SO - Earnings call 4 2023 | The Southern Company

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Operator

Good afternoon. My name is Malika, and I will be your conference operator today. At this time, I would like to welcome everyone to the Southern Company Fourth Quarter 2023 Earnings Call.

[Operator Instructions] As a reminder, this conference is being recorded, February 15, 2024.

I would now like to turn the conference over to Mr. Investor Treasurer. President, Vice Gammill, Relations and Scott Please sir. go ahead,

Scott Gammill

Good and you, Southern Company's Thank to Fourth afternoon, Call. welcome Malika. Earnings Quarter XXXX

me and Womack, Officer Joining Officer. Chris and are Executive Chief Chairman, of Tucker, Dan President Company; Chief Financial Southern today

we'll differ remind forward-looking making and indicated statements, the materially providing from you, addition could cause including statements important forward-looking in XX-K information. those subsequent Various Let factors in our those actual to be me today historical filings. results Form discussed to securities in

In present Investor to conference we this as we'll website Relations the are non-GAAP addition, well this financial for our information call. the included call, at investor.southerncompany.com. information which Reconciliations released financial measure as slides on this are morning applicable both GAAP the on in available

I'll to this Chris. turn At over it time,

Christopher Womack

Vogtle performance X, expectations, over successful its Plant carbon-free reliable, X X XXth hours Georgia. do you proved Since Good Thank XXXX in nuclear Unit an of exceptional you, Scott. a in States the the in Unit again the for our of the over and once decades. unprecedented constructed first July date, of safe, which in-service strong that unit things, was has face headwinds afternoon, completion year joining today. exceeded and Company, can including Southern delivering extraordinary in year financial we results X's us newly United for million-megawatt thank delivering energy across we

commissioning a of construction solar additional contracted issues brand-new X goal interim renewable portfolio continued Barry; and customer versus Power most plant, by recovery; goals, XXXX, reasonableness, combined to for as cost gas toward business XX% which items levels Southern including for prudence noteworthy prudence Other by XXXX and Power's a in carbon-free progress greenhouse of all generation; add Accounts Most an and XXX-megawatts schedule Alabama at top plant for our will achieving resolution electric Southern the complete, And gas satisfaction. ranked Institute #X on Power, XXX-megawatt Fortune XXXX earned acquired its reduction projects outstanding for generation completed Vogtle our the a new reduction Company fully is at of and week, included time for residential emission on Admired of J.D. National from XXXX; Award a XX% construction and cycle successfully X Electric the constructive was admired in Edison engagement process, magazine's XXXX. honors resolving utility customer list just of Companies X and reduction World's and last once

These achievements do. reflect of our team's keep to steadfast at center serve we communities the customers are privileged the the commitment to and we everything

to Heather, Throughout our time storm, its winter execution peaks territory. evidenced XXXX, conditions electric weather and customers and at Southern the strong severe fundamentals, franchises demands excel all preparations and our year through this X gas electricity to serving when across as reliably throughout gas system started state continue winter January's during reach and continue Company the

utilities from of model. the value weather navigate of operational demonstrates vertically how each combination such by to events customers benefit business ability Our state-regulated and further our outstanding severe integrated our through performance our of the

providing reserve of include XX% assumptions processes, energy our a long-term and which our planning margin benefit reliable like mix adoption a customers by resources. state's important utilities, Our of integrated winter electric planning for resilient

to for on I'd call financial an a Before like Unit provide Vogtle update, Dan to turning over the update X.

heat begin reaction Initial criticality the make the production. achieved create Unit self-sustaining X to continue meaningful yesterday. first with for progress startup, initial key completion time We the nuclear step during a for represents toward whereby criticality steam of to operators safely

in testing activities service, the the which quarter remaining declaration As projected of the start-up is with continues X perceive Unit sync approach preoperational grid, in we the and of with the second initial XXXX. that

Our commercial in assumes achieves Unit XXXX Dan X which [indiscernible], range, shortly share per April. guidance operation will earnings adjusted

turn Dan, the now to call I'll over you.

