Balch & Bingham LLP
Birmingham, Alabama
June 14, 2006
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Wachovia Capital Markets, LLC
One Wachovia Center
310 South College Street
Charlotte, North Carolina 28288-0602
As Representative of the Several Underwriters
RE: Alabama Power Company Series JJ 6.375% Senior Notes due June 15, 2046
Ladies and Gentlemen:
We have acted as general counsel to Alabama Power Company (the
"Company") in connection with (i) the Company's issuance of $150,000,000
aggregate principal amount of its Series JJ 6.375% Senior Notes due June 15,
2046 (the "Notes") pursuant to a Senior Note Indenture dated as of December 1,
1997, by and between the Company and JPMorgan Chase Bank, N.A. (formerly known
as The Chase Manhattan Bank), as trustee (the "Trustee"), as heretofore
supplemented and as further supplemented by the Thirty-Sixth Supplemental
Indenture dated as of June 14, 2006 (collectively, the "Indenture"); and (ii)
the purchase by the Underwriters (as defined herein) of the Notes pursuant to
the terms of an Underwriting Agreement dated June 7, 2006 (the "Underwriting
Agreement"), among the Company and the Underwriters named in Schedule I thereto
(the "Underwriters") for whom you are acting as representatives (the
"Representatives"). This opinion is being delivered to you as Representatives
pursuant to Section 6(c)(1) thereof.
All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined the
registration statement on Form S-3 (File Nos. 333-126348, 333-126348-01,
333-126348-02 and 333-126348-03) pertaining to the Notes and certain other
securities filed by the Company under the Securities Act of 1933, as amended
(the "Act"), as it became effective under the Act (the "Registration
Statement"); the Company's prospectus dated July 19, 2005 (the "Basic
Prospectus") as supplemented by a preliminary prospectus supplement dated June
6, 2006 (the "Pricing Prospectus"), filed by the Company pursuant to Rule 424(b)
of the rules and regulations of the Securities and Exchange Commission (the
"Commission") under the Act, which, pursuant to Form S-3, incorporates by
reference the Annual Report on Form 10-K of the Company for the fiscal year
June 14, 2006
Page 2
ended December 31, 2005, the Quarterly Report on Form 10-Q for the quarter ended
March 31, 2006 and the Current Reports on Form 8-K of the Company dated January
10, 2006, January 11, 2006, January 13, 2006, January 31, 2006, February 1,
2006, February 20, 2006, March 8, 2006, March 9, 2006 and June 6, 2006 (the
"Pricing Exchange Act Documents"), and a prospectus supplement dated June 7,
2006 (together with the Basic Prospectus, the "Final Supplemented Prospectus"),
filed by the Company pursuant to Rule 424(b) of the rules and regulations of the
Commission under the Act, which, pursuant to Form S-3, incorporates by reference
the Pricing Exchange Act Documents and the Current Reports on Form 8-K of the
Company dated June 7, 2006 and June 7, 2006 (collectively, the "Exchange Act
Documents"), each as filed under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"); and the Indenture. We have also examined the free writing
prospectus prepared by the Company and filed with the Commission on June 7, 2006
pursuant to Rule 433 of the Act (the "Permitted Free Writing Prospectus"). The
documents listed in Schedule III to the Underwriting Agreement, taken together,
are collectively referred to as the "Pricing Disclosure Package."
In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the certificate
representing the Notes, of which we have examined a specimen), and we have made
such other and further investigations as we deemed necessary to express the
opinions hereinafter set forth. In such examination, we have assumed the
genuineness of all signatures (other than those of the Company), the legal
capacity of natural persons, the authenticity of all documents submitted to us
as originals, the conformity to original documents of all documents submitted to
us as certified or photostatic copies and the authenticity of the originals of
such latter documents.
The Indenture and the Underwriting Agreement are herein referred to as
the "Agreements."
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion, relying as to matters of New
York law upon the opinion dated the date hereof rendered to you by Dewey
Ballantine LLP, that:
1. The Company has been duly organized and is validly existing and in
good standing as a corporation under the laws of the State of Alabama and has
due corporate authority to carry on the public utility business in which it is
engaged, to own and operate the properties used by it in such business and to
enter into and perform its obligations under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary corporate
action, and the Underwriting Agreement has been duly executed and delivered by
the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission legally required for the issuance and sale of
the Notes have been obtained; such orders are sufficient for the issuance and
the sale of the Notes; the issuance and the sale of the Notes conform in all
material respects with the terms of such orders; and no other order, consent or
other authorization or approval of any Alabama or United States governmental
body (other than in connection or in compliance with the provisions of the
securities or "blue sky" laws of any jurisdiction, as to which we express no
opinion) is legally required for the issuance and sale of the Notes in
accordance with the terms of the Underwriting Agreement.
