions
                                                                 ----------------------------------------

                                 Balance at Beginning     Charged to     Charged to Other                      Balance at End
         Description                   of Period             Income           Accounts       Deductions            of Period
  ------------------------------ ------------------------ -------------- ------------------- ----------------- --------------
  Provision for uncollectible
     accounts
       <S>                               <C>                <C>                  <C>           <C>                   <C>
       2000...................           $21,834            $31,329              $39           $31,403 (Note)        $21,799
       1999...................            11,268             35,476                -            24,910 (Note)         21,834
       1998...................             9,613             31,707                -            30,052 (Note)         11,268

- -------------------
Note:    Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.

</TABLE>
                                      S-2
<PAGE>
<TABLE>
<CAPTION>



                                                           ALABAMA POWER COMPANY
                                              SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                            FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                                      (Stated in Thousands of Dollars)

                                                                            Additions
                                                                  ---------------------------------------

                                     Balance at Beginning       Charged to      Charged to Other                     Balance at End
         Description                       of Period               Income            Accounts        Deductions          of Period
  ---------------------------------- -------------------------- --------------- ------------------ ----------------- ---------------
  Provision for uncollectible
    accounts
       <S>                                  <C>                     <C>                <C>          <C>                    <C>
       2000........................         $4,117                  $9,093             $-           $  6,973 (Note)        $6,237
       1999........................          1,855                  13,995              -             11,733 (Note)         4,117
       1998........................          2,272                   7,702              -              8,119 (Note)         1,855

- -------------------
Note:  Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.
</TABLE>


                                      S-3

<PAGE>
<TABLE>
<CAPTION>



                                                         GEORGIA POWER COMPANY
                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                          FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                                    (Stated in Thousands of Dollars)

                                                                        Additions
                                                              ---------------------------------------

                                      Balance at Beginning    Charged to     Charged to Other                     Balance at End
         Description                        of Period            Income           Accounts        Deductions          of Period
  ----------------------------------- ----------------------- -------------- ------------------ ----------------- ----------------
  Provision for uncollectible
    accounts
       <S>                                    <C>               <C>                 <C>            <C>                   <C>
       2000..........................         $7,000            $10,794             $-             $12,694 (Note)        $5,100
       1999..........................          5,500             14,406              -              12,906 (Note)         7,000
       1998..........................          3,000             17,856              -              15,356 (Note)         5,500
                                                                             8,888              ($3

- -------------------
Note:  Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.

</TABLE>


                                      S-4
<PAGE>
<TABLE>
<CAPTION>



                                                           GULF POWER COMPANY
                                             SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                          FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                                    (Stated in Thousands of Dollars)

                                                                          Additions
                                                                --------------------------------------

                                       Balance at Beginning     Charged to      Charged to Other                    Balance at End
         Description                         of Period             Income            Accounts      Deductions           of Period
  ------------------------------------ ------------------------ --------------- ------------------ ---------------- ---------------
  Provision for uncollectible
    accounts
       <S>                                    <C>                  <C>                  <C>          <C>                <C>
       2000..........................         $1,026               $2,702               $-           $2,426 (Note)      $1,302
       1999..........................            996                2,230                -            2,200(Note)        1,026
       1998..........................            796                2,288                -            2,088 (Note)         996

- -------------------
Note:  Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.
</TABLE>

                                      S-5

<PAGE>
<TABLE>
<CAPTION>



                                                        MISSISSIPPI POWER COMPANY
                                             SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                          FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                                    (Stated in Thousands of Dollars)

                                                                           Additions
                                                                 --------------------------------------

                                       Balance at Beginning      Charged to     Charged to Other                    Balance at End
         Description                         of Period              Income           Accounts      Deductions           of Period
  ------------------------------------ ------------------------- -------------- ------------------ ---------------- ---------------
  Provision for uncollectible
    accounts
       <S>                                      <C>                 <C>                <C>           <C>                  <C>
       2000..........................           $697                $1,156             $14           $1,296 (Note)        $571
       1999..........................            621                 1,964               -            1,888 (Note)         697
       1998..........................            698                 1,510              31            1,618 (Note)         621

- -------------------
Note:  Represents write-off of accounts considered to be uncollectible, less recoveries of amounts previously written off.
</TABLE>

                                      S-6
<PAGE>
<TABLE>
<CAPTION>



                                                  SAVANNAH ELECTRIC AND POWER COMPANY
                                            SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                         FOR THE YEARS ENDED DECEMBER 31, 2000, 1999 AND 1998
                                                   (Stated in Thousands of Dollars)

                                                                          Additions
                                                                -------------------------------------

                                         Balance at Beginning   Charged to   Charged to Other                   Balance at End
         Description                           of Period           Income         Accounts      Deductions          of Period
  -------------------------------------- ---------------------- ------------ ------------------ --------------- -----------------
  Provision for uncollectible
    accounts
       <S>                                        <C>                <C>            <C>           <C>                 <C>
       2000..........................             $237               $999           $-            $829 (Note)         $407
       1999..........................              284                594            -             641 (Note)          237
       1998..........................              354                417            -             487 (Note)          284

- -------------------
Note:  Represents write-off of accounts receivable considered to be uncollectible, less recoveries of amounts previously written
off.
</TABLE>


                                      S-7
<PAGE>
<TABLE>
<CAPTION>
                                  EXHIBIT INDEX

    The following exhibits indicated by an asterisk preceding the exhibit number
are filed herewith.  The balance of the exhibits have heretofore been filed with
the SEC, respectively, as the exhibits and in the file numbers indicated and are
incorporated  herein by  reference.  The  exhibits  marked with a pound sign are
management contracts or compensatory plans or arrangements  required to be filed
herewith  and  required  to be  identified  as such  by  Item  14 of Form  10-K.
Reference is made to a duplicate  list of exhibits being filed as a part of this
Form 10-K, which list, prepared in accordance with Item 601 of Regulation S-K of
the SEC, immediately precedes the exhibits being physically filed with this Form
10-K.
<S>     <C>

(1)      Underwriting Agreements

         GEORGIA


         (c)      -    Distribution Agreement dated November 29, 1995 between GEORGIA and Lehman Brothers Inc.; Donaldson, Lufkin &
                       Jenrette Securities Corporation; J. P. Morgan Securities Inc.; Salomon Brothers Inc and Smith Barney Inc.
                       relating to $300,000,000 First Mortgage Bonds Secured Medium-Term Notes.  (Designated in GEORGIA's Form 10-K
                       for the year ended December 31, 1995, as Exhibit 1(c).)


(3)      Articles of Incorporation and By-Laws

         SOUTHERN

           (a)  1   -    Composite Certificate of Incorporation of SOUTHERN, reflecting all amendments thereto through January 5,
                         1994.  (Designated in Registration No. 33-3546 as Exhibit 4(a), in Certificate of Notification, File No.
                         70-7341, as Exhibit A and in Certificate of Notification, File No. 70-8181, as Exhibit A.)

           (a)  2   -    By-laws of SOUTHERN as amended effective October 21, 1991, and as presently in effect. (Designated in Form
                         U-1, File No. 70-8181, as Exhibit A-2.)


         ALABAMA

           (b)  1   - Charter of ALABAMA and amendments thereto through August 10, 1998.(Designated in Registration Nos. 2-59634
                      as Exhibit 2(b), 2-60209 as Exhibit 2(c), 2-60484 as Exhibit 2(b), 2-70838 as Exhibit 4(a)-2, 2-85987 as
                      Exhibit 4(a)-2, 33-25539 as Exhibit 4(a)-2, 33-43917 as Exhibit 4(a)-2, in Form 8-K dated February 5, 1992,
                      File No. 1-3164, as Exhibit 4(b)-3, in Form 8-K dated July 8, 1992, File No. 1-3164, as Exhibit 4(b)-3, in
                      Form 8-K dated October 27, 1993, File No. 1-3164, as Exhibits 4(a) and 4(b), in Form 8-K dated November 16,
                      1993, File No. 1-3164, as Exhibit 4(a), in Certificate of Notification, File No. 70-8191, as Exhibit A, in
                      ALABAMA's Form 10-K for the year ended December 31, 1997, File No. 1-3164, as Exhibit 3(b)2 and Form 8-K
                      dated August 10, 1998, File No. 1-3164, as Exhibit 4.4.)

         * (b)  2   - Amendment to Charter of ALABAMA dated January 10, 2001.

                                      E-1
<PAGE>

           (b)  3   - By-laws of ALABAMA as amended effective July 23, 1993, and as presently in effect.(Designated in Form U-1,
                      File No. 70-8191, as Exhibit A-2.)

         GEORGIA

           (c)  1   - Charter of GEORGIA and amendments thereto through January 26, 1998.(Designated in Registration Nos. 2-63392
                      as Exhibit 2(a)-2, 2-78913 as Exhibits 4(a)-(2) and 4(a)-(3), 2-93039 as Exhibit 4(a)-(2), 2-96810 as Exhibit
                      4(a)-2, 33-141 as Exhibit 4(a)-(2), 33-1359 as Exhibit 4(a)(2), 33-5405 as Exhibit 4(b)(2), 33-14367 as
                      Exhibits 4(b)-(2) and 4(b)-(3), 33-22504 as Exhibits 4(b)-(2), 4(b)-(3) and 4(b)-(4), in GEORGIA's Form 10-K
                      for the year ended December 31, 1991, File No. 1-6468, as Exhibits 4(a)(2) and 4(a)(3), in Registration No.
                      33-48895 as Exhibits 4(b)-(2) and 4(b)-(3), in Form 8-K dated December 10, 1992, File No. 1-6468 as Exhibit
                      4(b), in Form 8-K dated June 17, 1993, File No. 1-6468, as Exhibit 4(b), in Form 8-K dated October 20, 1993,
                      File No. 1-6468, as Exhibit 4(b) and in GEORGIA's Form 10-K for the year ended December 31, 1997, File No.
                      1-6468, as Exhibit 3(c)2.)

         * (c)  2   - Amendment to Charter of GEORGIA dated February 16, 2001.

         * (c)  3   - By-laws of GEORGIA as amended effective November 15, 2000, and as presently in effect.


         GULF

           (d)  1   - Restated Articles of Incorporation of GULF and amendments thereto through January 28, 1998.  (Designated in
                      Registration No. 33-43739 as Exhibit 4(b)-1, in Form 8-K dated January 15, 1992, File No. 0-2429, as Exhibit
                      1(b), in Form 8-K dated August 18, 1992, File No. 0-2429, as Exhibit 4(b)-2, in Form 8-K dated September 22,
                      1993, File No. 0-2429, as Exhibit 4, in Form 8-K dated November 3, 1993, File No. 0-2429, as Exhibit 4 and in
                      GULF's Form 10-K for the year ended December 31, 1997, File No. 0-2429, as Exhibit 3(d)2.)

         * (d)  2   - Amendment to Articles of Incorporation of GULF dated February 9, 2001.

         * (d)  3   - By-laws of GULF as amended effective July 28, 2000, and as presently in effect.


         MISSISSIPPI

           (e)  1   - Articles of Incorporation of MISSISSIPPI, articles of merger of Mississippi Power Company (a Maine
                      corporation) into MISSISSIPPI and articles of amendment to the articles of incorporation of MISSISSIPPI
                      through December 31, 1997. (Designated in Registration No. 2-71540 as Exhibit 4(a)-1, in Form U5S for 1987,
                      File No. 30-222-2, as Exhibit B-10, in Registration No. 33-49320 as Exhibit 4(b)-(1), in Form 8-K dated
                      August 5, 1992, File No. 0-6849, as Exhibits 4(b)-2 and 4(b)-3, in Form 8-K dated August 4, 1993, File No.
                      0-6849, as Exhibit 4(b)-3, in Form 8-K dated August 18, 1993, File No. 0-6849, as Exhibit 4(b)-3 and in
                      MISSISSIPPI's Form 10-K for the year ended December 31, 1997, File No. 0-6849, as Exhibit 3(e)2.)



                                   E-2

<PAGE>

         * (e)  2   - Amendment to Articles of Incorporation of MISSISSIPPI dated March 8, 2001.

           (e)  3   - By-laws of MISSISSIPPI as amended effective April 2, 1996, and as presently in effect.  (Designated in Form
                      U5S for 1995, File No. 30-222-2, as Exhibit B-10.)

         SAVANNAH

           (f)  1   - Charter of SAVANNAH and amendments thereto through December 2, 1998.  (Designated in Registration Nos.
                      33-25183 as Exhibit 4(b)-(1), 33-45757 as Exhibit 4(b)-(2), in Form 8-K dated November 9, 1993, File No.
                      1-5072, as Exhibit 4(b) and in SAVANNAH's Form 10-K for the year ended December 31, 1998, as Exhibit 3(f)2.)

         * (f)  2   - By-laws of SAVANNAH as amended effective May 17, 2000, and as presently in effect.


(4)   Instruments Describing Rights of Security Holders, Including Indentures

         SOUTHERN

           (a)  1   -  Subordinated Note Indenture dated as of February 1, 1997, among  SOUTHERN, Southern Company Capital Funding,
                       Inc. and Bankers Trust Company, as Trustee, and indentures supplemental thereto dated as of February 4,
                       1997.  (Designated in Registration Nos. 333-28349 as Exhibits 4.1 and 4.2 and 333-28355 as Exhibit 4.2.)

           (a)  2   -  Subordinated Note Indenture dated as of June 1, 1997, among SOUTHERN, Southern Company Capital Funding, Inc.
                       and Bankers Trust Company, as Trustee, and indentures supplemental thereto through that dated as of December
                       23, 1998.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1997, File No. 1-3526, as
                       Exhibit (4)(a)2, in Form 8-K dated June 18, 1998, File No. 1-3526, as Exhibit 4.2 and in Form 8-K dated
                       December 18, 1998, File No. 1-3526, as Exhibit 4.4.)

           (a)  3   -  Amended and Restated Trust Agreement of Southern Company Capital Trust I dated as of February 1, 1997.
                       (Designated in Registration No. 333-28349 as Exhibit 4.6)

           (a)  4   -  Amended and Restated Trust Agreement of Southern Company Capital Trust II dated as of February 1, 1997.
                       (Designated in Registration No. 333-28355 as Exhibit 4.6)

           (a)  5   -  Amended and Restated Trust Agreement of Southern Company Capital Trust III dated as of June 1, 1997.
                       (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1997, File No. 1-3526, as Exhibit
                       (4)(a)5.)

           (a)  6   -  Amended and Restated Trust Agreement of Southern Company Capital Trust IV dated as of June 1, 1998.
                       (Designated in Form 8-K dated June 18, 1998, File No. 1-3526, as Exhibit 4.5.)


                                      E-3

<PAGE>

           (a)  7   -  Amended and Restated Trust Agreement of Southern Company Capital Trust V dated as of December 1, 1998.
                       (Designated in Form 8-K dated December 18, 1998, File No. 1-3526, as Exhibit 4.7A.)

           (a)  8   -  Capital Securities Guarantee Agreement relating to Southern Company Capital Trust I dated as of February 1,
                       1997. (Designated in Registration No. 333-28349 as Exhibit 4.10)

           (a)  9   -  Capital Securities Guarantee Agreement relating to Southern Company Capital Trust II dated as of February 1,
                       1997. (Designated in Registration No. 333-28355 as Exhibit 4.10)

           (a)  10  -  Preferred Securities Guarantee Agreement relating to Southern Company Capital Trust III dated as of June 1,
                       1997.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1997, File No. 1-3526, as Exhibit
                       (4)(a)8.)

           (a)  11  -  Preferred Securities Guarantee Agreement relating to Southern Company Capital Trust IV dated as of June 1,
                       1998.  (Designated in Form 8-K dated June 18, 1998, File No. 1-3626, as Exhibit 4.8.)

           (a)  12  -  Preferred Securities Guarantee Agreement relating to Southern Company Capital Trust V dated as of December 1,
                       1998.  (Designated in Form 8-K dated December 18, 1998, File No. 1-3526, as Exhibit 4.11A.)


         ALABAMA

           (b)  1   -  Indenture dated as of January 1, 1942, between ALABAMA and The Chase Manhattan Bank (formerly Chemical Bank),
                       as Trustee, and indentures supplemental thereto through that dated as of December 1, 1994.  (Designated in
                       Registration Nos. 2-59843 as Exhibit 2(a)-2, 2-60484 as Exhibits 2(a)-3 and 2(a)-4, 2-60716 as Exhibit 2(c),
                       2-67574 as Exhibit 2(c), 2-68687 as Exhibit 2(c), 2-69599 as Exhibit 4(a)-2, 2-71364 as Exhibit 4(a)-2,
                       2-73727 as Exhibit 4(a)-2, 33-5079 as Exhibit 4(a)-2, 33-17083 as Exhibit 4(a)-2, 33-22090 as Exhibit 4(a)-2,
                       in ALABAMA's Form 10-K for the year ended December 31, 1990, File No. 1-3164, as Exhibit 4(c), in
                       Registration Nos. 33-43917 as Exhibit 4(a)-2, 33-45492 as Exhibit 4(a)-2, 33-48885 as Exhibit 4(a)-2,
                       33-48917 as Exhibit 4(a)-2, in Form 8-K dated January 20, 1993, File No. 1-3164, as Exhibit 4(a)-3, in Form
                       8-K dated February 17, 1993, File No. 1-3164, as Exhibit 4(a)-3, in Form 8-K dated March 10, 1993, File No.
                       1-3164, as Exhibit 4(a)-3, in Certificate of Notification, File No. 70-8069, as Exhibits A and B, in Form 8-K
                       dated June 24, 1993, File No. 1-3164, as Exhibit 4, in Certificate of Notification, File No. 70-8069, as
                       Exhibit A, in Form 8-K dated November 16, 1993, File No. 1-3164, as Exhibit 4(b), in Certificate of
                       Notification, File No. 70-8069, as Exhibits A and B, in Certificate of Notification, File No. 70-8069, as
                       Exhibit A, in Certificate of Notification, File No. 70-8069, as Exhibit A and in Form 8-K dated November 30,
                       1994, File No. 1-3164, as Exhibit 4.)

                                      E-4
<PAGE>


           (b)  2   -  Subordinated Note Indenture dated as of January 1, 1996, between ALABAMA and The Chase Manhattan Bank
                       (formerly Chemical Bank), as Trustee, and indenture supplemental thereto dated as of January 1, 1996.
                       (Designated in Certificate of Notification, File No. 70-8461, as Exhibits E and F.)

           (b)  3   -  Subordinated Note Indenture dated as of January 1, 1997, between ALABAMA and The Chase Manhattan Bank, as
                       Trustee, and indentures supplemental thereto through that dated as of February 25, 1999.  (Designated in Form
                       8-K dated January 9, 1997, File No. 1-3164, as Exhibits 4.1 and 4.2 and in Form 8-K dated February 18, 1999,
                       File No. 3164, as Exhibit 4.2.)

           (b)  4   -  Senior Note Indenture dated as of December 1, 1997, between ALABAMA and The Chase Manhattan Bank, as Trustee,
                       and indentures supplemental thereto through that dated May 18, 2000.  (Designated in Form 8-K dated December
                       4, 1997, File No. 1-3164, as Exhibits 4.1 and 4.2, in Form 8-K dated February 20, 1998, File No. 1-3164, as
                       Exhibit 4.2, in Form 8-K dated April 17, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated August 11,
                       1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated September 8, 1998, File No. 1-3164, as Exhibit 4.2,
                       in Form 8-K dated September 16, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated October 7, 1998,
                       File No. 1-3164, as Exhibit 4.2, in Form 8-K dated October 28, 1998, File No. 1-3164, as Exhibit 4.2, in Form
                       8-K dated November 12, 1998, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated May 19, 1999, File No.
                       1-3164, as Exhibit 4.2, in Form 8-K dated August 13, 1999, File No. 1-3164, as Exhibit 4.2, in Form 8-K dated
                       September 21, 1999, File No. 1-3164, as Exhibit 4.2 and in Form 8-K dated May 11, 2000, File No. 1-3164, as
                       Exhibit 4.2.)

           (b)  5   -  Amended and Restated Trust Agreement of Alabama Power Capital Trust I dated as of January 1, 1996.
                       (Designated in Certificate of Notification, File No. 70-8461, as Exhibit D.)

           (b)  6   -  Amended and Restated Trust Agreement of Alabama Power Capital Trust II dated as of January 1, 1997.
                       (Designated in Form 8-K dated January 9, 1997, File No. 1-3164, as Exhibit 4.5.)

           (b)  7   -  Amended and Restated Trust Agreement of Alabama Power Capital Trust III dated as of February 1, 1999.
                       (Designated in Form 8-K dated February 18, 1999, File No. 1-3164, as Exhibit 4.5.)

           (b)  8   -  Guarantee Agreement relating to Alabama Power Capital Trust I dated as of January 1, 1996.  (Designated in
                       Certificate of Notification, File No. 70-8461, as Exhibit G.)

           (b)  9   -  Guarantee Agreement relating to Alabama Power Capital Trust II dated as of January 1, 1997. (Designated in
                       Form 8-K dated January 9, 1997, File No. 1-3164, as Exhibit 4.8.)

           (b)  10  -  Guarantee Agreement relating to Alabama Power Capital Trust III dated as of February 1, 1999. (Designated in
                       Form 8-K dated February 18, 1999, File No. 1-3164, as Exhibit 4.8.)

                                      E-5

<PAGE>


         GEORGIA

           (c)  1   -  Indenture dated as of March 1, 1941, between GEORGIA and The Chase Manhattan Bank (formerly Chemical Bank),
                       as Trustee, and indentures supplemental thereto dated as of March 1, 1941, March 3, 1941 (3 indentures),
                       March 6, 1941 (139 indentures), March 1, 1946 (88 indentures) and December 1, 1947, through October 15,
                       1995.  (Designated in Registration Nos. 2-4663 as Exhibits B-3 and B-3(a), 2-7299 as Exhibit 7(a)-2, 2-61116
                       as Exhibit 2(a)-3 and 2(a)-4, 2-62488 as Exhibit 2(a)-3, 2-63393 as Exhibit 2(a)-4, 2-63705 as Exhibit
                       2(a)-3, 2-68973 as Exhibit 2(a)-3, 2-70679 as Exhibit 4(a)-(2), 2-72324 as Exhibit 4(a)-2, 2-73987 as Exhibit
                       4(a)-(2), 2-77941 as Exhibits 4(a)-(2) and 4(a)-(3), 2-79336 as Exhibit 4(a)-(2), 2-81303 as Exhibit
                       4(a)-(2), 2-90105 as Exhibit 4(a)-(2), 33-5405 as Exhibit 4(a)-(2), 33-14367 as Exhibits 4(a)-(2) and
                       4(a)-(3), 33-22504 as Exhibits 4(a)-(2), 4(a)-(3) and 4(a)-(4), 33-32420 as Exhibit 4(a)-(2),  33-35683 as
                       Exhibit 4(a)-(2), in GEORGIA's Form 10-K for the year ended December 31, 1990, File No. 1-6468, as Exhibit
                       4(a)(3), in Form 10-K for the year ended December 31, 1991, File No. 1-6468, as Exhibit 4(a)(5), in
                       Registration No. 33-48895 as Exhibit 4(a)-(2), in Form 8-K dated August 26, 1992, File No. 1-6468, as Exhibit
                       4(a)-(3), in Form 8-K dated September 9, 1992, File No. 1-6468, as Exhibits 4(a)-(3) and 4(a)-(4), in Form
                       8-K dated September 23, 1992, File No. 1-6468, as Exhibit 4(a)-(3), in Form 8-A dated October 12, 1992, as
                       Exhibit 2(b), in Form 8-K dated January 27, 1993, File No. 1-6468, as Exhibit 4(a)-(3), in Registration No.
                       33-49661 as Exhibit 4(a)-(2), in Form 8-K dated July 26, 1993, File No. 1-6468, as Exhibit 4, in Certificate
                       of Notification, File No. 70-7832, as Exhibit M, in Certificate of Notification, File No. 70-7832, as Exhibit
                       C, in Certificate of Notification, File No. 70-7832, as Exhibits K and L, in Certificate of Notification,
                       File No. 70-8443, as Exhibit C, in Certificate of Notification, File No. 70-8443, as Exhibit C, in
                       Certificate of Notification, File No. 70-8443, as Exhibit E, in Certificate of Notification, File No.
                       70-8443, as Exhibit E, in Certificate of Notification, File No. 70-8443, as Exhibit E, in GEORGIA's Form 10-K
                       for the year ended December 31, 1994, File No. 1-6468, as Exhibits 4(c)2 and 4(c)3, in Certificate of
                       Notification, File No. 70-8443, as Exhibit C, in Certificate of Notification, File No. 70-8443, as Exhibit C,
                       in Form 8-K dated May 17, 1995, File No. 1-6468, as Exhibit 4 and in GEORGIA's Form 10-K for the year ended
                       December 31, 1995, File No. 1-6468, as Exhibits 4(c)2, 4(c)3, 4(c)4, 4(c)5 and 4(c)6.)

           (c)  2   -  Subordinated Note Indenture dated as of August 1, 1996, between GEORGIA and The Chase Manhattan Bank, as
                       Trustee, and indentures supplemental thereto through January 1, 1997.  (Designated in Form 8-K dated August
                       21, 1996, File No. 1-6468, as Exhibits 4.1 and 4.2 and in Form 8-K dated January 9, 1997, File No. 1-6468, as
                       Exhibit 4.2.)

           (c)  3   -  Subordinated Note Indenture dated as of June 1, 1997, between GEORGIA and The Chase Manhattan Bank, as
                       Trustee, and indentures supplemental thereto through that dated as of February 25, 1999.  (Designated in
                       Certificate of Notification, File No. 70-8461, as Exhibits D and E and Form 8-K dated February 17, 1999, File
                       No. 1-6468, as Exhibit 4.4.)


                                      E-6
<PAGE>


           (c)  4   -  Senior Note Indenture dated as of January 1, 1998, between GEORGIA and The Chase Manhattan Bank, as Trustee,
                       and indentures supplemental thereto through that dated as of February 23, 2001.  (Designated in Form 8-K
                       dated January 21, 1998, File No. 1-6468, as Exhibits 4.1 and 4.2, in Forms 8-K each dated November 19, 1998,
                       File No. 1-6468, as Exhibit 4.2, in Form 8-K dated March 3, 1999, File No. 1-6469 as Exhibit 4.2, in Form 8-K
                       dated February 15, 2000, File No. 1-6469 as Exhibit 4.2, in Form 8-K dated January 26, 2001, File No. 1-6469
                       as Exhibits 4.2(a) and 4.2(b) and in Form 8-K dated February 16, 2001, File No. 1-6469 as Exhibit 4.2.)

           (c)  5   -  Amended and Restated Trust Agreement of Georgia Power Capital Trust I dated as of August 1, 1996.
                       (Designated in Form 8-K dated August 21, 1996, File No. 1-6468, as Exhibit 4.5.)

           (c)  6   -  Amended and Restated Trust Agreement of Georgia Power Capital Trust II dated as of January 1, 1997.
                       (Designated in Form 8-K dated January 9, 1997, File No. 1-6468, as Exhibit 4.5.)

           (c)  7   -  Amended and Restated Trust Agreement of Georgia Power Capital Trust III dated as of June 1, 1997.
                       (Designated in Certificate of Notification, File No. 70-8461, as Exhibit C.)

           (c)  8   -  Amended and Restated Trust Agreement of Georgia Power Capital Trust IV dated as of February 1, 1999.
                       (Designated in Form 8-K dated February 17, 1999, as Exhibit 4.7-A)

           (c)  9   -  Guarantee Agreement relating to Georgia Power Capital Trust I dated as of August 1, 1996.  (Designated in
                       Form 8-K dated August 21, 1996, File No. 1-6468, as Exhibit 4.8.)

           (c)  10  -  Guarantee Agreement relating to Georgia Power Capital Trust II dated as of January 1, 1997.  (Designated in
                       Form 8-K dated January 9, 1997, File No. 1-6468, as Exhibit 4.8.)

           (c)  11  -  Guarantee Agreement relating to Georgia Power Capital Trust III dated as of June 1, 1997.  (Designated in
                       Certificate of Notification, File No. 70-8461, as Exhibit F.)

           (c)  12  -  Guarantee Agreement relating to Georgia Power Capital Trust IV dated as of February 1, 1999.  (Designated in
                       Form 8-K dated February 17, 1999, as Exhibit 4.11-A.)

      GULF

           (d)  1   -  Indenture dated as of September 1, 1941, between GULF and The Chase Manhattan Bank (formerly The Chase
                       Manhattan Bank (National Association)), as Trustee, and indentures supplemental thereto through November 1,
                       1996.  (Designated in Registration Nos. 2-4833 as Exhibit B-3, 2-62319 as Exhibit 2(a)-3, 2-63765 as Exhibit
                       2(a)-3, 2-66260 as Exhibit 2(a)-3, 33-2809 as Exhibit 4(a)-2,

                                      E-7
<PAGE>


                       33-43739 as Exhibit 4(a)-2, in GULF's Form 10-K for the year ended December 31, 1991, File No. 0-2429, as
                       Exhibit 4(b), in Form 8-K dated August 18, 1992, File No. 0-2429, as Exhibit 4(a)-3, in Registration No.
                       33-50165 as Exhibit 4(a)-2, in Form 8-K dated July 12, 1993, File No. 0-2429, as Exhibit 4, in Certificate of
                       Notification, File No. 70-8229, as Exhibit A, in Certificate of Notification, File No. 70-8229, as Exhibits E
                       and F, in Form 8-K dated January 17, 1996, File No. 0-2429, as Exhibit 4, in Certificate of Notification,
                       File No. 70-8229, as Exhibit A, in Certificate of Notification, File No. 70-8229, as Exhibit A and in Form
                       8-K dated November 6, 1996, File No. 0-2429, as Exhibit 4.)

           (d)  2   -  Subordinated Note Indenture dated as of January 1, 1997, between GULF and The Chase Manhattan Bank, as
                       Trustee, and indentures supplemental thereto through that dated as of January 1, 1998.  (Designated in Form
                       8-K dated January 27, 1997, File No. 0-2429, as Exhibits 4.1 and 4.2, in Form 8-K dated July 28, 1997, File
                       No. 0-2429, as Exhibit 4.2 and in Form 8-K dated January 13, 1998, File No. 0-2429, as Exhibit 4.2.)

           (d)  3   -  Senior Note Indenture dated as of January 1, 1998, between GULF and The Chase Manhattan Bank, as Trustee, and
                       indenture supplemental thereto dated as of August 24, 1999.  (Designated in Form 8-K dated June 17, 1998,
                       File No. 0-2429, as Exhibits 4.1 and 4.2 and in Form 8-K dated August 17, 1999, File No. 0-2429, as Exhibit
                       4.2.)

           (d)  4   -  Amended and Restated Trust Agreement of Gulf Power Capital Trust I dated as of January 1, 1997. (Designated
                       in Form 8-K dated January 27, 1997, File No. 0-2429, as Exhibit 4.5.)

           (d)  5   -  Amended and Restated Trust Agreement of Gulf Power Capital Trust II dated as of January 1, 1998. (Designated
                       in Form 8-K dated January 13, 1998, File No. 0-2429, as Exhibit 4.5.)

           (d)  6   -  Guarantee Agreement relating to Gulf Power Capital Trust I dated as of January 1, 1997.  (Designated in Form
                       8-K dated January 27, 1997, File No. 0-2429, as Exhibit 4.8.)

           (d)  7   -  Guarantee Agreement relating to Gulf Power Capital Trust II dated as of January 1, 1998. (Designated in Form
                       8-K dated January 13, 1998, File No. 0-2429, as Exhibit 4.8.)


         MISSISSIPPI

           (e)  1   -  Indenture dated as of September 1, 1941, between MISSISSIPPI and Bankers Trust Company, as Successor Trustee,
                       and indentures supplemental thereto through December 1, 1995.  (Designated in Registration Nos. 2-4834 as
                       Exhibit B-3, 2-62965 as Exhibit 2(b)-2, 2-66845 as Exhibit 2(b)-2, 2-71537 as Exhibit 4(a)-(2), 33-5414 as
                       Exhibit 4(a)-(2), 33-39833 as Exhibit 4(a)-2, in MISSISSIPPI's Form 10-K for the year ended December 31,
                       1991, File No. 0-6849, as Exhibit 4(b), in Form 8-K dated August 5, 1992, File No. 0-6849, as Exhibit 4(a)-2,
                       in Second Certificate of Notification, File No. 70-7941, as Exhibit I, in MISSISSIPPI's Form 8-K dated
                       February 26, 1993, File No. 0-6849, as Exhibit 4(a)-2, in Certificate of Notification, File No. 70-8127, as
                       Exhibit A, in Form 8-K dated June 22, 1993, File No. 0-6849, as Exhibit 1, in Certificate of Notification,
                       File No. 70-8127, as Exhibit A, in Form 8-K dated March 8, 1994, File No. 0-6849, as Exhibit 4, in
                       Certificate of Notification, File No. 70-8127, as Exhibit C and in Form 8-K dated December 5, 1995, File No.
                       0-6849, as Exhibit 4.)


                                      E-8

<PAGE>


           (e)  2   -  Senior Note Indenture dated as of May 1, 1998 between MISSISSIPPI and Bankers Trust Company, as Trustee and
                       indentures supplemental thereto through March 28, 2000. (Designated in Form 8-K dated May 14, 1998, File No.
                       0-6849, as Exhibits 4.1, 4.2(a) and 4.2(b) and in Form 8-K dated March 22, 2000, File No. 0-6849, as Exhibit
                       4.2.)

           (e)  3   -  Subordinated Note Indenture dated as of February 1, 1997, between MISSISSIPPI and Bankers Trust Company, as
                       Trustee, and indenture supplemental thereto dated as of February 1, 1997.  (Designated in Form 8-K dated
                       February 20, 1997, File No. 0-6849, as Exhibits 4.1 and 4.2.)

           (e)  4   -  Amended and Restated Trust Agreement of Mississippi Power Capital Trust I dated as of February 1, 1997.
                       (Designated in Form 8-K dated February 20, 1997, File No. 0-6849, as Exhibit 4.5.)

           (e)  5   -  Guarantee Agreement relating to Mississippi Power Capital Trust I dated as of February 1, 1997.  (Designated
                       in Form 8-K dated February 20, 1997, File No. 0-6849, as Exhibit 4.8.)


         SAVANNAH

           (f)  1   -  Indenture dated as of March 1, 1945, between SAVANNAH and The Bank of New York, New York, as Trustee, and
                       indentures supplemental thereto through May 1, 1996.  (Designated in Registration Nos. 33-25183 as Exhibit
                       4(a)-(1), 33-41496 as Exhibit 4(a)-(2), 33-45757 as Exhibit 4(a)-(2), in SAVANNAH's Form 10-K for the year
                       ended December 31, 1991, File No. 1-5072, as Exhibit 4(b), in Form 8-K dated July 8, 1992, File No. 1-5072,
                       as Exhibit 4(a)-3, in Registration No. 33-50587 as Exhibit 4(a)-(2), in Form 8-K dated July 22, 1993, File
                       No. 1-5072, as Exhibit 4, in Form 8-K dated May 18, 1995, File No. 1-5072, as Exhibit 4 and in Form 8-K dated
                       May 23, 1996, File No. 1-5072, as Exhibit 4.)

           (f)  2   -  Senior Note Indenture dated as of March 1, 1998 between SAVANNAH and The Bank of New York, as Trustee and
                       indenture supplemental thereto dated as of March 1, 1998.  (Designated in Form 8-K dated March 9, 1998, File
                       No. 1-5072, as Exhibits 4.1 and 4.2.)

           (f)  3   -  Subordinated Note Indenture dated as of December 1, 1998, between SAVANNAH and The Bank of New York, as
                       Trustee, and indenture supplemental thereto dated as of December 9, 1998.  (Designated in Form 8-K dated
                       December 3, 1998, File No. 1-5072, as Exhibit 4.3 and 4.4.)

           (f)  4   -  Amended and Restated Trust Agreement of Savannah Electric Capital Trust I dated as of December 1, 1998.
                       (Designated in Form 8-K dated December 3, 1998, File No. 1-5072, as Exhibit 4.7.)



                                      E-9

<PAGE>

           (f)  5   -  Guarantee Agreement relating to Savannah Electric Capital Trust I dated as of December 1, 1998.  (Designated
                       in Form 8-K dated December 3, 1998, File No. 1-5072, as Exhibit 4.11.)


(10)     Material Contracts

         SOUTHERN

           (a)  1   -  Service contracts dated as of January 1, 1984, between SCS and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and
                       SOUTHERN and Amendment No. 1 dated as of September 6, 1985 between SCS and SOUTHERN.  (Designated in
                       SOUTHERN's Form 10-K for the year ended December 31, 1984, File No. 1-3526, as Exhibit 10(a) and in
                       SOUTHERN's Form 10-K for the year ended December 31, 1985, File No. 1-3526, as Exhibit 10(a)(3).)

           (a)  2   -  Service contract dated as of July 17, 1981, between SCS and Mirant.  (Designated in SOUTHERN's Form 10-K for
                       the year ended December 31, 1985, File No. 1-3526, as Exhibit 10(a)(2).)

           (a)  3   -  Service contract dated as of March 3, 1988, between SCS and SAVANNAH.  (Designated in SAVANNAH's Form 10-K
                       for the year ended December 31, 1987, File No. 1-5072, as Exhibit 10-p.)

           (a)  4   -  Service contract dated as of January 15, 1991, between SCS and Southern Nuclear. (Designated in SOUTHERN's
                       Form 10-K for the year ended December 31, 1991, File No. 1-3526, as Exhibit 10(a)(4).)

           (a)  5   -  Service contract dated as of December 12, 1994, between SCS and Mobile Energy Services Company, Inc.
                       (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1994, File No. 1-3526, as Exhibit
                       10(a)58.)

         * (a)  6   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC and
                       SCS.

           (a)  7   -  Agreement dated as of January 27, 1959, Amendment No. 1 dated as of October 27, 1982 and Amendment No. 2
                       dated November 4, 1993 and effective June 1, 1994, among SEGCO, ALABAMA and GEORGIA.  (Designated in
                       Registration No. 2-59634 as Exhibit 5(c), in GEORGIA's Form 10-K for the year ended December 31, 1982, File
                       No. 1-6468, as Exhibit 10(d)(2) and in ALABAMA's Form 10-K for the year ended December 31, 1994, File No.
                       1-3164, as Exhibit 10(b)18.)

           (a)  8   -  Joint Committee Agreement dated as of August 27, 1976, among GEORGIA, OPC, MEAG and Dalton.  (Designated in
                       Registration No. 2-61116 as Exhibit 5(d).)

           (a)  9   -  Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation Agreement dated as of January 6, 1975,
                       between GEORGIA and OPC.  (Designated in Form 8-K for January, 1975, File No. 1-6468, as Exhibit (b)(1).)


                                      E-10
<PAGE>

          (a)  10  -  Edwin I. Hatch Nuclear Plant Operating Agreement dated as of January 6, 1975, between GEORGIA and OPC.
                       (Designated in Form 8-K for January, 1975, File No. 1-6468, as Exhibit (b)(3).)

           (a)  11  -  Revised and Restated Integrated Transmission System Agreement dated as of November 12, 1990, between GEORGIA
                       and OPC.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1990, File No. 1-6468, as
                       Exhibit 10(g).)

           (a)  12  -  Plant Hal Wansley Purchase and Ownership Participation Agreement dated as of March 26, 1976, between GEORGIA
                       and OPC.  (Designated in Certificate of Notification, File No. 70-5592, as Exhibit A.)

           (a)  13  -  Plant Hal Wansley Operating Agreement dated as of March 26, 1976, between GEORGIA and OPC.  (Designated in
                       Certificate of Notification, File No. 70-5592, as Exhibit B.)

           (a)  14  -  Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation Agreement dated as of August 27, 1976,
                       between GEORGIA, MEAG and Dalton.  (Designated in Form 8-K dated as of June 13, 1977, File No. 1-6468, as
                       Exhibit (b)(1).)

           (a)  15  -  Edwin I. Hatch Nuclear Plant Operating Agreement dated as of August 27, 1976, between GEORGIA, MEAG and
                       Dalton.  (Designated in Form 8-K for February 1977, File No. 1-6468, as Exhibit (b)(2).)

           (a)  16  -  Alvin W. Vogtle Nuclear Units Number One and Two Purchase and Ownership Participation Agreement dated as of
                       August 27, 1976 and Amendment No. 1 dated as of January 18, 1977, among GEORGIA, OPC, MEAG and Dalton.
                       (Designated in Form U-1, File No. 70-5792, as Exhibit B-1 and in Form 8-K for January 1977, File No. 1-6468,
                       as Exhibit (B)(3).)

           (a)  17  -  Alvin W. Vogtle Nuclear Units Number One and Two Operating Agreement dated as of August 27, 1976, among
                       GEORGIA, OPC, MEAG and Dalton.  (Designated in Form U-1, File No. 70-5792, as Exhibit B-2.)

           (a)  18  -  Alvin W. Vogtle Nuclear Units Number One and Two Purchase, Amendment, Assignment and Assumption Agreement
                       dated as of November 16, 1983, between GEORGIA and MEAG.  (Designated in GEORGIA's Form 10-K for the year
                       ended December 31, 1983, File No. 1-6468, as Exhibit 10(k)(4).)

           (a)  19  -  Plant Hal Wansley Purchase and Ownership Participation Agreement dated as of August 27, 1976, between GEORGIA
                       and MEAG.  (Designated in Form 8-K dated as of July 5, 1977, File No. 1-6468, as Exhibit (b)(2).)

           (a)  20  -  Plant Hal Wansley Operating Agreement dated as of August 27, 1976, between GEORGIA and MEAG.  (Designated in
                       Form 8-K dated as of July 5, 1977, File No. 1-6468, as Exhibit (b)(4).)

           (a)         21  -  Nuclear  Operating  Agreement  between  Southern
                       Nuclear  and   GEORGIA   dated  as  of  July  1,  1993.
                       (Designated in SOUTHERN's  Form 10-K for the year ended
                       December  31,  1997,   File  No.  1-3526,   as  Exhibit
                       10(a)21.)
                                      E-11

<PAGE>

           (a)  22 -   Pseudo  Scheduling and Services  Agreement between
                       GEORGIA and MEAG dated as of April 8, 1997. (Designated
                       in SOUTHERN's Form 10-K for the year ended December 31,
                       1997, File No. 1-3526, as Exhibit 10(a)22.)

           (a)  23  -  Plant  Hal  Wansley   Purchase   and   Ownership
                       Participation  Agreement  dated as of April  19,  1977,
                       between  GEORGIA  and Dalton.  (Designated  in Form 8-K
                       dated as of June 13, 1977, File No. 1-6468,  as Exhibit
                       (b)(3).)

           (a)  24  -  Plant Hal Wansley Operating Agreement dated as of April 19, 1977, between GEORGIA and Dalton. (Designated in
                       Form 8-K dated as of June 13, 1977, File No. 1-6468, as Exhibit (b)(7).)

           (a)  25  -  Plant Robert W. Scherer Units Number One and Two Purchase and Ownership Participation Agreement dated as of
                       May 15, 1980, Amendment No. 1 dated as of December 30, 1985, Amendment No. 2 dated as of July 1, 1986,
                       Amendment No. 3 dated as of August 1, 1988 and Amendment No. 4 dated as of December 31, 1990, among GEORGIA,
                       OPC, MEAG and Dalton.  (Designated in Form U-1, File No. 70-6481, as Exhibit B-3, in SOUTHERN's Form 10-K for
                       the year ended December 31, 1987, File No. 1-3526, as Exhibit 10(o)(2), in SOUTHERN's Form 10-K for the year
                       ended December 31, 1989, File No. 1-3526, as Exhibit 10(n)(2) and in SOUTHERN's Form 10-K for the year ended
                       December 31, 1993, File No. 1-3526, as Exhibit 10(a)54.)

           (a)  26  -  Plant Robert W. Scherer Units Number One and Two Operating Agreement dated as of May 15, 1980, Amendment No.
                       1 dated as of December 3, 1985 and Amendment No. 2 dated as of December 31, 1990, among GEORGIA, OPC, MEAG
                       and Dalton.  (Designated in Form U-1, File No. 70-6481, as Exhibit B-4, in SOUTHERN's Form 10-K for the year
                       ended December 31, 1987, File No. 1-3526, as Exhibit 10(o)(4) and in SOUTHERN's Form 10-K for the year ended
                       December 31, 1993, File No. 1-3526, as Exhibit 10(a)55.)

           (a)  27  -  Plant Robert W. Scherer Purchase, Sale and Option Agreement dated as of May 15, 1980, between GEORGIA and
                       MEAG.  (Designated in Form U-1, File No. 70-6481, as Exhibit B-1.)

           (a)  28  -  Plant Robert W. Scherer Purchase and Sale Agreement dated as of May 16, 1980, between GEORGIA and Dalton.
                       (Designated in Form U-1, File No. 70-6481, as Exhibit B-2.)

           (a)  29  -  Plant Robert W. Scherer Unit Number Three Purchase and Ownership Participation Agreement dated as of March 1,
                       1984, Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2 dated as of August 1, 1988, between
                       GEORGIA and GULF.  (Designated in Form U-1, File No. 70-6573, as Exhibit B-4, in SOUTHERN's Form 10-K for the
                       year ended December 31, 1987, as Exhibit 10(o)(2) and in SOUTHERN's Form 10-K for the year ended December 31,
                       1989, as Exhibit 10(n)(2).)

           (a)  30  -  Plant Robert W. Scherer Unit Number Three Operating Agreement dated as of March 1, 1984, between GEORGIA and
                       GULF.  (Designated in Form U-1, File No. 70-6573, as Exhibit B-5.)



                                      E-12

<PAGE>

           (a)  31  -  Plant Robert W. Scherer Unit No. Four Amended and Restated Purchase and Ownership Participation Agreement by
                       and among GEORGIA, FP&L and JEA, dated as of December 31, 1990 and Amendment No. 1 dated as of June 15,
                       1994.  (Designated in Form U-1, File No. 70-7843, as Exhibit B-1 and in SOUTHERN's Form 10-K for the year
                       ended December 31, 1994, File No. 1-3526, as Exhibit 10(a)60.)

           (a)  32  -  Plant Robert W. Scherer Unit No. Four Operating Agreement by and among GEORGIA, FP&L and JEA, dated as of
                       December 31, 1990 and Amendment No. 1 dated as of June 15, 1994.  (Designated in Form U-1, File No. 70-7843,
                       as Exhibit B-2 and in SOUTHERN's Form 10-K for the year ended December 31, 1994, File No. 1-3526, as Exhibit
                       10(a)61.)

           (a)  33  -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS. (Designated in SAVANNAH's Form 10-K for the year ended December 31, 1988, File No. 1-5072, as
                       Exhibit 10(d).)

           (a)  34  -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  (Designated in SAVANNAH's Form 10-K for the year ended December 31, 1988, File No. 1-5072,
                       as Exhibit 10(e).)

           (a)  35  -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  (Designated in SAVANNAH's Form 10-K for the year ended December 31, 1988,
                       File No. 1-5072, as Exhibit 10(f).)

           (a)  36  -  Rocky Mountain Pumped Storage Hydroelectric Project Ownership Participation Agreement dated November 18,
                       1988, between OPC and GEORGIA.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1988, File
                       No. 1-6468, as Exhibit 10(x).)

           (a)  37  -  Rocky Mountain Pumped Storage Hydroelectric Project Operating Agreement dated November 18, 1988, between OPC
                       and GEORGIA.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1988, File No. 1-6468, as
                       Exhibit 10(y).)

           (a)  38  -  Purchase and Ownership Agreement for Joint Ownership Interest in the James H. Miller, Jr. Steam Electric
                       Generating Plant Units One and Two dated November 18, 1988, between ALABAMA and AEC.  (Designated in Form
                       U-1, File No. 70-7609, as Exhibit B-1.)

           (a)  39  -  Operating Agreement for Joint Ownership Interest in the James H. Miller, Jr. Steam Electric Generating Plant
                       Units One and Two dated November 18, 1988, between ALABAMA and AEC.  (Designated in Form U-1, File No.
                       70-7609, as Exhibit B-2.)

                                      E-13

<PAGE>


           (a)  40  -  Transmission Facilities Agreement dated February 25, 1982, Amendment No. 1 dated May 12, 1982 and Amendment
                       No. 2 dated December 6, 1983, between Gulf States and MISSISSIPPI.  (Designated in MISSISSIPPI's Form 10-K
                       for the year ended December 31, 1981, File No. 0-6849, as Exhibit 10(f), in MISSISSIPPI's Form 10-K for the
                       year ended December 31, 1982, File No. 0-6849, as Exhibit 10(f)(2) and in MISSISSIPPI's Form 10-K for the
                       year ended December 31, 1983, File No. 0-6849, as Exhibit 10(f)(3).)

           (a)         41 - Long Term Transaction  Service  Agreement  between
                       GEORGIA  and  OPC  dated  as  of  February   26,  1999.
                       (Designated in SOUTHERN's  Form 10-K for the year ended
                       December  31,  1999,   File  No.  1-3526,   as  Exhibit
                       10(a)46.)

           (a)  42  -  Revised and Restated Coordination Services Agreement between and among GEORGIA, OPC and Georgia Systems
                       Operations Corporation dated as of September 10, 1997.  (Designated in SOUTHERN's Form 10-K for the year
                       ended December 31, 1997, File No. 1-3526, as Exhibit 10(a)48.)

           (a)  43  -  Amended and Restated Nuclear Managing Board Agreement for Plant Hatch and Plant Vogtle among GEORGIA, OPC,
                       MEAG and Dalton dated as of July 1, 1993.  (Designated in SOUTHERN's Form 10-K for the year ended December
                       31, 1993, File No. 1-3526, as Exhibit 10(a)49.)

           (a)  44  -  Integrated Transmission System Agreement, Power Sale and Coordination Umbrella Agreement between GEORGIA and
                       OPC dated as of November 12, 1990.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1990,
                       File No. 1-6468, as Exhibit 10(ff).)

           (a)  45  -  Revised and Restated Integrated Transmission System Agreement between GEORGIA and Dalton dated as of December
                       7, 1990.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1990, File No. 1-6468, as
                       Exhibit 10(gg).)

           (a)  46  -  Revised and Restated Integrated Transmission System Agreement between GEORGIA and MEAG dated as of December
                       7, 1990.  (Designated in GEORGIA's Form 10-K for the year ended December 31, 1990, File No. 1-6468, as
                       Exhibit 10(hh).)

           (a)  47  -  Long Term Transmission Service Agreement between Entergy Power, Inc. and ALABAMA, MISSISSIPPI and SCS.
                       (Designated in SOUTHERN's  Form 10-K for the year ended
                       December  31,  1992,   File  No.  1-3526,   as  Exhibit
                       10(a)53.)

           (a)  48  -  Plant Scherer Managing Board Agreement dated as of December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
                       FP&L and JEA.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1993, File No. 1-3526, as
                       Exhibit 10(a)56.)

           (a)  49  -  Plant McIntosh Combustion Turbine Purchase and Ownership Participation Agreement between GEORGIA and SAVANNAH
                       dated as of December 15, 1992.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1993,
                       File No. 1-3526, as Exhibit 10(a)57.)


                                      E-14

<PAGE>

           (a)  50  -  Plant McIntosh Combustion Turbine Operating Agreement between GEORGIA and SAVANNAH dated as of December 15,
                       1992.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1993, File No. 1-3526, as Exhibit
                       10(a)58.)

           (a)  51  -  Operating Agreement for the Joseph M. Farley Nuclear Plant between ALABAMA and Southern Nuclear dated as of
                       December 23, 1991.  (Designated in Form U-1, File No. 70-7530, as Exhibit B-7.)

      #  * (a)  52  -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1, 2001.

           (a)  53  -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five. (Designated in SOUTHERN's Form 10-K for the year ended December 31,
                       1998, File No. 1-3526 as Exhibit 10(a)61 and in SOUTHERN's Form 10-K for the year ended December 31, 1999,
                       File No. 1-3526, as Exhibit 10(a)61.)

         * (a)  54  -  Amendment Number Six to The Southern Company Employee Savings Plan.

           (a)  55  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three. (Designated in SOUTHERN's Form 10-K for the year ended
                       December 31, 1998, File No. 1-3526 as Exhibit 10(a)62 and in SOUTHERN's Form 10-K for the year ended December
                       31, 1999, File No. 1-3526, as Exhibit 10(a)63.)

         * (a)  56  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.

         * (a)  57  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.

         * (a)  58  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.

      #  * (a)  59  -  The Deferred Compensation Plan for the Directors of The Southern Company, Amended and Restated effective
                       February 19, 2001.

      #    (a)  60  -  The Southern Company Outside Directors Pension Plan.  (Designated in SOUTHERN's Form 10-K for the year ended
                       December 31, 1994, File No. 1-3526, as Exhibit 10(a)77.)

      #  * (a)  61  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.

      #    (a)  62  -  The Southern Company Outside Directors Stock Plan and First Amendment thereto.  (Designated in Registration
                       No. 33-54415 as Exhibit 4(c) and in SOUTHERN's Form 10-K for the year ended December 31, 1995, File No.
                       1-3526, as Exhibit 10(a)79.)

                                      E-15
<PAGE>


      #  * (a)  63  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.

      #  * (a)  64  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.

           (a)  65  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1996, File No.
                       1-3526, as Exhibit 10(a)83, in SOUTHERN's Form 10-K for the year ended December 31, 1997, File No. 1-3526, as
                       Exhibit 10(a)79, in SOUTHERN's Form 10-K for the year ended December 31, 1998, File No. 1-3526 as Exhibit
                       10(a)71 and in SOUTHERN's Form 10-K for the year ended December 31, 1999, File No. 1-3526, as Exhibit
                       10(a)72.)

         * (a)  66  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.

      #  * (a)  67  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1, 2000.

      #  * (a)  68  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.

      #    (a)  69  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1997, File No.
                       1-3526, as Exhibit 10(a)82, in SOUTHERN's Form 10-K for the year ended December 31, 1998, File No. 1-3526 as
                       Exhibit 10(a)76 and in SOUTHERN's Form 10-K for the year ended December 31, 1999, File No. 1-3526, as Exhibit
                       10(a)76.)

      #  * (a)  70  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.

      #  * (a)  71  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.

         * (a)  72  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000.

      #  * (a)  73  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.

      #    (a)  74  -  Deferred Compensation Agreement between SOUTHERN, GEORGIA and Henry Allen Franklin and First Amendment and
                       Assignment to SCS. (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1998, File No. 1-3526
                       as Exhibit 10(a)80 and in SOUTHERN's Form 10-K for the year ended December 31, 1999, File No. 1-3526, as
                       Exhibit 10(a)84.)

      #    (a)  75  -  Deferred Compensation Agreement between SOUTHERN, Southern Nuclear and William G. Hairston III. (Designated
                       in SOUTHERN's Form 10-K for the year ended December 31, 1998, File No. 1-3526 as Exhibit 10(a)81.)

                                      E-16
<PAGE>

     #    (a)  76  -  Deferred Compensation Agreement between SOUTHERN, GEORGIA and Warren Y. Jobe. (Designated in SOUTHERN's Form
                       10-K for the year ended December 31, 1998, File No. 1-3526 as Exhibit 10(a)82.)

      #    (a)  77  -  Deferred Compensation Agreement between SOUTHERN, Southern Energy Resources, Inc. and Gale E. Klappa and
                       First Amendment and Assignment to SCS.  (Designated in SOUTHERN's Form 10-K for the year ended December 31,
                       1999, File No. 1-3526, as Exhibit 10(a)87.)

      #    (a)  78  -  Deferred Compensation Agreement between SOUTHERN, Southern Energy Resources, Inc. and S. Marce Fuller.
                       (Designated in SOUTHERN's  Form 10-K for the year ended
                       December  31,  1999,   File  No.  1-3526,   as  Exhibit
                       10(a)88.)

      #  * (a)  79  -  Amended and Restated Change in Control Agreement between SOUTHERN, GULF and Travis J. Bowden.

      #  * (a)  80  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and A. W. Dahlberg.

      #  * (a)  81  -  Amended and Restated Change in Control Agreement between SOUTHERN, MISSISSIPPI and Dwight H. Evans.

      #    (a)  82  -  Change in Control Agreement between SOUTHERN, ALABAMA and Banks Harry Farris. (Designated in SOUTHERN's Form
                       10-K for the year ended December 31, 1998, File No. 1-3526 as Exhibit 10(a)88.)

      #  * (a)  83  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and Henry Allen Franklin.

      #  * (a)  84  -  Amended and Restated Change in Control Agreement between SOUTHERN, Southern Nuclear and William G. Hairston,
                       III.

      #  * (a)  85  -  Amended and Restated Change in Control Agreement between SOUTHERN, ALABAMA and Elmer B. Harris.

      #  * (a)  86  -  Amended and Restated Change in Control Agreement between SOUTHERN, SAVANNAH and G. Edison Holland, Jr.

      #  * (a)  87  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and C. Alan Martin.

      #  * (a)  88  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and Charles Douglas McCrary.

      #  * (a)  89  -  Amended and Restated Change in Control Agreement between SOUTHERN, GEORGIA and David M. Ratcliffe.

      #  * (a)  90  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and Stephen A. Wakefield.



                                      E-17
<PAGE>

      #  * (a)  91  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and W. Lawrence Westbrook.

      #  * (a)  92  -  Amended and Restated Change in Control Agreement between SOUTHERN, SCS and Gale E. Klappa.

      #    (a)  93  -  Change in Control Agreement between SOUTHERN, Southern Energy Resources, Inc. and S. Marce Fuller and First
                       Amendment thereto.  (Designated in SOUTHERN's Form 10-K for the year ended December 31, 1999, File No.
                       1-3526, as Exhibit 10(a)103.)

      #  * (a)  94  -  Deferred Compensation Agreement between SOUTHERN and William L. Westbrook.

      #  * (a)  95  -  Deferred Compensation Agreement between SOUTHERN and Alfred W. Dahlberg, III.

      #  * (a)  96  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.

      #  * (a)  97  -  Change in Control Agreement between SOUTHERN, SCS and Robert H. Haubein, Jr..

      #  * (a)  98  -  Deferred Compensation Agreement between SOUTHERN, SCS and Stephen A. Wakefield.

      #  * (a)  99  -  Deferred Compensation Agreement between SOUTHERN and Wayne T. Dalke.

      #  * (a)  100 -  Master Separation and Distribution Agreement dated as of September 1, 2000 between SOUTHERN and Mirant.

      #  * (a)  101 -  Indemnification and Insurance Matters Agreement dated as of September 1, 2000 between SOUTHERN and Mirant.

      #  * (a)  102 -  Tax Indemnification Agreement dated as of September 1, 2000 among SOUTHERN and its affiliated companies and
                       Mirant and its affiliated companies.

      #  * (a)  103 -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.

      #  * (a)  104 -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.

      #  * (a)  105 -  Deferred Cash Compensation  Trust Agreement
                       for Directors of SOUTHERN and its  subsidiaries,  dated
                       as of January  1, 2000,  between  Wachovia  Bank,  N.A,
                       SOUTHERN,  ALABAMA,  GEORGIA,  GULF,  MISSISSIPPI,  and
                       SAVANNAH.

                                      E-18
<PAGE>


         ALABAMA

           (b)  1   -  Service contracts dated as of January 1, 1984, between SCS and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and
                       SOUTHERN and Amendment No. 1 dated as of September 6, 1985 between SCS and SOUTHERN.  See Exhibit 10(a)1
                       herein.

         * (b)  2   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC and
                       SCS.  See Exhibit 10(a)6 herein.

           (b)  3   -  Agreement dated as of January 27, 1959, Amendment No. 1 dated as of October 27, 1982 and Amendment No. 2
                       dated November 4, 1993 and effective June 1, 1994, among SEGCO, ALABAMA and GEORGIA.  See Exhibit 10(a)7
                       herein.

           (b)  4   -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS.  See Exhibit 10(a)33 herein.

           (b)  5   -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  See Exhibit 10(a)34 herein.

           (b)  6   -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  See Exhibit 10(a)35 herein.

           (b)  7   -  Firm Power Purchase Contract between ALABAMA and AMEA.  (Designated in Certificate of Notification, File No.
                       70-7212, as Exhibit B.)

           (b)  8   -  1991 Firm Power Purchase Contract between ALABAMA and AMEA.  (Designated in Form U-1, File No. 70-7873, as
                       Exhibit B-1.)

           (b)  9   -  Purchase and Ownership Agreement for Joint Ownership Interest in the James H. Miller, Jr. Steam Electric
                       Generating Plant Units One and Two dated November 18, 1988, between ALABAMA and AEC.  See Exhibit 10(a)38
                       herein.

           (b)  10  -  Operating Agreement for Joint Ownership Interest in the James H. Miller, Jr. Steam Electric Generating Plant
                       Units One and Two dated November 18, 1988, between ALABAMA and AEC.  See Exhibit 10(a)39 herein.

           (b)  11  -  Long Term Transmission Service Agreement between Entergy Power, Inc. and ALABAMA, MISSISSIPPI and SCS.  See
                       Exhibit 10(a)47 herein.

           (b)  12  -  Operating Agreement for the Joseph M. Farley Nuclear Plant between ALABAMA and Southern Nuclear dated as of
                       December 23, 1991.  See Exhibit 10(a)51 herein.

      #  * (b)  13  -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1,
                       2001.  See Exhibit 10(a)52 herein.

           (b)  14  -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five.  See Exhibit 10(a)53 herein.



                                      E-19

<PAGE>

         * (b)  15 -   Amendment Number Six to The Southern Company Employee Savings Plan. See Exhibit 10(a)54 herein.

           (b)  16  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three.  See Exhibit 10(a)55 herein.

         * (b)  17  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.  See Exhibit 10(a)56 herein.

         * (b)  18  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)57 herein.

         * (b)  19  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.  See Exhibit 10(a)58
                       herein.

      #  * (b)  20  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.  See
                       Exhibit 10(a)61 herein.

      #    (b)  21  -  The Southern Company Outside Directors Pension Plan.  See Exhibit 10(a)60 herein.

      #  * (b)  22  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.  See Exhibit 10(a)63 herein.

           (b)  23  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  See Exhibit 10(a)65 herein.

         * (b)  24  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.  See Exhibit 10(a)66
                       herein.

      #  * (b)  25  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)67 herein.

      #  * (b)  26  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)68 herein.

      #  * (b)  27  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.  See
                       Exhibit 10(a)64 herein.

      #    (b)  28  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  See Exhibit 10(a)69 herein.

      #  * (b)  29  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.  See Exhibit 10(a)70 herein.

      #  * (b)  30  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)71 herein.

                                      E-20
<PAGE>


         * (b)  31  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000. See Exhibit
                       10(a)72 herein.

      #    (b)  32  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)73 herein.

      #    (b)  33  -  Change in Control Agreement between SOUTHERN, ALABAMA and Banks Harry Farris.  See Exhibit 10(a)82 herein.

      #  * (b)  34  -  Amended and Restated Change in Control Agreement between SOUTHERN, ALABAMA and Elmer B. Harris.  See Exhibit
                       10(a)85 herein.

      #    (b)  35  -  Supplemental Pension Agreement between ALABAMA, GULF and Travis J. Bowden. (Designated in ALABAMA's Form 10-K
                       for the year ended December 31, 1998, File No. 1-3164, as Exhibit 10(b)40.)

      #  * (b)  36  -  Deferred Compensation Plan for Directors of Alabama Power Company, Amended and Restated as of
                       January 1, 2000.

      #  * (b)  37  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.  See Exhibit
                       10(a)96 herein.

      #  * (b)  38  -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.  See Exhibit 10(a)103 herein.

      #  * (b)  39  -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.  See Exhibit
                       10(b) 104 herein.

      #  * (b)  40  -  Deferred Cash Compensation Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of
                       January 1, 2000, between Wachovia Bank, N.A, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.
                       See Exhibit 10(a)105 herein.

         GEORGIA

           (c)  1   -  Service contracts dated as of January 1, 1984, between SCS and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and
                       SOUTHERN and Amendment No. 1 dated as of September 6, 1985, between SCS and SOUTHERN.  See Exhibit 10(a)1
                       herein.

         * (c)  2   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC  and
                       SCS.  See Exhibit 10(a)6 herein.

           (c)  3   -  Agreement dated as of January 27, 1959, Amendment No. 1 dated as of October 27, 1982 and Amendment No. 2
                       dated November 4, 1993 and effective June 1, 1994, among SEGCO, ALABAMA and GEORGIA.  See Exhibit 10(a)7
                       herein.

           (c)  4   -  Joint Committee Agreement dated as of August 27, 1976, among GEORGIA, OPC, MEAG and Dalton.  See Exhibit
                       10(a)8 herein.

                                      E-21
<PAGE>

           (c)  5   -  Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation Agreement dated as of January 6, 1975,
                       between GEORGIA and OPC.  See Exhibit 10(a)9 herein.

           (c)  6   -  Edwin I. Hatch Nuclear Plant Operating Agreement dated as of January 6, 1975, between GEORGIA and OPC.  See
                       Exhibit 10(a)10 herein.

           (c)  7   -  Revised and Restated Integrated Transmission System Agreement dated as of November 12, 1990, between GEORGIA
                       and OPC.  See Exhibit 10(a)11 herein.

           (c)  8   -  Plant Hal Wansley Purchase and Ownership Participation Agreement dated as of March 26, 1976, between GEORGIA
                       and OPC.  See Exhibit 10(a)12 herein.

           (c)  9   -  Plant Hal Wansley Operating Agreement dated as of March 26, 1976, between GEORGIA and OPC.  See Exhibit
                       10(a)13 herein.

           (c)  10  -  Edwin I. Hatch Nuclear Plant Purchase and Ownership Participation Agreement dated as of August 27, 1976,
                       between GEORGIA, MEAG and Dalton.  See Exhibit 10(a)14 herein.

           (c)  11  -  Edwin I. Hatch Nuclear Plant Operating Agreement dated as of August 27, 1976, between GEORGIA, MEAG and
                       Dalton.  See Exhibit 10(a)15 herein.

           (c)  12  -  Alvin W. Vogtle Nuclear Units Number One and Two Purchase and Ownership Participation Agreement dated as of
                       August 27, 1976 and Amendment No. 1 dated as of January 18, 1977, among GEORGIA, OPC, MEAG and Dalton.  See
                       Exhibit 10(a)16 herein.

           (c)  13  -  Alvin W. Vogtle Nuclear Units Number One and Two Operating Agreement dated as of August 27, 1976, among
                       GEORGIA, OPC, MEAG and Dalton.  See Exhibit 10(a)17 herein.

           (c)  14 -   Alvin W. Vogtle  Nuclear  Units Number One and Two Purchase, Amendment, Assignment and   Assumption
                       Agreement  dated  as  of  November  16,  1983,  between
                       GEORGIA and MEAG. See Exhibit 10(a)18 herein.

           (c)  15  -  Plant Hal Wansley Purchase and Ownership Participation Agreement dated as of August 27, 1976, between GEORGIA
                       and MEAG.  See Exhibit 10(a)19 herein.

           (c)  16  -  Plant Hal Wansley Operating Agreement dated as of August 27, 1976, between GEORGIA and MEAG. See Exhibit
                       10(a)20 herein.

           (c)  17  -  Nuclear Operating Agreement between Southern Nuclear and GEORGIA dated as of July 1, 1993.  See Exhibit
                       10(a)21 herein.

           (c)  18  -  Pseudo Scheduling and Services Agreement between GEORGIA and MEAG dated as of April 8, 1997.  See Exhibit
                       10(a)22 herein.

           (c)  19  -  Plant Hal Wansley Purchase and Ownership Participation Agreement dated as of April 19, 1977, between GEORGIA
                       and Dalton.  See Exhibit 10(a)23 herein.

                                      E-22
<PAGE>

           (c)  20  -  Plant Hal Wansley Operating Agreement dated as of April 19, 1977, between GEORGIA and Dalton.  See Exhibit
                       10(a)24 herein.

           (c)  21  -  Plant Robert W. Scherer Units Number One and Two Purchase and Ownership Participation Agreement dated as of
                       May 15, 1980, Amendment No. 1 dated as of December 30, 1985, Amendment No. 2 dated as of July 1, 1986,
                       Amendment No. 3 dated as of August 1, 1988 and Amendment No. 4 dated as of December 31, 1990, among GEORGIA,
                       OPC, MEAG and Dalton.  See Exhibit 10(a)25 herein.

           (c)  22  -  Plant Robert W. Scherer Units Number One and Two Operating Agreement dated as of May 15, 1980, Amendment No.
                       1 dated as of December 3, 1985 and Amendment No. 2 dated as of December 31, 1990, among GEORGIA, OPC, MEAG
                       and Dalton.  See Exhibit 10(a)26 herein.

           (c)  23  -  Plant Robert W. Scherer Purchase, Sale and Option Agreement dated as of May 15, 1980, between GEORGIA and
                       MEAG.  See Exhibit 10(a)27 herein.

           (c)  24  -  Plant Robert W. Scherer Purchase and Sale Agreement dated as of May 16, 1980, between GEORGIA and Dalton.
                       See Exhibit 10(a)28 herein.

           (c)  25  -  Plant Robert W. Scherer Unit Number Three Purchase and Ownership Participation Agreement dated as of March 1,
                       1984, Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2 dated as of August 1, 1988, between
                       GEORGIA and GULF.  See Exhibit 10(a)29 herein.

           (c)  26  -  Plant Robert W. Scherer Unit Number Three Operating Agreement dated as of March 1, 1984, between GEORGIA and
                       GULF.  See Exhibit 10(a)30 herein.

           (c)  27  -  Plant Robert W. Scherer Unit No. Four Amended and Restated Purchase and Ownership Participation Agreement by
                       and among GEORGIA, FP&L and JEA dated as of December 31, 1990 and Amendment No. 1 dated as of June 15,
                       1994.  See Exhibit 10(a)31 herein.

           (c)  28  -  Plant Robert W. Scherer Unit No. Four Operating Agreement by and among GEORGIA, FP&L and JEA dated as of
                       December 31, 1990 and Amendment No. 1 dated as of June 15, 1994.  See Exhibit 10(a)32 herein.

           (c)  29  -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS.  See Exhibit 10(a)33 herein.

           (c)  30  -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  See Exhibit 10(a)34 herein.

           (c)  31  -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  See Exhibit 10(a)35 herein.

           (c)  32  -  Rocky Mountain Pumped Storage Hydroelectric Project Ownership Participation Agreement dated November 18,
                       1988, between OPC and GEORGIA.  See Exhibit 10(a)36 herein.


                                      E-23
<PAGE>

           (c)  33  -  Rocky Mountain Pumped Storage Hydroelectric Project Operating Agreement dated November 18, 1988, between OPC
                       and GEORGIA.  See Exhibit 10(a)37 herein.

           (c)  34  -  Long Term Transaction Service Agreement between GEORGIA and OPC dated as of February 26, 1999.  See Exhibit
                       10(a)41 herein.

           (c)  35  -  Revised  and  Restated   Coordination   Services
                       Agreement  between and among  GEORGIA,  OPC and Georgia
                       Systems  Operations  Corporation  dated as of September
                       10, 1997. See Exhibit 10(a)42 herein.

           (c)  36  -  Amended and Restated Nuclear Managing Board Agreement for Plant Hatch and Plant Vogtle among GEORGIA, OPC,
                       MEAG and Dalton dated as of July 1, 1993.  See Exhibit 10(a)43 herein.

           (c)  37  -  Integrated Transmission System Agreement, Power Sale and Coordination Umbrella Agreement between GEORGIA and
                       OPC dated as of November 12, 1990.  See Exhibit 10(a)44 herein.

           (c)  38  -  Revised and Restated Integrated Transmission System Agreement between GEORGIA and Dalton dated as of December
                       7, 1990.  See Exhibit 10(a)45 herein.

           (c)  39  -  Revised and Restated Integrated Transmission System Agreement between GEORGIA and MEAG dated as of December
                       7, 1990.  See Exhibit 10(a)46 herein.

           (c)  40  -  Plant Scherer Managing Board Agreement dated as of December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
                       FP&L and JEA.  See Exhibit 10(a)48 herein.

           (c)  41  -  Plant McIntosh Combustion Turbine Purchase and Ownership Participation Agreement between GEORGIA and SAVANNAH
                       dated as of December 15, 1992.  See Exhibit 10(a)49 herein.

           (c)  42  -  Plant McIntosh Combustion Turbine Operating Agreement between GEORGIA and SAVANNAH dated as of December 15,
                       1992.  See Exhibit 10(a)50 herein.

           (c)  43  -  Certificate of Limited Partnership of Georgia Power Capital.  (Designated in Certificate of Notification,
                       File No. 70-8461, as Exhibit B.)

           (c)  44  -  Amended and Restated Agreement of Limited Partnership of Georgia Power Capital, dated as of December 1,
                       1994.  (Designated in Certificate of Notification, File No. 70-8461, as Exhibit C.)

           (c)  45  -  Action of General Partner of Georgia Power Capital creating the Series A Preferred Securities.  (Designated
                       in Certificate of Notification, File No. 70-8461, as Exhibit D.)

           (c)  46  -  Guarantee Agreement of GEORGIA dated as of December 1, 1994, for the benefit of the holders from time to time
                       of the Series A Preferred Securities.  (Designated in Certificate of Notification, File No. 70-8461, as
                       Exhibit G.)


                                      E-24
<PAGE>

      #  * (c)  47  -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1,
                       2001.  See Exhibit 10(a)52 herein.

           (c)  48  -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five.  See Exhibit 10(a)53 herein.

         * (c)  49  -  Amendment Number Six to The Southern Company Employee Savings Plan.  See Exhibit 10(a)54 herein.

           (c)  50  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three.   See Exhibit 10(a)55 herein.

         * (c)  51  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.  See Exhibit 10(a)56 herein.

         * (c)  52  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)57 herein.

         * (c)  53  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.  See Exhibit 10(a)58
                       herein.

      #  * (c)  54  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.  See
                       Exhibit 10(a)61 herein.

      #    (c)  55  -  The Southern Company Outside Directors Pension Plan.  See Exhibit 10(a)60 herein.

      #  * (c)  56  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.  See Exhibit 10(a)63 herein.

           (c)  57  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  See Exhibit 10(a)65 herein.

         * (c)  58  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.  See Exhibit 10(a)66
                       herein.

      #  * (c)  59  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1, 2000. See Exhibit
                       10(a)67 herein.

      #  * (c)  60  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)68 herein.

      #  * (c)  61  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.  See
                       Exhibit 10(a)64 herein.

      #    (c)  62  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  See Exhibit 10(a)69 herein.


                                      E-25
<PAGE>


      #  * (c)  63  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.  See Exhibit 10(a)70 herein.

      #  * (c)  64  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)71 herein.

         * (c)  65  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)72 herein.

      #  * (c)  66  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)73 herein.

      #    (c)  67  -  Deferred Compensation Agreement between SOUTHERN, GEORGIA and Henry Allen Franklin and First Amendment and
                       Assignment to SCS.  See Exhibit 10(a)74 herein.

      #    (c)  68  -  Deferred Compensation Agreement between SOUTHERN, GEORGIA and Warren Y. Jobe.  See Exhibit 10(a)76 herein.

      #  * (c)  69  -  Amended and Restated Change in Control Agreement between SOUTHERN, GEORGIA and David M. Ratcliffe.  See
                       Exhibit 10(a)89 herein.

      #    (c)  70  -  Supplemental Pension Agreement between GEORGIA and Warren Y. Jobe.  (Designated in GEORGIA's Form 10-K for
                       the year ended December 31, 1998, File No. 1-6468, as Exhibit 10(c)77.)

      #  * (c)  71  -  Deferred Compensation Plan For Directors of Georgia Power Company, Amended and Restated Effective February
                       21, 2001.

      #  * (c)  72  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.  See Exhibit
                       10(a)96 herein.

      #  * (c)  73  -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.  See Exhibit 10(a)103 herein.

      #  * (c)  74  -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.  See Exhibit
                       10(a)104 herein.

      #  * (c)  75  -  Deferred Cash Compensation Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of
                       January 1, 2000, between Wachovia Bank, N.A, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.
                       See Exhibit 10 (a)105 herein.


         GULF

           (d)  1   -  Service contracts dated as of January 1, 1984, between SCS and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and
                       SOUTHERN and Amendment No. 1 dated as of September 6, 1985, between SCS and SOUTHERN.  See Exhibit 10(a)1
                       herein.

                                      E-26
<PAGE>


         * (d)  2   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC and
                       SCS.  See Exhibit 10(a)6 herein.

           (d)  3   -  Plant Robert W. Scherer Unit Number Three Purchase and Ownership Participation Agreement dated as of March 1,
                       1984, Amendment No. 1 dated as of July 1, 1986 and Amendment No. 2 dated as of August 1, 1988, between
                       GEORGIA and GULF.  See Exhibit 10(a)29 herein.

           (d)  4   -  Plant Robert W. Scherer Unit Number Three Operating Agreement dated as of March 1, 1984, between GEORGIA and
                       GULF.  See Exhibit 10(a)30 herein.

           (d)  5   -  Plant Scherer Managing Board Agreement dated as of December 31, 1990 among GEORGIA, OPC, MEAG, Dalton, GULF,
                       FP&L and JEA.  See Exhibit 10(a)48 herein.

           (d)  6   -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS.  See Exhibit 10(a)33 herein.

           (d)  7   -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  See Exhibit 10(a)34 herein.

           (d)  8   -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  See Exhibit 10(a)35 herein.

           (d)  9   -  Agreement between GULF and AEC, effective August 1, 1985.  (Designated in GULF's Form 10-K for the year ended
                       December 31, 1985, File No. 0-2429, as Exhibit 10(g).)

      #  * (d)  10  -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1,
                       2000.  See Exhibit 10(a)52 herein.

           (d)  11  -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five.  See Exhibit 10(a)53 herein.

         * (d)  12  -  Amendment Number Six to The Southern Company Employee Savings Plan.  See Exhibit 10(a)54 herein.

           (d)  13  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three.  See Exhibit 10(a)55 herein.

         * (d)  14  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.  See Exhibit 10(a)56 herein.

         * (d)  15  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)57 herein.


                                      E-27
<PAGE>

         * (d)  16  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.  See Exhibit 10(a)58
                       herein.

      #  * (d)  17  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.  See
                       Exhibit 10(a)61 herein.

      #    (d)  18  -  The Southern Company Outside Directors Pension Plan.  See Exhibit 10(a)60 herein.

      #  * (d)  19  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.  See Exhibit 10(a)63 herein.

           (d)  20  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  See Exhibit 10(a)65 herein.

         * (d)  21  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.  See Exhibit 10(a)66
                       herein.

      #  * (d)  22  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)71 herein.

         * (d)  23  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)72 herein.

      #  * (d)  24  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)73 herein.

      #  * (d)  25  -  Amended and Restated Change in Control Agreement between SOUTHERN, GULF and Travis J. Bowden.  See Exhibit
                       10(a)79 herein.

      #  * (d)  26  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)67 herein.

      #  * (d)  27  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)68 herein.

      #  * (d)  28  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.  See
                       Exhibit 10(a)64 herein.

      #    (d)  29  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  See Exhibit 10(a)69 herein.

      #  * (d)  30  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.  See Exhibit 10(a)70 herein.

      #    (d)  31  -  Supplemental Pension Agreement between SAVANNAH, GULF and G. Edison Holland, Jr.  (Designated in GULF's Form
                       10-K for the year ended December 31, 1998, File No. 0-2429, as Exhibit 10(d)35.)


                                      E-28
<PAGE>


      #    (d)  32  -  Supplemental Pension Agreement between ALABAMA, GULF and Travis J. Bowden.  See Exhibit 10(b)35 herein.

      #  * (d)  33  -  Deferred Compensation Plan For Directors of Gulf Power Company, Amended and Restated Effective January 1,
                       2000 and First Amendment thereto.

      #  * (d)  34  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.  See Exhibit
                       10(a)96 herein.

      #  * (d)  35  -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.  See Exhibit 10(a)103 herein.

      #  * (d)  36  -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.  See Exhibit
                       10(a)104 herein.

      #  * (d)  37  -  Deferred Cash Compensation Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of
                       January 1, 2000, between Wachovia Bank, N.A, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.
                       See Exhibit 10(a)105 herein.

         MISSISSIPPI

           (e)  1   -  Service contracts dated as of January 1, 1984, between SCS and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SEGCO and
                       SOUTHERN and Amendment No. 1 dated as of September 6, 1985, between SCS and SOUTHERN.  See Exhibit 10(a)1
                       herein.

         * (e)  2   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC and
                       SCS.  See Exhibit 10(a)6 herein.

           (e)  3   -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS.  See Exhibit 10(a)33 herein.

           (e)  4   -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  See Exhibit 10(a)34 herein.

           (e)  5   -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  See Exhibit 10(a)35 herein.

           (e)  6   -  Transmission Facilities Agreement dated February 25, 1982, Amendment No. 1 dated May 12, 1982 and Amendment
                       No. 2 dated December 6, 1983, between Gulf States and MISSISSIPPI.   See Exhibit 10(a)40 herein.

           (e)  7   -  Long Term Transmission Service Agreement between Entergy Power, Inc. and ALABAMA,  MISSISSIPPI and SCS.  See
                       Exhibit 10(a)47 herein.

                                      E-29
<PAGE>


      #  * (e)  8   -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1,
                       2001.  See Exhibit 10(a)52 herein.

           (e)  9   -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five.  See Exhibit 10(a)53 herein.

         * (e)  10  -  Amendment Number Six to The Southern Company Employee Savings Plan.  See Exhibit 10(a)54 herein.

           (e)  11  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three.  See Exhibit 10(a)55 herein.

         * (e)  12  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.  See Exhibit 10(a)56 herein.

           (e)  13  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)57 herein.

         * (e)  14  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.  See Exhibit 10(a)58
                       herein.

      #  * (e)  15  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.  See
                       Exhibit 10(a)61 herein.

      #    (e)  16  -  The Southern Company Outside Directors Pension Plan.  See Exhibit 10(a)60 herein.

      #  * (e)  17  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.  See Exhibit 10(a)63 herein.

           (e)  18  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  See Exhibit 10(a)65 herein.

         * (e)  19  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.  See Exhibit 10(a)66
                       herein.

      #  * (e)  20  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)71 herein.

         * (e)  21  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)72 herein.

      #  * (e)  22  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)73 herein.

      #  * (e)  23  -  Amended and Restated Change in Control Agreement between SOUTHERN, MISSISSIPPI and Dwight H. Evans.  See
                       Exhibit 10(a)81 herein.

                                      E-30
<PAGE>

      #  * (e)  24  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1,2000.  See Exhibit
                       10(a)67 herein.

      #  * (e)  25  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)68 herein.

      #  * (e)  26  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.  See
                       Exhibit 10(a)64 herein.

      #    (e)  27  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  See Exhibit 10(a)69 herein.

      #  * (e)  28  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.  See Exhibit 10(a)70 herein.

      #    (e)  29  -  Deferred Compensation Plan for Directors of Mississippi Power Company, Amended and Restated Effective January
                       1, 2000.  (Designated in MISSISSIPPI's Form 10-K for the year ended December 31, 1999, File No. 0-6849, as
                       Exhibit 10(e)37.)

      #  * (e)  30  -  Amendment Number One to the Deferred Compensation Plan for Directors of Mississippi Power Company.

      #  * (e)  31  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.  See Exhibit
                       10(a)96 herein.

      #  * (e)  32  -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.  See Exhibit 10(a)103 herein.

      #  * (e)  33  -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.  See Exhibit
                       10(a)104 herein.

      #  * (e)  34  -  Deferred Cash Compensation Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of
                       January 1, 2000, between Wachovia Bank, N.A, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.
                       See Exhibit 10(a)105 herein.

         SAVANNAH

           (f)  1   -  Service contract dated as of March 3, 1988, between SCS and SAVANNAH.  See Exhibit 10(a)3 herein.

         * (f)  2   -  Interchange contract dated February 17, 2000, between ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, SPC and
                       SCS.  See Exhibit 10(a)6 herein.

           (f)  3   -  Unit Power Sales Agreement dated July 19, 1988, between FPC and ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH
                       and SCS.  See Exhibit 10(a)33 herein.


                                      E-31
<PAGE>

           (f)  4   -  Amended Unit Power Sales Agreement dated July 20, 1988, between FP&L and ALABAMA, GEORGIA, GULF, MISSISSIPPI,
                       SAVANNAH and SCS.  See Exhibit 10(a)34 herein.

           (f)  5   -  Amended Unit Power Sales Agreement dated August 17, 1988, between JEA and ALABAMA, GEORGIA, GULF,
                       MISSISSIPPI, SAVANNAH and SCS.  See Exhibit 10(a)35 herein.

           (f)  6   -  Plant McIntosh Combustion Turbine Purchase and Ownership Participation Agreement between GEORGIA and SAVANNAH
                       dated as of December 15, 1992.  See Exhibit 10(a)49 herein.

           (f)  7   -  Plant McIntosh Combustion Turbine Operating Agreement between GEORGIA and SAVANNAH dated December 15, 1992.
                       See Exhibit 10(a)50 herein.

      #  * (f)  8   -  The Southern Company Executive Productivity Improvement Plan, Amended and Restated effective January 1,
                       2000.  See Exhibit 10(a)52 herein.

           (f)  9   -  The Southern Company Employee Savings Plan, Amended and Restated effective January 1, 1997 and all amendments
                       thereto through Amendment Number Five.  See Exhibit 10(a)53 herein.

         * (f)  10  -  Amendment Number Six to The Southern Company Employee Savings Plan.  See Exhibit 10(a)54 herein.

           (f)  11  -  The Southern Company Employee Stock Ownership Plan, Amended and Restated effective January 1, 1997 and all
                       amendments thereto through Amendment Number Three.  See Exhibit 10(a)55 herein.

         * (f)  12  -  Amendment Number Four to The Southern Company Employee Stock Ownership Plan.  See Exhibit 10(a)56 herein.

      #  * (f)  13  -  Supplemental Executive Retirement Plan of SAVANNAH, Amended and Restated effective October 26, 2000.

      #  * (f)  14  -  Deferred Compensation Plan for Key Employees of SAVANNAH, Amended and Restated effective October 26, 2000.

           (f)  15  -  The Southern Company Performance Pay Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)57 herein.

         * (f)  16  -  Southern Company Performance Pay Plan (Shareholder Approved) effective January 1, 2000.  See Exhibit 10(a)58
                       herein.

      #    (f)  17  -  The Southern Company Outside Directors Pension Plan.  See Exhibit 10(a)60 herein.

      #  * (f)  18  -  Deferred Compensation Plan for Directors of SAVANNAH, Amended and Restated effective October 26, 2000.

      #  * (f)  19  -  Outside Directors Stock Plan for Subsidiaries of The Southern Company, Amended and Restated effective January
                       1, 2000.  See Exhibit 10(a)63 herein.

                                      E-32
<PAGE>

           (f)  20  -  The Southern Company Pension Plan, effective as of January 1, 1997 and all amendments thereto through
                       Amendment Number Four.  See Exhibit 10(a)65 herein.

         * (f)  21  -  Amendment Number Five and Amendment Number Six to The Southern Company Pension Plan.  See Exhibit 10(a)66
                       herein.

      #  * (f)  22  -  The Southern Company Supplemental Benefit Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)76 herein.

         * (f)  23  -  Southern Company Change in Control Severance Plan, Amended and Restated effective July 10, 2000.  See Exhibit
                       10(a)72 herein.

      #  * (f)  24  -  Southern Company Executive Change in Control Severance Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)73 herein.

      #  * (f)  25  -  Amended and Restated Change in Control Agreement between SOUTHERN, SAVANNAH and G. Edison Holland, Jr.  See
                       Exhibit 10(a)86 herein.

      #  * (f)  26  -  The Southern Company Deferred Compensation Plan, Amended and Restated effective February 23, 2001.  See
                       Exhibit 10(a)61 herein.

      #  * (f)  27  -  The Southern Company Performance Stock Plan, Amended and Restated effective January 1, 2000.  See Exhibit
                       10(a)67 herein.

      #  * (f)  28  -  The Southern Company Supplemental Executive Retirement Plan, Amended and Restated effective July 10, 2000.
                       See Exhibit 10(a)68 herein.

      #  * (f)  29  -  The Southern Company Performance Dividend Plan, Amended and Restated effective December 11, 2000.  See
                       Exhibit 10(a)64 herein.

      #    (f)  30  -  The Southern Company Performance Sharing Plan effective January 1, 1997 and all amendments thereto through
                       Amendment Number Seven.  See Exhibit 10(a)69 herein.

      #  * (f)  31  -  Amendment Number Eight to The Southern Company Performance Sharing Plan.  See Exhibit 10(a)70 herein.

      #    (f)  32  -  Supplemental Pension Agreement between SAVANNAH, GULF and G. Edison Holland, Jr.  See Exhibit 10(d)31 herein.

      #  * (f)  33  -  Southern Company Change in Control Benefit Plan Determination Policy, effective July 10, 2000.  See Exhibit
                       10(a)96 herein.
      #  * (f)  34  -  Agreement for supplemental pension benefits between SAVANNAH and William Miles Greer.

      #  * (f)  35  -  Agreement crediting additional service between SAVANNAH and William Miles Greer.

      #  * (f)  36  -  Southern Company Deferred Compensation Trust Agreement dated as of January 1, 2001 between Wachovia Bank,
                       N.A., SOUTHERN, SCS, ALABAMA, GEORGIA, GULF, MISSISSIPPI, SAVANNAH, Southern Communications, Energy
                       Solutions, Mirant and Southern Nuclear.  See Exhibit 10(a)103 herein.


                                      E-33
<PAGE>

      #  * (f)  37  -  Deferred Stock Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of January 1, 2000,
                       between Reliance Trust Company, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.  See Exhibit
                       10(a)104 herein.

      #  * (f)  38  -  Deferred Cash Compensation Trust Agreement for Directors of SOUTHERN and its subsidiaries, dated as of
                       January 1, 2000, between Wachovia Bank, N.A, SOUTHERN, ALABAMA, GEORGIA, GULF, MISSISSIPPI, and SAVANNAH.
                       See Exhibit 10(a)105 herein.

(21)     Subsidiaries of Registrants

         SOUTHERN

         * (a)      -  Subsidiaries of Registrant is contained herein at page IV-5.

         ALABAMA

         * (b)      -  Subsidiaries of Registrant is contained herein at page IV-5.

         GEORGIA

         * (c)      -  Subsidiaries of Registrant is contained herein at page IV-5.

         GULF

         * (d)      -  Subsidiaries of Registrant is contained herein at page IV-5.

         MISSISSIPPI

         * (e)      -  Subsidiaries of Registrant is contained herein at page IV-5.

         SAVANNAH

         * (f)      -  Subsidiaries of Registrant is contained herein at page IV-5.


(23)     Consents of Experts and Counsel

         SOUTHERN

         * (a)      -  The consent of Arthur Andersen LLP is contained herein at page IV-6.

         ALABAMA

         * (b)      -  The consent of Arthur Andersen LLP is contained herein at page IV-7.

         GEORGIA

         * (c)      -  The consent of Arthur Andersen LLP is contained herein at page IV-8.


                                      E-34
<PAGE>

         GULF

         * (d)      -  The consent of Arthur Andersen LLP is contained herein at page IV-9.

         MISSISSIPPI

         * (e)      -  The consent of Arthur Andersen LLP is contained herein at page IV-10.

         SAVANNAH

         * (f)      -  The consent of Arthur Andersen LLP is contained herein at page IV-11.

 (24)    Powers of Attorney and Resolutions

         SOUTHERN

         * (a)      -  Power of Attorney and resolution.

         ALABAMA

         * (b)      -  Power of Attorney and resolution.

         GEORGIA

         * (c)      -  Power of Attorney and resolution.

         GULF

         * (d)      -  Power of Attorney and resolution.

         MISSISSIPPI

         * (e)      -  Power of Attorney and resolution.

         SAVANNAH

         * (f)      -  Power of Attorney and resolution.

                                      E-35
</TABLE>













</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>2
<FILENAME>x3b2.txt
<TEXT>



            Articles of Amendment to Joint Agreement Between Alabama
                  Power Company and Birmingham Electric Company
                 Prescribing the Terms and Conditions of Merger
                     Of Birmingham Electric Company Into and
                           With Alabama Power Company

STATE OF ALABAMA  )
                  )
JEFFERSON COUNTY  )


         We, Elmer B. Harris and William E. Zales, Jr. respectively the
President and Corporate Secretary of Alabama Power Company, a corporation, do
hereby certify that, at a meeting of the Board of Directors of said corporation
duly called and held at the office of said corporation in the City of
Birmingham, Alabama, on the 28th day of July, 2000, at 10:15 o'clock A.M.,
Central Time, a majority and quorum of Directors being present, the following
resolutions were duly adopted by said Board of Directors:

         RESOLVED: That, in connection with the proposed spin-off by Southern
         Company of Southern Energy, Inc., there be and hereby is called a
         special meeting of the shareholders of the Company for the purpose of
         considering and acting upon (a) a proposal to approve an amendment to
         the Charter of the Company to confer voting rights to the holders of
         the Company's preferred stock, the adoption of which the Board hereby
         recommends, and (b) such other proposals, including other amendments to
         the Company's Charter, as the officers shall determine in their
         discretion and cause to be specified in the notice of such meeting; and

         RESOLVED FURTHER: That the date, time and location of such special
         meeting, and any record date with respect thereto, shall be as
         determined by the officers in their discretion and caused by them to be
         specified in the notice of such meeting; and

         RESOLVED FURTHER: That the officers of the Company be and hereby are
         authorized to solicit proxies or consents from the shareholders of the
         Company for use in connection with such special meeting and to employ
         such broker-dealers, dealer-managers, proxy solicitors or other parties
         and to incur such costs and expenses (including payments to
         shareholders who vote affirmatively) in soliciting such proxies as the
         officers shall consider necessary or appropriate; and


<PAGE>




         RESOLVED FURTHER: That, in connection with the foregoing authorization
         and to carry out its purposes and intents, the officers of the Company
         be and they hereby are authorized to take any and all actions on behalf
         of the Company as they shall consider necessary or appropriate,
         including execution and filing of any applications or other documents
         with the Securities and Exchange Commission and other regulatory
         authorities and execution and delivery of agreements with
         broker-dealers, dealer-managers, proxy solicitors or other parties.

         And we do further certify that pursuant to such resolutions so adopted
at such meeting of the Board of Directors of Alabama Power Company, a special
meeting of the shareholders of the corporation was duly held at the office of
said corporation in the City of Birmingham, Alabama, on Thursday, the 14th day
of December, 2000, 10:30 o'clock A.M., Central Time, for the purpose of
considering taking action, in the manner provided by law, upon the aforesaid
proposal and upon such other proposal or proposals as were set forth in the
notice of such and for the transaction of any and all business in connection
therewith, including the following amendment to the Joint Agreement Between
Alabama Power Company and Birmingham Electric Company Prescribing the Terms and
Conditions of Merger Of Birmingham Electric Company and Into and With Alabama
Power Company, dated as of October 21, 1952 (as amended, the "Charter"):

         (1)      The first paragraph of Section C, "Voting Powers", of Article
                  IX is hereby deleted in its entirety and replaced with the
                  following:

                  "At all elections of directors of the consolidated
                  corporation, the holders of preferred stock and Class A
                  preferred stock shall have full voting rights with the holders
                  of common stock, all voting together as a single class; each
                  holder of preferred stock and Class A preferred stock with a
                  stated value of $100 being entitled to two-fifths vote for
                  each share thereof standing in his name, each holder of Class
                  A preferred stock with a stated value of $25 per share being
                  entitled to one-tenth vote for each share thereof standing in
                  his name, each holder of Class A preferred stock with a stated
                  value of $100,000 being entitled to 400 votes for each share
                  thereof standing in his name and each holder of common stock
                  being entitled to one vote for each share thereof standing in
                  his name. On all other matters, except on matters in respect
                  of which the laws of the State of Alabama shall provide that
                  all stockholders shall have the right to vote irrespective of
                  whether such right shall have been relinquished by any of such
                  stockholders and except as otherwise herein provided, the
                  holders of common stock shall have the exclusive right to
                  vote.

                  Notwithstanding the foregoing, whenever and as often as four
                  quarterly dividends payable on the preferred stock or Class A
                  preferred stock of any class shall be in default, in whole or
                  in part, the holders of the preferred stock and Class A
                  preferred stock of all classes shall have the exclusive right,
                  voting separately and as a single class, to vote for and to
                  elect the smallest number of directors that shall constitute a
                  majority of the then authorized number of directors of the
                  consolidated corporation. In the event of defaults entitling
                  the preferred stock and the Class A preferred stock to vote as
                  aforesaid, the holders of common stock shall have the
                  exclusive right, voting separately and as a class, to vote for
                  and to elect the greatest number of directors that shall
                  constitute a minority of the then authorized number of
                  directors of the consolidated corporation. In each such
                  instance in which the holders of the preferred stock and the
                  Class A preferred stock are entitled to vote separately and as
                  a single class or to vote together with the holders of the
                  common stock, other than for the election of directors, the
                  relative voting power of the various classes of stock shall be
                  computed as hereinafter provided. These additional voting
                  rights of the holders of the preferred stock and Class A
                  preferred stock shall cease, however, when all defaults in the
                  payment of dividends on their stock shall have been cured, and
                  such dividends shall be declared and paid out of any funds
                  legally available therefor as soon as, in the judgment of the
                  Board of Directors, is reasonably practicable."; and

         (2)      The lead in language (preceding clause (a)) to the last
                  paragraph of Section C, "Voting Powers", of Article IX, is
                  hereby deleted in its entirety and replaced with the
                  following:

                  "For the purposes of the foregoing provisions, other than when
                  the holders of the preferred stock, the Class A preferred
                  stock and the common stock vote together as a single class for
                  the election of directors, the preferred stock and the Class A
                  preferred stock of all classes shall be deemed to be a single
                  class, and the relative voting power of each class of
                  preferred stock, Class A preferred stock and common stock
                  shall be determined as follows:"

         We do further certify that notice in compliance with applicable laws
and the Bylaws of Alabama Power Company of the time, place and purpose of said
meeting of shareholders was given to each shareholder of Alabama Power Company
as follows: to those shareholders of record at the close of business on November
8, 2000 with respect to the 1988 Auction Preferred Stock and to those
shareholders of record at the close of business on October 30, 2000 with respect
to all other classes of preferred stock and common stock of Alabama Power
Company, in each case addressed to each shareholder at his, her or its address
as it appeared on the stock transfer books of the corporation, with postage
thereon prepaid and deposited in the United States mail; and that at said
meeting the holders of a majority of the total outstanding shares of preferred
stock having voting powers on such proposal and a majority of the total
outstanding shares of the common stock having voting powers on such proposal
were present in person or represented by proxy; and

         We do further certify that at the close of business on each of October
30, 2000 and November 8, 2000, Alabama Power Company had 475,115 shares of
Preferred Stock, par value $100 per share (the "$100 Preferred Stock"), issued
and outstanding, and 8,500,200 shares of Class A Preferred Stock, par value $1
per share (the "Class A Preferred Stock"), issued and outstanding (collectively,
the "Preferred Stock"), and 5,608,955 shares of common stock issued and
outstanding (the "Common Stock"). All of such outstanding shares of Preferred
Stock were entitled to vote on the above proposal as a single class, each share
of $100 Preferred Stock and each share of Class A Preferred Stock with a stated
value of $100 per share being counted as one, each share of Class A Preferred
Stock with a stated value of $25 per share being counted as one-quarter, and
each share of Class A Preferred Stock with a stated value of $100,000 per share
being counted as 1,000. The adoption of the above proposal required the
affirmative vote in favor thereof of (i) the holders of a majority of the shares
of the Common Stock of Alabama Power Company voting at the meeting and (ii) the
holders of a majority of the shares of Preferred Stock voting at the meeting,
voting as a single class; and

         We do further certify that at said meeting all of the 5,608,955 shares
of common stock outstanding voted affirmatively for the adoption of the
proposal, and of the total shares of Preferred Stock voting at the meeting
(counting shares of Preferred Stock as described above) 1,505,832 shares voted
affirmatively for the adoption of the proposal, 462,101 shares voted against the
proposal and 127,473 shares abstained, such affirmative votes being sufficient
for the adoption of the proposal.

         We, Elmer B. Harris and William E. Zales, Jr., as President and
Corporate Secretary, respectively, of Alabama Power Company, do hereby make this
report of such meeting and certify that such amendment, as set forth above, was
duly adopted in accordance with the applicable provisions of the Alabama
Business Corporation Act; and we do further certify that the proceedings of said
meeting of the Board of Directors and said special meeting of shareholders were
reduced to writing and that the same are hereby certified by Elmer B. Harris,
the President, and William E. Zales, Jr. the Corporate Secretary, of Alabama
Power Company, under its corporate seal.

         IN WITNESS WHEREOF, we, Elmer B. Harris, and William E. Zales, as
President and Corporate Secretary, respectively, of Alabama Power Company, do
hereunto set our hands and seal of such corporation on the 14th day of December,
2000.

                                      ELMER B. HARRIS
                                      President, Alabama Power Company

                                      WILLIAM E. ZALES, JR.
                                      Corporate Secretary, Alabama Power Company


<PAGE>


UNITED STATES OF AMERICA   )
STATE OF ALABAMA           )
MONTGOMERY COUNTY          )

         I, Jim Bennett, Secretary of State of the State of Alabama, do hereby
certify that the foregoing pages numbered 1 to 4, both inclusive, to which this
certificate is attached, contain a full, true and correct copy of the
Certificate of Resolutions of Board of Directors and Shareholders of Alabama
Power Company, as the same was certified by the President and Secretary of such
Alabama Power Company under its corporation seal and filed in this, the office
of Secretary of State of Alabama, on the ____ day of January, 2001.

         In Testimony Whereof, I have hereunto set my hand and caused the Great
Seal of the State of Alabama to be hereunto affixed at the Capitol in the City
of Montgomery, on this the _____ day of January in the year of our Lord, Two
Thousand and One.

(Seal)                                         JIM BENNETT
                                               Secretary of State of the
                                               State of Alabama
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>3
<FILENAME>x3c2.txt
<TEXT>

TO ALL TO WHOM THESE PRESENTS MAY COME -- GREETING:


         WHEREAS, GEORGIA POWER COMPANY, a corporation created and existing
under the laws of Georgia, has filed in this office in terms of law a petition
asking that its charter be amended to provide to the holders of its preferred
stock the right to vote at all elections of directors, with each share of
Preferred Stock entitled to one vote and each share of Class A Preferred Stock
entitled to one-quarter vote, voting with its common stock as single class; and

         WHEREAS, Georgia Power Company has complied with all the requirements
of the law in such cases made and provided.

         THEREFORE, the State of Georgia hereby amends the first paragraph of
Paragraph III, Subparagraph 14.C of the charter of said Georgia Power Company to
read as follows:

                  At all elections of directors of the Consolidated Corporation,
         the holders of Preferred Stock and Class A Preferred Stock shall have
         full voting rights with the holders of Common Stock, all voting
         together as a single class; each holder of Preferred Stock being
         entitled to one vote for each share thereof standing in his name, each
         holder of Class A Preferred Stock being entitled to one-quarter vote
         for each share thereof standing in his name and each holder of Common
         Stock being entitled to one vote for each share thereof standing in his
         name. On all other matters, except on matters in respect of which the
         laws of the State of Georgia shall provide that all stockholders shall
         have the right to vote irrespective of whether such right shall have
         been relinquished by any of such stockholders and except as otherwise
         herein provided, the holders of Common Stock shall have the exclusive
         right to vote.

                  Notwithstanding the foregoing, whenever and as often as four
         quarterly dividends payable on the Preferred Stock or Class A Preferred
         Stock of any class shall be in default, in whole or in part, the
         holders of the Preferred Stock and Class A Preferred Stock of all
         classes shall have the exclusive right, voting separately from any
         other kind of stock and as a single class (each share of Preferred
         Stock being counted as one and each share of Class A Preferred Stock
         being counted as one-quarter), to vote for and to elect the smallest
         number of directors that shall constitute a majority of the then
         authorized number of directors of the Consolidated Corporation, and, in
         all matters other than the election of directors, each holder of one or
         more shares of Preferred Stock shall be entitled to one vote for each
         such share of stock held by him and each holder of one or more shares
         of Class A Preferred Stock shall be entitled to one-quarter vote for
         each such share of stock held by him. In the event of defaults
         entitling the Preferred Stock and Class A Preferred Stock to vote as
         aforesaid, the holders of Common Stock shall have the exclusive right,
         voting separately and as a class, to vote for and to elect the greatest
         number of directors that shall constitute a minority of the then
         authorized number of directors of the Consolidated Corporation, and, in
         all matters other than the election of directors, each holder of Common
         Stock shall be entitled to one vote for each such share of stock held
         by him. These additional voting rights of the holders of the Preferred
         Stock and Class A Preferred Stock shall cease, however, when all
         defaults in the payment of dividends on their stock shall have been
         cured, and such dividends shall be declared and paid out of any funds
         legally available therefor as soon as, in the judgment of the Board of
         Directors, is reasonably practicable.

         THEREFORE, the State of Georgia hereby amends the last paragraph of
Paragraph III, Subparagraph 14.C of the charter of said Georgia Power Company to
read as follows:

                  For the purposes of the foregoing provisions, other than when
         the holders of the Preferred Stock, the Class A Preferred Stock and the
         Common Stock vote together as a single class for the election of
         directors, the Preferred Stock and the Class A Preferred Stock of all
         classes shall be deemed to be a single class, each share of Preferred
         Stock being counted as one and each share of Class A Preferred Stock
         being counted as one-quarter.


<PAGE>


         IN WITNESS WHEREOF, these presents have been signed by the Secretary of
State and the great seal has been attached hereto at the State Capitol in
Atlanta, Georgia, on this 16th day of February, 2001.


                                                     Secretary of State


<PAGE>




                  PETITION FOR FORTY-NINTH AMENDMENT TO CHARTER

TO THE SECRETARY OF STATE OF THE STATE OF GEORGIA:

         The petition of Georgia Power Company, a corporation of Fulton County,
in said State, respectfully shows:

         I. It is a street and suburban railroad, electric light and power and
steam heat corporation, incorporated under the above name on June 26, 1930, and
its charter has been amended on the following dates: (1) May 1, 1933, (2) March
31, 1941, (3) November 20, 1947, (4) October 18, 1949, (5) July 25, 1950, (6)
February 6, 1953, (7) April 3, 1953, (8) October 7, 1954, (9) September 6, 1961,
(10) October 27, 1961, (11) November 16, 1962, (12) November 15, 1963, (13)
October 2, 1964, (14) September 10, 1965, (15) July 8, 1966, (16) September 8,
1967, (17) September 6, 1968, (18) September 5, 1969, (19) March 13, 1970, (20)
April 10, 1970, (21) September 9, 1970, (22) February 19, 1971, (23) October 27,
1972, (24) October 24, 1975, (25) October 29, 1975, (26) July 2, 1976, (27)
February 23, 1979, (28) June 26, 1981, (29) September 16, 1982, (30) November
21, 1984, (31) November 26, 1984, (32) November 30, 1984, (33) April 18, 1985,
(34) September 26, 1985, (35) December 6, 1985, (36) July 16, 1986, (37) August
21, 1986, (38) June 2, 1987, (39) July 20, 1987, (40) August 19, 1987, (41)
November 5, 1991, (42) January 28, 1992, (43) June 1, 1992, (44) July 27, 1992,
(45) December 15, 1992, (46) June 28, 1993, (47) October 25, 1993 and (48)
January 26, 1998.

         II. All of the authorized shares of the capital stock of the Company
are without nominal or par value, and the authorized and outstanding shares of
capital stock of the Company outstanding at December 14, 2000, the date of the
written consent signed by the sole common stock shareholder of the Company
hereinafter referred to, are as follows:

                                                                Outstanding
                                       Authorized Number of     Number of Shares
Kind of Stock                          Shares

$4.60 Preferred Stock                  500,000                  145,689
Undesignated Preferred Stock           4,500,000                ----------
Undesignated Class A Preferred Stock   50,000,000               ----------
Common Stock                           15,000,000               7,761,500

         III. The Company desires an amendment to its charter to modify
Subparagraph 14.C of Paragraph III to provide to the holders of Preferred Stock
and Class A Preferred Stock the right to vote at all elections of directors of
the Company, with each share of Preferred Stock entitled to one vote and each
share of Class A Preferred Stock entitled to one-quarter vote, voting with the
holder or holders of the Company's Common Stock as a single class; such voting
rights shall be in addition to any special voting rights that holders of
Preferred Stock and Class A Preferred Stock currently have in accordance with
state law and provisions of the charter (all other terms and provisions of the
charter to remain unchanged).

         To that end, the Company requests that the first paragraph of Paragraph
III, Subparagraph 14.C of its charter be amended to read as follows:

                  At all elections of directors of the Consolidated Corporation,
         the holders of Preferred Stock and Class A Preferred Stock shall have
         full voting rights with the holders of Common Stock, all voting
         together as a single class; each holder of Preferred Stock being
         entitled to one vote for each share thereof standing in his name, each
         holder of Class A Preferred Stock being entitled to one-quarter vote
         for each share thereof standing in his name and each holder of Common
         Stock being entitled to one vote for each share thereof standing in his
         name. On all other matters, except on matters in respect of which the
         laws of the State of Georgia shall provide that all stockholders shall
         have the right to vote irrespective of whether such right shall have
         been relinquished by any of such stockholders and except as otherwise
         herein provided, the holders of Common Stock shall have the exclusive
         right to vote.

                  Notwithstanding the foregoing, whenever and as often as four
         quarterly dividends payable on the Preferred Stock or Class A Preferred
         Stock of any class shall be in default, in whole or in part, the
         holders of the Preferred Stock and Class A Preferred Stock of all
         classes shall have the exclusive right, voting separately from any
         other kind of stock and as a single class (each share of Preferred
         Stock being counted as one and each share of Class A Preferred Stock
         being counted as one-quarter), to vote for and to elect the smallest
         number of directors that shall constitute a majority of the then
         authorized number of directors of the Consolidated Corporation, and, in
         all matters other than the election of directors, each holder of one or
         more shares of Preferred Stock shall be entitled to one vote for each
         such share of stock held by him and each holder of one or more shares
         of Class A Preferred Stock shall be entitled to one-quarter vote for
         each such share of stock held by him. In the event of defaults
         entitling the Preferred Stock and Class A Preferred Stock to vote as
         aforesaid, the holders of Common Stock shall have the exclusive right,
         voting separately and as a class, to vote for and to elect the greatest
         number of directors that shall constitute a minority of the then
         authorized number of directors of the Consolidated Corporation, and, in
         all matters other than the election of directors, each holder of Common
         Stock shall be entitled to one vote for each such share of stock held
         by him. These additional voting rights of the holders of the Preferred
         Stock and Class A Preferred Stock shall cease, however, when all
         defaults in the payment of dividends on their stock shall have been
         cured, and such dividends shall be declared and paid out of any funds
         legally available therefor as soon as, in the judgment of the Board of
         Directors, is reasonably practicable.

         In addition, the Company requests that the last paragraph of Paragraph
III, Subparagraph 14.C of its charter be amended to read as follows:

                  For the purposes of the foregoing provisions, other than when
         the holders of the Preferred Stock, the Class A Preferred Stock and the
         Common Stock vote together as a single class for the election of
         directors, the Preferred Stock and the Class A Preferred Stock of all
         classes shall be deemed to be a single class, each share of Preferred
         Stock being counted as one and each share of Class A Preferred Stock
         being counted as one-quarter.

         IV. This petition for the proposed amendment has been duly authorized
by the action of at least a majority of the capital stock of the Company
outstanding and entitled by the terms of its charter or state law to act for
that purpose. The entire capital stock of the Company entitled to act has given
written consent to this amendment.

         V. Petitioner respectfully presents this, its petition for an amendment
to its charter, as heretofore amended, and asks that the same be granted as
herein prayed for and that all other rights, powers and privileges contained in
its original charter, as heretofore amended, and such as are incident to like
corporations under the laws of Georgia, do continue and remain of force and be
approved and confirmed.

                                                     GEORGIA POWER COMPANY



                                                     By: _____________________
                                                              President

Attest:

- -------------------------
Vice President and Corporate Secretary

Date:  February 16, 2001


<PAGE>




                   CERTIFIED ABSTRACT FROM THE MINUTES OF THE

                   BOARD OF DIRECTORS OF GEORGIA POWER COMPANY

                          WITH RESPECT TO PETITION FOR

                      FORTY-NINTH AMENDMENT TO ITS CHARTER

         On motion, duly made and seconded, the following resolution was
unanimously adopted by the Board of Directors of the Company:

                           RESOLVED: That, in connection with the proposed
         tax-free spin-off by The Southern Company of Southern Energy, Inc., it
         is desirable and in the best interests of the Company to seek the
         approval of the Company's shareholders to amend the Company's charter,
         as heretofore amended (the "Charter"), to provide to the holders of
         Preferred Stock and Class A Preferred Stock the right to vote at all
         elections of directors of the Company, with each share of Preferred
         Stock entitled to one vote and each share of Class A Preferred Stock
         entitled to one-quarter vote, voting with the holder or holders of the
         Company's Common Stock as a single class; such voting rights shall be
         in addition to any special voting rights that holders of Preferred
         Stock and Class A Preferred Stock currently have in accordance with
         state law and provisions of the Charter, and this Board of Directors
         does hereby authorize and approve such amendment;

                           RESOLVED FURTHER: That, as selected by the officers
         of the Company pursuant to authority granted by this Board of
         Directors, October 30, 2000 be and hereby is fixed as the record date
         for the determination of the holder of common stock entitled to approve
         such amendment, and only the holder of common stock of record at the
         close of business on October 30, 2000 will be entitled to approve such
         amendment;

                           RESOLVED FURTHER: That, if the holder of record of
         the Company's outstanding common stock approves the proposal to amend
         the Charter, the President or any Vice President and the Secretary, any
         Assistant Secretary, the Treasurer or any Assistant Treasurer of the
         Company be, and they hereby are, authorized and directed to make
         application to the Secretary of State of the State of Georgia that the
         Charter of Georgia Power Company, as constituted by the Joint
         Agreement, dated May 12, 1930, and certified by the Honorable George H.
         Carswell, Secretary of State of Georgia, under date of June 26, 1930,
         as heretofore amended by certificates of the Honorable Secretary of
         State dated (1) May 1, 1933, (2) March 31, 1941, (3) November 20, 1947,
         (4) October 18, 1949, (5) July 25, 1950, (6) February 6, 1953, (7)
         April 3, 1953, (8) October 7, 1954, (9) September 6, 1961, (10) October
         27, 1961, (11) November 16, 1962, (12) November 15, 1963, (13) October
         2, 1964, (14) September 10, 1965, (15) July 8, 1966, (16) September 8,
         1967, (17) September 6, 1968, (18) September 5, 1969, (19) March 13,
         1970, (20) April 10, 1970, (21) September 9, 1970, (22) February 19,
         1971, (23) October 27, 1972, (24) October 24, 1975, (25) October 29,
         1975, (26) July 2, 1976, (27) February 23, 1979, (28) June 26, 1981,
         (29) September 16, 1982, (30) November 21, 1984, (31) November 26,
         1984, (32) November 30, 1984, (33) April 18, 1985, (34) September 26,
         1985, (35) December 6, 1985, (36) July 16, 1986, (37) August 21, 1986,
         (38) June 2, 1987, (39) July 20, 1987, (40) August 19, 1987, (41)
         November 5, 1991, (42) January 28, 1992, (43) June 1, 1992, (44) July
         27, 1992, (45) December 15, 1992, (46) June 28, 1993, (47) October 25,
         1993 and (48) January 26, 1998, be further amended by modifying
         Subparagraph 14.C of Paragraph III to add voting rights (as described
         above) in all elections of directors to holders of Preferred Stock and
         Class A Preferred Stock (all other terms and provisions of the Charter
         to remain unchanged); and that the officers of the Company be, and they
         hereby are, authorized and empowered to take all such other action as
         any one of them may deem necessary or desirable to effect said
         amendment;

                           RESOLVED FURTHER: That the Secretary of the Company
         shall certify under the seal of the Company a copy of these
         resolutions and attach it to the petition for forty-ninth
         amendment to the Charter to be filed with the Secretary of
         State of the State of Georgia; and

                           RESOLVED FURTHER: That the officers of the Company
         be, and they hereby are, authorized and directed to do and perform all
         such acts, matters and things on behalf of the Company as they shall
         consider necessary and appropriate to carry out the proposals described
         in the foregoing resolutions in the manner provided by law and
         otherwise to consummate the transactions contemplated thereby.

         I, Judy M. Anderson, Secretary of Georgia Power Company, do hereby
certify that the foregoing is a true and correct copy of a resolution duly and
regularly adopted at a meeting of the board of directors of Georgia Power
Company, duly held on November 15, 2000, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.

         Given under my official signature and the seal of said Company this
16th day of February, 2001.


                                    Secretary

            (SEAL)



<PAGE>



                   CERTIFIED ABSTRACT FROM THE CONSENT OF THE

                    SOLE SHAREHOLDER OF GEORGIA POWER COMPANY

                          WITH RESPECT TO PETITION FOR

                      FORTY-NINTH AMENDMENT TO ITS CHARTER

         The following resolution was adopted by the unanimous written consent
of the holder of all of the outstanding shares of the Company's common stock:

                  RESOLVED: That the actions of the Board of Directors of the
         Company taken on November 15, 2000 to amend the Company's Charter to
         provide to the holders of Preferred Stock and Class A Preferred Stock
         the right to vote at all elections of directors of the Company, with
         each share of Preferred Stock entitled to one vote and each share of
         Class A Preferred Stock entitled to one-quarter vote, voting with the
         holder or holders of the Company's Common Stock as a single class; such
         voting rights being in addition to any special voting rights that
         holders of Preferred Stock and Class A Preferred Stock currently have
         in accordance with state law and provisions of the Charter are hereby
         confirmed ratified and approved.

         I, Judy M. Anderson, Secretary of Georgia Power Company, do hereby
certify that the foregoing is a true and correct copy of a resolution duly
adopted by written consent of the sole common stock shareholder of Georgia Power
Company on December 14, 2000, and that said resolution has not since been
rescinded but is still in full force and effect.

         Given under my official signature and the seal of said Company this
16th day of February, 2001.


                                    Secretary

          (SEAL)



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>4
<FILENAME>x3c3.txt
<TEXT>



                         BYLAWS OF GEORGIA POWER COMPANY

                     As Amended Effective November 15, 2000

                                      Seal

SECTION 1. The corporate seal shall be circular in form and bear the name of the
Company in the margin and the year of organization and the word "Seal" in the
center.

                             Stockholders' Meetings

SECTION 2. The annual meeting of the stockholders shall be held, upon notice as
hereinafter provided, at the principal office of the Company in the City of
Atlanta, County of Fulton, State of Georgia, on the third Wednesday in the month
of May in each year, if not a legal holiday, and if a legal holiday, then on the
next secular day following, when the stockholders entitled to vote thereon shall
elect by plurality vote the Board of Directors, and transact such other business
as may be brought before the meeting. At the annual meeting any business may be
transacted irrespective of whether the notice calling such meeting shall have
contained a reference thereto.

SECTION 3. Special meetings of the stockholders shall be held, upon notice as
hereinafter provided, at the principal office of the Company in the City of
Atlanta, County of Fulton, State of Georgia, except such meetings as the
Chairman of the Board or the President or the Board of Directors expressly
determine shall be held elsewhere within or without the State of Georgia, but
within the United States, in which case meetings may be held, upon notice as
hereinafter provided, at such other place or places as the Chairman of the Board
or the President or the Board of Directors may determine.

SECTION 4. At all meetings of the stockholders, the holders of capital stock of
the Company representing a majority of the aggregate number of votes entitled to
be cast at the meeting, present in person or represented by proxy, shall
constitute a quorum requisite for the transaction of business, except as
otherwise required by the Charter or by law. If, however, a quorum shall not be
present or represented at any meeting of the stockholders, the stockholders
entitled to vote thereat, present in person or by proxy, shall have power to
adjourn the meeting from time to time without notice other than announcement at
the meeting, until the requisite amount of voting stock shall be present, except
as otherwise required by the Charter or by law. At such adjourned meeting at
which the requisite amount of voting stock shall be represented, any business
may be transacted which might have been transacted at the meeting originally
notified.

SECTION 5. Each stockholder entitled to vote in accordance with the charter or
any amendment thereof and in accordance with the provisions of these Bylaws or
of any action taken pursuant thereto shall be entitled, in person or by proxy,
to the vote provided by the Charter for each share of stock entitled to vote
held by such stockholder. Except where the transfer books of the Company shall
have been closed or a date shall have been fixed as the record date for the
determination of its stockholders entitled to vote, as hereinafter provided, no
share of stock shall be voted on at any election for Directors which shall have
been transferred on the books of the Company within twenty days next preceding
such election of Directors. The vote for Directors, and, upon the demand of any
stockholder, the vote upon any question before the meeting, shall be by ballot.
All elections shall be by and all questions decided by plurality vote except as
otherwise provided by the Charter and/or by the laws of the State of Georgia.

SECTION 6. Written notice of the annual meeting shall be mailed to each
stockholder entitled to vote thereat, at such address as appears on the stock
books of the Company, at least ten days prior to the meeting. It shall be the
duty of every stockholder to furnish to the Secretary of the Company or to the
Transfer Agent, if any, of the class or series of stock owned by him, his post
office address and to notify said Secretary or Transfer Agent of any change
therein.

SECTION 7. Special meetings of the stockholders, for any purpose or purposes,
unless otherwise prescribed by statute, may be called by the Chairman of the
Board or by the President, and shall be called by the Chairman of the Board or
by the President or the Secretary upon the order in writing of a majority of or
by resolution of the Board of Directors or at the request in writing of
stockholders owning one-fourth of the entire capital stock of the Company issued
and outstanding and entitled to vote. Such request or order shall state the
purpose or purposes of the proposed meeting. On failure by the Chairman of the
Board or the President or the Secretary to call such special meeting when duly
requested, the makers of such request or order may call such special meeting
over their own signatures.

SECTION 8. Written notice of a special meeting of stockholders, stating the time
and place and object thereof, shall, unless waived in writing, be mailed,
postage prepaid, or delivered, at least ten days before such meeting, to each
stockholder entitled to vote thereat, at such address as appears on the books of
the Company. No business may be transacted at such meeting except that referred
to in said notice, or in a supplemental notice given also in compliance with the
provisions hereof, or such other business as may be germane or supplementary to
that stated in said notice or notices.

SECTION 9. No stockholder shall be entitled to notice of any meeting of
stockholders with respect to any shares registered in his name after the date
upon which notice of such meeting is required by law or these Bylaws to have
been mailed or otherwise given to stockholders.

                                    Directors

SECTION 10. The affairs of the Company shall be managed by a Board of Directors
consisting of not less than five nor more than the maximum number allowed by
law, who shall be elected annually by the stockholders entitled to vote, to hold
office for one year and until their successors are elected and qualify except
that any Director who is a full-time employee of the Company shall cease to be a
Director upon termination of his employment as a full-time employee or upon his
retirement from active duty under the Company's pension plan; provided that in
the event of failure to hold such annual meeting of the stockholders or to hold
such election at such meeting, such election may be held at any special meeting
of the stockholders called for the purpose and the Directors then in office
shall continue in office until their successors shall have been duly elected and
qualified. If the stockholders at such annual meeting or at any special meeting
called for the election of Directors shall not elect a full Board of Directors
at such election, the Directors elected may elect the remaining Directors in the
manner provided below for the filling of vacancies.

In addition to the Directors authorized by the first paragraph of this section,
there may also be one or more honorary members of the Board of Directors
consisting of retired employees of the Company or of any affiliated company or
companies who were serving as regular members of the Board of Directors at the
time of their retirement from active duty under the Company's pension plan, or
of any other former members of the Board who did not wish to continue or were
unable to continue as regular members of the Board, or of any other persons
whose services as such will be of value to the Company. Any such retired
employee or other former member of the Board or other person may, on the
recommendation of the Chief Executive Officer of the Company, be elected as an
Honorary Director at any Board of Directors' meeting by the vote of the majority
of the entire Board then in office or at any meeting of the stockholders by the
vote of the holders of the majority of the stock issued and outstanding and
entitled to vote at such meeting. An Honorary Director so chosen shall hold
office until the next annual meeting of stockholders. Honorary Directors shall
receive notices of all meetings of the Board of Directors and shall receive the
customary fee or salary and expense reimbursement or allowance for attending
meetings and may participate in an advisory capacity in all discussions and
deliberations of the Board of Directors, but will not have the right to vote.
Such Honorary Directors shall not be counted in determining compliance with the
number of Directors authorized by the first paragraph of this section or in
determining the existence of a quorum.

No person shall be eligible to serve as a Director or as an Honorary Director
after his 70th birthday; provided, however, that such provision shall not apply
to any person so long as such person shall serve as a member of the Independent
Litigation Committee established and designated by the Board of Directors on
September 17, 1986.

Any Director of the Company may resign at any time by giving written notice to
the Chairman of the Board or the President or the Secretary of the Company. Such
resignation shall take effect at the time specified therein; and, unless
otherwise specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

Each Director who is not an employee-director of the Company shall tender his
resignation from the Board of Directors when a change occurs in his principal
business association prior to normal retirement, excluding Directors serving on
the Board of Directors as of November 15, 2000. Upon receipt of a tender of
resignation in accordance with the foregoing statement, the Board of Directors,
in its sole discretion, shall determine whether such resignation shall be
accepted.

SECTION 11. In case of any vacancies in the Board of Directors through death,
resignation, disqualification, or any cause other than by reason of removal, the
remaining Directors, if less than a quorum, by affirmative vote of a majority
thereof, or if a quorum, by a majority vote of such quorum, may elect a
successor or successors, and the Director or Directors so chosen shall hold
office until the next annual election and until their successor or successors
shall be elected and qualified.

SECTION 12. In addition to the powers and authorities expressly conferred upon
it by the statute, by the charter and by these Bylaws, the Board may exercise
all such powers of the Company and do all such lawful acts and things as may be
done by the Company as are not by statute or by the charter or by these Bylaws
directed or required to be exercised or done by the stockholders.

SECTION 13. A majority of the Board shall constitute a quorum and shall be
competent to do all acts which the Board can do.

SECTION 14. Any and all of the Directors may at any time be removed without
cause assigned by the vote of the holders of a majority in number of all of the
outstanding stock entitled to vote, given at a meeting called for the purpose of
considering such action.

                       Meetings of the Board of Directors

SECTION 15. The newly elected Board of Directors may meet at such place and time
as shall be fixed by the vote of the stockholders at the meeting at which such
newly elected board was elected, for the purpose of organization or otherwise,
and no notice of such meeting shall be necessary to the elected Directors in
order legally to constitute the meeting, provided a quorum shall be present, or
they may meet at such place and time as shall be stated in a notice given to
such Directors either personally or by mail or telegram two days prior to such
meeting or as shall be fixed by the consent in writing of all the Directors.

SECTION 16. Regular meetings of the Board may be held without notice at such
time and place as shall from time to time be determined by the Board.

SECTION 17. Special meetings of the Board may be called by the Chairman of the
Board or the President, on two days' notice to each Director, by delivered
letter, by mail or by telegram or by personal communication either over the
telephone or otherwise; special meetings shall be called by the Secretary in
like manner and on like notice, on the written request of two Directors or on
the request of the Chairman of the Board or the President.

SECTION 18. Directors shall be entitled to a fee for attendance at each regular
or special meeting of the Board, or a committee of the Board, and/or to a
monthly or annual fee or salary provided that no fees or salaries shall be paid
to those Directors who are officers or employees, other than retired employees,
who are on a fixed basis of compensation from the Company or any subsidiary or
affiliated company and who have duties and responsibilities to such companies
other than those arising from the office of Director. Directors shall be
reimbursed for actual expenses, if any, incurred in attending meetings of the
Board of Directors and in otherwise performing duties as such Directors or in
lieu thereof to an allowance for expenses. The amount of fee for salary paid to
Directors and expense allowance, if any, shall be fixed by the Board of
Directors.

                         Executive and Other Committees

SECTION 19. The Board of Directors may, by resolution or resolutions passed by a
majority of the whole Board, designate an executive committee and one or more
other committees, each consisting of three or more directors, each of which
committees may act by a majority of its members. Such executive committee 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 Company when the Board is not
meeting; and each other committee shall have such powers of the Board and
otherwise as are provided in the resolution establishing such committee.
Provided, however, notwithstanding anything to the contrary herein, the
executive committee and all other committees established by the Board shall have
no power or authority (1) to amend the Charter or the Bylaws; (2) to adopt a
plan of merger or consolidation; (3) to sell, lease, exchange or otherwise
dispose of all or substantially all of the assets and property of the Company;
or (4) to voluntarily dissolve or revoke a voluntary dissolution of the Company.
Unless otherwise specifically permitted by the Board of Directors, the rules
promulgated by these Bylaws with respect to meetings of Directors, notice,
quorums, voting and other procedures at such meeting shall be applicable to
meetings of the executive and any other committee established by the Board of
Directors, except that special meetings of any such committees may be called on
one day's notice to all members of such committee.

                                    Officers

SECTION 20. The officers of the Company shall be chosen by the Board of
Directors at its first meeting after the meeting of stockholders at which such
board has been elected. The executive officers shall be a President, one or more
Vice Presidents as said Board of Directors may from time to time determine, and
in the discretion of the Board of Directors, a Chairman of the Board. The
administrative officers shall be a Secretary, a Treasurer and a Comptroller, and
such Assistant Secretaries, Assistant Treasurers and Assistant Comptrollers as
the Board of Directors may from time to time determine. Any two or more offices
may be held by the same person, except the offices of President and Secretary.
The Chairman of the Board and the President shall be chosen from among the Board
of Directors, but the other officers need not be members of the Board.

SECTION 21. The Board 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 22. The officers of the Company shall hold office at the pleasure of the
Board, 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 Board of
Directors with or without cause.

                 Powers and Duties of the Chairman of the Board

SECTION 23. The Chairman of the Board shall preside at all meetings of Directors
and stockholders. Unless otherwise provided by the Board, under the supervision
of and subject to the Board of Directors, he shall have the general control and
management of the business and affairs of the Company; and he shall perform and
do all acts and things incident to the position of Chairman of the Board and
such other duties as may be assigned to him from time to time by the Board of
Directors.

Unless otherwise provided by the Board, the Chairman of the Board shall have
full power and authority on behalf of the Company to execute any stockholder's
consent and to attend and act and to vote in person or by proxy at any meetings
of stockholders of any corporation in which the Company may own stock, and at
any such meeting shall possess and may exercise any and all the rights and
powers incident to the ownership of such stock and which, as the owner thereof,
the Company might have possessed and exercised if present. The Board of
Directors by resolution from time to time may confer like powers upon any other
person or persons.

                       Powers and Duties of the President

SECTION 24. The President shall do and perform all acts and things incident to
the position of President and such other duties as may be assigned to him from
time to time by the Board of Directors or the Chairman of the Board. In the
absence or inability to act of the Chairman of the Board, he shall act in his
stead. In the event the office of Chairman of the Board has not been filled by
the Board of Directors, or in the event it is specifically provided for by the
Board, the President shall have the powers and duties attributed to the office
of Chairman of the Board under the other provisions of these Bylaws.

                      Powers and Duties of Vice Presidents

SECTION 25. The Vice Presidents shall perform such duties on behalf of the
Company as may be respectively assigned to them from time to time by the Board
of Directors or the Chairman of the Board. In the absence or inability to act of
the President, any one of the Vice Presidents may act in his stead.
Notwithstanding any other provision of these Bylaws, under emergency conditions
existing in case of catastrophe wrought by war affecting the territory,
facilities or personnel of the Company, in the event of the absence, death or
inability to act of the Chairman of the Board, the powers and duties of the
Chairman of the Board shall, until the end of the emergency or until prior
action by the Board of Directors, devolve successively upon the President and
such other officers as shall have been designated in a resolution adopted by the
Board of Directors, and in accordance with the order of succession set forth
therein.

                        Power and Duties of the Secretary

SECTION 26. It shall be the duty of the Secretary to act as custodian of the
minutes of all meetings of the Board of Directors and of the stockholders and of
any committees of the Board of Directors which keep formal minutes; he shall
attend to the giving and serving of all notices of the Company; he shall attest
the seal of the Company upon all contracts and instruments executed under such
seal and shall affix or cause to be affixed the seal of the Company thereto and
to all certificates of shares of the capital stock. He shall have charge of the
corporate records and other corporate matters, of the stock certificate book,
transfer book and stock ledger, and such other books and papers as the Board of
Directors or the Chairman of the Board may direct. He shall perform such other
duties as may be assigned to him from time to time by the Board of Directors or
the Chairman of the Board

                       Powers and Duties of the Treasurer

SECTION 27. It shall be the duty of the Treasurer to have the care and custody
of all the funds and securities of the Company. He shall be accountable for the
receipts and disbursements of the funds of the Company. He shall endorse checks,
drafts and other instruments for the payment of money for deposit or collection
when necessary or proper and shall deposit the same to the credit of the Company
in such depositories as the Board of Directors may designate; he shall perform
all acts incident to the position of Treasurer, and such other duties as may be
assigned to him from time to time by the Board of Directors or the Chairman of
the Board.

                      Powers and Duties of the Comptroller

SECTION 28. It shall be the duty of the Comptroller to maintain adequate records
of all assets, liabilities, and accounting transactions of the Company; he shall
have charge of the installation and supervision of all accounting and
statistical records, financial and statistical statements and reports, and the
supervision of the accounting methods and systems in use by all departments and
shall perform such other duties as may be assigned to him from time to time by
the Board of Directors or the Chairman of the Board.

     Assistant Secretaries, Assistant Treasurers and Assistant Comptrollers

SECTION 29. An Assistant Secretary or an Assistant Treasurer or an Assistant
Comptroller shall, in the absence or disability or at the request of the
Secretary or Treasurer or Comptroller, respectively, perform the duties of the
Secretary or Treasurer or Comptroller, respectively, and shall perform such
other duties as may, from time to time, be assigned to him by the Board of
Directors or the Chairman of the Board. The performance of any such duty shall
be conclusive evidence of his right to act.

                       Duties of Officers May Be Delegated

SECTION 30. In case of the absence of an officer of the Company, or for any
other reason deemed sufficient, the Board of Directors or the Chairman of the
Board may delegate, for the time being, the powers or duties, or any of them of
such officer to any other officer, or to any Director.

                         Transfer Agents and Registrars

SECTION 31. The Board of Directors may appoint one or more Transfer Agents or
Transfer Clerks and Registrars, and may require all stock certificates and
certificates representing any rights or options to be signed by such Transfer
Agents or Transfer Clerks acting on behalf of the Company and by such
Registrars.

                              Certificates of Stock

SECTION 32. The certificates of stock of the Company shall be of such form and
devise as the Board of Directors may elect; they shall be numbered and shall be
entered in the books of the Company and registered as they are issued. They
shall exhibit the names of the registered holders and shall certify the number
of shares owned by the person in whose name issued, and shall be signed by, or
in the name of the Company by the Chairman of the Board, the President or a Vice
President and by the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and shall be sealed with the corporate seal of the Company,
which signatures and seal, in the case of certificates signed by a Transfer
Agent or Transfer Clerk and a Registrar, may be facsimile. In case any officer
or officers who shall have signed any such certificate or certificates, or whose
facsimile signature shall appear thereon, shall cease to be such officer or
officers of the Company, whether because of death, resignation or otherwise, and
before such certificate or certificates shall have been delivered by the
Company, such certificate or certificates may nevertheless be adopted by the
Company and be issued and delivered with the same force and effect as though the
person or persons who signed such certificate or certificates, or whose
facsimile signature appears thereon, had not ceased to be such officer or
officers of the Company, and the issuance and delivery of any such certificate
or certificates shall be conclusive evidence of such adoption.

                               Transfers of Stock

SECTION 33. Transfers of stock shall be made on the books of the Company only by
the person named in the certificate or by attorney lawfully constituted in
writing and upon the surrender of the certificate therefor, which shall be
canceled before the new certificate shall be issued.

SECTION 34. The Board of Directors shall have the power to prescribe a period
not exceeding 50 days prior to any meeting of the stockholders or the date for
payment of any dividend or the date for the allotment of rights of the date when
any change or conversion or exchange of capital stock shall go into effect,
during which no transfer of stock on the books of the Company may be made, or
may fix a day not more than 50 days prior to the holding of any such meeting of
stockholders or such date when any change or conversion or exchange of capital
stock shall go into effect, as a day as of which stockholders of record entitled
to notice of and to vote at such meeting of stockholders, or such date for
payment of any dividend or such date for the allotment of rights or such date
when any change or conversion or exchange of capital stock shall go into effect,
shall be determined, and only stockholders of record on such day entitled to
notice or to vote at such meeting of stockholders or entitled to receive payment
of any such dividend or to any such allotment of rights or to exercise the
rights in respect of any change, conversion or exchange of capital stock, as the
case may be, notwithstanding any transfer of any stock on the books of the
Company after any such record date fixed as aforesaid; provided, however, that
in the case of any meeting of stockholders, such period prescribed or day fixed,
as aforesaid, shall not be less than ten days prior to such meeting of
stockholders.

                             Registered Stockholders

SECTION 35. The Company shall be entitled to treat the holder of record of any
share or shares of stock or of any right or rights or option or options as the
holder in fact thereof and accordingly shall not be bound to recognize any
equitable or other claim to or interest in such share, right or option on the
part of any other person, whether or not it shall have express or other notice
thereof, save as expressly provided by the laws of Georgia.

                     Lost, Stolen or Destroyed Certificates

SECTION 36. No certificate of shares of stock of the Company shall be issued in
place of any certificate alleged to have been lost or stolen or destroyed,
except upon the submission of proper proof by the owner and the delivery to the
Company of a bond of indemnity against such lost or stolen or destroyed
certificate and except under such regulations and restrictions as the Board of
Directors may prescribe.

                      Annual Report and Inspection of Books

SECTION 37. The Chairman of the Board and the President shall make and present
to the annual meeting of stockholders a report showing a Balance Sheet and
Income Statement for the preceding fiscal year. A copy of such report shall be
mailed to each stockholder of the Company at least fifteen days in advance of
the annual meeting of the Company. Such report may also contain such other
information and may be in such detail as the Chairman of the Board and the
President and the Board of Directors may determine in their absolute discretion.
The stockholders of the Company entitled to vote, by a majority vote at any
meeting duly called, or in case such stockholders shall fail to act, the Board
of Directors, shall have the power from time to time to determine whether and to
what extent and at what times and places and under what conditions and
regulations the accounts and books of the Company (other than the stock ledger)
or any of them, shall be open to the inspection of stockholders; and no
stockholder shall have any right to inspect any account or book or document of
the Company, except as conferred by statute or authorized by the Board of
Directors or by a resolution of such stockholders.

                         Depositories, Checks and Notes

SECTION 38. The Board of Directors are authorized to select such Depositories as
they shall deem proper for the funds of the Company. All checks, drafts and
demands for money against such deposited funds and all notes of the Company
shall be signed by such officers or persons as the Board of Directors may from
time to time designate.

                                   Fiscal Year

SECTION 39. The fiscal year shall begin the first day of January in each year,
and shall end on the thirty-first day of December of such year.

                                     Notices

SECTION 40. Whenever under the provisions of these Bylaws notice is required to
be given to any director, officer or stockholder, it shall not be construed to
mean personal notice, unless otherwise provided in these Bylaws, but such notice
may be given in writing, by mail, by depositing the same in the post office or
letter box, in a postpaid wrapper, addressed to such stockholder, officer or
director at such address as appears on the books of the Company, or, in default
in other address, to such director, officer or stockholder at the General Post
Office in the City of Atlanta, Georgia, and such notice shall be deemed to be
given at the time when the same shall be thus mailed.

Notice need not be given of any adjourned meeting, special or regular, of
stockholders or directors other than by announcement at the meeting which is
being adjourned.

Any stockholder, director or officer may waive any notice required to be given
by statute or under the provisions of the Certificate of Incorporation or under
these Bylaws, and such waiver shall be deemed equivalent to the notice so
required; provided, always, that such waiver shall be in writing and signed by
such stockholder, officer or director, or by his duly authorized attorney,
whether before or after the meeting or the time stated therein, notice of which
is being waived.

                       Indemnification and Related Matters

SECTION 41. Each person who is or was a director or officer of the Company or is
or was an employee of the Company holding one or more positions of management
through and inclusive of department managers (but not positions below the level
of department 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 or officer of the Company or is or was
an employee of the Company holding one or more Management Positions, or is or
was serving at the request of the Company as a director, officer, employee,
agent or trustee of another corporation, partnership, joint venture, trust,
employee benefit plan or other enterprise, shall be indemnified by the Company
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.

Expenses (including attorneys' fees) incurred by a director or officer of the
Company or employee of the Company holding one or more Management Positions with
respect to the defense of any such claim, action, suit or proceeding may be
advanced by the Company 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 under taking 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 Company under this Section 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 Company.

The Company may purchase and maintain insurance at the expense of the Company on
behalf of any person who is or was a director, officer, employee, or agent of
the Company, or any person who is or was serving at the request of the Company
as a director (or the equivalent), 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 Company would have the power to indemnify
him against such liability or expense under this Section or otherwise.

Without limiting the generality of the foregoing provisions, no present or
future director or officer of the Company, 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, the
Federal Power Act, or any federal or state statute or municipal ordinance
regulating the Company 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, but shall
not be limited to, judgments, court costs, and attorneys' fees.

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.

If any word, clause or provision of the Bylaws or any indemnification made under
this Section 41 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.

                                   Amendments

SECTION 42. The Bylaws of the Company may be altered, amended or repealed at any
meeting of the Board of Directors, by the vote of a majority of the entire Board
then in office, or at any meeting of the stockholders by the vote of the holders
of the majority of the stock issued and outstanding and entitled to vote at such
meeting, in accordance with the provisions of the Charter and of these Bylaws.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>5
<FILENAME>x3d2.txt
<TEXT>



                                    Exhibit A
                              Articles of Amendment
                       to the Articles of Incorporation of

                               Gulf Power Company

         The first paragraph under the "Voting Powers" section is hereby deleted
in its entirety and replaced with the following:

                  At all elections of directors of the corporation, the holders
         of preferred stock and Class A preferred stock shall have full voting
         rights with the holders of common stock, all voting together as a
         single class; each holder of preferred stock being entitled to one vote
         for each share thereof standing in his name, each holder of Class A
         preferred stock being entitled to one-quarter vote for each share
         thereof standing in his name and each holder of common stock being
         entitled to one vote for each share thereof standing in his name. On
         all other matters, except on matters in respect of which the laws of
         the State of Maine shall provide that all stockholders shall have the
         right to vote irrespective of whether such right shall have been
         relinquished by any of such stockholders and except as otherwise herein
         provided, the holders of common stock shall have the exclusive right to
         vote.

                  Notwithstanding the foregoing, whenever and as often as four
         quarterly dividends payable on the preferred stock or Class A preferred
         stock of any series shall be in default, in whole or in part, the
         holders of the preferred stock and Class A preferred stock of all
         series shall have the exclusive right, voting separately and as a
         single class, to vote for and to elect the smallest number of directors
         that shall constitute a majority of the then authorized number of
         directors of the corporation, and, in all matters other than the
         election of directors, the holders of the preferred stock and Class A
         preferred stock shall be entitled to vote together with the holders of
         common stock. In the event of defaults entitling the preferred stock
         and Class A preferred stock to vote as aforesaid, the holders of common
         stock shall have the exclusive right, voting separately and as a class,
         to vote for and to elect the greatest number of directors that shall
         constitute a minority of the then authorized number of directors of the
         corporation, and, in all matters other than the election of directors,
         the holders of common stock shall be entitled to vote together with the
         holders of preferred stock and Class A preferred stock. In each
         instance in which the holders of the preferred stock and Class A
         preferred stock are entitled to vote separately and as a single class
         or to vote together with the holders of the common stock, other than
         for the election of directors, the relative voting power of the various
         series of stock shall be computed as hereinafter provided. These
         additional voting rights of the holders of the preferred stock and
         Class A preferred stock, however, shall cease when all defaults in the
         payment of dividends on their stock shall have been cured, and such
         dividends shall be declared and paid out of any funds legally available
         therefor as soon as, in the judgment of the Board of Directors, is
         reasonably practicable.

         The lead in language (preceding clause (a)) to the last paragraph of
the "Voting Powers" section is hereby deleted in its entirety and replaced with
the following:

                  For the purposes of the foregoing provisions, other than when
         the holders of the preferred stock, the Class A preferred stock and the
         common stock vote together as a single class for the election of
         directors, the preferred stock and the Class A preferred stock of all
         series shall be deemed to be a single class, and the relative voting
         power of each series of preferred stock, Class A preferred stock and
         common stock shall be determined as follows:
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>6
<FILENAME>x3d3.txt
<TEXT>



                               GULF POWER COMPANY

                                     BY-LAWS



                Section 1. The annual meeting of the stockholders of the
corporation for the election of directors and for the transaction of such other
corporate business as may properly come before such meeting shall be held at the
corporation's office at Augusta, in the State of Maine, or at such other place
within or without the State of Maine as the Board of Directors may determine, on
the last Tuesday in June in each year; provided, however, that the Board of
Directors may fix an earlier day for such annual meeting of stockholders in any
particular year; and provided further that, if the day fixed for such annual
meeting of stockholders is a legal holiday, such meeting shall be held on the
first day thereafter which is not a legal holiday.

                Section 2. Special meetings of the stockholders of the
corporation may be held at such time and at such place within or without the
State of Maine as may be determined by the President or the Board of Directors
or Executive Committee, or stockholders holding one-fourth of the then
outstanding capital stock entitled to vote.

                Section 3. Notice of the time, place and purpose of every
meeting of stockholders shall be mailed by the Secretary or the officer
performing his duties at least ten days before the meeting to each stockholder
of record entitled to vote, at his post office address as shown by the records
of the corporation, but meetings may be held without notice if all stockholders
entitled to vote are present or if notice is waived before or after the meeting
by those not present. No stockholder shall be entitled to notice of any meeting
of stockholders with respect to any shares registered in his name after the date
upon which notice of such meeting is required by law or by these by-laws to have
been mailed or otherwise given to stockholders.

                Section 4. Subject to the provisions of the articles of
incorporation, as amended, the holders of a majority of the stock of the
corporation entitled to vote, present in person or by proxy, shall constitute a
quorum, but less than a quorum shall have power to adjourn.

                At all meetings of stockholders, each stockholder entitled to
vote may vote and otherwise act either in person or by proxy.


<PAGE>


                Section 5. The stock of the corporation shall be transferable or
assignable on the books of the corporation by the holders in person or by
attorney on the surrender of the certificates therefor duly endorsed. The
certificates of stock of the corporation shall be numbered and shall be entered
in the books of the corporation and registered as they are issued. They shall
exhibit the name of the registered holder and shall certify the number of shares
owned by him and shall be signed by, or in the name of the corporation by, the
President or a Vice-President and by the Treasurer or an Assistant Treasurer or
the Secretary or an Assistant Secretary, and shall be sealed with the corporate
seal of the corporation. Where such certificate is signed by a Transfer Agent or
by a Transfer Clerk acting on behalf of the corporation and by a Registrar, the
signature of any such President, Vice-President, Treasurer, Assistant Treasurer,
Secretary or Assistant Secretary and the seal of the corporation may be
facsimile. In case any officer or officers who shall have signed, or whose
facsimile signature or signatures shall have been used on, any such certificate
or certificates, shall cease to be such officer or officers of the corporation,
whether because of death, resignation or otherwise, before such certificate or
certificates shall have been delivered by the corporation, such certificate or
certificates may nevertheless be adopted by the corporation and be issued and
delivered as though the person or persons who signed such certificate or
certificates or whose facsimile signature or signatures shall have been used
thereon had not ceased to be such officer or officers of the corporation and the
issuance and delivery of any such certificate or certificates shall be
conclusive evidence of such adoption.

                The stock transfer books of the corporation may be closed by
order of the Board of Directors for such period, not to exceed sixty days
previous to any meeting of the stockholders or previous to the payment of any
dividend upon the stock of the corporation, as the Board may determine, during
which time no transfer of stock upon the books of the Corporation shall be made,
and said books shall be re-opened the day following the date fixed for such
meeting or for the payment of such dividend. If the stock transfer books of the
corporation are ordered closed by the Board of Directors, every stockholder who
appears of record at the time of closing said books shall be entitled to vote at
the meeting or to receive the dividend on account of which the said books were
ordered closed. In lieu of providing for the closing of the stock transfer books
of the corporation, the Board of Directors may fix a date not exceeding sixty
days preceding the date of any meeting of stockholders, or any dividend payment
date, as the record date for the determination of the stockholders entitled to
notice of and to vote at such meeting, or entitled to receive such dividend, as
the case may be. If the stock transfer books of the corporation are not ordered
closed by the Board of Directors or if the Board of Directors does not fix a
date of record in lieu thereof, every stockholder who appears of record on the
date of a stockholders' meeting shall be entitled to vote at such meeting and
every stockholder who appears of record on the date specified by the Board of
Directors in their declaration of a dividend shall be entitled to such dividend.

                Section 6. Upon receipt by this corporation of evidence,
satisfactory to the Board of Directors, of the loss, destruction or mutilation
of any certificate of stock of this corporation and, if required by the Board of
Directors, upon receipt of indemnity satisfactory to the Board of Directors and
upon surrender and cancellation of such certificate, if mutilated, the Board of
Directors may, if it so determines, direct the officers of this corporation to
execute and deliver a new certificate of like tenor and for the same number of
shares of the same class of stock to be issued in lieu of such lost, destroyed
or mutilated certificate.

                Section 7. The affairs of this corporation shall be managed by a
Board consisting of not less than six directors, nor more than fifteen
directors, their number to be fixed at the annual or any special meeting of the
stockholders, who shall be elected annually by the stockholders entitled to
vote, to hold office until their successors are elected and qualify. Directors
need not be stockholders. A majority of the members of the Board then in office
shall constitute a quorum. Vacancies in the Board of Directors may be filled by
the Board at any meeting, except that vacancies arising from the election of
fewer directors than the total number fixed shall be filled at a meeting of the
stockholders called for the purpose of filling such vacancies, or by the Board
of Directors under special authorization from the stockholders. Any and all of
the directors may at any time be removed without cause assigned by the vote of
the holders of a majority in number of all of the outstanding stock entitled to
vote given at a meeting called for the purpose of considering such action. The
foregoing provisions of this Section 7 relating to the election of directors and
to the filling of vacancies in the Board of Directors shall be subject to the
provisions of the Articles of Incorporation, as amended.

                A person being a full-time executive employee of the corporation
or its parent company or any affiliated company when first elected a director of
the corporation (hereinafter sometimes referred to as an "employee-director")
shall not be eligible for election as a director when he ceases to be an
executive employee, whether by reason of resignation, retirement or other cause.
Any employee-director shall resign as a director effective on the date he ceases
to be an executive employee.


<PAGE>


                A person not an employee-director shall not be eligible to serve
as a director of the corporation (1) after his 70th birthday, (2) one year after
permanent separation from the business or professional organization with which
he was primarily associated when first elected a director, (3) one year after
any other material change in his primary occupation or executive position from
that which he pursued or held when first elected a director, or (4) one year
after moving his principal residence outside the service area in which he was a
resident when first elected a director, whichever event first occurs. The
application to an individual of any provision of this paragraph may be waived by
the Board of Directors. Any such waiver shall only be effective on a
year-to-year basis. The provisions of this paragraph, with the exception of item
(1) above, shall apply only to those individuals elected as a member of the
Board of Directors after the annual meeting of this Board held July 26, 1996.

                Any employee-director who is not eligible for election as a
director by reason of the foregoing provisions shall be eligible for election
and re-election by the Board of Directors as an advisory director, upon the
recommendation of the Chief Executive Officer of the corporation, for a term
ending at the first meeting of the Board of Directors following the annual
meeting of stockholders next following such election. Any person eligible for
election as an advisory director must be one whose services as such will be, in
the opinion of the Board of Directors, of value to the corporation. An advisory
director shall be entitled to notice of and to attend and advise but not to vote
at, meetings of the Board of Directors, and of any committees thereof to which
he shall be appointed, nor shall he be counted in determining the existence of a
quorum, and for his services may be paid, in the discretion of the Board of
Directors, compensation and reimbursement of expenses on the same basis as if he
were a director.

                Section 8. The annual meeting of the Board of Directors shall be
held as soon as practicable after the annual meeting of the stockholders. Other
meetings of the Board of Directors shall be held at the times fixed by
resolution of the Board or upon call of the Chairman of the Board, the President
or a Vice-President or any person upon whom powers have devolved pursuant to
Section 12 hereof. The Secretary or officer performing his duties shall give at
least two days' notice of all meetings of Directors, provided that a meeting may
be held without notice immediately after the annual election of Directors, and
notice need not be given of regular meetings held at times fixed by resolution
of the Board. Meetings may be held at any time without notice if all the
Directors are present or if those not present waive notice either before or
after the meeting. Notice by mail or telegraph to the usual business or
residence address of the director shall be sufficient. The purpose of special
meetings of the Board of Directors need not be stated in such notice unless
required by law and unless otherwise indicated in the notice any and all
business may be transacted at a special meeting of the Board of Directors.

                Section 9. The Board of Directors, as soon as may be convenient
after the election of directors in each year, may appoint one of their number
Chairman of the Board and shall appoint one of their number President of the
corporation, and shall also appoint one or more Vice-presidents, a Secretary, a
Clerk and a Treasurer, none of whom need be members of the Board, and shall,
from time to time, appoint such other officers as they may deem proper. The same
person may be appointed to more than one office. The term of office of all
officers shall be for one year and until their respective successors are chosen
and qualified, but any officer may be removed from office at any time by the
Board of Directors without cause assigned. Vacancies in the offices shall be
filled by the Board of Directors.

                Section 10. The Board of Directors, as soon as may be after the
election in each year, may appoint an executive committee to consist of the
President and such number of directors as the Board may from time to time
determine. Such committee shall have and may exercise all of the powers of the
Board during the intervals between its meetings which may be lawfully delegated,
subject to such limitations as may be provided by a resolution of the Board. The
Board shall have the power at any time to change the membership of such
committee and to fill vacancies in it. The executive committee may make rules
for the conduct of its business and may appoint such committees and assistants
as it may deem necessary. The Board may, from time to time, determine by
resolution the number of members of such committee required to constitute a
quorum. The Board shall designate the Chairman of the executive committee and
the proceedings of the executive committee shall from time to time be reported
to the Board of Directors.

                Section 11. Unless otherwise designated as separate offices by
the Board of Directors, the President shall be the Chief Executive Officer of
the corporation; he shall preside at all meetings of the stockholders and
directors; he shall have general supervision of the business of the corporation;
shall see that all orders and resolutions of the Board are carried into effect,
subject, however, to the rights of the directors to delegate any specific
powers, except such as may be by statute exclusively conferred on the President,
to any other officer of the corporation. He shall, unless otherwise ordered,
execute bonds, deeds, mortgages, and other contracts, and when required shall
cause the seal of the corporation to be affixed thereto and shall sign
certificates of stock. He shall be ex officio a member of all standing
committees, and shall submit to the stockholders at their annual meeting a
report of the year's business. Should the offices of President and Chief
Executive Officer be held by different persons, the above duties shall be as
delegated to each office by the Board of Directors.

                Section 12. Notwithstanding the provisions of Section 9 hereof,
in the event of the absence or inability of the President to act, the powers and
duties of the President shall, subject to the control of the Board of Directors,
devolve successively upon such other persons as shall have been designated in a
resolution adopted by the Board of Directors, and in accordance with the order
of succession set forth therein.

                Section 13. The Secretary shall attend all sessions of the Board
and record all votes and the minutes of all proceedings in a book to be kept for
that purpose; and shall perform like duties for standing committees when
required. He shall give or cause to be given notice of all meetings of the
stockholders and the Board of Directors, and of standing committees when
required, and shall perform such other duties as may be prescribed by the Board
of Directors or the President under whose supervision he shall act. He shall
keep in safe custody the seal of the Corporation, and when authorized, affix the
same to any instrument requiring a seal, and attest the signatures thereof, when
directed or required to do so.

                Section 14. 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 depositaries as may be designated by the Board of
Directors. He shall disburse the funds of the corporation as may be ordered by
the Board, taking proper vouchers for such disbursements, and shall render to
the President, and to the directors at the regular meetings of the Board or
whenever they may require it, an account of all his transactions as Treasurer
and of the financial condition of the corporation. He shall give the corporation
a bond 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.


<PAGE>


                Section 15. It shall be the duty of the Comptroller to supervise
and be responsible for accounting transactions of the corporation; to have
charge of the installation and supervision of all accounting and statistical
records, the preparation of all financial and statistical statements and
reports, and the accounting methods, systems and forms in use by all
departments; he shall perform such other duties as may be assigned to him from
time to time by the President.

                Section 16. One or more Assistant Secretaries or Assistant
Treasurers or Assistant Comptrollers may be elected by the Board or appointed by
the President to hold office until the next annual meeting of the Board of
Directors and until their successors are elected or appointed, but may be
removed at any time. They shall perform any or all of the duties of the
Secretary or Treasurer, or Comptroller as the case may be, and such other duties
as may be assigned to them from time to time.

                Section 17. The Clerk of the corporation shall be a resident of
Maine, and shall be sworn to the faithful performance of his duties. He need not
be a stockholder. He shall keep a full and accurate record of all stockholders'
meetings, shall keep an office in said Augusta as required by law, and shall
have the custody of all books and papers belonging to the corporation which are
located in said office. He shall receive as compensation for his services in
acting as proxy at annual meetings, keeping an office in Maine, preparing
records of annual meetings and furnishing the Secretary with duplicate copies of
same and of necessary blanks and forms at proper times the sum of fifty dollars
annually, payable in advance. He shall receive a reasonable compensation for all
additional services. In the absence of the Clerk, a Clerk pro tempore may be
chosen, who shall be a resident of Maine, and shall be duly sworn.

                Section 18. In the case of the absence of any officer of the
corporation, or for any other reason that the Board may deem sufficient, the
Board may delegate the powers or duties of such officers to any other officer or
to any director, for the time being.

                Section 19. If the office of any director becomes vacant by
reason of death, resignation, retirement, disqualification, removal from office,
or otherwise, the remaining directors then in office, even though less than a
quorum, by a majority vote may choose a successor or successors, who shall hold
office for the unexpired term in respect of which such vacancy occurred; but
vacancies in the Board of Directors arising from the election of fewer directors
than the total number fixed shall be filled in the manner prescribed by Section
7 thereof.


<PAGE>


                Section 20. The Board of Directors shall have power to authorize
the payment of compensation to the directors for services to the corporation,
including fees for attendance at meetings of the Board of Directors, of the
executive committee and all other committees and to determine the amount of such
compensation and fees.

                Section 21.

                A.  Indemnity

                To the fullest extent permitted by law, the Company shall
indemnify each person made, or threatened to be made, a party to any threatened,
pending, or completed claim, action, suit or proceeding, whether civil or
criminal, administrative or investigative, and whether by or in the right of the
Company or otherwise, by reason of the fact that such person, or such person's
testator or intestate, is or was a director, officer or was an employee of the
Company holding one or more management positions through and inclusive of
managers (but not positions below the level of managers) (such positions being
hereinafter referred to as "Management Positions") or is or was serving at the
request of the Company as a director, officer, employee, agent or trustee of
another corporation, partnership, joint venture, trust, employee benefit plan or
other enterprise, in any capacity at the request of the Company, against all
loss and expense actually or reasonably incurred by him including, without
limiting the generality of the foregoing, judgments, fines, penalties,
liabilities, sanctions, and amounts paid in settlement and attorneys fees and
disbursements actually and necessarily incurred by him in defense of such action
or proceeding, or any appeal therefrom. The indemnification provided by this
Section shall inure to the benefit of the heirs, executors and administrators of
such person.

                In any case in which a director, officer of the Company or
employee of the Company holding one or more Management Positions requests
indemnification with respect to the defense of any such claim, action, suit or
proceedings, the Company may advance expenses (including attorney's fees)
incurred by such person 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 a written undertaking by or on behalf of such person to
repay amounts advanced if it shall ultimately be determined that such person was
not entitled to be indemnified by the Company under this Section 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 Company. Such a person claiming
indemnification shall be entitled to indemnification upon a determination that
no judgment or other final adjudication adverse to such person has established
that such person's acts were committed in bad faith or were the result of active
and deliberate dishonesty and were material to the cause of action so
adjudicated, or such person personally obtained an economic benefit including a
financial profit or other advantage to which such person was not legally
entitled. Without limiting the generality of the foregoing provision, no former,
present or future director or officer of the Company or employee of the Company
holding one or more management positions, or his heirs, executors or
administrators, shall be liable for any undertaking entered into by the Company
or its subsidiaries or affiliates as required by the Securities and Exchange
Commission pursuant to any rule or regulation of the Securities and Exchange
Commission now or hereafter in effect or orders issued pursuant to the Public
Utility Holding Company Act of 1935, the Federal Power Act, or any undertaking
entered into by the Company due to environmental requirements including all
legally enforceable environmental compliance obligations imposed by federal,
state or local statute, regulation, permit, judicial or administrative decree,
order and judgment or other similar means, or any undertaking entered into by
the Company pursuant to any approved Company compliance plan or any federal or
state or municipal ordinance which directly or indirectly regulates the Company,
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.

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

                If any word, clause or provision of the By-laws or any
indemnification made under this Section 21 shall for any reason be determined to
be invalid, the remaining provisions of the By-Laws shall not otherwise be
affected thereby but shall remain in full force and effect. The masculine
pronoun, as used in the By-Laws, means the masculine and feminine wherever
applicable.

                B.  Insurance

                The Company may purchase and maintain insurance on behalf of any
person described in Section 21 against any liability or expense (including
attorney fees) which may be asserted against such person whether or not the
Company would have the power to indemnify such person against such liability or
expense under this Section 21 or otherwise.


<PAGE>


                Section 22. The Board of Directors are authorized to select such
depositaries as they shall deem proper for the funds of the corporation. All
checks and drafts against such deposited funds shall be signed by such officers
or such other persons as may be specified by the Board of Directors.

                Section 23. The corporate seal shall be circular in form, and
shall have inscribed thereon the name of the corporation, followed by the word
"Maine" and shall have the word "Seal" inscribed in the center thereof.

                Section 24. A director of this corporation shall not be
disqualified by his office from dealing or contracting with the corporation,
either as vendor, purchaser or otherwise, nor shall any transaction or contract
of this corporation be void or voidable by reason of the fact that any director
or any firm of which any director is a member or any corporation of which any
director is a shareholder or director is in any way interested in such
transaction or shall be authorized, ratified or approved either (a) by vote of a
majority of a quorum of the Board of Directors or the executive committee,
without counting in such majority or quorum any directors so interested or being
a member of a firm so interested or a shareholder or director of a corporation
so interested, or (b) by vote at a stockholders' meeting of the holders of a
majority of all the outstanding shares of the stock of the corporation entitled
to vote or by a writing or writings signed by a majority of such holders; nor
shall any director be liable to account to the corporation for any profit
realized by him from or through any transaction or contract of this corporation
authorized, ratified or approved as aforesaid, by reason of the fact that he or
any firm of which he is a member or any corporation of which he is a shareholder
or director was interested in such transaction or contract. Nothing herein
contained shall create any liability in the events above described or prevent
the authorization, ratification or approval of such contracts or transactions in
any other manner provided by law.

                Section 25. These by-laws may be altered or amended (a) by a
majority vote of the outstanding stock entitled to vote at any annual meeting or
upon notice at any special meeting of stockholders, or (b) at any meeting of the
Board of Directors by a majority vote of the entire Board then in office.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>7
<FILENAME>x3e2.txt
<TEXT>



                                    Exhibit A
                              Articles of Amendment
                       to the Articles of Incorporation of

                            Mississippi Power Company

         The first paragraph under the "Voting Powers" section of Paragraph
Fourth is hereby deleted in its entirety and replaced with the following:

                  At all elections of directors of the corporation, the holders
         of preferred stock shall have full voting rights with the holders of
         common stock, all voting together as a single class; each holder of
         preferred stock being entitled to one-half vote for each share thereof
         standing in his name and each holder of common stock being entitled to
         one vote for each share thereof standing in his name. On all other
         matters, except on matters in respect of which the laws of the State of
         Mississippi shall provide that all stockholders shall have the right to
         vote irrespective of whether such right shall have been relinquished by
         any of such stockholders and except as otherwise herein provided, the
         holders of common stock shall have the exclusive right to vote.

                  Notwithstanding the foregoing, whenever and as often as four
         quarterly dividends payable on the preferred stock of any series shall
         be in default, in whole or in part, the holders of the preferred stock
         of all series shall have the exclusive right, voting separately and as
         a single class, to vote for and to elect the smallest number of
         directors that shall constitute a majority of the then authorized
         number of directors of the corporation, and, in all matters other than
         the election of directors, each holder of one or more shares of
         preferred stock shall be entitled to one vote for each such share of
         stock held by him. In the event of defaults entitling the preferred
         stock to vote as aforesaid, the holders of common stock shall have the
         exclusive right, voting separately and as a class, to vote for and to
         elect the greatest number of directors that shall constitute a minority
         of the then authorized number of directors of the corporation, and, in
         all matters other than the election of directors, each holder of common
         stock shall be entitled to one vote for each such share held by him.
         These additional voting rights of the holders of the preferred stock,
         however, shall cease when all defaults in the payment of dividends on
         their stock shall have been cured, and such dividends shall be declared
         and paid out of any funds legally available therefor as soon as, in the
         judgment of the Board of Directors, is reasonably practicable.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3
<SEQUENCE>8
<FILENAME>x3f2.txt
<TEXT>




                -------------------------------------------------


                                     BY LAWS

                                       of

                       Savannah Electric and Power Company

                -------------------------------------------------






                           as Amended to May 17, 2000


<PAGE>


                      -------------------------------------
                                     BYLAWS

                                       of

                       Savannah Electric and Power Company
                      -------------------------------------


                                    ARTICLE I

                                      Name

         The name of this Corporation shall be Savannah Electric and Power
Company.

                                   ARTICLE II

                              Stockholders' Meeting

         All meetings of the Stockholders shall be held at the principal office
of the Corporation in Savannah, Georgia, unless some other place in Georgia is
stated in the call.

                                   ARTICLE III

                                 Annual Meetings

         The annual meeting of the Stockholders of this Corporation shall be
held on the third Tuesday in May in each year, if not a legal holiday, and if a
legal holiday, then on the next succeeding Tuesday not a legal holiday. In the
event that such annual meeting is omitted by oversight or otherwise on the date
herein provided therefor, a subsequent meeting may be held in place thereof, and
any business transacted or elections held at such meeting shall be as valid as
if transacted or held at the annual meeting. Such subsequent meeting shall be
called in the same manner and as provided for special Stockholders' meetings.

                                   ARTICLE IV

                                Special Meetings

         Special meetings of the Stockholders of this Corporation shall be held
whenever the Chairman of the Board, the President or a Vice President, a
majority of the Board of Directors, or the holders of at least one-fourth (1/4)
part in interest of the capital stock issued and outstanding and entitled to
vote thereat shall make application therefor to the Secretary or an Assistant
Secretary, stating the time, place and purpose of the meeting applied for.
Special meetings of the Stockholders shall also be held following the accrual of
the rights of the Preferred Stock of the Corporation, voting as a class, to
elect the smallest number of Directors of this Corporation necessary to
constitute a majority of the members of the Board of Directors, whenever
required to be held in accordance with the provisions of the Charter of the
Corporation and/or any resolution of the Stockholders setting forth the powers,
preferences, etc. of the various classes of stock of the Corporation.

                                    ARTICLE V

                        Notice of Stockholders' Meetings

         Notice of all Stockholders' meetings, stating the time and place, and,
in the case of special meetings, the objects for which such meetings are called,
shall be given by the Secretary or an Assistant Secretary, by mail, to each
Stockholder of record entitled to vote at said meeting at his or her registered
address, at least ten (10) days prior to the date of the meeting, and the person
giving such notice shall make affidavit in relation thereto; provided that
notice of any such meeting shall be deemed to be sufficiently given to any
Stockholder who, while the provisions of the Trading with the Enemy Act (Public
Act No. 91 of the Sixty-fifth Congress of the United States of America, as now
or hereafter amended) shall be operative, shall appear from the stock books to
be or shall be known to the Corporation to be an "enemy" or "ally of enemy" as
defined in the said Act and whose address appearing on such stock books is
outside the United States, or the mailing to whom of notice shall at the time be
prohibited by any other law of the United States of America or by any executive
order or regulation issued or promulgated by any officer or agency of the United
States of America (a) if, at least ten (10) days prior to the date of the
meeting, a copy of the notice of the meeting shall be mailed to any person or
agency who by any such law, order or regulation shall have been duly designated
to receive such notice or duly designated or appointed as custodian of the
property of such Stockholder; or (b) if a brief notice of such meeting,
including, in the case of a special meeting, either a brief statement of the
objects for which such meeting is called or a statement as to where there may be
obtained a copy of a written notice containing a statement of such objects,
shall be published by the Corporation at least once, not less than ten (10) days
before the meeting in a daily newspaper published in the English language and of
general circulation in the City of Savannah, Georgia; provided further, however,
that notice of any Stockholders' meeting stating that an increase of the stock
or an issuance of bonds will be considered, shall be published in a daily
newspaper published in the English language and of general circulation in the
City of Savannah, Georgia, once a week for four weeks prior to the time of
holding such meeting.

         Any meeting at which all the Stockholders are present, either in person
or represented by proxy, or of which those not present in person have waived
notice in writing, shall be a legal meeting for the transaction of business,
notwithstanding that notice has not been given as hereinbefore provided.

                                   ARTICLE Vl

                                Waiver of Notice

         Notice of any Stockholders' meeting may be waived by any Stockholder.

                                   ARTICLE VII

                                     Quorum

         At any meeting of the Stockholders a majority in interest of all the
capital stock issued and outstanding and entitled to vote, represented by
Stockholders of record in person or by proxy, shall constitute a quorum, but a
less interest may adjourn any meeting from time to time, and the meeting may be
held as adjourned without further notice. When a quorum is present at any
meeting, a majority of the capital stock represented thereat shall decide any
question brought before such meeting, unless the question is one upon which, by
express provision of law or of the Charter of this Corporation or these Bylaws,
a larger or different vote is required, in which case such express provision
shall govern and control the decision of such question. The provisions of this
Article are subject to the provisions of the Charter of the Company and/or any
resolution of the Stockholders setting forth the powers, preferences, etc., of
the various classes of stock of the Company.

                                  ARTICLE VIII

                                Proxy and Voting

         Stockholders of record may vote at any meeting either in person or by
proxy in writing, which shall be filed with the Secretary of the meeting before
being voted. The voting powers of the respective classes of stock of the Company
shall be as provided in the Charter of the Company and/or any resolution of the
Stockholders setting forth the powers, preferences, etc., of the various classes
of stock of the Company.

                                   ARTICLE IX

                               Board of Directors

         A Board of not less than five nor more than fifteen Directors shall be
chosen by ballot at the Annual Meeting of the Stockholders or at any meeting
held in lieu thereof as hereinbefore provided.

         The number of Directors for each corporate year shall be fixed by vote
at the meeting when elected, but the Stockholders may, at a special meeting
called for the purpose during any such year, increase or decrease (within the
limits above specified) the number of Directors as thus fixed and if necessary
elect Directors to complete the number so fixed. A majority of the Directors
shall be citizens and residents of Georgia. Each Director shall serve until the
next Annual Meeting of the Stockholders and until his successor is duly elected
and qualified. Directors need not be Stockholders of the Corporation.

         A non-employee Director shall become ineligible to serve as a Director
(a) after his 70th birthday; (b) one year after permanent separation from the
business or professional organization with which he was primarily associated
when first elected as a Director; (c) one year after any other material change
in his primary occupation or executive position from that which he pursued or
held when first elected as a Director; or (d) one year after moving his
principal residence outside the service area in which he was a resident when
first elected a Director. The provisions of this paragraph shall apply to all
such non-employee Directors regardless of the date of first election as a
Director.

         The provisions of this Article are subject to the provisions of the
Charter of the Company and/or any resolution of the Stockholders setting forth
the powers, preferences, etc., of the various classes of Company.

                                    ARTICLE X

                               Powers of Directors

         The Board of Directors shall have the entire management of the business
of the Corporation. In the management and control of the property, business and
affairs of the Corporation, the Board of Directors is hereby vested with all the
powers possessed by the Corporation itself, so far as this delegation of
authority is not inconsistent with the laws of the State of Georgia, with the
Charter of the Corporation or with these Bylaws. The Board of Directors shall
have power to determine what constitutes net earnings, profits and surplus,
respectively, what amount shall be reserved for working capital and for any
other purposes, and what amount shall be declared as dividends, and such
determination by the Board of Directors shall be final and conclusive.

                                   ARTICLE XI

                         Executive and Other Committees

         The Board of Directors may elect from their number an Executive
Committee of not less than three or more than seven members, which Committee may
exercise the powers of the Board of Directors in the management of the business
of the Corporation when the Board is not in session. The Executive Committee
shall report its action to the Board of Directors for approval. The Executive
Committee may make rules for the holding and conduct of its meetings and the
keeping of the records thereof.

         The Board of Directors may likewise elect or appoint from their number
other committees from time to time, the number composing such committees and the
powers conferred upon the same to be determined by vote of the Board of
Directors.

                                   ARTICLE XII

                                    Meetings

         Regular meetings of the Board of Directors shall be held at such places
and at such times as the Board may by vote from time to time determine, and if
so determined no notice thereof need be given. Special meetings of the Board of
Directors may be held at any time or place whenever called by the Chairman of
the Board, the President, a Vice President, the Secretary, an Assistant
Secretary, or five or more Directors, reasonable notice thereof being given to
each Director by the Secretary or an Assistant Secretary or officer calling the
meeting, or at any time without formal notice provided all the Directors are
present, or those not present have waived notice thereof in writing. Such
special meetings shall be held at such times and places as the notice thereof or
waiver shall specify.

                                  ARTICLE XIII

                                     Quorum

         A majority of the total number of members of the Board of Directors as
constituted for the time being, but not less than three, shall constitute a
quorum for the transaction of business, but a less number may adjourn any
meeting from time to time and the same may be held as adjourned without further
notice. When a quorum is present at any meeting, a majority vote of the members
in attendance thereat shall decide any questions brought before such meeting,
except as otherwise provided by law, by the Charter of this Corporation or by
these Bylaws.

                                   ARTICLE XIV

                                    Officers

         The officers of this Corporation shall be a Chairman of the Board,
subject to Article XVII hereof, and a President, one or more Vice Presidents, a
Secretary and a Treasurer. All officers shall be elected by the Board of
Directors after its election by the Stockholders, and a regular meeting may be
held without notice for this purpose immediately after the Annual Meeting of the
Stockholders and at the same place.

                                   ARTICLE XV

                         Additional Officers and Agents

         The Board of Directors at its discretion may appoint a General Manager,
one or more Assistant Treasurers and one or more Assistant Secretaries, and such
other officers or agents as it may deem advisable and prescribe the duties
thereof.

                                   ARTICLE XVI

                             Eligibility of Officers

         The Chairman of the Board, if any, and the President, shall each be a
Director of the Corporation. The Vice Presidents, Secretary and Treasurer and
such other officers as may be appointed may be but need not be Directors of the
Corporation. The same person may hold the offices of Secretary and Treasurer.

                                  ARTICLE XVII

                              Chairman of the Board

         The Corporation may, in the discretion of the Board of Directors, have
a Chairman of the Board who, in such case, shall be the chief executive officer
of the Corporation and, as such, shall have supervision of its policies,
business, and affairs, and such other powers and duties as are commonly incident
to the office of chief executive officer. He shall preside at the meetings of
the Board of Directors and may call meetings of the Board of Directors and of
any committee thereof, whenever he deems it necessary and he shall call to order
and act as chairman of all meetings of the Stockholders of the Corporation. In
addition, he shall have such other powers and duties as the Board of Directors
shall designate from time to time. The Chairman of the Board, unless some other
person is thereunto specifically authorized by vote of the Board of Directors,
shall have power to sign all bonds, deeds and contracts of the Corporation.
Should the Board of Directors determine not to have, or upon a vacancy occurring
in such office fail to elect, a Chairman of the Board, such office shall cease
to exist pending subsequent action by the Board of Directors recreating such
office.

