Regulatory Matters

3 Months Ended

Mar. 31, 2026

REGULATORY MATTERS

See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information relating to regulatory matters.

The recovery balances for retail fuel and storm/property damage for the traditional electric operating companies and natural gas cost for Southern Company Gas at March 31, 2026 and December 31, 2025 were as follows:


Recovery/Regulatory Clause	Balance Sheet Location	At March 31, 2026		At December 31, 2025
		(in millions)
Alabama Power







Rate ECR	Other regulatory assets, deferred	$	200	$	146


NDR	Other regulatory liabilities, deferred	52		60
Georgia Power
Fuel cost recovery	Receivables – under recovered retail fuel clause revenues	$	234	$	310
	Deferred under recovered retail fuel clause revenues	210		212


Storm damage recovery	Other regulatory assets, current	31		31
	Other regulatory assets, deferred	962		880
Mississippi Power
Fuel cost recovery(*)	Receivables – customer accounts, net	$	55	$	—
	Deferred under recovered retail fuel clause revenues	—		40

Property damage reserve	Other regulatory liabilities, deferred	57		57


Southern Company Gas

Natural gas cost recovery	Natural gas cost over recovery	$	131	$	158

(*)Mississippi Power also has wholesale MRA and Market Based (MB) fuel cost recovery factors. At March 31, 2026 and December 31, 2025, wholesale MRA fuel cost under recovery was $9 million and $6 million, respectively, and was included in customer accounts receivable, net on Mississippi Power's balance sheets. The wholesale MB fuel cost recovery was immaterial for both periods presented.

Alabama Power

Power to the People Act

In December 2025, the Alabama PSC issued a consent order to keep retail rates stable through 2027. On April 2, 2026, the State of Alabama enacted legislation providing that retail base rates established and in place on October 1, 2026 may not be increased before January 1, 2029 for utilities that are regulated by the Alabama PSC and that provide retail electric service. The ultimate outcome of this matter cannot be determined at this time.

Reliability Reserve Accounting Order

In accordance with the notification provided to the Alabama PSC through its annual Rate RSE filing indicating plans to use $60 million of the reliability reserve, Alabama Power utilized $21 million of its reliability reserve during the first quarter 2026 for reliability-related transmission, distribution, and generation expenses. At March 31, 2026, Alabama Power's reliability reserve balance was $163 million.

Environmental Accounting Order

As a result of the planned conversion of Plant Barry Unit 5 from coal to natural gas, the unit's net book value no longer meets the criteria to be considered probable of abandonment, and, in the first quarter 2026, approximately $307 million was reclassified from other utility plant, net to plant in service on Alabama Power's and Southern Company's balance sheets.

Georgia Power

Integrated Resource Plans

Certification Requests

On March 25, 2026, Georgia Interfaith Power & Light, Park Avenue Baptist Church, Unitarian Universalist Church of Savannah, Sierra Club, Adrien Webber, and Southern Alliance for Clean Energy filed a petition with the Fulton County Superior Court appealing the Georgia PSC's December 19, 2025 approval of Georgia Power's request for certification of resources totaling 9,885 MWs (2025 All-Source Certification). The petition requests a reversal of the 2025 All-Source Certification, including a decertification of at least 757 MWs of resources. Georgia Power believes the appeal has no merit; however, the ultimate outcome of this matter cannot be determined at this time.

2025 IRP

On April 23, 2026, pursuant to the final order for Georgia Power's 2025 IRP, Georgia Power filed for approval to issue a request for proposals seeking 2,000 MWs to 6,000 MWs of resources to meet capacity needs in 2032 and 2033. Georgia Power projects a decision from the Georgia PSC regarding issuance in the second quarter 2026. The ultimate outcome of this matter cannot be determined at this time.

Fuel Cost Recovery

On each of March 13, 2026 and April 15, 2026, Georgia Power filed an Interim Fuel Rider (IFR) notification and plan informing the Georgia PSC that Georgia Power's under recovered fuel balance accumulated since May 31, 2023 exceeded $200 million (IFR Threshold), as established in a Georgia PSC stipulation approved in 2023, as of February 28, 2026 and March 31, 2026, respectively. Georgia Power did not propose a fuel cost recovery rate change pursuant to these IFR notifications and plans and is required to monitor and report to the Georgia PSC monthly as long as the under recovered fuel balance is above the IFR Threshold. Georgia Power expects the Georgia PSC to make a final decision on its February 2026 fuel case on May 28, 2026. The ultimate outcome of this matter cannot be determined at this time.