June 14, 2006
Page 3
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery thereof
by the Trustee, constitutes a valid and legally binding instrument of the
Company, enforceable against the Company in accordance with its terms, subject
to the qualifications that the enforceability of the Company's obligations under
the Indenture may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally and by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and the
Indenture conforms as to legal matters in all material respects to the
description thereof in the Pricing Disclosure Package and the Final Supplemented
Prospectus.
5. The Notes have been duly authorized and executed by the Company and,
when authenticated by the Trustee in the manner provided in the Indenture and
delivered to and paid for by the Underwriters pursuant to the Underwriting
Agreement, will constitute valid and binding obligations of the Company,
enforceable against the Company in accordance with their terms, subject to the
qualifications that the enforceability of the Company's obligations under the
Notes may be limited by bankruptcy, insolvency, reorganization, moratorium and
other similar laws relating to or affecting creditors' rights generally and by
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law); and the Notes conform as to
legal matters in all material respects to the description thereof in the Pricing
Disclosure Package and the Final Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus or the Exchange
Act Documents and take no responsibility therefor, except as and to the extent
set forth in paragraphs 4 and 5 above. In the course of the preparation by the
Company of the Registration Statement, the Pricing Disclosure Package, the Final
Supplemented Prospectus and the Exchange Act Documents, we participated in
conferences with certain officers and employees of the Company, with other
counsel for the Company, with representatives of Deloitte & Touche LLP and with
your counsel. Based upon our examination of the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus and the Exchange
Act Documents, our investigations made in connection with the preparation of the
Registration Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus and the Exchange Act Documents and our participation in the
conferences referred to above, (i) we are of the opinion that the Registration
Statement, on the date of the Underwriting Agreement, and the Final Supplemented
Prospectus, as of June 7, 2006, complied as to form in all material respects
with the requirements of the Act and the applicable rules and regulations of the
Commission thereunder and that the Exchange Act Documents, as of their
respective dates of filing with the Commission, complied as to form in all
material respects with the relevant requirements of the Exchange Act and the
applicable rules and regulations of the Commission thereunder,
June 14, 2006
Page 4
except that in each case we express no opinion as to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Pricing Disclosure Package, the
Final Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing
came to our attention which gives us reason to believe that the Registration
Statement, on the date of the Underwriting Agreement (including the Exchange Act
Documents on file with the Commission as of such date), contained any untrue
statement of a material fact or omitted to state any material fact required to
be stated therein or necessary in order to make the statements therein not
misleading, that the Pricing Disclosure Package, as of the Applicable Time,
included an untrue statement of a material fact or omitted to state a material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the Final
Supplemented Prospectus (including the Exchange Act Documents) contained, as of
its date, or contains, on the date hereof, any untrue statement therein of a
material fact or omitted, as of its date, or omits, on the date hereof, to state
a material fact necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading, except that in
each case we express no opinion or belief with respect to the financial
statements or other financial or statistical data contained or incorporated by
reference in the Registration Statement, the Pricing Disclosure Package, the
Final Supplemented Prospectus or the Exchange Act Documents and with respect to
information set forth in the Pricing Prospectus and the Final Supplemented
Prospectus under the captions "Description of the Series JJ Senior Notes -
Book-Entry-Only Issuance - The Depository Trust Company" or "The Policy and the
Insurer" or under the caption "Experts" (as it relates to information with
respect to the Insurer) appearing on page S-13 thereof or in Appendix A thereto.
We are members of the State Bar of Alabama and we do not express any
opinion herein concerning any law other than the laws of such State, the federal
law of the United States and, to the extent set forth herein, the law of the
State of New York.
This opinion is rendered to you in connection with the above-described
transaction. This opinion may not be relied upon by you for any other purpose,
or relied upon by or furnished to any other person without our prior written
consent, except that Troutman Sanders LLP and Dewey Ballantine LLP may rely on
this opinion in giving their opinions pursuant to the Underwriting Agreement
insofar as such opinions relate to matters of Alabama law.
Very truly yours,
/s/ Balch & Bingham LLP
Dewey Ballantine LLP
New York, New York
June 14, 2006
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Wachovia Capital Markets, LLC
One Wachovia Center
301 South College Street
Charlotte, North Carolina 28288-0602
As Representatives of the Several Underwriters
ALABAMA POWER COMPANY
Series JJ 6.375% Senior Notes
due June 15, 2046
Ladies and Gentlemen:
We have represented the Underwriters (hereinafter defined) in
connection with (i) the issuance and sale by Alabama Power Company (the
"Company") of $150,000,000 aggregate principal amount of its Series JJ
6.375% Senior Notes due June 15, 2046 (the "Notes") pursuant to a
Senior Note Indenture dated as of December 1, 1997, by and between the
Company and JPMorgan Chase Bank, N.A. (formerly known as The Chase
Manhattan Bank), as trustee (the "Trustee"), as heretofore supplemented
and as further supplemented by the Thirty-Sixth Supplemental Indenture,
dated as of June 14, 2006 (collectively, the "Indenture"); and (ii) the
purchase by the Underwriters (as defined herein) of the Notes pursuant
to the terms of an Underwriting Agreement dated June 7, 2006 (the
"Underwriting Agreement"), among the Company and the Underwriters named
in Schedule I thereto (the "Underwriters") for whom you are acting as
representatives (the "Representatives"). This opinion is being
delivered to you as Representatives pursuant to Section 6(c)(4)
thereof.