Daniel Tucker

Thanks, Chris, and good afternoon, everyone.

our strong As for we are was see territories. adjusted very per XXXX, earnings higher reported you the expenses. performance a higher of lower utility this revenues from income XXXX marking headwind, history was nonfuel XXXX and our O&M offset mildest also to released top and XXXX in range. which expenses share compared somewhat our can primary morning, depreciation of significant interest weather with $X.XX and by we electric the the for guidance service of taxes, materials our year drivers The Mild

the to the results of today's package. deliver a of compared our results ability is our XXXX strength adjusted and and release great Our at to in reconciliation adjusted companies. of testament back to detailed our is to A earnings resilience very guidance of top reported and included XXXX team and portfolio

sales was which electric growth to the economy. by Turning both for usage of office retail X.X% dynamic. to residential electricity impacted for Weather-adjusted now compared year, to were and by partially lower in usage sales with return XXXX. Strong the sales the the commercial down commercial sales XXXX drove offset residential X.X%

continue decades. to which of we've X-year the nearly over electric residential Since electric robust total and the customers. addition XX,XXX XXX,XXX in residential see XX,XXX We represents added residential customers customers, XXXX, with residential over gas customer growth highest

lower closures. to nearly and X%, well plant sectors Industrial continued in slowing largely planned chemical construction-related and to due outages housing down for year finished long companies sales sales as as the to due

in and the underpins electricity our filed in XXXX sales development Georgia attracting years Integrated long-term forecast. territory Power's Consistent incredibly service economic recently businesses our Southeast Plan Resource new states extraordinary Several expanding our in detailed update, strong. remains to with drivers of success

XXXX X% to projected projected facilities a derisk total our X% put customers this existing new of growth increased investments is hour X% and capital benefit average and growth This and XXXX, period. growth to and to remain XXXX be the electric is reflected the of manufacturing approximately this for tremendous customers' XXXX growth in sales on rates. also same outlook. annually to drivers data from current to accelerate retail as growth a significant electricity are magnitude an annually, centers X% kilowatt around in Power's to downward Georgia to While to with for velocity projected over sales has The opportunity our sales potential pressure outlook substantial projected growth represents from approximately projected

now Turning and projections to our for beyond. XXXX earnings

$X.XX, X% Our guidance per growth is range. range to X% share $X.XX EPS that XXXX adjusted earnings for is long-term rate our from adjusted projected to and

we XXXX community a that to guidance stable XXXX. has since understatement say reasonably EPS X world It XXXX, investment the the wide range. lot Vogtle X initial of greatest early and with post changed and In with the is an construction a and provided early projection perhaps

On to for a and hundreds higher macro expense which and rates, ago. has of basis, X translated then we've millions of years higher dollars interest XXXX assumed than for alone interest higher any seen us significant inflation of longer

projection Additionally, moved date XXXX, projected the Vogtle relative in-service XXXX in our into XXXX. from to for early X

previously face hundreds create sales rate of pay investments. O&M billion the for In higher, is projections of to approximately work more help to value investors. are these base hard our challenges, our our and projected those and to be continued than to millions to and higher to expenses of maintain extremely lower for help $X for in to Compared projected grow business utility contribute dollars state-regulated affordability while projected XXXX XXXX, we've early

per of $X.XX We for earnings quarter share adjusted of the XXXX. estimated first

our year to utility plan a utility over investment to increase XX% X-year billion, attributable IRP and forecast efforts investment electric megawatts businesses. $X relative our of our a in the be reflects about XX% of current well also capital technology gas proposed forecast, state-regulated billion partially to XXXX Power's continues Georgia ongoing $XX The brick-and-mortar to resiliency reflects in increase proposed. and Our networks investments ago. capital spending increase capital XX% the our totaling state-regulated infrastructure. reflects in new It update, resources our This further

measured disciplined businesses. We state-regulated have for forecasting our capital utility maintained to approach our

capital Given ahead of was magnitude in change we it our in our plan. higher the peak timeframe projected new the go which demands, are to to felt sales appropriate resources growth resources certain and reflect serve and needed new in

tend long-term investment system as is visibility compliance refined. capital especially unfold, to later grow, our the customer into in integrated regulatory forecast processes planning obligations our Additionally, and additions improves, the years evolve

the in an and outsized it's the the increases reasonable expect to projected represent historical X-year growth velocity capital this forward. to do upward forecast scale of in adjustment year's a due of to the While trend near believe increases term, going continue we

our foundation for serve capital investment providing base outlook. to of own, strong Any long-term its forecast the state-regulated already an upside our On add simply capital growth solid annualized to durability billion approximately supports to outlook. of rate will a forecast X%, $XX

ratings remain a priority. credit investment-grade Strong

a investment, to have We a also continue order equity that to be high-quality believe in must credit. company high-quality

and FFO preserve we to the reduction X, improvement completion we credit construction improve meaningfully of and profile differentiated our our what will major As Unit positively strengthen the we ensure in risk Vogtle a profile. near in be project should believe help