Construction

At March 31, 2026, Georgia Power had recorded approximately $3.7 billion of combined capital costs, excluding AFUDC, for the projects reflected in the table below approved by the Georgia PSC through the 2023 IRP Update and certification requests in September and December 2025 authorized through its 2022 IRP. The total certified

amounts related to these projects are approximately $19.5 billion, excluding AFUDC. The ultimate outcome of these matters cannot be determined at this time.


Resource/Project	Approximate Nameplate Capacity (MW)	Actual/Projected COD
Projects Under Construction at March 31, 2026
Battery Energy Storage
McGrau Ford Phase 1	265	Fourth quarter 2026
Twiggs County	200	Fourth quarter 2027
Wadley	260	Fourth quarter 2027
Bowen Phase 1	250	Fourth quarter 2028
Bowen Phase 2	250	Fourth quarter 2029
South Hall	250	Fourth quarter 2028
Wansley	500	Fourth quarter 2028
Yates Phase 1	320	Fourth quarter 2028
Yates Phase 2	250	Fourth quarter 2028
Thomson	500	Fourth quarter 2029
Hammond Phase 2	193	Fourth quarter 2030
McIntosh	250	Fourth quarter 2030
Various facilities(a)	372	Second quarter 2026 through fourth quarter 2026
Solar with Battery Energy Storage
Laurens County	200	Fourth quarter 2028
Plant Mitchell	150	Fourth quarter 2028
Combined Cycle
Plant Bowen Unit 7	741	Fourth quarter 2029
Plant Bowen Unit 8	741	Second quarter 2030
Plant McIntosh Unit 12	757	Fourth quarter 2030
Plant Wansley Unit 10	727	Fourth quarter 2029
Plant Wansley Unit 11	727	Second quarter 2030
Combustion Turbine
Plant Yates Unit 8(b)	442	Fourth quarter 2026
Plant Yates Unit 9(b)	442	Second quarter 2027
Plant Yates Unit 10(b)	442	Third quarter 2027
Projects Completed During the Three Months Ended March 31, 2026
Battery Energy Storage
Robins	128	March 2026

(a)Subsequent to March 31, 2026, Georgia Power completed construction of the 50-MW Moody battery energy storage facility.

Mississippi Power

Performance Evaluation Plan

On March 16, 2026, Mississippi Power submitted its annual retail PEP Evaluation Report for 2026 to the Mississippi PSC, which affirmed its request filed in November 2025 for a 1.8%, or $20 million, annual increase in revenues, primarily due to increases in investment and depreciation. In accordance with the PEP rate schedule, the increase became effective with the first billing cycle of January 2026, subject to refund. The Mississippi PSC is expected to render a final decision in the second quarter 2026. The ultimate outcome of this matter cannot be determined at this time.

Integrated Resource Plans

On March 9, 2026, in compliance with its IRP requirements, Mississippi Power submitted its mid-point update to its 2024 IRP to the Mississippi PSC, indicating that the retirement dates of Plant Daniel Unit 2 and Plant Watson Unit 4 will extend beyond 2028.

The remaining net book value of Plant Daniel Unit 1 was approximately $124 million at March 31, 2026, and Mississippi Power is continuing to depreciate Plant Daniel Unit 1 using approved rates. Mississippi Power expects to reclassify the net book value remaining at retirement to a regulatory asset to be amortized over a period to be determined by the Mississippi PSC in future proceedings, consistent with a 2020 order. The ultimate outcome of this matter cannot be determined at this time.

Environmental Compliance Overview Plan

On April 14, 2026, the Mississippi PSC approved Mississippi Power's annual ECO Plan filing for 2026, resulting in a $2 million annual increase in revenues effective with the first billing cycle of May 2026.

System Restoration Rider

On March 2, 2026, Mississippi Power submitted its annual SRR filing for 2026 to the Mississippi PSC, indicating no change in retail rates. The filing includes a request to increase the minimum annual SRR accrual from $13.5 million to $13.7 million. The ultimate outcome of this matter cannot be determined at this time.

Reliability Reserve Accounting Order

On March 16, 2026, through its annual PEP Evaluation Report, Mississippi Power notified the Mississippi PSC of its intent to use approximately $8 million of its retail reliability reserve balance during 2026. During the first quarter 2026, Mississippi Power utilized the retail reliability reserve in the amount of $6 million for reliability-related generation, transmission, and distribution expenses. At March 31, 2026, Mississippi Power's retail reliability reserve balance was $52 million. See "Performance Evaluation Plan" herein for information regarding Mississippi Power's annual PEP filing.