All capitalized terms not otherwise defined herein shall have the
meanings set forth in the Underwriting Agreement.
In rendering the opinions expressed below, we have examined the
registration statement on Form S-3 (File Nos. 333-126348,
333-126348-01, 333-126348-02 and 333-126348-03) pertaining to the Notes
and certain other securities filed by the Company under the Securities
Act of 1933, as amended (the "Act"), as it became effective under the
Act (the "Registration Statement"); the Company's prospectus dated July
19, 2005 (the "Basic Prospectus") as supplemented by a preliminary
prospectus supplement dated June 6, 2006 (the "Pricing Prospectus"),
filed by the Company pursuant to Rule 424(b) of the rules and
regulations of the Securities and Exchange Commission (the
"Commission") under the Act, which, pursuant to Form S-3, incorporates
by reference the Annual Report on Form 10-K of the Company for the
fiscal year ended December 31, 2005, the Quarterly Report on Form 10-Q
of the Company for the quarter ended March 31, 2006 and the Current
Reports on Form 8-K of the Company dated January 10, 2006, January 11,
2006, January 13, 2006, January 31, 2006, February 1, 2006, February
20, 2006, March 8, 2006, March 9, 2006 and June 6, 2006 (the "Pricing
Exchange Act Documents"), and a prospectus supplement dated June 7,
2006 (together with the Basic Prospectus, the "Final Supplemented
Prospectus"), filed by the Company pursuant to Rule 424(b) of the rules
and regulations of the Commission under the Act, which, pursuant to
Form S-3, incorporates by reference the Pricing Exchange Act Documents
and the Current Reports on Form 8-K of the Company dated June 7, 2006
and June 7, 2006 (collectively, the "Exchange Act Documents"), each as
filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"); and the Indenture. We have also examined the free
writing prospectus prepared by the Company and filed with the
Commission on June 7, 2006 pursuant to Rule 433 of the Act (the
"Permitted Free Writing Prospectus"). The documents listed in Schedule
III to the Underwriting Agreement, taken together, are collectively
referred to as the "Pricing Disclosure Package."
In addition, we have examined, and have relied as to matters of fact
upon, the documents delivered to you at the closing (except the
certificate representing the Notes, of which we have examined a
specimen), and we have made such other and further investigations as we
deemed necessary to express the opinions hereinafter set forth. In such
examination, we have assumed the genuineness of all signatures, the
legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of
all documents submitted to us as certified or photostatic copies and
the authenticity of the originals of such latter documents.
The Indenture and the Underwriting Agreement are herein referred to
as the "Agreements."
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion, relying as aforesaid
and as to all matters covered hereby which are governed by or dependent
upon the law of the State of Alabama upon the opinion of Balch &
Bingham LLP dated the date hereof and addressed to you, that:
1. The Company has been duly organized and is validly existing and
in good standing as a corporation under the laws of the State of
Alabama and has due corporate authority to carry on the public utility
business in which it is engaged, to own and operate the properties used
Morgan Stanley & Co. Incorporateed
Wachovia Capital Markets, LLC
June 14, 2006
Page 2
by it in such business and to enter into and perform its obligations
under the Agreements and the Notes.
2. The execution, delivery and performance by the Company of the
Underwriting Agreement have been duly authorized by all necessary
corporate action, and the Underwriting Agreement has been duly executed
and delivered by the Company.
3. All orders, consents or other authorizations or approvals of the
Alabama Public Service Commission and the Commission legally required
for the issuance and sale of the Notes have been obtained; such orders
are sufficient for the issuance and sale of the Notes; the issuance and
sale of the Notes conform in all material respects with the terms of
such orders; and no other order, consent or other authorization or
approval of any Alabama or United States governmental body (other than
in connection or in compliance with the provisions of the securities or
"blue sky" laws of any jurisdiction, as to which we express no opinion)
is legally required for the issuance and sale of the Notes in
accordance with the terms of the Underwriting Agreement.