                                  ARTICLE XVIII

                                    President

         The President shall, subject to the supervision of the Chairman of the
Board, have the direction of and responsibility for, the operations of the
Corporation, and such other powers and duties as are commonly incident to that
office. He shall also have such other powers and duties as the Board of
Directors shall designate from time to time and, in the absence of the Chairman
of the Board, or should such office fail to exist, shall have the powers and
duties of the Chairman of the Board. The President or a Vice President, unless
some other person is thereunto specifically authorized by vote of the Board of
Directors, shall have power to sign all certificates of stock, bonds, deeds and
contracts of the Corporation.

                                   ARTICLE XIX

                                 Vice Presidents

         A Vice President shall perform the duties and have the powers of the
Chairman of the Board and the President during the absence or disability of the
Chairman of the Board (or the nonexistence of said office) and the President and
shall have power to sign all certificates of stock, bonds, deeds and contracts
of the Corporation, and shall perform such other duties and have such other
powers as the Board of Directors shall from time to time designate.

                                   ARTICLE XX

                                    Secretary

         The Secretary shall be present at all meetings of the Stockholders, of
the Board of Directors and of the Executive Committee, and shall keep accurate
records of the proceedings at such meetings in books provided for that purpose.
He shall perform all the duties commonly incident to his office and shall
perform such other duties and have such other powers as the Board of Directors
shall from time to time designate. In the absence of the Secretary, an Assistant
Secretary or a Secretary pro tempore shall perform his duties. The Secretary,
Assistant Secretary or Secretary pro tempore shall be sworn.

                                   ARTICLE XXI

                                    Treasurer

         The Treasurer, subject to the order of the Board of Directors, shall
have the care and custody of the money, funds, valuable papers and documents of
the Corporation (other than his own bond, which shall be in the custody of the
President), and shall have and exercise under the supervision of the Board of
Directors, all the powers and duties commonly incident to his office, and shall
give bond in such form and with such sureties as shall be required by the Board
of Directors. He shall deposit all funds of the Corporation in such bank or
banks, trust company or trust companies, or with such firm or firms doing a
banking business as the Board of Directors shall designate. He may endorse for
deposit or collection all checks, notes, et cetera, payable to the Corporation
or to its order, may accept drafts on behalf of the Corporation, and shall,
together with the President or a Vice President, sign all certificates of stock.
He shall keep accurate books of account of the Corporation's transactions, which
shall be the property of the Corporation, and, together with all its property in
his possession, shall be subject at all times to the inspection and control of
the Board of Directors. The Treasurer shall hold his office during the pleasure
of the Board of Directors, and shall in every way be subject to their orders.

         All checks, notes, drafts or other obligations for the payment of money
shall be signed by the Treasurer (except as the Board of Directors shall
otherwise specifically order) and, with the exception of checks for the payment
of not exceeding $10,000 (which require one signature) and notes, shall be
countersigned as a condition to their validity by the Chairman of the Board or
the President or such other officer or agent as the Board of Directors shall by
resolution direct; notes shall be countersigned as a condition to their validity
only by such officer or agent as the Board of Directors shall by resolution
direct. Checks for the total amount of any payroll may be drawn in accordance
with the foregoing provisions and deposited in a special fund. Checks upon this
fund may be drawn by such person as the Treasurer shall designate, and need not
be countersigned.

         The Directors may appoint one or more Assistant Treasurers with such
powers and duties, including the powers and duties of the Treasurer as herein
stated, as to them shall seem best.

                                  ARTICLE XXII

                                    Removals

         The Stockholders may, at any meeting called for the purpose, by vote of
a majority of the capital stock issued and outstanding, remove any Director or
other officer elected by them and elect his successor. The Board of Directors
may, by vote of not less than a majority of the entire Board, remove from office
any officer or agent elected or appointed by them. The provisions of this
Article are subject to the provisions of the Charter of the Company and/or any
resolution of the Stockholders setting forth the powers, preferences, etc., of
the various classes of stock of the Company.

                                  ARTICLE XXIII

                                    Vacancies

             If the office of any Director or officer or agent, one or more,
becomes vacant by reason of death, resignation, removal, disqualification or
otherwise, the remaining Directors, although less than a quorum, may, by a
majority vote, choose a successor or successors who shall hold office for the
unexpired term, but vacancies in the Board of Directors may be filled for the
unexpired term by the Stockholders at a meeting called for that purpose, unless
such vacancy shall have been filled by the Directors. The provisions of this
Article are subject to the provisions of the Charter of the Company and/or any
resolution of the Stockholders setting forth the powers, preferences, etc., of
the various classes of stock of the Company.

                                  ARTICLE XXIV

                                  Capital Stock

         The amount of capital stock shall be as fixed in the Charter of this
Corporation or as the same may be increased or decreased from time to time in
accordance with the provisions of law.

                                   ARTICLE XXV

                              Certificates of Stock

         Every Stockholder shall be entitled to a certificate or certificates of
stock of the Company in form prescribed by the Board of Directors, duly numbered
and sealed with the corporate seal of the Company, and setting forth the number
and kind of shares represented thereby to which each Stockholder is entitled.
Such certificates shall be signed by the President or a Vice President and by
the Treasurer or an Assistant Treasurer or the Secretary or an Assistant
Secretary of the Company. The Board of Directors may also appoint one or more
Transfer Agents and/or Registrars for its stock of any class or classes and may
require stock certificates to be counter-signed and/or registered by one or more
of such Transfer Agents and/or Registrars. If certificates of capital stock of
the Company are signed by a Transfer Agent or by a Registrar, the signature of
the officers of the Company and the seal of the Company thereon may be
facsimiles, engraved, printed or otherwise reproduced. Any provisions of these
Bylaws with reference to the signing and sealing of stock certificates shall
include, in cases above permitted, such facsimiles. In case any officer or
officers who shall have signed, or whose facsimile signature or signatures shall
have been used on, any such certificate or certificates shall cease to be such
officer or officers of the Company, whether because of death, resignation or
otherwise, before such certificate or certificates shall have been delivered by
the Company, such certificate or certificates may nevertheless be adopted by the
Board of Directors of the Company and be issued and delivered as though the
person or persons who signed such certificate or certificates or whose facsimile
signature or signatures shall have been used thereon had not ceased to be such
officer or officers of the Company.

                                  ARTICLE XXVI

                                Transfer of Stock

         Shares of stock may be transferred by delivery of the certificate,
accompanied either by an assignment in writing on the back of the certificate,
or by a written power of attorney to sell, assign and transfer the same, signed
by the owner of the certificate. No transfer shall affect the right of the
Corporation to pay any dividend due upon the stock, or to treat the holder of
record as the holder in fact until such transfer is recorded upon the books of
the Corporation or a new certificate is issued to the person to whom it has been
so transferred. It shall be the duty of every Stockholder to notify the
Corporation of his post office address.

                                  ARTICLE XXVII

                                  Record Dates

         The Board of Directors or the Executive Committee may fix in advance
(a) a date, not less than ten (10) nor more than forty-five (45) days preceding
the date of any meeting of the Stockholders, as a record date for the
determination of Stockholders entitled to notice of and to vote at any such
meeting or any adjournment thereof; (b) a date, not less than ten (10) nor more
than thirty (30) days prior to the date for the payment of any dividend, or
other distribution, or the date for the allotment of rights, or the date when
any change, conversion or exchange of capital stock (including any exchange of
stock upon a merger, consolidation or sale of all, or substantially all, of the
assets of the Corporation) shall go into effect, as a record date for the
determination of the Stockholders entitled to receive payment of any such
dividend, or distribution, or to any such allotment of rights, or to exercise
the rights in respect of any change, conversion or exchange of capital stock, as
the case may be; and (c) a date, not less than ten (10) nor more than forty-five
(45) days preceding the date for the taking of any other lawful corporate action
not covered by the foregoing, as a record date for the determination of
Stockholders entitled to act thereon and/or receive the benefit thereof;
notwithstanding, in any such case, any transfer of any stock on the books of the
Corporation after any such record date fixed as aforesaid.

                                 ARTICLE XXVIII

                              Loss of Certificates

         In case of the loss, mutilation or destruction of a certificate of
stock, a duplicate certificate may be issued therefor upon such terms as the
Board of Directors shall prescribe.

                                  ARTICLE XXIX

                                      Seal

         The seal of this Corporation shall consist of a flat faced circular die
with the words and figures "Savannah Electric and Power Company Corporate Seal
1921 Georgia" cut or engraved thereon.

                                   ARTICLE XXX

                  Facsimile Signatures on Bonds and Debentures

         The signatures of any officer of this Corporation executing a corporate
bond, debenture or other debt security of the Corporation or attesting the
corporate seal thereon, or upon any interest coupons annexed to any such
corporate bond, debenture or other debt security of the Corporation, and the
corporate seal affixed to any such bond, debenture or other debt security of the
Corporation, may be facsimiles, engraved or printed, provided that such bond,
debenture or other debt security of the Corporation is authenticated or
countersigned with the manual signature of an authorized officer of the
corporate trustee designated by the indenture or other agreement under which
said security is issued or of an authenticating agent appointed by such
corporate trustee to act in its behalf or by a transfer agent, or registered by
a registrar, other than the Corporation itself or an employee of the
Corporation. In case any officer or officers whose signature or signatures,
whether manual or facsimile, shall have been used on any corporate bond,
debenture or other debt security shall cease to be an officer or officers of the
Corporation for any reason before the same has been delivered by the
Corporation, such bond, debenture or other debt security may nevertheless be
issued and delivered as though the person or persons whose signatures were used
thereon had not ceased to be such officer or officers.

                                  ARTICLE XXXI

                       Indemnification and Related Matters

             Each person who is or was a director or officer of the Corporation
or is or was an employee of the Corporation holding one or more positions of
management through and inclusive of department managers (but not positions below
the level of department 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 or officer of the Corporation or is or
was an employee of the Corporation holding one or more Management Positions, or
is or was serving at the request of the Corporation as a 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 Article shall inure to the benefit of the
heirs, executors and administrators of such person.

         Expenses (including attorneys' fees) incurred by a director or officer
of the Corporation 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 this Article 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.

         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), 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 this Article or otherwise.

           Without limiting the generality of the foregoing provisions, no
present or future director or officer of the Corporation, or employee of the
Corporation holding one or more Management Positions, or his heirs, executors,
or administrators, shall be liable for any act, omission, step, or conduct taken
or had in good faith, or for any undertaking entered into by the Corporation or
its subsidiaries or affiliates which is required, authorized, or approved by any
order or orders issued pursuant to the Public Utility Holding Company Act of
1935, the Federal Power Act, or any undertaking entered into by the Corporation
due to environmental requirements including all legally enforceable
environmental compliance obligations imposed by federal, state or local statute,
regulation, permit, judicial or administrative decree, order and judgment or
other similar means, or any undertaking entered into by the Corporation pursuant
to any approved compliance plan, 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, or employee holding a Management Position, 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, but shall not be limited
to, judgments, court costs, and attorneys' fees.

         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.

         If any word, clause or provision of the Bylaws or any indemnification
made under this Article 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 XXXII

                                   Amendments

                  The By-laws of the Company may be altered, amended or repealed
(a) at any meeting of the Board of Directors by the vote of a majority of the
entire Board then in office, or (b) by the vote of the holders of a majority of
that part of the capital stock of the Company having voting powers which is
represented in person or by proxy at any annual meeting of stockholders or at
any special meeting called for that purpose (provided that a lawful quorum of
stockholders be there represented in person or by proxy), or (c) without a
meeting by the written consent of the holders of all of the issued and
outstanding capital stock of the Company having voting powers; provided,
however, that the Board of Directors shall not have power to alter, amend or
repeal the provisions of Article VII or Article XXXI of the By-laws and
provided, further, that an alteration, amendment or repeal of any other
provision of the By-laws by the Board of Directors shall cease to be effective
unless submitted to and ratified or approved at the next annual or special
meeting at which a lawful quorum of stockholders is represented in person or by
proxy by the vote of the holders of a majority of that part of the capital stock
of the Company having voting powers which is represented in person or by proxy
at such meeting

                                       ###


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>9
<FILENAME>x10a6.txt
<TEXT>

                                                                  Exhibit 10(a)6

Southern Company Services, Inc.                            Original Sheet No. 1
First Revised Rate Schedule FERC No. 138


                             SOUTHERN COMPANY SYSTEM
                        INTERCOMPANY INTERCHANGE CONTRACT

                              ARTICLE I - RECITALS

Section 1.1: This contract is made and entered into this17th day of February,
2000, by and between Alabama Power Company, a corporation organized and existing
under the laws of the State of Alabama with its principal office in Birmingham,
Alabama; Georgia Power Company, a corporation organized and existing under the
laws of the State of Georgia with its principal office in Atlanta, Georgia; Gulf
Power Company, a corporation organized and existing under the laws of the State
of Maine with its principal office in Pensacola, Florida; Mississippi Power
Company, a corporation organized and existing under the laws of the State of
Mississippi with its principal office in Gulfport, Mississippi; Savannah
Electric and Power Company, a corporation organized and existing under the laws
of the State of Georgia with its principal office in Savannah, Georgia; and New
Power Company, a corporation organized and existing under the laws of the State
of ___________ with its principal office in ___________, ___________, all such
companies being hereinafter collectively referred to as the "OPERATING
COMPANIES"; and Southern Company Services, Inc., a subsidiary service company
under the Public Utility Holding Company Act of 1935 ("AGENT" or "SCSI").


Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259




<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 2
First Revised Rate Schedule FERC No. 138


                                   WITNESSETH:




Section 1.2: WHEREAS, the common stock of the OPERATING COMPANIES is owned by
The Southern Company, a public utility holding company organized and operating
pursuant to the provisions of the Public Utility Holding Company Act of 1935
("the Act"); and

Section 1.3:      WHEREAS, the OPERATING COMPANIES can be operated as an
integrated electric utility system pursuant to the standards of the Act; and

Section 1.4: WHEREAS, the OPERATING COMPANIES have so operated their respective
electric facilities and conducted interconnected electric operations pursuant to
and in accordance with the provisions of interchange contracts, the most recent
of which being The Southern Company System Intercompany Interchange Contract
dated October 31, 1988, as amended ("the 1989 Contract"); and

Section 1.5: WHEREAS, the OPERATING COMPANIES desire to replace the 1989
Contract with an amended and restated contract to incorporate in one document
the numerous amendments subsequently made thereto and also to make further
revisions to reflect appropriate modifications to the current arrangement.

Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259


                                        2


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 3
First Revised Rate Schedule FERC No. 138

Section 1.6: WHEREAS, all of the OPERATING COMPANIES (including New Power
Company) will share in all of the benefits and burdens of this IIC, including
complying with operating, dispatch and reserve requirements, participating in
opportunity sales transactions, and bearing responsibility for their portion of
purchases.

Section 1.7: NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements hereinafter stated, the OPERATING COMPANIES agree and
contract as follows:

                          ARTICLE II - TERM OF CONTRACT

Section 2.1: This contract will be referred to as the Southern Company System
Intercompany Interchange Contract ("IIC"). Except as provided in Section 2.2,
the IIC shall become effective on April 18, 2000, and shall continue in effect
from year to year thereafter subject to termination as provided hereinafter.
When this IIC has become effective, it shall supersede and replace the 1989
Contract, and references to a section of such superseded interchange contract in
other agreements of the OPERATING COMPANIES shall be taken to mean reference to
the section of substantially like import in this IIC.

Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259


                                        3


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 4
First Revised Rate Schedule FERC No. 138

Section 2.2: Section 3.5 of the Allocation Methodology and Periodic Rate
Computation Manual to the 1989 Contract contained a provision pertaining to the
treatment of Operation and Maintenance ("O&M") expenses for units that were
projected to operate at less than a ten percent (10%) annual capacity factor
("Ten Percent Rule"). The Ten Percent Rule is eliminated in Section 3.4 of this
Manual, which change directly affects the dispatch of system resources. In the
event the Federal Energy Regulatory Commission ("FERC") does not allow Section
3.4 of this Manual to take effect without refund obligation, those provisions of
Section 3.5 of the Manual of the 1989 Contract setting forth the Ten Percent
Rule shall continue in effect until Section 3.4 of this Manual is approved at
the conclusion of the proceeding.

Section 2.3: This IIC may be terminated at any time by mutual agreement of the
OPERATING COMPANIES or may be terminated at any time by any OPERATING COMPANY by
its giving to each of the other OPERATING COMPANIES and the AGENT written notice
of its election to so terminate its participation in this IIC at least five (5)
years prior to the date of termination. This IIC shall continue in full force
and effect as to each OPERATING COMPANY until terminated as hereinabove
provided.


Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259

406001.4

                                                    4


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 5
First Revised Rate Schedule FERC No. 138

                     ARTICLE III - PRINCIPAL OBJECTIVES OF
                        INTERCOMPANY INTERCHANGE CONTRACT




Section 3.1: The purpose of this IIC is to provide the contractual basis for the
continued operation of the electric facilities of the OPERATING COMPANIES in
such a manner as to achieve the maximum possible economies consistent with the
highest practicable reliability of service, with the reasonable utilization of
natural resources and effect on the environment, and to provide a basis for
equitably sharing among the OPERATING COMPANIES the costs associated with the
operation of facilities that are used for the mutual benefit of all the
OPERATING COMPANIES.

Section 3.2: It is recognized that reliability of service and economy of
operation require that the energy supply to the system be controlled from a
centralized dispatching office and that this will require adequate communication
facilities and the provision of economic dispatch computer facilities and
automatic controls of generation.

Section 3.3: It is recognized that the IIC provides for the retention of lowest
cost energy resources by each OPERATING COMPANY for its own customers. Energy in
excess of that necessary to meet each OPERATING COMPANY's requirements is
delivered to the Pool as Interchange Energy and may include: (i) energy
generated from fossil fired generating plants and combustion turbines; and (ii)
purchased energy.

Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                        5


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 6
First Revised Rate Schedule FERC No. 138

Section 3.4: It is recognized that, under this IIC, each OPERATING COMPANY will
share in the benefits and pay its share of the costs of coordinated operations
as agreed upon in accordance with the terms hereof. All costs and revenues
associated with wholesale transactions under this IIC will be shared among all
OPERATING COMPANIES (including New Power Company) on a comparable basis through
the application of the governing procedures and methodologies to all such
OPERATING COMPANIES.

Section 3.5: It is recognized by the OPERATING COMPANIES that coordinated
electric operation contemplates minimum cost of power supply upon the
interconnected system at all times, consistent with service requirements and
other operating limitations. Benefits of integrated operation accruing to the
respective OPERATING COMPANIES are predicated upon cooperative efforts toward
this objective and are so reflected in all IIC determinations.


Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                        6


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 7
First Revised Rate Schedule FERC No. 138


                ARTICLE IV - ESTABLISHMENT OF OPERATING COMMITTEE
                      AND DESIGNATION OF AGENT TO ACT UNDER

                        DIRECTION OF OPERATING COMMITTEE



Section 4.1 - Establishment of Operating Committee: A designated representative
from each of the OPERATING COMPANIES, together with a designated representative
of the AGENT who shall act as chairman, shall form and constitute an Operating
Committee to meet at frequent intervals and determine the methods of operation
hereunder.

Section 4.2 - Duties of Operating Committee: The Operating Committee's areas of
responsibility include such matters as developing the concepts, terms and
conditions of this IIC; providing guidance and direction to the AGENT regarding
economic power system operations and the costs associated therewith; reviewing
and recommending generation expansion plans for approval by the respective
OPERATING COMPANIES; and other power system matters that relate to the overall
coordinated operation of the Southern electric system. Each OPERATING COMPANY
representative has one vote and all decisions must be unanimous.

Section 4.3 - Designation of AGENT: SCSI, as a party to this IIC, is designated
as AGENT of the OPERATING COMPANIES for administrative and coordination
functions.

Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                        7


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 8
First Revised Rate Schedule FERC No. 138

Section 4.4 - Duties of AGENT: The AGENT will perform such services and will
represent the OPERATING COMPANIES, or any of them, in all things to be done by
their agent in the execution of and operation under existing contracts with
nonaffiliated utilities or entities (hereinafter referred to as "OTHERS"), or
contracts supplemental thereto, and under any other contracts in which SCSI has
been designated to act as AGENT for the OPERATING COMPANIES.

         The OPERATING COMPANIES have certain contracts with OTHERS that provide
for the purchase and/or sale of capacity and/or energy by the OPERATING
COMPANIES. The AGENT will make the payments associated with purchases under
these contracts and under any other contracts or arrangements under which it
acts as agent for the OPERATING COMPANIES in accordance with their terms. Each
OPERATING COMPANY will reimburse the AGENT for its portion of such total
payments in accordance with the arrangement in effect with respect to the
particular contract. Similarly, the AGENT will collect the payments due for
sales under these contracts and under any other contracts or arrangements under
which it acts as agent and will distribute such payments among the OPERATING
COMPANIES in accordance with the arrangement in effect with respect to the
particular contract.

Issued by: Charles D. McCrary, Executive Vice-Pres.   Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                        8


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 9
First Revised Rate Schedule FERC No. 138

Section 4.5 - Term of Agency: The provisions of this IIC providing for authority
for the AGENT to act on behalf of the OPERATING COMPANIES, or any of them, shall
be deemed to refer, insofar as applicable, to all contracts under which the
AGENT acts as AGENT for the OPERATING COMPANIES and notwithstanding anything to
the contrary in ARTICLE II hereof, this IIC shall continue in effect insofar as
it pertains to other contracts under which the AGENT acts as agent for the
OPERATING COMPANIES during the life of any of the said contracts. The OPERATING
COMPANIES may, however, designate a new agent to act hereunder by giving thirty
(30) days written notice thereof to the AGENT whereupon such new agent shall be
the AGENT hereunder.

                      ARTICLE V - OPERATION AND MAINTENANCE
                 OF THE OPERATING COMPANIES' ELECTRIC FACILITIES

Section 5.1: The OPERATING COMPANIES agree to maintain their respective electric
facilities in good operating condition and to operate such facilities in
coordination with those of the other OPERATING COMPANIES as an integrated
electric system in accordance with determinations made from time to time by the
Operating Committee in order that an adequate power supply shall be available to
meet

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                        9


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 10
First Revised Rate Schedule FERC No. 138

the requirements of the customers of the respective parties hereto at the lowest
cost consistent with a high degree of service reliability.

                  ARTICLE VI - INCORPORATION OF THE ALLOCATION
                METHODOLOGY AND PERIODIC RATE COMPUTATION MANUAL

Section 6.1 - Incorporation of Manual: The mechanics and methods for determining
the charges for capacity and energy purchased and sold between the OPERATING
COMPANIES, the monthly capability requirement determinations, and the monthly
billings and payments between the OPERATING COMPANIES are described in detail in
the Allocation Methodology and Periodic Rate Computation Manual ("Manual")
attached hereto and incorporated herein by reference. The Manual also supplies
more detailed explanation of provisions of this IIC and is necessary to
effectuate its intent.

Section 6.2 - Purpose of Manual: The Manual contains a description of the
methodology and procedure used to calculate the charges for the services
provided for in this IIC. The OPERATING COMPANIES recognize that the cost of
providing such services

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       10


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 11
First Revised Rate Schedule FERC No. 138

will change during the term of this IIC due to changes in loads, investment and
expenses and the addition of electric facilities. Thus, in order for the
OPERATING COMPANIES to share equitably in the cost of the services to be
provided under this IIC, it will be necessary to revise or update, on a periodic
basis, the cost, expense, load and investment figures utilized in the derivation
of the charges for the services to be provided. The Manual will serve as a
formula rate allowing periodic revision of the charges to reflect changes in the
cost of providing the services contemplated by this IIC.

Section 6.3 - Charges to be Shown on Informational Schedules: The Manual
provides that charges derived by application of the formula rate will be shown
on Informational Schedules. The Informational Schedules will be revised on a
periodic basis to reflect application of the formula rate contained in the
Manual.

Section 6.4 - Revision of Charges and Regulatory Filings: Since the charges for
the services provided for in this IIC will be computed in accordance with the
formula rate method and procedures established in the Manual, it is contemplated
that revisions in such charges will not be changes in rates which would require
a filing and suspension under the Federal Power Act and the applicable Rules and
Regulations of the FERC. The initial Informational Schedules will be submitted
to the FERC, or its successor in

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259


                                       11


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 12
First Revised Rate Schedule FERC No. 138

interest, for informational purposes to show the application of the formula rate
and the resulting charges. In addition, work papers will be included with the
initial Informational Schedules showing a detailed application of the formula
rate contained in the Manual. Revised Informational Schedules will be submitted
to the FERC for informational purposes only.

Section 6.5 - Timing of Revisions to Charges: It is contemplated that charges,
computed in accordance with the formula rate contained in the Manual, will be
revised annually. It shall be the responsibility of the AGENT to obtain the data
and figures required from the respective OPERATING COMPANIES for utilization in
the formula rates. The AGENT will also be responsible for calculating the
revised charges to be shown on the Informational Schedules, which will be
submitted to the Operating Committee for review and confirmation.

Section 6.6 - Revision of Manual: The Operating Committee will review the Manual
periodically to determine whether revisions to the formula rate are necessary to
meet changed or changing conditions. If the Operating Committee determines that
revisions to the formula rate are appropriate or necessary, it will revise the
Manual accordingly. In such event, it will be the responsibility of the AGENT to
file the revised Manual with

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259


                                       12


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 13
First Revised Rate Schedule FERC No. 138

the FERC, or its successor in interest, in order to obtain timely approval or
acceptance thereof.

                 ARTICLE VII - INTERCHANGE CAPACITY TRANSACTIONS
                         BETWEEN THE OPERATING COMPANIES

Section 7.1 - Provision for Sharing of Temporary Surpluses or Deficits of
Capacity Between Operating Companies: The coordinated operation of the
integrated electric system creates a pool of power, referred to herein as "the
Pool," to which OPERATING COMPANIES commit their surplus power and from which
OPERATING COMPANIES receive their deficit power. The OPERATING COMPANIES
recognize that in a given year one or more of them may have a temporary surplus
or deficit of capacity as a result of coordinated planning or other
circumstances. It is the purpose of this IIC to allocate equitably between the
OPERATING COMPANIES such temporary surplus or deficit capacity so that each
OPERATING COMPANY will share in the burdens and benefits of coordination of the
integrated electric system. The OPERATING COMPANIES agree to purchase and sell
such temporary surplus and deficit capacity among themselves on a monthly basis.
The amount of capacity to be purchased or sold by the respective OPERATING
COMPANIES is determined by the formula methodology set out in ARTICLE IV of the
Manual.

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       13


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 14
First Revised Rate Schedule FERC No. 138

Section 7.2 - Charge for Monthly Capacity Transactions Among the OPERATING
COMPANIES: The OPERATING COMPANIES recognize that capacity reserves in the Pool
are predominantly made up of peaking plant or equivalent resources. Accordingly,
the monthly charge for capacity transactions among the OPERATING COMPANIES will
be based on the most recently acquired peaking plant resource that is available
for year-round operation and scheduling. Each OPERATING COMPANY's monthly charge
for capacity sold to the Pool is developed in accordance with the formula rate
set out in ARTICLE V of the Manual. The monthly capacity charge for each
OPERATING COMPANY, as developed in accordance with such formula rate, will be
shown on Informational Schedules. The selling OPERATING COMPANIES will make
capacity available monthly to the Pool for purposes of reserve sharing at the
charge shown on such Informational Schedules, and the buying OPERATING COMPANIES
will purchase capacity at the average cost of peaking capacity to the Pool.

                 ARTICLE VIII - INTERCHANGE ENERGY TRANSACTIONS
                         BETWEEN THE OPERATING COMPANIES

Section 8.1 - Provision for Interchange Energy: Coordinated electric system
operation, utilizing the concept of centralized integrated electric system
economic dispatch, results in energy transfers among the OPERATING COMPANIES.
Such energy transfers are

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       14


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 15
First Revised Rate Schedule FERC No. 138

accounted for on an hourly basis and are referred to as Interchange Energy. The
methodology for determining the amount of Interchange Energy supplied to or
purchased from the Pool is set out in ARTICLE II of the Manual. Interchange
Energy is composed of two categories designated as: (i) Associated Interchange
Energy (energy purchased or delivered to serve an OPERATING COMPANY's
requirements); and (ii) Opportunity Interchange Energy (energy purchased or
delivered to meet an OPERATING COMPANY's opportunity transactions).

Section 8.2 - Charge for Interchange Energy: The charge for Interchange Energy
sales by an OPERATING COMPANY during any hour will be based on the variable
costs of the generating resources that are considered as having supplied the
Interchange Energy. The methodology for determining the charges for Associated
and Opportunity Interchange Energy sales to the Pool during any hour is set out
in ARTICLE III of the Manual.

                        ARTICLE IX - PROVISION FOR OTHER
                            INTERCHANGE TRANSACTIONS

Section 9.1 - Assignable Energy: Assignable Energy is defined as energy acquired
from internal sources or from OTHERS for a purpose other than economic dispatch.
Assignable Energy is assigned to one or more of the OPERATING COMPANIES

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       15


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 16
First Revised Rate Schedule FERC No. 138

consistent with the purpose for which it is acquired. Such assignment will be
accomplished by first identifying the beneficiary (or beneficiaries) of the
Assignable Energy and then determining the appropriate share for each such
Operating Company. For example, these shares might be based on a Peak Period
Load Ratio (PPLR) in proportion to the PPLRs of other beneficiaries or relative
participation in a bilateral sale. Once assigned, Assignable Energy will not be
delivered to the Pool unless it becomes economically usable on the integrated
electric system.

Section 9.2 - Hydroelectric Operation During Periods of Minimum Steam
Operations: During certain periods of the year when unusually good flow
conditions prevail, certain steam generating units may be taken out of service
to increase the utilization of hydro energy. The OPERATING COMPANY having such
hydro generation may elect to take a fossil fired generating unit out of
service. In the alternative, if another OPERATING COMPANY takes a fossil fired
generating unit out of service for the purpose of utilizing such hydro energy,
the energy rate between the two OPERATING COMPANIES for that transaction will be
the average of the operation and maintenance cost of such hydro energy and the
variable cost of the fossil fired generating unit, or as otherwise agreed upon
by the two OPERATING COMPANIES.

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       16


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 17
First Revised Rate Schedule FERC No. 138

Section 9.3 - Tie-Line Frequency Regulation by Hydro Capacity: Tie-line load
control and frequency regulation by hydro involves additional costs because of
increased expenditures associated with such regulation. The charge for these
transactions is computed in accordance with the formula rate contained in
ARTICLE VI of the Manual.

Section 9.4 - Pool Transactions with OTHERS: Capacity and energy transactions
with OTHERS that are entered into on behalf of all OPERATING COMPANIES will be
governed by the following principles:

Section 9.4.1 - Pool Purchases of Capacity and Energy: The AGENT (or an
individual OPERATING COMPANY for the AGENT) may periodically purchase capacity
and energy from nonassociated sources for the benefit of the integrated electric
system. Such Pool purchases will initially be allocated at cost to all OPERATING
COMPANIES in proportion to their Peak-Period Load Ratios (as provided for in
ARTICLE X of this IIC). Purchases so allocated may be sold as Interchange Energy
when they are economically usable on the integrated electric system. Adjustments
may thereafter be made in order to reconcile any inequitable effects of this
process among the OPERATING COMPANIES, with the intent being that none of the
individual OPERATING COMPANIES should be adversely impacted by a purchase that
benefits

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259


                                       17


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 18
First Revised Rate Schedule FERC No. 138

the system as a whole. These impacts will be determined through a system
simulation that calculates each Operating Company's cost of generation that is
avoided by the purchase. This avoided cost will be compared on an hourly basis
to the cost of the purchase. To the extent the avoided cost exceeds the purchase
cost, the effect is "positive" (i.e., cost savings) for that hour. These hourly
results will be summed to determine the effect on each Operating Company for the
day. In situations where individual Operating Companies are adversely impacted
by a purchase that benefits the system as a whole, such adverse impacts will be
offset through a proportional reduction in the positive net benefits realized by
the other Operating Companies.

         Section 9.4.2 - Pool Sales of Capacity and Energy: The AGENT may from
time to time arrange for the sale to OTHERS of capacity and energy available on
the integrated electric system at rates provided for in contracts or at rates
mutually agreed upon. The capacity and/or energy obligation for the sale, as
well as the associated cost, is allocated to each OPERATING COMPANY on a
Peak-Period Load Ratio basis (as provided for in Article X of this IIC).
Payments by OTHERS are also distributed to the respective OPERATING COMPANIES on
the basis of the Peak-Period Load Ratios.

               ARTICLE X - UTILIZATION OF PEAK-PERIOD LOAD RATIOS

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       18


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 19
First Revised Rate Schedule FERC No. 138

Section 10.1 - Certain Allocations and Payments to be Based on Peak-Period Load
Ratios: The AGENT is responsible for the annual development of Peak-Period Load
Ratios for each of the OPERATING COMPANIES and such values shall be submitted to
the Operating Committee for review and confirmation. These Ratios will be
utilized for allocation of certain costs, payments, receipts and other
obligations as provided for in this IIC or the Manual. The procedure and
methodology for developing the Peak- Period Load Ratios are set out in ARTICLE I
of the Manual and the values for such Ratios are shown on an Informational
Schedule.

Section 10.2 - Other Uses of Peak-Period Load Ratios: It is agreed that the
Peak-Period Ratios shown on Informational Schedule No. 1 may be used, if
appropriate, by the OPERATING COMPANIES to reimburse the AGENT for other
expenses and costs not contemplated by this IIC.

                        ARTICLE XI - TRANSMISSION SERVICE

Section 11.1 - Applicability of Network Integration Transmission Service:
Network Integration Transmission Service ("Network Service") provides for the
integration, economic dispatch and regulation of current and planned Network
Resources to serve Network Load. Since the OPERATING COMPANIES integrate,
economically

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       19


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 20
First Revised Rate Schedule FERC No. 138

dispatch and regulate their generating resources to serve their native load
pursuant to this IIC, the associated use of the transmission system is in the
nature of Network Service. The OPERATING COMPANIES' native load is specifically
included in the determination of Load Ratio Shares used to derive the charge for
Network Service under the Open Access Transmission Tariff, and therefore the
OPERATING COMPANIES are bearing a cost responsibility for transactions hereunder
comparable to that assigned to other Network Customers.

Section 11.2 - Transmission Service for Other Transactions: To the extent the
OPERATING COMPANIES require transmission service associated with transactions
that are entered into for purposes other than serving native load customers,
such transmission service will be obtained pursuant to the Open Access
Transmission Tariff and/or from other transmission providers.

                        ARTICLE XII - BILLING AND PAYMENT

Section 12.1 - Recording and Billing of Energy Transactions: Each OPERATING
COMPANY shall transmit to the AGENT daily all data and information necessary to
develop the monthly bill for the various energy transactions contemplated by
this IIC. Each OPERATING COMPANY will transmit such data and information to the

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       20


<PAGE>


Southern Company Services, Inc.                            Original Sheet No. 21
First Revised Rate Schedule FERC No. 138

AGENT for each hour of the year to provide for such accounting and billing. All
these data are recorded by the AGENT as required to meet the provisions of this
IIC and to permit application of appropriate interchange charges. The OPERATING
COMPANIES are responsible for an arithmetical check of all figures submitted.
The AGENT is responsible for assembling all of the data and information and for
determining amounts of various classes of energy delivered to and received from
the Pool. The AGENT prepares intercompany energy billing for each month in
accordance with the provisions of this IIC. The bills shall contain such details
as required to permit review and verification by the OPERATING COMPANIES.

Section 12.2 - Month-End Adjustment of Daily Energy Determinations: At the close
of each month, the AGENT allocates energy from nonassociated sources to the
OPERATING COMPANIES and determines the amounts of various classes of energy
moved in interchange, based upon daily conditions. The sum of the daily totals
in interchange does not exactly equal corresponding amounts determined by
month-end meter readings because of certain minor transactions that are neither
metered nor recorded daily. Such differences in energy receipts and deliveries
are billed or credited to each OPERATING COMPANY at the average cost of
Interchange Energy to the Pool for the month.

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       21


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 22
First Revised Rate Schedule FERC No. 138

Section 12.3 - Billing of Capacity Transactions: The AGENT prepares a monthly
bill to the OPERATING COMPANIES for all capacity transactions contemplated by
this IIC. The bill shall contain such details as required to permit review and
verification by the OPERATING COMPANIES.

Section 12.4 - Billing and Payment Date: The AGENT renders all bills provided
for in this IIC not later than the 10th day of the billing month. All payments
by the OPERATING COMPANIES are made by the 20th day of the billing month.

Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       22


<PAGE>


Southern Company Services, Inc.                           Original Sheet No. 23
First Revised Rate Schedule FERC No. 138

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be signed
by their duly authorized representatives on the Operating Committee, which
signatures may be set forth on separate counterpart pages.

ALABAMA POWER COMPANY                       MISSISSIPPI POWER COMPANY


By Signature on Original                    By Signature on Original
   ---------------------                       ---------------------
Its _____________________                   Its

GEORGIA POWER COMPANY                       SAVANNAH ELECTRIC AND POWER COMPANY

By Signature on Original                    By Signature on Original
   ---------------------                       ---------------------
Its ____________________                    Its


GULF POWER COMPANY                          SOUTHERN COMPANY SERVICES, INC.

By Signature on Original                    By Signature on Original
   ---------------------                       ----------------------
Its ____________________                    Its



                                            [NEW POWER COMPANY]


                                            By [In formation]
                                               --------------
                                            Its



Issued by: Charles D. McCrary, Executive Vice-Pres.    Effective: April 18, 2000
Issued on: June 20, 2000
Filed to comply with order of the Federal Energy Regulatory
Commission, Docket Nos. ER00-1655-000 and ER00-1655-001, issued June 15, 2000,
91 FERCP. 61,259



                                       23


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>10
<FILENAME>x10a52.txt
<TEXT>

                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                              Amended and Restated







                              TROUTMAN SANDERS LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., Suite 5200
                             Atlanta, Georgia 30308
                                 (404) 885-3000


                            Effective January 1, 2001

<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    Purposes

         The purposes of the Southern Company Executive Productivity Improvement
Plan (the "Plan") are to provide a financial incentive which will focus the
efforts of certain executives on areas that will have a direct and significant
influence on corporate performance and to provide the potential for levels of
compensation that will enhance the Employing Companies' abilities to attract,
retain and motivate such executives. In order to achieve these objectives, the
Plan will be based upon corporate performance. This Plan is intended to meet the
requirements of Code Section 162(m) related to the deductibility of Awards paid
to Participants subject thereto.

         This Amendment and Restatement shall be effective as of January 1,
2001.

                                    ARTICLE I

                                   Definitions

         For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:

         1.1 "Annual Salary" shall mean base salary or wages paid to a
Participant before deductions for taxes, social security, etc., including all
amounts contributed by an Employing Company to The Southern Company Flexible
Benefits Plan on behalf of a Participant, amounts contributed by any Employing
Company to The Southern Company Employee Savings Plan as Elective Employer
Contributions, as said term is defined in Section 4.1 therein, pursuant to the
Participant's exercise of his deferral option made in accordance with Section
401(k) of the Internal Revenue Code, and amounts contributed to the Southern
Company Deferred Compensation Plan, but excluding all awards under the Southern
Company Performance Pay Plan, the Southern Company Performance Pay Plan
(Shareholder Approved) and the Southern Company Executive Productivity
Improvement Plan, overtime pay, shift differential and substitution pay. For
Computation Periods beginning on or before January 1, 1998, Annual Salary shall
be the Participant's Annual Salary as of the first day of the Computation
Period. For Computation Periods beginning January 1, 1999 and thereafter, Annual
Salary shall be the weighted average Annual Salary determined as of the last day
of each of the four years within the Computation Period.

         1.2 "Average ROE" shall mean the mathematical result obtained by (a)
calculating the return on equity for each year in the Computation Period, (b)
adding the return on equity calculations for all years in the Computation
Period; and (c) dividing the total by the number of years in the Computation
Period.

         1.3 "Award" shall mean the Award Opportunity or Award Units multiplied
by the Performance Unit Value determined under Sections 3.2 and 3.4 of the Plan
and, for Equity Participants only, then converted into Restricted Stock Units as
determined under Section 3.5 of the Plan.

         1.4 "Award Opportunity" shall mean the award opportunity determined
under Section 3.1 of the Plan.

         1.5 "Award Unit" shall mean the unit opportunity determined under
Section 3.3 of the Plan.

         1.6 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.

         1.7 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Directors, as it may be amended from time to time in accordance with
the provisions therein.

         1.8 "Chief Executive Officer" shall mean the individual designated as
such by the Board of Directors of an Employing Company and of Southern Company.

         1.9 "Committee" or "Compensation Committee" shall mean the Compensation
Committee of the Board of Directors of Southern Company or the Employing
Company.

         1.10 "Common Stock" shall mean the common stock of Southern Company.

         1.11 "Computation Period" shall mean a four-year period commencing on
the first day of the initial year of participation and thereafter it shall mean
a four-year period commencing the first day of January each year made up of the
ROE Computation Period and the TSR Computation Period, if any, respectively.

         1.12 "Employing Company" shall mean Southern Company Services, Inc., or
any other affiliate or subsidiary (direct or indirect) of Southern Company,
which the Board of Directors may from time to time determine to bring under the
Plan and which shall adopt the Plan, and any successor of any of them.

         1.13 "Equity Participant" shall mean a Participant who is designated by
the Committee to have his Award calculated using Restricted Stock Units.

         1.14 "Executive Employee" shall mean any person who is currently
employed by an Employing Company who is a "covered employee" as that term is
defined in Section 162(m) of the Internal Revenue Code (the "Code") and who is
designated as an Executive Employee by the Compensation Committee for purposes
of participating in the Plan and such other persons employed by an Employing
Company as the Compensation Committee in its discretion shall designate to
participant in the Plan.

         1.15 "Fair Market Value" shall mean the average of the high and low
prices at which a share of Common Stock shall have been traded on the respective
measurement date, such as the first and last days of a Computation Period, or on
the next preceding trading day if such date was not a trading date, as reported
on the New York Stock Exchange Composite Transactions Listing, or as otherwise
determined by the Committee. In no event shall the Fair Market Value equal less
than the par value of the Common Stock.

         1.16 "Grade Level" shall mean the evaluation assigned under the job
evaluation system. For Computation Periods beginning on or before January 1,
1998, Grade Level shall be the Participant's Grade Level as of the first day of
the Computation Period. For Computation Periods beginning January 1, 1999 and
thereafter, Grade Level shall be the weighted average Grade Level determined as
of the last day of each of the four years within the Computation Period.

         1.17 "Grade Level Value" shall mean the assigned dollar value within
the Annual Salary range for a Grade Level in a Computation Period, upon which
awards are based.

         1.18 "Non-Adopting Employer" shall mean any subsidiary or affiliate of
Southern Company which is not an Employing Company.

         1.19 "Participant" shall mean an Executive Employee who satisfies the
criteria referred to in Article II at the beginning of a Computation Period.

         1.20 "Payment Date" shall mean the date the check evidencing the Award
is endorsed by an authorized person of an Employing Company.

         1.21 "Percentage of Total Award" shall have the meaning ascribed in
Exhibits B and E hereof.

         1.22 "Plan" shall mean the Southern Company Executive Productivity
Improvement Plan, as described herein or as may be amended from time to time.

         1.23 "Prior Plan" shall mean the Plan as amended and restated effective
January 1, 1995.

         1.24 "Restricted Stock Units" shall mean the number of shares of Common
Stock deemed to have been awarded to the Equity Participant during a TSR
Computation Period for the sole purpose of providing the Equity Participant with
the opportunity to receive an Award which incorporates the appreciation on the
Common Stock during the TSR Computation Period.

         1.25 "Southern Company" shall mean The Southern Company.

         1.26 "ROE Computation Period" shall have the meaning ascribed in
Section 3.1 hereof.

         1.27 "ROE Peer Group Companies" shall mean the companies set forth on
Exhibit C attached hereto and as may be revised from time to time by the
Committee to reflect mergers, acquisitions, reorganizations, etc. of such
companies.

         1.28 "Termination for Cause" or "Cause" shall mean the termination of a
Participant's employment by an Employing Company under any of the following
circumstances:

                  (a) The Participant willfully neglects or refuses to discharge
         his or her duties to the Employing Company as an employee or refuses to
         comply with any lawful and reasonable instructions given to him or her
         by the Employing Company without reasonable excuse;

                  (b) The Participant is guilty of gross misconduct. For
         purposes of this Plan, the following acts shall constitute gross
         misconduct:

                           (i) any act involving fraud or dishonesty or breach
                  of appropriate regulations of competent authorities;

                           (ii) the carrying out of any activity or the making
                  of any statement which would prejudice or impair the good name
                  and standing of the Company or any Employing Company or would
                  bring the Company or any Employing Company into contempt,
                  ridicule or would reasonably shock or offend any community in
                  which the Company or any Employing Company is located;

                           (iii) attendance at work in a state of intoxication
                  or otherwise being found in possession at his or her workplace
                  of any prohibited drug or substance, possession of which would
                  amount to a criminal offense;

                           (iv) assault or other act of violence against any
                  employee or other person during the course of the
                  Participant's employment; and

                           (v) conviction of any felony or misdemeanor involving
                  moral turpitude.

         1.29 "Total Shareholder Return" or "TSR" shall mean the total amount an
investor would receive by investing $100 per quarter in Common Stock or in TSR
Peer Group Common Stock, as the case may be, as determined by measuring the
total dividends which would have been paid on such Common Stock or TSR Peer
Group Common Stock by reinvesting such dividends on a quarterly basis in
additional shares of Common Stock or TSR Peer Group Common Stock, as the case
may be, and the total gain or loss on such Common Stock or Peer Group Common
Stock as if such stock had been sold at the closing price on the last day of the
respective Computation Period.

         1.30 "TSR Computation Period" shall have the meaning ascribed in
Section 3.3 hereof.

         1.31 "TSR Peer Group Common Stock" shall mean the common stock of the
Peer Group Companies.

         1.32 "TSR Peer Group Companies" shall mean those companies considered
part of the peer group of Southern Company for a Computation Period as
determined and designated by the Committee and as set forth on a schedule
adopted by the Committee and provided to the Plan Administrator. The Committee
shall establish the TSR Peer Group Companies within the first ninety (90) days
of a Computation Period. The Committee shall have the discretion to change the
TSR Peer Group Companies at any time during a Computation Period. The Committee
shall also have the discretion to determine whether or not such change shall
apply to Participants subject to the limitations of Section 162(m) of the Code

         1.33 "Value of Performance Unit" shall have the meaning ascribed in
Exhibits B and E attached hereto.

         Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.

                                   ARTICLE II

                                  Participants

         2.1 Participation. Participation in the Plan shall be limited to
Executive Employees of the Employing Companies.

         2.2 Reduction in Grade Level. Any Participant who ceases to be an
Executive Employee prior to the close of a Computation Period shall receive an
Award for the Computation Period ending on December 31st of the year in which
such Participant ceased to be an Executive Employee and shall forfeit any Award
for any other Computation Periods that have not closed as of the date the
Participant ceases to be an Executive Employee.

         2.3 Termination of Employment. If a Participant's employment is
terminated by reason of death, disability or retirement, such Participant or his
or her estate shall be eligible to receive an Award for the Computation Period
ending in the year of such death, disability or retirement unless such death,
disability or retirement shall have occurred on January 1 in which case the
Participant or his or her estate shall only be entitled to an Award for the
Computation Period ending December 31 of the previous year. Any Participant who
terminates employment for any other reason shall receive only any unpaid Award
for a completed Computation Period and shall not be eligible to receive an Award
for the Computation Period ending in the year of such termination of employment.

         2.4 Transfer to Non-Adopting Employer. Notwithstanding the provisions
of Section 2.3 above, in the case of an individual transferring from an
Employing Company to a Non-Adopting Employer, any Award paid for any Computation
Period not yet closed as of the date of a Participant's transfer shall be paid
to the Participant by the Employing Company from which the Participant is
transferring on the following basis:

                  (i) 100% of the Award for the Computation Period ending in the
         year of transfer;

                  (ii) 75% of the Award for the Computation Period ending in the
         first year following the year of transfer;

                  (iii) 50% of the Award for the Computation Period ending in
         the second year following the year of transfer; and

                  (iv) 25% of the Award for the Computation Period ending in the
         third year following the year of transfer.

Such transferring Participant shall receive no award for any Computation Period
which has not begun on the date of the Participant's transfer or if such
Participant shall no longer be in an eligible Grade Level after such transfer.

         Any Awards payable under this Section 2.4 shall be based on the Grade
Level at the time of transfer.

         2.5 Transfer from Non-Adopting Employer. In the case of an individual
transferring from a Non-Adopting Employer to an Employing Company whose Grade
Level and length of service at the Non-Adopting Employer would have caused the
Employee to have been a Participant in the Plan if the Non-Adopting Employer
were an Employing Company and whose Grade Level after the transfer would enable
the Employee to participate in the Plan, such individual shall be deemed to have
been employed by an Employing Company while employed with the Non-Adopting
Employer and shall, for any Computation Period ending after such transfer, be
deemed a Participant in the Plan as if the Non-Adopting Employer was an
Employing Company.

         Any Awards payable under this Section 2.5 shall be based on the Grade
Levels at the Employing Company.

         2.6 Termination for Cause. Notwithstanding any other provision of this
Plan, a Participant whose employment is Terminated for Cause shall forfeit any
and all unpaid Awards under this Plan.

         2.7 Promotion. The administration of Awards for Participants who are
promoted or transferred from one Grade Level included in the Plan to another
Grade Level included in the Plan shall be based on the Participant's Grade Level
Value on the last day of the Computation Period for which an Award is being
granted. For the Computation Periods ending December 31, 1995, December 31,
1996, December 31, 1997 and December 31, 1998 a Participant's Grade Level Value
for determining Awards shall be the Participant's Grade Level Value on January
1, 1995.

         2.8 Maximum Award. Notwithstanding any other provision of this Plan,
the maximum Award for any Computation Period payable to any Participant shall be
two million dollars ($2,000,000).

         2.9 1995 Participants. Any individual who initially becomes a
Participant in the Plan as of January 1, 1995 shall be considered to have been
participating in the Plan as of January 1, 1993 for purposes of determining
benefits payable for any Computation Period that began or begins on or after
January 1, 1993 and such Participant will therefore be eligible for an Award
equal to seventy-five percent (75%) of the Award Opportunity for the Computation
Period ending December 31, 1995.

         2.10 Post-1995 Participants. In the case of an individual who becomes a
Participant subsequent to January 1, 1995, said Participant will participate in
each Computation Period which ends not less than two (2) years after becoming a
Participant.

                                   ARTICLE III

                      Corporate Financial Performance Award

         3.1 ROE Computation Period. For Computation Period years beginning
before January 1, 1997 (the "ROE Computation Period"), the Award Opportunity for
each Participant shall be based upon either his Grade Level Value (as determined
based on his Grade Level at the beginning of such period) or, in the Committee's
discretion, upon his Annual Salary at the beginning of such period and in either
case shall range from fifteen percent (15%) to sixty-five percent (65%) of such
Grade Level Value or Annual Salary, as applicable. The Award Opportunity for
each Grade Level or Annual Salary shall be determined in accordance with the
chart set forth in Exhibit A hereof. The Committee shall have the discretion to
change the Award Opportunity for a Computation Period. Additionally, the
Committee shall have the discretion to determine whether such change applies to
Participants subject to the limitations of Section 162(m) of the Code.

        3.2 ROE Ranking. Each Award Opportunity granted in the ROE Computation
Period shall be multiplied by the Value of Performance Unit factor and the
Percentage of Total Award factor set forth in Exhibit B hereof, which is based
on Southern Company's Average ROE ranking during the ROE Computation Period as
compared to the Average ROE ranking of the ROE Peer Group Companies to determine
a Participant's Award. The return on common equity of the ROE Peer Group
Companies shall be determined annually by an independent certified public
accountant based on generally accepted accounting principles and shall be
properly adjusted and annualized by such accountant so that each ROE Peer Group
Company return on common equity may be accurately compared to that of Southern
Company.

         3.3 TSR Computation Period. For Computation Period years beginning on
or after January 1, 1997 (the "TSR Computation Period"), the Award Units for
each Participant shall be based upon either his Grade Level Value or, in the
Committee's discretion, upon his Annual Salary and, in either case shall range
from fifteen percent (15%) to sixty-five percent (65%) of such Grade Level Value
or Annual Salary, as applicable. The Award Units for each Grade Level or Annual
Salary shall be determined in accordance with the charts set forth in Exhibit D
hereof. The Committee shall have the discretion to change the Award Units for a
Computation Period. Additionally, the Committee shall have the discretion to
determine whether such change applies to Participants subject to the limitations
of Section 162(m) of the Code.

         3.4 TSR Ranking. Each Award Unit granted in the TSR Computation Period
shall be multiplied by the Value of Performance Unit factor and the Percentage
of Total Award factor set forth in Exhibit E hereof which is based on Total
Shareholder Return of Southern Company as compared to the Total Shareholder
Return for the TSR Peer Group Companies. The Total Shareholder Return of
Southern Company and the TSR Peer Group Companies shall be determined annually
by an independent certified public accountant and shall be properly adjusted and
amortized by such accountant so that each TSR Peer Group Company's total
shareholder return may be accurately compared to that of Southern Company.

         3.5 Restricted Stock Unit Conversion. Notwithstanding Sections 3.3 and
3.4, the Award for Equity Participants during the TSR Computation Period shall
be determined as follows: (a) determine the number of Award Units pursuant to
Section 3.3; (b) multiply the Award Units by the percentage of the Award that is
to be converted (as determined by the Committee in its sole discretion)
("Adjusted Award Units"); (c) divide the Adjusted Award Units by the Fair Market
Value of the Common Stock on January 1 of the applicable TSR Computation Period
to determine the number of Restricted Stock Units available during the TSR
Computation Period; (d) multiply the Restricted Stock Units by the Value of the
Performance Unit factor and the Percentage of Total Award factor as set forth in
Section 3.4 of the Plan ("Total Restricted Stock Units"); (e) convert the Total
Restricted Stock Units by multiplying such portion of the Total Restricted Stock
Units by the Fair Market Value of Common Stock on the last day of the TSR
Computation Period. Notwithstanding any prior provision of Section 3.5, no Award
payable under Section 3.5 shall be paid in common stock. The Award shall equal
the Total Restricted Stock Units converted pursuant to subsection (e) above.

         Notwithstanding anything in the Plan to the contrary, the Committee
shall have the sole discretion to determine who will be designated an Equity
Participant and what percentage of an Award to an Equity Participant shall be
converted to Restricted Stock Units. The Equity Participant shall have no
ownership rights associated with the Restricted Stock Units (including the right
to any dividends on Common Stock). The Restricted Stock Units shall be used
solely for the purpose of measurement.

         3.6 Insufficient Earnings. Notwithstanding the above provisions, an
Award will not be granted, awarded or paid for any Computation Period ending
with the calendar year in which the current earnings of Southern Company are
less than the amount necessary to fund the dividends on its Common Stock at the
rate such dividends were paid for the immediately preceding calendar year.

         3.7 Extraordinary Income. In the exercise of negative discretion, the
Compensation Committee may calculate the Award for one or more Computation
Period(s) without regard to any extraordinary income item (but not loss)
otherwise recorded by Southern Company or any Employing Company, provided such
determination that an item of income is extraordinary is made by the Committee
prior to the close of the Computation Period.

         3.8 Payment. The Awards will be paid in cash for Participants and in
one-half in cash and one-half in Common Stock (pursuant to Section 3.5 (e) and
(f) above) for Equity Participants, as soon as is practicable after all
evaluations are completed. An Award payment may not be deferred under this Plan.
In the event an Award was deferred under the Prior Plan, such deferral shall be
governed by the terms of the Prior Plan.

                                   ARTICLE IV

                                Change in Control

         The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control of Southern Company or an Employing Company and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.

                                    ARTICLE V

                            Miscellaneous Provisions

         5.1 No Assignment. Neither the Participant, his beneficiary, nor his
personal representative shall have any rights to commute, sell, assign, transfer
or otherwise convey the right to receive any payments hereunder, which payments
and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.

         5.2 No Reserve. The Employing Company shall not reserve or otherwise
set aside funds for the payments of Awards deferred in accordance with the Prior
Plan.

         5.3 Plan Amendment. Except for the provisions of Article IV hereof,
which may not be amended, modified or terminated following a "Southern Change in
Control," "Subsidiary Change in Control" or a "Southern Termination" (as such
terms are defined in the Change in Control Benefit Plan Determination Policy),
the Plan may be amended, modified, or terminated by the Board of Directors in
its sole discretion at any time and from time to time; provided, however, that
no such amendment, modification, or termination shall impair any rights to
payments which have been deferred under the Prior Plan prior to such amendment,
modification, or termination.

         5.4 Additional Benefits. It is expressly understood and agreed that the
Awards made in accordance with the Plan are in addition to any other benefits or
compensation to which a Participant may be entitled or for which he may be
eligible, whether funded or unfunded, by reason of his employment with the
Employing Company.

         5.5 Withholding. There shall be deducted from the payment of each Award
under the Plan the amount of any tax required by any governmental authority to
be withheld and paid over by the Employing Company to such governmental
authority for the account of the person entitled to such distribution.

         5.6 Effect On Other Benefits. Any Awards paid to a Participant while
employed by an Employing Company shall not be considered in the calculation of
the Participant's benefits under any other employee welfare or pension benefit
plan maintained by an Employing Company, unless otherwise specifically provided
therein.

         5.7 Governing Law. This Plan, and all its rights under it, shall be
governed by and construed in accordance with the laws of the State of Georgia.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby amends and restates the Southern Company Executive
Productivity Improvement Plan this ____ day of ______________, 2001 to be
effective January 1, 2001.

                                 SOUTHERN COMPANY SERVICES, INC.



                               By:
                                        -------------------------------

                               Its:
                                        -------------------------------


Attest:

By:
         --------------------------------------------

Its:
         --------------------------------------------



<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    EXHIBIT A

                                Award Opportunity

Grade Level Value                             Award Opportunity

                                              Percentage of Grade Level Value
                                                       or Annual Salary

President/CEO                                          50/65%
         15                                            50%
         14                                            45%
         13                                            40%
         12                                            35%
         11                                            30%
         10                                            25%
         9                                             25%
         8                                             20%
         7                                             15%




<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    EXHIBIT B

                            AWARD PERCENTAGE SCHEDULE

                                    Position Ranking
   Value of
Performance Unit      12-14               15-17             18-20
         $           Companies          Companies         Companies
- ----------------     ---------          ---------         ---------

      $2.00             Top                Top               Top
       1.80             1.0                1.0               1.0
       1.60             2.0                2.0               2.0
       1.40             2.5                3.0               3.0
       1.20             3.0                4.0               4.0
       1.00             4.0                4.5               5.0
        .90             4.5                5.0               6.0
        .80             5.0                6.0               7.0
        .70             6.0                7.0               8.0
        .60             6.5                8.0               9.0
        .50             7.0                8.5               10.0
          0           Below 7.0          Below 8.5          Below 10


                        Percentage Of Total Award Factor

       Computation Period Ending                    Factor

         December 31, 1997                            75%

         December 31, 1998                            50%

         December 31, 1999                            25%

         Thereafter                                    0%


<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    EXHIBIT C

                            ROE Peer Group Companies


<PAGE>


Allegheny Energy, Inc.
Alliant Energy Corporation
Ameren Corporation
American Electric Power Company
Baltimore Gas & Electric Company
BEC Energy
Carolina Power & Light Company
Central & South West Corporation
CILCORP.  Inc.
Cinergy Corporation
Cleco Corporation

Conectiv CIV
CMS Energy Corporation
Commonwealth Energy System
Consolidated Edison, Inc.
Dominion Resources, Inc.
DPL, Inc.
DQE, Inc.
DTE Energy Company
Duke Energy Corporation

Eastern Utilities Associates Edison International Energy East Corporation
Entergy Corporation FirstEnergy Corporation Florida Progress Corporation FPL
Group, Inc.

GPU, Inc.
Hawaiian Electric Industries, Inc.
Houston Industries, Inc.
IDACORP, Inc.
Illinova Corporation
Interstate Energy Corporation
IPALCO Enterprises, Inc.
Washington Water Power Co.
Western Resources, Inc.
WPS Resources Corp.


Kansas City Power & Light Company
Keyspan Energy Corporation
LG&E Energy Corporation
MDU Resources
MidAmerican Energy Holdings Co.
Minnesota Power Company
Montana Power Company
Nevada Power Co.
New Century Energies, Inc.
New England Electric System
Niagara Mohawk Power Corp.
NIPSCO Industries, Inc.
Northeast Utilities Co.
Northern States Power Co.
OGE Energy Corp.
Orange & Rockland Utilities, Inc.
PG&E Corp.
PacifiCorp
PECO Energy Co.
Pinnacle West Capital Corp.
Potomac Electric Power Co.
PP&L Resources, Inc.
Public Service Co. of New Mexico
Public Service Enterprise Group, Inc.
Puget Sound Energy, Inc.
Rochester Gas & Electric Corp.
SCANA Corp.
Sierra Pacific Resources
SIGCORP, Inc.
TECO Energy, Inc.
Texas Utilities Company
Unicom Corp.
Unisource Energy Corp.
United Illuminating Company
UtiliCorp.  United, Inc.
Wisconsin Energy Corp.



<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    EXHIBIT D

                                   Award Units

         Grade Level Value                        Award Units
                                          Percentage of Grade Level Value
                                                or Annual Salary

         President/CEO                             50/65%
         15                                         50%
         14                                         45%
         13                                         40%
         12                                         35%
         11                                         30%
         10                                         25%
         9                                          25%
         8                                          20%
         7                                          15%




<PAGE>


                                SOUTHERN COMPANY

                     EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                                    EXHIBIT E

                            Performance Unit Factor*

   Value of Unit                                    Percentile of Southern TSR
                                                                  vs.
                                                           Investor Utility

      $ 2.00                                               90th and above
      $ 1.50                                               70th
      $ 1.00                                               50th
      $  .50                                               30th
      $  .00                                               Below 30th

*The Value of Unit for performance levels falling between the percentiles listed
above shall be interpolated on a straight line basis for any given calendar
year.

                        Percentage Of Total Award Factor

         Computation Period Ending               Factor

         December 31, 1997                         25%

         December 31, 1998                         50%

         December 31, 1999                         75%

         Thereafter                               100%




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>11
<FILENAME>x10a54.txt
<TEXT>



                             SIXTH AMENDMENT TO THE
                     SOUTHERN COMPANY EMPLOYEE SAVINGS PLAN

         WHEREAS, the Employee Savings Plan Committee ("Committee") heretofore
adopted the amendment and restatement of The Southern Company Employee Savings
Plan ("Plan"), effective as of January 1, 1997;

         WHEREAS, Southern Energy Resources, Inc. ("SERI"), an Employing Company
under the Plan, will become the employer of certain individuals currently
employed by Southern Company Energy Marketing, L.P. ("SCEM") following a
reorganization of SCEM;

         WHEREAS, the Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of
Southern Energy, Inc. ("SEI") held by Southern pursuant to a tax-free spin-off
under Section 355 of the Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans and programs, and certain employment matters;

         WHEREAS, the Committee desires to amend the Plan to exclude the former
employees of SCEM from participating in the Plan by virtue of their employment
with SERI;

         WHEREAS, the Committee desires to amend the Plan to address the
spin-off of SEI from Southern, including making such changes as are necessary
pursuant to the Agreement;

         WHEREAS, the Committee desires to amend the Plan to make certain other
technical changes and to reflect recent changes in the law; and

         WHEREAS, the Committee is authorized pursuant to Section 15.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.

         NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as of the dates indicated:

                                       1.

         Sections 2.20 and 2.21 of the Plan shall be eliminated in their
entirety, effective as of January 1, 2001. Each subsequent Section in Article II
shall remain as currently numbered until such time as the Plan is amended and
restated.

                                       2.

         Section 2.27 of the Plan shall be amended to read as follows, effective
as of December 22, 2000:

                    2.27 "Eligible Employee" shall mean an Employee who is
         employed by an Employing Company and (a) who was eligible to be
         included in the Plan on January 1, 1991, or (b) who is a regular
         full-time, regular part-time, or cooperative education employee other
         than:

                  (1)      an Employee who is treated as such solely by reason
                           of the "leased employee" rules of Code Section 414(n)
                           such that, pursuant to an agreement between an
                           Employing Company and any other person, such
                           individual has performed services for the Employing
                           Company (or the Employing Company and related persons
                           as described in Code Section 414(n)(6)) on a
                           substantially full-time basis for a period of at
                           least one year and such services were performed under
                           the primary direction or control of the Employing
                           Company;

                  (2)      any Employee who is represented by a collective
                           bargaining agent unless the representatives of his
                           bargaining unit and the Employing Company mutually
                           agree to participation in the Plan subject to its
                           terms by members of his bargaining unit;

                  (3)      an individual who is a cooperative education employee
                           and who first performs an Hour of Service on or after
                           January 1, 1995;

                  (4)      an individual who is classified by the Employing
                           Company as a temporary employee (who was not eligible
                           to be included in the Plan on January 1, 1991) or an
                           independent contractor, regardless of whether such
                           classification is determined to be in error.
                           Effective September 1, 1998, any individual
                           classified by the Employing Company as a temporary
                           employee shall be excluded from the Plan, regardless
                           of any prior inclusion in the Plan and regardless of
                           whether the "temporary employee" classification is
                           determined to be in error; and

                  (5)      an individual, who would otherwise be eligible to
                           participate in the Plan by virtue of his employment
                           by SERI, but who (i) was an employee of SCEM on
                           December 22, 2000, (ii) was hired by SERI on or after
                           December 23, 2000, and who was a former employee of
                           SCEM, or (iii) was hired by SERI on or after December
                           23, 2000, who is employed in the Americas Group and
                           whose job function is indicated on Exhibit A attached
                           hereto.

                                       3.

         Paragraph (5) of Section 2.27 of the Plan shall be amended to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

                  (5)      an individual who is employed by SERI.

                                       4.

         Section 2.48 of the Plan shall be amended to read as follows, effective
as of the Group Status Change Date as defined in the Agreement:

                  2.48 "Participant" shall mean (a) an Eligible Employee who has
         elected to participate in the Plan as provided in Article III and whose
         participation in the Plan at the time of reference has not been
         terminated as provided in the Plan, (b) an Employee or former Employee
         who has ceased to be a Participant under (a) above, but for whom an
         Account is maintained under the Plan, (c) an Eligible Employee who has
         made a Rollover Contribution to this Plan to the extent that the
         Provisions of the Plan apply to such Rollover Contribution of the
         Eligible Employee, and (d) an Employee or former Employee for whom a
         Transferred ESOP Account is maintained under the Plan.

                                       5.

         The second paragraph of Section 2.66, "Year of Service", including
subsections (a) and (b) of such paragraph, shall be eliminated in its entirety,
effective as of January 1, 2001.

                                       6.

         Two new definition Sections shall be added to the Plan to read as
follows, effective as of December 22, 2000:

                  2.67     "SCEM" shall mean Southern Company Energy Marketing,
                           L.P.

                  2.68     "SERI" shall mean Southern Energy Resources, Inc.


                                       7.

         Five new definition Sections shall be added to the Plan to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

                  2.69 "SEI" shall mean Southern Energy, Inc., any subsidiary of
         Southern Energy, Inc., or any successor thereto.

                  2.70     "SEI Stock" shall mean the common stock of SEI.

                  2.71 "SEI Stock Account" shall mean the total amount credited
         to the Account of a Participant as described in Section 9.1(c).

                  2.72 "SEI Stock Fund" shall mean the fund established to hold
         SEI Stock as described in Section 8.8.

                  2.73 "Transferred ESOP Account" shall mean the total amount
         credited to the Account of a Participant as described in Section
         9.1(d).

                                       8.

         Section 3.1 of the Plan shall be amended to read as follows, effective
as of January 1, 2001:

                    3.1 Eligibility Requirements. Each Eligible Employee who was
         an active Participant on December 31, 2000 shall continue to be an
         active Participant in the Plan on January 1, 2001, provided he remains
         an Eligible Employee. Each other Eligible Employee may elect to
         participate in the Plan as of any Enrollment Date after the Employee's
         first day of employment as an Eligible Employee or as soon as
         administratively practicable thereafter. An Eligible Employee shall
         make an election to participate by authorizing deductions from or
         reduction of his Compensation as contributions to the Plan in
         accordance with Article IV, and directing the investment of such
         contributions in accordance with Article VIII. Such Compensation
         deduction and/or reduction authorization and investment direction shall
         be made in accordance with the procedures established by the Committee.

                                       9.

         Section 3.2 of the Plan shall be amended to read as follows, effective
as of January 1, 2001:

                    3.2 Participation upon Reemployment. If an Employee
         terminates his employment with an Affiliated Employer and is
         subsequently reemployed as an Eligible Employee, he may elect to become
         an active Participant in the Plan as of the date of his reemployment or
         as soon as administratively practicable thereafter.

                                       10.

         Sections 3.5 through 3.9 of the Plan shall be deleted in their
entirety, and Section 3.10 shall be renumbered as Section 3.5, effective as of
January 1, 2001.

                                       11.

         Section 6.1 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    6.1 Section 415 Limitations. Notwithstanding any provision
         of the Plan to the contrary, the total Annual Additions allocated to
         the Account (and the accounts under all defined contribution plans
         maintained by an Affiliated Employer) of any Participant for any
         Limitation Year in accordance with Code Section 415 and the regulations
         thereunder, which are incorporated herein by this reference, shall not
         exceed the lesser of the following amounts:

                           (a) twenty-five percent (25%) of the Participant's
                  compensation (as defined in Code Section 415(c)(3) and any
                  rulings and regulations thereunder) in the Limitation Year; or

                           (b) $30,000 (as adjusted pursuant to Code Section
                  415(d)(1)(C)).

                    The Annual Addition for any Plan Year beginning before
         January 1, 1987 shall not be recomputed to treat all Voluntary
         Participant Contributions as an Annual Addition.

                                       12.

         Section 6.3 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    6.3 Combination of Plans. If an Employee participates in
         more than one defined contribution plan maintained by an Affiliated
         Employer and his Annual Additions exceed the limitations of Section
         6.1, corrective adjustments shall be made first under this Plan and
         then, to the extent necessary, under The Southern Company Performance
         Sharing Plan and then, to the extent necessary, under The Southern
         Company Employee Stock Ownership Plan.

                                       13.

         A new Section 8.8 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  8.8 SEI Stock Fund. All SEI Stock received by the Plan
         pursuant to Sections 9.1(c) and 9.1(d) shall be held in a "SEI Stock
         Fund." Participants may direct investments out of the SEI Stock Fund
         and into the other Investment Funds in accordance with the procedures
         of this Article VIII. However, Participants may not direct investments
         into the SEI Stock Fund and, should a Participant elect to direct
         investments out of the SEI Stock Fund, he may not again direct any
         amount attributable to such investments back into the SEI Stock Fund.
         In no event shall the SEI Stock Fund remain as an Investment Fund under
         the Plan later than the end of the calendar quarter which includes the
         five-year anniversary of the date SEI Stock is first held in the SEI
         Stock Fund.

                                       14.

         New subsections (c) and (d) shall be added to Section 9.1 of the Plan
to read as follows, effective as of the Group Status Change Date as defined in
the Agreement:

                  (c) Upon the distribution by the Southern Company to its
         shareholders of the SEI Stock held by the Southern Company pursuant to
         a tax-free spin-off under Code Section 355 or such similar transaction,
         the Committee shall establish a subaccount known as a Participant's
         "SEI Account" to reflect the Participant's interest in the SEI Stock
         received by the Plan (other than SEI Stock transferred to the Plan as
         described in Section 9.1(d)) pursuant to such transaction. To the
         extent that shares of SEI Stock are attributable to Common Stock in a
         Participant's subaccounts which reflect Elective Employer
         Contributions, Voluntary Participant Contributions, Employer Matching
         Contributions, Rollover Contributions, and amounts in a Participant's
         SEPCO Transferred Account, the shares of SEI Stock attributable to each
         shall retain their character as Elective Employer Contributions,
         Voluntary Participant Contributions, Employer Matching Contributions,
         Rollover Contributions, and amounts in a Participant's SEPCO
         Transferred Account, respectively, and the Committee shall establish
         and maintain such bookkeeping accounts as it deems necessary to account
         for such SEI Stock, and any subsequent earnings or losses attributable
         thereto, under this Plan.

                  (d) Upon the transfer to the Plan of the SEI Stock distributed
         to The Southern Company Employee Stock Ownership Plan ("ESOP") in
         connection with a transaction described in Section 9.1(c), the
         Committee shall establish a subaccount known as a Participant's
         "Transferred ESOP Account" to reflect the Participant's interest in the
         Plan attributable to the SEI Stock transferred to the Plan from the
         ESOP. The Committee shall establish and maintain separate bookkeeping
         accounts within the Transferred ESOP Account for amounts attributable
         to the SEI Stock that was distributed on Common Stock which had been
         held in the ESOP for more than two years as of the date of transfer,
         amounts attributable to SEI Stock that was distributed on Common Stock
         which had been held in the ESOP for more than one year but less than
         two years as of the date of transfer, and amounts attributable to SEI
         Stock that was distributed on Common Stock which had been held in the
         ESOP for less than one year as of the date of transfer, respectively.

                                       15.

         Subsection (a) of Section 11.1 of the Plan shall be amended to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

                    (a) Subject to the provisions of Article XII, this Section
         11.1, and Sections 11.2 through 11.6, a Participant may make
         withdrawals from his Account effective as of any Valuation Date in the
         order of priority listed below:

                             (1) All or a portion of the value of his Account
                    attributable to Voluntary Participant Contributions (not
                    including any earnings or appreciation thereon) made prior
                    to January 1, 1987;

                             (2) All amounts described above, plus all or a
                    portion of the value of his Account attributable to
                    Voluntary Participant Contributions, plus a ratable portion
                    of the earnings and/or appreciation on Voluntary Participant
                    Contributions;

                             (3) All amounts described above, plus effective
                    April 1, 1997, all or a portion of the value of his Account
                    attributable to Rollover Contributions (including earnings
                    and appreciation thereon);

                             (4) All amounts described above, plus the value of
                    his Transferred ESOP Account as described in Section 9.1(d);
                    provided, however, that the amount in his Transferred ESOP
                    Account attributable to SEI Stock that was distributed on
                    Common Stock which had been held in the ESOP for less than
                    two years as of the date of transfer may not be distributed
                    until the first day of the month following the two-year
                    anniversary of the date such Common Stock was contributed to
                    the ESOP;

                             (5) All amounts described above, plus up to fifty
                    percent (50%) of the value of his Account attributable to
                    Employer Matching Contributions (including earnings and
                    appreciation thereon) allocated to his Account; provided,
                    however, that said Participant shall have participated in
                    the Plan for not less than sixty (60) months at the time of
                    the withdrawal;

                             (6)(A) For Participants who have not attained age
                    59 1/2 or separated from service with the Affiliated
                    Employers (within the meaning of Code Section
                    401(k)(2)(B)(i)(I)), all amounts described above, plus all
                    or a portion of the value of his Account attributable to
                    Elective Employer Contributions (not including any earnings
                    or appreciation thereon for Plan Years beginning after
                    December 31, 1988); and

                           (B) For Participants who have attained age 59 1/2 or
                  separated from service with the Affiliated Employers (within
                  the meaning of Code Section 401(k)(2)(B)(i)(I)), all amounts
                  described above, plus all or a portion of the value of his
                  Account attributable to any earnings or appreciation on
                  Elective Employer Contributions.

         For purposes of this Section 11.1, any individual who becomes a
         Participant solely because a Transferred ESOP Account is established on
         behalf of such individual shall be treated as participating in the Plan
         as of the date such Transferred ESOP Account is established.

                                       16.

         The reference to "Section 11.1(a)(5)(A)" in Section 11.6 shall be
replaced by "Section 11.1(a)(6)(A)", effective as of the Group Status Change
Date as defined in the Agreement:

                                       17.

         Subsection (c) of Section 11.7 of the Plan shall be amended to read as
follows, effective as of January 1, 2001:

                  (c) The principal amount of a loan shall be obtained pro rata
         from each Investment Fund in which the Participant's Account is
         invested at that time such loan is obtained.

                                       18.

         The phrase "and/or SEI Stock" shall be added following the reference to
"Common Stock" in paragraph (2) of subsection (a) of Section 12.1, effective as
of the Group Status Change Date as defined in the Agreement.

                                       19.

         Section 12.11 of the Plan shall be amended to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  12.11 Form of Payment. All distributions under this Article
         XII shall be made in the form of cash, provided that the person
         entitled to such distribution may demand that the portion of any
         distribution which is attributable to Common Stock or SEI Stock be
         distributed in the form of such Common Stock or SEI Stock,
         respectively, to the extent of the whole number of shares in the
         Participant's Account, with a cash adjustment for any fractional
         shares.

                                       20.

         A new sentence shall be added to the end of Section 14.3 of the Plan to
read as follows, effective as of the Group Status Change Date as defined in the
Agreement:

         Procedures similar to those described above shall also apply to voting
         the SEI Stock credited to each Participant's Account.

                                       21.

         The phrase "or SEI Stock Fund" shall be added to the end of the first
sentence of Section 14.4 of the Plan, effective as of the Group Status Change
Date as defined in the Agreement.

                                       22.

         The phrase ", as provided in regulations prescribed by the Secretary of
the Treasury" shall be added to the end of the last sentence of Section 15.1 of
the Plan, effective as of September 5, 2000.

                                       23.

         A new Section 15.4 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  15.4 Transfer of Plan Assets. Notwithstanding any provision of
         the Plan to the contrary, upon the distribution by the Southern Company
         to its shareholders of the SEI Stock held by the Southern Company
         pursuant to a tax-free spin-off under Code Section 355 or such similar
         transaction, the Accounts of certain Participants who shall be
         identified in accordance with the Employee Matters Agreement entered
         into between the Southern Company and SEI ("Agreement") shall be
         transferred to a retirement plan established by SEI which is intended
         to constitute a qualified retirement plan under Code Section 401(a).
         The Committee shall determine the time of such transfers and shall
         establish such rules and procedures as its deems necessary or
         appropriate to effect the transfers, except that all actions with
         respect to the transfers shall be taken in a manner consistent with the
         Agreement.

                                       24.

         Section 16.4 of the Plan shall be deleted in its entirety, effective as
of January 1, 2000.

                                       25.

         A new sentence shall be added to the end of Section 18.5 of the Plan to
read as follows, effective as of September 5, 2000.

         Notwithstanding the foregoing, any optional form of benefit provided
         under this Plan solely as a result of the merger of the SEPCO Plan into
         this Plan shall be eliminated to the extent permitted and in accordance
         with the regulations prescribed by the Secretary of the Treasury under
         Code Section 411(d)(6), provided that the elimination of such optional
         form of benefit shall not be effective before the earlier of (a) the
         90th day after the Participant receives a summary of material
         modification describing the elimination of such optional form of
         benefit or (b) January 1, 2002.

                                       26.

         Southern Energy Resources, Inc. shall be removed as an Employing
Company in Appendix A of the Plan, effective as of the Group Status Change Date
as defined in the Agreement.

                                       27.

         Except as amended herein by this Sixth Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this Sixth Amendment.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Employee Savings Plan Committee, has adopted this
Sixth Amendment to The Southern Company Employee Savings Plan this ____ day of
___________________, 2000.

                                          EMPLOYEE SAVINGS PLAN COMMITTEE:

















</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>12
<FILENAME>x10a56.txt
<TEXT>



                             FOURTH AMENDMENT TO THE
                 SOUTHERN COMPANY EMPLOYEE STOCK OWNERSHIP PLAN

         WHEREAS, the Employee Stock Ownership Plan Committee ("Committee")
heretofore adopted the amendment and restatement of The Southern Company
Employee Stock Ownership Plan ("Plan"), effective as of January 1, 1997;

         WHEREAS, Southern Energy Resources, Inc. ("SERI"), an Employing Company
under the Plan, will become the employer of certain individuals currently
employed by Southern Company Energy Marketing, L.P. ("SCEM") following a
reorganization of SCEM;

         WHEREAS, the Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of
Southern Energy, Inc. ("SEI") held by Southern pursuant to a tax-free spin-off
under Section 355 of the Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans and programs, and certain employment matters;

         WHEREAS, the Committee desires to amend the Plan to exclude the former
employees of SCEM from participating in the Plan by virtue of their employment
with SERI;

         WHEREAS, the Committee desires to amend the Plan to address the
spin-off of SEI from Southern, including making such changes as are necessary
pursuant to the Agreement;

         WHEREAS, the Committee desires to amend the Plan to make certain other
technical changes and to reflect recent changes in the law; and

         WHEREAS, the Committee is authorized pursuant to Section 11.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.

         NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as of the dates indicated:

                                       1.

         Sections 2.14 and 2.15 of the Plan shall be eliminated in their
entirety, effective as of January 1, 2001. Each subsequent Section in Article II
shall remain as currently numbered until such time as the Plan is amended and
restated.

                                       2.

         Section 2.20 of the Plan shall be amended to read as follows, effective
as of December 22, 2000:

                  2.20 "Eligible Employee" shall mean an Employee who is
         employed by an Employing Company and (a) who was eligible to be
         included in the Plan on January 1, 1991, or (b) who is a regular
         full-time, regular part-time, or cooperative education employee other
         than:

                           (1) an Employee who is treated as such solely by
                  reason of the "leased employee" rules of Code Section 414(n)
                  such that, pursuant to an agreement between an Employing
                  Company and any other person, such individual has performed
                  services for the Employing Company (or the Employing Company
                  and related persons as described in Code Section 414(n)(6)) on
                  a substantially full-time basis for a period of at least one
                  year and such services were performed under the primary
                  direction or control of the Employing Company;

                           (2) any Employee who is represented by a collective
                  bargaining agent unless the representatives of his bargaining
                  unit and the Employing Company mutually agree to participation
                  in the Plan subject to its terms by members of his bargaining
                  unit;

                           (3) an individual who is a cooperative education
                  employee and who first performs an Hour of Service on or after
                  January 1, 1995;

                           (4) an individual who is classified by the Employing
                  Company as a temporary employee (who was not eligible to be
                  included in the Plan on January 1, 1991) or an independent
                  contractor, regardless of whether such classification is
                  determined to be in error. Effective September 1, 1998, any
                  individual classified by the Employing Company as a temporary
                  employee shall be excluded from the Plan, regardless of any
                  prior inclusion in the Plan and regardless of whether the
                  "temporary employee" classification is determined to be in
                  error;

                           (5) an Employee who is described in Section 3.8 of
                  the Plan; or

                           (6) an individual, who would otherwise be eligible to
                  participate in the Plan by virtue of his employment by SERI,
                  but who (i) was an employee of SCEM on December 22, 2000, (ii)
                  was hired by SERI on or after December 23, 2000, and who was a
                  former employee of SCEM, or (iii) was hired by SERI on or
                  after December 23, 2000, who is employed in the Americas Group
                  and whose job function is indicated on Exhibit A attached
                  hereto.

                                       3.

         Paragraph (6) of Section 2.20 of the Plan shall be amended to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

         (6)      an individual who is employed by SERI.

                                       4.

         Two new definition Sections shall be added to the Plan to read as
follows, effective as of December 22, 2000:

                  2.53     "SCEM" shall mean Southern Company Energy Marketing,
                           L.P.

                  2.54     "SERI" shall mean Southern Energy Resources, Inc.

                                       5.

         Two new definition Sections shall be added to the Plan to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

                  2.55 "SEI" shall mean Southern Energy, Inc., any subsidiary of
         Southern Energy, Inc., or any successor thereto.

                  2.56     "SEI Stock" shall mean the common stock of SEI.

                                       6.

         A new sentence shall be added to Section 6.2 of the Plan to read as
follows, effective as of January 1, 2000.

         Notwithstanding the foregoing, in no event shall a Participant who is
         employed by SCEM or SERI on December 31, 2000 receive an allocation of
         Common Stock for the Plan Year ending on such date.

                                       7.

         Section 6.3 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    6.3 Section 415 Limitations. Notwithstanding any provision
         of the Plan to the contrary, the total Annual Additions allocated to
         the Account (and the accounts under all defined contribution plans
         maintained by an Affiliated Employer) of any Participant for any
         Limitation Year in accordance with Code Section 415 and the regulations
         thereunder, which are incorporated herein by this reference, shall not
         exceed the lesser of the following amounts:

                           (a) twenty-five percent (25%) of the Participant's
                  compensation (as defined in Code Section 415(c)(3) and any
                  rulings and regulations thereunder) in the Limitation Year; or

                           (b) $30,000 (as adjusted pursuant to Code Section
                  415(d)(1)(C)).

                    The Annual Addition for any Plan Year beginning before
         January 1, 1987 shall not be recomputed to treat all employee
         contributions as an Annual Addition.

                                       8.

         Section 6.5 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    6.5 Combination of Plans. If an Employee participates in
         more than one defined contribution plan maintained by an Affiliated
         Employer and his Annual Additions exceed the limitations of Section
         6.3, corrective adjustments shall be made first under The Southern
         Company Employee Savings Plan and then, to the extent necessary, under
         The Southern Company Performance Sharing Plan and then, to the extent
         necessary, under this Plan.

                                       9.

         The second sentence of the second paragraph of Section 6.6 of the Plan
shall be amended as follows, effective as of the Group Status Change Date as
defined in the Agreement:

         Except as provided in Section 6.10, if a dividend or other distribution
         on the Common Stock allocated to a Participant's Account is of property
         other than cash or additional shares of Common Stock, the Trustee shall
         sell such property for an amount not less than its fair market value as
         determined by the Trustee and reinvest the proceeds of such sale in
         shares of Common Stock pursuant to this Section 6.6.

                                       10.

         A new Section 6.10 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  6.10 Transfer of SEI Stock. Upon the distribution by the
         Southern Company to its shareholders of the SEI Stock held by the
         Southern Company pursuant to a tax-free spin-off under Code Section 355
         or such similar transaction, all SEI Stock received by the Plan on
         behalf of a Participant shall be transferred to a "Transferred ESOP
         Account" established for such Participant under The Southern Company
         Employee Savings Plan. The transfer of SEI Stock shall be made
         contemporaneously with or as soon as administratively practicable
         following such transaction.

                                       11.

         The phrase ", as provided in regulations prescribed by the Secretary of
the Treasury" shall be added to the end of the last sentence of Section 11.1 of
the Plan, effective as of September 5, 2000.

                                       12.

         A new Section 11.4 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  11.4 Transfer of Plan Assets. Notwithstanding any provision of
         the Plan to the contrary, upon the distribution by the Southern Company
         to its shareholders of the SEI Stock held by the Southern Company
         pursuant to a tax-free spin-off under Code Section 355 or such similar
         transaction, the Accounts of certain Participants may be transferred to
         a retirement plan established by SEI which is intended to constitute a
         qualified retirement plan under Code Section 401(a) pursuant to the
         Employee Matters Agreement entered into between the Southern Company
         and SEI ("Agreement"). The Participants whose Accounts shall be
         transferred, if any, shall be identified in accordance with the
         Agreement. The Committee shall determine the time of such transfers and
         shall establish such rules and procedures as its deems necessary or
         appropriate to effect the transfers, except that all actions with
         respect to the transfers shall be taken in a manner consistent with the
         Agreement.

                                       13.

         Section 12.4 of the Plan shall be deleted in its entirety, effective as
of January 1, 2000.

                                       14.

         Southern Energy Resources, Inc. shall be removed as an Employing
Company in Appendix A of the Plan, effective as of the Group Status Change Date
as defined in the Agreement.

                                       15.

         Except as amended herein by this Fourth Amendment, the Plan shall
remain in full force and effect as amended and restated by the Company prior to
the adoption of this Fourth Amendment.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Employee Stock Ownership Plan Committee, has adopted
this Fourth Amendment to The Southern Company Employee Stock Ownership Plan this
____ day of ___________________, 2000.

                                     EMPLOYEE STOCK OWNERSHIP  PLAN COMMITTEE:
















</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>13
<FILENAME>x10a57.txt
<TEXT>



                                SOUTHERN COMPANY
                              PERFORMANCE PAY PLAN

                              Amended and Restated












                              Troutman Sanders LLP
                        Bank of America Plaza, Suite 5200
                           600 Peachtree Street, N.E.
                             Atlanta, Georgia 30308

                            Effective January 1, 2001

<PAGE>



                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                                    Purposes

         The purposes of the Amended and Restated Performance Pay Plan are to
focus the attention and efforts of employees on goals which have a direct and
significant influence on individual, Business Unit and corporate performance; to
improve the correlation between pay and performance for the achievement of
individual, Business Unit, and corporate goals; and to provide the potential for
levels of compensation that will enhance the ability of the Business Units to
attract, retain, and motivate employees. In order to achieve these objectives,
the Performance Pay Plan is intended to pay additional compensation to eligible
employees based upon individual, Business Unit and corporate performance. Such
compensation shall be paid out of the general assets of Southern Company. No
benefits under the Performance Pay Plan shall be deferred under this Plan or
held in trust for the benefit of eligible employees. The Performance Pay Plan is
not intended to be an employee benefit plan or any other plan subject to
regulation by the Employee Retirement Income Security Act of 1974, as amended.

         The Performance Pay Plan was established effective January 1, 1989. It
has subsequently been amended and restated effective January 1, 1991, January 1,
1993, January 1, 1996, and January 1, 2000. The Board of Directors of Southern
Company Services, Inc. now desires to amend and restate the Performance Pay Plan
to provide for a pro-rated Award upon the termination of the employment of a
Participant under a career transition plan adopted by an Employing Company. The
effective date of this amendment and restatement (the "Restatement Effective
Date") of the Performance Pay Plan shall be January 1, 2001.

                                    ARTICLE I

                                   Definitions

         For purposes of the Performance Pay Plan, the following terms shall
have the following meanings, unless a different meaning is plainly required by
the context:

         1.1 "Annual Salary" shall mean base salary or wages paid to an Employee
before deductions for taxes, social security, etc., including all amounts
contributed on an Employee's behalf by a Business Unit to the Southern Company
Flexible Benefits Plan, any amounts contributed on an Employee's behalf by any
Business Unit to the Southern Company Employee Savings Plan as Elective Employer
Contributions, as said term is defined in Section 4.1 therein, pursuant to an
Employee's exercise of any deferral option made in accordance with Section
401(k) of the Internal Revenue Code, and amounts contributed on an Employee's
behalf to the Southern Company Deferred Compensation Plan, but excluding all
awards under the Southern Company Performance Pay Plan, the Southern Company
Performance Pay Plan (Shareholder Approved), and the Southern Company Executive
Productivity Improvement Plan, overtime pay, shift differential and substitution
pay. Annual Salary of an Employee shall be determined as of the last day of the
Performance Period, except that the Annual Salary of an employee who terminates
before the last day of the Performance Period shall be determined as of his date
of termination. The Annual Salary of an Employee who commences service during a
Performance Period and the Annual Salary of an Employee who terminates his
employment for one of the reasons set forth in Section 2.1(c)(i)-(iv) and (e)
shall be prorated based upon his date of commencement or termination of service
with his Business Unit in accordance with the provisions of the Plan. With
respect to Covered Employees, "Annual Salary" shall be defined in the Covered
Employee Plan established by a Business Unit for the benefit of Covered
Employees.

         1.2 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.

         1.3 "Business Unit" shall mean an Employing Company or an
organizational unit established by the CEO (which may consist of a portion of
one Employing Company or portions of more than one Employing Company) and
designated from time to time to be eligible to participate under the Plan. A
Business Unit shall not consist of any portion of a Non-Adopting Company. In the
event more than one Business Unit covers the same Employee, the CEO shall assign
the Employee to a particular Business Unit for purposes of determining the
amount of an Incentive Pay Award for a Performance Period.

         1.4 "Business Unit Component" shall mean the weight given to the
Business Unit Goal in the determination of the Incentive Pay Award as
established by the CEO for a Performance Period and as set forth on a schedule
adopted by the CEO and provided to the Plan Administrator.

         1.5 "Business Unit Goal" shall mean the goal or goals that are
established by the CEO for each Performance Period for each Business Unit and as
set forth on a Schedule adopted by the CEO and provided to the Plan
Administrator.

         1.6 "Business Unit Goal Performance Percentage" shall mean the
percentage of the Business Unit Goal attained during a Performance Period.

         1.7 "CEO" shall mean the Chief Executive Officer of Southern Company.

         1.8 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Directors, as it may be amended from time to time in accordance with
the provisions therein.

         1.9 "Committee" shall mean the Compensation Committee of the Southern
Board.

         1.10 "Covered Employee" shall mean an employee of a Business Unit who
is covered by a collective bargaining agreement between the Business Unit and a
union or other employee representative and who participates in a Covered
Employee Plan.

         1.11 "Covered Employee Plan" shall mean a performance based plan
established for the benefit of Covered Employees by a Business Unit pursuant to
a collective bargaining agreement and is maintained in conjunction with this
Performance Pay Plan. The Covered Employee Plan may or may not mirror the
provisions of the Plan.

         1.12 "Effective Date" shall mean January 1, 1989. The "Restatement
Effective Date" shall mean January 1, 2001.

         1.13 "Employee" shall mean each active full-time and regular part-time
employee of a Business Unit who is receiving Annual Salary, regardless of their
classification as an exempt or non-exempt employee. The term "Employee" shall
not include any person who is a temporary employee, cooperative employee, a
contractor of a Business Unit or an employee covered by a collective bargaining
agreement except that such a collective bargaining employee may be eligible to
participate in a Covered Employee Plan as a Covered Employee pursuant to an
agreement between his Business Unit and his collective bargaining
representative. In addition, the term "Employee" shall not include any employee
who is eligible to participate in any incentive compensation program maintained
by his Business Unit that specifically provides that an eligible employee under
such program shall not be entitled to also receive Incentive Pay Awards under
this Plan.

         1.14 "Employing Companies" shall mean Southern Company Services, Inc.,
or any affiliate or subsidiary (direct or indirect) of Southern Company, which
the Board of Directors may from time to time determine to be eligible to
participate under the Plan and which shall adopt the Plan, and any successor of
any such affiliate or subsidiary. The Employing Companies as of the Restatement
Effective Date are as follows: Alabama Power Company, Georgia Power Company,
Gulf Power Company, Mississippi Power Company, Savannah Electric and Power
Company, Southern Company Services, Inc., Southern Nuclear Operating Company,
Inc., Southern Company Energy Solutions, Inc. and Southern Communications
Services, Inc.

         1.15 "Incentive Pay Award" shall mean the amount awarded to a
Participant in accordance with Article III hereof.

         1.16 "Non-Adopting Company" shall mean any subsidiary or affiliate of
Southern Company which is not an Employing Company.

         1.17 "Participant" shall mean all Employees and Covered Employees who
satisfy the criteria set forth in Article II.

         1.18 "Performance Period" shall mean each 12-month period commencing on
the first day of January and ending on the last day of December next following.

         1.19 "Plan" shall mean the Southern Company Performance Pay Plan, as
described herein or as from time to time amended.

         1.20 "Plan Administrator" shall mean the Benefits Department of
Southern Company Services, Inc.

         1.21 "Short Term Goals Adjustment" shall mean the percentage determined
by the CEO based upon the intermediate goals that have been established and set
forth on a Schedule adopted by the CEO and provided to the Plan Administrator
and used to adjust the calculation of the Incentive Pay Award as provided in
Section 3.1.

         1.22 "Southern Board" shall mean the Board of Directors of Southern
Company.

         1.23 "Southern Company" shall mean The Southern Company.

         1.24 "Southern Company Component" shall mean the weight given to the
Southern Goal as established by the CEO and as set forth on a schedule adopted
by the CEO and provided to the Plan Administrator.

         1.25 "Southern Goal" shall mean the goal or goals established by the
CEO and as set forth on a schedule adopted by the CEO and provided to the Plan
Administrator.

         1.26 "Southern Goal Performance Percentage" shall mean the percentage
of the Southern Goal attained during the Performance Period.

         1.27 "Top Performer" shall mean an Employee whose exceptional
performance qualifies him to receive an additional amount of Incentive Pay
Award. It is in the sole discretion of the head of the Business Unit to
determine who is to be designated a Top Performer.

         1.28 "Top Performer Pool" shall mean the pool of funds established by
the CEO for the payment of additional Incentive Pay to Top Performers.

         Where the context requires, words in the masculine gender include the
feminine and neuter genders and words in the singular include the plural and
words in the plural include the singular.

                                   ARTICLE II

                                  Participation

         2.1 Employees. All Employees of a Business Unit shall be eligible to
participate in the Plan and receive Incentive Pay Awards.

                  (a) Employees who commence service with a Business Unit after
         January 1 and before December 15 of a Performance Period shall be
         eligible to receive Incentive Pay Awards in the same proportion as the
         ratio of the number of months employed during a Performance Period
         bears to the total number of months in a Performance Period. The
         following shall apply for purposes of calculating the number of months
         of employment with a Business Unit under this Section 2.1:

                           (i) Employees whose effective date of employment is
                  on or before the fourteenth (14th) day of a month shall be
                  considered Employees as of the first day of such month; and

                           (ii) Employees whose effective date of employment is
                  on or after the fifteenth (15th) day of a month shall not be
                  considered Employees until the first day of the next
                  succeeding month.

                  (b) Employees whose effective date of employment is on or
         after December 15 of a Performance Period shall not be eligible to
         participate until the next succeeding Performance Period.

                  (c) Employees whose employment with a Business Unit is
         terminated during a Performance Period for one of the following reasons
         shall be eligible to receive an Incentive Pay Award for such
         Performance Period on a pro-rata basis:

                           (i) retirement,

                           (ii) total disability (as determined by the Social
                  Security Administration),

                           (iii)    death, or

                           (iv) termination of employment, but only in the event
                  the Participant shall transfer to or be reemployed by a
                  Non-Adopting Company, or any successor thereto, during such
                  Performance Period.

                           (v) termination of employment under a career
                  transition plan adopted by an Employing Company.

                  (d) The pro-rata amount of an Incentive Pay Award shall be
         determined for the Performance Period in which a termination described
         in Section 2.1(c) occurs by a fraction which is the number of months of
         employment with a Business Unit during the Performance Period, divided
         by the total number of months in the Performance Period. The following
         shall apply for purposes of calculating the number of months of
         employment with a Business Unit under this Section 2.(1)(d) for an
         Employee whose service is terminated for one of the reasons described
         in Section 2.1(c):

                           (i) The month in which the Employee's service
                  terminates shall not be considered if such terminating event
                  occurs on or before the fourteenth (14th) day of the month;
                  and

                           (ii) The month in which the Employee's service
                  terminates shall be considered if such terminating event
                  occurs on or after the fifteenth (15th) day of the month.

                  (e) An Employee who terminates participation in the Plan
         because the requirements of Section 1.5 of the Plan are not met (i.e.
         the Employee's Business Unit no longer participates in the Plan) shall
         be eligible to receive an Incentive Pay Award for such Performance
         Period on a pro-rata basis determined under Section 2.1(d) of the Plan
         by substituting the concept of termination of service with termination
         from participation in the Plan.

                  (f) The pro-rated amount of an Incentive Pay Award determined
         under Section 2.1(c)-(e) above shall be paid at the same time as all
         other Incentive Pay Awards under the Plan.

                  (g) An Employee whose employment with a Business Unit is
         terminated during a Performance Period for any reason other the reasons
         described in Section 2.1(c) shall not be eligible to receive an
         Incentive Pay Award for such Performance Period.

         2.2 Collective Bargaining Agreement. Notwithstanding any other
provision of the Plan, all Participants covered by a collective bargaining
agreement shall become ineligible for Incentive Pay Awards under a Covered
Employee Plan for and after any Performance Period in which such collective
bargaining agreement expires or is terminated for any reason.

         2.3 Covered Employees. All Covered Employees of a Business Unit who are
covered under a Covered Employee Plan shall not be eligible to receive Incentive
Pay Awards under the Plan, but shall be eligible to receive Incentive Pay Awards
in accordance with the terms of such Covered Employee Plan.

         2.4 Employee Transfers. If an Employee transfers from one Business Unit
("transferor Business Unit") to another Business Unit ("transferee Business
Unit") during a Performance Period, the transferee Business Unit goals shall be
used in calculating such Employee's Incentive Pay Award and the transferee
Business Unit shall pay such Employee's Incentive Pay Award for the entire
Performance Period.

                                   ARTICLE III

                        Incentive Pay Award Opportunities

         3.1 Determination of Incentive Pay Award. The Incentive Pay Award shall
be determined for each Employee by first determining the Employee's Target Award
Opportunity as established by the CEO and as set forth on a schedule adopted by
the CEO and forwarded to the Plan Administrator), which is based upon the
Employee's Grade Level Value on December 31st of the Performance Period, and
then multiplying the applicable Target Award Opportunity by the Participant's
Annual Salary and then by the Total Goal Performance Percentage. The Total Goal
Performance Percentage shall be determined in accordance with the following
formula:

               Determination of Total Goal Performance Percentage

      (Southern Company Component x Southern Goal Performance Percentage) +
     (Business Unit Component x Business Unit Goal Performance Percentage) =
     (Initial Financial Goal Performance) x (Short Term Goals Adjustment) =
                        Total Goal Performance Percentage

The Incentive Pay Award may then be adjusted downward by a percentage to be
determined by the head of the Employer's Business Unit based upon individual
performance. Alternatively, the Incentive Pay Award may be adjusted upward to
include an additional dollar amount if the Employee is designated a Top
Performer. Each head of a Business Unit shall determine in his sole and absolute
discretion who is a Top Performer and the amount of the additional Incentive Pay
Award. Incentive Pay Awards may be awarded to Top Performers even though no
Incentive Pay Award would be paid under the formula portion of the Plan. The
total amount awarded to all Top Performers shall not exceed the amount of the
Top Performer Pool.

         No Covered Employee shall be eligible for an Incentive Pay Award
(including a Top Performer adjustment) under the Plan. The Covered Employee
shall only receive an Incentive Pay Award under a Covered Employee Plan under
which the Covered Employee is eligible to participate.

         3.2 Transition PIP Awards During Transition Performance Periods. In
order to insure that an Employee receives an Incentive Pay Award that takes into
account what he would have also received under the Southern Company Productivity
Improvement Plan for the period January 1, 2000 through December 31, 2002, the
following transition rules apply:

                  (a) Definitions. For purposes of this Section 3.2, the
         following terms shall have the following meanings, unless a different
         meaning is plainly required by the context:

                           (i) "Adjusted PIP Award" shall mean an amount
                  calculated as follows: (1) multiply an Eligible Employee's
                  Grade Value (as defined under the PIP) as of December 31, 1999
                  by the Eligible Employee's Award Opportunity (as determined
                  under the PIP) as of December 31, 1999; then (2) multiply the
                  product of (1) by seventy-five percent (75%); and then (3)
                  multiply the product of (2) by 1.70.

                           (ii) "Eligible Employee" shall mean a Participant who
                  was eligible to receive an award under the PIP on December 31,
                  1999 and who is employed on the last day of the applicable
                  Transition Performance Period. Eligible Employee shall also
                  mean a Participant who was eligible to receive an award under
                  the Executive Productivity Improvement Plan on December 31,
                  1999, who is not eligible to participate in the Performance
                  Pay Plan (Shareholder Approved) on the last day of the
                  applicable Transition Performance Period and who is employed
                  on the last day of the applicable Transition Performance
                  Period.

                           (iii) "PPP Equivalent" shall mean an amount
                  calculated as follows: (1) multiply an Eligible Employee's
                  Annual Salary for the Transition Performance Period by the
                  Eligible Employee's Award Opportunity (as determined under the
                  Adjusted PIP Award); then (2) multiply the product of (1) by
                  seventy-five percent (75%); and then (3) multiply the product
                  of (2) by the Eligible Employee's Total Goal Performance
                  Percentage determined in Section 3.1.

                           (iv) "Productivity Improvement Plan" or "PIP" shall
                  mean (1) the Southern Company Productivity Improvement Plan,
                  amended and restated January 1, 1998, and terminated effective
                  December 31, 1999 and, (2) for purposes of determining the
                  Transition PIP Award for Eligible Employees who were eligible
                  to receive an award under the Southern Company Executive
                  Productivity Improvement Plan on December 31, 1999, the
                  Southern Company Executive Productivity Improvement Plan, as
                  of December 18, 1999.

                           (v) "Transition Performance Period" shall mean the
                  Performance Period from January 1, 2000 through December 31,
                  2000 ("2000 Transition Period") and the Performance Period
                  from January 1, 2001 through December 31, 2001 ("2001
                  Transition Period").

                           (vi) "Transition PIP Award" shall mean the additional
                  amount of incentive pay awarded under this Section 3.2 and
                  calculated pursuant to Section 3.2(c) below.

                  (b) The Company shall pay the Transition PIP Award to an
         Eligible Employee if a positive amount results from applying the
         calculation in accordance with Section 3.2(c).

                  (c) The Transition PIP Award shall be determined by comparing
         the Adjusted PIP Award to the PPP Equivalent. If the Adjusted PIP Award
         is greater than the PPP Equivalent, then the Transition PIP Award shall
         equal the difference between the Adjusted PIP Award and the PPP
         Equivalent. If the Adjusted PIP Award is less than the PPP Equivalent,
         then no Transition PIP Award shall be paid for the applicable
         Transition Performance Period.

                  (d) In the event an Eligible Employee terminates his
         employment with a Business Unit at any time after December 31, 1999,
         but before January 1, 2003, because of his retirement, total disability
         (as determined by the Social Security Administration) or death, then
         the Transition PIP Award for the Performance Period in which
         retirement, total disability or death occurs shall equal the Adjusted
         PIP Award (without subtracting the PPP Equivalent). The Transition PIP
         Award under this Section 3.2(d) shall be available in the next
         Transition Performance Period. For an Eligible Employee who terminates
         his employment during the 2001 Transition Period because of his
         retirement, total disability or death, such Eligible Employee shall
         receive a Transition PIP Award (calculated as provided under this
         subsection) for an additional period from January 1, 2002 through
         December 31, 2002. For purposes of this Plan, the date of disability or
         retirement shall be the last day of active service by the Eligible
         Employee and shall not mean any date subsequent to such last date of
         active service which is deemed to be a retirement or disability date
         under the terms of any pension, severance, retirement or disability
         plan or arrangement.

                  (e) In the event an Eligible Employee terminates his
         employment during a Transition Performance Period for any reason other
         than because of his retirement, total disability or death, he shall not
         receive a Transition PIP Award for such Transition Performance Period
         or any subsequent Transition Performance Period, if any.

                  (f) In the event an Eligible Employee is demoted to a Grade
         Level 6 or below at any time during the 2000 Transition Period, the
         Eligible Employee shall not receive a Transition PIP Award for the 2001
         Transition Period.

                  (g) In the event of a transfer of an Eligible Employee to a
         Non-Adopting Company, no Transition PIP Award will be paid.

                  (h) In the event of a transfer of an Employee from a
         Non-Adopting Company to a Business Unit, a prorated Transition PIP
         Award shall be paid to the Employee for the Transition Performance
         Period in which the Employee transfers and any subsequent Transition
         Performance Period provided such Employee was employed with the
         Non-Adopting Company on December 31, 1999, is currently eligible to
         participate in the Plan and is employed with the Business Unit on the
         last day of the applicable Transition Performance Period. The
         Transition PIP Award shall be prorated in the same manner as provided
         under the provisions of Section 2.1(a) of the Plan based upon the
         Employee's date of hire with the Business Unit. For purposes of this
         provision, Southern Energy Resources, Inc. shall remain a Non-Adopting
         Company through December 31, 2001 even if it no longer meets the
         definition of Non-Adopting Company under the Plan.

                  (i) The Plan Administrator shall be solely responsible for
         calculating each Participant's Transition PIP Award and distributing
         such Transition PIP Award at the same time and in the same manner as
         the Incentive Pay Awards.

         3.3 Non-Covered Employee Participants.

         (a) The Incentive Pay Award shall be calculated by the Plan
Administrator, based upon the formula set forth in Section 3.1 (and Section 3.2
if applicable in accordance with its terms) and the determinations of the head
of the Business Unit as to any adjustments for individual performance and for
Top Performers. Such determinations for individual performance and Top
Performers shall be provided to the Plan Administrator in a timely manner.

         (b) The Plan Administrator shall be solely responsible for calculating
each Participant's Incentive Pay Award and distributing such Incentive Pay
Award.

         (c) The Plan Administrator shall endeavor to pay the Incentive Pay
Awards for a Performance Period to the Participants not later than two and
one-half (2 1/2) months following the close of the preceding Performance Period,
or such shorter or longer period of time following the close of the preceding
Performance Period as may be required under the Internal Revenue Code to
preserve the timely accrual of the federal income tax deduction for Incentive
Pay Awards paid with respect to such Performance Period.

         (d) The Incentive Pay Award payment shall be made in cash or its
functional equivalent and the receipt of such payment may not be deferred under
this Plan at the option of the Employee. In the event of an Employee's death
prior to the payment of any Incentive Pay Award payable to the Employee, such
amount shall be paid to the estate of the Employee.

         3.4 Covered Employee Participants.

         (a) The Incentive Pay Awards for Covered Employee Participants shall be
calculated in accordance with the terms of such Covered Employee Plan.

         (b) The Plan Administrator shall be solely responsible for calculating
and distributing each Participant's Incentive Pay Award in accordance with the
terms of the Covered Employee Plan in which the Covered Employee Participant
participates.

         3.5 Extraordinary Item Exception. If requested by a Business Unit, at
the sole discretion of the CEO and the Committee, the Southern Goal Performance
or Business Unit Goal Performance determination for a Performance Period may be
calculated without regard to a particular term or occurrence ("Extraordinary
Item") incurred by Southern Company or any Business Unit, provided such
determination is made prior to the close of the Performance Period. If the CEO
and the Committee approve an Extraordinary Item, it shall be identified in a
schedule adopted by the CEO and provided to the Plan Administrator, and, in
addition, such schedule shall contain an explanation as to how such
Extraordinary Item shall impact the determination of the attainment of the
applicable goal.

         3.6      Forfeiture upon Termination for Cause.

         Notwithstanding anything to the contrary in this Plan, any Participant
whose employment is terminated for Cause shall forfeit any and all Incentive Pay
Awards and Transition PIP Awards (if any) that have not been paid to him as of
his date of termination. For purposes of the preceding sentence "Cause" shall
mean the termination of a Participant's employment by a Business Unit under any
of the following circumstances:

                  (a) The Participant willfully neglects or refuses to discharge
         his or her duties to the Business Unit as an employee or refuses to
         comply with any lawful or reasonable instructions given to him or her
         by the Business Unit without reasonable excuse;

                  (b) The Participant is guilty of gross misconduct. For
         purposes of this Plan, the following acts shall constitute gross
         misconduct:

                           (i) any act involving fraud or dishonesty or breach
                  of appropriate regulations of competent authorities;

                           (ii) the carrying out of any activity or the making
                  of any statement which would prejudice and/or reduce the good
                  name and standing of Southern Company or an Employing Company
                  or would bring Southern Company or an Employing Company into
                  contempt, ridicule or would reasonably shock or offend any
                  community in which Southern Company or an Employing Company is
                  located;

                           (iii) attendance at work in a state of intoxication
                  or otherwise being found in possession at his or her workplace
                  of any prohibited drug or substance, possession of which would
                  amount to a criminal offense;

                           (iv) assault or other act of violence against any
                  employee or other person during the course of the
                  Participant's employment; and

                           (v) conviction of any felony or misdemeanor involving
                  moral turpitude.

         The head of the Business Unit to which the Participant has been
assigned, and the Senior Vice President of Human Resources for Southern Company
Services, Inc., shall determine whether a Participant has been terminated for
"Cause."

         3.7 Determination of Incentive Pay Awards. The factors required to
determine Incentive Pay Awards shall be fixed in all events by the end of each
Performance Period.

         3.8 Insufficient Earnings. Notwithstanding any other provision of the
Plan to the contrary, an Incentive Pay Award and a Transition PIP Award, if any,
shall not be granted, awarded or paid for any Performance Period ending with the
calendar year in which the current earnings of Southern Company are less than
the amount necessary to fund the dividends on Southern's common stock at the
rate such dividends were paid for the immediately preceding calendar year.

         3.9 No Duplication. A Participant shall not receive more than one
Incentive Pay Award for a Performance Period under the Plan or any similar plan.

         3.10 Schedules. Any schedule to the Plan adopted by the CEO that is
applicable to a Performance Period shall remain in effect for any subsequent
Performance Period in the event the CEO has not adopted a schedule for such
subsequent Performance Period.

                                   ARTICLE IV

                                Change in Control

         The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control of Southern Company or an Employing Company and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.

                                    ARTICLE V

                             Administration of Plan

         5.1 Employment of Agents. The Plan Administrator shall be responsible
for the daily administration of the Plan and may appoint other persons or
entities to perform or assist in the performance of any of its fiduciary duties,
subject to its review and approval. The Plan Administrator shall have the right
to remove any such appointee from his position without cause or notice. Any
person, group of persons, or entity may serve in more than one fiduciary
capacity.

         5.2 Record Keeping and Reporting.

         (a) The Plan Administrator shall maintain permanent records and
accounts of Participants and shall be responsible for all receipts,
disbursements, transfers and other transactions concerning the Plan. Such
accounts, books, and records relating thereto shall be open to inspection and
audit by the boards of directors of the Employing Companies and any persons
designated thereby at all reasonable times.

         (b) The Plan Administrator shall undertake the preparation and filing
of all documents and forms required by any governmental agency. The Plan
Administrator shall keep all such books of account records, and other data as
may be necessary for proper administration of the Plan.

         5.3 Responsibilities in General. The Plan Administrator shall
administer the Plan in accordance with its terms and shall have all powers
necessary to carry out the provisions of the Plan as more particularly set forth
herein. The Plan Administrator shall interpret the Plan and shall determine all
questions concerning eligibility, administration, interpretation, and
application of the Plan, and all such determinations shall be conclusive and
binding on all Participants and interested persons. The Plan Administrator shall
adopt such procedures and guidelines as it deems necessary or desirable in order
to discharge its duties hereunder.

         5.4 Indemnification. The Business Units shall indemnify the Plan
Administrator against any and all claims, losses, damages, expenses, and
liability arising from its actions or omissions, except when the same are
finally adjudicated to be due to gross negligence or willful misconduct. The
Business Units may purchase at their own expense sufficient liability insurance
for the Plan Administrator to cover any and all claims, losses, damages, and
expenses arising from any action or omission in connection with the execution of
the duties as the Plan Administrator.

         5.5 Service of Process. The Plan Administrator shall be the appointed
agent for the service of process.

                                   ARTICLE VI

                            Miscellaneous Provisions

         6.1 No Right of Assignment or Alienation. Neither the Participant nor
his personal representative shall have any rights to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.

         6.2 No Trust Requirement. Unless the Board of Directors shall in its
discretion determine otherwise, the Business Units shall neither reserve nor
otherwise set aside funds for the payments of Incentive Pay Awards under the
Plan.

         6.3 Amendment and Termination of Plan. Except for the provisions of
Article IV hereof, which may not be amended following a "Southern Change in
Control," "Subsidiary Change in Control" or a "Southern Termination" (as such
terms are defined in the Change in Control Benefit Plan Determination Policy),
the Board of Directors may terminate the Plan at any time or may from time to
time amend the Plan; provided, however, that no amendment shall impair any
rights to payments which have been earned under the Plan prior to the
termination or amendment. Any amendment or termination of the Plan shall apply,
in the Board of Directors' sole discretion, with respect to all Employees
participating in the Plan, irrespective of whether any such amendment or
termination has been collectively bargained.

         6.4 Incentive Pay Award as Compensation.

         (a) Incentive Pay Awards made in accordance with the Plan are in
addition to any other benefits or compensation to which a Participant may be
entitled or for which he may be eligible, whether funded or unfunded, by reason
of his employment with the Business Unit.

         (b) There shall be deducted from each Incentive Pay Award to a
Participant the amount of any tax required to be withheld by any governmental
authority and paid over by the Business Unit to such governmental authority.

         6.5 Coordination with Benefit Plans. Any Incentive Pay Awards paid to a
Participant while employed by a Business Unit shall not be considered in the
calculation of the Participant's benefits under any employee welfare or pension
benefit plan maintained by an Business Unit, unless otherwise specifically
provided therein.

         6.6 Plan Not a Contract. The Plan shall not be deemed to constitute a
contract between a Business Unit and any Employee or Covered Employee, nor shall
anything herein contained be deemed to give any Employee or Covered Employee any
right to be retained in the employ of a Business Unit or interfere with the
right of the Business Unit to discharge any Employee or Covered Employee at any
time and to treat him without regard to the effect which such treatment might
have upon him as a Participant.

         6.7 Choice of Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Georgia except for the application of
any law which would require the use of the laws of another state.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its
officers duly authorized, hereby amends and restates Southern Company
Performance Pay Plan this _____ day of , 2001, to be effective January 1, 2001.

                                 SOUTHERN COMPANY SERVICES, INC.


                                 By:      _____________________________

                                 Its:     _____________________________




Attest:


By:      ____________________________________________

Its:
         --------------------------------------------



<PAGE>


                                 [Form Schedule]

                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                            Effective January 1, 2001

<TABLE>
<CAPTION>


                                        SHORT TERM GOALS FOR [INSERT YEAR]

- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
BIG         2000 Goals    APC            GPC             GULF          MPC          SAV          SNC
- ---         -----------   ---            ---             ----          ---          ---          ---
<S>         <C>           <C>            <C>             <C>           <C>          <C>          <C>
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
    I       o

- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
    II      o

- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
    IV      o

- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------
    IX      o
- ----------- ------------- -------------- --------------- ------------- ------------ ------------ ------------

</TABLE>


<PAGE>


                                 [Form Schedule]

                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                            Effective January 1, 2001


<TABLE>
<CAPTION>


                                   INCENTIVE PAY AWARD FACTORS FOR [INSERT YEAR]

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
                          Target Award
                           Opportunity
                          Percentage of                       Southern Company
                          Annual Salary    Southern Company   Goal Performance     Business Unit       Business Unit
                                               Component                             Component          Performance
     Grade Level                                                                                        Percentage
<S>                     <C>                <C>                <C>                <C>                <C>
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
President/CEO

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
15

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
14

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
13

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
12

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
11

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
10

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
 9

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
 8

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
 7

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
 6

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
1-5

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------
Nonexempt

- ----------------------- ------------------ ------------------ ------------------ ------------------ --------------------

</TABLE>



<PAGE>


                                 [Form Schedule]

                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                            Effective January 1, 2001

                   BUSINESS UNIT NET INCOME FOR [INSERT YEAR]



                                   Southern

 Year    Alabama  Georgia   Gulf   Mississippi  Savannah  Nuclear   SCS    SOCO
 ----    -------  -------   ----   -----------  --------  -------   ---    ----

 ----      ----    -----   -----      -----      -----     -----   -----  -----



<PAGE>


                                 [Form Schedule]

                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                            Effective January 1, 2001

                     SOUTHERN COMPANY GOAL FOR [INSERT YEAR]


       Year                                   Earnings Per Share

       ---                                                --- %



<PAGE>



                                 [Form Schedule]

                                SOUTHERN COMPANY

                              PERFORMANCE PAY PLAN

                              Amended and Restated

                            Effective January 1, 2001

                      EXTRAORDINARY ITEMS FOR [INSERT YEAR]




</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>14
<FILENAME>x10a58.txt
<TEXT>




                                SOUTHERN COMPANY
                              PERFORMANCE PAY PLAN
                             (SHAREHOLDER APPROVED)

                              Amended and Restated










                              Troutman Sanders LLP
                        Bank of America Plaza, Suite 5200
                           600 Peachtree Street, N.E.
                             Atlanta, Georgia 30308

                            Effective January 1, 2000


<PAGE>



                                SOUTHERN COMPANY
                              PERFORMANCE PAY PLAN

                             (SHAREHOLDER APPROVED)


                                    Purposes

         The purposes of the Performance Pay Plan (Shareholder Approved) are to
focus the attention and efforts of certain executives on goals which have a
direct and significant influence on individual, organizational and corporate
performance; to improve the correlation between pay and performance for the
achievement of corporate goals; and to provide the potential for levels of
compensation that will enhance the ability of Southern Company and its
affiliates to attract, retain, and motivate certain executive employees. Such
compensation shall be paid out of the general assets of Southern Company. No
benefits under the Performance Pay Plan (Shareholder Approved) shall be deferred
under this Plan or held in trust for the benefit of eligible employees. The
Performance Pay Plan (Shareholder Approved) is not intended to be an employee
benefit plan or any other plan subject to regulation by the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). It is intended to be a bonus
program as such term is defined in the regulations under ERISA at 29 C.F.R.
Section 2510.3-2(c) and a qualified performance based plan under Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code").

         The Performance Pay Plan (Shareholder Approved) is hereby established
and shall be effective January 1, 2000.

                                    ARTICLE I

                                   Definitions

         For purposes of the Performance Pay Plan (Shareholder Approved), the
following terms shall have the following meanings, unless a different meaning is
plainly required by the context:

         1.1 "Annual Salary" shall mean base salary or wages paid to an
Executive Employee before deductions for taxes, social security, etc., including
all amounts contributed on an Executive Employee's behalf by a Business Unit to
the Southern Company Flexible Benefits Plan, any amounts contributed on an
Executive Employee's behalf by a Business Unit to the Southern Company Employee
Savings Plan as Elective Employer Contributions (as said term is defined in
Section 4.1 therein), pursuant to an Executive Employee's exercise of any
deferral option made in accordance with Section 401(k) of the Internal Revenue
Code, any amounts contributed on an Executive Employee's behalf to the Southern
Company Deferred Compensation Plan, but excluding all awards under the Southern
Company Performance Pay Plan, the Southern Company Performance Pay Plan
(Shareholder Approved) and the the Southern Company Executive Productivity
Improvement Plan; overtime pay; shift differential; and substitution pay. Annual
Salary of an Executive Employee shall be determined as of the last day of the
Performance Period, except that the Annual Salary of an Executive Employee who
terminates before the last day of the Performance Period shall be determined as
of his date of termination. The Annual Salary of an Executive Employee who
commences service during a Performance Period and the Annual Salary of an
Executive Employee who terminates his employment for one of the reasons set
forth in Section 2.4 of the Plan shall be prorated based upon his date of
commencement or termination of service with his Business Unit in accordance with
the provisions of the Plan.

         1.2 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.

         1.3 "Business Unit" shall mean an Employing Company or an
organizational unit established by the Chief Executive Officer of Southern
Company ("CEO") (which may consist of a portion of one Employing Company or
portions of more than one Employing Company) and designated from time to time to
be eligible to participate under the Plan. A Business Unit shall not consist of
any portion of a Non-Adopting Company. In the event more than one Business Unit
covers the same Executive Employee, the Committee shall assign the Executive
Employee to a particular Business Unit for purposes of determining the amount of
an Incentive Pay Award for a Performance Period.

         0.4 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Directors, as it may be amended from time to time in accordance with
the provisions therein.

         1.5 "Committee" shall mean the Compensation and Management Succession
Committee of the Southern Board.

         1.6 "Effective Date" shall mean January 1, 2000.

         1.7 "Employee" shall mean an employee of a subsidiary or affiliate of
Southern Company.

         1.8 "Employing Company" or "Employing Companies" shall mean Southern
Company Services, Inc., or any affiliate or subsidiary (direct or indirect) of
Southern Company, which the Board of Directors may from time to time determine
to be eligible to participate under the Plan and which shall adopt the Plan, and
any successor of any such affiliate or subsidiary.

         1.9 "Executive Employee" shall mean an Employee who is an executive
officer of a Business Unit.

         1.10 "Incentive Pay Award" or "Award" shall mean the amount awarded to
a Participant in accordance with Article III hereof.

         1.11 "Non-Adopting Company" shall mean any subsidiary or affiliate of
Southern Company which is not a Business Unit.

         1.12 "Participant" shall mean an Executive Employee who satisfies the
criteria set forth in Article II.

         1.13 "Performance Period" shall mean each 12-month period commencing on
the first day of January and ending on the last day of December next following.

         1.14 "Plan" shall mean the Southern Company Performance Pay Plan
(Shareholder Approved), as described herein or as from time to time amended.

         1.15 "Plan Administrator" shall mean the Compensation and Benefits
Department of Southern Company Services, Inc.

         1.16 "Southern Board" shall mean the Board of Directors of Southern
Company.

         1.17 "Southern Company" shall mean The Southern Company.

         Where the context requires, words in the masculine gender include the
feminine and neuter genders and words in the singular include the plural and
words in the plural include the singular.

                                   ARTICLE II

                                  Participants

         2.1 Eligibility and Participation. All Executive Employees of the
Employing Companies shall be eligible to participate in the Plan. However,
actual participation in the Plan will be determined annually by the Committee
subject to the termination of participation provisions set forth in Sections 2.3
through 2.7 of the Plan. Employees approved for participation will be notified
of their selection as soon after approval as practicable. No Participant or
Executive Employee shall at any time have a right to be selected for
participation in the Plan for any Performance Period, despite having been
selected for participation in a previous Performance Period.

         2.2 Participation During Performance Period. The Committee shall have
in its sole and absolute discretion the authority to allow participation in the
Plan by any Executive Employee who becomes an Executive Employee after the first
ninety (90) days of the Performance Period. The Committee shall have the
discretion to adjust the Incentive Pay Award to reflect the period of
participation. Such participation and adjustment of the Incentive Pay Award
shall comply with the requirements of Section 162(m) of the Code.

         2.3 Termination of Approval. The Committee may withdraw approval for a
Participant's participation at any time. In the event of such withdrawal, the
Executive Employee concerned will cease to be a Participant as of the date of
such withdrawal. The Executive Employee will be notified of such withdrawal as
soon as practicable following the Committee's action. A Participant who is
withdrawn from participation under this Section 2.3 will not receive an
Incentive Pay Award for the Performance Period, except and to the extent that
the Committee decides otherwise in its sole and absolute discretion.

         2.4 Termination of Employment. If a Participant's employment is
terminated by reason of death, disability or retirement, such Participant or his
estate shall be eligible to receive an Incentive Pay Award for the Performance
Period ending in the year of such death, disability or retirement unless such
death, disability or retirement shall have occurred on January 1 in which case
the Participant or his estate shall only be entitled to an Incentive Pay Award
for the Performance Period ending December 31 of the previous year. Subject to
the provisions of Section 2.7, any Participant who terminates employment for any
other reason shall receive only any unpaid Incentive Pay Award for a completed
Performance Period and shall not be eligible to receive an Incentive Pay Award
for the Performance Period ending in the year of such termination of employment.

         2.5 Transfer to Non-Adopting Employer. Notwithstanding the provisions
of Section 2.4 above and any other contrary provision of the Plan, in the case
of an individual transferring from an Employing Company to a Non-Adopting
Employer, such individual shall continue to participate in the Plan for the
Performance Period during which the transfer occurs. However, the Committee
shall have in its sole and absolute discretion the authority to appropriately
adjust the Incentive Pay Award for such Performance Period provided such
adjustment is in accordance with any requirements of Section 162(m) of the Code.

         2.6 Corporate Spinoff. Notwithstanding the provisions of Section 2.4
above and any other contrary provisions of the Plan, in the case of an
individual who is no longer employed with an Employing Company because of a
corporate spinoff, such individual shall continue to participate in the Plan for
the Performance Period during which the spinoff occurs. However, the Committee
shall have in its sole and absolute discretion the authority to appropriately
adjust the Incentive Pay Award for such Performance Period provided such
adjustment is in accordance with any requirements of Section 162(m) of the Code.

         2.7 Forfeiture upon Termination for Cause. Notwithstanding anything to
the contrary in this Plan, any Participant whose employment is terminated for
Cause shall forfeit any and all unpaid Incentive Pay Awards as of his date of
termination. For purposes of the preceding sentence, "Cause" shall mean the
termination of a Participant's employment by a Business Unit under any of the
following circumstances:

         (a) The Participant willfully neglects or refuses to discharge his
duties to the Business Unit as an employee or refuses to comply with any lawful
or reasonable instructions given to him by the Business Unit without reasonable
excuse;

         (b) The Participant is guilty of gross misconduct. For purposes of this
Plan, the following acts shall constitute gross misconduct:

                  (i) any act involving fraud or dishonesty or breach of
         appropriate regulations of competent authorities;

                  (ii) the carrying out of any activity or the making of any
         statement which would prejudice and/or reduce the good name and
         standing of Southern Company or a Business Unit or would bring Southern
         Company or a Business Unit into any contempt or ridicule or would
         reasonably shock or offend any community in which Southern Company or a
         Business Unit is located;

                  (iii) attendance at work in a state of intoxication or
         otherwise being found in possession at his or her workplace of any
         prohibited drug or substance, possession of which would amount to a
         criminal offense;

                  (iv) assault or other act of violence against any employee or
         other person during the course of the Participant's employment; and

                  (v) conviction of any felony or misdemeanor involving moral
         turpitude.

         The Committee shall determine in its sole and absolute discretion
whether a Participant has been terminated for "Cause."

                                   ARTICLE III

                        Incentive Pay Award Opportunities

         3.1 Incentive Pay Award.

         (a) The Incentive Pay Award for a Performance Period shall be
determined based upon a formula established by the Committee in the first ninety
(90) days of the Performance Period using any combination of the following
factors:

                  (i) earnings per share or similar measure of Southern Company
         common stock, or another security of the Southern Company or its
         affiliates;

                  (ii) net income of Southern Company;

                  (iii) net income of a Business Unit;

                  (iv) return on equity for Southern Company common stock;

                  (v) total shareholder return on Southern Company common stock;

                  (vi) return on capital;

                  (vii) return on assets;

                  (viii) Annual Salary; and/or

                  (ix) any of the foregoing factors as compared to peer group
         companies.

         (b) Notwithstanding any other provision of the Plan, the Incentive Pay
Award shall not exceed six million dollars ($6,000,000.00) for any one
Participant during a Performance Period.

         (c) In accordance with the deductibility requirement under Code ss.
162(m), the regulations promulgated thereunder and any other pronouncements of
the Internal Revenue Service, the Committee shall have the sole and complete
discretion to adjust the Incentive Pay Award downward.

         3.2 Calculation and Payment of Incentive Pay Awards.

         (a) The Incentive Pay Award shall be calculated by the Plan
Administrator, based upon the formula established by the Committee pursuant to
Section 3.1 and the determinations of the Committee as to any negative
adjustments.

         (b) Prior to the payment of an Incentive Pay Award, the Committee shall
provide in writing certification that the Participant has fulfilled any
prerequisites for payment of such Incentive Pay Award as required under Section
162(m) of the Code. Once such certification is obtained, the Plan Administrator
shall be solely responsible for calculating each Participant's Incentive Pay
Award and distributing such Incentive Pay Award.

         (c) The Plan Administrator shall endeavor to pay the Incentive Pay
Awards for a Performance Period to the Participants not later than two and
one-half (2 1/2) months following the close of the preceding Performance Period,
or such shorter or longer period of time following the close of the preceding
Performance Period as may be required under the Internal Revenue Code to
preserve the timely accrual of the federal income tax deduction for Incentive
Pay Awards paid with respect to such Performance Period.

         (d) The Incentive Pay Award payment shall be made in cash or its
functional equivalent and the receipt of such payment may not be deferred under
this Plan at the option of the Participant. In the event of a Participant's
death prior to the payment of any Incentive Pay Award payable to the
Participant, such amount shall be paid to the estate of the Participant.

         (e) Effective May 10, 2000, if Southern Energy Resources, Inc. ("SERI")
fails or refuses to make payments under the Plan, Participants employed by SERI
may have the right to obtain payment by Southern Energy, Inc. ("SEI") pursuant
to the terms of the "Guarantee Agreement Concerning Southern Energy Resources,
Inc. Compensation and Benefit Arrangements" entered into by SERI and SEI. Such
Participant's right to payment is not increased as a result of this SEI
Guarantee. Participants employed by SERI have the same right to payment from SEI
as they have from SERI. Any demand to enforce this SEI Guarantee should be made
in writing and should reasonably and briefly specify the manner and the amount
SERI has failed to pay. Such writing given by personal delivery or mail shall be
effective upon actual receipt. Any writing given by telegram or telecopier shall
be effective upon actual receipt if received during SEI's normal business hours,
or at the beginning of the next business day after receipt, if not received
during SEI's normal business hours. All arrivals by telegram or telecopier shall
be confirmed promptly after transmission in writing by certified mail or
personal delivery.

         3.3 Certain Exclusions. The Committee may exclude various items and
occurrences from business results before determining the Incentive Pay Awards
under the Plan. To the extent such exclusions affect awards to Participants
covered under Section 162(m) of the Code, the exclusions shall be prescribed in
resolutions that meet the requirements of Section 162(m) of the Code for
deductibility.

         3.4 Determination of Incentive Pay Awards. All elements required to
determine Incentive Pay Awards shall be fixed in all events by the end of the
Performance Period.

         3.5 Insufficient Earnings. Notwithstanding the above provisions, an
Award will not be granted for any Computation Period ending with the calendar
year in which the current earnings of Southern Company are less than the amount
necessary to fund the dividends on Southern Company's common stock at the rate
such dividends were paid for the immediately preceding calendar year.

         3.6 Shareholder Approval. No Incentive Pay Award shall be paid to a
Participant under the Plan unless the Plan has been approved by a majority of
the shareholders of Southern Company as required by Section 162(m) of the Code.

         3.7. No Duplication. A Participant shall not receive more than one
Incentive Pay Award for a Performance Period under the Plan or any similar plan.
A Participant who receives an Incentive Pay Award under this Plan shall not
receive an award under the Southern Company Performance Pay Plan or any other
plan intended to replace the Southern Company Performance Pay Plan.

                                   ARTICLE IV

                                Change in Control

         The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control of Southern Company or an Employing Company and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.

                                    ARTICLE V

                             Administration of Plan

         5.1 Responsibilities. Subject to oversight and direction from the
Committee, the Plan Administrator shall be responsible for the daily
administration of the Plan. The Plan Administrator shall adopt such procedures
and guidelines as it deems necessary or desirable in order to discharge its
duties hereunder.

         5.2 Record Keeping and Reporting.

         (a) The Plan Administrator shall maintain permanent records and
accounts of Participants and shall be responsible for all receipts,
disbursements, transfers and other transactions concerning the Plan.

         (b) The Plan Administrator shall undertake the preparation and filing
of all documents and forms required by any governmental agency. The Plan
Administrator shall keep all such books of account records, and other data as
may be necessary for proper administration of the Plan.

         5.3 Responsibilities in General. Except for the specific powers and
responsibilities reserved to the Committee, the Plan Administrator shall
administer the Plan in accordance with its terms and shall have all powers
necessary to carry out the provisions of the Plan as more particularly set forth
herein. The Plan Administrator shall interpret the Plan and shall determine all
questions concerning eligibility, administration, interpretation, and
application of the Plan, and all such determinations shall be conclusive and
binding on all Participants and interested persons. The Plan Administrator shall
adopt such procedures and guidelines as it deems necessary or desirable in order
to discharge its duties hereunder.

         5.4 Indemnification. The Business Units shall indemnify the Plan
Administrator against any and all claims, losses, damages, expenses, and
liability arising from its actions or omissions, except when the same are
finally adjudicated to be due to gross negligence or willful misconduct. The
Business Units may purchase at their own expense sufficient liability insurance
for the Plan Administrator to cover any and all claims, losses, damages, and
expenses arising from any action or omission in connection with the execution of
the duties as the Plan Administrator.

         5.5 Service of Process. The Plan Administrator shall be the appointed
agent for the service of process.

                                   ARTICLE VI

                            Miscellaneous Provisions

         6.1 No Right of Assignment or Alienation. Neither the Participant nor
his personal representative shall have any rights to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.

         6.2 No Trust Requirement. Unless the Board of Directors shall in its
discretion determine otherwise, the Business Units shall neither reserve nor
otherwise set aside funds for the payments of Incentive Pay Awards under the
Plan.

         6.3 Amendment and Termination of Plan. Except for the provisions of
Article IV hereof, which may not be amended following a "Southern Change in
Control," "Subsidiary Change in Control" or a "Southern Termination" (as such
terms are defined in the Change in Control Benefit Plan Determination Policy),
the Board of Directors may terminate the Plan at any time or may from time to
time amend the Plan. Any amendment or termination of the Plan shall apply, in
the Board of Directors' sole discretion, with respect to all Participants.

         6.4 Incentive Pay Award as Compensation.

         (a) Incentive Pay Awards made in accordance with the Plan are in
addition to any other benefits or compensation to which a Participant may be
entitled or for which he may be eligible, whether funded or unfunded, by reason
of his employment with the Business Unit.

         (b) There shall be deducted from each Incentive Pay Award to a
Participant the amount of any tax required to be withheld by any governmental
authority and paid over by the Business Unit to such governmental authority.

         6.5 Coordination with Benefit Plans. Any Incentive Pay Awards paid to a
Participant while employed by a Business Unit shall not be considered in the
calculation of the Participant's benefits under any employee welfare or pension
benefit plan maintained by an Business Unit, unless otherwise specifically
provided therein.

         6.6 Plan Not a Contract. The Plan shall not be deemed to constitute a
contract between a Business Unit and any Executive Employee, nor shall anything
herein contained be deemed to give any Executive Employee any right to be
retained in the employ of a Business Unit or interfere with the right of the
Business Unit to discharge any Executive Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.

         6.7 Choice of Law. This Plan shall be governed by and construed in
accordance with the laws of the State of Georgia except for the application of
any law which would require the use of the laws of another state.

         6.8 Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Plan, a Change in Control transaction
would otherwise be accounted for as a pooling of interests under APB No. 16
("Pooling Accounting") (after giving effect to any and all other facts and
circumstances affecting whether such Change in Control transaction would use
Pooling Accounting), such provision or provisions of this Plan that would
otherwise cause the Change in Control transaction to be ineligible for Pooling
Accounting shall automatically be void and ineffective to the extent required to
permit Pooling Accounting to be used for such Change in Control transaction.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its
officers duly authorized, hereby establishes the Southern Company Performance
Pay Plan (Shareholder Approved) this _____ day of March , 2001, to be effective
January 1, 2000.

                                    SOUTHERN COMPANY SERVICES, INC.



                                    By: ____________________________
                  _________              Robert A. Bell
                  _________              Vice President


Attest:


By:      ____________________________________________
         Sam H. Dabbs, Jr.
         Assistant Secretary

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>15
<FILENAME>x10a59.txt
<TEXT>

                         DEFERRED COMPENSATION PLAN FOR

                        DIRECTORS OF THE SOUTHERN COMPANY

                Amended and Restated Effective February 19, 2001


<PAGE>


                                    SECTION 1

                                   Definitions

1.1      "Beneficial Ownership" means beneficial ownership within the meaning of
         Rule 13d-3 promulgated under the Exchange Act.

1.2      "Board" or "Board of Directors" means the Board of Directors of the
         Company.

1.3      "Business Combination" means a reorganization, merger or consolidation
         or sale of Southern, or a sale of all or substantially all of
         Southern's assets.

1.4      "Cash Compensation" means the annual retainer fees and meeting fees
         payable to a Director in cash.

1.5      "Code" means the Internal Revenue Code of 1986, as amended, or any
         successor statute.

1.6      "Committee" means the Governance Committee of the Board, or such other
         committee as may be designated by the Board to be responsible for
         administering the Plan.

1.7      "Common Stock" means the common stock of Southern, including any shares
         into which it may be split, subdivided, or combined.

1.8      "Company" means The Southern Company or any successor thereto.

1.9      "Compensation Payment Date" means the date on which compensation,
         including cash retainer, meeting fees, and Stock Retainer, is payable
         to a Director or compensation which would otherwise be payable to a
         Director if an election to defer such compensation had not been made.

1.10     "Consummation" means the completion of the final act necessary to
         complete a transaction as a matter of law, including, but not limited
         to, any required approvals by the corporation's shareholders and board
         of directors, the transfer of legal and beneficial title to securities
         or assets and the final approval of the transaction by any applicable
         domestic or foreign governments or agencies.

1.11     "Deferred Cash Trust" means the Deferred Cash Compensation Trust for
         Directors of The Southern Company and its Subsidiaries.

1.12     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, the Deferred Stock
         Account and/or the Stock dividend investment account.

1.13     "Deferred Pension Election" means the election by a Director under
         Section 5.3 in connection with the deferral of receipt of the
         Director's Pension Benefit until termination from the Board.

1.14     "Deferred Stock Account" means the bookkeeping account established
         under Section 6.3 on behalf of a Director and includes shares of Common
         Stock credited thereto to reflect the reinvestment of dividends
         pursuant to Section 6.3(a)(iii).

1.15     "Deferred Stock Trust" means the Deferred Stock Trust for Directors of
         The Southern Company and its Subsidiaries.

1.16     "Director" means a member of the Board.

1.17     "Distribution Election" means the designation by a Director of the
         manner of distribution of the amounts and quantities held in the
         Director's Deferred Compensation Accounts upon the director's
         termination from the Board pursuant to Section 5.4.

1.18     "Effective Date" means January 1, 2000.

1.19     "Employee" means an employee of Southern or any of its subsidiaries
         that are "employing companies" as defined in the Southern Company
         Deferred Compensation Plan as amended and restated January 1, 2000, and
         as may be amended from time to time.

1.20     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

1.21     "Group" has the meaning set forth in Section 14(d) of the Exchange Act.

1.22     "Incumbent Board" means those individuals who constitute the Southern
         board of directors as of October 19, 1998, plus any individual who
         shall become a director subsequent to such date whose election or
         nomination for election by Southern's shareholders was approved by a
         vote of at least 75% of the directors then comprising the Incumbent
         Board. Notwithstanding the foregoing, no individual who shall become a
         director of the Southern board of directors subsequent to October 19,
         1998, whose initial assumption of office occurs as a result of an
         actual or threatened election contest (within the meaning of Rule
         14a-11 of the regulations promulgated under the Exchange Act) with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         Person other than the Southern board of directors shall be a member of
         the Incumbent Board.

1.23     "Market Value" means the average of the high and low prices of the
         Common Stock, as published in the Wall Street Journal in its report of
         New York Stock Exchange composite transactions, on the date such Market
         Value is to be determined, as specified herein (or the average of the
         high and low sale prices on the trading day immediately preceding such
         date if the Common Stock is not traded on the New York Stock Exchange
         on such date).

1.24     "Participant" means a Director or former Director who has an unpaid
         Deferred Compensation Account balance under the Plan.

1.25     "Participating Companies" means those companies that are affiliated
         with the Company whose boards of directors have authorized the
         establishment of trust(s) for the funding of their respective
         directors' Deferred Compensation Accounts under their respective
         Deferred Compensation Plans for Directors, including the Company.

1.26     "Pension Benefit" means the U.S. dollar amount of the
         actuarially-determined present value of benefits based on a Director's
         expected service at the required retirement date under The Southern
         Company Outside Directors Pension Plan, as calculated as of the
         Termination Date, plus accrued earnings on such amount calculated as if
         invested at the Prime Interest Rate from the Termination Date, until
         such amount is invested in Deferred Compensation Accounts pursuant to
         the provisions of Section 5.3.

1.27     "Pension Benefit Investment Date" means the date to be determined by
         the Committee, as of which the Director's Pension Benefit will be
         credited to a Deferred Compensation Account in accordance with the
         director's Deferred Pension Election under Section 5.3.

1.28     "Phantom Stock Investment Account" means the bookkeeping account
         established pursuant to Section 6.2 in which a Director may elect to
         defer Cash Compensation or make investments, and includes amounts
         credited thereto to reflect the reinvestment of dividends.

1.29     "Plan" means the Deferred Compensation Plan for Directors of The
         Southern Company as from time to time in effect.

1.30     "Plan Period"  means the period designated in Section 4.

1.31     "Person" means any individual, entity or group within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Exchange Act.

1.32     "Preliminary Change in Control" means the occurrence of any of the
         following as determined by the Southern Committee:

         (a)      The Company has entered into a written agreement, such as, but
                  not limited to, a letter of intent, which, if Consummated,
                  would result in a Southern Change in Control;

         (b)      The Company or any Person publicly announces an intention to
                  take or to consider taking actions which, if Consummated,
                  would result in a Southern Change in Control under
                  circumstances where the Consummation of the announced action
                  or intended action is legally and financially possible;

         (c)      Any Person becomes the Beneficial Owner of fifteen percent
                  (15%) or more of the Common Stock; or

         (d)      The Board has declared that a Preliminary Change in Control
                  has occurred.

1.33     "Prime Interest Rate" means the prime rate of interest as published in
         the Wall Street Journal.

1.34     "Prime Rate Investment Account" means the bookkeeping account
         established pursuant to Section 6.1 in which a Director may elect to
         defer Cash Compensation or make investments, the investment return on
         which is computed at the Prime Interest Rate.

1.35     "Southern" means The Southern Company.

1.36     "Southern Change in Control" means any of the following:

         (a)      The Consummation of an acquisition by any Person of Beneficial
                  Ownership of 20% or more of Southern's Voting Securities;
                  provided, however, that for purposes of this subsection (a),
                  the following acquisitions of Southern's Voting Securities
                  shall not constitute a Change in Control:

                  (i)      any acquisition directly from Southern,

                  (ii)     any acquisition by Southern,

                  (iii)    any acquisition by any employee benefit plan (or
                           related trust) sponsored or maintained by Southern or
                           any corporation controlled by Southern,

                  (iv)     any acquisition by a qualified pension plan or
                           publicly held mutual fund,

                  (v)      any acquisition by an Employee or Group composed
                           exclusively of Employees, or

                  (vi)     any Business Combination which would not otherwise
                           constitute a Change in Control because of the
                           application of clauses (i), (ii) and (iii) of Section
                           1.36(c);

         (b)      A change in the composition of Southern's board of directors
                  whereby individuals who constitute the Incumbent Board cease
                  for any reason to constitute at least a majority of Southern's
                  board of directors; or

         (c)      Consummation of a Business Combination, unless, following such
                  Business Combination, all of the following three conditions
                  are met:

                  (i)      all or substantially all of the individuals and
                           entities who held Beneficial Ownership, respectively,
                           of Southern's Voting Securities immediately prior to
                           such Business Combination beneficially own, directly
                           or indirectly, 65% or more of the combined voting
                           power of the Voting Securities of the corporation
                           surviving or resulting from such Business
                           Combination, (including, without limitation, a
                           corporation which as a result of such transaction
                           holds Beneficial Ownership of all or substantially
                           all of Southern's Voting Securities or all or
                           substantially all of Southern's assets) (such
                           surviving or resulting corporation to be referred to
                           as "Surviving Company"), in substantially the same
                           proportions as their ownership, immediately prior to
                           such Business Combination, of Southern's Voting
                           Securities;

                  (ii)     no Person (excluding any corporation resulting from
                           such Business Combination, any qualified pension
                           plan, publicly held mutual fund, Group composed
                           exclusively of employees or employee benefit plan (or
                           related trust) of Southern, its subsidiaries, or
                           Surviving Company) holds Beneficial Ownership,
                           directly or indirectly, of 20% or more of the
                           combined voting power of the then outstanding Voting
                           Securities of Surviving Company except to the extent
                           that such ownership existed prior to the Business
                           Combination; and

                  (iii)    at least a majority of the members of the Board were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Board, providing for such Business
                           Combination.

1.37     "Southern Committee" means Chairman the Board, Chief Financial Officer
         of the Company, General Counsel of the Company, and the Chairman of the
         "Administrative Committee", as defined in Section 3.1 of the Southern
         Company Deferred Compensation Plan, as restated and amended effective
         January 1, 2000.

1.38     "Stock Dividend Investment Account" means the bookkeeping account(s)
         established pursuant to section 6.4 on behalf of a Director that is
         credited with shares of stock, other than Common Stock, paid as a
         dividend on shares of Common Stock.

1.39     "Stock Retainer" means the portion of the Board retainer fee that the
         Board has determined to credit to a Director's Deferred Stock Account.
         Such amount may be denominated in dollars and/or shares of Common
         Stock.

1.40    "Termination Date" means January 1, 1997, the date as of which The
        Southern Company Outside Directors Pension Plan was effectively
        terminated.

1.41     "Transferred Amount" means an amount (a) equal to the value of a
         Director's accounts under the applicable deferred compensation plan for
         directors of Alabama Power Company, Georgia Power Company, Gulf Power
         Company, Mississippi Power Company, or Savannah Electric and Power
         Company and (b) which has been transferred to the Plan in connection
         with the Director's transfer from the board of directors of Alabama
         Power Company, Georgia Power Company, Gulf Power Company, Mississippi
         Power Company, or Savannah Electric and Power Company to the Board.

1.42     "Trust Administrator" means the individual or committee that is
         established in the Deferred Stock Trust and the Deferred Cash Trust, to
         administer such trusts on behalf of the Participating Companies.

1.43     "Voting Securities" shall mean the outstanding voting securities of a
         corporation entitling the holder thereof to vote generally in the
         election of such corporation's directors.

Where the context requires, words in the masculine gender shall include the
feminine gender, words in the singular shall include the plural, and words in
the plural shall include the singular.


<PAGE>


                                    SECTION 2

                                     Purpose

The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.

                                    SECTION 3

                                   Eligibility

An individual who serves as a Director and is not otherwise actively employed by
the Company or any of its subsidiaries or affiliates is eligible to participate
in the Plan.

                                    SECTION 4

                                  Plan Periods

Except as pertains to a Director's initial Plan Period, all Plan Periods shall
be on a calendar year basis. The initial Plan Period applicable to any person
elected to the Board who was not a Director on the preceding December 31, shall
begin on the first day of such Director's membership on the Board. The initial
Plan Period under this amended and restated plan shall begin January 1, 2000.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to January 1, 2000.

                                    SECTION 5

                                    Elections

5.1      Cash Compensation

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all or any portion of Cash Compensation that
                  otherwise would be paid to the Director for the Plan Period,
                  be deferred in amounts as designated by the Director, and
                  credited to (i) a Prime Rate Investment Account, (ii) a
                  Phantom Stock Investment Account, or (iii) a Deferred Stock
                  Account. Upon the Director's termination from the Board of
                  Directors, such deferred compensation and accumulated
                  investment return held in the Director's Deferred Compensation
                  Accounts shall be distributed to the Director in accordance
                  with the Director's Distribution Election and the provisions
                  of Section 7.

         (b)      An election to defer Cash Compensation is irrevocable. Such an
                  election shall continue from Plan Period to Plan Period unless
                  the Director changes his election to defer Cash Compensation
                  payable in a future Plan Period prior to the beginning of such
                  future Plan Period.

         (c)      Cash Compensation deferred under this Section 5.1 shall be
                  invested in Deferred Compensation Accounts as directed by the
                  Director on the Compensation Payment Date.

5.2      Stock Retainer

         Director compensation designated as Stock Retainer shall be credited to
         the Director's Deferred Stock Account as of the Compensation Payment
         Date. Upon the Director's termination from the Board of Directors, such
         compensation and accumulated investment return held in the Director's
         Deferred Stock Account shall be distributed to the Director in
         accordance with the Director's Distribution Election and the provisions
         of Section 7.

5.3      Deferred Pension Election

         Any Director, who had a Pension Benefit as of the Termination Date,
         made a single one-time election, to credit all of his Pension Benefit
         into a Deferred Compensation Account. The Pension Benefit was credited
         on the Pension Benefit Investment Date, at the election of the
         Director, to (i) a Prime Rate Investment Account, (ii) a Phantom Stock
         Investment Account, or (iii) a Deferred Stock Account. Upon the
         Director's termination from the Board, such Pension Benefit and
         accumulated investment return held in the Director's Deferred
         Compensation Accounts shall be distributed to the Director in
         accordance with Section 5.4(b) and the provisions of Section 7.

5.4      Distribution Election

         (a)      Except as set forth in Sections 5.4(b) and (c), prior to the
                  initial establishment of a Deferred Compensation Account for a
                  Director, the Director must elect that upon termination from
                  the Board of Directors the values and quantities held in the
                  Directors Deferred Compensation Accounts be distributed to the
                  Director, pursuant to the provisions of Section 7, in a single
                  lump sum or in a series of annual installments not to exceed
                  ten (10). The time for the commencement of distributions shall
                  not be later than the first day of the month coinciding with
                  or next following the second anniversary of termination of
                  Board membership.

         (b)      Any Director who made a Deferred Pension Election in
                  accordance with Section 5.3 made a Distribution Election at
                  the time the Deferred Pension Election was made, attributable
                  to the Pension Benefit and any accumulated investment return.

         (c)      In the event a Director terminates from the Board with
                  Deferred Compensation Accounts established under Section 6.5,
                  the Transferred Amounts and accumulated investment return held
                  in the Accounts shall be distributed to the Director in
                  accordance with the Director's distribution election in effect
                  under the applicable deferred compensation plan for directors
                  of Alabama Power Company, Georgia Power Company, Gulf Power
                  Company, Mississippi Power Company, or Savannah Electric and
                  Power Company on the date the Director transferred to the
                  Board, and the provisions of Section 7, unless such election
                  is changed pursuant to Section 5.4(d).

         (d)      Distribution Elections made under Sections 5.4 (a), (b), and
                  (c) are irrevocable except that a Director may amend any of
                  the Distribution Elections then in effect not prior to the
                  390th day or later than the 360th day prior to his termination
                  of Board membership.

5.5      Beneficiary Designation

         A Director or former Director may designate a beneficiary to receive
         distributions from the Plan in accordance with the provisions of
         Section 7 upon the death of the director. The beneficiary designation
         may be changed by a Director or former Director at any time, and
         without the consent of the prior beneficiary.

5.6      Form of Election

         All elections pursuant to the provisions of this Section 5 of the Plan
         shall be made in writing to the Secretary of the Company on a form or
         forms available upon request of the Secretary.


<PAGE>


                                    SECTION 6

                                    Accounts

6.1      Prime Rate Investment Account

         A Prime Rate Investment Account shall be established for each Director
         electing deferral or investment of Cash Compensation at the Prime
         Interest Rate. The amount directed by the Director to such account
         shall be credited to it as of the Pension Benefit Investment Date or
         Compensation Payment Date, as applicable, and credited thereafter with
         interest computed using the Prime Interest Rate. Interest shall be
         computed from the date such compensation is credited to the account and
         compounded quarterly at the end of each calendar quarter. The Prime
         Interest Rate in effect on the first day of a calendar quarter shall be
         deemed the Prime Interest Rate in effect for that entire quarter.
         Interest shall accrue and compound on any balance until the amount
         credited to the account is fully distributed.

6.2      Phantom Stock Investment Account

         The Phantom Stock Investment Account established for each Director
         electing deferral of Cash Compensation for investment at the Common
         Stock investment rate shall be credited with the number of shares
         (including fractional shares rounded to the nearest ten-thousandth) of
         Common Stock which could have been purchased on the Pension Benefit
         Investment Date or the Compensation Payment Date, as applicable, as
         determined by dividing the applicable compensation by the Market Value
         on such date. On the date of the payment of dividends on the Common
         Stock, the Director's Phantom Stock Investment Account shall be
         credited with additional shares (including fractional shares rounded to
         the nearest ten-thousandth) of Common Stock, as follows:

         (a)      In the case of cash dividends, such additional shares as would
                  have been purchased as of the Common Stock dividend record
                  date as if the credited shares had been outstanding on such
                  date and dividends reinvested thereon under the Southern
                  Investment Plan;

         (b)      In the case of dividends payable in property other than cash
                  or Common Stock, such additional shares as could be purchased
                  at the Market Value as of the date of payment with the fair
                  market value of the property which would have been payable if
                  the credited shares had been outstanding; and

         (c)      In the case of dividends payable in Common Stock, such
                  additional shares as would have been payable on the credited
                  shares as if they had been outstanding.

6.3      Deferred Stock Account

         (a)      A Director's Deferred Stock Account will be credited:

                  (i)      with the number of shares of Common Stock (rounded to
                           the nearest ten thousandth of a share) determined by
                           dividing the sum of the amount of Cash Compensation
                           subject to deferral or investment in the Deferred
                           Stock Account and the Stock Retainer (that is
                           denominated in dollars), by the average price paid by
                           the Trustee of the Deferred Stock Trust for shares of
                           Common Stock with respect to the Pension Benefit
                           Investment Date or the Compensation Payment Date, as
                           applicable, as reported by the Trustee, or, if the
                           Trustee shall not at such time purchase any shares of
                           Common Stock, by the Market Value on such date;

                  (ii)     as of the date on which Stock Retainer (that is
                           denominated in shares of Common Stock) is paid, with
                           the number of shares of Common Stock payable to the
                           Director as his Stock Retainer; and

                  (iii)    as of each date on which dividends are paid on the
                           Common Stock, with the number of shares of Common
                           Stock (rounded to the nearest ten thousandth of a
                           share) determined by multiplying the number of shares
                           of Common Stock credited in the Director's Deferred
                           Stock Account on the dividend record date, by the
                           dividend rate per share of Common Stock, and dividing
                           the product by the price per share of Common Stock
                           attributable to the reinvestment of dividends on the
                           shares of Common Stock held in the Deferred Stock
                           Trust on the applicable dividend payment date or, if
                           the Trustee of the Deferred Stock Trust has not
                           reinvested in shares of Common Stock on the
                           applicable dividend reinvestment date, the product
                           shall be divided by the Market Value on the dividend
                           payment date.

         (b)      If Southern enters into transactions involving stock splits,
                  stock dividends, reverse splits or any other recapitalization
                  transactions, the number of shares of Common Stock credited to
                  a Director's Deferred Stock Account will be adjusted (rounded
                  to the nearest ten thousandth of a share) so that the
                  Director's Deferred Stock Account reflects the same equity
                  percentage interest in Southern after the recapitalization as
                  was the case before such transaction.

         (c)      If at least a majority of Southern's stock is sold or
                  exchanged by its shareholders pursuant to an integrated plan
                  for cash or property (including stock of another corporation)
                  or if substantially all of the assets of Southern are disposed
                  of and, as a consequence thereof, cash or property is
                  distributed to Southern's shareholders, each Director's
                  Deferred Stock Account will, to the extent not already so
                  credited under this Section 6.3, be (i) credited with the
                  amount of cash or property receivable by a Southern
                  shareholder directly holding the same number of shares of
                  Common Stock as is credited to such Director's Deferred Stock
                  Account and (ii) debited by that number of shares of Common
                  Stock surrendered by such equivalent Southern shareholder.

         (d)      Each Director who has a Deferred Stock Account also shall be
                  entitled to provide directions to the Trust Administrator to
                  similarly direct the Trustee of the Deferred Stock Trust to
                  vote, on any matter presented for a vote to the shareholders
                  of Southern, that number of shares of Common Stock held by the
                  Deferred Stock Trust equivalent to the number of shares of
                  Common Stock credited to the Director's Deferred Stock
                  Account. Such Trust Administrator shall arrange for
                  distribution to all Directors in a timely manner of all
                  communications directed generally to the Southern shareholders
                  as to which their votes are solicited.

6.4      Stock Dividend Investment Account

         (a)      A Director's Stock Dividend Investment Account will be
                  credited as of the date on which a dividend is paid to the
                  Company's common stockholders in stock other than Common Stock
                  with the number of shares of the other corporation's stock
                  receivable by a Southern stockholder directly holding the same
                  number of shares of Common Stock as is credited to such
                  Director's Deferred Stock Account.

         (b)      Each Director who has a Stock Dividend Investment Account also
                  shall be entitled to provide directions to the Trust
                  Administrator to similarly direct the Trustee of the Deferred
                  Stock Trust to vote on any matter presented for a vote to the
                  applicable corporation's shareholders, that number of shares
                  of the applicable corporation's common stock held by the
                  Deferred Stock Trust equivalent to the number of shares
                  credited to the Director's Stock Dividend Investment Account.
                  The Trust Administrator shall arrange for distribution to all
                  Directors in a timely manner of all communications directed
                  generally to the applicable corporation's shareholders as to
                  which their votes are solicited.

6.5      Transferred Amounts

         (a)      As soon as administratively practicable, the Company shall
                  establish for a Director transferring to the Board from
                  Alabama Power Company, Georgia Power Company, Gulf Power
                  Company, Mississippi Power Company, or Savannah Electric and
                  Power Company, such Deferred Compensation Accounts as are
                  necessary to implement Section 6.5 (b).

         (b)      Any Transferred Amounts will be credited to the Deferred
                  Compensation Account(s) established that are comparable to the
                  deferred compensation accounts to which such amounts were
                  credited under the applicable deferred compensation plan for
                  directors of Alabama Power Company, Georgia Power Company,
                  Gulf Power Company, Mississippi Power Company, or Savannah
                  Electric and Power Company, as soon as administratively
                  practicable following the date the Transferred Amounts are
                  transferred to the Plan. Thereafter, the Transferred Amounts
                  shall be credited with investment returns as applicable under
                  this Section 6 of the Plan.

                                    SECTION 7

                                  Distributions

7.1      Upon the termination of a Director's membership on the Board the amount
         credited to a Director's Deferred Compensation Accounts will be paid to
         the Director or his beneficiary, as applicable, in the following
         manner:

         (a)      the amount credited to a Director's Prime Rate Investment
                  Account and Phantom Stock Investment Account shall be paid in
                  cash;

         (b)      the amount credited to a Deferred Stock Account shall, except
                  as otherwise provided in Section 6.3 and Section 9.5, or to
                  the extent the Company is otherwise, in the reasonable
                  judgment of the Committee, precluded from doing so, be paid in
                  shares of Common Stock (with any fractional share interest
                  therein paid in cash to the extent of the then Market Value
                  thereof); and

         (c)      the amount credited to a Stock Dividend Investment Account
                  shall, except as otherwise provided in section 9.5, be paid
                  from the assets in the Deferred Stock Trust in shares of the
                  applicable corporation, however if there is not a sufficient
                  number of shares held in the Trust, the remainder shall be
                  paid in cash based upon the average of the high and low price
                  of the stock as reported in the Wall Street Journal on the
                  business day immediately proceeding the distribution date.

         Such payments shall be from the general assets of the Company
         (including the Deferred Cash Trust and the Deferred Stock Trust) in
         accordance with this Section 7.

         Notwithstanding the foregoing, in the event the Company enters into an
         agreement described in Section 7.3 with respect to a Director prior to
         the termination of the Director, the Company shall have no obligation
         to make distributions to the Director under this Section 7.1 in
         connection with such Director's termination of membership on the Board.

7.2      Unless other arrangements are specified by the Committee on a uniform
         and nondiscriminatory basis, deferred amounts shall be paid in the form
         of (i) a lump sum payment, or (ii) in approximately equal annual
         installments, as elected by the Director pursuant to the provisions of
         Section 5.4; provided, however, that payments shall be made only in a
         single lump sum if payment commences due to termination for cause. Such
         payments shall be made (or shall commence) as soon as practicable
         following the termination of Board membership or, if so elected in the
         Distribution Election, up to twenty-four (24) months following such
         termination.

         In the event a Director elected to receive the balance of his Deferred
         Compensation Accounts in a lump sum, distribution shall be made on the
         first day of the month selected by the Director on his Distribution
         Election, or as soon as reasonably possible thereafter. If the Director
         elected to receive annual installments, the first payment shall be made
         on the first day of the month selected by a Director, or as soon as
         reasonably possible thereafter, and shall be equal to the balance in
         the Director's Deferred Compensation Accounts on such date divided by
         the number of annual installment payments. Each subsequent annual
         payment shall be an amount equal to the balance in the Director's
         Deferred Compensation Accounts on the date of payment divided by the
         number of remaining annual payments and shall be paid on the
         anniversary of the preceding date of payment. The Market Value of any
         shares of Common Stock credited to a Director's Phantom Stock
         Investment Account shall be determined as of the twenty-fifth (25th)
         day of the month immediately preceding the date of any lump sum or
         installment distribution.

         Upon the death of a Director, or a former Director prior to the payment
         of all amounts credited to the Director's Deferred Compensation
         Accounts, the unpaid balance shall be paid in the sole discretion of
         the Committee (i) in a lump sum to the designated beneficiary of such
         Director or former Director within thirty (30) days of the date of
         death (or as soon as reasonably possible thereafter) or (ii) in
         accordance with the Distribution Election made by such Director or
         former Director. In the event a beneficiary designation has not been
         made, or the designated beneficiary is deceased or cannot be located,
         payment shall be made to the estate of the Director or former Director.
         The Market Value of any shares of Common Stock credited to a Director's
         Phantom Stock Investment Account shall be determined as of the
         twenty-fifth (25th) day of the month immediately preceding the date of
         any lump sum or installment distribution.

7.3      If the Company enters into a written agreement with a subsidiary,
         affiliate or former affiliate of the Company under which the
         subsidiary, affiliate or former affiliate assumes liability for a
         Director's benefits accrued under the Plan in connection with, but
         prior to, such Director's termination of membership on the Board and
         election to the board of directors of such subsidiary, affiliate or
         former affiliate of the Company, the value of the Director's benefits
         which have accrued under the Plan as of the date the Director
         terminates from the Board shall be transferred from the Company to the
         subsidiary, affiliate or former affiliate of the Company, and the
         Company shall have no further obligation to make any distributions to
         the Director under Section 7.1 or any other section herein.

                                    SECTION 8

                 Change in Control and Other Special Provisions

8.1      Notwithstanding any other terms of the Plan to the contrary, following
         a Southern Change in Control, the provisions of this Section 8 shall
         become operative and apply to the payment of benefits under the Plan
         with respect to any Director who is a Participant on such date.

8.2      The Deferred Cash Trust and the Deferred Stock Trust (collectively
         "Trusts") have been established to hold assets of the Participating
         Companies under certain circumstances as a reserve for the discharge of
         the Company's obligations under the Plan. In the event of a Preliminary
         Change in Control of the Company, the Company shall be obligated to
         immediately contribute such amounts to the Trusts as may be necessary
         to fully fund all benefits payable under the Plan in accordance with
         the procedures set forth in Section 8.3 hereof. In addition, in order
         to provide the added protections for certain individuals in accordance
         with Paragraph 7(b) of the Deferred Cash Trust and Paragraph 7(c) of
         the Deferred Stock Trust, the Company may fund the Trusts prior to a
         Preliminary Change in Control of the Company in accordance with the
         terms of the Trusts. All assets held in the Trusts remain subject only
         to the claims of the Participating Companies' general creditors whose
         claims against the Participating Companies are not satisfied because of
         the Participating Companies' bankruptcy or insolvency (as those terms
         are defined in the Trusts). No Participant has any preferred claim on,
         or beneficial ownership interest in, any assets of the Trusts before
         the assets are paid to the Participant and all rights created under the
         Trusts, as under the Plan, are unsecured contractual claims of the
         Participant against the Company.

8.3      As soon as practicable following a Preliminary Change in Control of the
         Company, the Company shall contribute to each Trust an amount based
         upon the funding strategy adopted by the Trust Administrator with the
         assistance of an appointed actuary necessary to fulfill the Company's
         obligations pursuant to this Section 8. In the event of a dispute over
         such actuary's determination with respect to either or both Trusts, the
         Company and any complaining Participant(s) shall refer such dispute to
         an independent, third party actuarial consultant, chosen by the Company
         and such Participant. If the Company and the Participant cannot agree
         on an independent, third party actuarial consultant, the actuarial
         consultant shall be chosen by lot from an equal number of actuaries
         submitted by the Company and the applicable Trustee. Any such referral
         shall only occur once in total and the determination by the third-party
         actuarial consultant shall be final and binding upon both parties. The
         Company shall be responsible for all of the fees and expenses of the
         independent actuarial consultant.

8.4      In the event of a Southern Change in Control, notwithstanding anything
         to the contrary in the Plan, upon termination as a Director, that
         amount in the Deferred Compensation Plan Account(s) of a Participant
         who was a Director determined as of the date of such Change in Control
         shall be paid out in a lump sum if such Participant makes an election
         pursuant to procedures established by the Trust Administrator, in its
         sole and absolute discretion. If no such election is made, the Director
         shall receive payment of his Accounts solely in accordance with Section
         7.


<PAGE>


                                    SECTION 9

                               General Provisions

9.1      In the event that the Company shall decide to establish an advance
         accrual reserve on its books against the future expense of payments
         from any Deferred Compensation Accounts, such reserve shall not under
         any circumstances be deemed to be an asset of this Plan but, at all
         times, shall remain a part of the general assets of the Company,
         subject to claims of the Company's creditors.

9.2      A person entitled to any amount under this Plan shall be a general
         unsecured creditor of the Company with respect to such amount.
         Furthermore, a person entitled to a payment or distribution with
         respect to a Deferred Compensation Account shall have a claim upon the
         Company only to the extent of the balance in his Deferred Compensation
         Accounts.

The Company will pay all commissions, fees, and expenses that may be incurred in
operating the Plan.

9.4      The Company will pay its prorated share of all commissions, fees, and
         expenses that may be incurred in operating any trust(s) established
         under the Plan (including the Deferred Stock Trust and the Deferred
         Cash Trust).

9.5      Notwithstanding any other provision of this Plan: (i) elections under
         this Plan may only be made by Directors while they are directors of the
         Company; (with the exception of the designation of beneficiaries) and
         (ii) distributions otherwise payable to a Director in the form of
         Common Stock or other corporation's stock shall be delayed and/or
         instead paid in cash in an amount equal to the fair market value
         thereof if such payment in stock would violate any federal or State
         securities laws (including Section 16(b) of the Securities Exchange Act
         of 1934, as amended) and/or rules and regulations promulgated
         thereunder.

9.6      Directors, their legal representatives and their beneficiaries shall
         have no right to anticipate, alienate, sell, assign, transfer, pledge
         or encumber their interests in the Plan, nor shall such interests be
         subject to attachment, garnishment, levy or execution by or on behalf
         of creditors of the Directors or of their beneficiaries.


<PAGE>


                                   SECTION 10

                                 Administration

Subject to the express provisions of the Plan, the Committee shall have the
exclusive right to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.

The Committee may delegate to such officers, employees, or departments of the
Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.

                                   SECTION 11

                    Amendment, Termination and Effective Date

11.1     Amendment of the Plan

         Except for the provisions of Section 8, which may not be amended
         following a Southern Change in Control, and subject to the provisions
         of Section 11.3, the Plan may be wholly or partially amended or
         otherwise modified at any time by written action of the Board.

11.2     Termination of the Plan

         Subject to the provisions of Section 11.3 herein, the Plan may be
         terminated at any time by written action of the Board.

11.3     No Impairment of Benefits

         Notwithstanding the provisions of Sections 11.1 and 11.2 herein, no
         amendment to or termination of the Plan shall impair any rights to
         benefits that have accrued hereunder.


<PAGE>


11.4     Governing Law

         This Plan shall be construed in accordance with and governed by the
laws of the State of Georgia.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective
February 19, 2001, has been executed pursuant to resolutions of the Board of
Directors of the Company, this ____ day of _______________, 2001.

                                               THE SOUTHERN COMPANY


                                                By: ________________________

Attest:


By: ___________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>16
<FILENAME>x10a61.txt
<TEXT>

                                                             Exhibit 10(a)61




                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN





                              Troutman Sanders LLP
                           600 Peachtree Street, N.E.
                           5200 Bank of America Plaza
                           Atlanta, Georgia 30308-2216
                                 (404) 885-3000









                              Amended and Restated as of February 23, 2001


<PAGE>


0297647


                                        i



                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN

                                TABLE OF CONTENTS





ARTICLE I Purpose and Adoption of Plan...................................1
          ----------------------------


ARTICLE II Definitions...................................................2
          ------------


ARTICLE III Administration of Plan.......................................6
            ----------------------


ARTICLE IV Eligibility...................................................8
           -----------


ARTICLE V Deferral Election.............................................10
          -----------------


ARTICLE VI Participants' Accounts.......................................12
           ----------------------


ARTICLE VII Account Distribution........................................16
            --------------------


ARTICLE VIII Miscellaneous Provisions...................................20
             ------------------------


<PAGE>
                                SOUTHERN COMPANY
                           DEFERRED COMPENSATION PLAN


                                    ARTICLE I
                          Purpose and Adoption of Plan

         1.1......Adoption: Southern Company Services, Inc. and the other
Employing Companies established the Deferred Compensation Plan for The Southern
Electric System effective October 1, 1988. The Plan has been amended from time
to time including this amendment and restatement effective February 23, 2001.
Except as otherwise provided herein, the terms of the Plan as in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to February 23, 2001.
         1.2......Purpose: This Southern Company Deferred Compensation Plan is
designed to permit a select group of management or highly compensated employees
to elect to defer a portion of their regular compensation during each payroll
period and to defer all or a portion of certain short-term and long-term
incentive payments until their death, disability, retirement, or other
termination of employment with an Employing Company. The Plan shall be an
unfunded deferred compensation arrangement whose benefits shall be paid solely
from the general assets of the Employing Companies.

