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The second-largest utility company in the U.S. by consumers services over 9 million customers with gas and electric power across six states in the Southeastern U.S.

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F500-2020-153-Southern-Company

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The Atlanta-based Southern Co. stays true to its name as the dominant power and utility player in Georgia, Alabama, and Mississippi with a mix of gas-fired, coal, nuclear, and renewable power generation. Southern also distributes natural gas in Tennessee, Virginia, and elsewhere. But Southern’s power business of wholesale gas and renewables operates in 15 states from California to Maine, showcasing the company’s growth well outside of the legacy Deep South. And its expanding PowerSecure business offers microgrid services nationwide. Likewise, the Southern Linc and Telecom businesses offer telecommunications and fiber-optics services to meet increasing demand.

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Southern (SO): Company Profile, Stock Price, News, Rankings

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Southern

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Good afternoon. My name is Christine and I'll be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Second Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If anyone should require operator assistance during today's conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Greg MacLeod, Director of Investor Relations. Please go ahead, sir.

Thank you, Christine. Good afternoon, welcome to Southern Company Second Quarter 2026 Earnings Call. Joining me today are Chris Womack, Chairman, President, and Chief Executive Officer of Southern Company, and David Poroch, Chief Financial Officer. Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q, and subsequent securities filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our investor relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris.

Thank you, Greg. Good afternoon, everyone, thank you for joining us for today's update. As you can see from the materials that were released this morning, Southern Company continues to perform exceptionally well, which supports a very bright future. We reported strong adjusted earnings results for the second quarter with each of our businesses contributing to performance meaningfully above the estimate we provided last quarter. The extraordinary economic development momentum and demand for power across our southeast region that we've seen for the past several years continues particularly from data centers and other large load customers. Our utilities are capturing this growth in a way that meaningfully benefits the customers and communities we are privileged to serve and supports our long-term outlook.

In just the last quarter, through three projects across the state, Alabama Power added approximately three gigawatts, while Georgia Power signed a 3.2 gigawatt, 25-year contract for electric service with OpenAI for its recently announced site near Savannah, Georgia. This site, which is expected to take electric service in phases beginning in 2028, features one gigawatt of flexible demand response, helping to support reliable energy for all customers when demand is highest. Combined, these four projects, representing six gigawatts of newly contracted customer load, along with agreements previously signed, brings our total contracts and large load agreements across our electric subsidiaries to over 17 gigawatts by the mid-2030s. These projects are not just bringing in substantial construction work. They're creating thousands of permanent jobs and generating billions of dollars of investment for the local economies in our service territories.

We are proud to responsibly support this growth in a way that benefits the communities we serve. In Alabama, the three new contracts were a clear confirmation of the continued economic development momentum building across all our electric service territories and our differentiated large load capabilities. Increasingly, our vertically integrated, state-regulated model supports our ability to provide reliable power with speed and is an important differentiator for our new and existing customers. Our success attracting significant growth is a testament to the benefits that this model affords all our customers. As a comprehensive one-stop shop for power solutions and economic development, our electric operating companies utilized long-range integrated system planning processes to coordinate timely development of generation, transmission, and distribution assets through well-structured and transparent regulatory processes that are designed to serve the growth reliably.

The Southeast, with its robust network of transportation and logistics infrastructure, diverse workforce, and a constructive business climate, continues to be highly attractive for all forms of economic development, including hyperscalers, data center developers, and large industrial manufacturers. Looking ahead, the opportunities for additional new large load and data center customer growth remains robust. New projects continue to be added to our prospective pipeline, large industrial and data center projects, which remains well above 75 gigawatts. We are encouraged by the continued progression of potential large load projects in varying stages of advanced development. Beyond the 17 gigawatts already contracted, there are an additional 8 gigawatts of projects in late stages, including 3 gigawatts projected to be finalized in the near term. Clearly, the benefits of our approach are resonating with both new customers and several repeat large load customers during a time of increasing power demand.

We are privileged to support this transformative growth. David, I'll now turn the call over to you for an update on our financial performance.

Thanks, Chris. Good afternoon, everyone. For the second quarter of 2026, our adjusted EPS was $1.13 per share, $0.21 higher than the second quarter of 2025, and $0.13 above our estimate. The primary drivers of our performance for the current quarter compared to last year included increased usage and customer growth, along with higher AFUDC from ongoing construction projects, higher earnings from equity method investments, and tax-related impacts at our state-regulated electric utilities. The improved results in the second quarter compared to the second quarter of 2025 were also supported by contributions from Southern Company Gas and some of our smaller complementary businesses, including PowerSecure, where the distributed generation, backup generation, and bridge power solutions markets continue to expand. This was partially offset by interest expense from higher debt balances and dilution from additional shares outstanding.