We provide annually. typically million investment are to approximately turning new $XXX on that These plans incremental our internal also capital plans at fund the highlighted equity I our earlier. of equity subsidiaries

preserve with a flexibility improving Additionally, focus financing continuous shareholder our we'll and on optionality value. preserving and

potential at-the-market For securities to we partially EPS plan partially doing improves refinance potentially, subsidiaries preserves our hybrid or in maintain capital to credit long-term or ATM [ will additional if example, or continue in callable finance objectives. spending determine ] an so we to our and increases

total shareholder laid we strives return, Company we've deliver that supports Southern risk-adjusted believe and objective. out a superior plan that to the

our toward franchises, the investment. on quality Our premier and Southern in contributes our growing utility we making remarkable customer priority Company and business and state-regulated community-focused history a dividend all strong premier investments place credit that model the

Chris, the you. call to I'll back now turn over

Christopher Womack

exceptional above Southern remaining meet you, challenges and while say, just of keeping Dan. on, Company We me head customers Again, to we communities let in in year center the rose didn't everything we an do. XXXX. that committed had them Thank

outstanding heights such the the to the prepared proud hardwork, our us to am show results. I doesn't enable happen. perseverance the collaboration, teams just that of to these throughout team a leadership the to achieve year new extraordinarily rise Having and

leaders Company our [indiscernible] to expect serve. are exceptional evolving in communities positioning service provide with investing an customers landscape has prioritized and we Southern the in to their solutions decades, growing teams deliver the focus needed people to the on For a our support to innovative and energy

vacant Rather seats, a As of our a know, we as embraced simply opportunity. you a in than XXXX. fill implemented handful all it early grand leadership company transition

level During the changes more throughout served movement the intentionally, XXXX, we XX industry. believe importantly the in we and what strengthen to further and the bench excitement, energy deepest officer to brought and The best company. changes and facilitated renewed be

excited our alike investors and ability expect company, and about the about the am I deliver Southern team stakeholders, of from excited and to customers our its results, I'm future this all Company.

are we questions. Thank you us ready and for joining afternoon to this continued Operator, take interest for in Company. now your again Southern

Operator

[Operator Instructions] from Our first with phone Shahriar line Partners. the Pourreza of is Guggenheim question

Shahriar Pourreza

Just the estimate of a growth in guess, new equity, the hitting that quickly to or about X% still $X.XX on level the now Does past? which midpoint Vogtle talked guidance X% the adding the be just So new base EPS 'XX we you comes rate charge? comfort include range, forward. back rolled of with X% you've to new should growth off the grow of And like sort so what's range that you that reiterated? I estimate

Daniel Tucker

question, this. And Yes. a on there's Shahriar. the of I Thanks for know focus lot

only range, from we're wants the always as with impacts lined in which I all XXXX Yes, range. -- up, into, XXXX. would Vogtle the in everyone guidance X, assumed to this project precision on inhale with going all, down. The that's all of mean, absolutely if start so think it what guidance you let's not with that if 'XX includes in relative it at but add I impact April. the being fascinated incremental been have been the certainly we've $X.XX to

amount, but Those mitigations And the that XXXX of flexibility is what of year what are by necessarily by adjusted every range with we available items And kind mitigate means. we haven't we're not the using a did ever that. the in mildest flexibility, aren't doing year. full unlike that -- and kind any to

to got service you've system, sure to you're the prioritizing maintain make to have You customers.

using that is opportunity it so this and year do to limited. diminish And forward. We're we have going will what flexibility the that

of kind slide X the guidance midpoint. We don't X% X% it couple think draw was kind range of But We off about also, is about XX of the thought we the of being to our the think always but important maybe slides I what's think range. needed nuances. and a not factored how top and always of growth of off more in we enough, those trajectories other it. off our to We've bottom drawn

off X% top, the the off bottom. X% So

I for that's every and captures XXXX. this think current if you do XXXX that there range, estimate from it out reasonable

We were we X% additions add to the to incremental capital last $X all as growth, plan. When opportunity possible. still just see the base it of the kind comes That at billion didn't year. capital added look, of rate We we that capital exists.