                                   ARTICLE II
                                   Definitions

         For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:
         2.1......"Account" shall mean the account or accounts established and
maintained by an Employing Company to reflect the interest of a Participant in
the Plan resulting from a Participant's deferral of Compensation or Incentive
Pay, or transfer of Transferred Amounts, and adjustments thereto to reflect
income, gains, losses, and other credits or charges. Charges to Participant's
Accounts for distributions shall be posted as of the date the Committee (or its
designee) notifies its paying agent to make such distribution.
         2.2......"Board of Directors" shall mean the Board of Directors of the
 Company.
         2.3......"Change in Control Benefit Plan Determination Policy" shall
mean the Change in Control Benefit Plan Determination Policy, as approved by the
Southern Board, as it may be amended from time to time in accordance with the
provisions therein.
         2.4......"Closing Price" shall mean the closing price on any trading
day of a share of the Common Stock based on consolidated trading as defined by
the Consolidated Tape Association and reported as part of the consolidated
trading prices of New York Stock Exchange listed securities.
         2.5......"Committee" shall mean the committee referred to in Section
3.1 hereof.
         2.6......"Common Stock" shall mean the common stock of Southern.
         2.7......"Company" shall mean Southern Company Services, Inc.
         2.8......"Compensation" shall mean the monthly rate of an Employee's
base wages or salary paid by any Employing Company to an Employee, including
amounts contributed by an Employing Company to the Employee Savings Plan as
Elective Employer Contributions, as said term is defined in Section 4.1 therein,
pursuant to the Employee's exercise of his or her deferral option made in
accordance with Section 401(k) of the Internal Revenue Code and amounts
contributed by an Employing Company to The Southern Company Flexible Benefits
Plan on behalf of the Employee pursuant to his or her salary reduction election
under such plan; but disregarding overtime and any reimbursements to an Employee
paid by any Employing Company including, but not limited to, reimbursements for
such items as moving expenses, automobile expenses, tax preparation expenses,
travel and entertainment expenses, and health and life insurance premiums.
         2.9......"Deferral Election" shall mean the Participant's written
election to defer a portion of his or her Compensation or Incentive Pay pursuant
to Article V hereof.
         2.10....."Distribution Election" shall mean the election under Article
VII hereof, pursuant to which a Participant elects to receive the balance of his
or her Account in either a lump sum or in annual installments following the
Participant's death, disability, retirement or other termination of Employment
with an Employing Company.
         2.11....."Effective Date" of this amendment and restatement shall mean
         February 23, 2001. 2.12....."Employee" shall mean any person who is
         currently employed by an Employing Company. 2.13....."Employee Savings
         Plan" shall mean The Southern Company Employee Savings Plan, as amended
         from time to time.
         2.14....."Employee Stock Ownership Plan" shall mean The Southern
Company Employee Stock Ownership Plan, as amended from time to time.
         2.15....."Employing Company" shall mean the Company, or any affiliate
or subsidiary (direct or indirect) of The Southern Company, which the Board of
Directors may from time to time determine to bring under the Plan and which
shall adopt the Plan, and any successor of any of them.
         2.16....."Enrollment Date" shall mean the Effective Date, January 1 of
each Plan Year, and such other dates as may be determined from time to time by
the Committee.
         2.17....."Exchange Act" shall mean the Securities Exchange Act of
1934, as amended.
         2.18....."Incentive Pay" shall mean such long-term or short-term
incentive pay as the Committee shall permit to be deferred under this Plan for
any Plan Year.
         2.19....."Investment Election" shall mean the Participant's written
election to have his or her deferred Compensation or Incentive Pay invested
pursuant to Section 6.3 or Section 6.4 hereof.
         2.20....."Mirant Plan" shall mean the Mirant Corporation Deferred
Compensation Plan for Directors and Select Employees.
         2.21....."Non-adopting  Company"  shall mean any  subsidiary  or
affiliate of The Southern  Company  which is not an Employing Company.
         2.22....."Participant" shall mean an Employee or former employee of an
Employing Company who is eligible to receive benefits under the Plan or who was
so eligible and had an unpaid Account balance upon his or her death, disability,
retirement or other termination of employment with an Employing Company.
         2.23....."Pension Plan" shall The Southern Company Pension Plan, as
amended from time to time.
         2.24....."Performance Sharing Plan" shall mean The Southern Company
         Performance Sharing Plan, as amended from time to time. 2.25....."Plan"
         shall mean the Southern Company Deferred Compensation Plan, amended and
         restated as of February 23, 2001, as
further amended from time to time. Prior to the January 1, 1996 amendment and
restatement, the Plan was entitled the Deferred Compensation Plan for The
Southern Electric System.
         2.26....."Plan Year" shall mean the calendar year.
         2.27....."Retirement Income" shall have the same meaning as set forth
in the Pension Plan.
         2.28....."Southern" shall mean Southern Company, its successors and
assigns.
         2.29....."Southern Board" shall mean the board of directors of
Southern.
         2.30....."Spin-off  Date" shall mean the "Group  Status  Change Date"
as defined in the  Employee  Matters  Agreement  between
Mirant Corporation (formerly Southern Energy, Inc.) and The Southern Company.
         2.31....."Supplemental Benefit Plan" shall mean The Southern Company
Supplemental Benefit Plan and the Supplemental Executive Retirement Plan of
Savannah Electric and Power Company, each as amended from time to time.
         2.32....."Transferred Amount" shall mean an amount equal to the value
of a Participant's accounts under the Mirant Plan which has been transferred to
and credited under the Plan pursuant to Section 6.2 herein in connection with
the Participant's transfer of employment from Mirant Corporation or any of its
subsidiaries to an Employing Company, excluding Mirant Corporation and its
subsidiaries.
         2.33....."Transferred Amount Investment Date" means the date as of
which a Participant's Transferred Amount will be credited and invested under the
Plan in accordance with Section 6.2.
         2.34....."Trust" shall mean the Southern Company Deferred Compensation
Trust.
         2.35....."Trustee" shall mean the entity designated as such in the
Trust.
         2.36....."Valuation Date" shall mean each trading day of the New York
Stock Exchange, or any successor national exchange on which the Common Stock is
traded and with respect to which a Closing Price may be determined.
         Where the context requires, the definitions of all terms set forth in
the Pension Plan, the Employee Savings Plan, the Employee Stock Ownership Plan,
the Performance Sharing Plan and the Supplemental Benefit Plan shall apply with
equal force and effect for purposes of interpretation and administration of the
Plan, unless said terms are otherwise specifically defined in the Plan. Words in
the masculine gender shall include the feminine and neuter genders, words in the
singular shall include the plural and words in the plural shall include the
singular.

                                   ARTICLE III
                             Administration of Plan

         3.1......The general administration of the Plan shall be placed in the
Committee. The Committee shall consist of the Vice President, Human Resources of
Southern, the Director, System Compensation and Benefits of Southern and the
Comptroller of Southern. Any member may resign or may be removed by the Board of
Directors and new members may be appointed by the Board of Directors at such
time or times as the Board of Directors in its discretion shall determine. The
Committee shall be chaired by the Vice President, Human Resources of Southern
and may select a Secretary (who may, but need not, be a member of the Committee)
to keep its records or to assist it in the discharge of its duties. A majority
of the members of the Committee shall constitute a quorum for the transaction of
business at any meeting. Any determination or action of the Committee may be
made or taken by a majority of the members present at any meeting thereof, or
without a meeting by resolution or written memorandum concurred in by a majority
of the members.
         3.2......No member of the Committee shall receive any compensation
from the Plan for his or her service.
         3.3......The Committee shall administer the Plan in accordance with its
terms and shall have all powers necessary to carry out the provisions of the
Plan as may be more particularly set forth herein. The Committee shall interpret
the Plan and shall determine all questions arising in the administration,
interpretation and application of the Plan. Any such determination by the
Committee shall be conclusive and binding on all persons. The Committee may
adopt such regulations as it deems desirable for the conduct of its affairs and
may appoint such accountants, counsel, actuaries, specialists and other persons
as it deems necessary or desirable in connection with the administration of this
Plan. The Committee shall be the Plan's agent for service of process.
         3.4......The Committee shall be reimbursed by the Employing Companies
for all reasonable expenses incurred by it in the fulfillment of its duties,
including, but not limited to, fees of accountants, counsel, actuaries, and
other specialists, and other costs of administering the Plan.
         3.5 (a) The Committee is responsible for the daily administration of
         the Plan and may appoint other persons or entities to perform any of
         its fiduciary functions. The Committee and any such appointee may
         employ advisors and other persons necessary or convenient to help the
         Committee carry out its duties, including its fiduciary duties. The
         Committee shall review the work and performance of each such appointee,
         and shall have the right to remove any such appointee from his or her
         position. Any person, group of persons or entity may serve in more than
         one fiduciary capacity.
                  (b) The Committee shall maintain accurate and detailed records
         and accounts of Participants and of their rights under the Plan and of
         all receipts, disbursements, transfers and other transactions
         concerning the Plan. Such accounts, books and records relating thereto
         shall be open at all reasonable times to inspection and audit by the
         Board of Directors and by any persons designated thereby.
                  (c) The Committee shall take all steps necessary to ensure
         that the Plan complies with the law at all times. These steps shall
         include such items as the preparation and filing of all documents and
         forms required by any governmental agency; maintaining of adequate
         Participants' records; recording and transmission of all notices
         required to be given to Participants and their beneficiaries; the
         receipt and dissemination, if required, of all reports and information
         received from an Employing Company; securing of such fidelity bonds as
         may be required by law; and doing such other acts necessary for the
         proper administration of the Plan. The Committee shall keep a record of
         all of its proceedings and acts, and shall keep all such books of
         account, records and other data as may be necessary for proper
         administration of the Plan. The Committee shall notify the Employing
         Companies upon their request of any action taken by the Committee, and
         when required, shall notify any other interested person or persons.

                                   ARTICLE IV
                                   Eligibility

         4.1......Any Employee who is determined eligible to participate in
accordance with Section 4.2 of the Plan and whose compensation equals or exceeds
such minimum amount as may be established by the Committee from time to time may
elect to participate in the Plan beginning on any Enrollment Date by electing to
have his or her Compensation or Incentive Pay reduced and such amounts
contributed to the Plan in accordance with Article V hereof, and directing the
investment of such contributions in accordance with Article VI hereof. The
Committee shall be authorized to establish the minimum compensation required for
eligibility to participate in the Plan, to be effective as of the first day of
the next succeeding Plan Year. Notwithstanding the foregoing, any Employee
eligible to participate in any similar deferred compensation plan maintained by
an Employing Company or maintained by a Non-adopting Company shall be ineligible
to defer Compensation or Incentive Pay under this Plan, unless the Committee in
its sole discretion shall determine otherwise.
         4.2......Effective December 19, 2000, the Committee shall determine
which Employees are eligible to participate in the Plan. Additionally, the
Committee shall be authorized to modify the minimum compensation amount
described in Section 4.1 of the Plan and to rescind the eligibility of any
Participant if necessary or advisable to insure that the Plan is maintained
primarily for the purpose of providing deferred compensation to a select group
of management or highly compensated employees, as such terms are defined by the
Employee Retirement Income Security Act of 1974, as amended.
         4.3......The Committee shall have the authority to permit, if it deems
appropriate, separate Deferral Elections under Article V hereof, Investment
Elections under Article VI hereof, and Distribution Elections under Article VII
hereof for Compensation and Incentive Pay, respectively.
         4.4......Notwithstanding the foregoing provisions of this Article IV,
an Employee who has Transferred Amounts transferred to and credited under the
Plan pursuant to Section 6.2 herein shall be a Participant in the Plan. However,
an Employee who becomes a Participant under this Section 4.4 who is not
determined eligible under Section 4.2 shall be a non-active Participant and
shall be ineligible to actively defer Compensation or Incentive Pay under this
Plan unless such Employee is later determined to be eligible under Section 4.2
or the Committee in its sole discretion determines otherwise.

                                    ARTICLE V
                                Deferral Election

         5.1......A Participant may elect to defer payment of a portion of his
or her Compensation otherwise payable to him by his or her Employing Company
during each payroll period of the next succeeding Plan Year by any whole
percentage not to exceed fifty percent (50%) of his or her Compensation, or such
greater or lesser amount as shall be determined by the Committee from time to
time. A Participant may also elect to defer payment of up to one hundred percent
(100%), by whole percentages, of any Incentive Pay otherwise payable to him or
her by his or her Employing Company.
         5.2......The Deferral Election shall be made in writing on a form
prescribed by the Committee and shall state as follows:
                  (a)      That  the  Participant  wishes  to  make an
election  to  defer  the  receipt  of a  portion  of his or her
         Compensation or all or a portion of his or her Incentive Pay;
                  (b) The whole percentage of his or her Compensation or
                  Incentive Pay which the Participant elects to defer; and (c)
                  The Distribution Election under Article VII hereof.
         5.3......The initial Deferral Election of a new Participant shall be
made in writing by the Participant and delivered to the Participant's Employing
Company by the date established by the Committee and shall be effective on the
next occurring Enrollment Date. Any modification or revocation of the most
recent Deferral Election shall be made by written notice of the Participant and
delivered to the Participant's Employing Company by the date established by the
Committee and shall be effective on the first day of the Plan Year immediately
following the date of the Deferral Election. A Deferral Election with respect to
the deferral of future Compensation or Incentive Pay shall be an annual election
for each Plan Year unless otherwise modified or revoked as provided herein. The
termination of a Participant's participation in the Plan shall not affect the
Participant's Compensation or Incentive Pay previously deferred under the Plan,
which shall be invested and distributed in accordance with the Participant's
elections and the terms and conditions of the Plan.
         5.4......Notwithstanding the provisions of Section 5.3 of the Plan, the
Committee, in its sole discretion upon written application by a Participant, may
authorize the suspension of a Participant's Deferral Election in the event of an
unforeseen emergency or hardship of the Participant. A Deferral Election
suspension will be on account of hardship if it is necessary in light of
immediate and heavy financial needs of the Participant which cannot reasonably
be met from the Participant's other financial resources. For this purpose, any
amounts held in the Participant's accounts in the Employee Savings Plan and the
Employee Stock Ownership Plan shall not be deemed to be reasonably available.
Any Deferral Election suspension authorized by the Committee shall become
effective as of the first payroll period beginning thirty (30) days after
receipt by the Participant's Employing Company of the Participant's suspension
application, or as soon as practicable after the receipt of such application.
Such Deferral Election suspension shall be effective for the remainder of the
Plan Year of application and shall be deemed an annual election by the
Participant for each succeeding Plan Year unless otherwise modified by the
Participant under the provisions of Section 5.3 hereof.

                                   ARTICLE VI
                             Participants' Accounts

         6.1......Upon the Committee's receipt of a Participant's valid Deferral
Election under Article V hereof, beginning as of the Enrollment Date, the
designated portion of Compensation and Incentive Pay shall be credited to the
Participant's Account as of the date of each such deferral in accordance with
the provisions of this Article VI.
         6.2......Transferred Amounts shall be credited to a Participant's
Account as soon as administratively practicable following the Participant's
transfer of employment. Any Transferred Amounts credited to a Participant's
Account which were invested at the prime interest rate under the Mirant Plan
shall be invested pursuant to Section 6.3 herein. Any Transferred Amounts
credited to a Participant's Account which were invested in Mirant Corporation
phantom stock under the Mirant Plan shall be invested in a Mirant Stock Option
investment pursuant to the terms of Section 6.4(d) herein, and prior to the
opening of the window period described in Section 6.4(d), such Transferred
Amounts may be transferred out of the Mirant Stock Option investment during
other window periods established by the Committee pursuant to Section 6.5
herein. Upon a Participant's termination of employment, the Transferred Amounts
and accumulated investment return held in the Participant's Account shall be
distributed to the Participant in accordance with the Participant's Distribution
Election and the provisions of Article VII.
         6.3......On the last business day of each month, the Account of each
Participant either electing to invest his or her deferred Compensation or
Incentive Pay for a Plan Year in accordance with this Section 6.3 or
transferring a Transferred Amount to this Plan in accordance with Section 6.2
for investment pursuant to this Section 6.3, shall be credited by the Employing
Company with an amount, in lieu of interest, equal to the monthly equivalent of
the per annum prime rate of interest as published by the Wall Street Journal as
the base rate on corporate loans posted as of the last business day of each
month by at least seventy five (75%) percent of the United States' largest
banks, compounded monthly on any Account balance until such balance is fully
distributed.
         6.4......The Account of each Participant either electing to invest his
or her deferred Compensation or Incentive Pay for a Plan Year in accordance with
this Section 6.4 for investment pursuant to this Section 6.4 shall be credited
on the date of deferral with the deemed number of shares (including fractional
shares) of Common Stock which could have been purchased on such date with the
dollar amount of such deferral, based upon the Common Stock's Closing Price on
the Valuation Date immediately preceding the date of deferral. As of the date on
which occurs the payment of dividends on the Common Stock, there shall be
credited with respect to the deemed number of shares of Common Stock in the
Participant's Account on such date such additional deemed shares (including
fractional shares) of Common Stock as follows:
                  (a) In the case of cash dividends, such additional deemed
         shares as could be purchased at the Closing Price on the Valuation Date
         immediately preceding the dividend payment date with the dividends
         which would have been payable on the deemed number of shares previously
         credited to the Participant's Account;
                  (b) In the case of dividends payable in property other than
         cash or Common Stock, such additional deemed shares as could be
         purchased at the Closing Price on the Valuation Date immediately
         preceding the dividend payment date with the fair market value of the
         property which would have been payable on the deemed number of shares
         previously credited to the Participant's Account; or
                  (c) In the case of dividends payable in Common Stock, such
         additional deemed shares as would have been payable on the deemed
         number of shares previously credited to the Participant's Account; or
                  (d) In the case of a deemed distribution of Mirant Corporation
         ("Mirant") common stock as a result of a spin-off of Mirant from the
         Southern Company or the transfer of Transferred Amounts which were
         invested in Mirant phantom stock under the Mirant Plan pursuant to
         Section 6.2 herein (collectively, "Mirant Shares"), the Mirant Shares
         shall be retained in a Mirant Stock Option investment for a limited
         period established by the Committee rather than immediately converted
         to Common Stock. The Participant will be given the opportunity to
         transfer the Mirant Shares into another investment option during a
         specific window period for such Mirant Shares established by the
         Committee pursuant to Section 6.5. Once the window period described in
         the preceding sentence closes, the Committee shall transfer the Mirant
         Shares into Common Stock at a time and in a manner designated by the
         Committee.
         6.5......The Investment Election by a Participant with respect to his
or her Account shall be made in writing on a form prescribed by the Committee.
Investment Elections shall be delivered to the Participant's Employing Company
prior to the first (1st) day of the month immediately prior to his or her
Enrollment Date or the next succeeding Plan Year, as appropriate, and shall be
effective on such Enrollment Date or the first day of such succeeding Plan Year.
Investment Elections shall be irrevocable and shall continue from Plan Year to
Plan Year unless the Participant changes the Investment Election regarding
future deferred Compensation or Incentive Pay by submitting a written request to
his or her Employing Company on a form prescribed by the Committee or unless the
Participant transfers all or a portion of his Account to another investment
option as provided below. Any such change shall become effective as of the first
day of the Plan Year next following the Plan Year in which such request is
submitted to the Employing Company. No transfer of amounts between investment
options shall be permitted under the Plan except during a window period which
may be designated by the Committee. The window period will normally occur once a
year. However, the Committee may designate additional window periods during
which transfers are allowed if it determines special circumstances warrant such
a window. The length and timing of each window period, the procedures for
transfer and the valuation of transferred Accounts or portions of Accounts shall
be determined by the Committee.
         6.6......As of the last day of each Plan Year, the Committee shall
issue a report to each Participant holding an Account, setting forth the dollar
amount of deferrals and Transferred Amounts invested under Section 6.3 hereof as
of the last day of the Plan Year and, with respect to deferrals and Transferred
Amounts invested under Section 6.4 hereof, the aggregate Closing Price of the
number of shares of Common Stock credited to each Participant's Account as of
the Valuation Date on or immediately preceding the last day of the Plan Year.

                                   ARTICLE VII
                              Account Distribution

         7.1 (a) When a Participant retires or terminates his or her employment
         with an Employing Company, he or she shall be entitled to receive in
         cash an amount equal to the dollar amount of any deferrals, Transferred
         Amounts, and any amounts in lieu of interest thereon credited to his or
         her Account under Section 6.3 hereof, and the dollar value of the
         aggregate Closing Price of the number of deemed shares of Common Stock
         (and fractions thereof) credited to his or her Account in accordance
         Section 6.4 hereof, determined as of the date following such
         termination or retirement that the Company notifies its paying agent to
         make the distribution or the immediately preceding Valuation Date, and
         any replacement benefits provided under Sections 6.3, 6.4 and 6.5
         hereof prior to January 1, 1996, such amounts to be paid in accordance
         with the Participant's most recent Distribution Election. No portion of
         a Participant's Account shall be distributed in Common Stock.
                  (b) The transfer by a Participant between subsidiaries or
         affiliates of Southern shall not be deemed to be a termination of
         employment with an Employing Company for purposes of the Plan.
                  (c) The Accounts of all Participants who are employees of
         Mirant Corporation or one of its subsidiaries under the Plan on the
         Spin-off Date shall be transferred to the Mirant Plan on a date
         selected by the Committee, and the Southern Company and its affiliates
         and subsidiaries shall have no further obligation to make any
         distribution to such Participants under Section 7.1.
         7.2......In the event that a Participant's most recent Distribution
Election is to receive a lump sum distribution of his or her Account, the dollar
amount determined under Section 7.1 hereof shall be paid to the Participant not
later than sixty (60) days following the date on which the Participant's
termination of employment occurs, or as soon as reasonably practicable
thereafter.
         7.3......In the event that a Participant's most recent Distribution
Election is to receive the distribution of his or her Account in annual
installments, the first payment shall be made not later than sixty (60) days
following the date on which the Participant's termination of employment occurs,
or as soon as reasonably practicable thereafter, and shall be in an amount equal
to the dollar balance in the Participant's Account determined under Section 7.1
hereof, divided by the number of annual installments elected. Subsequent annual
installments shall be in an amount equal to the dollar value of the
Participant's Account determined under Section 7.1 hereof divided by the number
of the remaining annual payments, and shall be paid as soon as practicable
following each anniversary of the initial payment date until the balance of the
Participant's Account is paid in full.
         7.4......The Participants' initial Distribution Elections may not be
revoked and shall govern the distribution of the Participants' Accounts.
Notwithstanding the foregoing, and except as otherwise provided herein, the
Committee may, in its sole discretion, upon application by a Participant, accept
an amended Distribution Election from a Participant provided the election is
made not later than the 366th day prior to a distribution of such Participant's
Account in accordance with the terms of the Plan; provided further, however,
that any Participant who is required to file reports pursuant to Section 16(a)
of the Securities and Exchange Act of 1934, as amended, with respect to equity
securities of Southern shall not be permitted to amend his or her Distribution
Election during any time period for which such Participant is required to file
any such reports with respect to the portion of his or her Account invested in
accordance with the provisions of Section 6.3 of the Plan, unless the Committee
in its sole discretion shall determine otherwise.
         7.5......Upon the death of a Participant prior to the complete
distribution his or her Account, the unpaid Account balance shall be paid in the
sole discretion of the Committee (a) in a lump sum to the Participant's
designated beneficiary within sixty (60) days following the date on which the
Committee is provided evidence of the Participant's death (or as soon as
reasonably practicable thereafter) or (b) in accordance with the Distribution
Election made by such Participant. In the event a beneficiary designation is not
on file or the designated beneficiary is deceased or cannot be located, payment
will be made to the Participant's estate.
         7.6......Beneficiary designations may be changed by the Participants
at any time without the consent of any prior beneficiary.
         7.7......Upon the total  disability  of a  Participant,  as
determined by the Social  Security  Administration,  prior to the
complete distribution of his or her Account, the unpaid balance of his or her
Account shall be paid in the sole discretion of the Committee (a) in a lump sum
to the Participant or his or her legal representative within sixty (60) days
following the date on which the Committee receives notification of the
determination of disability by the Social Security Administration (or as soon as
reasonable practicable thereafter) or (b) in accordance with the Participant's
Deferral Election.
         7.8......Upon application made by a Participant, his or her designated
beneficiary, or an authorized legal representative, the Committee may in its
sole discretion determine to accelerate payments or, in the event of death or
total disability (as determined by Social Security Administration), may extend
or otherwise make payments in a manner different from the manner in which such
payment would otherwise be made under the Participant's Deferral Election in the
absence of such determination.
         7.9......In the event a Participant who is employed on or after January
1, 1999 with an "Employing Company" (as defined in the Change in Control Benefit
Plan Determination Policy) disputes the calculation of his Account or payment of
amounts due under the terms of this Plan, Participant has recourse against the
Company, the Employing Company by which Participant is employed, if different,
the Plan, and the Trust for the payment of benefits to the extent the Trust so
provides.
         7.10.....Effective May 10, 2000, if Mirant Services, LLC (formerly
Southern Energy Resources, Inc.) ("Services") fails or refuses to make payments
under the Plan, Participants employed by Services may have the right to obtain
payment by Mirant Corporation (formerly Southern Energy, Inc.) ("Mirant")
pursuant to the terms of the "Guarantee Agreement Concerning Southern Energy
Resources, Inc. Compensation and Benefit Arrangements" entered into by Services
and Mirant. A Participant's right to payment is not increased as a result of
this Mirant Guarantee. Participants have the same right to payment from Mirant
as they have from Services. Any demand to enforce this Mirant Guarantee should
be made in writing and should reasonably and briefly specify the manner and the
amount Services has failed to pay. Such writing given by personal delivery or
mail shall be effective upon actual receipt. Any writing given by telegram or
telecopier shall be effective upon actual receipt if received during Mirant's
normal business hours, or at the beginning of the next business day after
receipt, if not received during Mirant's normal business hours. All arrivals by
telegram or telecopier shall be confirmed promptly after transmission in writing
by certified mail or personal delivery.
         7.11 The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control or preliminary change in control of Southern or an Employing
Company, the benefits to be provided hereunder and the funding of the Trust in
the event of such a change in control. Any modifications to the Change in
Control Benefit Plan Determination Policy are likewise incorporated herein.

                                  ARTICLE VIII
                            Miscellaneous Provisions

         8.1......Neither the Participant, his or her beneficiary, nor his or
her legal representative shall have any rights to commute, sell, assign,
transfer or otherwise convey the right to receive any payments hereunder, which
payments and the rights thereto are expressly declared to be non-assignable and
nontransferable. Any attempt to assign or transfer the right to payments of this
Plan shall be void and have no effect.
         8.2......Except as expressly limited under the terms of the Trust, an
Employing Company maintaining an Account for the benefit of a Participant shall
neither reserve nor specifically set aside funds for the payment of its
obligations under the Plan. In any event, such obligations shall be paid or
deemed to be paid solely from the general assets of the Employing Companies.
Participants shall only have the status of a general, unsecured creditor of the
Employing Company(ies). Notwithstanding that a Participant shall be entitled to
receive the balance of his or her Account under the Plan, the assets from which
such amount may be paid shall at all times be subject to the claims of the
creditors of the Participants' Employing Companies.
         8.3......Except for the provisions of Section 7.11 hereof, which may
not be amended following a "Southern Change in Control" or "Subsidiary Change in
Control" (as defined in the Change in Control Benefit Plan Determination
Policy), the Plan may be amended, modified, or terminated by the Board of
Directors in its sole discretion at any time and from time to time; provided,
however, that no such amendment, modification, or termination shall impair any
rights to any amounts which have been earned or deferred under the Plan prior to
such amendment, modification, or termination. Payment in full in cash of the
amount credited to a Participant's Account as of the date of any amendment,
modification of termination of the Plan shall not be deemed to be an impairment
of the Participant's rights under the Plan. The Plan may also be amended or
modified by the Committee if such amendment or modification does not involve a
substantial increase in cost to any Employing Company.
         8.4......It is expressly understood and agreed that the payments made
in accordance with the Plan are in addition to any other benefits or
compensation to which a Participant may be entitled or for which he or she may
be eligible, whether funded or unfunded, by reason of his or her employment with
any Employing Company.
         8.5......There shall be deducted from each payment under the Plan the
amount of any tax required by any governmental authority to be withheld and paid
over by an Employing Company to such governmental authority for the account of
the person entitled to such distribution.
         8.6......Any Compensation or Incentive Pay deferred by a Participant
while employed by an Employing Company and any Transferred Amounts shall not be
considered "compensation," as the term is defined in the Employee Savings Plan,
the Employee Stock Ownership Plan, or the Pension Plan. Distributions from a
Participant's Account shall not be considered wages, salaries or compensation
under any other employee benefit plan.
         8.7......No provision of this Plan shall be construed to affect in any
manner the existing rights of an Employing Company to suspend, terminate, alter,
modify, whether or not for cause, the employment relationship of the Participant
and his or her Employing Company.
         8.8......This Plan, and all rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.
         IN WITNESS WHEREOF, the amended and restated Plan has been executed by
duly authorized officers of Southern Company Services, Inc. pursuant to
resolutions of the Committee, this ___ day of __________, 2001.

         .........    SOUTHERN COMPANY SERVICES, INC.

                      By:__________________________________________________

                      Its:_________________________________________________

Attest:


By:      ______________________________

Its:     ______________________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>17
<FILENAME>x10a63.txt
<TEXT>



                          OUTSIDE DIRECTORS STOCK PLAN

                    FOR SUBSIDIARIES OF THE SOUTHERN COMPANY

                AS AMENDED AND RESTATED EFFECTIVE JANUARY 1, 2000


<PAGE>



                          OUTSIDE DIRECTORS STOCK PLAN

                    FOR SUBSIDIARIES OF THE SOUTHERN COMPANY

                    ARTICLE I - PURPOSE AND ADOPTION OF PLAN

         1.1 Adoption. The board of directors of The Southern Company hereby
adopts the Outside Directors Stock Plan for Subsidiaries of The Southern Company
as amended and restated effective January 1, 2000 (the "Plan"). The Plan was
initially established effective January 1, 1995, and amended effective January
1, 1995. The Plan was approved by the shareholders of the Company at the annual
meeting thereof held on May 24, 1995, and the Company's issuance of the Stock
pursuant to the Plan was approved by the Securities and Exchange Commission (the
"Commission") under the Public Utility Holding Company Act of 1935.

         1.2 Purpose. The Plan is designed to more closely align the interests
of Directors of the System Companies (defined herein) with the interests of the
shareholders of the Company through ownership of the Company's common stock, par
value $5.00 per share (the "Stock").


<PAGE>





                            ARTICLE II - DEFINITIONS

         2.1 "Affiliated Employer" shall mean any corporation, which is a member
of the controlled group of corporations of which The Southern Company is the
common parent corporation. 2.2 "Board of Directors" shall means the Board of
Directors of each System Company.

         2.3 "Commission" shall mean the Securities and Exchange Commission.

         2.4 "Company" shall mean The Southern Company.

         2.5 "Director" shall mean any person (a) who serves on the Board of
Directors of one or more System Companies on or after January 1, 1995; and (b)
who is not an active employee of The Southern Company or an Affiliated Employer.

         2.6 "Effective Date" shall mean January 1, 2000.

         2.7 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         2.8      "Market Value" shall mean the following:

                  (a) With respect to Stock that is issued by the Company, the
     average of the high and low prices of the Stock, as published in the Wall
     Street Journal in its report of New York Stock Exchange composite
     transactions, on the date one day prior to the date of distribution as set
     forth in Section 4.3(a) of the Plan (or the average of the high and low
     sale prices on the trading day immediately preceding such determination
     date if the stock is not traded on the date one day prior to the date of
     distribution).

                  (b) With respect to Stock that is purchased on the open
market, the actual purchase price paid for such Stock on the date of purchase.

         2.9 "Participant" shall mean each Director on the Board of Directors of
a System Company who meets the requirements of Section 3.1 of the Plan.

         2.10 "Plan" shall mean the Amended and Restated Outside Directors Stock
Plan for Subsidiaries of The Southern Company, as amended from time to time.

         2.11 "Plan Administrator" shall mean the Governance Committee of the
Board of Directors of the Company.

         2.12 "Plan Year" shall mean the calendar year.

         2.13 "Retainer Fee" shall mean the annual rate of the fees, payable to
a Director for service on the Board of Directors of a System Company, but
excluding reimbursements for expenses and any fees or compensation for:

                  (a) attendance at the meetings of the Board of Directors or
         any committee,

                  (b) service on a committee, and

                  (c) service at the request of the Board of Directors or a
         committee. Such amount may be denominated in dollars and/or a specific
         number of shares of Stock.

         2.14 "Stock" shall mean the Company's common stock, par value $5.00 per
share.

         2.15 "System Company" shall mean any affiliate or subsidiary of the
Company which the Board of Directors of the Company may from time to time
determine to bring under the Plan and which shall adopt the Plan, and any
successor of any of them. The System Companies that have adopted the Plan are
listed in Schedule A, attached hereto, as such Schedule may be amended from time
to time.

         The masculine pronoun shall be construed to include the feminine
pronoun and the singular shall include the plural, where the context so
requires.

                            ARTICLE III - ELIGIBILITY

         Each Director who serves on a Board of Directors of a System Company
shall become a Participant in the Plan on the first date such Director serves on
the Board of Directors of a System Company.

         ARTICLE IV - FORM AND TIME OF BENEFIT DISTRIBUTIONS

         4.1 Stock Grant. Each participant shall receive a portion of his
Retainer Fee in Stock, with the remainder of such Retainer Fee to be payable, as
elected by the Director in accordance with Section 4.2 below, in cash or in
Stock. The portion of the Retainer Fee required to be paid in Stock pursuant to
this Section 4.1 shall be stated in Schedule B, attached hereto, as such
Schedule shall be amended from time to time by the Governance Committee of the
Board of Directors of the Company.

         4.2 Election to Determine Percentage of Amount of Compensation to be
Paid in Stock. Each Participant shall have an annual opportunity to elect to
have the remaining portion of his Retainer Fee paid in cash or Stock of the
Company, or a combination thereof. Such election shall be made at the time
specified by the Plan Administrator on a form provided to the Participant by the
Plan Administrator or by the Corporate Secretary of the Director's System
Company. Nothing contained in this Section 4.2 shall be interpreted in such a
manner as would disqualify the Plan from treatment as a "formula plan" under
Rule 16-b3, as promulgated by the Commission under the Exchange Act, as that
rule may be amended from time to time.

         4.3 Amount and Date of Payment for Stock Compensation.

         (a) For any Plan Year in which a Director is a Participant for the full
Plan Year, any Stock compensation due a Participant pursuant to Sections 4.1 and
4.2 above shall be payable on a quarterly basis, with the first such quarterly
distribution being made on April 1 and succeeding quarterly distributions being
made on July 1, October 1, and January 1, except for Directors of Alabama Power
Company for whom Stock distributions will first be made on January 1 with
succeeding quarterly distributions made on April 1, July 1, and October 1. The
amount of Stock to be distributed to a Participant per quarter shall be equal to
the number of shares of Stock as set forth on Schedule "B" plus the amount
calculated by first dividing the Participant's elected dollar amount of Stock
compensation by four (4) and then dividing such quarterly quotient by the Market
Value of the Stock.

         4.4 Death Benefits. No benefits shall be payable under the Plan to any
beneficiary of a Participant following a Participant's death.

         4.5 Deferral of Stock Grant. If permitted by resolution of the Board of
Directors of a System Company, a Director may elect to defer receipt of 100% of
the Stock Grant set forth in Section 4.1, under the terms of the respective
System Company's Deferred Compensation Plan for Directors.

                       ARTICLE V - ADMINISTRATION OF PLAN

         5.1 Administrator. The general administration of the Plan shall be the
responsibility of the Governance Committee of the Board of Directors of The
Southern Company, as Plan Administrator.

         5.2 Powers. The Plan Administrator shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall interpret
the Plan and shall have the discretion to determine all questions arising in the
administration, interpretation and application of the Plan, including any
ambiguities contained herein or any questions of fact. Any such determination by
it shall be conclusive and binding on all persons. It may adopt such
regulations, as it deems desirable for the conduct of its affairs. It may
appoint such accountants, counsel, actuaries, specialists and other persons as
it deems necessary or desirable in connection with the administration of this
Plan, and shall be the agent for the service of process.

         5.3 Duties of the Plan Administrator.

         (a) The Plan Administrator is responsible for the daily administration
of the Plan. It may appoint other persons or entities to perform any of its
fiduciary functions. The Plan Administrator and any such appointee may employ
advisors and other persons necessary or convenient to help it carry out its
duties, including its fiduciary duties. The Plan Administrator shall have the
right to remove any such appointee from his position. Any person, group of
persons or entity may serve in more than one fiduciary capacity.

         (b) The Plan Administrator shall maintain accurate and detailed records
and accounts of Participants and of their rights under the Plan and of all
receipts, disbursements, transfers and other transactions concerning the Plan.
Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the Board of
Directors of each System Company.

         (c) The Plan Administrator shall take all steps necessary to ensure
that the Plan complies with the law at all times. These steps shall include such
items as the preparation and filing of all documents and forms required by any
governmental agency; maintaining of adequate Participants' records; recording
and transmission of all notices required to be given to Participants; the
receipt and dissemination, if required, of all reports and information received
from a System Company; securing of such fidelity bonds as may be required by
law; and doing such other acts necessary for the proper administration of the
Plan. The Plan Administrator shall keep a record of all of its proceedings and
acts and shall keep all such books of account, records and other data as may be
necessary for proper administration of the Plan.

         5.4 Indemnification. The System Companies shall indemnify the Plan
Administrator against any and all claims, losses, damages, expenses and
liability arising from any action or failure to act, except when the same is
finally judicially determined to be due to gross negligence or willful
misconduct. The System Companies may purchase at their own expense sufficient
liability insurance for the Plan Administrator to cover any and all claims,
losses, damages and expenses arising from any action or failure to act in
connection with the execution of the duties as Plan Administrator.

                           ARTICLE VI - MISCELLANEOUS

         6.1 Assignment. Neither the Participant nor his legal representative
shall have any rights to sell, assign, transfer or otherwise convey the right to
receive the payment of any benefit due hereunder, which payment and the right
thereto are expressly declared to be nonassignable and nontransferable. Any
attempt to assign or transfer the right to payment under the Plan shall be null
and void and of no effect.

         6.2. Amendment and Termination. The Plan may be wholly or partially
amended or otherwise modified, suspended or terminated at any time by the Board
of Directors of the Company or by Governance Committee with the approval of the
Board of Directors of the Company, upon execution of a duly authorized written
document. Schedules A and B of the Plan may be wholly or partially amended or
otherwise modified at any time by the Governance Committee, provided such
amended schedules shall be filed with the Plan records. Provided, however, that
without the approval of the shareholders of the Company entitled to vote
thereon, no amendment to the Plan, including Schedules A or B, may be made which
would, absent such shareholder approval, disqualify the Plan for coverage under
Rule 16b-3, as promulgated by the Commission under the Exchange Act, as that
rule may be amended from time to time. Notwithstanding the foregoing, no such
amendment or termination shall impair any rights to payments to which a
Participant may be entitled prior to the effective date of such amendment or
termination.

         6.3 No Guarantee of Continued or Future Service on a Board of
Directors. Participation hereunder shall not be construed as creating a right in
any Director to continued service or future service on the Board of Directors of
any System Company. Participation hereunder does not constitute an employment
contract between any Director and any System Company.

         6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective January
1, 2000, has been executed pursuant to resolutions of the Board of Directors of
The Southern Company, this ____ day of _______________, 2000.

                                          THE SOUTHERN COMPANY

                                          By: ________________________________

Attest:

By: ___________________________






<PAGE>


                          OUTSIDE DIRECTORS STOCK PLAN

                    FOR SUBSIDIARIES OF THE SOUTHERN COMPANY

                                   SCHEDULE A

The System Companies as of January 1, 1995 are:
         Alabama Power Company
         Georgia Power Company
         Gulf Power Company
         Mississippi Power Company
         Savannah Electric and Power Company


<PAGE>


                          OUTSIDE DIRECTORS STOCK PLAN

                    FOR SUBSIDIARIES OF THE SOUTHERN COMPANY

                                   SCHEDULE B

                              As of January 1, 2000

The Participant's Retainer Fee required to be distributed in common stock of The
Southern Company shall be determined in accordance with the following schedule:

Company                                Required Stock Distribution Per Quarter

Alabama Power Company                             80 shares of Stock
Georgia Power Company                             80 shares of Stock
Gulf Power Company                                50 shares of Stock
Mississippi Power Company                         50 shares of Stock
Savannah Electric and Power Company               50 shares of Stock


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>18
<FILENAME>x10a64.txt
<TEXT>



                                SOUTHERN COMPANY
                            PERFORMANCE DIVIDEND PLAN

                              Amended and Restated





                              TROUTMAN SANDERS LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., Suite 5200
                             Atlanta, Georgia 30308
                                 (404) 885-3000

                           Effective December 11, 2000



<PAGE>


                                SOUTHERN COMPANY

                            PERFORMANCE DIVIDEND PLAN

                                    Purposes

         The purposes of the Southern Company Performance Dividend Plan are to
provide a financial incentive which will focus the efforts of certain key
employees on areas which will have a direct and significant influence on
corporate performance and to provide the potential for levels of compensation
which will enhance the Employing Companies' abilities to attract, retain and
motivate such key employees. In order to achieve these objectives, the Plan will
be based upon corporate performance as measured by total shareholder return or
such other performance measure which the Committee may determine under the terms
of the Plan. This Plan is intended to meet the requirements of Code Section
162(m) related to the deductibility of Awards paid to Participants subject
thereto.

                                    ARTICLE I

                                   Definitions

         For purposes of the Plan, the following terms shall have the following
meanings unless a different meaning is plainly required by the context:

         1.1 "Annual Dividend" shall mean the aggregate, annual dividend
declared by Southern Company on Common Stock for the Plan Year in which an Award
is made.

         1.2 "Award" shall mean the awards granted pursuant to Article IV
hereof.

         1.3 "Board of Directors" shall mean the Board of Directors of Southern
Company Services, Inc.

         1.4 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board of Directors, as it may be amended from time to time in accordance with
the provisions therein.

         1.5 "Committee" shall mean the Compensation Committee of the Board of
Directors of Southern Company.

         1.6 "Common Stock" shall mean the common stock of Southern Company.

         1.7 "Computation Period" shall mean a four-year period commencing the
first day of January of each year, provided, however, that the Computation
Period for the first three years beginning in the year of the effective date of
the Plan shall be one year, two years and three years, respectively, beginning
January 1, 1997.

         1.8 "Employing Company" shall mean Southern Company Services, Inc., or
any other affiliate or subsidiary (direct or indirect) of Southern Company,
which the Board of Directors may from time to time determine to bring under the
Plan and which shall adopt the Plan, and any successor of any of them.

         1.9 "Key Employee" shall mean any person who is or was employed by an
Employing Company who has been granted Stock Options.

         1.10 Fair Market Value" shall mean the average of the high and low
prices at which a share of Common Stock shall have been traded on the respective
measurement date, such as the first and last days of a Computation Period or
Restriction Period, or on the next preceding trading day if such date was not a
trading date, as reported on the New York Stock Exchange Composite Transactions
Listing, or as otherwise determined by the Committee. In no event shall the Fair
Market Value equal less than the par value of the Common Stock.

         1.11 "Participant" shall mean a Key Employee who satisfies the criteria
set forth in Article III.

         1.12 "Payment Date" shall mean the date the check evidencing an Award
is endorsed by an authorized person of an Employing Company.

         1.13 "Peer Group Common Stock" shall mean the common stock of the Peer
Group Companies.

         1.14 "Peer Group Companies" shall mean those companies considered part
of the peer group of Southern Company for a Computation Period as determined and
designated by the Committee and as set forth on a Schedule adopted by the
Committee and provided to the Plan Administrator. The Committee shall establish
the Peer Group Companies within the first ninety (90) days of a Computation
Period. The Committee shall have the discretion to change the Peer Group
Companies at any time during a Computation Period. The Committee shall also have
the discretion to determine whether or not such change shall apply to
Participants subject to the limitations of Section 162(m) of the Code.

         1.15 "Performance Based" shall mean compensation which qualifies as
"performance based" within the meaning of Code Section 162(m)(4)(c) and the
regulations thereunder.

         1.16 "Permanent Disability" shall mean such permanent disability as
defined in The Southern Company Pension Plan.

         1.17 "Phantom Stock" shall mean phantom shares of Common Stock as
defined by The Southern Company Deferred Compensation Plan.

         1.18 "Plan" shall mean the Southern Company Performance Dividend Plan.

         1.19 "Plan Year" shall mean the calendar year.

         1.20 "Restricted Stock Units" shall mean the number of shares of Common
Stock deemed to have been awarded to a Participant at the end of a Computation
Period for the purpose of providing the Participant with the opportunity to
receive an Award which incorporates the appreciation on the Common Stock during
the Restriction Period. The Award shall not be invested in actual Common Stock
of the Company.

         1.21 "Restriction Period" shall mean the period during which the
Restricted Stock Units are subject to employment restrictions as provided in
Section 4.3.

         1.22 "Retirement" shall mean the termination of employment with an
Employing Company under the terms of The Southern Company Pension Plan or such
other retirement or early retirement plan or arrangement which the Committee
shall adopt and make available to a Participant.

         1.23     "Southern Company" shall mean The Southern Company.

         1.24 "Stock Option" shall mean those options to acquire Common Stock
awarded to Participants pursuant to the Southern Company Performance Stock Plan,
including, but not limited to, any nonqualified stock option which has been
transferred to a Transferee. "Stock Option" shall also mean that portion of
options to acquire Common Stock awarded to Participants pursuant to the Southern
Company Executive Stock Plan attributable to additional shares of Common Stock
granted to the Participant in the event of a spin-off of Southern Energy, Inc.,
from Southern Company. Notwithstanding the preceding sentence, "Stock Option"
shall not mean that portion of options to acquire Common Stock awarded to the
Participant under the Southern Company Executive Stock Plan attributable to
grants of Common Stock awarded prior to 1997.

         1.25 "Termination for Cause" or "Cause" shall mean the termination of a
Participant's employment by an Employing Company under any of the following
circumstances:

                  (a) The Participant willfully neglects or refuses to discharge
         his or her duties to the Employing Company as an employee or refuses to
         comply with any lawful or reasonable instructions given to him or her
         by the Employing Company without reasonable excuse;

                  (b) The Participant is guilty of gross misconduct. For
         purposes of this Plan, the following acts shall constitute gross
         misconduct:

                           (i) any act involving fraud or dishonesty or breach
                  of appropriate regulations of competent authorities;

                           (ii) the carrying out of any activity or the making
                  of any statement which would prejudice and/or reduce the good
                  name and standing of Southern Company or an Employing Company
                  or would bring Southern Company or an Employing Company into
                  contempt, ridicule or would reasonably shock or offend any
                  community in which Southern Company or an Employing Company is
                  located;

                           (iii) attendance at work in a state of intoxication
                  or otherwise being found in possession at his or her workplace
                  of any prohibited drug or substance, possession of which would
                  amount to a criminal offense;

                           (iv) assault or other act of violence against any
                  employee or other person during the course of the
                  Participant's employment; and

                           (v) conviction of any felony or misdemeanor involving
                  moral turpitude.

         1.26 "Total Shareholder Return" or "TSR" shall mean the total amount an
investor would receive by investing $100 per quarter in Common Stock or in Peer
Group Common Stock, as the case may be, as determined by measuring the total
dividends which would have been paid on such Common Stock or Peer Group Common
Stock by reinvesting such dividends on a quarterly basis in additional shares of
Common Stock or Peer Group Common Stock as the case may be and the total gain or
loss on such Common Stock or Peer Group Common Stock as if such stock had been
sold at the closing price on the last day of the respective Computation Period.

         1.27 "Transferee" shall mean the person, trust, partnership or limited
liability company to whom or to which Stock Options have been transferred
pursuant to Section 8.6 of the Southern Company Performance Stock Plan.

Where the context requires, words in the masculine gender shall include the
feminine and neuter genders, words in the singular shall include the plural, and
words in the plural shall include the singular.

                                   ARTICLE II

                              Plan Administration.

         2.1 Committee. The Plan shall be administered by the Committee. The
Committee is authorized to establish such rules and to appoint such agents as it
deems appropriate for the proper administration of the Plan, and to make such
determinations and to take such steps in connection with the Plan or the
benefits provided hereunder as it deems necessary or advisable.

         2.2 Plan Interpretation. The Committee shall have the exclusive
authority to interpret the Plan. The decision of the Committee with respect to
any question arising as to the grant of an Award to a Participant in the Plan,
the amount, term, form, and time of payment of Awards under the Plan, or any
other matter concerning the Plan shall be final, conclusive, and binding on both
Southern Company and the Participants.

                                   ARTICLE III

                                  Participants

         3.1 Participation in the Plan shall be limited to Key Employees of the
Employing Companies, or in the case of death, their estates or beneficiaries,
holding Stock Options as of the last day of any Computation Period. Key
Employees who do not hold Stock Options as of the last day of any Computation
Period solely because such Stock Options have been transferred to a Transferee
shall also participate in the Plan, provided the Transferee holds such Stock
Options as of the last day of any Computation Period.

         3.2 Any Participant who terminates his or her employment with an
Employing Company and who is not immediately re-employed with an affiliate of an
Employing Company prior to the Payment Date of any Award due under this Plan for
reasons other than death, Permanent Disability, or Retirement shall forfeit any
Award due under this Plan. If a Participant terminates his or her employment by
reason of death or Permanent Disability, such Participant or his or her estate
or representative shall continue to be eligible to receive Awards with respect
to any Stock Options which remain outstanding in accordance with their terms. If
a Participant terminates his or her employment by reason of Retirement, such
Participant shall continue to be eligible to receive Awards with respect to any
Stock Options which remain outstanding in accordance with their terms for the
Computation Period ending during the year of his or her Retirement and the next
two (2) succeeding Computation Periods.

         3.3 Notwithstanding any other provision of this Plan, no Participant
whose employment is terminated by an Employing Company for Cause shall be
eligible to receive an Award under this Plan.

         3.4 Notwithstanding any other provision of this Plan, the maximum Award
for any Plan Year payable to any Participant with respect to Stock Options
awarded during such Plan Year shall be six million dollars ($6,000,000).

         3.5 In the case of an individual who becomes a Participant subsequent
to January 1, 2000, such Participant shall participate in the Computation Period
that ends during the year that he is hired and in each Computation Period
thereafter. A new four-year measuring period shall begin each year in order to
recognize the need to link objectives over longer periods of time, to recognize
changes in the operating environment, and to encourage Participants to make
long-term decisions.

                                   ARTICLE IV

                           Performance Dividend Award

         4.1 Each Participant shall receive an Award on the last day of each
Computation Period which shall be based upon the number of vested and unvested,
outstanding Stock Options held by the Participant or the Transferee on the last
day of such Computation Period multiplied by the Annual Dividend multiplied by
the Payout Percentage determined in accordance with the following schedule:

Percentile of Southern TSR                     Payout Percentage
  Versus Peer Group TSR

      90th and above                                 100%
           70th                                       75%
           50th                                       50%
           30th                                       25%
        Below 30th                                    0%

The Payout Percentage for performance levels falling between the percentiles
listed above shall be interpolated on a straight line basis for any given Plan
Year. The Committee may also increase the Payout Percentage by up to a factor of
two (2) with respect to such Participants and under such circumstances as the
Committee in its discretion shall deem appropriate. The Committee may in its
sole discretion change the Payout Percentage during a Computation Period if it
deems such change appropriate. The Committee may also in its sole discretion
determine whether such change to the Payout Percentage applies to Participants
subject to the limitations of Section 162(m) of the Code.

         4.2 The Payout Percentage set forth herein shall be based on Southern
Company's Total Shareholder Return during a Computation Period as compared to
the Total Shareholder Return ranking of the Peer Group Companies for such
Computation Period. The Total Shareholder Return of the Peer Group Companies
shall be determined annually by an independent certified public accountant and
shall be properly adjusted and annualized by such accountant so that the Peer
Group Companies' Total Shareholder Return may be accurately compared to that of
Southern Company.

         4.3 If the Committee has increased the Payout Percentage by up to a
factor of two (2) for an Award to a Participant under Section 4.1 of the Plan,
the amount of such Award in excess of one hundred percent (100%) of the Annual
Dividend shall be converted into Restricted Stock Units using the Fair Market
Value of the Common Stock on the last day of the Computation Period. The
Restricted Stock Units shall not be paid to the Participant at the end of the
Computation Period and shall, instead, be subject to a Restriction Period
determined by the Committee. Unless determined otherwise by the Committee, in
the event the employment of a Participant is terminated by reason of Death,
Permanent Disability, or Retirement during the Restriction Period, the
Participant (or his estate or representative) shall receive an immediate cash
payment equal to the number of Restricted Stock Units held by the Participant
multiplied times the Fair Market Value of the Common Stock on the date of death,
Permanent Disability or Retirement, whichever applicable. In the event that a
Participant's employment terminates for any reason other than Death, Permanent
Disability or Retirement during the Restriction Period, all Restricted Stock
Units shall be immediately forfeited by the Participant to the Company unless
determined otherwise by the Committee. At the end of the Restriction Period, the
Restricted Stock Units shall be converted into cash using the Fair Market Value
of the Common Stock on the last day of the Restriction Period and shall be paid
in accordance with Section 4.5.

         If the Committee so determines, the Participant shall also be awarded
an amount equal to the Annual Dividend (payable during the Restriction Period)
multiplied times the number of Restricted Stock Units held by the Participant.
Such additional amount shall be subject to the same restrictions, forfeiture
provisions and payout provisions as the Restricted Stock Units as determined by
the Committee.

         4.4 Notwithstanding the above provisions, an Award shall not be granted
for any Computation Period ending with the Plan Year in which the current
earnings of Southern Company are less than the amount necessary to fund
dividends on its Common Stock at the rate such dividends were paid for the
immediately preceding Plan Year.

         4.5 Awards shall be paid in cash on or before the 15th day of the third
month following the last day of the Computation Period or Restriction Period,
whichever applicable, or, with respect to those Participants who are otherwise
eligible to participate in the Southern Company Deferred Compensation Plan, may
be deferred by exercising an option to do so no later than 12 months before any
amount would otherwise be distributed pursuant to this Section 4.5.
Notwithstanding the above 12 month limitation, a new Participant in the Plan
shall be eligible to elect to defer the receipt of any Award during the first
deferral election period established by the Company that follows the date he
first becomes eligible to participate in the Plan. If an election is made to
defer the receipt of the amount of any Award, such amount shall be deemed to be
invested in Phantom Stock. Dividend equivalents earned on such Phantom Stock
shall be automatically invested in additional shares of Phantom Stock.

                                    ARTICLE V

                                Change in Control

         The provisions of the Change in Control Benefit Plan Determination
Policy are incorporated herein by reference to determine the occurrence of a
change in control of Southern Company or an Employing Company and the benefits
to be provided hereunder in the event of such a change in control. Any
modifications to the Change in Control Benefit Plan Determination Policy are
likewise incorporated herein.

                                   ARTICLE VI

                            Miscellaneous Provisions

         6.1 Neither the Participant, his or her beneficiary, nor his or her
personal representative shall have any rights to commute, sell, assign, transfer
or otherwise convey the right to receive any payments hereunder, which payments
and the rights thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payments under
this Plan shall be void and have no effect.

         6.2 An Employing Company shall neither reserve nor otherwise set aside
funds for the payments of any Awards under this Plan.

         6.3 Except for the provisions of Article V, which may not be amended,
modified or terminated following a "Southern Change in Control," a "Subsidiary
Change in Control" or a "Southern Termination" (as such terms are defined in the
Change in Control Benefit Plan Determination Policy), the Plan may be amended,
modified, or terminated by the Board of Directors in its sole discretion at any
time and from time to time; provided, however, that no such amendment,
modification, or termination shall impair any rights to payments which have
accrued under the Plan prior to such amendment, modification, or termination.

         6.4 It is expressly understood and agreed that Awards made in
accordance with the Plan are in addition to any other benefits or compensation
to which a Participant may be entitled or for which he or she may be eligible,
whether funded or unfunded, by reason of his or her employment with an Employing
Company.

         6.5 There shall be deducted from the payment of each Award under the
Plan the amount of any tax required by any governmental authority to be withheld
and paid over by an Employing Company to such governmental authority for the
account of the person entitled to such distribution.

         6.6 Any Awards paid to a Participant while employed by an Employing
Company shall not be considered in the calculation of the Participant's benefits
under any other employee welfare or pension benefit plan maintained by an
Employing Company, unless otherwise specifically provided therein.

         6.7 This Plan, and all rights under it, shall be governed by and
construed in accordance with the laws of the State of Georgia.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officers, hereby adopts the Southern Company Performance Dividend
Plan this ____ day of _____________, ____, to be effective December 11, 2000.

                                   SOUTHERN COMPANY SERVICES, INC.

                                   By:
                                      ----------------------------------

                                   Its:
                                       ---------------------------------
Attest:

By:
   --------------------------------------------------

Its:
    -------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>19
<FILENAME>x10a66.txt
<TEXT>




                               FIFTH AMENDMENT TO

                              THE SOUTHERN COMPANY

                                  PENSION PLAN

         WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted The Southern Company Pension Plan, as amended and
restated (the "Plan"), effective January 1, 1997; and

         WHEREAS, the Company desires to amend the Plan to clarify offset
provisions applicable to the benefits provided to former Scott Paper Company
employees; and

         WHEREAS, the Company desires to amend the Plan to clarify offset
provisions applicable to the benefits provided to certain employees formerly
employed by Commonwealth Energy System; and

         WHEREAS, the Company desires to amend the Plan to clarify the benefit
and offset provisions applicable to certain employees formerly employed by
Commonwealth Edison of Indiana; and

         WHEREAS, the Company is authorized pursuant to Section 13.1 of the Plan
to amend the Plan at any time.

         NOW, THEREFORE, the Company hereby amends the Plan as follows to be
effective as provided herein:

                                       1.

         Effective January 1, 1995, Section 16.1(a) of the Plan shall be amended
by deleting such subsection (a) in its entirety and substituting the following
in lieu thereof:

                  (a) Former Scott Paper Company Employees. Effective January 1,
         1995, notwithstanding any other provision of the Plan to the contrary,
         with respect to a former, non-collective bargaining unit employee of
         Scott Paper Company who was employed by Southern Electric
         International, Inc. as of December 17, 1994 as set forth on Schedule
         2.1 of the Employee Transition Agreement entered into by and among
         Mobile Energy Services Company, Inc., Southern Electric International,
         Inc. and Scott Paper Company (hereinafter referred to in this Section
         16.1(a) as the "Scott Scheduled Employee"):

                           (1) Such Scott Scheduled Employee shall be eligible
                  to participate in the Plan effective January 1, 1995.

                           (2) Such Scott Scheduled Employee, if and when he
                  attains his Early Retirement Date, Normal Retirement Date, or
                  Deferred Retirement Date, or terminates service for any other
                  reason subject to the requirements of Section 8.1 or 8.2,
                  shall be entitled to receive Retirement Income based on both
                  his Accredited Service with an Employing Company and the
                  service accrued under the Scott Paper Company Pension Plan for
                  Salaried Employees (the "Scott Salaried Plan") which shall be
                  treated as if Accredited Service under this Plan. To calculate
                  such Scott Scheduled Employee's Retirement Income, the Scott
                  Scheduled Employee's Accrued Retirement Income, as determined
                  in accordance with Section 5.1, shall first be reduced by the
                  applicable reductions, if any, set forth in Article V, Section
                  8.1 and Section 8.2, as appropriate. Thereafter, such Scott
                  Salaried Employee's Accrued Retirement Income shall be reduced
                  by such Employee's accrued benefit in the Scott Salaried Plan,
                  as set forth in Schedule A attached hereto (the "Scheduled
                  Benefit"). Prior to the subtraction of the Scheduled Benefit
                  from the Scott Scheduled Employee's Accrued Retirement Income,
                  the Scheduled Benefit will be reduced to reflect the age at
                  which the Employee's Retirement Income is scheduled to
                  commence (the "Southern Commencement Date") in accordance with
                  the applicable reduction factors set forth in Schedule A.

                           (3) For purposes of calculating the Social Security
                  Offset and the level income option set forth in the last
                  paragraph of Section 5.5, the actual salary history of a Scott
                  Scheduled Employee with Scott Paper Company shall be included.
                  If the actual salary history is not available from Scott Paper
                  Company, such history shall be estimated in accordance with
                  Section 5.4.

                           (4) For vesting purposes, such Scott Scheduled
                  Employee shall be entitled to receive Vesting Years of Service
                  as provided in Section 1.41 and, in addition, shall be
                  entitled to vesting service equal to the sum of the years of
                  vesting service accrued under each defined benefit pension
                  plan maintained by Scott Paper Company in which such Scott
                  Scheduled Employee participated.

                                       2.

         Effective January 1, 1998, Section 16.1(b) of the Plan, as amended by
the First Amendment and Second Amendment to the Plan, is further amended by
deleting such subsection (b) in its entirety and substituting the following in
lieu thereof:

                  (b) Former Commonwealth Edison of Indiana Employees. Effective
         January 1, 1998, notwithstanding any other provision of the Plan to the
         contrary, any former employee of Commonwealth Edison of Indiana
         ("ComEd") who was employed by Southern Energy Resources, Inc. on or
         before December 31, 1997 and is set forth on a schedule of employees
         acknowledged by the Retirement Board (hereafter "January 1 ComEd
         Employees") shall be eligible to participate in the Plan effective
         January 1, 1998. In addition, any former employee of ComEd who becomes
         employed by Southern Energy Resources, Inc. on or after January 1, 1998
         but prior to April 1, 1998 (hereafter "Date of Employment") and is set
         forth on the schedule of employees acknowledged by the Retirement Board
         (hereafter "Pre-April 1 ComEd Employees") shall become a participant as
         of the first day of the month coincident with or next following such
         employee's Date of Employment. The following provisions of this
         subparagraph (b) shall also apply with respect to all January 1 ComEd
         Employees and Pre-April 1 ComEd Employees (hereafter jointly referred
         to as "ComEd Scheduled Employees"):

                           (1) Such ComEd Scheduled Employee, if and when he
                  attains his Early Retirement Date, Normal Retirement Date, or
                  Deferred Retirement Date, or terminates service for any reason
                  subject to the requirements of Section 8.1 or 8.2, shall be
                  entitled to receive the greater of A or B below:

                  (A)      Retirement Income based on both his Accredited
                           Service with an Employing Company and the service
                           accrued under the Commonwealth Edison Company of
                           Indiana Service Annuity System Plan (the "ComEd
                           Plan") which shall be treated as if Accredited
                           Service under this Plan. To calculate such ComEd
                           Scheduled Employee's Retirement Income under this
                           subsection (A), the ComEd Scheduled Employee's
                           Accrued Retirement Income, as determined in
                           accordance with Section 5.1, subject to the
                           provisions of Article XV of the Plan, shall first be
                           reduced by the Employee's accrued benefit in the
                           ComEd Plan, determined as if he retired from ComEd at
                           his normal retirement age, as that term is defined in
                           the ComEd Plan on December 31, 1997 and as set forth
                           on Schedule B attached hereto (the "ComEd Reduction
                           Amount"). For each full year of Accredited Service
                           with an Employing Company earned by a ComEd Scheduled
                           Employee, up to a maximum of 10 years, the ComEd
                           Reduction Amount shall be reduced by 5% with the
                           maximum reduction equal to 50% of the original ComEd
                           Reduction Amount. Thereafter, such Employee's
                           Retirement Income shall be subject to applicable
                           reductions, if any, in accordance with Article V
                           (subject to the provisions in Article XV), Section
                           8.1 and Section 8.2, as appropriate.

                  (B)      Retirement Income based on his Accredited Service
                           with an Employing Company and disregarding any
                           service accrued under the ComEd Plan, subject to
                           applicable reductions, if any, in accordance with
                           Article V (subject to the provisions in Article XV),
                           Section 8.1 and Section 8.2, as appropriate.

                           (2) For purposes of calculating the level income
                  option set forth in the last paragraph of Section 5.5, the
                  actual salary history of a ComEd Scheduled Employee with ComEd
                  shall be included. If the actual salary history is not
                  available from ComEd, such history shall be estimated in
                  accordance with Section 5.4.

                           (3) For vesting purposes, such ComEd Scheduled
                  Employee shall be entitled to receive Vesting Years of Service
                  as provided in Section 1.41 and, in addition, shall be
                  entitled to vesting service equal to the years of service
                  accrued under the ComEd Plan.

                                       3.

         Effective January 1, 1999, Section 16.1(c) of the Plan, as added by the
Third Amendment to the Plan and amended by the Fourth Amendment to the Plan,
shall be amended by deleting such subsection (c) in its entirety and
substituting the following in lieu thereof:

         (c)      Former Commonwealth Energy System Employees.

                           (1) Effective January 1, 1999, notwithstanding any
                  other provision of the Plan to the contrary, any former
                  employees of Commonwealth Energy System ("CES") who were
                  employed by Southern Energy Resources, Inc. and are set forth
                  on Schedule C attached hereto (hereinafter "CES Employees")
                  shall be included in the Plan as of the first day of the month
                  coincident with or next following the later of the CES
                  Employee's employment date or the date on which he first
                  completes an Eligibility Year of Service as provided in
                  Paragraph (5) below.

                           (2) CES Employees who (A) were actively employed by
                  CES on January 1, 1997 and (B) attain their fortieth (40th)
                  birthday on or before January 1, 2002 shall not be subject to
                  provisions of Article XV of the Plan.

                           (3) If and when a CES Employee attains his Early
                  Retirement Date, Normal Retirement Date, or Deferred
                  Retirement Date, or terminates service for any reason subject
                  to the requirements of Section 8.1 or 8.2, he shall be
                  entitled to receive Retirement Income based on both his
                  Accredited Service with an Employing Company and the Credited
                  Service as defined under The Pension Plan for Employees of
                  Commonwealth Energy System and Subsidiary Companies (the "CES
                  Plan") which shall be treated as Accredited Service under this
                  Plan. However, after applicable reductions for early
                  commencement as provided in Article V, Section 8.1 and Section
                  8.2, as appropriate, but prior to adjustments for forms of
                  payment, a CES Employee's Accrued Retirement Income will be
                  reduced by the benefit attributable to Credited Service
                  accrued by a CES Employee under the CES Plan as set forth in
                  Schedule C attached hereto (the "Scheduled Benefit"). Prior to
                  the Scheduled Benefit being subtracted from a CES Employee's
                  Retirement Income, it will be reduced to reflect the age at
                  which the CES Employee's Retirement Income is scheduled to
                  commence (the "Southern Commencement Date"). Such early
                  retirement reductions shall be determined (A) for a CES
                  Employee who is at least age 55 but not yet 65 on his Southern
                  Commencement Date, by applying the factors set forth in the
                  definition of Actuarial Equivalent contained in Section 8 of
                  Schedule D attached hereto for each calendar month by which
                  the Southern Commencement Date precedes his sixty-fifth (65th)
                  birthday; and (B) for a CES Employee who is under age 55 on
                  his Southern Commencement Date, by first applying the
                  reduction factors in (A) for ages 55 to 65 and then applying
                  an additional reduction equal to one-third of one-percent
                  (.333%) for each calendar month by which the Southern
                  Commencement Date precedes his fifty-fifth (55th) birthday.
                  Notwithstanding the above, the Scheduled Benefit of CES
                  Employees who are specifically designated on Schedule C to
                  have 75 points shall not be subject to the early retirement
                  reductions described in (A) above but shall be subject to
                  those reductions described in (B) above (relating to those CES
                  Employees with a Commencement Date that precedes their
                  fifty-fifth (55th) birthday), if applicable.

                           (4) For purposes of calculating Retirement Income,
                  such CES Employee's actual salary history with CES shall be
                  included. With respect to determining the Social Security
                  Offset and the level income option set forth in the last
                  paragraph of Section 5.5, if the actual salary history is not
                  available from CES, such history shall be estimated in
                  accordance with Section 5.4.

                           (5) For vesting and participation purposes, such CES
                  Employee shall be entitled to receive Vesting and Eligibility
                  Years of Service as provided under the Plan and, in addition,
                  shall be entitled to vesting and eligibility service equal to
                  the years of service as defined and accrued under the CES
                  Plan.

                           (6) Notwithstanding any provision in this Plan to the
                  contrary, a CES Employee's Retirement Income will not be less
                  than the greater of (A) his Retirement Allowance or (B) his
                  vested benefit, as described in Schedule D attached hereto
                  which summarizes the benefit provisions provided by the CES
                  Plan on December 31, 1998, as of the earlier of his
                  retirement, termination of employment, or December 31, 2001.
                  Such determination will be made prior to any adjustment for
                  forms of payments.

                           (7) For purposes of this 16.1(c), Earnings shall mean
                  the following:

                           (A)      With respect to Paragraph (3) above, for
                                    periods on and after January 1, 1999,
                                    Earnings is defined in Paragraph 1.13 and
                                    for periods before January 1, 1999, Earnings
                                    shall have the same meaning as the term
                                    "Compensation" as provided under the CES
                                    Plan during the applicable period.

                           (B)      With respect to determining the minimum
                                    benefit provided in Paragraph (6) above,
                                    Earnings shall have the same meaning as
                                    Compensation as provided under the CES Plan
                                    prior to January 1, 1999 and from the period
                                    January 1, 1999 to December 31, 2001 shall
                                    mean the authorized basic rate of
                                    compensation at Southern Energy Resources,
                                    Inc. ("SERI") as in effect on January 1 each
                                    year, converted to an annual basis,
                                    exclusive of all compensation in the form of
                                    pay for overtime, commissions, bonuses and
                                    the like; but inclusive of amounts deferred
                                    under a salary reduction agreement for that
                                    year. Notwithstanding anything contained
                                    herein to the contrary, a CES Employee's
                                    Compensation for any Plan Year as determined
                                    under the preceding sentence shall not
                                    exceed $150,000.00 (or such higher limit as
                                    determined by the Secretary of the Treasury
                                    under Section 401(a)(17) of the Code).

         IN WITNESS WHEREOF, Southern Company Services, Inc., through its duly
authorized officer, has adopted this Fifth Amendment to The Southern Company
Pension Plan pursuant to resolutions of the Board of Directors of Southern
Company Services, Inc. this ____ day of , 2000, to be effective as stated
herein.

                         SOUTHERN COMPANY SERVICES, INC.


                         By:
                            --------------------------------------------------

                         Title:
                               -----------------------------------------------
ATTEST

By:      ________________________

Its:     ________________________

<PAGE>
                               SIXTH AMENDMENT TO
                              THE SOUTHERN COMPANY

                                  PENSION PLAN

         WHEREAS, the Board of Directors of Southern Company Services, Inc. (the
"Company") heretofore adopted The Southern Company Pension Plan, as amended and
restated (the "Plan"), effective January 1, 1997;

         WHEREAS, Southern Energy, Inc. ("SEI"), an Employing Company under the
Plan, will through a subsidiary become the employer of certain individuals
currently employed by Southern Company Energy Marketing, L.P. ("SCEM") following
a reorganization of SCEM;

         WHEREAS, The Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of SEI
held by Southern pursuant to a tax-free spin-off under Section 355 of the
Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans, and programs, and certain employment matters;

         WHEREAS, the Company desires to amend the Plan to exclude the former
SCEM employees from participation in the Plan by virtue of their employment with
SEI;

         WHEREAS, the Company desires to amend the Plan to address the spin-off
of SEI from Southern, including making such changes as are pursuant to the
Agreement;

         WHEREAS, the Company desires to amend the Plan to authorize
participation by employees represented by the International Brotherhood of
Electrical Workers Local 1208 and Office and Professional Employees
International Union Local 455, pursuant to negotiated collective bargaining
agreements;

         WHEREAS, the Company desires to amend the Plan to clarify the
Accredited Service awarded under the Prior Plans;

         WHEREAS, the Company desires to amend the Plan to make certain
technical changes and to reflect recent changes in the law; and

         WHEREAS, the Company is authorized, pursuant to Section 13.1 of the
Plan, to amend the Plan at any time.

         NOW, THEREFORE, the Company hereby amends the Plan as follows,
effective as of January 1, 1997, unless indicated otherwise below:


<PAGE>


                                       1.

         The first paragraph of Section 1.36, "Social Security Offset," shall be
amended, effective January 1, 1998, to read as follows:

                  1.36 "Social Security Offset" shall mean an amount equal to
         one-half (1/2) of the amount, if any, of the Federal primary Social
         Security benefit (primary old age insurance benefit) to which it is
         estimated that an Employee will become entitled in accordance with the
         Social Security Act in force as provided in subparagraphs (a) through
         (e) below which shall exceed $168 per month on and after January 1,
         1989, $250 per month on and after January 1, 1991, for Employees who
         (a) are not covered by the terms of a collective bargaining agreement
         or (b) are covered by the terms of a collective bargaining agreement
         but where the bargaining unit representative and an Employing Company
         have mutually agreed to participation in the Plan as amended, $325 per
         month on and after January 1, 1996, and for Employees who are covered
         under a collective bargaining agreement with IBEW Local 1208, $350 per
         month on and after January 1, 1998, multiplied by a fraction not
         greater than one, the numerator of which shall be the Employee's total
         Accredited Service, and the denominator of which shall be such total
         Accredited Service plus the Accredited Service the Employee could have
         accumulated if he had continued his employment from the date he
         terminates service with any Affiliated Employer until his Normal
         Retirement Date. For purposes of determining the estimated Federal
         primary Social Security benefit used in the Social Security Offset, an
         Employee shall be deemed to be entitled to receive Federal primary
         Social Security benefits after retirement or death, if earlier,
         regardless of the fact that he may have disqualified himself to receive
         payment thereof. In addition to the foregoing, the calculation of the
         Social Security benefit shall be based on the salary history of the
         Employee as provided in Section 5.4 and shall be determined pursuant to
         the following, as applicable:

                                       2.

         Article II, "Eligibility," shall be amended by adding the following new
Section 2.8 to the end:

2.8      Exclusion of Certain Employees of Southern Energy Resources, Inc.
         Notwithstanding any other provision of this Article II, the following
         Employees who would otherwise be eligible to participate in the Plan by
         virtue of their employment by Southern Energy Resources, Inc. ("SERI")
         shall not be eligible to participate in the Plan:

                  (a) individuals employed by Southern Company Energy Marketing,
                  L.P. ("SCEM") on December 22, 2000;

                  (b) Employees hired by SERI on or after December 23, 2000, who
                  are employed in the Americas Group and whose job function is
                  listed on Attachment A attached hereto.

                                       3.

         Section 2.8, "Exclusion of Certain Employees of Southern Energy
Resources, Inc.," shall be amended to read as follows, effective as of the Group
Status Change Date as defined in the Agreement:

                  2.8 Exclusion of Certain Employees of Southern Energy, Inc.
         Notwithstanding any other provision of this Article II, Employees who
         are eligible to participate in the Plan by virtue of their employment
         by Southern Energy, Inc. or any subsidiary or affiliate thereof shall
         not be eligible to participate in the Plan.

                                       4.

         Section 4.1, "Accredited Service pursuant to Prior Plan," shall be
deleted in its entirety and replaced with the following:

4.1      Accredited Service pursuant to Prior Plan.

         (a)      Each Employee who participated in the Prior Plans shall be
                  credited with such Accredited Service, if any, earned under
                  such Prior Plans as of December 31, 1996.

         (b)      In addition to any Accredited Service credited under Section
                  4.1(a), an Employee shall be entitled to Accredited Service
                  determined under the Prior Plans, without regard to the age
                  requirement for eligibility to participate in the Prior Plans,
                  in excess of the Accredited Service determined under the Prior
                  Plans (including the age requirement for eligibility to
                  participate in the Prior Plans). Such Accredited Service shall
                  be considered Accredited Service after December 31, 1985 for
                  purposes of calculating an Employee's Retirement Income under
                  Articles V, XV or XVII.

                                       5.

         Section 4.4, "Accrual of Retirement Income during period of total
disability," shall be amended by adding the following new subsection (e) (and
redesignating the current subsection (e) as subsection (f)):

                  (e)      (i) If an Employee's Disability Leave terminates on
                           or after his Normal Retirement Date and he fails to
                           return to the employment of an Employing Company
                           within sixty (60) days after the termination of such
                           leave, his service shall be deemed to have terminated
                           upon the termination of his Disability Leave and such
                           termination of service shall be deemed to constitute
                           his retirement under Section 3.3.

                           (ii) An Employee whose Disability Leave continues
                           beyond his Normal Retirement Date based on
                           entitlement to long-term disability benefits under a
                           long-term disability plan of an Employing Company
                           shall have payment of his Retirement Income suspended
                           pursuant to Code Section 411(a)(3)(B) until he is no
                           longer eligible under a long-term disability plan of
                           an Employing Company. Such Employee shall then
                           receive Retirement Income determined as of the date
                           such eligibility ends. However, if the Employee's
                           Disability Leave continues after the date the
                           Employee ceases to be eligible for the long-term
                           disability plan of an Employing Company based on
                           entitlement to Social Security Disability benefits,
                           his Retirement Income for the period after his Normal
                           Retirement Date shall be determined under Subsection
                           (iii).

                           (iii) An Employee whose Disability Leave continues
                           for any period after his Normal Retirement Date based
                           solely on his entitlement to Social Security
                           Disability benefits shall receive Retirement Income
                           as of his Deferred Retirement Date. However, if his
                           Deferred Retirement Date occurs in a Plan Year
                           subsequent to the Plan Year in which occurs his
                           Normal Retirement Date, his Retirement Income shall
                           not be less than his Retirement Income adjusted for
                           commencement after his Normal Retirement Date. For
                           the Plan Year following the Plan Year in which occurs
                           the Employee's Normal Retirement Date, his adjusted
                           Retirement Income shall be equal to the greater of
                           his Retirement Income determined as of such date or
                           the Actuarial Equivalent of his Retirement Income
                           computed as of his Normal Retirement Date. For the
                           next Plan Year, his adjusted Retirement Income shall
                           be equal to the greater of his Retirement Income
                           determined as of such Plan Year or the Actuarial
                           Equivalent of his adjusted Retirement Income computed
                           as of the end of the prior Plan Year. This process
                           shall be repeated each Plan Year until the
                           termination of his Disability Leave.

                                       6.

         Section 5.7, "Payment of Retirement Income," shall be amended,
effective January 1, 2000, by adding the following to the end of the second
paragraph:

         However, if an Employee fails to make an election pursuant to this
         Section 5.7 within the thirty (30) day period immediately preceding his
         Retirement Date, his Retirement Income shall be determined as of his
         Retirement Date and payment thereof shall commence as soon as
         administratively feasible following his election to retire, provided
         his election occurs not more than ninety (90) days after his Retirement
         Date. If the election is made more than ninety (90) days following an
         Employee's Retirement Date, his benefits shall commence as soon as
         administratively feasible and his Retirement Income shall be determined
         as of the first day of the month following submission of his election.

                                       7.

         Subsection (3) of Section 5.9(b), "Required minimum distributions,"
shall be deleted in its entirety and replaced with the following:

(3)               With respect to an Employee who retires after attaining age
                  70-1/2 and who has not previously commenced receipt of his
                  Retirement Income pursuant to this Section 5.9(b) while an
                  Employee of an Affiliated Employer, the amount of his
                  Retirement Income shall be computed as of the end of the Plan
                  Year the Employee attains age 70-1/2 and shall be recomputed
                  as of the close of each Plan Year thereafter and preceding his
                  Deferred Retirement Date. With respect to each Plan Year
                  following the Plan Year the Employee attains age 70-1/2, his
                  Retirement Income shall equal the greater of his Retirement
                  Income determined as of such Plan Year or the Actuarial
                  Equivalent of his Retirement Income computed as of the end of
                  the Plan Year he attains age 70-1/2. For the next Plan Year,
                  his adjusted Retirement Income shall be equal to the greater
                  of his Retirement Income determined as of such Plan Year or
                  the Actuarial Equivalent of his adjusted Retirement Income
                  computed as of the end of the prior Plan Year. This process
                  shall be repeated each Plan Year until his Deferred Retirement
                  Date.

                                       8.

         Section 5.9(b), "Required minimum distributions," shall be amended by
adding a new subsection (4) as follows:

(4)               If a former Employee who is receiving Retirement Income shall
                  be reemployed by any Affiliated Employer as an Employee and
                  his Retirement Income is suspended in accordance with Section
                  5.10(b), the Retirement Income payable upon his subsequent
                  retirement shall be adjusted in accordance with Section
                  5.9(b)(3) if his subsequent retirement occurs after he attains
                  age 70-1/2, but shall be reduced by the Actuarial Equivalent
                  of any Retirement Income he received prior to his reemployment
                  in accordance with Section 5.10(b).

                                       9.

         Section 5.10, "Suspension of Retirement Income for reemployment," shall
be renamed "Suspension of Retirement Income," and shall be amended to read as
follows:

                  5.10     Suspension of Retirement Income.

                           (a) The Retirement Income of an Employee who remains
                           in active service after his Normal Retirement Date
                           shall be suspended for each calendar month after his
                           Normal Retirement Date during which he completes
                           forty (40) or more Hours of Service, pursuant to
                           ERISA Section 203(a)(3)(B) ("ERISA Section
                           203(a)(3)(B) Service").

                           (b) If a former Employee who is receiving Retirement
                           Income shall be reemployed by any Affiliated Employer
                           as an Employee and shall not elect to waive his right
                           to participate under the Plan or the pension plan of
                           the Affiliated Employer, whichever applies, his
                           Retirement Income shall be suspended for each
                           calendar month after his reemployment during which he
                           is employed in ERISA Section 203(a)(3)(B) Service.
                           The Retirement Income payable upon his subsequent
                           retirement shall be reduced by the Actuarial
                           Equivalent of any Retirement Income he received prior
                           to his reemployment.

                           (c) No payment shall be suspended by the Plan
                           pursuant to this Section 5.10 unless the Plan
                           notifies the Employee by personal delivery or first
                           class mail during the first calendar month in which
                           the Plan withholds payments that his Retirement
                           Income is suspended.

                           (d) If the payment of Retirement Income has been
                           suspended, payments shall resume no later than the
                           first day of the third calendar month after the
                           calendar month in which the Employee ceases to be
                           employed in ERISA Section 203(a)(3)(B) service. The
                           initial payment upon resumption shall include the
                           payment scheduled to occur in the calendar month when
                           payments resume and any amounts withheld during the
                           period between the cessation of ERISA Section
                           203(a)(3)(B) service and the resumption of payments.

                                       10.

         Effective for plan years beginning on or after January 1, 2000, Section
6.4, "Limitation on benefits from multiple plans," Section 6.5, "Special rules
for plans subject to overall limitations under Code Section 415(e)," and Section
6.6, "Combination of plans," shall be deleted in their entirety and replaced
with the following (and Section 6.7 shall be renumbered as Section 6.5):

                  6.4      Limitations on benefits from multiple plans.

                           (a) For purposes of the limitations described in
                           Section 6.1 of the Plan and Section 415 of the Code,
                           all defined benefit plans (whether or not terminated)
                           maintained by an Affiliated Employer shall be treated
                           as one defined benefit plan.

                           (b) Notwithstanding any provisions contained herein
                           to the contrary, in the event that an Employee
                           participates in another defined benefit plan required
                           to be aggregated with this Plan under Code Section
                           415(g) and the combined benefits with respect to an
                           Employee exceed the limitations contained in Code
                           Section 415(b), corrective adjustments shall first be
                           made under this Plan.

                                       11.

         Subsection (c) of Section 8.5, "Calculation of present value for
cash-out of benefits and for determining amount of benefits," shall be deleted
in its entirety and replaced with the following, effective as of January 1,
2001:

                           (c) For purposes of this Section 8.5, "Applicable
                           Interest Rate" shall be calculated by using the
                           annual rate of interest on 30-year Treasury
                           securities for the month of August in the Plan Year
                           which precedes the Plan Year in which such present
                           value is determined and by using the prevailing
                           commissioners' standard table used to determine
                           reserves for group annuity contracts in effect on the
                           date as of which the present value is being
                           determined. Notwithstanding the foregoing, for the
                           Plan Year beginning January 1, 2001, the Applicable
                           Interest Rate shall be calculated using the annual
                           rate of interest on 30-year Treasury securities for
                           the month of August, or for the month of November, in
                           the Plan Year which precedes such Plan Year,
                           whichever month produces the greater amount.

                                       12.

         Effective on and after the date this amendment is adopted, Article XVII
of the Plan shall be amended in its entirety to read as set forth below:

                                                   Article XVII

                  17.1     Definition of Terms Used in this Article XVII and the
                           SEPCO Schedule.

                           (a) "SEPCO" shall mean Savannah Electric and Power
                           Company.

                           (b) "SEPCO Plan" shall mean the Employees' Retirement
                           Plan of Savannah Electric and Power Company, as
                           amended and restated January 1, 1997.

                           (c) "SEPCO Schedule" shall mean the Schedule attached
                           to the Plan and made a part thereof containing the
                           provisions of the SEPCO Plan as merged into the Plan
                           effective January 1, 1998 which shall apply to SEPCO
                           Employees and Covered SEPCO Employees.

                           (d) "SEPCO Employee" shall mean an Employee as
                           defined in the SEPCO Plan having an Hour of Service
                           under the SEPCO Plan on or after January 1, 1997.
                           This shall include persons represented by a
                           collective bargaining agent where such agent and
                           SEPCO have mutually agreed to participate in the
                           Plan. This shall not include employees who are hired
                           or rehired at SEPCO after December 31, 1997 or
                           rescind a waiver of participation under Section 3.8
                           of the SEPCO Plan or SEPCO Schedule on or after
                           January 1, 1998 that was in effect on December 31,
                           1997. Notwithstanding anything to the contrary above,
                           Covered SEPCO Employees shall be considered SEPCO
                           Employees unless otherwise provided in this Article
                           XVII or otherwise required by law.

                           (e) "Covered SEPCO Employee" shall mean an Employee
                           or former Employee who is or was represented by the
                           International Brotherhood of Electrical Workers
                           ("IBEW") Local 1208 or the Office and Professional
                           Employees International Union ("OPEIU") Local 455,
                           who has an Hour of Service under the SEPCO Plan or
                           SEPCO Schedule on or after January 1, 1997. An
                           Employee who is represented by IBEW Local 1208 and is
                           hired or re-hired on or after January 1, 1999 or who
                           is represented by OPEIU Local 455 and is hired or
                           re-hired on or after January 1, 2000 shall not be
                           considered a Covered SEPCO Employee. Rather, such
                           Employee shall be treated only as an Employee under
                           the Plan.

                  17.2     [RESERVED]

                  17.3     SEPCO Employees Eligibility in the New Pension
                           Program

                           (a) The following SEPCO Employees shall be subject to
                           this Section 17.3 of the Plan:

                                    (1) SEPCO Employees, including Covered SEPCO
                                    Employees, who are actively employed by
                                    SEPCO on January 1, 1997 but who will not
                                    attain their fortieth (40th) birthday on or
                                    before January 1, 2002, or

                                    (2) SEPCO Employees, including Covered SEPCO
                                    Employees, who are hired or re-hired by
                                    SEPCO after January 1, 1997, or

                                    (3) SEPCO Employees who are not members of
                                    an eligible class of SEPCO Employees on or
                                    after January 1, 1997 and have not
                                    previously participated in the SEPCO Plan.

                           (b) The monthly Retirement Income payable as a single
                           life annuity to a SEPCO Employee described in Section
                           17.3(a) (or his Provisional Payee) who retires from
                           the service of SEPCO or another Employing Company at
                           his Normal Retirement Date or Deferred Retirement
                           Date (before adjustment for a Provisional Payee
                           designation, if any) after January 1, 1997, subject
                           to the limitations in Article VI, shall be the
                           greater of (1) and (2) below:

                                    (1) 1.0% of his Average Monthly Earnings
                                    multiplied by his years (and fraction of a
                                    year) of Accredited Service, without
                                    application of the limitation described in
                                    Section 4.2(e), to his Normal Retirement
                                    Date or Deferred Retirement Date; or

                                    (2) $25 multiplied by his years (and
                                    fraction of a year) of Accredited Service,
                                    without application of the limitation
                                    described in Section 4.2(e), to his Normal
                                    Retirement Date or Deferred Retirement Date.

                           (c) Notwithstanding paragraph (b) above, if the
                           Allowance of a SEPCO Employee determined under the
                           SEPCO Schedule as of the earlier of his retirement or
                           termination of employment with SEPCO or December 31,
                           2001 would be greater, such SEPCO Employee shall be
                           entitled when eligible to receive payments of such
                           greater Allowance upon his retirement or termination
                           of employment with SEPCO or another Employing
                           Company.

                           (d) Notwithstanding paragraphs (b) and (c) above,
                           Retirement Income or Allowance, as the case may be,
                           determined with respect to a SEPCO Employee under
                           this Article XVII who retires on his Normal
                           Retirement Date or Deferred Retirement Date shall not
                           be less than the Retirement Income or Allowance which
                           would have been payable with respect to such SEPCO
                           Employee commencing on his earlier Retirement Date
                           had (1) the SEPCO Employee retired on his earlier
                           Retirement Date which would have resulted in the
                           greatest Retirement Income or Allowance and (2) such
                           Retirement Income or Allowance commencing on such
                           earlier Retirement Date been payable in the same form
                           as his Retirement Income or Allowance commencing on
                           his Normal Retirement Date or Deferred Retirement
                           Date.

                           (e) With respect to SEPCO Employees described in this
                           Section 17.3 who retire before their Normal
                           Retirement Date, the monthly amount of Retirement
                           Income provided in paragraph (b) above shall be
                           reduced in accordance with Section 5.5.

                           (f) With respect to Covered SEPCO Employees described
                           in this Section 17.3 (or their Provisional Payees),
                           the monthly amount of Retirement Income provided in
                           paragraphs (b) through (e) above shall become payable
                           as of the later of (i) the first of the month
                           following the Covered SEPCO Employee's retirement, or
                           (ii) January 1, 1998.

                           (g) Covered SEPCO Employees who retired or terminated
                           employment prior to (i) July 1, 1999 for Covered
                           SEPCO Employees represented by IBEW and (ii) February
                           9, 2000 for Covered SEPCO Employees represented by
                           OPEIU, and who commenced payment of an Allowance
                           under the SEPCO Schedule shall receive a lump sum
                           payment which is the actuarial equivalent of the
                           difference, if any, between the Retirement Income
                           payable pursuant to paragraphs (b) through (e) above
                           and the Allowance they have previously received
                           determined from their date of retirement to the
                           earlier of their date of death or the date payment
                           under this paragraph (g) is made. Such lump sum
                           payments shall be made as soon as administratively
                           feasible following adoption of these provisions. The
                           monthly payments pursuant to paragraphs (b) through
                           (e), if greater than the Covered SEPCO Employee's
                           Allowance, shall be made thereafter.

                           (h) The Provisional Payees of Covered SEPCO Employees
                           described in Section 17.3 who died prior to (i) July
                           1, 1999 for Covered SEPCO Employees represented by
                           IBEW and (ii) February 9, 2000 for Covered SEPCO
                           Employees represented by OPEIU, after having
                           commenced payment of an Allowance under the SEPCO
                           Schedule, shall receive a lump sum payment that is
                           the actuarial equivalent of the difference, if any,
                           between the survivor benefits under the Plan and the
                           survivor benefits under the SEPCO Schedule that the
                           Provisional Payees have previously received
                           determined from the date of the Covered SEPCO
                           Employee's death through the earlier of (i) the
                           Provisional Payee's date of death, or (ii) the date
                           payment is made under this paragraph (h) to the
                           Provisional Payee. Thereafter, monthly payments shall
                           be made to the Provisional Payee in accordance with
                           Section 17.5(h) of this Article XVII.

                           (i) For purposes of subsections (g) and (h) of this
                           Section 17.3, actuarial equivalent shall mean the
                           value of such lump sum payment determined as of the
                           date of distribution of the lump sum applying the
                           Applicable Interest Rate as defined in Section 8.5(c)
                           of the Plan and using the prevailing commissioners'
                           standard table used to determined reserves for group
                           annuity contracts in effect on the date as of which
                           the present value is being determined.

         17.4 SEPCO Employees Not Described in 17.2 or 17.3. SEPCO Employees not
         described in Section 17.2 or 17.3 above shall be eligible for a benefit
         under the Plan as described in this Section 17.4, notwithstanding any
         other provision of the Plan or SEPCO Schedule to the contrary.

                  (a) A SEPCO Employee shall be eligible to participate in the
                  Plan and receive Retirement Income thereunder as determined
                  under the Plan's terms and this Article XVII. Notwithstanding
                  the preceding sentence, if such SEPCO Employee's Allowance
                  determined as of the earlier of his retirement or termination
                  of employment with SEPCO or December 31, 2001 would be
                  greater, such SEPCO Employee shall be entitled when eligible
                  to commence payments of such greater Allowance upon his
                  retirement or termination of employment with SEPCO or another
                  Employing Company.

                  (b) Notwithstanding paragraph (a) above, only with respect to
                  SEPCO Employees who have attained age fifty (50) and have ten
                  (10) or more years of Credited Service on or before January 1,
                  1997 or who have attained age 55 on or before January 1, 1997,
                  such SEPCO Employees shall be entitled to receive the greater
                  of their Allowance or Retirement Income upon retirement.

                  (c) Covered SEPCO Employees who are described in this Section
                  17.4 (or their Provisional Payees) shall receive the monthly
                  benefit described in paragraph (a) for months beginning on the
                  later of (i) the first of the month following their
                  retirement, or (ii) January 1, 1998.

                  (d) A Covered SEPCO Employee who retires or terminates
                  employment prior to (i) July 1, 1999 for Covered SEPCO
                  Employees represented by IBEW and (ii) February 9, 2000 for
                  Covered SEPCO Employees represented by OPEIU, and who
                  commences payment of an Allowance under the SEPCO Schedule
                  before such date shall receive a lump sum payment which is the
                  actuarial equivalent of the difference, if any, between the
                  benefits payable pursuant to paragraph (a) above and the
                  Allowance they have previously received determined from their
                  date of retirement to the earlier of their date of death or
                  the date a lump sum payment is made pursuant to this paragraph
                  (d). Such lump sum payments shall be made as soon as
                  administratively feasible following adoption of these
                  provisions. The monthly payments pursuant to paragraph (a)
                  shall be made thereafter.

                  (e) The Provisional Payee of a Covered SEPCO Employee
                  described in this Section 17.4 who died prior to (i) July 1,
                  1999 for Covered SEPCO Employees represented by IBEW, and (ii)
                  February 9, 2000 for Covered SEPCO Employees represented by
                  OPEIU, after having commenced payment of an Allowance under
                  the SEPCO Schedule shall receive a lump sum payment that is
                  the actuarial equivalent of the difference, if any, between
                  the survivor benefits under the Plan and the survivor benefits
                  under the SEPCO Schedule that the Provisional Payee has
                  previously received determined from the date of the Covered
                  SEPCO Employee's death through the earlier of (i) the
                  Provisional Payee's date of death, or (ii) the date payment is
                  made to the Provisional Payee under this paragraph (e).
                  Thereafter, monthly payments shall be made in accordance with
                  Section 17.5(h) of this Article XVII.

                  (f) For purposes of subsections (d) and (e) of this Section
                  17.4, actuarial equivalent shall mean the value of such lump
                  sum payment determined as of the date of distribution of the
                  lump sum applying the Applicable Interest Rate as defined in
                  Section 8.5(c) of the Plan and using the prevailing
                  commissioners' standard table used to determined reserves for
                  group annuity contracts in effect on the date as of which the
                  present value is being determined.

                  17.5 Special Transition Rules. Notwithstanding any other
                  provisions in the Plan to the contrary, SEPCO Employees who
                  participate in the Plan shall be subject to the following
                  transition rules.

                           (a) In determining the greater benefit as required
                           under Sections 17.3 and 17.4, the form of payment and
                           any early retirement reductions with respect to the
                           payment of Retirement Income as set forth in Articles
                           V and VII of the Plan and of an Allowance as set
                           forth in Articles 5 and 7 of the SEPCO Schedule shall
                           be considered. For purposes of making the preceding
                           determination, (1) the applicable Allowance shall
                           first be converted to a monthly payment, and (2) the
                           Retirement Annuities described in Article 2 of the
                           SEPCO Schedule shall be taken into account consistent
                           with Section 5.01 of the SEPCO Schedule.

                           (b) With respect to eligibility to participate in the
                           Plan, all SEPCO Employees employed by SEPCO on
                           December 31, 1997 who are not already eligible to
                           participate in the Plan shall be immediately eligible
                           to participate in the Plan.

                           (c) SEPCO Employees who were eligible to participate
                           in the SEPCO Plan on December 31, 1997 shall have
                           their Vesting Years of Service determined as if their
                           anniversary date of hire is January 1. All SEPCO
                           Employees who participate in the Plan shall be
                           credited with Vesting Years of Service based upon the
                           terms of the Plan for periods of service on and after
                           January 1, 1998, and based upon the Continuous
                           Service such SEPCO Employees accrued under the SEPCO
                           Plan prior to January 1, 1998.

                           (d)      (1) For SEPCO Employees (other than Covered
                                    SEPCO Employees):

                                            (A) For periods of service on and
                                            after January 1, 1998, Accredited
                                            Service for SEPCO Employees shall be
                                            determined in accordance with the
                                            Plan.

                                            (B) For periods of service on and
                                            after January 1, 1998, with respect
                                            to any Allowance a SEPCO Employee
                                            may be entitled to under the SEPCO
                                            Schedule, such Allowance shall be
                                            determined using Accredited Service
                                            in place of Credited Service.

                                            (C) For periods of service prior to
                                            January 1, 1998, the Credited
                                            Service of a SEPCO Employee shall be
                                            used to determine such SEPCO
                                            Employee's Allowance and Retirement
                                            Income accrued prior to January 1,
                                            1998.

                                            (D) When calculating a SEPCO
                                            Employee's Retirement Income prior
                                            to June 1, 2000, the maximum amount
                                            of Accredited Service and Credited
                                            Service that will be considered is
                                            forty-three (43) years.

                                    (2)     For Covered SEPCO Employees:

                                            (A) For periods of service on and
                                            after January 1, 2001, Accredited
                                            Service for Covered SEPCO Employees
                                            shall be determined in accordance
                                            with the Plan.

                                            (B) For periods of service on and
                                            after January 1, 2001, with respect
                                            to any Allowance a Covered SEPCO
                                            Employee may be entitled to under
                                            the SEPCO Schedule, such Allowance
                                            shall be determined using Accredited
                                            Service in place of Credited
                                            Service.

                                            (C) For periods of service prior to
                                            January 1, 2001, the Credited
                                            Service of a Covered SEPCO Employee
                                            shall be used to determine such
                                            Covered SEPCO Employee's Allowance
                                            and Retirement Income accrued prior
                                            to January 1, 2001. Such Credited
                                            Service shall count as Accredited
                                            Service to determine eligibility for
                                            retirement at age fifty pursuant to
                                            paragraph (g) below.

                                            (D) When calculating a Covered SEPCO
                                            Employee's Retirement Income under
                                            Section 17.4 prior to June 1, 2000,
                                            the maximum amount of Accredited
                                            Service and Credited Service that
                                            will be considered is forty-three
                                            (43) years.

                           (e) For purposes of calculating Retirement Income for
                           a SEPCO Employee, Compensation determined under the
                           SEPCO Plan, excluding unused accrued vacation, shall
                           be used in place of Earnings for periods of service
                           prior to January 1, 1998.

                           (f) The Normal Retirement Date of a SEPCO Employee
                           shall always be determined in accordance with the
                           SEPCO Plan prior to January 1, 1998 and the SEPCO
                           Schedule on and after January 1, 1998.

                           (g)      (1) A SEPCO Employee may retire if he has
                                    either attained age fifty-five (55) or
                                    attained age fifty (50) and has at least ten
                                    (10) years of Accredited Service as
                                    determined under this Article XVII. A SEPCO
                                    Employee who retires because he has attained
                                    age fifty (50) and has ten (10) years of
                                    Accredited Service may not commence receipt
                                    of his Retirement Income or Allowance until
                                    on or after January 1, 1998.

                                    (2) A SEPCO Employee who retires under
                                    paragraph (1) above having at least ten (10)
                                    years of Accredited Service shall be
                                    entitled to the greater of his (A)
                                    Retirement Income determined under Section
                                    5.5 (excluding the third paragraph thereof)
                                    and this Article XVII or (B) Allowance
                                    determined under this Article XVII and in
                                    addition applying a reduction of one-third
                                    of one percent ([OBJECT OMITTED]%) for each
                                    calendar month by which the commencement
                                    date precedes the first day of the month
                                    following any such Employee's attainment of
                                    his fifty-fifth (55th) birthday. However,
                                    effective for SEPCO Employees who retire on
                                    or after June 1, 2000, the term three-tenths
                                    of one percent (0.3%) shall replace
                                    one-third of one percent ([OBJECT OMITTED]%)
                                    in the preceding sentence.

                                    (3) A SEPCO Employee who retires or
                                    terminates under paragraph (1) above after
                                    attaining age 55 having less than ten (10)
                                    years of Accredited Service shall be
                                    entitled to the greater of his (A)
                                    Retirement Income determined under Section
                                    8.2 (without regard to the ten (10) years of
                                    Accredited Service requirement) and this
                                    Article XVII or (B) Allowance determined
                                    under this Article XVII.

                           (h) On and after January 1, 1998, the Provisional
                           Payees of SEPCO Employees who are not Covered SEPCO
                           Employees shall only be entitled to benefits as
                           provided in Article VII of the Plan. On or after
                           January 1, 1998 but on or before December 31, 2000,
                           Provisional Payees of Covered SEPCO Employees shall
                           be entitled to benefits equal to the greater of (i)
                           the benefits provided for in Article VII of the Plan,
                           or (ii) the benefits provided for in Article 7 of the
                           SEPCO Schedule. Provisional Payees of Covered SEPCO
                           Employees who retire, terminate employment or die on
                           or after January 1, 2001 shall only be entitled to
                           benefits as provided in Article VII of the Plan.

                           (i) With respect to the accrual of Retirement Income
                           or an Allowance during a period of total disability,
                           SEPCO Employees incurring a disability on and after
                           January 1, 1998 shall only be subject to the
                           provisions of Section 4.4 of the Plan.

                                    Notwithstanding the above, a Covered SEPCO
                           Employee who incurs a disability on or after January
                           1, 1998 but on or before December 31, 2000 shall
                           accrue Retirement Income or an Allowance equal to the
                           greater of : (i) his Retirement Income determined
                           under Section 4.4 of the Plan, or (ii) his Allowance
                           determined under the SEPCO Schedule. Covered SEPCO
                           Employees who become disabled on or after January 1,
                           2001 shall only be entitled to benefits as provided
                           in Section 4.4 of the Plan.

                           (j)      (1) The options for payment described in
                                    Sections 7.1(c) and (d) and Sections 7.6(c)
                                    and (d) may be elected by SEPCO Employees
                                    who are not Covered SEPCO Employees and who
                                    retire or terminate on or after January 1,
                                    1998 and by Covered SEPCO Employees who
                                    retire or terminate on or after (i) July 1,
                                    1999 for Covered SEPCO Employees represented
                                    by IBEW, and (ii) February 9, 2000 for
                                    Covered SEPCO Employees represented by
                                    OPEIU.

                                    (2) Notwithstanding Section 17.3, SEPCO
                                    Employees who terminate or retire in 1997
                                    and Covered SEPCO Employees who terminate or
                                    retire prior to January 1, 2001 and commence
                                    receipt of an Allowance shall not be
                                    eligible to change the form of benefit
                                    elected under the SEPCO Plan even if such
                                    SEPCO Employees are entitled to receive
                                    Retirement Income under this Article XVII.

                                    (3) Notwithstanding Section 7.07(a)(Option
                                    ii) of the SEPCO Schedule, SEPCO Employees
                                    who are not Covered SEPCO Employees shall
                                    not be eligible to elect a 75% joint and
                                    survivor annuity. Covered SEPCO Employees,
                                    however, shall be allowed to elect a 75%
                                    joint and survivor annuity pursuant to
                                    Section 7.07(a)(Option ii) before January 1,
                                    2001.

                           (k) SEPCO Employees may elect in accordance with the
                           SEPCO Schedule to have their benefit, whether paid as
                           Retirement Income or an Allowance, adjusted to take
                           into account their old-age insurance benefit under
                           Title II of the Social Security Act. In the event
                           that a SEPCO Employee's Retirement Income is greater
                           than his Allowance under Section 17.3 or 17.4, the
                           old age insurance benefit used to compute such
                           Retirement Income shall be used to determine the
                           amount payable under Section 5.04 of the SEPCO
                           Schedule.

                           (l) Notwithstanding anything in this Article XVII to
                           the contrary, the Accrued Benefit of any SEPCO
                           Employee shall not be less than the Accrued Benefit
                           such SEPCO Employee derived under the SEPCO Plan as
                           of the earlier of retirement, termination or December
                           31, 1997.

         17.6     Transfers of SEPCO Employees.

                  (a) With respect to a transfer of employment from an Employing
                  Company other than SEPCO to SEPCO, (1) occurring prior to
                  January 1, 1998, the person will be treated as a SEPCO
                  Employee under this Article XVII or (2) occurring on or after
                  January 1, 1998, the person will be treated as an Employee
                  under the terms of the Plan. Notwithstanding the foregoing, a
                  person transferring to SEPCO as a Covered SEPCO Employee on or
                  after January 1, 1998 will be treated as a SEPCO Employee.
                  Only persons transferring to SEPCO as a Covered SEPCO Employee
                  on or after January 1, 2001 will be treated as an Employee.

                  (b) With respect to a transfer of employment from SEPCO to an
                  Employing Company, (1) occurring prior to January 1, 1997, the
                  person will be treated like an Employee under Sections 4.6(a),
                  (c) and (d) of the Plan provided that any Retirement Income or
                  Allowance payable to the Employee shall be determined in
                  accordance with Section 17.5(a), (g), (j) and (k) or (2)
                  occurring on or after January 1, 1997, the person will be
                  treated as a SEPCO Employee or Covered SEPCO Employee,
                  whichever is applicable, under this Article XVII.

         17.7 Application of Plan to SEPCO. To the extent not inconsistent with
         the provisions of this Article XVII, all the provisions of the Plan are
         applicable to SEPCO Employees and Covered SEPCO Employees.

                                       13.

         Section 1.14 of the SEPCO Schedule, the definition of "Employee," shall
be deleted in its entirety and replaced with the following new definition:

                  1.14 "Employee" shall mean any person regularly employed by
                  the Company who receives regular stated salary, or wages paid
                  directly by the Company as (a) a regular full-time employee,
                  (b) a regular part-time employee, (c) a cooperative education
                  employee or (d) a temporary employee paid directly or
                  indirectly by the Company. Notwithstanding the preceding
                  sentence, on and after January 1, 1998 but before January 1,
                  2001, "Employee" shall be limited to Covered SEPCO Employees
                  as defined in Article XVII of the Plan. Thereafter, no person
                  employed by the Company shall be an "Employee" under this
                  SEPCO Schedule. For purposes of this Section 1.14, temporary
                  employee means a full-time or part-time employee who provides
                  services to the Company for a stated period of time after
                  which period such employee will be terminated from employment.
                  The term Employee shall also include Leased Employees within
                  the meaning of Code ss. 414(n) (2). Notwithstanding the
                  foregoing, if such Leased Employees constitute less than
                  twenty percent (20%) of the Employer's non-highly compensated
                  workforce within the meaning of Code ss. 414(n)(5)(C)(ii), the
                  term Employee shall not include those Leased Employees covered
                  under the SEPCO Schedule described in Code ss. 414(n)(5). The
                  term Employee for participation purposes shall not include any
                  individual who is classified by the Company as an independent
                  contractor or temporary employee (unless with respect to a
                  temporary employee who is grandfathered under this SEPCO
                  Schedule) regardless of whether such classification is in
                  error.

                                       14.

         Southern Energy, Inc. shall be removed as an Employing Company in
Appendix A of the Plan, effective as of the "Group Status Change Date," as
defined in the Agreement.

                                       15.

         Except as amended herein by this Sixth Amendment, the Plan shall remain
in full force and effect as amended and restated by the Company prior to the
adoption of this Sixth Amendment.


<PAGE>


         IN WITNESS WHEREOF, Southern Company Services, Inc. through its duly
authorized officer, has adopted this Sixth Amendment to The Southern Company
Pension Plan this ____ day of _________________, 2000, to be effective as stated
herein.

                                  SOUTHERN COMPANY SERVICES, INC.


                                  By: _____________________________________

                                  Title:___________________________________



ATTEST:

By:  _________________________________________________________

Title:________________________________________________________


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>20
<FILENAME>x10a67.txt
<TEXT>




                                SOUTHERN COMPANY
                             PERFORMANCE STOCK PLAN

                              AMENDED AND RESTATED






                              TROUTMAN SANDERS LLP
                              Bank of America Plaza
                     600 Peachtree Street, N.E., Suite 5200
                             Atlanta, Georgia 30308
                                 (404) 885-3000

                            Effective January 1, 2000


<PAGE>


                     SOUTHERN COMPANY PERFORMANCE STOCK PLAN

                              AMENDED AND RESTATED

                                    Purposes

         This Southern Company Performance Stock Plan originally established
effective January 1, 1998 is hereby amended and restated effective January 1,
2000. The Plan is intended to maximize the long-term success of Southern
Company, ensure a balanced emphasis on both current and long-term performance,
enhance Participants' identification with shareholders' interests, and
facilitate the attraction and retention of key individuals with outstanding
ability.

                                    ARTICLE I

         Definitions. Whenever used in the Plan, the following terms shall have
the meaning set forth below:

         1.1 "Award" shall mean, individually and collectively, any Option,
Stock Appreciation Right or Restricted Stock granted under the Plan.

         1.2 "Award Document" shall mean the written document evidencing the
grant of an Award and setting forth the terms and conditions thereof.

         1.3 "Base Value" shall mean the Fair Market Value of a Stock
Appreciation Right on the date of its grant.

         1.4 "Board" or "Board of Directors" shall mean the Board of Directors
of Southern Company.

         1.5 "Change in Control Benefit Plan Determination Policy" shall mean
the change in control benefit plan determination policy, as approved by the
Board, as it may be amended from time to time in accordance with the provisions
therein.

         1.6 "Code" shall mean the Internal Revenue Code of 1986, as amended.

         1.7 "Committee" shall mean the Compensation Committee of the Board of
Directors composed solely of not less than three (3) Nonemployee Directors and,
to the extent necessary for any Award intended to qualify as Performance Based
to so qualify, each member of the Committee shall be an Outside Director.

         1.8 "Common Stock" shall mean the common stock of Southern Company.

         1.9 "Covered Employee" shall mean a Participant who is, as of the last
day of Southern Company's fiscal year in which the Participant shall be required
to recognize taxable income with respect to an Award, a "covered employee"
within the meaning of Code section 162(m)(3) and the regulations thereunder.

         1.10 "Director" shall mean any person who is a member of the Board of
Directors or of the board of directors of an Employing Company.

         1.11 "Disability" shall mean total and permanent disability as
determined by the Social Security Administration.

         1.12 "Effective Date" shall mean January 1, 2000.

         1.13 "Employee" shall mean any person who is employed by an Employing
Company.

         1.14 "Employing Company" shall mean any affiliate or subsidiary (direct
or indirect) of Southern Company, which the Board of Directors may from time to
time determine to bring under the Plan and which may adopt the Plan, and any
successor of any of them.

         1.15 "Fair Market Value" shall mean the average of the high and low
prices at which a share of Common Stock shall have been traded on the respective
measurement date, such as the date of grant or the exercise of an Award, or on
the next preceding trading day if such date was not a trading date, as reported
on the New York Stock Exchange-Composite Transactions Listing, or as otherwise
determined by the Committee. In no event shall the Fair Market Value equal less
than the par value of the Common Stock.

         1.16 "Incentive Stock Option" shall mean a stock option satisfying the
requirements of Section 422 of the Code granted pursuant to Section 4.1(b) and
designated by the Committee as an Incentive Stock Option.

         1.17 "Nonemployee Director" shall mean a Director of Southern Company
who is a "nonemployee director" within the meaning of Rule 16b-3 promulgated
under the Exchange Act.

         1.18 "Nonqualified Stock Option" shall mean an Option, other than an
Incentive Stock Option, granted pursuant to Section 4.1(c).

         1.19 "Option" shall mean, individually and collectively, an Incentive
Stock Option or a Nonqualified Stock Option to purchase Common Stock.

         1.20 "Optionee" shall mean a person to whom an Option has been granted
under the Plan.

         1.21 "Option Price" shall mean the price per share of Common Stock set
by the grant of an Option, but in no event less than the Fair Market Value of
the Common Stock on the date of grant.

         1.22 "Outside Director" shall mean a Director of Southern Company who
is an "outside director" within the meaning of Section 162(m) of the Code and
the regulations promulgated thereunder.

         1.23 "Participant" shall mean any Director or Employee who satisfies
the criteria set forth in Article III.

         1.24 "Performance-Based" shall mean compensation which qualifies as
"performance-based" within the meaning of Code section 162(m)(4)(c) and the
regulations thereunder.

         1.25 "Plan" shall mean this Southern Company Performance Stock Plan, as
amended and restated and as may be further amended from time to time.

         1.26 "Restricted Stock" shall mean an Award granted pursuant to Section
4.1(e).

         1.27 "Retirement" shall mean the termination of service or employment
by a Participant on or after age 65 or as otherwise determined by the Committee
in its sole discretion.

         1.28 "Separation Date" shall mean, as determined by the Committee, the
date on which a Participant's service or employment with Southern Company or an
Employing Company terminates for reasons other than his transfer of service or
employment to Southern Company or another Employing Company. Whether any leave
of absence shall constitute a termination of service or employment for the
purposes of the Plan shall be determined in each case by the Committee in its
sole discretion.

         1.29 "Southern Company" shall mean The Southern Company.

         1.30 "Stock Appreciation Right" or "SAR" shall mean a right to any
appreciation in value of shares of Common Stock granted pursuant to Section
4.1(d).

         Where the context requires, words in the masculine gender shall include
the feminine and neuter genders, words in the singular shall include the plural,
and words in the plural shall include the singular.

                                   ARTICLE II

         2.1 Plan Administration. The Plan shall be administered by the
Committee. The Committee is authorized to establish such rules, to appoint such
agents and to delegate such authority as it deems appropriate for the proper
administration of the Plan, including, but not limited to, the delegation of
authority to such person or persons to exercise the discretion provided in
Section 5.1 hereof to determine whether a Participant may exercise an Award
subsequent to termination of employment, and to make such determinations and to
take such steps in connection with the Plan or the benefits provided hereunder
as it deems necessary or advisable.

         2.2 Plan Interpretation. The Committee shall have the exclusive
authority to interpret the Plan. The decision of the Committee with respect to
any question arising as to the grant of an Award to a Participant in the Plan,
the amount, term, form, and time of payment of Awards under the Plan, or any
other matter concerning the Plan shall be final, conclusive, and binding on both
Southern Company and the Participants.

                                   ARTICLE III

         3.1 Eligibility. The Participants in the Plan shall be limited to
Directors and to those Employees, as determined by the Committee, who have a
significant impact on the long-term performance and success of Southern Company.
Subject to the terms of the Plan, the Committee shall identify individuals
eligible to become Participants in the Plan, select from time to time the
Participants to whom Awards shall be granted and shall determine the number of
Awards to be granted.

                                   ARTICLE IV

         4.1 Awards.

                  (a) General. Beginning January 1, 1998 and thereafter, the
         Committee shall determine the forms and amounts of Awards for
         Participants. All Awards shall be subject to the terms and conditions
         of the Plan and to such other terms and conditions consistent with the
         Plan as the Committee deems appropriate. Awards under the Plan need not
         be uniform and Awards under two (2) or more paragraphs may be combined
         in one Award Document. Any combination of Awards may be granted at one
         time and on more than one occasion to the same Participant. More than
         one Award may be granted to a Participant in the same calendar year.
         Such Awards may take the following forms, in the Committee's sole
         discretion:

                  (b) Incentive Stock Options. These shall be stock options
         within the meaning of Section 422 of the Code to purchase Common Stock.
         In addition to other restrictions contained in the Plan, an Incentive
         Stock Option (1) shall not be exercised more than ten (10) years after
         the date it is granted, (2) shall not have an Option Price less than
         the Fair Market Value of Common Stock on the date the Incentive Stock
         Option is granted, (3) shall otherwise comply with Section 422 of the
         Code, (4) shall be granted only to Employees and (5) shall be
         designated as an "Incentive Stock Option" by the Committee. The
         aggregate Fair Market Value of Common Stock, determined at the time of
         each grant, for which any Optionee may vest in Incentive Stock Options
         under this Plan for any calendar year shall not exceed $100,000.

                  (c) Nonqualified Stock Options. These shall be stock options
         to purchase Common Stock which are not designated by the Committee as
         "Incentive Stock Options." At the time of the grant, the Committee
         shall determine the Option exercise period, the Option Price, and such
         other conditions or restrictions on the exercise of the Nonqualified
         Stock Option as the Committee deems appropriate. In addition to other
         restrictions contained in the Plan, a Nonqualified Stock Option (1)
         shall not be exercised more than ten (10) years after the date it is
         granted, and (2) shall not have an Option Price less than 100% of the
         Fair Market Value of Common Stock on the date the Nonqualified Stock
         Option is granted.

                  (d) Stock Appreciation Rights. These shall be rights that on
         exercise entitle the holder to receive the excess of (1) the Fair
         Market Value of Common Stock on the date of exercise over (2) its Base
         Value multiplied by (3) the number of SARs exercised. Such rights shall
         be satisfied in cash, stock, or a combination thereof, as determined by
         the Committee. Stock Appreciation Rights granted under the Plan may be
         granted in the sole discretion of the Committee in conjunction with an
         Incentive Stock Option or Nonqualified Stock Option under the Plan. The
         Committee may impose such conditions or restrictions on the exercise of
         SARs as it deems appropriate and may terminate, amend, or suspend such
         SARs at any time. SARs granted under this Plan shall not be exercised
         more than ten (10) years after the date of grant.

                  (e) Restricted Stock. Restricted Stock shall be shares of
         Common Stock held by Southern Company for the benefit of a Participant
         without payment of consideration, except as otherwise may be determined
         by the Committee in its discretion, with restrictions or conditions
         upon the Participant's right to retain, transfer or sell such shares.
         The following provisions shall be applicable to Restricted Stock
         Awards:

                           (1) Stock Power. Each certificate for Restricted
                  Stock shall be registered in the name of the Participant and
                  shall be deposited by him with Southern Company, together with
                  a stock power endorsed in blank.

                           (2) Restriction Period. At the time of making a
                  Restricted Stock Award, the Committee shall establish the
                  "Restriction Period" applicable thereto. Such Restriction
                  Period may be up to ten (10) years as determined by the
                  Committee. The Committee may provide for the annual lapse of
                  restrictions with respect to a specified percentage of the
                  Restricted Stock, provided the Participant satisfies all
                  eligibility requirements at such time.

                           (3) Dividends. The Participant shall be entitled to
                  receive dividends during the Restriction Period and shall have
                  the right to vote such Common Stock and all other
                  shareholder's rights except the following:

                                    (i) the Participant shall not be entitled to
                           delivery of the stock certificate during the
                           Restriction Period,

                                    (ii) Southern Company shall retain custody
                           of the Common Stock during the Restriction Period,
                           and

                                    (iii) a breach of a restriction or a breach
                           of the terms and conditions established by the
                           Committee with respect to the Restricted Stock shall
                           cause a forfeiture of the Restricted Stock.

         4.2      Award Document.

                  (a) General. After the Committee determines the form and
         amount of a Participant's Award, it shall cause Southern Company to
         prepare an Award Document to be delivered to the Participant setting
         forth the form and amount of the Award and any conditions and
         restrictions on the Award imposed by the Plan and the Committee.

                  (b) Vesting of Award Outstanding as of October 18, 1999. Only
         with respect to Awards outstanding as of October 18, 1999,
         notwithstanding the terms of any Award Document, vesting of such Awards
         shall occur prior to a termination of employment on the anniversary of
         each grant date as follows: first - 34%; second - 33%; and third - 33%.

         4.3 Exercise and Payment. The exercise of an Option shall be made only
by a written notice delivered in person or by mail to the Secretary of Southern
Company at Southern Company's principal executive office, specifying the number
of shares of Common Stock to be purchased and accompanied by payment therefor
and otherwise in accordance with the Award Document pursuant to which the Option
was granted. The purchase price for any shares of Common Stock purchased
pursuant to the exercise of an Option shall be paid, as determined by the
Committee in its discretion and set forth in the Award Document at the time of
grant, in either of the following forms (or any combination thereof): (i) cash
or (ii) the transfer of shares of Common Stock with a Fair Market Value equal to
the aggregate exercise price of the Option to Southern Company upon such terms
and conditions as determined by the Committee. In addition, Options may be
exercised through a registered broker-dealer pursuant to such cashless exercise
procedures (other than the withholding of shares of Common Stock that would
otherwise be acquired upon the exercise of such Option) which are, from time to
time, deemed acceptable by the Committee, and the Committee may authorize that
the purchase price payable upon exercise of an Option may be paid by having
shares of Common Stock withheld that otherwise would be acquired upon such
exercise. Any shares of Common Stock transferred to Southern Company (or
withheld upon exercise) as payment of the purchase price under an Option shall
be valued at their Fair Market Value on the day preceding the date of exercise
of such Option. The Optionee shall deliver the Award Document evidencing the
Option to the Secretary of Southern Company who shall endorse thereon a notation
of such exercise and return such Award Document to the Optionee. No fractional
shares of Common Stock (or cash in lieu thereof) shall be issued upon exercise
of an Option and the number of shares of Common Stock that may be purchased upon
exercise shall be rounded to the nearest number of whole shares of Common Stock.

         4.4 Limitations on Exercise. Awards do not provide the Participant with
any rights or interests until they vest. Unless otherwise provided in the Award
Document, and subject to any other relevant Sections of the Plan, an Award shall
vest twenty-five (25%) percent per year on each of the first four (4)
anniversary dates of the Grant Date, provided the Participant has continued in
the employment of the Company through such anniversary or anniversaries.

                                    ARTICLE V

         5.1 Termination of Service or Employment. A Participant whose service
as a Director or whose employment terminates for reasons other than Retirement,
Disability, or death shall, in the discretion of the Committee, has no right to
receive any benefit or payment for existing Awards under the Plan. Any
outstanding Award shall terminate on the Participant's Separation Date;
provided, however, that the Committee or its designee, in its or his sole
discretion, may permit the exercise of any outstanding Award after the
Participant's Separation Date, at such time and in such manner as the Committee
or such designee may determine, but in no event in the case of Incentive Stock
Options shall such exercise be beyond the earlier of (a) three (3) months from
the Participant's Separation Date or (b) the expiration date of the Award, to
the extent exercisable on such Participant's Separation Date.

         5.2 Death of a Participant. Unless otherwise provided in the Award
Document, in the event of the death of a Participant prior to the exercise of
all Incentive Stock Options, Nonqualified Stock Options, and Stock Appreciation
Rights granted to such Participant, the administrator of the deceased
Participant's estate, the executor under his will, or the person or persons to
whom the Options or SARs shall have been validly transferred by such executor or
administrator pursuant to the will or laws of intestate succession shall have
the right, within thirty-six (36) months from the date of such Participant's
death, but not beyond the expiration date of the Options or SARs, to exercise
such Options or SARs to the extent exercisable on such Participant's Separation
Date.

         5.3 Retirement.

                  (a) Incentive Stock Options. In the event of the termination
         of a Participant's employment as result of his Retirement prior to the
         exercise of all Incentive Stock Options granted to the Participant,
         such Participant shall have the right, within three (3) months of his
         Separation Date, but not beyond the expiration date of such Options, to
         exercise such Incentive Stock Options to the extent exercisable on his
         Separation Date.

                  (b) Nonqualified Stock Options and SARs. Unless otherwise
         provided in the Award Document, in the event of the termination of a
         Participant's employment as a result of his Retirement prior to the
         exercise of all Nonqualified Stock Options or Stock Appreciation Rights
         granted to the Participant, such Participant shall have the right with
         respect to all Nonqualified Stock Options or SARs outstanding as of
         October 18, 1999 and thereafter granted, within sixty (60) months of
         his Separation Date, but not beyond the expiration date of such
         Nonqualified Stock Options or SARs, to exercise such Nonqualified Stock
         Options or SARs to the extent exercisable on his Separation Date.

         5.4 Disability.

                  (a) Incentive Stock Options. In the event of the termination
         of a Participant's employment due to Disability prior to the exercise
         of all Incentive Stock Options granted to the Participant, such
         Participant or his legal representative shall have the right, within
         twelve (12) months of his Separation Date, but not beyond the
         expiration date of such Incentive Stock Options, to exercise such
         Incentive Stock Options to the extent exercisable on his Separation
         Date.

                  (b) Nonqualified Stock Options and SARs. Unless otherwise
         provided in the Award Document, in the event of the termination of a
         Participant's employment due to Disability prior to the exercise of all
         Nonqualified Stock Options or Stock Appreciation Rights granted to the
         Participant, such Participant or his legal representative shall have
         the right, within thirty-six (36) months of his Separation Date, but
         not beyond the expiration date of such Nonqualified Stock Options or
         SARs, to exercise such Nonqualified Stock Options or SARs to the extent
         exercisable on his Separation Date.

         5.5 Change in Control. The provisions of the Change in Control Benefit
Plan Determination Policy are incorporated herein by reference to determine the
occurrence of a change in control of Southern Company or an Employing Company
and the benefits to be provided hereunder in the event of such a change in
control. Any modifications to the Change in Control Benefit Plan Determination
Policy are likewise incorporated herein.

                                   ARTICLE VI

         6.1 Limitation of Shares of Common Stock Available under the Plan.

                  (a) Share Limit. The total number of shares of Common Stock
         available to be granted by the Committee as Awards to the Participants
         under the Plan shall not exceed 40,000,000 shares. Upon a change in
         capitalization, the maximum number of shares of Common Stock referred
         to in the preceding sentence shall be adjusted in number and kind
         pursuant to Section 7.1 hereof.

                  (b) Share Reduction. The total number of shares available
         under Section 6.1(a) shall be reduced from time to time in the manner
         specified:

                           (1) Incentive Stock Options and Nonqualified Stock
                  Options. The grant of an Incentive Stock Option and
                  Nonqualified Stock Option shall reduce the available shares by
                  the number of shares subject to such Option.

                           (2) Stock Appreciation Rights. The grant of Stock
                  Appreciation Rights shall reduce the available shares by the
                  number of SARs granted; provided, however, if SARs are granted
                  in conjunction with an Option and the exercise of such Option
                  would cancel the SARs and vice versa, then the grant of the
                  SARs will only reduce the amount available by the excess, if
                  any, of the number of SARs granted over the number of shares
                  subject to the related Option.

                           (3) Restricted Stock. The grant of Restricted Stock
                  shall reduce the available shares by the number of shares of
                  Restricted Stock granted.

                  (c) Share Increase. The total number of shares available under
         Section 6.1(a) shall be increased from time to time in the manner
         specified:

                           (1) Incentive Stock Options and Nonqualified Stock
                  Options. The lapse or cancellation of an Incentive Stock
                  Option or Nonqualified Stock Option shall increase the
                  available shares by the number of shares released from such
                  Option; provided, however, in the event the cancellation of an
                  Option is due to the exercise of SARs related to such Option,
                  the cancellation of such Option shall only increase the amount
                  available by the excess, if any, of the number of shares
                  released from such Option over the number of SARs exercised.

                           (2) Stock Appreciation Rights. The lapse or
                  cancellation of Stock Appreciation Rights shall increase the
                  available shares by the number of SARs which lapse or are
                  canceled; provided, however, in the event the cancellation of
                  such SARs is due to the exercise of an Option related to such
                  SARs, the cancellation of such SARs shall only increase the
                  available shares by the excess, if any, of the number of SARs
                  canceled over the number of shares delivered on the exercise
                  of such Option.

                           (3) Restricted Shares. The reversion of Restricted
                  Stock to Southern Company due to the breach or occurrence of a
                  restriction or failure to satisfy a condition on such shares
                  shall increase the available shares by the number of shares of
                  Restricted Stock reverted.

         6.2 Maximum Shares to Participant. The maximum number of shares of
Common Stock which may be the subject of Awards to a Participant during any
calendar year during the term of the Plan shall be 1,000,000.


                                   ARTICLE VII

         7.1 Adjustment Upon Changes in Capitalization. In the event of any
change in corporate capitalization, such as a stock split, stock dividend or
reclassification, or a corporate transaction, such as any merger, consolidation,
separation, including a spin-off, or other distribution of stock or property of
Southern Company, any reorganization (whether or not such reorganization comes
within the definition of such term in Code Section 368) or any partial or
complete liquidation of Southern Company, the Committee shall as appropriate
adjust the total number of shares of Common Stock available for Awards under the
Plan or allocable to any individual Participant, the number of shares of Common
Stock subject to outstanding Options, the exercise price for such Options, the
number of outstanding SARs, the Base Value of such SARs, the number of shares of
outstanding Restricted Stock and the Award limit set forth in subsection 6.2.

         7.2 Merger, Consolidation or Tender Offer. In the event of a merger or
consolidation of Southern Company or a tender offer for shares of Common Stock,
or in anticipation of such merger, consolidation, or tender offer, the Committee
may make such adjustments with respect to Awards under the Plan and take such
other action as it deems necessary or appropriate to reflect such merger,
consolidation, or tender offer, including without limitation the substitution of
new Awards, the termination or adjustment of outstanding Awards, the
acceleration of Awards, or the removal of limitations or restrictions on
outstanding Awards.

                                  ARTICLE VIII

         8.1 Withholding Taxes. Southern Company or the Employing Company of the
Participant, as the case may be, shall deduct from all payments and
distributions in cash under the Plan any taxes required to be withheld for
federal, state, or local governments. In the event distributions are made in
shares of Common Stock, Southern Company shall retain the value of sufficient
shares to equal the amount of the tax required to be withheld in respect of such
distributions.

         8.2 Service or Employment. The establishment of the Plan and Awards
hereunder shall not be construed as conferring on any Participant any right to
continued service or employment, and the service or employment of any
Participant may be terminated without regard to the effect which such action
might have upon him or her as a Participant.

         8.3 Non-Alienation of Benefits. Except as otherwise provided in Section
8.5 or 8.6 hereof, or as may otherwise be provided in the Participant's Award
Document with respect to Awards other than Incentive Stock Options, and other
than as specifically provided with regard to the death of a Participant, no
benefit under the Plan shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge, encumbrance, or charge,
excluding the use of Options under this Plan as collateral in exercising such
Options. Any attempt to do so shall be null and void. No such benefits shall,
prior to receipt thereof by the Participant, be in any manner liable for or
subject to the debts, contracts, liabilities, engagement, or torts of the
Participant.

         8.4 Non-Alienation of Election or Exercise Rights. Except as otherwise
provided in Section 8.5 or 8.6 hereof, or as may otherwise be provided in the
Participant's Award Document with respect to Awards other than Incentive Stock
Options, no election as to benefits or exercise of Options, Stock Appreciation
Rights, or other rights may be made during a Participant's lifetime by anyone
other than the Participant.

         8.5 Transfer of Awards (Other Than ISOs) to Revocable Trust. Awards
other than Incentive Stock Options may be transferred by a Participant to a
revocable trust under circumstances where the grantor Participant is the trustee
or co-trustee of such revocable trust and the trust beneficiaries are limited to
the grantor Participant and, in the event of the Participant's death, the
grantor's spouse, lineal descendants and lineal ancestors. Powers of the
non-Participant co-trustee must be limited to the exercise of the Awards held by
the trust in the event of the Participant's death or incapacity. Written notice
of the Participant's intent to transfer Awards under this Section 8.5 must be
delivered to the Vice President of Human Resources of Southern Company Services,
Inc. prior to such transfer.

8.6 Transfer of Nonqualified Stock Options by Certain Participants. Nonqualified
Stock Options may be transferred by a Participant who Southern Company
determines must file reports on the beneficial ownership of securities under
Section 17(a) of the Public Utility Holding Company Act of 1935, as amended, or
who is specifically approved by the Committee, to, or for the benefit of, the
Participant's Immediate Family (including, without limitation, to a trust for
the benefit of the Participant's Immediate Family or to a partnership or limited
liability company whose only partners or members are the Participant and/or the
Participant's Immediate Family), subject to such limits as the Committee may
establish. The transferee shall remain subject to all the terms and conditions
applicable to the Nonqualified Stock Option prior to such transfer. The term
"Immediate Family" shall mean the Participant's spouse, children, and
grandchildren (and, for these purposes, shall also include the Participant).
Written notice of the Participant's intent to transfer Options under this
Section 8.6 must be delivered to the Vice President of Human Resources of
Southern Company Services, Inc. prior to such transfer.

         8.7 Amendment, Modification, and Termination of the Plan. Except for
the provisions of Section 5.5 hereof, which cannot be amended, modified or
terminated following a "Subsidiary Change in Control" or a "Southern
Termination" (as defined in the Change in Control Benefit Plan Determination
Policy), the Board of Directors, at any time, may terminate and in any respect
amend or modify the Plan; provided, however, that, except as provided in Section
7.1, no such action by the Board of Directors, without approval of Southern
Company's shareholders, may increase the total number of shares of Common Stock
available under the Plan; and further provided that, except as provided in
Section 7.2, no amendment, modification, or termination of the Plan shall in any
manner adversely affect the rights of any Participant under the Plan without the
consent of such Participant.

         8.8 Indemnification. Each person who is or shall have been a member of
the Committee or of the Board of Directors shall be indemnified and held
harmless by Southern Company against and from any loss, cost, liability, or
expense that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which he may be
a party or in which he may be involved by reason of any action or failure to act
under the Plan and against and from any and all amounts paid by him in
satisfaction of judgment in any such action, suit, or proceeding against him.
Such person shall give Southern Company an opportunity, at its own expense, to
handle and defend the same before he undertakes to handle and defend it on his
own behalf. The foregoing right of indemnification shall not be exclusive of any
other rights of indemnification to which such persons may be entitled under
Southern Company's Articles of Incorporation or Bylaws, as a matter of law, or
otherwise, or any power that Southern Company may have to indemnify them or hold
them harmless.

         8.9 Reliance on Reports. Each member of the Committee and each member
of the Board of Directors shall be fully justified in relying or acting in good
faith upon any report made by the independent public accountants of Southern
Company and any Employing Company and upon any other information furnished in
connection with the Plan by any person or persons other than himself. In no
event shall any person who is or shall have been a member of the Committee or
the Board of Directors be liable for any determination made or other action
taken or any omission to act in reliance upon any such report or information or
for any action taken, including the furnishing of information, or failure to
act, if in good faith.

         8.10 Governing Law. To the extent that federal law shall not be held to
have preempted local law, this Plan shall be governed by the laws of the State
of Delaware. If any provision of the Plan shall be held invalid or
unenforceable, the remaining provisions hereof shall continue in full force and
effect.

         8.11 Term. The Plan shall remain in effect for ten (10) years from the
Effective Date or until terminated by the Board of Directors, whichever occurs
first.

         8.12 Additional Terms. With respect to any Award, the Committee may, in
its discretion: (i) modify or restrict any of the terms and conditions of any
Awards (provided, however, that no such modification of an Award may in any way
adversely affect a Participant's Award, without the written consent of a
Participant); (ii) modify or restrict Award exercise procedures and any other
Plan procedures; (iii) establish local country plans as subplans to this Plan,
each of which may be attached as an Appendix hereto; and (iv) take any action,
before or after an Award is made, which it deems advisable to obtain or comply
with any necessary local government regulatory exemptions or approvals; provided
that the Committee may not take any action hereunder which would violate any
securities law or any governing statute.

         8.13 Refusal of Award. Any Participant may refuse the grant of an Award
by notifying the Committee of his or her refusal in writing in a form and
pursuant to procedures to be determined by the Committee.

         8.14 No Additional Rights. Nothing in the Plan shall interfere with or
limit in any way the right of the Company to terminate any Participant's
employment at any time, or confer upon any Participant any right to continue in
the employ of the Company.

         No employee shall have the right to be selected to receive an Award
under this Plan or having been so selected, to be selected to receive a future
Award.

         Neither the Award nor any benefits arising under this Plan shall
constitute part of a Participant's employment contract with the Company (or any
affiliate or subsidiary of the Company), and accordingly, this Plan and the
benefits hereunder may be terminated at any time in the sole and exclusive
discretion of the Committee without giving rise to liability on the part of the
Company (or any affiliate or subsidiary of the Company) for severance payments.

         8.15 Requirements of Law. The granting of Awards and the issuance of
shares of Common Stock under the Plan shall be subject to all applicable laws,
rules, and regulations, and to such approvals by any governmental agencies or
national securities exchanges as may be required.

         IN WITNESS WHEREOF, Southern Company has caused the Southern Company
Performance Stock Plan, as amended and restated, to be executed by its duly
authorized officers pursuant to resolutions of the Board of Directors as of the
______day of ___________2000, to be effective January 1, 2000.

                                SOUTHERN COMPANY


                                By:
                                   -----------------------------------

                                Its:
                                    ----------------------------------

Attest:

By:
   --------------------------------------------------

Its:
    -------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>21
<FILENAME>x10a68.txt
<TEXT>




                              THE SOUTHERN COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN








                              Troutman Sanders LLP
                           600 Peachtree Street, N.E.
                        Suite 5200 Bank of America Plaza
                           Atlanta, Georgia 30308-2216
                                 (404) 885-3000

                  Amended and Restated Effective July 10, 2000

<PAGE>





                              THE SOUTHERN COMPANY
                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                    ARTICLE I - PURPOSE AND ADOPTION OF PLAN

         1.1 Adoption: Southern Company Services, Inc. hereby adopts The
Southern Company Supplemental Executive Retirement Plan as amended and restated
effective July 10, 2000 (the "Plan"). The Plan was initially established
effective January 1, 1997, and was subsequently amended from time to time
thereafter. The Plan shall be an unfunded deferred compensation arrangement
whose benefits shall be paid solely from the general assets of the Company.

         1.2 Purpose: The Plan is designed to provide deferred compensation
benefits primarily for a select group of management or highly compensated
employees which are not otherwise payable under The Southern Company Pension
Plan as a result of the exclusion of incentive pay from the definition of
earnings set forth under such plan.

                            ARTICLE II - DEFINITIONS

         2.1 "Administrative Committee" shall mean the committee referred to in
Section 3.1 hereof.

         2.2 "Affiliated Employer" shall mean any corporation which is a member
of the controlled group of corporations of which Southern Company is the common
parent corporation which the Board of Directors may from time to time determine
to bring under the Plan and which shall adopt the Plan, and any successor of any
of them. The Affiliated Employers are set forth in Appendix A to the Plan, as
amended from time to time.

         2.3 "Beneficiary" shall mean any person, estate, trust or organization
entitled to receive any payment under the Plan upon the death of a Participant.

         2.4 "Board of Directors" shall mean the Board of Directors of the
Company.

         2.5 "Change in Control Benefit Plan Determination Policy" shall mean
the Change in Control Benefit Plan Determination Policy, as approved by the
Southern Board, as it may be amended from time to time in accordance with the
provisions therein.

         2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

         2.7 "Company" shall mean Southern Company Services, Inc.

         2.8 "Effective Date" of this amendment and restatement shall mean July
10, 2000.

         2.9 "Employee" shall mean any person who is employed by an Affiliated
Employer excluding any persons represented by a collective bargaining agent.

         2.10 "Incentive Pay" shall mean all awards earned while an Employee
under any incentive pay plans sponsored by an Affiliated Employer as shall be
determined by the Board of Directors from time to time and set forth in Appendix
B attached hereto, provided such incentive award was earned on or after January
1, 1994. If a person was formerly represented by a collective bargaining agent
with respect to any corporation which is a member of the controlled group of
corporations of which Southern Company is the common parent and such person
subsequently becomes an Employee, incentive awards described in the preceding
sentence shall include awards earned on and after January 1, 1994 while
represented by such collective bargaining agent.

         2.11 "Participant" shall mean an Employee or former Employee of an
Affiliated Employer who is eligible and participates in the Plan pursuant to
Sections 4.1 and 4.2.

         2.12 "Pension Plan" shall mean The Southern Company Pension Plan, as
amended from time to time.

         2.13 "Plan" shall mean The Southern Company Supplemental Executive
Retirement Plan, as amended from time to time.

         2.14 "Plan Year" shall mean the calendar year.

         2.15 "SERP Benefit" shall mean the benefit described in Section 5.1.

         2.16 "Southern Board" shall mean the board of directors of Southern
Company.

         2.17 "Supplemental Pension Benefit" shall mean the pension benefit, if
any, that is payable to a Participant under a group and/or individual
supplemental benefit plan of an Affiliated Employer (as such term is defined
therein).

         2.18 "Trust" shall mean the Southern Company Deferred Compensation
Trust.

         Where the context requires, the definitions of all terms set forth in
the Pension Plan shall apply with equal force and effect for purposes of
interpretation and administration of the Plan, unless said terms are otherwise
specifically defined in the Plan. The masculine pronoun shall be construed to
include the feminine pronoun and the singular shall include the plural, where
the context so requires.


<PAGE>



                      ARTICLE III - ADMINISTRATION OF PLAN

         3.1 Administrator. The general administration of the Plan shall be
placed in the Administrative Committee. The Administrative Committee shall
consist of the Vice President, Human Resources of The Southern Company, the
Director, System Compensation and Benefits of The Southern Company and the
Comptroller of The Southern Company or any other position or positions that
succeed to the duties of the foregoing positions. Any member may resign or may
be removed by the Board of Directors and new members may be appointed by the
Board of Directors at such time or times as the Board of Directors in its
discretion shall determine. The Administrative Committee shall be chaired by the
Vice President, Human Resources of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Administrative Committee)
to keep its records or to assist it in the discharge of its duties. A majority
of the members of the Administrative Committee shall constitute a quorum for the
transaction of business at any meeting. Any determination or action of the
Administrative Committee may be made or taken by a majority of the members
present at any meeting thereof, or without a meeting by resolution or written
memorandum concurred in by a majority of the members.

         3.2 Powers. The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. The Administrative
Committee shall have the discretionary authority to interpret the Plan and shall
determine all questions arising in the administration, interpretation and
application of the Plan. Any such determination by it shall be conclusive and
binding on all persons. It may adopt such regulations as it deems desirable for
the conduct of its affairs. It may appoint such accountants, counsel, actuaries,
specialists and other persons as it deems necessary or desirable in connection
with the administration of this Plan, and shall be the agent for the service of
process.

         3.3 Duties of the Administrative Committee.

                  (a) The Administrative Committee is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Administrative Committee and any such
appointee may employ advisors and other persons necessary or convenient to help
it carry out its duties, including its fiduciary duties. The Administrative
Committee shall have the right to remove any such appointee from his position.
Any person, group of persons or entity may serve in more than one fiduciary
capacity.

                  (b) The Administrative Committee shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the
Administrative Committee.

                  (c) The Administrative Committee shall take all steps
necessary to ensure that the Plan complies with the law at all times. These
steps shall include such items as the preparation and filing of all documents
and forms required by any governmental agency; maintaining adequate
Participants' records; recording and transmission of all notices required to be
given to Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Affiliated Employer;
securing of such fidelity bonds as may be required by law; and doing such other
acts necessary for the proper administration of the Plan. The Administrative
Committee shall keep a record of all of its proceedings and acts, and shall keep
all such books of account, records and other data as may be necessary for proper
administration of the Plan.

         3.4 Indemnification. The Company shall indemnify the Administrative
Committee against any and all claims, losses, damages, expenses and liability
arising from an action or failure to act, except when the same is finally
judicially determined to be due to gross negligence or willful misconduct. The
Company may purchase at its own expense sufficient liability insurance for the
Administrative Committee to cover any and all claims, losses, damages and
expenses arising from any action or failure to act in connection with the
execution of the duties as Administrative Committee. No member of the
Administrative Committee shall receive any compensation from the Plan for his
service as such.

                            ARTICLE IV - ELIGIBILITY

         4.1 Eligibility Requirements. All Employees who are determined to be
eligible to participate in the Plan in accordance with Section 4.2 whose
benefits under the Pension Plan are limited by the exclusion of Incentive Pay
from the definition of Earnings thereunder (or their spouses, as the case may
be) shall be eligible to receive benefits under the Plan provided such Employees
are (a) participating in the Plan at the time they terminate from an Affiliated
Employer and are retirement eligible or (b) die while in active service while
with an Affiliated Employer provided each such Employee's spouse is eligible to
receive a survivor benefit under Article VII of the Pension Plan at each
eligible Employee's death. Notwithstanding the foregoing sentence, any former
Employee who is rehired by an Affiliated Employer on or after January 1, 1997,
shall also be required to complete one (1) year of continuous paid service with
an Affiliated Employer before being eligible to participate in the Plan.

         4.2 Determination of Eligibility. The Administrative Committee shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Administrative Committee shall be authorized
to rescind the eligibility of any Participant if necessary to ensure that the
Plan is maintained primarily for the purpose of providing deferred compensation
to a select group of management or highly compensated employees under the
Employee Retirement Income Security Act of 1974, as amended.

                              ARTICLE V - BENEFITS

         5.1 SERP Benefit.

         (a) Subject to Article XV of the Pension Plan, a Participant shall be
entitled to a monthly SERP Benefit equal to:

                  (1)      1.70% (1.0% if subject to Article XV of the Pension
                           Plan) of the Participant's Average Monthly Earnings
                           multiplied by his years (and fraction of a year) of
                           Accredited Service to his Retirement Date, death or
                           other termination of service, including a Social
                           Security Offset, as adjusted, if necessary, under the
                           terms of the Pension Plan for commencement prior to
                           the Participant's Normal Retirement Date; less

                  (2)      such Participant's Retirement Income that is payable
                           under the Pension Plan; less

                  (3)      such Participant's Supplemental Pension Benefit.

         (b) For purposes of Section 5.1(a)(1), the Participant's Average
Monthly Earnings shall be calculated based on the Participant's Earnings that
are considered under the Pension Plan in calculating his Retirement Income, but
without regard to the limitation of Section 401(a)(17) of the Code, and
including the following additional amounts:

                  (1)      any portion of such Participant's base pay that he
                           may have elected to defer under The Southern Company
                           Deferred Compensation Plan, but excluding Incentive
                           Pay he deferred under such plan; and

                  (2)      any Incentive Pay which was earned as of the
                           applicable Plan Year in excess of 25% of the
                           Participant's corresponding base pay for the
                           applicable Plan Year determined under this Section
                           5.1(b).

In addition, to determine the Plan Years which produce the highest monthly
average to calculate Average Monthly Earnings under the Plan, a Participant's
Earnings should include those additional amounts provided for in Section 5.1(b).

         (c) For purposes of Section 5.1(a)(1), the Participant's years of
Accredited Service shall include any deemed Accredited Service provided under
the terms of any agreement concerning supplemental pension payments between the
Participant and an Affiliated Employer.

         (d) To the extent that a Participant's Retirement Income under the
Pension Plan is recalculated as a result of an amendment to the Pension Plan in
order to increase the amount of his Retirement Income, the Participant's SERP
Benefit shall also be recalculated in order to properly reflect such increase in
determining payments of the Participant's SERP Benefit made on or after the
effective date of such increase.

         5.2 Distribution of Benefits.

         (a) The SERP Benefit, as determined in accordance with Section 5.1,
shall be payable in monthly increments on the first day of the month
concurrently with the Participant's Retirement Income under the Pension Plan.
The form in which the SERP Benefit is paid will be the same as elected by the
Participant under the Pension Plan except that the amount of the monthly benefit
will be modified at the appropriate time based on the commencement of payments
as follows. Payments shall be adjusted to include three components:

                  (1)      The amount necessary to pay the tax due under the
                           Federal Insurance Contributions Act with respect to
                           the accrued SERP Benefit determined upon retirement
                           (or such other appropriate "resolution date" as
                           defined under Treasury Regulation Section
                           31.3121(v)-2) calculated in accordance with Section
                           5.1;

                  (2)      The amount estimated to pay the federal and state
                           income tax withholding liability due on the amount
                           paid under paragraph (1) above; and

                  (3)      An adjusted monthly benefit determined on an
                           actuarially equivalent basis in accordance with the
                           terms of the Pension Plan which takes into account
                           the amounts paid under paragraph (1) and (2) above
                           and taking into account the form of benefit elected
                           by the Participant under the Pension Plan.

Upon adjustment, the remaining monthly payments shall equal the amount described
in paragraph (3) above. The Beneficiary of a Participant's Pension Benefit shall
be the same as the Provisional Payee, if any, of the Participant's Retirement
Income under the Pension Plan.

         5.3 Allocation of SERP Benefit Liability. In the event that a
Participant eligible to receive a SERP Benefit has been employed at more than
one Affiliated Employer, the SERP Benefit liability shall be apportioned so that
each such Affiliated Employer is obligated in accordance with Section 5.4 to
cover the percentage of the total SERP Benefit as determined below. Each
Affiliated Employer's share of the SERP Benefit liability shall be calculated by
multiplying the SERP Benefit by a fraction where the numerator of such fraction
is the pay, as defined by the Administrative Committee, received by the
Participant at the respective Affiliated Employer multiplied by the Accredited
Service earned by the Participant at the respective Affiliated Employer and
where the denominator of such fraction is the sum of all numerators calculated
for each respective Affiliated Employer for which the Participant has been
employed. In the event that a Participant receives additional Accredited Service
in accordance with Section 5.1(c), for purposes of determining liability under
this Section 5.3, such Accredited Service shall be allocated to each Affiliated
Employer which has contracted with the Participant in accordance with such
contract and this allocation will be utilized to adjust the appropriate
components of the fraction in the preceding sentence in determining each
Affiliated Employer's share of the SERP Benefit liability.

         5.4 Funding of Benefits. Except as expressly limited under the terms of
the Trust, the Company shall not reserve or otherwise set aside funds for the
payment of its obligations under the Plan. In any event, such obligations shall
be paid or deemed to be paid solely from the general assets of the Company.
Participants shall only have the status of a general, unsecured creditor of the
Company. When a Participant becomes entitled to payment of a SERP Benefit, the
Company may, in its sole discretion, elect to purchase an annuity from a
reputable third party annuity provider to secure payment of all or any portion
of the Participant's SERP Benefit, pursuant to a uniform annuitization program
adopted by the Administrative Committee.

         5.5 Withholding. There shall be deducted from the payment of any SERP
Benefit due under the Plan the amount of any tax required by any governmental
authority to be withheld and paid over by the Company to such governmental
authority for the account of the Participant or Beneficiary entitled to such
payment.

         5.6 Recourse Against Deferred Compensation Trust. In the event a
Participant who is employed on or after January 1, 1999 with an "Employing
Company" (as defined in the Change in Control Benefit Plan Determination Policy)
disputes the calculation of his SERP Benefit, the Participant has recourse
against the Company, the Employing Company by which the Participant is employed,
if different, the Plan, and the Trust for payment of benefits to the extent the
Trust so provides.

         5.7 SEI Guarantee. Effective May 10, 2000, if Southern Energy
Resources, Inc. ("SERI") fails or refuses to make payments under the Plan,
Participants employed by SERI may have the right to obtain payment by Southern
Energy, Inc. ("SEI") pursuant to the terms of the "Guarantee Agreement
Concerning Southern Energy Resources, Inc. Compensation and Benefit
Arrangements" entered into by SERI and SEI. A Participant's right to payment is
not increased as a result of this SEI Guarantee. Participants have the same
right to payment from SEI as they have from SERI. Any demand to enforce this SEI
Guarantee should be made in writing and should reasonably and briefly specify
the manner and the amount SERI has failed to pay. Such writing given by personal
delivery or mail shall be effective upon actual receipt. Any writing given by
telegram or telecopier shall be effective upon actual receipt if received during
SEI's normal business hours, or at the beginning of the next business day after
receipt, if not received during SEI's normal business hours. All arrivals by
telegram or telecopier shall be confirmed promptly after transmission in writing
by certified mail or personal delivery.

         5.8 Change in Control. The provisions of the Change in Control Benefit
Plan Determination Policy are incorporated herein by reference to determine the
occurrence of a change in control or preliminary change in control of Southern
Company or an Employing Company, the benefits to be provided hereunder and the
funding of the Trust in the event of such a change in control. Any modifications
to the Change in Control Benefit Plan Determination Policy are likewise
incorporated herein.

                           ARTICLE VI - MISCELLANEOUS

         6.1 Assignment. Neither the Participant, his Beneficiary nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any SERP Benefit due hereunder, which
payment and the right thereto are expressly declared to be nonassignable and
nontransferable. Any attempt to assign or transfer the right to payment under
the Plan shall be null and void and of no effect.

         6.2 Amendment and Termination. Except for the provisions of Section 5.8
hereof, which may not be amended following a "Southern Change in Control" or
"Subsidiary Change in Control" (as defined in the Change in Control Benefit Plan
Determination Policy), the Plan may be amended or terminated at any time by the
Board of Directors, provided that no amendment or termination shall cause a
forfeiture or reduction in any benefits accrued as of the date of such amendment
or termination.

         6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between an Affiliated Employer
and a Participant, nor shall it limit the right of an Affiliated Employer to
suspend, terminate, alter or modify, whether or not for cause, the employment
relationship between the Affiliated Employer and a Participant.

         6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.

         IN WITNESS WHEREOF, the amended and restated Plan has been executed by
duly authorized officers of Southern Company Services, Inc. pursuant to
resolutions of the Board of Directors of Southern Company Services, Inc. this
_______ day of ____________________ , 2000.



                           SOUTHERN COMPANY SERVICES, INC.


                           By:__________________________________________________
                           By:______________________________


                           Its:_________________________________________________

Attest:



By:      ______________________________

Its:     ______________________________



<PAGE>


                                   APPENDIX A

                        THE SOUTHERN COMPANY SUPPLEMENTAL

                            EXECUTIVE RETIREMENT PLAN

                   AFFILIATED EMPLOYERS AS OF JANUARY 1, 2000

         Alabama Power Company
         Georgia Power Company
         Gulf Power Company
         Mississippi Power Company

         Savannah Electric and Power Company
         Southern Communications Services, Inc.
         Southern Company Energy Solutions, Inc.
         Southern Company Services, Inc.
         Southern Energy Resources, Inc.
         Southern Nuclear Operating Company, Inc.


<PAGE>


                                   APPENDIX B

                        THE SOUTHERN COMPANY SUPPLEMENTAL

                            EXECUTIVE RETIREMENT PLAN

                               INCENTIVE PAY PLANS

         Effective as of January 1, 1999, all awards under the following
incentive pay plans shall be counted for purposes of Section 2.10 of the Plan:

         The Southern Company Performance Pay Plan
         The Southern Company Productivity Improvement Plan
         The Southern Company Executive Productivity Improvement Plan

         Georgia Power Company Customer Choice Group Incentive Compensation Plan
         Georgia Power Company Customer Partnership Teams Incentive Plan Georgia
         Power Company Residential Customer Partnership Team Incentive Plan
         Merchandise Sales Business Unit Incentive Plan (APC/Gulf) Southern
         Company Energy Solutions Officer and Staff Incentive Compensation Plan
         Southern Company Energy Solutions PowerCall Security Incentive
         Compensation Plan

                  (Installation & Service Technicians)
         Southern Company National Accounts Incentive Compensation Plan
         Southern LINC Annual Incentive Plan
         Southern LINC Regional Sales Managers Incentive Plan
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>22
<FILENAME>x10a70.txt
<TEXT>

                             EIGHTH AMENDMENT TO THE
                                SOUTHERN COMPANY

                            PERFORMANCE SHARING PLAN

         WHEREAS, Southern Company Services, Inc. heretofore adopted The
Southern Company Performance Sharing Plan ("Plan"), effective as of January 1,
1997;

         WHEREAS, Southern Energy Resources, Inc. ("SERI"), an Employing Company
under the Plan, will become the employer of certain individuals currently
employed by Southern Company Energy Marketing, L.P. ("SCEM") following a
reorganization of SCEM;

         WHEREAS, the Southern Company ("Southern") anticipates that in 2001 it
will distribute pro rata to the Southern shareholders all of the stock of
Southern Energy, Inc. ("SEI") held by Southern pursuant to a tax-free spin-off
under Section 355 of the Internal Revenue Code;

         WHEREAS, in connection with such transaction, Southern and SEI have
entered into an Employee Matters Agreement ("Agreement") to allocate between
them assets, liabilities and responsibilities with respect to certain employee
compensation, benefit plans and programs, and certain employment matters;

         WHEREAS, the Performance Sharing Plan Committee ("Committee") desires
to amend the Plan to exclude the former employees of SCEM from participating in
the Plan by virtue of their employment with SERI;

         WHEREAS, the Committee desires to amend the Plan to address the
spin-off of SEI from Southern, including making such changes as are necessary
pursuant to the Agreement;

         WHEREAS, the Committee desires to amend the Plan to make certain other
technical changes and to reflect recent changes in the law; and

         WHEREAS, the Committee is authorized pursuant to Section 12.1 of the
Plan to amend the Plan at any time, provided that the amendment does not involve
a substantial increase in cost to any Employing Company or is necessary or
desirable to comply with the laws and regulations applicable to the Plan.

         NOW, THEREFORE, the Committee hereby amends the Plan as follows, to be
effective as of the dates indicated:

                                       1.

         Sections 2.13 and 2.14 of the Plan shall be eliminated in their
entirety, effective as of January 1, 2001. Each subsequent Section in Article II
shall remain as currently numbered until such time as the Plan is amended and
restated.

                                       2.

         Section 2.19 of the Plan shall be amended to read as follows, effective
as of December 22, 2000:

                  2.19 "Eligible Employee" shall mean an Employee who is
         employed by an Employing Company and who is classified by the Employing
         Company as a regular full-time, regular part-time or cooperative
         education employee who:

                  (a)      was actively employed on December 31, 1996 but who
                           will not attain his fortieth (40th) birthday on or
                           before January 1, 2002 or who was not a member of an
                           eligible class of employees under a pension plan of
                           an Employing Company on December 31, 1996 and has not
                           previously participated in any such pension plan;

                  (b)      was actively employed on December 31, 1996 and
                           properly elects to participate in this Plan pursuant
                           to the procedures established under the Plan for
                           making such election; or

                  (c)      was employed or reemployed on or after January 1,
                           1997 or who rescinded a waiver of participation in
                           The Southern Company Pension Plan pursuant to Section
                           2.7 thereof on or after January 1, 1997 that was in
                           effect on December 31, 1996.

                  "Eligible Employee" shall not include:

                  (t)      any individual, who would otherwise be eligible to
                           participate in the Plan by virtue of his employment
                           by SERI, but who (i) is an employee of SCEM on
                           December 22, 2000, (ii) was hired by SERI on or after
                           December 23, 2000, and who was a former employee of
                           SCEM, or (iii) was hired by SERI on or after December
                           23, 2000, who is employed in the Americas Group and
                           whose job function is indicated on Exhibit A attached
                           hereto;

                  (u)      an Employee who is described in Section 3.8 of the
                           Plan;

                  (v)      an Employee who has been previously employed by an
                           Employing Company, transferred to Southern Company
                           Energy Marketing, L.P., subsequently transfers back
                           to an Employing Company, and is not described in
                           paragraph (a) of Section 15.1 of The Southern Company
                           Pension Plan;

                  (w)      an Employee who is treated as such solely by reason
                           of the "leased employee" rules of Code Section 414(n)
                           such that, pursuant to an agreement between an
                           Employing Company and any other person, such
                           individual has performed services for the Employing
                           Company (or the Employing Company and related persons
                           as described in Code Section 414(n)(6)) on a
                           substantially full-time basis for a period of at
                           least one year and such services were performed under
                           the primary direction or control of the Employing
                           Company;

                  (x)      any Employee who is represented by a collective
                           bargaining agent unless the representatives of his
                           bargaining unit and the Employing Company mutually
                           agree to participation in the Plan subject to its
                           terms by members of his bargaining unit;

                  (y)      any individual or Employee who is classified by the
                           Employing Company as a temporary employee or as an
                           independent contractor, regardless of prior inclusion
                           under the Plan or whether such classification is
                           determined to be in error; or

                  (z)      any individual or Employee who has voluntarily waived
                           participation in the Plan for any reason, including
                           any individual or Employee who has waived benefits
                           upon employment by the Employing Company.

                                       3.

         Paragraph (t) of Section 2.19 of the Plan shall be amended to read as
follows, effective as of the Group Status Change Date as defined in the
Agreement:

         (t)      an individual who is employed by SERI;

                                       4.

         Two new definition Sections shall be added to the Plan to read as
follows, effective as of December 22, 2000:

                  2.54     "SCEM" shall mean Southern Company Energy Marketing,
                           L.P.

                  2.55     "SERI" shall mean Southern Energy Resources, Inc.





                                       5.

         A new definition Section shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  2.56 "SEI" shall mean Southern Energy, Inc., any subsidiary of
         Southern Energy, Inc., or any successor thereto.

                                       6.

         Section 5.1 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    5.1 Section 415 Limitations. Notwithstanding any provision
         of the Plan to the contrary, the total Annual Additions allocated to
         the Account (and the accounts under all defined contribution plans
         maintained by an Affiliated Employer) of any Participant for any
         Limitation Year in accordance with Code Section 415 and the regulations
         thereunder, which are incorporated herein by this reference, shall not
         exceed the lesser of the following amounts:

                           (a) twenty-five percent (25%) of the Participant's
                  compensation (as defined in Code Section 415(c)(3) and any
                  rulings and regulations thereunder) in the Limitation Year; or

                           (b) $30,000 (as adjusted pursuant to Code Section
                  415(d)(1)(C)).

                                       7.

         Section 5.3 of the Plan shall be amended to read as follows, effective
as of January 1, 2000:

                    5.3 Combination of Plans. If an Employee participates in
         more than one defined contribution plan maintained by an Affiliated
         Employer and his Annual Additions exceed the limitations of Section
         5.1, corrective adjustments shall be made first under The Southern
         Company Employee Savings Plan and then, to the extent necessary, under
         this Plan and then, to the extent necessary, under the Southern Company
         Employee Stock Ownership Plan.

                                       8.

         The phrase ", as provided in regulations prescribed by the Secretary of
the Treasury" shall be added to the end of the last sentence in the second
paragraph of Section 12.1 of the Plan, effective as of September 5, 2000.

                                       9.

         Section 13.5 of the Plan shall be deleted in its entirety, effective as
of January 1, 2000.

                                       10.

         A new Section 15.4 shall be added to the Plan to read as follows,
effective as of the Group Status Change Date as defined in the Agreement:

                  15.4 Transfer of Plan Assets. Notwithstanding any provision of
         the Plan to the contrary, upon the distribution by the Southern Company
         to its shareholders of the SEI Stock held by the Southern Company
         pursuant to a tax-free spin-off under Code Section 355 or such similar
         transaction, the Accounts of certain active Participants who shall be
         identified in accordance with the Employee Matters Agreement entered
         into between the Southern Company and SEI ("Agreement") shall be
         transferred to a retirement plan established by SEI which is intended
         to constitute a qualified retirement plan under Code Section 401(a).
         The Committee shall determine the time of such transfers and shall
         establish such rules and procedures as its deems necessary or
         appropriate to effect the transfers, except that all actions with
         respect to the transfers shall be taken in a manner consistent with the
         Agreement.

                                       11.

         Southern Energy Resources, Inc. shall be removed as an Employing
Company in Appendix A of the Plan, effective as of the Group Status Change Date
as defined in the Agreement.

                                       12.

         Except as amended herein by this Eighth Amendment, the Plan shall
remain in full force and effect as amended and restated by the Company prior to
the adoption of this Eighth Amendment.

         IN WITNESS WHEREOF, Southern Company Services, Inc., through the duly
authorized members of the Performance Sharing Plan Committee, has adopted this
Eighth Amendment to The Southern Company Performance Sharing Plan this ____ day
of ___________________, 2000.

                              PERFORMANCE SHARING PLAN COMMITTEE:


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>23
<FILENAME>x10a71.txt
<TEXT>



                              THE SOUTHERN COMPANY
                            SUPPLEMENTAL BENEFIT PLAN










                              Troutman Sanders LLP
                           600 Peachtree Street, N.E.
                        Suite 5200 Bank of America Plaza
                           Atlanta, Georgia 30308-2216
                                 (404) 885-3000

               Amended and Restated Effective as of July 10, 2000



<PAGE>




                              THE SOUTHERN COMPANY

                            SUPPLEMENTAL BENEFIT PLAN

                                                                        Page

ARTICLE I         PURPOSE AND ADOPTION OF PLAN............................1
         1.1      Adoption................................................1
         1.2      Purpose.................................................2


ARTICLE II        DEFINITIONS.............................................3
         2.1      Account.................................................3
         2.2      Administrative Committee................................3
         2.3      Beneficiary.............................................3
         2.4      Board of Directors......................................3
         2.5      Change in  Control  Benefit  Plan  Determination
                  Policy..................................................3
         2.6      Code....................................................3
         2.7      Common Stock............................................3
         2.8      Company.................................................3
         2.9      Deferred Compensation Plan..............................3
         2.10     Effective Date..........................................3
         2.11     Employee................................................3
         2.12     Employing Company.......................................4
         2.13     ESOP....................................................4
         2.14     Non-Pension Benefit.....................................4
         2.15     Participant.............................................4
         2.16     Pension Benefit.........................................4
         2.17     Pension Plan............................................4
         2.18     Performance Sharing Plan................................4
         2.19     Phantom Common Stock....................................4
         2.20     Plan....................................................4
         2.21     Plan Year...............................................4
         2.22     Purchase Price..........................................5
         2.23     Sales Price.............................................5
         2.24     Savings Plan............................................5
         2.25     Southern Board..........................................5
         2.26     Southern Company........................................5
         2.27     Trust...................................................5
         2.28     Valuation Date..........................................5




<PAGE>




ARTICLE III       ADMINISTRATION OF PLAN..................................6
         3.1      Administrator...........................................6
         3.2      Powers..................................................6
         3.3      Duties of the Administrative Committee..................7
         3.4      Indemnification.........................................8


ARTICLE IV        ELIGIBILITY.............................................9
         4.1      Eligibility Requirements................................9
         4.2      Determination of Eligibility............................9
         4.3      Eligibility  of Employees  of Savannah  Electric
                  and Power Company.......................................9


ARTICLE V         BENEFITS...............................................11
         5.1      Pension Benefit........................................11
         5.2      Non-Pension Benefit....................................11
         5.3      Distribution of Benefits...............................14
         5.4      Allocation of Pension Benefit Liability................17
         5.5      Funding of Benefits....................................17
         5.6      Withholding............................................18
         5.7      Recourse Against Deferred Compensation Trust...........18
         5.8      SEI Guarantee..........................................18
         5.9      Change in Control......................................19


ARTICLE VI        MISCELLANEOUS..........................................19
         6.1      Assignment.............................................19
         6.2      Amendment and Termination..............................19
         6.3      No Guarantee of Employment.............................20
         6.4      Construction...........................................20



<PAGE>





                              THE SOUTHERN COMPANY

                            SUPPLEMENTAL BENEFIT PLAN



                    ARTICLE I - PURPOSE AND ADOPTION OF PLAN

         1.1 Adoption: The Southern Company Supplemental Benefit Plan, effective
as of July 10, 2000 and hereinafter set forth (the "Plan"), is a modification
and continuation of the Supplemental Benefit Plan for Southern Company Services,
Inc. and Southern Electric International, Inc., which originally became
effective January 1, 1983, was amended and restated effective January 1, 1998,
and was subsequently amended by the First Amendment dated April 15, 1999.

                  Effective January 1, 1998, the following other plans were
merged into the Plan:

         o        Supplemental Benefit Plan for Alabama Power Company

         o        Supplemental Benefit Plan for Georgia Power Company

         o        Supplemental Benefit Plan for Gulf Power Company

         o        Supplemental Benefit Plan for Mississippi Power Company

         o        Supplemental Benefit Plan for Southern Company Services, Inc.
                  and Southern Electric International, Inc., as adopted by
                  Southern Communications Services, Inc.

         o        Supplemental Benefit Plan for Southern Company Services, Inc.
                  and Southern Electric International, Inc., as adopted by
                  Southern Development and Investment Group, Inc.

         o        Supplemental Benefit Plan for Southern Nuclear Operating
                  Company, Inc.

                  Employees participating in the merged plans and employed by an
Employing Company on January 1, 1998 became immediately covered under the Plan;
provided, however, that the terms of the prior plans govern an Employee's
circumstances with regard to actions taken or occurring before January 1, 1998.
The benefits of former Employees are payable in accordance with the provisions
of the prior plans.

         1.2 Purpose: The Plan is designed to provide certain retirement and
other deferred compensation benefits primarily for a select group of management
or highly compensated employees which are not otherwise payable or cannot
otherwise be provided by the Employing Companies (1) under The Southern Company
Pension Plan, The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan and The Southern Company Performance Sharing Plan,
as a result of the limitations set forth under Sections 401(a)(17), 401(k),
401(m), 402(g), or 415 of the Internal Revenue Code of 1986, as amended from
time to time; and (2) to compensate for lost benefits resulting from
participation in The Southern Company Deferred Compensation Plan, as amended
from time to time. The Plan shall be an unfunded deferred compensation
arrangement whose benefits shall be paid solely from the general assets of the
Employing Companies.


<PAGE>


                            ARTICLE II - DEFINITIONS



         2.1 "Account" shall mean the total amount credited to the account of a
Participant to reflect the interest of a Participant in the Plan resulting from
a Participant's Non-Pension Benefit calculated in accordance with Section 5.2.

         2.2 "Administrative Committee" shall mean the committee referred to in
Section 3.1 hereof.

         2.3 "Beneficiary" shall mean any person, estate, trust, or organization
entitled to receive any payment under the Plan upon the death of a Participant.

         2.4 "Board of Directors" shall mean the Board of Directors of the
Company.

         2.5 "Change in Control Benefit Plan Determination Policy" shall mean
the Change in Control Benefit Plan Determination Policy, as approved by the
Southern Board, as it may be amended from time to time in accordance with the
provisions therein.

         2.6 "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.

         2.7 "Common Stock" shall mean common stock of Southern Company.

         2.8 "Company" shall mean Southern Company Services, Inc.

         2.9 "Deferred Compensation Plan" shall mean The Southern Company
Deferred Compensation Plan, as amended from time to time.

         2.10 "Effective Date" of this amendment and restatement shall mean July
10, 2000.

         2.11 "Employee" shall mean any person who is currently employed by an
Employing Company.

         2.12 "Employing Company" shall mean the Company and any affiliate or
subsidiary of Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and any successor to them. The Employing
Companies are set forth in Appendix A to the Plan, as amended from time to time.

         2.13 "ESOP" shall mean The Southern Company Employee Stock Ownership
Plan, as amended from time to time.

         2.14 "Non-Pension Benefit" shall mean the benefit described in Section
5.2.

         2.15 "Participant" shall mean an Employee or former Employee of an
Employing Company who is eligible and participates in the Plan pursuant to
Sections 4.1 and 4.2.

         2.16 "Pension Benefit" shall mean the benefit described in Section 5.1.

         2.17 "Pension Plan" shall mean The Southern Company Pension Plan, as
amended from time to time.

         2.18 "Performance Sharing Plan" shall mean The Southern Company
Performance Sharing Plan, as amended from time to time.

         2.19 "Phantom Common Stock" shall mean the Common Stock in which a
Participant is deemed to invest his Non-Pension Benefit as if such Common Stock
had been purchased upon contribution to the Savings Plan, the ESOP and/or the
Performance Sharing Plan, as the case may be.

         2.20 "Plan" shall mean The Southern Company Supplemental Benefit Plan,
as amended from time to time.

         2.21 "Plan Year" shall mean the calendar year.

         2.22 "Purchase Price" shall mean for purposes of deemed purchases of
Phantom Common Stock the following: (a) with respect to the Savings Plan and the
Performance Sharing Plan, the weighted average purchase price of a share of the
Common Stock under the Savings Plan as of the applicable Valuation Date; (b)
with respect to any investment of dividends attributable to Phantom Common
Stock, the dividend reinvestment price of a share of the Common Stock under the
Savings Plan as of the applicable Valuation Date; and (c) with respect to the
ESOP, the price at which a share of Common Stock is purchased with regard to a
contribution made for each applicable Plan Year.

         2.23 "Sales Price" shall mean the weighted average sales price of a
share of Common Stock under the Savings Plan as of each applicable Valuation
Date.

         2.24 "Savings Plan" shall mean The Southern Company Employee Savings
Plan, as amended from time to time.

         2.25 "Southern Board" shall mean the board of directors of Southern
Company.

         2.26 "Southern Company" shall mean Southern Company, its successors and
assigns.

         2.27 "Trust" shall mean the Southern Company Deferred Compensation
Trust.

         2.28 "Valuation Date" shall mean each business day of the New York
Stock Exchange. Where the context requires, the definitions of all terms set
forth in the Pension Plan, the ESOP, the Performance Sharing Plan, the Savings
Plan and the Deferred Compensation Plan shall apply with equal force and effect
for purposes of interpretation and administration of the Plan, unless said terms
are otherwise specifically defined in the Plan. The masculine pronoun shall be
construed to include the feminine pronoun and the singular shall include the
plural, where the context so requires.


<PAGE>


                      ARTICLE III - ADMINISTRATION OF PLAN



         3.1 Administrator. The general administration of the Plan shall be
placed in the Administrative Committee. The Administrative Committee shall
consist of the Vice President, Human Resources of The Southern Company, the
Director, System Compensation and Benefits of The Southern Company and the
Comptroller of The Southern Company or any other position or positions that
succeed to the duties of the foregoing positions. Any member may resign or may
be removed by the Board of Directors and new members may be appointed by the
Board of Directors at such time or times as the Board of Directors in its
discretion shall determine. The Administrative Committee shall be chaired by the
Vice President, Human Resources of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Administrative Committee)
to keep its records or to assist it in the discharge of its duties. A majority
of the members of the Administrative Committee shall constitute a quorum for the
transaction of business at any meeting. Any determination or action of the
Administrative Committee may be made or taken by a majority of the members
present at any meeting thereof, or without a meeting by resolution or written
memorandum concurred in by a majority of the members.

         3.2 Powers. The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan more particularly set forth herein. It shall have the
discretion to interpret the Plan and shall determine all questions arising in
the administration, interpretation and application of the Plan. Any such
determination by it shall be conclusive and binding on all persons. It may adopt
such regulations as it deems desirable for the conduct of its affairs. It may
appoint such accountants, counsel, actuaries, specialists and other persons as
it deems necessary or desirable in connection with the administration of this
Plan, and shall be the agent for the service of process.

         3.3 Duties of the Administrative Committee.

                  (a) The Administrative Committee is responsible for the daily
administration of the Plan. It may appoint other persons or entities to perform
any of its fiduciary functions. The Administrative Committee and any such
appointee may employ advisors and other persons necessary or convenient to help
it carry out its duties, including its fiduciary duties. The Administrative
Committee shall have the right to remove any such appointee from his position.
Any person, group of persons or entity may serve in more than one fiduciary
capacity.

                  (b) The Administrative Committee shall maintain accurate and
detailed records and accounts of Participants and of their rights under the Plan
and of all receipts, disbursements, transfers and other transactions concerning
the Plan. Such accounts, books and records relating thereto shall be open at all
reasonable times to inspection and audit by persons designated by the
Administrative Committee.

                  (c) The Administrative Committee shall take all steps
necessary to ensure that the Plan complies with the law at all times. These
steps shall include such items as the preparation and filing of all documents
and forms required by any governmental agency; maintaining of adequate
Participants' records; recording and transmission of all notices required to be
given to Participants and their Beneficiaries; the receipt and dissemination, if
required, of all reports and information received from an Employing Company;
securing of such fidelity bonds as may be required by law; and doing such other
acts necessary for the proper administration of the Plan. The Administrative
Committee shall keep a record of all of its proceedings and acts, and shall keep
all such books of account, records and other data as may be necessary for proper
administration of the Plan.

         3.4 Indemnification. The Employing Companies shall indemnify the
Administrative Committee against any and all claims, losses, damages, expenses
and liability arising from an action or failure to act, except when the same is
finally judicially determined to be due to gross negligence or willful
misconduct. The Employing Companies may purchase at their own expense sufficient
liability insurance for the Administrative Committee to cover any and all
claims, losses, damages and expenses arising from any action or failure to act
in connection with the execution of the duties as Administrative Committee. No
member of the Administrative Committee who is also an Employee of the Employing
Companies shall receive any compensation from the Plan for his services in
administering the Plan.


<PAGE>


                            ARTICLE IV - ELIGIBILITY



         4.1 Eligibility Requirements. Subject to Section 4.3, all Employees who
are determined eligible to participate in accordance with Section 4.2: (a) whose
benefits under the Pension Plan are limited by the limitations set forth in
Sections 401(a)(17) or 415 of the Code, (b) for whom contributions by their
Employing Company to the Savings Plan are limited by the limitations set forth
in Sections 401(a)(17), 401(k), 401(m), 402(g) or 415 of the Code, (c) for whom
contributions by their Employing Company to the ESOP are limited by the
limitations set forth in Sections 401(a)(17) or 415 of the Code, (d) for whom
contributions by their Employing Company to the Performance Sharing Plan are
limited by the limitations set forth in Sections 401(a)(17) or 415 of the Code,
or (e) who make deferrals under the Deferred Compensation Plan, shall be
eligible to receive benefits under the Plan.

         4.2 Determination of Eligibility. The Administrative Committee shall
determine which Employees are eligible to participate. Upon becoming a
Participant, an Employee shall be deemed to have assented to the Plan and to any
amendments hereafter adopted. The Administrative Committee shall be authorized
to rescind the eligibility of any Participant if necessary to ensure that the
Plan is maintained primarily for the purpose of providing deferred compensation
to a select group of management or highly compensated employees under the
Employee Retirement Income Security Act of 1974, as amended.

         4.3 Eligibility of Employees of Savannah Electric and Power Company.

                  (a) Employees of Savannah Electric and Power Company meeting
the requirements of Sections 4.1 and 4.2 on or after January 1, 1997 shall be
eligible to participate in the Plan provided that such employees are not
participating in the Supplemental Executive Retirement Plan of Savannah Electric
and Power Company. Such Employees' benefits shall include any accruals for the
Plan Year ending December 31, 1997 as determined in accordance with Sections 5.1
and 5.2.

                  (b) Notwithstanding paragraph (a) above, Employees of Savannah
Electric and Power Company who have participated in The Southern Company
Deferred Compensation Plan on and after January 1, 1996, shall be eligible to
participate in the Plan but only to the extent that the Plan compensates
employees for lost benefits resulting from participation in The Southern Company
Deferred Compensation Plan. Such Employees' benefits shall include any accruals
permitted under the preceding sentence for Plan Years ending December 31, 1996
and December 31, 1997 determined in accordance with Sections 5.1 and 5.2.


<PAGE>


                              ARTICLE V - BENEFITS



         5.1 Pension Benefit.

                  (a) Each Participant shall be entitled to a Pension Benefit
equal to that portion of his Retirement Income under the Pension Plan which is
not payable under the Pension Plan as a result of the limitations imposed by
Sections 401(a)(17) or 415(b) of the Code.

