Have renegotiation conversations started for expiring Southern Power tolling agreements, and is there interest from hyperscalers in these assets?

Management confirmed that both recontracting opportunities and conversations with hyperscalers are underway, indicating that Southern Power is actively pursuing both avenues. “I guess I'd say the answer is yes and yes. I mean, we're in the midst of some recontracting opportunities... at the same time with all the activity in the marketplace all across this country, we see there could be opportunities for Southern Power.”

How does the accelerating load growth and visibility affect the regulatory strategy, particularly regarding rate stay-outs and potential for further extensions?

Management emphasized that the focus is on rate stability, with large load contracts structured to protect existing customers and contribute to freezes in Georgia and Alabama. The DOE loans further enhance affordability, aligning with the regulatory strategy. “I think the focus for us is more about rate stability. And so as we have structured these contracts with large loads to make sure they pay their full share... all of that gives us protection but also it supports our ability to make sure that we're protecting existing customers.”

Could the $850 million in cumulative bill credits increase with more contracted large load, and is there a softening in Georgia's contracted commitments compared to other states?

Management stated they are always looking for opportunities to put downward pressure on rates. They clarified that Georgia's load is still very strong, and any perceived 'softening' is a 'refinement' due to collateral requirements, leading to a higher quality portfolio of potential customers. “I think what you're seeing really is a refinement of that and not a degradation at all. Actually, I'd maybe characterize it as a strengthening of that portfolio of anything.”

Southern Company (SO) Q1 FY26 earnings call: guidance and Q&A

Earnings call· Mar 2026 (Q1 FY26)· Utilities· Apr 30, 2026

Source: earnings call transcript

Executive summary

Southern Company Q1 FY26 — Strong Performance Driven by Large Load Growth and DOE Loan Agreements

Southern Company delivered strong first-quarter results, driven by significant large load growth and robust economic development across its service territories. The company's strategy focuses on rate stability for existing customers by structuring new contracts to cover the full cost of incremental demand. Proactive financing, including substantial DOE loan agreements, further supports affordability and long-term capital plans, reinforcing a confident outlook for sustained value creation.

Highlights

Adjusted EPS of $1.32 per share, $0.09 higher year-over-year and $0.12 above estimate.
Signed contracts for 1.9 gigawatts of customer load with hyperscalers in the last 2 months, bringing fully contracted large load agreements to over 11 gigawatts.
First quarter weather-normal retail electricity sales to all classes increased 2.3% year-over-year, the highest in recent history.
Secured $26.5 billion in loan agreements with the Department of Energy, projected to generate cumulative customer savings of $7 billion over approximately 30 years.
Increased annual common dividend by $0.08 per share, marking the 25th consecutive annual increase and 79 consecutive years of maintaining or increasing the dividend.

Guidance & targets

Category	Target	Timeline	Confidence
Adjusted EPS	$1.00 per share medium materiality	Q2 · FY26	High
Multi-year EPS Growth Rate	7% to 8% CAGR high materiality	Multi-year	High
FFO to Debt Target	17% high materiality	FY29	High
Remaining Equity/Equity Equivalents Need	$1.8 billion high materiality	Through 2030 · FY30	High
Georgia Power All-Source RFP New Generation Resources	2 to 6 gigawatts high materiality	2032 to 2033 · FY32-FY33	High

SO operating KPIs by quarter

SO operating KPIs stated on its earnings calls, by fiscal quarter
KPI	Dec 2024 Q4 FY24	Sep 2025 Q3 FY25	Dec 2025 Q4 FY25	Change vs prior quarter
Customers	9M The tremendous value inherent in our 3 electric utilities and 4 natural gas distribution utilities is a function of our continuous focus on our 9 million customers, our constructive regulatory environments with orderly processes and service territories with strong long-term fundamentals. Source: earnings call transcript	9M+ Our state-regulated electric and gas utilities continue to provide long-term value to the more than 9 million customers across the Southeast and beyond with reliable and affordable energy. Source: earnings call transcript	9M I'm incredibly proud of the way Southern Company's electric and gas teams safely performed under these harsh conditions for our 9 million customers. Source: earnings call transcript	—

Operating figures the company stated on at least two of the calls shown, checked against each call's transcript. Click a figure to read the sentence. A dash means it was not stated that quarter.