A complete reconciliation of year-over-year earnings is included in the materials we released this morning. Combined with our first quarter results, our adjusted EPS for the first half of the year is $2.46, well above our year-to-date expectations. With customer rates held stable at our two largest subsidiaries, this strong performance continues to be driven by increased sales and customer growth and strong execution across each of our regulated businesses and Southern Power. These results exemplify Southern Company's commitment to delivering for customers and investors. Looking towards the second half of the year, we anticipate this momentum continuing and now project our full year 2026 adjusted earnings to be near or at the top of our 2026 adjusted EPS guidance range of $4.50-$4.60. Our adjusted EPS estimate for the third quarter is $1.65 per share. Turning now to retail electricity sales.

Year to date, weather normal retail electricity sales were 2.3% higher than the first half of 2025, consistent with the trends observed earlier this year. This represents the highest retail sales growth through June we've seen in nearly two decades. Year to date, weather normal retail electricity sales are higher across all customer classes, bolstered by continued residential customer additions, diverse industrial and manufacturing expansions, and significantly increasing usage from data centers. Approximately 11,000 new electric residential customers were added in the quarter, bringing our net electric customer adds to over 40,000 in the last year. Manufacturing and reshoring trends, particularly in Alabama in the primary metals, stone, clay, glass, and pipeline segments, supported continued industrial strength. Weather normal commercial sales grew 7.4% in the second quarter, bringing year-to-date weather normal commercial sales to 6% higher than the first half of 2025.

Notably, data center usage was 55% higher compared to the second quarter of 2025 and is now up 49% year to date, primarily due to accelerating load ramps from our large load customers. System-wide, our data center load now exceeds 1.2 gigawatts, an increase of more than 500 megawatts over the prior year, and we expect this trend to continue accelerating as our 17 gigawatts of contracted demand comes online. As Chris mentioned earlier, economic development activity in the Southeast continues to be strong. In the last quarter alone, announcements were made for nearly $14 billion of investment and more than 3,000 new jobs, led by several new data center facilities in Alabama and a new Amazon warehouse in Georgia.

The projects announced in the second quarter marked the second highest investment level ever recorded in our electric territories, underscoring the strength of regional trends in economic development and ultimately help shape future growth opportunities. Turning to our infrastructure build-out, the continued success of our operating territories in attracting significant new load is driving the need for additional new power generation and infrastructure across our Southeast region. Over the past several years, we worked constructively with regulators to meet the demand of our growing system, securing approvals for 10 gigawatts of new company-owned generation resources, including thermal, battery, and solar resources, as well as hundreds of miles of new transmission lines.

With the first two of several battery sites in service and benefiting customers and work on the three combustion turbines and plant gates advancing towards completion in the coming quarters, we continue to execute on the construction of our portfolio of new build generation projects. As our projected incremental load needs grow beyond our system's current and expected supply of generation capacity into the next decade, we remain well positioned to respond. Ongoing requests for proposals for RFPs at both Alabama Power and Georgia Power are underway for potential additional generation resources to help ensure that we can continue to provide a reliable and affordable service to all customers. These transparent and orderly processes are designed to facilitate the timely and cost-effective procurement of new generation needs in the early 2030s.

To the extent that company-owned resources are selected through these active RFP processes and ultimately authorized by the respective PSCs, these new generation investments would represent substantial incremental investment upon our current base capital plan. We continue to proactively address our identified equity needs to support our path towards 17% FFO to Debt by 2029. In the second quarter, we sourced an additional $700 million of equity through our at-the-market or ATM program with forward contracts that settle at our discretion through 2028. Together with a significant amount of equity previously sourced, we have reduced our projected remaining equity need by 2030 to $1.1 billion.

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

Thank you, David. We are truly in transformative times for the energy industry and our nation, and Southern Company has continually demonstrated that we are executing on this extraordinary growth in a way that protects and benefits customers and communities. Last week, the Southern Company Electric system was proud to formally reinforce this commitment by joining the National Ratepayer Protection Pledge alongside several other utilities. This pledge aligns with the Southern Company system's well-established approach to serving growth in a responsible manner while maintaining rate stability and reliability for millions of households and small businesses across the Southeast. We are confident the approach we're taking will deliver lasting benefits as we deliver rate stability for our customers. Recall, the framework under which we approach contracting with large load customers includes pricing with minimum bills to cover at least 100% of the incremental cost to serve.