                  (b) For purposes of this Section 5.1, the Pension Benefit of a
Participant shall be calculated based on the Participant's Earnings that are
considered under the Pension Plan in calculating his Retirement Income, without
regard to the limitation of Section 401(a)(17) of the Code, including any
portion of his compensation he may have elected to defer under the Deferred
Compensation Plan, but excluding incentive pay he deferred under such Deferred
Compensation Plan.

                  (c) To the extent that a Participant's Retirement Income under
the Pension Plan is recalculated as a result of an amendment to the Pension Plan
in order to increase the amount of his Retirement Income, the Participant's
Pension Benefit shall also be recalculated in order to properly reflect such
increase in determining payments of the Participant's Pension Benefit made on or
after the effective date of such increase.

         5.2 Non-Pension Benefit.

                  (a) A Participant shall be entitled to a Non-Pension Benefit
which is determined under this Section 5.2. An Account shall be established for
the Participant as of his initial Plan Year of participation in the Plan. Each
Plan Year, such Account shall be credited with an amount equal to the amount
that his Employing Company is prohibited from contributing (1) to the Savings
Plan on behalf of the Participant as a result of the limitations imposed by
Sections 401(a)(17), 401(k), 401(m), 402(g), or 415(c) of the Code, (2) to the
ESOP on behalf of the Participant as a result of the limitations imposed by
Sections 401(a)(17) or 415(c) of the Code and (3) to the Performance Sharing
Plan (including for the 1997 Plan Year) on behalf of the Participant as a result
of the limitations imposed by Sections 401(a)(17) or 415(c) of the Code.

                  (b) For purposes of this Section 5.2, the Non-Pension Benefit
of a Participant shall be calculated based on the Participant's compensation
that would have been considered in calculating allocations to his accounts under
the Savings Plan, ESOP and Performance Sharing Plan, without regard to the
limitations of Section 401(a)(17) or Section 402(g) of the Code, including any
portion of his compensation he may have elected to defer under the Deferred
Compensation Plan, but with respect to the Savings Plan only excluding incentive
pay he deferred under the Deferred Compensation Plan.

                  (c) The Non-Pension Benefit of the Participant shall be deemed
to be invested in Phantom Common Stock. On each such date of investment, a
Participant's Account shall be credited with the number of shares (including
fractional shares) of Phantom Common Stock which could have been purchased on
such date, based upon the Common Stock's Purchase Price. As of the date upon
which occurs the payment of dividends on the Common Stock, there shall be
credited with respect to shares of Phantom Common Stock in the Participant's
Account on such date, such additional shares (including fractional shares) of
Phantom Common Stock as follows:

                           (1) In the case of cash dividends, such additional
         shares as could be purchased at the Purchase Price with the dividends
         which would have been payable if the credited shares had been
         outstanding;

                           (2) In the case of dividends payable in property
         other than cash or Common Stock, such additional shares as could be
         purchased at the Purchase Price with the fair market value of the
         property which would have been payable if the credited shares had been
         outstanding; or

                           (3) In the case of dividends payable in Common Stock,
         such additional shares as would have been payable on the credited
         shares if they had been outstanding.

                  (d) As soon as practicable following the first day of his
eligibility to have benefits credited to his Account, a Participant shall
designate in writing on a form to be prescribed by the Administrative Committee
the method of payment of his Account, which shall be the payment of a single
lump sum or a series of annual installments not to exceed twenty (20). The
method of distribution initially designated by a Participant shall not be
revoked and shall govern the distribution of a Participant's Account.
Notwithstanding the foregoing, in the sole discretion of the Administrative
Committee, upon application by the Participant, the method of distribution
designated by such Participant may be modified not prior to 395 days nor later
than 365 days prior to a Participant's date of separation from service in order
to change the form of distribution of his Account in accordance with the terms
of the Plan; provided, however, that any Participant who is required to file
reports pursuant to Section 16(a) of the Securities and Exchange Act of 1934, as
amended, with respect to equity securities of The Southern Company shall not be
permitted to amend his distribution election during any time period for which
such Participant is required to file any such reports with respect to his
Non-Pension Benefit unless such amendment is specifically approved by the
Administrative Committee in its sole discretion. Each Participant, his
Beneficiary, and legal representative shall be bound as to any action taken
pursuant to the method of distribution elected by a Participant and the terms of
the Plan.

         5.3 Distribution of Benefits.

                  (a) The Pension Benefit, as determined in accordance with
Section 5.1, shall be payable in monthly increments on the first day of the
month concurrently with the Participant's Retirement Income under the Pension
Plan. The form in which the Pension Benefit is paid will be the same as elected
by the Participant under the Pension Plan except that the amount of the monthly
benefit will be modified at the appropriate time based on the commencement of
payments as follows. Payments shall be adjusted to include three components:

                           (1)      The amount necessary to pay the tax due
                                    under the Federal Insurance Contributions
                                    Act with respect to the accrued Pension
                                    Benefit determined upon retirement (or such
                                    other appropriate "resolution date" as
                                    defined under Treasury Regulation Section
                                    31.3121(v)-2) calculated in accordance with
                                    Section 5.1;

                           (2)      The amount estimated to pay the federal and
                                    state income tax withholding liability due
                                    on the amount paid under paragraph (1)
                                    above; and

                           (3)      An adjusted monthly benefit determined on an
                                    actuarially equivalent basis in accordance
                                    with the terms of the Pension Plan which
                                    takes into account the amounts paid under
                                    paragraph (1) and (2) above and taking into
                                    account the form of benefit elected by the
                                    Participant under the Pension Plan.

Upon adjustment, the remaining monthly payments shall equal the amount described
in paragraph (3) above. The Beneficiary of a Participant's Pension Benefit shall
be the same as the Provisional Payee, if any, of the Participant's Retirement
Income under the Pension Plan.

                  (b) When a Participant terminates his employment with an
Employing Company, said Participant shall be entitled to receive the market
value of any shares of Phantom Common Stock (and fractions thereof) reflected in
his Account in a single lump sum distribution or annual installments not to
exceed twenty (20). Such distribution shall be made not later than sixty (60)
days following the date on which his termination of employment occurs, or as
soon as reasonably practicable thereafter. The transfer by a Participant between
companies within The Southern Company shall not be deemed to be a termination of
employment with an Employing Company. With regard to any distribution made under
this Article, the market value of any shares of Phantom Common Stock credited to
a Participant's Account shall be based on the Sales Price. No portion of a
Participant's Account shall be distributed in Common Stock.

                  (c) In the event a Participant elects to receive the
distribution of his Account in annual installments, the first payment shall be
made not later than sixty (60) days following the date on which his termination
of employment occurs, or as soon as reasonably practicable thereafter.
Installments shall equal the balance in the Participant's Account taking into
account the tax due under the Federal Insurance Contributions Act divided by the
number of annual installment payments. Each subsequent annual payment shall be
an amount equal to the balance in the Participant's Account as of the Valuation
Date, divided by the number of the remaining annual payments and shall be due on
the anniversary of the preceding payment date.

                  (d) Upon the death of a Participant, or a former Participant
prior to the payment of the market value of any shares of Phantom Common Stock
(and fractions thereof) credited to said Participant's Account based on the
Sales Price, the unpaid balance shall be paid in the sole discretion of the
Administrative Committee (1) in a lump sum to the designated Beneficiary of a
Participant or former Participant within sixty (60) days following the date on
which the Administrative Committee is provided evidence of the Participant's
death (or as soon as reasonably practicable thereafter) or (2) in accordance
with the distribution method chosen by such Participant or former Participant.
The Beneficiary designation may be changed by the Participant or former
Participant at any time without the consent of the prior Beneficiary. In the
event a Beneficiary designation is not on file or the designated Beneficiary is
deceased or cannot be located, payment will be made to the person or persons in
the first of the following classes of successive preference, if then living:

                           (1)......the Participant's spouse on the date of his
                                    death;

                           (2)......the Participant's children, equally;

                           (3)......the Participant's parents, equally;

                           (4)......the Participant's brothers and sisters,
                                    equally; or

                           (5)......the Participant's executors or
                                    administrators.

                  Payment to such one or more persons shall completely discharge
the Plan with respect to the amount so paid.

                  (e) Upon the total disability of a Participant or former
Participant, as determined by the Social Security Administration, prior to the
payment of the market value of any shares of Phantom Common Stock (and fractions
thereof) credited to such Participant's Account based on the Sales Price, the
unpaid balance of his Account shall be paid in the sole discretion of the
Administrative Committee (1) in a lump sum to the Participant or former
Participant, or his legal representative within sixty (60) days following the
date on which the Administrative Committee receives notification of the
determination of a disability by the Social Security Administration (or as soon
as reasonably practicable thereafter) or (2) in accordance with the distribution
method elected by such Participant or former Participant.

                  (f) The Administrative Committee, in its sole discretion upon
application made by the Participant, a designated Beneficiary, or their legal
representative, may determine to accelerate payments or, in the event of death
or total disability (as determined by Social Security Administration), to extend
or otherwise make payments in a manner different from the manner in which such
payment would be made under the method of distribution elected by the
Participant in the absence of such determination.

         5.4 Allocation of Pension Benefit Liability. In the event that a
Participant eligible to receive a Pension Benefit has been employed at more than
one Employing Company, the Pension Benefit liability shall be apportioned so
that each such Employing Company is obligated in accordance with Section 5.5 to
cover the percentage of the total Pension Benefit as determined below. Each
Employing Company's share of the Pension Benefit liability shall be calculated
by multiplying the Pension Benefit by a fraction where the numerator of such
fraction is the pay, as defined by the Administrative Committee, received by the
Participant at the respective Employing Company multiplied by the Accredited
Service earned by the Participant at the respective Employing Company and where
the denominator of such fraction is the sum of all numerators calculated for
each respective Employing Company for which the Participant has been employed.

         5.5 Funding of Benefits. Except as expressly limited under the terms of
the Trust, neither the Company nor any Employing Company hereunder shall reserve
or otherwise set aside funds for the payment of its obligations under the Plan.
In any event, such obligations shall be paid or deemed to be paid solely from
the general assets of the Employing Companies. Participants shall only have the
status of general, unsecured creditors of the Company and their respective
Employing Companies. Notwithstanding that a Participant shall be entitled to
receive the balance of his Account under the Plan, the assets from which such
amount shall be paid shall at all times remain subject to the claims of the
creditors of the Participant's Employing Company. When a Participant becomes
entitled to payment of a Pension Benefit, the Company may, in its sole
discretion, elect to purchase an annuity from a reputable third party annuity
provider to secure payment of all or any portion of the Participant's Pension
Benefit, pursuant to a uniform annuitization program adopted by the
Administrative Committee.

         5.6 Withholding. There shall be deducted from payments and, if
necessary, from the Non-Pension Account under the Plan the amount of any tax
required by any governmental authority to be withheld and paid over by an
Employing Company to such governmental authority for the account of the
Participant or Beneficiary.

         5.7 Recourse Against Deferred Compensation Trust. In the event a
Participant who is employed on or after January 1, 1999 with an "Employing
Company" (as such term is defined in the Change in Control Benefit Plan
Determination Policy) disputes the calculation of his Pension Benefit or
Non-Pension Benefit, or payment of amounts due under the terms of the Plan, the
Participant has recourse against the Company, the Employing Company by which the
Participant is employed, if different, the Plan, and the Trust for payment of
benefits to the extent the Trust so provides.

         5.8 SEI Guarantee. Effective May 10, 2000, if Southern Energy
Resources, Inc. ("SERI") fails or refuses to make payments under the Plan,
Participants employed by SERI may have the right to obtain payment by Southern
Energy, Inc. ("SEI") pursuant to the terms of the "Guarantee Agreement
Concerning Southern Energy Resources, Inc. Compensation and Benefit
Arrangements" entered into by SERI and SEI. A Participant's right to payment is
not increased as a result of this SEI Guarantee. Participants have the same
right to payment from SEI as they have from SERI. Any demand to enforce this SEI
Guarantee should be made in writing and should reasonably and briefly specify
the manner and the amount SERI has failed to pay. Such writing given by personal
delivery or mail shall be effective upon actual receipt. Any writing given by
telegram or telecopier shall be effective upon actual receipt if received during
SEI's normal business hours, or at the beginning of the next business day after
receipt, if not received during SEI's normal business hours. All arrivals by
telegram or telecopier shall be confirmed promptly after transmission in writing
by certified mail or personal delivery.

         5.9 Change in Control. The provisions of the Change in Control Benefit
Plan Determination Policy are incorporated herein by reference to determine the
occurrence of a change in control or preliminary change in control of Southern
Company or an Employing Company, the benefits to be provided hereunder and the
funding of the Trust in the event of such a change in control. Any modifications
to the Change in Control Benefit Plan Determination Policy are likewise
incorporated herein.

                           ARTICLE VI - MISCELLANEOUS



         6.1 Assignment. Neither the Participant, his Beneficiary, nor his legal
representative shall have any rights to sell, assign, transfer or otherwise
convey the right to receive the payment of any Pension Benefit or Non-Pension
Benefit due hereunder, which payment and the right thereto are expressly
declared to be nonassignable and nontransferable. Any attempt to assign or
transfer the right to payment under the Plan shall be null and void and of no
effect.

         6.2 Amendment and Termination. Except for the provisions of Section 5.9
hereof, which may not be amended following a "Southern Change in Control" or
"Subsidiary Change in Control", as defined in the Change in Control Benefit Plan
Determination Policy, the Plan may be amended or terminated at any time by the
Board of Directors, provided that no amendment or termination shall cause a
forfeiture or reduction in any benefits accrued as of the date of such amendment
or termination. The Plan may also be amended by the Administrative Committee (a)
if such amendment does not involve a substantial increase in cost to any
Employing Company, or (b) as may be necessary, proper, or desirable in order to
comply with laws or regulations enacted or promulgated by any federal or state
governmental authority.

         6.3 No Guarantee of Employment. Participation hereunder shall not be
construed as creating any contract of employment between any Employing Company
and a Participant, nor shall it limit the right of an Employing Company to
suspend, terminate, alter, or modify, whether or not for cause, the employment
relationship between such Employing Company and a Participant.

         6.4 Construction. This Plan shall be construed in accordance with and
governed by the laws of the State of Georgia, to the extent such laws are not
otherwise superseded by the laws of the United States.

         IN WITNESS WHEREOF, the amended and restated Plan has been executed by
a duly authorize officer of Southern Company Services, Inc., pursuant to
resolutions of the Board of Directors of the Company, this day of , 2000.

                          SOUTHERN COMPANY SERVICES, INC.


                          By:__________________________________________________

                          Its:_________________________________________________

Attest:

By:      ______________________________

Its:     ______________________________


<PAGE>


                                   APPENDIX A

                 THE SOUTHERN COMPANY SUPPLEMENTAL BENEFIT PLAN

                    EMPLOYING COMPANIES AS OF JANUARY 1, 2000

                              Alabama Power Company

                              Georgia Power Company

                               Gulf Power Company

                            Mississippi Power Company

                       Savannah Electric and Power Company

                     Southern Communications Services, Inc.

                     Southern Company Energy Solutions, Inc.

                         Southern Company Services, Inc.

                         Southern Energy Resources, Inc.

                    Southern Nuclear Operating Company, Inc.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>24
<FILENAME>x10a72.txt
<TEXT>




                                SOUTHERN COMPANY
                                CHANGE IN CONTROL
                                 SEVERANCE PLAN

                              Troutman Sanders LLP
                        Bank of America Plaza, Suite 5200
                           600 Peachtree Street, N.E.
                             Atlanta, Georgia 30308

                             Effective July 10, 2000




<PAGE>


                                SOUTHERN COMPANY
                                CHANGE IN CONTROL
                                 SEVERANCE PLAN

                    ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN

         1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts
this Southern Company Change in Control Severance Plan, effective as of the date
of execution hereof. This Plan was originally effective December 7, 1998; it was
amended by a First Amendment also effective December 7, 1998. This amended and
restated Plan is effective July 10, 2000. The Plan shall be an unfunded
severance pay plan that is a welfare plan as such term is defined by the
Employee Retirement Income Security Act of 1974, the benefits of which shall be
paid solely from the general assets of the respective Employing Companies.

         1.2 Purpose. The Plan is primarily designed to provide benefits to
certain employees of the Employing Companies, whose employment is terminated
subsequent to a change in control of Southern or their respective Employing
Company.

                             ARTICLE 2 - DEFINITIONS

         2.1 "Administrative Committee" shall mean the Board of Directors, plus,
in the event of any act necessary to be taken in connection with the Plan
relative to a particular Participant, the Chief Executive Officer of the
Participant's Employing Company, if such Chief Executive Officer is not already
a member of the Board of Directors.

         2.2 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.

         2.3 "Board of Directors" shall mean the board of directors of the
Company.

         2.4 "Business Combination" shall mean a reorganization, merger or
consolidation of Southern or sale or other disposition of all or substantially
all of the assets of Southern.

         2.5 "Change in Control" shall mean,

                  (a) with respect to Southern, the occurrence of any of the
         following:

                  (i) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 20% or more of Southern's Voting Securities;
         provided, however, that for purposes of this Section 2.5(a)(i), the
         following acquisitions of Southern's Voting Securities shall not
         constitute a Change in Control:

                           (A) any acquisition directly from Southern;

                           (B) any acquisition by Southern;

                           (C) any acquisition by any employee benefit plan (or
                  related trust) sponsored or maintained by Southern or any
                  Southern Subsidiary;

                           (D) any acquisition by a qualified pension plan or
                  publicly held mutual fund;

                           (E) any acquisition by an employee of Southern or its
                  subsidiary or affiliate or Group composed exclusively of such
                  employees; or

                           (F) any Business Combination which would not
                  otherwise constitute a Change in Control because of the
                  application of clauses (A), (B) and (C) of Section
                  2.5(a)(iii);

                  (ii) A change in the composition of the Southern Board whereby
         individuals who constitute the Incumbent Board cease for any reason to
         constitute at least a majority of the Southern Board; or

                  (iii) Consummation of a Business Combination, unless,
         following such Business Combination, all of the following three
         conditions are met:

                           (A) all or substantially all of the individuals and
                  entities who held Beneficial Ownership, respectively, of
                  Southern's Voting Securities immediately prior to such
                  Business Combination beneficially own, directly or indirectly,
                  65% or more of the combined voting power of the Voting
                  Securities of the corporation surviving or resulting from such
                  Business Combination, (including, without limitation, a
                  corporation which as a result of such transaction holds
                  Beneficial Ownership of all or substantially all of Southern's
                  Voting Securities or all or substantially all of Southern's
                  assets) (such surviving or resulting corporation to be
                  referred to as "Surviving Company"), in substantially the same
                  proportions as their ownership, immediately prior to such
                  Business Combination, of Southern's Voting Securities;

                           (B) no Person (excluding any corporation resulting
                  from such Business Combination, any qualified pension plan,
                  publicly held mutual fund, Group composed exclusively of
                  Employees or employee benefit plan (or related trust) of
                  Southern, any Southern Subsidiary or Surviving Company) holds
                  Beneficial Ownership, directly or indirectly, of 20% or more
                  of the combined voting power of the then outstanding Voting
                  Securities of Surviving Company except to the extent that such
                  ownership existed prior to the Business Combination; and

                           (C) at least a majority of the members of the board
                  of directors of Surviving Company were members of the
                  Incumbent Board at the earlier of the date of execution of the
                  initial agreement, or of the action of the Southern Board,
                  providing for such Business Combination.

                  (b) with respect to an Employing Company, the occurrence of
         any of the following:

                  (i) Consummation of an acquisition by any Person of Beneficial
         Ownership of 50% or more of the combined voting power of the then
         outstanding Voting Securities of an Employing Company; provided,
         however, that for purposes of this Section 2.5(b)(i), any acquisition
         by an employee of Southern or its subsidiary or affiliate, or Group
         composed entirely of such employees, any qualified pension plan, any
         publicly held mutual fund or any employee benefit plan (or related
         trust) sponsored or maintained by Southern or any Southern Subsidiary
         shall not constitute a Change in Control;

                  (ii) Consummation of a reorganization, merger or consolidation
         of an Employing Company (an "Employing Company Business Combination"),
         in each case, unless, following such Employing Company Business
         Combination, Southern Controls the corporation surviving or resulting
         from such Employing Company Business Combination; or

                  (iii) Consummation of the sale or other disposition of all or
         substantially all of the assets of an Employing Company to an entity
         which Southern does not Control.

                  Notwithstanding the foregoing, in no event shall "Change in
         Control" mean an initial public offering or a spin-off of an Employing
         Company,

                  For purposes of this Section 2.5 only, SERI shall not be
         considered an Employing Company. 2.6 "COBRA Coverage" shall mean any
         continuation coverage to which a Participant or his dependents may be
         entitled pursuant to Code Section 4980B.

         2.7 "Code" shall mean the Internal Revenue Code of 1986, as amended.

         2.8 "Company" shall mean Southern Company Services, Inc., its
successors and assigns.

         2.9 "Consummation" shall mean the completion of the final act necessary
to complete a transaction as a matter of law, including, but not limited to, any
required approvals by the corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets and the final
approval of the transaction by any applicable domestic or foreign governments or
governmental agencies.

         2.10 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.

         2.11 "DIC Plan" shall mean the Southern Energy Resources, Inc. Deferred
Incentive Compensation Plan or any successor thereto which is considered an
"equitable arrangement" thereof, as such plans may be amended from time to time.

         2.12 "Effective Date" shall mean the date of execution hereof.

         2.13 "Employee" shall mean each regular full-time or regular part-time
employee of an Employing Company of Grade 9 or below (or, if the Grade system is
not used, below $130,000 of annual base salary rate for the twelve month period
immediately preceding the Change in Control) not covered by a collective
bargaining agreement between the Employing Company and a union or other employee
representative. With respect to a Change in Control of SEI, SERI Participants
shall be deemed to be employed by SEI for purposes of being covered under this
Plan.

         2.14 "Employee Outplacement Program" shall mean the program established
by the Employing Company from time to time for the purpose of assisting
Participants covered by the Plan in finding employment outside of the Employing
Company which provides for the following services:

                  (a)      self assessment, career decision and goal setting;

                  (b)      job market research and job sources;

                  (c)      networking and interviewing skills;

                  (d)      planning and implementation strategy;

                  (e)      resume writing, job hunting methods and salary
                           negotiation; and

                  (f)      office support and job search resources.

         2.15 "Employing Company" shall mean the Company, or any other Southern
Subsidiary, which the Board of Directors may from time to time determine to
bring under the Plan and which shall adopt the Plan, and any successor of any of
them.

         2.16 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         2.17 "Good Reason" shall mean, without an Employee's express written
consent, after written notice to his Employing Company, and after a thirty (30)
day opportunity for the Employee's Employing Company to cure, the continuing
occurrence of any of the following events:

                  (a) Reduced Salary. A reduction of five percent (5%) or more
         by the Employing Company in either of the following: (i) the Employee's
         annual base salary rate for the twelve month period immediately
         preceding the Change in Control ("Base Salary") (except for a less than
         ten percent (10%), across-the-board Base Salary reduction similarly
         affecting at least ninety-five percent (95%) of all Employees of the
         Employing Company) or (ii) the sum of the Employee's Base Salary plus
         target bonus under his Employing Company's short term bonus plan (e.g.,
         either the PPP Plan or the Southern Energy, Inc. Short Term Plan, as
         the case may be), as in effect immediately prior to the Change in
         Control (except for a less than ten percent (10%), across-the-board
         reduction of Base Salary plus target bonus under such short term plans
         similarly affecting at least ninety-five (95%) of all Employees of the
         Employing Company);

                  (b) Relocation. A change in an Employee's work location to a
         location more than fifty (50) miles from the facility where the
         Employee was located at the time of the Change in Control, unless such
         new work location is within fifty (50) miles from the Employee's
         principal place of residence at the time of the Change in Control. The
         acceptance, if any, by an Employee of employment by an Employing
         Company at a work location which is outside the fifty mile radius set
         forth in this Section 2.17(b) shall not be a waiver of the Employee's
         right to refuse subsequent transfer by an Employing Company to a
         location which is more than fifty (50) miles from the Employee's
         principal place of residence at the time of the Change in Control, and
         such subsequent unconsented transfer shall be "Good Reason" under this
         Agreement;

                  (c) Compensation Plans. The failure by an Employing Company to
         continue in effect any "compensation plan or agreement" in which an
         Employee participates or the elimination of the Employee's
         participation in any such plan (except for across-the-board plan
         changes or terminations similarly affecting at least ninety-five
         percent (95%) of all Employees of the Employing Company);

                  For purposes of this Section 2.17(c), the term "compensation
         plan or agreement" shall mean any written arrangement executed by an
         authorized officer of the Employing Company which provides for
         periodic, non-discretionary compensatory payments to Employees in the
         nature of bonuses.

                  (d) Benefits and Perquisites. The taking of any action by the
         Employing Company that would directly or indirectly materially reduce
         the benefits enjoyed by an Employee under the Employing Company's
         retirement, life insurance, medical, health and accident, disability,
         deferred compensation or savings plans in which the Employee was
         participating immediately prior to the Change in Control, or the
         failure by the Employing Company to provide an Employee with the number
         of paid vacation days to which the Employee is entitled on the basis of
         years of service with the Employing Company in accordance with the
         Employing Company's normal vacation policy in effect immediately prior
         to the Change in Control (except for across-the-board plan or vacation
         policy changes or plan terminations similarly affecting at least
         ninety-five percent (95%) of all Employees of the Employing Company).
         2.18 "Group" shall have the meaning set forth in Section 14(d) of the
         Exchange Act. 2.19 "Group Health Plan" shall mean the group health plan
         covering the Participant, as such plan may be amended from time to
         time.

         2.20 "Group Life Insurance Plan" shall mean the group life insurance
program covering the Participant, as such plan may be amended from time to time.

         2.21 "Incumbent Board" shall mean those individuals who constitute the
Southern Board as of October 19, 1998, plus any individual who shall become a
director subsequent to such date whose election or nomination for election by
Southern's shareholders was approved by a vote of at least 75% of the directors
then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to the
Effective Date whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Southern Board shall be a
member of the Incumbent Board.

         2.22 "Month of Service" shall mean any calendar month during which a
Participant has worked at least one (1) hour or was on approved leave of absence
while in the employ of an Employing Company or any other Southern Subsidiary.

         2.23 "Participant" shall mean an Employee who meets the eligibility
requirements of Section 3.1 of this Plan.

         2.24 "Pension Plan" shall mean The Southern Company Pension Plan or any
successor thereto, as such plans may be amended from time to time.

         2.25 "Performance Dividend Plan" or "PDP Plan" shall mean the Southern
Company Performance Dividend Plan or any successor thereto which is considered
an "equitable arrangement" under Section 1.25 thereof, as such plans may be
amended from time to time.

         2.26 "Performance Pay Plan" or "PPP Plan" shall mean the Southern
Company Performance Pay Plan or any successor thereto which is considered an
"equitable arrangement" under Section 1.31 thereof, as such plans may be amended
from time to time.

         2.27 "Performance Stock Plan" shall mean the Southern Company
Performance Stock Plan or any successor thereto which is considered an
"equitable arrangement" under Section 1.33 thereof, as such plans may be amended
from time to time.

         2.28 "Person" shall mean any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act.

         2.29 "Plan" shall mean the Southern Company Change in Control Severance
Plan.

         2.30 "Short Term Plan" shall mean the Southern Energy Resources, Inc.
Short Term Plan, as amended from time to time.

         2.31 "SEI" shall mean Southern Energy, Inc., its successors and
assigns.

         2.32 "SERI" shall mean Southern Energy Resources, Inc., its successors
and assigns.

         2.33 "SERI Participant" shall mean a Participant who is employed by
SERI.

         2.34 "Southern" shall mean The Southern Company, its successors and
assigns.

         2.35 "Southern Board" shall mean the board of directors of Southern.

         2.36 "Southern Subsidiary" shall mean any corporation or other entity
which Southern Controls.

         2.37 "Straight Time Pay" shall mean a Participant's highest base salary
during the calendar year in which his Termination Date occurs, plus the average
of the most recent three years' commission pay (if employed less than three
years, the average of the period of employment). Base salary shall include "add
ons" such as monthly shift differential, monthly premium pay, etc., but shall
not include overtime pay. For Participants who were part-time Employees
"Straight Time Pay" shall mean the actual average salary, plus the average of
the most recent three years' commission pay (if employed less than three years,
the average of the period of employment), paid during the calendar year in which
the Participant's Termination Date occurs.

         2.38 "Support Employee" shall mean an Employee of the Company (which
shall continue to be such Employee's Employing Company for purposes of this
Plan) who:

                  (a) Is involuntarily terminated without Cause within one year
         of the Change in Control of an Employing Company (other than the
         Company) and either (i) spent at least 40% of his working time
         performing services for such Employing Company at the time of the
         Change in Control and for the six months prior thereto, or (ii) is
         determined by the Administrative Committee to be involuntarily
         terminated without Cause as a result of such Change in Control; or

                  (b) Voluntarily terminates with Good Reason within one year of
         the Change in Control of an Employing Company (other than the Company)
         and spent at least 40% of his working time performing services for such
         Employing Company at the time of the Change in Control and for the six
         months prior thereto.

         2.39 "Termination for Cause" or "Cause" shall mean an Employee's
termination of employment with his Employing Company upon the occurrence of any
of the following:

                  (a) The willful and continued failure by the Employee to
         substantially perform his duties with his Employing Company (other than
         any such failure resulting from the Employee's Total Disability or from
         the Employee's retirement or any such actual or anticipated failure
         resulting from termination by the Employee for Good Reason) after a
         written demand for substantial performance is delivered to him by the
         Employee's responsible corporate officer, which demand specifically
         identifies the manner in which such corporate officer believes the
         Employee has not substantially performed his duties; or

                  (b) The willful engaging by the Employee in conduct that is
         demonstrably and materially injurious to his Employing Company,
         monetarily or otherwise, including but not limited to any of the
         following:

                           (i) any willful act involving fraud or dishonesty in
                  the course of an Employee's employment by his Employing
                  Company;

                           (ii) the willful carrying out of any activity or the
                  making of any statement by an Employee which would materially
                  prejudice or impair the good name and standing of his
                  Employing Company, Southern or any other Southern Subsidiary
                  or would bring his Employing Company, Southern or any other
                  Southern Subsidiary into contempt, ridicule or would
                  reasonably shock or offend any community in which his
                  Employing Company, Southern or such other Southern Subsidiary
                  is located;

                           (iii) attendance by an Employee at work in a state of
                  intoxication or otherwise being found in possession at his
                  workplace of any prohibited drug or substance, possession of
                  which would amount to a criminal offense;

                           (iv) violation of his Employing Company's policies on
                  drug and alcohol usage, fitness for duty requirements or
                  similar policies as may exist from time to time as adopted by
                  the Employing Company's safety officer;

                           (v) assault or other act of violence by an Employee
                  against any person during the course of employment; or

                           (vi) an Employee's indictment for any felony or any
                  misdemeanor involving moral turpitude. No act or failure to
                  act by an Employee shall be deemed "willful" unless done, or
                  omitted to be done, by the Employee not in good faith and
                  without reasonable belief that his action or omission was in
                  the best interest of his Employing Company.

         Notwithstanding the foregoing, an Employee shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of the majority
of the Administrative Committee at a meeting called and held for such purpose
(after reasonable notice to the Employee and an opportunity for him, together
with counsel, to be heard before the Administrative Committee), finding that, in
the good faith opinion of the Administrative Committee, the Employee was guilty
of conduct set forth in Section 2.39(a) or (b) hereof and specifying the
particulars thereof in detail.

         2.40 "Termination Date" shall mean the date on which a Participant is
separated from his Employing Company's regular payroll; provided, however, that
solely for purposes of Section 3.2(c) hereof, the Termination Date of
Participants who are deemed to be retired pursuant to the provisions of Section
3.3 hereof, shall be the effective date of their retirement pursuant to the
terms of the Pension Plan.

         2.41 "Total Disability" shall mean total disability under the terms of
the Pension Plan.

         2.42 "Value Creation Plan" shall mean the Southern Energy Resources,
Inc. Value Creation Plan or any replacement thereto which is considered an
"equitable arrangement" under Section 1.30 thereof, as such plans may be amended
from time to time.

         2.43 "Voting Securities" shall mean the outstanding voting securities
of a corporation entitling the holder thereof to vote generally in the election
of such corporation's directors.

         2.44 "Waiver and Release" shall mean the Waiver and Release attached
hereto as Exhibit A.

         2.45 "Year of Service" shall mean an Employee's Months of Service
divided by twelve (12) rounded to the nearest whole year, rounding up if the
remaining number of months is seven (7) or greater and rounding down if the
remaining number of months is less than seven (7). If an Employee has a break in
his service with his Employing Company, he will receive credit under this Plan
for the service prior to the break in service only if the break in service was
less than five years and his service prior to the break exceeds the length of
the break in service.

                         ARTICLE 3 - SEVERANCE BENEFITS

         3.1 Eligibility.

                  (a) Employees. Except as otherwise provided herein, any
         Employee whose employment is involuntarily terminated by his Employing
         Company at any time during the two year period following a Change in
         Control of Southern or his Employing Company for reasons other than
         Cause or who shall voluntarily terminate his employment with his
         Employing Company for Good Reason at any time during the two year
         period following a Change in Control of Southern or his Employing
         Company shall be entitled to participate in this Plan and receive the
         benefits described in Section 3.2 hereof, subject to the terms and
         conditions described in this Article 3.

                  (b) Support Employees. A Support Employee shall be entitled to
         participate in this Plan and receive the benefits described in Section
         3.2 hereof, subject to the terms and conditions described in this
         Article 3.

                  (c) Limits on Eligibility. Notwithstanding anything to the
         contrary herein, an Employee or Support Employee shall not be eligible
         to receive benefits under this Plan if the Employee or Support
         Employee:

                           (i) is not actively at work on his Termination Date,
                  unless such Employee or Support Employee is capable of
                  returning to work within twelve (12) weeks of the beginning of
                  any leave of absence from work;

                           (ii) voluntarily terminates his employment with his
                  Employing Company for other than Good Reason;

                           (iii) is terminated by his Employing Company for
                  Cause;

                           (iv) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  acquires all or substantially all of the assets of Southern, a
                  Southern Subsidiary or his Employing Company;

                           (v) refuses an offer of continued employment with his
                  Employing Company, Southern or a Southern Subsidiary, or any
                  employer that acquires all or substantially all of the assets
                  of Southern, a Southern Subsidiary or his Employing Company,
                  under circumstances where such refusal would not amount to
                  Good Reason for voluntary termination of employment and such
                  employer agrees to adopt this Plan as it applies to such
                  Participant; or

                           (vi) elects to receive the benefits of any other
                  voluntary or involuntary severance, separation or outplacement
                  program, plan or agreement maintained by his Employing Company
                  in lieu of benefits under this Plan; provided however, that
                  the receipt of benefits under any retention plan or agreement
                  shall not be deemed to be the receipt of benefits under any
                  severance, separation or outplacement program for purposes of
                  this Plan.

         3.2 Benefits. Upon the Employing Company's receipt of an effective
Waiver and Release, Participants shall be entitled to receive the following
benefits:

                  (a) Employee Outplacement Services. Each Participant shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         the Participant's Termination Date.

                  (b) Severance Benefit. Each Participant shall be paid a cash
         amount equal to the sum of the following amounts:

                           (i) eight (8) weeks' Straight Time Pay,

                           (ii) one (1) week's Straight Time Pay for each of the
                  Participant's first five (5) Years of Service;

                           (iii) two (2) weeks' Straight Time Pay for each of
                  the Participant's sixth (6th) through tenth (10th) Years of
                  Service;

                           (iv) three (3) weeks' Straight Time Pay for each of
                  the Participant's eleventh (11th) through fifteenth (15th)
                  Years of Service;

                           (v) five (5) weeks' Straight Time Pay for each of the
                  Participant's sixteenth (16th) through twentieth (20th) Years
                  of Service; and

                           (vi) six (6) weeks' Straight Time Pay for each of the
                  Participant's Years of Service in excess of twenty (20) Years
                  of Service.

                  (c)      Welfare Benefit.

                           (i) Except as provided in Section 3.3 hereof, each
                  Participant shall be eligible to participate in the Employing
                  Company's Group Health Plan for a period of six (6) months for
                  each of the Participant's Years of Service, not to exceed a
                  period of five (5) years, beginning on the first day of the
                  first month following the Participant's Termination Date
                  unless otherwise specifically provided under such plan, upon
                  the Participant's payment of both the Employing Company's and
                  the Participant's premium under such plan. A Participant who
                  receives this extended medical coverage shall also be entitled
                  to elect coverage under the Group Health Plan for his
                  dependents who are participating in the Group Health Plan on
                  the Participant's Termination Date (and for such other
                  dependents as may be entitled to coverage under the provisions
                  of the Health Insurance Portability and Accountability Act of
                  1996) for the duration of the Participant's extended medical
                  coverage under this Section 3.2(c) to the extent such
                  dependents remain eligible for dependent coverage under the
                  terms of the Group Health Plan.

                           (ii) The extended medical coverage afforded to a
                  Participant pursuant to this Section 3.2(c) as well as the
                  premiums to be paid by the Participant in connection with such
                  coverage shall be determined in accordance with the terms of
                  the Group Health Plan and shall be subject to any changes in
                  the terms and conditions of the Group Health Plan as well as
                  any future increases in premiums under the Group Health Plan.
                  The premiums to be paid by the Participant in connection with
                  this extended coverage shall be due on the first day of each
                  month; provided, however, that if a Participant fails to pay
                  his premium within thirty (30) days of its due date, such
                  Participant's extended coverage shall be terminated.

                           (iii) Any Group Health Plan coverage provided under
                  this Section 3.2(c) shall be a part of and not in addition to
                  any COBRA Coverage which a Participant or his dependent may
                  elect. In the event that a Participant or his dependent
                  becomes eligible to be covered, by virtue of re-employment or
                  otherwise, by any employer-sponsored group health plan or is
                  eligible for coverage under any government-sponsored health
                  plan during the above period, coverage under the Employing
                  Company's Group Health Plan available to the Participant or
                  his dependent by virtue of the provisions of this Article 3
                  shall terminate, except as may otherwise be required by law,
                  and shall not be renewed. It shall be the duty of a
                  Participant to inform the Employing Company of his eligibility
                  to participate in any such health plan.

                           (iv) Except as otherwise provided in Section 3.3
                  hereof, regardless of whether a Participant elects the
                  extended coverage described in Section 3.2(c) hereof, the
                  Employing Company shall pay to each Participant a cash amount
                  equal to the Employing Company's and the Participant's cost of
                  premiums for coverage under the Group Health Plan and Group
                  Life Insurance Plan, if the Participant was participating in
                  such plans on his Termination Date, for a period equal to the
                  total number of weeks of pay the Participant receives as a
                  severance benefit under Section 3.2(b) hereof.

                  (d) Stock Option Vesting. The provisions of this Section
         3.2(d) shall apply to any Participant who, as of the date of the Change
         in Control, was a participant in the Performance Stock Plan, the
         defined terms of which are incorporated in this Section 3.2(d) by
         reference.

                           (i) Any of the Participant's Options and Stock
                  Appreciation Rights outstanding as of the Termination Date
                  which are not then exercisable and vested, shall become fully
                  exercisable and vested to the full extent of the original
                  grant; provided, that in the case of a Participant holding a
                  Stock Appreciation Right who is subject to Section 16(b) of
                  the Exchange Act, such Stock Appreciation Right shall not
                  become fully vested and exercisable at such time if such
                  actions would result in liability to the Participant under
                  Section 16(b) of the Exchange Act, provided further, that any
                  such actions not taken as a result of the rules under Section
                  16(b) of the Exchange Act shall be effected as of the first
                  date that such activity would no longer result in liability
                  under Section 16(b) of the Exchange Act.

                           (ii) The restrictions and deferral limitations
                  applicable to any of the Participant's Restricted Stock as of
                  the Termination Date shall lapse, and such Restricted Stock
                  shall become free of all restrictions and limitations and
                  become fully vested and transferable to the full extent of the
                  original grant.

                           (iii) The restrictions and deferral limitations and
                  other conditions applicable to any other Awards held by the
                  Participant under the Performance Stock Plan as of the
                  Termination Date shall lapse, and such other Awards shall
                  become free of all restrictions, limitations or conditions and
                  become fully vested and transferable to the full extent of the
                  original grant. (e) Performance Pay Plan. The provisions of
                  this Section 3.2(e) shall apply to any Participant who, as of
                  the date of the Change in Control, was a participant in the
                  Performance Pay Plan, the defined terms of which are
                  incorporated in this Section 3.2(e) by reference. Provided the
                  Participant is not entitled to benefits under Article IV of
                  the PPP Plan, if the PPP Plan is in place through the
                  Participant's Termination Date and to the extent the
                  Participant is entitled to participate therein, the
                  Participant shall be entitled to receive cash in an amount
                  equal to a prorated payout of his Incentive Pay Award under
                  the PPP Plan for the Performance Period in which the
                  Termination Date shall have occurred, at target performance
                  under the PPP Plan and prorated by the number of months which
                  have passed since the beginning of the Performance Period
                  until the Termination Date.

                  (f) Performance Dividend Plan. The provisions of this Section
         3.2(f) shall apply to any Participant who, as of the date of the Change
         in Control, was a participant in the Performance Dividend Plan, the
         defined terms of which are incorporated in this Section 3.2(f) by
         reference. Provided the Participant is not entitled to benefits under
         Article V of the Performance Dividend Plan, if the Performance Dividend
         Plan is in place through the Participant's Termination Date and to the
         extent the Participant is entitled to participate therein, the
         Participant shall be entitled to receive cash for each Award held as of
         such date based on a Payout Percentage of 50% under Section 4.1 of the
         Performance Dividend Plan for the Performance Period in which the
         Termination Date shall have occurred, and the Annual Dividend declared
         prior to the Termination Date.

                  (g) Value Creation Plan. The provisions of this Section 3.2(g)
         shall apply to any Participant who, as of the date of the Change in
         Control, was a participant in the Value Creation Plan, the defined
         terms of which are incorporated in this Section 3.2(g) by reference.
         Any of the Participant's Appreciation Rights or Indexed Rights
         outstanding as of the Termination Date which are not then exercisable
         and vested, shall become fully exercisable and vested to the full
         extent of the original grant. Notwithstanding anything in the Value
         Creation Plan to the contrary, Share Value with respect to any
         Appreciation Rights or Indexed Rights held by the Participant following
         his Termination Date shall be no less than the Share Value as of the
         date of the Change in Control of Southern or his Employing Company, as
         the case may be.

                  (h) Short Term Plan. The provisions of this Section 3.2(h)
         shall apply to any Participant who, as of the date of the Change in
         Control was a Participant in the Short Term Plan, the defined terms of
         which are incorporated in this Section 3.2(h) by reference. Provided
         the Participant is not entitled to benefits under Article V of the
         Short Term Plan, if the Short Term Plan is in place through the
         Participant's Termination Date and to the extent the Participant is
         entitled to participate therein, the Participant shall be entitled to
         receive cash in an amount equal to his Award under the Short Term Plan
         for the Performance Period in which the Termination Date shall have
         occurred, at Total Target for the Participant's Job Category and
         prorated by the number of months which have passed since the beginning
         of the Performance Period until the Termination Date.

                  (i) Other Short Term Incentive Plans. The provisions of this
         Section 3.2(i) shall apply to any Participant who, as of the date of
         the Change in Control is a participant in any other "short term
         incentive compensation plan" not otherwise previously referred to in
         this Section 3.2. Provided the Participant is not otherwise entitled to
         a plan payout under any change in control provisions of such plans, if
         the "short term incentive compensation plan" is in place through the
         Participant's Termination Date and to the extent the Participant is
         entitled to participate therein, the Participant shall be entitled to
         receive cash in an amount equal to his award under his respective
         Employing Company's "short term incentive compensation plan" for the
         annual performance period in which the Termination Date shall have
         occurred, at the Participant's target performance level and prorated by
         the number of months which have passed since the beginning of the
         annual performance period until the Termination Date. For purposes of
         this Section 3.2(i), the term "short term incentive compensation plan"
         shall mean any incentive compensation plan or arrangement adopted in
         writing by an Employing Company which provides for annual, recurring
         compensatory bonuses to participants based upon articulated performance
         criteria, and which have been identified by the Board of Directors and
         listed on Exhibit B hereto which may be amended from time to time to
         reflect plan additions, terminations and amendments.

                  (j) DIC Plan. The provisions of this Section 3.2(j) shall
         apply to any Participant who, as of the date of the Change in Control,
         was a participant in the DIC Plan, the defined terms of which are
         incorporated into this Section 3.2(j) by reference. Provided a
         Participant is not entitled to benefits under Article V of the DIC
         Plan, if the DIC Plan is in place through Participant's Termination
         Date and to the extent that Participant is entitled to participate
         therein, any of the Participant's Awards as of the Termination Date
         which are not then vested shall become fully vested and Participant
         shall be entitled to receive cash in the amount equal to Participant's
         Account as of his Termination Date. Notwithstanding anything in the DIC
         Plan to the contrary, the investment return on the Awards determined in
         accordance with Section 3.1 of the DIC Plan for any Plan Year following
         a Change in Control of Southern or its Employing Company shall be no
         less than the investment return determined in accordance with Section
         3.1 of the DIC Plan as of the date of such Change in Control with
         respect to those Accounts which are outstanding as of the date of such
         Change in Control. 3.3 Coordination with Retiree Medical and Life
         Insurance Coverage. Notwithstanding anything to the contrary above, any
         Participant who is otherwise eligible to retire pursuant to the terms
         of the Pension Plan, shall be deemed to have retired for purposes of
         all employee benefit plans sponsored by the Employing Company of which
         the Participant is a participant. A Participant who is deemed to have
         retired in accordance with the preceding sentence shall not be eligible
         to receive the benefits described in Section 3.2(c) hereof if, upon his
         Termination Date, such Participant becomes eligible to receive the
         retiree medical and life insurance coverage provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan.

         3.4 Maximum Benefit. Notwithstanding anything to the contrary above,
with respect to each Participant, the maximum benefit payable under this Article
3 shall be an amount equal to two (2) times such Participant's "annual
compensation" as defined in Department of Labor Regulation Section 2510.3-2(b),
which, for purposes of this Plan shall be no less than Straight Time Pay plus
thirty percent (30%). When necessary, the Administrative Committee shall reduce
the severance benefits described in Section 3.2(b) and 3.2(c)(iv) hereof to
comply with this Section 3.4.

         3.5 Payment of Benefits. The total amount payable under this Article 3
shall be paid to a Participant in one (1) lump sum payment within two (2)
payroll periods of the later of the following to occur: (a) the Participant's
Termination Date, or (b) the tender to the Employing Company by the Participant
of an effective Waiver and Release (in the form of Exhibit A attached hereto)
and the expiration of any applicable revocation period for such waiver. In the
event of a dispute with respect to liability or amount of any benefit due
hereunder, an effective Waiver and Release shall be tendered at the time of
final resolution of any such dispute when payment is tendered by the Employing
Company.

         3.6 Benefits in the Event of Death. In the event of the Participant's
death prior to the payment of all benefits due under this Article 3, the
Participant's estate shall be entitled to receive as due any amounts not yet
paid under this Article 3 upon the tender by the executor or administrator of
the estate of an effective Waiver and Release.

         3.7 Legal Fees. In the event of a dispute between a Participant and his
Employing Company with regard to any amounts due hereunder, if any material
issue in such dispute is finally resolved in the Participant's favor, his
Employing Company shall reimburse the Participant's legal fees incurred with
respect to all issues in such dispute in an amount not to exceed fifteen
thousand dollars ($15,000).

         3.8 No Mitigation. A Participant who receives benefits under Section
3.2 of this Plan shall have no duty or obligation to seek other employment
following his Termination Date and, except as otherwise provided in Subsection
3.1(d) hereof, the amounts due a Participant hereunder shall not be reduced or
suspended if such Participant accepts such subsequent employment.

         3.9 Non-qualified Retirement and Deferred Compensation Plans.
Subsequent to a Change in Control, any claims by a Participant for benefits
under any of the Company's non-qualified retirement or deferred compensation
plans shall be resolved through binding arbitration in accordance with the
procedures and provisions set forth in Article 5 hereof and if any material
issue in such dispute is finally resolved in the Participant's favor, the
Company shall reimburse the Participant's legal fees in the manner provided in
Section 3.7 hereof.

         3.10 Guarantee of SEI. Effective May 10, 2000, if SERI fails or refuses
to make payments under the Plan, SERI Participants may have the right to obtain
payment by SEI pursuant to the terms of the "Guarantee Agreement Concerning
Southern Energy Resources, Inc. Compensation and Benefit Arrangements" entered
into by SEI and SERI. A SERI Participant's right to payment is not increased as
a result of this Guarantee. SERI Participants have the same right to payment
from SEI as they have from SERI. Any demand to enforce this Guarantee should be
made in writing and should reasonably and briefly specify the manner and the
amount SERI has failed to pay. Such writing given by personal delivery or mail
shall be effective upon actual receipt. Any writing given by telegram or
telecopier shall be effective upon actual receipt if received during SEI's
normal business hours, or at the beginning of the next business day after
receipt, if not received during SEI's normal business hours. All arrivals by
telegram or telecopier shall be confirmed promptly after transmission in writing
by certified mail or personal delivery.

                           ARTICLE 4 - ADMINISTRATION

         4.1 Administrative Committee. The Administrative Committee shall be
responsible for the general administration of the Plan and shall be a "named
fiduciary" under Section 402 of the Employee Retirement Income Security Act of
1974, as amended.

         4.2 Duties of the Administrative Committee.

                  (a) The Administrative Committee shall be responsible for the
         daily administration of the Plan and may appoint other persons or
         entities to perform or assist in the performance of any of its
         fiduciary duties, subject to its review and approval. The
         Administrative Committee shall have the right to remove any such
         appointee from his position without cause upon notice. Any person,
         group of persons, or entity may serve in more than one fiduciary
         capacity.

                  (b) The Administrative Committee shall maintain permanent
         records and accounts of Participants and of their rights under the Plan
         and of all receipts, disbursements, transfers, and other transactions
         concerning the Plan. Such accounts, books, and records relating thereto
         shall be open at all reasonable times to inspection and audit by the
         Company and any persons designated thereby.

                  (c) The Administrative Committee shall take all steps
         necessary to ensure that the Plan complies with the law at all times,
         including the preparation and filing of all documents and forms
         required by any governmental agency; maintenance of adequate
         Participant records; recording and transmission of all notices required
         to be given to Participants and their beneficiaries; receipt and
         dissemination, if required, of all reports and information received
         from the Employing Companies; securing of such fidelity bonds as may be
         required by law; and doing such other acts necessary for the proper
         administration of the Plan. The Administrative Committee shall keep a
         record of all of its proceedings and acts, and shall keep all such
         books of accounts, records, and other data as may be necessary for
         proper administration of the Plan. The Administrative Committee shall
         notify the Employing Companies upon their request of any action taken
         by it, and when required, shall notify any other interested person or
         persons.

         4.3 Powers. The Administrative Committee shall administer the Plan in
accordance with its terms and shall have all powers necessary to carry out the
provisions of the Plan as more particularly set forth herein. The Administrative
Committee shall have the discretionary authority to interpret the Plan
(including any ambiguities herein) and to determine all questions arising in the
administration, interpretation, and application of the Plan. The Administrative
Committee shall adopt such procedures and regulations necessary or desirable for
the discharge of its duties hereunder and may appoint such accountants, counsel,
actuaries, specialists, and other agents as it deems necessary or desirable in
connection with the administration of this Plan. The Administrative Committee
shall be the legal appointed agent for the service of process.

         4.4 Compensation of the Administrative Committee. The Administrative
Committee shall not receive any compensation from the Plan for its services.

         4.5 Payment of Expenses. The Administrative Committee shall be
reimbursed by the Employing Companies for its reasonable expenses incurred in
the discharge of its duties. Such expenses shall include any expenses incident
to its duties, including, but not limited to, fees of accountants, counsel,
actuaries, and other specialists, and other costs of administering the Plan.

         4.6 Indemnification. Each Employing Company shall indemnify the
Administrative Committee against any and all claims, losses, damages, expenses,
and liability arising from its actions or omissions, except when the same is
finally adjudicated to be the result of gross negligence or willful misconduct.
The Employing Companies may purchase at their own expense sufficient liability
insurance for the Administrative Committee to cover any and all claims, losses,
damages, and expenses arising from any action or omission in connection with the
execution of the duties as the Administrative Committee.

                             ARTICLE 5 - ARBITRATION

         5.1 General. Any dispute, controversy or claim arising out of or
relating to the Company's obligations to pay severance benefits under this Plan,
or the breach thereof, shall be settled and resolved solely by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") except as otherwise provided herein. The arbitration shall
be the sole and exclusive forum for resolution of any such claim for severance
benefits and the arbitrators' award shall be final and binding. The provisions
of this Article 5 are not intended to apply to any other disputes, claims or
controversies arising out of or relating to a Participant's employment by an
Employing Company or the termination thereof.

         5.2 Demand for Arbitration. Arbitration shall be initiated by serving a
written notice of demand for arbitration to the Participant, in the case of an
Employing Company, or to the Administrative Committee, in the case of a
Participant.

         5.3 Law and Venue. The arbitrators shall apply the laws of the State of
Georgia, except to the extent pre-empted by federal law, excluding any law which
would require the use of the law of another state. The arbitration shall be held
in Atlanta, Georgia.

         5.4 Appointment of Arbitrators. Arbitrators shall be appointed within
fifteen (15) business days following service of the demand for arbitration. The
number of arbitrators shall be three. One arbitrator shall be appointed by the
Participant, one arbitrator shall be appointed by the Employing Company, and the
two arbitrators shall appoint a third. If the arbitrators cannot agree on a
third arbitrator within thirty (30) business days after the service of demand
for arbitration, the third arbitrator shall be selected by the AAA.

         5.5 Costs. The arbitration filing fee shall be paid by the Participant.
All other costs of arbitration shall be borne equally by the Participant and his
Employing Company, provided, however, that such Employing Company shall
reimburse such fees and costs in the event any material issue in such dispute is
finally resolved in the Participant's favor and the Participant is reimbursed
legal fees under Section 3.7 hereof.

         5.6 Interim and Injunctive Relief. Nothing in this Article 5 is
intended to preclude, upon application of either party, any court having
jurisdiction from issuing and enforcing in any lawful manner such temporary
restraining orders, preliminary injunctions, and other interim measures of
relief as may be necessary to prevent harm to either party's interests or as
otherwise may be appropriate pending the conclusion of arbitration proceedings
pursuant to this Article 5 and nothing herein is intended to prevent any court
from entering and enforcing in any lawful manner such judgments for permanent
equitable relief as may be necessary to prevent harm to a party's interests or
as otherwise may be appropriate following the issuance of arbitral awards
pursuant to this Article 5.

                            ARTICLE 6 - MISCELLANEOUS

         6.1 Funding of Benefits. Unless the Board of Directors in its
discretion determines otherwise, the benefits payable to a Participant under the
Plan shall not be funded in any manner and shall be paid by the Employing
Companies out of their general assets, which assets are subject to the claims of
the Employing Companies' creditors.

         6.2 Withholding. There shall be deducted from the payment of any
benefit due under the Plan the amount of any tax required by any governmental
authority to be withheld and paid over by the Employing Companies to such
governmental authority for the account of the Participant entitled to such
payment.

         6.3 Assignment. No Participant or beneficiary shall have any rights to
sell, assign, transfer, encumber, or otherwise convey the right to receive the
payment of any benefit due hereunder, which payment and the rights thereto are
expressly declared to be nonassignable and nontransferable. Any attempt to do so
shall be null and void and of no effect.

         6.4 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided, however, the Plan may not be
amended in any material of respect or terminated within the two (2) year period
following a Change in Control nor shall any amendment or termination impair the
rights of any Participant which have accrued hereunder prior to any such
amendment or termination.

         6.5 Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Plan, a Change in Control transaction
would otherwise be accounted for as a pooling-of-interests under APB No.16
("Pooling Accounting") (after giving effect to any and all other facts and
circumstances affecting whether such Change in Control transaction would use
Pooling Accounting), such provision or provisions of this Plan which would
otherwise cause the Change in Control transaction to be ineligible for Pooling
Accounting shall be void and ineffective in such a manner and to the extent that
by eliminating such provision or provisions of this Plan, Pooling Accounting
would be required for such Change in Control transaction.

         IN WITNESS WHEREOF, this Southern Company Change in Control Severance
Plan has been executed by the Company through its duly authorized officers, this
____ day of ___________, 2000, to be effective as provided herein.

                                SOUTHERN COMPANY SERVICES, INC.


                                By:
                                   ---------------------------------------


<PAGE>




                                    Exhibit A

                                SOUTHERN COMPANY

                                CHANGE IN CONTROL

                                 SEVERANCE PLAN

                               Waiver and Release

         I understand that I am entitled to receive the severance benefits
described in Article 3 of the Southern Company Change in Control Severance Plan
(the "Plan") if I execute this Waiver and Release ("Waiver"). I understand that
the benefits I have elected to receive under the Plan are in excess of those I
would have received from ____________________ (the "Company") if I had not
elected to participate in the Plan and sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. I understand and agree that I
am obligated to keep confidential and not disclose the terms of this Waiver,
including, but not limited to, the benefits under this Plan, except to my
attorneys, financial advisors, or except where such disclosure is required by
law. However, nothing in this Waiver shall prohibit me from engaging in
protected activities under applicable law or from communicating, either
voluntary or otherwise, with any governmental agency concerning any potential
violation of the law.

         In signing this Waiver, I am not releasing claims to any vested or
accrued benefits that I have under any workers' compensation laws or any
retirement plan or welfare benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, which is sponsored by or
adopted by the Company and/or any of its direct or indirect subsidiaries;
however, I understand and acknowledge that nothing herein is intended to or
shall be construed to require the Company to institute or continue in effect any
particular plan or benefit sponsored by the Company and the Company hereby
reserves the right to amend or terminate any of its benefit programs at any time
in accordance with the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company except for programs specifically designed for
participants in the Plan.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to forty-five (45) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
_____ day of ________________, in the year ___.


                    Employee's signature


                    Employee's printed name

         Acknowledged and Accepted by the Administrative Committee of the
Southern Company Change in Control Severance Plan.

By:
         -----------------------------------
Date:
         -----------------------------------



<PAGE>


                             Attachment to Exhibit A

TO:      All Eligible Employees under the Southern Company Change in Control
         Severance Plan

FROM:    _____________________

RE:      ADEA Information Notice

DATE:    _____________________


         A severance plan known as the Southern Company Change in Control
Severance Plan ("Plan") has been approved and established by The Southern
Company, its affiliates and its direct and indirect subsidiaries (collectively
the "Company"). You are eligible to participate in the Plan subject to the terms
of the Plan. In accordance with the Age Discrimination in Employment Act
("ADEA"), the Company is providing you the following information pertaining to
eligibility and participation in the Plan.

o             The purpose of the Plan is to provide benefits to certain
              employees of The Southern Company and certain subsidiaries of The
              Southern Company ("Employing Companies") whose employment is
              terminated subsequent to a change in control of The Southern
              Company or their respective Employing Company. A full description
              of the benefits under the Plan as well as any restrictions or
              limitations that may be applicable can be found in the Summary
              Plan Description you have been given.

o             Each active regular employee of an Employing Company of Grade 9 or
              below (or, if the Grade System is not used, below $130,000 of
              annual base salary rate for the 12 month period immediately
              preceding the change in control) not covered by a collective
              bargaining agreement is generally eligible to participate in the
              Plan if during the two year period following a change in control:
              (i) his employment is involuntarily terminated for reasons other
              than cause, or (ii) he voluntarily terminates his employment for
              good reason.

o             All eligible employees may elect to receive severance benefits
              under the Plan by signing an Election Form and Waiver Agreement no
              later than 45 calendar days from the date it is received. The
              Agreement will remain revocable by you for a seven day period
              after you sign it.

o             Attached is a list sorted by job title and age of each employee
              eligible to participate in the Plan as well as a list of the ages
              of all employees in the same job classification who are not
              eligible to participate in the Plan.

         In furtherance of you making an informed decision, the Company urges
you to seek a financial advisor, legal counsel and a qualified tax advisor to
assist you in fully understanding your rights and benefits under the plan and
the Election Form and Waiver Agreement that you will be required to sign to
receive severance benefits under the Plan.

         If you have any questions or need additional information, please call
me at _______________.

Sincerely,

- ----------------------
[Name]
- ----------------------
[Title]


<PAGE>
<TABLE>


                             ADEA INFORMATION NOTICE

<S>                                                          <C>
- ------------------------------------------------------------ ---------------------------------------------------------
                 Job Title, Classification                                            Age of
             or Category of Eligible Employees                                  Eligible Employees

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
[List  job   classification,   title  or  category  of  all  [List corresponding age of each eligible employee]
eligible employees]
- ------------------------------------------------------------ ---------------------------------------------------------



- ------------------------------------------------------------ ---------------------------------------------------------
                 Job Title, Classification                                            Age of
            or Category of Ineligible Employees                                Ineligible Employees

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
[List  job   classification,   title  or  category  of  all  [List corresponding age of each ineligible employee]
ineligible employees]
- ------------------------------------------------------------ ---------------------------------------------------------

</TABLE>


<PAGE>


                                    Exhibit B

                                SOUTHERN COMPANY

                                CHANGE IN CONTROL

                                 SEVERANCE PLAN

                     Short Term Incentive Compensation Plans
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>25
<FILENAME>x10a73.txt
<TEXT>




                                SOUTHERN COMPANY
                           EXECUTIVE CHANGE IN CONTROL
                                 SEVERANCE PLAN




                              Troutman Sanders LLP
                        Bank of America Plaza, Suite 5200
                           600 Peachtree Street, N.E.
                             Atlanta, Georgia 30308

                             Effective July 10, 2000


<PAGE>



                                SOUTHERN COMPANY

                           EXECUTIVE CHANGE IN CONTROL

                                 SEVERANCE PLAN

                    ARTICLE 1 - PURPOSE AND ADOPTION OF PLAN

         1.1 Adoption of Plan. Southern Company Services, Inc. hereby adopts
this Southern Company Executive Change in Control Severance Plan. This Plan was
originally effective December 7, 1998; it was amended by a First Amendment also
effective December 7, 1998. This amended and restated Plan is effective July 10,
2000. The Plan shall be an unfunded "top hat" plan designed to provide certain
severance benefits to a select group of management or highly compensated
employees, to be paid solely from the general assets of the respective Employing
Companies.

         1.2 Purpose. The Plan is primarily designed to provide benefits to
certain key employees of the Employing Companies, whose employment is terminated
subsequent to a change in control of Southern or their respective Employing
Company.

                             ARTICLE 2 - DEFINITIONS

         2.1 "Administrative Committee" shall mean the Board of Directors, plus,
in the event of any act necessary to be taken in connection with the Plan
relative to a particular Participant, the Chief Executive Officer of the
Participant's Employing Company, if such Chief Executive Officer is not already
a member of the Board of Directors.

         2.2 "Annual Compensation" shall mean a Participant's highest annual
base salary rate for the twelve month period immediately preceding the date of
the Change in Control plus target bonus.

         2.3 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.

         2.4 "Board of Directors" shall mean the board of directors of the
Company.

         2.5 "Business Combination" shall mean a reorganization, merger or
consolidation of Southern or sale or other disposition of all or substantially
all of the assets of Southern.

         2.6 "Change in Control" shall mean,

         (a) with respect to Southern, the occurrence of any of the following:

                  (i) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 20% or more of Southern's Voting Securities;
         provided, however, that for purposes of this Section 2.6(a)(i), the
         following acquisitions of Southern's Voting Securities shall not
         constitute a Change in Control:

                           (A) any acquisition directly from Southern;

                           (B) any acquisition by Southern;

                           (C) any acquisition by any employee benefit plan (or
                  related trust) sponsored or maintained by Southern or any
                  Southern Subsidiary;

                           (D) any acquisition by a qualified pension plan or
                  publicly held mutual fund;

                           (E) any acquisition by an employee of Southern or its
                  subsidiary or affiliate, or Group composed exclusively of such
                  employees; or

                           (F) any Business Combination which would not
                  otherwise constitute a Change in Control because of the
                  application of clauses (A), (B) and (C) of Section
                  2.6(a)(iii).

                  (ii) A change in the composition of the Southern Board whereby
         individuals who constitute the Incumbent Board cease for any reason to
         constitute at least a majority of the Southern Board; or

                  (iii) Consummation of a Business Combination, unless,
         following such Business Combination, all of the following three
         conditions are met:

                           (A) all or substantially all of the individuals and
                  entities who held Beneficial Ownership, respectively, of
                  Southern's Voting Securities immediately prior to such
                  Business Combination beneficially own, directly or indirectly,
                  65% or more of the combined voting power of the Voting
                  Securities of the corporation surviving or resulting from such
                  Business Combination, (including, without limitation, a
                  corporation which as a result of such transaction holds
                  Beneficial Ownership of all or substantially all of Southern's
                  Voting Securities or all or substantially all of Southern's
                  assets) (such surviving or resulting corporation to be
                  referred to as "Surviving Company"), in substantially the same
                  proportions as their ownership, immediately prior to such
                  Business Combination, of Southern's Voting Securities;

                           (B) no Person (excluding any corporation resulting
                  from such Business Combination, any qualified pension plan,
                  publicly held mutual fund, Group composed exclusively of
                  Employees or employee benefit plan (or related trust) of
                  Southern, any Southern Subsidiary or Surviving Company) holds
                  Beneficial Ownership, directly or indirectly, of 20% or more
                  of the combined voting power of the then outstanding Voting
                  Securities of Surviving Company except to the extent that such
                  ownership existed prior to the Business Combination; and

                           (C) at least a majority of the members of the board
                  of directors of Surviving Company were members of the
                  Incumbent Board at the earlier of the date of execution of the
                  initial agreement, or of the action of the Southern Board,
                  providing for such Business Combination.

         (b) with respect to an Employing Company, the occurrence of any of the
following:

                  (i) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 50% or more of the combined voting power of the
         then outstanding Voting Securities of an Employing Company; provided,
         however, that for purposes of this Section 2.6(b)(i), any acquisition
         by an employee of Southern or its subsidiary or affiliate, or Group
         composed entirely of such employees, any qualified pension plan, any
         publicly held mutual fund or any employee benefit plan (or related
         trust) sponsored or maintained by Southern or any Southern Subsidiary
         shall not constitute a Change in Control;

                  (ii) The Consummation of a reorganization, merger or
         consolidation of an Employing Company (an "Employing Company Business
         Combination"), in each case, unless, following such Employing Company
         Business Combination, Southern Controls the corporation surviving or
         resulting from such Employing Company Business Combination; or

                  (iii) The Consummation of the sale or other disposition of all
         or substantially all of the assets of an Employing Company to an entity
         which Southern does not Control.

         Notwithstanding the foregoing, in no event shall "Change in Control"
mean an initial public offering or a spin-off of an Employing Company.

         For purposes of this Section 2.6 only, SERI shall not be considered an
Employing Company. 2.7 "COBRA Coverage" shall mean any continuation coverage to
which a Participant or his dependents may be entitled pursuant to Code Section
4980B.

         2.8 "Code" shall mean the Internal Revenue Code of 1986, as amended.

         2.9 "Company" shall mean Southern Company Services, Inc., its
successors and assigns.

         2.10 "Consummation" shall mean the completion of the final act
necessary to complete a transaction as a matter of law, including, but not
limited to, any required approvals by the corporation's shareholders and board
of directors, the transfer of legal and beneficial title to securities or assets
and the final approval of the transaction by any applicable domestic or foreign
governments or governmental agencies.

         2.11 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.

         2.12 "DIC Plan" shall mean the Southern Energy Resources, Inc. Deferred
Incentive Compensation Plan or any successor thereto which is considered an
"equitable arrangement" thereof, as such plans may be amended from time to time.

         2.13     "Effective Date" shall mean the date of execution hereof.

         2.14 "Employee" shall mean each regular full-time or regular part-time
employee of an Employing Company of Grades 10 to 13 (or, if the Grade system is
not used, $130,000 or more of annual base salary rate for the twelve month
period immediately preceding the Change in Control who has not otherwise entered
into a Change in Control agreement with his Employing Company and elects to
receive benefits under such agreement) not covered by a collective bargaining
agreement between the Employing Company and a union or other employee
representative. With respect to a Change in Control of SEI, SERI Participants
shall be deemed to be employed by SEI for purposes of being covered under this
Plan.

         2.15 "Employee Outplacement Program" shall mean the program established
by the Employing Company from time to time for the purpose of assisting
Participants covered by the Plan in finding employment outside of the Employing
Company which provides for the following services:

                  (a) self assessment, career decision and goal setting;

                  (b) job market research and job sources;

                  (c) networking and interviewing skills;

                  (d) planning and implementation strategy;

                  (e) resume writing, job hunting methods and salary
         negotiation; and

                  (f) office support and job search resources.

         2.16 "Employing Company" shall mean the Company, or any other Southern
Subsidiary, which the Board of Directors may from time to time determine to
bring under the Plan and which shall adopt the Plan, and any successor of any of
them.

         2.17 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         2.18 "Good Reason" shall mean, without an Employee's express written
consent, after written notice to his Employing Company, and after a thirty (30)
day opportunity for the Employee's Employing Company to cure, the continuing
occurrence of any of the following events:

                  (a) Inconsistent Duties. A meaningful and detrimental
         alteration in the Employee's position or in the nature or status of his
         responsibilities from those in effect immediately prior to the Change
         in Control;

                  (b) Reduced Salary. A reduction of five percent (5%) or more
         by the Employing Company in either of the following: (i) the Employee's
         annual base salary rate for the twelve month period immediately
         preceding the date of the Change in Control ("Base Salary") (except for
         a less than ten percent (10%), across-the-board Base Salary reduction
         similarly affecting at least ninety-five percent (95%) of all Employees
         of the Employing Company); or (ii) the sum of the Employee's Base
         Salary plus target bonus under his Employing Company's short term bonus
         plan (e.g., either the PPP Plan or the Southern Energy, Inc. Short Term
         Plan, as the case may be), as in effect immediately prior to the Change
         in Control (except for a less than ten percent (10%), across-the-board
         reduction of Base Salary plus target bonus under such short term plan
         similarly affecting at least ninety-five percent (95%) of all Employees
         of the Employing Company);

                  (c) Compensation Plans. The failure by the Employing Company
         to continue in effect any "compensation plan or agreement" in which an
         Employee participates as of the date of the Change in Control or the
         elimination of the Employee's participation in any such plan, (except
         for across-the-board plan changes or terminations similarly affecting
         at least ninety-five percent (95%) of all Employees of the Employing
         Company);

                  For purposes of this Section 2.18(c), the "compensation plan
         or agreement" shall mean any written arrangement executed by an
         authorized officer of the Employing Company which provides for
         periodic, non-discretionary compensatory payments to employees in the
         nature of bonuses.

                  (d) Relocation. A change in an Employee's work location to a
         location more than fifty (50) miles from the facility where the
         Employee was located at the time of the Change in Control, unless such
         new work location is within fifty (50) miles from the Employee's
         principal place of residence at the time of the Change in Control. The
         acceptance, if any, by an Employee of employment by an Employing
         Company at a work location which is outside the fifty mile radius set
         forth in this Section 2.18(d) shall not be a waiver of the Employee's
         right to refuse subsequent transfer by an Employing Company to a
         location which is more than fifty (50) miles from the Employee's
         principal place of residence at the time of the Change in Control, and
         such subsequent, unconsented transfer shall be "Good Reason" under this
         Agreement; or

                  (e) Benefits and Perquisites. The taking of any action by the
         Employing Company that would directly or indirectly materially reduce
         the benefits enjoyed by an Employee under the Employing Company's
         retirement, life insurance, medical, health and accident, disability,
         deferred compensation or savings plans in which the Employee was
         participating immediately prior to the Change in Control, or the
         failure by the Employing Company to provide an Employee with the number
         of paid vacation days to which the Employee is entitled on the basis of
         years of service with the Employing Company in accordance with the
         Employing Company's normal vacation policy in effect immediately prior
         to the Change in Control (except for across-the-board plan or vacation
         policy changes or plan terminations similarly affecting at least
         ninety-five percent (95%) of all Employees of the Employing Company).
         2.19 "Group" shall have the meaning set forth in Section 14(d) of the
         Exchange Act. 2.20 "Group Health Plan" shall mean the group health plan
         covering the Participant, as such plan may be amended from time to
         time.

         2.21 "Group Life Insurance Plan" shall mean the group life insurance
program covering the Participant, as such plan may be amended from time to time.

         2.22 "Incumbent Board" shall mean those individuals who constitute the
Southern Board as of October 19, 1998 plus any individual who shall become a
director subsequent to such date whose election or nomination for election by
Southern's shareholders was approved by a vote of at least 75% of the directors
then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to the
Effective Date whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Southern Board shall be a
member of the Incumbent Board.

         2.23 "Month of Service" shall mean any calendar month during which a
Participant has worked at least one (1) hour or was on approved leave of absence
while in the employ of an Employing Company or any other Southern Subsidiary.

         2.24 "Participant" shall mean an Employee who meets the eligibility
requirements of Section 3.1 of this Plan.

         2.25 "Pension Plan" shall mean The Southern Company Pension Plan or any
successor thereto, as such plans may be amended from time to time.

         2.26 "Performance Dividend Plan" or "PDP Plan" shall mean the Southern
Company Performance Dividend Plan or any successor thereto which is considered
an "equitable arrangement" under Section 1.25 thereof, as such plans may be
amended from time to time.

         2.27 "Performance Pay Plan" or "PPP Plan" shall mean the Southern
Company Performance Pay Plan or any successor thereto which is considered an
"equitable arrangement" under Section 1.31 thereof, as such plans may be amended
from time to time.

         2.28 "Performance Stock Plan" shall mean the Southern Company
Performance Stock Plan or any successor thereto which is considered an
"equitable arrangement" under Section 1.33 thereof, as such plans may be amended
from time to time.

         2.29 "Person" shall mean any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of Exchange Act.

         2.30 "Plan" shall mean the Southern Company Executive Change in Control
Severance Plan.

         2.31 "SEI" shall mean Southern Energy, Inc., its successors and
assigns.

         2.32 "SERI" shall mean Southern Energy Resources, Inc., its successors
and assigns.

         2.33 "SERI Participant" shall mean a Participant who is employed by
SERI.

         2.34 "Short Term Plan" shall mean the Southern Energy Resources, Inc.
Short Term Plan, as amended from time to time.

         2.35 "Southern" shall mean The Southern Company, its successors and
assigns.

         2.36 "Southern Board" shall mean the board of directors of Southern.

         2.37 "Southern Subsidiary" shall mean any corporation or other entity
Controlled by Southern.

         2.38 "Support Employee" shall mean an Employee of the Company (which
shall continue to be such Employee's Employing Company for purposes of this
Plan) who:

                  (a) Is involuntarily terminated without Cause within one year
         of the Change in Control of an Employing Company (other than the
         Company) and either (i) spent at least 40% of his working time
         performing services for such Employing Company at the time of the
         Change in Control and for the six months prior thereto, or (ii) is
         determined by the Administrative Committee to be involuntarily
         terminated without Cause as a result of such Change in Control; or

                  (b) Voluntarily terminates with Good Reason within one year of
         the Change in Control of an Employing Company (other than the Company)
         and spent at least 40% of his working time performing services for such
         Employing Company at the time of the Change in Control and for the six
         months prior thereto. For purposes of this Section 2.38(b) only, Good
         Reason shall not include the provisions of Section 2.18(a), entitled
         "Inconsistent Duties." 2.39 "Termination for Cause" or "Cause" shall
         mean an Employee's termination of employment with his Employing Company
         upon the occurrence of any of the following:

                  (a) The willful and continued failure by the Employee to
         substantially perform his duties with his Employing Company (other than
         any such failure resulting from the Employee's Total Disability or from
         the Employee's retirement or any such actual or anticipated failure
         resulting from termination by the Employee for Good Reason) after a
         written demand for substantial performance is delivered to him by the
         Administrative Committee, which demand specifically identifies the
         manner in which the Administrative Committee believes that he has not
         substantially performed his duties; or

                  (b) The willful engaging by the Employee in conduct that is
         demonstrably and materially injurious to his Employing Company,
         monetarily or otherwise, including but not limited to any of the
         following:

                           (i) any willful act involving fraud or dishonesty in
                  the course of an Employee's employment by his Employing
                  Company;

                           (ii) the willful carrying out of any activity or the
                  making of any statement by an Employee which would materially
                  prejudice or impair the good name and standing of his
                  Employing Company, Southern or any other Southern Subsidiary
                  or would bring his Employing Company, Southern or any other
                  Southern Subsidiary into contempt, ridicule or would
                  reasonably shock or offend any community in which his
                  Employing Company, Southern or such other Southern Subsidiary
                  is located;

                           (iii) attendance by an Employee at work in a state of
                  intoxication or otherwise being found in possession at his
                  workplace of any prohibited drug or substance, possession of
                  which would amount to a criminal offense;

                           (iv) violation of his Employing Company's policies on
                  drug and alcohol usage, fitness for duty requirements or
                  similar policies as may exist from time to time as adopted by
                  the Employing Company's safety officer;

                           (v) assault or other act of violence by an Employee
                  against any person during the course of employment; or

                           (vi) an Employee's indictment for any felony or any
                  misdemeanor involving moral turpitude.

         No act or failure to act by an Employee shall be deemed "willful"
unless done, or omitted to be done, by the Employee not in good faith and
without reasonable belief that his action or omission was in the best interest
of his Employing Company.

         Notwithstanding the foregoing, an Employee shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of the majority
of the Administrative Committee at a meeting called and held for such purpose
(after reasonable notice to the Employee and an opportunity for him, together
with counsel, to be heard before the Administrative Committee), finding that, in
the good faith opinion of the Administrative Committee, the Employee was guilty
of conduct set forth in Section 2.39(a) or (b) hereof and specifying the
particulars thereof in detail.

         2.40 "Termination Date" shall mean the date on which a Participant is
separated from his Employing Company's regular payroll; provided, however, that
solely for purposes of Section 3.2(c) hereof, the Termination Date of
Participants who are deemed to be retired pursuant to the provisions of Section
3.3 hereof, shall be the effective date of their retirement pursuant to the
terms of the Pension Plan.

         2.41 "Total Disability" shall mean total disability within the meaning
of the Pension Plan.

         2.42 "Value Creation Plan" shall mean the Southern Energy Resources,
Inc. Value Creation Plan or any replacement thereto which is considered an
"equitable arrangement" under Section 1.30 thereof, as such plans may be amended
from time to time.

         2.43 "Voting Securities" shall mean the outstanding voting securities
of a corporation entitling the holder thereof to vote generally in the election
of such corporation's directors.

         2.44 "Waiver and Release" shall mean the Waiver and Release attached
hereto as Exhibit A.

         2.45 "Year of Service" shall mean an Employee's Months of Service
divided by twelve (12) rounded to the nearest whole year, rounding up if the
remaining number of months is seven (7) or greater and rounding down if the
remaining number of months is less than seven (7). If an Employee has a break in
his service with his Employing Company, he will receive credit under this Plan
for the service prior to the break in service only if the break in service was
less than five years and his service prior to the break exceeds the length of
the break in service.

                         ARTICLE 3 - SEVERANCE BENEFITS

         3.1      Eligibility.

                  (a) Employees. Except as otherwise provided herein, any
         Employee whose employment is involuntarily terminated by his Employing
         Company at any time during the two year period following a Change in
         Control of Southern or his Employing Company for reasons other than
         Cause or who shall voluntarily terminate his employment with his
         Employing Company for Good Reason at any time during the two year
         period following a Change in Control of Southern or his Employing
         Company, shall be entitled to participate in this Plan and receive the
         benefits described in Section 3.2 hereof, subject to the terms and
         conditions described in this Article 3.

                  (b) Support Employees. A Support Employee shall be entitled to
         participate in this Plan and receive the benefits described in Section
         3.2 hereof, subject to the terms and conditions described in this
         Article 3.

                  (c) Limits on Eligibility. Notwithstanding anything to the
         contrary herein, an Employee or Support Employee shall not be eligible
         to receive benefits under this Plan if the Employee or Support
         Employee:

                           (i) is not actively at work on his Termination Date,
                  unless such Employee or Support Employee is capable of
                  returning to work within twelve (12) weeks of the beginning of
                  any leave of absence from work;

                           (ii) voluntarily terminates his employment with his
                  Employing Company for other than Good Reason;

                           (iii) is terminated by his Employing Company for
                  Cause;

                           (iv) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  acquires all or substantially all of the assets of Southern, a
                  Southern Subsidiary or his Employing Company;

                           (v) refuses an offer of continued employment with his
                  Employing Company, Southern or a Southern Subsidiary, or any
                  employer that acquires all or substantially all of the assets
                  of Southern, a Southern Subsidiary or his Employing Company,
                  under circumstances where such refusal would not amount to
                  Good Reason for voluntary termination of employment and such
                  employer agrees to adopt this Plan as it applies to such
                  Participant; or

                           (vi) elects to receive the benefits of any other
                  voluntary or involuntary severance, separation or outplacement
                  program, plan or agreement maintained by his Employing Company
                  in lieu of benefits under this Plan; provided however, that
                  the receipt of benefits under any retention plan or agreement
                  shall not be deemed to be the receipt of benefits under any
                  severance, separation or outplacement program for purposes of
                  this Plan.

         3.2 Benefits. Upon the Employing Company's receipt of an effective
Waiver and Release, Participants shall be entitled to receive the following
benefits:

                  (a) Employee Outplacement Services. Each Participant shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         the Participant's Termination Date.

                  (b) Severance Benefit. Participants shall be paid in cash an
         amount equal to two times the Participant's Annual Compensation, but
         not in excess of the Capped Amount. For purposes of this Section
         3.2(b), the Capped Amount shall be the amount otherwise payable under
         this Section 3.2(b), reduced in such amount and to such extent that no
         amount of the payment under this Section 3.2(b), plus all other
         "parachute payments" under Code Section 280G, would constitute an
         "excess parachute payment" under Code Section 280G, but only to the
         extent that if the payment under this Section 3.2(b) were increased by
         one additional dollar ($1.00), a portion of the payment under this
         Section 3.2(b) would be an "excess parachute payment" under Code
         Section 280G. The calculation of the Capped Amount and any other
         determinations relating to the applicability of Code Section 280G (and
         the rules and regulations promulgated thereunder) to the payments
         contemplated by this Plan shall be made by the tax department of the
         independent public accounting firm then responsible for preparing
         Southern's consolidated federal income tax return, and such
         determinations shall be binding upon the Participants, Southern and the
         Employing Company.

                  (c) Welfare Benefit.

                           (i) Except as provided in Section 3.3 hereof, each
                  Participant shall be eligible to participate in the Employing
                  Company's Group Health Plan for a period of six (6) months for
                  each of the Participant's Years of Service, not to exceed a
                  period of five (5) years, beginning on the first day of the
                  first month following the Participant's Termination Date
                  unless otherwise specifically provided under such plan, upon
                  the Participant's payment of both the Employing Company's and
                  the Participant's premium under such plan. A Participant who
                  receives this extended medical coverage shall also be entitled
                  to elect coverage under the Group Health Plan for his
                  dependents who are participating in the Group Health Plan on
                  the Participant's Termination Date (and for such other
                  dependents as may be entitled to coverage under the provisions
                  of the Health Insurance Portability and Accountability Act of
                  1996) for the duration of the Participant's extended medical
                  coverage under this Section 3.2(c) to the extent such
                  dependents remain eligible for dependent coverage under the
                  terms of the Group Health Plan.

                           (ii) The extended medical coverage afforded to a
                  Participant pursuant to this Section 3.2(c) as well as the
                  premiums to be paid by the Participant in connection with such
                  coverage shall be determined in accordance with the terms of
                  the Group Health Plan and shall be subject to any changes in
                  the terms and conditions of the Group Health Plan as well as
                  any future increases in premiums under the Group Health Plan.
                  The premiums to be paid by the Participant in connection with
                  this extended coverage shall be due on the first day of each
                  month; provided, however, that if a Participant fails to pay
                  his premium within thirty (30) days of its due date, such
                  Participant's extended coverage shall be terminated.

                           (iii) Any Group Health Plan coverage provided under
                  this Section 3.2(c) shall be a part of and not in addition to
                  any COBRA Coverage which a Participant or his dependent may
                  elect. In the event that a Participant or his dependent
                  becomes eligible to be covered, by virtue of re-employment or
                  otherwise, by any employer-sponsored group health plan or is
                  eligible for coverage under any government-sponsored health
                  plan during the above period, coverage under the Employing
                  Company's Group Health Plan available to the Participant or
                  his dependent by virtue of the provisions of this Article 3
                  shall terminate, except as may otherwise be required by law,
                  and shall not be renewed. It shall be the duty of a
                  Participant to inform the Employing Company of his eligibility
                  to participate in any such health plan.

                           (iv) Except as otherwise provided in Section 3.3
                  hereof, regardless of whether a Participant elects the
                  extended coverage described in Section 3.2(a) hereof, the
                  Employing Company shall pay to each Participant a cash amount
                  equal to the Employing Company's and the Participant's cost of
                  premiums for two (2) years of coverage under the Group Health
                  Plan and Group Life Insurance Plan, as such Plans were in
                  effect as of the date of the Change in Control.

                  (d) Stock Option Vesting. The provisions of this Section
         3.2(d) shall apply to any Participant who, as of the date of the Change
         in Control, was a participant in the Performance Stock Plan, the
         defined terms of which are incorporated in this Section 3.2(d) by
         reference.

                           (i) Any of the Participant's Options and Stock
                  Appreciation Rights outstanding as of the Termination Date
                  which are not then exercisable and vested, shall become fully
                  exercisable and vested to the full extent of the original
                  grant; provided, that in the case of a Participant holding a
                  Stock Appreciation Right who is subject to Section 16(b) of
                  the Exchange Act, such Stock Appreciation Right shall not
                  become fully vested and exercisable at such time if such
                  actions would result in liability to the Participant under
                  Section 16(b) of the Exchange Act, provided further that any
                  such actions not taken as a result of the rules under Section
                  16(b) of the Exchange Act shall be effected as of the first
                  date that such activity would no longer result in liability
                  under Section 16(b) of the Exchange Act.

                           (ii) The restrictions and deferral limitations
                  applicable to any of the Participant's Restricted Stock as of
                  the Termination Date shall lapse, and such Restricted Stock
                  shall become free of all restrictions and limitations and
                  become fully vested and transferable to the full extent of the
                  original grant.

                           (iii) The restrictions and deferral limitations and
                  other conditions applicable to any other Awards held by the
                  Participant under the Performance Stock Plan as of the
                  Termination Date shall lapse, and such other Awards shall
                  become free of all restrictions, limitations or conditions and
                  become fully vested and transferable to the full extent of the
                  original grant. (e) Performance Pay Plan. The provisions of
                  this Section 3.2(e) shall apply to any Participant who, as of
                  the date of the Change in Control, was a participant in the
                  Performance Pay Plan, the defined terms of which are
                  incorporated in this Section 3.2(e) by reference. Provided the
                  Participant is not entitled to benefits under Article IV of
                  the PPP Plan, if the PPP Plan is in place as of the
                  Participant's Termination Date and to the extent the
                  Participant is entitled to participate therein, the
                  Participant shall be entitled to receive cash in an amount
                  equal to a prorated payout of his Incentive Pay Award under
                  the PPP Plan for the Performance Period in which the
                  Termination Date shall have occurred, at target performance
                  under the PPP Plan and prorated by the number of months which
                  have passed since the beginning of the Performance Period
                  until the Termination Date.

                  (f) Performance Dividend Plan. The provisions of this Section
         3.2(f) shall apply to any Participant who, as of the date of the Change
         in Control, was a participant in the Performance Dividend Plan, the
         defined terms of which are incorporated in this Section 3.2(f) by
         reference. Provided the Participant is not entitled to benefits under
         Article V of the Performance Dividend Plan, if the Performance Dividend
         Plan is in place through the Participant's Termination Date and to the
         extent the Participant is entitled to participate therein, the
         Participant shall be entitled to receive cash for each Award held as of
         such date based on a Payout Percentage of 50% under Section 4.1 of the
         Performance Dividend Plan for the Performance Period in which the
         Termination Date shall have occurred, and the Annual Dividend declared
         prior to the Termination Date.

                  (g) Value Creation Plan. The provisions of this Section 3.2(g)
         shall apply to any Participant who, as of the date of the Change in
         Control, was a participant in the Value Creation Plan, the defined
         terms of which are incorporated in this Section 3.2(g) by reference.
         Any of the Participant's Appreciation Rights or Indexed Rights
         outstanding as of the Termination Date which are not then exercisable
         and vested, shall become fully exercisable and vested to the full
         extent of the original grant. Notwithstanding anything in the Value
         Creation Plan to the contrary, Share Value with respect to any
         Appreciation Rights or Indexed Rights held by the Participant following
         his Termination Date shall be no less than the Share Value as of the
         date of the Change in Control of Southern or his Employing Company, as
         the case may be.

                  (h) Short Term Plan. The provisions of this Section 3.2(h)
         shall apply to any Participant who, as of the date of the Change in
         Control was a Participant in the Short Term Plan, the defined terms of
         which are incorporated in this Section 3.2(h) by reference. Provided
         the Participant is not entitled to benefits under Article V of the
         Short Term Plan, if the Short Term Plan is in place through the
         Participant's Termination Date and to the extent the Participant is
         entitled to participate therein, the Participant shall be entitled to
         receive cash in an amount equal to his Award under the Short Term Plan
         for the Performance Period in which the Termination Date shall have
         occurred, at Total Target for the Participant's Job Category and
         prorated by the number of months which have passed since the beginning
         of the Performance Period until the Termination Date.

                  (i) Other Short Term Incentive Plans. The provisions of this
         Section 3.2(i) shall apply to any Participant who, as of the date of
         the Change in Control is a participant in any other "short term
         incentive compensation plan" not otherwise previously referred to in
         this Section 3.2. Provided the Participant is not otherwise entitled to
         a plan payout under any change in control provisions of such plans, if
         the "short term incentive compensation plan" is in place through the
         Participant's Termination Date and to the extent the Participant is
         entitled to participate therein, the Participant shall be entitled to
         receive cash in an amount equal to his award under his respective
         Employing Company's "short term incentive compensation plan" for the
         annual performance period in which the Termination Date shall have
         occurred, at the Participant's target performance level and prorated by
         the number of months which have passed since the beginning of the
         annual performance period until the Termination Date. For purposes of
         this Section 3.2(i), the term "short term incentive compensation plan"
         shall mean any incentive compensation plan or arrangement adopted in
         writing by an Employing Company which provides for annual, recurring
         compensatory bonuses to participants based upon articulated performance
         criteria, and which have been identified by the Board of Directors and
         listed on Exhibit B hereto, which may be amended from time to time to
         reflect plan additions, terminations and amendments.

                  (j) DIC Plan. The provisions of this Section 3.2(j) shall
         apply to any Participant who, as of the date of the Change in Control,
         was a participant in the DIC Plan, the defined terms of which are
         incorporated into this Section 3.2(j) by reference. Provided a
         Participant is not entitled to benefits under Article V of the DIC
         Plan, if the DIC Plan is in place through Participant's Termination
         Date and to the extent that Participant is entitled to participate
         therein, any of the Participant's Awards as of the Termination Date
         which are not then vested shall become fully vested and Participant
         shall be entitled to receive cash in the amount equal to Participant's
         Account as of his Termination Date. Notwithstanding anything in the DIC
         Plan to the contrary, the investment return on the Awards determined in
         accordance with Section 3.1 of the DIC Plan for any Plan Year following
         a Change in Control of Southern or its Employing Company shall be no
         less than the investment return determined in accordance with Section
         3.1 of the DIC Plan as of the date of such Change in Control with
         respect to those Accounts which are outstanding as of the date of such
         Change in Control. 3.3 Coordination with Retiree Medical and Life
         Insurance Coverage. Notwithstanding anything to the contrary above, any
         Participant who is otherwise eligible to retire pursuant to the terms
         of the Pension Plan shall be deemed to have retired for purposes of all
         employee benefit plans sponsored by the Employing Company of which the
         Participant is a participant. A Participant who is deemed to have
         retired in accordance with the preceding sentence shall not be eligible
         to receive the benefits described in Section 3.2(c) hereof if, upon his
         Termination Date, such Participant becomes eligible to receive the
         retiree medical and life insurance coverage provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan.

         3.4 Payment of Benefits. The amounts due a Participant under Sections
3.2(b) and (c) hereof shall be payable in one (1) lump sum payment as soon as
administratively practicable within thirty (30) days of the later of the
following to occur: (a) the Participant's Termination Date, or (b) the tender to
the Employing Company by the Participant of an effective Waiver and Release in
the form of Exhibit A attached hereto and the expiration of any applicable
revocation period for such waiver. In the event of a dispute with respect to
liability or amount of any benefit due hereunder, an effective Waiver and
Release shall be tendered at the time of final resolution of any such dispute
when payment is tendered by the Employing Company.

         3.5 Benefits in the Event of Death. In the event of the Participant's
death prior to the payment of all benefits due under this Article 3, the
Participant's estate shall be entitled to receive as due any amounts not yet
paid under this Article 3 upon the tender by the executor or administrator of
the estate of an effective Waiver and Release.

         3.6 Legal Fees. In the event of a dispute between a Participant and his
Employing Company with regard to any amounts due hereunder, if any material
issue in such dispute is finally resolved in the Participant's favor, his
Employing Company shall reimburse the Participant's legal fees incurred with
respect to all issues in such dispute in an amount not to exceed thirty thousand
dollars ($30,000).

         3.7 No Mitigation. A Participant who receives benefits under Section
3.2 of this Plan shall have no duty or obligation to seek other employment
following his Termination Date and, except as otherwise provided in Subsection
3.1(d) hereof, the amounts due a Participant hereunder shall not be reduced or
suspended if such Participant accepts such subsequent employment.

         3.8 Non-qualified Retirement and Deferred Compensation Plans.
Subsequent to a Change in Control, any claims by a Participant for benefits
under any of the Company's non-qualified retirement or deferred compensation
plans shall be resolved through binding arbitration in accordance with the
procedures and provisions set forth in Article 5 hereof and if any material
issue in such dispute is finally resolved in the Participant's favor, the
Company shall reimburse the Participant's legal fees in the manner provided in
Section 3.6 hereof.

         3.9 Guarantee of SEI. Effective May 10, 2000, if SERI fails or refuses
to make payments under the Plan, SERI Participants may have the right to obtain
payment by SEI pursuant to the terms of the "Guarantee Agreement Concerning
Southern Energy Resources, Inc. Compensation and Benefit Arrangements" entered
into by SEI and SERI. A SERI Participant's right to payment is not increased as
a result of this Guarantee. SERI Participants have the same right to payment
from SEI as they have from SERI. Any demand to enforce this Guarantee should be
made in writing and should reasonably and briefly specify the manner and the
amount SERI has failed to pay. Such writing given by personal delivery or mail
shall be effective upon actual receipt. Any writing given by telegram or
telecopier shall be effective upon actual receipt if received during SEI's
normal business hours, or at the beginning of the next business day after
receipt, if not received during SEI's normal business hours. All arrivals by
telegram or telecopier shall be confirmed promptly after transmission in writing
by certified mail or personal delivery.

                           ARTICLE 4 - ADMINISTRATION

         4.1 Administrative Committee. The Administrative Committee shall be
responsible for the general administration of the Plan and may appoint other
persons or entities to perform or assist in the performance of any of its
duties, subject to its review and approval. The Administrative Committee shall
have the right to remove any such appointee from his position without cause upon
notice.

                             ARTICLE 5 - ARBITRATION

         5.1 General. Any dispute, controversy or claim arising out of or
relating to the Company's obligations to pay severance benefits under this Plan,
or the breach thereof, shall be settled and resolved solely by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association ("AAA") except as otherwise provided herein. The arbitration shall
be the sole and exclusive forum for resolution of any such claim for severance
benefits and the arbitrators' award shall be final and binding. The provisions
of this Article 5 are not intended to apply to any other disputes, claims or
controversies arising out of or relating to a Participant's employment by an
Employing Company or the termination thereof.

         5.2 Demand for Arbitration. Arbitration shall be initiated by serving a
written notice of demand for arbitration to the Participant, in the case of an
Employing Company, or to the Administrative Committee, in the case of a
Participant.

         5.3 Law and Venue. The arbitrators shall apply the laws of the State of
Georgia, except to the extent pre-empted by federal law, excluding any law which
would require the use of the law of another state. The arbitration shall be held
in Atlanta, Georgia.

         5.4 Appointment of Arbitrators. Arbitrators shall be appointed within
fifteen (15) business days following service of the demand for arbitration. The
number of arbitrators shall be three. One arbitrator shall be appointed by the
Participant, one arbitrator shall be appointed by the Employing Company, and the
two arbitrators shall appoint a third. If the arbitrators cannot agree on a
third arbitrator within thirty (30) business days after the service of demand
for arbitration, the third arbitrator shall be selected by the AAA.

         5.5 Costs. The arbitration filing fee shall be paid by the Participant.
All other costs of arbitration shall be borne equally by the Participant and his
Employing Company, provided, however, that such Employing Company shall
reimburse such fees and costs in the event any material issue in such dispute is
finally resolved in the Participant's favor and the Participant is reimbursed
legal fees under Section 3.6 hereof.

         5.6 Interim and Injunctive Relief. Nothing in this Article 5 is
intended to preclude, upon application of either party, any court having
jurisdiction from issuing and enforcing in any lawful manner such temporary
restraining orders, preliminary injunctions, and other interim measures of
relief as may be necessary to prevent harm to either party's interests or as
otherwise may be appropriate pending the conclusion of arbitration proceedings
pursuant to this Article 5 and nothing herein is intended to prevent any court
from entering and enforcing in any lawful manner such judgments for permanent
equitable relief as may be necessary to prevent harm to a party's interests or
as otherwise may be appropriate following the issuance of arbitral awards
pursuant to this Article 5.

                            ARTICLE 6 - MISCELLANEOUS

         6.1 Funding of Benefits. Unless the Board of Directors shall in its
discretion determine otherwise, the benefits payable to a Participant under the
Plan shall not be funded in any manner and shall be paid by the Employing
Companies out of their general assets, which assets are subject to the claims of
the Employing Companies' creditors.

         6.2 Withholding. There shall be deducted from the payment of any
benefit due under the Plan the amount of any tax required by any governmental
authority to be withheld and paid over by the Employing Companies to such
governmental authority for the account of the Participant entitled to such
payment.

         6.3 Assignment. No Participant or beneficiary shall have any rights to
sell, assign, transfer, encumber, or otherwise convey the right to receive the
payment of any benefit due hereunder, which payment and the rights thereto are
expressly declared to be nonassignable and nontransferable. Any attempt to do so
shall be null and void and of no effect.

         6.4 Amendment and Termination. The Plan may be amended or terminated at
any time by the Board of Directors, provided, however, the Plan may not be
amended in any material respect or terminated within the two (2) year period
following a Change in Control nor shall any amendment or termination impair the
rights of any Participant which have accrued hereunder prior to any such
amendment or termination.

         6.5 Pooling Accounting. Notwithstanding anything to the contrary
herein, if, but for any provision of this Plan, a Change in Control transaction
would otherwise be accounted for as a pooling-of-interests under APB No.16
("Pooling Accounting") (after giving effect to any and all other facts and
circumstances affecting whether such Change in Control transaction would use
Pooling Accounting), such provision or provisions of this Plan which would
otherwise cause the Change in Control transaction to be ineligible for Pooling
Accounting shall be void and ineffective in such a manner and to the extent that
by eliminating such provision or provisions of this Plan, Pooling Accounting
would be required for such Change in Control transaction.

         IN WITNESS WHEREOF, this Southern Company Executive Change in Control
Severance Plan has been executed by the Company through its duly authorized
officers, this ____ day of ___________, 2000, to be effective as provided
herein.

                             SOUTHERN COMPANY SERVICES, INC.

                             By:      ____________________________________


<PAGE>




                                    Exhibit A

                                SOUTHERN COMPANY

                           EXECUTIVE CHANGE IN CONTROL

                                 SEVERANCE PLAN

                               Waiver and Release

         I understand that I am entitled to receive the Severance Benefits
described in Article 3 of the Southern Company Executive Change in Control
Severance Plan (the "Plan") if I execute this Waiver and Release ("Waiver"). I
understand that the benefits I have elected to receive under the Plan are in
excess of those I would have received from ________________________ (the
"Company") if I had not elected to participate in the Plan and sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. I understand and agree that I
am obligated to keep confidential and not disclose the terms of this Waiver,
including, but not limited to, the benefits under this Plan, except to my
attorneys, financial advisors, or except where such disclosure is required by
law. However, nothing in this Waiver shall prohibit me from engaging in
protected activities under applicable law or from communicating, either
voluntary or otherwise, with any governmental agency concerning any potential
violation of the law.

         In signing this Waiver, I am not releasing claims to any vested or
accrued benefits that I have under any workers' compensation laws or any
retirement plan or welfare benefit plan within the meaning of the Employee
Retirement Income Security Act of 1974, as amended, which is sponsored by or
adopted by the Company and/or any of its direct or indirect subsidiaries;
however, I understand and acknowledge that nothing herein is intended to or
shall be construed to require the Company to institute or continue in effect any
particular plan or benefit sponsored by the Company and the Company hereby
reserves the right to amend or terminate any of its benefit programs at any time
in accordance with the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company except for programs specifically designed for
participants in the Plan.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to forty-five (45) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
_________ day of_________ , in the year ______.


                        Employee's signature


                        Employee's printed name

         Acknowledged and Accepted by the Administrative Committee of the
Southern Company Executive Change in Control Severance Plan.

By:
         -----------------------------------
Date:
         -----------------------------------


<PAGE>


                             Attachment to Exhibit A

TO:      All Eligible Employees under the Southern Company Executive Change in
         Control Severance Plan

FROM:    _____________________

RE:      ADEA Information Notice

DATE:    _____________________


         A severance plan known as the Southern Company Executive Change in
Control Severance Plan ("Plan") has been approved and established by The
Southern Company, its affiliates and its direct and indirect subsidiaries
(collectively the "Company"). You are eligible to participate in the Plan
subject to the terms of the Plan. In accordance with the Age Discrimination in
Employment Act ("ADEA"), the Company is providing you the following information
pertaining to eligibility and participation in the Plan.

o             The purpose of the Plan is to provide benefits to certain key
              employees of The Southern Company and certain subsidiaries of The
              Southern Company ("Employing Companies") whose employment is
              terminated subsequent to a change in control of The Southern
              Company or their respective Employing Company.

o             Each active regular employee of an Employing Company of Grade 10
              to 13 (or, if the Grade System is not used, $130,000 or more of
              annual base salary rate for the 12 month period immediately
              preceding the change in control) not covered by a collective
              bargaining agreement is generally eligible to participate in the
              Plan if, during the two year period following a change in control:
              (i) his employment is involuntarily terminated for reasons other
              than cause, or (ii) he voluntarily terminates employment for good
              reason.

o             All eligible employees may receive severance benefits under the
              Plan by signing a Waiver and Release no later than 45 calendar
              days from the date it is received. The Waiver and Release will
              remain revocable by you for a seven day period after you sign it.

o             Attached is a list sorted by job title and age of each employee
              eligible to participate in the Plan as well as a list of the ages
              of all employees in the same job classification who are not
              eligible to participate in the Plan.

         In furtherance of you making an informed decision, the Company urges
you to seek a financial advisor, legal counsel and a qualified tax advisor to
assist you in fully understanding your rights and benefits under the plan and
the Waiver and Release that you will be required to sign to receive severance
benefits under the Plan.

         If you have any questions or need additional information, please call
me at _______________.

Sincerely,

- ----------------------
[Name]
- ----------------------
[Title]


<PAGE>

<TABLE>


                             ADEA INFORMATION NOTICE

<S>                                                          <C>
- ------------------------------------------------------------ ---------------------------------------------------------
                 Job Title, Classification                                            Age of
             or Category of Eligible Employees                                  Eligible Employees

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
[List  job   classification,   title  or  category  of  all  [List corresponding age of each eligible employee]
eligible employees]
- ------------------------------------------------------------ ---------------------------------------------------------



- ------------------------------------------------------------ ---------------------------------------------------------
                 Job Title, Classification                                            Age of
            or Category of Ineligible Employees                                Ineligible Employees

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------

- ------------------------------------------------------------ ---------------------------------------------------------
- ------------------------------------------------------------ ---------------------------------------------------------
[List  job   classification,   title  or  category  of  all  [List corresponding age of each ineligible employee]
ineligible employees]
- ------------------------------------------------------------ ---------------------------------------------------------

</TABLE>


<PAGE>


                                    Exhibit B

                                SOUTHERN COMPANY

                           EXECUTIVE CHANGE IN CONTROL

                                 SEVERANCE PLAN

                     Short Term Incentive Compensation Plans
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>26
<FILENAME>x10a79.txt
<TEXT>


                              AMENDED AND RESTATED

                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Gulf
Power Company (the "Company") and Mr. Travis J. Bowden ("Mr. Bowden")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties, originally effective and executed on February 26, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Bowden is the President and Chief Executive Officer of the
Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective February 26, 1999 (the "Original Agreement") to provide to Mr. Bowden
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Bowden's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Bowden or any
                           Group of which Mr. Bowden is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Bowden, any Group of which Mr. Bowden is a party, any
                           Group composed exclusively of Company employees, any
                           qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Bowden, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Bowden is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Bowden or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Gulf Power Company , its successors
         and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Bowden's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Bowden's position or in the nature or status
                  of his responsibilities from those in effect immediately prior
                  to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Bowden's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Bowden's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Bowden participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Bowden's participation therein, (except for
                  across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Bowden's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Bowden is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Bowden's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Bowden of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Bowden's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Bowden's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Bowden under the
                  Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Bowden was participating immediately prior to the
                  Change in Control; or the failure by the Company to provide
                  Mr. Bowden with the number of paid vacation days to which Mr.
                  Bowden is entitled on the basis of years of service with the
                  Company in accordance with the Company's normal vacation
                  policy in effect immediately prior to the Change in Control
                  (except for across-the-board plan or vacation policy changes
                  or plan terminations similarly affecting at least ninety-five
                  percent (95%) of the Executive Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Bowden, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Bowden, as such plan may be amended from
         time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Bowden has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Bowden's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Bowden
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Bowden's Total
                  Disability or from Mr. Bowden's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Bowden for Good Reason) after a written demand for substantial
                  performance is delivered to him by the Southern Board, which
                  demand specifically identifies the manner in which the
                  Southern Board believes that he has not substantially
                  performed his duties; or

                           (ii) The willful engaging by Mr. Bowden in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Bowden's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Bowden shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Bowden not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

                  Notwithstanding the foregoing, Mr. Bowden shall not be deemed
         to have been terminated for Cause unless and until there shall have
         been delivered to him a copy of a resolution duly adopted by the
         affirmative vote of not less than three quarters of the entire
         membership of the Southern Board at a meeting of the Southern Board
         called and held for such purpose (after reasonable notice to Mr. Bowden
         and an opportunity for him, together with counsel, to be heard before
         the Southern Board), finding that, in the good faith opinion of the
         Southern Board, Mr. Bowden was guilty of conduct set forth above in
         clause (i) or (ii) of this Paragraph 1.(bb) and specifying the
         particulars thereof in detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Bowden's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Bowden's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Bowden's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Bowden has a break in his service with the Company, he will
         receive credit under this Agreement for service prior to the break in
         service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Bowden's employment is involuntarily terminated
         by the Company at any time during the two year period following a
         Change in Control for reasons other than Cause, or if Mr. Bowden
         voluntarily terminates his employment with the Company for Good Reason
         at any time during the two year period following a Change in Control,
         Mr. Bowden shall be entitled to receive the benefits described in this
         Agreement upon the Company's receipt of an effective Waiver and
         Release. Notwithstanding anything to the contrary herein, Mr. Bowden
         shall not be eligible to receive benefits under this Agreement if Mr.
         Bowden:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Bowden meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Bowden an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Bowden under Code Section 280G exceeds three (3) times Mr. Bowden's
         "base amount" (as such term is defined under Code Section 280G ("Base
         Amount")) by ten percent (10%) or more; provided further, that if no
         280G Gross-up is paid, the Severance Amount shall be capped at three
         (3) times Mr. Bowden's Base Amount, less all other "parachute payments"
         (as such term is defined under Code Section 280G) received by Mr.
         Bowden, less one dollar (the "Capped Amount"), if the Capped Amount,
         reduced by HI Tax and Income Tax, exceeds what otherwise would have
         been the Severance Amount, reduced by HI Tax, Income Tax and Excise
         Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Bowden meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Bowden shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Bowden's Years of
                  Service, not to exceed five (5) years. If Mr. Bowden elects to
                  receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Bowden's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Bowden's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Bowden pursuant to Paragraph 2.(c)(i), as well
                           as the premiums to be paid by Mr. Bowden in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Bowden in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Bowden or
                           his dependents may elect. In the event that Mr.
                           Bowden or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Bowden or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Bowden shall be entitled to receive
                           cash in an amount equal to the Company's and Mr.
                           Bowden's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Bowden meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Bowden's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Bowden is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Bowden under Section 16(b) of the
                           Exchange Act, provided further, that any such actions
                           not taken as a result of the rules under Section
                           16(b) of the Exchange Act shall be effected as of the
                           first date that such activity would no longer result
                           in liability under Section 16(b) of the Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Bowden's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Bowden under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Bowden is not
                  entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Bowden's Termination Date and to the extent Mr. Bowden is
                  entitled to participate therein, Mr. Bowden shall be entitled
                  to receive cash in an amount equal to a prorated payout of his
                  Incentive Pay Awards under the PPP Plan for the Performance
                  Period in which the Termination Date shall have occurred, at
                  target performance under the PPP Plan and prorated by the
                  number of months which have passed since the beginning of the
                  Performance Period until the Termination Date.

                           (iii) Performance Dividend Plan. Provided Mr. Bowden
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Bowden's Termination
                  Date and to the extent Mr. Bowden is entitled to participate
                  therein, Mr. Bowden shall be entitled to receive cash for each
                  Award held by Mr. Bowden on his Termination Date, based on
                  actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Bowden is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Bowden is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Bowden is entitled to participate therein, Mr. Bowden
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Bowden's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria.

                  (e) Payment of Benefits. Any amounts due under this Agreement
         shall be paid in one (1) lump sum payment as soon as administratively
         practicable following the later of: (i) Mr. Bowden's Termination Date,
         or (ii) upon Mr. Bowden's tender of an effective Waiver and Release to
         the Company in the form of Exhibit A attached hereto and the expiration
         of any applicable revocation period for such waiver. In the event of a
         dispute with respect to liability or amount of any benefit due
         hereunder, an effective Waiver and Release shall be tendered at the
         time of final resolution of any such dispute when payment is tendered
         by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Bowden's death prior to the payment of all amounts due under this
         Agreement, Mr. Bowden's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Bowden
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Bowden's
         favor, the Company shall reimburse Mr. Bowden's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Bowden shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Bowden's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Bowden for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Bowden's favor, the Company shall
         reimburse Mr. Bowden's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Bowden's employment by
the Company is terminated during the two year period following a Change in
Control and Mr. Bowden accepts employment by Southern, a Southern Subsidiary, or
any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Bowden is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Bowden
hereunder shall not be reduced or suspended if Mr. Bowden accepts such
subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Bowden's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Bowden, in the case of the Company, or
         to the Southern Board, in the case of Mr. Bowden.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Bowden, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Bowden.
         All other costs of arbitration shall be borne equally by Mr. Bowden and
         the Company, provided, however, that the Company shall reimburse such
         fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Bowden's favor and Mr. Bowden is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Bowden under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Bowden.

                  (c) Assignment. Mr. Bowden shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000. THE SOUTHERN COMPANY


                               By:      ____________________________________
                                        GULF POWER COMPANY


                               By:      ____________________________________
                                        MR. BOWDEN

                                        -----------------------------
                                        Travis J. Bowden


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Travis J. Bowden
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Travis J. Bowden, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Gulf Power Company
(collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                               Travis J. Bowden

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>27
<FILENAME>x10a80.txt
<TEXT>


                              AMENDED AND RESTATED

                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. A. W. Dahlberg ("Mr. Dahlberg")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties, originally effective and executed on December 7, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Dahlberg is the Chairman of the Board and Chief Executive
Officer of Southern; WHEREAS, Mr. Dahlberg is the Chairman of the Executive
Committee of the Company; WHEREAS, the Parties entered into a Change in Control
Agreement effective December 7, 1998 (the "Original Agreement") to provide to
Mr. Dahlberg certain severance benefits under certain circumstances following a
change in control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to the provisions of such Section 6(d), to
(i) change certain references from normal market bonus to target bonus, (ii)
clarify that an initial public offering and a spin-off of the Company does not
constitute a "change in control" under the Agreement, (iii) change references
from the "Productivity Improvement Plan" to the "Executive Productivity
Improvement Plan," (iv) add Southern Energy, Inc. as a company released in the
waiver and release attached hereto, and (v) certain other technical and
miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Dahlberg's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (d) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(d)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Dahlberg or any
                           Group of which Mr. Dahlberg is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(d)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Dahlberg, any Group of which Mr. Dahlberg is a party,
                           any Group composed exclusively of Company employees,
                           any qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(d)(iv), any acquisition by Mr. Dahlberg, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Dahlberg is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (e) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Dahlberg or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (f) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (g) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (h) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (i) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (j) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (k) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (l) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (m) "Executive Productivity Improvement Plan" or "Executive
         PIP Plan" shall mean the Southern Company Executive Productivity
         Improvement Plan or replacement thereto, as such plans may be amended
         from time to time.

                  (n) "Good Reason" shall mean, without Mr. Dahlberg's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Dahlberg's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Dahlberg's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Dahlberg's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Dahlberg participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Dahlberg's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company); For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Dahlberg's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Dahlberg is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Dahlberg's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Dahlberg of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Dahlberg's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Dahlberg's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Dahlberg under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Dahlberg was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Dahlberg with the number of paid vacation days to
                  which Mr. Dahlberg is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Dahlberg as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Dahlberg as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Dahlberg has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Dahlberg's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Dahlberg
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Dahlberg's Total
                  Disability or from Mr. Dahlberg's retirement or any such
                  actual or anticipated failure resulting from termination by
                  Mr. Dahlberg for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Dahlberg in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Dahlberg's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Dahlberg shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Dahlberg not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Dahlberg shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Dahlberg and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Dahlberg was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Dahlberg's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(b) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Dahlberg's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Dahlberg's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Dahlberg has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2.       Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Dahlberg's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Dahlberg voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Dahlberg shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Dahlberg shall not be eligible to receive benefits under this
         Agreement if Mr. Dahlberg:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to any
                  Southern Subsidiary or any employer that succeeds to all or
                  substantially all of the assets of Southern or any Southern
                  Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, or any Southern Subsidiary under circumstances where
                  such refusal would not amount to Good Reason for voluntary
                  termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Dahlberg meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Dahlberg an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Dahlberg under Code Section 280G exceeds three (3) times Mr.
         Dahlberg's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Dahlberg's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Dahlberg, less one dollar (the "Capped Amount"), if the
         Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise
         would have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Dahlberg meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Dahlberg shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Dahlberg's Years of
                  Service, not to exceed five (5) years. If Mr. Dahlberg elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Dahlberg's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Dahlberg's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Dahlberg pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Dahlberg in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Dahlberg in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Dahlberg
                           or his dependents may elect. In the event that Mr.
                           Dahlberg or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Dahlberg or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed. (ii) Mr. Dahlberg shall be entitled
                           to receive cash in an amount equal to the Company's
                           and Mr. Dahlberg's cost of premiums for three (3)
                           years of coverage under the Group Health Plan and
                           Group Life Insurance Plan in accordance with the
                           terms of such plans as of the date of the Change in
                           Control.

                  (d) Incentive Plans. If Mr. Dahlberg meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Dahlberg's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Dahlberg is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Dahlberg under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Dahlberg's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Dahlberg under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Dahlberg is
                  not entitled to benefits under Article V of the PPP Plan (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Dahlberg's Termination Date and to the extent Mr. Dahlberg
                  is entitled to participate therein, Mr. Dahlberg shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Executive PIP Plan. Provided Mr. Dahlberg is
                  not entitled to benefits under Article IV of the Executive PIP
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Executive PIP Plan
                  is in place through Mr. Dahlberg's Termination Date and to the
                  extent Mr. Dahlberg is entitled to participate therein, Mr.
                  Dahlberg shall be entitled to receive cash in an amount equal
                  to his Award Opportunity for the Computation Periods in which
                  the Termination Date shall have occurred at a target Value of
                  Performance Unit of $1.00, prorated for each Performance
                  Period by the number of months which have passed since the
                  beginning of each of the Computation Periods until the
                  Termination Date.

                           (iv) Performance Dividend Plan. Provided Mr. Dahlberg
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iv) by reference), if the Performance Dividend
                  Plan is in place through Mr. Dahlberg's Termination Date and
                  to the extent Mr. Dahlberg is entitled to participate therein,
                  Mr. Dahlberg shall be entitled to receive cash for each Award
                  held by Mr. Dahlberg on his Termination Date, based on actual
                  performance under Section 4.1 of the Performance Dividend Plan
                  determined as of the most recently completed calendar quarter
                  of the Performance Period in which the Termination Date shall
                  have occurred, and the Annual Dividend declared prior to the
                  Termination Date.

                           (v) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(v) shall apply if and to the extent
                  that Mr. Dahlberg is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Dahlberg is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Dahlberg is entitled to participate therein, Mr. Dahlberg
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Dahlberg's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(v) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of:

                                    (i) Mr. Dahlberg's Termination Date, or

                                    (ii) upon Mr. Dahlberg's tender of an
                           effective Waiver and Release to the Company in the
                           form of Exhibit A attached hereto and the expiration
                           of any applicable revocation period for such waiver.
                           In the event of a dispute with respect to liability
                           or amount of any benefit due hereunder, an effective
                           Waiver and Release shall be tendered at the time of
                           final resolution of any such dispute when payment is
                           tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Dahlberg's death prior to the payment of all amounts due under this
         Agreement, Mr. Dahlberg's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Dahlberg
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Dahlberg's
         favor, the Company shall reimburse Mr. Dahlberg's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Dahlberg shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Dahlberg's Termination Date.

                 (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Dahlberg for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Dalhberg's favor, the Company shall
         reimburse Mr. Dahlberg's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Dahlberg's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Dahlberg accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Dahlberg is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Dahlberg hereunder shall not be reduced or suspended if Mr. Dahlberg accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Dahlberg's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Dahlberg, in the case of the Company,
         or to the Southern Board, in the case of Mr. Dahlberg.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Dahlberg, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Dahlberg.
         All other costs of arbitration shall be borne equally by Mr. Dahlberg
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Dahlberg's favor and Mr. Dahlberg is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Dahlberg under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Dahlberg.

                  (c) Assignment. Mr. Dahlberg shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.


<PAGE>


         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, -----.

                                           THE SOUTHERN COMPANY


                                  By:      ____________________________________
                                           SOUTHERN COMPANY
                                               SERVICES, INC.


                                  By:      ____________________________________
                                           MR. DAHLBERG

                                           -----------------------------
                                           A.W. Dahlberg


<PAGE>




                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. A.W. Dahlberg
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, A.W. Dahlberg, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                              A.W. Dahlberg

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>28
<FILENAME>x10a81.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"),
Mississippi Power Company (the "Company") and Mr. Dwight H. Evans ("Mr. Evans")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties, originally effective and executed on February 24, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Evans is the President and Chief Executive Officer of the
Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective February 24, 1999 (the "Original Agreement") to provide to Mr. Evans
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Evans's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Evans or any
                           Group of which Mr. Evans is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Evans, any Group of which Mr. Evans is a party, any
                           Group composed exclusively of Company employees, any
                           qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Evans, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Evans is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Evans or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Mississippi Power Company, its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Evans's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Evans's position or in the nature or status
                  of his responsibilities from those in effect immediately prior
                  to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Evans's annual base salary rate as in effect immediately prior
                  to the Change in Control (except for a less than ten percent
                  (10%), across-the-board annual base salary rate reduction
                  similarly affecting at least ninety-five percent (95%) of the
                  Executive Employees of the Company); or (ii) the sum of Mr.
                  Evans's annual base salary rate plus target bonus under the
                  PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Evans participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Evans's participation therein, (except for
                  across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Evans's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Evans is located at the time of the Change in
                  Control, unless such new work location is within fifty (50)
                  miles from Mr. Evans's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Evans of employment by the Company at a work location which is
                  outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Evans's right to refuse
                  subsequent transfer by the Company to a location which is more
                  than fifty (50) miles from Mr. Evans's principal place of
                  residence at the time of the Change in Control, and such
                  subsequent unconsented transfer shall be "Good Reason" under
                  this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Evans under the
                  Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Evans was participating immediately prior to the
                  Change in Control; or the failure by the Company to provide
                  Mr. Evans with the number of paid vacation days to which Mr.
                  Evans is entitled on the basis of years of service with the
                  Company in accordance with the Company's normal vacation
                  policy in effect immediately prior to the Change in Control
                  (except for across-the-board plan or vacation policy changes
                  or plan terminations similarly affecting at least ninety-five
                  percent (95%) of the Executive Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Evans, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Evans, as such plan may be amended from
         time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Evans has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Evans's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Evans
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Evans's Total
                  Disability or from Mr. Evans's retirement or any such actual
                  or anticipated failure resulting from termination by Mr. Evans
                  for Good Reason) after a written demand for substantial
                  performance is delivered to him by the Southern Board, which
                  demand specifically identifies the manner in which the
                  Southern Board believes that he has not substantially
                  performed his duties; or

                           (ii) The willful engaging by Mr. Evans in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Evans's employment by
                           the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Evans shall be deemed "willful"
                           unless done, or omitted to be done, by Mr. Evans not
                           in good faith and without reasonable belief that his
                           action or omission was in the best interest of the
                           Company.

         Notwithstanding the foregoing, Mr. Evans shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Evans and an opportunity for him, together with counsel, to be heard before
the Southern Board), finding that, in the good faith opinion of the Southern
Board, Mr. Evans was guilty of conduct set forth above in clause (i) or (ii) of
this Paragraph 1.(bb) and specifying the particulars thereof in detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Evans's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Evans's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Evans's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Evans has a break in his service with the Company, he will
         receive credit under this Agreement for service prior to the break in
         service only if the break in service is less than five years.

         2.       Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Evans's employment is involuntarily terminated
         by the Company at any time during the two year period following a
         Change in Control for reasons other than Cause, or if Mr. Evans
         voluntarily terminates his employment with the Company for Good Reason
         at any time during the two year period following a Change in Control,
         Mr. Evans shall be entitled to receive the benefits described in this
         Agreement upon the Company's receipt of an effective Waiver and
         Release. Notwithstanding anything to the contrary herein, Mr. Evans
         shall not be eligible to receive benefits under this Agreement if Mr.
         Evans:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Evans meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Evans an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Evans under Code Section 280G exceeds three (3) times Mr. Evans's
         "base amount" (as such term is defined under Code Section 280G ("Base
         Amount")) by ten percent (10%) or more; provided further, that if no
         280G Gross-up is paid, the Severance Amount shall be capped at three
         (3) times Mr. Evans's Base Amount, less all other "parachute payments"
         (as such term is defined under Code Section 280G) received by Mr.
         Evans, less one dollar (the "Capped Amount"), if the Capped Amount,
         reduced by HI Tax and Income Tax, exceeds what otherwise would have
         been the Severance Amount, reduced by HI Tax, Income Tax and Excise
         Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Evans meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Evans shall be eligible to participate in the
                  Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Evans's Years of
                  Service, not to exceed five (5) years. If Mr. Evans elects to
                  receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Evans's Termination Date (and for such other dependents as
                  may be entitled to coverage under the provisions of the Health
                  Insurance Portability and Accountability Act of 1996) for the
                  duration of Mr. Evans's extended medical coverage under this
                  Paragraph 2.(c)(i) to the extent such dependents remain
                  eligible for dependent coverage under the terms of the Group
                  Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Evans pursuant to Paragraph 2.(c)(i), as well
                           as the premiums to be paid by Mr. Evans in connection
                           with such coverage shall be determined in accordance
                           with the terms of the Group Health Plan and shall be
                           subject to any changes in the terms and conditions of
                           the Group Health Plan as well as any future increases
                           in premiums under the Group Health Plan. The premiums
                           to be paid by Mr. Evans in connection with this
                           extended coverage shall be due on the first day of
                           each month; provided, however, that if he fails to
                           pay his premium within thirty (30) days of its due
                           date, such extended coverage shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Evans or
                           his dependents may elect. In the event that Mr. Evans
                           or his dependents become eligible to be covered, by
                           virtue of re-employment or otherwise, by any
                           employer-sponsored group health plan or is eligible
                           for coverage under any government-sponsored health
                           plan during the above period, coverage under the
                           Company's Group Health Plan available to Mr. Evans or
                           his dependents by virtue of the provisions of
                           Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Evans shall be entitled to receive
                           cash in an amount equal to the Company's and Mr.
                           Evans's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Evans meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Evans's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Evans is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Evans under Section 16(b) of the
                           Exchange Act, provided further, that any such actions
                           not taken as a result of the rules under Section
                           16(b) of the Exchange Act shall be effected as of the
                           first date that such activity would no longer result
                           in liability under Section 16(b) of the Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Evans's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Evans under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Evans is not
                  entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Evans's Termination Date and to the extent Mr. Evans is
                  entitled to participate therein, Mr. Evans shall be entitled
                  to receive cash in an amount equal to a prorated payout of his
                  Incentive Pay Awards under the PPP Plan for the Performance
                  Period in which the Termination Date shall have occurred, at
                  target performance under the PPP Plan and prorated by the
                  number of months which have passed since the beginning of the
                  Performance Period until the Termination Date.

                           (iii) Performance Dividend Plan. Provided Mr. Evans
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Evans's Termination Date
                  and to the extent Mr. Evans is entitled to participate
                  therein, Mr. Evans shall be entitled to receive cash for each
                  Award held by Mr. Evans on his Termination Date, based on
                  actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Evans is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Evans is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Evans is entitled to participate therein, Mr. Evans shall
                  receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Evans's target performance level and prorated
                  by the number of months which have passed since the beginning
                  of the annual performance period until his Termination Date.
                  For purposes of this Paragraph 2.(d)(iv) the term "short term
                  incentive compensation plan" shall mean any incentive
                  compensation plan or arrangement adopted in writing by the
                  Company which provides for annual, recurring compensatory
                  bonuses based upon articulated performance criteria.

                  (e) Payment of Benefits. Any amounts due under this Agreement
         shall be paid in one (1) lump sum payment as soon as administratively
         practicable following the later of: (i) Mr. Evans's Termination Date,
         or (ii) upon Mr. Evans's tender of an effective Waiver and Release to
         the Company in the form of Exhibit A attached hereto and the expiration
         of any applicable revocation period for such waiver. In the event of a
         dispute with respect to liability or amount of any benefit due
         hereunder, an effective Waiver and Release shall be tendered at the
         time of final resolution of any such dispute when payment is tendered
         by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Evans's death prior to the payment of all amounts due under this
         Agreement, Mr. Evans's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Evans
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Evans's
         favor, the Company shall reimburse Mr. Evans's legal fees incurred with
         respect to all issues in such dispute in an amount not to exceed fifty
         thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Evans shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Evans's Termination Date. (i) Non-qualified Retirement and Deferred
         Compensation Plans. The Parties agree that subsequent to a Change in
         Control, any claims by Mr. Evans for benefits under any of the
         Company's non-qualified retirement or deferred compensation plans shall
         be resolved through binding arbitration in accordance with the
         provisions and procedures set forth in Paragraph 5 hereof and if any
         material issue in such dispute is finally resolved in Mr. Evans's
         favor, the Company shall reimburse Mr. Evans's legal fees in the manner
         provided in Paragraph 2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Evans's employment by
the Company is terminated during the two year period following a Change in
Control and Mr. Evans accepts employment by Southern, a Southern Subsidiary, or
any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Evans is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Evans
hereunder shall not be reduced or suspended if Mr. Evans accepts such subsequent
employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Evans's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Evans, in the case of the Company, or
         to the Southern Board, in the case of Mr. Evans.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Evans, one arbitrator shall be appointed by the Company, and the
         two arbitrators shall appoint a third. If the arbitrators cannot agree
         on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Evans. All
         other costs of arbitration shall be borne equally by Mr. Evans and the
         Company, provided, however, that the Company shall reimburse such fees
         and costs in the event any material issue in such dispute is finally
         resolved in Mr. Evans's favor and Mr. Evans is reimbursed legal fees
         under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Evans under this
         Agreement shall not be funded in any manner and shall be paid by the
         Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Evans.

                  (c) Assignment. Mr. Evans shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.

                                         THE SOUTHERN COMPANY


                                By:      ____________________________________


                                         MISSISSIPPI POWER COMPANY


                                By:      ____________________________________


                                         MR. EVANS

                                         -----------------------------
                                         Dwight H. Evans


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Dwight H. Evans
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Dwight H. Evans, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Mississippi Power Company
(collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                              Dwight H. Evans

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>29
<FILENAME>x10a83.txt
<TEXT>



                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. Henry Allen Franklin ("Mr.
Franklin") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, effective and executed on July 8, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Franklin is the President and Chief Operating Officer of
Southern;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective July 8, 1999 (the "July 8, 1999 Agreement") to provide to Mr. Franklin
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the July 8, 1999 Agreement, the
Parties may amend the July 8, 1999 Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to the provisions of such Section 6(d), to
(i) change certain references from normal market bonus to target bonus, (ii)
clarify that an initial public offering and a spin-off of the Company does not
constitute a "change in control" under the Agreement, (iii) change references
from the "Productivity Improvement Plan" to the "Executive Productivity
Improvement Plan," (iv) add Southern Energy, Inc. as a company released in the
waiver and release attached hereto, and (v) certain other technical and
miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Franklin's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (d) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(d)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Franklin or any
                           Group of which Mr. Franklin is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(d)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Franklin, any Group of which Mr. Franklin is a party,
                           any Group composed exclusively of Company employees,
                           any qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(d)(iv), any acquisition by Mr. Franklin, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Franklin is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.

                           Notwithstanding the foregoing, in no event shall
                  "Change in Control" mean an initial public offering or a
                  spin-off of the Company.

                  (e) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Franklin or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (f) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (g) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (h) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (i) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (j) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (k) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (l) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (m) "Executive Productivity Improvement Plan" or "Executive
         PIP Plan" shall mean the Southern Company Executive Productivity
         Improvement Plan or replacement thereto, as such plans may be amended
         from time to time.

                  (n) "Good Reason" shall mean, without Mr. Franklin's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Franklin's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Franklin's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Franklin's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Franklin participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Franklin's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company); For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Franklin's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Franklin is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Franklin's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Franklin of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Franklin's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Franklin's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Franklin under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Franklin was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Franklin with the number of paid vacation days to
                  which Mr. Franklin is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi)     For purposes of this Paragraph 1.(n), the
                  term "Executive  Employee" shall mean
                  those employees of the Company of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Franklin as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Franklin as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Franklin has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Franklin's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Franklin
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Franklin's Total
                  Disability or from Mr. Franklin's retirement or any such
                  actual or anticipated failure resulting from termination by
                  Mr. Franklin for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Franklin in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Franklin's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Franklin shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Franklin not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Franklin shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Franklin and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Franklin was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Franklin's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(b) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Franklin's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Franklin's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Franklin has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Franklin's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Franklin voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Franklin shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Franklin shall not be eligible to receive benefits under this
         Agreement if Mr. Franklin:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to any
                  Southern Subsidiary or any employer that succeeds to all or
                  substantially all of the assets of Southern or any Southern
                  Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, or any Southern Subsidiary under circumstances where
                  such refusal would not amount to Good Reason for voluntary
                  termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Franklin meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Franklin an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Franklin under Code Section 280G exceeds three (3) times Mr.
         Franklin's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Franklin's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Franklin, less one dollar (the "Capped Amount"), if the
         Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise
         would have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Franklin meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Franklin shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Franklin's Years of
                  Service, not to exceed five (5) years. If Mr. Franklin elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Franklin's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Franklin's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Franklin pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Franklin in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Franklin in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Franklin
                           or his dependents may elect. In the event that Mr.
                           Franklin or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Franklin or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed. (ii) Mr. Franklin shall be entitled
                           to receive cash in an amount equal to the Company's
                           and Mr. Franklin's cost of premiums for three (3)
                           years of coverage under the Group Health Plan and
                           Group Life Insurance Plan in accordance with the
                           terms of such plans as of the date of the Change in
                           Control.

                  (d) Incentive Plans. If Mr. Franklin meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Franklin's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Franklin is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Franklin under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Franklin's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Franklin under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Franklin is
                  not entitled to benefits under Article V of the PPP Plan (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Franklin's Termination Date and to the extent Mr. Franklin
                  is entitled to participate therein, Mr. Franklin shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Executive PIP Plan. Provided Mr. Franklin is
                  not entitled to benefits under Article IV of the Executive PIP
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Executive PIP Plan
                  is in place through Mr. Franklin's Termination Date and to the
                  extent Mr. Franklin is entitled to participate therein, Mr.
                  Franklin shall be entitled to receive cash in an amount equal
                  to his Award Opportunity for the Computation Periods in which
                  the Termination Date shall have occurred at a target Value of
                  Performance Unit of $1.00, prorated for each Performance
                  Period by the number of months which have passed since the
                  beginning of each of the Computation Periods until the
                  Termination Date.

                           (iv) Performance Dividend Plan. Provided Mr. Franklin
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iv) by reference), if the Performance Dividend
                  Plan is in place through Mr. Franklin's Termination Date and
                  to the extent Mr. Franklin is entitled to participate therein,
                  Mr. Franklin shall be entitled to receive cash for each Award
                  held by Mr. Franklin on his Termination Date, based on actual
                  performance under Section 4.1 of the Performance Dividend Plan
                  determined as of the most recently completed calendar quarter
                  of the Performance Period in which the Termination Date shall
                  have occurred, and the Annual Dividend declared prior to the
                  Termination Date.

                           (v) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(v) shall apply if and to the extent
                  that Mr. Franklin is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Franklin is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Franklin is entitled to participate therein, Mr. Franklin
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Franklin's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(v) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Franklin's Termination Date, or (ii) upon Mr. Franklin's
                  tender of an effective Waiver and Release to the Company in
                  the form of Exhibit A attached hereto and the expiration of
                  any applicable revocation period for such waiver. In the event
                  of a dispute with respect to liability or amount of any
                  benefit due hereunder, an effective Waiver and Release shall
                  be tendered at the time of final resolution of any such
                  dispute when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Franklin's death prior to the payment of all amounts due under this
         Agreement, Mr. Franklin's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Franklin
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Franklin's
         favor, the Company shall reimburse Mr. Franklin's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Franklin shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Franklin's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Franklin for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Dalhberg's favor, the Company shall
         reimburse Mr. Franklin's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Franklin's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Franklin accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Franklin is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Franklin hereunder shall not be reduced or suspended if Mr. Franklin accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Franklin's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Franklin, in the case of the Company,
         or to the Southern Board, in the case of Mr. Franklin.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Franklin, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Franklin.
         All other costs of arbitration shall be borne equally by Mr. Franklin
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Franklin's favor and Mr. Franklin is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Franklin under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Franklin.

                  (c) Assignment. Mr. Franklin shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, -----. THE SOUTHERN COMPANY


                               By:      ____________________________________


                                        SOUTHERN COMPANY
                                            SERVICES, INC.


                               By:      ____________________________________


                                        MR. FRANKLIN

                                        -----------------------------
                                        Henry Allen Franklin


<PAGE>

                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Henry Allen
Franklin upon the occurrence of an event that triggers eligibility for severance
benefits under the Change in Control Agreement, as described in Paragraph 2(a)
of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Henry Allen Franklin, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                  Henry Allen Franklin

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>30
<FILENAME>x10a84.txt
<TEXT>



                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Nuclear Operating Company, Inc. (the "Company") and Mr. William G. Hairston, III
("Mr. Hairston") (hereinafter collectively referred to as the "Parties") is
effective July 10, 2000. This Agreement amends and restates the Change in
Control Agreement entered into by the Parties, originally effective and executed
on December 8, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Hairston is the President and Chief Executive Officer of
the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective December 8, 1998 (the "Original Agreement") to provide to Mr. Hairston
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Hairston's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Hairston or any
                           Group of which Mr. Hairston is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Hairston, any Group of which Mr. Hairston is a party,
                           any Group composed exclusively of Company employees,
                           any qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Hairston, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Hairston is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                 (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Hairston or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Nuclear Operating Company,
         Inc., its successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;


                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy; (v) resume
                  writing, job hunting methods and salary negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Hairston's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Hairston's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Hairston's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Hairston's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Hairston participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Hairston's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Hairston's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Hairston is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Hairston's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Hairston of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Hairston's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Hairston's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Hairston under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Hairston was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Hairston with the number of paid vacation days to
                  which Mr. Hairston is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Hairston, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Hairston, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Hairston has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Hairston's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Hairston
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Hairston's Total
                  Disability or from Mr. Hairston's retirement or any such
                  actual or anticipated failure resulting from termination by
                  Mr. Hairston for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Hairston in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Hairston's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Hairston shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Hairston not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Hairston shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Hairston and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Hairston was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Hairston's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(c) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Hairston's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Hairston's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Hairston has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Hairston's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Hairston voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Hairston shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Hairston shall not be eligible to receive benefits under this
         Agreement if Mr. Hairston:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Hairston meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Hairston an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Hairston under Code Section 280G exceeds three (3) times Mr.
         Hairston's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Hairston's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Hairston, less one dollar (the "Capped Amount"), if the
         Capped Amount, reduced by HI Tax and Income Tax, exceeds what otherwise
         would have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Hairston meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Hairston shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Hairston's Years of
                  Service, not to exceed five (5) years. If Mr. Hairston elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Hairston's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Hairston's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Hairston pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Hairston in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Hairston in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Hairston
                           or his dependents may elect. In the event that Mr.
                           Hairston or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Hairston or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed. (ii) Mr. Hairston shall be entitled
                           to receive cash in an amount equal to the Company's
                           and Mr. Hairston's cost of premiums for three (3)
                           years of coverage under the Group Health Plan and
                           Group Life Insurance Plan in accordance with the
                           terms of such plans as of the date of the Change in
                           Control.

                  (d) Incentive Plans. If Mr. Hairston meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Hairston's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Hairston is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Hairston under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Hairston's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Hairston under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Hairston is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Hairston's Termination Date and to the extent Mr. Hairston
                  is entitled to participate therein, Mr. Hairston shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr.
                  Hairston is not entitled to benefits under the Performance
                  Dividend Plan (the defined terms of which are incorporated in
                  this Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Hairston's Termination
                  Date and to the extent Mr. Hairston is entitled to participate
                  therein, Mr. Hairston shall be entitled to receive cash for
                  each Award held by Mr. Hairston on his Termination Date, based
                  on actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Hairston is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Hairston is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Hairston is entitled to participate therein, Mr. Hairston
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Hairston's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Hairston's Termination Date, or (ii) upon Mr. Hairston's
                  tender of an effective Waiver and Release to the Company in
                  the form of Exhibit A attached hereto and the expiration of
                  any applicable revocation period for such waiver. In the event
                  of a dispute with respect to liability or amount of any
                  benefit due hereunder, an effective Waiver and Release shall
                  be tendered at the time of final resolution of any such
                  dispute when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Hairston's death prior to the payment of all amounts due under this
         Agreement, Mr. Hairston's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Hairston
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Hairston's
         favor, the Company shall reimburse Mr. Hairston's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Hairston shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Hairston's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Hairston for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Hairston's favor, the Company shall
         reimburse Mr. Hairston's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Hairston's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Hairston accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Hairston is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Hairston hereunder shall not be reduced or suspended if Mr. Hairston accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Hairston's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Hairston, in the case of the Company,
         or to the Southern Board, in the case of Mr. Hairston.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Hairston, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Hairston.
         All other costs of arbitration shall be borne equally by Mr. Hairston
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Hairston's favor and Mr. Hairston is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Hairston under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Hairston.

                  (c) Assignment. Mr. Hairston shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                      THE SOUTHERN COMPANY


                             By:      ____________________________________


                                      SOUTHERN NUCLEAR OPERATING
                                      COMPANY, INC.


                             By:      ____________________________________


                                      MR. HAIRSTON


                                      -----------------------------
                                      William G. Hairston, III


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. William G.
Hairston, III upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, William G. Hairston, III understand that I am entitled to receive
the severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Nuclear Operating
Company, Inc. (collectively, the "Company") if I had not elected to sign this
Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                  William G. Hairston, III

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>31
<FILENAME>x10a85.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Alabama
Power Company (the "Company") and Mr. Elmer B. Harris ("Mr. Harris")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties, originally effective and executed on January 22, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Harris is the Chief Executive Officer and President of the
Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective January 22, 1999 (the "Original Agreement") to provide to Mr. Harris
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Harris's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Harris or any
                           Group of which Mr. Harris is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Harris, any Group of which Mr. Harris is a party, any
                           Group composed exclusively of Company employees, any
                           qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Harris, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Harris is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Harris or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Alabama Power Company, its successors
         and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                           setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Harris's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Harris's position or in the nature or status
                  of his responsibilities from those in effect immediately prior
                  to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Harris's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Harris's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Harris participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Harris's participation therein, (except for
                  across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Harris's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Harris is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Harris's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Harris of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Harris's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Harris's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Harris under the
                  Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Harris was participating immediately prior to the
                  Change in Control; or the failure by the Company to provide
                  Mr. Harris with the number of paid vacation days to which Mr.
                  Harris is entitled on the basis of years of service with the
                  Company in accordance with the Company's normal vacation
                  policy in effect immediately prior to the Change in Control
                  (except for across-the-board plan or vacation policy changes
                  or plan terminations similarly affecting at least ninety-five
                  percent (95%) of the Executive Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Harris, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Harris, as such plan may be amended from
         time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Harris has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Harris's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Harris
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Harris's Total
                  Disability or from Mr. Harris's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Harris for Good Reason) after a written demand for substantial
                  performance is delivered to him by the Southern Board, which
                  demand specifically identifies the manner in which the
                  Southern Board believes that he has not substantially
                  performed his duties; or

                           (ii) The willful engaging by Mr. Harris in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Harris's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Harris shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Harris not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Harris shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Harris and an opportunity for him, together with counsel, to be heard before
the Southern Board), finding that, in the good faith opinion of the Southern
Board, Mr. Harris was guilty of conduct set forth above in clause (i) or (ii) of
this Paragraph 1.(bb) and specifying the particulars thereof in detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Harris's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Harris's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Harris's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Harris has a break in his service with the Company, he will
         receive credit under this Agreement for service prior to the break in
         service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Harris's employment is involuntarily terminated
         by the Company at any time during the two year period following a
         Change in Control for reasons other than Cause, or if Mr. Harris
         voluntarily terminates his employment with the Company for Good Reason
         at any time during the two year period following a Change in Control,
         Mr. Harris shall be entitled to receive the benefits described in this
         Agreement upon the Company's receipt of an effective Waiver and
         Release. Notwithstanding anything to the contrary herein, Mr. Harris
         shall not be eligible to receive benefits under this Agreement if Mr.
         Harris:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Harris meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Harris an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Harris under Code Section 280G exceeds three (3) times Mr. Harris's
         "base amount" (as such term is defined under Code Section 280G ("Base
         Amount")) by ten percent (10%) or more; provided further, that if no
         280G Gross-up is paid, the Severance Amount shall be capped at three
         (3) times Mr. Harris's Base Amount, less all other "parachute payments"
         (as such term is defined under Code Section 280G) received by Mr.
         Harris, less one dollar (the "Capped Amount"), if the Capped Amount,
         reduced by HI Tax and Income Tax, exceeds what otherwise would have
         been the Severance Amount, reduced by HI Tax, Income Tax and Excise
         Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Harris meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Harris shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Harris's Years of
                  Service, not to exceed five (5) years. If Mr. Harris elects to
                  receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Harris's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Harris's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Harris pursuant to Paragraph 2.(c)(i), as well
                           as the premiums to be paid by Mr. Harris in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Harris in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Harris or
                           his dependents may elect. In the event that Mr.
                           Harris or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Harris or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Harris shall be entitled to receive
                           cash in an amount equal to the Company's and Mr.
                           Harris's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Harris meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Harris's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Harris is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Harris under Section 16(b) of the
                           Exchange Act, provided further, that any such actions
                           not taken as a result of the rules under Section
                           16(b) of the Exchange Act shall be effected as of the
                           first date that such activity would no longer result
                           in liability under Section 16(b) of the Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Harris's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Harris under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Harris is not
                  entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Harris's Termination Date and to the extent Mr. Harris is
                  entitled to participate therein, Mr. Harris shall be entitled
                  to receive cash in an amount equal to a prorated payout of his
                  Incentive Pay Awards under the PPP Plan for the Performance
                  Period in which the Termination Date shall have occurred, at
                  target performance under the PPP Plan and prorated by the
                  number of months which have passed since the beginning of the
                  Performance Period until the Termination Date.

                           (iii) Performance Dividend Plan. Provided Mr. Harris
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Harris's Termination
                  Date and to the extent Mr. Harris is entitled to participate
                  therein, Mr. Harris shall be entitled to receive cash for each
                  Award held by Mr. Harris on his Termination Date, based on
                  actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Harris is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Harris is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Harris is entitled to participate therein, Mr. Harris
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Harris's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria.

                  (e) Payment of Benefits. Any amounts due under this Agreement
         shall be paid in one (1) lump sum payment as soon as administratively
         practicable following the later of: (i) Mr. Harris's Termination Date,
         or (ii) upon Mr. Harris's tender of an effective Waiver and Release to
         the Company in the form of Exhibit A attached hereto and the expiration
         of any applicable revocation period for such waiver. In the event of a
         dispute with respect to liability or amount of any benefit due
         hereunder, an effective Waiver and Release shall be tendered at the
         time of final resolution of any such dispute when payment is tendered
         by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Harris's death prior to the payment of all amounts due under this
         Agreement, Mr. Harris's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Harris
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Harris's
         favor, the Company shall reimburse Mr. Harris's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Harris shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Harris's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Harris for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Harris's favor, the Company shall
         reimburse Mr. Harris's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Harris's employment by
the Company is terminated during the two year period following a Change in
Control and Mr. Harris accepts employment by Southern, a Southern Subsidiary, or
any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Harris is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Harris
hereunder shall not be reduced or suspended if Mr. Harris accepts such
subsequent employment.

         5.       Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Harris's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Harris, in the case of the Company, or
         to the Southern Board, in the case of Mr. Harris.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Harris, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Harris.
         All other costs of arbitration shall be borne equally by Mr. Harris and
         the Company, provided, however, that the Company shall reimburse such
         fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Harris's favor and Mr. Harris is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Harris under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Harris.

                  (c) Assignment. Mr. Harris shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                  THE SOUTHERN COMPANY


                         By:      ____________________________________


                                  ALABAMA POWER COMPANY


                         By:      ____________________________________


                                  MR. HARRIS

                                  -----------------------------
                                  Elmer B. Harris



                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Elmer B. Harris
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Elmer B. Harris, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Alabama Power Company
(collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                              Elmer B. Harris

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>32
<FILENAME>x10a86.txt
<TEXT>



                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Savannah
Electric & Power Company (the "Company") and Mr. G. Edison Holland, Jr. ("Mr.
Holland") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, originally effective and executed on
February 23, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Holland is the President and Chief Executive Officer of
the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective February 23, 1999 (the "Original Agreement") to provide to Mr. Holland
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Holland's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Holland or any
                           Group of which Mr. Holland is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Holland, any Group of which Mr. Holland is a party,
                           any Group composed exclusively of Company employees,
                           any qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Holland, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Holland is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Holland or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Savannah Electric & Power Company,
         its successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                           setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Holland's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Holland's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Holland's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Holland's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Holland participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Holland's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Holland's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Holland is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Holland's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Holland of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Holland's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Holland's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Holland under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Holland was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Holland with the number of paid vacation days to
                  which Mr. Holland is entitled on the basis of years of service
                  with the Company in accordance with the Company's normal
                  vacation policy in effect immediately prior to the Change in
                  Control (except for across-the-board plan or vacation policy
                  changes or plan terminations similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Holland, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Holland, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Holland has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Holland's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Holland
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Holland's Total
                  Disability or from Mr. Holland's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Holland for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Holland in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Holland's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Holland shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Holland not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Holland shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Holland and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Holland was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Holland's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Holland's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Holland's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Holland has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Holland's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Holland voluntarily terminates his employment with the Company for Good
         Reason at any time during the two year period following a Change in
         Control, Mr. Holland shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Holland shall not be eligible to receive benefits under this
         Agreement if Mr. Holland:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Holland meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Holland an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Holland under Code Section 280G exceeds three (3) times Mr.
         Holland's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Holland's Base Amount, less all other "parachute
         payments" (as such term is defined under Code Section 280G) received by
         Mr. Holland, less one dollar (the "Capped Amount"), if the Capped
         Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would
         have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Holland meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Holland shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Holland's Years of
                  Service, not to exceed five (5) years. If Mr. Holland elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Holland's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Holland's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Holland pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Holland in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Holland in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Holland
                           or his dependents may elect. In the event that Mr.
                           Holland or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Holland or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Holland shall be entitled to
                           receive cash in an amount equal to the Company's and
                           Mr. Holland's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Holland meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Holland's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Holland is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Holland under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Holland's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Holland under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Holland is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Holland's Termination Date and to the extent Mr. Holland
                  is entitled to participate therein, Mr. Holland shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr. Holland
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Holland's Termination
                  Date and to the extent Mr. Holland is entitled to participate
                  therein, Mr. Holland shall be entitled to receive cash for
                  each Award held by Mr. Holland on his Termination Date, based
                  on actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Holland is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Holland is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Holland is entitled to participate therein, Mr. Holland
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Holland's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria.

                  (e) Payment of Benefits. Any amounts due under this Agreement
         shall be paid in one (1) lump sum payment as soon as administratively
         practicable following the later of: (i) Mr. Holland's Termination Date,
         or (ii) upon Mr. Holland's tender of an effective Waiver and Release to
         the Company in the form of Exhibit A attached hereto and the expiration
         of any applicable revocation period for such waiver. In the event of a
         dispute with respect to liability or amount of any benefit due
         hereunder, an effective Waiver and Release shall be tendered at the
         time of final resolution of any such dispute when payment is tendered
         by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Holland's death prior to the payment of all amounts due under this
         Agreement, Mr. Holland's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Holland
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Holland's
         favor, the Company shall reimburse Mr. Holland's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Holland shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Holland's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Holland for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Holland's favor, the Company shall
         reimburse Mr. Holland's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Holland's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Holland accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Holland is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Holland hereunder shall not be reduced or suspended if Mr. Holland accepts such
subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Holland's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Holland, in the case of the Company,
         or to the Southern Board, in the case of Mr. Holland.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Holland, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Holland.
         All other costs of arbitration shall be borne equally by Mr. Holland
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Holland's favor and Mr. Holland is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Holland under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Holland.

                  (c) Assignment. Mr. Holland shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.

                                     THE SOUTHERN COMPANY


                            By:      ____________________________________


                                     SAVANNAH ELECTRIC & POWER COMPANY


                            By:      ____________________________________


                                     MR. HOLLAND


                                     -----------------------------
                                     G. Edison Holland, Jr.


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. G. Edison
Holland, Jr. upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, G. Edison Holland, Jr., understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Savannah Electric & Power
Company (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                 G. Edison Holland, Jr.

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>33
<FILENAME>x10a87.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Alabama
Power Company (the "Company") and Mr. C. Alan Martin ("Mr. Martin") (hereinafter
collectively referred to as the "Parties") is effective July 10, 2000. This
Agreement amends and restates the Change in Control Agreement entered into by
Southern, Southern Company Services, Inc. and Mr. Martin, originally effective
and executed on December 7, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Southern, Southern Company Services, Inc. and Mr. Martin
entered into a Change in Control Agreement effective December 7, 1998 (the
"Original Agreement") to provide to Mr. Martin certain severance benefits under
certain circumstances following a change in control (as defined herein) of
Southern or Southern Company Services, Inc.;

         WHEREAS, subsequent to the Original Agreement, Mr. Martin transferred
to the Company and is its Executive Vice President;

         WHEREAS, the Company wishes to provide to Mr. Martin certain severance
benefits under certain circumstances following a change in control (as defined
herein) of Southern or the Company to the same extent as prior to his transfer
to the Company;

         WHEREAS, Southern, the Company and Mr. Martin wish to enter this
Amended and Restated Change in Control Agreement pursuant to Section 6(d), to
(i) reflect his current employment by the Company and to supersede the Original
Agreement, (ii) change certain references from normal market bonus to target
bonus, (iii) clarify that an initial public offering and a spin-off of the
Company does not constitute a "change in control" under the Agreement, (iv)
delete references to the "Productivity Improvement Plan," (v) add Southern
Energy, Inc. as a company released in the waiver and release attached hereto,
and (vi) certain other technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Martin's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Martin or any
                           Group of which Mr. Martin is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Martin, any Group of which Mr. Martin is a party, any
                           Group composed exclusively of Company employees, any
                           qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Martin, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Martin is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Martin or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Alabama Power Company, its successors
         and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Martin's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Martin's position or in the nature or status
                  of his responsibilities from those in effect immediately prior
                  to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Martin's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Martin's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Martin participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Martin's participation therein, (except for
                  across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Martin's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Martin is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Martin's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Martin of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Martin's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Martin's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Martin under the
                  Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Martin was participating immediately prior to the
                  Change in Control; or the failure by the Company to provide
                  Mr. Martin with the number of paid vacation days to which Mr.
                  Martin is entitled on the basis of years of service with the
                  Company in accordance with the Company's normal vacation
                  policy in effect immediately prior to the Change in Control
                  (except for across-the-board plan or vacation policy changes
                  or plan terminations similarly affecting at least ninety-five
                  percent (95%) of the Executive Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Martin, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Martin, as such plan may be amended from
         time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Martin has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Martin's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Martin
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Martin's Total
                  Disability or from Mr. Martin's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Martin for Good Reason) after a written demand for substantial
                  performance is delivered to him by the Southern Board, which
                  demand specifically identifies the manner in which the
                  Southern Board believes that he has not substantially
                  performed his duties; or

                           (ii) The willful engaging by Mr. Martin in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Martin's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Martin shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Martin not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Martin shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Martin and an opportunity for him, together with counsel, to be heard before
the Southern Board), finding that, in the good faith opinion of the Southern
Board, Mr. Martin was guilty of conduct set forth above in clause (i) or (ii) of
this Paragraph 1.(bb) and specifying the particulars thereof in detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Martin's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Martin's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Martin's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Martin has a break in his service with the Company, he will
         receive credit under this Agreement for service prior to the break in
         service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Martin's employment is involuntarily terminated
         by the Company at any time during the two year period following a
         Change in Control for reasons other than Cause, or if Mr. Martin
         voluntarily terminates his employment with the Company for Good Reason
         at any time during the two year period following a Change in Control,
         Mr. Martin shall be entitled to receive the benefits described in this
         Agreement upon the Company's receipt of an effective Waiver and
         Release. Notwithstanding anything to the contrary herein, Mr. Martin
         shall not be eligible to receive benefits under this Agreement if Mr.
         Martin:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Martin meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Martin an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Martin under Code Section 280G exceeds three (3) times Mr. Martin's
         "base amount" (as such term is defined under Code Section 280G ("Base
         Amount")) by ten percent (10%) or more; provided further, that if no
         280G Gross-up is paid, the Severance Amount shall be capped at three
         (3) times Mr. Martin's Base Amount, less all other "parachute payments"
         (as such term is defined under Code Section 280G) received by Mr.
         Martin, less one dollar (the "Capped Amount"), if the Capped Amount,
         reduced by HI Tax and Income Tax, exceeds what otherwise would have
         been the Severance Amount, reduced by HI Tax, Income Tax and Excise
         Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Martin meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Martin shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Martin's Years of
                  Service, not to exceed five (5) years. If Mr. Martin elects to
                  receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Martin's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Martin's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Martin pursuant to Paragraph 2.(c)(i), as well
                           as the premiums to be paid by Mr. Martin in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Martin in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Martin or
                           his dependents may elect. In the event that Mr.
                           Martin or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Martin or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Martin shall be entitled to receive
                           cash in an amount equal to the Company's and Mr.
                           Martin's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Martin meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Martin's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Martin is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Martin under Section 16(b) of the
                           Exchange Act, provided further, that any such actions
                           not taken as a result of the rules under Section
                           16(b) of the Exchange Act shall be effected as of the
                           first date that such activity would no longer result
                           in liability under Section 16(b) of the Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Martin's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Martin under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Martin is not
                  entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Martin's Termination Date and to the extent Mr. Martin is
                  entitled to participate therein, Mr. Martin shall be entitled
                  to receive cash in an amount equal to a prorated payout of his
                  Incentive Pay Awards under the PPP Plan for the Performance
                  Period in which the Termination Date shall have occurred, at
                  target performance under the PPP Plan and prorated by the
                  number of months which have passed since the beginning of the
                  Performance Period until the Termination Date.

                           (iii) Performance Dividend Plan. Provided Mr. Martin
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Martin's Termination
                  Date and to the extent Mr. Martin is entitled to participate
                  therein, Mr. Martin shall be entitled to receive cash for each
                  Award held by Mr. Martin on his Termination Date, based on
                  actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Martin is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Martin is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Martin is entitled to participate therein, Mr. Martin
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Martin's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Martin's Termination Date, or (ii) upon Mr. Martin's tender of
                  an effective Waiver and Release to the Company in the form of
                  Exhibit A attached hereto and the expiration of any applicable
                  revocation period for such waiver. In the event of a dispute
                  with respect to liability or amount of any benefit due
                  hereunder, an effective Waiver and Release shall be tendered
                  at the time of final resolution of any such dispute when
                  payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Martin's death prior to the payment of all amounts due under this
         Agreement, Mr. Martin's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Martin
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Martin's
         favor, the Company shall reimburse Mr. Martin's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Martin shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Martin's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Martin for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Martin's favor, the Company shall
         reimburse Mr. Martin's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Martin's employment by
the Company is terminated during the two year period following a Change in
Control and Mr. Martin accepts employment by Southern, a Southern Subsidiary, or
any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Martin is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Martin
hereunder shall not be reduced or suspended if Mr. Martin accepts such
subsequent employment.

         5.       Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Martin's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Martin, in the case of the Company, or
         to the Southern Board, in the case of Mr. Martin.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Martin, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Martin.
         All other costs of arbitration shall be borne equally by Mr. Martin and
         the Company, provided, however, that the Company shall reimburse such
         fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Martin's favor and Mr. Martin is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Martin under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Martin.

                  (c) Assignment. Mr. Martin shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                 THE SOUTHERN COMPANY


                        By:      ____________________________________


                                 ALABAMA POWER COMPANY


                        By:      ____________________________________


                                 MR. MARTIN

                                 -----------------------------
                                       C. Alan Martin


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. C. Alan Martin
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, C. Alan Martin, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Alabama Power Company
(collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                              C. Alan Martin

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>34
<FILENAME>x10a88.txt
<TEXT>


                              AMENDED AND RESTATED

                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. Charles Douglas McCrary ("Mr.
McCrary") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, originally effective and executed on
December 7, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. McCrary is the Executive Vice President of the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective December 7, 1998 (the "Original Agreement") to provide to Mr. McCrary
certain severance benefits under certain circumstances following a change in
control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. McCrary's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. McCrary or any
                           Group of which Mr. McCrary is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board; (iii) Consummation of a Business
                           Combination, provided, however, that such a Business
                           Combination shall not constitute a Change in Control
                           if all three (3) of the following conditions are met:

                                             (A) all or substantially all of the
                                    individuals and entities who held Beneficial
                                    Ownership, respectively, of Southern's
                                    Voting Securities immediately prior to such
                                    Business Combination beneficially own,
                                    directly or indirectly, 65% or more of the
                                    combined voting power of the Voting
                                    Securities of the corporation surviving or
                                    resulting from such Business Combination,
                                    (including, without limitation, a
                                    corporation which as a result of such
                                    transaction holds Beneficial Ownership of
                                    all or substantially all of Southern's
                                    Voting Securities or all or substantially
                                    all of Southern's assets) (such surviving or
                                    resulting corporation to be referred to as
                                    "Surviving Company"), in substantially the
                                    same proportions as their ownership,
                                    immediately prior to such Business
                                    Combination, of Southern's Voting
                                    Securities;

                                             (B) no Person (excluding any
                                    corporation resulting from such Business
                                    Combination, any employee benefit plan (or
                                    related trust) of Southern, any Southern
                                    Subsidiary or Surviving Company, Mr.
                                    McCrary, any Group of which Mr. McCrary is a
                                    party, any Group composed exclusively of
                                    Company employees, any qualified pension
                                    plan (or related trust) or any publicly held
                                    mutual fund) holds Beneficial Ownership,
                                    directly or indirectly, of 20% or more of
                                    the combined voting power of the then
                                    outstanding Voting Securities of Surviving
                                    Company except to the extent that such
                                    ownership existed prior to the Business
                                    Combination; and

                                             (C) at least a majority of the
                                    members of the board of directors of
                                    Surviving Company were members of the
                                    Incumbent Board at the earlier of the date
                                    of execution of the initial agreement, or of
                                    the action of the Southern Board, providing
                                    for such Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. McCrary, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. McCrary is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. McCrary or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. McCrary's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. McCrary's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  McCrary's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. McCrary's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. McCrary participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. McCrary's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. McCrary's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. McCrary is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. McCrary's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  McCrary of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. McCrary's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. McCrary's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. McCrary under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. McCrary was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. McCrary with the number of paid vacation days to
                  which Mr. McCrary is entitled on the basis of years of service
                  with the Company in accordance with the Company's normal
                  vacation policy in effect immediately prior to the Change in
                  Control (except for across-the-board plan or vacation policy
                  changes or plan terminations similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. McCrary, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. McCrary, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. McCrary has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. McCrary's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. McCrary
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. McCrary's Total
                  Disability or from Mr. McCrary's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  McCrary for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. McCrary in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. McCrary's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. McCrary shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           McCrary not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. McCrary shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. McCrary and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. McCrary was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         McCrary's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. McCrary's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. McCrary's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. McCrary has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. McCrary's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         McCrary voluntarily terminates his employment with the Company for Good
         Reason at any time during the two year period following a Change in
         Control, Mr. McCrary shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. McCrary shall not be eligible to receive benefits under this
         Agreement if Mr. McCrary:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. McCrary meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. McCrary an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. McCrary under Code Section 280G exceeds three (3) times Mr.
         McCrary's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. McCrary's Base Amount, less all other "parachute
         payments" (as such term is defined under Code Section 280G) received by
         Mr. McCrary, less one dollar (the "Capped Amount"), if the Capped
         Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would
         have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. McCrary meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. McCrary shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. McCrary's Years of
                  Service, not to exceed five (5) years. If Mr. McCrary elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. McCrary's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. McCrary's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. McCrary pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. McCrary in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. McCrary in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. McCrary
                           or his dependents may elect. In the event that Mr.
                           McCrary or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           McCrary or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. McCrary shall be entitled to
                           receive cash in an amount equal to the Company's and
                           Mr. McCrary's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. McCrary meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. McCrary's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. McCrary is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. McCrary under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. McCrary's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. McCrary under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. McCrary is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. McCrary's Termination Date and to the extent Mr. McCrary
                  is entitled to participate therein, Mr. McCrary shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr. McCrary
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. McCrary's Termination
                  Date and to the extent Mr. McCrary is entitled to participate
                  therein, Mr. McCrary shall be entitled to receive cash for
                  each Award held by Mr. McCrary on his Termination Date, based
                  on actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. McCrary is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. McCrary is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. McCrary is entitled to participate therein, Mr. McCrary
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. McCrary's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  McCrary's Termination Date, or (ii) upon Mr. McCrary's tender
                  of an effective Waiver and Release to the Company in the form
                  of Exhibit A attached hereto and the expiration of any
                  applicable revocation period for such waiver. In the event of
                  a dispute with respect to liability or amount of any benefit
                  due hereunder, an effective Waiver and Release shall be
                  tendered at the time of final resolution of any such dispute
                  when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         McCrary's death prior to the payment of all amounts due under this
         Agreement, Mr. McCrary's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. McCrary
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. McCrary's
         favor, the Company shall reimburse Mr. McCrary's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. McCrary shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. McCrary's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. McCrary for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. McCrary's favor, the Company shall
         reimburse Mr. McCrary's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. McCrary's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. McCrary accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. McCrary is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
McCrary hereunder shall not be reduced or suspended if Mr. McCrary accepts such
subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. McCrary's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. McCrary, in the case of the Company,
         or to the Southern Board, in the case of Mr. McCrary.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. McCrary, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. McCrary.
         All other costs of arbitration shall be borne equally by Mr. McCrary
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. McCrary's favor and Mr. McCrary is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. McCrary under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. McCrary.

                  (c) Assignment. Mr. McCrary shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                THE SOUTHERN COMPANY


                       By:      ____________________________________


                                SOUTHERN COMPANY SERVICES, INC.


                       By:      ____________________________________


                                MR. MCCRARY


                                -----------------------------
                                Charles Douglas McCrary


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Charles Douglas
McCrary upon the occurrence of an event that triggers eligibility for severance
benefits under the Change in Control Agreement, as described in Paragraph 2(a)
of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Charles Douglas McCrary, understand that I am entitled to receive
the severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                Charles Douglas McCrary

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>35
<FILENAME>x10a89.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Georgia
Power Company (the "Company") and Mr. David M. Ratcliffe ("Mr. Ratcliffe")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties, originally effective and executed on February 17, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Ratcliffe is the President and Chief Executive Officer of
the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective February 17, 1999 (the "Original Agreement") to provide to Mr.
Ratcliffe certain severance benefits under certain circumstances following a
change in control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Ratcliffe's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Ratcliffe or any
                           Group of which Mr. Ratcliffe is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board; (iii) Consummation of a Business
                           Combination, provided, however, that such a Business
                           Combination shall not constitute a Change in Control
                           if all three (3) of the following conditions are met:

                                             (A) all or substantially all of the
                                    individuals and entities who held Beneficial
                                    Ownership, respectively, of Southern's
                                    Voting Securities immediately prior to such
                                    Business Combination beneficially own,
                                    directly or indirectly, 65% or more of the
                                    combined voting power of the Voting
                                    Securities of the corporation surviving or
                                    resulting from such Business Combination,
                                    (including, without limitation, a
                                    corporation which as a result of such
                                    transaction holds Beneficial Ownership of
                                    all or substantially all of Southern's
                                    Voting Securities or all or substantially
                                    all of Southern's assets) (such surviving or
                                    resulting corporation to be referred to as
                                    "Surviving Company"), in substantially the
                                    same proportions as their ownership,
                                    immediately prior to such Business
                                    Combination, of Southern's Voting
                                    Securities;

                                             (B) no Person (excluding any
                                    corporation resulting from such Business
                                    Combination, any employee benefit plan (or
                                    related trust) of Southern, any Southern
                                    Subsidiary or Surviving Company, Mr.
                                    Ratcliffe, any Group of which Mr. Ratcliffe
                                    is a party, any Group composed exclusively
                                    of Company employees, any qualified pension
                                    plan (or related trust) or any publicly held
                                    mutual fund) holds Beneficial Ownership,
                                    directly or indirectly, of 20% or more of
                                    the combined voting power of the then
                                    outstanding Voting Securities of Surviving
                                    Company except to the extent that such
                                    ownership existed prior to the Business
                                    Combination; and

                                             (C) at least a majority of the
                                    members of the board of directors of
                                    Surviving Company were members of the
                                    Incumbent Board at the earlier of the date
                                    of execution of the initial agreement, or of
                                    the action of the Southern Board, providing
                                    for such Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Ratcliffe, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Ratcliffe is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Ratcliffe or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Georgia Power Company, its successors
         and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                  setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Ratcliffe's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Ratcliffe's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Ratcliffe's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Ratcliffe's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Ratcliffe participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Ratcliffe's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Ratcliffe's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Ratcliffe is located at the time of the
                  Change in Control, unless such new work location is within
                  fifty (50) miles from Mr. Ratcliffe's principal place of
                  residence at the time of the Change in Control. The
                  acceptance, if any, by Mr. Ratcliffe of employment by the
                  Company at a work location which is outside the fifty mile
                  radius set forth in this Paragraph 1.(n)(iv) shall not be a
                  waiver of Mr. Ratcliffe's right to refuse subsequent transfer
                  by the Company to a location which is more than fifty (50)
                  miles from Mr. Ratcliffe's principal place of residence at the
                  time of the Change in Control, and such subsequent unconsented
                  transfer shall be "Good Reason" under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Ratcliffe under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Ratcliffe was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Ratcliffe with the number of paid vacation days to
                  which Mr. Ratcliffe is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Ratcliffe, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Ratcliffe, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Ratcliffe has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Ratcliffe's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr.
                  Ratcliffe substantially to perform his duties with the Company
                  (other than any such failure resulting from Mr. Ratcliffe's
                  Total Disability or from Mr. Ratcliffe's retirement or any
                  such actual or anticipated failure resulting from termination
                  by Mr. Ratcliffe for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Ratcliffe in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Ratcliffe's
                           employment by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Ratcliffe shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Ratcliffe not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Ratcliffe shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than three quarters of the entire membership of the Southern Board at a meeting
of the Southern Board called and held for such purpose (after reasonable notice
to Mr. Ratcliffe and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Ratcliffe was guilty of conduct set forth above in clause
(i) or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Ratcliffe's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(c) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Ratcliffe's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Ratcliffe's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Ratcliffe has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Ratcliffe's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Ratcliffe voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Ratcliffe shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Ratcliffe shall not be eligible to receive benefits under this
         Agreement if Mr. Ratcliffe:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Ratcliffe meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Ratcliffe an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Ratcliffe under Code Section 280G exceeds three (3) times Mr.
         Ratcliffe's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Ratcliffe's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Ratcliffe, less one dollar (the "Capped Amount"), if
         the Capped Amount, reduced by HI Tax and Income Tax, exceeds what
         otherwise would have been the Severance Amount, reduced by HI Tax,
         Income Tax and Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

         (c) Welfare Benefits. If Mr. Ratcliffe meets the eligibility
requirements of Paragraph 2.(a) hereof and is not otherwise eligible to receive
retiree medical and life insurance benefits provided to certain retirees
pursuant to the terms of the Pension Plan, the Group Health Plan and the Group
Life Insurance Plan, he shall be entitled to the benefits set forth in this
Paragraph 2.(c).

                           (i) Mr. Ratcliffe shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Ratcliffe's Years of
                  Service, not to exceed five (5) years. If Mr. Ratcliffe elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Ratcliffe's Termination Date (and for such other
                  dependents as may be entitled to coverage under the provisions
                  of the Health Insurance Portability and Accountability Act of
                  1996) for the duration of Mr. Ratcliffe's extended medical
                  coverage under this Paragraph 2.(c)(i) to the extent such
                  dependents remain eligible for dependent coverage under the
                  terms of the Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Ratcliffe pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Ratcliffe in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Ratcliffe in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Ratcliffe
                           or his dependents may elect. In the event that Mr.
                           Ratcliffe or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Ratcliffe or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed.

                           (ii) Mr. Ratcliffe shall be entitled to receive cash
                  in an amount equal to the Company's and Mr. Ratcliffe's cost
                  of premiums for three (3) years of coverage under the Group
                  Health Plan and Group Life Insurance Plan in accordance with
                  the terms of such plans as of the date of the Change in
                  Control.

                  (d) Incentive Plans. If Mr. Ratcliffe meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i)      Stock Option Plan.

                                    (A) Any of Mr. Ratcliffe's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Ratcliffe is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Ratcliffe under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Ratcliffe's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Ratcliffe under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Ratcliffe is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Ratcliffe's Termination Date and to the extent Mr.
                  Ratcliffe is entitled to participate therein, Mr. Ratcliffe
                  shall be entitled to receive cash in an amount equal to a
                  prorated payout of his Incentive Pay Awards under the PPP Plan
                  for the Performance Period in which the Termination Date shall
                  have occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr.
                  Ratcliffe is not entitled to benefits under the Performance
                  Dividend Plan (the defined terms of which are incorporated in
                  this Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Ratcliffe's Termination
                  Date and to the extent Mr. Ratcliffe is entitled to
                  participate therein, Mr. Ratcliffe shall be entitled to
                  receive cash for each Award held by Mr. Ratcliffe on his
                  Termination Date, based on actual performance under Section
                  4.1 of the Performance Dividend Plan determined as of the most
                  recently completed calendar quarter of the Performance Period
                  in which the Termination Date shall have occurred, and the
                  Annual Dividend declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Ratcliffe is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Ratcliffe is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Ratcliffe is entitled to participate therein, Mr.
                  Ratcliffe shall receive cash in an amount equal to his award
                  under the Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Ratcliffe's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Ratcliffe's Termination Date, or (ii) upon Mr. Ratcliffe's
                  tender of an effective Waiver and Release to the Company in
                  the form of Exhibit A attached hereto and the expiration of
                  any applicable revocation period for such waiver. In the event
                  of a dispute with respect to liability or amount of any
                  benefit due hereunder, an effective Waiver and Release shall
                  be tendered at the time of final resolution of any such
                  dispute when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Ratcliffe's death prior to the payment of all amounts due under this
         Agreement, Mr. Ratcliffe's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr.
         Ratcliffe and the Company with regard to any amounts due hereunder, if
         any material issue in such dispute is finally resolved in Mr.
         Ratcliffe's favor, the Company shall reimburse Mr. Ratcliffe's legal
         fees incurred with respect to all issues in such dispute in an amount
         not to exceed fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Ratcliffe shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Ratcliffe's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Ratcliffe for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Ratcliffe's favor, the Company shall
         reimburse Mr. Ratcliffe's legal fees in the manner provided in
         Paragraph 2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Ratcliffe's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Ratcliffe accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Ratcliffe is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Ratcliffe hereunder shall not be reduced or suspended if Mr. Ratcliffe accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Ratcliffe's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Ratcliffe, in the case of the Company,
         or to the Southern Board, in the case of Mr. Ratcliffe.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Ratcliffe, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Ratcliffe.
         All other costs of arbitration shall be borne equally by Mr. Ratcliffe
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Ratcliffe's favor and Mr. Ratcliffe is
         reimbursed legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Ratcliffe under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Ratcliffe.

                  (c) Assignment. Mr. Ratcliffe shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.