So by a yes, yes, and rate time. mitigated shares increased fraction percent of of so it's a grow base, ability to our slightly ever over

as Our ability it's solid to as hit numbers our is been. ever

Shahriar Pourreza

Got it.

Dan. Okay. of a spoken know I just receive That's sort year sort capital PTCs, of has pretty dollars one obviously of millions then your fund And extensively to to and plan. lastly, nuclear helpful, that on expects of of hundreds peers

plans? Is receive part on you today of do I guess, it credit nuclear or your funding anything plan expect does to of the PTC -- any material fund? the metrics

Daniel Tucker

thanks, We Shahriar. Yes. yes, --

into We've basis debt that's terrific nuclear that factored several year without any forecast of We above have points nuclear improving PTCs. from with time, PTCs plan and over frankly flow FFO an outlook. in our to a I hundred those our the threshold any improves at not look got cash every metric

Is very it. well possible. extent counting to be. those there the we time could PTCs? we'll not opportunity to And customers capture We most flow us some do, the the for to amount to of think there practical of those on We're

going our a factor earnings kind And not of look. so -- how be to metrics we're it's in or

Operator

from with the Steve is Research. Wolfe question of next Our line Fleishman

Steven Fleishman

let's running? be differentiated. say, debt, about do when to you'll -- you XX% year you units expect bulk there, talked full do I of expect a which XXXX, you've just be When is first FFO So in think you targeting to have When there?

Daniel Tucker

Yes.

So always the a the said, XX-ish, of forecast us way characterized it's it kind I've see we that in gets I've past. to

to think today, about it's terrific So me you a let I this. sure still in think differentiated the doing are, conservative we're Steve, can we're and everything and tell we being make where and we story here we way

about Moody's actual result if XXXX X for service. before just So that's was in Vogtle think we Keep XX%. metrics, in our mind, is

the kind incremental fact that of resolves believe itself, is on the things, weight we're in that live on and you XXX improves. regulatory as plants weighs service a other by building points in construction, of little than those more bit XXXX. capital a long Vogtle timeline, about this some at with metrics. will that The XXXX, we deploying improve new of Georgia metrics basis the credit gas flow lag there's And that think or bit cash of

XX forecast point to away, that under-recovered improvement. continue and bit as of little in a of adds impact debt XX XX the and fuel that kind to short the equity a then with over So of to time, that of I it's see after go And XX basis -- term function issuing that's a capital, improvement for year the that also gets kind from in over we're trajectory. the and there's collected to that about every goes 'XX, that the upward that

towards the our improving my of range. every we of year still is an and get X again, years forecast, mid-XX But So thresholds. in hundreds kind that in XX points basis in above X-year story,

Steven Fleishman

[indiscernible]? question, seems you sales And unprecedented, this just least least X% in is -- mean at -- can the growth, Great. just for talk my particularly, I I Georgia, growth, kind year at my to the the a other of which guess,

Christopher Womack

go ahead, go No, question. ahead. Finish your

Steven Fleishman

so are a huge? kind that? should just because And because how ones of in not happen? number? that this -- How guess, proposed are your risk-adjusted sure of it back plan growth they're peers or ones -- you you're doing I going kind just holding think I you're it's your you against conservative are between to just I about is how that differentiating projects from Or

Christopher Womack

it that an Yes, to development growth is unprecedented continue activities. from economic we witness

broken. looking site in just mean so not but this that some a will, actual there's we been at look I in permits, forward be has we that we for state. fact, project and yes, is And ground they building commitment permits -- so I terms are the look. building been very build demonstrated announcements mean, factor companies a look in of in conservative of visits, making

we that that But factored these actions years. we pipeline. economic of of we seen we to think their state. has some terms in past and for an say, just those for So taken IRP, certainty go the as updated thresholds activity, real. unprecedented operating make filings participation, companies, And those those projects demonstrated this we businesses commission that some businesses We've just those before firmness -- X their through in go having in in are, in development in that the shows -- fact, the we clearly continue have to being aggressive

Daniel Tucker

Yes. development IRP update. filing just in momentum the add activity that economic has And I'll to the since that even XXXX continued, that,

thank it's do we've to going in in still evolve. It's not XXXX, conservative we not out counting unlikely. so but yet, And There's filing got nature, goodness, that, on a and this lingering periodically. we're a there our to lot continue