Large load customers are paying their full share. We also include provisions with strong protections in the form of termination payments backed by significant high credit quality collateral requirements that provide an additional layer of security. This large load contracting structure helps ensure investors and customers are protected while providing meaningful savings for existing customers. With retail base rates held stable in both Georgia and Alabama until 2029 and significant customer benefits identified and committed to based on previously signed large load contracts, we are demonstrating that when growth is done right, everyone benefits. Across our businesses, we continue to demonstrate exceptional execution and meaningful progress delivering on this growth.

Southern Company has a bright future, especially when considering the strength of the Southeast economy, the likelihood of additional large load contracts, incremental capital investment opportunities across our state-regulated utilities, and our ability to capture value across the energy value chain through Southern Power, investments in Southeastern natural gas infrastructure, and distributed and bridge power opportunities through complementary businesses like PowerSecure. This extraordinary growth continues to strengthen our business fundamentals and expand capital investment opportunities well into the next decade. We continue to see momentum building in support of an improving growth outlook into the future. The success we have had in the first half of the year positions us exceptionally well to deliver on our near-term objectives while reinforcing and strengthening our confidence in our long-term outlook and our goal to be towards the top half of our long-term earnings trajectory.

Ultimately, this is a long-term business in which capital is deployed to serve customers for many decades. As we deliver for the communities we serve each and every day, as we work towards our goal to provide sustainable long-term growth and outstanding financial integrity year after year, we are well-positioned to continue executing with a discipline that is rooted in our longstanding commitment to our customers and investors alike. As we conclude our prepared remarks today, I want to emphasize Southern Company's commitment to making the communities that we have the privilege to serve better off because we are there. As a partner to the communities and cities where we operate, we were proud to help support Atlanta's efforts over the last two months in hosting eight FIFA World Cup matches on the world stage.

The success was a culmination of years of hard work by local, regional, and state leadership and included significant investment in local infrastructure to welcome hundreds of thousands of visitors to Atlanta. This event was an excellent showcase for the Southeastern U.S. and an opportunity to continue building upon the momentum that defines this region which will have an impact that will resonate for decades to come. Operator, we are now ready to take questions.

Thank you. We will now be conducting questions-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. Participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. One moment please while we poll for questions. Thank you. Our first question comes from the line of Nick Campanella with Barclays. Please proceed with your question.

Hey, good morning or good afternoon rather. Hope you're hearing me.

Hey, how's it going? All right. Just now that you have higher visibility on contracted megawatts and load ramps, specifically 2028 increase and 2030 increase by a few gigawatts here. How does that incremental sales revenue and visibility, how does that impact your ability to maybe extend or stay out further and you've kind of committed to on the regulatory front? Just, maybe you can kind of talk to that a little bit. Thanks.

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

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

Thanks for those thoughts. Maybe on the three gigawatts that you're finalizing stages for, is that within the 2030 window or is it after it? What are kind of the key milestones you still need to get through on those three gigs of finalizing? Thank you.

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

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

Wonderful. Excellent. Just, Chris, on Southern Power, the existing tolling agreements are going to start to roll off. I know there's obviously an opportunity to repurpose the capacity towards serving the hyperscalers. Can you maybe discuss how you're thinking about that opportunity set? Have conversations with the hyperscalers begun with these assets? Would any opportunities be captured within your existing 75 gigawatt pipeline? I guess what does this mean to the plan, I guess? Yeah.

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

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

Got it. These wouldn't just be typical tolling agreements, they would be the energy and capacity side, I'm assuming under a long-term PPA.

Got it. Then I know, Chris, your favorite topic is new nuclear, right? I guess with sort of lessons learned between unit three and four and sort of this big attention now to large scale reactors, should there be any financial backing from the government and hyperscalers taking on some of the cost overrun risk? Is that something Southern would be interested in building, i.e. through the AP1000? Just any color on potentially participating in this consortium, or you just looking to license the blueprints? Thanks.

Shar, thank you very much. You've heard me talk a lot about the importance of new nuclear helping this country meet this incredible moment that's in front of us. I do think as we look into the 2030s, this country needs to have, particularly in the mid-30s, need to have some more nuclear units in operation. I have to give a great big shout-out and compliment to the Trump administration. There are a number of actions they have taken on the regulatory front with bringing groups together around long lead time items, just a lot of things that they're doing, and we're having a lot of conversations with them about how to make this a reality. Southern's not going to be next, let me be clear about that.

We're going to continue to work constructively and very, I would say, pretty aggressive with this administration and with a lot of other parties to see how we can get this done, because I do think it's important from an energy policy standpoint, from the economy, to meet this moment and meet this demand that we see in the marketplace today.