                                        THE SOUTHERN COMPANY


                               By:      ____________________________________


                                        GEORGIA POWER COMPANY


                               By:      ____________________________________


                                        MR. RATCLIFFE


                                        -----------------------------
                                        David M. Ratcliffe


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. David M.
Ratcliffe upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, David M. Ratcliffe, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Georgia Power Company
(collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                      David M. Ratcliffe

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>36
<FILENAME>x10a90.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. Stephen A. Wakefield ("Mr.
Wakefield") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, originally effective and executed on
December 7, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Wakefield is the Senior Vice President and General Counsel
of the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective December 7, 1998 (the "Original Agreement") to provide to Mr.
Wakefield certain severance benefits under certain circumstances following a
change in control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Wakefield's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Wakefield or any
                           Group of which Mr. Wakefield is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board; (iii) Consummation of a Business
                           Combination, provided, however, that such a Business
                           Combination shall not constitute a Change in Control
                           if all three (3) of the following conditions are met:

                                             (A) all or substantially all of the
                                    individuals and entities who held Beneficial
                                    Ownership, respectively, of Southern's
                                    Voting Securities immediately prior to such
                                    Business Combination beneficially own,
                                    directly or indirectly, 65% or more of the
                                    combined voting power of the Voting
                                    Securities of the corporation surviving or
                                    resulting from such Business Combination,
                                    (including, without limitation, a
                                    corporation which as a result of such
                                    transaction holds Beneficial Ownership of
                                    all or substantially all of Southern's
                                    Voting Securities or all or substantially
                                    all of Southern's assets) (such surviving or
                                    resulting corporation to be referred to as
                                    "Surviving Company"), in substantially the
                                    same proportions as their ownership,
                                    immediately prior to such Business
                                    Combination, of Southern's Voting
                                    Securities;

                                             (B) no Person (excluding any
                                    corporation resulting from such Business
                                    Combination, any employee benefit plan (or
                                    related trust) of Southern, any Southern
                                    Subsidiary or Surviving Company, Mr.
                                    Wakefield, any Group of which Mr. Wakefield
                                    is a party, any Group composed exclusively
                                    of Company employees, any qualified pension
                                    plan (or related trust) or any publicly held
                                    mutual fund) holds Beneficial Ownership,
                                    directly or indirectly, of 20% or more of
                                    the combined voting power of the then
                                    outstanding Voting Securities of Surviving
                                    Company except to the extent that such
                                    ownership existed prior to the Business
                                    Combination; and

                                             (C) at least a majority of the
                                    members of the board of directors of
                                    Surviving Company were members of the
                                    Incumbent Board at the earlier of the date
                                    of execution of the initial agreement, or of
                                    the action of the Southern Board, providing
                                    for such Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Wakefield, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Wakefield is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Wakefield or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                           setting;

                           (ii) job market research and job sources;

                           (iii) networking and interviewing skills;

                           (iv) planning and implementation strategy;

                           (v) resume writing, job hunting methods and salary
                  negotiation; and

                           (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Wakefield's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Wakefield's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Wakefield's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Wakefield's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Wakefield participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Wakefield's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Wakefield's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Wakefield is located at the time of the
                  Change in Control, unless such new work location is within
                  fifty (50) miles from Mr. Wakefield's principal place of
                  residence at the time of the Change in Control. The
                  acceptance, if any, by Mr. Wakefield of employment by the
                  Company at a work location which is outside the fifty mile
                  radius set forth in this Paragraph 1.(n)(iv) shall not be a
                  waiver of Mr. Wakefield's right to refuse subsequent transfer
                  by the Company to a location which is more than fifty (50)
                  miles from Mr. Wakefield's principal place of residence at the
                  time of the Change in Control, and such subsequent unconsented
                  transfer shall be "Good Reason" under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Wakefield under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Wakefield was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Wakefield with the number of paid vacation days to
                  which Mr. Wakefield is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Wakefield, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Wakefield, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Wakefield has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Wakefield's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr.
                  Wakefield substantially to perform his duties with the Company
                  (other than any such failure resulting from Mr. Wakefield's
                  Total Disability or from Mr. Wakefield's retirement or any
                  such actual or anticipated failure resulting from termination
                  by Mr. Wakefield for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Wakefield in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Wakefield's
                           employment by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Wakefield shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Wakefield not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Wakefield shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than three quarters of the entire membership of the Southern Board at a meeting
of the Southern Board called and held for such purpose (after reasonable notice
to Mr. Wakefield and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Wakefield was guilty of conduct set forth above in clause
(i) or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Wakefield's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(c) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Wakefield's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Wakefield's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Wakefield has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Wakefield's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Wakefield voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Wakefield shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Wakefield shall not be eligible to receive benefits under this
         Agreement if Mr. Wakefield:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Wakefield meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Wakefield an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Wakefield under Code Section 280G exceeds three (3) times Mr.
         Wakefield's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Wakefield's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Wakefield, less one dollar (the "Capped Amount"), if
         the Capped Amount, reduced by HI Tax and Income Tax, exceeds what
         otherwise would have been the Severance Amount, reduced by HI Tax,
         Income Tax and Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Wakefield meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Wakefield shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Wakefield's Years of
                  Service, not to exceed five (5) years. If Mr. Wakefield elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Wakefield's Termination Date (and for such other
                  dependents as may be entitled to coverage under the provisions
                  of the Health Insurance Portability and Accountability Act of
                  1996) for the duration of Mr. Wakefield's extended medical
                  coverage under this Paragraph 2.(c)(i) to the extent such
                  dependents remain eligible for dependent coverage under the
                  terms of the Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Wakefield pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Wakefield in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Wakefield in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Wakefield
                           or his dependents may elect. In the event that Mr.
                           Wakefield or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Wakefield or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed.

                           (ii) Mr. Wakefield shall be entitled to receive cash
                  in an amount equal to the Company's and Mr. Wakefield's cost
                  of premiums for three (3) years of coverage under the Group
                  Health Plan and Group Life Insurance Plan in accordance with
                  the terms of such plans as of the date of the Change in
                  Control.

                  (d) Incentive Plans. If Mr. Wakefield meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i)      Stock Option Plan.

                                    (A) Any of Mr. Wakefield's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Wakefield is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Wakefield under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Wakefield's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Wakefield under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Wakefield is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Wakefield's Termination Date and to the extent Mr.
                  Wakefield is entitled to participate therein, Mr. Wakefield
                  shall be entitled to receive cash in an amount equal to a
                  prorated payout of his Incentive Pay Awards under the PPP Plan
                  for the Performance Period in which the Termination Date shall
                  have occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr.
                  Wakefield is not entitled to benefits under the Performance
                  Dividend Plan (the defined terms of which are incorporated in
                  this Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Wakefield's Termination
                  Date and to the extent Mr. Wakefield is entitled to
                  participate therein, Mr. Wakefield shall be entitled to
                  receive cash for each Award held by Mr. Wakefield on his
                  Termination Date, based on actual performance under Section
                  4.1 of the Performance Dividend Plan determined as of the most
                  recently completed calendar quarter of the Performance Period
                  in which the Termination Date shall have occurred, and the
                  Annual Dividend declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Wakefield is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Wakefield is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Wakefield is entitled to participate therein, Mr.
                  Wakefield shall receive cash in an amount equal to his award
                  under the Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Wakefield's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Wakefield's Termination Date, or (ii) upon Mr. Wakefield's
                  tender of an effective Waiver and Release to the Company in
                  the form of Exhibit A attached hereto and the expiration of
                  any applicable revocation period for such waiver. In the event
                  of a dispute with respect to liability or amount of any
                  benefit due hereunder, an effective Waiver and Release shall
                  be tendered at the time of final resolution of any such
                  dispute when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Wakefield's death prior to the payment of all amounts due under this
         Agreement, Mr. Wakefield's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr.
         Wakefield and the Company with regard to any amounts due hereunder, if
         any material issue in such dispute is finally resolved in Mr.
         Wakefield's favor, the Company shall reimburse Mr. Wakefield's legal
         fees incurred with respect to all issues in such dispute in an amount
         not to exceed fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Wakefield shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Wakefield's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Wakefield for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Wakefield's favor, the Company shall
         reimburse Mr. Wakefield's legal fees in the manner provided in
         Paragraph 2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Wakefield's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Wakefield accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Wakefield is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Wakefield hereunder shall not be reduced or suspended if Mr. Wakefield accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Wakefield's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Wakefield, in the case of the Company,
         or to the Southern Board, in the case of Mr. Wakefield.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Wakefield, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Wakefield.
         All other costs of arbitration shall be borne equally by Mr. Wakefield
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Wakefield's favor and Mr. Wakefield is
         reimbursed legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Wakefield under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Wakefield.

                  (c) Assignment. Mr. Wakefield shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                   THE SOUTHERN COMPANY


                          By:      ____________________________________


                                   SOUTHERN COMPANY SERVICES, INC.


                          By:      ____________________________________


                                   MR. WAKEFIELD


                                   -----------------------------
                                   Stephen A. Wakefield


<PAGE>

                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Stephen A.
Wakefield upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Stephen A. Wakefield, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                  Stephen A. Wakefield

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>37
<FILENAME>x10a91.txt
<TEXT>


                              AMENDED AND RESTATED

                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. W. Lawrence Westbrook ("Mr.
Westbrook") (hereinafter collectively referred to as the "Parties") is effective
July 10, 2000. This Agreement amends and restates the Change in Control
Agreement entered into by the Parties, originally effective and executed on
December 7, 1998.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Westbrook is the Executive Vice President and Chief
Financial Officer of the Company; WHEREAS, the Parties entered into a Change in
Control Agreement effective December 7, 1998 (the "Original Agreement") to
provide to Mr. Westbrook certain severance benefits under certain circumstances
following a change in control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the Original Agreement, the
Parties may amend the Original Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Westbrook's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Westbrook or any
                           Group of which Mr. Westbrook is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii);

                           (ii) A change in the composition of the Southern
                  Board whereby individuals who constitute the Incumbent Board
                  cease for any reason to constitute at least a majority of the
                  Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Westbrook, any Group of which Mr. Westbrook is a
                           party, any Group composed exclusively of Company
                           employees, any qualified pension plan (or related
                           trust) or any publicly held mutual fund) holds
                           Beneficial Ownership, directly or indirectly, of 20%
                           or more of the combined voting power of the then
                           outstanding Voting Securities of Surviving Company
                           except to the extent that such ownership existed
                           prior to the Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Westbrook, any
                  Group composed exclusively of employees of the Company, any
                  Group of which Mr. Westbrook is a party, any qualified pension
                  plan (or related trust), any publicly held mutual fund, any
                  employee benefit plan (or related trust) sponsored or
                  maintained by Southern or any Southern Subsidiary shall not
                  constitute a Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Westbrook or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                           setting; (ii) job market research and job sources;
                           (iii) networking and interviewing skills; (iv)
                           planning and implementation strategy; (v) resume
                           writing, job hunting methods and salary negotiation;
                           and (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Westbrook's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Westbrook's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Westbrook's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Westbrook's annual base salary rate plus target
                  bonus under the PPP Plan (except for a less than ten percent
                  (10%), across-the-board reduction of annual base salary rate
                  plus target bonus under the PPP Plan similarly affecting at
                  least ninety-five percent (95%) of the Executive Employees of
                  the Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Westbrook participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Westbrook's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Westbrook's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Westbrook is located at the time of the
                  Change in Control, unless such new work location is within
                  fifty (50) miles from Mr. Westbrook's principal place of
                  residence at the time of the Change in Control. The
                  acceptance, if any, by Mr. Westbrook of employment by the
                  Company at a work location which is outside the fifty mile
                  radius set forth in this Paragraph 1.(n)(iv) shall not be a
                  waiver of Mr. Westbrook's right to refuse subsequent transfer
                  by the Company to a location which is more than fifty (50)
                  miles from Mr. Westbrook's principal place of residence at the
                  time of the Change in Control, and such subsequent unconsented
                  transfer shall be "Good Reason" under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Westbrook under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Westbrook was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Westbrook with the number of paid vacation days to
                  which Mr. Westbrook is entitled on the basis of years of
                  service with the Company in accordance with the Company's
                  normal vacation policy in effect immediately prior to the
                  Change in Control (except for across-the-board plan or
                  vacation policy changes or plan terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Westbrook, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Westbrook, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Westbrook has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Westbrook's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr.
                  Westbrook substantially to perform his duties with the Company
                  (other than any such failure resulting from Mr. Westbrook's
                  Total Disability or from Mr. Westbrook's retirement or any
                  such actual or anticipated failure resulting from termination
                  by Mr. Westbrook for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Westbrook in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Westbrook's
                           employment by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Westbrook shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Westbrook not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Westbrook shall not be deemed to
have been terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by the affirmative vote of not less
than three quarters of the entire membership of the Southern Board at a meeting
of the Southern Board called and held for such purpose (after reasonable notice
to Mr. Westbrook and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Westbrook was guilty of conduct set forth above in clause
(i) or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Westbrook's employment with the Company is terminated; provided,
         however, that solely for purposes of Paragraph 2.(c) hereof, the
         Termination Date shall be the effective date of his retirement pursuant
         to the terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Westbrook's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Westbrook's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Westbrook has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Westbrook's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Westbrook voluntarily terminates his employment with the Company for
         Good Reason at any time during the two year period following a Change
         in Control, Mr. Westbrook shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Westbrook shall not be eligible to receive benefits under this
         Agreement if Mr. Westbrook:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Westbrook meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Westbrook an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Westbrook under Code Section 280G exceeds three (3) times Mr.
         Westbrook's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Westbrook's Base Amount, less all other
         "parachute payments" (as such term is defined under Code Section 280G)
         received by Mr. Westbrook, less one dollar (the "Capped Amount"), if
         the Capped Amount, reduced by HI Tax and Income Tax, exceeds what
         otherwise would have been the Severance Amount, reduced by HI Tax,
         Income Tax and Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Westbrook meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Westbrook shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Westbrook's Years of
                  Service, not to exceed five (5) years. If Mr. Westbrook elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Westbrook's Termination Date (and for such other
                  dependents as may be entitled to coverage under the provisions
                  of the Health Insurance Portability and Accountability Act of
                  1996) for the duration of Mr. Westbrook's extended medical
                  coverage under this Paragraph 2.(c)(i) to the extent such
                  dependents remain eligible for dependent coverage under the
                  terms of the Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Westbrook pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Westbrook in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Westbrook in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Westbrook
                           or his dependents may elect. In the event that Mr.
                           Westbrook or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Westbrook or his dependents by virtue of the
                           provisions of Paragraph 2.(c)(i) shall terminate,
                           except as may otherwise be required by law, and shall
                           not be renewed.

                           (ii) Mr. Westbrook shall be entitled to receive cash
                  in an amount equal to the Company's and Mr. Westbrook's cost
                  of premiums for three (3) years of coverage under the Group
                  Health Plan and Group Life Insurance Plan in accordance with
                  the terms of such plans as of the date of the Change in
                  Control.

                  (d) Incentive Plans. If Mr. Westbrook meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Westbrook's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Westbrook is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Westbrook under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Westbrook's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Westbrook under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Westbrook is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Westbrook's Termination Date and to the extent Mr.
                  Westbrook is entitled to participate therein, Mr. Westbrook
                  shall be entitled to receive cash in an amount equal to a
                  prorated payout of his Incentive Pay Awards under the PPP Plan
                  for the Performance Period in which the Termination Date shall
                  have occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr.
                  Westbrook is not entitled to benefits under the Performance
                  Dividend Plan (the defined terms of which are incorporated in
                  this Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Westbrook's Termination
                  Date and to the extent Mr. Westbrook is entitled to
                  participate therein, Mr. Westbrook shall be entitled to
                  receive cash for each Award held by Mr. Westbrook on his
                  Termination Date, based on actual performance under Section
                  4.1 of the Performance Dividend Plan determined as of the most
                  recently completed calendar quarter of the Performance Period
                  in which the Termination Date shall have occurred, and the
                  Annual Dividend declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Westbrook is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Westbrook is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Westbrook is entitled to participate therein, Mr.
                  Westbrook shall receive cash in an amount equal to his award
                  under the Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Westbrook's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Westbrook's Termination Date, or (ii) upon Mr. Westbrook's
                  tender of an effective Waiver and Release to the Company in
                  the form of Exhibit A attached hereto and the expiration of
                  any applicable revocation period for such waiver. In the event
                  of a dispute with respect to liability or amount of any
                  benefit due hereunder, an effective Waiver and Release shall
                  be tendered at the time of final resolution of any such
                  dispute when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Westbrook's death prior to the payment of all amounts due under this
         Agreement, Mr. Westbrook's estate shall be entitled to receive as due
         any amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr.
         Westbrook and the Company with regard to any amounts due hereunder, if
         any material issue in such dispute is finally resolved in Mr.
         Westbrook's favor, the Company shall reimburse Mr. Westbrook's legal
         fees incurred with respect to all issues in such dispute in an amount
         not to exceed fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Westbrook shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Westbrook's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Westbrook for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Westbrook's favor, the Company shall
         reimburse Mr. Westbrook's legal fees in the manner provided in
         Paragraph 2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Westbrook's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Westbrook accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Westbrook is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Westbrook hereunder shall not be reduced or suspended if Mr. Westbrook accepts
such subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Westbrook's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Westbrook, in the case of the Company,
         or to the Southern Board, in the case of Mr. Westbrook.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Westbrook, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Westbrook.
         All other costs of arbitration shall be borne equally by Mr. Westbrook
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Westbrook's favor and Mr. Westbrook is
         reimbursed legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Westbrook under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Westbrook.

                  (c) Assignment. Mr. Westbrook shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.

                                  THE SOUTHERN COMPANY


                         By:      ____________________________________


                                  SOUTHERN COMPANY SERVICES, INC.


                         By:      ____________________________________


                                  MR. WESTBROOK


                                  -----------------------------
                                  W. Lawrence Westbrook


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. W. Lawrence
Westbrook upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, W. Lawrence Westbrook, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                       W. Lawrence Westbrook

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>38
<FILENAME>x10a92.txt
<TEXT>


                              AMENDED AND RESTATED
                           CHANGE IN CONTROL AGREEMENT

         THIS AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT ("Agreement")
made and entered into by and between The Southern Company ("Southern"), Southern
Company Services, Inc. (the "Company") and Mr. Gale E. Klappa ("Mr. Klappa")
(hereinafter collectively referred to as the "Parties") is effective July 10,
2000. This Agreement amends and restates the Change in Control Agreement entered
into by the Parties effective October 6, 1999.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Klappa is Executive Vice President of the Company;

         WHEREAS, the Parties entered into a Change in Control Agreement
effective October 6, 1999 (the "October 6, 1999 Agreement") to provide to Mr.
Klappa certain severance benefits under certain circumstances following a change
in control (as defined herein) of Southern or the Company;

         WHEREAS, pursuant to Section 6(d) of the October 6, 1999 Agreement, the
Parties may amend the October 6, 1999 Agreement by written agreement;

         WHEREAS, the Parties wish to enter into this Amended and Restated
Change in Control Agreement pursuant to Section 6(d), to (i) change certain
references from normal market bonus to target bonus, (ii) clarify that an
initial public offering and a spin-off of the Company does not constitute a
"change in control" under the Agreement, (iii) delete references to the
"Productivity Improvement Plan," (iv) add Southern Energy, Inc. as a company
released in the waiver and release attached hereto, and (v) certain other
technical and miscellaneous modifications;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Klappa's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Klappa or any
                           Group of which Mr. Klappa is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Klappa, any Group of which Mr. Klappa is a party, any
                           Group composed exclusively of Company employees, any
                           qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Klappa, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Klappa is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Klappa or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "DIC Plan" shall mean the Southern Energy Resources, Inc.
         Deferred Incentive Compensation Plan or replacement thereto, as such
         plans may be amended from time to time.

                  (l) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (m) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                  (i) self-assessment, career decision and goal setting; (ii)
         job market research and job sources; (iii) networking and interviewing
         skills; (iv) planning and implementation strategy; (v) resume writing,
         job hunting methods and salary negotiation; and (vi) office support and
         job search resources.

                  (n) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (o) "Good Reason" shall mean, without Mr. Klappa's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Klappa's position or in the nature or status
                  of his responsibilities from those in effect immediately prior
                  to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Klappa's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Klappa's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Klappa participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Klappa's participation therein, (except for
                  across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(o), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Klappa's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Klappa is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Klappa's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Klappa of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(o)(iv) shall not be a waiver of Mr. Klappa's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Klappa's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Klappa under the
                  Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Klappa was participating immediately prior to the
                  Change in Control; or the failure by the Company to provide
                  Mr. Klappa with the number of paid vacation days to which Mr.
                  Klappa is entitled on the basis of years of service with the
                  Company in accordance with the Company's normal vacation
                  policy in effect immediately prior to the Change in Control
                  (except for across-the-board plan or vacation policy changes
                  or plan terminations similarly affecting at least ninety-five
                  percent (95%) of the Executive Employees of the Company).

                           (vi) For purposes of this Paragraph 1.(o), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (p) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (q) "Group Health Plan" shall mean the group health plan
         covering Mr. Klappa, as such plan may be amended from time to time.

                  (r) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Klappa, as such plan may be amended from
         time to time.

                  (s) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (t) "Month of Service" shall mean any calendar month during
         which Mr. Klappa has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (u) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (v) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (w) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (x) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (y) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (z) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (aa) "Southern Board" shall mean the board of directors of
         Southern.

                  (bb) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (cc) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Klappa's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Klappa
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Klappa's Total
                  Disability or from Mr. Klappa's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Klappa for Good Reason) after a written demand for substantial
                  performance is delivered to him by the Southern Board, which
                  demand specifically identifies the manner in which the
                  Southern Board believes that he has not substantially
                  performed his duties; or

                           (ii) The willful engaging by Mr. Klappa in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Klappa's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Klappa shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Klappa not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Klappa shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Klappa and an opportunity for him, together with counsel, to be heard before
the Southern Board), finding that, in the good faith opinion of the Southern
Board, Mr. Klappa was guilty of conduct set forth above in clause (i) or (ii) of
this Paragraph 1.(cc) and specifying the particulars thereof in detail.

                  (dd) "Termination Date" shall mean the date on which Mr.
         Klappa's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (ee) "Total Disability" shall mean Mr. Klappa's total
         disability within the meaning of the Pension Plan.

                  (ff) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (gg) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (hh) "Year of Service" shall mean Mr. Klappa's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Klappa has a break in his service with the Company, he will
         receive credit under this Agreement for service prior to the break in
         service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Klappa's employment is involuntarily terminated
         by the Company at any time during the two year period following a
         Change in Control for reasons other than Cause, or if Mr. Klappa
         voluntarily terminates his employment with the Company for Good Reason
         at any time during the two year period following a Change in Control,
         Mr. Klappa shall be entitled to receive the benefits described in this
         Agreement upon the Company's receipt of an effective Waiver and
         Release. Notwithstanding anything to the contrary herein, Mr. Klappa
         shall not be eligible to receive benefits under this Agreement if Mr.
         Klappa:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Klappa meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Klappa an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Klappa under Code Section 280G exceeds three (3) times Mr. Klappa's
         "base amount" (as such term is defined under Code Section 280G ("Base
         Amount")) by ten percent (10%) or more; provided further, that if no
         280G Gross-up is paid, the Severance Amount shall be capped at three
         (3) times Mr. Klappa's Base Amount, less all other "parachute payments"
         (as such term is defined under Code Section 280G) received by Mr.
         Klappa, less one dollar (the "Capped Amount"), if the Capped Amount,
         reduced by HI Tax and Income Tax, exceeds what otherwise would have
         been the Severance Amount, reduced by HI Tax, Income Tax and Excise
         Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Klappa meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Klappa shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Klappa's Years of
                  Service, not to exceed five (5) years. If Mr. Klappa elects to
                  receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Klappa's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Klappa's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Klappa pursuant to Paragraph 2.(c)(i), as well
                           as the premiums to be paid by Mr. Klappa in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Klappa in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Klappa or
                           his dependents may elect. In the event that Mr.
                           Klappa or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Klappa or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Klappa shall be entitled to receive
                           cash in an amount equal to the Company's and Mr.
                           Klappa's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Klappa meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Klappa's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Klappa is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Klappa under Section 16(b) of the
                           Exchange Act, provided further, that any such actions
                           not taken as a result of the rules under Section
                           16(b) of the Exchange Act shall be effected as of the
                           first date that such activity would no longer result
                           in liability under Section 16(b) of the Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Klappa's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Klappa under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Klappa is not
                  entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Klappa's Termination Date and to the extent Mr. Klappa is
                  entitled to participate therein, Mr. Klappa shall be entitled
                  to receive cash in an amount equal to a prorated payout of his
                  Incentive Pay Awards under the PPP Plan for the Performance
                  Period in which the Termination Date shall have occurred, at
                  target performance under the PPP Plan and prorated by the
                  number of months which have passed since the beginning of the
                  Performance Period until the Termination Date.

                           (iii) Performance Dividend Plan. Provided Mr. Klappa
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Klappa's Termination
                  Date and to the extent Mr. Klappa is entitled to participate
                  therein, Mr. Klappa shall be entitled to receive cash for each
                  Award held by Mr. Klappa on his Termination Date, based on
                  actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Klappa is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Klappa is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Klappa is entitled to participate therein, Mr. Klappa
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Klappa's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria.

                           (v) DIC Plan. Provided Mr. Klappa is not entitled to
                  benefits under Article V of the DIC Plan (the defined terms of
                  which are incorporated into this Paragraph 2(d)(v) by
                  reference), if the DIC Plan is in place through Mr. Klappa's
                  Termination Date and to the extent that Mr. Klappa is entitled
                  to participate therein, any of Mr. Klappa's Awards as of the
                  Termination Date which are not then vested shall become fully
                  vested and Mr. Klappa shall be entitled to receive cash in the
                  amount equal to Mr. Klappa's Account as of his Termination
                  Date. Notwithstanding anything in the DIC Plan to the
                  contrary, the investment return on the Awards determined in
                  accordance with Section 3.1 of the DIC Plan for any Plan Year
                  following a Change in Control shall be no less than the
                  investment return on the Awards determined in accordance with
                  Section 3.1 of the DIC Plan as of the date of such Change in
                  Control with respect to those Accounts which are outstanding
                  as of the date of such Change in Control. (e) Payment of
                  Benefits. Any amounts due under this Agreement shall be paid
                  in one (1) lump sum payment as soon as administratively
                  practicable following the later of: (i) Mr. Klappa's
                  Termination Date, or (ii) upon Mr. Klappa's tender of an
                  effective Waiver and Release to the Company in the form of
                  Exhibit A attached hereto and the expiration of any applicable
                  revocation period for such waiver. In the event of a dispute
                  with respect to liability or amount of any benefit due
                  hereunder, an effective Waiver and Release shall be tendered
                  at the time of final resolution of any such dispute when
                  payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Klappa's death prior to the payment of all amounts due under this
         Agreement, Mr. Klappa's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Klappa
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Klappa's
         favor, the Company shall reimburse Mr. Klappa's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Klappa shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Klappa's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Klappa for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Klappa's favor, the Company shall
         reimburse Mr. Klappa's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Klappa's employment by
the Company is terminated during the two year period following a Change in
Control and Mr. Klappa accepts employment by Southern, a Southern Subsidiary, or
any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Klappa is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr. Klappa
hereunder shall not be reduced or suspended if Mr. Klappa accepts such
subsequent employment.

         5. Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Klappa's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Klappa, in the case of the Company, or
         to the Southern Board, in the case of Mr. Klappa.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Klappa, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Klappa.
         All other costs of arbitration shall be borne equally by Mr. Klappa and
         the Company, provided, however, that the Company shall reimburse such
         fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Klappa's favor and Mr. Klappa is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Klappa under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Klappa.

                  (c) Assignment. Mr. Klappa shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                      THE SOUTHERN COMPANY


                             By:      ____________________________________


                                      SOUTHERN COMPANY SERVICES, INC.


                             By:      ____________________________________


                                       MR. KLAPPA

                                      -----------------------------
                                             Gale E. Klappa


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Gale E. Klappa
upon the occurrence of an event that triggers eligibility for severance benefits
under the Change in Control Agreement, as described in Paragraph 2(a) of such
agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Gale E. Klappa, understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                              Gale E. Klappa

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>39
<FILENAME>x10a94.txt
<TEXT>

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between THE SOUTHERN COMPANY, with its corporate offices located at
270 Peachtree Street, 14th Floor, Atlanta, Georgia 30303 (the "Company"), and
WILLIAM L. WESTBROOK, residing at 10 Bohler Mews, Atlanta, Georgia 30327
("Employee").

                               W I T N E S S E T H

         WHEREAS, Employee has been employed by the Company for approximately
thirty-seven (37) years;

         WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;

         WHEREAS, in order to be eligible for benefits under this Agreement, the
parties have agreed that Employee shall retire from employment with the Company
on the earlier of the last day of a month mutually agreed upon by Employee and
the Company, the last day of the month following the date the Company makes a
pro-rata distribution to the holders of its common stock of all of the shares of
Southern Energy, Inc. stock owned by the Company or June 30, 2001, but in no
event shall Employee retire from employment with the Company prior to March 1,
2001;

         WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations attendant to such retirement, and desire to reach an
accord and satisfaction of all claims arising from Employee's employment and his
retirement, with appropriate releases; and

         WHEREAS, the Company desires to provide Employee with deferred
compensation and other severance benefits for service he has provided or will
provide for the Company prior to retirement;

         WHEREAS, it is the Company's intent that Employee otherwise receive all
benefits and compensation which Employee has accrued as of his early retirement
date, and this Agreement and the Release attached hereto is not intended in any
way to affect Employee's right to such benefits and compensation;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:

         1. Retirement from Employment. Upon Employee's execution of this
Agreement, voluntary early retirement from employment on the earlier of the last
day of a month mutually agreed upon by Employee and the Company, the last day of
the month following the date the Company makes a pro-rata distribution to the
holders of its common stock of all of the shares of Southern Energy, Inc. stock
owned by the Company ("Spin-off") or June 30, 2001, but in no event prior to
March 1, 2001 (the Employee's "Early Retirement Date"), and effectiveness of the
Release attached hereto as Exhibit 1 (such effectiveness being no earlier than
the Employee's Early Retirement Date), the Company shall pay to Employee the
amounts described in Paragraph 2 hereof and shall apply the treatment set forth
in Paragraph 3 to Employee's Nonqualified Stock Options under The Southern
Company Performance Stock Plan. Employee agrees to provide the Company with at
least 30 days prior written notification of his Early Retirement Date. Employee
covenants and agrees that the consideration set forth in Paragraphs 2 and 3 is
in full satisfaction of all sums owed to Employee, if any, by the Company, and
constitutes good and complete consideration for his Release attached hereto as
Exhibit 1, those nondisclosure, non-compete and ownership obligations under
Paragraph 5 hereof and all other obligations and covenants of Employee contained
herein. Employee agrees that this Agreement provides him certain benefits to
which he would not otherwise be entitled.

         2. Severance Payments to Employee. Subject to Paragraph 1, the Company
shall pay the following amounts to employee:

                  (a) On the effective date of the Release (such effective date
         being no earlier than the Employee's Early Retirement Date), the
         Company shall pay to Employee a lump sum amount equal to Five Hundred
         Fifty Thousand Two Hundred and No/100 Dollars ($550,200.00), plus a
         lump sum amount equal to any unused financial planning allowance as of
         his Early Retirement Date that is still payable in the year of his
         retirement hereunder (such financial planning allowance shall equal
         Seven Thousand and No/100 Dollars ($7,000.00) as of the commencement of
         the calendar year in which Employee retires, and such amount shall be
         reduced prior to Employee's retirement in accordance with its use).

                  (b) Subject to Paragraph 1, in the event of a Spin-off,
         Company shall pay to Employee an amount ("Additional Spin-off Amount")
         determined in accordance with the following table:

    If Spin-off occurs:                Additional Spin-off Amount is:
    -------------------                ------------------------------
  On or before December 31, 2001            $223,000.00
  After December 31, 2001, but              $185,833.34
  before January 1, 2003

  After December 31, 2002, but              $148,666.67
  before January 1, 2004

  After December 31, 2003, but              $111,500.00
  before January 1, 2005

  After December 31, 2004, but              $74,333.34
  before January 1, 2006

  After December 31, 2005, but              $37,166.67
  before January 1, 2007

  After December 31, 2006                   $0


         The Additional Spin-Off Amount payable to Employee in accordance with
this subparagraph 2(b), if any, shall be paid to Employee on the first day of
the first month coincident with or next following the later of (i) the date of
the Spin-Off, (ii) Employee's Early Retirement Date, and (iii) the effective
date of the Release (such effective date being no earlier than Employee's Early
Retirement Date).

                  (c) Subject to the terms and conditions of this Agreement,
         including Paragraph 1 hereof, beginning on the effective date of the
         Release (such effective date being no earlier than Employee's Early
         Retirement Date), and thereafter on the first day of the month, the
         Company shall commence payment to Employee of a monthly installment
         ("Employee Replacement Benefit"), determined in accordance with the
         following table and adjusted as provided below:

Employee's Early Retirement Date is:     Employee Replacement Benefit is:

       March 31, 2001                          $9,927.00


       April 30, 2001                          $9,727.00


       May 31, 2001                            $9,471.00


       June 30, 2001                           $9,268.00


         Based upon the foregoing table and assuming for all purposes a single
life annuity payout under the three plans listed below, the Employee Replacement
Benefit, together with (i) the Retirement Income that Employee receives under
The Southern Company Pension Plan ("Pension Plan"); (ii) the SERP Benefit the
Employee receives under The Southern Company Supplemental Executive Retirement
Plan ("SERP"); and (iii) the Pension Benefit that Employee receives under The
Southern Company Supplemental Benefit Plan ("Supplemental Benefit Plan"), shall
result in a total annual payment to Employee of Four Hundred Two Thousand Nine
Hundred Forty-Five Dollars And No Cents ($402,945.00) ("Annual Floor").

         The Employee Replacement Benefit and Annual Floor payable to Employee
described above shall be adjusted to reflect the Employee's provisional payee
option selected under The Southern Company Pension Plan ("Pension Plan") and
shall be increased from time to time to reflect future increases, if any, in
Retirement Income of retirees following the Employee's retirement.

         In accordance with Paragraph 16 hereof, Employee shall be responsible
for all state and federal income taxes and his share of FICA taxes owed on the
amounts payable in accordance with subparagraphs (a), (b) and (c) of this
Paragraph 2, and Company shall make appropriate withholding of these amounts.

         3. Employee's Stock Options Under The Southern Company Performance
Stock Plan. Employee's Nonqualified Stock Options ("Stock Options") covering a
total of 107,115 shares of common stock of the Company under The Southern
Company Performance Stock Plan ("Performance Stock Plan") shall continue in
accordance with their terms; provided, however, that, subject to Paragraph 1,
for all purposes of the Company's Performance Stock Plan, Employee's retirement
on his Early Retirement Date in accordance with this Agreement shall be deemed
to constitute Retirement (as defined in the Company's Performance Stock Plan)
with the result thereof to include that as of Employee's Early Retirement Date,
(i) all of Employee's existing Stock Options, and all of his rights therein,
will become fully vested and non-forfeitable; (ii) any restrictions or
reductions applicable to option holders under the Company's Performance Stock
Plan in case of early retirement shall be inapplicable; and (iii) the
sixty-month exercise period under the Performance Stock Plan with respect to
such Stock Options (which is subject to the expiration of such Stock Options)
shall commence as of Employee's Early Retirement Date. The Company agrees that
the Employee's existing Stock Options will be adjusted for the Spin-off in the
same manner as other participants under the Performance Stock Plan.

         4. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 9 hereof, Employee and the Company covenant and agree that they shall
not engage in any communications which shall disparage one another or interfere
with their existing or prospective business relationships.

         5. Non-Disclosure, Non-Solicitation and Non-Competition Provisions.

                  (a) Preamble. As a material inducement to the Company to enter
         into this Agreement, and its recognition of the valuable experience,
         knowledge and proprietary information Employee gained from his
         employment with the Company, Employee agrees he will abide by and
         adhere to the following Non-Disclosure, Non-Solicitation and
         Non-Competition Provisions.

                  (b) Definitions. For purposes of this Paragraph 5, the
         following terms shall have the following meanings:

                  (i)      "Confidential Information" shall mean the proprietary
                           and confidential data or information, other than
                           "Trade Secrets" (as defined below), (A) that either
                           (i) belongs to the Company or (ii) pertains to the
                           Company and that, if it does not belong to the
                           Company, is either subject to a confidentiality
                           agreement or belongs to or is held by a third party
                           that the Company reasonably expects will maintain the
                           proprietary or confidential nature of the data or
                           information, including, but not limited to, attorneys
                           and accountants engaged by the Company, and (B) that
                           is of value to the Company and is not generally known
                           to the public but is generally known only to the
                           Company and those of its employees, independent
                           contractors or agents to whom such information must
                           be confided for business purposes, regarding the
                           products, services, contractual arrangements,
                           customers, suppliers, and partners of the Company
                           gained by Employee as a result of his employment with
                           the Company. Confidential Information shall also
                           include other items that the Company may from time to
                           time mark or otherwise identify as confidential,
                           provided that Employee has knowledge of such marking
                           or identification. As used in this subsection,
                           "Company" shall include any of the Company's
                           affiliates.

                  (ii)     "Entity" shall mean any business, individual,
                           partnership, joint venture, agency, governmental
                           subdivision, association, firm, corporation or other
                           entity.

                  (iii)    "Territory" shall include the geographic area in
                           which Southern Company and any of its affiliates,
                           exclusive of Southern Energy, Inc., provides
                           electrical service to retail customers as of the date
                           of this Agreement.

                  (iv)     "Trade Secrets" shall mean information of the Company
                           or any of its affiliates which (A) derives economic
                           value, actual or potential, from not being generally
                           known to, and not being readily ascertainable by
                           proper means by, other persons who can obtain
                           economic value from its disclosure or use; and (B) is
                           the subject of efforts that are reasonable under the
                           circumstances to maintain its secrecy; it being
                           agreed that such information includes, without
                           limitation, non-public information related to the
                           rate making process of the Company, or its
                           affiliates, technical and non-technical data, a
                           formula, a pattern, a compilation, a program, a
                           device, a method, a technique, a drawing, a process,
                           financial data, financial plans, product plans or a
                           list of actual or potential customers or suppliers or
                           any other information which is defined as a "trade
                           secret" under applicable law. (v) "Work Product"
                           shall mean all tangible work product, property, data,
                           documentation, concepts or plans, inventions,
                           improvements, techniques and processes relating to
                           the Company or any of its affiliates that were
                           conceived, discovered, created or developed by
                           Employee pursuant to his employment with the Company.

                  (c) Nondisclosure: Ownership of Proprietary Property.

                  (i)      In recognition of the need of the Company to protect
                           its legitimate business interests, Employee hereby
                           covenants and agrees that: (A) with regard to each
                           item constituting all or any portion of a Trade
                           Secret at all times such information remains a "trade
                           secret" under applicable law and (B) with regard to
                           any Confidential Information, for a period of three
                           (3) years following the Early Retirement Date
                           (hereafter the "Nondisclosure Period"), Employee
                           shall regard and treat Trade Secrets and all
                           Confidential Information as strictly confidential and
                           wholly-owned by the Company and shall not, for any
                           reason, in any fashion, either directly or
                           indirectly, use, sell, lend, lease, distribute,
                           license, give, transfer, assign, show, disclose,
                           disseminate, reproduce, copy, misappropriate or
                           otherwise communicate any such item or information to
                           any third party or Entity for any purpose other than
                           in accordance with this Agreement, as required by
                           applicable law, or to defend against litigation
                           brought by the Company alleging a breach by Employee
                           of the non-disclosure provisions of Paragraph 5 of
                           this Agreement. Employee shall exercise all
                           reasonable best efforts to ensure the continued
                           confidentiality of all Trade Secrets and Confidential
                           Information of the Company known by, disclosed to or
                           made available to Employee in connection with his
                           employment relationship with the Company or any other
                           past or present relationship with the Company.
                           Employee shall immediately notify the Company of any
                           unauthorized disclosure or use of any Trade Secrets
                           or Confidential Information of which Employee becomes
                           aware. Employee shall assist the Company, to the
                           extent necessary and reasonable, in the procurement
                           of any protection of the Company's rights to or in
                           any of the Trade Secrets or Confidential Information.

                  (ii)     All Work Product shall be owned exclusively by the
                           Company. To the greatest extent possible, any Work
                           Product shall be deemed to be "work made for hire"
                           (as defined in the Copyright Act, 17 U.S.C.A.ss. 101
                           et seq., as amended), and Employee hereby
                           unconditionally and irrevocably transfers and assigns
                           to the Company all right, title and interest Employee
                           currently has or may have by operation of law or
                           otherwise in or to any Work Product, including,
                           without limitation, all patents, copyrights,
                           trademarks, trade secrets, service marks and other
                           intellectual property rights. Employee agrees to
                           execute and deliver to the Company any transfers,
                           assignments, documents or other instruments which the
                           Company may deem necessary or appropriate, from time
                           to time, to vest complete title and ownership of any
                           and all Work Product, and all associated intellectual
                           property and other rights therein, exclusively in the
                           Company.

                  (iii)    Employee represents and agrees that he will keep the
                           terms and amount of this Agreement completely
                           confidential, and except to his personal agents or
                           legal counsel to the extent required by law or as
                           necessary to either defend against litigation brought
                           by the Company alleging a breach by Employee of the
                           non-disclosure provisions of Paragraph 5 of this
                           Agreement or arbitrate a claim or dispute pursuant to
                           Paragraph 19 of this Agreement, he will not hereafter
                           disclose this information concerning this Agreement
                           to anyone, including, but not limited to, any past,
                           present, or prospective employee or applicant for
                           employment with the Company. Employee may only
                           disclose to future, potential employers of Employee
                           that he participates in a deferred compensation
                           arrangement with the Company which imposes certain
                           restrictions on him related to such future, potential
                           employment.

         (d) No Employment.

         Employee agrees that he shall not hereafter seek any re-employment with
the Company, its parent, its affiliates or its subsidiaries.

         (e) Non-Solicitation of Employees.

         Employee agrees, during the three (3) years following the Employee's
separation from employment, that he will not, either directly or indirectly,
alone or in conjunction with any other person or entity, actively recruit,
engage in passive hiring efforts, solicit, attempt to solicit, or induce any
person who, during such three year period, or within one year prior to
Employee's separation from employment, was an exempt employee of the Company or
any of its subsidiaries, or was an officer of the Company or any of its
affiliates to leave or cease such employment for any reason whatsoever or hire
or engage the services of such person in any business substantially similar or
competitive with that in which The Southern Company and its affiliates were
engaged during the employment.

         (f) Non-Competition.

         Employee agrees that, for a period of two (2) years from the date of
separation of employment with the Company, he will not:

         (i)      be employed by an entity which is engaged in the generation,
                  transmission, distribution or sale, whether at retail or
                  wholesale, of electricity within the Territory, or

         (ii)     consult for or advise any entity with respect to the
                  acquisition or development of power generation assets located
                  or to be located within the Territory, or

         (iii)    unless requested by the Company or required by law to do so,
                  testify or otherwise appear with respect to or regarding a
                  matter affecting Southern Company, its subsidiaries or
                  Southern Energy, Inc., before any (A) regulatory agency,
                  government commission or regulatory body within the Territory,
                  (B) the Federal Energy Regulatory Commission or (C) the
                  Securities and Exchange Commission.

Notwithstanding these limitations, and by way of clarification, Employer agrees
that Employee may at any time engage in a consulting relationship with any
entity, whether or not within the Territory, to provide advice as to financial
matters, such as capital budgeting, capital processes, debt or equity offerings,
project finance, commercial paper transactions, rating agency matters, risk
management, insurance, and other similar finance related matters, provided that
such consultation does not violate the restrictions set forth in (ii) and (iii)
of this subsection (f). Further, Employee may at any time consult for, advise or
serve on the board of directors of a technology development company that is
involved in electric power technology, such as fuel cell or micro-turbine
technology, provided that such company is not involved in the generation,
transmission, distribution or sale of electricity in the Territory in excess of
ten (10) megawatts.

         Employee and Company expressly covenant and agree that the scope,
territorial, time and other restrictions contained in this Agreement constitute
the most reasonable and equitable restrictions possible to protect the business
interest of the Company given: (1) the business of the Company; (2) the
competitive nature of the Company's industry; and (3) that Employee's skills are
such that he could easily find alternative, commensurate employment or
consulting work in his field which would not violate any of the provisions of
this Agreement.

         6. Return of Materials. Upon the Employee's retirement or earlier
termination, or at any point after that time upon the specific request of the
Company, Employee shall return to the Company all written or descriptive
materials or any other property of any kind belonging to the Company, its
Affiliates, or its agents, including, without limitation, any Intellectual
Property, Confidential Information and Trade Secrets, in Employee's possession.

         7. Cooperation. The parties agree that as a result of Employee's duties
and activities during his employment, Employee's reasonable availability may be
necessary for the Company to meaningfully respond to or address actual or
threatened litigation, or government inquiries or investigations, or required
filings with state, federal or foreign agencies (hereinafter "Company Matters").
Upon request of the Company, and at any point following termination of
employment, Employee will make himself available to the Company for reasonable
periods consistent with his future employment, if any, by other Entities and
will cooperate with its agents and attorneys as reasonably required by such
Company matters. The Company will reimburse Employee for any reasonable
out-of-pocket expenses associated with providing such cooperation.

         8. Termination with Cause. In the event of Employee's termination of
employment for Cause at any time prior to Employee's Early Retirement Date, the
Employee shall forfeit all of the benefits provided in Paragraphs 2 and 3, and
the Company and Employee shall have no further obligations with respect to this
Agreement or the Release attached as Exhibit 1 other than, as to Employee, the
return of information under Paragraph 6. As used in this Agreement, the term
"Cause" shall mean Employee's gross negligence or willful misconduct in the
performance of his duties and services required in the course of employment by
the Company; or a material breach of the fiduciary obligations owed by an
officer and an employee to Southern, provided that the Company has given written
notice to Employee of such gross negligence, willful misconduct or material
breach and Employee has failed to cure such gross negligence, willful misconduct
or material breach within fifteen (15) days after Employee receives such notice.
No act or failure by Employee shall be deemed "willful" unless done, or omitted
to be done, by Employee not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.

         9. Confidentiality and Legal Process. The Parties hereto each represent
and agree that they will keep the terms, amount and fact of this Agreement
confidential and that they will not hereafter disclose any information
concerning this Agreement to any one other than their respective agents or legal
counsel. Employee specifically acknowledges and agrees that he will not
hereafter disclose any information concerning this Agreement to any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement shall preclude Employee
from disclosing to any prospective employer or client, in connection with its
decision to hire Employee, solely that he entered into an arrangement with the
Company which imposes certain restrictions on him related to such future
potential employment or retention. Nothing in this Agreement is intended to
prohibit either party from performing any duty or obligation that shall arise as
a matter of law. Specifically, Employee shall continue to be under a duty to
truthfully respond to any legal and valid subpoena or other legal process. This
Agreement is not intended in any way to proscribe either party's right and
ability to provide information to any federal, state or local government in the
lawful exercise of such governments' governmental functions.

         10. Successors And Assigns; Applicable Law. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs, administrators,
representatives, executors, successors and assigns, and shall be binding upon
and inure to the benefit of Southern, the Company and their officers, directors,
employees, agents, shareholders, parent corporation and affiliates, and their
respective predecessors, successors, assigns, heirs, executors and
administrators and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Georgia,
United States of America (without giving effect to principles of conflicts of
laws).

         11. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Employee and
an authorized representative of the Company.

         12. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         13. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement. Notwithstanding anything
contained in this Agreement to the contrary, the Company acknowledges and agrees
that following Employee's retirement pursuant to this Agreement, it shall pay
all of its obligations under this Agreement when due without set off or
reduction as a result of any defense or claim that the Company may have at any
time against the Employee. Notwithstanding the preceding sentence, Employee
acknowledges that Company shall have the right to pursue Employee for recovery
of such payments for Employee's violation of the terms of this Agreement, and in
the event of a final judgment against Employee, Company shall recover pursuant
to such judgment and, if the judgment so provides, cease any additional payments
hereunder.

         14. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Employee may be entitled to receive the value
of his benefit under the terms and conditions of this Agreement, the assets from
which such amount may be paid shall at all times be subject to the claims of the
Company's creditors.

         15. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Employee may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company, including but not limited to, (i) those rights and
benefits to which Employee is entitled under the Change of Control Agreement
between The Southern Company, Southern Company Services, Inc. and Employee,
provided Employee remains employed by the Company and such Change in Control
Agreement by its terms is in effect; (ii) all benefits accrued by Employee as of
his Early Retirement Date, including, but not limited to, those provided under
the terms of The Southern Company Performance Pay Plan; and (iii) any rights to
indemnification in respect of his services as an employee, officer and/or
director of the Company or any of its subsidiaries or affiliates as provided by
law or the Certificate of Incorporation and/or By-laws (or like constitutive
documents) of the Company or any of its subsidiaries or affiliates.

         16. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of Employee.

         17. Compensation. Any compensation contributed on behalf of Employee
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         18. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Employee and the Company.

         19. Arbitration.

         (a) Any dispute, controversy or claim arising out of or relating to the
Company's obligations to pay benefits under this Agreement, or the breach
thereof, shall be settled and resolved solely by arbitration in accordance with
the Commercial Arbitration Rules of the American Arbitration Association ("AAA")
except as otherwise provided herein. The arbitration shall be the sole and
exclusive forum for resolution of any such claim for benefits hereunder and the
arbitrators' award shall be final and binding.

         (b) Arbitration shall be initiated by serving a written notice of
demand for arbitration to Employee, in the case of the Company, or to the
Southern Corporate Secretary, in the case of Employee.

         (c) The arbitration shall be held in Atlanta, Georgia. The arbitrators
shall apply the law of the State of Georgia, to the extent not preempted by
federal law, excluding any law which would require the application of the law of
another state.

         (d) The parties shall appoint arbitrators within fifteen (15) business
days following service of the demand for arbitration. The number of arbitrators
shall be three. One arbitrator shall be appointed by Employee, one arbitrator
shall be appointed by the Company, and the two arbitrators shall appoint a
third. If the arbitrators cannot agree on a third arbitrator within thirty (30)
business days after the service of demand for arbitration, the third arbitrator
shall be selected by the AAA.

         (e) The arbitration filing fee shall be borne equally by Employee and
the Company. All other costs of arbitration shall be borne equally by Employee
and the Company, provided, however, that in the event any material issue in the
dispute being arbitrated hereunder is finally resolved in Employee's favor, the
Company shall reimburse Employee for all such fees and costs paid by Employee
and Employee's legal fees incurred with respect to such dispute in an amount not
to exceed $50,000.

         (f) The parties agree that they will faithfully observe the rules that
govern any arbitration between them, they will abide by and perform any award
rendered by the arbitrators in any such arbitration, including any award of
injunctive relief, and a judgment of a court having jurisdiction may be entered
upon an award.

         (g) The parties agree that nothing in this Paragraph 19 is intended to
preclude upon application of either party any court having jurisdiction from
issuing and enforcing in any lawful manner such temporary restraining orders,
preliminary injunctions, and other interim measures of relief as may be
necessary to prevent harm to a party's interests or as otherwise may be
appropriate pending the conclusion of arbitration proceedings pursuant to this
Agreement; regardless of whether an arbitration proceeding under this Paragraph
19 has begun. The parties further agree that nothing herein shall prevent any
court from entering and enforcing any lawful manner such judgments for permanent
equitable relief as may be necessary to prevent harm to a party's interests or
as otherwise may be appropriate following the issuance of arbitral awards
pursuant to this Paragraph 19.

         20. Non-Qualified Benefit Security - Annuitization.

         (a) Company acknowledges and agrees that Employee shall be eligible for
a partial annuitization of his non-qualified pension benefit between his Early
Retirement Date and the later of the third anniversary of his Early Retirement
Date or the date on which he attains age 65, in accordance with Company policy,
including but not limited to the following:

         (i)      Annuitizable benefit equals the excess, if any, of the
                  Employee's total non-qualified pension plan benefits over 40%
                  of the Employee's total qualified and non-qualified pension
                  plan benefits;

         (ii)     Pension plan benefits include only those benefits payable by:

                  a.       Any Southern, or affiliated company sponsored, tax
                           qualified pension plan; and

                  b.       The following pension plans which are not tax
                           qualified: Southern Company Supplemental Benefit
                           Plan, Southern Company Supplemental Executive
                           Retirement Plan, Southern Energy, Inc. Supplemental
                           Executive Retirement Plan, and Savannah Electric
                           Power Company Supplemental Executive Retirement Plan.

         (b) Consistent with Company policy, with respect to any partial
annuitization of non-qualified pension benefits, the Company will "tax equalize"
the annuity benefit and provide Employee with a "tax equalization gross up" due
to the significant differences between the taxation of monthly non-qualified
pension benefits and monthly annuity benefits.

         (c) The parties acknowledge and agree that the annuitization policy
described in this Paragraph 20 does not apply to any obligations of the Company
described in the preceding Paragraphs of this Agreement.

         21. Notices. All notices, demands, elections, requests and other
communications hereunder shall be in writing and shall be deemed to have been
given to a party hereto, if personally delivered, on the date of such delivery,
or five days after having been mailed, postage prepaid, by certified or
registered mail, return receipt requested, to the party at its or his address as
set forth at the beginning hereof (in the case of the Company, marked to the
attention of the Secretary, or, in the case of Paragraph 19, to the attention of
the Company's Board of Directors) or to such other address as the party may
designate by notice given in conformity with the foregoing.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
this ___ day of ________________, 2001.

                                    "COMPANY"

                                    THE SOUTHERN COMPANY

                                    By:
                                             ---------------------------------
                                    Its:
                                             ---------------------------------
                                   "EMPLOYEE"

                                    WILLIAM L. WESTBROOK




<PAGE>





                                  EXHIBIT 1 to

                         Deferred Compensation Agreement
                            with WILLIAM L. WESTBROOK

                                RELEASE AGREEMENT

         THIS RELEASE ("Release') is made and entered into by WILLIAM L.
WESTBROOK ("Employee") for the benefit of THE SOUTHERN COMPANY, and its
successor or assigns ("Company").

         WHEREAS, Employee and Company have agreed that Employee shall retire
from employment with The Southern Company on the earlier of the last day of a
month mutually agreed upon by Employee and the Company, the last day of the
month following the date the Company makes a distribution to the holders of its
common stock of all of the shares of Southern Energy, Inc. stock owned by the
Company or June 30, 2001, but in no event shall Employee retire from employment
with the Company prior to March 1, 2001;

         WHEREAS, Employee and the Company have previously entered into that
certain Deferred Compensation Agreement, dated _________________, 2001
("Agreement"), that this Release is incorporated therein by reference;

         WHEREAS, the Agreement delineates the Employee's and Company's
respective rights, duties and obligations attendant to such retirement, and
Employee and Company desire to reach an accord and satisfaction of all claims
arising from Employee's employment, and his retirement from employment, with
appropriate releases, in accordance with the Agreement;

         WHEREAS, the Company desires to provide Employee with deferred
compensation in accordance with the Agreement for service he has or will provide
for the Company prior to his retirement;

         NOW, THEREFORE, in consideration of the premises and the agreements of
the parties set forth in this Release, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:

         1. Release. Employee does hereby remise, release and forever discharge
the Company and their officers, directors, employees, agents, shareholders,
parent corporation and affiliates, and their respective predecessors,
successors, assigns, heirs, executors and administrators (collectively,
"Releasees"), of and from all manner of actions and causes of action, suits,
debts, claims and demands whatsoever at law or in equity, known or unknown,
actual or contingent, including, but not limited to, any claims which have been
asserted, or could be asserted now or in the future, against any Releasees
arising under any and all federal, state or local laws and any common law
claims, and including, but not limited to, any claims Employee may have pursuant
to the Age Discrimination in Employment Act and any claims to benefits under any
and all offer letters, employment or separation agreements, or bonus, severance,
workforce reduction, early retirement, out-placement, or other similar plans
sponsored by the Company, now or hereafter recognized (collectively, "Claims"),
which he ever had or now has or may in the future have, by reason of any matter,
cause or thing arising out of his employment relationship and privileges, his
serving as an employee of the Company or the separation from his employment
relationship or affiliation as an employee of the Company as of the date of this
Release against each of the Releasees. Notwithstanding the foregoing, Employee
does not release (i) any Claims under the Age Discrimination in Employment Act
that may arise after his execution of this Release; (ii) any rights to
indemnification from the Company in respect of Employee's Services as an
employee, officer and/or director of the Company or any of its subsidiaries or
affiliates as provided by law or the Certificate of Incorporation and/or Bylaws
(or like constitutive documents of the Company or any of its subsidiaries or
affiliates); (iii) any rights that Employee may have under the Agreement; or
(iv) any rights to benefits accrued by Employee as of his termination date.

         2. No Assignment of Claim. Employee represents that he has not assigned
or transferred, or purported to assign or transfer, any Claims or any portion
thereof or interest therein to any party prior to the date of this Release.

         3. Deferred Compensation. In accordance with the Deferred Compensation
Agreement, the Company agrees to provide the Employee or his spouse, as the case
may be, the benefits provided in Paragraphs 2 and 3 of the Agreement.

         4. No Admission Of Liability. This Release shall not in any way be
construed as an admission by the Company or Employee of any improper actions or
liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person, on the
part of itself or himself, its or his employees or agents.

         5. Voluntary Execution. Employee warrants, represents and agrees that
he has been encouraged in writing to seek advice from anyone of his choosing
regarding this Release, including his attorney and accountant or tax advisor
prior to his signing it; that this Release represents written notice to do so;
that he has been given the opportunity and sufficient time to seek such advice;
and that he fully understands the meaning and contents of this Release. He
further represents and warrants that he was not coerced, threatened or otherwise
forced to sign this Release, and that his signature appearing hereinafter is
voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE.

         6. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE
THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN
(7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE
UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM
AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.

I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.

                                   "EMPLOYEE"

                                   WILLIAM L. WESTBROOK

                                   --------------------------------------------
Date

WITNESSED BY:

- --------------------------------------------

- --------------------------------------------
Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>40
<FILENAME>x10a95.txt
<TEXT>

                                                              Exhibit 10(a)95

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between THE SOUTHERN COMPANY (the "Company") and ALFRED W. DAHLBERG,
III ("Employee").

                               W I T N E S S E T H

         WHEREAS, Employee has been employed by the Company for approximately
forty-one (41) years;

         WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;

         WHEREAS, the parties have agreed that Employee's employment with the
Company shall terminate on or about April 1, 2001;

         WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations attendant to such termination of employment, and desire
to reach an accord and satisfaction of all claims arising from Employee's
employment and his termination of employment, with appropriate releases; and

         WHEREAS, the Company desires to provide Employee with deferred
compensation and other severance benefits for service he has provided or will
provide for the Company;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:

         1. Termination of Employment. Upon Employee's execution of this
Agreement, voluntary termination of employment with the Company on or about
April 1, 2001 (the Employee's "Termination Date"), and effectiveness of the
Release attached hereto as Exhibit 1 (such effectiveness being no earlier than
the Employee's Termination Date), the Company agrees to pay to Employee or his
spouse, if applicable, the amounts described in Paragraphs 3, 4, 5, 6, 8 and 9
hereof. Employee covenants and agrees that the consideration set forth in
Paragraphs 2(b), 3, 4, 5, 6, 8 and 9 is in full satisfaction of all sums owed to
Employee, if any, by the Company, and constitutes good and complete
consideration for his Release attached hereto as Exhibit 1, those nondisclosure,
non-compete and ownership obligations under Paragraph 11 hereof and all other
obligations and covenants of Employee contained herein. Employee agrees that
this Agreement provides him certain benefits to which he would not otherwise be
entitled.

         2.       Stock Option Grant for Year 2001.

         (a) Company has granted to Employee an Award of Non-Qualified Stock
Options ("Options") under The Southern Company Performance Stock Plan
("Performance Stock Plan") that when multiplied by The Southern Company's stock
price at the time of grant equals or exceeds Six Million Six Hundred Forty
Thousand Dollars and No Cents ($6,640,000.00).

         (b) In addition, Company has granted to Employee 350,000 Options which
represents approximately thirty-three percent (33%) of Employee's outstanding
and unexercised options granted prior to January 1, 2001. The amount of Options
granted in accordance with the preceding sentence was based on the projected
adjustment that the Company intends to make to all outstanding options on
account of the anticipated spin-off of Mirant Corporation from the Southern
Company. The adjustment is designed to provide option holders with a similar
aggregate value in options before and after such transaction.

         (c) Options granted in accordance with 2(a) and (b) above shall be used
to calculate Employee's Awards under The Southern Company Performance Dividend
Plan and Supplemental Performance Dividend Payments under Paragraph 9 herein.

         3. Severance Payment to Employee. Subject to Paragraph 1, on the
effective date of the Release (such effective date being no earlier than the
Employee's Termination Date), the Company shall pay to Employee a lump sum
amount equal to Two Hundred Thousand Dollars and No Cents ($200,000.00) for
miscellaneous perquisites. In accordance with Paragraph 22, Employee shall be
responsible for all state and federal income taxes and his share of FICA taxes
owed on the foregoing amount, and Company shall make appropriate withholding of
these amounts.

         4. Supplemental Pension Payments. Subject to the terms and conditions
of this Agreement, including Paragraph 1 hereof, beginning the first day of the
first month following both Employee's Termination Date and the effective date of
the Release (such effective date being no earlier than the Employee's
Termination Date), the Company shall pay to Employee an Employee Replacement
Benefit adjusted pursuant to subparagraph 4(c) below.

                  (a) "Employee Replacement Benefit" shall mean a monthly amount
equal to the difference between Employee's Monthly Retirement Benefit and the
Monthly Retirement Benefit which would have been payable to Employee if:

                           (i)      Employee's Accrued Retirement Income under
                                    The Southern Company Pension Plan ("Pension
                                    Plan"), SERP Benefit under The Southern
                                    Company Supplemental Executive Retirement
                                    Plan ("SERP") and Pension Benefit under The
                                    Southern Company Supplemental Benefit Plan
                                    ("Supplemental Benefit Plan") were not
                                    reduced for Early Retirement;

                           (ii)     Employee's Retirement Income under the
                                    Pension Plan, SERP Benefit under the SERP
                                    and Pension Benefit under the Supplemental
                                    Benefit Plan were calculated as if:

                           (x)      Employee's period of Accredited Service
                                    under the Pension Plan included an
                                    additional year and one month of Accredited
                                    Service;

                           (y)      Employee's Average Monthly Earnings were
                                    determined as if Employee received Earnings
                                    through April 30, 2002, with a three percent
                                    (3%) increase (or, if greater, his actual
                                    awarded increase) in base salary for the
                                    immediately preceding year on March 1, 2001,
                                    and a three percent (3%) increase in base
                                    salary on March 1, 2002; and

                           (z)      Employee received (i) an Incentive Pay Award
                                    for the 2001 Performance Period under The
                                    Southern Company Performance Pay Plan
                                    (Shareholder Approved) ("Performance Pay
                                    Plan"), or any other similar plans in which
                                    the Employee participates, equal to the
                                    greater of 150% of target as established by
                                    the Compensation and Management Succession
                                    Committee of the Board of Directors of The
                                    Southern Company ("Compensation Committee"),
                                    or the actual Awards which would have been
                                    paid to Employee under such plans if
                                    Employee had continued employment through
                                    the last day of the 2001 Performance Period
                                    and if Employee's 2001 Annual Salary was
                                    calculated taking into consideration the
                                    increase in base salary contemplated under
                                    subsection (y) immediately above, and (ii)
                                    an Incentive Pay Award for the 2002
                                    Performance Period under the Performance Pay
                                    Plan, or any other similar plans in which
                                    the Employee participates, equal to the
                                    greater of 150% of target as established by
                                    the Compensation Committee or the actual
                                    Awards which would have been paid to
                                    Employee under such plans if Employee
                                    continued employment until, and retired on,
                                    April 30, 2002, and if Employee's 2002
                                    Annual Salary was calculated taking into
                                    consideration the increases in base salary
                                    contemplated under subsection (y)
                                    immediately above. (b) "Monthly Retirement
                                    Benefit" shall mean the sum of the monthly
                                    amount payable to Employee as of his
                                    Termination Date under each of the Pension
                                    Plan, the SERP and the Supplemental Benefit
                                    Plan.

                  (c) The benefits provided in this Paragraph 4 and Paragraph 5
below shall be adjusted to reflect the provisional payee option selected under
the Pension Plan. For purposes of calculating the Retirement Income in these
Paragraphs, no limitation on benefits imposed by the Internal Revenue Code as it
now exists or is hereinafter amended, or any limiting legislation, shall be
taken into account. Any amounts payable in accordance with this Paragraph 4 and
Paragraph 5 below shall be recalculated from time to time to reflect future
increases, if any, in Retirement Income of retirees following the Employee's
retirement.

         5. Minimum Pension Payments. Notwithstanding the terms of this
Agreement, in no event shall the sum of the payments to Employee under the
Pension Plan, the SERP, the Supplemental Benefit Plan and Paragraph 4 of this
Agreement (collectively, "Pension Payments"), equal less than a single life
annuity of One Million Seven Hundred Thirty-Three Thousand Dollars and No Cents
($1,733,000.00) per year ("Pension Payment Floor"), as adjusted to reflect the
provisional payee option selected. Subject to Paragraph 1, if Employee's Pension
Payments are less than the Pension Payment Floor, Company shall pay to Employee,
commencing on the first day of the first month following both the Employee's
Termination Date and the effective date of the Release (such effective date
being no earlier than the Employee's Termination Date), and thereafter on the
first day of each succeeding month during the lifetime of the Employee, an
amount equal to the difference between the Pension Payments actually payable to
Employee and the Pension Payment Floor, as adjusted pursuant to Paragraph 4(c).

         6. Payments to Provisional Payee in the Event of Employee's Death.
Employee shall only be entitled to the benefit payments set forth in Paragraphs
4 and 5 above that become due and payable between the Employee's Termination
Date and his death. Upon the death of Employee, the provisional payee designated
by the Employee (or designated for him by default) under the Pension Plan, if
living, shall be entitled to the following amounts:

                  (a) Provisional Payee Payments. Beginning on the first day of
the first month following the Employee's Termination Date, the effective date of
the Release and the Employee's death, the Company agrees to pay to such
provisional payee (i) a monthly benefit determined pursuant to Paragraph 4
herein, and (ii) payments determined, if any, pursuant to Paragraph 5 herein.
All payments to the Employee's provisional payee pursuant to this Paragraph 6(a)
shall be adjusted pursuant to Paragraph 4(c).

                  (b) Provisional Payee's Death. Upon the death of such
provisional payee following the death of Employee, a Lump Sum Death Benefit
shall be payable to such provisional payee's heirs or assigns. For purposes of
the preceding sentence, "Lump Sum Death Benefit" means the Present Value of the
Employee Replacement Benefit under Paragraph 4, plus any payments under
Paragraph 5 herein less the amount of the Employee Replacement Benefit and any
payments under Paragraph 5 actually paid to Employee and his provisional payee.
For purposes of the preceding sentence, the "Present Value" of the Employee
Replacement Benefit, plus any payments under Paragraph 5, shall be calculated
using seven and one-half percent (7 1/2%) interest and the 1983 Group Annuity
Mortality Table with male and female rates averaged determined as of the
Employee's Termination Date.

         7. Lump Sum Payments. Notwithstanding the terms of this Agreement, the
Company may, in its sole discretion, at any time, pay a Lump Sum Payment to the
Employee or his provisional payee, as applicable, in lieu of the benefits
provided in Paragraphs 4 and 5. "Lump Sum Payment" shall mean the present value
of the unpaid Employee Replacement Benefit under Paragraph 4 hereof, plus unpaid
payments under Paragraph 5, if any, determined as of the date such Lump Sum
Payment is paid to Employee. Present value shall be determined using seven and
one-half percent (7 1/2%) interest and the 1983 Group Annuity Mortality Table
with male and female rates averaged.

         8. Supplemental Incentive Pay Award. Subject to Paragraph 1, Company
shall credit to Employee's Account under the Southern Company Deferred
Compensation Plan ("Deferred Compensation Plan") an amount equal to the
difference between the Incentive Pay Award for the 2001 Performance Period
payable to Employee in accordance with the terms of The Southern Company
Performance Pay Plan (Shareholder Approved) (hereinafter referred to as the
"Performance Pay Plan"), or any other similar plan in which Employee
participates, and the amount which would have been payable to Employee under the
Performance Pay Plan if Employee had been employed through December 31, 2001 at
the same rate of salary he was receiving on his Termination Date ("Supplemental
Incentive Pay Award"), and such Supplemental Pay Award shall be invested
pursuant to Section 6.2 of the Deferred Compensation Plan. The Company shall
credit such Supplemental Incentive Pay Award to Employee's Account under the
Deferred Compensation Plan for investment pursuant to Section 6.2 of the
Deferred Compensation Plan on the same date Employee's 2001 Incentive Pay Award
under the Performance Pay Plan is credited to Employee's Account under the
Deferred Compensation Plan. In the event Employee dies prior to the date the
benefit provided under this Paragraph 8 is payable, the benefit in this
Paragraph shall be paid pursuant to the terms of the Performance Pay Plan.
Moreover, in the event Employee dies after the date the benefit provided under
this Paragraph 8 is payable but before the benefit is fully distributed under
the terms of the Deferred Compensation Plan, such benefit shall be paid under
the terms of the Deferred Compensation Plan.

         9. Performance Dividend Payments. Subject to Paragraph 1, Company shall
pay to Employee (i) an amount equal to the Award Employee would have received
under The Southern Company Performance Dividend Plan ("Performance Dividend
Plan") based on its terms in effect as of the execution of this Agreement, if
Employee were eligible to receive Awards under the Performance Dividend Plan for
an additional Computation Period and if the Compensation Committee increased the
Payout Percentage by a factor of two (2) for Employee pursuant to Section 4.1 of
such Plan (i.e., total opportunity equals two times dividends) for the
additional Computation Period; and (ii) amounts equal to the difference, if any,
between each Award the Employee receives under the Performance Dividend Plan
after his Termination Date as a retired Participant and the Award the Employee
would have received under the Performance Dividend Plan based on its terms in
effect as of the execution of this Agreement if the Compensation Committee
increased the Payout Percentage by a factor of two (2) for Employee pursuant to
Section 4.1 of such Plan (i.e., total opportunity provided by Performance
Dividend Plan and this Agreement equals two times dividends). Payments under (i)
and (ii) of this Paragraph 9 are collectively referred to herein as,
"Supplemental Performance Dividend Payments". Company shall pay such
Supplemental Performance Dividend Payments on the date such Payments would have
been made under the Performance Dividend Plan if Employee were eligible or if
such amounts were payable, as applicable. In the event Employee dies prior to
the date the benefits provided under this Paragraph 9 are payable, the benefits
in this Paragraph shall be paid pursuant to the terms of the Performance
Dividend Plan. In the event, the Company's common stock is no longer traded on a
United States securities exchange, Employee shall not be entitled to a payment
under this Paragraph 9 except as may be provided under the Company's change in
control program as incorporated by the Performance Dividend Plan.

         10. Publicity; No Disparaging Statement. Except as otherwise provided
in Paragraph 15 hereof, Employee and the Company covenant and agree that they
shall not engage in any communications which shall disparage one another or
interfere with their existing or prospective business relationships.

         11. Non-Disclosure, Non-Solicitation and Non-Competition Provisions.

         (a) Preamble. As a material inducement to the Company to enter into
this Agreement and provide the benefits set forth in Paragraphs 2(b), 3, 4, 5,
6, 8 and 9, and its recognition of the valuable experience, knowledge and
proprietary information Employee gained from his employment with the Company,
Employee warrants and agrees he will abide by and adhere to the following
Non-Disclosure, Non-Solicitation and Non-Competition Provisions.

         (b) Definitions. For purposes of this Paragraph 11, the following terms
shall have the following meanings:

                           (i)      "Confidential Information" shall mean the
                                    proprietary and confidential data or
                                    information belonging to or pertaining to
                                    the Company, or any of its affiliates other
                                    than "Trade Secrets" (as defined below),
                                    which is of tangible or intangible value to
                                    the Company, or any of its affiliates and
                                    that is not generally known to the public
                                    but is generally known only to the Company,
                                    or any of its affiliates and those of its
                                    employees, independent contractors or agents
                                    to whom such information must be confided
                                    for business purposes, regarding the
                                    products, services, contractual
                                    arrangements, customers, suppliers, and
                                    partners of the Company, or any of its
                                    affiliates gained by Employee as a result of
                                    his employment with the Company, including,
                                    but not limited to, all information known to
                                    Employee regarding any proceedings brought
                                    before the Georgia Public Service Commission
                                    during his employment with the Company.
                                    Confidential Information shall also include
                                    other items that the Company may from time
                                    to time mark or otherwise identify as
                                    confidential.

                           (ii)     "Entity" shall mean any business,
                                    individual, partnership, joint venture,
                                    agency, governmental subdivision,
                                    association, firm, corporation or other
                                    entity.

                           (iii)    "Territory" shall include Georgia, Alabama,
                                    Mississippi or Florida.

                           (iv)     "Trade Secrets" shall mean information of
                                    the Company or any of its affiliates which
                                    (A) derives economic value, actual or
                                    potential, from not being generally known
                                    to, and not being readily ascertainable by
                                    proper means by, other persons who can
                                    obtain economic value from its disclosure or
                                    use; and (B) is the subject of efforts that
                                    are reasonable under the circumstances to
                                    maintain its secrecy; it being agreed that
                                    such information includes, without
                                    limitation, non-public information related
                                    to the rate making process of the Company,
                                    or its affiliates, technical and
                                    non-technical data, a formula, a pattern, a
                                    compilation, a program, a device, a method,
                                    a technique, a drawing, a process, financial
                                    data, financial plans, product plans or a
                                    list of actual or potential customers or
                                    suppliers or any other information which is
                                    defined as a "trade secret" under applicable
                                    law.

                           (v)      "Work Product" shall mean all tangible work
                                    product, property, data, documentation,
                                    "know-how," concepts or plans, inventions,
                                    improvements, techniques and processes
                                    relating to the Company or any of its
                                    affiliates that were conceived, discovered,
                                    created or developed by Employee pursuant to
                                    his employment with the Company.

         (c) Nondisclosure: Ownership of Proprietary Property.

                           (i)      In recognition of the need of the Company to
                                    protect its legitimate business interests,
                                    Employee hereby covenants and agrees that:
                                    (a) with regard to each item constituting
                                    all or any portion of a Trade Secret at all
                                    times such information remains a "trade
                                    secret" under applicable law and (b) with
                                    regard to any Confidential Information, for
                                    a period of three (3) years following the
                                    Termination Date (hereafter the
                                    "Nondisclosure Period"), Employee shall
                                    regard and treat Trade Secrets and all
                                    Confidential Information as strictly
                                    confidential and wholly-owned by the Company
                                    and shall not, for any reason, in any
                                    fashion, either directly or indirectly, use,
                                    sell, lend, lease, distribute, license,
                                    give, transfer, assign, show, disclose,
                                    disseminate, reproduce, copy, misappropriate
                                    or otherwise communicate any such item or
                                    information to any third party or Entity for
                                    any purpose other than in accordance with
                                    this Agreement or as required by applicable
                                    law. Employee shall exercise all reasonable
                                    best efforts to ensure the continued
                                    confidentiality of all Trade Secrets and
                                    Confidential Information of the Company
                                    known by, disclosed to or made available to
                                    Employee in connection with his employment
                                    relationship with the Company or any other
                                    past or present relationship with the
                                    Company. Employee shall immediately notify
                                    the Company of any unauthorized disclosure
                                    or use of any Trade Secrets or Confidential
                                    Information of which Employee becomes aware.
                                    Employee shall assist the Company, to the
                                    extent necessary, in the procurement of any
                                    protection of the Company's rights to or in
                                    any of the Trade Secrets or Confidential
                                    Information.

                           (ii)     All Work Product shall be owned exclusively
                                    by the Company. To the greatest extent
                                    possible, any Work Product shall be deemed
                                    to be "work made for hire" (as defined in
                                    the Copyright Act, 17 U.S.C.A.ss. 101 et
                                    seq., as amended), and Employee hereby
                                    unconditionally and irrevocably transfers
                                    and assigns to the Company all right, title
                                    and interest Employee currently has or may
                                    have by operation of law or otherwise in or
                                    to any Work Product, including, without
                                    limitation, all patents, copyrights,
                                    trademarks, trade secrets, service marks and
                                    other intellectual property rights. Employee
                                    agrees to execute and deliver to the Company
                                    any transfers, assignments, documents or
                                    other instruments which the Company may deem
                                    necessary or appropriate, from time to time,
                                    to vest complete title and ownership of any
                                    and all Work Product, and all associated
                                    intellectual property and other rights
                                    therein, exclusively in the Company.

                           (iii)    Employee represents and agrees that he will
                                    keep the terms and amount of this Agreement
                                    completely confidential, and except to his
                                    personal agents or to the extent required by
                                    law, he will not hereafter disclose this
                                    information concerning this Agreement to
                                    anyone, including, but not limited to, any
                                    past, present, or prospective employee or
                                    applicant for employment with the Company.
                                    Employee may only disclose to future,
                                    potential employers of Employee that he
                                    participates in a deferred compensation
                                    arrangement with the Company which imposes
                                    certain restrictions on him related to such
                                    future, potential employment. (d) No
                                    Employment. Employee agrees that he shall
                                    not hereafter seek any re-employment with
                                    the Company, its parent, its affiliates or
                                    its subsidiaries, other than Mirant
                                    Corporation

         (e) Non-Solicitation of Employees.

                  Employee agrees, during the three (3) years following the
Employee's separation from employment, that he will not, either directly or
indirectly, alone or in conjunction with any other person or entity, actively
recruit, engage in passive hiring efforts, solicit, attempt to solicit, or
induce any person who, during such three (3) year period, or within one (1) year
prior to Employee's separation from employment, was an exempt employee of the
Company or any of its subsidiaries, or was an officer of the Company or any of
its affiliates to leave or cease such employment for any reason whatsoever or
hire or engage the services of such person in any business substantially similar
or competitive with that in which The Southern Company and its affiliates were
engaged during the employment.

         (f)      Non-Solicitation of Customers.

                 Employee acknowledges that in the course of employment, he has
learned about Company's business, services, materials, programs and products and
the manner in which they are developed, marketed, serviced and provided.
Employee knows and acknowledges that the Company has invested considerable time
and money in developing its programs, agreements, offices, representatives,
services, products and marketing techniques and that they are unique and
original. Employee further acknowledges that the Company must keep secret all
pertinent information divulged to Employee and Company's business concepts,
ideas, programs, plans and processes, so as not to aid Company's competitors.
Accordingly, Company is entitled to the following protection, which Employee
agrees is reasonable:

                  Employee agrees that for a period of two (2) years following
termination of employment, he will not, on his own behalf or on behalf of any
person, firm, partnership, association, corporation, or other business
organization, entity or enterprise, knowingly solicit, call upon, or initiate
communication or contact with any person or entity or any representative of any
person or entity, with whom Employee had contact during his employment, with a
view toward the sale or the providing of any product, equipment or service sold
or provided or under development by Company during the period of two (2) years
immediately preceding the date of Employee's termination. The restrictions set
forth in this section shall apply only to persons or entities with whom Employee
had actual contact during the two (2) years prior to termination of employment
with a view toward the sale or providing of any product, equipment or service
sold or provided or under development by Company.

         (g) Non-Competition.

                  Employee and Company expressly covenant and agree that the
scope, territorial, time and other restrictions contained in this Agreement
constitute the most reasonable and equitable restrictions possible to protect
the business interest of the Company given: (i) the business of the Company;
(ii) the competitive nature of the Company's industry; and (iii) that Employee's
skills are such that he could easily find alternative, commensurate employment
or consulting work in his field which would not violate any of the provisions of
this Agreement. Therefore, Employee agrees to not engage within the Territory
for a period of two (2) years from the date of separation from employment, other
than on behalf of Mirant Corporation or an acquiror of Mirant Corporation, in
any activity in which Employee has participated in or directed on behalf of the
Company or any of its affiliates within the past two (2) years.

         12. Return of Materials. Upon the Employee's termination, or at any
point after that time upon the specific request of the Company, Employee shall
return to the Company all written or descriptive materials of any kind belonging
or relating to the Company or its Affiliates, including, without limitation, any
Intellectual Property, Confidential Information and Trade Secrets, in Employee's
possession.

         13. Cooperation. The parties agree that as a result of Employee's
duties and activities during his employment, Employee's reasonable availability
may be necessary for the Company to meaningfully respond to or address actual or
threatened litigation, or government inquiries or investigations, or required
filings with state, federal or foreign agencies (hereinafter "Company Matters").
Upon request of the Company, and at any point following termination of
employment, Employee will make himself available to the Company for reasonable
periods consistent with his future employment, if any, by other Entities and
will cooperate with its agents and attorneys as reasonably required by such
Company matters. The Company will reimburse Employee for any reasonable
out-of-pocket expenses associated with providing such cooperation.

         14. Termination with Cause. In the event of Employee's termination of
employment for Cause at any time, the Employee shall forfeit the entire benefit
provided in Paragraphs 2(b), 3, 4, 5, 6, 8 and 9, and the Company shall have no
further obligations with respect to any amount under this Agreement. As used in
this Agreement, the term "Cause" shall mean gross negligence or willful
misconduct in the performance of the duties and services required in the course
of employment by the Company; the final conviction of a felony or misdemeanor
involving moral turpitude; the carrying out of any activity or the making of any
statement which would prejudice the good name and standing of the Company, or an
affiliate or subsidiary of the Company (collectively "Southern") or would bring
Southern into contempt, ridicule or would reasonably shock or offend any
community in which Southern is located; a material breach of the fiduciary
obligations owed by an officer and an employee to Southern; or the Employee's
unsatisfactory performance of the duties and services required by his or his
employment.

         15. Confidentiality and Legal Process. Employee represents and agrees
that he will keep the terms, amount and fact of this Agreement confidential and
that he will not hereafter disclose any information concerning this Agreement to
any one other than his personal agents, including, but not limited to, any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Employee from performing any duty or obligation that shall arise as a matter of
law. Specifically, Employee shall continue to be under a duty to truthfully
respond to any legal and valid subpoena or other legal process. This Agreement
is not intended in any way to proscribe Employee's right and ability to provide
information to any federal, state or local government in the lawful exercise of
such governments' governmental functions.

         16. Successors And Assigns; Applicable Law. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs, administrators,
representatives, executors, successors and assigns, and shall be binding upon
and inure to the benefit of Southern, the Company and their officers, directors,
employees, agents, shareholders, parent corporation and affiliates, and their
respective predecessors, successors, assigns, heirs, executors and
administrators and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Georgia,
United States of America (without giving effect to principles of conflicts of
laws).

         17. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Employee and
an authorized representative of the Company.

         18. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         19. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor including, but not limited to, the
Company's right to recover amounts paid and/or to cease making payments under
Paragraphs 2(b), 3, 4, 5, 6, 8 and 9. The parties hereto agree and acknowledge
that money damages may not be an adequate remedy for any breach of the
provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

         20. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Employee may be entitled to receive the value
of his benefit under the terms and conditions of this Agreement, the assets from
which such amount may be paid shall at all times be subject to the claims of the
Company's creditors.

         21. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Employee may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company.

         22. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of Employee.

         23. Compensation. Any compensation contributed on behalf of Employee
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         24. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Employee and the Company.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
this ___ day of ________________, 2001.

                                    "COMPANY"

                                    THE SOUTHERN COMPANY

                                    By:
                                             ----------------------------------
                                    Its:
                                             ----------------------------------

                                   "EMPLOYEE"

                                   ALFRED W. DAHLBERG, III




<PAGE>



                                  EXHIBIT 1 to

                         Deferred Compensation Agreement
                          with ALFRED W. DAHLBERG, III

                                RELEASE AGREEMENT

         THIS RELEASE ("Release') is made and entered into by and between ALFRED
W. DAHLBERG, III ("Employee") and THE SOUTHERN COMPANY, and its successor or
assigns ("Company").

         WHEREAS, Employee and Company have agreed that Employee's employment
with The Southern Company shall terminate on or about April 1, 2001;

         WHEREAS, Employee and the Company have previously entered into that
certain Deferred Compensation Agreement, dated _________________, 2001
("Agreement"), that this Release is incorporated therein by reference;

         WHEREAS, Employee and Company desire to delineate their respective
rights, duties and obligations attendant to such termination and desire to reach
an accord and satisfaction of all claims arising from Employee's employment, and
his termination of employment, with appropriate releases, in accordance with the
Agreement;

         WHEREAS, the Company desires to provide Employee with deferred
compensation in accordance with the Agreement for service he has or will provide
for the Company;

         NOW, THEREFORE, in consideration of the premises and the agreements of
the parties set forth in this Release, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:

         1. Release. Employee does hereby remise, release and forever discharge
the Company and their officers, directors, employees, agents, shareholders,
parent corporation and affiliates, and their respective predecessors,
successors, assigns, heirs, executors and administrators (collectively,
"Releasees"), of and from all manner of actions and causes of action, suits,
debts, claims and demands whatsoever at law or in equity, known or unknown,
actual or contingent, including, but not limited to, any claims which have been
asserted, or could be asserted now or in the future, against any Releasees
arising under any and all federal, state or local laws and any common law
claims, and including, but not limited to, any claims Employee may have pursuant
to the Age Discrimination in Employment Act and any claims to benefits under any
and all offer letters, employment or separation agreements, or bonus, severance,
workforce reduction, early retirement, out-placement, or other similar plans
sponsored by the Company, now or hereafter recognized (collectively, "Claims"),
which he ever had or now has or may in the future have, by reason of any matter,
cause or thing arising out of his employment relationship and privileges, his
serving as an employee of the Company or the separation from his employment
relationship or affiliation as an employee of the Company as of the date of this
Release against each of the Releasees. Notwithstanding the foregoing, Employee
does not release any Claims under the Age Discrimination in Employment Act that
may arise after his execution of this Release.

         2. No Assignment of Claim. Employee represents that he has not assigned
or transferred, or purported to assign or transfer, any Claims or any portion
thereof or interest therein to any party prior to the date of this Release.

         3. Deferred Compensation. In accordance with the Deferred Compensation
Agreement, the Company agrees to pay the Employee or his spouse, as the case may
be, the amounts provided in Paragraphs 3, 4, 5, 6, 8 and 9 of the Agreement.

         4. No Admission Of Liability. This Release shall not in any way be
construed as an admission by the Company or Employee of any improper actions or
liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person, on the
part of itself or himself, its or his employees or agents.

         5. Voluntary Execution. Employee warrants, represents and agrees that
he has been encouraged in writing to seek advice from anyone of his choosing
regarding this Release, including his attorney and accountant or tax advisor
prior to his signing it; that this Release represents written notice to do so;
that he has been given the opportunity and sufficient time to seek such advice;
and that he fully understands the meaning and contents of this Release. he
further represents and warrants that he was not coerced, threatened or otherwise
forced to sign this Release, and that his signature appearing hereinafter is
voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE.

         6. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE
THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN
(7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE
UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM
AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.

Acknowledged and Agreed To:
                                    "COMPANY"

                                    THE SOUTHERN COMPANY

                                    By:
                                             ----------------------------------
                                    Its:
                                             ----------------------------------

I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.

                                   "EMPLOYEE"

                                   ALFRED W. DAHLBERG, III

                                   --------------------------------------------
Date

WITNESSED BY:

- --------------------------------------------

- --------------------------------------------
Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>41
<FILENAME>x10a96.txt
<TEXT>


                                SOUTHERN COMPANY
                                CHANGE IN CONTROL
                        BENEFIT PLAN DETERMINATION POLICY








                              Troutman Sanders LLP
                        Bank of America Plaza, Suite 5200
                           600 Peachtree Street, N.E.
                             Atlanta, Georgia 30308


<PAGE>


                                SOUTHERN COMPANY
                                CHANGE IN CONTROL
                              BENEFIT PLANS POLICY

                   ARTICLE I - PURPOSE AND ADOPTION OF POLICY

         1.1 Adoption of Policy. Southern Company Services, Inc. hereby adopts
this Southern Company Change in Control Benefit Plan Determination Policy,
effective July 10, 2000

         1.2 Purpose. The Policy is designed to govern the determination of a
Change in Control of Southern and/or the Employing Companies, and the benefits
to be provided to employees of Southern and the Employing Companies under
certain employee benefit plans.

                            ARTICLE II - DEFINITIONS

         2.1 "Administrative Committee" shall mean the Vice President of Human
Resources of Southern Company, Director of System Compensation and Benefits and
the Comptroller of Southern Company.

         2.2 "Beneficial Ownership" shall mean beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.

         2.3 "Business Combination" shall mean a reorganization, merger or
consolidation of Southern Company or sale or other disposition of all or
substantially all of the assets of Southern Company.

         2.4 "Change in Control" shall mean a Southern Change in Control and/or
a Subsidiary Change in Control, as applicable.

         2.5 "Common Stock" shall mean the common stock of Southern Company.

         2.6 "Company" shall mean Southern Company Services, Inc., its
successors and assigns.

         2.7 "Consummation" shall mean the completion of the final act necessary
to complete a transaction as a matter of law, including, but not limited to, any
required approvals by the corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets and the final
approval of the transaction by any applicable domestic or foreign governments or
agencies.

         2.8 "Control" shall mean, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.

         2.9 "Employee Benefit Plan(s)" shall mean, collectively, the Southern
Company Performance Stock Plan, the Southern Company Executive Stock Plan, the
Southern Company Performance Pay Plan (Shareholder Approved), the Southern
Company Performance Pay Plan, the Southern Company Executive Productivity
Improvement Plan, and the Southern Company Performance Dividend Plan, the
Southern Company Supplemental Benefit Plan, the Southern Company Supplemental
Executive Retirement Plan and the Southern Company Deferred Compensation Plan,
as may be amended from time to time in accordance with their terms.

         2.10 "Employing Company" shall mean the Company, or any other
corporation or other entity Controlled by Southern Company, which has adopted
the Change in Control Program, and any successor of any of them. With respect to
a Change in Control of Southern Energy, Inc. ("SEI"), employees of Southern
Energy Resources, Inc. shall be deemed to be employed by SEI for purposes of
being covered under this Policy.

         2.11 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.

         2.12 "Group" shall have the meaning set forth in Section 14(d) of the
Exchange Act.

         2.13 "Incumbent Board" shall mean those individuals who constitute the
Southern Board as of October 19, 1998, plus any individual who shall become a
director subsequent to such date whose election or nomination for election by
Southern Company's shareholders was approved by a vote of at least 75% of the
directors then comprising the Incumbent Board. Notwithstanding the foregoing, no
individual who shall become a director of the Southern Board subsequent to
October 19, 1998, whose initial assumption of office occurs as a result of an
actual or threatened election contest (within the meaning of Rule 14a-11 of the
Regulations promulgated under the Exchange Act) with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Southern Board shall be a
member of the Incumbent Board.

         2.14 "Person" shall mean any individual, entity or group within the
meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

         2.15 "Plan Termination" shall mean the termination of an Employee
Benefit Plan by Southern Company or an Employing Company following a Southern
Change in Control unless an equitable arrangement (embodied in an ongoing
substitute or replacement plan) has been made with respect to the Employee
Benefit Plan in connection with the Change in Control. For purposes of this
Policy, an ongoing substitute or alternative plan shall be considered an
"equitable arrangement" if a nationally recognized compensation consulting firm
chosen by the Administrative Committee opines in writing that the post-Change in
Control plan is an equitable substitute or replacement of the Employee Benefit
Plan.

         2.16 "Preliminary Change in Control" shall mean the occurrence of any
of the following as determined by the Southern Committee.

                  (1) Southern Company or an Employing Company has entered into
         a written agreement, such as, but not limited to, a letter of intent,
         which, if Consummated, would result in a Southern Change in Control or
         a Subsidiary Change in Control, as the case may be;

                  (2) Southern Company, an Employing Company or any Person
         publicly announces an intention to take or to consider taking actions
         which, if Consummated, would result in a Southern Change of Control or
         a Subsidiary Change in Control under circumstances where the
         Consummation of the announced action or intended action is legally and
         financially possible;

                  (3) Any Person achieves the Beneficial Ownership of fifteen
         percent (15%) or more of the Common Stock; or

                  (4) The Southern Board or the board of directors of an
         Employing Company has declared that a Preliminary Change of Control has
         occurred.

         2.17 "Southern Board" shall mean the board of directors of Southern
Company.

         2.18 "Southern Change in Control" shall mean any of the following:

                  (a) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 20% or more of Southern Company's Voting
         Securities; provided, however, that for purposes of this subsection
         (a), the following acquisitions of Southern Company's Voting Securities
         shall not constitute a Change in Control:

                           (i) any acquisition directly from Southern Company;

                           (ii) any acquisition by Southern Company;

                           (iii) any acquisition by any employee benefit plan
                  (or related trust) sponsored or maintained by Southern Company
                  or any corporation controlled by Southern Company;

                           (iv) any acquisition by a qualified pension plan or
                  publicly held mutual fund;

                           (v) any acquisition by an employee of Southern
                  Company or its subsidiary of affiliate, or Group composed
                  exclusively of such employees; or

                           (vi) any Business Combination which would not
                  otherwise constitute a Change in Control because of the
                  application of clauses (i), (ii) and (iii) of this Section;

                  (b) A change in the composition of the Southern Board whereby
         individuals who constitute the Incumbent Board cease for any reason to
         constitute at least a majority of the Southern Board; or

                  (c) Consummation of a Business Combination, unless, following
         such Business Combination, all of the following three conditions are
         met:

                           (i) all or substantially all of the individuals and
                  entities who held Beneficial Ownership, respectively, of
                  Southern Company's Voting Securities immediately prior to such
                  Business Combination beneficially own, directly or indirectly,
                  65% or more of the combined voting power of the Voting
                  Securities of the corporation surviving or resulting from such
                  Business Combination, (including, without limitation, a
                  corporation which as a result of such transaction holds
                  Beneficial Ownership of all or substantially all of Southern
                  Company's Voting Securities or all or substantially all of
                  Southern Company's assets) (such surviving or resulting
                  corporation to be referred to as "Surviving Company"), in
                  substantially the same proportions as their ownership,
                  immediately prior to such Business Combination, of the
                  Southern Company's Voting Securities;

                           (ii) no Person (excluding any corporation resulting
                  from such Business Combination, any qualified pension plan,
                  publicly held mutual fund, Group composed exclusively of
                  Employees or employee benefit plan (or related trust) of
                  Southern Company, its subsidiaries or Surviving Company) holds
                  Beneficial Ownership, directly or indirectly, of 20% or more
                  of the combined voting power of the then outstanding Voting
                  Securities of Surviving Company except to the extent that such
                  ownership existed prior to the Business Combination; and

                           (iii) at least a majority of the members of the board
                  of directors of Surviving Company were members of the
                  Incumbent Board at the earlier of the date of execution of the
                  initial agreement, or of the action of the Southern Board,
                  providing for such Business Combination.

         2.19 "Southern Committee" shall mean the committee comprised of the
Chairman of the Southern Board, Chief Financial Officer of Southern Company,
General Counsel of Southern Company and the Chairman of the Administrative
Committee.

         2.20 "Southern Company" shall mean The Southern Company, its successors
and assigns.

         2.21 "Southern Termination" shall mean the following:

                  (a) The Consummation of a reorganization, merger or
         consolidation of Southern Company under circumstances where either (i)
         Southern Company is not the surviving corporation or (ii) Southern
         Company's Voting Securities are no longer publicly traded;

                  (b) The Consummation of a sale or other disposition of all or
         substantially all of Southern Company's assets; or

                  (c) The Consummation of an acquisition by any Person of
         Beneficial Ownership of all of Southern Company's Voting Securities
         such that Southern Company's Voting Securities are no longer publicly
         traded.

         2.22 "Subsidiary Change in Control" shall mean the following:

                  (a) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 50% or more of the combined voting power of the
         then outstanding Voting Securities of an Employing Company; provided,
         however, that for purposes of this Subsection 2.22, any acquisition by
         an employee of Southern Company or its subsidiary of affiliate, or
         Group composed entirely of such employees, any qualified pension plan,
         publicly held mutual fund or any employee benefit plan (or related
         trust) sponsored or maintained by Southern Company or any corporation
         Controlled by Southern Company shall not constitute a Change in
         Control;

                  (b) Consummation of a reorganization, merger or consolidation
         of an Employing Company (an "Employing Company Business Combination"),
         in each case, unless, following such Employing Company Business
         Combination, Southern Company Controls the corporation surviving or
         resulting from such Employing Company Business Combination, or

                  (c) Consummation of the sale or other disposition of all or
         substantially all of the assets of an Employing Company to an entity
         which Southern Company does not Control.

Notwithstanding the foregoing, in no event shall "Subsidiary Change in Control"
mean an initial public offering or a spin-off of an Employing Company.

         2.23 "Subsidiary Employee" shall mean an Employee of an Employing
Company which has undergone a Subsidiary Change in Control whose employment is
not immediately transferred to another Employing Company upon such Subsidiary
Change in Control.

         2.24 "Surviving Company" shall mean the corporation which either
survives or results from any reorganization, merger or consolidation of which
Southern Company is a party under circumstances where Southern Company does not
survive.

         2.25 "Trust" shall mean the Southern Company Deferred Compensation
Trust.

         2.26 "Voting Securities" shall mean the outstanding voting securities
of a corporation entitling the holder thereof to vote generally in the election
of such corporation's directors.

                        ARTICLE III - POOLING ACCOUNTING

         Notwithstanding anything to the contrary herein, if, but for any
provision of this Policy, a Change in Control transaction would otherwise be
accounted for as a pooling-of-interests under APB No.16 ("Pooling Accounting")
(after giving effect to any and all other facts and circumstances affecting
whether such Change in Control transaction would use Pooling Accounting), such
provision or provisions of this Policy which would otherwise cause the Change in
Control transaction to be ineligible for Pooling Accounting shall automatically
be void and ineffective in such a manner and to the extent that by eliminating
such provision or provisions of this Policy, Pooling Accounting would be
required for such Change in Control transaction and Pooling Accounting is in
fact used for such Change in Control transaction.

        ARTICLE IV - PERFORMANCE STOCK PLAN CHANGE IN CONTROL PROVISIONS

         4.1 Application. The provisions of this Article IV apply to benefits
payable under the Southern Company Performance Stock Plan (the "PSP") and the
Southern Company Executive Stock Plan ("ESP"), notwithstanding any provision in
the PSP or ESP to the contrary. The meaning of capitalized terms not defined
herein are determined under the PSP and ESP.

         4.2 Subsidiary Change in Control. In the event of a Subsidiary Change
in Control:

                  (a) Any Options and Stock Appreciation Rights held by a
         Subsidiary Employee which are outstanding as of the date such
         Subsidiary Change in Control is determined to have occurred, and which
         are not then exercisable and vested, shall become fully exercisable and
         vested to the full extent of the original grant; provided, that in the
         case of a Subsidiary Employee holding a Stock Appreciation Right who is
         actually subject to Section 16(b) of the Exchange Act, such Stock
         Appreciation Right shall not become fully vested and exercisable unless
         it shall have been outstanding for at least six months as of the date
         such Subsidiary Change in Control is determined to have occurred.

                  (b) The restrictions and deferral limitations applicable to
         any Restricted Stock held by a Subsidiary Employee shall lapse, and
         such Restricted Stock shall become free of all restrictions and
         limitations and become fully vested and transferable to the full extent
         of the original grant.

                  (c) The restrictions and deferral limitations and other
         conditions applicable to any other Awards held by Subsidiary Employees
         shall lapse, and such other Awards shall become free of all
         restrictions, limitations or conditions and become fully vested and
         transferable to the full extent of the original grant.

         4.3 Southern Termination. In the event of a Southern Termination:

                  (a) Any Options and Stock Appreciation Rights which are
         outstanding as of the date such Southern Termination is determined to
         have occurred, and which are not then exercisable and vested, shall
         become fully exercisable and vested to the full extent of the original
         grant; provided, that in the case of a Participant holding a Stock
         Appreciation Right who is subject to Section 16(b) of the Exchange Act,
         such Stock Appreciation Right shall not become fully vested and
         exercisable at such time if such actions would result in liability to
         the Participant under Section 16(b), provided further, that any such
         actions not taken as a result of the rules under Section 16(b) shall be
         effected as of the first date that such activity would no longer result
         in liability under such section.

                  (b) The restrictions and deferral limitations applicable to
         any Restricted Stock shall lapse, and such Restricted Stock shall
         become free of all restrictions and limitations and become fully vested
         and transferable to the full extent of the original grant.

                  (c) The restrictions and deferral limitations and other
         conditions applicable to any other Awards under the PSP or ESP shall
         lapse, and such other Awards shall become free of all restrictions,
         limitations or conditions and become fully vested and transferable to
         the full extent of the original grant.

                  (d) Any Options, Stock Appreciation Rights or Restricted Stock
         which are outstanding as of the date such Southern Termination is
         determined to have occurred, shall be converted into or replaced by
         options, stock appreciation rights or restricted stock, as the case may
         be, in the Surviving Company, or the corporation which has acquired all
         of Southern Company's Common Stock or assets. In the event of such
         conversion or replacement, the terms of the replacement options or
         stock appreciation rights shall preserve with respect to each Option
         and each SAR the spread between the Fair Market Value of the shares
         subject to the Options or SARs and the Option Price or Base Value, as
         the case may be, as determined immediately prior to the Southern
         Termination. Similarly, the terms of replacement restricted stock shall
         preserve the Fair Market Value of each share of Restricted Stock as
         determined immediately prior to the Southern Termination. No
         replacement option, stock appreciation right or share of restricted
         stock received shall be subject to any terms which are less favorable
         than those which existed with respect to the original Option, SAR or
         share of Restricted Stock immediately prior to the Southern
         Termination.

                  (e) In the event that it is not possible to effect the
         conversion set forth in Section 4.3(d) hereof, any and all outstanding
         Options, Stock Appreciation Rights and Restricted Stock as of the date
         of the Southern Termination which are not so converted shall be
         terminated and the affected Participants shall receive within thirty
         (30) days of the Southern Termination cash equal to the difference
         between the Option Price and Fair Market Value, in the case of Options,
         the Base Value and Fair Market Value, in the case of SARs and equal to
         the Fair Market Value, in the case of Restricted Stock. For purposes of
         this Section 4.3(e), Fair Market Value shall be determined as of the
         day prior to the date of the Southern Termination.

            ARTICLE V - PERFORMANCE PAY PLAN (SHAREHOLDER APPROVED)

                          CHANGE IN CONTROL PROVISIONS

         5.1 Application. The provisions of this Article V apply to benefits
payable under the Southern Company Performance Pay Plan (Shareholder Approved)
(the "Executive PPP"), notwithstanding any provision in the Executive PPP to the
contrary. The meaning of capitalized terms not defined herein are determined
under the Executive PPP.

         5.2 Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the Executive PPP,
payout of Incentive Pay Awards to Participants for the Performance Period in
which the Southern Change in Control shall have occurred shall be the greater of
actual or target performance under the Executive PPP.

         5.3 Plan Termination. In the event of a Plan Termination with respect
to the Executive PPP within two (2) years following a Southern Change in
Control, each Participant who is an Employee on the date of such Plan
Termination shall be entitled to receive within thirty (30) days of the Plan
Termination, cash in an amount equal to a pro-rated payout of his Incentive Pay
Award under the Executive PPP for the Performance Period in which the Plan
Termination shall have occurred, at the greater of target or actual performance
under the Executive PPP and prorated by the number of months which have passed
since the beginning of the Performance Period until the date of the Plan
Termination.

         5.4 Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control whose
employment is not transferred upon such Subsidiary Change in Control to another
Business Unit shall be entitled to receive within thirty (30) days of the
Subsidiary Change in Control, cash in an amount equal to a prorated payout of
his Incentive Pay Award under the Executive PPP for the Performance Period in
which the Subsidiary Change in Control shall have occurred, at the greater of
actual or target performance under the Executive PPP and prorated by the number
of months which have passed since the beginning of the Performance Period until
the date of the Subsidiary Change in Control.

         5.5 Southern Termination. In the event of a Southern Termination, each
Participant on the date of such Southern Termination shall be entitled to
receive within thirty (30) days of the Southern Termination, cash in an amount
equal to a prorated payout of his Incentive Pay Award under the Executive PPP
for the Performance Period in which the Southern Termination shall have
occurred, at the greater of actual or target performance under the Executive PPP
and prorated by the number of months which have passed since the beginning of
the Performance Period until the date of the Southern Termination. The Executive
PPP shall terminate immediately following the payments provided for in this
Section 5.5.

         5.6 Pro rata Calculation. For purposes of calculating any pro rata
Incentive Pay Awards under this Article V, a month shall not be considered if
the determining event occurs on or before the 14th day of the month, and a month
shall be considered if the determining event occurs on or after the 15th day of
the month.

         ARTICLE VI - PERFORMANCE PAY PLAN CHANGE IN CONTROL PROVISIONS

         6.1 Application. The provisions of this Article VI apply to benefits
payable under the Southern Company Performance Pay Plan (the "PPP"),
notwithstanding any provision in the PPP to the contrary. The meaning of
capitalized terms not defined herein are determined under the PPP.

         6.2 Southern Change in Control. In the event of a Southern Change in
Control, if there is no Plan Termination with respect to the PPP, payout of
Incentive Pay Awards to Participants for the Performance Period in which the
Southern Change in Control shall have occurred shall be the greater of actual or
target performance under the PPP.

         6.3 Plan Termination. In the event of a Plan Termination with respect
to the PPP within two (2) years following a Southern Change in Control, each
Participant who is an Employee on the date of such Plan Termination shall be
entitled to receive within thirty (30) days of the Plan Termination, cash in an
amount equal to a pro-rated payout of his Incentive Pay Award under the PPP for
the Performance Period in which the Plan Termination shall have occurred, at the
greater of target or actual performance under the PPP and prorated by the number
of months which have passed since the beginning of the Performance Period until
the date of the Plan Termination.

         6.4 Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control whose
employment is not transferred upon such Subsidiary Change in Control to another
Business Unit shall be entitled to receive within thirty (30) days of the
Subsidiary Change in Control, cash in an amount equal to a prorated payout of
his Incentive Pay Award under the PPP for the Performance Period in which the
Subsidiary Change in Control shall have occurred, at the greater of actual or
target performance under the PPP and prorated by the number of months which have
passed since the beginning of the Performance Period until the date of the
Subsidiary Change in Control.

         6.5 Southern Termination. In the event of a Southern Termination, each
Participant on the date of such Southern Termination shall be entitled to
receive within thirty (30) days of the Southern Termination, cash in an amount
equal to a prorated payout of his Incentive Pay Award under the PPP for the
Performance Period in which the Southern Termination shall have occurred, at the
greater of actual or target performance under the PPP and prorated by the number
of months which have passed since the beginning of the Performance Period until
the date of the Southern Termination. The PPP shall terminate immediately
following the payments provided for in this Section 6.5.

         6.6 Pro rata Calculation. For purposes of calculating any pro rata
Incentive Pay Awards under this Article VI, a month shall not be considered if
the determining event occurs on or before the 14th day of the month, and a month
shall be considered if the determining event occurs on or after the 15th day of
the month.

              ARTICLE VII - EXECUTIVE PRODUCTIVITY IMPROVEMENT PLAN

                          CHANGE IN CONTROL PROVISIONS

         7.1 Application. The provisions of this Article VII apply to benefits
payable under the Southern Company Executive Productivity Improvement Plan (the
"Executive PIP"), notwithstanding any provision in the Executive PIP to the
contrary. The meaning of capitalized terms not defined herein are determined
under the Executive PIP.

         7.2 Southern Change in Control. In the event of a Plan Termination with
respect to the Executive PIP within the two (2) year period following a Southern
Change in Control, each Participant who is an Executive Employee on the date of
the Plan Termination shall be entitled to receive within thirty (30) days of the
Plan Termination, cash in an amount equal to his Award Opportunity or Award
Units, as the case may be, for the Computation Period in which the Plan
Termination shall have occurred, at a target Value of Performance Unit of $1.00,
prorated for each Computation Period by the number of months which have passed
since the beginning of the Computation Period until the date of the Plan
Termination.

         7.3 Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control whose
employment is not transferred upon such Subsidiary Change in Control to another
Employing Company shall be entitled to receive within thirty (30) days of the
Subsidiary Change in Control, cash in an amount equal to his Award Opportunity,
or Award Units, as the case may be, for the Computation Period in which the
Subsidiary Change in Control shall have occurred, at a target Value of
Performance Unit of $1.00, prorated for each Computation Period by the number of
months which have passed since the beginning of the Computation Period until the
date of the Subsidiary Change in Control.

         7.4 Southern Termination. In the event of a Southern Termination, if
the Executive PIP or an equitable replacement thereto remains effective on
December 31st of the Plan Year in which the Southern Change in Control shall
have occurred, the Executive PIP or Replacement Plan shall operate with respect
to the Performance Period then ended in accordance with its terms, but in no
event shall the Value of Performance Unit under the Plan or similar factor under
a replacement plan for such Performance Period be less than $1.00 or target
performance, respectively.

                    ARTICLE VIII - PERFORMANCE DIVIDEND PLAN

                          CHANGE IN CONTROL PROVISIONS

         8.1 Application. The provisions of this Article VIII apply to benefits
payable under the Southern Company Performance Dividend Plan (the "PDP"),
notwithstanding any provision in the PDP to the contrary. The meaning of
capitalized terms not defined herein are determined under the PDP.

         8.2 Southern Change in Control. In the event of a Plan Termination with
respect to the PDP within two (2) years following a Southern Change in Control,
each Participant who is an employee of his Employing Company on the date of such
Plan Termination shall be entitled to receive within thirty (30) days of the
Plan Termination, cash for each Award held as of such date, based on actual
performance under Section 4.1 of the PDP determined as of the date of the Plan
Termination, and the Annual Dividend declared prior to the date of the Plan
Termination.

         8.3 Subsidiary Change in Control. In the event of a Subsidiary Change
in Control, each Subsidiary Employee on the date of such Change in Control whose
employment is not transferred upon such Subsidiary Change in Control to another
Employing Company shall be entitled to receive within thirty (30) days of the
Subsidiary Change in Control, cash for each Award held as of such date, based on
actual performance under Section 4.1 of the PDP determined as of the date on
which the Subsidiary Change in Control shall have occurred, and the Annual
Dividend declared prior to the date of the Subsidiary Change in Control.

         8.4 Southern Termination. In the event of a Southern Termination, each
Participant who is an employee of his Employing Company on the date of such
Southern Termination shall be entitled to receive within thirty (30) days of the
Southern Termination, cash for each Award held as of such date, based on actual
performance under Section 4.1 of the PDP determined as of the date on which the
Southern Termination shall have occurred, and the Annual Dividend declared prior
to the date of the Southern Termination.

                     ARTICLE IX - SUPPLEMENTAL BENEFIT PLAN

                 CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS

         9.1 Application. The provisions of this Article IX apply to benefits
payable under The Southern Company Supplemental Benefit Plan (the "SBP"),
notwithstanding any provision in the SBP to the contrary. The meaning of
capitalized terms not defined herein are determined under the SBP.

         9.2 General. Notwithstanding any other terms of the SBP to the
contrary, upon a Southern Change in Control or a Subsidiary Change in Control,
the provisions of this Article IX shall become operative and apply to the
calculation and payment of benefits under the SBP with respect to any Subsidiary
Employee who is a Participant on such date.

         9.3 Funding of Trust. The Trust has been established to hold assets of
the Employing Companies under certain circumstances as a reserve for the
discharge of the Employing Companies' obligations under the SBP. In the event of
a Preliminary Change in Control of Southern Company, all Employing Companies
shall be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund the Pension Benefit and Non-Pension Benefit payable
under the SBP, the Pension Benefit to be determined under Section 9.5 hereof, in
accordance with the procedures set forth in Section 9.4 hereof. In the event of
a Preliminary Change in Control of an Employing Company, such Employing Company
shall be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund the Pension Benefit and Non-Pension Benefit payable to
its Subsidiary Employees under the SBP, the Pension Benefit to be determined
under Section 9.6 hereof, in accordance with the procedures set forth in Section
9.4 hereof. In addition, in order to provide the added protections for certain
individuals in accordance with Paragraph 7(b) of the Trust, the Employing
Companies may fund the Trust prior to a Preliminary Change in Control of
Southern Company or an Employing Company. All assets held in the Trust remain
subject only to the claims of the Employing Companies' general creditors whose
claims against the Employing Companies are not satisfied because of the
Employing Companies' bankruptcy or insolvency (as those terms are defined in the
Trust). No Participant has any preferred claim on, or beneficial ownership
interest in, any assets of the Trust before the assets are paid to the
Participant and all rights created under the Trust, as under the SBP, are
unsecured contractual claims of the Participant against his Employing Company.

         9.4 Calculation of Trust Contribution. As soon as practicable following
either a Preliminary Change in Control of Southern Company or of an Employing
Company, the affected Employing Companies shall contribute an amount based upon
the funding strategy adopted by the Administrative Committee with the assistance
of an appointed actuary necessary to fulfill the Employing Companies'
obligations pursuant to this Article IX. In the event of a dispute after a
Change in Control over such actuary's determination, the respective Employing
Company(ies) and any complaining Participant(s) shall refer such dispute to an
independent, third-party actuarial consultant, chosen by the Employing Company
and such Participant. If the Employing Company and the Participant cannot agree
on an independent, third-party actuarial consultant, the actuarial consultant
shall be chosen by lot from an equal number of actuaries submitted by the
affected Employing Companies and the Trustee. Any such referral shall only occur
once in total and the determination by the third-party actuarial consultant
shall be final and binding upon both parties. The Employing Companies shall be
responsible for all of the fees and expenses of the independent actuarial
consultant.

         9.5 Pension Benefit Upon Southern Change in Control. On the date of a
Southern Change in Control, the Pension Benefit of each Participant who is an
Employee of an Employing Company and who has a non-forfeitable right to
Retirement Income under the Pension Plan, will be calculated based on such
Participant's Earnings and Accredited Service on such date, regardless of
whether such Participant is retirement eligible on such date. Each Participant,
who is an Employee of an Employing Company, will be entitled to receive the
amount of his Pension Benefit based on such Participant's Earnings and
Accredited Service as of the date of a Southern Change in Control adjusted to
take into account appropriate early reduction factors, if any, based on the
Participant's commencement of benefits. Such benefit shall be paid in lump sum,
upon termination of employment or retirement. Any benefits accrued under the SBP
subsequent to the date of a Southern Change in Control will be calculated and
distributed pursuant to the terms of the SBP, without regard to this Article IX.

         9.6 Pension Benefit Upon Subsidiary Change in Control. On the date of a
Subsidiary Change in Control of an Employing Company, the Pension Benefit of
each Participant who is an Employee of such Employing Company and who has a
non-forfeitable right to Retirement Income under the Pension Plan, will be
calculated based on such Participant's Earnings and Accredited Service on such
date, regardless of whether such Participant is retirement eligible on such
date. Each Participant, who is an Employee of such Employing Company, will be
entitled to receive the amount of his Pension Benefit based on such
Participant's Earnings and Accredited Service as of the date of a Subsidiary
Change in Control adjusted to take into account appropriate early reduction
factors, if any, based on the Participant's commencement of benefits. Such
benefit shall be paid in lump sum, upon termination of employment or retirement.
Any benefits accrued under the SBP subsequent to the date of a Subsidiary Change
in Control will be calculated and distributed pursuant to the terms of the SBP,
without regard to this Article IX.

         9.7 Non-Pension Benefit Distribution Election upon Change in Control.
In the event of a Southern Change in Control or a Subsidiary Change in Control,
notwithstanding anything to the contrary in the SBP, upon termination or
retirement from employment, that Non-Pension Benefit of a Participant who was an
Employee of an Employing Company affected by such a Change in Control shall be
paid out in a lump sum if such Participant makes an election pursuant to
procedures established by the Administrative Committee in its sole and absolute
discretion. If no such election is made, the Participant shall receive payment
of his Account solely in accordance with Article V of the SBP.

               ARTICLE X - SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                 CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS

         10.1 Application. The provisions of this Article X apply to benefits
payable under The Southern Company Supplemental Executive Retirement Plan (the
"SERP"), notwithstanding any provision in the SERP to the contrary. The meaning
of capitalized terms not defined herein are determined under the SERP.

         10.2 General. Notwithstanding any other terms of the SERP to the
contrary, upon a Southern Change in Control or a Subsidiary Change in Control,
the provisions of this Article X shall become operative and apply to the
calculation and payment of benefits under the SERP with respect to any
Subsidiary Employee who is a Participant on such date.

         10.3 Funding of Trust. The Trust has been established to hold assets of
the Employing Companies under certain circumstances as a reserve for the
discharge of the Employing Companies' obligations under the SERP. In the event
of a Preliminary Change in Control of Southern Company, all Employing Companies
shall be obligated to immediately contribute such amounts to the Trust as may be
necessary to fully fund all benefits payable under the SERP, as determined under
Section 10.5 hereof, in accordance with the procedures set forth in Section 10.4
hereof. In the event of a Preliminary Change in Control of an Employing Company,
such Employing Company shall be obligated to immediately contribute such amounts
to the Trust as may be necessary to fully fund all benefits payable to its
Subsidiary Employees under the SERP, as determined under Section 10.6 hereof, in
accordance with the procedures set forth in Section 10.4 hereof. In addition, in
order to provide the added protections for certain individuals in accordance
with Paragraph 7(b) of the Trust, the Employing Companies may fund the Trust
prior to a Preliminary Change in Control of Southern Company or an Employing
Company. All assets held in the Trust remain subject only to the claims of the
Employing Companies' general creditors whose claims against the Employing
Companies are not satisfied because of the Employing Companies' bankruptcy or
insolvency (as those terms are defined in the Trust). No Participant has any
preferred claim on, or beneficial ownership interest in, any assets of the Trust
before the assets are paid to the Participant and all rights created under the
Trust, as under the SERP, are unsecured contractual claims of the Participant
against his Employing Company.

         10.4 Calculation of Trust Contribution. As soon as practicable
following either a Preliminary Change in Control of Southern Company or of an
Employing Company, the affected Employing Companies shall contribute an amount
based upon the funding strategy adopted by the Administrative Committee with the
assistance of an appointed actuary necessary to fulfill the Employing Companies'
obligations pursuant to this Article X. In the event of a dispute after a Change
in Control over such actuary's determination, the respective Employing
Company(ies) and any complaining Participant(s) shall refer such dispute to an
independent, third-party actuarial consultant, chosen by the Employing Company
and such Participant. If the Employing Company and the Participant cannot agree
on an independent, third-party actuarial consultant, the actuarial consultant
shall be chosen by lot from an equal number of actuaries submitted by the
affected Employing Companies and the Trustee. Any such referral shall only occur
once in total and the determination by the third-party actuarial consultant
shall be final and binding upon both parties. The Employing Companies shall be
responsible for all of the fees and expenses of the independent actuarial
consultant.

         10.5 SERP Benefit Upon Southern Change in Control. On the date of a
Southern Change in Control, the SERP Benefit of each Participant, who is an
Employee of an Employing Company and who has a non-forfeitable right to
Retirement Income under the Pension Plan, will be calculated based on such
Participant's Earnings and Accredited Service on such date, regardless of
whether such Participant is retirement eligible on such date. Each such
Participant, who is an Employee of an Employing Company, will be entitled to
receive the amount of his SERP Benefit based on such Participant's Earnings and
Accredited Service as of the date of a Southern Change in Control adjusted to
take into account appropriate early reduction factors, if any, based on the
Participant's commencement of benefits. Such benefit shall be paid in lump sum,
upon termination of employment or retirement. Any benefits accrued under the
SERP subsequent to the date of a Southern Change in Control will be calculated
and distributed pursuant to the terms of the SERP, without regard to this
Article X.

         10.6 SERP Benefit Upon Subsidiary Change in Control. On the date of a
Subsidiary Change in Control of an Employing Company, the SERP Benefit of each
Participant, who is an Employee of such Employing Company and who has a
non-forfeitable right to Retirement Income under the Pension Plan, will be
calculated based on such Participant's Earnings and Accredited Service on such
date, regardless of whether such Participant is retirement eligible on such
date. Each such Participant, who is an Employee of such Employing Company, will
be entitled to receive the amount of his SERP Benefit based on such
Participant's Earnings and Accredited Service as of the date of a Subsidiary
Change in Control adjusted to take into account appropriate early reduction
factors, if any, based on the Participant's commencement of benefits. Such
benefit shall be paid in lump sum, upon termination of employment or retirement.
Any benefits accrued under the SERP subsequent to the date of a Subsidiary
Change in Control will be calculated and distributed pursuant to the terms of
the SERP, without regard to this Article X.

                     ARTICLE XI - DEFERRED COMPENSATION PLAN

                 CHANGE IN CONTROL AND OTHER SPECIAL PROVISIONS

         11.1 Application. The provisions of this Article XI apply to benefits
payable under the Southern Company Deferred Compensation Plan (the "DCP"),
notwithstanding any provision in the DCP to the contrary. The meaning of
capitalized terms not defined herein are determined under the DCP.

         11.2 Notwithstanding any other terms of the DCP to the contrary,
following a Southern Change in Control or a Subsidiary Change in Control, the
provisions of this Article XI shall apply to the payment of benefits under the
DCP with respect to any Subsidiary Employee who is a Participant on such date.

         11.3 The Trust has been established to hold assets of the Employing
Companies under certain circumstances as a reserve for the discharge of the
Employing Companies' obligations under the DCP. In the event of a Preliminary
Change in Control of Southern, all Employing Companies shall be obligated to
immediately contribute such amounts to the Trust as may be necessary to fully
fund all benefits payable under the DCP in accordance with the procedures set
forth in Section 11.4 hereof. In the event of a Preliminary Change in Control of
an Employing Company, such Employing Company shall be obligated to immediately
contribute such amounts to the Trust as may be necessary to fully fund all
benefits payable to its Subsidiary Employees under the DCP in accordance with
the procedures set forth in Section 11.4 hereof. In addition, in order to
provide the added protections for certain individuals in accordance with
Paragraph 7(b) of the Trust, the Employing Companies may fund the Trust prior to
a Preliminary Change in Control of Southern or an Employing Company in
accordance with the terms of the Trust. All assets held in the Trust remain
subject only to the claims of the Employing Companies' general creditors whose
claims against the Employing Companies are not satisfied because of the
Employing Companies' bankruptcy or insolvency (as those terms are defined in the
Trust). No Participant has any preferred claim on, or beneficial ownership
interest in, any assets of the Trust before the assets are paid to the
Participant and all rights created under the Trust, as under the DCP, are
unsecured contractual claims of the Participant against his Employing Company.

         11.4 As soon as practicable following either a Preliminary Change in
Control of Southern or of an Employing Company, the affected Employing Companies
shall contribute an amount based upon the funding strategy adopted by the
Committee with the assistance of an appointed actuary necessary to fulfill the
Employing Companies' obligations pursuant to this Article XI. In the event of a
dispute over such actuary's determination, the respective Employing Company(ies)
and any complaining Participant(s) shall refer such dispute to an independent,
third-party actuarial consultant, chosen by the Employing Company and such
Participant. If the Employing Company and the Participant cannot agree on an
independent, third-party actuarial consultant, the actuarial consultant shall be
chosen by lot from an equal number of actuaries submitted by the Employing
Company and the Trustee. Any such referral shall only occur once in total and
the determination by the third-party actuarial consultant shall be final and
binding upon both parties. The Employing Companies shall be responsible for all
of the fees and expenses of the independent actuarial consultant.

         11.5 In the event of a Southern Change in Control or a Subsidiary
Change in Control, notwithstanding anything to the contrary in the DCP, upon
termination or retirement from employment, the Account of a Participant who was
an Employee of an Employing Company affected by such a Change in Control shall
be paid out in a lump sum if such Participant makes an election pursuant to
procedures established by the Committee in its sole and absolute discretion. If
no such election is made, the Participant shall receive payment of his Account
solely in accordance with Article VII of the DCP.

                          ARTICLE XII - ADMINISTRATION

         12.1 Administrative Committee. The committee designated as
administrator of each of the Employee Benefit Plans shall be responsible for the
general administration of this Policy as it relates to such committee's
respective Employee Benefit Plan.

                          ARTICLE XIII - MISCELLANEOUS

         13.1 Amendment and Termination. This Policy may be amended or
terminated at any time by the board of directors of Southern Company Services,
Inc. (or its successors and assigns, if applicable), provided, however, the
Policy may not be amended in any material respect or terminated within the two
(2) year period following a Change in Control nor shall any amendment or
termination impair the rights of any Participant in the Employee Benefit Plans
which have accrued hereunder prior to any such amendment or termination.

         13.2 Additional Rights. Nothing in the Policy shall interfere with or
limit in any way the right of the Employing Companies to terminate any
employee's employment at any time, or confer upon any employee any right to
continue in the employ of the Employing Companies.


<PAGE>


         IN WITNESS WHEREOF, this Southern Company Change in Control Benefit
Plan Determination Policy has been executed by duly authorized officers of
Southern Company Services, Inc. pursuant to resolutions of the Board of
Directors of Southern Company Services, Inc. this ______ day of
________________________, 2000.

                             SOUTHERN COMPANY SERVICES, INC.


                             By:________________________________________
                                          Christopher C. Womack
                                Senior Vice President, Human Resources



ATTEST:

By: _________________________________________

Its: _________________________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>42
<FILENAME>x10a97.txt
<TEXT>


                           CHANGE IN CONTROL AGREEMENT

         THIS CHANGE IN CONTROL AGREEMENT ("Agreement") made and entered into by
and between The Southern Company ("Southern"), Southern Company Services, Inc.
(the "Company") and Mr. Robert H. Haubein, Jr. ("Mr. Haubein") (hereinafter
collectively referred to as the "Parties") is effective May 8, 2000.

                              W I T N E S S E T H:
                               - - - - - - - - - -

         WHEREAS, Mr. Haubein is Senior Vice President of the Company;

         WHEREAS, the Company wishes to provide to Mr. Haubein certain severance
benefits under certain circumstances following a change in control (as defined
herein) of Southern or the Company;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the Parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereby agree as follows:

         1. Definitions. For purposes of this Agreement, the following terms
shall have the following meanings:

                  (a) "Annual Compensation" shall mean Mr. Haubein's highest
         annual base salary rate for the twelve (12) month period immediately
         preceding the date of the Change in Control plus target bonus.

                  (b) "Beneficial Ownership" shall mean beneficial ownership
         within the meaning of Rule 13d-3 promulgated under the Exchange Act.

                  (c) "Board" shall mean the board of directors of the Company.

                  (d) "Business Combination" shall mean a reorganization, merger
         or consolidation of Southern or sale or other disposition of all or
         substantially all of the assets of Southern.

                  (e) "Change in Control" shall mean any of the following:

                           (i) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 20% or more of Southern's Voting
                  Securities; provided, however, that for purposes of this
                  Paragraph 1.(e)(i), the following acquisitions of Southern's
                  Voting Securities shall not constitute a Change in Control:

                                    (A) any acquisition directly from Southern;

                                    (B) any acquisition by Southern;

                                    (C) any acquisition by any employee benefit
                           plan (or related trust) sponsored or maintained by
                           Southern or any Southern Subsidiary;

                                    (D) any acquisition by a qualified pension
                           plan or publicly held mutual fund;

                                    (E) any acquisition by a Group composed
                           exclusively of employees of Southern, or any Southern
                           Subsidiary;

                                    (F) any acquisition by Mr. Haubein or any
                           Group of which Mr. Haubein is a party; or

                                    (G) any Business Combination which would not
                           otherwise constitute a change in control because of
                           the application of clauses (A), (B) and (C) of
                           Paragraph 1.(e)(iii); (ii) A change in the
                           composition of the Southern Board whereby individuals
                           who constitute the Incumbent Board cease for any
                           reason to constitute at least a majority of the
                           Southern Board;

                           (iii) Consummation of a Business Combination,
                  provided, however, that such a Business Combination shall not
                  constitute a Change in Control if all three (3) of the
                  following conditions are met:

                                    (A) all or substantially all of the
                           individuals and entities who held Beneficial
                           Ownership, respectively, of Southern's Voting
                           Securities immediately prior to such Business
                           Combination beneficially own, directly or indirectly,
                           65% or more of the combined voting power of the
                           Voting Securities of the corporation surviving or
                           resulting from such Business Combination, (including,
                           without limitation, a corporation which as a result
                           of such transaction holds Beneficial Ownership of all
                           or substantially all of Southern's Voting Securities
                           or all or substantially all of Southern's assets)
                           (such surviving or resulting corporation to be
                           referred to as "Surviving Company"), in substantially
                           the same proportions as their ownership, immediately
                           prior to such Business Combination, of Southern's
                           Voting Securities;

                                    (B) no Person (excluding any corporation
                           resulting from such Business Combination, any
                           employee benefit plan (or related trust) of Southern,
                           any Southern Subsidiary or Surviving Company, Mr.
                           Haubein, any Group of which Mr. Haubein is a party,
                           any Group composed exclusively of Company employees,
                           any qualified pension plan (or related trust) or any
                           publicly held mutual fund) holds Beneficial
                           Ownership, directly or indirectly, of 20% or more of
                           the combined voting power of the then outstanding
                           Voting Securities of Surviving Company except to the
                           extent that such ownership existed prior to the
                           Business Combination; and

                                    (C) at least a majority of the members of
                           the board of directors of Surviving Company were
                           members of the Incumbent Board at the earlier of the
                           date of execution of the initial agreement, or of the
                           action of the Southern Board, providing for such
                           Business Combination.

                           (iv) The Consummation of an acquisition by any Person
                  of Beneficial Ownership of 50% or more of the combined voting
                  power of the then outstanding Voting Securities of the
                  Company; provided, however, that for purposes of this
                  Paragraph 1.(e)(iv), any acquisition by Mr. Haubein, any Group
                  composed exclusively of employees of the Company, any Group of
                  which Mr. Haubein is a party, any qualified pension plan (or
                  related trust), any publicly held mutual fund, any employee
                  benefit plan (or related trust) sponsored or maintained by
                  Southern or any Southern Subsidiary shall not constitute a
                  Change in Control;

                           (v) Consummation of a reorganization, merger or
                  consolidation of the Company (an "Employing Company Business
                  Combination"), in each case, unless, following such Employing
                  Company Business Combination, Southern Controls the
                  corporation or other entity surviving or resulting from such
                  Employing Company Business Combination; or

                           (vi) Consummation of the sale or other disposition of
                  all or substantially all of the assets of the Company to a
                  corporation or other entity which Southern does not Control.
                  Notwithstanding the foregoing, in no event shall "Change in
                  Control" mean an initial public offering or a spin-off of the
                  Company.

                  (f) "COBRA Coverage" shall mean any continuation coverage to
         which Mr. Haubein or his dependents may be entitled pursuant to Code
         Section 4980B.

                  (g) "Code" shall mean the Internal Revenue Code of 1986, as
         amended.

                  (h) "Company" shall mean Southern Company Services, Inc., its
         successors and assigns.

                  (i) "Consummation" shall mean the completion of the final act
         necessary to complete a transaction as a matter of law, including, but
         not limited to, any required approvals by the corporation's
         shareholders and board of directors, the transfer of legal and
         beneficial title to securities or assets and the final approval of the
         transaction by any applicable domestic or foreign governments or
         governmental agencies.

                  (j) "Control" shall mean, in the case of a corporation,
         Beneficial Ownership of more than 50% of the combined voting power of
         the corporation's Voting Securities, or in the case of any other
         entity, Beneficial Ownership of more than 50% of such entity's voting
         equity interests.

                  (k) "Effective Date" shall mean the date of execution of this
         Agreement.

                  (l) "Employee Outplacement Program" shall mean the program
         established by the Company from time to time for the purpose of
         assisting participants covered by the plan in finding employment
         outside of the Company which provides for the following services:

                           (i) self-assessment, career decision and goal
                           setting; (ii) job market research and job sources;
                           (iii) networking and interviewing skills; (iv)
                           planning and implementation strategy; (v) resume
                           writing, job hunting methods and salary negotiation;
                           and (vi) office support and job search resources.

                  (m) "Exchange Act" shall mean the Securities Exchange Act of
         1934, as amended.

                  (n) "Good Reason" shall mean, without Mr. Haubein's express
         written consent, after written notice to the Board, and after a thirty
         (30) day opportunity for the Board to cure, the continuing occurrence
         of any of the following events:

                           (i) Inconsistent Duties. A meaningful and detrimental
                  alteration in Mr. Haubein's position or in the nature or
                  status of his responsibilities from those in effect
                  immediately prior to the Change in Control;

                           (ii) Reduced Salary. A reduction of five percent (5%)
                  or more by the Company in either of the following: (i) Mr.
                  Haubein's annual base salary rate as in effect immediately
                  prior to the Change in Control (except for a less than ten
                  percent (10%), across-the-board annual base salary rate
                  reduction similarly affecting at least ninety-five percent
                  (95%) of the Executive Employees of the Company); or (ii) the
                  sum of Mr. Haubein's annual base salary rate plus target bonus
                  under the PPP Plan (except for a less than ten percent (10%),
                  across-the-board reduction of annual base salary rate plus
                  target bonus under the PPP Plan similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company);

                           (iii) Pension and Compensation Plans. The failure by
                  the Company to continue in effect any pension or compensation
                  plan or agreement in which Mr. Haubein participates or is a
                  party as of the date of the Change in Control or the
                  elimination of Mr. Haubein's participation therein, (except
                  for across-the-board plan changes or terminations similarly
                  affecting at least ninety-five percent (95%) of the Executive
                  Employees of the Company). For purposes of this Paragraph
                  1.(n), a "pension plan or agreement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for payments upon retirement; and a
                  "compensation plan or arrangement" shall mean any written
                  arrangement executed by an authorized officer of the Company
                  which provides for periodic, non-discretionary compensatory
                  payments in the nature of bonuses.

                           (iv) Relocation. A change in Mr. Haubein's work
                  location to a location more than fifty (50) miles from the
                  office where Mr. Haubein is located at the time of the Change
                  in Control, unless such new work location is within fifty (50)
                  miles from Mr. Haubein's principal place of residence at the
                  time of the Change in Control. The acceptance, if any, by Mr.
                  Haubein of employment by the Company at a work location which
                  is outside the fifty mile radius set forth in this Paragraph
                  1.(n)(iv) shall not be a waiver of Mr. Haubein's right to
                  refuse subsequent transfer by the Company to a location which
                  is more than fifty (50) miles from Mr. Haubein's principal
                  place of residence at the time of the Change in Control, and
                  such subsequent unconsented transfer shall be "Good Reason"
                  under this Agreement; or

                           (v) Benefits and Perquisites. The taking of any
                  action by the Company which would directly or indirectly
                  materially reduce the benefits enjoyed by Mr. Haubein under
                  the Company's retirement, life insurance, medical, health and
                  accident, disability, deferred compensation or savings plans
                  in which Mr. Haubein was participating immediately prior to
                  the Change in Control; or the failure by the Company to
                  provide Mr. Haubein with the number of paid vacation days to
                  which Mr. Haubein is entitled on the basis of years of service
                  with the Company in accordance with the Company's normal
                  vacation policy in effect immediately prior to the Change in
                  Control (except for across-the-board plan or vacation policy
                  changes or plan terminations similarly affecting at least
                  ninety-five percent (95%) of the Executive Employees of the
                  Company).

                           (vi) For purposes of this Paragraph 1.(n), the term
                  "Executive Employee" shall mean those employees of the Company
                  of Grade Level 10 or above.

                  (o) "Group" shall have the meaning set forth in Section 14(d)
         of the Exchange Act.

                  (p) "Group Health Plan" shall mean the group health plan
         covering Mr. Haubein, as such plan may be amended from time to time.

                  (q) "Group Life Insurance Plan" shall mean the group life
         insurance program covering Mr. Haubein, as such plan may be amended
         from time to time.

                  (r) "Incumbent Board" shall mean those individuals who
         constitute the Southern Board as of October 19, 1998 plus any
         individual who shall become a director subsequent to such date whose
         election or nomination for election by Southern's shareholders was
         approved by a vote of at least 75% of the directors then comprising the
         Incumbent Board. Notwithstanding the foregoing, no individual who shall
         become a director of the Southern Board subsequent to October 19, 1998
         whose initial assumption of office occurs as a result of an actual or
         threatened election contest (within the meaning of Rule 14a-11 of the
         Regulations promulgated under the Exchange Act) with respect to the
         election or removal of directors or other actual or threatened
         solicitation of proxies or consents by or on behalf of a Person other
         than the Southern Board shall be a member of the Incumbent Board.

                  (s) "Month of Service" shall mean any calendar month during
         which Mr. Haubein has worked at least one (1) hour or was on approved
         leave of absence while in the employ of the Company or any affiliate or
         subsidiary of Southern.

                  (t) "Pension Plan" shall mean The Southern Company Pension
         Plan, as such plan may be amended from time to time.

                  (u) "Performance Dividend Plan" shall mean the Southern
         Company Performance Dividend Plan or any replacement thereto, as such
         plans may be amended from time to time.

                  (v) "Performance Stock Plan" shall mean the Southern Company
         Performance Stock Plan or any replacement thereto, as such plans may be
         amended from time to time.

                  (w) "Person" shall mean any individual, entity or group within
         the meaning of Section 13(d)(3) or 14(d)(2) of Act.

                  (x) "Performance Pay Plan" or "PPP Plan" shall mean the
         Southern Company Performance Pay Plan or any replacement thereto, as
         such plans may be amended from time to time.

                  (y) "Southern" shall mean The Southern Company, its successors
         and assigns.

                  (z) "Southern Board" shall mean the board of directors of
         Southern.

                  (aa) "Southern Subsidiary" shall mean any corporation or other
         entity Controlled by Southern.

                  (bb) "Termination for Cause" or "Cause" shall mean the
         termination of Mr. Haubein's employment by the Company upon the
         occurrence of any of the following:

                           (i) The willful and continued failure by Mr. Haubein
                  substantially to perform his duties with the Company (other
                  than any such failure resulting from Mr. Haubein's Total
                  Disability or from Mr. Haubein's retirement or any such actual
                  or anticipated failure resulting from termination by Mr.
                  Haubein for Good Reason) after a written demand for
                  substantial performance is delivered to him by the Southern
                  Board, which demand specifically identifies the manner in
                  which the Southern Board believes that he has not
                  substantially performed his duties; or

                           (ii) The willful engaging by Mr. Haubein in conduct
                  that is demonstrably and materially injurious to the Company,
                  monetarily or otherwise, including, but not limited to any of
                  the following:

                                    (A) any willful act involving fraud or
                           dishonesty in the course of Mr. Haubein's employment
                           by the Company;

                                    (B) the willful carrying out of any activity
                           or the making of any statement which would materially
                           prejudice or impair the good name and standing of the
                           Company, Southern or any Southern Subsidiary or would
                           bring the Company, Southern or any Southern
                           Subsidiary into contempt, ridicule or would
                           reasonably shock or offend any community in which the
                           Company, Southern or such Southern Subsidiary is
                           located;

                                    (C) attendance at work in a state of
                           intoxication or otherwise being found in possession
                           at his workplace of any prohibited drug or substance,
                           possession of which would amount to a criminal
                           offense;

                                    (D) violation of the Company's policies on
                           drug and alcohol usage, fitness for duty requirements
                           or similar policies as may exist from time to time as
                           adopted by the Company's safety officer;

                                    (E) assault or other act of violence against
                           any person during the course of employment; or

                                    (F) indictment of any felony or any
                           misdemeanor involving moral turpitude. No act or
                           failure to act by Mr. Haubein shall be deemed
                           "willful" unless done, or omitted to be done, by Mr.
                           Haubein not in good faith and without reasonable
                           belief that his action or omission was in the best
                           interest of the Company.

         Notwithstanding the foregoing, Mr. Haubein shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to
him a copy of a resolution duly adopted by the affirmative vote of not less than
three quarters of the entire membership of the Southern Board at a meeting of
the Southern Board called and held for such purpose (after reasonable notice to
Mr. Haubein and an opportunity for him, together with counsel, to be heard
before the Southern Board), finding that, in the good faith opinion of the
Southern Board, Mr. Haubein was guilty of conduct set forth above in clause (i)
or (ii) of this Paragraph 1.(bb) and specifying the particulars thereof in
detail.

                  (cc) "Termination Date" shall mean the date on which Mr.
         Haubein's employment with the Company is terminated; provided, however,
         that solely for purposes of Paragraph 2.(c) hereof, the Termination
         Date shall be the effective date of his retirement pursuant to the
         terms of the Pension Plan.

                  (dd) "Total Disability" shall mean Mr. Haubein's total
         disability within the meaning of the Pension Plan.

                  (ee) "Voting Securities" shall mean the outstanding voting
         securities of a corporation entitling the holder thereof to vote
         generally in the election of such corporation's directors.

                  (ff) "Waiver and Release" shall mean the Waiver and Release
         attached hereto as Exhibit A.

                  (gg) "Year of Service" shall mean Mr. Haubein's Months of
         Service divided by twelve (12) rounded to the nearest whole year,
         rounding up if the remaining number of months is seven (7) or greater
         and rounding down if the remaining number of months is less than seven
         (7). If Mr. Haubein has a break in his service with the Company, he
         will receive credit under this Agreement for service prior to the break
         in service only if the break in service is less than five years.

         2. Severance Benefits.

                  (a) Eligibility. Except as otherwise provided in this
         Paragraph 2.(a), if Mr. Haubein's employment is involuntarily
         terminated by the Company at any time during the two year period
         following a Change in Control for reasons other than Cause, or if Mr.
         Haubein voluntarily terminates his employment with the Company for Good
         Reason at any time during the two year period following a Change in
         Control, Mr. Haubein shall be entitled to receive the benefits
         described in this Agreement upon the Company's receipt of an effective
         Waiver and Release. Notwithstanding anything to the contrary herein,
         Mr. Haubein shall not be eligible to receive benefits under this
         Agreement if Mr. Haubein:

                           (i) voluntarily terminates his employment with the
                  Company for other than Good Reason;

                           (ii) has his employment terminated by the Company for
                  Cause;

                           (iii) accepts the transfer of his employment to
                  Southern, any Southern Subsidiary or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern or any Southern Subsidiary;

                           (iv) refuses an offer of continued employment with
                  the Company, any Southern Subsidiary, or any employer that
                  succeeds to all or substantially all of the assets of the
                  Company, Southern, or any Southern Subsidiary under
                  circumstances where such refusal would not amount to Good
                  Reason for voluntary termination of employment; or

                           (v) elects to receive the benefits of any other
                  voluntary or involuntary severance or separation program, plan
                  or agreement maintained by the Company in lieu of benefits
                  under this Agreement; provided however, that the receipt of
                  benefits under the terms of any retention plan or agreement
                  shall not be deemed to be the receipt of severance or
                  separation benefits for purposes of this Agreement.

                  (b) Severance Benefits. If Mr. Haubein meets the eligibility
         requirements of Paragraph 2.(a) hereof, he shall be entitled to a cash
         severance benefit in an amount equal to three times his Annual
         Compensation (the "Severance Amount"). If any portion of the Severance
         Amount constitutes an "excess parachute payment" (as such term is
         defined under Code Section 280G ("Excess Parachute Payment")), the
         Company shall pay to Mr. Haubein an additional amount calculated by
         determining the amount of tax under Code Section 4999 that he otherwise
         would have paid on any Excess Parachute Payment with respect to the
         Change in Control and dividing such amount by a decimal determined by
         adding the tax rate under Code Section 4999 ("Excise Tax"), the
         hospital insurance tax under Code Section 3101(b) ("HI Tax") and
         federal and state income tax measured at the highest marginal rates
         ("Income Tax") and subtracting such result from the number one (1) (the
         "280G Gross-up"); provided, however, that no 280G Gross-up shall be
         paid unless the Severance Amount plus all other "parachute payments" to
         Mr. Haubein under Code Section 280G exceeds three (3) times Mr.
         Haubein's "base amount" (as such term is defined under Code Section
         280G ("Base Amount")) by ten percent (10%) or more; provided further,
         that if no 280G Gross-up is paid, the Severance Amount shall be capped
         at three (3) times Mr. Haubein's Base Amount, less all other "parachute
         payments" (as such term is defined under Code Section 280G) received by
         Mr. Haubein, less one dollar (the "Capped Amount"), if the Capped
         Amount, reduced by HI Tax and Income Tax, exceeds what otherwise would
         have been the Severance Amount, reduced by HI Tax, Income Tax and
         Excise Tax.

                  For purposes of this Paragraph 2.(b), whether any amount would
         constitute an Excess Parachute Payment and any other calculations of
         tax, e.g., Excise Tax, HI Tax, Income Tax, etc., or other amounts,
         e.g., Base Amount, Capped Amount, etc., shall be determined by the tax
         department of the independent public accounting firm then responsible
         for preparing Southern's consolidated federal income tax return, and
         such calculations or determinations shall be binding upon the parties
         hereto.

                  (c) Welfare Benefits. If Mr. Haubein meets the eligibility
         requirements of Paragraph 2.(a) hereof and is not otherwise eligible to
         receive retiree medical and life insurance benefits provided to certain
         retirees pursuant to the terms of the Pension Plan, the Group Health
         Plan and the Group Life Insurance Plan, he shall be entitled to the
         benefits set forth in this Paragraph 2.(c).

                           (i) Mr. Haubein shall be eligible to participate in
                  the Company's Group Health Plan, upon payment of both the
                  Company's and his monthly premium under such plan, for a
                  period of six (6) months for each of Mr. Haubein's Years of
                  Service, not to exceed five (5) years. If Mr. Haubein elects
                  to receive this extended medical coverage, he shall also be
                  entitled to elect coverage under the Group Health Plan for his
                  dependents who were participating in the Group Health Plan on
                  Mr. Haubein's Termination Date (and for such other dependents
                  as may be entitled to coverage under the provisions of the
                  Health Insurance Portability and Accountability Act of 1996)
                  for the duration of Mr. Haubein's extended medical coverage
                  under this Paragraph 2.(c)(i) to the extent such dependents
                  remain eligible for dependent coverage under the terms of the
                  Group Health Plan.

                                    (A) The extended medical coverage afforded
                           to Mr. Haubein pursuant to Paragraph 2.(c)(i), as
                           well as the premiums to be paid by Mr. Haubein in
                           connection with such coverage shall be determined in
                           accordance with the terms of the Group Health Plan
                           and shall be subject to any changes in the terms and
                           conditions of the Group Health Plan as well as any
                           future increases in premiums under the Group Health
                           Plan. The premiums to be paid by Mr. Haubein in
                           connection with this extended coverage shall be due
                           on the first day of each month; provided, however,
                           that if he fails to pay his premium within thirty
                           (30) days of its due date, such extended coverage
                           shall be terminated.

                                    (B) Any Group Health Plan coverage provided
                           under Paragraph 2.(c)(i) shall be a part of and not
                           in addition to any COBRA Coverage which Mr. Haubein
                           or his dependents may elect. In the event that Mr.
                           Haubein or his dependents become eligible to be
                           covered, by virtue of re-employment or otherwise, by
                           any employer-sponsored group health plan or is
                           eligible for coverage under any government-sponsored
                           health plan during the above period, coverage under
                           the Company's Group Health Plan available to Mr.
                           Haubein or his dependents by virtue of the provisions
                           of Paragraph 2.(c)(i) shall terminate, except as may
                           otherwise be required by law, and shall not be
                           renewed. (ii) Mr. Haubein shall be entitled to
                           receive cash in an amount equal to the Company's and
                           Mr. Haubein's cost of premiums for three (3) years of
                           coverage under the Group Health Plan and Group Life
                           Insurance Plan in accordance with the terms of such
                           plans as of the date of the Change in Control.

                  (d) Incentive Plans. If Mr. Haubein meets the eligibility
         requirements of Paragraph 2.(a) hereof he shall be entitled to the
         following benefits under the Company's incentive plans:

                           (i) Stock Option Plan.

                                    (A) Any of Mr. Haubein's Options and Stock
                           Appreciation Rights under the Performance Stock Plan
                           (the defined terms of which are incorporated in this
                           Paragraph 2.(d)(i) by reference) which are
                           outstanding as of the Termination Date and which are
                           not then exercisable and vested, shall become fully
                           exercisable and vested to the full extent of the
                           original grant; provided, that in the case of a Stock
                           Appreciation Right, if Mr. Haubein is subject to
                           Section 16(b) of the Exchange Act, such Stock
                           Appreciation Right shall not become fully vested and
                           exercisable at such time if such actions would result
                           in liability to Mr. Haubein under Section 16(b) of
                           the Exchange Act, provided further, that any such
                           actions not taken as a result of the rules under
                           Section 16(b) of the Exchange Act shall be effected
                           as of the first date that such activity would no
                           longer result in liability under Section 16(b) of the
                           Exchange Act.

                                    (B) The restrictions and deferral
                           limitations applicable to any of Mr. Haubein's
                           Restricted Stock as of the Termination Date shall
                           lapse, and such Restricted Stock shall become free of
                           all restrictions and limitations and become fully
                           vested and transferable to the full extent of the
                           original grant.

                                    (C) The restrictions and deferral
                           limitations and other conditions applicable to any
                           other Awards held by Mr. Haubein under the Stock
                           Performance Plan as of the Termination Date shall
                           lapse, and such other Awards shall become free of all
                           restrictions, limitations or conditions and become
                           fully vested and transferable to the full extent of
                           the original grant.

                           (ii) Performance Pay Plan. Provided Mr. Haubein is
                  not entitled to benefits under Article V of the PPP Plan, (the
                  defined terms of which are incorporated in this Paragraph
                  2.(d)(ii) by reference), if the PPP Plan is in place through
                  Mr. Haubein's Termination Date and to the extent Mr. Haubein
                  is entitled to participate therein, Mr. Haubein shall be
                  entitled to receive cash in an amount equal to a prorated
                  payout of his Incentive Pay Awards under the PPP Plan for the
                  Performance Period in which the Termination Date shall have
                  occurred, at target performance under the PPP Plan and
                  prorated by the number of months which have passed since the
                  beginning of the Performance Period until the Termination
                  Date.

                           (iii) Performance Dividend Plan. Provided Mr. Haubein
                  is not entitled to benefits under the Performance Dividend
                  Plan (the defined terms of which are incorporated in this
                  Paragraph 2.(d)(iii) by reference), if the Performance
                  Dividend Plan is in place through Mr. Haubein's Termination
                  Date and to the extent Mr. Haubein is entitled to participate
                  therein, Mr. Haubein shall be entitled to receive cash for
                  each Award held by Mr. Haubein on his Termination Date, based
                  on actual performance under Section 4.1 of the Performance
                  Dividend Plan determined as of the most recently completed
                  calendar quarter of the Performance Period in which the
                  Termination Date shall have occurred, and the Annual Dividend
                  declared prior to the Termination Date.

                           (iv) Other Short Term Incentive Plans. The provisions
                  of this Paragraph 2.(d)(iv) shall apply if and to the extent
                  that Mr. Haubein is a participant in any other "short term
                  compensation plan" not otherwise previously referred to in
                  this Paragraph 2.(d). Provided Mr. Haubein is not otherwise
                  entitled to a plan payout under any change of control
                  provisions of such plans, if the "short term compensation
                  plan" is in place as of the Termination Date and to the extent
                  Mr. Haubein is entitled to participate therein, Mr. Haubein
                  shall receive cash in an amount equal to his award under the
                  Company's "short term incentive plan" for the annual
                  performance period in which the Termination Date shall have
                  occurred, at Mr. Haubein's target performance level and
                  prorated by the number of months which have passed since the
                  beginning of the annual performance period until his
                  Termination Date. For purposes of this Paragraph 2.(d)(iv) the
                  term "short term incentive compensation plan" shall mean any
                  incentive compensation plan or arrangement adopted in writing
                  by the Company which provides for annual, recurring
                  compensatory bonuses based upon articulated performance
                  criteria. (e) Payment of Benefits. Any amounts due under this
                  Agreement shall be paid in one (1) lump sum payment as soon as
                  administratively practicable following the later of: (i) Mr.
                  Haubein's Termination Date, or (ii) upon Mr. Haubein's tender
                  of an effective Waiver and Release to the Company in the form
                  of Exhibit A attached hereto and the expiration of any
                  applicable revocation period for such waiver. In the event of
                  a dispute with respect to liability or amount of any benefit
                  due hereunder, an effective Waiver and Release shall be
                  tendered at the time of final resolution of any such dispute
                  when payment is tendered by the Company.

                  (f) Benefits in the Event of Death. In the event of Mr.
         Haubein's death prior to the payment of all amounts due under this
         Agreement, Mr. Haubein's estate shall be entitled to receive as due any
         amounts not yet paid under this Agreement upon the tender by the
         executor or administrator of the estate of an effective Waiver and
         Release.

                  (g) Legal Fees. In the event of a dispute between Mr. Haubein
         and the Company with regard to any amounts due hereunder, if any
         material issue in such dispute is finally resolved in Mr. Haubein's
         favor, the Company shall reimburse Mr. Haubein's legal fees incurred
         with respect to all issues in such dispute in an amount not to exceed
         fifty thousand dollars ($50,000).

                  (h) Employee Outplacement Services. Mr. Haubein shall be
         eligible to participate in the Employee Outplacement Program, which
         program shall not be less than six (6) months duration measured from
         Mr. Haubein's Termination Date.

                  (i) Non-qualified Retirement and Deferred Compensation Plans.
         The Parties agree that subsequent to a Change in Control, any claims by
         Mr. Haubein for benefits under any of the Company's non-qualified
         retirement or deferred compensation plans shall be resolved through
         binding arbitration in accordance with the provisions and procedures
         set forth in Paragraph 5 hereof and if any material issue in such
         dispute is finally resolved in Mr. Haubein's favor, the Company shall
         reimburse Mr. Haubein's legal fees in the manner provided in Paragraph
         2.(g) hereof.

         3. Transfer of Employment. In the event that Mr. Haubein's employment
by the Company is terminated during the two year period following a Change in
Control and Mr. Haubein accepts employment by Southern, a Southern Subsidiary,
or any employer that succeeds to all or substantially all of the assets of the
Company, Southern or any Southern Subsidiary, the Company shall assign this
Agreement to Southern, such Southern Subsidiary, or successor employer, Southern
shall accept such assignment or cause such Southern Subsidiary or successor
employer to accept such assignment, and such assignee shall become the "Company"
for all purposes hereunder.

         4. No Mitigation. If Mr. Haubein is otherwise eligible to receive
benefits under Paragraph 2 of this Agreement, he shall have no duty or
obligation to seek other employment following his Termination Date and, except
as otherwise provided in Paragraph 2.(a)(iii) hereof, the amounts due Mr.
Haubein hereunder shall not be reduced or suspended if Mr. Haubein accepts such
subsequent employment.

         5.       Arbitration.

                  (a) Any dispute, controversy or claim arising out of or
         relating to the Company's obligations to pay severance benefits under
         this Agreement, or the breach thereof, shall be settled and resolved
         solely by arbitration in accordance with the Commercial Arbitration
         Rules of the American Arbitration Association ("AAA") except as
         otherwise provided herein. The arbitration shall be the sole and
         exclusive forum for resolution of any such claim for severance benefits
         and the arbitrators' award shall be final and binding. The provisions
         of this Paragraph 5 are not intended to apply to any other disputes,
         claims or controversies arising out of or relating to Mr. Haubein's
         employment by the Company or the termination thereof.

                  (b) Arbitration shall be initiated by serving a written notice
         of demand for arbitration to Mr. Haubein, in the case of the Company,
         or to the Southern Board, in the case of Mr. Haubein.

                  (c) The arbitration shall be held in Atlanta, Georgia. The
         arbitrators shall apply the law of the State of Georgia, to the extent
         not preempted by federal law, excluding any law which would require the
         application of the law of another state.

                  (d) The parties shall appoint arbitrators within fifteen (15)
         business days following service of the demand for arbitration. The
         number of arbitrators shall be three. One arbitrator shall be appointed
         by Mr. Haubein, one arbitrator shall be appointed by the Company, and
         the two arbitrators shall appoint a third. If the arbitrators cannot
         agree on a third arbitrator within thirty (30) business days after the
         service of demand for arbitration, the third arbitrator shall be
         selected by the AAA.

                  (e) The arbitration filing fee shall be paid by Mr. Haubein.
         All other costs of arbitration shall be borne equally by Mr. Haubein
         and the Company, provided, however, that the Company shall reimburse
         such fees and costs in the event any material issue in such dispute is
         finally resolved in Mr. Haubein's favor and Mr. Haubein is reimbursed
         legal fees under Paragraph 2.(g) hereof.

                  (f) The parties agree that they will faithfully observe the
         rules that govern any arbitration between them, they will abide by and
         perform any award rendered by the arbitrators in any such arbitration,
         including any award of injunctive relief, and a judgment of a court
         having jurisdiction may be entered upon an award.

                  (g) The parties agree that nothing in this Paragraph 5 is
         intended to preclude upon application of either party any court having
         jurisdiction from issuing and enforcing in any lawful manner such
         temporary restraining orders, preliminary injunctions, and other
         interim measures of relief as may be necessary to prevent harm to a
         party's interests or as otherwise may be appropriate pending the
         conclusion of arbitration proceedings pursuant to this Agreement;
         regardless of whether an arbitration proceeding under this Paragraph 5
         has begun. The parties further agree that nothing herein shall prevent
         any court from entering and enforcing in any lawful manner such
         judgments for permanent equitable relief as may be necessary to prevent
         harm to a party's interests or as otherwise may be appropriate
         following the issuance of arbitral awards pursuant to this Paragraph 5.

         6. Miscellaneous.

                  (a) Funding of Benefits. Unless the Board in its discretion
         shall determine otherwise, the benefits payable to Mr. Haubein under
         this Agreement shall not be funded in any manner and shall be paid by
         the Company out of its general assets, which assets are subject to the
         claims of the Company's creditors.

                  (b) Withholding. There shall be deducted from the payment of
         any benefit due under this Agreement the amount of any tax required by
         any governmental authority to be withheld and paid over by the Company
         to such governmental authority for the account of Mr. Haubein.

                  (c) Assignment. Mr. Haubein shall have no rights to sell,
         assign, transfer, encumber, or otherwise convey the right to receive
         the payment of any benefit due hereunder, which payment and the rights
         thereto are expressly declared to be nonassignable and nontransferable.
         Any attempt to do so shall be null and void and of no effect.

                  (d) Amendment and Termination. The Agreement may be amended or
         terminated only by a writing executed by the parties.

                  (e) Construction. This Agreement shall be construed in
         accordance with and governed by the laws of the State of Georgia, to
         the extent not preempted by federal law, disregarding any provision of
         law which would require the application of the law of another state.

                  (f) Pooling Accounting. Notwithstanding anything to the
         contrary herein, if, but for any provision of this Agreement, a Change
         in Control transaction would otherwise be accounted for as a
         pooling-of-interests under APB No.16 ("Pooling Accounting") (after
         giving effect to any and all other facts and circumstances affecting
         whether such Change in Control transaction would use Pooling
         Accounting), such provision or provisions of this Agreement which would
         otherwise cause the Change in Control transaction to be ineligible for
         Pooling Accounting shall be void and ineffective in such a manner and
         to the extent that by eliminating such provision or provisions of this
         Agreement, Pooling Accounting would be required for such Change in
         Control transaction.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement
this ____ day of __________________, 2000.


                                     THE SOUTHERN COMPANY


                            By:      ____________________________________


                                     SOUTHERN COMPANY SERVICES, INC.


                            By:      ____________________________________


                                     MR. HAUBEIN


                                     -----------------------------
                                     Robert H. Haubein, Jr.


<PAGE>


                                    Exhibit A

                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         The attached Waiver and Release is to be given to Mr. Robert H.
Haubein, Jr. upon the occurrence of an event that triggers eligibility for
severance benefits under the Change in Control Agreement, as described in
Paragraph 2(a) of such agreement.


<PAGE>


                           CHANGE IN CONTROL AGREEMENT

                               Waiver and Release

         I, Robert H. Haubein, Jr., understand that I am entitled to receive the
severance benefits described in Section 2 of the Change in Control Agreement
(the "Agreement") if I execute this Waiver and Release ("Waiver"). I understand
that the benefits I will receive under the Agreement are in excess of those I
would have received from The Southern Company and Southern Company Services,
Inc. (collectively, the "Company") if I had not elected to sign this Waiver.

         I recognize that I may have a claim against the Company under the Civil
Rights Act of 1964 and 1991, the Age Discrimination in Employment Act, the
Rehabilitation Act of 1973, the Energy Reorganization Act of 1974, as amended,
the Americans with Disabilities Act or other federal, state and local laws.

         In exchange for the benefits I elect to receive, I hereby irrevocably
waive and release all claims, of any kind whatsoever, whether known or unknown
in connection with any claim which I ever had, may have, or now have against The
Southern Company, Alabama Power Company, Georgia Power Company, Gulf Power
Company, Mississippi Power Company, Savannah Electric and Power Company,
Southern Communication Services, Inc., Southern Company Services, Inc., Southern
Energy Resources, Inc., Southern Company Energy Solutions, Inc., Southern
Nuclear Operating Company, Inc., Southern Energy, Inc. and other direct or
indirect subsidiaries of The Southern Company and their past, present and future
officers, directors, employees, agents and attorneys. Nothing in this Waiver
shall be construed to release claims or causes of action under the Age
Discrimination in Employment Act or the Energy Reorganization Act of 1974, as
amended, which arise out of events occurring after the execution date of this
Waiver.

         In further exchange for the benefits I elect to receive, I understand
and agree that I will respect the proprietary and confidential nature of any
information I have obtained in the course of my service with the Company or any
subsidiary or affiliate of The Southern Company. However, nothing in this Waiver
shall prohibit me from engaging in protected activities under applicable law or
from communicating, either voluntary or otherwise, with any governmental agency
concerning any potential violation of the law.

         In signing this Waiver, I am not releasing claims to benefits that I am
already entitled to under any workers' compensation laws or under any retirement
plan or welfare benefit plan within the meaning of the Employee Retirement
Income Security Act of 1974, as amended, which is sponsored by or adopted by the
Company and/or any of its direct or indirect subsidiaries; however, I understand
and acknowledge that nothing herein is intended to or shall be construed to
require the Company to institute or continue in effect any particular plan or
benefit sponsored by the Company and the Company hereby reserves the right to
amend or terminate any of its benefit programs at any time in accordance with
the procedures set forth in such plans.

         In signing this Waiver, I realize that I am waiving and releasing,
among other things, any claims to benefits under any and all bonus, severance,
workforce reduction, early retirement, outplacement, or any other similar type
plan sponsored by the Company.

         I have been encouraged and advised in writing to seek advice from
anyone of my choosing regarding this Waiver, including my attorney, and my
accountant or tax advisor. Prior to signing this Waiver, I have been given the
opportunity and sufficient time to seek such advice, and I fully understand the
meaning and contents of this Waiver.

         I understand that I may take up to twenty-one (21) calendar days to
consider whether or not I desire to enter this Waiver. I was not coerced,
threatened or otherwise forced to sign this Waiver. I have made my choice to
sign this Waiver voluntarily and of my own free will.

         I understand that I may revoke this Waiver at any time during the seven
(7) calendar day period after I sign and deliver this Waiver to the Company. If
I revoke this Waiver, I must do so in writing delivered to the Company. I
understand that this Waiver is not effective until the expiration of this seven
(7) calendar day revocation period. I understand that upon the expiration of
such seven (7) calendar day revocation period this entire Waiver will be binding
upon me and will be irrevocable.

         I understand that by signing this Waiver I am giving up rights I may
have.

         IN WITNESS WHEREOF, the undersigned hereby executes this Waiver this
____ day of ____________________, in the year _____.


                                                     Robert H. Haubein, Jr.

Sworn to and subscribed to me this
____ day of ____________, _____.


Notary Public

My Commission Expires:


(Notary Seal)

         Acknowledged and Accepted by the Company, as defined in the Waiver.

By:
         -----------------------------------
Date:
         -----------------------------------



</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>43
<FILENAME>x10a98.txt
<TEXT>

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") is made and entered
into by and between THE SOUTHERN COMPANY ("Southern"), SOUTHERN COMPANY
SERVICES, INC. (the "Company") and STEPHEN A. WAKEFIELD ("Employee").

                               W I T N E S S E T H

         WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;

         WHEREAS, the parties desire to provide Employee with deferred
compensation upon the occurrence of certain enumerated events for service he has
provided or will provide for the Company;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:

         1. Severance Benefit. If the Employee's employment with the Company is
terminated without cause, the Company shall pay to Employee a lump sum amount
equal to two (2) times base pay in effect at the time of the Employee's
termination. As used in this Agreement, the term "cause" shall mean fraud or
dishonesty, willful failure to perform the duties and services required in the
course of employment by the Company, the final conviction of a felony or
misdemeanor involving moral turpitude, the carrying out of any activity or the
making of any statement which would prejudice the good name and standing of the
Company. Except for termination for cause, the Company shall give Employee at
least thirty (30) days written notice in the event it terminates the Employee's
employment. Employee shall be responsible for all state and federal income taxes
and his share of FICA taxes owed on the foregoing amounts.

         2.       Supplemental Pension Payment to Employee.

                  a. Upon the Employee's retirement from the Company and his
         entering into an effective Release in the form attached hereto as
         Exhibit 1, the Company agrees to pay the Employee an amount equal to
         the difference between his Retirement Income payable in accordance with
         the terms and provisions of The Southern Company Pension Plan as
         applicable to the Employee on his date of hire and as may be amended
         from time to time (hereinafter referred to as the "Pension Plan"), and
         the amount of Retirement Income the Employee would have been entitled
         to receive under the Pension Plan as if the Employee's period of
         Accredited Service under the Pension Plan included an additional ten
         (10) years. Similarly, such additional service shall also be credited
         to Employee for purposes of calculating a benefit under the Southern
         Company Supplemental Executive Retirement Plan ("SERP"). The benefits
         in this Paragraph 2(a) shall be recalculated from time to time to
         reflect future increases, if any, in the Retirement Income of retirees
         following the Employee's retirement. The Employee's years of service
         (or any portion thereof) provided in this Paragraph 2(a) and
         application of the special definition of "Final Average Pay" set forth
         in Paragraph 2(c) below granted under this Agreement shall not be
         recognized for purposes of calculating the above benefits in the event
         of his termination of service with the Company prior to accrual of five
         (5) years of vesting service as defined under the Pension Plan, unless
         such termination occurs on account of death or disability or unless
         such termination results in eligibility for severance benefits under
         Paragraph 2(a) of the Change in Control Agreement between the Employee
         and the Company and Southern (hereinafter referred to as the "Change in
         Control Agreement").

                  b. For purposes of calculating the Retirement Income amount
         provided in Paragraph 2(a) above, no limitation on benefits imposed by
         the Internal Revenue Code as it now exists or is hereinafter amended or
         any limiting legislation shall be taken into account. Any amounts
         payable in accordance with this Paragraph 2(b) shall be recalculated
         from time to time to reflect future increases, if any, in Retirement
         Income of retirees following the Employee's retirement.

                  c. In determining the benefit described in Paragraphs 2(a) and
         (b) above, Final Average Pay shall be determined by uniformly
         substituting "three years" for "five years" in the definition of "Final
         Average Pay" in every instance it is necessary to calculate the
         benefit.

                  d. For purposes of this Agreement, without regard to whether
         the Employee has accrued ten (10) years of Accredited Service, any
         termination of Employee's employment with the Company after Employee
         shall have completed five years of vesting service as defined under the
         Pension Plan, or termination at any time on account of death or
         disability, or eligibility for severance benefits under Paragraph 2(a)
         of the Change in Control Agreement, shall be deemed to be a retirement.
         The Employee's benefit under this Agreement shall be subject to such
         early retirement reduction factors as would apply to a participant in
         the Pension Plan based on the Employee's date of retirement under this
         Agreement. Subject to such reduction factors, the Employee shall be
         eligible under this Agreement upon retirement before attainment of age
         sixty-five (65) to receive a monthly benefit equal to the sum of the
         following: (i) the monthly benefit the Employee would be eligible to
         receive under the Pension Plan as of the Employee's retirement under
         this Agreement; (ii) the monthly benefit the Employee would be eligible
         to receive under the Southern Company Supplemental Benefit Plan
         ("Supplemental Benefit Plan") and the SERP; and (iii) the monthly
         benefit the Employee would be eligible to receive under this Agreement
         as provided for in Paragraphs 2(a) and (b) above as of the Employee's
         retirement under this Agreement. Upon attainment of age sixty-five
         (65), the Employee shall be eligible under this Agreement to receive a
         monthly benefit equal to that amount provided for in the preceding
         sentence above reduced, if necessary, so that the total amount of
         monthly payments received by the Employee considering the monthly
         benefits payable under this Agreement, the Pension Plan, Supplemental
         Benefit Plan and SERP, respectively, at age sixty-five (65) equals the
         total amount of payments provided for in the preceding sentence.

         3. Consideration. Employee covenants and agrees that the consideration
set forth in Paragraphs 1 and 2 shall be in full satisfaction of all sums owed
to Employee, if any, by the Company and that the consideration set forth in
Paragraph 2 shall constitute good and complete consideration for the Release
attached hereto as Exhibit 1, those nondisclosure and ownership obligations
under Paragraph 6 hereof, and all other obligations and covenants of Employee
contained herein.

         4. Commencement and Form of Payment of Supplemental Pension Benefit.
The benefit provided in accordance with Paragraph 2 above shall be paid in
monthly installments on the first day of each month in accordance with the
election to receive Retirement Income under the Pension Plan. In the event the
Employee is married, predeceases his spouse, and his spouse is entitled to
payments as a Provisional Payee, monthly payments shall be made in the same
manner as provided by the Provisional Payee option elected by the Employee under
the Pension Plan taking into account the additional Accredited Service and the
special three year "Final Average Pay" treatment set forth in Paragraphs 2(a)
and (c) above. In the event the Employee shall not be married or shall not be
survived by his spouse, the benefit described in the preceding sentence shall be
forfeited. The Employee or his surviving spouse shall not, under any
circumstances, have any option or right to require payments hereunder otherwise
than in accordance with the terms hereof.

         5. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 8 hereof, Employee, Southern and the Company covenant and agree that
they shall not engage in any communications which shall disparage one another or
interfere with their existing or prospective business relationships.

         6. Non-Disclosure and Non-Solicitation.

                  a. Definitions. For purposes of this Paragraph 6, the
         following terms shall have the following meanings:

                           i) "Entity" shall mean any business, individual,
                  partnership, joint venture, agency, governmental subdivision,
                  association, firm, corporation or other entity.

                           ii) "Affiliate" shall mean the following Entities:
                  (A) any Entity which owns an Interest (as defined below) in
                  the Company either directly or indirectly through any other
                  Entity, (B) any Entity an Interest in which is owned directly
                  or indirectly by any Entity which owns directly or indirectly
                  an Interest in the Company or (C) any Entity in which the
                  Company owns an Interest either directly or indirectly through
                  any other Entity. For purposes of this Agreement, the term
                  "Interest" shall include any equity interest in an Entity in
                  an amount equal to or greater than 30% of the Entity's total
                  outstanding equity interests.

                           iii) "Confidential Information" shall mean
                  proprietary and confidential data or information other than
                  Trade Secrets (as defined below), which is valuable to, and
                  related to the business of, the Company, its Affiliates or
                  non-affiliated Entities with whom the Company or its
                  Affiliates has or have business relationships (collectively,
                  "Third Parties"), and the details of which are generally
                  unknown to the public or to the Company's competitors,
                  including, without limitation, information regarding the
                  Company's employees, business strategies, models and systems,
                  customers, suppliers, partners and affiliates, gained by
                  Employee as a result of his affiliation with the Company or
                  its Affiliates, and other items that the Company or its
                  Affiliates may from time to time mark or otherwise identify as
                  confidential.

                           iv) "Trade Secrets" shall mean information of or
                  related to the Company, its Affiliates or Third Parties which
                  (A) derives economic value, actual or potential, from not
                  being generally known to, and not being readily ascertainable
                  by proper means by, other persons who can obtain economic
                  value from its disclosure or use; and (B) is the subject of
                  efforts that are reasonable under the circumstances to
                  maintain its secrecy; it being agreed that such information
                  includes, without limitation, technical and non-technical
                  data, a formula, a pattern, a compilation, a program, a
                  device, a method, a technique, a drawing, a process, financial
                  data, financial plans, product plans or a list of actual or
                  potential customers or suppliers.

                           v) "Intellectual Property" shall mean all work
                  product, property, data, documentation, "know-how", concepts
                  or plans, inventions, discovery, compositions, innovations,
                  computer programs, improvements, techniques, processes,
                  designs, article of manufacture or information of any kind, or
                  any new or useful improvements of any of the foregoing and any
                  Trade Secrets, patents, copyrights, Confidential Information,
                  mask work, trademark or service mark, relating in any way to
                  the Company or its Affiliates and its or their business
                  prepared, conceived, revised, discovered, developed, or
                  created by Employee for the Company or its Affiliates or by
                  using the Company's or its Affiliates' time, personnel,
                  facilities, or material.

                  b. Nondisclosure: Ownership of Proprietary Property.

                           i) Nondisclosure. In recognition of the Company's
                  need to protect its legitimate business interests, Employee
                  hereby acknowledges that he has been given access to valuable
                  Trade Secrets and Confidential Information; and Employee
                  hereby covenants and agrees that he will use the Trade Secrets
                  and Confidential Information for the Company's business
                  purposes only, and that he will not for any reason, in any
                  fashion, form or manner, other than as instructed by a duly
                  authorized representative of the Company, copy, disclose,
                  disseminate, communicate, transfer or otherwise convey to any
                  Entity any item: (A) which is a Trade Secret, for so long as
                  such item remains a trade secret under applicable law; or (B)
                  which is Confidential Information, other than Trade Secrets,
                  for a period of two (2) years from the Employee's termination.

                           ii) Notification of Unauthorized Disclosure. Employee
                  shall exercise his best efforts to ensure the continued
                  confidentiality of all Trade Secrets and Confidential
                  Information known by, disclosed or made available to Employee.
                  Employee shall immediately notify the Company of any
                  unauthorized disclosure or use of any Trade Secrets or
                  Confidential Information of which Employee becomes aware.
                  Employee shall assist the Company, to the extent necessary, in
                  the procurement or protection of the Company's or its
                  Affiliates' rights to or in any Intellectual Property, Trade
                  Secrets or Confidential Information and, upon the Company's
                  request, shall assist, to the extent necessary, in the
                  procurement or protection of any Third Party's rights to or in
                  any Intellectual Property, Trade Secrets or Confidential
                  Information.

                           iii) Ownership. To the greatest extent possible, any
                  and all Intellectual Property shall be deemed to be "work made
                  for hire" (as defined in the Copyright Act, 17 U.S.C.A. ss.ss.
                  101 et seq.), and Employee hereby unconditionally and
                  irrevocably transfers and assigns to the Company or its
                  Affiliates all rights, title and interest Employee currently
                  has or in the future may have by operation of law or otherwise
                  in or to any Intellectual Property, including, without
                  limitation, all patents, copyrights, trademarks, service marks
                  and other Intellectual Property rights and agrees that the
                  Company or its Affiliates shall have the exclusive world-wide
                  ownership of such Intellectual Property, and that no
                  Intellectual Property shall be treated as or deemed to be a
                  "joint work" (as defined by the Copyright Act) of Employee and
                  the Company, its Affiliates or otherwise. Employee agrees to
                  execute and deliver to the Company or its Affiliates any
                  transfers, assignments, documents or other instruments which
                  the Company or its Affiliates may deem necessary or
                  appropriate to vest complete title and ownership of any
                  Intellectual Property, and all rights therein, exclusively in
                  the Company or its Affiliates, as the case may be.

                           iv) Return of Materials. Upon the Employee's
                  termination, or at any point after that time upon the specific
                  request of the Company, Employee shall return to the Company
                  all written or descriptive materials of any kind belonging or
                  relating to the Company or its Affiliates, including, without
                  limitation, any Intellectual Property, Confidential
                  Information and Trade Secrets, in Employee's possession.

         7. Transfer of Employment to Southern or a Southern Subsidiary or
Affiliate. In the event that Employee's employment by the Company is terminated
and Employee shall become immediately re-employed by Southern or a subsidiary or
an affiliate of Southern, the Company shall assign this Agreement to Southern or
such subsidiary or affiliate, Southern shall accept such assignment or cause
such affiliate or subsidiary to accept such assignment, such assignee shall
become the "Company" for all purposes hereunder, including but not limited to
the Release attached hereto and incorporated herein as Exhibit 1. In the event
of such assignment, the expense of this Agreement shall be shared pro rata by
the Company and any such assignee based upon the number of months after the
effective date of this Agreement that the Employee is employed by the Company,
and/or Southern and/or such affiliate or subsidiary of Southern, as the case may
be.