Christopher Womack

conservative as Steve, a But Yes. this look make these is very decisions. we

Steven Fleishman

one very just to centers data since this. or focused data on thing of other like everybody then The X% manufacturing is growth? And is center Yes. how relative last much it growth, on

Christopher Womack

right represent XX% emerging we somewhere that load. centers now, around of think Data

Operator

the question of Sachs. Goldman next is Carly line Davenport with Our from

Carly Davenport

just talk in on made spend the of you to the just a around about needs what X-year IRP? the Could new Georgia Maybe incremental that on some start including little plan. the you drove assumptions resource bit

April, capital about plan of necessary decision? order it's the commission with think how then in after if And that expected there sort updating the would you

Daniel Tucker

a it's question. great Carly, Yes,

this about for the Steve. is in kind These I minutes than -- that are velocity it needed sooner right this and alluded I later. us. and of It's to resources think few characterized just front of magnitude we really growth ago, So of a

think And -- trend happening. and break so us ahead bit reasonable regulatory a to outcome directionally reflect get for of was to we there's what's little slightly kind it of

to the so bit, we were of very in specific fuel a included. kind just little what And we curtain back

Power If of proposal turbines, is we've back the the capital you commission that fall, look what Georgia new plan the back at included owned front over in there's the included leaves of And in and in base. and of those, of are lot and various resources. go combustion [indiscernible] put essentially it the in storage X projects projects I solar or storage that not hundreds, kind think, small military of X kind bases That included of Air megawatts near then storage in a there. specific Force located XXX a

We will in in a reminder, again, XXXX. there's April, but decision a whole as another process get a coming

April. we'll there in be obviously process. continue projections a our the out, may as apprised So keep and community may out update be clarity those coming of investment further play the clarity 'XX accordingly. There degree And to

Carly Davenport

X. Great. That's about Vogtle on then maybe super helpful. as think Unit just we And executing

on embedded might to slip a insights you the gauge of April milestones current to have of about levers can near-term the updates there? that's impacts? we And that the little we you project to any some might that the can of bit into beyond offset kind kind that sort of guidance, Just that talk pull extent timeline there those does progress on get then

Christopher Womack

to through criticality month. start that testing achieved the Yes. to and occur by saying grid, the could Carly, later milestone and let initial this thinking next is me major progress we start-up. The yesterday, with continue

experiences during units issues last from through second we we take expect these We our at we through X, year X these Unit as the moving could we work -- the with that arise. Unit And and in X, how quarter. account as got completion worked look have through Unit could we

right we're weeks and this investment a planning margin we think of at it to sure unit get time online look right. view we on are number we where we as But and But now, have we'll being we to that accomplish are, April, taking we long-term the objective. as make in a of

Daniel Tucker

that's to we've range, to kind flexibility we're the I mentioned I expect today that mean, a that, flexibility. Yes. for what out, right? [indiscernible] in roughly some I service earlier, because to be of beyond $X.XX April $X.XX range partially And Carly, a we why obviously, month. it's have But of speak laid address deploying we there. a it's mean out already in every I'll

detailed weather or play it year really might So within on we whether depending or just might degree how function moving the about could else, the us early a that some of something the the range for flexibility. year too year the out. to have plays be as circumstances greater exactly that of It's out, it's in be

Operator

next Our America. the of Julien from of Bank line is with Dumoulin-Smith question

Julien Dumoulin-Smith

you have said A quick up on following questions, of what couple guys of late.

number on Just growth. sales on this big

the Are to to to just this technically in forecast, I is Just by clarify, outlook? pending lines Question mean, got work you an extent this underpinned improving will. fully doesn't Is I and Or that that against one, IRP that in point as reflect go sales. IRP sales more the the IRP you've you there process? ROE your really up which this seeing the if know something you the outlook? at through

Daniel Tucker

So I'm you're ROE. not improved headed where with sure

Julien Dumoulin-Smith

returns the sales, Just from if from you will. improving additional

Daniel Tucker

returns I say, sustainable. perspective utility customers' improving perspective. is opportunity kind a ROE of predictable, really an not downward to regulated the our overall, -- as mean, from view put existing Certainly pressure objective that rates. regular, on From an from we

you'll continue I way. to see out think it play that

laid perspective view from of resource had IRP economic the development that to additional expectation IRP do stay of this be based put for so than on Julien, we update that long on degree Georgia a for actually perspective. this from is the so success what's in in Power, to conservative because out we've for term that the growth this Southern, is clear, here, roughly X% the Just more sales a update ahead some number X% an

those to huge have It's reinforces also is play continue potential kind numbers as go the what out, continues to to of differential, but it a not this up.