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

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

Fantastic. Thank you guys so much. I appreciate it. See you soon.

Okay. Thanks, Shar. We appreciate you, man.

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

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

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

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

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

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

We don't get ahead of our regulators. Obviously you can see how the upside that we've talked about is not in our capital plan right now. The RFPs that are open in Alabama, the RFPs that are open in Georgia, none of that is contemplated in our capital forecast at the moment.

The other thing I would add, to open our contract in Georgia pushes us beyond our recently approved capacity by right around one gigawatt. Just making sure that was real clear in terms of where we are and what the upside opportunities are.

Got it. Very clear. Thank you guys for the time.

Our next question comes from the line of Steve D'Ambrisi with RBC Capital Markets. Please proceed with your question.

Hey, good morning. Thanks very much for taking my question. Just had a quick one, kind of a follow-up on Carly's question, actually. Just to put a little bit of a finer point on it. It's my understanding that basically any new incremental load, especially large load in Alabama, would drive basically incremental generation requirements. Obviously, you have the RFP outstanding, but if the load forecast is up 3 gigawatts in the quarter, and then you're talking about OpenAI at least 1 gigawatt, but I think the RFP is 2-6 but is a range beyond that as well. Can you just frame, is this 4-5+ gigawatts of gen that we could put some type of capacity multiple on and try and estimate what the size is?

Obviously, I don't want to put the cart in front of the horse, but want to make sure we're level setting on what's in the plan and what the opportunity is.

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

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

I mean, those projects will vary project by project, as we finalize those agreements and they are certified and blessed by the commissions, we'll factor those into the RFP process going forward to match up with the year in which those resources are in fact needed. As we kind of are in a position to inform as we finalize those contracts, that is information that will be forthcoming once those contracts are finalized and the projects are approved, as also as we provide you with an updated load forecast. There are a couple proceedings that will unveil how that all lines up and matches up with the needs and what the new opportunities are going forward.

I might add, as we work through those processes, to the extent that the company is selected to provide that generation resource, we're going to probably start feathering in some spend that's also not currently contemplated in our projections in the sort of the 2028 timeframe, that'll start to feather in as we build out that generation to come online in the 2031, 2032 timeline.

Okay. That's very helpful. Thanks, Chris. Thanks, David. Appreciate the time.

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

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

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

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

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

One of the things I'd add there is that very early on in our conversations with hyperscalers, we begin to raise matters like technical requirements in terms of how their operations would impact the system, how it would impact the grid. Not just being a taker, but creating flexibility to provide benefits to the entire grid. I think as we look at this broader conversation about data centers, I think these things have got to be communicated more broadly in terms of the value and benefits and flexibility and how they're being supportive of the grid as is how they're being supportive of communities. There's an incredibly positive narrative and story to be told here.

We all have got to be, I think, voice these benefits a little more stronger in terms of making sure that gets into the conversations about data centers, as we hear all the conversation and noise right now about what's going on. Just a great win-win, I think, for us as well as the customer.

Got it. Makes sense. That story needs to be told a bit more. Makes a lot of sense to us. Thank you.

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

Hi, good afternoon. I'm doing well, thanks. Could you just remind, in Georgia, for OpenAI and other customers who maybe aren't investment-grade credits or strong investment-grade, how do the tariffs work from a credit standpoint? The large load tariffs.

Yeah. Remember the, if you will, the kind of four pillars under which we're negotiating structure these contracts in our territories. You got long-term contracts, and you hit it exactly, the OpenAI contract is 25 years. Our minimum bills cover 100% of the incremental cost to serve. There's default provisions in there, and those default payments are tied to collateral. We've got a lot of flexibility in terms of the forms of collateral that we can take from these counterparties. If a parent guarantee works, for us, depending on the credit quality of the counterparty, we'll work with that. In some instances that they're not quite at the investment grade that we want to see, we'll look to lines of credit, we'll look to surety bonds, we'll look to other combinations.

At the end of the day, the collateral portfolio that we're going to take to back up these contracts is going to put us at about an A-minus or better position. Keep in mind, you asked specifically about OpenAI, and that's about $28 billion of collateral that will be in the aggregate upon full ramp. I think we're in a really good spot for that. Keep in mind, we have the flexibility to determine what collateral is acceptable to us, and puts us in a position of about A-minus or better. Combination of lines of credit, surety bonds in this particular case.

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

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

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

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

I'd say you continue to see the pipeline continue to remain very full and continue to grow, and you continue to see projects advance and project get approved all across our territory.

Southern (SO) Q2 2026 Earnings Call Transcript

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