         8. Confidentiality and Legal Process. Employee represents and agrees
that he will keep the terms, amount and fact of this Agreement confidential and
that he will not hereafter disclose any information concerning this Agreement to
any one other than his personal agents, including, but not limited to, any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Employee from performing any duty or obligation that shall arise as a matter of
law. Specifically, Employee shall continue to be under a duty to truthfully
respond to any legal and valid subpoena or other legal process. This Agreement
is not intended in any way to proscribe Employee's right and ability to provide
information to any federal, state or local government in the lawful exercise of
such governments' governmental functions.

         9. Successors And Assigns; Applicable Law. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs, administrators,
representatives, executors, successors and assigns, and shall be binding upon
and inure to the benefit of Southern, the Company and their officers, directors,
employees, agents, shareholders, parent corporation and affiliates, and their
respective predecessors, successors, assigns, heirs, executors and
administrators and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Georgia,
United States of America (without giving effect to principles of conflicts of
laws).

         10. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof including but not limited to that
certain employment agreement dated June 2, 1997. This Agreement shall not be
modified or amended except by a written instrument signed by both Employee and
an authorized representative of Southern and the Company.

         11. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         12. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

         13. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Employee may be entitled to receive the value
of his benefit under the terms and conditions of this Agreement, the assets from
which such amount may be paid shall at all times be subject to the claims of the
Company's creditors.

         14. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Employee may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company, and that the Release attached hereto as Exhibit 1
is not intended and does not waive any rights to such benefits. Notwithstanding
the foregoing, the Employee shall not be eligible for the severance benefit
under Paragraph 1 hereof if he elects to receive the severance benefits under
the Change in Control Agreement or any voluntary or involuntary severance or
separation program maintained by the Company or Southern.

         15. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of Employee.

         16. Compensation. Any compensation contributed on behalf of Employee
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         17. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Employee and the Company.





         IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
this ___ day of ________________, 1999.

                                  "SOUTHERN"

                                   THE SOUTHERN COMPANY

                                   By:
                                            ----------------------------------
                                   Its:
                                            ----------------------------------
                                    "COMPANY"

                                    SOUTHERN COMPANY SERVICES, INC.

                                    By:
                                              --------------------------------
                                    Its:
                                              --------------------------------

                                   "EMPLOYEE"

                                    STEPHEN A. WAKEFIELD


                                    WITNESSED BY:




<PAGE>



                                  EXHIBIT 1 to

                         Deferred Compensation Agreement

                             of Stephen A. Wakefield

                                RELEASE AGREEMENT

         THIS RELEASE ("Release') is made and entered into by and between
STEPHEN A. WAKEFIELD ("Employee"), THE SOUTHERN COMPANY ("Southern") and
SOUTHERN COMPANY SERVICES, INC. and its successor or assigns ("Company").

 WHEREAS, Employee, Southern and Company have agreed that Employee's
employment with _________________ shall terminate on _____________, _______;

         WHEREAS, Employee, Southern and the Company have previously entered
into that certain Deferred Compensation Agreement, dated _______, 1999
("Agreement"), that this Release is incorporated into by reference;

         WHEREAS, Employee, Southern and Company desire to delineate their
respective rights, duties and obligations attendant to such termination and
desire to reach an accord and satisfaction of all claims arising from Employee's
employment, and his termination of employment, with appropriate Releases, in
accordance with the Agreement;

         WHEREAS, the Company desires to provide Employee with deferred
compensation in accordance with the Agreement for service he has or will provide
for the Company;

         NOW, THEREFORE, in consideration of the premises and the agreements of
the parties set forth in this Release, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:

         1. Release. Employee does hereby remise, Release and forever discharge
Southern and the Company and their officers, directors, employees, agents,
shareholders, parent corporation and affiliates, and their respective
predecessors, successors, assigns, heirs, executors and administrators
(collectively, "Releasees"), of and from all manner of actions and causes of
action, suits, debts, claims and demands whatsoever at law or in equity, known
or unknown, actual or contingent, including, but not limited to, any claims
which have been asserted, or could be asserted now or in the future, against any
Releasees arising under any and all federal, state or local laws and any common
law claims, and including, but not limited to, any claims Employee may have
pursuant to the Age Discrimination in Employment Act and any claims to benefits
under any and all offer letters, employment or separation agreements, or bonus,
severance, workforce reduction, early retirement, out-placement, or other
similar plans sponsored by the Company, now or hereafter recognized
(collectively, "Claims"), which he ever had or now has or may in the future
have, by reason of any matter, cause or thing arising out of his employment
relationship and privileges, his serving as an employee of the Company or the
separation from his employment relationship or affiliation as an employee of the
Company as of the date of this Release against each of the Releasees.
Notwithstanding the foregoing, Employee does not Release any Claims under the
Age Discrimination in Employment Act that may arise after his execution of this
Release.

         2. No Assignment of Claim. Employee represents that he has not assigned
or transferred, or purported to assign or transfer, any Claims or any portion
thereof or interest therein to any party prior to the date of this Release.

         3. Deferred Compensation. In accordance with the Deferred Compensation
Agreement, the Company agrees to pay the Employee or his spouse, as the case may
be, the amounts outlined in Paragraphs 2 and 4 of the Agreement.

         4. No Admission Of Liability. This Release shall not in any way be
construed as an admission by Southern, the Company or Employee of any improper
actions or liability whatsoever as to one another, and each specifically
disclaims any liability to or improper actions against the other or any other
person, on the part of itself or himself, its or his employees or agents.

         5. Voluntary Execution. Employee warrants, represents and agrees that
he has been encouraged in writing to seek advice from anyone of his choosing
regarding this Release, including his attorney and accountant or tax advisor
prior to his signing it; that this Release represents written notice to do so;
that he has been given the opportunity and sufficient time to seek such advice;
and that he fully understands the meaning and contents of this Release. He
further represents and warrants that he was not coerced, threatened or otherwise
forced to sign this Release, and that his signature appearing hereinafter is
voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE.

         6. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE
THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN
(7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE
UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM
AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.


<PAGE>


Acknowledged and Agreed To:
                                   "SOUTHERN"

                                   THE SOUTHERN COMPANY

                                   By:
                                            -----------------------------------
                                   Its:
                                            -----------------------------------
                                    "COMPANY"

                                   SOUTHERN COMPANY SERVICES, INC.

                                   By:
                                            -----------------------------------
                                   Its:
                                            -----------------------------------

I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.

                                   "EMPLOYEE"

                                   STEPHEN A. WAKEFIELD


Date

WITNESSED BY:


Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>44
<FILENAME>x10a99.txt
<TEXT>

                                                               Exhibit 10(a)99

                         DEFERRED COMPENSATION AGREEMENT

         THIS DEFERRED COMPENSATION AGREEMENT ("Agreement") made and entered
into by and between GEORGIA POWER COMPANY (the "Company") and WAYNE T. DAHLKE
("Employee").

                               W I T N E S S E T H

         WHEREAS, Employee has been employed by the Company for approximately
thirty-five (35) years;

         WHEREAS, Employee is a highly compensated employee of the Company and
is a member of its management;

         WHEREAS, the parties have agreed that Employee's employment with the
Company shall terminate on September 1, 2000;

         WHEREAS, the parties desire to delineate their respective rights,
duties, and obligations attendant to such termination of employment, and desire
to reach an accord and satisfaction of all claims arising from Employee's
employment and his termination of employment, with appropriate releases; and

         WHEREAS, the Company desires to provide Employee with deferred
compensation for service he has provided or will provide for the Company;

         NOW, THEREFORE, in consideration of the premises, and the agreements of
the parties set forth in this Agreement, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto, intending to be legally bound, hereby covenant and agree as
follows:

         1. Termination of Employment. Upon Employee's execution of this
Agreement, voluntary termination of employment with the Company on September 1,
2000 (the Employee's "Termination Date"), and effectiveness of the Release
attached hereto as Exhibit 1, the Company agrees to pay to Employee or his
spouse, if applicable, the amounts described in Paragraph 2 hereof. Employee
covenants and agrees that the consideration set forth in Paragraph 2 is in full
satisfaction of all sums owed to Employee, if any, by the Company, and
constitutes good and complete consideration for his Release attached hereto as
Exhibit 1, those nondisclosure, non-compete and ownership obligations under
Paragraph 4 hereof and all other obligations and covenants of Employee contained
herein. Employee agrees that this Agreement provides him certain benefits to
which he would not otherwise be entitled.

         2. Severance Payment to Employee. On the first day of the first month
following both the Employee's Termination Date and the effective date of the
Release attached hereto as Exhibit 1, the Company shall commence payments to
Employee of sixty-five (65) monthly installments in an amount equal to Eleven
Thousand Six Hundred Eighteen Dollars and Ninety-Five Cents ($11,618.95) per
monthly installment payment with the sum of all payments equal to $755,231.75.
In the event of a Southern Change in Control or a Subsidiary Change in Control
affecting Employee as defined in the Southern Company Deferred Compensation
Plan, unpaid installments shall be paid in a lump sum as soon as practicable
after the occurrence of such an event. In the event Employee dies before
receiving payment of the amount described in this Paragraph 2 hereof, it shall
be paid to Employee's spouse, if living, or if not, to the Employee's estate.
Upon application made by the Employee, his spouse, or an authorized legal
representative, as applicable, the Company may in its sole discretion determine
to accelerate installment payments due under this Agreement. In accordance with
Paragraph 15, Employee shall be responsible for all state and federal income
taxes and his share of FICA taxes owed on the foregoing amount, and Company
shall make appropriate withholding of these amounts.

         3. Publicity; No Disparaging Statement. Except as otherwise provided in
Paragraph 8 hereof, Employee and the Company covenant and agree that they shall
not engage in any communications which shall disparage one another or interfere
with their existing or prospective business relationships.

         4. Non-Disclosure, Non-Solicitation and Non-Competition Provisions.

         (a) Preamble. As a material inducement to the Company to enter into
this Agreement, and its recognition of the valuable experience, knowledge and
proprietary information Employee gained from his employment with the Company,
Employee warrants and agrees he will abide by and adhere to the following
Non-Disclosure, Non-Solicitation and Non-Competition Provisions.

         (b) Definitions. For purposes of this Paragraph 4, the following terms
shall have the following meanings:

                  (i)      "Confidential Information" shall mean the proprietary
                           and confidential data or information belonging to or
                           pertaining to the Company, The Southern Company or
                           any of its affiliates other than "Trade Secrets" (as
                           defined below), which is of tangible or intangible
                           value to the Company, The Southern Company or any of
                           its affiliates and that is not generally known to the
                           public but is generally known only to the Company,
                           The Southern Company or any of its affiliates and
                           those of its employees, independent contractors or
                           agents to whom such information must be confided for
                           business purposes, regarding the products, services,
                           contractual arrangements, customers, suppliers, and
                           partners of the Company, The Southern Company or any
                           of its affiliates gained by Employee as a result of
                           his employment with the Company, including, but not
                           limited to, all information known to Employee
                           regarding any proceedings brought before the Georgia
                           Public Service Commission during his employment with
                           the Company. Confidential Information shall also
                           include other items that the Company may from time to
                           time mark or otherwise identify as confidential.

                  (ii)     "Entity" shall mean any business, individual,
                           partnership, joint venture, agency, governmental
                           subdivision, association, firm, corporation or other
                           entity.

                  (iii)    "Territory" shall include Georgia, Alabama,
                           Mississippi or Florida.

                  (iv)     "Trade Secrets" shall mean information of the
                           Company, The Southern Company or any of its
                           affiliates which (A) derives economic value, actual
                           or potential, from not being generally known to, and
                           not being readily ascertainable by proper means by,
                           other persons who can obtain economic value from its
                           disclosure or use; and (B) is the subject of efforts
                           that are reasonable under the circumstances to
                           maintain its secrecy; it being agreed that such
                           information includes, without limitation, non-public
                           information related to the rate making process of the
                           Company, The Southern Company or its affiliates,
                           technical and non-technical data, a formula, a
                           pattern, a compilation, a program, a device, a
                           method, a technique, a drawing, a process, financial
                           data, financial plans, product plans or a list of
                           actual or potential customers or suppliers or any
                           other information which is defined as a "trade
                           secret" under applicable law.

                  (v)      "Work Product" shall mean all tangible work product,
                           property, data, documentation, "know-how," concepts
                           or plans, inventions, improvements, techniques and
                           processes relating to the Company, The Southern
                           Company or any of its affiliates that were conceived,
                           discovered, created or developed by Employee pursuant
                           to his employment with the Company.

         (c) Nondisclosure: Ownership of Proprietary Property.

                  (i)      In recognition of the need of the Company to protect
                           its legitimate business interests, Employee hereby
                           covenants and agrees that: (a) with regard to each
                           item constituting all or any portion of a Trade
                           Secret at all times such information remains a "trade
                           secret" under applicable law and (b) with regard to
                           any Confidential Information, for a period of three
                           (3) years following the Termination Date (hereafter
                           the "Nondisclosure Period"), Employee shall regard
                           and treat Trade Secrets and all Confidential
                           Information as strictly confidential and wholly-owned
                           by the Company and shall not, for any reason, in any
                           fashion, either directly or indirectly, use, sell,
                           lend, lease, distribute, license, give, transfer,
                           assign, show, disclose, disseminate, reproduce, copy,
                           misappropriate or otherwise communicate any such item
                           or information to any third party or Entity for any
                           purpose other than in accordance with this Agreement
                           or as required by applicable law. Employee shall
                           exercise all reasonable best efforts to ensure the
                           continued confidentiality of all Trade Secrets and
                           Confidential Information of the Company known by,
                           disclosed to or made available to Employee in
                           connection with his employment relationship with the
                           Company or any other past or present relationship
                           with the Company. Employee shall immediately notify
                           the Company of any unauthorized disclosure or use of
                           any Trade Secrets or Confidential Information of
                           which Employee becomes aware. Employee shall assist
                           the Company, to the extent necessary, in the
                           procurement of any protection of the Company's rights
                           to or in any of the Trade Secrets or Confidential
                           Information.

                  (ii)     All Work Product shall be owned exclusively by the
                           Company. To the greatest extent possible, any Work
                           Product shall be deemed to be "work made for hire"
                           (as defined in the Copyright Act, 17 U.S.C.A.ss. 101
                           et seq., as amended), and Employee hereby
                           unconditionally and irrevocably transfers and assigns
                           to the Company all right, title and interest Employee
                           currently has or may have by operation of law or
                           otherwise in or to any Work Product, including,
                           without limitation, all patents, copyrights,
                           trademarks, trade secrets, service marks and other
                           intellectual property rights. Employee agrees to
                           execute and deliver to the Company any transfers,
                           assignments, documents or other instruments which the
                           Company may deem necessary or appropriate, from time
                           to time, to vest complete title and ownership of any
                           and all Work Product, and all associated intellectual
                           property and other rights therein, exclusively in the
                           Company.

                  (iii)    Employee represents and agrees that he will keep the
                           terms and amount of this Agreement completely
                           confidential, and except to his personal agents or to
                           the extent required by law, he will not hereafter
                           disclose this information concerning this Agreement
                           to anyone, including, but not limited to, any past,
                           present, or prospective employee or applicant for
                           employment with the Company. Employee may only
                           disclose to future, potential employers of Employee
                           that he participates in a deferred compensation and
                           consulting arrangement with the Company which imposes
                           certain restrictions on him related to such future,
                           potential employment. (d) No Employment.

                  Employee agrees that he shall not hereafter seek any
re-employment with the Company, its parent, its affiliates or its subsidiaries.

         (e) Non-Solicitation Of Employees.

         Employee agrees, during the three years following the Employee's
separation from employment, that he will not, either directly or indirectly,
alone or in conjunction with any other person or entity, actively recruit,
engage in passive hiring efforts, solicit, attempt to solicit, or induce any
person who, during such three year period, or within one year prior to
Employee's separation from employment, was an exempt employee of the Company or
any of its subsidiaries, or was an officer of The Southern Company or any of its
affiliates to leave or cease such employment for any reason whatsoever or hire
or engage the services of such person in any business substantially similar or
competitive with that in which The Southern Company and its affiliates were
engaged during the employment.

         (f) Non-Solicitation of Customers.

                  Employee acknowledges that in the course of employment, he has
learned about Company's business, services, materials, programs and products and
the manner in which they are developed, marketed, serviced and provided.
Employee knows and acknowledges that the Company has invested considerable time
and money in developing its programs, agreements, offices, representatives,
services, products and marketing techniques and that they are unique and
original. Employee further acknowledges that the Company must keep secret all
pertinent information divulged to Employee and Company's business concepts,
ideas, programs, plans and processes, so as not to aid Company's competitors.
Accordingly, Company is entitled to the following protection, which Employee
agrees is reasonable:

                  Employee agrees that for a period of two (2) years following
termination of employment, he will not, on his own behalf or on behalf of any
person, firm, partnership, association, corporation, or other business
organization, entity or enterprise, knowingly solicit, call upon, or initiate
communication or contact with any person or entity or any representative of any
person or entity, with whom Employee had contact during his employment, with a
view toward the sale or the providing of any product, equipment or service sold
or provided or under development by Company during the period of two (2) years
immediately preceding the date of Employee's termination. The restrictions set
forth in this section shall apply only to persons or entities with whom Employee
had actual contact during the two (2) years prior to termination of employment
with a view toward the sale or providing of any product, equipment or service
sold or provided or under development by Company.

         (g)      Non-Competition.

                  Employee and Company expressly covenant and agree that the
scope, territorial, time and other restrictions contained in this Agreement
constitute the most reasonable and equitable restrictions possible to protect
the business interest of the Company given: (i) the business of the Company;
(ii) the competitive nature of the Company's industry; and (iii) that Employee's
skills are such that he could easily find alternative, commensurate employment
or consulting work in his field which would not violate any of the provisions of
this Agreement. Therefore, Employee agrees to not engage within the Territory
for a period of two years from the date of separation from employment in any
activity in which Employee has participated in or directed on behalf of the
Company, The Southern Company or any of its affiliates within the past two
years.

         5. Return of Materials. Upon the Employee's termination, or at any
point after that time upon the specific request of the Company, Employee shall
return to the Company all written or descriptive materials of any kind belonging
or relating to the Company or its Affiliates, including, without limitation, any
Intellectual Property, Confidential Information and Trade Secrets, in Employee's
possession.

         6. Cooperation. The parties agree that as a result of Employee's duties
and activities during his employment, Employee's reasonable availability may be
necessary for the Company to meaningfully respond to or address actual or
threatened litigation, or government inquiries or investigations, or required
filings with state, federal or foreign agencies (hereinafter "Company Matters").
Upon request of the Company, and at any point following termination of
employment, Employee will make himself available to the Company for reasonable
periods consistent with his future employment, if any, by other Entities and
will cooperate with its agents and attorneys as reasonably required by such
Company matters. The Company will reimburse Employee for any reasonable
out-of-pocket expenses associated with providing such cooperation.

         7. Termination with Cause. In the event of Employee's termination of
employment for Cause at any time, the Employee shall forfeit the entire benefit
provided in Paragraph 2 and the Company shall have no further obligations with
respect to any amount under this Agreement. As used in this Agreement, the term
"Cause" shall mean gross negligence or willful misconduct in the performance of
the duties and services required in the course of employment by the Company; the
final conviction of a felony or misdemeanor involving moral turpitude; the
carrying out of any activity or the making of any statement which would
prejudice the good name and standing of the Company, or an affiliate or
subsidiary of the Southern Company (collectively "Southern") or would bring
Southern into contempt, ridicule or would reasonably shock or offend any
community in which Southern is located; a material breach of the fiduciary
obligations owed by an officer and an employee to Southern; or the Employee's
unsatisfactory performance of the duties and services required by his or her
employment.

         8. Confidentiality and Legal Process. Employee represents and agrees
that he will keep the terms, amount and fact of this Agreement confidential and
that he will not hereafter disclose any information concerning this Agreement to
any one other than his personal agents, including, but not limited to, any past,
present, or prospective employee or applicant for employment with Company.
Notwithstanding the foregoing, nothing in this Agreement is intended to prohibit
Employee from performing any duty or obligation that shall arise as a matter of
law. Specifically, Employee shall continue to be under a duty to truthfully
respond to any legal and valid subpoena or other legal process. This Agreement
is not intended in any way to proscribe Employee's right and ability to provide
information to any federal, state or local government in the lawful exercise of
such governments' governmental functions.

         9. Successors And Assigns; Applicable Law. This Agreement shall be
binding upon and inure to the benefit of Employee and his heirs, administrators,
representatives, executors, successors and assigns, and shall be binding upon
and inure to the benefit of Southern, the Company and their officers, directors,
employees, agents, shareholders, parent corporation and affiliates, and their
respective predecessors, successors, assigns, heirs, executors and
administrators and each of them, and to their heirs, administrators,
representatives, executors, successors and assigns. This Agreement shall be
construed and interpreted in accordance with the laws of the State of Georgia,
United States of America (without giving effect to principles of conflicts of
laws).

         10. Complete Agreement. This Agreement shall constitute the full and
complete Agreement between the parties concerning its subject matter and fully
supersedes any and all other prior Agreements or understandings between the
parties concerning the subject matter hereof. This Agreement shall not be
modified or amended except by a written instrument signed by both Employee and
an authorized representative of Southern and the Company.

         11. Severability. The unenforceability or invalidity of any particular
provision of this Agreement shall not affect its other provisions, and to the
extent necessary to give such other provisions effect, they shall be deemed
severable.

         12. Waiver Of Breach; Specific Performance. The waiver of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any other breach. Each of the parties to this Agreement will be entitled to
enforce its or his rights under this Agreement, specifically, to recover damages
by reason of any breach of any provision of this Agreement and to exercise all
other rights existing in its or his favor. The parties hereto agree and
acknowledge that money damages may not be an adequate remedy for any breach of
the provisions of this Agreement and that any party may in its or his sole
discretion apply to any court of law or equity of competent jurisdiction for
specific performance or injunctive relief in order to enforce or prevent any
violations of the provisions of this Agreement.

         13. Unsecured General Creditor. The Company shall neither reserve nor
specifically set aside funds for the payment of its obligations under this
Agreement, and such obligations shall be paid solely from the general assets of
the Company. Notwithstanding that Employee may be entitled to receive the value
of his benefit under the terms and conditions of this Agreement, the assets from
which such amount may be paid shall at all times be subject to the claims of the
Company's creditors.

         14. No Effect On Other Arrangements. It is expressly understood and
agreed that the payments made in accordance with this Agreement are in addition
to any other benefits or compensation to which Employee may be entitled or for
which he may be eligible, whether funded or unfunded, by reason of his
employment with the Company.

         15. Tax Withholding. There shall be deducted from each payment under
this Agreement the amount of any tax required by any governmental authority to
be withheld and paid over by the Company to such governmental authority for the
account of Employee.

         16. Compensation. Any compensation contributed on behalf of Employee
under this Agreement shall not be considered "compensation," as the term is
defined in The Southern Company Employee Savings Plan, The Southern Company
Employee Stock Ownership Plan, The Southern Company Performance Sharing Plan or
The Southern Company Pension Plan. Payments under this Agreement shall not be
considered wages, salaries or compensation under any other employee benefit
plan.

         17. No Guarantee of Employment. No provision of this Agreement shall be
construed to affect in any manner the existing rights of the Company to suspend,
terminate, alter, modify, whether or not for cause, the employment relationship
of Employee and the Company.

         IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
this ___ day of ________________, 2000.

                                    "COMPANY"

                                    GEORGIA POWER COMPANY

                                    By:
                                             ----------------------------------
                                    Its:
                                             ----------------------------------

                                   "EMPLOYEE"

                                   WAYNE T. DAHLKE




<PAGE>



                                  EXHIBIT 1 to

                         Deferred Compensation Agreement
                              with Wayne T. Dahlke

                                RELEASE AGREEMENT

         THIS RELEASE ("Release') is made and entered into by and between WAYNE
T. DAHLKE ("Employee") and GEORGIA POWER COMPANY, and its successor or assigns
("Company").

         WHEREAS, Employee and Company have agreed that Employee's employment
with Georgia Power Company shall terminate on September 1, 2000;

         WHEREAS, Employee and the Company have previously entered into that
certain Deferred Compensation Agreement, dated _________________, 2000
("Agreement"), that this Release is incorporated therein by reference;

         WHEREAS, Employee and Company desire to delineate their respective
rights, duties and obligations attendant to such termination and desire to reach
an accord and satisfaction of all claims arising from Employee's employment, and
his termination of employment, with appropriate releases, in accordance with the
Agreement;

         WHEREAS, the Company desires to provide Employee with deferred
compensation in accordance with the Agreement for service he has or will provide
for the Company;

         NOW, THEREFORE, in consideration of the premises and the agreements of
the parties set forth in this Release, and other good and valuable consideration
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby covenant and agree as follows:

         1. Release. Employee does hereby remise, release and forever discharge
the Company and their officers, directors, employees, agents, shareholders,
parent corporation and affiliates, and their respective predecessors,
successors, assigns, heirs, executors and administrators (collectively,
"Releasees"), of and from all manner of actions and causes of action, suits,
debts, claims and demands whatsoever at law or in equity, known or unknown,
actual or contingent, including, but not limited to, any claims which have been
asserted, or could be asserted now or in the future, against any Releasees
arising under any and all federal, state or local laws and any common law
claims, and including, but not limited to, any claims Employee may have pursuant
to the Age Discrimination in Employment Act and any claims to benefits under any
and all offer letters, employment or separation agreements, or bonus, severance,
workforce reduction, early retirement, out-placement, or other similar plans
sponsored by the Company, now or hereafter recognized (collectively, "Claims"),
which he ever had or now has or may in the future have, by reason of any matter,
cause or thing arising out of his employment relationship and privileges, his
serving as an employee of the Company or the separation from his employment
relationship or affiliation as an employee of the Company as of the date of this
Release against each of the Releasees. Notwithstanding the foregoing, Employee
does not release any Claims under the Age Discrimination in Employment Act that
may arise after his execution of this Release.

         2. No Assignment of Claim. Employee represents that he has not assigned
or transferred, or purported to assign or transfer, any Claims or any portion
thereof or interest therein to any party prior to the date of this Release.

         3. Deferred Compensation. In accordance with the Deferred Compensation
Agreement, the Company agrees to pay the Employee or his spouse, as the case may
be, the amounts provided in Paragraph 2 of the Agreement.

         4. No Admission Of Liability. This Release shall not in any way be
construed as an admission by the Company or Employee of any improper actions or
liability whatsoever as to one another, and each specifically disclaims any
liability to or improper actions against the other or any other person, on the
part of itself or himself, its or his employees or agents.

         5. Voluntary Execution. Employee warrants, represents and agrees that
he has been encouraged in writing to seek advice from anyone of his choosing
regarding this Release, including his attorney and accountant or tax advisor
prior to his signing it; that this Release represents written notice to do so;
that he has been given the opportunity and sufficient time to seek such advice;
and that he fully understands the meaning and contents of this Release. He
further represents and warrants that he was not coerced, threatened or otherwise
forced to sign this Release, and that his signature appearing hereinafter is
voluntary and genuine. EMPLOYEE UNDERSTANDS THAT HE MAY TAKE UP TO TWENTY-ONE
(21) DAYS TO CONSIDER WHETHER OR NOT HE DESIRES TO ENTER INTO THIS RELEASE.

         6. Ability to Revoke Agreement. EMPLOYEE UNDERSTANDS THAT HE MAY REVOKE
THIS RELEASE BY NOTIFYING THE COMPANY IN WRITING OF SUCH REVOCATION WITHIN SEVEN
(7) DAYS OF HIS EXECUTION OF THIS RELEASE AND THAT THIS RELEASE IS NOT EFFECTIVE
UNTIL THE EXPIRATION OF SUCH SEVEN (7) DAY PERIOD. HE UNDERSTANDS THAT UPON THE
EXPIRATION OF SUCH SEVEN (7) DAY PERIOD THIS RELEASE WILL BE BINDING UPON HIM
AND HIS HEIRS, ADMINISTRATORS, REPRESENTATIVES, EXECUTORS, SUCCESSORS AND
ASSIGNS AND WILL BE IRREVOCABLE.


<PAGE>


Acknowledged and Agreed To:
                                    "COMPANY"

                                     GEORGIA POWER COMPANY

                                     By:
                                              ---------------------------------
                                     Its:
                                              ---------------------------------

I UNDERSTAND THAT BY SIGNING THIS RELEASE, I AM GIVING UP RIGHTS I MAY HAVE. I
UNDERSTAND THAT I DO NOT HAVE TO SIGN THIS RELEASE.

                                   "EMPLOYEE"

                                   WAYNE T. DAHLKE

                                   -----------------------------------------
Date

WITNESSED BY:

- --------------------------------------------

- --------------------------------------------
Date
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>45
<FILENAME>x10a100.txt
<TEXT>


                                                                EXHIBIT 10(a)100


                                     FORM OF

                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT

                                     BETWEEN

                              THE SOUTHERN COMPANY

                                       AND

                              SOUTHERN ENERGY, INC.



<PAGE>


                                TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                       Page
<S>                                                                                                    <C>
ARTICLE I  SEPARATION....................................................................................2
   Section 1.1. Separation Date..........................................................................2
   Section 1.2. Closing of Transactions..................................................................2
   Section 1.3. Exchange of Secretary's Certificates.....................................................2
ARTICLE II  DOCUMENTS TO BE DELIVERED ON THE SEPARATION DATE.............................................2
   Section 2.1. Documents to Be Delivered By Southern....................................................2
   Section 2.2 Documents to Be Delivered by Southern Energy..............................................3
ARTICLE III   THE IPO AND ACTIONS PENDING THE IPO........................................................3
   Section 3.1 Transactions Prior to the IPO.............................................................3
   Section 3.2. Use of Proceeds..........................................................................4
   Section 3.3 Cooperation...............................................................................4
   Section 3.4 Conditions Precedent to Consummation of the IPO...........................................4
ARTICLE IV  THE DISTRIBUTION.............................................................................6
   Section 4.1  The Distribution.........................................................................6
   Section 4.2  Actions Prior To The Distribution........................................................6
   Section 4.3 Sole Discretion of Southern...............................................................7
   Section 4.4 Conditions To Distribution................................................................8
   Section 4.5 Fractional Shares.........................................................................8
ARTICLE V  COVENANTS AND OTHER MATTERS...................................................................9
   Section 5.1 Other Agreements..........................................................................9
   Section 5.2 Further Instruments.......................................................................9
   Section 5.3 Agreement For Exchange of Information.....................................................9
   Section 5.4 Auditors and Audits; Annual and Quarterly Statements and Accounting......................11
   Section 5.5 Consistency with Past Practices..........................................................13
   Section 5.6 Payment of Expenses......................................................................13
   Section 5.7 Dispute Resolution.......................................................................13
   Section 5.8 Governmental Approvals...................................................................14
   Section 5.9 Regulatory Proceedings...................................................................15
   Section 5.10 Regulatory Effect of Distribution.......................................................15
   Section 5.11 HoldCo Transaction......................................................................15
   Section 5.12. Continuance of Southern Credit Support.................................................16
   Section 5.13. Mobile Facility........................................................................16
   Section 5.14 Assignment of Agreements................................................................17
   Section 5.15 Southern Energy Board Representation....................................................17
ARTICLE VI  MISCELLANEOUS...............................................................................18
   Section 6.1 LIMITATION OF LIABILITY..................................................................18
   Section 6.2 Entire Agreement.........................................................................18
   Section 6.3 Governing Law............................................................................18
   Section 6.4 Termination..............................................................................18
   Section 6.5 Notices..................................................................................18
   Section 6.6 Counterparts.............................................................................19
   Section 6.7 Binding Effect; Assignment...............................................................19
   Section 6.8 Severability.............................................................................19
</TABLE>


<PAGE>


<TABLE>
<S>                                                                                                    <C>
   Section 6.9 Failure or Indulgence Not Waiver; Remedies Cumulative....................................19
   Section 6.10 Amendment...............................................................................19
   Section 6.11 Authority...............................................................................19
   Section 6.12 Interpretation..........................................................................20
   Section 6.13 Conflicting Agreements..................................................................20
ARTICLE VII  DEFINITIONS................................................................................20
   Section 7.1 Affiliated Company.......................................................................20
   Section 7.2 Ancillary Agreements.....................................................................20
   Section 7.3 Business Day.............................................................................20
   Section 7.4 Change of Control Date...................................................................20
   Section 7.5 Code.....................................................................................20
   Section 7.6 Commission...............................................................................20
   Section 7.7 Disputes.................................................................................21
   Section 7.8 Distribution.............................................................................21
   Section 7.9 Distribution Agent.......................................................................21
   Section 7.10 Distribution Date.......................................................................21
   Section 7.11 Exchange Act............................................................................21
   Section 7.12 Governmental Approvals..................................................................21
   Section 7.13 Governmental Authority..................................................................21
   Section 7.14 HoldCo Transaction......................................................................21
   Section 7.15 Information.............................................................................21
   Section 7.16 IPO.....................................................................................21
   Section 7.17 IPO Closing Date........................................................................21
   Section 7.18 IPO Registration Statement..............................................................21
   Section 7.19 NYSE....................................................................................22
   Section 7.20 Person..................................................................................22
   Section 7.21 Record Date.............................................................................22
   Section 7.22 SE Finance..............................................................................22
   Section 7.23 SE Capital Funding......................................................................22
   Section 7.24 Separation..............................................................................22
   Section 7.25 Separation Date.........................................................................22
   Section 7.26 Southern Business.......................................................................22
   Section 7.27 Southern Energy Business................................................................22
   Section 7.28 Southern Energy Group...................................................................22
   Section 7.29 Southern Energy Auditors................................................................23
   Section 7.30 Southern Group..........................................................................23
   Section 7.31 Southern's Auditors.....................................................................23
   Section 7.32 Subsidiary..............................................................................23
   Section 7.33 Troutman Sanders........................................................................23
   Section 7.34 Underwriters............................................................................23
   Section 7.35 Underwriting Agreement..................................................................23
   Schedule 5.11  HoldCo Transaction
   Schedule 5.12  Plant Dahlberg Transaction
   Schedule 5.14  Transferred Agreements
   Schedule 7.1   Southern Energy Affiliated Companies
</TABLE>



<PAGE>


                  MASTER SEPARATION AND DISTRIBUTION AGREEMENT


    THIS MASTER SEPARATION AND DISTRIBUTION AGREEMENT (this "Agreement") is
entered into as of September 1, 2000, between The Southern Company ("Southern"),
a Delaware corporation, and Southern Energy, Inc. ("Southern Energy"), a
Delaware corporation. Capitalized terms used herein and not otherwise defined
shall have the meanings ascribed to such terms in Article VII hereof.



                                    RECITALS

    WHEREAS, the Boards of Directors of Southern and Southern Energy have each
determined that it would be appropriate and desirable for Southern to separate
the Southern Energy Group from the Southern Group (the "Separation"), and, in
connection with the Separation, for Southern to acquire certain entities
currently associated with the Southern Energy Business from Southern Energy, and
for Southern Energy to acquire certain assets from Southern; and

    WHEREAS, Southern and Southern Energy currently contemplate that, in
connection with the Separation, Southern Energy will make an initial public
offering ("IPO") of an amount of its common stock pursuant to a registration
statement on Form S-1 pursuant to the Securities Act of 1933, as amended (the
"IPO Registration Statement"), that will reduce Southern's ownership of Southern
Energy by less than 20%; and


    WHEREAS, Southern and Southern Energy further currently contemplate that, in
connection with the Separation, Southern Energy will transfer two of its
wholly-owned Subsidiaries, SE Finance and SE Capital Funding, to Southern (the
"HoldCo Transaction"), and Southern will assume certain liabilities in
connection therewith; and


    WHEREAS, Southern currently contemplates that, within twelve months
following the IPO, Southern will distribute to the holders of its common stock,
by means of a pro rata distribution, all of the shares of Southern Energy common
stock then owned by Southern (the "Distribution"); and

    WHEREAS, Southern and Southern Energy intend that the Distribution will
qualify as a tax-free distribution under Section 355 of the Internal Revenue
Code of 1986, as amended (the "Code"), and that this Agreement is intended to
be, and is hereby adopted as, a plan of reorganization under Section 368 of the
Code; and

    WHEREAS, the parties intend in this Agreement, including the Exhibits and
Schedules hereto, to set forth the principal arrangements between them regarding
the Separation.

<PAGE>


    NOW, THEREFORE, in consideration of the foregoing and the covenants and
agreements set forth below, the parties hereto agree as follows:


                                    ARTICLE I

                                   SEPARATION


    Section 1.1. Separation Date. Unless otherwise provided in this Agreement,
or in any agreement to be executed in connection with this Agreement, the
effective time and date of each undertaking or agreement in connection with the
Separation shall be as of 12:01 a.m., Eastern Time, September 1, 2000 or such
other date as may be fixed by Southern (the "Separation Date").


    Section 1.2. Closing of Transactions. Unless otherwise provided herein, the
closing of the transactions contemplated in Article II shall occur by the
lodging of each of the executed agreements, instruments or other documents to be
executed pursuant to this Agreement with Troutman Sanders LLP, 600 Peachtree
Street, Suite 5200, Atlanta, Georgia 30308, to be held in escrow for delivery as
provided in Section 1.3 of this Agreement.

    Section 1.3. Exchange of Secretary's Certificates. Upon receipt of a
certificate of the Secretary or an Assistant Secretary of Southern in the form
attached to this Agreement as Exhibit A, Troutman Sanders shall deliver to
Southern Energy on behalf of Southern all of the items required to be delivered
by Southern hereunder pursuant to Section 2.1 of this Agreement and each such
item shall be deemed to be delivered to Southern Energy as of the Separation
Date upon delivery of such certificate. Upon receipt of a certificate of the
Secretary or an Assistant Secretary of Southern Energy in the form attached to
this Agreement as Exhibit B, Troutman Sanders shall deliver to Southern on
behalf of Southern Energy all of the items required to be delivered by Southern
Energy hereunder and each such item shall be deemed to be delivered to Southern
as of the Separation Date upon receipt of such certificate.

                                   ARTICLE II

                DOCUMENTS TO BE DELIVERED ON THE SEPARATION DATE



    Section 2.1. Documents to Be Delivered By Southern. On the Separation Date,
Southern will deliver, or will cause its appropriate Subsidiaries to deliver, to
Southern Energy all of the following items and agreements (collectively,
together with all agreements and documents contemplated by this Agreement and
such other agreements, including any agreements, the "Ancillary Agreements"):





                                       2



<PAGE>

        (a) A duly executed Technology and Intellectual Property Ownership and
            License Agreement substantially in the form attached hereto as
            Exhibit C;

        (b) A duly executed Employee Matters Agreement substantially in the form
            attached hereto as Exhibit D;


        (c) A duly executed Tax Indemnification Agreement substantially in the
            form attached hereto as Exhibit E;


        (d) A duly executed Transitional Services Agreement substantially in the
            form attached hereto as Exhibit F;

        (e) A duly executed Confidential Disclosure Agreement substantially in
            the form attached hereto as Exhibit G;

        (f) A duly executed Indemnification and Insurance Matters Agreement
            substantially in the form attached hereto as Exhibit H;

        (g) Such other agreements, documents or instruments as the parties may
            agree are necessary or desirable in order to achieve the purposes
            hereof.

    Section 2.2 Documents to Be Delivered by Southern Energy. As of the
Separation Date, in each case where Southern Energy or any of its Subsidiaries
is a party to any agreement or instrument referred to in Section 2.1, Southern
Energy will or will cause its appropriate Subsidiaries to deliver to Southern a
duly executed counterpart of such agreement or instrument.

                                   ARTICLE III

                       THE IPO AND ACTIONS PENDING THE IPO

    Section 3.1 Transactions Prior to the IPO. Subject to the conditions
specified in Section 3.4, Southern and Southern Energy shall use their
reasonable commercial efforts to consummate the IPO. Such efforts shall include,
but not necessarily be limited to, those specified in this Section 3.1:


        (a)       Registration Statement. Southern Energy shall file the IPO
Registration Statement, and such amendments or supplements thereto, as may be
necessary in order to cause the same to become and remain effective as required
by law or by the managing underwriters for the IPO (the "Underwriters"),
including, but not limited to, filing such amendments to the IPO Registration
Statement as may be required by the underwriting agreement to be entered into
among Southern Energy and the Underwriters (the "Underwriting Agreement"), the
Securities and Exchange Commission (the "Commission") or federal, state or
foreign securities laws. Southern and Southern Energy



                                       3
<PAGE>


shall also cooperate in preparing, filing with the Commission and causing to
become effective a registration statement registering the common stock of
Southern Energy under the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and any registration statements or amendments thereof which are
required to reflect the establishment of, or amendments to, any employee benefit
and other plans necessary or appropriate in connection with the IPO, the
Separation, the Distribution or the other transactions contemplated by this
Agreement.



    (b) Underwriting Agreement. Southern Energy shall enter into the
Underwriting Agreement, in form and substance reasonably satisfactory to
Southern Energy, and shall comply with its obligations thereunder.


    (c) Other Matters. Southern and Southern Energy shall consult with each
other and the Underwriters regarding the timing, pricing and other material
matters with respect to the IPO.

    (d) Blue Sky. Southern Energy shall use its reasonable commercial efforts to
take all such action as may be necessary or appropriate under state securities
and blue sky laws of the United States (and any comparable laws under any
foreign jurisdictions) in connection with the IPO.

    (e) NYSE Listing. Southern Energy shall prepare, file and use reasonable
commercial efforts to seek to make effective, an application for listing of the
common stock of Southern Energy issued in the IPO on the New York Stock Exchange
(the "NYSE"), subject to official notice of issuance.

    Section 3.2. Use of Proceeds. The proceeds of the IPO will be retained by
Southern Energy to be used for general corporate purposes.

    Section 3.3 Cooperation. Southern Energy shall consult with, and cooperate
in all respects with, Southern in connection with the pricing of the common
stock of Southern Energy to be offered in the IPO and shall, at Southern's
direction, promptly take any and all actions necessary or desirable to
consummate the IPO as contemplated by the IPO Registration Statement and the
Underwriting Agreement.

    Section 3.4 Conditions Precedent to Consummation of the IPO. As soon as
practicable after the Separation Date, the parties hereto shall use their
reasonable commercial efforts to satisfy the conditions listed below to the
consummation of the IPO. The obligations of the parties to use their reasonable
commercial efforts to consummate the IPO shall be conditioned on the
satisfaction, or waiver by Southern, of the following conditions:

    (a) Registration Statement. The IPO Registration Statement shall have been
filed and declared effective by the Commission, and there shall be no stop-order
in effect with respect thereto.



                                       4


<PAGE>

    (b) Blue Sky. The actions and filings with regard to state securities and
blue sky laws of the United States (and any comparable laws under any foreign
jurisdictions) described in Section 3.1(d) shall have been taken and, where
applicable, have become effective or been accepted.

    (c) NYSE Listing. The common stock of Southern Energy to be issued in the
IPO shall have been accepted for listing on the NYSE, on official notice of
issuance.

    (d) Underwriting Agreement. Southern Energy shall have entered into the
Underwriting Agreement and all conditions to the obligations of Southern Energy
and the Underwriters shall have been satisfied or waived.


    (e) Common Stock Ownership. Southern shall be satisfied in its sole
discretion that it will own more than 80% of the outstanding common stock of
Southern Energy following the IPO. All other conditions to permit the
Distribution to qualify as a tax-free distribution to Southern, Southern Energy
and Southern's stockholders shall, to the extent applicable as of the time of
the IPO, be satisfied, and there shall be no event or condition that is likely
to cause any of such conditions not to be satisfied as of the time of the
Distribution or thereafter.


    (f) Governmental Approvals. Any material Governmental Approvals necessary to
consummate the IPO shall have been obtained and be in full force and effect.


    (g) No Legal Restraints. No order, injunction or decree issued by any court
or agency of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Separation or the IPO or any of the other
transactions contemplated by this Agreement shall be in effect.


    (h) Separation. The Separation shall have become effective.

    (i) Other Actions. Such other actions as the parties hereto may, based upon
the advice of counsel, reasonably request to be taken prior to the IPO in order
to assure the successful completion of the IPO shall have been taken.

    (j) No Termination. This Agreement shall not have been terminated.



                                       5


<PAGE>

                                   ARTICLE IV

                                THE DISTRIBUTION

      Section 4.1 The Distribution.

    (a) Delivery of Shares for Distribution. Subject to Section 4.4 hereof, on
or prior to the date the Distribution is effective (the "Distribution Date"),
Southern will deliver to the distribution agent to be appointed by Southern, or
if no distribution agent is appointed, then Southern (the "Distribution Agent"),
to distribute to the stockholders of Southern the shares of common stock of
Southern Energy held by Southern pursuant to the Distribution for the benefit of
holders of record of common stock of Southern on the Record Date, a single stock
certificate, endorsed by Southern in blank, representing all of the outstanding
shares of common stock of Southern Energy then owned by Southern, and shall
cause the transfer agent for the shares of common stock of Southern to instruct
the Distribution Agent to distribute on the Distribution Date the appropriate
number of such shares of common stock of Southern Energy to each such holder or
designated transferee or transferees of such holder.

    (b) Shares Received. Subject to Sections 4.4 and 4.5, each holder of common
stock of Southern on the Record Date (or such holder's designated transferee or
transferees) will be entitled to receive in the Distribution a number of shares
of common stock of Southern Energy equal to the number of shares of common stock
of Southern held by such holder on the Record Date multiplied by a fraction the
numerator of which is the number of shares of common stock of Southern Energy
beneficially owned by Southern on the Record Date and the denominator of which
is the number of shares of common stock of Southern outstanding on the Record
Date.


    (c) Obligation to Provide Information. Southern Energy and Southern, as the
case may be, will provide to the Distribution Agent all share certificates and
any information required in order to complete the Distribution on the basis
specified above.



    Section 4.2 Actions Prior To The Distribution.

    (a) Information Statement. Southern and Southern Energy shall prepare and
mail, prior to the Distribution Date, to the holders of common stock of Southern
such information concerning Southern Energy and the Distribution and such other
matters as Southern shall reasonably determine are necessary and as may be
required by law. Southern and Southern Energy will prepare, and Southern Energy
will, to the extent required under applicable law, file with the Commission any
such documentation which Southern and Southern Energy determines is necessary or
desirable to effectuate the Distribution, and Southern and Southern Energy shall
each use its reasonable commercial efforts to obtain all necessary approvals
from the Commission with respect thereto as soon as practicable.



                                       6


<PAGE>

    (b) Blue Sky. Southern and Southern Energy shall take all such actions as
may be necessary or appropriate under the securities or blue sky laws of the
United States (and any comparable laws under any foreign jurisdiction) in
connection with the Distribution.

    (c) NYSE Listing. Southern Energy shall prepare and file, and shall use its
reasonable commercial efforts to have approved, an application for the listing
of the common stock of Southern Energy to be distributed in the Distribution on
the NYSE, subject to official notice of distribution.

    (d) Resignation of Directors and Officers. Immediately prior to the
Distribution, (i) each person who is an officer, director or employee of any
member of the Southern Group and an officer, director or employee of any member
of the Southern Energy Group immediately prior to the Distribution (each a
"Joint Employee") and who is to continue as an officer, director or employee of
any member of the Southern Group after the Distribution shall resign from each
of such person's positions with each member of the Southern Energy Group, and
(ii) each such Joint Employee who is to continue as an officer, director or
employee of any member of the Southern Energy Group, after the Distribution,
shall resign from each of such person's positions with each member of the
Southern Group.

    (e) Conditions. Southern and Southern Energy shall take all reasonable steps
necessary and appropriate to cause the conditions set forth in Section 4.4 to be
satisfied and to effect the Distribution on the Distribution Date.


    Section 4.3 Sole Discretion of Southern. Southern currently intends,
following the consummation of the IPO, to complete the Distribution within
twelve (12) months of the IPO Closing Date. Southern shall, in its sole and
absolute discretion, determine the date of the consummation of the Distribution
and all terms of the Distribution, including, without limitation, the form,
structure and terms of any transaction(s) and/or offering(s) to effect the
Distribution and the timing of and conditions to the consummation of the
Distribution. In addition, Southern may at any time and from time to time until
the completion of the Distribution decide to abandon the Distribution or modify
or change the terms of the Distribution, including, without limitation, by
accelerating or delaying the timing of the consummation of all or part of the
Distribution. Southern Energy shall cooperate with Southern in all respects to
accomplish the Distribution and shall, at Southern's direction, promptly take
any and all actions necessary or desirable to effect the Distribution,
including, without limitation, the registration under the Securities Act of the
common stock of Southern Energy on an appropriate registration form or forms to
be designated by Southern. Southern shall select any investment banker(s) and
manager(s) in connection with the Distribution, as well as any financial
printer, solicitation and/or exchange agent and outside counsel for Southern;
provided, however, that nothing herein shall prohibit Southern Energy from
engaging (at its own expense) its own financial, legal, accounting and other
advisors in connection with the Distribution.




                                       7

<PAGE>

    Section 4.4 Conditions To Distribution. The following are conditions to the
consummation of the Distribution. The conditions are for the sole benefit of
Southern and shall not give rise to or create any duty on the part of Southern
or the Southern Board of Directors to waive or not waive any such condition.

    (a) IRS Ruling. Southern shall have obtained a private letter ruling from
the Internal Revenue Service in form and substance satisfactory to Southern (in
its sole discretion), and such ruling shall remain in effect as of the
Distribution Date, to the effect that (i) the distribution by Southern of all of
its Southern Energy stock to the stockholders of Southern will qualify as a
reorganization under Section 355 of the Code; and (ii) no gain or loss will be
recognized by (and no amount will otherwise be included in the income of) the
stockholders of Southern upon their receipt of Southern Energy common stock
pursuant to the Distribution.


    (b) Governmental Approvals. Any material Governmental Approvals necessary to
consummate the Distribution and the HoldCo Transaction shall have been obtained
and be in full force and effect;


    (c) No Legal Restraints. No order, injunction or decree issued by any court
or agency of competent jurisdiction or other legal restraint or prohibition
preventing the consummation of the Distribution shall be in effect and no other
event outside the control of Southern shall have occurred or failed to occur
that prevents the consummation of the Distribution; and

    (d) No Material Adverse Effect. No other events or developments shall have
occurred subsequent to the IPO Closing Date that, in the judgment of the Board
of Directors of Southern, would result in the Distribution having a material
adverse effect on Southern or on the stockholders of Southern.


    Section 4.5 Fractional Shares. As soon as practicable after the Distribution
Date, Southern shall direct the Distribution Agent to determine the number of
whole shares and fractional shares of common stock of Southern Energy allocable
to each holder of record or beneficial owner of common stock of Southern as of
the Record Date, to aggregate all such fractional shares and sell the whole
shares obtained thereby at the direction of Southern, in open market
transactions, at then prevailing trading prices, and to cause to be distributed
to each such holder or for the benefit of each such beneficial owner to which a
fractional share shall be allocable such holder's or owner's ratable share of
the proceeds of such sale, after making appropriate deductions of the amount
required to be withheld for federal income tax purposes and after deducting an
amount equal to all brokerage charges, commissions and transfer taxes attributed
to such sale. Southern and the Distribution Agent shall use their reasonable
commercial efforts to aggregate the shares of common stock of Southern that may
be held by any beneficial owner thereof through more than one account in
determining the fractional share allocable to such beneficial owner.




                                       8


<PAGE>


                                    ARTICLE V

                           COVENANTS AND OTHER MATTERS

    Section 5.1 Other Agreements. In addition to the specific agreements,
documents and instruments annexed to this Agreement, Southern and Southern
Energy agree to execute or cause to be executed by the appropriate parties and
deliver, as appropriate, such other agreements, instruments and other documents
as may be necessary or desirable in order to effect the purposes of this
Agreement and the Ancillary Agreements.

    Section 5.2 Further Instruments. At the request of Southern Energy and
without further consideration, Southern will execute and deliver, and will cause
its applicable Subsidiaries to execute and deliver, to Southern Energy and its
Subsidiaries such other instruments of transfer, conveyance, assignment,
substitution and confirmation and take such action as Southern Energy may
reasonably deem necessary or desirable in order more effectively to transfer,
convey and assign to Southern Energy and its Subsidiaries and confirm Southern
Energy's and its Subsidiaries' title to all of the assets, rights and other
things of value contemplated to be transferred to Southern Energy and its
Subsidiaries pursuant to this Agreement, the Ancillary Agreements, and any
documents referred to therein, to put Southern Energy and its Subsidiaries in
actual possession and operating control thereof and to permit Southern Energy
and its Subsidiaries to exercise all rights with respect thereto (including,
without limitation, rights under contracts and other arrangements as to which
the consent of any third party to the transfer thereof shall not have previously
been obtained). At the request of Southern and without further consideration,
Southern Energy will execute and deliver, and will cause its applicable
Subsidiaries to execute and deliver, to Southern and its Subsidiaries all
instruments, assumptions, novations, undertakings, substitutions or other
documents and take such other action as Southern may reasonably deem necessary
or desirable in order to have Southern Energy fully and unconditionally assume
and discharge the liabilities contemplated to be assumed by Southern Energy
under this Agreement or any document in connection herewith and to relieve the
Southern Group of any liability or obligation with respect thereto and evidence
the same to third parties. Neither Southern nor Southern Energy shall be
obligated, in connection with the foregoing, to expend money other than
reasonable out-of-pocket expenses, attorneys' fees and recording or similar
fees. Furthermore, each party, at the request of another party hereto, shall
execute and deliver such other instruments and do and perform such other acts
and things as may be necessary or desirable for effecting completely the
consummation of the transactions contemplated hereby.


    Section 5.3 Agreement For Exchange of Information. Each of Southern and
Southern Energy agrees to provide, or cause to be provided, to each other, at
any time before or after the Change of Control Date, as soon as reasonably
practicable after written request therefor, any Information in the possession or
under the control of such party that the requesting party reasonably needs (i)
to comply with reporting, disclosure, filing or




                                       9


<PAGE>


other requirements imposed on the requesting party (including under applicable
securities laws) by a Governmental Authority having jurisdiction over the
requesting party, (ii) for use in any other judicial, regulatory, administrative
or other proceeding or in order to satisfy audit, accounting, claims,
regulatory, litigation or other similar requirements, (iii) to comply with its
obligations under this Agreement or any Ancillary Agreement or (iv) in
connection with the ongoing businesses of Southern or Southern Energy as it
relates to the conduct of such businesses prior to the Change of Control Date,
as the case may be; provided, however, that in the event that any party
determines that any such provision of Information could be commercially
detrimental, violate any law or agreement, or waive any attorney-client
privilege, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm or
consequence.


    (a) Internal Accounting Controls; Financial Information. After the
Separation Date, (i) each party shall maintain in effect at its own cost and
expense adequate systems and controls for its business to the extent necessary
to enable the other party to satisfy its reporting, accounting, audit and other
obligations, and (ii) each party shall provide, or cause to be provided, to the
other party and its Subsidiaries in such form as such requesting party shall
request, at no charge to the requesting party, all financial and other data and
information as the requesting party determines necessary or advisable in order
to prepare its financial statements and reports or filings with any Governmental
Authority.

    (b) Ownership of Information. Any Information owned by a party that is
provided to a requesting party pursuant to this Section 5.3 shall be deemed to
remain the property of the providing party. Unless specifically set forth
herein, nothing contained in this Agreement shall be construed as granting or
conferring rights of license or otherwise in any such Information.


    (c) Record Retention. To facilitate the possible exchange of Information
pursuant to this Section 5.3 and other provisions of this Agreement after the
Change of Control Date, each party agrees to use its reasonable commercial
efforts to retain all Information in its respective possession or control on the
Change of Control Date substantially in accordance with its policies as in
effect on the Separation Date. Southern Energy shall not amend its or its
Subsidiaries' record retention policies prior to the Change of Control Date
without the consent of Southern. However, except as set forth in the Tax
Indemnification Agreement, at any time after the Change of Control Date, each
party may amend their respective record retention policies at such party's
discretion; provided, however, that if a party desires to effect the amendment
within three (3) years after the Change of Control Date, the amending party must
give thirty (30) days prior written notice of such change in the policy to the
other party to this Agreement. No party will destroy, or permit any of its
Subsidiaries to destroy, any Information that exists on the Separation Date
(other than Information that is permitted to be destroyed under the current
record retention policy of such party) without first using its reasonable
commercial efforts to notify the other party of the proposed destruction and
giving the other party the opportunity to take possession of such Information
prior to such destruction.




                                       10


<PAGE>

    (d) Limitation of Liability. No party shall have any liability to any other
party in the event that any Information exchanged or provided pursuant to this
Section is found to be inaccurate, in the absence of willful misconduct by the
party providing such Information. No party shall have any liability to any other
party if any Information is destroyed or lost after reasonable commercial
efforts by such party to comply with the provisions of Section 5.4(c).


    (e) Other Agreements Providing For Exchange of Information. The rights and
obligations granted under this Section 5.3 are subject to any specific
limitations, qualifications or additional provisions on the sharing, exchange or
confidential treatment of Information set forth in this Agreement and any
Ancillary Agreement.



    (f) Production of Witnesses; Records; Cooperation. Each party hereto shall,
except in the case of a legal or other proceeding by one party against another
party (which shall be governed by such discovery rules as may be applicable
under Section 5.7 or otherwise), use its reasonable commercial efforts to make
available to each other party, upon written request, the former, current and
future directors, officers, employees, other personnel and agents of such party
as witnesses and any books, records or other documents within its control or
which it otherwise has the ability to make available, to the extent that any
such person (giving consideration to business demands of such directors,
officers, employees, other personnel and agents) or books, records or other
documents may reasonably be required in connection with any legal, regulatory,
administrative or other proceeding in which the requesting party may from time
to time be involved, regardless of whether such legal, regulatory,
administrative or other proceeding is a matter with respect to which
indemnification may be sought hereunder. The requesting party shall bear all
costs and expenses in connection therewith.


    Section 5.4 Auditors and Audits; Annual and Quarterly Statements and
Accounting. Each party agrees that, for so long as Southern Energy remains a
Subsidiary of Southern, and with respect to any financial reporting period
during which Southern Energy was a Subsidiary of Southern:

    (a) Selection of Auditors. Southern Energy shall not select a different
accounting firm than the firm selected by Southern to audit its financial
statements to serve as its independent certified public accountants (the
"Southern Energy Auditors") for purposes of providing an opinion on its
consolidated financial statements without Southern's prior written consent
(which shall not be unreasonably withheld).


    (b) Date of Auditors' Opinion and Quarterly Reviews. Southern Energy shall
use its reasonable commercial efforts to enable the Southern Energy Auditors to
complete their audit such that they will date their opinion on Southern Energy's
audited annual financial statements on the same date that Southern's independent
certified public accountants ("Southern's Auditors") date their opinion on
Southern's audited annual financial statements, and to enable Southern to meet
its timetable for the printing, filing



                                       11

<PAGE>


and public dissemination of Southern's annual financial statements. Southern
Energy shall use its reasonable commercial efforts to enable the Southern Energy
Auditors to complete their quarterly review procedures such that they will
provide clearance on Southern Energy's quarterly financial statements on the
same date that Southern's Auditors provide clearance on Southern's quarterly
financial statements.



    (c) Annual and Quarterly Financial Statements. Southern Energy shall provide
to Southern on a timely basis all Information that Southern reasonably requires
to meet its schedule for the preparation, printing, filing, and public
dissemination of Southern's annual and quarterly financial statements. Without
limiting the generality of the foregoing, Southern Energy will provide all
required financial Information with respect to Southern Energy and its
Subsidiaries to the Southern Energy Auditors in a sufficient and reasonable time
and in sufficient detail to permit the Southern Energy Auditors to take all
steps and perform all reviews necessary to provide sufficient assistance to
Southern's Auditors with respect to Information to be included or contained in
Southern's annual and quarterly financial statements. Similarly, Southern shall
provide to Southern Energy on a timely basis all Information that Southern
Energy reasonably requires to meet its schedule for the preparation, printing,
filing, and public dissemination of Southern Energy's annual and quarterly
financial statements. Without limiting the generality of the foregoing, Southern
will provide all required financial Information with respect to Southern and its
Subsidiaries to Southern's Auditors in a sufficient and reasonable time and in
sufficient detail to permit Southern's Auditors to take all steps and perform
all reviews necessary to provide sufficient assistance to the Southern Energy
Auditors with respect to Information to be included or contained in Southern
Energy's annual and quarterly financial statements.



    (d) Identity of Personnel Performing the Annual Audit and Quarterly Reviews.
Southern Energy shall authorize the Southern Energy Auditors to make available
to Southern's Auditors both the personnel who performed or are performing the
annual audits and quarterly reviews of Southern Energy and work papers related
to the annual audits and quarterly reviews of Southern Energy, in all cases
within a reasonable time prior to the Southern Energy Auditors' opinion date, so
that Southern's Auditors are able to perform the procedures they consider
necessary to take responsibility for the work of the Southern Energy Auditors as
it relates to Southern's Auditors' report on Southern's financial statements,
all within sufficient time to enable Southern to meet its timetable for the
printing, filing and public dissemination of Southern's annual and quarterly
statements. Similarly, Southern shall authorize Southern's Auditors to make
available to the Southern Energy Auditors both the personnel who performed or
are performing the annual audits and quarterly reviews of Southern and work
papers related to the annual audits and quarterly reviews of Southern, in all
cases within a reasonable time prior to Southern's Auditors' opinion date, so
that the Southern Energy Auditors are able to perform the procedures they
consider necessary to take responsibility for the work of Southern's Auditors as
it relates to the Southern Energy Auditors' report on Southern Energy's
statements, all within sufficient time to enable Southern Energy to meet its




                                       12


<PAGE>


timetable for the printing, filing and public dissemination of Southern Energy's
annual and quarterly financial statements.



    (e) Notice of Change in Accounting Principles. Southern Energy shall give
Southern as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Separation Date. Southern
Energy will consult with Southern and, if requested by Southern, Southern Energy
will consult with Southern's Auditors with respect thereto. Southern shall give
Southern Energy as much prior notice as reasonably practical of any proposed
determination of, or any significant changes in, its accounting estimates or
accounting principles from those in effect on the Separation Date.



    (f) Conflict with Third-Party Agreements. Nothing in Sections 5.3 and 5.4
shall require Southern Energy to violate any agreement with any third parties
regarding the confidentiality of confidential and proprietary information
relating to that third party or its business; provided, however, that in the
event that Southern Energy is required under Sections 5.3 and 5.4 to disclose
any such information, Southern Energy shall use all commercially reasonable
efforts to seek to obtain such third party's consent to the disclosure of such
information.


    Section 5.5 Consistency with Past Practices. At all times Southern will
cause Southern Energy before the Separation Date to continue to conduct business
in the ordinary course, including but not limited to acquisitions, divestitures
and project financings, consistent with past practices.

    Section 5.6 Payment of Expenses. Southern Energy shall pay all underwriting
fees (other than incentive fees), discounts and commissions incurred in
connection with the IPO. Except as otherwise provided in this Agreement, the
Ancillary Agreements or any other agreement between the parties relating to the
Separation, the IPO or the Distribution, all other out-of-pocket costs and
expenses of the parties hereto in connection with the preparation of this
Agreement and the Ancillary Agreements, the IPO (including underwriting
incentive fees) and the Distribution shall be paid by Southern. Notwithstanding
the foregoing, Southern Energy shall pay any internal fees, costs and expenses
incurred by Southern Energy in connection with the Separation, the IPO and the
Distribution.

    Section 5.7 Dispute Resolution. Except as otherwise set forth in any
Ancillary Agreement, resolution of any and all disputes arising from or in
connection with this Agreement, whether based on contract, tort, or otherwise
(collectively, "Disputes"), shall be exclusively governed by and settled in
accordance with the provisions of this Section 5.7.

    (a) Negotiation. The parties shall make a good faith attempt to resolve any
Dispute arising out of or relating to this Agreement through negotiation. Within
thirty (30) days after notice of a Dispute is given by either party to the other
party, each party



                                       13


<PAGE>

shall select one or more representatives who are vice presidents, senior vice
presidents or executive vice presidents of such party, which representatives
shall meet and make a good faith attempt to resolve such Dispute and shall
continue to negotiate in good faith in an effort to resolve the Dispute or
renegotiate the applicable section or provision without the necessity of any
formal proceedings. If such representatives fail to resolve a Dispute within
thirty (30) days after the first meeting of the representatives, such Dispute
shall be referred to the chief executive officers of each of the parties for
resolution. During the course of negotiations under this Section 5.7(a), all
reasonable requests made by one party to the other for information, including
requests for copies of relevant documents, will be honored. The specific format
for such negotiations will be left to the discretion of the designated
representatives but may include the preparation of agreed upon statements of
fact or written statements of position furnished to the other party.


    (b) Non-Binding Mediation. In the event that any Dispute arising out of or
related to this Agreement is not settled by the parties within thirty (30) days
after the referral of such Dispute to the chief executive officers of the
parties under Section 5.7(a), the parties will attempt in good faith to resolve
such Dispute by non-binding mediation in accordance with the American
Arbitration Association Commercial Mediation Rules. The mediation shall be held
within thirty (30) days of the end of such thirty (30) day negotiation period of
the chief executive officers. Except as provided below in Section 5.7(c), no
litigation for the resolution of such dispute may be commenced until the parties
try in good faith to settle the dispute by such mediation in accordance with
such rules and either party has concluded in good faith that amicable resolution
through continued mediation of the matter does not appear likely. The costs of
mediation shall be shared equally by the parties to the mediation. Any
settlement reached by mediation shall be recorded in writing, signed by the
parties, and shall be binding on them.


    (c) Proceedings. Nothing herein, however, shall prohibit either party from
initiating litigation or other judicial or administrative proceedings if such
party would be substantially harmed by a failure to act during the time that
such good faith efforts are being made to resolve the Dispute through
negotiation or mediation. In the event that litigation is commenced under this
Section 5.7(c), the parties agree to continue to attempt to resolve any Dispute
according to the terms of Sections 5.7(a) and 5.7(b) during the course of such
litigation proceedings under this Section 5.7(c).

    Section 5.8 Governmental Approvals. The parties acknowledge that certain of
the transactions contemplated by this Agreement and the Ancillary Agreements are
subject to certain conditions established by applicable government regulations,
orders, and approvals ("Existing Authority"). The parties intend to implement
this Agreement, the Ancillary Agreements and the transactions contemplated
thereby consistent with and to the extent permitted by Existing Authority and to
cooperate toward obtaining and maintaining in effect such Governmental Approvals
as may be required in order to implement this Agreement and each of the
Ancillary Agreements as fully as possible in accordance with their respective
terms. To the extent that any of the transactions contemplated by this Agreement
or any Ancillary Agreement require any Governmental



                                       14


<PAGE>

Approvals, the parties will use their reasonable commercial efforts to obtain
any such Governmental Approvals.


    Section 5.9 Regulatory Proceedings. For a period beginning on the Separation
Date and ending eighteen (18) months after the Change of Control Date, neither
Southern Energy nor any Subsidiary of Southern Energy will initiate, intervene
in, or participate in any proceedings or matter before the Federal Energy
Regulatory Commission or any agency or legislature of the States of Alabama,
Florida, Georgia or Mississippi which directly involves (1) corporate
transactions or (2) the generation, transmission, distribution, purchase or sale
of electric power by Southern or any of its Subsidiaries unless prior written
consent is given by Southern, except to the extent that any such proceedings or
matters involve obligations arising under this Agreement or any of the Ancillary
Agreements, or to the extent any such proceeding or matter directly involves a
contract or agreement for the purchase or sale of electricity or gas by Southern
Energy or any Subsidiary of Southern Energy, or to the extent any such
proceeding before the Federal Energy Regulatory Commission involves the
transmission of electricity, except for a proceeding to establish a regional
transmission organization in which Southern or any of its Subsidiaries is a
participant.




    Section 5.10 Regulatory Effect of Distribution. Southern and Southern Energy
intend that the Distribution will result in Southern Energy and its Subsidiaries
losing their status under the Public Utility Holding Company Act of 1935
("PUHCA") as "affiliates" or "subsidiaries" of Southern or its Subsidiaries. To
the extent a doubt arises as to that legal effect, at the request of either,
Southern and Southern Energy shall cooperate in resolving such doubt to achieve
that mutual goal through reasonable changes in business practices, cooperating
towards regulatory or judicial filings or proceedings or obtaining no-action
letter relief. Without limiting the foregoing, in the event Southern owns less
than 20% of the outstanding common stock of Southern Energy at any time while
PUHCA continues to be in effect, Southern shall, at Southern Energy's request,
enter into voting trust agreements or voting covenants designed to eliminate
attribution of voting securities control to Southern to the extent necessary to
cause Southern Energy and its Subsidiaries to lose their status under PUHCA as
"affiliates" or "subsidiaries" of Southern or its Subsidiaries.




    Section 5.11 HoldCo Transaction. As promptly as practicable following the
receipt of all required Governmental Approvals and any required consents or
approvals of any lender to Southern or Southern Energy or its Subsidiaries, (a)
Southern Energy and Southern shall cause SE Finance and SE Capital Funding to be
transferred to Southern, in substantially the manner set forth on Schedule
5.11(a) or in such other manner as Southern and Southern Energy may agree, and
each of Southern and Southern Energy shall execute and deliver any and all
instruments of transfer, stock transfer powers or other agreements or documents
and take such actions as may be necessary to effectively transfer SE Finance and
SE Capital Funding to Southern in such manner, and to permit Southern and its
Subsidiaries to exercise all rights with respect thereto, and (b) Southern and
Southern Energy shall execute and deliver any and all such instruments of



                                       15

<PAGE>


substitution and such other instruments or agreements as shall be necessary for
the obligations of Southern Energy under the each of the agreements set forth on
Schedule 5.11(b) (the "Keepwell Agreements") to be substituted by Southern and
for Southern Energy to be unconditionally released therefrom, provided that
Southern shall not be required to grant or provide any cash or other
consideration in connection with any such assumption or substitution or assume
or otherwise become liable for any liabilities or obligations which exceed the
liabilities or obligations of Southern Energy under the Keepwell Agreements
immediately prior to such assumption.



    Section 5.12. Continuance of Southern Credit Support. Notwithstanding any
other provision of this Agreement or the provisions of any Ancillary Agreement
to the contrary, the parties hereby agree that (i) Southern shall maintain in
full force and effect each guarantee, letter of credit, keepwell or support
agreement or other credit support document, instrument or other similar
arrangement issued for the benefit of any Person in the Southern Energy Group by
or on behalf of Southern (the "Credit Support Arrangements") which is
outstanding as of the Separation Date, until such time as such Credit Support
Arrangement terminates in accordance with its terms or is otherwise released at
the request of Southern Energy; provided, that Southern Energy shall use
commercially reasonable efforts, at the request of Southern, to attempt to
release or replace any Credit Support Arrangement for which such replacement or
release is reasonably available; and (ii) after the IPO Closing Date and until
the first date on which Southern Energy is no longer a Subsidiary of Southern
(the "Additional Credit Support Arrangement Commitment Termination Date"), upon
the request of Southern Energy, Southern shall issue additional Credit Support
Arrangements for the benefit of Southern Company Energy Marketing L.P. ("SCEM");
provided, that Southern shall not be obligated to issue any such additional
Credit Support Arrangements to the extent that the aggregate amount of all
outstanding Credit Support Arrangements for the benefit of SCEM would exceed
$425,000,000; provided further, that Southern shall not be required to provide
any such additional Credit Support Arrangements on terms that are materially
more burdensome to Southern than the terms of the Credit Support Arrangements
outstanding on the date of this Agreement; and provided, further, that Southern
may condition such additional Credit Support Arrangements such that they may
expire approximately six (6) months following the Additional Credit Support
Arrangement Commitment Termination Date. In consideration of Southern's
provision of the Credit Support Arrangements, Southern Energy shall pay to
Southern, beginning on the Additional Credit Support Arrangement Commitment
Termination Date, a monthly fee in an amount equal to 1% per annum, payable in
arrears on the first day of each month on the average aggregate maximum
principal amount of all Credit Support Arrangements outstanding during such
month.



    Section 5.13. Mobile Facility. Southern and Southern Energy shall continue
discussions following the Separation Date regarding the appropriate ownership
and operation of the Mobile, Alabama cogeneration facility, including the
possibility of an incentive-based operating agreement with a Southern Energy
Subsidiary.




                                       16


<PAGE>


    Section 5.14 Assignment of Agreements. Effective as of the Separation Date,
Southern shall assign, transfer, convey and deliver to Southern Energy, and
agrees to cause its applicable Subsidiaries to assign, transfer, convey and
deliver to Southern Energy's applicable Subsidiaries, and Southern Energy hereby
accepts from Southern, and agrees to cause its applicable Subsidiaries to accept
from Southern's applicable Subsidiaries, all of Southern's and its applicable
Subsidiaries' respective right, title and interest in and to the documents and
agreements listed on Schedule 5.14 attached hereto (each an "Assigned
Agreement"). To the extent that Southern's or its applicable Subsidiaries'
respective right, title and interest in and to any Assigned Agreement may not be
assigned without the consent of another Person which consent has not been
obtained, this provision shall not constitute an agreement to assign the same if
an attempted assignment would constitute a breach thereof or be unlawful, and
Southern shall use its commercially reasonable efforts to obtain any such
required consent(s) by the Distribution Date. The parties agree that if any
consent to an assignment of any Assigned Agreement shall not be obtained or if
any attempted assignment would be ineffective or would impair Southern Energy's
or its applicable Subsidiaries' rights and obligations under such Assigned
Agreement, such that Southern Energy would not in effect acquire the benefit of
all such rights and obligations, Southern, to the maximum extent permitted by
law and such Assigned Agreement, shall enter into such reasonable arrangements
with Southern Energy as are necessary to provide Southern Energy or its
applicable Subsidiary with the benefits and obligations of such Assigned
Agreement from the Separation Date. The parties shall cooperate and shall each
use their commercially reasonable efforts after the Separation Date to obtain an
assignment of such Assigned Agreement to Southern Energy.



    Section 5.15 Southern Energy Board Representation. At any time after the
Separation Date, if and for so long as Southern shall beneficially own (within
the meaning of Rule 13d-3 under the Exchange Act) shares of Southern Energy
common stock which at such time represent more than 25% of the outstanding
shares of Southern Energy common stock and less than 50% of such outstanding
shares, Southern shall be entitled to designate two of the nominees of the Board
of Directors of Southern Energy for election to such Board at each annual
meeting of Southern Energy's shareholders, provided that such number of
designees shall be reduced by the number of persons then serving on the Southern
Energy Board in any class of directors that is not up for election at such
annual meeting who are then also serving as officers or directors of Southern.




                                       17


<PAGE>

                                   ARTICLE VI

                                  MISCELLANEOUS



       Section 6.1 LIMITATION OF LIABILITY. IN NO EVENT SHALL ANY MEMBER OF THE
SOUTHERN GROUP OR SOUTHERN ENERGY GROUP OR THEIR RESPECTIVE DIRECTORS, OFFICERS
AND EMPLOYEES BE LIABLE TO ANY OTHER MEMBER OF THE SOUTHERN GROUP OR SOUTHERN
ENERGY GROUP FOR ANY SPECIAL, CONSEQUENTIAL, INDIRECT, INCIDENTAL OR PUNITIVE
DAMAGES OR LOST PROFITS, HOWEVER CAUSED AND ON ANY THEORY OF LIABILITY
(INCLUDING NEGLIGENCE) ARISING IN ANY WAY OUT OF THIS AGREEMENT, WHETHER OR NOT
SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES; PROVIDED,
HOWEVER, THAT THE FOREGOING LIMITATIONS SHALL NOT LIMIT EACH PARTY'S
INDEMNIFICATION OBLIGATIONS FOR LIABILITIES TO THIRD PARTIES AS SET FORTH IN THE
INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT.


       Section 6.2 Entire Agreement. This Agreement, the other Ancillary
Agreements and the Exhibits and Schedules referenced or attached hereto and
thereto, constitutes the entire agreement between the parties with respect to
the subject matter hereof and shall supersede all prior written and oral and all
contemporaneous oral agreements and understandings with respect to the subject
matter hereof.


       Section 6.3 Governing Law. This Agreement shall be governed and construed
and enforced in accordance with the laws of the State of Georgia as to all
matters regardless of the laws that might otherwise govern under the principles
of conflicts of laws applicable thereto.



       Section 6.4 Termination. This Agreement and all Ancillary Agreements may
be terminated and the Distribution abandoned at any time prior to the IPO
Closing Date by and in the sole discretion of Southern without the approval of
Southern Energy. This Agreement may be terminated at any time after the IPO
Closing Date and before the Change of Control Date by mutual consent of Southern
and Southern Energy. In the event of termination pursuant to this Section, no
party shall have any liability of any kind to the other party.


       Section 6.5 Notices. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) business day after being deposited with
an overnight courier service or (v) four (4) days after being deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the attention of
the



                                       18


<PAGE>


party's General Counsel at the address of its principal executive office or such
other address as a party may request by notifying the other in writing.


       Section 6.6 Counterparts. This Agreement, including the Schedules and
Exhibits hereto and the other documents referred to herein, may be executed in
counterparts, each of which shall be deemed to be an original but all of which
shall constitute one and the same agreement.

       Section 6.7 Binding Effect; Assignment. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective legal
representatives and successors, and nothing in this Agreement, express or
implied, is intended to confer upon any other Person any rights or remedies of
any nature whatsoever under or by reason of this Agreement. This Agreement may
not be assigned by any party hereto.

       Section 6.8 Severability. If any term or other provision of this
Agreement or the Schedules or Exhibits attached hereto is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to either party. Upon such determination that any term or other
provision is invalid, illegal or incapable of being enforced, the parties hereto
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner to
the end that transactions contemplated hereby are fulfilled to the fullest
extent possible.

       Section 6.9 Failure or Indulgence Not Waiver; Remedies Cumulative. No
failure or delay on the part of either party hereto in the exercise of any right
hereunder shall impair such right or be construed to be a waiver of, or
acquiescence in, any breach of any representation, warranty or agreement herein,
nor shall any single or partial exercise of any such right preclude other or
further exercise thereof or of any other right. All rights and remedies existing
under this Agreement or the Schedules or Exhibits attached hereto are cumulative
to, and not exclusive of, any rights or remedies otherwise available.

       Section 6.10 Amendment. No change or amendment will be made to this
Agreement except by an instrument in writing signed on behalf of each of the
parties to such agreement.

       Section 6.11 Authority. Each of the parties hereto represents to the
other that (a) it has the corporate or other requisite power and authority to
execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other actions, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding obligation,
enforceable against it in accordance with its terms subject to



                                       19


<PAGE>

applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general equity principles.


       Section 6.12 Interpretation. The headings contained in this Agreement, in
any Exhibit or Schedule hereto and in the table of contents to this Agreement
are for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement. Any capitalized term used in any Schedule or
Exhibit but not otherwise defined therein, shall have the meaning assigned to
such term in this Agreement. When a reference is made in this Agreement to an
Article or a Section, Exhibit or Schedule, such reference shall be to an Article
or Section of, or an Exhibit or Schedule to, this Agreement unless otherwise
indicated.


       Section 6.13 Conflicting Agreements. In the event of conflict between
this Agreement and any Ancillary Agreement or other agreement executed in
connection herewith, the provisions of such other agreement shall prevail.

                                   ARTICLE VII

                                   DEFINITIONS

       Section 7.1 Affiliated Company. "Affiliated Company" means, with respect
to Southern, any entity in which Southern holds a 50% or less ownership interest
and, with respect to Southern Energy, any entity in which Southern Energy holds
a 50% or less ownership interest and that is listed on Schedule 7.1 hereto.
Schedule 7.1 may be amended from time to time after the date hereof upon mutual
written consent of the parties.

       Section 7.2 Ancillary Agreements. "Ancillary Agreements" has the meaning
set forth in Section 2.1 hereof.

       Section 7.3 Business Day. "Business Day" means a day other than a
Saturday, a Sunday or a day on which banking institutions located in the State
of Georgia are authorized or obligated by law or executive order to close.


       Section 7.4 Change of Control Date. "Change of Control Date" means the
earlier of: (a) the Distribution Date (defined in the Master Separation
Agreement as the date the Distribution is effective), or (b) the first date on
which Southern ceases to control at least 33 1/3% of the common stock of
Southern Energy then outstanding.



       Section 7.5 Code. "Code" means the Internal Revenue Code of 1986, as
amended from time to time.



       Section 7.6 Commission. "Commission" means the Securities and Exchange
Commission.




                                       20

<PAGE>


       Section 7.7 Disputes. "Disputes" has the meaning set forth in Section 5.7
hereof.



       Section 7.8 Distribution. "Distribution" has the meaning set forth in the
Recitals hereof.



       Section 7.9 Distribution Agent. "Distribution Agent" has the meaning set
forth in Section 4.1 hereof.



       Section 7.10 Distribution Date. "Distribution Date" has the meaning set
forth in Section 4.1 hereof.



       Section 7.11 Exchange Act. "Exchange Act" means the Securities and
Exchange Act of 1934, as amended.



       Section 7.12 Governmental Approvals. "Governmental Approvals" means any
notices, reports or other filings to be made, or any consents, registrations,
approvals, permits or authorizations to be obtained from, any Governmental
Authority.



       Section 7.13 Governmental Authority. "Governmental Authority" shall mean
any federal, state, local, foreign or international court, government,
department, commission, board, bureau, agency, official or other regulatory,
administrative or governmental authority.



       Section 7.14 HoldCo Transaction. "HoldCo Transaction" has the meaning set
forth in the Recitals hereof.



       Section 7.15 Information. "Information" means information, whether or not
patentable or copyrightable, in written, oral, electronic or other tangible or
intangible forms, stored in any medium, including studies, reports, records,
books, contracts, instruments, surveys, discoveries, ideas, concepts, know-how,
techniques, designs, specifications, drawings, blueprints, diagrams, models,
prototypes, samples, flow charts, data, computer data, disks, diskettes, tapes,
computer programs or other software, marketing plans, customer names,
communications by or to attorneys (including attorney-client privileged
communications), memos and other materials prepared by attorneys or under their
direction (including attorney work product), and other technical, financial,
employee or business information or data.



       Section 7.16 IPO. "IPO" has the meaning set forth in the Recitals hereof.



       Section 7.17 IPO Closing Date. "IPO Closing Date" means the date of the
closing of the IPO upon satisfaction of the conditions of Article II hereof.



       Section 7.18 IPO Registration Statement. "IPO Registration Statement"
means the registration statement on Form S-1 pursuant to the Securities Act of
1933, as amended, to



                                       21

<PAGE>


be filed with the Commission registering the shares of common stock of Southern
Energy to be issued in the IPO, together with all amendments thereto.



       Section 7.19  NYSE. "NYSE" means the New York Stock Exchange.



       Section 7.20 Person. "Person" means an individual, a partnership, a
corporation, a limited liability company, an association, a joint stock company,
a trust, a joint venture, an unincorporated organization and a governmental
entity or any department, agency or political subdivision thereof.



       Section 7.21 Record Date. "Record Date" means the close of business on
the date to be determined by the Board of Directors of Southern as the record
date for determining the stockholders of Southern entitled to receive shares of
common stock of Southern Energy in the Distribution.



       Section 7.22 SE Finance. "SE Finance" means SE Finance Capital
Corporation and its Subsidiaries and Affiliated Companies.



       Section 7.23 SE Capital Funding. "SE Capital Funding" means Southern
Energy Capital Funding, Inc. and its Subsidiaries and Affiliated Companies.



       Section 7.24 Separation. "Separation" has the meaning set forth in the
Recitals hereof.



       Section 7.25 Separation Date. "Separation Date" has the meaning set forth
in Section 1.1 hereof.



       Section 7.26 Southern Business. "Southern Business" means any business of
Southern and its Subsidiaries and Affiliated Companies other than the Southern
Energy Business.



       Section 7.27 Southern Energy Business. "Southern Energy Business" means
(a) the business and operations of Southern Energy and its Subsidiaries and
Affiliated Companies, and (b) except as otherwise expressly provided herein, any
terminated, divested or discontinued businesses or operations that at the time
of termination, divestiture or discontinuation primarily related to the Southern
Energy Business as then conducted; provided, that the Southern Energy Business
shall not include the business or operations of HoldCo, SE Finance, SE Capital
Funding or Southern Company Energy Solutions, Inc.



       Section 7.28 Southern Energy Group. "Southern Energy Group" means
Southern Energy, each Subsidiary and Affiliated Company of Southern Energy
immediately after the Separation Date and each Person that becomes a Subsidiary
or Affiliate Company of Southern Energy after the Separation Date; provided that
the Southern Energy Group




                                       22


<PAGE>


shall not include HoldCo, SE Finance, SE Capital Funding or Southern Company
Energy Solutions, Inc.



       Section 7.29 Southern Energy Auditors. "Southern Energy Auditors" means
Southern Energy's independent certified public accountants.



       Section 7.30 Southern Group. "Southern Group" means Southern, each
Subsidiary and Affiliated Company of Southern (other than any member of the
Southern Energy Group) immediately after the Separation Date and each Person
that becomes a Subsidiary or an Affiliated Company of Southern after the
Separation Date.



       Section 7.31 Southern's Auditors. "Southern's Auditors" means Southern's
independent certified public accountants.



       Section 7.32 Subsidiary. "Subsidiary" means with respect to any specified
Person, any corporation, any limited liability company, any partnership or other
legal entity of which such Person or its Subsidiaries owns, directly or
indirectly, more than 50% of the stock or other equity interest entitled to vote
on the election of the members of the board of directors or similar governing
body. Unless context otherwise requires, reference to Southern Energy and its
Subsidiaries at any time following the HoldCo Transaction shall not include the
subsidiaries of Southern Energy that will be transferred to Southern in
connection with the HoldCo Transaction.



       Section 7.33 Troutman Sanders. "Troutman Sanders" means Troutman Sanders
LLP.



       Section 7.34 Underwriters. "Underwriters" means the underwriters of the
IPO.



       Section 7.35 Underwriting Agreement. "Underwriting Agreement" has the
meaning set forth in Section 3.1(a) hereof.




                                       23

<PAGE>


       WHEREFORE, the parties have signed this Master Separation and
Distribution Agreement effective as of the date first set forth above.

THE SOUTHERN COMPANY                       SOUTHERN ENERGY, INC.



By:                                        By:
   ----------------------------------         ----------------------------------
Name:   H. Allen Franklin                  Name:   S. Marce Fuller
Title:  President and Chief Operating      Title:  President and Chief Executive
        Officer                                    Officer




                                       24


<PAGE>



                                  Schedule 5.11
                               HoldCo Transaction

       (a) Description of HoldCo Transaction. SE Finance and SE Capital Funding
shall be transferred from Southern Energy to Southern in a manner and in an
order substantially similar to the following:


1.     Southern Energy issues 1 share of redeemable preferred stock to Southern.



2.     Southern Energy and Southern Company Energy Solutions ("Energy
       Solutions"), a wholly-owned subsidiary of Southern, shall then create
       Southern Energy Holdco, Inc. ("HoldCo").



3.     Southern Energy then makes contribution to capital of HoldCo in exchange
       for 80% or more of the shares of Holdco; such contribution consists of
       100% of the common stock of SE Finance and SE Capital Funding. At the
       same time, Energy Solutions shall contribute certain assets to a
       wholly-owned limited liability company of Holdco in exchange for 20% or
       less of the shares of Holdco.



4.     Southern Energy redeems its 1 share of redeemable preferred stock held by
       Southern in exchange for the shares of Holdco Southern Energy owns.


       (b) Credit Support to be Substituted for and Released. In connection with
the HoldCo Transaction, the following instruments will be substituted for by
Southern, and Southern Energy will be released from any liability thereunder:

1.     Keep Well Agreement dated December 17, 1998, from Southern Energy to
       Southern Energy Finance Company, Inc. and Credit Suisse First Boston, as
       agent for the lenders under the Term Loan Agreement and various Note
       Purchase Agreements dated of even date therewith.

2.     Keep Well Agreement dated November 17, 1999, as amended and restated as
       of December 16, 1999, from Southern Energy to SE Finance Capital
       Corporation and ING (U.S.) Capital L.L.C., as agent for the lenders under
       the Amended and Restated Term Loan Agreement.



                                       25

<PAGE>






Schedule 5.14



                             Transferred Agreements


Cooperation Agreement between The State Power Corporation of China and Southern
Company dated February, 1999.





                                       26

<PAGE>



Schedule 7.1


                      Southern Energy Affiliated Companies


    Each Affiliated Company listed on Exhibit 21.1 to the in the final
prospectus filed by Southern Energy with the SEC pursuant to Rule 424(b) under
the Securities Act of 1933, as amended, in connection with the IPO; other than
SE Finance and SE Capital Funding and their respective Subsidiaries and
Affiliated Companies.




                                       27

<PAGE>





                                    EXHIBIT A



           CERTIFICATE OF SECRETARY OR ASSISTANT SECRETARY OF SOUTHERN



I, ____________________, [Assistant] Secretary of The Southern Company, a
corporation organized and existing under the laws of the State of Delaware (the
"Company"), DO HEREBY CERTIFY that attached hereto are true and correct copies
of certain resolutions adopted by the Board of Directors of the Company, which
resolutions have not been amended, modified or rescinded and remain in full
force and effect on the date hereof.



IN WITNESS WHEREOF, I have hereunder set my hand and affixed the seal of The
Southern Company this __________________ day of ___________, 2000.





                                             -----------------------------------
                                             [Assistant] Secretary




                                       28
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>46
<FILENAME>x10a101.txt
<TEXT>


                                                                EXHIBIT 10(a)101

                                    FORM OF

                INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT

                                    BETWEEN

                              THE SOUTHERN COMPANY

                                      AND

                             SOUTHERN ENERGY, INC.


<PAGE>


                               TABLE OF CONTENTS


<TABLE>
<CAPTION>
                                                                                                          Page
<S>                                                                                                       <C>
ARTICLE I  MUTUAL RELEASES; INDEMNIFICATION.............................................................     1
   Section 1.1. Release of Pre-Closing Claims...........................................................     1
   Section 1.2. Indemnification by Southern Energy......................................................     2
   Section 1.3. Indemnification by Southern.............................................................     3
   Section 1.4. Procedures for Defense, Settlement and Indemnification of Third Party
                Claims..................................................................................     3
   Section 1.5. Additional Matters......................................................................     5
   Section 1.6. Survival of Indemnities.................................................................     6
ARTICLE II  INSURANCE MATTERS...........................................................................     6
   Section 2.1. Southern Energy Insurance Coverage During the Transition Period.........................     6
   Section 2.2. Cooperation and Agreement Not to Release Carriers.......................................     7
   Section 2.3. Southern Energy Insurance Coverage After the Insurance Transition
                 Period.................................................................................     7
   Section 2.4. Responsibilities for Self-insured Obligations...........................................     8
   Section 2.5. Procedures With Respect to Insured Southern Energy Liabilities..........................     8
   Section 2.6. Insufficient Limits of Liability for Southern Liabilities and Southern
                 Energy Liabilities.....................................................................     9
   Section 2.7. Cooperation.............................................................................    10
   Section 2.8. No Assignment or Waiver.................................................................    10
   Section 2.9. No Liability............................................................................    10
   Section 2.10. No Restrictions........................................................................    10
   Section 2.12. Further Agreements.....................................................................    10
   Section 2.13. Matters Governed by Employee Matters Agreement.........................................    10
ARTICLE III  MISCELLANEOUS..............................................................................    11
   Section 3.1. Entire Agreement........................................................................    11
   Section 3.2. Governing Law...........................................................................    11
   Section 3.3. Notices.................................................................................    11
   Section 3.4. Parties in Interest.....................................................................    11
   Section 3.5. Other Agreements Evidencing Indemnification Obligations.................................    11
   Section 3.6. Counterparts............................................................................    11
   Section 3.7. Assignment..............................................................................    11
   Section 3.8. Severability............................................................................    12
   Section 3.9. Failure or Indulgence Not Waiver........................................................    12
   Section 3.10. Amendment..............................................................................    12
   Section 3.11. Authority..............................................................................    12
   Section 3.12. Interpretation.........................................................................    12
   Section 3.13. Governmental Approvals.................................................................    12
ARTICLE IV  DEFINITIONS.................................................................................    13
   Section 4.1. Action..................................................................................    13
   Section 4.2. Affiliated Company......................................................................    13
   Section 4.3. Claims Committee........................................................................    13
   Section 4.4. Commingled Claims.......................................................................    13
   Section 4.5. Coverage Amount.........................................................................    13
   Section 4.6. Credit Support Arrangements.............................................................    13
</TABLE>




                                       2

<PAGE>



<TABLE>
<S>                                                                                                         <C>
   Section 4.7. Employee Matters Agreement..............................................................    13
   Section 4.8. Employment Liabilities..................................................................    13
   Section 4.9. Environmental Claim.....................................................................    14
   Section 4.10. HoldCo Transaction.....................................................................    14
   Section 4.11. Indemnitee.............................................................................    14
   Section 4.12. Insurance Policies.....................................................................    14
   Section 4.13. Insurance Transition Period............................................................    14
   Section 4.13. Insurance Transition Period............................................................    14
   Section 4.14. Insured Southern Energy Liability......................................................    14
   Section 4.15. Intercompany Agreements................................................................    14
   Section 4.16. IPO Registration Statement.............................................................    14
   Section 4.17. Liabilities............................................................................    14
   Section 4.18. Person.................................................................................    15
   Section 4.19. Separation.............................................................................    15
   Section 4.20. Separation Agreement...................................................................    15
   Section 4.21. Separation Date........................................................................    15
   Section 4.22. Southern Business......................................................................    15
   Section 4.23. Southern Energy Business...............................................................    15
   Section 4.24. Southern Energy Covered Parties........................................................    15
   Section 4.25. Southern Energy Group..................................................................    15
   Section 4.26. Southern Energy Indemnitees............................................................    15
   Section 4.27. Southern Energy Liabilities............................................................    15
   Section 4.28. Southern Group.........................................................................    15
   Section 4.29. Southern Indemnitees...................................................................    16
   Section 4.30. Subsidiary.............................................................................    16
   Section 4.31. Tax Indemnification Agreement..........................................................    16
   Section 4.32. Taxes..................................................................................    16
   Section 4.33. Third Party Claim......................................................................    16
</TABLE>





                                       3

<PAGE>


                INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT


         THIS INDEMNIFICATION AND INSURANCE MATTERS AGREEMENT (this
"Agreement") is entered into as of September 1, 2000, between The Southern
Company, a Delaware corporation ("Southern"), and Southern Energy, Inc., a
Delaware corporation ("Southern Energy"). Capitalized terms used herein and not
otherwise defined herein shall have the meanings ascribed to such terms in the
Article IV below.


                                    RECITALS

         WHEREAS, the Board of Directors of Southern has determined that it is
in the best interest of Southern and its stockholders to separate Southern's
existing businesses into two independent businesses;


         WHEREAS, as part of the foregoing, Southern and Southern Energy have
agreed, pursuant to the Master Separation and Distribution Agreement dated as
of September 1, 2000 (the "Separation Agreement"), which provides, among other
things, the initial public offering of Southern Energy stock, the distribution
of such stock and the execution and delivery of certain other agreements in
order to facilitate and provide for the foregoing; and


         WHEREAS, the parties desire to set forth certain agreements regarding
indemnification and insurance.

         NOW, THEREFORE, in consideration of the foregoing and the covenants
and agreements set forth below, the parties hereto agree as follows:

                                   ARTICLE I

                        MUTUAL RELEASES; INDEMNIFICATION

         Section 1.1. Release of Pre-Closing Claims.

         (a)        Southern Energy Release. Except as provided in Section
1.1(c), effective as of the Separation Date, Southern Energy does hereby, for
itself and as agent for each member of the Southern Energy Group, remise,
release and forever discharge the Southern Indemnitees from any and all
Liabilities whatsoever, whether at law or in equity (including any right of
contribution), whether arising under any contract or agreement, by operation of
law or otherwise, existing or arising from any acts or events occurring or
failing to occur or alleged to have occurred or to have failed to occur or any
conditions existing or alleged to have existed on or before the Separation
Date, including any such acts, events or conditions on or before the Separation
Date in connection with the transactions and all other activities to implement
any of the Separation, the IPO and the Distribution.


<PAGE>



         (b)      Southern Release. Except as provided in Section 1.1(c),
effective as of the Separation Date, Southern does hereby, for itself and as
agent for each member of the Southern Group, remise, release and forever
discharge the Southern Energy Indemnitees from any and all Liabilities
whatsoever, whether at law or in equity (including any right of contribution),
whether arising under any contract or agreement, by operation of law or
otherwise, existing or arising from any acts or events occurring or failing to
occur or alleged to have occurred or to have failed to occur or any conditions
existing or alleged to have existed on or before the Separation Date, including
any such acts, events or conditions on or before the Separation Date in
connection with the transactions and all other activities to implement any of
the Separation, the IPO and the Distribution.


         (c)      Excluded Liabilities; No Impairment. Nothing contained in
Section 1.1(a) or (b) shall release any claims under, or impair any right of
any Person to enforce, the Separation Agreement, any Ancillary Agreement
(including this Agreement), or any Intercompany Agreement, in each case in
accordance with its terms.

         (d)      No Actions as to Released Claims. Southern Energy agrees, for
itself and as agent for each member of the Southern Energy Group, not to make
any claim or demand, or commence any Action asserting any claim or demand,
including any claim of contribution or any indemnification, against Southern or
any member of the Southern Group, or any other Person released pursuant to
Section 1.1(a), with respect to any Liabilities released pursuant to Section
1.1(a). Southern agrees, for itself and as agent for each member of the
Southern Group, not to make any claim or demand, or commence any Action
asserting any claim or demand, including any claim of contribution or any
indemnification, against Southern Energy or any member of the Southern Energy
Group, or any other Person released pursuant to Section 1.1(b), with respect to
any Liabilities released pursuant to Section 1.1(b).

         (e)      Further Instruments. At any time, at the request of any other
party, each party shall cause each member of its respective Group to execute
and deliver releases reflecting the provisions hereof.

         Section 1.2.      Indemnification by Southern Energy. Except as
otherwise provided in this Agreement, Southern Energy shall, for itself and as
agent for each member of the Southern Energy Group, indemnify, defend (or,
where applicable, pay the defense costs for) and hold harmless the Southern
Indemnitees from and against any and all Liabilities that any third party seeks
to impose upon the Southern Indemnitees, or which are imposed upon the Southern
Indemnitees, if and to the extent such Liabilities relate to, arise out of or
result from any of the following items (without duplication):

                  (i)      any acts or omission or alleged acts or omissions by
         or on behalf of any member of the Southern Energy Group in the conduct
         of the Southern Energy Business or in connection with the IPO or the
         Distribution;


                  (ii)     any breach by Southern Energy or any member of the
         Southern Energy



                                       2
<PAGE>



         Group of the Separation Agreement or any of the Ancillary Agreements
         (including this Agreement); and



                  (iii)    any Southern Energy Liability.


         In the event that any member of the Southern Energy Group makes a
payment to the Southern Indemnitees hereunder, and any of the Southern
Indemnitees subsequently diminishes the Liabilities on account of which such
payment was made, either directly or through a third-party recovery, Southern
will promptly repay (or will procure a Southern Indemnitee to promptly repay)
such member of the Southern Energy Group the amount by which the payment made
by such member of the Southern Energy Group exceeds the actual cost of the
associated indemnified Liability.

         Section 1.3.      Indemnification by Southern. Except as otherwise
provided in this Agreement, Southern shall, for itself and as agent for each
member of the Southern Group, indemnify, defend (or, where applicable, pay the
defense costs for) and hold harmless the Southern Energy Indemnitees from and
against any and all Liabilities that any third party seeks to impose upon the
Southern Energy Indemnitees, or which are imposed upon the Southern Energy
Indemnitees, if and to the extent such Liabilities relate to, arise out of or
result from any of the following items (without duplication):

                  (i)      any acts or omissions or alleged acts or omissions by
         or on behalf of any member of the Southern Group in the conduct of the
         Southern Business or in connection with the IPO or the Distribution;

                  (ii)     any breach by Southern or any member of the Southern
         Group of the Separation Agreement or any of the Ancillary Agreements
         (including this Agreement); and

                  (iii)    any Liabilities of the Southern Group other than the
         Credit Support Arrangements.

         In the event that any member of the Southern Group makes a payment to
the Southern Energy Indemnitees hereunder, and any of the Southern Energy
Indemnitees subsequently diminishes the Liabilities on account of which such
payment was made, either directly or through a third-party recovery, Southern
Energy will promptly repay (or will procure a Southern Energy Indemnitee to
promptly repay) such member of the Southern Group the amount by which the
payment made by such member of the Southern Group exceeds the actual cost of
the indemnified Liabilities.

         Section 1.4.      Procedures for Defense, Settlement and
Indemnification of Third Party Claims.


         (a)      Notice of Claims. If a Southern Indemnitee or a Southern
Energy Indemnitee (as applicable) (an "Indemnitee") shall receive notice or
otherwise learn of the assertion by a Person (including any Governmental
Authority) who is not a member of



                                       3
<PAGE>



the Southern Group or the Southern Energy Group of any claim or of the
commencement by any such Person of any Action (collectively, a "Third Party
Claim") with respect to which a party (an "Indemnifying Party") may be
obligated to provide indemnification to such Indemnitee pursuant to Section 1.2
or 1.3, or any other section of the Separation Agreement or any Ancillary
Agreement (including this Agreement), Southern and Southern Energy (as
applicable) will ensure that such Indemnitee shall give such Indemnifying Party
written notice thereof within thirty (30) days after becoming aware of such
Third Party Claim. Any such notice shall describe the Third Party Claim in
reasonable detail. Notwithstanding the foregoing, the delay or failure of any
Indemnitee or other Person to give notice as provided in this Section 1.4(a)
shall not relieve the related Indemnifying Party of its obligations under this
Article I, except to the extent that such Indemnifying Party is actually and
substantially prejudiced by such delay or failure to give notice.



         (b)      Claims Committee. Any of the parties may refer any dispute
regarding the provisions of this Agreement to the Claims Committee for
resolution. All determinations of the Claims Committee, if unanimous, shall be
binding on all of the parties and their respective successors and assigns. The
Claims Committee shall reach a resolution that minimizes expenses for all
parties and seeks to avoid hiring multiple counsel. In the event a Liability
arises from both an event, act or omission relating primarily to the Southern
Energy Business and an event, act or omission relating primarily to the
Southern Business, the Claims Committee shall apportion the Liability in
accordance with comparative fault, and it may re-apportion the Liability as it
learns of additional facts bearing on that assessment. In the event that the
Claims Committee cannot reach a unanimous determination as to the nature,
status or handling of any such claims within thirty (30) days after such
referral (unless the Claims Committee unanimously agrees to a longer time
period), the issue will be submitted for resolution pursuant to the procedures
set forth in the dispute resolution provisions contained in Section 5.7 of the
Separation Agreement; provided, that the provisions of this Section 1.4(b)
shall supercede the requirements of the second sentence of Section 5.7(a) of
the Separation Agreement.


         (c)      Defense of Commingled Claims. With respect to any Commingled
Claim, the Claims Committee shall determine which party shall manage the
defense of, and may seek to settle or compromise, such Commingled Claim based
upon the specific facts of such claim.

         (d)      Defense By Indemnifying Party. Other than in the case of a
Commingled Claim, an Indemnifying Party will manage the defense of and (unless
the Indemnifying Party has specified any reservations or exceptions to the
obligation to manage the defense or to indemnify that have been referred to,
but not resolved by, the Claims Committee) may settle or compromise any Third
Party Claim. Within thirty (30) days after the receipt of notice from an
Indemnitee in accordance with Section 1.4(a) (or sooner, if the nature of such
Third Party Claim so requires), the Indemnifying Party shall notify the
Indemnitee that the Indemnifying Party will assume responsibility for managing
the defense of such Third Party Claim, which notice shall specify any
reservations or exceptions.



                                       4

<PAGE>



         (e)      Defense By Indemnitee. If an Indemnifying Party fails to
assume responsibility for managing the defense of a Third Party Claim, or fails
to notify an Indemnitee that it will assume responsibility as provided in
Section 1.4(d), such Indemnitee may manage the defense of such Third Party
Claim.


         (f)      No Settlement By Indemnitee Without Consent. Unless the
Indemnifying Party has failed to manage the defense of the Third Party Claim in
accordance with the terms of this Agreement, no Indemnitee may settle or
compromise any Third Party Claim without the consent of the Indemnifying Party.

         (g)      No Consent to Certain Judgments or Settlements Without
Consent. Notwithstanding Section 1.4(d) above, no party shall consent to entry
of any judgment or enter into any settlement of a Third Party Claim without the
consent of the other party (such consent not to be unreasonably withheld) if
the effect of such judgment or settlement is to (A) permit any injunction,
declaratory judgment, other order or other nonmonetary relief to be entered,
directly or indirectly, against the other party or (B) materially affect the
other party due to the allocation of Liabilities and related indemnities set
forth in the Separation Agreement, this Agreement or any other Ancillary
Agreement.

         Section 1.5. Additional Matters.

         (a)      Cooperation in Defense and Settlement. With respect to any
Third Party Claim that implicates both Southern Energy and Southern in a
material fashion due to the allocation of Liabilities, responsibilities for
management of defense and related indemnities set forth in the Separation
Agreement, this Agreement or any of the Ancillary Agreements, the parties agree
to cooperate fully and maintain a joint defense (in a manner that will preserve
the attorney-client privilege with respect thereto) so as to minimize such
Liabilities and defense costs associated therewith. The party that is not
responsible for managing the defense of such Third Party Claims shall, upon
reasonable request, be consulted with respect to significant matters relating
thereto and may, if necessary or helpful, associate counsel to assist in the
defense of such claims.

         (b)      Substitution. In the event of an Action in which the
Indemnifying Party is not a named defendant, if either the Indemnitee or the
Indemnifying Party shall so request, the parties shall endeavor to substitute
the Indemnifying Party for the named defendant. If such substitution or
addition cannot be achieved for any reason or is not requested, the rights and
obligations of the parties regarding indemnification and the management of the
defense of claims as set forth in this Article I shall not be altered.

         (c)      Subrogation. In the event of payment by or on behalf of any
Indemnifying Party to or on behalf of any Indemnitee in connection with any
Third Party Claim, such Indemnifying Party shall be subrogated to and shall
stand in the place of such Indemnitee, in whole or in part based upon whether
the Indemnifying Party has paid all or only part of the Indemnitee's Liability,
as to any events or circumstances in respect of which such Indemnitee may have
any right, defense or claim relating to such Third Party Claim against any
claimant or plaintiff asserting such Third Party Claim or against any other



                                       5

<PAGE>


person. Such Indemnitee shall cooperate with such Indemnifying Party in a
reasonable manner, and at the cost and expense of such Indemnifying Party, in
prosecuting any subrogated right, defense or claim.


         (d)      Not Applicable to Taxes or Employment Liabilities. This
Agreement shall not apply to Taxes (which are covered by the Tax
Indemnification Agreement) or Employment Liabilities (which are covered by the
Employee Matters Agreement).


         Section 1.6. Survival of Indemnities. Subject to Section 3.7, the
rights and obligations of the members of the Southern Group and the Southern
Energy Group under this Article I shall survive the sale or other transfer by
any party of any assets or businesses or the assignment by it of any
Liabilities or the sale by any member of the Southern Group or the Southern
Energy Group of the capital stock or other equity interests of any Subsidiary
to any Person.

                                   ARTICLE II

                               INSURANCE MATTERS

         Section 2.1. Southern Energy Insurance Coverage During the Transition
Period.


         (a)      Maintain Comparable Insurance. Throughout the period beginning
on the Separation Date and ending on the Insurance Transition End Date (the
"Insurance Transition Period"), Southern shall, subject to insurance market
conditions and other factors beyond its control, maintain policies of
insurance, including for the benefit of Southern Energy or any of its
Subsidiaries, directors, officers, employees or other covered parties
(collectively, the "Southern Energy Covered Parties") which are comparable to
those maintained generally by Southern; provided, however, if Southern
determines that (i) the amount or scope of such coverage will be reduced during
the Insurance Transition Period to a level materially inferior to the level of
coverage in existence immediately prior to the Insurance Transition Period, or
(ii) the retention or deductible level applicable to such coverage, if any,
will be increased during the Insurance Transition Period to a level materially
greater than the levels in existence immediately prior to the Insurance
Transition Period, Southern shall give Southern Energy notice of such
determination as promptly as practicable. Upon notice of such determination,
Southern Energy shall be entitled to no less than sixty (60) days to evaluate
its options regarding continuance of coverage hereunder and may cancel its
interest in all or any portion of such coverage as of any day within such sixty
(60) day period. Except as provided below, during the Insurance Transition
Period, such policies of insurance shall cover Southern Energy Covered Parties
for liabilities and losses insured prior to the Insurance Transition End Date.



         (b)      Directors & Officers ("D&O") Insurance Coverage. With effect
from August 1, 2000, Southern shall obtain, subject to market availability and
favorable pricing, $200 million in D&O insurance coverage limits (in addition
to Southern's current D&O insurance coverage), with an option for a six-year
extended reporting period (the



                                       6
<PAGE>



"Additional D&O Insurance;" and, together with Southern's current D&O insurance
coverage, the "D&O Insurance"). The D&O Insurance shall cover Southern and
Southern Energy individually and collectively. The Additional D&O Insurance
shall be maintained in force for a one-year period, unless the parties shall
mutually agree to renew it for a further period. Upon policy expiration,
Southern will exercise the option for the six-year extended reporting period.
At the end of the extended reporting period, either party may request a further
extension of the reporting period in respect of both parties. Upon such
request, Southern shall effect such extension, subject to market availability.
The cost of the Additional D&O Insurance, including any extended reporting
period option, shall be shared equally between Southern and Southern Energy.



         (c)      Reimbursement for Premiums. Southern Energy shall promptly pay
or reimburse Southern, as the case may be, for premium expenses, and Southern
Energy Covered Parties shall promptly pay or reimburse Southern for any costs
and expenses which Southern may incur in connection with the insurance
coverages maintained pursuant to this Section 2.1, including but not limited to
any subsequent premium adjustments. All payments and reimbursements by Southern
Energy and Southern Energy Covered Parties to Southern shall be made within
fifteen (15) days after Southern Energy's receipt of an invoice from Southern.



         Section 2.2. Cooperation and Agreement Not to Release Carriers. Each
of Southern and Southern Energy will share such information as is reasonably
necessary in order to permit the other to manage and conduct its insurance
matters in an orderly fashion. Each of Southern and Southern Energy, at the
request of the other, shall cooperate with and use commercially reasonable
efforts to assist the other in recoveries for claims made under any insurance
policy for the benefit of any insured party, and neither Southern nor Southern
Energy, nor any of their Subsidiaries, shall take any action which would
intentionally jeopardize or otherwise interfere with either party's ability to
collect any proceeds payable pursuant to any insurance policy. Except as
otherwise contemplated by the Separation Agreement, this Agreement or any
Ancillary Agreement, after the Separation Date, neither Southern nor Southern
Energy shall (and shall ensure that no member of their respective Groups
shall), without the consent of the other, provide any insurance carrier with a
release, or amend, modify or waive any rights under any such policy or
agreement, if such release, amendment, modification or waiver would adversely
affect any rights or potential rights of any member of the other Group
thereunder. However, nothing in this Section 2.2 shall (A) preclude any member
of any Group from presenting any claim or from exhausting any policy limit, (B)
require any member of any Group to pay any premium or other amount or to incur
any Liability, (C) require any member of any Group to renew, extend or continue
any policy in force or (D) except as otherwise provided in Section 2.12, apply
to Southern in connection with rights to coverage for Environmental Actions
under Insurance Policies in effect prior to the Separation Date.



         Section 2.3. Southern Energy Insurance Coverage After the Insurance
Transition Period.



                                       7
<PAGE>



         (a)      Except as otherwise set forth herein, from and after the
Insurance Transition End Date, Southern Energy, and Southern Energy alone,
shall be responsible for obtaining and maintaining insurance programs for its
risk of loss and such insurance arrangements shall be separate and apart from
Southern's insurance programs. Notwithstanding the foregoing, Southern, upon
the request of Southern Energy, shall use all commercially reasonable efforts
to assist Southern Energy in the transition to its own separate insurance
programs from and after the Insurance Transition Period, and shall provide
Southern Energy with any information that is in the possession of Southern and
is reasonably available and necessary to either obtain insurance coverages for
Southern Energy or to assist Southern Energy in preventing unintended
self-insurance, in whatever form.



         (b)      D&O Insurance Coverage. After the Insurance Transition End
Date, Southern will endeavor to maintain, subject to market availability, a
minimum of $200 million D&O coverage insuring both Southern and Southern Energy
under Southern's policy for all activities prior to the Insurance Transition
End Date. With respect to Southern Energy, such coverage shall apply solely to
Southern Energy's wrongful act(s) or alleged wrongful act(s) occurring prior to
the Insurance Transition End Date.



         Section 2.4 Maintenance of D&O Insurance Limits. It is the intent of
Southern and Southern Energy that the D&O Insurance shall be maintained in an
amount sufficient to provide at least $100 million of coverage (the "Minimum
D&O Coverage") to each of the parties for claims arising during the policy
period which are unrelated to the IPO, the Distribution, the Separation or any
other actions contemplated by the Separation Agreement and this Agreement
("Unrelated Claims"). In the event that either party should experience claims
which, in the aggregate, are likely to erode D&O Insurance coverage limits
available to the other party to below $100 million, then Southern shall arrange
with its insurers, subject to market availability, for a reinstatement of
coverage limits sufficient to maintain $100 million of D&O Insurance coverage
for such other party's Unrelated Claims. Unless the parties shall mutually
agree otherwise, determination of the eroded coverage amount to be reinstated
shall be based on claims paid and reserves established by the insurers
underwriting the applicable D&O Insurance. The cost to reinstate policy limits
shall be borne by the party incurring the Unrelated Claims which have eroded
the other party's Minimum D&O Coverage.



         Section 2.5. Responsibilities for Self-insured Obligations. Southern
Energy will reimburse Southern for all amounts necessary to exhaust or
otherwise satisfy all applicable self-insured retentions, amounts for fronted
policies, deductibles and retrospective premium adjustments and similar amounts
not covered by Insurance Policies in connection with Southern Energy
Liabilities and Insured Southern Energy Liabilities.



         Section 2.6. Procedures With Respect to Insured Southern Energy
Liabilities.



         (a)      Reimbursement. Southern Energy will reimburse Southern for all
amounts incurred to pursue insurance recoveries from Insurance Policies for
Insured Southern



                                       8
<PAGE>



 Energy Liabilities.



         (b)      Management of Claims. The defense of claims, suits or actions
giving rise to potential or actual Insured Southern Energy Liabilities will be
managed (in conjunction with Southern's insurers, as appropriate) by the party
that would have had responsibility for managing such claims, suits or actions
had such Insured Southern Energy Liabilities been Southern Energy Liabilities.



         Section 2.7. Insufficient Limits of Liability for Southern Liabilities
and Southern Energy Liabilities. In the event that there are insufficient
limits of liability available under Southern's Insurance Policies provided in
Sections 2.1(b), 2.3(b), 2.4 or other applicable polices in effect prior to the
Insurance Transition End Date to cover the Liabilities of Southern and/or
Southern Energy that would otherwise be covered by such Insurance Policies,
then to the extent that other insurance is not available to Southern and/or
Southern Energy for such Liabilities an adjustment will be made in accordance
with the following procedures:



                  (i)      Each party will be allocated an amount equal to their
         proportional share of any Liabilities (which Liabilities would
         otherwise be covered under Southern's Insurance Policies) in excess of
         the Coverage Amount. Each party's proportional share of such excess
         Liabilities shall be calculated by multiplying (A) the aggregate
         amount of all Liabilities (net of any deductible) of both parties
         which are eligible for coverage under a Southern Insurance Policy in
         the coverage period applicable to such policy, less the Coverage
         Amount applicable to such policy, by (B) a fraction, the numerator of
         which is the amount of such Liabilities attributable to such party,
         and the denominator of which is the aggregate amount of all such
         Liabilities of both parties. Any dispute between the parties in
         determining the proper allocation of liabilities pursuant to this
         section shall be resolved pursuant to the procedures set forth in
         Section 1.4(b) hereof.



                  (ii)     A party who receives more than its share of the
         Coverage Amount (the "Overallocated Party") agrees to reimburse the
         other party (the "Underallocated Party") to the extent that the
         Liabilities of the Underallocated Party that would have been covered
         under such Insurance Policies (subject to the limitations of Section
         2.12) is less than the Underallocated Party's share of the Coverage
         Amount.



                  (iii)    In addition to and without limiting the foregoing,
         Southern and Southern Energy shall cooperate and use their reasonable
         best efforts to maintain such general liability or other applicable
         shared coverage levels for both parties as are in existence on the
         Separation Date. To that effect, in the event that the coverage under
         any general liability or other applicable shared policy is eroded to
         less than 50% of the applicable level of coverage as of the Separation
         Date, the parties shall cooperate in equitably determining the
         appropriate allocation of the costs of and responsibility for the
         reinstatement, subject to market availability, of coverage under such
         policies to its original level. Additionally, Southern shall maintain
         Southern Energy's coverage for claims relating to Liabilities arising
         prior to the




                                       9

<PAGE>



         Separation Date until such time as Southern Energy shall have arranged
         for "prior acts" coverage for such Liabilities; provided, that
         Southern Energy shall use commercially reasonable efforts to obtain
         such coverage as soon as practicable upon the reasonable request of
         Southern, and Southern shall, subject to market availability, use
         commercially reasonable efforts to assist Southern Energy in obtaining
         such coverage.



         Section 2.8.      Cooperation. Southern and Southern Energy will
cooperate with each other in all respects, and they shall execute any
additional documents which are reasonably necessary, to effectuate the
provisions of this Article II.



         Section 2.9.      No Assignment or Waiver. This Agreement shall not be
considered as an attempted assignment of any policy of insurance or as a
contract of insurance and shall not be construed to waive any right or remedy
of any member of the Southern Group in respect of any Insurance Policy or any
other contract or policy of insurance.



         Section 2.10.     No Liability. Southern Energy does hereby, for itself
and as agent for each other member of the Southern Energy Group, agree that no
member of the Southern Group or any Southern Indemnitee shall have any
Liability whatsoever as a result of the insurance policies and practices of
Southern and its Subsidiaries as in effect at any time prior to the Insurance
Transition End Date, including as a result of the level or scope of any such
insurance, the creditworthiness of any insurance carrier, the terms and
conditions of any policy, the adequacy or timeliness of any notice to any
insurance carrier with respect to any claim or potential claim or otherwise.



         Section 2.11.     No Restrictions. Nothing in this Agreement shall be
deemed to restrict any member of the Southern Energy Group from acquiring at
its own expense any other insurance policy in respect of any Liabilities or
covering any period.



         Section 2.12.     Further Agreements. The Parties acknowledge that they
intend to allocate financial obligations without violating any laws regarding
insurance, self-insurance or other financial responsibility. If it is
determined that any action undertaken pursuant to the Separation Agreement,
this Agreement or any Ancillary Agreement is violative of any insurance,
self-insurance or related financial responsibility law or regulation, the
parties agree to work together to do whatever is necessary to comply with such
law or regulation while trying to accomplish, as much as possible, the
allocation of financial obligations as intended in the Separation Agreement,
this Agreement and any Ancillary Agreement.


         Section 2.13.     Matters Governed by Employee Matters Agreement. This
Article II shall not apply to any insurance policies that are the subject of
the Employee Matters Agreement.



                                      10

<PAGE>


                                  ARTICLE III

                                 MISCELLANEOUS

         Section 3.1.      Entire Agreement. This Agreement, the Master
Separation Agreement, the other Ancillary Agreements and the Exhibits and
Schedules attached hereto and thereto, constitutes the entire agreement between
the parties with respect to the subject matter hereof and shall supersede all
prior written and oral and all contemporaneous oral agreements and
understandings with respect to the subject matter hereof.


         Section 3.2.      Governing Law. This Agreement shall be governed by
and construed in accordance with the laws of the State of Georgia as to all
matters regardless of the laws that might otherwise govern under principles of
conflicts of laws applicable thereto.


         Section 3.3.      Notices. Any notice, demand, offer, request or other
communication required or permitted to be given by either party pursuant to the
terms of this Agreement shall be in writing and shall be deemed effectively
given the earlier of (i) when received, (ii) when delivered personally, (iii)
one (1) business day after being delivered by facsimile (with receipt of
appropriate confirmation), (iv) one (1) business day after being deposited with
an overnight courier service or (v) four (4) days after being deposited in the
U.S. mail, First Class with postage prepaid, and addressed to the attention of
the party's General Counsel at the address of its principal executive office or
such other address as a party may request by notifying the other in writing.

         Section 3.4.      Parties in Interest. This Agreement, including the
Schedules and Exhibits hereto, and the other documents referred to herein,
shall be binding upon Southern, Southern's Subsidiaries, Southern Energy and
Southern Energy's Subsidiaries and inure solely to the benefit of the Southern
Energy Indemnitees and the Southern Indemnitees and their respective permitted
assigns, and nothing in this Agreement, express or implied, is intended to
confer upon any other Person any rights or remedies of any nature whatsoever
under or by reason of this Agreement.

         Section 3.5.      Other Agreements Evidencing Indemnification
Obligations. Southern hereby agrees to execute, for the benefit of any Southern
Energy Indemnitee, such documents as may be reasonably requested by such
Southern Energy Indemnitee, evidencing Southern's agreement that the
indemnification obligations of Southern set forth in this Agreement inure to
the benefit of and are enforceable by such Southern Energy Indemnitee. Southern
Energy hereby agrees to execute, for the benefit of any Southern Indemnitee,
such documents as may be reasonably requested by such Southern Indemnitee,
evidencing Southern Energy's agreement that the indemnification obligations of
Southern Energy set forth in this Agreement inure to the benefit of and are
enforceable by such Southern Indemnitee.

         Section 3.6.      Counterparts. This Agreement, including the Schedules
and Exhibits hereto, and the other documents referred to herein, may be
executed in counterparts, each of which shall be deemed to be an original but
all of which shall constitute one and the same agreement.

         Section 3.7.      Assignment. The rights and obligations in this
Agreement may not be



                                      11

<PAGE>


assigned or delegated by any party hereto, in whole or in part, without the
express prior written consent of the other party hereto.

         Section 3.8.      Severability. If any term or other provision of this
Agreement or the Schedules or Exhibits attached hereto is determined by a
nonappealable decision by a court, administrative agency or arbitrator to be
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
materially adverse to any party.


         Upon such determination that any term or other provision is invalid,
illegal or incapable of being enforced, the parties hereto shall negotiate in
good faith to modify this Agreement so as to effect the original intent of the
parties as closely as possible in an acceptable manner to the end that
transactions contemplated hereby are fulfilled to the fullest extent possible.


         Section 3.9.      Failure or Indulgence Not Waiver. No failure or delay
on the part of either party hereto in the exercise of any right hereunder shall
impair such right or be construed to be a waiver of, or acquiescence in, any
breach of any representation, warranty or agreement herein, nor shall any
single or partial exercise of any such right preclude other or further exercise
thereof or of any other right.

         Section 3.10.     Amendment.  No change or amendment will be made to
this Agreement except by an instrument in writing signed on behalf of each of
the parties to this Agreement.

         Section 3.11.     Authority. Each of the parties hereto represents to
the other that (a) it has the corporate or other requisite power and authority
to execute, deliver and perform this Agreement, (b) the execution, delivery and
performance of this Agreement by it have been duly authorized by all necessary
corporate or other action, (c) it has duly and validly executed and delivered
this Agreement, and (d) this Agreement is a legal, valid and binding
obligation, enforceable against it in accordance with its terms subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and general equity principles.

         Section 3.12.     Interpretation. The headings contained in this
Agreement, in any Exhibit or Schedule hereto and in the table or contents to
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement. Any capitalized term used in
any Schedule or Exhibit but not otherwise defined therein, shall have the
meaning assigned to such term in this Agreement. When a reference is made in
this Agreement to an Article or a Section, Exhibit or Schedule, such reference
shall be to an Article or Section of, or an Exhibit or Schedule to, this
Agreement unless otherwise indicated.

         Section 3.13.     Governmental Approvals. The parties acknowledge that
certain of the



                                      12

<PAGE>


provisions of this Agreement may be subject to certain conditions established
by applicable government regulations, orders, and approvals ("Existing
Authority"). The parties intend to implement this Agreement consistent with and
to the extent permitted by Existing Authority and to cooperate toward obtaining
and maintaining in effect such governmental agency consents, orders or
approvals as may be required in order to implement this Agreement as fully as
possible in accordance with its terms.

                                   ARTICLE IV

                                  DEFINITIONS

         Section 4.1.      Action. "Action" means any demand, action, suit,
countersuit, arbitration, inquiry, proceeding or investigation by or before any
federal, state, local, foreign or international governmental authority or any
arbitration or mediation tribunal.

         Section 4.2.      Affiliated Company. "Affiliated Company" has the
meaning set forth in the Separation Agreement.


         Section 4.3.      Claims Committee. "Claims Committee" means a
committee composed of (i) either the General Counsel or an Associate General
Counsel of Southern and (ii) either the General Counsel or an Associate General
Counsel of Southern Energy.


         Section 4.4.      Commingled Claims. "Commingled Claims" means,
collectively, any Third Party Claims (i) which involve an employee, consultant
or contractor that was employed by both the Southern Energy Business and the
Southern Business, (ii) in which both Southern and Southern Energy are named,
or (iii) involving both the Southern Energy Business and the Southern Business.


         Section 4.5.      Coverage Amount. "Coverage Amount" means the lesser
of (A) the available limits of liability under Southern's Insurance Policies in
effect prior to the Insurance Transition End Date, net of uncollectible amounts
attributable to insurer insolvencies, and (B) the proceeds received from
Southern's Insurance Policies if any Liabilities are the subject of disputed
coverage claims and, following consultation with each other, Southern and/or
Southern Energy agree to accept less than full policy limits from Southern's
and Southern Energy's insurers.


         Section 4.6.      Credit Support Arrangements. "Credit Support
Arrangements" has the meaning set forth in Section 5.13 of the Separation
Agreement.

         Section 4.7.      Employee Matters Agreement. "Employee Matters
Agreement" means the Employee Matters Agreement attached as an exhibit to the
Separation Agreement.

         Section 4.8.      Employment Liabilities. "Employment Liabilities" has
the meaning set forth in Schedule 2.01 to the Employee Matters Agreement.



                                      13

<PAGE>


         Section 4.9.      Environmental Claim. "Environmental Claim" means any
and all administrative or judicial actions, suits, orders, claims, liens,
notices of violation, investigations, complaints, requests for information,
proceedings or other written communication, whether criminal or civil, by any
Person based upon, alleging, asserting, or claiming any (a) violation of, or
liability under any environmental law, (b) violation of any permit, or (c)
liability for investigatory costs, cleanup costs, removal costs, remedial
costs, response costs, natural resource damages, property damage, personal
injury, fines, or penalties arising out of, based upon, resulting from or
related to, the presence, release, or threatened release into the environment
of any hazardous materials or any other environmental condition.

         Section 4.10.     HoldCo Transaction. "HoldCo Transaction" has the
meaning set forth in the Separation Agreement.

         Section 4.11.     Indemnitee. "Indemnitee" has the meaning set forth in
Section 1.4(a) hereof.

         Section 4.12.     Insurance Policies. "Insurance Policies" means
insurance policies pursuant to which a Person makes a true risk transfer to an
insurer.


         Section 4.13.     Insurance Transition End Date. "Insurance Transition
End Date" means the earlier of (i) the Distribution Date, or (ii) the first
date on which Southern owns less than 50% of the common stock of Southern
Energy then outstanding.



         Section 4.14.     Insurance Transition Period. "Insurance Transition
Period" has the meaning set forth in Section 2.1 of this Agreement.



         Section 4.15.     Insured Southern Energy Liability. "Insured Southern
Energy Liability" means any Southern Energy Liability to the extent that (i) it
is covered under the terms of Southern's Insurance Policies in effect prior to
the Insurance Transition End Date and (ii) Southern Energy is not a named
insured under, or otherwise entitled to the benefits of, such Insurance
Policies.



         Section 4.16.     Intercompany Agreements. "Intercompany Agreements"
means any written agreement between Southern or any of its Subsidiaries or
Affiliated Companies and Southern Energy or any of its Subsidiaries or
Affiliated Companies which is in effect prior to the Separation Date.



         Section 4.17.     IPO Registration Statement. "IPO Registration
Statement" means the registration statement on Form S-1 pursuant to the
Securities Act to be filed with the SEC registering the shares of common stock
of Southern Energy to be issued in the IPO, together with all amendments
thereto.



         Section 4.18.     Liabilities. "Liabilities" means all debts,
liabilities, guarantees, assurances, commitments and obligations, whether
fixed, contingent or absolute, asserted or unasserted, matured or unmatured,
liquidated or unliquidated, accrued or not accrued,



                                      14
<PAGE>



known or unknown, due or to become due, whenever or however arising (including,
without limitation, whether arising out of any contract or tort based on
negligence or strict liability) and whether or not the same would be required
by generally accepted principles and accounting policies to be reflected in
financial statements or disclosed in the notes thereto. For purposes of any
indemnification hereunder, "Liabilities" shall be deemed also to include any
and all damages, claims, suits, judgments, fines, penalties, costs and expenses
of any kind or character, including attorney's fees.



         Section 4.19.     Person. "Person" means an individual, a partnership,
a corporation, a limited liability company, an association, a joint stock
company, a trust, a joint venture, an unincorporated organization and a
governmental entity or any department, agency or political subdivision thereof.



         Section 4.20.     Separation. "Separation" has the meaning set forth in
the Separation Agreement.



         Section 4.21.     Separation Agreement. "Separation Agreement" means
the Master Separation and Distribution Agreement dated as of September 1, 2000,
of which this is an exhibit thereto.




         Section 4.22.     Separation Date. "Separation Date" means as of 12:01
a.m., Eastern Standard Time, September 1, 2000, or such date as may be fixed by
the Board of Directors of Southern.




         Section 4.23.     Southern Business. "Southern Business" has the
meaning set forth in the Separation Agreement.



         Section 4.24.     Southern Energy Business. "Southern Energy Business"
has the meaning set forth in the Separation Agreement.



         Section 4.25.     Southern Energy Covered Parties. "Southern Energy
Covered Parties" shall have the meaning set forth in Section 2.1(a) of this
Agreement.



         Section 4.26.     Southern Energy Group. "Southern Energy Group" has
the meaning set forth in the Separation Agreement.



         Section 4.27.     Southern Energy Indemnitees. "Southern Energy
Indemnitees" means Southern Energy, each member of the Southern Energy Group
and each of their respective directors, officers and employees.



         Section 4.28.     Southern Energy Liabilities. "Southern Energy
Liabilities" means (i) all Liabilities of the Southern Energy Group, and (ii)
the Credit Support Arrangements.



         Section 4.29.     Southern Group. "Southern Group" has the meaning set
forth in the Separation Agreement.



                                      15
<PAGE>



         Section 4.30.     Southern Indemnitees. "Southern Indemnitees" means
Southern, each member of the Southern Group and each of their respective
directors, officers and employees.



         Section 4.31.     Subsidiary. "Subsidiary" has the meaning set forth in
the Separation Agreement.



         Section 4.32.     Tax Indemnification Agreement. "Tax Indemnification
Agreement" means the Tax Indemnification Agreement attached as an exhibit to
the Separation Agreement.



         Section 4.33.     Taxes. "Taxes" has the meaning set forth in the Tax
Indemnification Agreement.



         Section 4.34.     Third Party Claim. "Third Party Claim" has the
meaning set forth in Section 1.4(a) of this Agreement.



                         [SIGNATURES ON FOLLOWING PAGE]




                                      16
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>47
<FILENAME>x10a102.txt
<TEXT>

                                                                EXHIBIT 10(a)102


                                     FORM OF

                          TAX INDEMNIFICATION AGREEMENT

                                  BY AND AMONG

                              THE SOUTHERN COMPANY

                          AND ITS AFFILIATED COMPANIES

                                       AND

                              SOUTHERN ENERGY, INC.

                          AND ITS AFFILIATED COMPANIES

                                TABLE OF CONTENTS



<PAGE>



                                TABLE OF CONTENTS



<TABLE>
<S>                                                                                                              <C>
RECITALS..........................................................................................................1
SECTION 1.  DEFINITIONS...........................................................................................2
SECTION 2. PREPARATION AND FILING OF TAX RETURNS..................................................................6
   2.1 In General.................................................................................................6
   2.2 Information and Cooperation................................................................................7
   2.3 Manner of Filing Tax Returns...............................................................................7
   2.4 Agent......................................................................................................8
SECTION 3. REPRESENTATIONS AND COVENANTS..........................................................................8
   3.1 Southern Energy Representations and Covenants..............................................................8
   3.2 Southern Representations and Covenants.....................................................................9
SECTION 4. TAX SHARING AND PAYMENTS...............................................................................9
   4.1 In General.................................................................................................9
   4.2 Payments..................................................................................................10
SECTION 5. ALLOCATION OF CERTAIN TAX ITEMS.......................................................................10
   5.1 Liability for Restructuring Taxes and Deconsolidation.....................................................10
   5.2 Carryforwards and Carrybacks..............................................................................10
   5.3 Refunds...................................................................................................11
   5.4 Allocation of Tax Items...................................................................................11
   5.5 Continuing Covenants......................................................................................11
SECTION 6. INDEMNIFICATION PROVISIONS............................................................................11
   6.1 General Indemnification...................................................................................11
   6.2 Spinoff Indemnification...................................................................................12
   6.3 Indemnified Liability.....................................................................................13
   6.4 Amount of Indemnified Liability for Income Taxes..........................................................13
   6.5 Indemnity Amount..........................................................................................14
   6.6 Alternate Remedy..........................................................................................14
   6.7 Payments..................................................................................................14
   6.8 Prompt Performance........................................................................................15
   6.9 Interest..................................................................................................15
   6.10 Tax Records..............................................................................................15
SECTION 7. AUDITS AND CONTEST RIGHTS.............................................................................15
   7.1 In General................................................................................................15
   7.2 Notice....................................................................................................16
   7.3 Contests..................................................................................................16
   7.4 Limitations...............................................................................................17
   7.5 Failure to Notify, Etc....................................................................................18
   7.6 Remedies..................................................................................................18
SECTION 8. STOCK OPTIONS.........................................................................................19
   8.1 In General................................................................................................19
   8.2 Notices, Withholding, Reporting...........................................................................19
   8.3 Adjustments...............................................................................................19
SECTION 9. MISCELLANEOUS.........................................................................................19
   9.1 Effectiveness.............................................................................................19
   9.2 Notices...................................................................................................19
</TABLE>


<PAGE>


<TABLE>
<S>                                                                                                             <C>
   9.3 Changes in Law............................................................................................20
   9.4 Confidentiality...........................................................................................20
   9.5 Successors................................................................................................21
   9.6 Affiliated Companies......................................................................................21
   9.7 Authorization, Etc........................................................................................21
   9.8 Entire Agreement..........................................................................................21
   9.9 Governing Law; Jurisdiction...............................................................................21
   9.10 Dispute Resolution.......................................................................................21
   9.11 Counterparts.............................................................................................21
   9.12 Severability.............................................................................................21
   9.13 No Third Party Beneficiaries.............................................................................22
   9.14 Waivers, Etc.............................................................................................22
   9.15 Setoff...................................................................................................22
</TABLE>




                                       ii

<PAGE>

                          TAX INDEMNIFICATION AGREEMENT


         THIS TAX INDEMNIFICATION AGREEMENT (this "Agreement"), dated as of
September 1, 2000, by and among The Southern Company ("Southern"), a Delaware
corporation and each Southern Affiliated Company, and Southern Energy, Inc.
("Southern Energy"), a Delaware corporation and currently a direct, wholly owned
subsidiary of Southern, and each Southern Energy Affiliated Company is entered
into in connection with the Spinoff (as defined below).


                                    RECITALS

         WHEREAS, Southern is the common parent of an affiliated group of
corporations within the meaning of Section 1504(a) of the Internal Revenue Code
of 1986, as amended (the "Code"), which currently files a consolidated federal
income tax return, and which, together with Southern Energy and other affiliated
corporations, is party to the Tax Allocation Agreement (as defined below);


         WHEREAS, as set forth in the Master Separation and Distribution
Agreement dated as of September 1, 2000 (the "Separation Agreement"), and
subject to the terms and conditions thereof, Southern and Southern Energy have
determined it would be appropriate and desirable for Southern to separate the
Southern Energy Group from the Southern Group, and in connection with such
separation (as more fully discussed in the Separation Agreement), for Southern
to acquire HoldCo (as defined below) from Southern Energy (the "HoldCo
Transaction");



         WHEREAS, Southern and Southern Energy contemplate that in addition to
the HoldCo Transaction, Southern Energy will make an initial public offering
(the "IPO") of Southern Energy common stock that will reduce Southern's
ownership of Southern Energy on a fully-diluted basis to not less than 80.1
percent;


         WHEREAS, subsequent to the IPO, Southern intends to distribute all of
its shares of Southern Energy common stock, on a pro rata basis, to the holders
of the common stock of Southern, subject to the terms and conditions of the
Separation Agreement (the "Distribution");

         WHEREAS, the Distribution is intended to qualify as a tax free
distribution under Section 355 of the Code;

         WHEREAS, upon the Distribution, Southern Energy will cease to be a
member of the Southern Consolidated Group for federal income tax purposes; and

         WHEREAS, in contemplation of the Distribution pursuant to which
Southern Energy and its domestic subsidiaries will cease to be members of the
Southern Group (as defined below), the parties hereto have determined to enter
into this Agreement, setting forth their agreement with respect to certain Tax
matters.

<PAGE>

         NOW THEREFORE, in consideration of the mutual covenants and promises
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

SECTION 1.  DEFINITIONS

         1.1 In General. As used in this Agreement, the following capitalized
terms shall have the following meanings:

         "Adequate Assurances" means posting a bond or providing a letter of
credit reasonably acceptable to the Indemnitee; provided, however, if the
Indemnifying Party fails to post such bond or provide such letter of credit, the
Indemnifying Party shall provide cash equal to the Indemnity Amount to the
Indemnitee not less than thirty (30) days prior to the date on which such Tax
would become due and payable by the Indemnitee.

         "Affiliated Company" means, for income tax purposes, any entity in
which a common parent holds 80% or more of the voting power and value of such
corporation. In the case of Southern, such term shall exclude Southern Energy
and any Southern Energy Affiliated Company.

         "Audit" includes any audit, assessment of Taxes, other examination by
any Tax Authority, proceeding, or appeal of such a proceeding relating to Taxes,
whether administrative or judicial, including proceedings relating to competent
authority determinations.

         "Code" means the Internal Revenue Code of 1986, as amended.

         "Consolidated Group" means a group of one or more corporations
connected through stock ownership with a common parent in which the common
parent owns at least 80% of the total voting power and value of such corporation
and that files a Consolidated Return.

         "Consolidated Return" means any Tax Return with respect to Federal
Income Taxes filed on a consolidated basis wherein Southern Energy or any
Affiliated Company joins in the filing of such Tax Return (for any taxable
period) with Southern or one more Southern Affiliated Companies.

         "Consolidated Return Year" means any taxable year for which a
Consolidated Return is filed.

         "Control" means stock representing 50% or more of the total combined
voting power of all classes of stock entitled to vote or at least 50% of the
total value of shares of all classes of stock.

         "Distribution" has the meaning set forth in the Recitals to this
Agreement.

         "Distribution Date" means the date on which the Distribution is
effective.



                                       2


<PAGE>

         "Federal Income Tax" means any Tax imposed under Subtitle A of the Code
(including the Taxes imposed by Sections 11, 55, and 1201(a) of the Code), and
any interest, additions to Tax or penalties applicable or related thereto, and
any other income-based U.S. federal Tax which is hereinafter imposed upon
corporations.

         "Filing Party" has the meaning set forth in Section 2.3(b) of this
Agreement.


         "Final Determination" means with respect to any issue (i) a decision,
judgment, decree or other order by any court of competent jurisdiction, which
decision, judgment, decree or other order has become final and not subject to
further appeal, (ii) a closing agreement (whether or not entered into under
Section 7121 of the Code) or any other binding settlement agreement (whether or
not with the IRS) entered into in connection with or in contemplation of an
administrative or judicial proceeding, or (iii) the completion of the highest
level of administrative proceedings if a judicial contest is not or is no longer
available.


         "HoldCo" means the entity created by Southern Energy that will own all
of the stock of SE Finance Capital Corporation and Southern Company Capital
Funding, Inc. and will be merged with Southern Company Energy Solutions, Inc.

         "HoldCo Transaction" has the meaning set forth in the Recitals of this
Agreement.

         "Income Taxes" means (1) any tax based upon, measured by, or calculated
with respect to (A) net income or profits (including any capital gains tax,
minimum tax and any tax on items of Tax preference, but not including sales,
use, real or personal property, gross or net receipts, transfer or similar
taxes) or (B) multiple bases if one or more of the bases upon which such tax may
be based, measured by, or calculated with respect to, is described in clause (A)
above, or (2) any U.S., state or local franchise tax.

         "Indemnified Liability" has the meaning set forth in Section 6.3.

         "Indemnifying Party" has the meaning set forth in Section 6.2(d) of
this Agreement.

         "Indemnitee" has the meaning set forth in Section 6.2(d) of this
Agreement.

         "Indemnity Amount" has the meaning set forth in Section 6.5.

         "Initial Private Letter Ruling" means the first private letter ruling
issued by the Service to Southern in connection with the Spinoff.

         "Non-Filing Party" has the meaning set forth in Section 2.3(c) of this
Agreement.

         "Option" means an option to acquire common stock, or other equity-based
incentives the economic value of which is designed to mirror that of an option,
including non-qualified stock options, discounted non-qualified stock options,
cliff options to the extent stock is issued or issuable (as opposed to cash
compensation), and tandem stock options to the extent stock is issued or
issuable (as opposed to cash compensation).



                                       3


<PAGE>


         "Post-Distribution Period" means any taxable period or portion thereof
beginning after the Distribution Date.



         "Pre-Distribution Period" means any taxable period or portion thereof
ending on or prior to the Distribution Date.


         "Prohibited Act" has the meaning set forth in Section 6.2(c).

         "Restricted Period" means the period beginning two years before the
date of the Distribution and ending two years after the Distribution Date.


         "Restructuring" means the transactions undertaken by Southern and
Southern Energy (and their respective Affiliated Companies) designed to
accomplish the HoldCo Transaction.


         "Restructuring Tax" means any Tax imposed as a result of the
transactions contemplated by the Restructuring.

         "Ruling Documents" means (1) the request for a ruling under Section 355
and various other Sections of the Code, filed with the Service in connection
with the Spinoff, together with any supplemental filings or ruling requests or
other materials subsequently submitted on behalf of Southern, its subsidiaries
and shareholders to the Service, the appendices and exhibits thereto, and any
rulings issued by the Service to Southern in connection with the Spinoff or (2)
any similar filings submitted to, or rulings issued by, any other Tax Authority
in connection with the Spinoff.

         "Separate Tax" means any Tax incurred by an entity that is not a
Federal Income Tax arising from the filing of the Consolidated Return.

         "Separate Return" means any Tax Return filed by any entity that is not
part of the Consolidated Tax Return.

         "Separation Agreement" has the meaning set forth in the Recitals to
this Agreement.

         "Service" means the Internal Revenue Service.

         "Southern Energy Group" means Southern Energy and any Southern Energy
Affiliated Company of which Southern Energy would be the common parent
corporation after the HoldCo Transaction.

         "Southern Energy Historic Group" means Southern Energy or any Southern
Energy Affiliated Company, including SE Finance Capital Corporation, in
existence prior to the creation and transfer of HoldCo.


                                       4


<PAGE>

         "Southern Group" means Southern, any Southern Affiliated Company or
other entity of which Southern is the common parent corporation, and any
corporation or other entity which may be, or may become a member of such group
from time to time after the HoldCo Transaction. Southern Company Energy
Solutions, Inc., shall at all times remain a member of the Southern Group
notwithstanding any merger into HoldCo.


         "Southern Historic Group" means Southern or any Southern Affiliated
Company (other than Southern Energy or any Southern Energy Affiliated Company)
that was part of Southern's Consolidated Group prior to the HoldCo Transaction,
including Southern Company Energy Solutions, Inc.


         "Spinoff" means the separation of the Southern Energy Group from the
Southern Group through the Distribution.

         "Tax" includes any charges, fees, levies, imposts, duties, or other
assessments of a similar nature, including income, alternative or add-on
minimum, gross receipts, profits, lease, service, service use, wage, wage
withholding, employment, workers compensation, business occupation, occupation,
premiums, environmental, estimated, excise, employment, sales, use, transfer,
license, payroll, franchise, severance, stamp, occupation, windfall profits,
withholding, social security, unemployment, disability, ad valorem, estimated,
highway use, commercial rent, capital stock, paid up capital, recording,
registration, property, real property gains, value added, business license,
custom duties, or other tax or governmental fee of any kind whatsoever, imposed
or required to be withheld by any Tax Authority including any interest,
additions to tax, or penalties applicable or related thereto.

         "Tax Allocation Agreement" means the Income Tax Allocation Agreement
entered into by and among Southern and all the members of its Consolidated Group
dated December 29, 1981, as amended, pursuant to which the parties agreed upon
the allocation of Tax Items relating to the Consolidated Group and the
Consolidated Return.

         "Tax Authority" means any governmental authority or any subdivision,
agency, commission or authority thereof or any quasi-governmental or private
body having jurisdiction over the assessment, determination, collection or
imposition of any Tax (including the Service).

         "Tax Benefit" means a reduction in the Tax liability of a taxpayer (or
of the affiliated group of which it is a member) for any taxable period. Except
as otherwise provided in this Agreement, a Tax Benefit shall be deemed to have
been realized or received from a Tax Item in a taxable period only if and to the
extent that the Tax liability of the taxpayer (or of the affiliated group of
which it is a member) for such period, after taking into account the effect of
the Tax Item on the Tax liability of such taxpayer in the current period and all
prior periods, is less than it would have been if such Tax liability were
determined without regard to such Tax Item.

         "Tax Detriment" means an increase in the Tax liability of a taxpayer
(or of the affiliated group of which it is a member) for any taxable period.
Except as otherwise provided in this Agreement, a Tax Detriment shall be deemed
to have been realized or received from a Tax Item in a taxable period only if
and to the extent that the Tax liability of the taxpayer (or of the



                                       5

<PAGE>
affiliated group of which it is a member) for such period, after taking into
account the effect of the Tax Item on the Tax liability of such taxpayer in the
current period and all prior periods, is more than it would have been if such
Tax liability were determined without regard to such Tax Item.

         "Tax Item" means any item of income, gain, loss, deduction or credit,
or other attribute that may have the effect of increasing or decreasing any Tax.


         "Tax Law" means any federal, state, local or foreign law with respect
to Taxes, including the Code and Treasury Regulations.


         "Tax Return" means any return, report, certificate, form or similar
statement or document (including, any related or supporting information or
schedule attached thereto and any information return, amended Tax return, claim
for refund or declaration of estimated Tax) required to be supplied to, or filed
with, a Tax Authority in connection with the determination, assessment or
collection of any Tax or the administration of any laws, regulations or
administrative requirements relating to any Tax.

         "Treasury Regulations" means the final, temporary and proposed income
Tax regulations promulgated under the Code, as such regulations may be amended
from time to time (including corresponding provisions of succeeding
regulations).

         1.2 Construction Principles. As used in this Agreement, the singular
shall be deemed to include the plural and vice versa, and the captions and
section headings are inserted for convenience of reference only and are not
intended to have any significance for the interpretation of, or construction of,
the provisions of this Agreement. It is intended that this Agreement shall
comply with the Public Utility Holding Company Act of 1935, Rule 45(c), to the
extent relevant, and all ambiguities shall be interpreted and resolved
accordingly.

              SECTION 2. PREPARATION AND FILING OF TAX RETURNS.

         2.1 In General.

         (a) During the Pre-Distribution Period, Southern shall timely file or
cause to be filed all Tax Returns that are filed on a consolidated, combined or
unitary basis and include any member of the Southern Energy Group or Southern
Energy Historic Group as provided in the Tax Allocation Agreement. Each entity
required to file a Separate Return shall timely file or cause to be filed all
such Separate Returns for any Pre-Distribution Period. Notwithstanding the
foregoing, Southern shall timely file or cause to be filed all Tax Returns with
respect to HoldCo.

         (b) Southern shall timely file or cause to be filed any Tax Return
related to the Southern Group for any Post-Distribution Period. Southern Energy
shall timely file or cause to be filed any Tax Return related to the Southern
Energy Group for any Post-Distribution Period.


                                       6


<PAGE>

         2.2 Information and Cooperation.

         (a) Southern and Southern Energy shall provide each other all documents
and information, and make available employees and officers of Southern and
Southern Energy, as reasonably requested by the other party, on a mutually
convenient basis during normal business hours, to aid the other party in
preparing any Tax Return described in Section 2.1 of this Agreement to the
extent that such Tax Return relates to any Pre-Distribution Period or to contest
any Audit of any such Tax Return.


         (b) In the case of any Tax Return for a Pre-Distribution Period
described in Section 2.1 of this Agreement, Southern will provide Southern
Energy with a copy of that portion of each such Tax Return to the extent it
relates to Southern Energy or any Southern Energy Affiliated Company, together
with all related tax accounting work papers, not later than five (5) days after
the receipt of a written request therefor. In addition, Southern will provide to
employees of Southern Energy responsible for preparing its Tax Returns with
access to any private letter rulings, together with any requests therefor and
related documents and any other relevant information, as it relates to Southern
Energy for any period prior to the Distribution Date, and will provide Southern
Energy with a copy of such rulings or documents to the extent that the issues
discussed therein are relevant to Southern Energy or a Southern Energy
Affiliated Company, not later than five (5) days after the receipt of a written
request therefor.



         (c) Notwithstanding any other provision of this Agreement, neither
Southern nor any Southern Affiliated Company shall be required to provide
Southern Energy or any Southern Energy Affiliated Company access to or copies of
any information that relate to Southern or any Southern Affiliated Company
unless it also relates to Southern Energy or a Southern Energy Affiliated
Company. In addition, in the event that Southern determines that the provision
of any information to Southern Energy or any Southern Energy Affiliated Company
could be commercially detrimental, violate any law or agreement or waive any
privilege that may be asserted under applicable law including, any privilege
arising under or relating to the attorney-client relationship (including the
attorney-client and work product privileges), the accountant-client privilege,
and any privilege relating to internal evaluation processes, the parties shall
take all reasonable measures to permit the compliance with such obligations in a
manner that avoids any such harm or consequence. In the event that Southern
Energy determines that the provision of any information to Southern or any
Southern Affiliated Company could be commercially detrimental, violate any law
or agreement or waive any privilege that may be asserted under applicable law
including, any privilege arising under or relating to the attorney-client
relationship (including the attorney-client and work product privileges), the
accountant-client privilege, and any privilege relating to internal evaluation
processes, the parties shall take all reasonable measures to permit the
compliance with such obligations in a manner that avoids any such harm or
consequence.


         2.3 Manner of Filing Tax Returns.


         (a) Southern (for itself and the Southern Affiliated Companies) and
Southern Energy (for itself and the Southern Energy Affiliated Companies) agree
to file all Tax Returns for any Pre-Distribution Period, and to take all other
actions in a manner consistent with the position that


                                       7

<PAGE>


Southern Energy and the Southern Energy Affiliated Companies are part of the
Southern Consolidated Group for all periods through and including the
Distribution Date.



         (b) Except as otherwise provided in this Section 2.3 of this Agreement,
the party that is required to file a return under Section 2.1 of this Agreement
(the "Filing Party") shall have the exclusive right to determine (1) the manner
in which such Tax Return shall be prepared and filed, including the elections,
methods of accounting, positions, conventions and principles of taxation to be
used and the manner in which any Tax Item shall be reported, (2) whether any
extensions may be requested, (3) the elections that will be made in such Tax
Return, (4) whether any amended Tax Returns shall be filed, (5) whether any
claims for refund shall be made, (6) whether any refunds shall be paid by way of
refund or credited against any liability for the related Tax, and (7) whether to
retain outside specialists to prepare such Tax Return, whom to retain for such
purpose and the scope of any such retainer. Notwithstanding the foregoing, if
Southern Energy requests Southern to make a particular determination under this
Section 2.3(b) with respect to a Tax Return of Southern Energy or a Southern
Energy Affiliated Company, Southern shall not unreasonably withhold its consent
to such request.


         (c) Any Tax Return described in Section 2.1(a) of this Agreement (but
only with respect to Tax Items of Southern Energy or an Southern Energy
Affiliated Company), which Tax Return is filed after the date of this Agreement,
shall be prepared on a basis consistent with the elections, methods of
accounting, positions, conventions and principles of taxation and the manner in
which any Tax Item or other information is reported as reflected on the most
recently filed prior Tax Returns involving similar matters. The preceding
sentence shall not apply if the Filing Party obtains the prior written consent
(which consent shall not be unreasonably withheld) of the other party (the
"Non-Filing Party").

         2.4 Agent. Southern Energy hereby irrevocably designates, and agrees to
cause each Southern Energy Affiliated Company to so designate, Southern as its
sole and exclusive agent and attorney-in-fact to take such action (including
execution of documents) as Southern, in its sole discretion, may deem
appropriate in any and all matters (including Audits) relating to any
Consolidated Return described in Section 2.1(a) of this Agreement; provided,
however, that Southern shall not exercise its rights as agent and
attorney-in-fact in any manner that is inconsistent with the rights granted to
Southern Energy under this Agreement, and nothing in this Section 2.4 shall
limit the rights granted to Southern Energy under this Agreement.

         SECTION 3. REPRESENTATIONS AND COVENANTS.

         3.1 Southern Energy Representations and Covenants. Southern Energy, for
itself and the Southern Energy Affiliated Companies, hereby represents, warrants
and covenants that:

         (a) Southern Energy has reviewed the information and representations
made in the Ruling Documents submitted to the Service prior to the date of this
Agreement and, to Southern Energy's knowledge, all of such information or
representations that relate to Southern Energy or any Southern Energy Affiliated
Company, or the business or operations of either, are true, correct and
complete.



                                       8


<PAGE>

         (b) Southern Energy will not, and will cause each Southern Energy
Affiliated Company not to, take any action, or fail or omit to take any action,
that would cause any of the information or representations made in the Ruling
Documents that relate to Southern Energy, the Southern Energy Historic Group, or
any Southern Energy Affiliated Company or the business or operations of each, to
be untrue, regardless of whether such information or representations were
included in the Initial Private Letter Ruling (or any supplemental ruling).

         3.2 Southern Representations and Covenants. Southern, for itself and
the Southern Affiliated Companies, hereby represents, warrants and covenants
that:


         (a) Southern has reviewed the information and representations made in
the Ruling Documents submitted to the Service prior to the date of this
Agreement, and, to its knowledge, all of such information or representations
that relate to Southern or any Southern Affiliated Company or the business or
operations of either, are true, correct and complete.


         (b) Southern will not, and will cause each Southern Affiliated Company
not to, take any action, or fail or omit to take any action, that would cause
any of the information or representations made in the Ruling Documents to be
untrue, regardless of whether such information or representations were included
in the Initial Private Letter Ruling.

                 SECTION 4. TAX SHARING AND PAYMENTS.

         4.1 In General. Except to the extent specifically modified or
supplemented herein, the Tax Allocation Agreement shall continue in full force
and effect. Consequently, for example, for taxable periods ending on or before
the Distribution Date, payments to Southern or Southern Energy, as the case may
be, shall continue to be made in accordance with past practices. The provisions
of the Tax Allocation Agreement shall fix the rights and obligations of the
parties as to the matters covered thereby. Notwithstanding any other provision
of this Agreement, the Tax Allocation Agreement shall not apply to any
Post-Distribution Period of Southern Energy and the Southern Energy Group,
except as provided in Section 5.2(b) of this Agreement.

         (a) Southern Energy shall be responsible for, and shall indemnify and
hold harmless Southern against, any and all Taxes incurred by Southern Energy,
the Southern Energy Group, or the Southern Energy Historic Group (except as
provided below) for any Pre-Distribution Period in accordance with past
practices and the principles set forth in the Tax Allocation Agreement other
than any Restructuring Taxes for which Southern or any Southern Affiliated
Company is liable under Section 5 of this Agreement. Southern shall be
responsible for, and shall indemnify and hold harmless Southern Energy against,
any and all Taxes incurred by Southern or any Southern Affiliated Company (other
than Taxes attributable to Southern Energy or any Southern Energy Affiliated
Company) for any Pre-Distribution Period (except as provided below) in
accordance with past practices and the principles set forth in the Tax
Allocation Agreement other than any Restructuring Taxes for which Southern
Energy or any Southern Energy Affiliated Company is liable under Section 5 of
this Agreement.



                                       9


<PAGE>

         (b) Southern shall be responsible for, and shall indemnify and hold
harmless Southern Energy against, any and all Taxes incurred by HoldCo and its
Affiliated Companies for any tax period.

         (c) Southern Energy shall be responsible for all Taxes that relate to
the Southern Energy Group with respect to any Post-Distribution Period. Southern
shall be responsible for all Taxes that relate to the Southern Group with
respect to any Post-Distribution Period.


         4.2 Payments.


         (a) Federal Income Taxes. Southern shall pay (or cause to paid) to the
Service all Federal Income Taxes, if any, of any Consolidated Group due and
payable for all Pre-Distribution Periods.


         (b) Separate Taxes. Southern shall pay (or cause to be paid) to the
appropriate Tax Authorities all Separate Taxes, if any, that relate to Southern,
the Southern Historic Group, or the Southern Group. Southern Energy shall pay
(or cause to be paid) to the appropriate Tax Authorities all Separate Taxes, if
any, that relate to Southern Energy, the Southern Energy Historic Group or the
Southern Energy Group.


                SECTION 5. ALLOCATION OF CERTAIN TAX ITEMS.


         5.1 Liability for Restructuring Taxes and Deconsolidation.



         (a) Southern shall be responsible for, and shall indemnify and hold
harmless Southern Energy against any and all Restructuring Taxes relating to
HoldCo Transaction.


         (b) Except as otherwise provided by this Agreement, all Taxes arising
from the deconsolidation of the Southern Energy Group from the Southern Group
shall be the obligation of the entity that is liable for such Taxes under
applicable Tax Law.

         5.2 Carryforwards and Carrybacks.

         (a) Southern shall notify Southern Energy after the Distribution Date
of any consolidated carryover item which may be partially or totally attributed
to and carried over by a Southern Energy Affiliated Company and will notify
Southern Energy of subsequent adjustments which may affect such carryover item.


         (b) Notwithstanding any other provision of this Agreement, Southern
Energy shall not be required to make any election under Section 172(b)(3) of the
Code and, to the extent feasible, any similar provision of any state or local
Tax Law, to relinquish any right to carryback net operating losses. Upon a
request by Southern Energy, Southern shall be required to include on an amended
Consolidated Return any net operating losses of Southern Energy arising in a
Post-Distribution Period to the extent allowed under the Code; provided, that if
Southern incurs a Tax



                                       10
<PAGE>


Detriment related to the inclusion of such net operating losses on the
Consolidated Return, Southern Energy shall indemnify Southern for the amount of
such Tax Detriment.



         5.3 Refunds. Any refund of Taxes received in a Pre-Distribution Period
will be allocated in a manner consistent with the existing Tax Allocation
Agreement. Any refund of Taxes received in a Post-Distribution Period resulting
from an adjustment made to a Tax Return filed for a Pre-Distribution Period will
be allocated to the party whose Return resulted in such refund, including any
refund relating to the carryback of a net operating loss pursuant to Section
5.2(b).


         5.4 Allocation of Tax Items.

         (a) All Tax computations (1) ending on the Distribution Date and (2)
the immediate following Tax period of Southern Energy or any Southern Energy
Affiliated Company, shall be made pursuant to the principles of Section
1.1502-76(b) of the Treasury Regulations or of a corresponding provision under
the laws of other jurisdictions, as determined by Southern, taking into account
all reasonable suggestions made by Southern Energy with respect thereto.


         (b) Earnings and Profits. Southern will advise Southern Energy in
writing of the decrease in Southern earnings and profits attributable to the
Distribution under Section 312(h) of the Code as a result of the Spin-Off not
later than November 15, 2002, with respect to transactions completed during
fiscal year 2001; provided, however, that Southern shall provide Southern Energy
with estimates of such amounts (determined in accordance with past practice) as
reasonably requested by Southern Energy.


         5.5 Continuing Covenants. Southern (for itself and each Southern
Affiliated Company) and Southern Energy (for itself and each Southern Energy
Affiliated Company) agree (1) not to take any action reasonably expected to
result in an increased Tax Detriment to the other party or a reduction in a Tax
Benefit of the other party under this Agreement, and (2) to take any action
reasonably requested by the other party that would reasonably be expected to
result in a Tax Benefit or avoid a Tax Detriment to the other party, provided
that such action does not result in any additional cost not fully compensated
for by the requesting party. The parties hereby acknowledge that the preceding
sentence is not intended to limit, and therefore shall not apply to, the rights
of the parties with respect to matters otherwise covered by this Agreement.


                SECTION 6. INDEMNIFICATION PROVISIONS.


         6.1 General Indemnification.


         (a) In General. Southern Energy and each Southern Energy Affiliated
Company shall jointly and severally indemnify Southern, each Southern Affiliated
Company and their respective directors, officers and employees, and hold them
harmless from and against any and all Taxes for which Southern Energy or any
Southern Energy Affiliated Company is liable under this Agreement and any loss,
cost, damage or expense, including reasonable attorneys' fees and costs, that is
attributable to, or results from, the failure of Southern Energy, any Southern
Energy Affiliated Company or any director, officer, or employee to make any
payment required to be made under this Agreement. Southern and each Southern
Affiliated Company shall jointly and



                                       11
<PAGE>


severally indemnify Southern Energy, each Southern Energy Affiliated Company and
their respective directors, officers and employees, and hold them harmless from
and against any and all Taxes for which Southern or any Southern Affiliated
Company is liable under this Agreement and any loss, cost, damage or expense,
including reasonable attorneys' fees and costs, that is attributable to, or
results from the failure of Southern any Southern Affiliated Company or any
director, officer or employee to make any payment required to be made under this
Agreement.



         (b) Inaccurate or Incomplete Information. Southern Energy and each
Southern Energy Affiliated Company shall jointly and severally indemnify
Southern, each Southern Affiliated Company and their respective directors,
officers and employees, and hold them harmless from and against any cost, fine,
penalty, or other expenses of any kind attributable to the negligence of
Southern Energy or any Southern Energy Affiliated Company in supplying Southern
or any Southern Affiliated Company with inaccurate or incomplete information, in
connection with the preparation of any Tax Return. Southern and each Southern
Affiliated Company shall jointly and severally indemnify Southern Energy, each
Southern Energy Affiliated Company and their respective directors, officers and
employees, and hold them harmless from and against any cost, fine, penalty, or
other expense of any kind attributable to the negligence of Southern or any
Southern Affiliated Company in supplying Southern Energy or any Southern Energy
Affiliated Company with inaccurate or incomplete information, in connection with
the preparation of any Tax Return.



6.2 Spinoff Indemnification.


         (a) In General. Notwithstanding anything herein or in the Tax
Allocation Agreement to the contrary, the provisions of this Section 6 shall
govern all matters among the parties hereto related to an Indemnified Liability
(as defined in Section 6.3 below) and an Indemnity Amount (as defined in Section
6.5 below).


         (b) Continued Conduct of Business. During the Restricted Period, each
of Southern and Southern Energy agrees that it will not cease the active conduct
of its trade or business within the meaning of Section 355(b) of the Code nor
cause or permit to be caused a change in its Control (other than the
Distribution).


         (c) Ruling Requirement for Major Transactions Undertaken by Southern
Energy during the Restricted Period. During the Restricted Period, Southern and
Southern Energy will not enter into any of the following transactions, or enter
into any other transaction which, by itself or in the aggregate, may cause the
Distribution to be treated as part of a plan pursuant to which one or more
persons acquire directly or indirectly stock representing Control of Southern or
Southern Energy, as the case may be, within the meaning of Code Section 355(e):

                  (i)   merge or consolidate with or into any other corporation;

                  (ii)  liquidate or partially liquidate (within the meaning of
         such terms as defined in Section 346 and Section 302, respectively, of
         the Code);



                                       12

<PAGE>


                  (iii) sell or transfer all or substantially all its assets
         (within the meaning of Rev. Proc. 77-37, 1977 - 2 C.B. 568) in a single
         transaction or series of related transactions;

                  (iv)  redeem or otherwise repurchase any of Southern or
         Southern Energy's capital stock; or


                  (v)   make any change in its equity structure (including stock
         issuances, pursuant to the exercise of options or otherwise, option
         grants, the adoption of, or authorization of shares under a stock
         option plan, capital contributions or acquisition but not including the
         Distribution), (actions (i), (ii), (iii), (iv) and (v) are referred to
         as the "Prohibited Acts"), unless Southern or Southern Energy first
         obtains, and permits the other party to review, a supplemental ruling
         from the Service, that such transaction, and any transaction related
         thereto, will not affect the qualification of the Spin-Off under
         Section 355 of the Code.



         (d) Indemnification. If Southern or Southern Energy breaches any
representations set forth in Section 3 of this Agreement or takes any action or
enters into any agreement to take any action, including, without limitation, any
breach of Sections 6.2(b) and (c), and the Spin-Off shall fail to qualify under
Section 355 of the Code as a result of such action or actions, then such party
(the "Indemnifying Party") shall indemnify and hold harmless the other party
against any and all federal, state and local taxes, interest, penalties and
additions to Tax imposed upon or incurred by Southern, the Southern Group, any
shareholder of Southern, Southern Energy or the Southern Energy Group, as the
case may be, (each such party an "Indemnitee") as a result of the failure of the
Spin-Off to so qualify to the extent provided herein. For purposes of this
Agreement, the failure of the Spin-Off to qualify under Section 355 of the Code
shall include, without limitation, the imposition of any Tax upon any Indemnitee
under Code Section 355(e).


         6.3 Indemnified Liability. For purposes of this Agreement, the term
"Indemnified Liability" means any liability imposed upon or incurred by (1)
Southern, any member of the Southern Group, or Southern shareholder for which
Southern, any other member of the Southern Group or Southern shareholder is
indemnified and held harmless under Section 6.4, or (2) Southern Energy or any
member of the Southern Energy Group, for which Southern Energy or any other
member of the Southern Energy Group is indemnified and held harmless under
Section 6.4, but shall not refer to the amount of such liability.


         6.4 Amount of Indemnified Liability for Income Taxes. The amount of an
Indemnified Liability for a federal or state Tax incurred by an Indemnitee based
on or determined with reference to income shall be deemed to be the amount of
Tax computed by multiplying (i) the taxing jurisdiction's highest effective Tax
rate applicable to Indemnitee of the character subject to Tax as a result of the
failure of the Spin-Off to qualify under Section 355 of the Code for the taxable
period in which the Spin-Off occurs, times (ii) the gain or income of Indemnitee
which is subject to Tax in the taxing jurisdiction as a result of the failure of
the Spin-Off to qualify under Section 355 of the Code, and (iii) in the case of
a state, times the percentage representing the extent to which such gain or
income is apportioned or allocated to such state; provided, however, that in the
case of a state Tax determined as a percentage of Federal Income Tax liability,
the amount of Indemnified Liability shall be deemed to be the amount of Tax
computed by



                                       13
<PAGE>


multiplying (i) that state's highest effective rate applicable to Indemnitee of
the character subject to Tax as a result of the failure of the Spin-Off to
qualify under Section 355 of the Code for taxable period in which the Spin-Off
occurs, times (ii) the amount of deemed Federal Income Tax (whether or not
incurred) imposed upon Indemnitee from the failure of the Spin-Off to qualify
under Section 355 of the Code computed in accordance with this Section 6.6,
times (iii) the percentage representing the extent to which the gain or income
required to be recognized on the Spin-Off is apportioned to such state.



         6.5 Indemnity Amount. With respect to any Indemnified Liability, the
amount which the Indemnifying Party shall pay to Indemnitee as indemnification
(the "Indemnity Amount") shall be the sum of (i) the amount of the Indemnified
Liability, as determined under Section 6.4, (ii) any penalties and interest
imposed with respect to the Indemnified Liability and (iii) an amount such that
when the sum of the amounts set forth in clauses (i), (ii) and this clause (iii)
of this Section 6.5 are reduced by all Taxes imposed as a result of the receipt
of such sum, (taking into account any related current credits or deductions
payable by the Indemnitee or any of its Affiliated Companies under any law or
governmental authority) the reduced amount is equal to the sum of the amounts
set forth in clauses (i) and (ii) of this Section 6.5 .


         6.6 Alternate Remedy. Southern and Southern Energy, respectively,
recognize that any failure by it or any Affiliated Company to comply with their
obligations under this Section 6 may result in additional Taxes which could
cause irreparable harm to Southern and its shareholders, the Southern Affiliated
Companies, and/or Southern Energy and the Southern Energy Affiliated Companies,
and that such entities may be inadequately compensated by monetary damages for
such failure. Accordingly, if (A) (1) either party shall fail to comply with any
obligation under this Section 6 which would be reasonably foreseeable to result
in any additional Taxes, and (2) such party shall fail to provide the other
party with a written opinion of a nationally recognized tax attorney, or a tax
accountant that is a member of a nationally recognized law firm or accounting
firm that the failure to comply with such obligation will not result in any
increase in Taxes of Southern and its shareholders, any Southern Affiliated
Company, Southern Energy or any Southern Energy Affiliated Company, as the case
may be, and such opinion is provided to such party for its review and approval,
which approval will not be unreasonably withheld, or (B) if it is probable that
the failure by such party to comply with any such obligation under this Section
6 will result in an Indemnified Liability under this Agreement and the
Indemnifying Party fails to provide Adequate Assurances to the Indemnitee of its
ability to pay the Indemnity Amount under this Agreement, then Southern or
Southern Energy, as the case may be, shall be entitled to injunctive relief in
addition to all other remedies.

         6.7 Payments.


         (a) In General. Except as otherwise provided under this Agreement, to
the extent that any party has an indemnification or payment obligation to
another party pursuant to this Agreement, the indemnitee shall provide the
indemnifying party with its calculation of the amount of such indemnification
payment. Such calculation shall provide sufficient detail to permit the
indemnifying party to reasonably understand the calculations. All
indemnification payments shall be made to such indemnitee or to the appropriate
Tax Authority as specified by the indemnitee within the time prescribed for
payment in this Agreement, or if no period is prescribed, within




                                       14


<PAGE>


thirty (30) days after delivery by the indemnitee to the indemnifying party of
written notice of a payment or if such liability is contested pursuant to
Section 7.3 of this Agreement, within thirty (30) days of the incurrence of such
an amount based on a Final Determination, together with a computation of the
amounts due. Any disputes with respect to indemnification payments shall be
resolved in accordance with Section 9.10 below.


         (b) Electronic Payments. Any payment required under this Agreement in
an amount in excess of one million dollars ($1,000,000.00) shall be made by
electronic funds transfer of immediately available funds.

         6.8 Prompt Performance. All actions required to be taken by any party
under this Agreement shall be performed within the time prescribed for
performance in this Agreement, or if no period is prescribed, such actions shall
be performed promptly.


         6.9 Interest. Payments pursuant to this Agreement that are not made
within the period prescribed in this Section 6.7(a) shall bear interest for the
period from and including the date immediately following the last date of the
period through and including the date of payment at a per annum rate equal to
the prime rate as published in The Wall Street Journal on the date of
determination, plus two percent (2%). Such interest will be payable at the same
time as the payment to which it relates and shall be calculated on the basis of
a year of 365 days and the actual number of days for which due.


         6.10 Tax Records. The parties to this Agreement hereby agree to retain
and provide on proper demand by any Taxing Authority (subject to any applicable
privileges) the books, records, documentation and other information relating to
any Tax Return until the later of (a) the expiration of the applicable statute
of limitations (giving effect to any extension, waiver or mitigation thereof)
and (b) in the event any claim is made under this Agreement for which such
information is relevant, until a Final Determination with respect to such claim.

                  SECTION 7. AUDITS AND CONTEST RIGHTS.

         7.1 In General. Upon the termination of Southern Energy and the
Southern Energy Group as members of the Southern Consolidated Group, the Tax
Allocation Agreement shall apply with respect to any period in which the income
of the terminating member is included in the Consolidated Return. The
terminating member shall remain liable to Southern for payments required under
the Tax Allocation Agreement, including, but not limited to, payments of Tax and
estimated Tax for periods in which the member's income is included in the
Southern Consolidated Return. Subject to Section 2.2(c) of this Agreement, the
terminating member shall cooperate and provide reasonable access to books,
records and other information needed in connection with Audits, administrative
proceedings, litigation and other similar matters related to periods in which
the member was a member of the Southern Consolidated Group. Notwithstanding the
foregoing, Southern Energy and the Southern Energy Group will not be required
under the Tax Allocation Agreement to pay more on a combined or consolidated
basis than that which it would have been required to pay had Southern Energy or
a member of the Southern Energy Group filed a separate Federal Income Tax
Return.



                                       15


<PAGE>


         (b) Except as otherwise provided in this Agreement, the respective
Filing Party shall have the right to control, contest, and represent the
interests of Southern, any Southern Affiliated Company, Southern Energy or any
Southern Energy Affiliated Company in any Audit relating to any Tax Return that
the Filing Party is responsible for filing under Section 2.1 of this Agreement
and to resolve, settle or agree to any deficiency, claim or adjustment proposed,
asserted or assessed in connection with or as a result of any such Audit. The
Filing Party's rights shall extend to any matter pertaining to the management
and control of an Audit, including execution of waivers, choice of forum,
scheduling of conferences and the resolution of any Tax Item.



         7.2 Notice. If, after the date of this Agreement, Southern (or any
Southern Affiliated Company) or Southern Energy (or any Southern Energy
Affiliated Company) receives written notice of, or relating to, an Audit from a
Tax Authority that asserts, proposes or recommends a deficiency, claim or
adjustment that, if sustained, could result in Taxes for which the other party
is responsible under this Agreement, then the party receiving such notice shall
provide a copy of such notice to such other party within ten (10) days of
receipt thereof.


         7.3 Contests.

         (a) If any Tax Authority asserts, proposes or recommends a deficiency,
claim or adjustment that, if sustained, could result in Taxes for which the
Non-Filing Party is responsible under this Agreement, then upon request by the
Non-Filing Party, the Filing Party shall contest, or continue to contest, any
deficiency, claim or adjustment and the Filing Party shall keep the Non-Filing
Party informed in a timely manner reasonably in advance of all actions taken or
proposed to be taken by the Filing Party in connection with such deficiency,
claim or adjustment.

         (b) In the case of an Audit with respect to any Tax Item, the Filing
Party shall:

                  (1) in the case of any material correspondence or filing
submitted to the Tax Authority or any judicial authority that relates to the
merits of such deficiency, claim or adjustment (i) reasonably in advance of such
submission, but subject to applicable time constraints imposed by such Tax
Authority or judicial authority, provide the Non-Filing Party with a draft copy
of the portion of such correspondence or filing that relates to such deficiency,
claim or adjustment, (ii) incorporate, subject to applicable time constraints
imposed by such Tax Authority or judicial authority, the Non-Filing Party's
comments and changes on such draft copy of such correspondence or filing, and
(iii) provide the Non-Filing Party with a final copy of the portion of such
correspondence or filing that relates to such deficiency, claim or adjustment;

                  (2) provide the Non-Filing Party with notice reasonably in
advance of, and the Non-Filing Party shall have the right to attend, any
meetings with the Tax Authority (including meetings with examiners) or hearings
or proceedings before any judicial authority to the extent they relate to such
deficiency, claim or adjustment; and

                  (3) at the Filing Party's reasonable request (or upon the
Filing Party's consent to a request by the Non-Filing Party, which consent shall
not be unreasonably withheld), the Non-Filing Party shall assume responsibility
for (i) contesting and presenting the merits with respect to any deficiency,
claim or adjustment that, if sustained, would result in Taxes for which the



                                       16


<PAGE>

Non-Filing Party is responsible under this Agreement, or (ii) resolving,
settling or agreeing to any such deficiency, claim or adjustment. Any such
request (or consent) by the Filing Party shall be subject to the Non-Filing
Party's continued compliance with the conditions of Section 7.4 of this
Agreement and to such other conditions as the Filing Party and Non-Filing Party
reasonably agree.