4. The Indenture has been duly authorized, executed and delivered by
the Company and, assuming the due authorization, execution and delivery
thereof by the Trustee, constitutes a valid and legally binding
instrument of the Company, enforceable against the Company in
accordance with its terms, subject to the qualifications that the
enforceability of the Company's obligations under the Indenture may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
the Indenture conforms as to legal matters in all material respects to
the description thereof in the Pricing Disclosure Package and the Final
Supplemented Prospectus.
5. The Notes have been duly authorized and executed by the Company
and, when authenticated by the Trustee in the manner provided in the
Indenture and delivered to and paid for by the Underwriters pursuant to
the Underwriting Agreement, will constitute valid and binding
obligations of the Company enforceable against the Company in
accordance with their terms, subject to the qualifications that the
enforceability of the Company's obligations under the Notes may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally and
by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law); and
the Notes conform as to legal matters in all material respects to the
description thereof in the Pricing Disclosure Package and the Final
Supplemented Prospectus.
6. The Indenture has been duly qualified under the Trust Indenture
Act of 1939, as amended.
We have not independently verified the accuracy, completeness or
fairness of the statements made or included in the Registration
Morgan Stanley & Co. Incorporateed
Wachovia Capital Markets, LLC
June 14, 2006
Page 3
Statement, the Pricing Disclosure Package, the Final Supplemented
Prospectus or the Exchange Act Documents and take no responsibility
therefor, except as and to the extent set forth in paragraphs 4 and 5
above. In the course of the preparation by the Company of the
Registration Statement, the Pricing Disclosure Package, the Final
Supplemented Prospectus and the Exchange Act Documents, we participated
in conferences with certain officers and employees of the Company, with
representatives of Deloitte & Touche LLP and with counsel to the
Company. Based upon our examination of the Registration Statement, the
Pricing Disclosure Package, the Final Supplemented Prospectus and the
Exchange Act Documents, our investigations made in connection with the
preparation of the Registration Statement, the Pricing Disclosure
Package and the Final Supplemented Prospectus and our participation in
the conferences referred to above, (i) we are of the opinion that the
Registration Statement, on the date of the Underwriting Agreement, and
the Final Supplemented Prospectus, as of June 7, 2006, complied as to
form in all material respects with the requirements of the Act and the
applicable rules and regulations of the Commission thereunder and that
the Exchange Act Documents, as of their respective dates of filing with
the Commission, complied as to form in all material respects with the
relevant requirements of the Exchange Act and the applicable rules and
regulations of the Commission thereunder, except that in each case we
express no opinion as to the financial statements or other financial or
statistical data contained or incorporated by reference in the
Registration Statement, the Pricing Disclosure Package, the Final
Supplemented Prospectus or the Exchange Act Documents, and (ii) nothing
came to our attention which gives us reason to believe that the
Registration Statement, on the date of the Underwriting Agreement
(including the Exchange Act Documents on file with the Commission as of
such date), contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or
necessary in order to make the statements therein not misleading, that
the Pricing Disclosure Package, as of the Applicable Time, included an
untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, or that the
Final Supplemented Prospectus (including the Exchange Act Documents)
contained, as of its date, or contains, on the date hereof, any untrue
statement of a material fact or omitted, as of its date, or omits, on
the date hereof, to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which
they were made, not misleading, except that in each case we express no
opinion or belief with respect to the financial statements or other
financial or statistical data contained or incorporated by reference in
the Registration Statement, the Pricing Disclosure Package, the Final
Supplemented Prospectus or the Exchange Act Documents and with respect
to information set forth in the Pricing Prospectus and the Final
Supplemented Prospectus under the captions "Description of the Series
JJ Senior Notes - Book-Entry-Only Issuance - The Depository Trust
Company" or "The Policy and the Insurer" or under the caption "Experts"
(as it relates to information with respect to the Insurer) appearing on
page S-13 thereof or in Appendix A thereto.
Morgan Stanley & Co. Incorporateed
Wachovia Capital Markets, LLC
June 14, 2006
Page 4
We are members of the State Bar of New York and we do not express
any opinion herein concerning any law other than the law of the State
of New York and the federal law of the United States and, to the extent
set forth herein, the law of the State of Alabama.
This opinion is rendered solely to you in connection with the above
matter. This opinion may not be relied upon by you for any other
purpose or relied upon by or furnished to any other person without our
prior written consent except that Balch & Bingham LLP and Troutman
Sanders LLP may rely on this opinion in giving their opinions pursuant
to Section 6 of the Underwriting Agreement, insofar as such opinions
relate to matters of New York law, and Balch & Bingham LLP may rely on
this opinion in giving its opinions (i) pursuant to Sections 102, 302
and 904 of the Indenture and (ii) in connection with the Company's
listing application with respect to the Notes to the New York Stock
Exchange, insofar as such opinions relate to matters of New York law.
Very truly yours,
/s/ DEWEY BALLANTINE LLP