Orderbook & backlog

Approved New Generation Resources Development Portfolio 10 GW Q1 FY26

In development, includes multiple battery systems and natural gas combustion turbines projected online late 2026 and 2027

Prospective Large Load Pipeline Over 75 GW Q1 FY26

Includes data centers and large manufacturers in electric service territories

Deals & partnerships

Department of Energy Loan agreements $26.5 billion Approximately 30-year term

Historic loan agreements that will benefit customers across Alabama and Georgia for decades, translating into meaningful long-term customer savings.

Capital programs

Georgia Power Battery Energy Storage Systems completed

Benefit:Nearly 200 MW capacity

Georgia Power achieved commercial operations for two battery energy storage systems. These are the first of several resources included within the 10 gigawatt portfolio of approved new generation resources.

Southern Power Natural Gas Turbine Upgrades underway $700 million

Start: 2026

Benefit:400 MW additional capacity

Southern Power is moving forward to add 400 megawatts of additional capacity upgrades through natural gas turbine upgrades at multiple existing facilities in Alabama and Georgia. This incremental investment is projected to add approximately $700 million to the capital plan. The company continues to evaluate other growth investment opportunities, including an additional 300 megawatts of natural gas upgrades.

Q&A highlights

Is Southern Company interested in new AP1000 nuclear builds, potentially with hyperscaler and government backing, given recent consortium discussions?

Management expressed excitement about the Trump administration's support for new nuclear and efforts to mitigate risks. While Southern Company will share its Vogtle experience, it is not currently committing to building new units, but is positive on the industry's progress.

“Southern Company is not at a place to make a commitment about building a new unit. We're going to continue to share the experiences that we gained from Bubble Units 3 and 4.”

asked by Shahriar Pourreza · answered by Christopher Womack

2 min read 6 chapters

Detailed narrative

Large Load Growth and Customer Strategy

Southern Company is experiencing extraordinary growth, with 23 gigawatts of contracted or latent stage load across its electric service territories. In the last two months, the company signed contracts for an additional 1.9 gigawatts of customer load with high credit quality hyperscalers, bringing fully contracted large load agreements to over 11 gigawatts.

These bilateral agreements are structured to ensure that customers driving incremental demand cover the full cost of service, protecting existing customers and contributing to rate stability.

Regulatory Environment and Rate Stability

The company maintains a focus on rate stability, with base rates held stable in Alabama and Georgia until at least 2029. A recent filing in Georgia aims to lower rates through the recovery of fuel and storm costs. This approach, supported by constructive regulatory frameworks, allows for additional capital investment to serve incremental growth opportunities while providing meaningful benefits to customers and communities.

Capital Investments and Generation Development

Construction on several key investments is underway, including Georgia Power achieving commercial operations for two battery energy storage systems, adding nearly 200 megawatts of capacity. These projects are part of a 10 gigawatt portfolio of approved new generation resources in development, with multiple battery systems and natural gas combustion turbines projected to be online in late 2026 and 2027.

The company is also evaluating an all-source RFP for 2 to 6 gigawatts of new dispatchable generation for 2032-2033.

DOE Loan Agreements and Financial Strength

Southern Company announced historic $26.5 billion loan agreements with the Department of Energy, which are expected to translate into meaningful long-term customer savings of $7 billion over approximately 30 years. These lower-cost financing arrangements also reduce pressure on the company's capital market needs.

Proactive equity management, including $500 million sourced through an ATM program, supports strong credit quality and the path towards a 17% FFO to debt target by 2029.

Retail Sales and Economic Development Trends

First quarter weather-normal retail electricity sales to all classes increased 2.3% year-over-year, driven by meaningful customer growth and increased usage, particularly from data centers. Residential customer additions totaled 46,000, while commercial sales grew 4.5% (weather-adjusted) and data center usage expanded 42% year-over-year.

The Southeast continues to attract significant economic development, with over $7 billion in capital investment and nearly 4,000 new jobs announced in Q1 FY26.

Southern Power Growth Opportunities

Southern Power is moving forward with 400 megawatts of additional capacity upgrades through natural gas turbine upgrades at existing facilities in Alabama and Georgia, with commercial operation projected between 2029 and 2031. This incremental investment adds approximately $700 million to the capital plan.

The company is also evaluating an additional 300 megawatts of natural gas upgrades and other new generation opportunities to meet future demand, consistent with its strategy of contracting with high credit quality counterparties.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.