         7.4 Limitations.

         (a) In General. The Filing Party shall have no obligation to contest,
or to continue to contest, any deficiency, claim or adjustment in accordance
with Section 7.3, and the Non-Filing Party shall have no right to control or
participate under Section 7.3 of this Agreement unless:


                  (1) within thirty (30) days of a reasonable request by the
Filing Party, the Non-Filing Party shall deliver to the Filing Party a written
opinion of a nationally recognized tax attorney or tax accountant that is a
member of a recognized law firm or accounting firm, to the effect that the
Non-Filing Party's position with respect to such deficiency, claim or adjustment
is supported by a reasonable basis (within the meaning of Treasury Regulations
Section 1.6662-3(b)(3));


                  (2) the Non-Filing Party shall have agreed to be bound by a
Final Determination of such deficiency, claim or adjustment;

                  (3) the Non-Filing Party shall have agreed to pay, and shall
be currently paying, all reasonable out of pocket costs and expenses incurred by
the Filing Party to contest such deficiency, claim or assessment including
reasonable outside attorneys', accountants' and investigatory fees and
disbursements;

                  (4) the Non-Filing Party shall have advanced to the Filing
Party, on an interest-free basis (and with no additional net after-tax cost to
the Filing Party), the amount of Tax in controversy (but not in excess of the
lesser of (A) the amount of Tax for which the Non-Filing Party could be liable
under this Agreement or (B) the amounts actually expended by the Filing Party
for this item) to the extent necessary for the contest to proceed in the forum
selected by the Filing Party;

                  (5) the Non-Filing Party shall have provided to the Filing
Party all documents and information, and shall have made available employees and
officers of the Non-Filing Party, as may be necessary, useful or reasonably
required by the Filing Party in contesting such deficiency, claim or adjustment;
and

                  (6) the contest of such deficiency, claim or adjustment shall
involve no material danger of the sale, forfeiture or loss of, or the creation
of any lien on, any asset of the Filing Party (except if the Non-Filing Party
shall have adequately bonded such lien or otherwise made provision to protect
the interests of the Filing Party in a manner reasonably satisfactory to the
Filing Party).



                                       17


<PAGE>


         (b) Settlement. Notwithstanding Section 7.4(a), the Filing Party may
resolve, settle or agree to any deficiency, claim or adjustment proposed,
asserted or assessed in connection with any Audit of any Tax Return that it is
responsible for filing under Section 2.1 of this Agreement if the Filing Party
has provided the Non-Filing Party with a reasonable opportunity to review a copy
of that portion of the settlement or compromise proposal which relates to the
claim for which the Filing Party is seeking indemnification hereunder; provided,
that if (a) the Filing Party fails to provide the Non-Filing Party such a
reasonable opportunity to review such portion of such proposal, or (b) after
such reasonable opportunity to review such proposal the Non-Filing Party in
writing reasonably withholds its consent to all or part of such settlement or
compromise proposal, then, unless the Filing Party was not required to continue
the applicable contest under the terms of Section 7.4(a), the Non-Filing Party
shall not be obligated to indemnify the Filing Party hereunder to the extent of
the amount attributable to the loss to which such settlement or compromise
relates as to which the Non-Filing Party has reasonably withheld its consent, or
with respect to any other loss for which a successful contest is foreclosed
because of such settlement or compromise as to which the Non-Filing Party has
reasonably withheld its consent. If the Filing Party effects a settlement or
compromise of such contest, notwithstanding that the Non-Filing Party has
reasonably withheld its consent thereto, the Filing Party shall repay to the
Non-Filing Party such amounts that the Non-Filing Party advanced pursuant to
clause (a)(4) of this Section 7.4 hereof as relate to such claim, to the extent
that the Non-Filing Party has reasonably withheld its consent to the settlement
or compromise thereof (together with interest at the prime rate as published in
the Wall Street Journal on any such amount paid by the Non-Filing Party from the
date paid by Lessee to the date repaid by the Filing Party).


         (c) Waiver. Notwithstanding any other provision of this Section 7.4,
the Filing Party may resolve, settle, or agree to any deficiency, claim or
adjustment for any taxable period if the Filing Party waives it right to
indemnity with respect to such Tax Item. In such event, the Filing Party shall
promptly reimburse the Non-Filing Party for all amounts previously advanced by
the Non-Filing Party to the Filing Party in connection with such deficiency,
claim or adjustment under Section 7.4(a)(4) of this Agreement. In addition, the
Filing Party shall reimburse the Non-Filing Party for any Tax Detriment that
directly results from the settlement of such deficiency, claim or adjustment. No
waiver by the Filing Party under this Section 7.4(c) with respect to any
deficiency, claim or adjustment relating to any single Tax Item, position, issue
or transaction or relating to any single Tax for any one taxable period shall
operate as a waiver with respect to any other deficiency, claim or adjustment.

         7.5 Failure to Notify, Etc. The failure of the Filing Party promptly to
notify the Non-Filing Party of any matter relating to a particular Tax for a
taxable period or to take any action specified in Section 7.3 of this Agreement
shall not relieve the Non-Filing Party of any liability and/or obligation which
it may have to the Filing Party under this Agreement with respect to such Tax
for such taxable period except to the extent that the Non-Filing Party's rights
hereunder are materially prejudiced by such failure and in no event shall such
failure relieve the Non-Filing Party of any other liability and/or obligation
which it may have to the Filing Party.


         7.6 Remedies. Except as otherwise provided in this Agreement, the
parties hereby agree that the sole and exclusive remedy for a breach by the
Filing Party of the Filing Party's obligations to the Non-Filing Party with
respect to a deficiency, claim or adjustment relating to



                                       18

<PAGE>


the redetermination of a Tax Item of the Non-Filing Party for a taxable period
shall first be a reduction in the amount that would otherwise be payable by the
Non-Filing Party for such taxable period and then an increase in amount that
would otherwise be payable by the Filing Party for such taxable period, in
either case because of the breach. The parties further agree that no claim
against the Filing Party and no defense to the Non-Filing Party's liabilities to
the Filing Party under this Agreement shall arise from the resolution by the
Filing Party of any deficiency, claim or adjustment relating to the
redetermination of any Tax Item of the Filing Party.



                            SECTION 8. STOCK OPTIONS.



         8.1 In General. The parties hereto agree that Southern shall be
entitled to any Tax Benefit arising by reason of exercises of Options to
purchase shares of Southern stock, and that Southern Energy shall be entitled to
any Tax Benefit arising by reason of exercises of Options to purchase shares of
Southern Energy stock. The parties hereto agree to report all Tax deductions
with respect to stock options and other equity issued to their employees
consistently with this Section 8.1, to the extent permitted by the Tax Law.


         8.2 Notices, Withholding, Reporting. Southern shall promptly notify
Southern Energy of any Post-Separation Date event giving rise to income to any
Southern Energy Group employees or former employees in connection with exercises
of options to purchase shares of Southern stock. If required by the Tax Law,
Southern Energy shall withhold applicable Taxes and satisfy applicable Tax
reporting obligations in connection therewith.

         8.3 Adjustments. If Southern Energy or any Southern Energy Affiliated
Company receives any Tax Benefit to which Southern is entitled under Section 8.1
of this Agreement, Southern Energy shall pay the amount of such Tax Benefit to
Southern. If Southern or any Southern Affiliated Company receives any Tax
Benefit to which Southern Energy is entitled under Section 8.1 of this
Agreement, Southern shall pay the amount of such Tax Benefit to Southern Energy.

                            SECTION 9. MISCELLANEOUS


         9.1 Effectiveness. This Agreement shall become effective as of the date
hereof. In the event Southern does not effect the Distribution as contemplated
by the Separation Agreement but Southern Energy and the Southern Energy Group
cease to be members of the Southern Consolidated Group for any reason (a
"Deconsolidation Event"), this Agreement shall continue in full force and effect
subject to the following exceptions: (i) Sections 3, 5.4(b), and 6.2 - 6.6
hereof shall no longer be effective, (ii) the definition of "Distribution Date"
shall mean the date on which a Deconsolidation Event is effective, (iii) the
definition of "Post-Distribution Period" shall mean any taxable period or
portion thereof beginning after the date of the Deconsolidation Event, and (iv)
the definition of "Pre-Distribution Period" shall mean any taxable period or
portion thereof ending on or prior to the date of the Deconsolidation Event.


         9.2 Notices. Any notice, request, instruction or other document to be
given or delivered under this Agreement by any party to another party shall be
in writing and shall be deemed to have been duly given or delivered when (a)
delivered in person, (b) deposited in the United



                                       19


<PAGE>

States mail, postage prepaid and sent certified mail, return receipt requested
or (c) delivered to Federal Express or similar service for overnight delivery to
the address of the party set forth below:

         If to Southern or any Southern Affiliated Company, to W. Dean Hudson,
with a copy to the General Counsel of Southern, at:

                  The Southern Company
                  270 Peachtree Street
                  Atlanta, Georgia  30303

         If to Southern Energy or any Southern Energy Affiliated Company, to
James A. Ward, with a copy to the General Counsel of Southern Energy:

                  Southern Energy, Inc.
                  900 Ashwood Parkway
                  Suite 500
                  Atlanta, Georgia  30338

Any party may, by written notice to the other parties, change the address or the
party to which any notice, request, instruction or other document is to be
delivered.


9.3 Changes in Law.


         (a) Any reference to a provision of the Code or a law of another
jurisdiction shall include a reference to any applicable successor provision or
law.

         (b) If, due to any change in applicable law or regulations or their
interpretation by any court of law or other governing body having jurisdiction
subsequent to the date of this Agreement, performance of any provision of this
Agreement or any transaction contemplated thereby shall become impracticable or
impossible, the parties hereto shall use their commercially reasonable efforts
to find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such provision.

         9.4 Confidentiality. For a period of three years, commencing on the
date of this Agreement, each party shall hold and cause its directors, officers,
employees, advisors and consultants to hold in strict confidence, unless
compelled to disclose by judicial or administrative process or, in the opinion
of its counsel, by other requirements of law, all information (other than any
such information relating solely to the business or affairs of such party)
concerning the other parties hereto furnished it by such other party or its
representatives pursuant to this Agreement (except to the extent that such
information can be shown to have been (a) in the public domain through no fault
of such party or (b) later lawfully acquired from other sources not under a duty
of confidentiality by the party to which it was furnished), and each party shall
not release or disclose such information to any other person, except its
directors, officers, employees, auditors, attorneys, financial advisors, bankers
and other consultants who shall be advised of and agree to be bound by the
provisions of this Section 9.4. Each party shall be deemed to have satisfied its




                                       20


<PAGE>

obligation to hold confidential information concerning or supplied by the other
party if it exercises the same care as it takes to preserve confidentiality for
its own similar information.

         9.5 Successors. This Agreement shall be binding on and inure to the
benefit and detriment of any successor, by merger, acquisition of assets or
otherwise, to any of the parties hereto, to the same extent as if such successor
had been an original party.

         9.6 Affiliated Companies. Southern shall cause to be performed, and
hereby guarantees the performance of, all actions, agreements and obligations
set forth herein to be performed by any Southern Affiliated Company, and
Southern Energy shall cause to be performed, and hereby guarantees the
performance of, all actions, agreements and obligations set forth herein to be
performed by any Southern Energy Affiliated Company.

         9.7 Authorization, Etc. Each of the parties hereto hereby represents
and warrants that it has the power and authority to execute, deliver and perform
this Agreement, that this Agreement has been duly authorized by all necessary
corporate action on the part of such party, that this Agreement constitutes a
legal, valid and binding obligation of each such party and that the execution,
delivery and performance of this Agreement by such party does not contravene or
conflict with any provision of law or of its charter or bylaws or any agreement,
instrument or order binding on such party.

         9.8 Entire Agreement. This Agreement and the Tax Allocation Agreement
contains the entire agreement among the parties hereto with respect to the
subject matter hereof.


         9.9 Governing Law; Jurisdiction. This Agreement shall be governed by
and construed and enforced in accordance with the laws of the State of Georgia
as to all matters regardless of the law that might otherwise govern under the
principles of conflicts of law applicable thereto.



         9.10 Dispute Resolution. The resolution of any and all disputes arising
from or in connection with this Agreement shall be governed by and settled in
accordance with the provisions of Section 5.7 of the Separation Agreement;
provided, however, that at the request of Southern or Southern Energy, a
nationally recognized tax attorney or tax accountant that is a member of a
nationally recognized law firm or accounting firm, which firm is independent of
both parties, will be appointed for purposes of the non-binding mediation
procedures described in Section 5.7(b) of the Separation Agreement.


         9.11 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same Agreement.

         9.12 Severability. If any term, provision, covenant, or restriction of
this Agreement is held by a court of competent jurisdiction (or an arbitrator or
arbitration panel) to be invalid, void, or unenforceable, the remainder of the
terms, provisions, covenants, and restrictions set forth herein shall remain in
full force and effect, and shall in no way be affected, impaired, or
invalidated. It is hereby stipulated and declared to be the intention of the
parties that they would have executed the remaining terms, provisions,
covenants, and restrictions without including any



                                       21


<PAGE>

of such which may be hereafter declared invalid, void, or unenforceable. In the
event that any such term, provision, covenant or restriction is held to be
invalid, void or unenforceable, the parties hereto shall use their best efforts
to find and employ an alternate means to achieve the same or substantially the
same result as that contemplated by such terms, provisions, covenant, or
restriction.

         9.13 No Third Party Beneficiaries. This Agreement is solely for the
benefit of Southern, the Southern Affiliated Companies, Southern Energy and the
Southern Energy Affiliated Companies. This Agreement should not be deemed to
confer upon third parties any remedy, claim, liability, reimbursement, cause of
action or other rights in excess of those existing without this Agreement.

         9.14 Waivers, Etc. No failure or delay on the part of the parties in
exercising any power or right hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such right or power, preclude
any other or further exercise thereof or the exercise of any other right or
power. No modification or waiver of any provision of this Agreement nor consent
to any departure by the parties therefrom shall in any event be effective unless
the same shall be in writing.


         9.15 Setoff. All payments to be made by any party under this Agreement
may be netted against payments due to such party under this Agreement, but
otherwise shall be made without setoff, counterclaim or withholding, all of
which are hereby expressly waived.



                                       22
<PAGE>


         IN WITNESS WHEREOF, each of the parties hereto has caused this
Agreement to be executed by a duly authorized officer as of the date first above
written.

                    THE SOUTHERN COMPANY
                    on behalf of itself and the Southern Affiliated Companies


                    By:
                       ---------------------------------------------------------
                          Name:   H. Allen Franklin
                          Title:  President and Chief Operating Officer


                    SOUTHERN ENERGY, INC.
                    on behalf of itself and the Southern Energy
                    Affiliated Companies


                    By:
                       ---------------------------------------------------------
                          Name:   S. Marce Fuller
                          Title:  President and Chief Executive Officer




                                       23

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>48
<FILENAME>x10a103.txt
<TEXT>

                                                               Exhibit 10(a)103




                                SOUTHERN COMPANY
                      DEFERRED COMPENSATION TRUST AGREEMENT





                              Troutman Sanders LLP
                           600 Peachtree Street, N.E.
                        Suite 5200 Bank of America Plaza
                           Atlanta, Georgia 30308-2216
                                 (404) 885-3000







                               Amended and Restated Effective January 1, 2001


<PAGE>








                                SOUTHERN COMPANY
                      DEFERRED COMPENSATION TRUST AGREEMENT

                                TABLE OF CONTENTS

1.    Purpose...........................................................1
2.    Trust Corpus......................................................1
3.    Grantor Trust.....................................................2
4.    Irrevocability of Trust...........................................2
5.    Change in Control and Preliminary Change in Control...............3
6.    Investment of Trust Assets........................................4
7.    Distribution of Trust Assets......................................6
8.    Termination of the Trust and Reversion of Trust Assets...........10
9.    Powers of the Trustee............................................11
10.   Termination of Trustee...........................................14
11.   Resignation of Trustee and Appointment of Successor Trustee......15
12.   Trustee Compensation.............................................16
13.   Trustee's Consent to Act and Indemnification of the Trustee......16
14.   Prohibition Against Assignment...................................16
15.   Annual Accounting................................................16
16.   Notices..........................................................17
17.   Miscellaneous Provisions.........................................17



<PAGE>






                                SOUTHERN COMPANY
                      DEFERRED COMPENSATION TRUST AGREEMENT

         This amended and restated Trust Agreement entered into this _____ day
of ___________, 2001 is between the Grantors as set forth on the signature page
of this Trust Agreement and Wachovia Bank, N.A. (the "Trustee"). This Trust
Agreement is effective January 1, 2001 ("Effective Date") and supersedes all
previous Trust Agreements.
         1. Purpose. The purpose of this trust (the "Trust") is to provide a
vehicle to (a) hold assets of the Grantors as a reserve for the discharge of
certain of the Grantors' obligations (i) upon the occurrence of a change in
control, and (ii) in accordance with paragraph 7(b), to provide added
protections for certain individuals who are actively employed by a Grantor on or
after January 1, 1999 entitled to receive benefits under designated plans and
arrangements and (b) invest, reinvest, disburse and distribute those assets and
the earnings thereon as provided hereunder. Individuals eligible for benefits in
accordance with the preceding sentence shall hereinafter be referred to as
"Beneficiaries" under the Trust. Subject to approval by the Administrative
Committee (the "Committee"), Grantors shall designate in writing to the Trustee
in Exhibit A attached hereto and made a part hereof those plans or arrangements
subject to all or certain provisions of the Trust (the "Plans"). Exhibit A shall
also specify which provisions of the Trust apply to the various Plans.
         2. Trust Corpus. The Grantors hereby transfer to the Trustee and the
Trustee hereby accepts and agrees to hold, in trust, the sum of Ten Dollars
($10.00) plus such cash and/or property, if any, transferred to the Trustee by
the Grantors or on behalf of the Grantors pursuant to obligations incurred under
any or all of the Plans and the earnings thereon, and such cash and/or property,
together with the earnings thereon and together with any other cash or property
received by the Trustee pursuant to Section 9(a) of this Trust Agreement, shall
constitute the trust estate and shall be held, managed and distributed as
hereinafter provided. The Grantors shall execute any and all instruments
necessary to vest the Trustee with full title to the property hereby
transferred.
         3. Grantor Trust. The Trust is intended to be a trust of which the
Grantors are treated as individual owners for federal income tax purposes in
accordance with the provisions of Sections 671 through 679 of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Trustee, in its sole and
absolute discretion, deems it necessary or advisable for the Grantors and/or the
Trustee to undertake or refrain from undertaking any actions (including, but not
limited to, making or refraining from making any elections or filings) in order
to ensure that the Grantors are at all times treated as individual owners of the
Trust for federal income tax purposes, the Grantors and/or the Trustee will
undertake or refrain from undertaking (as the case may be) such actions. The
Grantors hereby irrevocably authorize the Trustee to be their attorney-in-fact
for the purpose of performing any act which the Trustee, in its sole and
absolute discretion, deems necessary or advisable in order to accomplish the
purposes and the intent of this Section 3. The Trustee shall be fully protected
in acting or refraining from acting in accordance with the provisions of this
Section 3.
         4. Irrevocability of Trust. Prior to the occurrence of a "Preliminary
Change in Control" (hereinafter referred to as a "Preliminary CIC"), the Trust
shall be revocable and may be altered or amended in any substantive respect, or
revoked or terminated by the Grantors in whole or in part provided that no such
amendment may increase the duties of the Trustee without its consent. In the
event of a Preliminary CIC, the Trust may not be altered or amended in any
substantive respect, or revoked or terminated by the Grantor or Grantors
incurring a Preliminary CIC unless a majority of the Beneficiaries, determined
as of the day before such Preliminary CIC, agree in writing to such an
alteration, amendment, revocation or termination provided that no such amendment
may increase the duties of the Trustee without its consent. If after a
Preliminary CIC occurs but fails to become a Change in Control, thereafter the
Trust shall again be revocable and may be altered or amended in any substantive
respect, or revoked or terminated by the Grantors in whole or in part provided
that no such amendment may increase the duties of the Trustee without its
consent. Notwithstanding the preceding, the Trust may be amended following a
Preliminary CIC or a Change in Control without approval of the Beneficiaries to
protect the tax status or ERISA status of this Trust. For purposes of this
Trust, Preliminary CIC and other capitalized terms if not defined in the Trust
shall have the same meaning as set forth in the Southern Company Change in
Control Program Policy as may be amended from time to time.
         5. Contributions to Trust. The Grantors have obligated themselves under
the terms of the Plans, which are hereby incorporated by reference, to make
certain contributions to the Trust upon the occurrence of a Preliminary CIC.
Upon such a Preliminary CIC, the Grantors affected thereby shall account for
each Beneficiary's benefit funded by contributions to the Trust in a manner
determined by the Committee. The Grantors have also obligated themselves to make
certain contributions to the Trust in a manner determined by the Committee to
provide for the protections set forth in Section 7(b) hereof. A return of such
contributions and earnings thereon may only occur under the following
circumstances: (a) if, on the second anniversary of a Preliminary CIC or any
time thereafter, the Southern Committee determines that a Change in Control has
not been Consummated, the Trustee upon its agreement with this determination
shall, upon the request of the Grantor or Grantors incurring a Preliminary CIC,
return to such Grantor or Grantors property contributed to the Trust on account
of the occurrence of a Preliminary CIC; (b) if, at any time, following a
Preliminary CIC, the Southern Committee provides evidence satisfactory to the
Trustee that the Preliminary CIC will not become a Change in Control; or (c) if
the Trustee determines in its sole and absolute discretion that a Southern
Change in Control has occurred, and, on the second anniversary of the date of
Consummation of such Change in Control 75% of the members of the Incumbent Board
on such anniversary date shall continue to serve as determined by the Southern
Committee, the Trustee upon its agreement with this determination shall return
to the Grantor or Grantors incurring a Change in Control, upon such Grantor's
request, any such property received and earnings thereon as a result of such
Change in Control; or (d) prior to Change of Control, with respect to amounts
contributed to fund benefits paid in accordance with Section 7(b) hereof, if the
Trust assets equal or exceed 200% of the targeted funding level as established
by the Committee prior to a Change in Control, assets shall be returned by the
Trustee to the Grantor or Grantors designated by the Committee to reduce total
assets to 150% of the targeted funding level.
         6.       Investment of Trust Assets.
                  --------------------------
         (a) Subject to the provisions of paragraph (b) below, until the Trustee
has distributed all of the assets of the Trust in accordance with the terms
hereof, the Trustee shall invest and reinvest such assets (without regard to any
state law limiting the investment powers of fiduciaries) in such securities and
other property as the Trustee deems advisable, considering the probable income
(including capital appreciation potential) from any such investment, the
probable safety of the assets of the Trust and, where appropriate, the rate of
return at which the assets would have been invested on behalf of each
Beneficiary under any applicable qualified defined benefit pension plan
maintained by the Grantors. Within the limitations of the foregoing, the Trustee
is specifically authorized to acquire, for cash or on credit, every kind of
property, real, personal or mixed, and to make every kind of investment,
specifically including, but not limited to, corporate and governmental
obligations of every kind, preferred or common stocks, securities of any
regulated investment company or trust, and property in which the Trustee owns an
undivided interest in any other trust capacity. The Trustee is expressly
authorized and empowered to hold or purchase such insurance in its own name (and
with itself as the beneficiary) as it shall determine to be necessary or
advisable to advance best the purposes of the Trust and the interests of the
Beneficiaries.
         (b) The Trustee shall invest and reinvest the assets of the Trust in
accordance with such investment objectives, guidelines, restrictions or
directions as the Committee or its delegee may furnish to the Trustee at the
time of the execution of the Trust or at any later date; provided, however, that
if there is a Preliminary CIC, the Trust's investment objectives, guidelines,
restrictions or directions may not be changed thereafter unless there is a
return of Grantor contributions pursuant to Section 5(a), (b) or (c). Upon a
Change of Control, the Trustee shall promptly contact all Beneficiaries at their
last known addresses provided by the Grantors and put such Beneficiaries on
notice of the funding of the Trust and the Trustee's obligations hereunder. The
Committee shall promptly provide the Trustee with such information as it needs
to carry out this duty.
         7.       Distribution of Trust Assets.
                  ----------------------------
         (a) The Grantors may make payment of benefits directly to Beneficiaries
as they become due under the terms of the Plan(s). Upon a Change in Control, the
Grantors shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to Beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan(s), the Grantors
shall make the balance of each such payment as it falls due in accordance with
the Plan(s). The Trustee shall notify the Grantors where principal and earnings
are not sufficient. Nothing in this Agreement shall relieve the Grantors of
their liabilities to pay benefits due under the Plan(s) except to the extent
such liabilities are met by application of assets of the Trust.
         (b) At such time as a Beneficiary is entitled to payments under any of
the Plans prior to a Change in Control, if the Grantors fail to make payment of
all or a portion of the benefits to a Beneficiary under any Plan in accordance
with paragraph (a) above, such Beneficiary can make application for payment in
accordance with the provisions of paragraph (d)(i) below. If so requested, the
Trustee shall make an independent determination in its sole and absolute
discretion regarding the Beneficiary's right to payment under the Plan(s) within
60 days thereof. Such determination shall be made with advice from outside
counsel independent of Southern and the Trustee. The Grantors agree to be bound
by Trustee's determination and to make payment of benefits as they fall due
commencing not later than 30 days following Trustee's determination regarding
entitlement to benefits absent a manifest abuse of discretion by the Trustee. If
Trustee determines benefits are payable to Beneficiary and Grantor fails to
commence payment within 30 days following the Trustee's determination, Trustee
shall make payment of such benefits and instruct Beneficiary in writing that he
or she must bring suit within 180 days of the Trustee's claims determination or
thereafter be barred from doing so. Trustee shall only make benefits payments
until the first of the following to occur: (i) 180 days following its claims
determination if the Beneficiary fails to bring a lawsuit to enforce his or her
rights within this limitation period; or (ii) until there is a final
adjudication or other final resolution of the Beneficiary's claim. In the event
that such Beneficiary timely files a lawsuit within 180 days of Trustee's
determination that Beneficiary is entitled to the disputed benefits, all
reasonable costs of litigation (as determined in the sole and absolute
discretion of the Trustee) shall be periodically, but no less than quarterly,
advanced to the Beneficiary through the final adjudication of the claim;
provided, however, that the Beneficiary shall repay such advanced costs of
litigation if he or she fails to have finally resolved in the Beneficiary's
favor a material issue supporting the underlying merits of the Beneficiary's
claim for benefits in such dispute as determined in the sole and absolute
discretion of the Trustee. Alternatively, in the event that a Beneficiary files
a lawsuit to obtain benefits after the Trustee determines that such Beneficiary
is not entitled to such benefits, all costs of litigation shall be borne by each
party thereto; provided, however, that the Grantors, or the Trustee if the
Grantors refuse, shall reimburse such reasonable costs in the event any material
issue supporting the underlying merits of the Beneficiary's claim for benefits
in such dispute as determined in the sole and absolute discretion of the Trustee
is finally resolved in favor of the Beneficiary.
         (c) Subject to the provisions of paragraph (d) of this Section 7, after
a Change in Control, a Beneficiary shall receive payment from the Trust in
amount equal to the accrued benefit to which he is entitled under the Plans
determined as of the Change in Control, less any payments previously made to him
by the Grantors pursuant to the terms of the Plan(s). The form of payment will
be consistent with the forms provided under the terms of the Plan(s).
         (d) (i) The commencement of payments from the Trust shall be
conditioned on the Trustee's prior receipt of a written instrument from the
Beneficiary in a form reasonably satisfactory to the Trustee. In addition to any
other information the Trustee requires, such form should indicate the amount, if
any, the Beneficiary has received from the Grantors under the Plans as of his
request. All payments to a Beneficiary from the Trust shall be made in
accordance with a good faith interpretation of the provisions of the applicable
Plan(s). (ii) Except as provided below, the Trustee shall make or commence
payment to the Beneficiary in accordance with his representations not later than
30 business days after its receipt thereof; provided, however, that before the
Trustee makes or commences any such payment and not later than 7 business days
after its receipt of the Beneficiary's representations, the Trustee shall
request in writing the Grantors' agreement that the Beneficiary's
representations are accurate with respect to the amount, fact, and time of
payment to him. The Trustee shall enclose with such request a copy of the
Beneficiary's representations and written advice to the Grantors that it must
respond to the Trustee's request on or before the 20th business day (which date
shall be set forth in such written advice) after the Beneficiary furnished such
representations to the Trustee. If the Grantors in a writing delivered to the
Trustee agrees with the Beneficiary's representations in all respects, or if the
Grantors do not respond to the Trustee's request by the 20th-day deadline, the
Trustee shall make payment in accordance with the Beneficiary's representations.
If the Grantors advise the Trustee in writing on or before the 20th-day deadline
that it does not agree with any or all of the Beneficiary's representations, the
Trustee immediately shall take whatever steps it in its sole and absolute
discretion deems appropriate, including, but not limited to, a review of any
notice furnished by the Grantor pursuant to paragraph (e) hereof, to attempt to
resolve the difference(s) between the Grantors and the Beneficiary. If, however,
the Trustee is unable to resolve such difference(s) to its satisfaction within
60 days after its receipt of the Beneficiary's representations, the Trustee
shall make an independent determination in its sole and absolute discretion with
the advice of independent counsel regarding the Beneficiary's claim for benefits
and commence such payment, if any, within such 60 day period. In the event
Grantors do not agree with Beneficiary's right to payment of all or a portion of
a benefit under any Plan(s), Grantors may bring a declaratory judgment action to
clarify their rights. Trustee may rely on any final judgment concerning a
declaratory judgment action with respect to the payment of benefits from the
Trust.
         (e) Notwithstanding any other provision of the Trust to the contrary,
after a Change in Control the Trustee shall make payments hereunder before such
payments are otherwise due if it determines in its sole and absolute discretion,
based on a change in the tax or revenue laws of the United States of America, a
published ruling or similar announcement issued by the Internal Revenue Service,
a regulation issued by the Secretary of the Treasury or his delegate, a final
non-appealable decision by the Internal Revenue Service addressed to a
Beneficiary, a final decision by a court of competent jurisdiction involving a
Beneficiary, or a closing agreement made under Code Section 7121 that is
approved by the Internal Revenue Service and involves a Beneficiary, that a
Beneficiary has recognized or will recognize income for federal income tax
purposes with respect to amounts that are or will be payable to him under the
Plans before they are paid to him. The Trustee in its sole and absolute
discretion shall reimburse a Beneficiary all costs determined to be reasonable
to defend any tax claims described herein which are asserted by the Internal
Revenue Service against any Beneficiary, including attorney fees and cost of
appeal, and shall have the sole authority to determine whether or not to appeal
any determination made by the Internal Revenue Service or by a lower court. The
Trustee also shall reimburse any Beneficiary for any interest or penalties in
respect of tax claims hereunder upon receipt of documentation of same.
         (f) Unless (contemporaneously with his submission of the written
instrument referred to in paragraph (a) hereof) a Beneficiary furnishes
documentation in form and substance satisfactory to the Trustee that no
withholding is required with respect to a payment to be made to him from the
Trust, the Trustee may deduct from any such payment any federal, state or local
taxes required by law to be withheld by the Trustee.
         (g) The Trustee shall provide the Grantors with written confirmation of
the fact and time of any commencement of payments hereunder within 10 business
days after any payments commence to a Beneficiary. The Grantors shall notify the
Trustee in the same manner of any payments it commences to make to a Beneficiary
pursuant to the Plans.
         (h) The Trustee shall be fully protected in making any payment or any
calculations in accordance with the provisions of this Section 7.
         8. Termination of the Trust and Reversion of Trust Assets. The Trust
shall terminate upon the first to occur of (i) the payment by the Grantors of
all amounts due the Beneficiaries under each of the Plans or the receipt by the
Trustee of a valid release to that effect from each of the Beneficiaries with
respect to payments made to him, or (ii) the twenty-first anniversary of the
death of the last survivor of the Beneficiaries who are in being on the date of
the execution of this Trust Agreement. Upon termination of the Trust, any and
all assets remaining in the Trust, after the payment to the Beneficiaries of all
amounts to which they are entitled and after payment of the expenses and
compensation in Sections 12 and 17(i) of this Trust Agreement, shall revert to
the Grantors in accordance with their separate interest as accounted for by the
Committee, and the Trustee shall promptly take such action as shall be necessary
to transfer any such assets to the Grantors in accordance with such interest.
Notwithstanding the above, the Grantors shall be obligated to take whatever
steps are necessary to ensure that the Trust is not terminated for a period of
five (5) years following a Change in Control, such steps to include, but not
being limited to, the transfer to the Trustee of cash or other assets pursuant
to the provisions of Section 9(a) hereof.
         9. Powers of the Trustee. To carry out the purposes of the Trust and
subject to any limitations herein expressed, the Trustee is vested with the
following powers until final distribution, in addition to any now or hereafter
conferred by law affecting the trust or estate created hereunder. In exercising
such powers, the Trustee shall act in a manner reasonable and equitable in view
of the interests of the Beneficiaries and in a manner in which persons of
ordinary prudence, diligence, discretion and judgment would act in the
management of their own affairs.
         (a) Receive and Retain Property. To receive and retain any property
received at the inception of the Trust or at any other time, whether or not such
property is unproductive of income or is property in which the Trustee is
personally interested or in which the Trustee owns an undivided interest in any
other trust capacity.
         (b) Dispose of, Develop, and Abandon Assets. To dispose of an asset,
for cash or on credit, at public or private sale and, in connection with any
sale or disposition, to give such warranties and indemnifications as the Trustee
shall determine; to manage, develop, improve, exchange, partition, change the
character of or abandon a Trust asset or any interest therein.
         (c) Borrow and Encumber. To borrow money for any Trust purpose upon
such terms and conditions as may be determined by the Trustee; to obligate the
Trust or any part thereof by mortgage, deed of trust, pledge or otherwise, for a
term within or extending beyond the term of the Trust.
         (d)      Lease.  To enter for any purpose  into a lease as lessor or
lessee,  with or without an option to
purchase or renew, for a term.
         (e) Grant or Acquire Options. To grant or acquire options and rights of
first refusal involving the sale or purchase of any Trust assets, including the
power to write covered call options listed on any securities exchange.
         (f) Powers Respecting Securities. To have all the rights, powers,
privileges and responsibilities of an owner of securities, including, without
limiting the foregoing, the power to vote, to give general or limited proxies,
to pay calls, assessments, and other sums; to assent to, or to oppose, corporate
sales or other acts; to participate in, or to oppose, any voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and, in connection therewith, to give warranties and
indemnifications and to deposit securities with and transfer title to any
protective or other committee; to exchange, exercise or sell stock subscription
or conversion rights; and, regardless of any limitations elsewhere in this
instrument relative to investments by the Trustee, to accept and retain as an
investment hereunder any securities received through the exercise of any of the
foregoing powers.
         (g) Use of Nominee. To hold securities or other property in the name of
the Trustee, in the name of a nominee of the Trustee, or in the name of a
custodian (or its nominee) selected by the Trustee, with or without disclosure
of the Trust, the Trustee being responsible for the acts of such custodian or
nominee affecting such property.
         (h) Advance Money. To advance money for the protection of the Trust,
and for all expenses, losses and liabilities sustained or incurred in the
administration of the Trust or because of the holding or ownership of any Trust
assets, for which advances, with interest, the Trustee has a lien on the Trust
assets as against the Beneficiaries.
         (i) Pay, Contest or Settle Claims. To pay, contest or settle any claim
by or against the Trust by compromise, arbitration or otherwise; to release, in
whole or in part, any claim belonging to the Trust to the extent that the claim
is uncollectible. Notwithstanding the foregoing, the Trustee may only pay or
settle a claim asserted against the Trust by a Grantor if it is compelled to do
so by a final order of a court of competent jurisdiction.
         (j)      Litigate.  To prosecute or defend  actions,  claims or
proceedings  for the  protection of Trust assets and of the Trustee in the
performance of its duties.
         (k) Employ Advisers and Agents. To employ and reasonably compensate
persons, corporations or associations, including attorneys, auditors, investment
advisers or agents, even if they are associated with the Trustee, to advise or
assist the Trustee in the performance of its administrative duties; to act
without independent investigation upon their recommendations.
         (l) Use Custodian. If no bank or trust company is acting as Trustee
hereunder, the Trustee shall appoint a bank or trust company to act as custodian
(the "Custodian") for securities and any other Trust assets. Any such
appointment shall terminate when a bank or trust company begins to serve as
Trustee hereunder. The Custodian shall keep the deposited property, collect and
receive the income and principal, and hold, invest, disburse or otherwise
dispose of the property or its proceeds (specifically including selling and
purchasing securities, and delivering securities sold and receiving securities
purchased) upon the order of the Trustee.
         (m)      Execute  Documents.  To execute and deliver all  instruments
which will accomplish or facilitate the exercise of the powers vested in the
Trustee.
         (n) Grant of Powers Limited. The Trustee is expressly prohibited from
exercising any powers vested in it primarily for the benefit of the Grantors
rather than for the benefit of the Beneficiaries. The Trustee shall not have the
power to purchase, exchange, or otherwise deal with or dispose of the assets of
the Trust for less than adequate and full consideration in money or money's
worth.
         (o) Deposit Assets. To deposit Trust assets in commercial, savings or
savings and loan accounts (including such accounts in a corporate Trustee's
banking department) and to keep such portion of the Trust assets in cash or cash
balances as the Trustee may, from time to time, deem to be in the best interests
of the Trust, without liability for interest thereon.
         10. Termination of Trustee. Grantors may remove Trustee upon sixty (60)
days notice or upon such shorter period of time if acceptable to Trustee;
provided that upon a Preliminary CIC or subsequent Change in Control the
Grantors may only remove the Trustee if a majority of the Beneficiaries approve
such action.
         11.      Appointment of Successor Trustee.
                  --------------------------------
         (a) The Trustee shall have the right to resign upon 60 days' written
notice to the Grantor, during which time the Grantor shall appoint a "Qualified
Successor Trustee." If no Qualified Successor Trustee accepts such appointment,
the resigning Trustee shall petition a court of competent jurisdiction for the
appointment of a "Qualified Successor Trustee." For this purpose, a "Qualified
Successor Trustee" must be a bank or trust company with a market capitalization
of at least $10 billion but may not be the Grantor, any person who would be a
"related or subordinate party" to the Grantor within the meaning of Section
672(c) of the Code or a corporation that would be a member of an "affiliated
group" of corporations including the Grantor within the meaning of Section
1504(a) of the Code if the words "80 percent" wherever they appear in that
section were replaced by the words "50 percent." Upon the written acceptance by
the Qualified Successor Trustee of the trust and upon approval of the resigning
Trustee's final account by those entitled thereto, the resigning Trustee shall
be discharged.
         (b) Upon the occurrence of a corporate transaction involving the
ownership or assets of a Grantor, the affected Grantors upon written
acknowledgment to the Trustee of their obligations under the Trust and Plans may
in their sole discretion direct the Trustee to transfer or assign all or a
portion of the assets of the Trust to a Qualified Successor Trustee. The
Committee shall instruct the Trustee regarding the assets to be transferred or
assigned; provided, however, that no assets shall be transferred to such a
Qualified Successor Trustee until the Trustee is satisfied that contributions
required under the Plans have been made prior to or concurrent with this
transfer or assignment. Notwithstanding the foregoing, the Trustee shall only be
permitted to transfer or assign assets from the Trust to a Qualified Successor
Trustee if the transfer and assignment are consistent with the purpose and
intent of the Trust.
         12. Trustee Compensation. The Trustee shall be entitled to receive as
compensation for its services hereunder the compensation (a) as negotiated and
agreed to by the Grantors and the Trustee, or (b) if not negotiated or if the
parties are unable to reach agreement, as allowed a trustee under the laws of
the State of Georgia in effect at the time such compensation is payable. Such
compensation shall be paid by the Grantors; provided, however, that to the
extent such compensation is not paid by the Grantors, subject to the provisions
of Section 17(j) hereof, it shall be charged against and paid from the Trust
and, subject to Section 4 of this Trust Agreement, upon a Preliminary Change in
Control, the Grantors shall reimburse the Trust for any such payment made from
the Trust within 30 days of its receipt from the Trustee of written notice of
such payment.
         13. Trustee's Consent to Act and Indemnification of the Trustee. The
Trustee hereby grants and consents to act as Trustee hereunder. The Grantors
agree to indemnify the Trustee and hold it harmless from and against all claims,
liabilities, legal fees and expenses that may be asserted against it, otherwise
than on account of conduct of the Trustee which is found by a final judgment of
a court of competent jurisdiction to be a breach of its fiduciary duty whether
by reason of the Trustee's taking or refraining from taking any action in
connection with the Trust, whether or not the Trustee is a party to a legal
proceeding or otherwise.
         14. Prohibition Against Assignment. No Beneficiary shall have any
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust before such assets are paid to the Beneficiary as provided in Section 7,
and all rights created under the Trust and the Plans shall be unsecured
contractual rights of the Beneficiary against the Grantor which is his employer
for purposes of the Plans. No part of, or claim against, the assets of the Trust
may be assigned, anticipated, alienated, encumbered, garnished, attached or in
any other manner disposed of by any of the Beneficiaries, and no such part or
claim shall be subject to any legal process or claims of creditors of any of the
Beneficiaries.
         15. Annual Accounting. The Trustee shall keep accurate and detailed
accounts of all investments, receipts and disbursements and other transactions
hereunder, and, within ninety days following the close of each calendar year,
and within ninety days after the Trustee's resignation or termination of the
Trust as provided herein, the Trustee shall render a written account of its
administration of the Trust to the Grantors by submitting a record of receipts,
investments, disbursements, distributions, gains, losses, assets on hand at the
end of the accounting period and other pertinent information, including a
description of all securities and investments purchased and sold during such
calendar year. Trustee shall separately account for each Grantor's interest in
Trust assets. Written approval of an account shall, as to all matters shown in
the account, be binding upon the Grantors and shall forever release and
discharge the Trustee from any liability or accountability. The Grantors will be
deemed to have given their written approval if he does not object in writing to
the Trustee within one hundred and twenty days (120) after the date of receipt
of such account from the Trustee. The Trustee shall be entitled at any time to
institute an action in a court of competent jurisdiction for a judicial
settlement of its account.
         16. Notices. Any notice or instructions required under any of the
provisions of this Trust Agreement shall be deemed effectively given only if
such notice is in writing and is delivered personally or by certified or
registered mail, return receipt requested and postage prepaid, addressed to the
addresses as set forth below of the parties hereto. The address of the parties
are as follows:
                        (i)     The Grantors:
                                Will be provided by Committee to Trustee

                        (ii)    The Trustee:
                                Wachovia Bank, N.A.
                                Attn:  Executive Services
                                NC 31013
                                P.O. Box 3099
                                Winston-Salem, NC   27150

The Grantors or Trustee may at any time change the address to which notices are
to be sent to it by giving written notice thereof in the manner provided above.
         17.      Miscellaneous Provisions.
                  ------------------------
         (a) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to contracts made
and to be performed therein and the Trustee shall not be required to account in
any court other than one of the courts of such state.
         (b) The Committee may give direction to Trustee on behalf of the
Grantors with regard to those matters identified in writing by the Grantors. The
Trustee will be fully protected in relying on such direction by the Committee.
         (c) All section headings herein have been inserted for convenience of
reference only and shall in no way modify, restrict or affect the meaning or
interpretation of any of the terms or provisions of this Trust Agreement.
         (d) This Trust Agreement is intended as a complete and exclusive
statement of the agreement of the parties hereto, supersedes all previous
agreements or understandings among them and may not be modified or terminated
orally.
         (e)      The term "Trustee" shall include any successor Trustee.
         (f) If a Trustee or Custodian hereunder is a bank or trust company, any
corporation resulting from any merger, consolidation or conversion to which such
bank or trust company may be a party, or any corporation otherwise succeeding
generally to all or substantially all of the assets or business of such bank or
trust company, shall be the successor to it as Trustee or Custodian hereunder,
as the case may be without the execution of any instrument or any further action
on the part of any party hereto.
         (g) If any provision of this Trust shall be invalid and unenforceable,
the remaining provisions hereof shall subsist and be carried into effect.
         (h) The Plans are by this reference expressly incorporated herein and
made a part hereof with the same force and effect as if fully set forth at
length. As of the date first stated above, the terms of the Plans are as set
forth in Exhibit A attached hereto.
         (i) The assets of the Trust shall be subject only to the claims of the
Grantor's general creditors in the event of one or more of the Grantors'
bankruptcy or insolvency. A Grantor shall be considered "bankrupt" or
"insolvent" if the Grantor is (A) unable to pay its debts when due or (B)
engaged as a debtor in a proceeding under the Bankruptcy Code, 11 U.S.C. Section
101 et seq. The Board of Directors or the chief executive officer of a Grantor
must notify the Trustee of the Grantor's bankruptcy or insolvency within three
(3) days following the occurrence of such event. Upon receipt of such a notice,
or, upon receipt of a written allegation from a person or entity claiming to be
a creditor of a Grantor that such Grantor is bankrupt or insolvent, the Trustee
shall discontinue payments to Beneficiaries. The Trustee shall, as soon as
practicable after receipt of such notice or written allegation, determine
whether such Grantor is bankrupt or insolvent. If the Trustee determines, based
on such notice, written allegation, or such other information as it deems
appropriate, that such Grantor is bankrupt or insolvent, the Trustee shall hold
the assets of the Trust for the benefit of the general creditors of the Grantor
or Grantors, and deliver any undistributed assets attributable to such Grantor
or Grantors to satisfy the claims of such creditors as a court of competent
jurisdiction may direct. The Committee in conjunction with the Trustee shall
identify the amount of assets attributable to any bankrupt or insolvent Grantor
in order to segregate such assets for the benefit of such Grantor's creditors.
The Trustee shall resume payments to Beneficiaries only after it has determined
that the Grantor in issue is not bankrupt or insolvent, is no longer bankrupt or
insolvent (if the Trustee determined that the Grantor was bankrupt or
insolvent), pursuant to an order of a court of competent jurisdiction. Unless
the Trustee has actual knowledge of the Grantor's bankruptcy or insolvency of
the Grantor or Grantors, the Trustee shall have no duty to inquire whether such
Grantor(s) is bankrupt or insolvent. The Trustee may in all events rely on such
evidence concerning the pertinent Grantor's solvency as may be furnished to the
Trustee which will give the Trustee a reasonable basis for making a
determination concerning such Grantor's solvency. If the Trustee discontinues
payment of benefits from the Trust pursuant to this Section 17(h) and
subsequently resumes such payments, the first payment following such
discontinuance shall include the aggregate amount of all payments which would
have been made to each Beneficiary less the aggregate amount of payments made to
the Beneficiary by the Grantor(s) in lieu of the payments provided for hereunder
during any such period of discontinuance. In addition, interest at a rate equal
to the average 90 day Treasury Bill rate during the period of such
discontinuance shall be paid on the amount, if any, determined to be owed in
accordance with the preceding sentence.
         (j) Any and all taxes, expenses (including, but not limited to, the
Trustee's compensation) and costs of litigation relating to or concerning the
adoption, administration and termination of the Trust shall be borne and
promptly paid by the Grantors; provided, however, that, to the extent such
taxes, expenses and costs relating to the Trust are due and owing and (A) are
not paid by the Grantors, and (B) have not been paid for more than sixty (60)
days, they shall be charged against and paid from the Trust, and, subject to
Section 4 of this Trust Agreement, upon a Preliminary Change in Control, the
Grantors shall reimburse the Trust for any such payment made from the Trust
within 30 days of its receipt from the Trustee of written notice of such
payment.
         (k) Any reference hereunder to a Beneficiary shall expressly be deemed
to include, where relevant, the beneficiaries of a Beneficiary duly appointed
under the terms of the Plans. A Beneficiary shall cease to have such status once
any and all amounts due such Beneficiary under the Plan have been satisfied.
         (l)      Any  reference  hereunder  to the  Grantors  shall  expressly
 be deemed to  include a  Grantor's successor and assigns.
         (m) Whenever used herein, and to the extent appropriate, the masculine,
feminine or neuter gender shall include the other two genders, the singular
shall include the plural and the plural shall include the singular.

         IN WITNESS WHEREOF, the parties hereto have executed this amended and
restated Trust Agreement as of this day of ________________, 2001.
                                            TRUSTEE: WACHOVIA BANK, N.A.


                      By:
                         --------------------------------------------------

                         GRANTOR: ALABAMA POWER COMPANY


                   By:
                      --------------------------------------------------

                         GRANTOR: GEORGIA POWER COMPANY


                        By:
                           --------------------------------------------------

                           GRANTOR: GULF POWER COMPANY


                       By:
                          --------------------------------------------------

                                            GRANTOR: MISSISSIPPI POWER COMPANY


                         By:
                             --------------------------------------------------

                         GRANTOR:          SAVANNAH ELECTRIC & POWER COMPANY


                         By:
                           --------------------------------------------------

                       GRANTOR:          SOUTHERN COMMUNICATIONS SERVICES, INC.


                       By:
                          --------------------------------------------------


                    [Signatures continued on following page]


<PAGE>


                   [Signatures continued from preceding page]




                    GRANTOR:           SOUTHERN COMPANY ENERGY SOLUTIONS, INC.


                     By:
                          --------------------------------------------------

                      GRANTOR: SOUTHERN COMPANY SERVICES, INC.


                     By:
                             --------------------------------------------------

                       GRANTOR: SOUTHERN ENERGY, INC.


                         By:
                            --------------------------------------------------

                    GRANTOR:          SOUTHERN NUCLEAR OPERATING COMPANY, INC.


                          By:
                            --------------------------------------------------



<PAGE>


                                    EXHIBIT A

Plans and Arrangements Subject to the Trust1

<PAGE>


                                    EXHIBIT B

                       Contacts and Addresses of Grantors

- --------
1 The parenthetical reference sets forth the Trust provisions applicable to the
respective Plans listed herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>49
<FILENAME>x10a104.txt
<TEXT>

                                                             Exhibit 10(a)104





                 DEFERRED STOCK TRUST AGREEMENT FOR DIRECTORS OF
                     SOUTHERN COMPANY AND ITS SUBSIDIARIES
                 Amended and Restated Effective January 1, 2000











<PAGE>








                DEFERRED STOCK TRUST AGREEMENT FOR DIRECTORS OF
                     SOUTHERN COMPANY AND ITS SUBSIDIARIES


                                TABLE OF CONTENTS

1.    Purpose.........................................................1
2.    Trust Corpus....................................................1
3.    Grantor Trust...................................................2
4.    Irrevocability of Trust.........................................2
5.    Change in Control and Preliminary Change in Control.............3
6.    Investment of Trust Assets......................................5
7.    Distribution of Trust Assets....................................6
8.    Termination of the Trust and Reversion of Trust Assets.........11
9.    Powers of the Trustee..........................................12
10.   Termination of Trustee.........................................15
11.   Resignation of Trustee and Appointment of Successor Trustee....15
12.   Trustee Compensation...........................................17
13.   Trustee's Consent to Act and Indemnification of the Trustee....17
14.   Prohibition Against Assignment.................................17
15.   Annual Accounting..............................................18
16.   Notices........................................................18
17.   Miscellaneous Provisions.......................................19



<PAGE>





        DEFERRED STOCK TRUST AGREEMENT FOR DIRECTORS OF SOUTHERN COMPANY
                              AND ITS SUBSIDIARIES


         This Amended and Restated Trust Agreement entered into this _____ day
of ___________, 2000 (the "Effective Date") is between the Grantors as set forth
on the signature page of this Trust Agreement and Reliance Trust Company (the
"Trustee").
         1. Purpose. The purpose of this trust (the "Trust") is to provide a
vehicle to (a) hold assets of the Grantors as a reserve for the discharge of
certain of the Grantors' obligations with respect to Deferred Stock Account
balances under the respective Grantors' Deferred Compensation Plans for
Directors (i) as directed by the Grantors in accordance with paragraph 7(a);
(ii) upon the occurrence of a change in control; and (iii) in accordance with
paragraph 7(c) and (b) invest, reinvest, disburse and distribute those assets
and the earnings thereon as provided hereunder. Individuals eligible for
benefits hereunder shall hereinafter be referred to as "Beneficiaries" under the
Trust. Grantors shall designate in writing to the Trustee in Exhibit A attached
hereto and made a part hereof those plans or arrangements subject to all or
certain provisions of the Trust (the "Plans"). Exhibit A shall also specify
which provisions of the Trust apply to the various Plans.
         2. Trust Corpus. The Grantors hereby transfer to the Trustee and the
Trustee hereby accepts and agrees to hold, in trust, the sum of One Dollar
($1.00) plus such cash and/or property, if any, transferred to the Trustee by
the Grantors or on behalf of the Grantors pursuant to obligations incurred under
any or all of the Plans and the earnings thereon, and such cash and/or property,
together with the earnings thereon and together with any other cash or property
received by the Trustee pursuant to Section 9(a) of this Trust Agreement, shall
constitute the trust estate and shall be held, managed and distributed as
hereinafter provided. The Grantors shall execute any and all instruments
necessary to vest the Trustee with full title to the property hereby
transferred.
         3. Grantor Trust. The Trust is intended to be a trust of which the
Grantors are treated as individual owners for federal income tax purposes in
accordance with the provisions of Sections 671 through 679 of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Trustee, in its sole and
absolute discretion, deems it necessary or advisable for the Grantors and/or the
Trustee to undertake or refrain from undertaking any actions (including, but not
limited to, making or refraining from making any elections or filings) in order
to ensure that the Grantors are at all times treated as individual owners of the
Trust for federal income tax purposes, the Grantors and/or the Trustee will
undertake or refrain from undertaking (as the case may be) such actions. The
Grantors hereby irrevocably authorize the Trustee to be their attorney-in-fact
for the purpose of performing any act which the Trustee, in its sole and
absolute discretion, deems necessary or advisable in order to accomplish the
purposes and the intent of this Section 3. The Trustee shall be fully protected
in acting or refraining from acting in accordance with the provisions of this
Section 3.
         4. Irrevocability of Trust. Prior to the occurrence of a "Preliminary
Change in Control" (hereinafter referred to as a "Preliminary CIC"), the Trust
shall be revocable and may be altered or amended in any substantive respect, or
revoked or terminated by the Grantors in whole or in part provided that no such
amendment may increase the duties of the Trustee without its consent. In the
event of a Preliminary CIC, the Trust may not be altered or amended in any
substantive respect, or revoked or terminated by the Grantor or Grantors
incurring a Preliminary CIC unless a majority of the Beneficiaries, determined
as of the day before such Preliminary CIC, agree in writing to such an
alteration, amendment, revocation or termination provided that no such amendment
may increase the duties of the Trustee without its consent. If after a
Preliminary CIC occurs but fails to become a Change in Control, thereafter the
Trust shall again be revocable and may be altered or amended in any substantive
respect, or revoked or terminated by the Grantors in whole or in part provided
that no such amendment may increase the duties of the Trustee without its
consent. Notwithstanding the preceding, the Trust may be amended following a
Preliminary CIC or a Change in Control without approval of the Beneficiaries to
protect the tax status or ERISA status of this Trust. For purposes of this
Trust, Preliminary CIC and other capitalized terms if not defined in the Trust
shall have the same meaning as set forth in the Grantor's respective Deferred
Compensation Plan for Directors.
         5. Contributions to Trust. The Grantors may make periodic discretionary
contributions to the Trust in order to satisfy distributions directed to be made
in accordance with Section 7(a) herein. In addition, the Grantors have obligated
themselves under the terms of the Plans, which are hereby incorporated by
reference, to make certain contributions to the Trust upon the occurrence of a
Preliminary CIC. Upon such a Preliminary CIC, the Grantors affected thereby
shall account for each Beneficiary's benefit funded by contributions to the
Trust in a manner determined by the Trust Administrative Committee. The Grantors
have also obligated themselves, if necessary, to make certain contributions to
the Trust in a manner determined by the Trust Administrative Committee to
provide for the protections set forth in Section 7(c) hereof. A return of such
contributions and earnings thereon may only occur under the following
circumstances: (a) if, on the second anniversary of a Preliminary CIC or any
time thereafter, the Southern Committee determines that a Change in Control has
not been Consummated, the Trustee upon its agreement with this determination
shall, upon the request of the Grantor or Grantors incurring a Preliminary CIC,
return to such Grantor or Grantors property contributed to the Trust on account
of the occurrence of a Preliminary CIC; (b) if, at any time, following a
Preliminary CIC, the Southern Committee provides evidence satisfactory to the
Trustee that the Preliminary CIC will not become a Change in Control; or (c) if
the Trustee determines in its sole and absolute discretion that a Southern
Change in Control has occurred, and, on the second anniversary of the date of
Consummation of such Change in Control 75% of the members of the Incumbent Board
on such anniversary date shall continue to serve as determined by the Southern
Committee, the Trustee upon its agreement with this determination shall return
to the Grantor or Grantors incurring a Change in Control, upon such Grantor's
request, any such property received and earnings thereon as a result of such
Change in Control; or (d) prior to Change of Control, with respect to amounts
contributed to fund benefits paid in accordance with Section 7(c) hereof, if the
Trust assets equal or exceed 200% of the targeted funding level as established
by the Trust Administrative Committee prior to a Change in Control, assets shall
be returned by the Trustee to the Grantor or Grantors designated by the Trust
Administrative Committee to reduce total assets to 150% of the targeted funding
level.
6.       Investment of Trust Assets and Voting Rights.
         --------------------------------------------
         (a) The Trustee may invest, in its sole discretion, in: (i) any form of
marketable financial instruments traded on The New York Stock Exchange,
including, in particular, shares of common stock of The Southern Company
("Shares"); or (ii) proprietary money market mutual funds. The Grantors
acknowledges the discretion of the Trustee regarding its investment authority;
however, to the extent of Deferred Stock Account balances under the Plans, the
Trust corpus should be predominantly invested in Shares and the Grantors
expressly waive any diversification of investments that otherwise might be
required of a trustee under applicable state law. The Trustee is expressly
authorized and empowered to hold or purchase such insurance in its own name (and
with itself as the beneficiary) as it shall determine to be necessary or
advisable to advance best the purposes of the Trust and the interest of the
Beneficiaries.
         (b) All rights associated with assets of the Trust shall be exercised
by the Trustee or the person designated by the Trustee, and shall in no event be
exercisable by or rest with Beneficiaries; provided, however, that voting rights
with respect to all Shares held as Trust assets, and any decision to accept or
reject a tender offer made for such shares, will be exercised by the Trustee in
accordance with instructions received from the Trust Administrative Committee.
         (c) Each Beneficiary shall have the right, with respect to that number
of Shares allocated to his or her Deferred Stock Account under the Plans, to
direct the Trust Administrative Committee as to the manner in which he or she
wishes that such number of Shares be voted on any and all matters put to a
shareholder vote. The Trust Administrative Committee shall direct the Trustee to
vote a corresponding number of Shares held in the Trust in accordance with such
directions. To the extent that the Trust holds Shares either in excess of the
number allocated to all Beneficiaries' Deferred Stock Accounts or as to which
the Trust Administrative Committee does not receive timely and proper direction
from the applicable Beneficiaries, the Trust Administrative Committee may direct
the Trustee to vote such Shares in the same proportion as the other Shares are
directed to be voted. If the Trust ever holds fewer Shares than there are Shares
allocated to Deferred Stock Accounts under the Plans as to which timely and
proper directions have been received from the applicable Beneficiaries, the
Trust Administrative Committee shall direct the Trustee to vote all Shares held
in the Trust in the same proportion as the total Shares covered by timely and
proper directions have been directed to be voted.
 7.      Distribution of Trust Assets.
         ----------------------------
         (a) If, prior to a Change In Control, a Grantor desires that a payment
to a Beneficiary, attributable to a Deferred Stock Account under a Plan, be made
from trust assets, the Trust Administrative Committee shall notify the Trustee
at least ten days prior to the date the payment becomes due under such Plan.
Such notification shall provide sufficient instructions acceptable to the
Trustee for making the requisite payment. If the principal of the Trust, and any
earnings thereon, are not sufficient to make payments of benefits in accordance
with the terms of the Plan(s), the Grantors shall make the balance of each such
payment as it falls due in accordance with the Plan(s). The Trustee shall notify
the Grantors where principal and earnings are not sufficient. Nothing in this
Agreement shall relieve the Grantors of their liabilities to pay benefits due
under the Plan(s) except to the extent such liabilities are met by application
of assets of the Trust.
          (b) The Grantors may make payment of benefits directly to
Beneficiaries as they become due under the terms of the Plan(s). Upon a Change
in Control, the Grantors shall notify the Trustee of its decision to make
payment of benefits directly prior to the time amounts are payable to
Beneficiaries.
         (c) At such time as a Beneficiary is entitled to payments under any of
the Plans prior to a Change in Control, if the Grantor fails to direct the
Trustee to make payment under the Plan in accordance with paragraph (a) above or
fails to make payment of all or a portion of the benefits to a Beneficiary under
any Plan in accordance with paragraph (a) or (b) above, such Beneficiary can
make application for payment in accordance with the provisions of paragraph
(e)(i) below. If so requested, the Trustee shall make an independent
determination in its sole and absolute discretion regarding the Beneficiary's
right to payment under the Plan(s) within 60 days thereof. Such determination
shall be made with advice from outside counsel independent of Southern and the
Trustee. The Grantors agree to be bound by Trustee's determination and to make
payment of or direct Trustee to make payment of, benefits as they fall due
commencing not later than 30 days following Trustee's determination regarding
entitlement to benefits absent a manifest abuse of discretion by the Trustee. If
Trustee determines benefits are payable to Beneficiary and Grantor fails to
commence payment, or direct Trustee to make payment, within 30 days following
the Trustee's determination, Trustee shall make payment of such benefits and
instruct Beneficiary in writing that he or she must bring suit within 180 days
of the Trustee's claims determination or thereafter be barred from doing so.
Trustee shall only make benefits payments hereunder until the first of the
following to occur: (i) 180 days following its claims determination if the
Beneficiary fails to bring a lawsuit to enforce his or her rights within this
limitation period; or (ii) until there is a final adjudication or other final
resolution of the Beneficiary's claim. In the event that such Beneficiary timely
files a lawsuit within 180 days of Trustee's determination that Beneficiary is
entitled to the disputed benefits, all reasonable costs of litigation (as
determined in the sole and absolute discretion of the Trustee) shall be
periodically, but no less than quarterly, advanced to the Beneficiary through
the final adjudication of the claim; provided, however, that the Beneficiary
shall repay such advanced costs of litigation if he or she fails to have finally
resolved in the Beneficiary's favor a material issue supporting the underlying
merits of the Beneficiary's claim for benefits in such dispute as determined in
the sole and absolute discretion of the Trustee. Alternatively, in the event
that a Beneficiary files a lawsuit to obtain benefits after the Trustee
determines that such Beneficiary is not entitled to such benefits, all costs of
litigation shall be borne by each party thereto; provided, however, that the
Grantors, or the Trustee if the Grantors refuse, shall reimburse such reasonable
costs in the event any material issue supporting the underlying merits of the
Beneficiary's claim for benefits in such dispute is finally resolved in favor of
the Beneficiary.
         (d) Subject to the provisions of paragraph (e) of this Section 7, after
a Change in Control, a Beneficiary shall receive payment from the Trust in an
amount equal to the accrued benefit to which he is entitled under the Plans
determined as of the Change in Control, less any payments previously made to him
by the Grantors or Trustee pursuant to the terms of the Plan(s) and this Trust.
The form of payment will be consistent with the forms provided under the terms
of the Plan(s).
         (e) (i) The commencement of payments from the Trust, other than
pursuant to directions of a Grantor or Trust Administrative Committee, shall be
conditioned on the Trustee's prior receipt of a written instrument from the
Beneficiary in a form reasonably satisfactory to the Trustee. In addition to any
other information the Trustee requires, such form should indicate the amount, if
any, the Beneficiary has received from the Grantors under the Plans as of his
request. All payments to a Beneficiary from the Trust shall be made in
accordance with a good faith interpretation of the provisions of the applicable
Plan(s). (ii) Except as provided below, the Trustee shall make or commence
payment to the Beneficiary in accordance with his representations not later than
30 business days after its receipt thereof; provided, however, that before the
Trustee makes or commences any such payment and not later than 7 business days
after its receipt of the Beneficiary's representations, the Trustee shall
request in writing the Grantors' agreement that the Beneficiary's
representations are accurate with respect to the amount, fact, and time of
payment to him. The Trustee shall enclose with such request a copy of the
Beneficiary's representations and written advice to the Grantors that it must
respond to the Trustee's request on or before the 20th business day (which date
shall be set forth in such written advice) after the Beneficiary furnished such
representations to the Trustee. If the Grantors in a writing delivered to the
Trustee agree with the Beneficiary's representations in all respects, or if the
Grantors do not respond to the Trustee's request by the 20th-day deadline, the
Trustee shall make payment in accordance with the Beneficiary's representations.
If the Grantors advise the Trustee in writing on or before the 20th-day deadline
that it does not agree with any or all of the Beneficiary's representations, the
Trustee immediately shall take whatever steps it in its sole and absolute
discretion deems appropriate, including, but not limited to, a review of any
notice furnished by the Grantor pursuant to paragraph (e) hereof, to attempt to
resolve the difference(s) between the Grantors and the Beneficiary. If, however,
the Trustee is unable to resolve such difference(s) to its satisfaction within
60 days after its receipt of the Beneficiary's representations, the Trustee
shall make an independent determination in its sole and absolute discretion with
the advice of independent counsel regarding the Beneficiary's claim for benefits
and commence such payment, if any, within such 60 day period. In the event
Grantors do not agree with Beneficiary's right to payment of all or a portion of
a benefit under any Plan(s), Grantors may bring a declaratory judgment action to
clarify their rights. Trustee may rely on any final judgment concerning a
declaratory judgment action with respect to the payment of benefits from the
Trust.
         (f) Notwithstanding any other provision of the Trust to the contrary,
after a Change in Control the Trustee shall make payments hereunder before such
payments are otherwise due if it determines in its sole and absolute discretion,
based on a change in the tax or revenue laws of the United States of America, a
published ruling or similar announcement issued by the Internal Revenue Service,
a regulation issued by the Secretary of the Treasury or his delegate, a final
non-appealable decision by the Internal Revenue Service addressed to a
Beneficiary, a final decision by a court of competent jurisdiction involving a
Beneficiary, or a closing agreement made under Code Section 7121 that is
approved by the Internal Revenue Service and involves a Beneficiary, that a
Beneficiary has recognized or will recognize income for federal income tax
purposes with respect to amounts that are or will be payable to him under the
Plans before they are paid to him. The Trustee in its sole and absolute
discretion shall reimburse a Beneficiary all costs determined to be reasonable
to defend any tax claims described herein which are asserted by the Internal
Revenue Service against any Beneficiary, including attorney fees and cost of
appeal, and shall have the sole authority to determine whether or not to appeal
any determination made by the Internal Revenue Service or by a lower court. The
Trustee also shall reimburse any Beneficiary for any interest or penalties in
respect of tax claims hereunder upon receipt of documentation of same.
         (g) Unless (contemporaneously with his submission of the written
instrument referred to in paragraph (b) hereof) a Beneficiary or Trust
Administrative Committee furnishes documentation in form and substance
satisfactory to the Trustee that no withholding is required with respect to a
payment to be made to him from the Trust, the Trustee may deduct from any such
payment any federal, state or local taxes required by law to be withheld by the
Trustee.
         (h) The Trustee shall provide the Grantors with written confirmation of
the fact and time of any commencement of payments hereunder within 10 business
days after any payments commence to a Beneficiary. The Grantors shall notify the
Trustee in the same manner of any payments it commences to make to a Beneficiary
pursuant to the Plans.
         (i) The Trustee shall be fully protected in making any payment or any
calculations in accordance with the provisions of this Section 7.
         8. Termination of the Trust and Reversion of Trust Assets. The Trust
shall terminate upon the first to occur of (i) the payment by the Grantors of
all amounts due the Beneficiaries under each of the Plans or the receipt by the
Trustee of a valid release to that effect from each of the Beneficiaries with
respect to payments made to him, or (ii) the twenty-first anniversary of the
death of the last survivor of the Beneficiaries who are in being on the date of
the execution of this Trust Agreement. Upon termination of the Trust, any and
all assets remaining in the Trust, after the payment to the Beneficiaries of all
amounts to which they are entitled and after payment of the expenses and
compensation in Sections 12 and 17(i) of this Trust Agreement, shall revert to
the Grantors in accordance with their separate interest as accounted for by the
Trust Administrative Trust, and the Trustee shall promptly take such action as
shall be necessary to transfer any such assets to the Grantors in accordance
with such interest. Notwithstanding the above, the Grantors shall be obligated
to take whatever steps are necessary to ensure that the Trust is not terminated
for a period of five (5) years following a Change in Control, such steps to
include, but not being limited to, the transfer to the Trustee of cash or other
assets pursuant to the provisions of Section 9(a) hereof.
         9. Powers of the Trustee. To carry out the purposes of the Trust and
subject to any limitations herein expressed, the Trustee is vested with the
following powers until final distribution, in addition to any now or hereafter
conferred by law affecting the trust or estate created hereunder. In exercising
such powers, the Trustee shall act in a manner reasonable and equitable in view
of the interests of the Beneficiaries and in a manner in which persons of
ordinary prudence, diligence, discretion and judgment would act in the
management of their own affairs.
         (a) Receive and Retain Property. To receive and retain any property
received at the inception of the Trust or at any other time, whether or not such
property is unproductive of income or is property in which the Trustee is
personally interested or in which the Trustee owns an undivided interest in any
other trust capacity.
         (b) Dispose of, Develop, and Abandon Assets. To dispose of an asset,
for cash or on credit, at public or private sale and, in connection with any
sale or disposition, to give such warranties and indemnifications as the Trustee
shall determine; to manage, develop, improve, exchange, partition, change the
character of or abandon a Trust asset or any interest therein.
         (c) Borrow and Encumber. To borrow money for any Trust purpose upon
such terms and conditions as may be determined by the Trustee; to obligate the
Trust or any part thereof by mortgage, deed of trust, pledge or otherwise, for a
term within or extending beyond the term of the Trust.
         (d)      Lease.  To enter for any purpose  into a lease as lessor or
lessee,  with or without an option to purchase or renew, for a term.
         (e) Grant or Acquire Options. To grant or acquire options and rights of
first refusal involving the sale or purchase of any Trust assets, including the
power to write covered call options listed on any securities exchange.
         (f) Powers Respecting Securities. Except as set forth in Paragraph 6(c)
pertaining to voting rights in Shares held in the Trust, the Trustee shall have
all the rights, powers, privileges and responsibilities of an owner of
securities, including, without limiting the foregoing, the power to vote, to
give general or limited proxies, to pay calls, assessments, and other sums; to
assent to, or to oppose, corporate sales or other acts; to participate in, or to
oppose, any voting trusts, pooling agreements, foreclosures, reorganizations,
consolidations, mergers and liquidations, and, in connection therewith, to give
warranties and indemnifications and to deposit securities with and transfer
title to any protective or other committee; to exchange, exercise or sell stock
subscription or conversion rights; and, regardless of any limitations elsewhere
in this instrument relative to investments by the Trustee, to accept and retain
as an investment hereunder any securities received through the exercise of any
of the foregoing powers.
         (g) Use of Nominee. To hold securities or other property in the name of
the Trustee, in the name of a nominee of the Trustee, or in the name of a
custodian (or its nominee) selected by the Trustee, with or without disclosure
of the Trust, the Trustee being responsible for the acts of such custodian or
nominee affecting such property.
         (h) Advance Money. To advance money for the protection of the Trust,
and for all expenses, losses and liabilities sustained or incurred in the
administration of the Trust or because of the holding or ownership of any Trust
assets, for which advances, with interest, the Trustee has a lien on the Trust
assets as against the Beneficiaries.
         (i) Pay, Contest or Settle Claims. To pay, contest or settle any claim
by or against the Trust by compromise, arbitration or otherwise; to release, in
whole or in part, any claim belonging to the Trust to the extent that the claim
is uncollectible. Notwithstanding the foregoing, the Trustee may only pay or
settle a claim asserted against the Trust by a Grantor if it is compelled to do
so by a final order of a court of competent jurisdiction.
         (j)      Litigate.  To prosecute or defend  actions,  claims or
proceedings  for the  protection of Trust assets and of the Trustee in the
performance of its duties.
         (k) Employ Advisers and Agents. To employ and reasonably compensate
persons, corporations or associations, including attorneys, auditors, investment
advisers or agents, even if they are associated with the Trustee, to advise or
assist the Trustee in the performance of its administrative duties; to act
without independent investigation upon their recommendations.
         (l) Use Custodian. If no bank or trust company is acting as Trustee
hereunder, the Trustee shall appoint a bank or trust company to act as custodian
(the "Custodian") for securities and any other Trust assets. Any such
appointment shall terminate when a bank or trust company begins to serve as
Trustee hereunder. The Custodian shall keep the deposited property, collect and
receive the income and principal, and hold, invest, disburse or otherwise
dispose of the property or its proceeds (specifically including selling and
purchasing securities, and delivering securities sold and receiving securities
purchased) upon the order of the Trustee.
         (m)      Execute  Documents.  To execute and deliver all  instruments
that will  accomplish or facilitate the exercise of the powers vested in the
Trustee.
         (n) Grant of Powers Limited. The Trustee is expressly prohibited from
exercising any powers vested in it primarily for the benefit of the Grantors
rather than for the benefit of the Beneficiaries. The Trustee shall not have the
power to purchase, exchange, or otherwise deal with or dispose of the assets of
the Trust for less than adequate and full consideration in money or money's
worth.
         (o) Deposit Assets. To deposit Trust assets in commercial, savings or
savings and loan accounts (including such accounts in a corporate Trustee's
banking department) and to keep such portion of the Trust assets in cash or cash
balances as the Trustee may, from time to time, deem to be in the best interests
of the Trust, without liability for interest thereon.
         10. Termination of Trustee. Grantors may remove Trustee upon sixty (60)
days notice or upon such shorter period of time if acceptable to Trustee;
provided that upon a Preliminary CIC or subsequent Change in Control the
Grantors may only remove the Trustee if a majority of the Beneficiaries approve
such action.
         11.      Appointment of Successor Trustee.
                  --------------------------------
         (a) The Trustee shall have the right to resign upon 60 days' written
notice to the Grantor, during which time the Grantor shall appoint a "Qualified
Successor Trustee." If no Qualified Successor Trustee accepts such appointment,
the resigning Trustee shall petition a court of competent jurisdiction for the
appointment of a "Qualified Successor Trustee." For this purpose, a "Qualified
Successor Trustee" must be a bank or trust company with a market capitalization
of at least $10 billion but may not be the Grantor, any person who would be a
"related or subordinate party" to the Grantor within the meaning of Section
672(c) of the Code or a corporation that would be a member of an "affiliated
group" of corporations including the Grantor within the meaning of Section
1504(a) of the Code if the words "80 percent" wherever they appear in that
section were replaced by the words "50 percent." Upon the written acceptance by
the Qualified Successor Trustee of the trust and upon approval of the resigning
Trustee's final account by those entitled thereto, the resigning Trustee shall
be discharged.
         (b) Upon the occurrence of a corporate transaction involving the
ownership or assets of a Grantor, the affected Grantors upon written
acknowledgment to the Trustee of their obligations under the Trust and Plans may
in their sole discretion direct the Trustee to transfer or assign all or a
portion of the assets of the Trust to a Qualified Successor Trustee. The Trust
Administrative Committee shall instruct the Trustee regarding the assets to be
transferred or assigned; provided, however, that no assets shall be transferred
to such a Qualified Successor Trustee until the Trustee is satisfied that
contributions required under the Plans have been made prior to or concurrent
with this transfer or assignment. Notwithstanding the foregoing, the Trustee
shall only be permitted to transfer or assign assets from the Trust to a
Qualified Successor Trustee if the transfer and assignment are consistent with
the purpose and intent of the Trust.
         12. Trustee Compensation. The Trustee shall be entitled to receive as
compensation for its services hereunder the compensation (a) as negotiated and
agreed to by the Grantors and the Trustee, or (b) if not negotiated or if the
parties are unable to reach agreement, as allowed a trustee under the laws of
the State of Georgia in effect at the time such compensation is payable. Such
compensation shall be paid by the Grantors; provided, however, that to the
extent such compensation is not paid by the Grantors, subject to the provisions
of Section 17(i) hereof, it shall be charged against and paid from the Trust and
the Grantors shall reimburse the Trust for any such payment made from the Trust
within 30 days of its receipt from the Trustee of written notice of such
payment.
         13. Trustee's Consent to Act and Indemnification of the Trustee. The
Trustee hereby grants and consents to act as Trustee hereunder. The Grantors
agree to indemnify the Trustee and hold it harmless from and against all claims,
liabilities, legal fees and expenses that may be asserted against it, otherwise
than on account of conduct of the Trustee which is found by a final judgment of
a court of competent jurisdiction to be a breach of its fiduciary duty whether
by reason of the Trustee's taking or refraining from taking any action in
connection with the Trust, whether or not the Trustee is a party to a legal
proceeding or otherwise.
         14. Prohibition Against Assignment. No Beneficiary shall have any
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust before such assets are paid to the Beneficiary as provided in Section 7,
and all rights created under the Trust and the Plans shall be unsecured
contractual rights of the Beneficiary against the Grantor which is his employer
for purposes of the Plans. No part of, or claim against, the assets of the Trust
may be assigned, anticipated, alienated, encumbered, garnished, attached or in
any other manner disposed of by any of the Beneficiaries, and no such part or
claim shall be subject to any legal process or claims of creditors of any of the
Beneficiaries.
         15. Annual Accounting. The Trustee shall keep accurate and detailed
accounts of all investments, receipts and disbursements and other transactions
hereunder, and, within ninety days following the close of each calendar year,
and within ninety days after the Trustee's resignation or termination of the
Trust as provided herein, the Trustee shall render a written account of its
administration of the Trust to the Grantors by submitting a record of receipts,
investments, disbursements, distributions, gains, losses, assets on hand at the
end of the accounting period and other pertinent information, including a
description of all securities and investments purchased and sold during such
calendar year. Trustee shall separately account for each Grantor's interest in
Trust assets. Written approval of an account shall, as to all matters shown in
the account, be binding upon the Grantors and shall forever release and
discharge the Trustee from any liability or accountability. The Grantors will be
deemed to have given their written approval if he does not object in writing to
the Trustee within one hundred and twenty days after the date of receipt of such
account from the Trustee. The Trustee shall be entitled at any time to institute
an action in a court of competent jurisdiction for a judicial settlement of its
account.
         16. Notices. Any notice or instructions required under any of the
provisions of this Trust Agreement shall be deemed effectively given only if
such notice is in writing and is delivered personally or by certified or
registered mail, return receipt requested and postage prepaid, addressed to the
addresses as set forth below of the parties hereto. The addresses of the parties
are as follows:
                                    (i)     The Grantors:
                                            Secretary
                                            Southern Company
                                            270 Peachtree Street, Suite 1400
                                            Atlanta, GA 30303
                                    (ii)    The Trustee:
                             Reliance Trust Company
                          3384 Peachtree Road Suite 900
                             Atlanta, GA 30326-1106

The Grantors or Trustee may at any time change the address to which notices are
to be sent to it by giving written notice thereof in the manner provided above.
         17.      Miscellaneous Provisions.
                  ------------------------
         (a) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to contracts made
and to be performed therein and the Trustee shall not be required to account in
any court other than one of the courts of such state.
         (b) The Trust Administrative Committee may give direction to Trustee on
behalf of the Grantors with regard to those matters identified in writing by the
Grantors. The Trustee will be fully protected in relying on such direction by
the Trust Administrative Committee.
         (c) All section headings herein have been inserted for convenience of
reference only and shall in no way modify, restrict or affect the meaning or
interpretation of any of the terms or provisions of this Trust Agreement.
         (d) This Trust Agreement is intended as a complete and exclusive
statement of the agreement of the parties hereto, supersedes all previous
agreements or understandings among them and may not be modified or terminated
orally.
         (e)      The term "Trustee" shall include any successor Trustee.
         (f) If a Trustee or Custodian hereunder is a bank or trust company, any
corporation resulting from any merger, consolidation or conversion to which such
bank or trust company may be a party, or any corporation otherwise succeeding
generally to all or substantially all of the assets or business of such bank or
trust company, shall be the successor to it as Trustee or Custodian hereunder,
as the case may be without the execution of any instrument or any further action
on the part of any party hereto.
         (g) If any provision of this Trust shall be invalid and unenforceable,
the remaining provisions hereof shall subsist and be carried into effect.
         (h) The Plans are by this reference expressly incorporated herein and
made a part hereof with the same force and effect as if fully set forth at
length. As of the date first stated above, the terms of the Plans are as set
forth in Exhibit A attached hereto.
         (i) The assets of the Trust shall be subject only to the claims of the
Grantor's general creditors in the event of one or more of the Grantors'
bankruptcy or insolvency. A Grantor shall be considered "bankrupt" or
"insolvent" if the Grantor is (A) unable to pay its debts when due or (B)
engaged as a debtor in a proceeding under the Bankruptcy Code, 11 U.S.C. Section
101 et seq. The Board of Directors or the chief executive officer of a Grantor
must notify the Trustee of the Grantor's bankruptcy or insolvency within three
(3) days following the occurrence of such event. Upon receipt of such a notice,
or, upon receipt of a written allegation from a person or entity claiming to be
a creditor of a Grantor that such Grantor is bankrupt or insolvent, the Trustee
shall discontinue payments to Beneficiaries. The Trustee shall, as soon as
practicable after receipt of such notice or written allegation, determine
whether such Grantor is bankrupt or insolvent. If the Trustee determines, based
on such notice, written allegation, or such other information as it deems
appropriate, that such Grantor is bankrupt or insolvent, the Trustee shall hold
the assets of the Trust for the benefit of the general creditors of the Grantor
or Grantors, and deliver any undistributed assets attributable to such Grantor
or Grantors to satisfy the claims of such creditors as a court of competent
jurisdiction may direct. The Trust Administrative Committee in conjunction with
the Trustee shall identify the amount of assets attributable to any bankrupt or
insolvent Grantor in order to segregate such assets for the benefit of such
Grantor's creditors. The Trustee shall resume payments to Beneficiaries only
after it has determined that the Grantor in issue is not bankrupt or insolvent,
is no longer bankrupt or insolvent (if the Trustee determined that the Grantor
was bankrupt or insolvent), pursuant to an order of a court of competent
jurisdiction. Unless the Trustee has actual knowledge of the Grantor's
bankruptcy or insolvency of the Grantor or Grantors, the Trustee shall have no
duty to inquire whether such Grantor(s) is bankrupt or insolvent. The Trustee
may in all events rely on such evidence concerning the pertinent Grantor's
solvency as may be furnished to the Trustee that will give the Trustee a
reasonable basis for making a determination concerning such Grantor's solvency.
If the Trustee discontinues payment of benefits from the Trust pursuant to this
Section 17(h) and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of all payments
which would have been made to each Beneficiary less the aggregate amount of
payments made to the Beneficiary by the Grantor(s) in lieu of the payments
provided for hereunder during any such period of discontinuance. In addition,
interest at a rate equal to the average 90 day Treasury Bill rate during the
period of such discontinuance shall be paid on the amount, if any, determined to
be owed in accordance with the preceding sentence.
         (j) Any and all taxes, expenses (including, but not limited to, the
Trustee's compensation) and costs of litigation relating to or concerning the
adoption, administration and termination of the Trust shall be borne and
promptly paid by the Grantors; provided, however, that, to the extent such
taxes, expenses and costs relating to the Trust are due and owing and (A) are
not paid by the Grantors, and (B) have not been paid for more than sixty (60)
days, they shall be charged against and paid from the Trust, and the Grantors
shall reimburse the Trust for any such payment made from the Trust within 30
days of its receipt from the Trustee of written notice of such payment.
         (k) Any reference hereunder to a Beneficiary shall expressly be deemed
to include, where relevant, the beneficiaries of a Beneficiary duly appointed
under the terms of the Plans. A Beneficiary shall cease to have such status once
any and all amounts due such Beneficiary under the Plan have been satisfied.
         (l)      Any  reference  hereunder  to the  Grantors  shall  expressly
be deemed to  include a  Grantor's successor and assigns.
         (m) Whenever used herein, and to the extent appropriate, the masculine,
feminine or neuter gender shall include the other two genders, the singular
shall include the plural and the plural shall include the singular.

         IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement as of ____________________, 2000.
                                            TRUSTEE:

                                                   RELIANCE TRUST COMPANY




<PAGE>


         GRANTOR:
                  -----------------------------------------------------
                           ALABAMA POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           GEORGIA POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           GULF POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           MISSISSIPPI POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           SAVANNAH ELECTRIC AND POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           THE SOUTHERN COMPANY



<PAGE>


                                    EXHIBIT A

Plans and Arrangements Subject to the Trust1

<PAGE>


                                    EXHIBIT B

                       Contacts and Addresses of Grantors

- --------
1 The parenthetical reference sets forth the Trust provisions applicable to the
respective Plans listed herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>50
<FILENAME>x10a105.txt
<TEXT>

                                                           Exhibit 10(a)105





           DEFERRED CASH COMPENSATION TRUST AGREEMENT FOR DIRECTORS OF
                     SOUTHERN COMPANY AND ITS SUBSIDIARIES











<PAGE>








           DEFERRED CASH COMPENSATION TRUST AGREEMENT FOR DIRECTORS OF
                     SOUTHERN COMPANY AND ITS SUBSIDIARIES


                                TABLE OF CONTENTS

1.    Purpose.............................................................1
2.    Trust Corpus........................................................2
3.    Grantor Trust.......................................................2
4.    Irrevocability of Trust.............................................3
5.    Change in Control and Preliminary Change in Control.................3
6.    Investment of Trust Assets..........................................5
7.    Distribution of Trust Assets........................................6
8.    Termination of the Trust and Reversion of Trust Assets.............11
9.    Powers of the Trustee..............................................12
10.   Termination of Trustee.............................................15
11.   Resignation of Trustee and Appointment of Successor Trustee........15
12.   Trustee Compensation...............................................16
13.   Trustee's Consent to Act and Indemnification of the Trustee........17
14.   Prohibition Against Assignment.....................................17
15.   Annual Accounting..................................................17
16.   Notices............................................................18
17.   Miscellaneous Provisions...........................................19



<PAGE>






           DEFERRED CASH COMPENSATION TRUST AGREEMENT FOR DIRECTORS OF
                     SOUTHERN COMPANY AND ITS SUBSIDIARIES


         This Trust Agreement entered into this _____ day of ___________, 2000
(the "Effective Date") is between the Grantors as set forth on the signature
page of this Trust Agreement and Wachovia Bank, N.A. (the "Trustee").
         1. Purpose. The purpose of this trust (the "Trust") is to provide a
vehicle to (a) hold assets of the Grantors as a reserve for the discharge of
certain of the Grantors' obligations with respect to Prime Rate Investment
Accounts and Phantom Stock Investment Accounts under the respective Grantors'
Deferred Compensation Plans for Directors (i) upon the occurrence of a change in
control, and (ii) in accordance with paragraph 7(b), to provide added
protections for certain individuals who actively serve on the Board of Directors
of a Grantor on or after January 1, 1999, entitled to receive benefits under
designated plans and arrangements and (b) invest, reinvest, disburse and
distribute those assets and the earnings thereon as provided hereunder.
Individuals eligible for benefits in accordance with the preceding sentence
shall hereinafter be referred to as "Beneficiaries" under the Trust. Grantors
shall designate in writing to the Trustee in Exhibit A attached hereto and made
a part hereof those plans or arrangements subject to all or certain provisions
of the Trust (the "Plans"). Exhibit A shall also specify which provisions of the
Trust apply to the various Plans.
         2. Trust Corpus. The Grantors hereby transfer to the Trustee and the
Trustee hereby accepts and agrees to hold, in trust, the sum of Ten Dollars
($10.00) plus such cash and/or property, if any, transferred to the Trustee by
the Grantors or on behalf of the Grantors pursuant to obligations incurred under
any or all of the Plans and the earnings thereon, and such cash and/or property,
together with the earnings thereon and together with any other cash or property
received by the Trustee pursuant to Section 9(a) of this Trust Agreement, shall
constitute the trust estate and shall be held, managed and distributed as
hereinafter provided. The Grantors shall execute any and all instruments
necessary to vest the Trustee with full title to the property hereby
transferred.
         3. Grantor Trust. The Trust is intended to be a trust of which the
Grantors are treated as individual owners for federal income tax purposes in
accordance with the provisions of Sections 671 through 679 of the Internal
Revenue Code of 1986, as amended (the "Code"). If the Trustee, in its sole and
absolute discretion, deems it necessary or advisable for the Grantors and/or the
Trustee to undertake or refrain from undertaking any actions (including, but not
limited to, making or refraining from making any elections or filings) in order
to ensure that the Grantors are at all times treated as individual owners of the
Trust for federal income tax purposes, the Grantors and/or the Trustee will
undertake or refrain from undertaking (as the case may be) such actions. The
Grantors hereby irrevocably authorize the Trustee to be their attorney-in-fact
for the purpose of performing any act which the Trustee, in its sole and
absolute discretion, deems necessary or advisable in order to accomplish the
purposes and the intent of this Section 3. The Trustee shall be fully protected
in acting or refraining from acting in accordance with the provisions of this
Section 3.
         4. Irrevocability of Trust. Prior to the occurrence of a "Preliminary
Change in Control" (hereinafter referred to as a "Preliminary CIC"), the Trust
shall be revocable and may be altered or amended in any substantive respect, or
revoked or terminated by the Grantors in whole or in part provided that no such
amendment may increase the duties of the Trustee without its consent. In the
event of a Preliminary CIC, the Trust may not be altered or amended in any
substantive respect, or revoked or terminated by the Grantor or Grantors
incurring a Preliminary CIC unless a majority of the Beneficiaries, determined
as of the day before such Preliminary CIC, agree in writing to such an
alteration, amendment, revocation or termination provided that no such amendment
may increase the duties of the Trustee without its consent. If after a
Preliminary CIC occurs but fails to become a Change in Control, thereafter the
Trust shall again be revocable and may be altered or amended in any substantive
respect, or revoked or terminated by the Grantors in whole or in part provided
that no such amendment may increase the duties of the Trustee without its
consent. Notwithstanding the preceding, the Trust may be amended following a
Preliminary CIC or a Change in Control without approval of the Beneficiaries to
protect the tax status or ERISA status of this Trust. For purposes of this
Trust, Preliminary CIC and other capitalized terms if not defined in the Trust
shall have the same meaning as set forth in the Grantor's respective Deferred
Compensation Plan for Directors.
         5. Contributions to Trust. The Grantors have obligated themselves under
the terms of the Plans, which are hereby incorporated by reference, to make
certain contributions to the Trust upon the occurrence of a Preliminary CIC.
Upon such a Preliminary CIC, the Grantors affected thereby shall account for
each Beneficiary's benefit funded by contributions to the Trust in a manner
determined by the Trust Administrative Committee. The Grantors have also
obligated themselves to make certain contributions to the Trust in a manner
determined by the Trust Administrative Committee to provide for the protections
set forth in Section 7(c) hereof. A return of such contributions and earnings
thereon may only occur under the following circumstances: (a) if, on the second
anniversary of a Preliminary CIC or any time thereafter, the Southern Committee
determines that a Change in Control has not been Consummated, the Trustee upon
its agreement with this determination shall, upon the request of the Grantor or
Grantors incurring a Preliminary CIC, return to such Grantor or Grantors
property contributed to the Trust on account of the occurrence of a Preliminary
CIC; (b) if, at any time, following a Preliminary CIC, the Southern Committee
provides evidence satisfactory to the Trustee that the Preliminary CIC will not
become a Change in Control; or (c) if the Trustee determines in its sole and
absolute discretion that a Southern Change in Control has occurred, and, on the
second anniversary of the date of Consummation of such Change in Control 75% of
the members of the Incumbent Board on such anniversary date shall continue to
serve as determined by the Southern Committee, the Trustee upon its agreement
with this determination shall return to the Grantor or Grantors incurring a
Change in Control, upon such Grantor's request, any such property received and
earnings thereon as a result of such Change in Control; or (d) prior to Change
of Control, with respect to amounts contributed to fund benefits paid in
accordance with Section 7(b) hereof, if the Trust assets equal or exceed 200% of
the targeted funding level as established by the Trust Administrative Committee
prior to a Change in Control, assets shall be returned by the Trustee to the
Grantor or Grantors designated by the Trust Administrative Committee to reduce
total assets to 150% of the targeted funding level.
6.       Investment of Trust Assets.
         --------------------------
(a) Subject to the provisions of paragraph (b) below, until the Trustee has
distributed all of the assets of the Trust in accordance with the terms hereof,
the Trustee shall invest and reinvest such assets (without regard to any state
law limiting the investment powers of fiduciaries) in such securities and other
property as the Trustee deems advisable, considering the probable income
(including capital appreciation potential) from any such investment, the
probable safety of the assets of the Trust and, where appropriate, the rate of
return at which the assets would have been invested on behalf of each
Beneficiary under any applicable qualified defined benefit pension plan
maintained by the Grantors. Within the limitations of the foregoing, the Trustee
is specifically authorized to acquire, for cash or on credit, every kind of
property, real, personal or mixed, and to make every kind of investment,
specifically including, but not limited to, corporate and governmental
obligations of every kind, preferred or common stocks, securities of any
regulated investment company or trust, and property in which the Trustee owns an
undivided interest in any other trust capacity. The Trustee is expressly
authorized and empowered to hold or purchase such insurance in its own name (and
with itself as the beneficiary) as it shall determine to be necessary or
advisable to advance best the purposes of the Trust and the interests of the
Beneficiaries.
(b) The Trustee shall invest and reinvest the assets of the Trust in accordance
with such investment objectives, guidelines, restrictions or directions as the
Trust Administrative Committee or its delegee may furnish to the Trustee at the
time of the execution of the Trust or at any later date; provided, however, that
if there is a Preliminary CIC, the Trust's investment objectives, guidelines,
restrictions or directions may not be changed thereafter unless there is a
return of Grantor contributions pursuant to Section 5(a), (b) or (c). Upon a
Change in Control, the Trustee shall promptly contact all Beneficiaries at their
last known addresses provided by the Grantors and put such Beneficiaries on
notice of the funding of the Trust and the Trustee's obligations hereunder. The
Trust Administrative Committee shall promptly provide the Trustee with such
information as it needs to carry out this duty.
         7.       Distribution of Trust Assets.
                  ----------------------------
         (a) The Grantors may make payment of benefits directly to Beneficiaries
as they become due under the terms of the Plan(s). Upon a Change in Control, the
Grantors shall notify the Trustee of its decision to make payment of benefits
directly prior to the time amounts are payable to Beneficiaries. In addition, if
the principal of the Trust, and any earnings thereon, are not sufficient to make
payments of benefits in accordance with the terms of the Plan(s), the Grantors
shall make the balance of each such payment as it falls due in accordance with
the Plan(s). The Trustee shall notify the Grantors where principal and earnings
are not sufficient. Nothing in this Agreement shall relieve the Grantors of
their liabilities to pay benefits due under the Plan(s) except to the extent
such liabilities are met by application of assets of the Trust.
         (b) At such time as a Beneficiary is entitled to payments under any of
the Plans prior to a Change in Control, if the Grantors fail to make payment of
all or a portion of the benefits to a Beneficiary under any Plan in accordance
with paragraph (a) above, such Beneficiary can make application for payment in
accordance with the provisions of paragraph (d)(i) below. If so requested, the
Trustee shall make an independent determination in its sole and absolute
discretion regarding the Beneficiary's right to payment under the Plan(s) within
60 days thereof. Such determination shall be made with advice from outside
counsel independent of Southern and the Trustee. The Grantors agree to be bound
by Trustee's determination and to make payment of benefits as they fall due
commencing not later than 30 days following Trustee's determination regarding
entitlement to benefits absent a manifest abuse of discretion by the Trustee. If
Trustee determines benefits are payable to Beneficiary and Grantor fails to
commence payment within 30 days following the Trustee's determination, Trustee
shall make payment of such benefits and instruct Beneficiary in writing that he
or she must bring suit within 180 days of the Trustee's claims determination or
thereafter be barred from doing so. Trustee shall only make benefits payments
until the first of the following to occur: (i) 180 days following its claims
determination if the Beneficiary fails to bring a lawsuit to enforce his or her
rights within this limitation period; or (ii) until there is a final
adjudication or other final resolution of the Beneficiary's claim. In the event
that such Beneficiary timely files a lawsuit within 180 days of Trustee's
determination that Beneficiary is entitled to the disputed benefits, all
reasonable costs of litigation (as determined in the sole and absolute
discretion of the Trustee) shall be periodically, but no less than quarterly,
advanced to the Beneficiary through the final adjudication of the claim;
provided, however, that the Beneficiary shall repay such advanced costs of
litigation if he or she fails to have finally resolved in the Beneficiary's
favor a material issue supporting the underlying merits of the Beneficiary's
claim for benefits in such dispute as determined in the sole and absolute
discretion of the Trustee. Alternatively, in the event that a Beneficiary files
a lawsuit to obtain benefits after the Trustee determines that such Beneficiary
is not entitled to such benefits, all costs of litigation shall be borne by each
party thereto; provided, however, that the Grantors, or the Trustee if the
Grantors refuse, shall reimburse such reasonable costs in the event any material
issue supporting the underlying merits of the Beneficiary's claim for benefits
in such dispute is finally resolved in favor of the Beneficiary.
         (c) Subject to the provisions of paragraph (d) of this Section 7, after
a Change in Control, a Beneficiary shall receive payment from the Trust in
amount equal to the accrued benefit to which he is entitled under the Plans
determined as of the Change in Control, less any payments previously made to him
by the Grantors pursuant to the terms of the Plan(s). The form of payment will
be consistent with the forms provided under the terms of the Plan(s).
         (d) (i) The commencement of payments from the Trust shall be
conditioned on the Trustee's prior receipt of a written instrument from the
Beneficiary in a form reasonably satisfactory to the Trustee. In addition to any
other information the Trustee requires, such form should indicate the amount, if
any, the Beneficiary has received from the Grantors under the Plans as of his
request. All payments to a Beneficiary from the Trust shall be made in
accordance with a good faith interpretation of the provisions of the applicable
Plan(s). (ii) Except as provided below, the Trustee shall make or commence
payment to the Beneficiary in accordance with his representations not later than
30 business days after its receipt thereof; provided, however, that before the
Trustee makes or commences any such payment and not later than 7 business days
after its receipt of the Beneficiary's representations, the Trustee shall
request in writing the Grantors' agreement that the Beneficiary's
representations are accurate with respect to the amount, fact, and time of
payment to him. The Trustee shall enclose with such request a copy of the
Beneficiary's representations and written advice to the Grantors that it must
respond to the Trustee's request on or before the 20th business day (which date
shall be set forth in such written advice) after the Beneficiary furnished such
representations to the Trustee. If the Grantors in a writing delivered to the
Trustee agree with the Beneficiary's representations in all respects, or if the
Grantors do not respond to the Trustee's request by the 20th-day deadline, the
Trustee shall make payment in accordance with the Beneficiary's representations.
If the Grantors advise the Trustee in writing on or before the 20th-day deadline
that it does not agree with any or all of the Beneficiary's representations, the
Trustee immediately shall take whatever steps it in its sole and absolute
discretion deems appropriate, including, but not limited to, a review of any
notice furnished by the Grantor pursuant to paragraph (e) hereof, to attempt to
resolve the difference(s) between the Grantors and the Beneficiary. If, however,
the Trustee is unable to resolve such difference(s) to its satisfaction within
60 days after its receipt of the Beneficiary's representations, the Trustee
shall make an independent determination in its sole and absolute discretion with
the advice of independent counsel regarding the Beneficiary's claim for benefits
and commence such payment, if any, within such 60 day period. In the event
Grantors do not agree with Beneficiary's right to payment of all or a portion of
a benefit under any Plan(s), Grantors may bring a declaratory judgment action to
clarify their rights. Trustee may rely on any final judgment concerning a
declaratory judgment action with respect to the payment of benefits from the
Trust.
         (e) Notwithstanding any other provision of the Trust to the contrary,
after a Change in Control the Trustee shall make payments hereunder before such
payments are otherwise due if it determines in its sole and absolute discretion,
based on a change in the tax or revenue laws of the United States of America, a
published ruling or similar announcement issued by the Internal Revenue Service,
a regulation issued by the Secretary of the Treasury or his delegate, a final
non-appealable decision by the Internal Revenue Service addressed to a
Beneficiary, a final decision by a court of competent jurisdiction involving a
Beneficiary, or a closing agreement made under Code Section 7121 that is
approved by the Internal Revenue Service and involves a Beneficiary, that a
Beneficiary has recognized or will recognize income for federal income tax
purposes with respect to amounts that are or will be payable to him under the
Plans before they are paid to him. The Trustee in its sole and absolute
discretion shall reimburse a Beneficiary all costs determined to be reasonable
to defend any tax claims described herein which are asserted by the Internal
Revenue Service against any Beneficiary, including attorney fees and cost of
appeal, and shall have the sole authority to determine whether or not to appeal
any determination made by the Internal Revenue Service or by a lower court. The
Trustee also shall reimburse any Beneficiary for any interest or penalties in
respect of tax claims hereunder upon receipt of documentation of same.
         (f) Unless (contemporaneously with his submission of the written
instrument referred to in paragraph (a) hereof) a Beneficiary furnishes
documentation in form and substance satisfactory to the Trustee that no
withholding is required with respect to a payment to be made to him from the
Trust, the Trustee may deduct from any such payment any federal, state or local
taxes required by law to be withheld by the Trustee.
         (g) The Trustee shall provide the Grantors with written confirmation of
the fact and time of any commencement of payments hereunder within 10 business
days after any payments commence to a Beneficiary. The Grantors shall notify the
Trustee in the same manner of any payments it commences to make to a Beneficiary
pursuant to the Plans.
         (h) The Trustee shall be fully protected in making any payment or any
calculations in accordance with the provisions of this Section 7.
         8. Termination of the Trust and Reversion of Trust Assets. The Trust
shall terminate upon the first to occur of (i) the payment by the Grantors of
all amounts due the Beneficiaries under each of the Plans or the receipt by the
Trustee of a valid release to that effect from each of the Beneficiaries with
respect to payments made to him, or (ii) the twenty-first anniversary of the
death of the last survivor of the Beneficiaries who are in being on the date of
the execution of this Trust Agreement. Upon termination of the Trust, any and
all assets remaining in the Trust, after the payment to the Beneficiaries of all
amounts to which they are entitled and after payment of the expenses and
compensation in Sections 12 and 17(i) of this Trust Agreement, shall revert to
the Grantors in accordance with their separate interest as accounted for by the
Trust Administrative Trust, and the Trustee shall promptly take such action as
shall be necessary to transfer any such assets to the Grantors in accordance
with such interest. Notwithstanding the above, the Grantors shall be obligated
to take whatever steps are necessary to ensure that the Trust is not terminated
for a period of five (5) years following a Change in Control, such steps to
include, but not being limited to, the transfer to the Trustee of cash or other
assets pursuant to the provisions of Section 9(a) hereof.
         9. Powers of the Trustee. To carry out the purposes of the Trust and
subject to any limitations herein expressed, the Trustee is vested with the
following powers until final distribution, in addition to any now or hereafter
conferred by law affecting the trust or estate created hereunder. In exercising
such powers, the Trustee shall act in a manner reasonable and equitable in view
of the interests of the Beneficiaries and in a manner in which persons of
ordinary prudence, diligence, discretion and judgment would act in the
management of their own affairs.
         (a) Receive and Retain Property. To receive and retain any property
received at the inception of the Trust or at any other time, whether or not such
property is unproductive of income or is property in which the Trustee is
personally interested or in which the Trustee owns an undivided interest in any
other trust capacity.
         (b) Dispose of, Develop, and Abandon Assets. To dispose of an asset,
for cash or on credit, at public or private sale and, in connection with any
sale or disposition, to give such warranties and indemnifications as the Trustee
shall determine; to manage, develop, improve, exchange, partition, change the
character of or abandon a Trust asset or any interest therein.
         (c) Borrow and Encumber. To borrow money for any Trust purpose upon
such terms and conditions as may be determined by the Trustee; to obligate the
Trust or any part thereof by mortgage, deed of trust, pledge or otherwise, for a
term within or extending beyond the term of the Trust.
         (d)      Lease.  To enter for any purpose  into a lease as lessor or
lessee,  with or without an option to purchase or renew, for a term.
         (e) Grant or Acquire Options. To grant or acquire options and rights of
first refusal involving the sale or purchase of any Trust assets, including the
power to write covered call options listed on any securities exchange.
         (f) Powers Respecting Securities. To have all the rights, powers,
privileges and responsibilities of an owner of securities, including, without
limiting the foregoing, the power to vote, to give general or limited proxies,
to pay calls, assessments, and other sums; to assent to, or to oppose, corporate
sales or other acts; to participate in, or to oppose, any voting trusts, pooling
agreements, foreclosures, reorganizations, consolidations, mergers and
liquidations, and, in connection therewith, to give warranties and
indemnifications and to deposit securities with and transfer title to any
protective or other committee; to exchange, exercise or sell stock subscription
or conversion rights; and, regardless of any limitations elsewhere in this
instrument relative to investments by the Trustee, to accept and retain as an
investment hereunder any securities received through the exercise of any of the
foregoing powers.
         (g) Use of Nominee. To hold securities or other property in the name of
the Trustee, in the name of a nominee of the Trustee, or in the name of a
custodian (or its nominee) selected by the Trustee, with or without disclosure
of the Trust, the Trustee being responsible for the acts of such custodian or
nominee affecting such property.
         (h) Advance Money. To advance money for the protection of the Trust,
and for all expenses, losses and liabilities sustained or incurred in the
administration of the Trust or because of the holding or ownership of any Trust
assets, for which advances, with interest, the Trustee has a lien on the Trust
assets as against the Beneficiaries.
         (i) Pay, Contest or Settle Claims. To pay, contest or settle any claim
by or against the Trust by compromise, arbitration or otherwise; to release, in
whole or in part, any claim belonging to the Trust to the extent that the claim
is uncollectible. Notwithstanding the foregoing, the Trustee may only pay or
settle a claim asserted against the Trust by a Grantor if it is compelled to do
so by a final order of a court of competent jurisdiction.
         (j)      Litigate.  To prosecute or defend  actions,  claims or
proceedings  for the  protection of Trust assets and of the Trustee in the
performance of its duties.
         (k) Employ Advisers and Agents. To employ and reasonably compensate
persons, corporations or associations, including attorneys, auditors, investment
advisers or agents, even if they are associated with the Trustee, to advise or
assist the Trustee in the performance of its administrative duties; to act
without independent investigation upon their recommendations.
         (l) Use Custodian. If no bank or trust company is acting as Trustee
hereunder, the Trustee shall appoint a bank or trust company to act as custodian
(the "Custodian") for securities and any other Trust assets. Any such
appointment shall terminate when a bank or trust company begins to serve as
Trustee hereunder. The Custodian shall keep the deposited property, collect and
receive the income and principal, and hold, invest, disburse or otherwise
dispose of the property or its proceeds (specifically including selling and
purchasing securities, and delivering securities sold and receiving securities
purchased) upon the order of the Trustee.
         (m)      Execute  Documents.  To execute and deliver all  instruments
that will  accomplish or facilitate
the exercise of the powers vested in the Trustee.
         (n) Grant of Powers Limited. The Trustee is expressly prohibited from
exercising any powers vested in it primarily for the benefit of the Grantors
rather than for the benefit of the Beneficiaries. The Trustee shall not have the
power to purchase, exchange, or otherwise deal with or dispose of the assets of
the Trust for less than adequate and full consideration in money or money's
worth.
         (o) Deposit Assets. To deposit Trust assets in commercial, savings or
savings and loan accounts (including such accounts in a corporate Trustee's
banking department) and to keep such portion of the Trust assets in cash or cash
balances as the Trustee may, from time to time, deem to be in the best interests
of the Trust, without liability for interest thereon.
         10. Termination of Trustee. Grantors may remove Trustee upon sixty (60)
days notice or upon such shorter period of time if acceptable to Trustee;
provided that upon a Preliminary CIC or subsequent Change in Control the
Grantors may only remove the Trustee if a majority of the Beneficiaries approve
such action.
         11.      Appointment of Successor Trustee.
                  --------------------------------
         (a) The Trustee shall have the right to resign upon 60 days' written
notice to the Grantor, during which time the Grantor shall appoint a "Qualified
Successor Trustee." If no Qualified Successor Trustee accepts such appointment,
the resigning Trustee shall petition a court of competent jurisdiction for the
appointment of a "Qualified Successor Trustee." For this purpose, a "Qualified
Successor Trustee" must be a bank or trust company with a market capitalization
of at least $10 billion but may not be the Grantor, any person who would be a
"related or subordinate party" to the Grantor within the meaning of Section
672(c) of the Code or a corporation that would be a member of an "affiliated
group" of corporations including the Grantor within the meaning of Section
1504(a) of the Code if the words "80 percent" wherever they appear in that
section were replaced by the words "50 percent." Upon the written acceptance by
the Qualified Successor Trustee of the trust and upon approval of the resigning
Trustee's final account by those entitled thereto, the resigning Trustee shall
be discharged.
         (b) Upon the occurrence of a corporate transaction involving the
ownership or assets of a Grantor, the affected Grantors upon written
acknowledgment to the Trustee of their obligations under the Trust and Plans may
in their sole discretion direct the Trustee to transfer or assign all or a
portion of the assets of the Trust to a Qualified Successor Trustee. The Trust
Administrative Committee shall instruct the Trustee regarding the assets to be
transferred or assigned; provided, however, that no assets shall be transferred
to such a Qualified Successor Trustee until the Trustee is satisfied that
contributions required under the Plans have been made prior to or concurrent
with this transfer or assignment. Notwithstanding the foregoing, the Trustee
shall only be permitted to transfer or assign assets from the Trust to a
Qualified Successor Trustee if the transfer and assignment are consistent with
the purpose and intent of the Trust.
         12. Trustee Compensation. The Trustee shall be entitled to receive as
compensation for its services hereunder the compensation (a) as negotiated and
agreed to by the Grantors and the Trustee, or (b) if not negotiated or if the
parties are unable to reach agreement, as allowed a trustee under the laws of
the State of Georgia in effect at the time such compensation is payable. Such
compensation shall be paid by the Grantors; provided, however, that to the
extent such compensation is not paid by the Grantors, subject to the provisions
of Section 17(i) hereof, it shall be charged against and paid from the Trust and
the Grantors shall reimburse the Trust for any such payment made from the Trust
within 30 days of its receipt from the Trustee of written notice of such
payment.
         13. Trustee's Consent to Act and Indemnification of the Trustee. The
Trustee hereby grants and consents to act as Trustee hereunder. The Grantors
agree to indemnify the Trustee and hold it harmless from and against all claims,
liabilities, legal fees and expenses that may be asserted against it, otherwise
than on account of conduct of the Trustee which is found by a final judgment of
a court of competent jurisdiction to be a breach of its fiduciary duty whether
by reason of the Trustee's taking or refraining from taking any action in
connection with the Trust, whether or not the Trustee is a party to a legal
proceeding or otherwise.
         14. Prohibition Against Assignment. No Beneficiary shall have any
preferred claim on, or any beneficial ownership interest in, any assets of the
Trust before such assets are paid to the Beneficiary as provided in Section 7,
and all rights created under the Trust and the Plans shall be unsecured
contractual rights of the Beneficiary against the Grantor which is his employer
for purposes of the Plans. No part of, or claim against, the assets of the Trust
may be assigned, anticipated, alienated, encumbered, garnished, attached or in
any other manner disposed of by any of the Beneficiaries, and no such part or
claim shall be subject to any legal process or claims of creditors of any of the
Beneficiaries.
         15. Annual Accounting. The Trustee shall keep accurate and detailed
accounts of all investments, receipts and disbursements and other transactions
hereunder, and, within ninety days following the close of each calendar year,
and within ninety days after the Trustee's resignation or termination of the
Trust as provided herein, the Trustee shall render a written account of its
administration of the Trust to the Grantors by submitting a record of receipts,
investments, disbursements, distributions, gains, losses, assets on hand at the
end of the accounting period and other pertinent information, including a
description of all securities and investments purchased and sold during such
calendar year. Trustee shall separately account for each Grantor's interest in
Trust assets. Written approval of an account shall, as to all matters shown in
the account, be binding upon the Grantors and shall forever release and
discharge the Trustee from any liability or accountability. The Grantors will be
deemed to have given their written approval if he does not object in writing to
the Trustee within one hundred and twenty days after the date of receipt of such
account from the Trustee. The Trustee shall be entitled at any time to institute
an action in a court of competent jurisdiction for a judicial settlement of its
account.
         16. Notices. Any notice or instructions required under any of the
provisions of this Trust Agreement shall be deemed effectively given only if
such notice is in writing and is delivered personally or by certified or
registered mail, return receipt requested and postage prepaid, addressed to the
addresses as set forth below of the parties hereto. The addresses of the parties
are as follows:
                                    (i)     The Grantors:
                                            Secretary
                                            Southern Company
                                            270 Peachtree Street, Suite 1400
                                            Atlanta, GA 30303
                                    (ii)    The Trustee:
                                            Wachovia Bank, N.A.
                                            Attn:  Executive Services
                                            NC 31013
                                            P.O. Box 3099
                                            Winston-Salem, NC 27150

The Grantors or Trustee may at any time change the address to which notices are
to be sent to it by giving written notice thereof in the manner provided above.
         17.      Miscellaneous Provisions.
                  ------------------------
         (a) This Trust Agreement shall be governed by and construed in
accordance with the laws of the State of Georgia applicable to contracts made
and to be performed therein and the Trustee shall not be required to account in
any court other than one of the courts of such state.
         (b) The Trust Administrative Committee may give direction to Trustee on
behalf of the Grantors with regard to those matters identified in writing by the
Grantors. The Trustee will be fully protected in relying on such direction by
the Trust Administrative Committee.
         (c) All section headings herein have been inserted for convenience of
reference only and shall in no way modify, restrict or affect the meaning or
interpretation of any of the terms or provisions of this Trust Agreement.
         (d) This Trust Agreement is intended as a complete and exclusive
statement of the agreement of the parties hereto, supersedes all previous
agreements or understandings among them and may not be modified or terminated
orally.
         (e)      The term "Trustee" shall include any successor Trustee.
         (f) If a Trustee or Custodian hereunder is a bank or trust company, any
corporation resulting from any merger, consolidation or conversion to which such
bank or trust company may be a party, or any corporation otherwise succeeding
generally to all or substantially all of the assets or business of such bank or
trust company, shall be the successor to it as Trustee or Custodian hereunder,
as the case may be without the execution of any instrument or any further action
on the part of any party hereto.
         (g) If any provision of this Trust shall be invalid and unenforceable,
the remaining provisions hereof shall subsist and be carried into effect.
         (h) The Plans are by this reference expressly incorporated herein and
made a part hereof with the same force and effect as if fully set forth at
length. As of the date first stated above, the terms of the Plans are as set
forth in Exhibit A attached hereto.
         (i) The assets of the Trust shall be subject only to the claims of the
Grantor's general creditors in the event of one or more of the Grantors'
bankruptcy or insolvency. A Grantor shall be considered "bankrupt" or
"insolvent" if the Grantor is (A) unable to pay its debts when due or (B)
engaged as a debtor in a proceeding under the Bankruptcy Code, 11 U.S.C. Section
101 et seq. The Board of Directors or the chief executive officer of a Grantor
must notify the Trustee of the Grantor's bankruptcy or insolvency within three
(3) days following the occurrence of such event. Upon receipt of such a notice,
or, upon receipt of a written allegation from a person or entity claiming to be
a creditor of a Grantor that such Grantor is bankrupt or insolvent, the Trustee
shall discontinue payments to Beneficiaries. The Trustee shall, as soon as
practicable after receipt of such notice or written allegation, determine
whether such Grantor is bankrupt or insolvent. If the Trustee determines, based
on such notice, written allegation, or such other information as it deems
appropriate, that such Grantor is bankrupt or insolvent, the Trustee shall hold
the assets of the Trust for the benefit of the general creditors of the Grantor
or Grantors, and deliver any undistributed assets attributable to such Grantor
or Grantors to satisfy the claims of such creditors as a court of competent
jurisdiction may direct. The Trust Administrative Committee in conjunction with
the Trustee shall identify the amount of assets attributable to any bankrupt or
insolvent Grantor in order to segregate such assets for the benefit of such
Grantor's creditors. The Trustee shall resume payments to Beneficiaries only
after it has determined that the Grantor in issue is not bankrupt or insolvent,
is no longer bankrupt or insolvent (if the Trustee determined that the Grantor
was bankrupt or insolvent), pursuant to an order of a court of competent
jurisdiction. Unless the Trustee has actual knowledge of the Grantor's
bankruptcy or insolvency of the Grantor or Grantors, the Trustee shall have no
duty to inquire whether such Grantor(s) is bankrupt or insolvent. The Trustee
may in all events rely on such evidence concerning the pertinent Grantor's
solvency as may be furnished to the Trustee that will give the Trustee a
reasonable basis for making a determination concerning such Grantor's solvency.
If the Trustee discontinues payment of benefits from the Trust pursuant to this
Section 17(h) and subsequently resumes such payments, the first payment
following such discontinuance shall include the aggregate amount of all payments
which would have been made to each Beneficiary less the aggregate amount of
payments made to the Beneficiary by the Grantor(s) in lieu of the payments
provided for hereunder during any such period of discontinuance. In addition,
interest at a rate equal to the average 90 day Treasury Bill rate during the
period of such discontinuance shall be paid on the amount, if any, determined to
be owed in accordance with the preceding sentence.
         (j) Any and all taxes, expenses (including, but not limited to, the
Trustee's compensation) and costs of litigation relating to or concerning the
adoption, administration and termination of the Trust shall be borne and
promptly paid by the Grantors; provided, however, that, to the extent such
taxes, expenses and costs relating to the Trust are due and owing and (A) are
not paid by the Grantors, and (B) have not been paid for more than sixty (60)
days, they shall be charged against and paid from the Trust, and the Grantors
shall reimburse the Trust for any such payment made from the Trust within 30
days of its receipt from the Trustee of written notice of such payment.
         (k) Any reference hereunder to a Beneficiary shall expressly be deemed
to include, where relevant, the beneficiaries of a Beneficiary duly appointed
under the terms of the Plans. A Beneficiary shall cease to have such status once
any and all amounts due such Beneficiary under the Plan have been satisfied.
         (l)      Any  reference  hereunder  to the  Grantors  shall  expressly
be deemed to  include a  Grantor's successor and assigns.
         (m) Whenever used herein, and to the extent appropriate, the masculine,
feminine or neuter gender shall include the other two genders, the singular
shall include the plural and the plural shall include the singular.
         IN WITNESS WHEREOF, the parties hereto have executed this Trust
Agreement as of ____________________, 2000.
         TRUSTEE:

                           WACHOVIA BANK, N.A.

         GRANTOR:
                  -----------------------------------------------------
                           ALABAMA POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           GEORGIA POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           GULF POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           MISSISSIPPI POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           SAVANNAH ELECTRIC AND POWER COMPANY

         GRANTOR:
                  -----------------------------------------------------
                           THE SOUTHERN COMPANY


<PAGE>


                                    EXHIBIT A

Plans and Arrangements Subject to the Trust1

<PAGE>


                                    EXHIBIT B

                       Contacts and Addresses of Grantors

- --------
1 The parenthetical reference sets forth the Trust provisions applicable to the
respective Plans listed herein.
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>51
<FILENAME>x10b36.txt
<TEXT>


                         DEFERRED COMPENSATION PLAN FOR

                       DIRECTORS OF ALABAMA POWER COMPANY

                 Amended and Restated Effective January 1, 2000


<PAGE>


                                    SECTION 1

                                   Definitions

1.1      "Beneficial Ownership" means beneficial ownership within the meaning of
         Rule 13d-3 promulgated under the Exchange Act.

1.2      "Board" or "Board of Directors" means the Board of Directors of the
         Company.

1.3      "Business Combination" means a reorganization, merger or consolidation
         or sale of Southern, or a sale of all or substantially all of
         Southern's assets.

1.4      "Cash Compensation" means the annual retainer fees and meeting fees
         payable to a Director in cash.

1.5      "Code" means the Internal Revenue Code of 1986, as amended, or any
         successor statute.

1.6      "Committee" means the Compensation Committee of the Board, or such
         other committee as may be designated by the Board to be responsible for
         administering the Plan.

1.7      "Common Stock" means the common stock of Southern, including any shares
         into which it may be split, subdivided, or combined.

1.8      "Company" means Alabama Power Company, or any successor thereto.

1.9      "Company Change in Control" means the following:

                  (a) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 50% or more of the combined voting power of the
         then outstanding Voting Securities of the Company; provided, however,
         that for purposes of this Section 1.9, any acquisition by an Employee,
         or Group composed entirely of Employees, any qualified pension plan,
         any publicly held mutual fund or any employee benefit plan (or related
         trust) sponsored or maintained by Southern or any corporation
         Controlled by Southern shall not constitute a Change in Control;

                  (b) Consummation of a reorganization, merger or consolidation
         of the Company (a "Company Business Combination"), in each case,
         unless, following such Company Business Combination, Southern Controls
         the corporation surviving or resulting from such Company Business
         Combination; or

                  (c) Consummation of the sale or other disposition of all or
         substantially all of the assets of the Company to an entity which
         Southern does not Control.

1.10     "Compensation Payment Date" means the date on which compensation,
         including cash retainer, meeting fees, and the Stock Retainer, is
         payable to a Director or compensation would otherwise be payable to a
         Director if an election to defer such compensation had not been made.

1.11     "Consummation" means the completion of the final act necessary to
         complete a transaction as a matter of law, including, but not limited
         to, any required approvals by the corporation's shareholders and board
         of directors, the transfer of legal and beneficial title to securities
         or assets and the final approval of the transaction by any applicable
         domestic or foreign governments or agencies.

1.12      "Control" means, in the case of a corporation, Beneficial Ownership of
          more than 50% of the combined voting power of the corporation's Voting
          Securities, or in the case of any other entity, Beneficial Ownership
          of more than 50% of such entity's voting equity interests.

1.13     "Deferred Cash Trust" means the Deferred Cash Compensation Trust for
         Directors of The Southern Company and its Subsidiaries.

1.14     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, and/or the Deferred
         Stock Account.

1.15     "Deferred Pension Election" means the election by a Director under
         Section 5.3 in connection with the deferral of receipt of the
         Director's Pension Benefit until termination from the Board.

1.16     "Deferred Stock Account" means the bookkeeping account established
         under Section 6.3 on behalf of a Director and includes shares of Common
         Stock credited thereto to reflect the reinvestment of dividends
         pursuant to Section 6.3(a)(iii).

1.17     "Deferred Stock Trust" means the Deferred Stock Trust for Directors of
         The Southern Company and its Subsidiaries.

1.18     "Director" means a member of the Board.

1.19     "Distribution Election" means the designation by a Director of the
         manner of distribution of the amounts and quantities held in the
         Director's Deferred Compensation Accounts upon the director's
         termination from the Board pursuant to Section 5.4.

1.20     "Effective Date" means January 1, 2000.

1.21     "Employee" means an employee of Southern or any of its subsidiaries
         that are "employing companies" as defined in the Southern Company
         Deferred Compensation Plan as amended and restated January 1, 2000, and
         as may be amended from time to time.

1.22     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

1.23     "Group" has the meaning set forth in Section 14(d) of the Exchange Act.

1.24     "Incumbent Board" means those individuals who constitute the Southern
         board of directors as of October 19, 1998, plus any individual who
         shall become a director subsequent to such date whose election or
         nomination for election by Southern's shareholders was approved by a
         vote of at least 75% of the directors then comprising the Incumbent
         Board. Notwithstanding the foregoing, no individual who shall become a
         director of the Southern board of directors subsequent to October 19,
         1998, whose initial assumption of office occurs as a result of an
         actual or threatened election contest (within the meaning of Rule
         14a-11 of the regulations promulgated under the Exchange Act) with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         Person other than the Southern board of directors shall be a member of
         the Incumbent Board.

1.25     "Market Value" means the average of the high and low prices of the
         Common Stock, as published in the Wall Street Journal in its report of
         New York Stock Exchange composite transactions, on the date such Market
         Value is to be determined, as specified herein (or the average of the
         high and low sale prices on the trading day immediately preceding such
         date if the Common Stock is not traded on the New York Stock Exchange
         on such date).

1.26     "Participant" means a Director or former Director who has an unpaid
         Deferred Compensation Account balance under the Plan.

1.27     "Participating Companies" means those companies whose boards of
         directors have authorized the establishment of trust(s) for the funding
         of their respective directors' Deferred Compensation Accounts under
         their respective Deferred Compensation Plans for Directors, including
         the Company.

1.28     "Pension Benefit" means the U.S. dollar amount of the
         actuarially-determined present value of benefits based on a Director's
         expected service at the required retirement date under The Southern
         Company Outside Directors Pension Plan, as calculated as of the
         Termination Date, plus accrued earnings on such amount calculated as if
         invested at the Prime Interest Rate from the Termination Date, until
         such amount is invested in Deferred Compensation Accounts pursuant to
         the provisions of Section 5.3.

1.29     "Pension Benefit Investment Date" means the date to be determined by
         the Committee, as of which the Director's Pension Benefit will be
         credited to a Deferred Compensation Account in accordance with the
         director's Deferred Pension Election under Section 5.3.

1.30     "Phantom Stock Investment Account" means the bookkeeping account
         established pursuant to Section 6.2 in which a Director may elect to
         defer Cash Compensation or make investments, and includes amounts
         credited thereto to reflect the reinvestment of dividends.

1.31     "Plan" means the Deferred Compensation Plan for Directors of Alabama
         Power Company as from time to time in effect.

1.32     "Plan Period" means the period designated in Section 4.

1.33     "Person" means any individual, entity or group within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Exchange Act.

1.34     "Preliminary Change in Control" means the occurrence of any of the
         following as determined by the Southern Committee:

         (a)      Southern or the Company has entered into a written agreement,
                  such as, but not limited to, a letter of intent, which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control, as the case may be;

         (b)      Southern, the Company or any Person publicly announces an
                  intention to take or to consider taking actions which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control under circumstances where the
                  Consummation of the announced action or intended action is
                  legally and financially possible;

         (c)      Any Person becomes the Beneficial Owner of fifteen percent
                  (15%) or more of the Common Stock; or (d) The Southern board
                  of directors or the board of directors of the Company has
                  declared that a Preliminary Change in Control has occurred.

1.35     "Prime Interest Rate" means the prime rate of interest as determined by
         AmSouth Bank.

1.36     "Prime Rate Investment Account" means the bookkeeping account
         established pursuant to Section 6.1 in which a Director may elect to
         defer Cash Compensation or make investments, the investment return on
         which is computed at the Prime Interest Rate.

1.37     "Southern" means The Southern Company.

1.38     "Southern Change in Control" means any of the following:
         (a) The Consummation of an acquisition by any Person of Beneficial
         Ownership of 20% or more of Southern's Voting Securities; provided,
         however, that for purposes of this subsection (a), the following
         acquisitions of Southern's Voting Securities shall not constitute a
         Change in Control:

                  (i)      any acquisition directly from Southern,

                  (ii)     any acquisition by Southern,

                  (iii)    any acquisition by any employee benefit plan (or
                           related trust) sponsored or maintained by Southern or
                           any corporation controlled by Southern,

                  (iv)     any acquisition by a qualified pension plan or
                           publicly held mutual fund,

                  (v)      any acquisition by an Employee or Group composed
                           exclusively of Employees, or

                  (vi)     any Business Combination which would not otherwise
                           constitute a Change in Control because of the
                           application of clauses (i), (ii) and (iii) of Section
                           1.38(c);

         (b) A change in the composition of Southern's board of directors
         whereby individuals who constitute the Incumbent Board cease for any
         reason to constitute at least a majority of Southern's board of
         directors; or (c) Consummation of a Business Combination, unless,
         following such Business Combination, all of the following three
         conditions are met:

                  (i) all or substantially all of the individuals and entities
                  who held Beneficial Ownership, respectively, of Southern's
                  Voting Securities immediately prior to such Business
                  Combination beneficially own, directly or indirectly, 65% or
                  more of the combined voting power of the Voting Securities of
                  the corporation surviving or resulting from such Business
                  Combination, (including, without limitation, a corporation
                  which as a result of such transaction holds Beneficial
                  Ownership of all or substantially all of Southern's Voting
                  Securities or all or substantially all of Southern's assets)
                  (such surviving or resulting corporation to be referred to as
                  "Surviving Company"), in substantially the same proportions as
                  their ownership, immediately prior to such Business
                  Combination, of Southern's Voting Securities; (ii) no Person
                  (excluding any corporation resulting from such Business
                  Combination, any qualified pension plan, publicly held mutual
                  fund, Group composed exclusively of employees or employee
                  benefit plan (or related trust) of Southern, its subsidiaries,
                  or Surviving Company) holds Beneficial Ownership, directly or
                  indirectly, of 20% or more of the combined voting power of the
                  then outstanding Voting Securities of Surviving Company except
                  to the extent that such ownership existed prior to the
                  Business Combination; and (iii) at least a majority of the
                  members of the board of directors of Surviving Company were
                  members of the Incumbent Board at the earlier of the date of
                  execution of the initial agreement, or of the action of the
                  Southern board of directors, providing for such Business
                  Combination.

1.39     "Southern Committee" means Chairman of the Southern board of directors,
         Chief Financial Officer of Southern, General Counsel of Southern, and
         the Chairman of the "Administrative Committee", as defined in Section
         3.1 of the Southern Company Deferred Compensation Plan, as restated and
         amended effective January 1, 2000.

1.40     "Stock Retainer" means the annual Board retainer fee that is paid to
         the Director in the form of Common Stock.

1.41     "Termination Date" means January 1, 1997, the date as of which The
         Southern Company Outside Directors Pension Plan was effectively
         terminated.

1.42     "Trust Administrator" means the individual or committee that is
         established in the Deferred Stock Trust and the Deferred Cash Trust, to
         administer such trusts on behalf of the Participating Companies.

1.43     "Voting Securities" shall mean the outstanding voting securities of a
         corporation entitling the holder thereof to vote generally in the
         election of such corporation's directors.

Where the context requires, words in the masculine gender shall include the
feminine gender, words in the singular shall include the plural, and words in
the plural shall include the singular.


<PAGE>


                                    SECTION 2

                                     Purpose

The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.

                                    SECTION 3

                                   Eligibility

An individual who serves as a Director and is not otherwise actively employed by
the Company or any of its subsidiaries or affiliates is eligible to participate
in the Plan.

                                    SECTION 4

                                  Plan Periods

Except as pertains to a Director's initial Plan Period, all Plan Periods shall
be on a calendar year basis. The initial Plan Period applicable to any person
elected to the Board who was not a Director on the preceding December 31, shall
begin on the first day of such Director's membership on the Board. The initial
Plan Period under this amended and restated plan shall begin January 1, 2000.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to January 1, 2000.

                                    SECTION 5

                                    Elections

5.1      Cash Compensation

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all or any portion of Cash Compensation that
                  otherwise would be paid to the Director for the Plan Period,
                  be deferred in amounts as designated by the Director, and
                  credited to (i) a Prime Rate Investment Account, (ii) a
                  Phantom Stock Investment Account, or, effective with
                  compensation payable on or after January 1, 2001, (iii) a
                  Deferred Stock Account. Upon the Director's termination from
                  the Board of Directors, such deferred compensation and
                  accumulated investment return held in the Director's Deferred
                  Compensation Accounts shall be distributed to the Director in
                  accordance with the Director's Distribution Election and the
                  provisions of Section 7.

         (b)      An election to defer Cash Compensation is irrevocable for a
                  Plan Period. Such an election shall continue from Plan Period
                  to Plan Period unless the Director changes his election to
                  defer cash compensation payable in a future Plan Period prior
                  to the beginning of such future Plan Period.

         (c)      Cash Compensation deferred under this Section 5.1 shall be
                  invested in Deferred Compensation Accounts as directed by the
                  Director on the Compensation Payment Date.

5.2      Stock Retainer

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all of the Stock Retainer that otherwise would
                  be paid to the Director for the Plan Period, be deferred by
                  the Director, and credited to his Deferred Stock Account, such
                  deferred compensation and accumulated investment return held
                  in the Director's Deferred Stock Account shall be distributed
                  to the Director in accordance with the Director's Distribution
                  Election and the provisions of Section 7.

         (b)      An election to defer the Stock Retainer is irrevocable for a
                  Plan Period. Such an election shall continue from Plan Period
                  to Plan Period unless the Director changes his election to
                  defer Stock Retainer paid in a future Plan Period prior to the
                  beginning of such future Plan Period.

         (c)      Stock Retainer deferred under this Section 5.2 shall be
                  invested in Deferred Stock Account as directed by the Director
                  on the Compensation Payment Date.

5.3      Deferred Pension Election

         Any Director, who had a Pension Benefit as of the Termination Date,
         made a single one-time election, to credit all of his Pension Benefit
         into (i) a Prime Rate Investment Account or (ii) a Phantom Stock
         Investment Account. Upon the Director's termination from the Board,
         such Pension Benefit and accumulated investment return held in the
         Director's Deferred Compensation Accounts shall be distributed to the
         Director in accordance with the Director's Distribution Election made
         in accordance with Section 5.4(b) and the provisions of Section 7.

5.4      Distribution Election

         (a)      Except as set forth in Section 5.4(b), prior to the initial
                  establishment of a Deferred Compensation Account for a
                  Director, the Director must elect that upon termination from
                  the Board of Directors the values and quantities held in the
                  Directors Deferred Compensation Accounts be distributed to the
                  Director, pursuant to the provisions of Section 7, in a lump
                  sum or in a series of annual or quarterly installments not to
                  exceed fifteen (15) years. The time for the commencement of
                  distribution shall not be later than the first day of the
                  month coinciding with or next following the second anniversary
                  of termination of Board membership.

         (b)      Any Director who made a Deferred Pension Election in
                  accordance with Section 5.3 made a Distribution Election at
                  the time the Deferred Pension Election was made, attributable
                  to the Pension Benefit and any accumulated investment return.

         (c)      Distribution Elections made under Sections 5.4 (a) and (b) are
                  irrevocable except that a Director may amend either or both
                  Distribution Elections then in effect not prior to the 390th
                  day or later than the 360th day prior to his termination of
                  Board membership.

5.5      Beneficiary Designation

         A Director or former Director may designate a beneficiary to receive
         distributions from the Plan in accordance with the provisions of
         Section 7 upon the death of the director. The beneficiary designation
         may be changed by a Director or former Director at any time, and
         without the consent of the prior beneficiary.

5.6      Form of Election

         All elections pursuant to the provisions of this Section 5 of the Plan
         shall be made in writing to the Secretary or Assistant Secretary of the
         Company on a form or forms available upon request of the Secretary or
         Assistant Secretary.


<PAGE>


                                    SECTION 6

                                    Accounts

6.1      Prime Rate Investment Account

         A Prime Rate Investment Account shall be established for each Director
         electing deferral or investment of Cash Compensation at the Prime
         Interest Rate. The amount directed by the Director to such account
         shall be credited to it as of the Pension Benefit Investment Date or
         Compensation Payment Date, as applicable, and credited thereafter with
         interest computed using the Prime Interest Rate. Interest shall be
         computed from the date such compensation is credited to the account and
         compounded quarterly at the end of each calendar quarter. The Prime
         Interest Rate in effect on the first day of a calendar quarter shall be
         deemed the Prime Interest Rate in effect for that entire quarter.
         Interest shall accrue and compound on any balance until the amount
         credited to the account is fully distributed.

6.2      Phantom Stock Investment Account

         The Phantom Stock Investment Account established for each Director
         electing deferral of Cash Compensation for investment at the Common
         Stock investment rate shall be credited with the number of shares
         (including fractional shares rounded to the nearest ten-thousandth) of
         Common Stock which could have been purchased on the Pension Benefit
         Investment Date or the Compensation Payment Date, as applicable, as
         determined by dividing the applicable compensation by the Market Value
         on such date. On the date of the payment of dividends on the Common
         Stock, the Director's Phantom Stock Investment Account shall be
         credited with additional shares (including fractional shares rounded to
         the nearest ten-thousandth) of Common Stock, as follows:

         (a)      In the case of cash dividends, such additional shares as would
                  have been purchased as of the Common Stock dividend record
                  date as if the credited shares had been outstanding on such
                  date and dividends reinvested thereon under the Southern
                  Investment Plan;

         (b)      In the case of dividends payable in property other than cash
                  or Common Stock, such additional shares as could be purchased
                  at the Market Value as of the date of payment with the fair
                  market value of the property which would have been payable if
                  the credited shares had been outstanding; and

         (c)      In the case of dividends payable in Common Stock, such
                  additional shares as would have been payable on the credited
                  shares as if they had been outstanding.

6.3      Deferred Stock Account

         (a)      A Director's Deferred Stock Account will be credited:

                  (i)      with the number of shares of Common Stock (rounded to
                           the next highest number of full shares) determined by
                           dividing the amount of Cash Compensation subject to
                           deferral or investment in the Deferred Stock Account
                           by the Market Value on the Pension Benefit Investment
                           Date or the Compensation Payment Date, as applicable,

                  (ii)     as of the date on which Stock Retainer is paid, the
                           shares of Common Stock payable to the Director as his
                           Stock Retainer; and

                  (iii)    as of each date on which dividends are paid on the
                           Common Stock, with the number of shares of Common
                           Stock (rounded to the nearest ten thousandth of a
                           share) determined by multiplying the number of shares
                           of Common Stock credited in the Director's Deferred
                           Stock Account on the dividend record date, by the
                           dividend rate per share of Common Stock, and dividing
                           the product by the price per share of Common Stock
                           attributable to the reinvestment of dividends on the
                           shares of Common Stock held in the Deferred Stock
                           Trust on the applicable dividend payment date or, if
                           the Trustee of the Deferred Stock Trust has not
                           reinvested in shares of Common Stock on the
                           applicable dividend reinvestment date, the product
                           shall be divided by the Market Value on the dividend
                           payment date.

         (b)      If Southern enters into transactions involving stock splits,
                  stock dividends, reverse splits or any other recapitalization
                  transactions, the number of shares of Common Stock credited to
                  a Director's Deferred Stock Account will be adjusted (rounded
                  to the nearest ten thousandth of a share) so that the
                  Director's Deferred Stock Account reflects the same equity
                  percentage interest in Southern after the recapitalization as
                  was the case before such transaction.

         (c)      If at least a majority of Southern's stock is sold or
                  exchanged by its shareholders pursuant to an integrated plan
                  for cash or property (including stock of another corporation)
                  or if substantially all of the assets of Southern are disposed
                  of and, as a consequence thereof, cash or property is
                  distributed to Southern's shareholders, each Director's
                  Deferred Stock Account will, to the extent not already so
                  credited under this Section 6.3, be (i) credited with the
                  amount of cash or property receivable by a Southern
                  shareholder directly holding the same number of shares of
                  Common Stock as is credited to such Director's Deferred Stock
                  Account and (ii) debited by that number of shares of Common
                  Stock surrendered by such equivalent Southern shareholder.

         (d)      Each Director who has a Deferred Stock Account also shall be
                  entitled to provide directions to the Trust Administrator to
                  cause such committee to similarly direct the Trustee of the
                  Deferred Stock Trust to vote, on any matter presented for a
                  vote to the shareholders of Southern, that number of shares of
                  Common Stock held by the Deferred Stock Trust equivalent to
                  the number of shares of Common Stock credited to the
                  Director's Deferred Stock Account. Such committee shall
                  arrange for distribution to all Directors in a timely manner
                  of all communications directed generally to the Southern
                  shareholders as to which their votes are solicited.

                                    SECTION 7

                                  Distributions

7.1      Upon termination of a Director's membership on the Board, the amount
         credited to a Director's Deferred Compensation Accounts will be paid to
         the Director or his beneficiary, as applicable. The amount credited to
         a Director's Prime Rate Investment Account and Phantom Stock Investment
         Account shall be paid in cash and the amount credited to his Deferred
         Stock Account shall, except as otherwise provided in Section 6.3(c),
         Section 9.5, or to the extent the Company is otherwise, in the
         reasonable judgment of the Committee, precluded from doing so, be paid
         in shares of Common Stock (with any fractional share interest therein
         paid in cash to the extent of the then Market Value thereof). Such
         payments shall be from the general assets of the Company (including the
         Deferred Cash Trust and the Deferred Stock Trust) in accordance with
         this Section 7.

7.2      Unless other arrangements are specified by the Committee on a uniform
         and nondiscriminatory basis, deferred amounts shall be paid in the form
         of (i) a lump sum payment, or (ii) in approximately equal annual or
         quarterly installments, as elected by the Director pursuant to the
         provisions of Section 5.4; provided, however, that payments shall be
         made only in a single lump sum if payment commences due to termination
         for cause. Such payments shall be made (or shall commence) as soon as
         practicable following the termination of Board membership or, if so
         elected in the Distribution Election, up to twenty-four (24) months
         following such termination.

         In the event a Director elected to receive the balance of his Deferred
         Compensation Accounts in a lump sum, distribution shall be made on the
         first day of the month selected by the Director on his Distribution
         Election, or as soon as reasonably possible thereafter. If the Director
         elected to receive annual installments, the first payment shall be made
         on the first day of the month selected by a Director, or as soon as
         reasonably possible thereafter, and shall be equal to the balance in
         the Director's Deferred Compensation Accounts on such date divided by
         the number of annual installment payments. Each subsequent annual
         payment shall be an amount equal to the balance in the Director's
         Deferred Compensation Accounts on the date of payment divided by the
         number of remaining annual payments and shall be paid on the
         anniversary of the preceding date of payment. Notwithstanding a
         Director's election to receive his Deferred Compensation Account
         balance in installments, the Compensation Committee, upon request of
         the Director and in its sole discretion, may accelerate the payment of
         any such installments for cause, such as financial hardship or
         financial emergency. The Market Value of any shares of Common Stock
         credited to a Director's Phantom Stock Investment Account shall be
         determined as of the twenty-fifth (25th) day of the month immediately
         preceding the date of any lump sum or installment distribution.

         Upon the death of a Director, or a former Director prior to the payment
         of all amounts credited to the Director's Deferred Compensation
         Accounts, the unpaid balance shall be paid in the sole discretion of
         the Committee (i) in a lump sum to the designated beneficiary of such
         Director or former Director within thirty (30) days of the date of
         death (or as soon as reasonably possible thereafter) or (ii) in
         accordance with the Distribution Election made by such Director or
         former Director. In the event a beneficiary designation has not been
         made, or the designated beneficiary is deceased or cannot be located,
         payment shall be made to the estate of the Director or former Director.
         The Market Value of any shares of Common Stock credited to a Director's
         Phantom Stock Investment Account shall be determined as of the
         twenty-fifth (25th) day of the month immediately preceding the date of
         any lump sum or installment distribution.

                                    SECTION 8

                 Change in Control and Other Special Provisions

8.1      Notwithstanding any other terms of the Plan to the contrary, following
         a Southern Change in Control or a Company Change in Control, the
         provisions of this Section 8 shall apply to the payment of benefits
         under the Plan with respect to any Director who is a Participant on
         such date.

8.2      The Deferred Cash Trust and the Deferred Stock Trust (collectively
         "Trusts") have been established to hold assets of the Participating
         Companies under certain circumstances as a reserve for the discharge of
         the Company's obligations under the Plan. In the event of a Preliminary
         Change in Control of Southern or the Company, the Company shall be
         obligated to immediately contribute such amounts to the Trusts as may
         be necessary to fully fund all benefits payable under the Plan in
         accordance with the procedures set forth in Section 8.3 hereof. In
         addition, in order to provide the added protections for certain
         individuals in accordance with Paragraph 7(c) of the Trust, the Company
         may fund the Trusts prior to a Preliminary Change in Control of
         Southern or the Company in accordance with the terms of the Trusts. All
         assets held in the Trusts remain subject only to the claims of the
         Participating Companies' general creditors whose claims against the
         Participating Companies are not satisfied because of the Participating
         Companies' bankruptcy or insolvency (as those terms are defined in the
         Trust). No Participant has any preferred claim on, or beneficial
         ownership interest in, any assets of the Trusts before the assets are
         paid to the Participant and all rights created under the Trusts, as
         under the Plan, are unsecured contractual claims of the Participant
         against the Company.

8.3      As soon as practicable following either a Preliminary Change in Control
         of Southern or of the Company, the Company shall contribute an amount
         based upon the funding strategy adopted by the Trust Administrator
         necessary to fulfill the Company's obligations pursuant to this Section
         8. In the event of a dispute over such actuary's determination, the
         Company and any complaining Participant(s) shall refer such dispute to
         an independent, third party actuarial consultant, chosen by the Company
         and such Participant. If the Company and the Participant cannot agree
         on an independent, third party actuarial consultant, the actuarial
         consultant shall be chosen by lot from an equal number of actuaries
         submitted by the Company and the applicable Trustee. Any such referral
         shall only occur once in total and the determination by the third-party
         actuarial consultant shall be final and binding upon both parties. The
         Company shall be responsible for all of the fees and expenses of the
         independent actuarial consultant.

8.4      In the event of a Southern Change in Control or a Company Change in
         Control, notwithstanding anything to the contrary in the Plan, upon
         termination as a Director, that amount in the Deferred Compensation
         Plan Account(s) of a Participant who was a Director determined as of
         such Change in Control shall be paid out in a lump sum if such
         Participant makes an election pursuant to procedures established by the
         Trust Administrator, in its sole and absolute discretion. If no such
         election is made, the Director shall receive payment of his Accounts
         solely in accordance with Section 7.

                                    SECTION 9

                               General Provisions

9.1      In the event that the Company shall decide to establish an advance
         accrual reserve on its books against the future expense of payments
         from any Deferred Compensation Accounts, such reserve shall not under
         any circumstances be deemed to be an asset of this Plan but, at all
         times, shall remain a part of the general assets of the Company,
         subject to claims of the Company's creditors.

9.2      A person entitled to any amount under this Plan shall be a general
         unsecured creditor of the Company with respect to such amount.
         Furthermore, a person entitled to a payment or distribution with
         respect to a Deferred Compensation Account shall have a claim upon the
         Company only to the extent of the balance in his Deferred Compensation
         Accounts.

9.3      All commissions, fees, and expenses that may be incurred in operating
         the Plan will be paid by the Company.

9.4      The Company will pay its prorated share of all commissions, fees, and
         expenses that may be incurred in operating any trust(s) established
         under the Plan (including the Deferred Stock Trust and the Deferred
         Cash Trust).

9.5      Notwithstanding any other provision of this Plan: (i) elections under
         this Plan may only be made by Directors while they are directors of the
         Company; (with the exception of the designation of beneficiaries) and
         (ii) distributions otherwise payable to a Director in the form of
         Common Stock shall be delayed and/or instead paid in cash in an amount
         equal to the fair market value thereof if such payment in Common Stock
         would violate any federal or State securities laws (including Section
         16(b) of the Securities Exchange Act of 1934, as amended) and/or rules
         and regulations promulgated thereunder.

9.6      Directors, their legal representatives and their beneficiaries shall
         have no right to anticipate, alienate, sell, assign, transfer, pledge
         or encumber their interests in the Plan, nor shall such interests be
         subject to attachment, garnishment, levy or execution by or on behalf
         of creditors of the Directors or of their beneficiaries.

                                   SECTION 10

                                 Administration

Subject to the express provisions of the Plan, the Committee shall have the
exclusive right to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.

The Committee may delegate to such officers, employees, or departments of the
Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.

                                   SECTION 11

                    Amendment, Termination and Effective Date

11.1     Amendment of the Plan

         Except for the provisions of Section 8, which may not be amended
         following a Southern Change in Control or Company Change in Control,
         and subject to the provisions of Section 11.3, the Plan may be wholly
         or partially amended or otherwise modified at any time by written
         action of the Board of Directors.

11.2     Termination of the Plan

         Subject to the provisions of Section 11.3 herein, the Plan may be
         terminated at any time by written action of the Board of Directors.

11.3     No Impairment of Benefits

         Notwithstanding the provisions of Sections 11.1 and 11.2, herein no
         amendment to or termination of the Plan shall impair any rights to
         benefits that have accrued hereunder.

11.4     Governing Law

         This Plan shall be construed in accordance with and governed by the
         laws of the State of Alabama.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective January
1, 2000, has been executed pursuant to resolutions of the Board of Directors of
Alabama Power Company, this 21st day of January, 2000.

                                            ALABAMA POWER COMPANY

                                        By: ________________________________

Attest:

By: ___________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>52
<FILENAME>x10c71.txt
<TEXT>



                           DEFERRED COMPENSATION PLAN
                                FOR DIRECTORS OF
                              GEORGIA POWER COMPANY

                Amended and Restated Effective February 21, 2001


<PAGE>




                                    SECTION 1

                                   Definitions

         1.1 "Beneficial Ownership" means beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act.

         1.2 "Board" or "Board of Directors" means the Board of Directors of the
Company.

         1.3 "Business Combination" means a reorganization, merger or
consolidation or sale of Southern, or a sale of all or substantially all of
Southern's assets.

         1.4 "Cash Compensation" means the annual retainer fees and meeting fees
payable to a Director in cash.

         1.5 "Code" means the Internal Revenue Code of 1986, as amended, or any
successor statute.

         1.6 "Committee" means the Compensation and Executive Committees of the
Board, or such other committee as may be designated by the Board to be
responsible for administering the Plan.

         1.7 "Common Stock" means the common stock of Southern, including any
shares into which it may be split, subdivided, or combined.

         1.8 "Company" means the Georgia Power Company, or any successor
thereto.

         1.9 "Company Change in Control" means the following:

                  (a)      The Consummation of an acquisition by any Person of
                           Beneficial Ownership of 50% or more of the combined
                           voting power of the then outstanding Voting
                           Securities of the Company; provided, however, that
                           for purposes of this Section 1.9, any acquisition by
                           an Employee, or Group composed entirely of Employees,
                           any qualified pension plan, any publicly held mutual
                           fund or any employee benefit plan (or related trust)
                           sponsored or maintained by Southern or any
                           corporation Controlled by Southern shall not
                           constitute a Change in Control;

                  (b)      Consummation of a reorganization, merger or
                           consolidation of the Company (a "Company Business
                           Combination"), in each case, unless, following such
                           Company Business Combination, Southern Controls the
                           corporation surviving or resulting from such Company
                           Business Combination; or

                  (c)      Consummation of the sale or other disposition of all
                           or substantially all of the assets of the Company to
                           an entity which Southern does not Control.

         1.10 "Compensation Payment Date" means the date on which compensation,
including cash retainer, meeting fees, and the Stock Retainer, is payable to a
Director or compensation would otherwise be payable to a Director if an election
to defer such compensation had not been made.

         1.11 "Consummation" means the completion of the final act necessary to
complete a transaction as a matter of law, including, but not limited to, any
required approvals by the corporation's shareholders and board of directors, the
transfer of legal and beneficial title to securities or assets and the final
approval of the transaction by any applicable domestic or foreign governments or
agencies.

         1.12 "Control" means, in the case of a corporation, Beneficial
Ownership of more than 50% of the combined voting power of the corporation's
Voting Securities, or in the case of any other entity, Beneficial Ownership of
more than 50% of such entity's voting equity interests.

         1.13 "Deferred Cash Trust" means the Deferred Cash Compensation Trust
for Directors of The Southern Company and its Subsidiaries.

         1.14 "Deferred Compensation Account" means the Prime Rate Investment
Account, the Phantom Stock Investment Account, the Deferred Stock Account,
and/or the Subsidiary Company Investment Account.

         1.15 "Deferred Pension Election" means the election by a Director under
Section 5.3 in connection with the deferral of receipt of the Director's Pension
Benefit until termination from the Board.

         1.16 "Deferred Stock Account" means the bookkeeping account established
under Section 6.3 on behalf of a Director and includes shares of Common Stock
credited thereto to reflect the reinvestment of dividends pursuant to Section
6.3(a)(iii).

         1.17 "Deferred Stock Trust" means the Deferred Stock Trust for
Directors of The Southern Company and its Subsidiaries.

         1.18 "Director" means a member of the Board.

         1.19 "Distribution Election" means the designation by a Director of the
manner of distribution of the amounts and quantities held in the Director's
Deferred Compensation Accounts upon the director's termination from the Board
pursuant to Section 5.4.

         1.20     "Effective Date" means February 19, 2001.

         1.21 "Employee" means an employee of Southern or any of its
subsidiaries that are "employing companies" as defined in the Southern Company
Deferred Compensation Plan as amended and restated January 1, 2000, and as may
be amended from time to time.

         1.22 "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

         1.23 "Group" has the meaning set forth in Section 14(d) of the Exchange
Act.

         1.24 "Incumbent Board" means those individuals who constitute the
Southern board of directors as of October 19, 1998, plus any individual who
shall become a director subsequent to such date whose election or nomination for
election by Southern's shareholders was approved by a vote of at least 75% of
the directors then comprising the Incumbent Board. Notwithstanding the
foregoing, no individual who shall become a director of the Southern board of
directors subsequent to October 19, 1998, whose initial assumption of office
occurs as a result of an actual or threatened election contest (within the
meaning of Rule 14a-11 of the regulations promulgated under the Exchange Act)
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person other
than the Southern board of directors shall be a member of the Incumbent Board.

         1.25 "Market Value" means the average of the high and low prices of the
Common Stock, as published in the Wall Street Journal in its report of New York
Stock Exchange composite transactions, on the date such Market Value is to be
determined, as specified herein (or the average of the high and low sale prices
on the trading day immediately preceding such date if the Common Stock is not
traded on the New York Stock Exchange on such date).

         1.26 "Participant" means a Director or former Director who has an
unpaid Deferred Compensation Account balance under the Plan.

         1.27 "Participating Companies" means those companies whose boards of
directors have authorized the establishment of trust(s) for the funding of their
respective directors' Deferred Compensation Accounts under their respective
Deferred Compensation Plans for Directors, including the Company.

         1.28 "Pension Benefit" means the U.S. dollar amount of the
actuarially-determined present value of benefits based on a Director's expected
service at the required retirement date under The Southern Company Outside
Directors Pension Plan, as calculated as of the Termination Date, plus accrued
earnings on such amount calculated as if invested at the Wachovia Bank of
Georgia Prime Interest Rate from the Termination Date, until such amount is
invested in Deferred Compensation Accounts pursuant to the provisions of Section
5.3.

         1.29 "Pension Benefit Investment Date" means the date to be determined
by the Committee, as of which the Director's Pension Benefit will be credited to
a Deferred Compensation Account in accordance with the director's Deferred
Pension Election under Section 5.3.

         1.30 "Phantom Stock Investment Account" means the bookkeeping account
established pursuant to Section 6.2 in which a Director may elect to defer Cash
Compensation or make investments, and includes amounts credited thereto to
reflect the reinvestment of dividends.

         1.31 "Plan" means the Deferred Compensation Plan for Directors of
Georgia Power Company as from time to time in effect.

         1.32 "Plan Period" means the period designated in Section 4.

         1.33 "Person" means any individual, entity or group within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act.

         1.34 "Preliminary Change in Control" means the occurrence of any of the
following as determined by the Southern Committee:

                  (a)      Southern or the Company has entered into a written
                           agreement, such as, but not limited to, a letter of
                           intent, which, if Consummated, would result in a
                           Southern Change in Control or a Company Change in
                           Control, as the case may be;

                  (b)      Southern, the Company or any Person publicly
                           announces an intention to take or to consider taking
                           actions which, if Consummated, would result in a
                           Southern Change in Control or a Company Change in
                           Control under circumstances where the Consummation of
                           the announced action or intended action is legally
                           and financially possible;

                  (c)      Any Person becomes the Beneficial Owner of fifteen
                           percent (15%) or more of the Common Stock; or

                  (d)      The Southern board of directors or the board of
                           directors of the Company has declared that a
                           Preliminary Change in Control has occurred.

         1.35 "Prime Interest Rate" means the prime rate of interest as listed
with the Wachovia Bank of Georgia, or its successor on the 1st day of each
quarter.

         1.36 "Prime Rate Investment Account" means the bookkeeping account
established pursuant to Section 6.1 in which a Director may elect to defer Cash
Compensation or make investments, the investment return on which is computed at
the Prime Interest Rate.

         1.37 "Southern" means The Southern Company.

         1.38 "Southern Change in Control" means any of the following:

                  (a)      The Consummation of an acquisition by any Person of
                           Beneficial Ownership of 20% or more of Southern's
                           Voting Securities; provided, however, that for
                           purposes of this subsection (a), the following
                           acquisitions of Southern's Voting Securities shall
                           not constitute a Change in Control:

                           (i)      any acquisition directly from Southern,

                           (ii)     any acquisition by Southern,

                           (iii)    any acquisition by any employee benefit plan
                                    (or related trust) sponsored or maintained
                                    by Southern or any corporation controlled by
                                    Southern,

                           (iv)     any acquisition by a qualified pension plan
                                    or publicly held mutual fund,

                           (v)      any acquisition by an Employee or Group
                                    composed exclusively of Employees, or

                           (vi)     any Business Combination which would not
                                    otherwise constitute a Change in Control
                                    because of the application of clauses (i),
                                    (ii) and (iii) of Section 1.37(c);

                  (b)      A change in the composition of Southern's board of
                           directors whereby individuals who constitute the
                           Incumbent Board cease for any reason to constitute at
                           least a majority of Southern's board of directors; or

                  (c)      Consummation of a Business Combination, unless,
                           following such Business Combination, all of the
                           following three conditions are met:

                           (i)      all or substantially all of the individuals
                                    and entities who held Beneficial Ownership,
                                    respectively, of Southern's Voting
                                    Securities immediately prior to such
                                    Business Combination beneficially own,
                                    directly or indirectly, 65% or more of the
                                    combined voting power of the Voting
                                    Securities of the corporation surviving or
                                    resulting from such Business Combination,
                                    (including, without limitation, a
                                    corporation which as a result of such
                                    transaction holds Beneficial Ownership of
                                    all or substantially all of Southern's
                                    Voting Securities or all or substantially
                                    all of Southern's assets) (such surviving or
                                    resulting corporation to be referred to as
                                    "Surviving Company"), in substantially the
                                    same proportions as their ownership,
                                    immediately prior to such Business
                                    Combination, of Southern's Voting
                                    Securities;

                           (ii)     no Person (excluding any corporation
                                    resulting from such Business Combination,
                                    any qualified pension plan, publicly held
                                    mutual fund, Group composed exclusively of
                                    employees or employee benefit plan (or
                                    related trust) of Southern, its
                                    subsidiaries, or Surviving Company) holds
                                    Beneficial Ownership, directly or
                                    indirectly, of 20% or more of the combined
                                    voting power of the then outstanding Voting
                                    Securities of Surviving Company except to
                                    the extent that such ownership existed prior
                                    to the Business Combination; and

                           (iii)    at least a majority of the members of the
                                    board of directors of Surviving Company were
                                    members of the Incumbent Board at the
                                    earlier of the date of execution of the
                                    initial agreement, or of the action of the
                                    Southern board of directors, providing for
                                    such Business Combination.

         1.39 "Southern Committee" means Chairman of the Southern board of
directors, Chief Financial Officer of Southern, General Counsel of Southern, and
the Chairman of the "Administrative Committee", as defined in Section 3.1 of the
Southern Company Deferred Compensation Plan, as restated and amended effective
January 1, 2000, and as may be amended from time to time.

         1.40 "Stock Retainer" means the annual Board retainer fee that is paid
to the Director in the form of Common Stock.

         1.41 "Subsidiary Company Investment Account" means the bookkeeping
account(s) established pursuant to section 6.4 on behalf of a Director that is
credited with shares of stock, other than Common Stock, distributed to holders
of record of Common Stock on account of a spin-off of a Southern Company
subsidiary.

         1.42 "Termination Date" means January 1, 1997, the date as of which The
Southern Company Outside Directors Pension Plan was effectively terminated.

         1.43 "Transferred Amount" means an amount equal to the value of a
Director's accounts under the applicable deferred compensation plan for
directors of The Southern Company or one of its subsidiaries or affiliates,
which has been transferred to the Plan in connection with the Director's
transfer from the board of directors of The Southern Company or one of its
subsidiaries or affiliates to the Board.

         1.44 "Transferred Amount Investment Date" means the date as of which a
Director's Transferred Amount will be credited to a Deferred Compensation
Account in accordance with Section 5.4.

         1.45 "Trust Administrator" means the individual or committee that is
established in the Deferred Stock Trust and the Deferred Cash Trust, to
administer such trusts on behalf of the Participating Companies.

         1.46 "Voting Securities" means the outstanding voting securities of a
corporation entitling the holder thereof to vote generally in the election of
such corporation's directors.

         Where the context requires, words in the masculine gender shall include
the feminine gender, words in the singular shall include the plural, and words
in the plural shall include the singular.

                                    SECTION 2

                                     Purpose

         The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.

                                    SECTION 3

                                   Eligibility

         An individual who serves as a Director and is not otherwise actively
employed by the Company or any of its subsidiaries or affiliates is eligible to
participate in the Plan.

                                    SECTION 4

                                  Plan Periods

         Except as pertains to a Director's initial Plan Period, all Plan
Periods shall be on a calendar year basis. The initial Plan Period applicable to
any person elected to the Board who was not a Director on the preceding December
31, shall begin on the first day of such Director's membership on the Board.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the Effective Date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to February 21, 2001.

                                    SECTION 5

                                    Elections

         5.1      Cash Compensation

                  (a)      Prior to the beginning of a Plan Period, a Director
                           may direct that payment of all or any portion of Cash
                           Compensation that otherwise would be paid to the
                           Director for the Plan Period, be deferred in amounts
                           as designated by the Director, and credited to (i) a
                           Prime Rate Investment Account, (ii) a Phantom Stock
                           Investment Account, or, effective with compensation
                           payable on or after January 1, 2001, (iii) a Deferred
                           Stock Account. Upon the Director's termination from
                           the Board of Directors, such deferred compensation
                           and accumulated investment return held in the
                           Director's Deferred Compensation Accounts shall be
                           distributed to the Director in accordance with the
                           Director's Distribution Election and the provisions
                           of Section 7.

                  (b)      An election to defer Cash Compensation is
                           irrevocable. Such an election shall continue from
                           Plan Period to Plan Period unless the Director
                           changes his election to defer cash compensation
                           payable in a future Plan Period prior to the
                           beginning of such future Plan Period. The new
                           deferral election should not affect amounts
                           previously deferred.

                  (c)      Cash Compensation deferred under this Section 5.1
                           shall be invested in Deferred Compensation Accounts
                           as directed by the Director on the Compensation
                           Payment Date.

         5.2      Stock Retainer

                  (a)      Prior to the beginning of a Plan Period, a Director
                           may direct that payment of all or none of the Stock
                           Retainer that otherwise would be paid to the Director
                           for the Plan Period, be deferred by the Directors,
                           and credited to his Deferred Stock Account, such
                           deferred compensation and accumulated investment
                           return held in the Director's Deferred Stock Account
                           shall be distributed to the Director in accordance
                           with the Director's Distribution Election and the
                           provisions of Section 7.

                  (b)      An election to defer the Stock Retainer is
                           irrevocable. Such an election shall continue from
                           Plan Period to Plan Period unless the Director
                           changes his election to defer Stock Retainer paid in
                           a future Plan Period prior to the beginning of such
                           future Plan Period. The new deferral election should
                           not affect amounts previously deferred.

                  (c)      Stock Retainer deferred under this Section 5.2 shall
                           be invested in Deferred Stock Account as directed by
                           the Director on the Compensation Payment Date.

         5.3      Deferred Pension Election

         Any Director, who had a Pension Benefit as of the Termination Date,
made a single one-time election, to credit all of his Pension Benefit into (i) a
Prime Rate Investment Account or (ii) a Phantom Stock Investment Account. Upon
the Director's termination from the Board, such Pension Benefit and accumulated
investment return held in the Director's Deferred Compensation Accounts shall be
distributed to the Director in accordance with the Director's Distribution
Election made in accordance with Section 5.4(b) and the provisions of Section 7.

         5.4      Distribution Election

                  (a)      Except as set forth in Section 5.4(b) and (c), prior
                           to the initial establishment of a Deferred
                           Compensation Account for a Director, the Director
                           must elect, in writing, that upon termination from
                           the Board of Directors the values and quantities held
                           in the Directors Deferred Compensation Accounts be
                           distributed to the Director, pursuant to the
                           provisions of Section 7, in a lump sum or in a series
                           of annual installments not to exceed ten (10). The
                           time for the commencement of distribution shall not
                           be later than the first day of the month coinciding
                           with or next following the second anniversary of
                           termination of Board membership.

                  (b)      Any Director who made a Deferred Pension Election in
                           accordance with Section 5.3 made a Distribution
                           Election at the time the Deferred Pension Election
                           was made, attributable to the Pension Benefit and any
                           accumulated investment return.

                  (c)      In the event a Director terminates from the Board
                           with Deferred Compensation Accounts established under
                           Section 6.5, the Transferred Amounts and accumulated
                           investment return held in such Accounts shall be
                           distributed to the Director in accordance with the
                           Director's distribution election in effect under the
                           applicable deferred compensation plan for directors
                           of The Southern Company or one of its subsidiaries or
                           affiliates on the date the Director is transferred to
                           the Board and the provisions of Section 7, unless
                           such election is changed pursuant to Section 5.4(d).

                  (d)      Distribution Elections made under Sections 5.4 (a),
                           (b) and (c) are irrevocable except that a Director
                           may amend any of the Distribution Elections then in
                           effect not prior to the 390th day or later than the
                           360th day prior to his termination of Board
                           membership with approval of the Compensation
                           committee on a form prescribed by the Compensation
                           committee and delivered to the Secretary or Assistant
                           Secretary.

         5.5      Beneficiary Designation

         A Director or former Director may designate a beneficiary to receive
distributions from the Plan in accordance with the provisions of Section 7 upon
the death of the director. The beneficiary designation may be changed by a
Director or former Director at any time, and without the consent of the prior
beneficiary.

         5.6      Form of Election

         All elections pursuant to the provisions of this Section 5 of the Plan
shall be made in writing to the Secretary or Assistant Secretary of the Company
on a form or forms available upon request of the Secretary or Assistant
Secretary.

                                    SECTION 6

                                    Accounts

         6.1      Prime Rate Investment Account

         A Prime Rate Investment Account shall be established for each Director
electing deferral of Cash Compensation for investment at the Prime Interest
Rate. The amount directed by the Director to such account shall be credited to
it as of the Pension Benefit Investment Date, Compensation Payment Date, or
Transferred Amount Investment Date, as applicable, and credited thereafter with
interest computed using the Prime Interest Rate. Interest shall be computed from
the date such compensation is credited to the account and compounded quarterly
at the end of each calendar quarter. The Prime Interest Rate in effect on the
first day of a calendar quarter shall be deemed the Prime Interest Rate in
effect for that entire quarter. Interest shall accrue and compound on any
balance until the amount credited to the account is fully distributed.

         6.2      Phantom Stock Investment Account

         The Phantom Stock Investment Account established for each Director
electing deferral of Cash Compensation for investment at the Common Stock
investment rate shall be credited with the number of shares (including
fractional shares rounded to the nearest ten-thousandth) of Common Stock which
could have been purchased on the Pension Benefit Investment Date, the
Compensation Payment Date, or Transferred Amount Investment Date, as applicable,
as determined by dividing the applicable compensation by the Market Value on
such date. On the date of the payment of dividends on the Common Stock, the
Director's Phantom Stock Investment Account shall be credited with additional
shares (including fractional shares rounded to the nearest ten-thousandth) of
Common Stock, as follows:

                  (a)      In the case of cash dividends, such additional shares
                           as would have been purchased as of the Common Stock
                           dividend record date as if the credited shares had
                           been outstanding on such date and dividends
                           reinvested thereon under the Southern Investment
                           Plan;

                  (b)      In the case of dividends payable in property other
                           than cash or Common Stock, such additional shares as
                           could be purchased at the Market Value as of the date
                           of payment with the fair market value of the property
                           which would have been payable if the credited shares
                           had been outstanding; and

                  (c)      In the case of dividends payable in Common Stock,
                           such additional shares as would have been payable on
                           the credited shares as if they had been outstanding.

         6.3      Deferred Stock Account

                  (a)      A Director's Deferred Stock Account will be credited:

                           (i)      with the number of shares of Common Stock
                                    (rounded to the nearest ten thousandth of a
                                    share) determined by dividing the amount of
                                    Cash Compensation subject to deferral or
                                    investment in the Deferred Stock Account by
                                    the average price paid by the Trustee of the
                                    Deferred Stock Trust for shares of Common
                                    Stock with respect to the Pension Benefit
                                    Investment Date or the Compensation Payment
                                    Date, as applicable, as reported by the
                                    Trustee, or, if the Trustee shall not at
                                    such time purchase any shares of Common
                                    Stock, by the Market Value on such date;

                           (ii)     as of the date on which Stock Retainer is
                                    paid, the shares of Common Stock payable to
                                    the Director as his Stock Retainer; and

                           (iii)    as of each date on which dividends are paid
                                    on the Common Stock, with the number of
                                    shares of Common Stock (rounded to the
                                    nearest ten thousandth of a share)
                                    determined by multiplying the number of
                                    shares of Common Stock credited in the
                                    Director's Deferred Stock Account on the
                                    dividend record date, by the dividend rate
                                    per share of Common Stock, and dividing the
                                    product by the price per share of Common
                                    Stock attributable to the reinvestment of
                                    dividends on the shares of Common Stock held
                                    in the Deferred Stock Trust on the
                                    applicable dividend payment date or, if the
                                    Trustee of the Deferred Stock Trust has not
                                    reinvested in shares of Common Stock on the
                                    applicable dividend reinvestment date, the
                                    product shall be divided by the Market Value
                                    on the dividend payment date.

                  (b)      If Southern enters into transactions involving stock
                           splits, stock dividends, reverse splits or any other
                           recapitalization transactions, the number of shares
                           of Common Stock credited to a Director's Deferred
                           Stock Account will be adjusted (rounded to the
                           nearest ten thousandth of a share) so that the
                           Director's Deferred Stock Account reflects the same
                           equity percentage interest in Southern after the
                           recapitalization as was the case before such
                           transaction.

                  (c)      If at least a majority of Southern's stock is sold or
                           exchanged by its shareholders pursuant to an
                           integrated plan for cash or property (including stock
                           of another corporation) or if substantially all of
                           the assets of Southern are disposed of and, as a
                           consequence thereof, cash or property is distributed
                           to Southern's shareholders, each Director's Deferred
                           Stock Account will, to the extent not already so
                           credited under this Section 6.3, be (i) credited with
                           the amount of cash or property receivable by a
                           Southern shareholder directly holding the same number
                           of shares of Common Stock as is credited to such
                           Director's Deferred Stock Account and (ii) debited by
                           that number of shares of Common Stock surrendered by
                           such equivalent Southern shareholder.

                  (d)      Each Director who has a Deferred Stock Account also
                           shall be entitled to provide directions to the Trust
                           Administrator to cause such committee to similarly
                           direct the Trustee of the Deferred Stock Trust to
                           vote, on any matter presented for a vote to the
                           shareholders of Southern, that number of shares of
                           Common Stock held by the Deferred Stock Trust
                           equivalent to the number of shares of Common Stock
                           credited to the Director's Deferred Stock Account.
                           Such committee shall arrange for distribution to all
                           Directors in a timely manner of all communications
                           directed generally to the Southern shareholders as to
                           which their votes are solicited.

         6.4      Subsidiary Company Investment Account

                  (a)      A Director's Subsidiary Company Investment Account
                           will be credited as of the date on which a
                           distribution is paid to the Company's common
                           stockholders in stock other than Common Stock with
                           the number of shares of the other corporation's stock
                           receivable by a Southern stockholder directly holding
                           the same number of shares of Common Stock as is
                           credited to such Director's Deferred Stock Account.

                  (b)      Each Director who has a Subsidiary Company Investment
                           Account also shall be entitled to provide directions
                           to the Trust Administrator to similarly direct the
                           Trustee of the Deferred Stock Trust to vote on any
                           matter presented for a vote to the applicable
                           corporation's shareholders, that number of shares of
                           the applicable corporation's common stock held by the
                           Deferred Stock Trust equivalent to the number of
                           shares credited to the Director's Subsidiary Company
                           Investment Account. The Trust Administrator shall
                           arrange for distribution to all Directors in a timely
                           manner of all communications directed generally to
                           the applicable corporation's shareholders as to which
                           their votes are solicited.

         6.5      Transferred Amounts

                  (a)      As soon as administratively practicable, the Company
                           shall establish for a Director transferring to the
                           Board from the board of directors of The Southern
                           Company or any of its subsidiaries or affiliates such
                           Deferred Compensation Accounts as are necessary to
                           implement Section 6.5(b).

                  (b)      Any Transferred Amounts will be credited to the
                           Deferred Compensation Account(s) established that are
                           comparable to the deferred compensation accounts to
                           which such amounts were credited under the applicable
                           deferred compensation plan for directors of The
                           Southern Company or one of its subsidiaries or
                           affiliates, as soon as administratively practicable
                           following the date the Transferred Amounts are
                           transferred to the Plan. Thereafter, the Transferred
                           Amounts shall be credited with investment returns as
                           applicable under this Section 6 of the Plan.

                                    SECTION 7

                                  Distributions

         7.1 Upon the termination of a Director's membership on the Board the
amount credited to a Director's Deferred Compensation Accounts will be paid to
the Director or his beneficiary, as applicable, in the following manner:

                  (a)      the amount credited to a Director's Prime Rate
                           Investment Account and Phantom Stock Investment
                           Account shall be paid in cash;

                  (b)      the amount credited to a Director's Deferred Stock
                           Account shall, except as otherwise provided in
                           Section 6.3 and Section 9.5, or to the extent the
                           Company is otherwise, in the reasonable judgment of
                           the Committee, precluded from doing so, be paid in
                           shares of Common Stock (with any fractional share
                           interest therein paid in cash to the extent of the
                           then Market Value thereof); and

                  (c)      the amount credited to a Subsidiary Company
                           Investment Account shall, except as otherwise
                           provided in section 9.5, be paid from the assets in
                           the Deferred Stock Trust in shares of the applicable
                           corporation, however if there is not a sufficient
                           number of shares held in the Trust, the remainder
                           shall be paid in cash based upon the average of the
                           high and low price of the stock as reported in the
                           Wall Street Journal on the business day immediately
                           proceeding the distribution date.

                           Such payments shall be from the general assets of the
                           Company (including the Deferred Cash Trust and the
                           Deferred Stock Trust) in accordance with this Section
                           7.

         Notwithstanding the foregoing, in the event the Company enters into an
agreement described in Section 7.3 with respect to a Director prior to the
Director's termination of membership, the Company shall have no obligation to
make distributions to the Director under this Section 7.1 in connection with
such Director's termination of membership on the Board.

         7.2 Unless other arrangements are specified by the Committee on a
uniform and nondiscriminatory basis, deferred amounts shall be paid in the form
of (i) a lump sum payment, or (ii) in approximately equal annual installments,
as elected by the Director pursuant to the provisions of Section 5.4. Such
payments shall be made (or shall commence) as soon as practicable following the
termination of Board membership or, if so elected in the Distribution Election,
up to twenty-four (24) months following such termination.

         In the event a Director elected to receive the balance of his Deferred
Compensation Accounts in a lump sum, distribution shall be made on the first day
of the month selected by the Director on his Distribution Election, or as soon
as reasonably possible thereafter. If the Director elected to receive annual
installments, the first payment shall be made on the first day of the month
selected by a Director, or as soon as reasonably possible thereafter, and shall
be equal to the balance in the Director's Deferred Compensation Accounts on such
date divided by the number of annual installment payments. Each subsequent
annual payment shall be an amount equal to the balance in the Director's
Deferred Compensation Accounts on the date of payment divided by the number of
remaining annual payments and shall be paid on the anniversary of the preceding
date of payment. The Market Value of any shares of Common Stock credited to a
Director's Phantom Stock Investment Account shall be determined as of the
twenty-fifth (25th) day of the month immediately preceding the date of any lump
sum or installment distribution.

         Upon the death of a Director, or a former Director prior to the payment
of all amounts credited to the Director's Deferred Compensation Accounts, the
unpaid balance shall be paid in the sole discretion of the Committee (i) in a
lump sum to the designated beneficiary of such Director or former Director
within thirty (30) days of the date of death (or as soon as reasonably possible
thereafter) or (ii) in accordance with the Distribution Election made by such
Director or former Director. In the event a beneficiary designation has not been
made, or the designated beneficiary is deceased or cannot be located, payment
shall be made to the estate of the Director or former Director. The Market Value
of any shares of Common Stock credited to a Director's Phantom Stock Investment
Account shall be determined as of the twenty-fifth (25th) day of the month
immediately preceding the date of any lump sum or installment distribution.

         7.3 If the Company enters into a written agreement with a parent or
affiliate of the Company under which the parent or affiliate assumes liability
for a Director's benefits accrued under the Plan in connection with, but prior
to, such Director's termination of membership on the Board and the Director
either has been or will be elected to the Board of Directors of such parent or
affiliate of the Company, the value of the Director's benefits which have
accrued under the Plan as of the date the Director terminates from the Board
shall be transferred from the Company to the parent or affiliate of the Company,
and the Company shall have no further obligation to make any distributions to
the Director under Section 7.1 or any other section herein.

                                    SECTION 8

                 Change in Control and Other Special Provisions

         8.1 Notwithstanding any other terms of the Plan to the contrary,
following a Southern Change in Control or a Company Change in Control, the
provisions of this Section 8 shall apply to the payment of benefits under the
Plan with respect to any Director who is a Participant on such date.

         8.2 The Deferred Cash Trust and the Deferred Stock Trust (collectively
"Trusts") have been established to hold assets of the Participating Companies
under certain circumstances as a reserve for the discharge of the Company's
obligations under the Plan. In the event of a Preliminary Change in Control of
Southern or the Company, the Company shall be obligated to immediately
contribute such amounts to the Trusts as may be necessary to fully fund all
benefits payable under the Plan in accordance with the procedures set forth in
Section 8.3 hereof. In addition, in order to provide the added protections for
certain individuals in accordance with Paragraph 7(c) of the Trust, the Company
may fund the Trusts prior to a Preliminary Change in Control of Southern or the
Company in accordance with the terms of the Trusts. All assets held in the
Trusts remain subject only to the claims of the Participating Companies' general
creditors whose claims against the Participating Companies are not satisfied
because of the Participating Companies' bankruptcy or insolvency (as those terms
are defined in the Trust). No Participant has any preferred claim on, or
beneficial ownership interest in, any assets of the Trusts before the assets are
paid to the Participant and all rights created under the Trusts, as under the
Plan, are unsecured contractual claims of the Participant against the Company.

         8.3 As soon as practicable following either a Preliminary Change in
Control of Southern or of the Company, the Company shall contribute an amount
based upon the funding strategy adopted by the Trust Administrator necessary to
fulfill the Company's obligations pursuant to this Section 8. In the event of a
dispute over such actuary's determination, the Company and any complaining
Participant(s) shall refer such dispute to an independent, third party actuarial
consultant, chosen by the Company and such Participant. If the Company and the
Participant cannot agree on an independent, third party actuarial consultant,
the actuarial consultant shall be chosen by lot from an equal number of
actuaries submitted by the Company and the applicable Trustee. Any such referral
shall only occur once in total and the determination by the third-party
actuarial consultant shall be final and binding upon both parties. The Company
shall be responsible for all of the fees and expenses of the independent
actuarial consultant.

         8.4 In the event of a Southern Change in Control or a Company Change in
Control, notwithstanding anything to the contrary in the Plan, upon termination
as a Director, that amount in the Deferred Compensation Plan Account(s) of a
Participant who was a Director determined as of such Change in Control shall be
paid out in a lump sum if such Participant makes an election pursuant to
procedures established by the Trust Administrator, in its sole and absolute
discretion. If no such election is made, the Director shall receive payment of
his Accounts solely in accordance with Section 7.

                                    SECTION 9

                               General Provisions

         9.1 In the event that the Company shall decide to establish an advance
accrual reserve on its books against the future expense of payments from any
Deferred Compensation Accounts, such reserve shall not under any circumstances
be deemed to be an asset of this Plan but, at all times, shall remain a part of
the general assets of the Company, subject to claims of the Company's creditors.

         9.2 A person entitled to any amount under this Plan shall be a general
unsecured creditor of the Company with respect to such amount. Furthermore, a
person entitled to a payment or distribution with respect to a Deferred
Compensation Account shall have a claim upon the Company only to the extent of
the balance in his Deferred Compensation Accounts.

         9.3 All commissions, fees, and expenses that may be incurred in
operating the Plan will be paid by the Company.

         9.4 The Company will pay its prorated share of all commissions, fees,
and expenses that may be incurred in operating any trust(s) established under
the Plan (including the Deferred Stock Trust and the Deferred Cash Trust).

         9.5 Notwithstanding any other provision of this Plan: (i) elections
under this Plan may only be made by Directors while they are directors of the
Company; (with the exception of the designation of beneficiaries) and (ii)
distributions otherwise payable to a Director in the form of Common Stock shall
be delayed and/or instead paid in cash in an amount equal to the fair market
value thereof if such payment in Common Stock would violate any federal or State
securities laws (including Section 16(b) of the Securities Exchange Act of 1934,
as amended) and/or rules and regulations promulgated thereunder.

         9.6 Directors, their legal representatives and their beneficiaries
shall have no right to anticipate, alienate, sell, assign, transfer, pledge or
encumber their interests in the Plan, nor shall such interests be subject to
attachment, garnishment, levy or execution by or on behalf of creditors of the
Directors or of their beneficiaries.

                                   SECTION 10

                                 Administration

         Subject to the express provisions of the Plan, the Committee shall have
the exclusive right to interpret the Plan, to prescribe, amend and rescind rules
and regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.

         The Committee may delegate to such officers, employees, or departments
of the Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.

                                   SECTION 11

                    Amendment, Termination and Effective Date

         11.1     Amendment of the Plan

         Except for the provisions of Section 8, which may not be amended
following a Southern Change in Control or Company Change in Control, and subject
to the provisions of Section 11.3, the Plan may be wholly or partially amended
or otherwise modified at any time by written action of the Board of Directors.

         11.2     Termination of the Plan

         Subject to the provisions of Section 11.3 herein, the Plan may be
terminated at any time by written action of the Board of Directors.

         11.3     No Impairment of Benefits

         Notwithstanding the provisions of Sections 11.1 and 11.2, herein no
amendment to or termination of the Plan shall impair any rights to benefits that
have accrued hereunder.

         11.4     Governing Law

         This Plan shall be construed in accordance with and governed by the
laws of the State of Georgia.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective
February 21, 2001, has been executed pursuant to resolutions of the Board of
Directors of Georgia Power Company, this ____ day of _______________, 2001.

                                         GEORGIA POWER COMPANY



                                         By: ________________________________

Attest:


By: ___________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>53
<FILENAME>x10d33.txt
<TEXT>



                         DEFERRED COMPENSATION PLAN FOR
                         DIRECTORS OF GULF POWER COMPANY

                 Amended and Restated Effective January 1, 2000


<PAGE>


                                    SECTION 1

                                   Definitions

1.1      "Beneficial Ownership" means beneficial ownership within the meaning of
         Rule 13d-3 promulgated under the Exchange Act.

1.2      "Board" or "Board of Directors" means the Board of Directors of the
         Company.

1.3      "Business Combination" means a reorganization, merger or consolidation
         or sale of Southern, or a sale of all or substantially all of
         Southern's assets.

1.4      "Cash Compensation" means the annual retainer fees and meeting fees
         payable to a Director in cash.

1.5      "Code" means the Internal Revenue Code of 1986, as amended, or any
         successor statute.

1.6      "Committee" means the Compensation Committee of the Board, or such
         other committee as may be designated by the Board to be responsible for
         administering the Plan.

1.7      "Common Stock" means the common stock of Southern, including any shares
         into which it may be split, subdivided, or combined.

1.8      "Company" means Gulf PowerCompany, or any successor thereto.

1.9      "Company Change in Control" means the following:

         (a)      The Consummation of an acquisition by any Person of Beneficial
                  Ownership of 50% or more of the combined voting power of the
                  then outstanding Voting Securities of the Company; provided,
                  however, that for purposes of this Section 1.9, any
                  acquisition by an Employee, or Group composed entirely of
                  Employees, any qualified pension plan, any publicly held
                  mutual fund or any employee benefit plan (or related trust)
                  sponsored or maintained by Southern or any corporation
                  Controlled by Southern shall not constitute a Change in
                  Control;

         (b)      Consummation of a reorganization, merger or consolidation of
                  the Company (a "Company Business Combination"), in each case,
                  unless, following such Company Business Combination, Southern
                  Controls the corporation surviving or resulting from such
                  Company Business Combination; or

         (c)      Consummation of the sale or other disposition of all or
                  substantially all of the assets of the Company to an entity
                  which Southern does not Control.

1.10     "Compensation Payment Date" means the date on which compensation,
         including cash retainer, meeting fees, and the Stock Retainer, is
         payable to a Director or compensation would otherwise be payable to a
         Director if an election to defer such compensation had not been made.

1.11     "Consummation" means the completion of the final act necessary to
         complete a transaction as a matter of law, including, but not limited
         to, any required approvals by the corporation's shareholders and board
         of directors, the transfer of legal and beneficial title to securities
         or assets and the final approval of the transaction by any applicable
         domestic or foreign governments or agencies.

1.12      "Control" means, in the case of a corporation, Beneficial Ownership of
          more than 50% of the combined voting power of the corporation's Voting
          Securities, or in the case of any other entity, Beneficial Ownership
          of more than 50% of such entity's voting equity interests.

1.13     "Deferred Cash Trust" means the Deferred Cash Compensation Trust for
         Directors of The Southern Company and its Subsidiaries.

1.14     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, and/or the Deferred
         Stock Account.

1.15     "Deferred Pension Election" means the election by a Director under
         Section 5.3 in connection with the deferral of receipt of the
         Director's Pension Benefit until termination from the Board.

1.16     "Deferred Stock Account" means the bookkeeping account established
         under Section 6.3 on behalf of a Director and includes shares of Common
         Stock credited thereto to reflect the reinvestment of dividends
         pursuant to Section 6.3(a)(iii).

1.17     "Deferred Stock Trust" means the Deferred Stock Trust for Directors of
         The Southern Company and its Subsidiaries.

1.18     "Director" means a member of the Board.

1.19     "Distribution Election" means the designation by a Director of the
         manner of distribution of the amounts and quantities held in the
         Director's Deferred Compensation Accounts upon the director's
         termination from the Board pursuant to Section 5.4.

1.20     "Effective Date" means January 1, 2000.

1.21     "Employee" means an employee of Southern or any of its subsidiaries
         that are "employing companies" as defined in the Southern Company
         Deferred Compensation Plan as amended and restated January 1, 2000, and
         as may be amended from time to time.

1.22     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

1.23     "Group" has the meaning set forth in Section 14(d) of the Exchange Act.

1.24     "Incumbent Board" means those individuals who constitute the Southern
         board of directors as of October 19, 1998, plus any individual who
         shall become a director subsequent to such date whose election or
         nomination for election by Southern's shareholders was approved by a
         vote of at least 75% of the directors then comprising the Incumbent
         Board. Notwithstanding the foregoing, no individual who shall become a
         director of the Southern board of directors subsequent to October 19,
         1998, whose initial assumption of office occurs as a result of an
         actual or threatened election contest (within the meaning of Rule
         14a-11 of the regulations promulgated under the Exchange Act) with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         Person other than the Southern board of directors shall be a member of
         the Incumbent Board.

1.25     "Market Value" means the average of the high and low prices of the
         Common Stock, as published in the Wall Street Journal in its report of
         New York Stock Exchange composite transactions, on the date such Market
         Value is to be determined, as specified herein (or the average of the
         high and low sale prices on the trading day immediately preceding such
         date if the Common Stock is not traded on the New York Stock Exchange
         on such date).

1.26     "Participant" means a Director or former Director who has an unpaid
         Deferred Compensation Account balance under the Plan.

1.27     "Participating Companies" means those companies whose boards of
         directors have authorized the establishment of trust(s) for the funding
         of their respective directors' Deferred Compensation Accounts under
         their respective Deferred Compensation Plans for Directors, including
         the Company.

1.28     "Pension Benefit" means the U.S. dollar amount of the
         actuarially-determined present value of benefits based on a Director's
         expected service at the required retirement date under The Southern
         Company Outside Directors Pension Plan, as calculated as of the
         Termination Date, plus accrued earnings on such amount calculated as if
         invested at the Prime Interest Rate from the Termination Date, until
         such amount is invested in Deferred Compensation Accounts pursuant to
         the provisions of Section 5.3.

1.29     "Pension Benefit Investment Date" means the date to be determined by
         the Committee, as of which the Director's Pension Benefit will be
         credited to a Deferred Compensation Account in accordance with the
         director's Deferred Pension Election under Section 5.3.

1.30     "Phantom Stock Investment Account" means the bookkeeping account
         established pursuant to Section 6.2 in which a Director may elect to
         defer Cash Compensation or make investments, and includes amounts
         credited thereto to reflect the reinvestment of dividends.

1.31     "Plan" means the Deferred Compensation Plan for Directors of Gulf Power
         Company as from time to time in effect.

1.32     "Plan Period" means the period designated in Section 4.

1.33     "Person" means any individual, entity or group within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Exchange Act.

1.34     "Preliminary Change in Control" means the occurrence of any of the
         following as determined by the Southern Committee:

         (a)      Southern or the Company has entered into a written agreement,
                  such as, but not limited to, a letter of intent, which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control, as the case may be;

         (b)      Southern, the Company or any Person publicly announces an
                  intention to take or to consider taking actions which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control under circumstances where the
                  Consummation of the announced action or intended action is
                  legally and financially possible;

         (c)      Any Person becomes the Beneficial Owner of fifteen percent
                  (15%) or more of the Common Stock; or (d) The Southern board
                  of directors or the board of directors of the Company has
                  declared that a Preliminary Change in Control has occurred.

1.35     "Prime Interest Rate" means the prime rate of interest as published in
         the Wall Street Journal.

1.36     "Prime Rate Investment Account" means the bookkeeping account
         established pursuant to Section 6.1 in which a Director may elect to
         defer Cash Compensation or make investments, the investment return on
         which is computed at the Prime Interest Rate.

1.37     "Southern" means The Southern Company.

1.38     "Southern Change in Control" means any of the following:
         (a) The Consummation of an acquisition by any Person of Beneficial
         Ownership of 20% or more of Southern's Voting Securities; provided,
         however, that for purposes of this subsection (a), the following
         acquisitions of Southern's Voting Securities shall not constitute a
         Change in Control:

                  (i)      any acquisition directly from Southern,

                  (ii)     any acquisition by Southern,

                  (iii)    any acquisition by any employee benefit plan (or
                           related trust) sponsored or maintained by Southern or
                           any corporation controlled by Southern,

                  (iv)     any acquisition by a qualified pension plan or
                           publicly held mutual fund,

                  (v)      any acquisition by an Employee or Group composed
                           exclusively of Employees, or

                  (vi)     any Business Combination which would not otherwise
                           constitute a Change in Control because of the
                           application of clauses (i), (ii) and (iii) of Section
                           1.37(c);

         (b)      A change in the composition of Southern's board of directors
                  whereby individuals who constitute the Incumbent Board cease
                  for any reason to constitute at least a majority of Southern's
                  board of directors; or (c) Consummation of a Business
                  Combination, unless, following such Business Combination, all
                  of the following three conditions are met:

                  (i) all or substantially all of the individuals and entities
                  who held Beneficial Ownership, respectively, of Southern's
                  Voting Securities immediately prior to such Business
                  Combination beneficially own, directly or indirectly, 65% or
                  more of the combined voting power of the Voting Securities of
                  the corporation surviving or resulting from such Business
                  Combination, (including, without limitation, a corporation
                  which as a result of such transaction holds Beneficial
                  Ownership of all or substantially all of Southern's Voting
                  Securities or all or substantially all of Southern's assets)
                  (such surviving or resulting corporation to be referred to as
                  "Surviving Company"), in substantially the same proportions as
                  their ownership, immediately prior to such Business
                  Combination, of Southern's Voting Securities; (ii) no Person
                  (excluding any corporation resulting from such Business
                  Combination, any qualified pension plan, publicly held mutual
                  fund, Group composed exclusively of employees or employee
                  benefit plan (or related trust) of Southern, its subsidiaries,
                  or Surviving Company) holds Beneficial Ownership, directly or
                  indirectly, of 20% or more of the combined voting power of the
                  then outstanding Voting Securities of Surviving Company except
                  to the extent that such ownership existed prior to the
                  Business Combination; and (iii) at least a majority of the
                  members of the board of directors of Surviving Company were
                  members of the Incumbent Board at the earlier of the date of
                  execution of the initial agreement, or of the action of the
                  Southern board of directors, providing for such Business
                  Combination.

1.39     "Southern Committee" means Chairman of the Southern board of directors,
         Chief Financial Officer of Southern, General Counsel of Southern, and
         the Chairman of the "Administrative Committee", as defined in Section
         3.1 of the Southern Company Deferred Compensation Plan, as restated and
         amended effective January 1, 2000.

1.40     "Stock Retainer" means the annual Board retainer fee that is paid to
         the Director in the form of Common Stock.

1.41     "Termination Date" means January 1, 1997, the date as of which The
         Southern Company Outside Directors Pension Plan was effectively
         terminated.

1.42     "Trust Administrator" means the individual or committee that is
         established in the Deferred Stock Trust and the Deferred Cash Trust, to
         administer such trusts on behalf of the Participating Companies.

1.43     "Voting Securities" shall mean the outstanding voting securities of a
         corporation entitling the holder thereof to vote generally in the
         election of such corporation's directors.

Where the context requires, words in the masculine gender shall include the
feminine gender, words in the singular shall include the plural, and words in
the plural shall include the singular.


<PAGE>


                                    SECTION 2

                                     Purpose

The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.

                                    SECTION 3

                                   Eligibility

An individual who serves as a Director and is not otherwise actively employed by
the Company or any of its subsidiaries or affiliates is eligible to participate
in the Plan.

                                    SECTION 4

                                  Plan Periods

Except as pertains to a Director's initial Plan Period, all Plan Periods shall
be on a calendar year basis. The initial Plan Period applicable to any person
elected to the Board who was not a Director on the preceding December 31, shall
begin on the first day of such Director's membership on the Board. The initial
Plan Period under this amended and restated plan shall begin January 1, 2000.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to January 1, 2000.

                                    SECTION 5

                                    Elections

5.1      Cash Compensation

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all or any portion of Cash Compensation that
                  otherwise would be paid to the Director for the Plan Period,
                  be deferred in amounts as designated by the Director, and
                  credited to (i) a Prime Rate Investment Account, (ii) a
                  Phantom Stock Investment Account, or, effective with
                  compensation payable on or after January 1, 2001, (iii) a
                  Deferred Stock Account. Upon the Director's termination from
                  the Board of Directors, such deferred compensation and
                  accumulated investment return held in the Director's Deferred
                  Compensation Accounts shall be distributed to the Director in
                  accordance with the Director's Distribution Election and the
                  provisions of Section 7.

         (b)      An election to defer Cash Compensation is irrevocable. Such an
                  election shall continue from Plan Period to Plan Period unless
                  the Director changes his election to defer cash compensation
                  payable in a future Plan Period prior to the beginning of such
                  future Plan Period.

         (c)      Cash Compensation deferred under this Section 5.1 shall be
                  invested in Deferred Compensation Accounts as directed by the
                  Director on the Compensation Payment Date.

5.2      Stock Retainer

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all of the Stock Retainer that otherwise would
                  be paid to the Director for the Plan Period, be deferred by
                  the Directors, and credited to his Deferred Stock Account,
                  such deferred compensation and accumulated investment return
                  held in the Director's Deferred Stock Account shall be
                  distributed to the Director in accordance with the Director's
                  Distribution Election and the provisions of Section 7.

         (b)      An election to defer the Stock Retainer is irrevocable. Such
                  an election shall continue from Plan Period to Plan Period
                  unless the Director changes his election to defer Stock
                  Retainer paid in a future Plan Period prior to the beginning
                  of such future Plan Period.

         (c)      Stock Retainer deferred under this Section 5.2 shall be
                  invested in Deferred Stock Account as directed by the Director
                  on the Compensation Payment Date.

5.3      Deferred Pension Election

         Any Director, who had a Pension Benefit as of the Termination Date,
         made a single one-time election, to credit all of his Pension Benefit
         into (i) a Prime Rate Investment Account or (ii) a Phantom Stock
         Investment Account. Upon the Director's termination from the Board,
         such Pension Benefit and accumulated investment return held in the
         Director's Deferred Compensation Accounts shall be distributed to the
         Director in accordance with the Director's Distribution Election made
         in accordance with Section 5.4(b) and the provisions of Section 7.

5.4      Distribution Election

         (a)      Except as set forth in Section 5.4(b), prior to the initial
                  establishment of a Deferred Compensation Account for a
                  Director, the Director must elect that upon termination from
                  the Board of Directors the values and quantities held in the
                  Directors Deferred Compensation Accounts be distributed to the
                  Director, pursuant to the provisions of Section 7, in a lump
                  sum or in a series of annual installments not to exceed ten
                  (10). The time for the commencement of distribution shall not
                  be later than the first day of the month coinciding with or
                  next following the second anniversary of termination of Board
                  membership.

         (b)      Any Director who made a Deferred Pension Election in
                  accordance with Section 5.3 made a Distribution Election at
                  the time the Deferred Pension Election was made, attributable
                  to the Pension Benefit and any accumalated investment return.

         (c)      Distribution Elections made under Sections 5.4 (a) and (b) are
                  irrevocable except that a Director may amend either or both
                  Distribution Elections then in effect not prior to the 390th
                  day or later than the 360th day prior to his termination of
                  Board membership.

5.5      Beneficiary Designation

         A Director or former Director may designate a beneficiary to receive
         distributions from the Plan in accordance with the provisions of
         Section 7 upon the death of the director. The beneficiary designation
         may be changed by a Director or former Director at any time, and
         without the consent of the prior beneficiary.

5.6      Form of Election

         All elections pursuant to the provisions of this Section 5 of the Plan
         shall be made in writing to the Secretary or Assistant Secretary of the
         Company on a form or forms available upon request of the Secretary or
         Assistant Secretary.


<PAGE>


                                    SECTION 6

                                    Accounts

6.1      Prime Rate Investment Account

         A Prime Rate Investment Account shall be established for each Director
         electing deferral or investment of Cash Compensation at the Prime
         Interest Rate. The amount directed by the Director to such account
         shall be credited to it as of the Pension Benefit Investment Date or
         Compensation Payment Date, as applicable, and credited thereafter with
         interest computed using the Prime Interest Rate. Interest shall be
         computed from the date such compensation is credited to the account and
         compounded quarterly at the end of each calendar quarter. The Prime
         Interest Rate in effect on the first day of a calendar quarter shall be
         deemed the Prime Interest Rate in effect for that entire quarter.
         Interest shall accrue and compound on any balance until the amount
         credited to the account is fully distributed.

6.2      Phantom Stock Investment Account

         The Phantom Stock Investment Account established for each Director
         electing deferral of Cash Compensation for investment at the Common
         Stock investment rate shall be credited with the number of shares
         (including fractional shares rounded to the nearest ten-thousandth) of
         Common Stock which could have been purchased on the Pension Benefit
         Investment Date or the Compensation Payment Date, as applicable, as
         determined by dividing the applicable compensation by the Market Value
         on such date. On the date of the payment of dividends on the Common
         Stock, the Director's Phantom Stock Investment Account shall be
         credited with additional shares (including fractional shares rounded to
         the nearest ten-thousandth) of Common Stock, as follows:

         (a)      In the case of cash dividends, such additional shares as would
                  have been purchased as of the Common Stock dividend record
                  date as if the credited shares had been outstanding on such
                  date and dividends reinvested thereon under the Southern
                  Investment Plan;

         (b)      In the case of dividends payable in property other than cash
                  or Common Stock, such additional shares as could be purchased
                  at the Market Value as of the date of payment with the fair
                  market value of the property which would have been payable if
                  the credited shares had been outstanding; and

         (c)      In the case of dividends payable in Common Stock, such
                  additional shares as would have been payable on the credited
                  shares as if they had been outstanding.

6.3      Deferred Stock Account

         (a)      A Director's Deferred Stock Account will be credited:

                  (i)      with the number of shares of Common Stock (rounded to
                           the nearest ten thousandth of a share) determined by
                           dividing the amount of Cash Compensation subject to
                           deferral or investment in the Deferred Stock Account
                           by the average price paid by the Trustee of the
                           Deferred Stock Trust for shares of Common Stock with
                           respect to the Pension Benefit Investment Date or the
                           Compensation Payment Date, as applicable, as reported
                           by the Trustee, or, if the Trustee shall not at such
                           time purchase any shares of Common Stock, by the
                           Market Value on such date;

                  (ii)     as of the date on which Stock Retainer is paid, the
                           shares of Common Stock payable to the Director as his
                           Stock Retainer; and

                  (iii)    as of each date on which dividends are paid on the
                           Common Stock, with the number of shares of Common
                           Stock (rounded to the nearest ten thousandth of a
                           share) determined by multiplying the number of shares
                           of Common Stock credited in the Director's Deferred
                           Stock Account on the dividend record date, by the
                           dividend rate per share of Common Stock, and dividing
                           the product by the price per share of Common Stock
                           attributable to the reinvestment of dividends on the
                           shares of Common Stock held in the Deferred Stock
                           Trust on the applicable dividend payment date or, if
                           the Trustee of the Deferred Stock Trust has not
                           reinvested in shares of Common Stock on the
                           applicable dividend reinvestment date, the product
                           shall be divided by the Market Value on the dividend
                           payment date.

         (b)      If Southern enters into transactions involving stock splits,
                  stock dividends, reverse splits or any other recapitalization
                  transactions, the number of shares of Common Stock credited to
                  a Director's Deferred Stock Account will be adjusted (rounded
                  to the nearest ten thousandth of a share) so that the
                  Director's Deferred Stock Account reflects the same equity
                  percentage interest in Southern after the recapitalization as
                  was the case before such transaction.

         (c)      If at least a majority of Southern's stock is sold or
                  exchanged by its shareholders pursuant to an integrated plan
                  for cash or property (including stock of another corporation)
                  or if substantially all of the assets of Southern are disposed
                  of and, as a consequence thereof, cash or property is
                  distributed to Southern's shareholders, each Director's
                  Deferred Stock Account will, to the extent not already so
                  credited under this Section 6.3, be (i) credited with the
                  amount of cash or property receivable by a Southern
                  shareholder directly holding the same number of shares of
                  Common Stock as is credited to such Director's Deferred Stock
                  Account and (ii) debited by that number of shares of Common
                  Stock surrendered by such equivalent Southern shareholder.

         (d)      Each Director who has a Deferred Stock Account also shall be
                  entitled to provide directions to the Trust Administrator to
                  cause such committee to similarly direct the Trustee of the
                  Deferred Stock Trust to vote, on any matter presented for a
                  vote to the shareholders of Southern, that number of shares of
                  Common Stock held by the Deferred Stock Trust equivalent to
                  the number of shares of Common Stock credited to the
                  Director's Deferred Stock Account. Such committee shall
                  arrange for distribution to all Directors in a timely manner
                  of all communications directed generally to the Southern
                  shareholders as to which their votes are solicited.

                                    SECTION 7

                                  Distributions

7.1      Upon termination of a Director's membership on the Board, the amount
         credited to a Director's Deferred Compensation Accounts will be paid to
         the Director or his beneficiary, as applicable. The amount credited to
         a Director's Prime Rate Investment Account and Phantom Stock Investment
         Account shall be paid in cash and the amount credited to his Deferred
         Stock Account shall, except as otherwise provided in Section 6.3(c),
         Section 9.5, or to the extent the Company is otherwise, in the
         reasonable judgment of the Committee, precluded from doing so, be paid
         in shares of Common Stock (with any fractional share interest therein
         paid in cash to the extent of the then Market Value thereof). Such
         payments shall be from the general assets of the Company (including the
         Deferred Cash Trust and the Deferred Stock Trust) in accordance with
         this Section 7.

7.2      Unless other arrangements are specified by the Committee on a uniform
         and nondiscriminatory basis, deferred amounts shall be paid in the form
         of (i) a lump sum payment, or (ii) in approximately equal annual
         installments, as elected by the Director pursuant to the provisions of
         Section 5.4. Such payments shall be made (or shall commence) as soon as
         practicable following the termination of Board membership or, if so
         elected in the Distribution Election, up to twenty-four (24) months
         following such termination.

         In the event a Director elected to receive the balance of his Deferred
         Compensation Accounts in a lump sum, distribution shall be made on the
         first day of the month selected by the Director on his Distribution
         Election, or as soon as reasonably possible thereafter. If the Director
         elected to receive annual installments, the first payment shall be made
         on the first day of the month selected by a Director, or as soon as
         reasonably possible thereafter, and shall be equal to the balance in
         the Director's Deferred Compensation Accounts on such date divided by
         the number of annual installment payments. Each subsequent annual
         payment shall be an amount equal to the balance in the Director's
         Deferred Compensation Accounts on the date of payment divided by the
         number of remaining annual payments and shall be paid on the
         anniversary of the preceding date of payment. The Market Value of any
         shares of Common Stock credited to a Director's Phantom Stock
         Investment Account shall be determined as of the twenty-fifth (25th)
         day of the month immediately preceding the date of any lump sum or
         installment distribution. Notwithstanding a Director's election to
         receive his Deferred Compensation Account Balance in installments, the
         Committee, in its sole discretion upon request of the Director or his
         legal representative, may accelerate the payment of any such
         installments for cause.

         Upon the death of a Director, or a former Director prior to the payment
         of all amounts credited to the Director's Deferred Compensation
         Accounts, the unpaid balance shall be paid in the sole discretion of
         the Committee (i) in a lump sum to the designated beneficiary of such
         Director or former Director within thirty (30) days of the date of
         death (or as soon as reasonably possible thereafter) or (ii) in
         accordance with the Distribution Election made by such Director or
         former Director. In the event a beneficiary designation has not been
         made, or the designated beneficiary is deceased or cannot be located,
         payment shall be made to the estate of the Director or former Director.
         The Market Value of any shares of Common Stock credited to a Director's
         Phantom Stock Investment Account shall be determined as of the
         twenty-fifth (25th) day of the month immediately preceding the date of
         any lump sum or installment distribution.


<PAGE>


                                    SECTION 8

                 Change in Control and Other Special Provisions

8.1      Notwithstanding any other terms of the Plan to the contrary, following
         a Southern Change in Control or a Company Change in Control, the
         provisions of this Section 8 shall apply to the payment of benefits
         under the Plan with respect to any Director who is a Participant on
         such date.

8.2      The Deferred Cash Trust and the Deferred Stock Trust (collectively
         "Trusts") have been established to hold assets of the Participating
         Companies under certain circumstances as a reserve for the discharge of
         the Company's obligations under the Plan. In the event of a Preliminary
         Change in Control of Southern or the Company, the Company shall be
         obligated to immediately contribute such amounts to the Trusts as may
         be necessary to fully fund all benefits payable under the Plan in
         accordance with the procedures set forth in Section 8.3 hereof. In
         addition, in order to provide the added protections for certain
         individuals in accordance with Paragraph 7(c) of the Trust, the Company
         may fund the Trusts prior to a Preliminary Change in Control of
         Southern or the Company in accordance with the terms of the Trusts. All
         assets held in the Trusts remain subject only to the claims of the
         Participating Companies' general creditors whose claims against the
         Participating Companies are not satisfied because of the Participating
         Companies' bankruptcy or insolvency (as those terms are defined in the
         Trust). No Participant has any preferred claim on, or beneficial
         ownership interest in, any assets of the Trusts before the assets are
         paid to the Participant and all rights created under the Trusts, as
         under the Plan, are unsecured contractual claims of the Participant
         against the Company.

8.3      As soon as practicable following either a Preliminary Change in Control
         of Southern or of the Company, the Company shall contribute an amount
         based upon the funding strategy adopted by the Trust Administrator
         necessary to fulfill the Company's obligations pursuant to this Section
         8. In the event of a dispute over such actuary's determination, the
         Company and any complaining Participant(s) shall refer such dispute to
         an independent, third party actuarial consultant, chosen by the Company
         and such Participant. If the Company and the Participant cannot agree
         on an independent, third party actuarial consultant, the actuarial
         consultant shall be chosen by lot from an equal number of actuaries
         submitted by the Company and the applicable Trustee. Any such referral
         shall only occur once in total and the determination by the third-party
         actuarial consultant shall be final and binding upon both parties. The
         Company shall be responsible for all of the fees and expenses of the
         independent actuarial consultant.

8.4      In the event of a Southern Change in Control or a Company Change in
         Control, notwithstanding anything to the contrary in the Plan, upon
         termination as a Director, that amount in the Deferred Compensation
         Plan Account(s) of a Participant who was a Director determined as of
         such Change in Control shall be paid out in a lump sum if such
         Participant makes an election pursuant to procedures established by the
         Trust Administrator, in its sole and absolute discretion. If no such
         election is made, the Director shall receive payment of his Accounts
         solely in accordance with Section 7.

                                    SECTION 9

                               General Provisions

9.1      In the event that the Company shall decide to establish an advance
         accrual reserve on its books against the future expense of payments
         from any Deferred Compensation Accounts, such reserve shall not under
         any circumstances be deemed to be an asset of this Plan but, at all
         times, shall remain a part of the general assets of the Company,
         subject to claims of the Company's creditors.

9.2      A person entitled to any amount under this Plan shall be a general
         unsecured creditor of the Company with respect to such amount.
         Furthermore, a person entitled to a payment or distribution with
         respect to a Deferred Compensation Account shall have a claim upon the
         Company only to the extent of the balance in his Deferred Compensation
         Accounts.

9.3      All commissions, fees, and expenses that may be incurred in operating
         the Plan will be paid by the Company.

9.4      The Company will pay its prorated share of all commissions, fees, and
         expenses that may be incurred in operating any trust(s) established
         under the Plan (including the Deferred Stock Trust and the Deferred
         Cash Trust).

9.5      Notwithstanding any other provision of this Plan: (i) elections under
         this Plan may only be made by Directors while they are directors of the
         Company; (with the exception of the designation of beneficiaries) and
         (ii) distributions otherwise payable to a Director in the form of
         Common Stock shall be delayed and/or instead paid in cash in an amount
         equal to the fair market value thereof if such payment in Common Stock
         would violate any federal or State securities laws (including Section
         16(b) of the Securities Exchange Act of 1934, as amended) and/or rules
         and regulations promulgated thereunder.

9.6      Directors, their legal representatives and their beneficiaries shall
         have no right to anticipate, alienate, sell, assign, transfer, pledge
         or encumber their interests in the Plan, nor shall such interests be
         subject to attachment, garnishment, levy or execution by or on behalf
         of creditors of the Directors or of their beneficiaries.

                                   SECTION 10

                                 Administration

Subject to the express provisions of the Plan, the Committee shall have the
exclusive right to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.

The Committee may delegate to such officers, employees, or departments of the
Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.

                                   SECTION 11

                    Amendment, Termination and Effective Date

11.1     Amendment of the Plan

         Except for the provisions of Section 8, which may not be amended
         following a Southern Change in Control or Company Change in Control,
         and subject to the provisions of Section 11.3, the Plan may be wholly
         or partially amended or otherwise modified at any time by written
         action of the Board of Directors.

11.2     Termination of the Plan

         Subject to the provisions of Section 11.3 herein, the Plan may be
         terminated at any time by written action of the Board of Directors.


<PAGE>


11.3     No Impairment of Benefits

         Notwithstanding the provisions of Sections 11.1 and 11.2, herein no
         amendment to or termination of the Plan shall impair any rights to
         benefits that have accrued hereunder.

11.4     Governing Law

         This Plan shall be construed in accordance with and governed by the
laws of the State of Maine.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective January
1, 2000, has been executed pursuant to resolutions of the Board of Directors of
Gulf Power Company, this 16th day of October, 2000.

                               GULF POWER COMPANY

                               By: ________________________________
                                   Travis J. Bowden
                                   President and Chief Executive Officer

Attest:

By: ___________________________
      Linda G. Malone
      Assistant Secretary

<PAGE>



                                 FIRST AMENDMENT
                           TO THE AMENDED AND RESTATED
                   DEFERRED COMPENSATION PLAN FOR DIRECTORS OF

                               GULF POWER COMPANY

         WHEREAS, Gulf Power Company ("Company") established the Amended and
Restated Deferred Compensation Plan for Directors of Gulf Power Company ("Plan")
to provide a method for a Director to defer payment of his Director's
compensation until a date following the termination of his membership on the
Board; and

         WHEREAS, pursuant to the authority granted to it under Section 11.1 of
the Plan, the Company desires to amend the Plan to provide for an additional
bookkeeping account that is credited with shares of stock, other than Common
Stock, that is paid as a dividend on shares of Common Stock.

         NOW THEREFORE, effective January 1, 2001, the Plan is hereby amended in
the following particulars:

         By amending Section 1.12 to read in its entirety:

1.12     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, the Deferred Stock
         Account and/or the Stock Dividend Investment Account.

         By renumbering Sections 1.40 through 1.43 to Sections 1.41 through
1.44.

         By adding new Section 1.40 to read in its entirety:

1.40     "Stock Dividend Investment Account" means the bookkeeping account(s)
         established pursuant to section 6.4 on behalf of a Director that is
         credited with shares of stock, other than Common Stock, paid as a
         dividend on shares of Common Stock.

         By adding new Section 6.4 to read in its entirety:

6.4      Stock Dividend Investment Account

(a)      A Director's Stock Dividend Investment Account will be credited as of
         the date on which a dividend is paid to the Company's common
         stockholders in stock other than Common Stock with the number of shares
         of the other corporation's stock receivable by a Southern stockholder
         directly holding the same number of shares of Common Stock as is
         credited to such Director's Deferred Stock Account.

(b)      Each Director who has a Stock Dividend Investment Account also shall be
         entitled to provide directions to the Trust Administrator to similarly
         direct the Trustee of the Deferred Stock Trust to vote on any matter
         presented for a vote to the applicable corporation's shareholders, that
         number of shares of the applicable corporation's common stock held by
         the Deferred Stock Trust equivalent to the number of shares credited to
         the Director's Stock Dividend Investment Account. The Trust
         Administrator shall arrange for distribution to all Directors in a
         timely manner of all communications directed generally to the
         applicable corporation's shareholders as to which their votes are
         solicited.

         By adding new Section 7.1(c) to read in its entirety:

(c)      the amount credited to a Stock Dividend Investment Account shall,
         except as otherwise provided in section 9.5, be paid from the assets in
         the Deferred Stock Trust in shares of the applicable corporation,
         however if there is not a sufficient number of shares held in the
         Trust, the remainder shall be paid in cash based upon the average of
         the high and low price of the stock as reported in the Wall Street
         Journal on the business day immediately proceeding the distribution
         date.

         IN WITNESS WHEREOF, the First Amendment has been executed by a duly
authorized officer of Gulf Power Company pursuant to resolutions of the Board of
Directors of the Company, this 27th day of October, 2000.

                               GULF POWER COMPANY


                               By:
                                  -------------------------------
                                        Travis J. Bowden

                               Its:     President and CEO
                                   ------------------------------

ATTEST:

By:
   --------------------------------------------------
         W. E. Tate

Its:     Secretary
    -------------------------------------------------


</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>54
<FILENAME>x10e30.txt
<TEXT>



                                 FIRST AMENDMENT
                           TO THE AMENDED AND RESTATED
                   DEFERRED COMPENSATION PLAN FOR DIRECTORS OF

                            MISSISSIPPI POWER COMPANY

         WHEREAS, Mississippi Power Company ("Company") established the Amended
and Restated Deferred Compensation Plan for Directors of Mississippi Power
Company ("Plan") to provide a method for a Director to defer payment of his
Director's compensation until a date following the termination of his membership
on the Board; and

         WHEREAS, pursuant to the authority granted to it under Section 11.1 of
the Plan, the Company desires to amend the Plan to provide for an additional
bookkeeping account that is credited with shares of stock, other than Common
Stock, that is paid as a dividend on shares of Common Stock.

         NOW THEREFORE, effective January 1, 2001, the Plan is hereby amended in
the following particulars:

         By amending Section 1.12 to read in its entirety:

1.12     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, the Deferred Stock
         Account and/or the Stock Dividend Investment Account.

         By renumbering Sections 1.40 through 1.43 to Sections 1.41 through
1.44.

         By adding new Section 1.40 to read in its entirety:

1.40     "Stock Dividend Investment Account" means the bookkeeping account(s)
         established pursuant to section 6.4 on behalf of a Director that is
         credited with shares of stock, other than Common Stock, paid as a
         dividend on shares of Common Stock.

         By adding new Section 6.4 to read in its entirety:

6.4      Stock Dividend Investment Account

(a)      A Director's Stock Dividend Investment Account will be credited as of
         the date on which a dividend is paid to the Company's common
         stockholders in stock other than Common Stock with the number of shares
         of the other corporation's stock receivable by a Southern stockholder
         directly holding the same number of shares of Common Stock as is
         credited to such Director's Deferred Stock Account.

(b)      Each Director who has a Stock Dividend Investment Account also shall be
         entitled to provide directions to the Trust Administrator to similarly
         direct the Trustee of the Deferred Stock Trust to vote on any matter
         presented for a vote to the applicable corporation's shareholders, that
         number of shares of the applicable corporation's common stock held by
         the Deferred Stock Trust equivalent to the number of shares credited to
         the Director's Stock Dividend Investment Account. The Trust
         Administrator shall arrange for distribution to all Directors in a
         timely manner of all communications directed generally to the
         applicable corporation's shareholders as to which their votes are
         solicited.

         By adding new Section 7.1(c) to read in its entirety:

(c)      the amount credited to a Stock Dividend Investment Account shall,
         except as otherwise provided in section 9.5, be paid from the assets in
         the Deferred Stock Trust in shares of the applicable corporation,
         however if there is not a sufficient number of shares held in the
         Trust, the remainder shall be paid in cash based upon the average of
         the high and low price of the stock as reported in the Wall Street
         Journal on the business day immediately proceeding the distribution
         date.

         IN WITNESS WHEREOF, the First Amendment has been executed by a duly
authorized officer of Mississippi Power Company pursuant to resolutions of the
Board of Directors of the Company, this 25th day of October, 2000.

                            MISSISSIPPI POWER COMPANY

                            By:
                               -----------------------------------------------
                                  Michael W. Southern
                            Its: Vice President, Secretary, Treasurer and CFO

ATTEST:

By:
   --------------------------------------------------
         Vicki L. Pierce

Its:     Assistant Secretary
    -------------------------------------------------

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>55
<FILENAME>x10f13.txt
<TEXT>

                                                               Exhibit 10(f)13

                     SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

                                       OF

                       SAVANNAH ELECTRIC AND POWER COMPANY

                 Amended and Restated Effective October 26, 2000


<PAGE>



                                TABLE OF CONTENTS

ARTICLE I       ADOPTION AND PURPOSE......................................1
         1.1    Adoption of Plan..........................................1
         1.2    Purpose...................................................1

ARTICLE II      DEFINITIONS...............................................1
         2.1    Accrued SERP Retirement Benefit...........................1
         2.2    Assumed Pension Plan Retirement Benefit....................
         1

         2.3    Change in Control Benefit Plans Policy....................2
         2.4    Committee.................................................2
         2.5    Company...................................................2
         2.6    Credited Service..........................................2
         2.7    Designated Beneficiary....................................2
         2.8    Disability Benefit........................................2
         2.9    Disability Date...........................................2
         2.10   Early Retirement Date.....................................2
         2.11   Early Retirement Factor...................................2
         2.12   Eligible Spouse...........................................3
         2.13   FICA Adjustment...........................................3
         2.14   Final Average Salary......................................3
         2.15   Normal Retirement Date....................................3
         2.16   Participant...............................................4
         2.17   Plan......................................................4
         2.18   Postponed Retirement Date.................................4
         2.19   Salary....................................................4
         2.20   SEPCO Schedule............................................4
         2.21   SERP Death Benefit........................................4
         2.22   SERP Disability Benefit...................................4
         2.23   SERP Retirement Benefit...................................4
         2.24   Severance Date............................................4
         2.25   Social Security Amount....................................5
         2.26   Southern Pension Plan.....................................5
         2.27   Total Disability and Totally Disabled.....................5
         2.28   Vested Percentage.........................................5

ARTICLE III     ELIGIBILITY AND PARTICIPATION.............................5
         3.1    Eligibility...............................................5
         3.2    Participation.............................................5

ARTICLE IV      RETIREMENT BENEFITS.......................................6
         4.1    Normal Retirement.........................................6
         4.2    Early Retirement..........................................6
         4.3    Postponed Retirement......................................7
         4.4    Commencement and Form of Payment..........................7
         4.5    Re-employment of Retired Participant......................7
         4.6    Transfers  between  Companies  and Other  Special
                Events....................................................7
         4.7    Effect of Other Arrangement on Plan Benefits..............9
         4.8    Effect of Certain  Pre-Retirement  Death  Benefit
                Elections................................................10


ARTICLE V       PRERETIREMENT DEATH BENEFITS.............................10
         5.1    Death Benefit............................................10
         5.2    Payment..................................................10

ARTICLE VI      DISABILITY BENEFITS......................................11
         6.1    Disability Prior to Retirement Date......................11
         6.2    Benefit at Retirement Date...............................12

ARTICLE VII     SEVERANCE BENEFITS.......................................12
         7.1    Eligibility..............................................12
         7.2    Participant Benefit......................................12
         7.3    Spousal Benefit..........................................13
         7.4    Resumption of Employment After Severance.................13

ARTICLE VIII    CHANGE IN CONTROL........................................13

ARTICLE IX      ADMINISTRATIVE COMMITTEE.................................14
         9.1    Authority................................................14
         9.2    Voting...................................................14
         9.3    Records..................................................14
         9.4    Liability................................................14

ARTICLE X       AMENDMENT AND TERMINATION................................14
         10.1   Amendment and Termination................................14

ARTICLE XI      MISCELLANEOUS............................................14
         11.1   Non-Alienation of Benefits...............................14
         11.2   No Trust Created.........................................15
         11.3   No Employment Agreement..................................15
         11.4   Binding Effect...........................................15
         11.5   Suicide..................................................15
         11.6   Claims for Benefits......................................15
         11.7   Recourse Against Deferred Compensation Trust.............16
         11.8   Post-Retirement Adjustments..............................16
         11.9   Entire Plan..............................................16
         11.10  Merger or Consolidation..................................16
         11.11  Age Differential of Spouse...............................16

ARTICLE XII     CONSTRUCTION.............................................17
         12.1   Governing Law............................................17
         12.2   Gender...................................................17
         12.3   Headings, etc............................................17
         12.4   Children.................................................17
         12.5   Action...................................................17


<PAGE>




                                    ARTICLE I

                              ADOPTION AND PURPOSE

         1.1 Adoption of Plan. The Company previously established the
Supplemental Executive Retirement Plan of Savannah Electric and Power Company,
effective as of January 1, 1984. The Plan was subsequently amended and restated
by the Company, effective as of January 1, 1987, was again amended and restated,
effective as of January 1, 1996 and was subsequently amended three more times.
It was then amended and restated effective January 1, 1998. The Company hereby
again amends and restates the Supplemental Executive Retirement Plan of Savannah
Electric and Power Company, as hereinafter stated, to be effective as of October
26, 2000.

         1.2 Purpose. This Plan is designed and implemented for the purpose of
enhancing the earnings and growth of Savannah Electric and Power Company by
providing to the limited group of management employees largely responsible for
such earnings and long-term growth deferred compensation in the form of
supplemental retirement income benefits, thereby increasing the incentive of
such key management employees to make the Company more profitable. The benefits
are normally payable to Participants upon retirement, disability or death. The
terms of the benefits operate in conjunction with the Participant's benefits
payable under The Southern Company Pension Plan and the Southern Company
Services, Inc. Long Term Disability Plan, as adopted by Savannah Electric and
Power Company, and are designed to supplement such benefits and provide the
Participant with additional financial security upon retirement, disability or
death.

                                   ARTICLE II

                                   DEFINITIONS

         Unless otherwise clearly required by the context, the terms used herein
shall have the following meanings:

         2.1 "Accrued SERP Retirement Benefit" shall mean the amount determined
by multiplying the Participant's SERP Retirement Benefit times a fraction (not
exceeding 1.0), the numerator of which is the number of years and months of
Credited Service completed on the Participant's Early Retirement Date, Severance
Date or any other date, whichever is applicable, and the denominator of which
shall be the greater of (a) the number of years and months of Credited Service
which the Participant would have completed upon attainment of age 62 if he had
remained employed until such time or (b) 15 years of Credited Service.

         2.2 "Assumed Pension Plan Retirement Benefit" shall mean the annual
retirement benefit a Participant would receive under the Southern Pension Plan
(determined after any reductions for early retirement but before adjustments
attributable to elections of optional forms of benefit and/or pre-retirement
survivor annuities), calculated with the following assumptions:

                  (a) A married Participant elects to receive his retirement
         benefit on a life and seventy-five percent (75%) joint survivor basis.

                  (b) A single Participant elects to receive his retirement
         benefit on a life and ten-year certain basis.

         The calculation of the above-referenced forms of payment shall be done
utilizing the assumptions set forth in Section 1.15 of the SEPCO Schedule.

         2.3 "Change in Control Benefit Plans Policy" shall mean the change in
control benefit plans policy for Company only plans, as approved by the Board of
Directors of the Company, as it may be amended from time to time in accordance
with the provisions therein

         2.4 "Committee" shall mean the Administrative Benefits Committee
appointed by the Board of Directors of the Company to administer the Plan.

         2.5 "Company" shall mean Savannah Electric and Power Company and any
successor to Savannah Electric and Power Company by merger, purchase or
otherwise.

         2.6 "Credited Service" shall have the same meaning as set forth in the
Southern Pension Plan.

         2.7 "Designated Beneficiary" shall mean one or more beneficiaries, as
designated by a Participant in writing delivered to the Committee, to whom
certain pre-retirement death benefit payments shall be made pursuant to the
provisions of Article V. In the event no such written designation is made by the
Participant or if such beneficiary shall not be living or in existence at the
time for commencement of payment, the Participant shall be deemed to have
designated his estate as such beneficiary.

         2.8 "Disability Benefit" shall mean a Totally Disabled Participant's
actual annual disability benefit paid pursuant to the Southern Company Services,
Inc. Long Term Disability Plan, as adopted by Savannah Electric and Power
Company.

         2.9 "Disability Date" shall be the day first following the expiration
of the "Waiting Period" as that term is set forth in the Southern Company
Services, Inc. Long Term Disability Plan, as adopted by Savannah Electric and
Power Company.

         2.10 "Early Retirement Date" shall have the same meaning as set forth
in the Southern Pension Plan.

         2.11 "Early Retirement Factor" shall be for a Participant who has
attained age 55 and retires a fraction not exceeding 1.0, the numerator of which
shall be the number of years and months of Credited Service which the
Participant would have completed at the commencement of benefits from this Plan
if he had remained employed until such time and the denominator of which shall
be the Participant's number of years and months of Credited Service which he
would have completed at attainment of age 62 if he had remained employed until
such age. In addition to the foregoing, the Early Retirement Factor shall
include for a Participant who elects to retire on or after attainment of age 50
but before attainment of age 55 (in accordance with the terms of the Southern
Pension Plan) a reduction of one-third of one percent (0[OBJECT OMITTED]%) for
each month, by which the Participant's age at the time payment commences
precedes the Participant's attainment of age 55.

         2.12 "Eligible Spouse" shall mean the spouse of a Participant who under
the laws of the state where the marriage was contracted, is deemed married to
that Participant on the date on which the payments from this Plan are to begin
to the Participant, except that for purposes of Article V, Eligible Spouse shall
mean a person who is married to a Participant for a period of at least twelve
months prior to his death.

         2.13 "FICA Adjustment" shall mean the benefit that is paid under the
terms of this Plan except that the amount of the monthly benefit will be
modified at the appropriate time based on the commencement of payments as
follows. Payments shall be adjusted to include three components:

                  (a) the amount necessary to pay the tax due under the Federal
         Insurance Contributions Act with respect to the benefit determined upon
         eligibility to commence payments (or such other appropriate "resolution
         date" as defined under Treasury Regulation ss. 31.3121(v)-2) calculated
         in accordance with the applicable provisions of this Plan;

                  (b) the amount estimated to pay the federal and state income
         tax withholding liability due on the amount paid under Paragraph (a)
         above; and

                  (c) an adjusted monthly benefit determined on an actuarially
         equivalent basis in accordance with the terms of the [Pension Plan]
         which takes into account the amounts paid under Paragraphs (a) and (b)
         above and taking into account the form of benefit elected by the
         Participant under this Plan.

Upon adjustment, the remaining monthly payment shall equal the amount described
in Paragraph (c) above.

         2.14 "Final Average Salary" shall mean a Participant's average yearly
Salary during the 36 months of highest compensation within the 120 month period
immediately preceding the earliest to occur of the Participant's Severance Date,
Disability Date, date of death, Early Retirement Date, Normal Retirement Date,
or Postponed Retirement Date, whichever is applicable. For purposes of the
preceding sentence, effective January 1, 1994, the determination of the 36
highest consecutive months with the 120 month period shall only include those
months in which the Participant receives Salary. In the event the Participant
does not have at least 36 months of regular employment with the Company, Final
Average Salary shall mean the average yearly Salary for the Participant's total
number of calendar months of employment; provided, however, that if a
Participant dies during Total Disability, Final Average Salary shall be
determined for the appropriate months immediately preceding the Participant's
Disability Date.

         2.15 "Normal Retirement Date" shall mean the first day of the calendar
month following the birthday on which a Participant attains the age of 65.

         2.16 "Participant" shall mean an employee or former employee of the
Company who is eligible and is participating in the Plan in accordance with
Article III of this Plan.

         2.17 "Plan" shall mean the Supplemental Executive Retirement Plan of
Savannah Electric and Power Company, as contained herein and as may be amended
from time to time hereafter.

         2.18 "Postponed Retirement Date" shall mean the first day of the
calendar month on which a Participant actually retires after his Normal
Retirement Date.

         2.19 "Salary" shall mean the annual compensation, excluding any long
term or short term incentive plan compensation, paid by the Company to a
Participant plus compensation, other than short term or long term incentive
amounts, deferred under any defined compensation plan or arrangement (including
without limitation, the Deferred Compensation Plan for Key Employees of Savannah
Electric and Power Company).

         2.20 "SEPCO Schedule" shall mean that same named schedule attached to
the Southern Pension Plan, as may be amended from time to time.

         2.21 "SERP Death Benefit" shall mean an amount equal to fifty-two and
one-half percent (52 1/2%) of the Participant's Final Average Salary, reduced by
both of the following:

                  (a) the Participant's Southern Pension Plan pre-retirement
         death benefit, if any (determined without respect to adjustments
         attributable to elections under Sections 7.1(a) or 7.6(a) of the
         Southern Pension Plan); and

                  (b) fifty percent (50%) of the Participant's Social Security
         Amount.

         2.22 "SERP Disability Benefit" shall mean an amount equal to seventy
percent (70%) of the Participant's Final Average Salary, reduced by both of the
following:

                  (a) the Participant's Disability Benefit, if any; and

                  (b) the Participant's Social Security Amount.

         2.23 "SERP Retirement Benefit" shall mean an amount equal to seventy
percent (70%) of the Participant's Final Average Salary, reduced by both of the
following:

                  (a) the Participant's Assumed Pension Plan Retirement Benefit;
         and

                  (b) fifty percent (50%) of the Participant's Social Security
         Amount.

         2.24 "Severance Date" shall mean the date a Participant leaves the
employ of the Company other than for retirement, Total Disability or death.

         2.25 "Social Security Amount" shall have the same meaning as set forth
in Section 1.29 of the SEPCO Schedule.

         2.26 "Southern Pension Plan" shall mean The Southern Company Pension
Plan, as amended and restated effective January 1, 1997, as may be amended from
time to time.

         2.27 "Total Disability and Totally Disabled" shall have the same
meaning as set forth in the Southern Company Services, Inc. Long Term Disability
Plan, as adopted by Savannah Electric and Power Company.

         2.28 "Vested Percentage" shall mean a Participant's vested percentage
in his benefits under the Plan as determined in accordance with the following
schedule:

       Years of Credited
   Service at Severance Date                        Vested Percentage
   -------------------------                        -----------------
               6                                           10%
               7                                           20%
               8                                           30%
               9                                           40%
               10                                          50%
               11                                          60%
               12                                          70%
               13                                          80%
               14                                          90%
           15 or more                                      100%

Notwithstanding anything to the contrary above, the Vested Percentage of a
Participant who has attained age 60 shall be 100%.

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

         3.1 Eligibility. The Committee shall have the sole discretion to
determine the employees or former employees that are eligible to become or
remain Participants, as the case may be, in accordance with the purposes of the
Plan. Notwithstanding the preceding sentence, on and after January 1, 1998, the
Committee shall not authorize the participation of any employee in the Plan
other than those employees who have Participant status on December 31, 1997. The
Committee may, however, authorize, in its sole discretion, former employees to
remain Participants.

         3.2 Participation. The Committee shall notify those employees selected
as Participants of their participation and resulting benefits.

                                   ARTICLE IV

                               RETIREMENT BENEFITS

         4.1 Normal Retirement.

                  (a) Participant Benefit. Upon retirement at his Normal
         Retirement Date, a Participant shall become entitled to receive an
         amount equal to 1/12th of the Participant's SERP Retirement Benefit,
         payable monthly during the Participant's lifetime.

                  (b) Spousal Benefit. Upon the death of a retired Participant
         who is either receiving or entitled to receive a Normal Retirement
         Benefit in accordance with Section 4.1(a), the surviving Eligible
         Spouse of such a Participant, if any, shall become entitled to receive
         an amount equal to 75% of the deceased Participant's Normal Retirement
         Benefit, payable monthly to the Eligible Spouse during her lifetime.

         4.2 Early Retirement.

                  (a) Participant Benefit. Upon retirement at his Early
         Retirement Date, a Participant shall become entitled to receive an
         amount equal to 1/12th of the Participant's Accrued SERP Retirement
         Benefit (as adjusted below, where applicable), payable monthly during
         the Participant's lifetime. For purposes of determining the
         Participant's Accrued SERP Retirement Benefit, 70% of Final Average
         Salary shall be reduced by the Early Retirement Factor when the
         Participant's retirement income under the Pension Plan commences prior
         to the Participant's attainment of age 62.

                  (b) Spousal Benefit. Upon the death of a retired Participant
         who is either receiving or entitled to receive an Early Retirement
         Benefit in accordance with Section 4.2(a), the surviving Eligible
         Spouse of such Participant, if any, shall become entitled to receive
         the benefit described in Section 4.2(b)(1) or (b)(2) below, whichever
         is applicable:

                                    (1) If the Participant was receiving his
                                    Early Retirement Benefit at the time of his
                                    death, his surviving Eligible Spouse, if
                                    any, shall receive a monthly amount equal to
                                    75% of the deceased Participant's actual
                                    Early Retirement Benefit, payable monthly to
                                    the Eligible Spouse during her lifetime.

                                    (2) If the Participant's death occurs prior
                                    to commencement of payment of his Early
                                    Retirement Benefit, his surviving Eligible
                                    Spouse, if any, shall receive a monthly
                                    amount equal to 75% of the deceased
                                    Participant's Early Retirement Benefit
                                    calculated as if payment of such
                                    Participant's Early Retirement Benefit had
                                    commenced at his date of death, payable
                                    monthly to the Eligible Spouse during her
                                    lifetime.

         4.3 Postponed Retirement.

                  (a) Participant Benefit. Upon retirement at a Postponed
         Retirement Date, a Participant shall become entitled to receive an
         amount equal to 1/12th of the Participant's SERP Retirement Benefit,
         payable monthly during the Participant's lifetime.

                  (b) Spousal Benefit. Upon the death of a retired Participant
         who is either receiving or entitled to receive a Postponed Retirement
         Benefit in accordance with Section 4.3(a), the surviving Eligible
         Spouse of such a Participant, if any, shall become entitled to receive
         an amount equal to 75% of the deceased Participant's Postponed
         Retirement Benefit, payable monthly to the Eligible Spouse during her
         lifetime.

         4.4 Commencement and Form of Payment. The payment of a Participant's
benefits under this Article IV taking into account the FICA Adjustment shall
commence at the same time as his retirement payments from the Southern Pension
Plan. All benefits payable to an Eligible Spouse under this Article IV shall
commence within 60 days of the Participant's death. The Participant may elect
any form of payment available under the Southern Pension Plan except for the
level income option coordinated with Social Security described in Section 5.5 of
the Southern Pension Plan. The calculation of the above-referenced forms of
payment shall be done utilizing the assumptions set forth in Section 1.15 of the
SEPCO Schedule.

         4.5 Re-employment of Retired Participant. A retired Participant who is
receiving or eligible to receive retirement benefits under this Article IV who
is re-employed by the Company shall not be eligible to resume participation in
the Plan.

         4.6 Transfers between Companies and Other Special Events. Except as
provided below, following a transfer of employment or after incurring certain
other enumerated events, the Participant shall not be entitled to or accrue any
benefits under the Plan except as provided in this Section 4.6.

                           (a) (1) In the event a Participant in the Plan incurs
                  one or more of the following adverse events prior to
                  commencement of payment of his benefits under the Plan but
                  after the Participant is eligible to retire as of an Early
                  Retirement Date, such Participant will be entitled to the
                  benefit described in Section 4.6(a)(2):

                                            (A) The Participant is involuntarily
                                    transferred to another subsidiary or
                                    affiliate of The Southern Company
                                    ("Transferee Company") on account of the
                                    functionalization of his job or on account
                                    of a merger or consolidation of the Company
                                    (including if such merger or consolidation
                                    constitutes a Change in Control as defined
                                    in the Change in Control Benefit Plans
                                    Policy) and for reasons other than for cause
                                    is terminated by the Transferee Company,
                                    demoted to a lower grade level position or
                                    incurs a salary reduction or freeze,
                                    provided he otherwise remains eligible to
                                    participate in this Plan as a key management
                                    level employee as determined in Article III;
                                    and

                                            (B) For reasons other than for
                                    cause, the Participant is terminated,
                                    demoted to a lower grade level position or
                                    incurs a salary reduction or freeze by the
                                    Company on account of the functionalization
                                    of his job, merger or consolidation of the
                                    Company (including if such merger or
                                    consolidation constitutes a Change in
                                    Control as defined in the Change in Control
                                    Benefit Plans Policy) or an announced
                                    restructuring of management level job
                                    positions, provided he otherwise remains
                                    eligible to participate in this Plan as a
                                    key management level employee as determined
                                    in Article III.

                                    (2) The Participant shall be entitled to a
                           benefit described in Section 4.1 as if he had
                           attained his Normal Retirement Date commencing upon
                           the later of age 55 or the first day of the month
                           first following his termination of employment from
                           the Transferee Company or Company, as applicable. In
                           the event a Participant elects to commence his
                           benefit prior to attainment of age 55, his benefit
                           shall be calculated as provided in Section 4.1 as if
                           he had attained his Normal Retirement Date but shall
                           be reduced by one-twelfth (1/12) of five percent (5%)
                           for each month the benefit commences prior to the
                           date the Participant would attain age 55.

                                    (3) For purposes of calculating any benefit
                           paid to a Participant pursuant to this Section
                           4.6(a), the Participant's Final Average Salary,
                           Social Security Amount, Assumed Pension Plan
                           Retirement Benefit and any other component of the
                           benefit formula under this Plan shall be determined
                           as of the Participant's date of termination from the
                           Company or, if later, from the Transferee Company.

                           (b) In the event a Participant in the Plan transfers
                  to a Transferee Company prior to commencement of payment of
                  his benefits under the Plan and subsequently retires from the
                  Transferee Company or another subsidiary or affiliate of The
                  Southern Company, the benefits to be paid to such Participant
                  under the Plan shall be the amount determined by multiplying
                  the amount determined in accordance with Section 4.6(b)(1)
                  times the amount determined in accordance with Section
                  4.6(b)(2) below.

                                    (1) Seventy percent (70%) of such
                           Participant's Final Average Salary reduced by both of
                           the following:

                                             (A) fifty percent (50%) of such
                                    Participant's Social Security Amount.

                                             (B) such Participant's Assumed
                                    Pension Plan Retirement Benefit as of the
                                    effective date of such transfer of
                                    employment.

                                    (2) The Participant's number of years and
                           months of Credited Service as of the effective date
                           of such transfer plus one year of Credited Service
                           for each year of subsequent employment at the other
                           subsidiary or affiliate of The Southern Company,
                           divided by the number of years and months of Credited
                           Service which the Participant will have completed at
                           age 62 if he remains employed until such age.

         For purposes of calculating any benefit paid a transferred Participant
pursuant to this Section 4.6(b), the Participant's Final Average Salary, Social
Security Amount, Assumed Pension Plan Retirement Benefit and any other such
component of the benefit formula under this Plan, except for Credited Service as
set forth in Section 4.6(b)(2) above, shall be determined as of the
Participant's date of transfer.

         If the transferred Participant retires from another subsidiary or
affiliate of The Southern Company or the Company on a date other than his Normal
Retirement Date, dies, becomes disabled or otherwise ceases to be employed by
another subsidiary or affiliate of The Southern Company or the Company, such
Participant, or surviving spouse in the event of the death of the Participant,
shall receive the benefit available under this Plan due upon the occurrence of
such event as if the Participant continued to accrue service under this Section
4.6(b). Any such alternative benefit shall be subject to all applicable
limitations, adjustments and reductions described in this Plan that apply in the
event that a Participant retires on a date other than his Normal Retirement
Date, dies, becomes disabled or otherwise terminates employment with the
Company, including, but not limited to, those set forth in Sections 4.2, 4.3 and
4.6 hereof and Articles V, VI and VII hereof.

         4.7 Effect of Other Arrangement on Plan Benefits. In the event a
Participant in the Plan enters into a supplemental benefit arrangement with the
Company or Transferee Company other than in accordance with this Plan, in the
sole discretion of the Chief Executive Officer of the Company or any comparable
successor thereto, the benefits to be paid to such Participant under this Plan
may be reduced on an actuarially equivalent basis by the benefits payable to
such Participant under the other supplemental benefit arrangement. The
determination as to whether there exists another supplemental benefit
arrangement shall be made by the Chief Executive Officer of the Company or any
comparable successor thereto in its sole discretion. Notwithstanding the above,
in no event shall a supplemental benefit arrangement include any arrangement
related to a "Change in Control" (as defined in the Change in Control Benefit
Plans Policy) which has been approved by the Board of Directors of the Company.

         4.8 Effect of Certain Pre-Retirement Death Benefit Elections. In the
event that a Participant elects a death benefit subject to a charge under
Section 7.4(a) of the Southern Pension Plan or Section 7.03(d) of the SEPCO
Schedule but does not die before commencing benefits under this Plan, such
Participant's benefit under this Article IV shall be calculated as if the
aforementioned election had not occurred.

                                    ARTICLE V

                          PRERETIREMENT DEATH BENEFITS

         5.1 Death Benefit.

                  (a) Upon the death of a Participant while employed or while
         receiving disability retirement benefits pursuant to Article 6.1
         hereof, prior to his retirement under Article IV, a pre-retirement
         death benefit shall be payable if the deceased Participant is survived
         by either an Eligible Spouse or children under age 21. The monthly
         death benefit described herein shall be an amount equal to 1/12th of
         the Participant's SERP Death Benefit.

                  (b) In the event that a Participant elects a death benefit
         subject to a charge under Section 7.4(a) of the Southern Pension Plan
         or Section 7.03(d) of the SEPCO Schedule and dies before commencing
         benefits under this Plan, the Designated Beneficiary's benefit under
         this Plan shall be calculated as if the aforementioned election had not
         occurred.

         5.2 Payment.

                  (a) If the deceased Participant is survived by an Eligible
         Spouse, the pre-retirement death benefit shall be paid monthly taking
         into account the FICA Adjustment to such Eligible Spouse during her
         lifetime. Notwithstanding the foregoing, if, upon the death of such
         Eligible Spouse, there be then living any children of the Participant
         under age 21, the pre-retirement death benefit described in Section 5.1
         shall be paid monthly to the Participant's Designated Beneficiary until
         the last such surviving child reaches age 21.

                  (b) If the deceased Participant is not survived by an Eligible
         Spouse but is survived by children under age 21, the pre-retirement
         death benefit described in Section 5. 1 shall be paid monthly taking
         into account the FICA Adjustment to the Participant's Designated
         Beneficiary until the last such surviving child reaches age 21.

                                   ARTICLE VI

                               DISABILITY BENEFITS

         6.1 Disability Prior to Retirement Date.

                  (a) Benefit. In the event of Total Disability prior to his
         Normal Retirement Date, the Participant shall become entitled to
         receive a disability retirement benefit commencing on his Disability
         Date. Such monthly disability retirement benefit shall be determined as
         of the date of the Participant's Disability Date and shall be equal to
         1/12th of the Participant's SERP Disability Benefit.

                  (b) Payment. Such disability benefits shall be payable monthly
         taking into account the FICA Adjustment to the Totally Disabled
         Participant until the earliest of the following dates:

                           (1) he resumes working;

                           (2) he refuses to submit to a medical examination or
                  a related series of examinations by a physician or physicians
                  acceptable to the Committee when such examination or related
                  series of examinations is requested by the Committee (but not
                  more often than semi-annually), to determine whether he is
                  eligible for continuation of his disability retirement
                  benefit. These examinations requested by the Committee shall
                  be at the expense of the Company;

                           (3) the Committee determines on the basis of a
                  medical examination herein authorized, or other evidence
                  obtained by said Committee that he has sufficiently recovered
                  to work;

                           (4) he dies;

                           (5) he elects to retire at his Early Retirement Date;
                  or

                           (6) he reaches his Normal Retirement Date.

                  (c) Re-employment of Disabled Participant. A Totally Disabled
         Participant who returns to regular active employment with the Company
         shall be considered to have been on an authorized leave of absence
         during the period he was disabled and, if he shall in due course become
         entitled to retirement benefits hereunder, the period of his Total
         Disability shall be included in his Credited Service and his Salary
         during such period of Total Disability shall be considered to have been
         at the rate of his annual salary in effect during the calendar year
         next preceding commencement of his Total Disability.

         6.2 Benefit at Retirement Date.

                  (a) Benefit. Upon reaching the earlier of his Early Retirement
         Date and electing to retire or his Normal Retirement Date, a
         Participant receiving the disability retirement benefit described in
         Section 6.1 above shall become entitled to the disability retirement
         benefits as described in this Section 6.2(a) taking into account the
         FICA Adjustment in lieu of the retirement benefits provided in Article
         IV. Such benefits shall be calculated at either the Participant's Early
         Retirement Date as elected by the Participant or Normal Retirement
         Date, as the case may be, and shall be equal to the Participant's Early
         Retirement Benefit, and associated Eligible Spouse's benefit, or Normal
         Retirement Benefit, and associated Eligible Spouse's benefit, as the
         case may be, as described in Sections 4.1 and 4.2, as if such disabled
         Participant had actually retired upon his Early Retirement Date or his
         Normal Retirement Date with the prior period of Total Disability being
         treated as Credited Service; provided, however, that in determining
         such Early Retirement Benefit or Normal Retirement Benefit, as the case
         may be, the Participant's Final Average Salary shall be calculated as
         of his Disability Date.

                  (b) Payment. The disability retirement benefits described in
         Section 6.2(a) above shall be payable in the same manner as the
         retirement benefits described in Sections 4. 1 or 4.2, taking into
         account the FICA Adjustment as the case may be, as if the Participant
         had actually retired.

                                   ARTICLE VII

                               SEVERANCE BENEFITS

         7.1 Eligibility. A Participant whose employment is terminated for
reasons other than death, Total Disability or retirement prior to completing
five (5) years of Credited Service shall not be entitled to receive any benefits
under this Plan. A Participant whose employment is transferred to another
subsidiary or affiliate of The Southern Company shall not be eligible to receive
benefits pursuant to Article VII, but shall instead be entitled to the benefits,
if any, described in Section 4.6 above.

         7.2 Participant Benefit. A Participant whose employment is terminated
for reasons other than death, Total Disability or retirement after completing
five (5) years of Credited Service shall be entitled to receive a monthly
severance benefit in an amount equal to 1/12th of the Participant's Vested
Percentage of his Accrued SERP Retirement Benefit calculated as of his Severance
Date, adjusted as follows: for purposes of determining the Participant's Accrued
SERP Retirement Benefit, 70% of Final Average Salary shall be reduced by the
early retirement factor under Section 5.02(b) of the SEPCO Schedule where the
Participant's benefit commences prior to the Participant's attainment of age 62.
In addition to the foregoing, the reductions shall include for a Participant who
commences his severance benefit after attainment of age 50 but before attainment
of age 55 a reduction of one-third of one percent (0[OBJECT OMITTED]%) for each
month by which the Participant's age at the time payment commences precedes the
Participant's attainment of age 55. A Participant's severance benefit shall be
paid monthly to him taking into account the FICA Adjustment for his lifetime,
beginning at the same time when retirement income payments under the Southern
Pension Plan commence.

         7.3 Spousal Benefit. Upon the death of a Participant who (i) has
attained age 50; (ii) is either receiving or entitled to receive a severance
benefit in accordance with Section 7.2; and (iii) is survived by an Eligible
Spouse, such Eligible Spouse shall become entitled to receive the benefit
described in Section 7.3(a) or (b) below, whichever is applicable:

                  (a) If the Participant was receiving his severance benefit at
         the time of his death, the Eligible Spouse's benefit shall be an amount
         equal to 75% of the deceased Participant's actual severance benefit,
         payable monthly to the Eligible Spouse for her lifetime.

                  (b) If the Participant's death occurs prior to commencement of
         payment of his severance benefit, the Eligible Spouse's benefit is a
         monthly amount equal to 75% of the deceased Participant's severance
         benefit calculated as if payment of such Participant's severance
         benefit had commenced at his date of death, payable monthly to the
         Eligible Spouse during her lifetime.

All benefit payments to an Eligible Spouse hereunder taking into account the
FICA Adjustment shall commence within 60 days of the Participant's death.

         7.4 Resumption of Employment After Severance. In the event a
Participant becomes entitled to a severance benefit but prior to commencement of
payment of such benefit such Participant is re-employed by the Company in a
capacity which entitles him to participate in this Plan, he shall forfeit such
severance benefit and shall again participate in the Plan as if his service with
the Company had never terminated; provided, however, that such Participant shall
not receive any Credited Service for the period of time between his termination
of employment and his re-employment. Notwithstanding anything to the contrary
above, if, at the time of the Participant's re-employment, payment of his
severance benefit has already commenced, such Participant shall not be eligible
to commence participation in this Plan and shall, therefore, have no right,
claim or entitlement to any benefits hereunder other than to payment of such
severance benefit.

                                  ARTICLE VIII

                                CHANGE IN CONTROL

         The provisions of the Change in Control Benefit Plans Policy are
incorporated herein by reference to determine the occurrence of a Change in
Control or Preliminary Change in Control of the Company or The Southern Company
(as defined in such Policy), the benefits to be provided hereunder and the
funding of the Trust (as defined in such Policy) in the event of such a Change
in Control. Any modifications to the Change in Control Benefit Plans Policy are
likewise incorporated herein.

                                   ARTICLE IX

                            ADMINISTRATIVE COMMITTEE

         9.1 Authority. This Plan shall be administered by an Administrative
Committee of not less than three (3) members appointed by the Board of Directors
of the Company. The Board of Directors may from time to time appoint members of
the Committee in substitution for the members previously appointed and may fill
vacancies, however caused. The Committee shall have all powers necessary to
enable it to carry out its duties in the administration of the Plan. Not in
limitation, but in application of the foregoing, the Committee shall have the
discretion, duty and power to determine all questions that may arise hereunder
as to the status and rights of participants in the Plan.

         9.2 Voting. The Committee shall act by a majority of the number then
constituting the Committee, and such action may be taken either by a vote at a
meeting or in writing without a meeting.

         9.3 Records. The Committee shall keep a complete record of all its
proceedings and all data relating to the administration of the Plan. The
Committee shall select one of its members as a Chairman. The Committee shall
appoint a Secretary to keep minutes of its meetings and the Secretary may or may
not be a member of the Committee. The Committee shall make such rules and
regulations for the conduct of its business as it shall deem advisable.

         9.4 Liability. No member of the Committee shall be personally liable
for any actions taken by the Committee unless the member's action involves
willful misconduct.

                                    ARTICLE X

                            AMENDMENT AND TERMINATION

         10.1 Amendment and Termination. Except for the provisions of Article
VIII hereof, which may not be amended following a "Savannah Change in Control"
or "Southern Change in Control" (as defined in the Change in Control Benefit
Plans Policy), the Company reserves the right, at any time or from time to time,
by action of its Board of Directors, to modify or amend in whole or in part any
or all provisions of the Plan. In addition, the Company reserves the right by
action of its Board of Directors to terminate the Plan in whole or in part;
provided, however, that such termination shall not affect any vested accrued
benefits of Participants hereunder.

                                   ARTICLE XI

                                  MISCELLANEOUS

         11.1 Non-Alienation of Benefits. No right or benefit under the Plan
shall be subject to anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate, alienate, sell, assign,
pledge, encumber or charge any right or benefit under the Plan shall be void. No
right or benefit hereunder shall in any manner be liable for or subject to the
debts, contracts, liabilities or torts of the person entitled to such benefits.
If the Participant, Eligible Spouse, or any other beneficiary hereunder shall
become bankrupt, or attempt to anticipate, alienate, sell, assign, pledge,
encumber, or charge any right hereunder, then such right or benefit shall, in
the discretion of the Committee, cease and terminate, and in such event, the
Committee may hold or apply the same or any part thereof for the benefit of the
Participant or his spouse, children or other dependents, or any of them, in such
manner and in such amounts and proportions as the Committee may deem proper.

         11.2 No Trust Created. The obligations of the Company to make payments
hereunder shall constitute a liability of the Company to a Participant. Except
as expressly limited under the terms of the Trust (as defined in the Change in
Control Benefit Plans Policy), such payments shall be made from the general
funds of the Company, and the Company shall not be required to establish or
maintain any special or separate fund, or purchase or acquire life insurance on
a Participant's life, or otherwise to segregate assets to assure that such
payment shall be made, and neither a Participant, Eligible Spouse, or any other
beneficiary shall have any interest in any particular asset of the Company by
reason of its obligations hereunder. Nothing contained in the Plan shall create
or be construed as creating a trust of any kind or any other fiduciary
relationship between the Company and a Participant or any other person.
Notwithstanding the foregoing, in the event a Participant who is employed on or
after January 1, 1999 with the Company disputes the calculation of his benefit
under the terms of this Plan or payment of amounts due under the terms of this
Plan, the Participant has recourse against the Company, the Plan and the Trust
(as defined in the Change in Control Benefit Plans Policy) for the payment of
benefits to the extent such Trust provides. When a Participant becomes entitled
to payment of a benefit hereunder, the Company may, in its sole discretion,
elect to purchase an annuity from a reputable third party annuity provider to
secure payment of all or any portion of the Participant's benefit, pursuant to a
uniform annuitization program adopted by the Committee.

         11.3 No Employment Agreement. Neither the execution of this Plan nor
any action taken by the Company pursuant to this Plan shall be held or construed
to confer on a Participant any legal right to be continued as an Employee of the
Company in an executive position or in any other capacity whatsoever. This Plan
shall not be deemed to constitute a contract of employment between the Company
and a Participant, nor shall any provision herein restrict the right of any
Participant to terminate his employment with the Company.

         11.4 Binding Effect. Obligations incurred by the Company pursuant to
this Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant, his Eligible Spouse or other
beneficiary.

         11.5 Suicide. Except as hereinafter provided, no benefit shall be
payable under the Plan to a Participant, Eligible Spouse or other beneficiary
where such Participant dies as a result of suicide within two (2) years of his
commencement of participation herein.

         11.6 Claims for Benefits. Each Participant or beneficiary must claim
any benefit to which he is entitled under this Plan by a written notification to
the Committee. If a claim is denied, it must be denied within a reasonable
period of time, and be contained in a written notice stating the following:

                  (a) The specific reason for the denial;

                  (b) Specific reference to the Plan provision on which the
         denial is based;

                  (c) Description of additional information necessary for the
         claimant to present his claim, if any, and an explanation of why such
         material is necessary.

                  (d) An explanation of the Plan's claims review procedure.

         The claimant will have 60 days to request a review of the denial by the
Committee, which will provide a full and fair review. The request for review
must be in writing delivered to the Committee. The claimant may review pertinent
documents, and he may submit issues and comments in writing.

         The decision by the Committee with respect to the review must be given
within 60 days after receipt of the request, unless special circumstances
require an extension (such as for a hearing). In no event shall the decision be
delayed beyond 120 days after receipt of the request for review. The decision
shall be written in a manner calculated to be understood by the claimant, and it
shall include specific reasons and refer to special Plan provisions as to its
effect.

         11.7 Recourse Against Deferred Compensation Trust. In addition to
Section 11.6, in the event a Participant who is employed on or after January 1,
1999 with the Company disputes the calculation of his SERP Benefit, the
Participant has recourse against the Company, the Plan, and the Southern Company
Deferred Compensation Trust for payment of benefits to the extent such Trust so
provides.

         11.8 Post-Retirement Adjustments. To the extent that a Participant's
Retirement Income or Allowance under the Southern Pension Plan is recalculated
as a result of an amendment in order to increase the amount of his Retirement
Income or Allowance, the Participant's benefit under this Plan shall also be
recalculated in order to properly reflect such increase in determining payments
of such benefit made on and after the effective date of the increase.

         11.9 Entire Plan. This document and any amendments contain all the
terms and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.

         11.10 Merger or Consolidation. In the event of a merger or a
consolidation by the Company with another corporation or the acquisition of
substantially all of the assets or outstanding stock of the Company by another
corporation, then and in such event the obligations and responsibilities of the
Company under this Plan shall be assumed by any such successor or acquiring
corporation, and all of the rights, privileges and benefits of the Participants
hereunder shall continue.

         11.11 Age Differential of Spouse. If a Participant's Eligible Spouse at
the time of commencement of a (a) Normal Retirement Benefit;(b) Early Retirement
Benefit; (c) Postponed Retirement Benefit; (d) pre-retirement death benefit; or
(e) Severance Benefit is more than ten years younger than the Participant, the
monthly benefits payable hereunder shall be reduced actuarially using actuarial
assumptions under Section 1.15 of the SEPCO Schedule and assuming that the
Eligible Spouse is ten years older than such spouse's attained age.

                                   ARTICLE XII

                                  CONSTRUCTION

         12.1 Governing Law. This Plan shall be construed and governed in
accordance with the laws of the State of Georgia.

         12.2 Gender. The masculine gender, where appearing in the Plan, shall
be deemed to include the feminine gender, and the singular may include the
plural, unless the context clearly indicates to the contrary.

         12.3 Headings, etc.. The cover page of this Plan, the Table of Contents
and all headings used in this Plan are for convenience of reference only and are
not part of the substance of this Plan.

         12.4 Children. All references in the Plan to a Participant's children
shall include both natural and adopted children.

         12.5 Action. Any action under this Plan required or permitted by the
Company shall be by action of its Board of Directors or its duly authorized
designee.

         IN WITNESS WHEREOF, this Plan has been executed by duly authorized
officers of Savannah Electric and Power Company this 16th day of November, 2000
to be effective as of October 26, 2000.

                              SAVANNAH ELECTRIC AND POWER COMPANY



                              By:      _______________________________________
By:
                                       Vice President, Treasurer, and
                                                Chief Financial Officer

ATTEST:

- ---------------------------------------
Comptroller and Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>56
<FILENAME>x10f14.txt
<TEXT>

                                                               Exhibit 10(f)14
                           DEFERRED COMPENSATION PLAN

                                       FOR

                             ----------------------

                                  KEY EMPLOYEES

                              ---------------------


                                       OF

                       SAVANNAH ELECTRIC AND POWER COMPANY

               AS AMENDED AND RESTATED EFFECTIVE OCTOBER 26, 2000


<PAGE>







                                TABLE OF CONTENTS

ARTICLE I     STATEMENT OF PURPOSE...................................1


ARTICLE II    DEFINITIONS............................................1


ARTICLE III   ELIGIBILITY AND PARTICIPATION..........................3


ARTICLE IV    RETIREMENT BENEFITS....................................6


ARTICLE V     SURVIVOR BENEFITS......................................8


ARTICLE VI    DISABILITY BENEFITS...................................10


ARTICLE VII   SEVERANCE BENEFITS....................................11


ARTICLE VIII  ADDITIONAL BENEFITS...................................12


ARTICLE IX    ACCRUAL OF BENEFITS...................................12


ARTICLE X     CHANGE IN CONTROL BENEFIT PLANS POLICY................13


ARTICLE XI    ADMINISTRATIVE COMMITTEE..............................13


ARTICLE XII   AMENDMENT AND TERMINATION.............................14


ARTICLE XIII  MISCELLANEOUS.........................................14


ARTICLE XIV   CONSTRUCTION..........................................17





<PAGE>







                           DEFERRED COMPENSATION PLAN

                                       FOR

                                  KEY EMPLOYEES

                                       OF

                       SAVANNAH ELECTRIC AND POWER COMPANY

               AS AMENDED AND RESTATED EFFECTIVE OCTOBER 26, 2000

         This Plan amends and restates the Company's Deferred Compensation Plan
for Key Employees, as originally effective December 1, 1983, and subsequently
amended.

                                    ARTICLE I

                              STATEMENT OF PURPOSE

         The purpose of this Plan is to benefit Savannah Electric and Power
Company through increased incentive on the part of key employees of the Company
and to further the long-term growth and earnings of the Company by offering
long-term incentives in addition to current compensation to the limited group of
management employees of the Company who will be largely responsible for such
growth.

                                   ARTICLE II

                                   DEFINITIONS

         When used herein the following terms shall have the meanings indicated
unless a different meaning is clearly required by the context.

         1. "Annuity Starting Date": The date on which payment of a benefit
payable hereunder is to commence.

         2. "Change in Control Benefit Plans Policy": shall mean the change in
control benefit plans policy for Company only plans, as approved by the Company,
as it may be amended from time to time in accordance with the provisions
therein.

         3. "Committee": The Administrative Benefits Committee appointed by the
Board of Directors of the Company to administer the Plan.

         4. "Company": Savannah Electric and Power Company, a Georgia
corporation, and its corporate successors.

         5. "Deferred Compensation Agreement": An Omnibus Deferred Compensation
Agreement entered into between the Company and a Participant or such other prior
agreements if the Participant elects not to enter into an Omnibus Deferred
Compensation Agreement.

         6. "Defined Contribution Plan": Shall include, but not be limited to,
any of the following qualified employer contribution plans: (i) 401-K, cash or
deferred profit sharing plan; (ii) Thrift plans; (iii) defined contribution
pension plans; (iv) profit sharing plan; (v) employee stock ownership plan
(ESOP); and (vi) any other qualified defined contribution plan meeting the
qualifications prescribed by the Internal Revenue Code, as described in TEFRA,
or any subsequent amendments thereto.

         7. "Designated Beneficiary": One or more beneficiaries, as designated
in writing to the Committee, to whom payments otherwise due to or for the
benefit of the Participant hereunder shall be made in the event of his death
prior to the complete payment of such benefit. In the event no such written
designation is made by a participant or if such beneficiary shall not be in
existence at the Participant's death or if such beneficiary predeceases the
Participant, the Participant shall be deemed to have designated his estate as
such beneficiary.

         8. "Disability Retirement": Retirement from the employ of the Company
because of Total Disability.

         9. "Disability Retirement Date": The date upon which a Participant
retires from the employ of the Company because of Total Disability.

         10. "Early Retirement": Retirement from the employ of the Company upon
or after attaining age sixty (60) but prior to age sixty-five (65).

         11. "Early Retirement Date": The date upon which a Participant who has
attained an age of at least sixty (60) but has not yet reached age sixty-five
(65) retires from the employ of the Company.

         12. "Employee": A person who is employed by the Company.

         13. "Insurable": The life of a Participant is insurable at the time of
an election to defer compensation under this Plan by an insurance company
approved by the Committee and at premium rates acceptable to the Committee in
the exercise of its sole and absolute discretion.

         14. "Normal Retirement": Retirement from the employ of the Company upon
the Normal Retirement Date.

         15. "Normal Retirement Date": The date upon which such Participant
attains the age of sixty-five (65).

         16. "Participant": An Employee who is or hereafter becomes eligible to
participate in the Plan and does participate by electing, in the manner
specified herein, to defer compensation pursuant to this Plan.

         17. "Plan": The Deferred Compensation Plan for Key Employees of
Savannah Electric and Power Company contained herein, and as may be amended from
time to time hereafter.

         18. "Postponed Retirement": Retirement from the employ of the Company
after attaining age sixty-five (65).

         19. "Postponed Retirement Date": The date upon which a Participant over
age sixty-five (65) retires from the employ of the Company.

         20. "Salary": The annual compensation paid by the Company to a
Participant including (i) any payments from an executive incentive compensation
plan and (ii) amounts of compensation deferred under any deferred compensation
plan or arrangement.

         21. "Total Disability": A Participant is to be deemed totally disabled
when he has been wholly and continuously disabled by reason of sickness or
injury, and has been under the regular care of a physician approved by the
Committee during the preceding six (6) months. The Participant shall thereafter
be deemed to be permanently disabled so long as he is prevented from engaging in
any occupation as determined by the Committee, for which he is reasonably
qualified, by training, education, background and experience, as a result of
said sickness or injury, provided he is still under the regular care of a
physician acceptable to the Committee.

         22. "Year of Service": A period of twelve (12) consecutive months (no
month to be counted in more than one Year of Service) during which the
Participant has been or hereafter (i) is continuously employed by the Company,
or (ii) is continuously on leave of absence approved by the Company.

                                   ARTICLE III

                          ELIGIBILITY AND PARTICIPATION

         1. Eligibility. The Committee shall have the sole discretion to
determine the employees that are eligible to become Participants in accordance
with the purposes of the Plan.

         2. Participation.

                  (a) An eligible Employee may participate in the Plan by
         irrevocably electing, in the manner specified herein, to defer future
         Salary for a one (1) or three (3) year deferral opportunity in 1997, a
         one (1) or two (2) year deferral opportunity in 1998 and a final one
         (1) year deferral opportunity in 1999 (or such fewer years remaining
         until the Employee's Normal Retirement Date). An eligible Employee may
         defer a minimum of $1,000 per year under the three (3) or two (2) year
         election and $2,500 per year under the one (1) year election. The
         maximum annual amount of Salary which may be deferred shall be equal to
         fifty percent (50%) of such Employee's Salary (as defined in Article
         II) for the calendar year in which such election is made;

                  (b) An eligible Employee becomes a Participant in the Plan
         upon the execution and delivery of a Deferred Compensation Agreement.
         Such Agreement must be executed on or before December 31 to defer
         compensation to be earned in succeeding calendar years; (c) During a
         deferral period(s), the annual amount of compensation to be deferred
         shall be deferred on a basis as determined by the Committee.

                  (d) The Committee shall be vested with the authority to deny
         Participants the right to defer Salary pursuant to the Plan in any
         calendar year, provided, however, any such denial shall apply to all
         eligible Participants.

         3. Benefits. Benefits payable pursuant to any election made hereunder
will be calculated and based upon both a Participant's age at the time of a
deferral election and the amount of deferrals. In addition, the amount of
Survivor Benefits will depend on whether the Participant is Insurable or
non-Insurable.

         4. Conditions Subsequent.

                  (a) In the event of a legislative, judicial or regulatory
         development ("Development") that meets both requirements below, the
         Committee shall be vested with the authority to condition the Company's
         obligations under a Deferred Compensation Agreement:

                           (i) The Development adversely, fundamentally and
                  materially affects the taxation of corporate owned life
                  insurance owned by the Company, including, but not limited to,
                  a change in any of the following federal income tax
                  provisions:

                                    (A) the current provisions related to the
                           exclusion from gross income of proceeds of life
                           insurance contracts payable upon the death of the
                           insured;

                                    (B) the current exclusion from income of any
                           increase in the "cash value" or "inside build up" of
                           life insurance contracts from time to time;

                                    (C) the current exclusion from income of any
                           "policy loan" obtained by the owner of a life
                           insurance contract; and

                                    (D) the current exclusion from income of
                           "dividends" on a life insurance contract which are
                           used to purchase additional insurance; and (ii) The
                           Development occurs prior to the commencement of
                           payment of benefits pursuant to a Deferred
                           Compensation Agreement.

                  In the event the Company's obligations under a Deferred
         Compensation Agreement are so conditioned, and the event constituting
         the condition subsequent occurs, the Company shall have the right, for
         a period of one (1) year following such event, to refund to the
         Participant or his Designated Beneficiary the deferrals made under the
         Deferred Compensation Agreement with interest from the date of deferral
         accrued at the rate equal to the greater of the rate of return for the
         (x) "prime interest rate" investment option, or (y) the Southern
         Company "Common Stock" investment option determined in the same manner
         as calculated under the Southern Company Deferred Compensation Plan if
         the Participant has executed an Omnibus Deferred Compensation
         Agreement; or if the Participant has not, the rate set forth in the
         prior Deferred Compensation Agreement(s) entered into by Participant.
         The payment of such refund shall fully and completely discharge the
         Company's obligations under the Deferred Compensation Agreement and
         shall fully and completely satisfy all the Participant's and his
         Designated Beneficiary's rights thereunder.

                  (b) Notwithstanding any other provision in Paragraph (a)
         above, the Company shall not have the right to condition payment after
         the earlier of any of the foregoing events:

                                    (A) the Company cashes out a majority of its
                           investment in Company owned life insurance which has
                           been purchased in conjunction with the provision of
                           benefits under the Plan; or

                                    (B) the Company incurs a Savannah Change in
                           Control or a Southern Change in Control as defined
                           under the Change in Control Benefit Plans Policy in
                           effect as of the execution of this Agreement.

                                   ARTICLE IV

                               RETIREMENT BENEFITS

         1. Normal Retirement Benefit.

                  (a) Upon the Normal Retirement of a Participant, such
         Participant becomes entitled to his Normal Retirement Benefit. The
         Normal Retirement Benefit is a level fifteen (15) year annuity payable
         in one hundred eighty (180) equal monthly installments in the amount
         stated in the Participant's Deferred Compensation Agreement. Payment of
         the Normal Retirement Benefit shall commence on the January 1st
         immediately following the Participant's Normal Retirement Date (such
         date being the "Regular Annuity Starting Date") and shall continue on
         the first day of each month thereafter until one hundred eighty (180)
         monthly payments have been made.

                  (b) The Normal Retirement Benefit amount which the Company
         will agree to pay depends upon a number of factors, including, among
         other things, the amount of the deferral and the length of time between
         the date of the deferral and the Annuity Starting Date of the benefit.

         2. Postponed Retirement Benefit.

                  (a) Upon the Postponed Retirement of a Participant, such
         Participant becomes entitled to his Postponed Retirement Benefit. The
         Postponed Retirement Benefit is a level fifteen (15) year annuity
         payable in equal monthly installments. Payment of the Postponed
         Retirement Benefit shall commence on the January 1st immediately
         following the Participant's Postponed Retirement Date (such date being
         the "Postponed Annuity Starting Date"), and shall continue on the first
         day of each month thereafter until one hundred eighty (180) monthly
         payments have been made.

                  (b) The monthly benefit of the Postponed Retirement Benefit
         shall be an amount equal to the monthly benefit of the Normal
         Retirement Benefit increased by six percent (6%) compounded annually
         for each year that the Regular Annuity Starting Date precedes his
         Postponed Annuity Starting Date.

         3.       Early Retirement Benefit.

                  (a) Upon the Early Retirement of a Participant, such
         Participant becomes entitled to his Early Retirement Benefit. The Early
         Retirement Benefit is a level fifteen (15) year annuity payable in
         equal monthly installments, the amount of which shall be the same as
         those of the Normal Retirement Benefit. Subject to Sections 3(b) and
         3(c) of this Article IV, payment of the Early Retirement Benefit shall
         commence on the January 1st immediately following the Participant's
         Normal Retirement Date (such date being the "Regular Annuity Starting
         Date"), and shall continue on the first day of each month thereafter
         until one hundred eighty (180) monthly payments have been made.

                  (b) Subject to the Committee's approval, a Participant is
         entitled to elect to have payment of his Early Retirement Benefit
         commence on any January 1st following his Early Retirement Date and
         preceding his Regular Annuity Starting Date (such date being the
         "Accelerated Annuity Starting Date"). Such election shall be made in
         writing delivered to the Committee at least thirty (30) days prior to
         the requested accelerated Annuity Starting Date.

                  (c) In the event a Participant elects an Accelerated Annuity
         Starting Date and it is approved by the Committee, his Early Retirement
         Benefit shall be reduced by seven percent (7%) compounded annually for
         each year that the Accelerated Annuity Starting Date precedes his
         Regular Annuity Starting Date.

         4. Death Prior to Commencement of Benefit. Anything herein to the
contrary notwithstanding, in the event a Participant dies after becoming
entitled to his Normal Retirement Benefit or Early Retirement Benefit and prior
to the Annuity Starting Date of such Retirement Benefit, the Participant's
Designated Beneficiary shall receive, in lieu of such Retirement Benefit, the
Survivor Benefit specified in Article V hereof.

         5. Payments to Beneficiary. In the event a Participant dies prior to
full payment of his Retirement Benefit under this Article IV, all remaining
payments due hereunder shall be made to such Participant's Designated
Beneficiary.

                                    ARTICLE V

                                SURVIVOR BENEFITS

         1. Survivor Benefit. Upon the occurrence of any of the following
events, the Company shall pay to the Participant's Designated Beneficiary the
Survivor Benefits as defined in this Article V. The Survivor Benefits payable
hereunder are in lieu of any other benefit under this Plan.

                  (a) The death of the Participant while employed by the
         Company;

                  (b) The death of the Participant after becoming entitled to a
         Retirement Benefit of Article IV hereof, but prior to commencement of
         payment of such benefit;

                  (c) The death of the Participant after becoming entitled to
         the Disability Benefit of Article VI, Section 2, hereof, but prior to
         commencement of payment of such benefit; or

                  (d) The death of the Participant after becoming entitled to
         the Severance Benefit of Article VII, Section l(b), hereof, but prior
         to commencement of payment of such benefit.

         2. Payment. Payment of the Survivor Benefit will commence on the first
day of the month following receipt by the Committee of written proof of the
Participant's death and shall continue on the first day of each month thereafter
until one hundred eighty (180) monthly payments have been made.

         3. Amount.

                  (a) If the Participant is Insurable, then the Survivor Benefit
         is a level fifteen (15) year annuity payable to his Designated
         Beneficiary in one hundred eighty (180) equal monthly installments in
         the amount(s) stated in the Participant's Deferred Compensation
         Agreement.

                  (b) If the Participant is not Insurable and his death both (i)
         occurs after attaining age sixty (60) and (ii) constitutes one of the
         events described in Sections l(a), l(b), and l(c) of this Article V,
         then the Survivor Benefit is a level fifteen (15) year annuity payable
         in one hundred eighty (180) equal monthly installments in a monthly
         amount equal to the present value at the Participant's date of death of
         the Participant's monthly Normal Retirement Benefit, as set forth in
         the Participants Deferred Compensation Agreement, discounted, for the
         period between the Participant's Regular Annuity Starting Date (as
         defined in Article IV, Section 1) and the Participant's date of death,
         by the Present Value Interest Rate stated in the Participant's Deferred
         Compensation Agreement or, if no such rate is so stated, ten percent
         (10%) per annum, compounded annually.

                  (c) Anything to the contrary herein notwithstanding, if the
         Survivor Benefit is payable by reason of the Participant's death
         occurring at a time when, had he retired on the day of his death, he
         would have been entitled to the Postponed Retirement Benefit (as
         provided in Article IV, Section 2), then the monthly amount of the
         Survivor Benefit shall equal the monthly amount of the Participant's
         Normal Retirement Benefit, as set forth in the Participant's Deferred
         Compensation Agreement, increased by six percent (6%) per annum
         compounded annually for the period between the Participant's Regular
         Annuity Starting Date (as defined in Article IV, Section 1) and the
         Participant's death.

                  (d) If the Participant is not Insurable and either the
         Participant has not attained age sixty (60) at the time of his death or
         his death constitutes the event described in Section l(d) of this
         Article V, then the total amount of the Survivor Benefit shall equal
         his actual gross deferrals plus interest thereon at nine percent (9%)
         per annum compounded annually until his date of death. Such amount
         shall be payable to the Participant's Designated Beneficiary at the
         option of the Committee in either a lump sum on the first day of the
         month immediately following receipt by the Committee of written proof
         of the Participant's death or in up to one hundred eighty (180) equal
         consecutive monthly installments with interest at nine percent (9%) per
         annum, compounded annually, commencing on the first day of the month
         immediately following receipt by the Committee of proof of the
         Participant's death.

                  (e) Notwithstanding anything herein to the contrary, in the
         event the Participant's death occurs prior to April 1st of the year
         following the year in which the Participant enters into a Deferred
         Compensation Agreement, then no Survivor Benefit shall be payable
         pursuant to such Deferred Compensation Agreement. In lieu of any such
         Survivor Benefit, the Company shall pay to the Participant's Designated
         Beneficiary, in one lump sum, the actual gross deferrals made, if any,
         pursuant to such Deferred Compensation Agreement plus interest thereon
         at nine percent (9%) per annum until date of payment.

                                   ARTICLE VI

                               DISABILITY BENEFITS

         1. Entitlement. Upon Disability Retirement a Participant becomes
entitled to the Disability Benefit described in this Article VI.

         2. Disability Benefit.

                  (a) The Disability Benefit shall be a benefit identical to the
         Retirement Benefits as provided in Article IV hereof (either the Normal
         Retirement Benefit or Early Retirement Benefit, as the case may be), to
         which the retired Participant would have become entitled if he had
         retired after attaining age sixty (60). Provided, however, in the event
         such Participant dies prior to commencement of payment of such
         Disability Benefit, the Participant's Designated Beneficiary shall
         receive, in lieu of such Disability Benefit, the Survivor Benefit
         specified in Article V hereof.

                  (b) Notwithstanding the foregoing, such retired Participant
         may request to receive, in lieu of the Disability Benefit provided by
         subparagraph (a) above, a benefit equal to his actual gross deferrals
         plus interest thereon at nine percent (9%) per annum compounded
         annually until his Disability Retirement Date. Payment of such benefit
         is at the discretion of the Committee and shall commence on the first
         day of the month following both (i) the retired Participant's
         Disability Retirement Date and (ii) the expiration of six (6) months of
         Total Disability. Such benefit shall be payable in the option of the
         Committee either in a lump sum or in up to sixty (60) equal consecutive
         monthly installments with interest at nine percent (9%) per annum.

         3. Re-Employment. In the event a retired Participant entitled to a
Disability Benefit hereunder but prior to commencement of payment of such
benefit is reemployed by the Company in a capacity which entitles him to
participate in the Plan, he shall forfeit such Disability Benefit and shall
participate in the Plan as if his service with the Company had never terminated.
Anything in the foregoing to the contrary notwithstanding, however, if at the
time of the retired Participant's reemployment payment of his Disability Benefit
hereunder has already commenced, he shall be ineligible to again commence
participation in the Plan and shall, therefore, have no right, claim or
entitlement to any benefits hereunder other than full payment of such Disability
Benefit.

         4. Payments to Beneficiary. In the event that a retired disabled
Participant dies after commencement of the payment of his disability benefit
under this Article VI but prior to full payment of such Disability Benefit, all
remaining payments due hereunder shall be made to such Participant's Designated
Beneficiary.

                                   ARTICLE VII

                               SEVERANCE BENEFITS

         1. Severance Benefits.

                  (a) In the event a Participant's employment with the Company
         terminates for any reason other than death, Total Disability, Early
         Retirement or Normal Retirement, and at the time of such termination
         such Participant has neither accrued ten (10) Years of Service nor
         attained age forty-eight (48) the Participant's participation in the
         Plan shall cease as of the date of such termination. In such event, the
         Company shall pay the former Participant the amount of his actual gross
         deferrals plus interest thereon at seven percent (7%) per annum,
         compounded annually. Such amount shall be payable to the former
         Participant at the option of the Committee in either a lump sum within
         ninety (90) days following such termination or in up to sixty (60)
         equal consecutive monthly installments with interest at seven percent
         (7%) per annum commencing within ninety (90) days following such
         termination.

                  (b) In the event a Participant's employment with the Company
         terminates for any reason other than death, Total Disability, Early
         Retirement or Normal Retirement, and at the time of such termination
         such Participant has either accrued ten (10) or more Years of Service
         or attained age forty-eight (48) such Participant shall receive a
         benefit identical to the Retirement Benefits of Article IV (either the
         Early Retirement Benefit or Normal Retirement Benefit, as the case may
         be) to which such Participant would have become entitled if he retired
         upon or after attaining age sixty (60). Provided, however, in the event
         a Participant dies prior to commencement of payment of such Severance
         Benefit, the Participant's Designated Beneficiary shall receive, in
         lieu of such Severance Benefit, the Survivor Benefit specified in
         Article V hereof.

         2. Payments to Beneficiary. In the event a Participant dies prior to
full payment of his Severance Benefit under this Article VII, all remaining
payments due hereunder shall be made to such Participant's Designated
Beneficiary.

                                  ARTICLE VIII

                               ADDITIONAL BENEFITS

         1. Loss of Benefits. It is possible that the deferral of a
Participant's Salary pursuant to this Plan will result in a loss of benefits
through a reduction of amounts actually or potentially credited to his
account(s) under a qualified Defined Contribution Plan sponsored by the Company.

         2. Additional Benefits. If the Committee determines that a Participant
has suffered a Benefit Loss in any year, additional benefits shall be provided
to the Participant under this Plan as if the Participant had made a one (1) year
deferral election to defer Salary in an amount equal to the Benefit Loss. Such
one (1) year deferral election shall be deemed to occur in the same year in
which the deferral under this Plan causes such Benefit Loss.

                                   ARTICLE IX

                               ACCRUAL OF BENEFITS

         1. If the employment of a Participant terminates for any reason prior
to the completion of the deferrals agreed upon in the Deferred Compensation
Agreement or if the agreed deferrals are not made for any other reason, then all
of his benefits under the Plan shall be reduced by a fraction, the numerator of
which is the amount of the gross deferrals agreed to be deferred which were not
deferred, and the denominator of which is the amount of gross deferrals agreed
to be deferred.

         2. The reduction of benefits under Section 1 of this Article IX shall
not apply to any benefits receivable by a Participant or his Designated
Beneficiary under:

                  (a) Article V, Section 1, (a) only, but only when the
                  Participant is Insurable; (b) Article V, Section 3, (d) only;
                  (c) Article VI, Section 2, (b) only; (d) Article VII, Section
                  1, (a) only; (e) Article VIII.

                                    ARTICLE X

                     CHANGE IN CONTROL BENEFIT PLANS POLICY

         The provisions of the Change in Control Benefit Plans Policy are
incorporated herein by reference to determine the occurrence of a change in
control or preliminary change in control of Southern or the Company (as such
terms are defined in such Policy), the benefits to be provided hereunder and the
funding of the Trust (as defined in such Policy) in the event of such a change
in control. Any modifications to the Change in Control Benefit Plans Policy are
likewise incorporated herein.

                                   ARTICLE XI

ADMINISTRATIVE COMMITTEE

         1. This Plan shall be administered by an Administrative Committee of
not less than three (3) members appointed by the Board of Directors of the
Company. The Board of Directors may from time to time appoint members of the
Committee in substitution for the members previously appointed and may fill
vacancies, however caused. The Committee shall have all powers necessary to
enable it to carry out its duties in the administration of the Plan. Not in
limitation, but in application of the foregoing, the Committee shall have the
duty and power to determine all questions that may arise hereunder as to the
status and rights of participants in the Plan.

         2. The Committee shall act by a majority of the number then
constituting the Committee, and such action may be taken either by a vote at a
meeting or in writing without a meeting.

         3. The Committee shall keep a complete record of all its proceedings
and all data relating to the administration of the Plan.

         4. The Committee shall select one of its members as a Chairman. The
Committee shall appoint a Secretary to keep minutes of its meetings and the
Secretary may or may not be a member of the Committee. The Committee shall make
such rules and regulations for the conduct of its business as it shall deem
advisable.

         5. No member of the Committee shall be personally liable for any
actions taken by the Committee unless the member's action involves willful
misconduct.

                                   ARTICLE XII

                            AMENDMENT AND TERMINATION

         Except for the provisions of Article X hereof which may not be amended
following a "Southern Change in Control" or "Savannah Change in Control" (as
defined in the Change in Control Benefit Plans Policy), the Company reserves the
right, at any time or from time to time, by action of its Board of Directors, to
modify or amend in whole or in part any or all provisions of the Plan. In
addition, the Company reserves the right by action of its Board of Directors to
terminate the Plan in whole or in part. Provided, however, notwithstanding the
preceding sentences, such amendment or termination shall not affect in any way
the Deferred Compensation Agreements then in effect.

                                  ARTICLE XIII

                                  MISCELLANEOUS

         1. Suicide. Except as hereafter provided, no benefit shall be payable
under the Plan with respect to a deferral election to a Participant or his
Designated Beneficiary who dies as a result of suicide with twenty-five (25)
months of the December 31st preceding a deferral period to defer compensation to
be earned in the succeeding calendar year or years.

         In the event of such suicide, the Participant's Designated Beneficiary
shall receive within a reasonable period the actual gross deferrals, if any,
made by such Participant with interest at seven percent (7%) per annum to date
of payment.

         2. Non-Alienation of Benefits. No right or benefit under the Plan shall
be subject to anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, sell, assign, pledge, encumber
or charge any right or benefit under this Agreement shall be void. No right or
benefit hereunder shall in any manner be liable for or subject to the debts,
contracts, liabilities or torts of the person entitled to such benefits. If the
Participant or any beneficiary hereunder shall become bankrupt, or attempt to
anticipate, alienate, sell, assign, pledge, encumber, or charge any right
hereunder, then such right or benefit shall, in the discretion of the Committee,
cease and terminate, and in such event, the Committee may hold or apply the same
or any part thereof for the benefit of the Participant or his beneficiary,
spouse, children or other dependents, or any of them in such manner and in such
amounts and proportions as the Committee may deem proper.

         3. No Trust Created. The obligations of the Company to make payments
hereunder shall constitute a liability of the Company to a Participant. Except
as expressly limited under the terms of the Trust (as defined in the Change in
Control Benefit Plans Policy), such payments shall be made from the general
funds of the Company, and the Company shall not be required to establish or
maintain any special or separate fund, or purchase or acquire life insurance on
a Participant's life, or otherwise to segregate assets to assure that such
payment shall be made, and neither a Participant, his estate nor Designated
Beneficiary shall have any interest in any particular asset of the Company by
reason of its obligations hereunder. Nothing contained in the Plan shall create
or be construed as creating a trust of any kind or other fiduciary relationship
between the Company and a Participant or any other person. Notwithstanding the
foregoing, in the event a Participant who is employed on or after January 1,
1999 with the Company disputes the calculation of his benefit under the terms of
this Plan or payment of amounts due under the terms of this Plan, the
Participant has recourse against the Company, the Plan and the Trust (as defined
in the Change in Control Benefit Plans Policy) for the payment of benefits to
the extent such Trust provides.

         4. No Employment Agreement. Neither the execution of this Plan nor any
action taken by the Company pursuant to this Plan shall be held or construed to
confer on a Participant any legal right to be continued as an Employee of the
Company in an executive position or in any other capacity whatsoever. This Plan
shall not be deemed to constitute a contract of employment between the Company
and a Participant, nor shall any provision herein restrict the right of the
Company to discharge any Participant or restrict the right of any Participant to
terminate his employment with the Company.

         5. Designation of Beneficiary. Participants shall file with the Company
a notice in writing designating one or more Designated Beneficiaries to whom
payments otherwise due to or for the benefit of the Participant hereunder shall
be made in the event of his death prior to the complete payment of such benefit.
Participants shall have the right to change the beneficiary or beneficiaries so
designated from time to time; provided, however, that any change shall not
become effective until received in writing by the Committee.

         6. Claims for Benefits. Each Participant or beneficiary must claim any
benefit to which he is entitled under this Plan by a written notification to the
Committee. If a claim is denied, it must be denied within a reasonable period of
time, and be contained in a written notice stating the following:

                           A. The specific reason for the denial.

                           B. Specific reference to the Plan provision on which
                  the denial is based.

                           C. Description of additional information necessary
                  for the claimant to present his claim, if any, and an
                  explanation of why such material is necessary.

                           D. An explanation of the Plan's claims review
                  procedure. The claimant will have 60 days to request a review
                  of the denial by the Committee, which will provide a full and
                  fair review. The request for review must be in writing
                  delivered to the Committee. The claimant may review pertinent
                  documents, and he may submit issues and comments in writing.

         The decision by the Committee with respect to the review must be given
within 60 days after receipt of the request, unless special circumstances
require an extension (such as for a hearing). In no event shall the decision be
delayed beyond 120 days after receipt of the request for review. The decision
shall be written in a manner calculated to be understood by the claimant, and it
shall include specific reasons and refer to special Plan provisions as to its
effect.

         7. Binding Effect. Obligations incurred by the Company pursuant to this
Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns, and the Participant and the beneficiary or beneficiaries
designated pursuant to Article IX, Section 5 hereinabove.

         8. Entire Plan. This document and any amendments contains all the terms
and provisions of the Plan and shall constitute the entire Plan, any other
alleged terms or provisions being of no effect.

         9. Merger or Consolidation. In the event of a merger or a consolidation
by the Company with another corporation, or the acquisition of substantially all
of the assets or outstanding stock of the Company by another corporation, then
and in such event the obligations and responsibilities of the Company under this
Plan shall be assumed by any such successor or acquiring corporation, and all of
the rights, privileges and benefits of the Participants hereunder shall
continue.

                                   ARTICLE XIV

                                  CONSTRUCTION

         1. Governing Law. This Plan shall be construed and governed in
accordance with the laws of the State of Georgia.

         2. Gender. The masculine gender, where appearing in the Plan, shall be
deemed to include the feminine gender, and the singular may include the plural,
unless the context clearly indicates to the contrary.

         3. Headings, etc. The cover page of this Plan, the Table of Contents
and all headings used in this Plan are for convenience of reference only and are
not part of the substance of this Plan.

                           SAVANNAH ELECTRIC AND POWER COMPANY

                           By:  _____________________________________________
                                G. Edison Holland, Jr.
                                President and Chief Executive Officer

ATTEST:

- ----------------------------------------------------------
Nancy E. Frankenhauser
Comptroller and Corporate Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>57
<FILENAME>x10f18.txt
<TEXT>


                       1997 DEFERRED COMPENSATION PLAN FOR
                DIRECTORS OF SAVANNAH ELECTRIC AND POWER COMPANY

                 Amended and Restated Effective October 26, 2000


<PAGE>


                                    SECTION 1

                                   Definitions

1.1      "Beneficial Ownership" means beneficial ownership within the meaning of
         Rule 13d-3 promulgated under the Exchange Act.

1.2      "Board" or "Board of Directors" means the Board of Directors of the
         Company.

1.3      "Business Combination" means a reorganization, merger or consolidation
         or sale of Southern, or a sale of all or substantially all of
         Southern's assets.

1.4      "Cash Compensation" means the annual retainer fees and meeting fees
         payable to a Director in cash.

1.5      "Code" means the Internal Revenue Code of 1986, as amended, or any
         successor statute.

1.6      "Committee" means the Audit and Compensation Committee of the Board, or
         such other committee as may be designated by the Board to be
         responsible for administering the Plan.

1.7      "Common Stock" means the common stock of Southern, including any shares
         into which it may be split, subdivided, or combined.

1.8      "Company" means Savannah Electric and Power Company, or any successor
         thereto.

1.9      "Company Change in Control" means the following:
                  (a) The Consummation of an acquisition by any Person of
         Beneficial Ownership of 50% or more of the combined voting power of the
         then outstanding Voting Securities of the Company; provided, however,
         that for purposes of this Section 1.9, any acquisition by an Employee,
         or Group composed entirely of Employees, any qualified pension plan,
         any publicly held mutual fund or any employee benefit plan (or related
         trust) sponsored or maintained by Southern or any corporation
         Controlled by Southern shall not constitute a Change in Control;

                  (b) Consummation of a reorganization, merger or consolidation
         of the Company (a "Company Business Combination"), in each case,
         unless, following such Company Business Combination, Southern Controls
         the corporation surviving or resulting from such Company Business
         Combination; or

                  (c) Consummation of the sale or other disposition of all or
         substantially all of the assets of the Company to an entity which
         Southern does not Control.

1.10     "Compensation Payment Date" means the date on which compensation,
         including cash retainer, meeting fees, and the Stock Retainer, is
         payable to a Director or compensation would otherwise be payable to a
         Director if an election to defer such compensation had not been made.

1.11     "Consummation" means the completion of the final act necessary to
         complete a transaction as a matter of law, including, but not limited
         to, any required approvals by the corporation's shareholders and board
         of directors, the transfer of legal and beneficial title to securities
         or assets and the final approval of the transaction by any applicable
         domestic or foreign governments or agencies.

1.12      "Control" means, in the case of a corporation, Beneficial Ownership of
          more than 50% of the combined voting power of the corporation's Voting
          Securities, or in the case of any other entity, Beneficial Ownership
          of more than 50% of such entity's voting equity interests.

1.13     "Deferred Cash Trust" means the Deferred Cash Compensation Trust for
         Directors of The Southern Company and its Subsidiaries.

1.14     "Deferred Compensation Account" means the Prime Rate Investment
         Account, the Phantom Stock Investment Account, the Deferred Stock
         Account and/or the Stock Dividend Investment Account.

1.15     "Deferred Pension Election" means the election by a Director under
         Section 5.3 in connection with the deferral of receipt of the
         Director's Pension Benefit until termination from the Board.

1.16     "Deferred Stock Account" means the bookkeeping account established
         under Section 6.3 on behalf of a Director and includes shares of Common
         Stock credited thereto to reflect the reinvestment of dividends
         pursuant to Section 6.3(a)(iii).

1.17     "Deferred Stock Trust" means the Deferred Stock Trust for Directors of
         The Southern Company and its Subsidiaries.

1.18     "Director" means a member of the Board.

1.19     "Distribution Election" means the designation by a Director of the
         manner of distribution of the amounts and quantities held in the
         Director's Deferred Compensation Accounts upon the director's
         termination from the Board pursuant to Section 5.4.

1.20     "Effective Date" means October 26, 2000.

1.21     "Employee" means an employee of Southern or any of its subsidiaries
         that are "employing companies" as defined in the Southern Company
         Deferred Compensation Plan as amended and restated January 1, 2000, and
         as may be amended from time to time.

1.22     "Exchange Act" means the Securities Exchange Act of 1934, as amended.

1.23     "Group" has the meaning set forth in Section 14(d) of the Exchange Act.

1.24     "Incumbent Board" means those individuals who constitute the Southern
         board of directors as of October 19, 1998, plus any individual who
         shall become a director subsequent to such date whose election or
         nomination for election by Southern's shareholders was approved by a
         vote of at least 75% of the directors then comprising the Incumbent
         Board. Notwithstanding the foregoing, no individual who shall become a
         director of the Southern board of directors subsequent to October 19,
         1998, whose initial assumption of office occurs as a result of an
         actual or threatened election contest (within the meaning of Rule
         14a-11 of the regulations promulgated under the Exchange Act) with
         respect to the election or removal of directors or other actual or
         threatened solicitation of proxies or consents by or on behalf of a
         Person other than the Southern board of directors shall be a member of
         the Incumbent Board.

1.25     "Market Value" means the average of the high and low prices of the
         Common Stock, as published in the Wall Street Journal in its report of
         New York Stock Exchange composite transactions, on the date such Market
         Value is to be determined, as specified herein (or the average of the
         high and low sale prices on the trading day immediately preceding such
         date if the Common Stock is not traded on the New York Stock Exchange
         on such date).

1.26     "Participant" means a Director or former Director who has an unpaid
         Deferred Compensation Account balance under the Plan.

1.27     "Participating Companies" means those companies whose boards of
         directors have authorized the establishment of trust(s) for the funding
         of their respective directors' Deferred Compensation Accounts under
         their respective Deferred Compensation Plans for Directors, including
         the Company.

1.28     "Pension Benefit" means the U.S. dollar amount of the
         actuarially-determined present value of benefits based on a Director's
         expected service at the required retirement date under The Southern
         Company Outside Directors Pension Plan, as calculated as of the
         Termination Date, plus accrued earnings on such amount calculated as if
         invested at the Prime Interest Rate from the Termination Date, until
         such amount is invested in Deferred Compensation Accounts pursuant to
         the provisions of Section 5.3.

1.29     "Pension Benefit Investment Date" means the date to be determined by
         the Committee, as of which the Director's Pension Benefit will be
         credited to a Deferred Compensation Account in accordance with the
         director's Deferred Pension Election under Section 5.3.

1.30     "Phantom Stock Investment Account" means the bookkeeping account
         established pursuant to Section 6.2 in which a Director may elect to
         defer Cash Compensation or make investments, and includes amounts
         credited thereto to reflect the reinvestment of dividends.

1.31     "Plan" means the Deferred Compensation Plan for Directors of Savannah
         Electric and Power Company as from time to time in effect.

1.32     "Plan Period" means the period designated in Section 4.

1.33     "Person" means any individual, entity or group within the meaning of
         Section 13(d)(3) or 14(d)(2) of the Exchange Act.

1.34     "Preliminary Change in Control" means the occurrence of any of the
         following as determined by the Southern Committee:

         (a)      Southern or the Company has entered into a written agreement,
                  such as, but not limited to, a letter of intent, which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control, as the case may be;

         (b)      Southern, the Company or any Person publicly announces an
                  intention to take or to consider taking actions which, if
                  Consummated, would result in a Southern Change in Control or a
                  Company Change in Control under circumstances where the
                  Consummation of the announced action or intended action is
                  legally and financially possible;

         (c)      Any Person becomes the Beneficial Owner of fifteen percent
                  (15%) or more of the Common Stock; or

         (d)      The Southern board of directors or the board of directors of
                  the Company has declared that a Preliminary Change in Control
                  has occurred.

1.35     "Prime Interest Rate" means the prime rate of interest as published in
         the Wall Street Journal.

1.36     "Prime Rate Investment Account" means the bookkeeping account
         established pursuant to Section 6.1 in which a Director may elect to
         defer Cash Compensation or make investments, the investment return on
         which is computed at the Prime Interest Rate.

1.37     "Southern" means The Southern Company.

1.38     "Southern Change in Control" means any of the following:

         (a)      The Consummation of an acquisition by any Person of Beneficial
                  Ownership of 20% or more of Southern's Voting Securities;
                  provided, however, that for purposes of this subsection (a),
                  the following acquisitions of Southern's Voting Securities
                  shall not constitute a Change in Control:

                  (i)      any acquisition directly from Southern,

                  (ii)     any acquisition by Southern,

                  (iii)    any acquisition by any employee benefit plan (or
                           related trust) sponsored or maintained by Southern or
                           any corporation controlled by Southern,

                  (iv)     any acquisition by a qualified pension plan or
                           publicly held mutual fund,

                  (v)      any acquisition by an Employee or Group composed
                           exclusively of Employees, or

                  (vi)     any Business Combination which would not otherwise
                           constitute a Change in Control because of the
                           application of clauses (i), (ii) and (iii) of Section
                           1.37(c);

         (b)      A change in the composition of Southern's board of directors
                  whereby individuals who constitute the Incumbent Board cease
                  for any reason to constitute at least a majority of Southern's
                  board of directors; or

         (c)      Consummation of a Business Combination, unless, following such
                  Business Combination, all of the following three conditions
                  are met:

                  (i) all or substantially all of the individuals and entities
                  who held Beneficial Ownership, respectively, of Southern's
                  Voting Securities immediately prior to such Business
                  Combination beneficially own, directly or indirectly, 65% or
                  more of the combined voting power of the Voting Securities of
                  the corporation surviving or resulting from such Business
                  Combination, (including, without limitation, a corporation
                  which as a result of such transaction holds Beneficial
                  Ownership of all or substantially all of Southern's Voting
                  Securities or all or substantially all of Southern's assets)
                  (such surviving or resulting corporation to be referred to as
                  "Surviving Company"), in substantially the same proportions as
                  their ownership, immediately prior to such Business
                  Combination, of Southern's Voting Securities; (ii) no Person
                  (excluding any corporation resulting from such Business
                  Combination, any qualified pension plan, publicly held mutual
                  fund, Group composed exclusively of employees or employee
                  benefit plan (or related trust) of Southern, its subsidiaries,
                  or Surviving Company) holds Beneficial Ownership, directly or
                  indirectly, of 20% or more of the combined voting power of the
                  then outstanding Voting Securities of Surviving Company except
                  to the extent that such ownership existed prior to the
                  Business Combination; and (iii) at least a majority of the
                  members of the board of directors of Surviving Company were
                  members of the Incumbent Board at the earlier of the date of
                  execution of the initial agreement, or of the action of the
                  Southern board of directors, providing for such Business
                  Combination.

1.39     "Southern Committee" means Chairman of the Southern board of directors,
         Chief Financial Officer of Southern, General Counsel of Southern, and
         the Chairman of the "Administrative Committee", as defined in Section
         3.1 of the Southern Company Deferred Compensation Plan, as restated and
         amended effective January 1, 2000.

1.40     "Stock Dividend Investment Account" means the bookkeeping account(s)
         established pursuant to section 6.4 on behalf of a Director that is
         credited with shares of stock, other than Common Stock, paid as a
         dividend on shares of Common Stock.

1.41     "Stock Retainer" means the annual Board retainer fee that is paid to
         the Director in the form of Common Stock.

1.42     "Termination Date" means January 1, 1997, the date as of which The
         Southern Company Outside Directors Pension Plan was effectively
         terminated.

1.43     "Trust Administrator" means the individual or committee that is
         established to in the Deferred Stock Trust and the Deferred Cash Trust,
         to administer such trusts on behalf of the Participating Companies.

1.44     "Voting Securities" shall mean the outstanding voting securities of a
         corporation entitling the holder thereof to vote generally in the
         election of such corporation's directors.

Where the context requires, words in the masculine gender shall include the
feminine gender, words in the singular shall include the plural, and words in
the plural shall include the singular.

                                    SECTION 2

                                     Purpose

The Plan provides a method of deferring payment to a Director of his
compensation until a date following the termination of his membership on the
Board.

                                    SECTION 3

                                   Eligibility

An individual who serves as a Director and is not otherwise actively employed by
the Company or any of its subsidiaries or affiliates is eligible to participate
in the Plan.

                                    SECTION 4

                                  Plan Periods

Except as pertains to a Director's initial Plan Period, all Plan Periods shall
be on a calendar year basis. The initial Plan Period applicable to any person
elected to the Board who was not a Director on the preceding December 31, shall
begin on the first day of such Director's membership on the Board. The initial
Plan Period under this amended and restated plan shall begin January 1, 2001.
Except as otherwise provided herein, the terms of the Plan in effect prior to
the effective date of this Plan shall continue to be applicable to deferrals
made pursuant to the Plan prior to January 1, 2000.

                                    SECTION 5

                                    Elections

5.1      Cash Compensation

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all or any portion of Cash Compensation that
                  otherwise would be paid to the Director for the Plan Period,
                  be deferred in amounts as designated by the Director, and
                  credited to (i) a Prime Rate Investment Account, (ii) a
                  Phantom Stock Investment Account, or (iii) a Deferred Stock
                  Account. Upon the Director's termination from the Board of
                  Directors, such deferred compensation and accumulated
                  investment return held in the Director's Deferred Compensation
                  Accounts shall be distributed to the Director in accordance
                  with the Director's Distribution Election and the provisions
                  of Section 7.

         (b)      An election to defer Cash Compensation is irrevocable. Such an
                  election shall continue from Plan Period to Plan Period unless
                  the Director changes his election to defer cash compensation
                  paid in a future Plan Period prior to the beginning of such
                  future Plan Period.

         (c)      Cash Compensation deferred under this Section 5.1 shall be
                  invested in Deferred Compensation Accounts as directed by the
                  Director on the Compensation Payment Date.

5.2      Stock Retainer

         (a)      Prior to the beginning of a Plan Period, a Director may direct
                  that payment of all of the Stock Retainer that otherwise would
                  be paid to the Director for the Plan Period, be deferred by
                  the Directors, and credited to his Deferred Stock Account,
                  such deferred compensation and accumulated investment return
                  held in the Director's Deferred Stock Account shall be
                  distributed to the Director in accordance with the Director's
                  Distribution Election and the provisions of Section 7.

         (b)      An election to defer the Stock Retainer is irrevocable. Such
                  an election shall continue from Plan Period to Plan Period
                  unless the Director changes his election to defer Stock
                  Retainer paid in a future Plan Period prior to the beginning
                  of such future Plan Period.

         (c)      Stock Retainer deferred under this Section 5.2 shall be
                  invested in Deferred Stock Account as directed by the Director
                  on the Compensation Payment Date.

5.3      Deferred Pension Election

         Any Director, who had a Pension Benefit as of the Termination Date,
         made a single one-time election, , to credit all of his Pension Benefit
         into a Deferred Compensation Account. The Pension Benefit was credited
         on the Pension Benefit Investment Date, at the election of the
         Director, to (i) a Prime Rate Investment Account or (ii) a Phantom
         Stock Investment Account. Upon the Director's termination from the
         Board, such Pension Benefit and accumulated investment return held in
         the Director's Deferred Compensation Accounts shall be distributed to
         the Director in accordance with the Director's Distribution Election
         and the provisions of Section 7.

5.4      Distribution Election

         (a)      Except as set forth in Section 5.4(b), prior to the initial
                  establishment a Deferred Compensation Account for a Director,
                  the Director must elect that upon termination from the Board
                  of Directors the values and quantities held in the Directors
                  Deferred Compensation Accounts be distributed to the Director,
                  pursuant to the provisions of Section 7, in a lump sum or in a
                  series of annual installments not to exceed ten (10). The time
                  for the commencement of distribution shall not be later than
                  the first day of the month coinciding with or next following
                  the second anniversary of termination of Board membership.

         (b)      Any Director who made a Deferred Pension Election in
                  accordance with Section 5.3 made a Distribution Election at
                  the time the Deferred Pension Election was made, attributable
                  to the Pension Benefit and any accumalated investment return.

         (c)      Distribution Elections made under Sections 5.4 (a) and (b) are
                  irrevocable except that a Director may amend either or both
                  Distribution Elections then in effect not prior to the 390th
                  day or later than the 360th day prior to his termination of
                  Board membership.

5.5      Beneficiary Designation

         A Director or former Director may designate a beneficiary to receive
         distributions from the Plan in accordance with the provisions of
         Section 7 upon the death of the director. The beneficiary designation
         may be changed by a Director or former Director at any time, and
         without the consent of the prior beneficiary.

5.6      Form of Election

         All elections pursuant to the provisions of this Section 5 of the Plan
         shall be made in writing to the Secretary of the Company on a form or
         forms available upon request of the Secretary or Assistant Secretary.

                                    SECTION 6

                                    Accounts

6.1      Prime Rate Investment Account

         A Prime Rate Investment Account shall be established for each Director
         electing deferral or investment of Cash Compensation at the Prime
         Interest Rate. The amount directed by the Director to such account
         shall be credited to it as of the Pension Benefit Investment Date or
         Compensation Payment Date, as applicable, and credited thereafter with
         interest computed using the Prime Interest Rate. Interest shall be
         computed from the date such compensation is credited to the account and
         compounded quarterly at the end of each calendar quarter. The Prime
         Interest Rate in effect on the first day of a calendar quarter shall be
         deemed the Prime Interest Rate in effect for that entire quarter.
         Interest shall accrue and compound on any balance until the amount
         credited to the account is fully distributed.

6.2      Phantom Stock Investment Account

         The Phantom Stock Investment Account established for each Director
         electing deferral of Cash Compensation for investment at the Common
         Stock investment rate shall be credited with the number of shares
         (including fractional shares rounded to the nearest ten-thousandth) of
         Common Stock which could have been purchased on the Pension Benefit
         Investment Date or the Compensation Payment Date, as applicable, as
         determined by dividing the applicable compensation by the Market Value
         on such date. On the date of the payment of dividends on the Common
         Stock, the Director's Phantom Stock Investment Account shall be
         credited with additional shares (including fractional shares rounded to
         the nearest ten-thousandth) of Common Stock, as follows:

         (a)      In the case of cash dividends, such additional shares as would
                  have been purchased as of the Common Stock dividend record
                  date as if the credited shares had been outstanding on such
                  date and dividends reinvested thereon under the Southern
                  Investment Plan;

         (b)      In the case of dividends payable in property other than cash
                  or Common Stock, such additional shares as could be purchased
                  at the Market Value as of the date of payment with the fair
                  market value of the property which would have been payable if
                  the credited shares had been outstanding; and

         (c)      In the case of dividends payable in Common Stock, such
                  additional shares as would have been payable on the credited
                  shares as if they had been outstanding.

6.3      Deferred Stock Account

         (a)      A Director's Deferred Stock Account will be credited:

                  (i)      with the number of shares of Common Stock (rounded to
                           the nearest ten thousandth of a share) determined by
                           dividing the amount of Cash Compensation subject to
                           deferral or investment in the Deferred Stock Account
                           by the average price paid by the Trustee of the
                           Deferred Stock Trust for shares of Common Stock with
                           respect to the Pension Benefit Investment Date or the
                           Compensation Payment Date, as applicable, as reported
                           by the Trustee, or, if the Trustee shall not at such
                           time purchase any shares of Common Stock, by the
                           Market Value on such date;

                  (ii)     as of the date on which Stock Retainer is paid, the
                           shares of Common Stock payable to the Director as his
                           Stock Retainer; and

                  (iii)    as of each date on which dividends are paid on the
                           Common Stock, with the number of shares of Common
                           Stock (rounded to the nearest ten thousandth of a
                           share) determined by multiplying the number of shares
                           of Common Stock credited in the Director's Deferred
                           Stock Account on the dividend record date, by the
                           dividend rate per share of Common Stock, and dividing
                           the product by the price per share of Common Stock
                           attributable to the reinvestment of dividends on the
                           shares of Common Stock held in the Deferred Stock
                           Trust on the applicable dividend payment date or, if
                           the Trustee of the Deferred Stock Trust has not
                           reinvested in shares of Common Stock on the
                           applicable dividend reinvestment date, the product
                           shall be divided by the Market Value on the dividend
                           payment date.

         (b)      If Southern enters into transactions involving stock splits,
                  stock dividends, reverse splits or any other recapitalization
                  transactions, the number of shares of Common Stock credited to
                  a Director's Deferred Stock Account will be adjusted (rounded
                  to the nearest ten thousandth of a share) so that the
                  Director's Deferred Stock Account reflects the same equity
                  percentage interest in Southern after the recapitalization as
                  was the case before such transaction.

         (c)      If at least a majority of Southern's stock is sold or
                  exchanged by its shareholders pursuant to an integrated plan
                  for cash or property (including stock of another corporation)
                  or if substantially all of the assets of Southern are disposed
                  of and, as a consequence thereof, cash or property is
                  distributed to Southern's shareholders, each Director's
                  Deferred Stock Account will, to the extent not already so
                  credited under this Section 6.3, be (i) credited with the
                  amount of cash or property receivable by a Southern
                  shareholder directly holding the same number of shares of
                  Common Stock as is credited to such Director's Deferred Stock
                  Account and (ii) debited by that number of shares of Common
                  Stock surrendered by such equivalent Southern shareholder.

(c)               Each Director who has a Deferred Stock Account also shall be
                  entitled to provide directions to the Trust Administrator to
                  cause such committee to similarly direct the Trustee of the
                  Deferred Stock Trust to vote, on any matter presented for a
                  vote to the shareholders of Southern, that number of shares of
                  Common Stock held by the Deferred Stock Trust equivalent to
                  the number of shares of Common Stock credited to the
                  Director's Deferred Stock Account. Such committee shall
                  arrange for distribution to all Directors in a timely manner
                  of all communications directed generally to the Southern
                  shareholders as to which their votes are solicited.

6.4      Stock Dividend Investment Account

(a)      A Director's Stock Dividend Investment Account will be credited as of
         the date on which a dividend is paid to the Company's common
         stockholders in stock other than Common Stock with the number of shares
         of the other corporation's stock receivable by a Southern stockholder
         directly holding the same number of shares of Common Stock as is
         credited to such Director's Deferred Stock Account.

(b)      Each Director who has a Stock Dividend Investment Account also shall be
         entitled to provide directions to the Trust Administrator to similarly
         direct the Trustee of the Deferred Stock Trust to vote on any matter
         presented for a vote to the applicable corporation's shareholders, that
         number of shares of the applicable corporation's common stock held by
         the Deferred Stock Trust equivalent to the number of shares credited to
         the Director's Stock Dividend Investment Account. The Trust
         Administrator shall arrange for distribution to all Directors in a
         timely manner of all communications directed generally to the
         applicable corporation's shareholders as to which their votes are
         solicited.


                                    SECTION 7

                                  Distributions

7.1      Upon termination of a Director's membership on the Board, the amount
         credited to a Director's Deferred Compensation Accounts will be paid to
         the Director or his beneficiary, as applicable. The amount credited to
         a Director's Prime Rate Investment Account and Phantom Stock Investment
         Account shall be paid in cash and the amount credited to his Deferred
         Stock Account shall, except as otherwise provided in Section 6.3(c),
         Section 9.5, or to the extent the Company is otherwise, in the
         reasonable judgment of the Committee, precluded from doing so, be paid
         in shares of Common Stock (with any fractional share interest therein
         paid in cash to the extent of the then Market Value thereof). Such
         payments shall be from the general assets of the Company (including the
         Deferred Cash Trust and the Deferred Stock Trust) in accordance with
         this Section 7. The amount credited to a Stock Dividend Investment
         Account shall, except as otherwise provided in section 9.5, be paid
         from the assets in the Deferred Stock Trust in shares of the applicable
         corporation, however if there is not a sufficient number of shares held
         in the Trust, the remainder shall be paid in cash based upon the
         average of the high and low price of the stock as reported in the Wall
         Street Journal on the business day immediately proceeding the
         distribution date.

7.2      Unless other arrangements are specified by the Committee on a uniform
         and nondiscriminatory basis, deferred amounts shall be paid in the form
         of (i) a lump sum payment, or (ii) in approximately equal annual
         installments, as elected by the Director pursuant to the provision of
         Section 5.4. Such payments shall be made (or shall commence) as soon as
         practicable following the termination of Board membership or, if so
         elected in the Distribution Election, up to twenty-four (24) months
         following such termination.

         In the event a Director elected to receive the balance of his Deferred
         Compensation Accounts in a lump sum, distribution shall be made on the
         first day of the month selected by the Director on his Distribution
         Election, or as soon as reasonably possible thereafter. If the Director
         elected to receive annual installments, the first payment shall be made
         on the first day of the month selected by a Director, or as soon as
         reasonably possible thereafter, and shall be equal to the balance in
         the Director's Deferred Compensation Accounts on such date divided by
         the number of annual installment payments. Each subsequent annual
         payment shall be an amount equal to the balance in the Director's
         Deferred Compensation Accounts on the date of payment divided by the
         number of remaining annual payments and shall be paid on the
         anniversary of the preceding date of payment.

         The Market Value of any shares of Common Stock credited to a Director's
         Phantom Stock Investment Account shall be determined as of the
         twenty-fifth (25th) day of the month immediately preceding the date of
         any lump sum or installment distribution.

         Upon the death of a Director, or a former Director prior to the payment
         of all amounts credited to the Director's Deferred Compensation
         Accounts, the unpaid balance shall be paid in the sole discretion of
         the Committee (i) in a lump sum to the designated beneficiary of such
         Director or former Director within thirty (30) days of the date of
         death (or as soon as reasonably possible thereafter) or (ii) in
         accordance with the Distribution Election made by such Director or
         former Director. In the event a beneficiary designation has not been
         made, or the designated beneficiary is deceased or cannot be located,
         payment shall be made to the estate of the Director or former Director.
         The Market Value of any shares of Common Stock credited to a Director's
         Phantom Stock Investment Account shall be determined as of the
         twenty-fifth (25th) day of the month immediately preceding the date of
         any lump sum or installment distribution.

                                    SECTION 8

                 Change in Control and Other Special Provisions

8.1      Notwithstanding any other terms of the Plan to the contrary, following
         a Southern Change in Control or a Company Change in Control, the
         provisions of this Section 8 shall apply to the payment of benefits
         under the Plan with respect to any Director who is a Participant on
         such date.

8.2      The Deferred Cash Trust and the Deferred Stock Trust (collectively
         "Trusts") have been established to hold assets of the Participating
         Companies under certain circumstances as a reserve for the discharge of
         the Company's obligations under the Plan. In the event of a Preliminary
         Change in Control of Southern or the Company, the Company shall be
         obligated to immediately contribute such amounts to the Trusts as may
         be necessary to fully fund all benefits payable under the Plan in
         accordance with the procedures set forth in Section 8.3 hereof. In
         addition, in order to provide the added protections for certain
         individuals in accordance with Paragraph 7(c) of the Trust, the Company
         may fund the Trusts prior to a Preliminary Change in Control of
         Southern or the Company in accordance with the terms of the Trusts. All
         assets held in the Trusts remain subject only to the claims of the
         Participating Companies' general creditors whose claims against the
         Participating Companies are not satisfied because of the Participating
         Companies' bankruptcy or insolvency (as those terms are defined in the
         Trust). No Participant has any preferred claim on, or beneficial
         ownership interest in, any assets of the Trusts before the assets are
         paid to the Participant and all rights created under the Trusts, as
         under the Plan, are unsecured contractual claims of the Participant
         against the Company.

8.3      As soon as practicable following either a Preliminary Change in Control
         of Southern or of the Company, the Company shall contribute an amount
         based upon the funding strategy adopted by the Trust Administrator
         necessary to fulfill the Company's obligations pursuant to this Section
         8. In the event of a dispute over such actuary's determination, the
         Company and any complaining Participant(s) shall refer such dispute to
         an independent, third party actuarial consultant, chosen by the Company
         and such Participant. If the Company and the Participant cannot agree
         on an independent, third party actuarial consultant, the actuarial
         consultant shall be chosen by lot from an equal number of actuaries
         submitted by the Company and the applicable Trustee. Any such referral
         shall only occur once in total and the determination by the third-party
         actuarial consultant shall be final and binding upon both parties. The
         Company shall be responsible for all of the fees and expenses of the
         independent actuarial consultant.

8.4      In the event of a Southern Change in Control or a Company Change in
         Control, notwithstanding anything to the contrary in the Plan, upon
         termination as a Director, that amount in the Deferred Compensation
         Plan Account(s) of a Participant who was a Director determined as of
         such Change in Control shall be paid out in a lump sum if such
         Participant makes an election pursuant to procedures established by the
         Trust Administrator, in its sole and absolute discretion. If no such
         election is made, the Director shall receive payment of his Accounts
         solely in accordance with Section 7.

                                    SECTION 9

                               General Provisions

9.1      In the event that the Company shall decide to establish an advance
         accrual reserve on its books against the future expense of payments
         from any Deferred Compensation Accounts, such reserve shall not under
         any circumstances be deemed to be an asset of this Plan but, at all
         times, shall remain a part of the general assets of the Company,
         subject to claims of the Company's creditors.

9.2      A person entitled to any amount under this Plan shall be a general
         unsecured creditor of the Company with respect to such amount.
         Furthermore, a person entitled to a payment or distribution with
         respect to a Deferred Compensation Account shall have a claim upon the
         Company only to the extent of the balance in his Deferred Compensation
         Accounts.

9.3      All commissions, fees, and expenses that may be incurred in operating
         the Plan will be paid by the Company.

9.4      The Company will pay its prorated share of all commissions, fees, and
         expenses that may be incurred in operating any trust(s) established
         under the Plan (including the Deferred Stock Trust and the Deferred
         Cash Trust).

9.5      Notwithstanding any other provision of this Plan: (i) elections under
         this Plan may only be made by Directors while they are directors of the
         Company; (with the exception of the designation of beneficiaries) and
         (ii) distributions otherwise payable to a Director in the form of
         Common Stock shall be delayed and/or instead paid in cash in an amount
         equal to the fair market value thereof if such payment in Common Stock
         would violate any federal or State securities laws (including Section
         16(b) of the Securities Exchange Act of 1934, as amended) and/or rules
         and regulations promulgated thereunder.

9.6      Directors, their legal representatives and their beneficiaries shall
         have no right to anticipate, alienate, sell, assign, transfer, pledge
         or encumber their interests in the Plan, nor shall such interests be
         subject to attachment, garnishment, levy or execution by or on behalf
         of creditors of the Directors or of their beneficiaries.

                                   SECTION 10

                                 Administration

Subject to the express provisions of the Plan, the Committee shall have the
exclusive right to interpret the Plan, to prescribe, amend and rescind rules and
regulations relating to it and to make all other determinations necessary or
advisable for the administration of the Plan. The decisions, actions and records
of the Committee shall be conclusive and binding upon the Company and all
persons having or claiming to have any right or interest in or under the Plan.

The Committee may delegate to such officers, employees, or departments of the
Company or Southern, such authority, duties, and responsibilities of the
Committee as it, in its sole discretion, considers necessary or appropriate for
the proper and efficient operation of the Plan, including, without limitation,
(i) interpretation of the Plan, (ii) approval and payment of claims, and (iii)
establishment of procedures for administration of the Plan.

                                   SECTION 11

                    Amendment, Termination and Effective Date

11.1     Amendment of the Plan

         Except for the provisions of Section 8, which may not be amended
         following a Southern Change in Control or Company Change in Control,
         and subject to the provisions of Section 11.3, the Plan may be wholly
         or partially amended or otherwise modified at any time by written
         action of the Board of Directors.

11.2     Termination of the Plan

         Subject to the provisions of Section 11.3 herein, the Plan may be
         terminated at any time by written action of the Board of Directors.

11.3     No Impairment of Benefits

         Notwithstanding the provisions of Sections 11.1 and 11.2, herein no
         amendment to or termination of the Plan shall impair any rights to
         benefits that have accrued hereunder.

11.4     Governing Law

         This Plan shall be construed in accordance with and governed by the
         laws of the State of Georgia.

         IN WITNESS WHEREOF, the Plan, as amended and restated effective October
26, 2000 has been executed pursuant to resolutions of the Board of Directors of
Savannah Electric and Power Company, this 26th day of October, 2000.

                                            SAVANNAH ELECTRIC AND POWER COMPANY

                                           By: ________________________________

Attest:

By: ___________________________

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>58
<FILENAME>x10f34.txt
<TEXT>



                                    AGREEMENT

         THIS AGREEMENT made and entered into effective as of December 1, 1983
by and between Savannah Electric and Power Company, a Georgia corporation,
hereinafter referred to as the "Company", and William Miles Greer, hereinafter
referred to as the "Employee."

         WHEREAS, Employee became an employee of the Company as of December 1,
1983; and

         WHEREAS, during the period prior to his employment with the Company,
the Employee acquired knowledge valuable to the Company's affairs and its
business; and

         WHEREAS, under the prevailing interpretations of the sections of the
Internal Revenue Code and the Employee Retirement Income Security Act of 1974,
as amended, applicable to the Employees' Retirement Plan of Savannah Electric
and Power Company (hereinafter referred to as the "Pension Plan"), the
Employee's years of service with his former employer may not be recognized for
purposes of calculating the Employee's retirement Allowance under the Pension
Plan; and

         WHEREAS, the Company has agreed to establish an agreement with Employee
to recognize such service; and

         WHEREAS, the Company desires not only to recognize the valuable
knowledge acquired by the Employee while employed by his former employer, but
also desires to secure the continued services of the Employee; and

         WHEREAS, the Employee is willing to continue to service the Company
faithfully, diligently, and competently;

         NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and the Employee hereby agree as follows:

         1. Upon the Employee's termination of service with the Company, the
Company agrees to pay the Employee a monthly amount equal to the difference
between his retirement Allowance payable in accordance with the terms and
provisions of the Pension Plan, as amended from time to time, and the monthly
retirement Allowance the Employee would have been entitled to receive under the
Pension Plan as if he had first been employed by the Company on July 1, 1974
(considering the one year waiting period under the Plan, this would allow
Credited Service to be recognized starting July 1, 1975).

         If, however, Employee terminates employment with the Company prior to
April 1, 1993, the Credited Service recognized in the sentence above shall be
limited to the number of years and months of actual service the Employee has
served with the Company.

         The Employee's additional years of Credited Service under the Pension
Plan after December 1, 1983 shall also be recognized for purposes of calculating
the Employee's retirement Allowance under this Paragraph 1 in the event of his
termination of service with the Company for reasons other than death, transfer
to an affiliated or associated company, or retirement under the Pension Plan.
Notwithstanding the foregoing, in the event such Credited Service is for any
reason disregarded in calculating benefits under the Pension Plan, it shall also
be disregarded for purposes of this Agreement.

         The amount paid pursuant to this Paragraph 1 shall be recalculated from
time to time to reflect any future increases in the retirement Allowance of
retirees under the Pension Plan following the Employee's retirement at his early
retirement date, Normal Retirement Date, or deferred retirement date under the
Pension Plan, as appropriate.

         2. The amount calculated in accordance with Paragraph 1 shall be paid
in monthly increments on the first day of each month concurrently with the
Employee's retirement Allowance under the Pension Plan. In the event the
Employee is married and the Employee's spouse is living on the date payments
commence under this Paragraph 2, the monthly payments shall be paid in the same
manner as the 100% joint and survivor annuity option under the Pension Plan,
including any adjustments for post-retirement survivor coverage as would be made
under the Pension Plan, in which case 100% of the monthly amount payable to the
Employee shall be payable to his Surviving Spouse after his death until the
death of such Surviving Spouse. In the event the Employee shall die before
payments commence under this Paragraph 2 and he shall be survived by his
Surviving Spouse, such Surviving Spouse shall be entitled to a monthly survivor
benefit calculated pursuant to Paragraph 1 and payable in accordance with the
Pension Plan. In the event the Employee shall not be married on the date
payments commence under this Paragraph 2, the monthly amounts payable under
Paragraph 1 shall be paid to the Employee as a single life annuity. The Employee
or his Surviving Spouse shall not, under any circumstances, have any option or
right to require payments hereunder otherwise than in accordance with the terms
hereof.

         3. Neither the entering into nor the termination of this Agreement for
any reason shall affect the Employee's right to such salary, fees or other
compensation for services as an employee, officer or director of the Company, as
may be agreed upon from time to time, nor his right to participate in all of the
employee benefit plans maintained by the Company on the same basis as any other
regular full-time employee of the Company.

         4. Nothing contained in this Agreement shall be construed to affect in
any manner the existing rights of the Company to suspend, terminate, alter or
modify, whether or not for cause, the employment relationship of the parties
hereto.

         5. Neither the Employee nor the Surviving Spouse or other beneficiary
under this Agreement shall have any right to sell, assign, transfer, encumber or
otherwise convey this right to receive payment of any amounts payable hereunder,
which payment and the right thereto are expressly declared to be nonassignable
and nontransferable. Any attempt to do so shall be null and void and of no
effect.

         6. The Company shall not reserve or otherwise set aside funds for the
payment of its obligations hereunder, which obligations shall be paid from the
general assets of the Company. Notwithstanding that the Employee shall be
entitled to receive the entire amounts stated herein, the assets from which such
amounts shall be paid shall at all times be subject to the claims of the
Company's creditors.

         7. The Company and the Employee agree that the Employee is highly
compensated and holds a management position with the Company.

         8. The Company and the Employee agree that this Agreement is an
employee benefit plan for an individual who is a member of management and is
highly compensated, as described in ss.ss. 201(2), 301(a)(3) and 401(a)(1) of
the Employee Retirement Income Security Act of 1974.

         9. Except as preempted by federal law, this Agreement shall be
construed in accordance with and governed by the laws of the State of Georgia.

         10. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and any successor to the business of the Company, and in any
event, the Agreement shall, if not sooner terminated, terminate for all purposes
upon the death of the Employee or, if his spouse shall survive the Employee and
shall be entitled to receive any payments hereunder, upon the death of the
Employee's Surviving Spouse, and the satisfaction by the Company of its
obligations hereunder.

         11. In the event the Employee is transferred to or accepts employment
with an affiliate of the Company, it is the intent of the Company to have the
Employee's new employer assume the Company's responsibilities under this
Agreement. If, however, such new employer does not assume this Agreement, the
Company shall continue to be obligated to provide benefits under this Agreement
as if the Employee had remained employed with the Company during the period he
is employed by such affiliate, but for purposes of determining the Employee's
benefit under this Agreement, the Employee shall be deemed to have become
Employed by such affiliate on July 1, 1974 and the affiliate's defined benefit
pension plan shall be used to determine the benefit due hereunder in lieu of
using the Pension Plan to determine Employee's benefit hereunder. Any benefit so
calculated shall be reduced by the benefit due employee under the Pension Plan
and the affiliate's defined benefit Pension Plan. Notwithstanding any of the
above, in no event shall Employee's benefit under this Agreement, the Pension
Plan and the affiliate's defined benefit pension plan be less than Employee's
benefit under this Plan and the Pension Plan at the time of the Employee's
transfer or acceptance of employment with any such affiliate.


<PAGE>


         IN WITNESS WHEREOF, this Agreement has been executed by the Employee
and Southern Company Services, Inc., through its duly authorized officers this
______ day of November, 1995.

                                            EMPLOYEE:




                                                         WILLIAM MILES GREER

Sworn to and subscribed before me this ___ day of ________, 1995.


Notary Public, State of Georgia

My Commission Expires:


(NOTARIAL SEAL)


                                     EMPLOYER:
                                     SAVANNAH ELECTRIC AND POWER COMPANY


                                     BY:
                                        --------------------------------------

                                     ATTEST:
                                           ------------------------------------

Sworn to and subscribed before me this ___ day of ________, 1995.


Notary Public, State of Georgia

My Commission Expires:


(NOTARIAL SEAL)

</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10
<SEQUENCE>59
<FILENAME>x10f35.txt
<TEXT>



STATE OF GEORGIA  )
                  )
COUNTY OF CHATHAM )


         THIS AGREEMENT is made and entered into as of the 3rd day of December,
1990, by and between W. MILES GREER, of Chatham County, Georgia ("Employee"),
and SAVANNAH ELECTRIC AND POWER COMPANY, a Georgia public utility corporation,
with its principal office and place of business in Chatham county, Georgia (the
"Company").

                              W I T N E S S E T H :

         WHERAS, Employee was employed by the Company on December 1, 1983, and
was thereafter duly elected as an officer of the Company; and

         WHEREAS, prior to accepting employment by the Company, Employee and the
Company negotiated a contract providing for Employee's compensation; and

         WHEREAS, the Company agreed, in connection with Employee's
compensation, to credit Employee with eight (8) years of additional service with
the Company under the terms and provisions of the Company's supplemental
Executive Retirement Plan ("SERP") and the Company's Deferred Compensation Plan
for Key Employees ("Deferred Compensation Plan"), copies of which are attached
hereto as Exhibits "A" and "B," respectively, and made a part hereof by
reference; and

         WHEREAS, the Company and Employee desire to confirm and reduce to
writing their mutual understanding and agreement for such service credit of the
Employee under the SERP and the Deferred Compensation Plan of the Company;

         NOW, THEREFORE, for and in consideration of the premises, and other
good and valuable legal consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto hereby agree as follows:

         1. Additional Credited Service for Employee. The Company hereby credits
Employee with eight (8) years of additional service under the provisions of the
Company's SERP and Deferred Compensation Plan. Such eight (8) years of
additional service of Employee shall be added to Employee's "Credited Service"
as defined under Section 2.06 of said SERP and added to Employee's "Year of
Service" as defined under Article II, Section 21, of said Deferred Compensation
Plan.

         2. Confirmation of SERP and Deferred Compensation Plan. Except as
amended hereby with respect to Employee, all of the terms and provisions of the
SERP and Deferred Compensation Plan with respect to the Employee shall remain in
full force and effect, including, without limitation, the provisions thereof
providing for amendment and termination.


<PAGE>


         IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officers and its corporate seal to be affixed
and Employee has hereunto set his hand and seal as of the day and year first
above written.

                          SAVANNAH ELECTRIC AND POWER COMPANY

                          By:________________________________________
                                                     President

                          Attest:______________________________________
                                      Treasurer and Secretary

      (Corporate Seal)

                                ------------------------------
                                       W Miles Greer
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>60
<FILENAME>x24a.txt
<TEXT>



February 19, 2001


Tommy Chisholm, and Wayne Boston

Dear Sirs:

         The Southern Company proposes to file or join in the filing of reports
under the Securities Exchange Act of 1934, as amended, with the Securities and
Exchange Commission with respect to the following: (1) the filing of this
Company's Annual Report on Form 10-K for the year ended December 31, 2000 and
(2) the filing of Quarterly Reports on Form 10-Q during 2001 and any Current
Reports on Form 8-K

         The Southern Company and the undersigned directors and officers of said
Company, individually as a director and/or as an officer of the Company, hereby
make, constitute and appoint each of you our true and lawful Attorney for each
of us and in each of our names, places and steads to sign and cause to be filed
with the Securities and Exchange Commission in connection with the foregoing
said Annual Report on Form 10-K, said Quarterly Reports on Form 10-Q, any
Current Reports on Form 8-K and any necessary or appropriate amendment or
amendments to any such reports, to be accompanied in each case by any necessary
or appropriate exhibits or schedules thereto.

                                                   Yours very truly,

                                                   THE SOUTHERN COMPANY


                                                   By /s/A. W. Dahlberg
                                                        A. W. Dahlberg
                                                 Chairman of the Board and
                                                  Chief Executive Officer


<PAGE>


                                      - 2 -



      /s/Daniel P. Amos                                  /s/Donald M. James
        Daniel P. Amos                                    Donald M. James



      /s/Dorrit J. Bern                                   /s/Zack T. Pate
        Dorrit J. Bern                                      Zack T. Pate



     /s/Thomas F. Chapman                               /s/Gerald J. St. Pe'
      Thomas F. Chapman                                  Gerald J. St. Pe'



      /s/A. W. Dahlberg                               /s/Stephen A. Wakefield
        A. W. Dahlberg                                  Stephen A. Wakefield



     /s/H. Allen Franklin                                /s/W. L. Westbrook
      H. Allen Franklin                                   W. L. Westbrook



________________________________                         /s/Tommy Chisholm
       Bruce S. Gordon                                     Tommy Chisholm



     /s/L. G. Hardman III                                /s/W. Dean Hudson
      L. G. Hardman III                                    W. Dean Hudson



________________________________
       Elmer B. Harris


<PAGE>





March 14, 2001


Tommy Chisholm and Wayne Boston

Dear Sirs:

         As an officer of The Southern Company, I hereby make, constitute, and
appoint each of you my true and lawful Attorney in my name, place, and stead, to
sign and cause to be filed with the Securities and Exchange Commission (1) this
Company's Annual Report on Form 10-K for the year ended December 31, 2000, (2)
Quarterly Reports on Form 10-Q during 2001, (3) any Current Reports on Form 8-K,
and (4) any necessary or appropriate amendment or amendments to any such
reports, each such report or amendments to such reports to be accompanied in
each case by any necessary or appropriate exhibits or schedules thereto.

                                                              Yours very truly,

                                                              /s/Gale E. Klappa

<PAGE>
Extract from minutes of meeting of the board of directors of The Southern
Company.

                               - - - - - - - - - -

                  RESOLVED: That for the purpose of signing the Company's Annual
         Report on Form 10-K for the year ended December 31, 2000 and 2001 Form
         10-Q's and Form 8-K's, and of remedying any deficiencies with
         respect thereto by appropriate amendment or amendments, this Company,
         the members of its board of directors, and its officers, are authorized
         to give their several powers of attorney to Tommy Chisholm and Wayne
         Boston.

                               - - - - - - - - - -

                  The undersigned officer of The Southern Company does hereby
certify that the foregoing is a true and correct copy of a resolution duly and
regularly adopted at a meeting of the board of directors of The Southern
Company, duly held on February 19, 2001, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.

Dated  March 28, 2001                               THE SOUTHERN COMPANY


                                                    By  /s/Tommy Chisholm
                                                          Tommy Chisholm
                                                            Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>61
<FILENAME>x24b.txt
<TEXT>

January 26, 2001



W. L. Westbrook                                      Wayne Boston
270 Peachtree Street, N.W.                           241 Ralph McGill Blvd. NE
Atlanta, Georgia  30303                              Atlanta, Georgia 30308-3374

Dear Sirs:

         Alabama Power Company proposes to file with the Securities and Exchange
Commission, under the Securities Exchange Act of 1934, (1) its Annual Report on
Form 10-K for the year ended December 31, 2000, and (2) its quarterly reports on
Form 10-Q during 2001.

         Alabama Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint W. L. Westbrook and Wayne Boston our true
and lawful Attorneys for each of us and in each of our names, places and steads
to sign and cause to be filed with the Securities and Exchange Commission in
connection with the foregoing said Annual Report on Form 10-K, quarterly reports
on Form 10-Q, and any appropriate amendment or amendments thereto and any
necessary exhibits.

                                            Yours very truly,

                                            ALABAMA POWER COMPANY



                                            By /s/Elmer B. Harris
                                                 Elmer B. Harris
                                         President and Chief Executive Officer


<PAGE>


                                      - 2 -



        /s/Whit Armstrong                             /s/William V. Muse
         Whit Armstrong                                 William V. Muse


______________________________                         /s/John T. Porter
         David J. Cooper                                John T. Porter


      /s/H. Allen Franklin                            /s/Robert D. Powers
        H. Allen Franklin                              Robert D. Powers


       /s/Elmer B. Harris                            /s/Andreas Renschler
         Elmer B. Harris                               Andreas Renschler


       /s/R. Kent Henslee                              /s/C. Dowd Ritter
         R. Kent Henslee                                C. Dowd Ritter


      /s/Carl E. Jones, Jr.                           /s/James H. Sanford
       Carl E. Jones, Jr.                              James H. Sanford


______________________________                        /s/John Cox Webb, IV
        Patricia M. King                               John Cox Webb, IV


       /s/James K. Lowder                             /s/James W. Wright
         James K. Lowder                                James W. Wright


    /s/Wallace D. Malone, Jr.                     /s/William B. Hutchins, III
     Wallace D. Malone, Jr.                        William B. Hutchins, III


      /s/Thomas C. Meredith                            /s/Art P. Beattie
       Thomas C. Meredith                               Art P. Beattie


 ______________________________
         Mayer Mitchell


<PAGE>
Extract from minutes of meeting of the board of directors of Alabama Power
Company.

                               - - - - - - - - - -

                  RESOLVED: That for the purpose of signing and filing with the
         Securities and Exchange Commission under the Securities Exchange Act of
         1934, Alabama Power Company's annual report on Form 10-K for the year
         ended December 31, 2000, and its 2001 quarterly reports on Form 10-Q,
         and of remedying any deficiencies with respect thereto by appropriate
         amendment or amendments, Alabama Power Company, the members of its
         Board of Directors, and its officers are authorized to give their
         several powers of attorney to W. L. Westbrook and Wayne Boston, in
         substantially the form of power of attorney presented to this meeting.

                               - - - - - - - - - -

                  The undersigned officer of Alabama Power Company does hereby
certify that the foregoing is a true and correct copy of resolution duly and
regularly adopted at a meeting of the board of directors of Alabama Power
Company, duly held on January 26, 2001, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.

Dated March 28, 2001                          ALABAMA POWER COMPANY


                                              By /s/Wayne Boston
                                                   Wayne Boston
                                                Assistant Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>62
<FILENAME>x24c.txt
<TEXT>

February 21, 2001


Thomas A. Fanning, W. L. Westbrook, Gale Klappa and Wayne Boston


Dear Sirs:

         Georgia Power Company proposes to file or join in the filing of reports
under the Securities Exchange Act of 1934 with the Securities and Exchange
Commission with respect to the following: (1) the filing of its Annual Report on
Form 10-K for the year ended December 31, 2000, and (2) the filing of its
quarterly reports on Form 10-Q during 2001.

         Georgia Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of you our true and lawful Attorney for
each of us and in each of our names, places and steads to sign and cause to be
filed with the Securities and Exchange Commission in connection with the
foregoing said Annual Report on Form 10-K, quarterly reports on Form 10-Q and
any appropriate amendment or amendments thereto and any necessary exhibits.

                                           Yours very truly,

                                           GEORGIA POWER COMPANY



                                           By  /s/David M. Ratcliffe
                                                 David M. Ratcliffe
                                           President and Chief Executive
                                                      Officer


<PAGE>


                                      - 2 -



     /s/Daniel P. Amos                                 /s/David M. Ratcliffe
      Daniel P. Amos                                    David M. Ratcliffe



   /s/Juanita P. Baranco                              /s/William Jerry Vereen
    Juanita P. Baranco                                 William Jerry Vereen



/s/William A. Fickling, Jr.                                /s/Carl Ware
 William A. Fickling, Jr.                                    Carl Ware



   /s/H. Allen Franklin                               /s/E. Jenner Wood, III
     H. Allen Franklin                                  E. Jenner Wood, III



   /s/L. G. Hardman III                                /s/Thomas A. Fanning
     L. G. Hardman III                                   Thomas A. Fanning



  /s/James R. Lientz, Jr.                               /s/Judy M. Anderson
   James R. Lientz, Jr.                                  Judy M. Anderson



 /s/G. Joseph Prendergast                              /s/Cliff S. Thrasher
   G. Joseph Prendergast                                 Cliff S. Thrasher

<PAGE>
Extract from minutes of meeting of the board of directors of Georgia Power
Company.

                               - - - - - - - - - -

                  RESOLVED: That for the purpose of signing reports under the
         Securities Exchange Act of 1934 to be filed with the Securities and
         Exchange Commission with respect to (a) the filing of the Company's
         Annual Report on Form 10-K for the year ended December 31, 2000, and
         (b) quarterly filings on Form 10-Q during 2001; and of remedying any
         deficiencies with respect thereto by appropriate amendment or
         amendments, this Company and the members of its Board of Directors
         authorize their several powers of attorney to Thomas A. Fanning, W. L.
         Westbrook Gale Klappa and Wayne Boston.

                               - - - - - - - - - -

         The undersigned officer of Georgia Power Company does hereby certify
that the foregoing is a true and correct copy of resolution duly and regularly
adopted at a meeting of the board of directors of Georgia Power Company, duly
held on February 21, 2001, at which a quorum was in attendance and voting
throughout, and that said resolution has not since been rescinded but is still
in full force and effect.

Dated  March 28, 2001                            GEORGIA POWER COMPANY


                                                 By  /s/Wayne Boston
                                                       Wayne Boston
                                                   Assistant Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>63
<FILENAME>x24d.txt
<TEXT>

                                February 21, 2001



Mr. W. L. Westbrook                             Mr. Wayne Boston
The Southern Company                            Southern Company Services, Inc.
270 Peachtree Street, N.W.                      241 Ralph McGill Blvd. NE
Atlanta GA  30303                               Atlanta GA  30308-3374


Dear Sirs:

                             Re: Forms 10-K and 10-Q

         Gulf Power Company proposes to file or join in the filing of reports
under the Securities Exchange Act of 1934 with the Securities and Exchange
Commission with respect to the following: (1) its Annual Report on Form 10-K for
the year ended December 31, 2000, and (2) its 2001 quarterly reports on Form
10-Q.

         Gulf Power Company and the undersigned Directors and Officers of said
Company, individually as a Director and/or as an Officer of the Company, hereby
make, constitute and appoint each of you our true and lawful Attorney for each
of us and in each of our names, places and steads to sign and cause to be filed
with the Securities and Exchange Commission in connection with the foregoing
said Annual Report on Form 10-K, quarterly reports on Form 10-Q and any
appropriate amendment or amendments thereto and any necessary exhibits.

                                                    Sincerely,



                                              By /s/Travis J. Bowden
                                                 Travis J. Bowden
                                       President and Chief Executive Officer


<PAGE>


                                      - 2 -






 /s/Travis J. Bowden                                        /s/Barbara H. Thames
  Travis J. Bowden                                            Barbara H. Thames




 /s/Fred C. Donovan                                         /s/Ronnie R. Labrato
   Fred C. Donovan                                            Ronnie R. Labrato




/s/H. Allen Franklin                                          /s/Warren E. Tate
  H. Allen Franklin                                            Warren E. Tate




 /s/W. D. Hull, Jr.
   W. D. Hull, Jr.

<PAGE>
Extract from minutes of meeting of the board of directors of Gulf Power Company.

                               - - - - - - - - - -

                  RESOLVED, That for the purpose of signing the reports under
         the Securities Exchange Act of 1934 to be filed with the Securities and
         Exchange Commission with respect to the filing of this Company's Annual
         Report on Form 10-K for the year ended December 31, 2000, and its 2001
         quarterly reports on Form 10-Q, and of remedying any deficiencies with
         respect thereto by appropriate amendment or amendments, this Company,
         the members of its Board of Directors, and its Officers, are authorized
         to give their several powers of attorney to W. L. Westbrook and Wayne
         Boston.

                               - - - - - - - - - -

         The undersigned officer of Gulf Power Company does hereby certify that
the foregoing is a true and correct copy of resolution duly and regularly
adopted at a meeting of the board of directors of Gulf Power Company, duly held
on February , 2001, at which a quorum was in attendance and voting throughout,
and that said resolution has not since been rescinded but is still in full force
and effect.

Dated  March 28, 2001                                     GULF POWER COMPANY


                                                          By  /s/Wayne Boston
                                                                Wayne Boston
                                                             Assistant Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>64
<FILENAME>x24e.txt
<TEXT>




February 28, 2001


Gale E. Klappa and Wayne Boston

Dear Sirs:

         Mississippi Power Company proposes to file or join in the filing of
reports under the Securities Exchange Act of 1934 with the Securities and
Exchange Commission with respect to the following: (1) the filing of its Annual
Report on Form 10-K for the year ended December 31, 2000, and (2) the filing of
its quarterly reports on Form 10-Q during 2001.

         Mississippi Power Company and the undersigned directors and officers of
said Company, individually as a director and/or as an officer of the Company,
hereby make, constitute and appoint each of you our true and lawful Attorney for
each of us and in each of our names, places and steads to sign and cause to be
filed with the Securities and Exchange Commission in connection with the
foregoing said Annual Report on Form 10-K, quarterly reports on Form 10-Q and
any appropriate amendment or amendments thereto and any necessary exhibits.

                                             Yours very truly,

                                             MISSISSIPPI POWER COMPANY



                                             By    /s/Dwight H. Evans
                                                     Dwight H. Evans
                                        President and Chief Executive Officer


<PAGE>


                                      - 2 -





 /s/Dwight H. Evans                                    /s/George A. Schloegel
   Dwight H. Evans                                       George A. Schloegel




 /s/Robert S. Gaddis                                    /s/Philip J. Terrell
  Robert S. Gaddis                                        Philip J. Terrell




 /s/Linda T. Howard                                         /s/Gene Warr
   Linda T. Howard                                            Gene Warr




 /s/Aubrey K. Lucas                                    /s/Michael W. Southern
   Aubrey K. Lucas                                       Michael W. Southern




 /s/Malcolm Portera                                     /s/Frances V. Turnage
   Malcolm Portera                                       Frances V. Turnage



<PAGE>
Extract from minutes of meeting of the board of directors of Mississippi Power
Company.

                               - - - - - - - - - -

                  RESOLVED: That this Company, the members of this Company's
         Board of Directors and its officers are authorized to give their
         several powers of attorney to Gale E. Klappa and Wayne Boston for the
         purpose of signing the reports under the Securities Exchange Act of
         1934 to be filed with the Securities and Exchange Commission with
         respect to the filing of the Company's Annual Report on Form 10-K for
         the year ended December 31, 2000, and the filing of this Company's
         quarterly reports to the Securities and Exchange Commission on Form
         10-Q for the year 2001.

                               - - - - - - - - - -

         The undersigned officer of Mississippi Power Company does hereby
certify that the foregoing is a true and correct copy of resolution duly and
regularly adopted at a meeting of the board of directors of Mississippi Power
Company, duly held on February 28, 2001, at which a quorum was in attendance and
voting throughout, and that said resolution has not since been rescinded but is
still in full force and effect.

Dated  March 28, 2001                                 MISSISSIPPI POWER COMPANY


                                                      By  /s/Wayne Boston
                                                            Wayne Boston
                                                         Assistant Secretary
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-24
<SEQUENCE>65
<FILENAME>x24f.txt
<TEXT>




February 22, 2001


Gale E. Klappa and Wayne Boston

Dear Sirs:

         Savannah Electric and Power Company proposes to file with the
Securities and Exchange Commission, under the Securities Exchange Act of 1934,
(1) its Annual Report on Form 10-K for the year ended December 31, 2000, and (2)
its quarterly reports on Form 10-Q during 2001.

         Savannah Electric and Power Company and the undersigned directors and
officers of said Company, individually as a director and/or as an officer of the
Company, hereby make, constitute and appoint W. L. Westbrook and Wayne Boston
our true and lawful Attorneys for each of us and in each of our names, places
and steads to sign and cause to be filed with the Securities and Exchange
Commission in connection with the foregoing said Annual Report on Form 10-K,
quarterly reports on Form 10-Q, and any appropriate amendment or amendments
thereto and any necessary exhibits.

                                            Yours very truly,

                                            SAVANNAH ELECTRIC AND POWER COMPANY



                                            By /s/G. Edison Holland, Jr.
                                                 G. Edison Holland, Jr.
                                              President and Chief Executive
                                                        Officer


<PAGE>


                                      - 2 -






    /s/Gus H. Bell III                               /s/Robert B. Miller III
      Gus H. Bell III                                 Robert B. Miller III




    /s/Archie H. Davis                               /s/Arnold M. Tenenbaum
      Archie H. Davis                                  Arnold M. Tenenbaum




    /s/Walter D. Gnann                                   /s/K. R. Willis
      Walter D. Gnann                                     K. R. Willis




 /s/G. Edison Holland, Jr                           /s/Nancy E. Frankenhauser
  G. Edison Holland, Jr.                             Nancy E. Frankenhauser


<PAGE>
Extract from minutes of meeting of the board of directors of Savannah Electric
and Power Company.

                               - - - - - - - - - -

                  RESOLVED: That for the purpose of signing reports required to
         be filed by the Company under the Securities Exchange Act of 1934 to be
         filed with the Securities and Exchange Commission including (a) the
         filing of this Company's Annual Report on Form 10-K for the year ended
         December 31, 2000, and (b) quarterly reports on Form 10-Q during
         calendar year 2001; and of remedying any deficiencies with respect
         thereto by appropriate amendment or amendments, this Company and the
         members of its Board of Directors, and its officers, be and they are
         hereby authorized to give their several powers of attorney to Gale E.
         Klappa and Wayne Boston for the purposes set out above.

                               - - - - - - - - - -

         The undersigned officer of Savannah Electric and Power Company does
hereby certify that the foregoing is a true and correct copy of resolution duly
and regularly adopted at a meeting of the board of directors of Savannah
Electric and Power Company, duly held on February 22, 2001, at which a quorum
was in attendance and voting throughout, and that said resolution has not since
been rescinded but is still in full force and effect.

Dated  March 28, 2001                       SAVANNAH ELECTRIC AND POWER COMPANY



                                             By /s/Wayne Boston
                                                  Wayne Boston
                                              Assistant Secretary
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
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