Julien Dumoulin-Smith

you the about once, of you're at terms coming is pro that then back to talking forma XX% Vogtle thinking all? that guys I FFO Just -- on? were X changed And in what the quickly. pivoting how Excellent. Yes. to has just debt mean, about mean, I

Daniel Tucker

a what which, objectives, this kind profile terms I company in of changed the all I think A being my financial believe supports the nothing's said see we before, profile fully category No, ahead of the for BBB+ us the parent our I I've again, of that. supports utilities, think

only the because The that of in metrics incremental any we're any stand of those ramp-up points where slower those is it's capital deploying. thing hundred and in every slightly a several to that's every terms in But our of relative of year, thresholds, basis above changed we year improves.

Julien Dumoulin-Smith

Wonderful. the And then the cooler I to the just then there on in bit talk here. will. reactor sort some And [ if extent quickly on some know root in of ]? [indiscernible]. there you I that on [indiscernible] to the the What's little adjacent need other cooler the -- which to know status pumps, pumps, just of a some evaluate the was cause of impact reactor VX a there's there's is language

Christopher Womack

Yes.

back with sure we pump with we all pumps And the manufacturer. issue, we pretty new go the pumps. cause sent analysis, think have yet. but has all were not we're been issues, we cause And in the forward. good pump, but the we the we And not similar tested the made as think other any there identified we we've shape But performed root the done so to of a yes, the analysis

Operator

Our next Barclays. Nick the of is line Campanella question with from

Nicholas Campanella

cause. just up the Julien follow a on guess question on I the root that had

that possibility what's [indiscernible] an [indiscernible]. back in risk just to look going the no X of at the actual mentioned just And longer you line? the Unit And issue? go be to pumps having when think I is

Christopher Womack

at test these the I think that guess, we just we And we run new as an pump with thought other we I I we you good We sent looked manufacturers, consider the that other handle. was, pumps. issue And identified it's have what the pump the think the assess as issue pumps, pumps. a we to man, have the time. think we we the on pump, the mean, we installed. not

have guess, as to we similar pump we've kind have forward. the things to confidence we sure go what that color we issues as make I have the I provides do the don't issues we good in think of, identified and and to

Daniel Tucker

Yes.

a now. running I think these things globally, XX champ right like there's of

Nicholas Campanella

Absolutely. of the know on of Yes, XX% reflecting that's helpful. of I that a IRP, you plan, first the this kind the half And and roughly get decision then capital just year. in

plan? do tweaks how quarter next think year? the it be there just just update of the another we Is So Or kind in cards? fourth this mid-period going financing to about to time a opportunity is

Daniel Tucker

Look, none they'll these will be regulatory day. of -- light in outcomes the of be all

I what's to laid of we've is approved kind what's approved. storage think projects. already, very be yet I clear combustion it what X included be will specific and and which out those turbines

provide opportunities. And formal but do the we We'll interim think I way. to more so we'll be certainly year updates able be along every as color there'll normally do, I think

remained when will territories. service extremely of opportunity to in electric it owning the that our continue to we've in And comes is conservative exist other any renewables interim

known very well. gets And sure are that, that, as that also happen. optimistic clarity, as we'll We make that's that will

Christopher Womack

this you'll a today, processes testimony and the is these you'll process, But man, they that also different us see by play decision works through that you've and IRP Georgia many filing see But have may seen commission through and leads But before. transparency the as process process, commission. to perspective. the out staff in great the April

you'll kind forward, it as and will real of time see So go those processes we unfolds. how continue

Operator

the is Morgan from of David next Our Arcaro Stanley. question with line

David Arcaro

base pressure think parameter on system term? handle into need rate T&D there longer you the growth growth, growth get the is kind about load load years kind base of see. Let's is generation time? still system on X% Thinking potential upward strain growth rate Or to X% base the over this decade? of X% rate number trajectory, that to right about the of growth growth, that strain, as enough to that later is rate

Daniel Tucker

what We upward We're process. think, to these regulatory We've to processes. April. ahead We'll we in we've fruition. not there's We'll XXXX to tried come certainly of measured potential trying far a remained forecasted. is likely Dave, development get believe activity get too Yes. and imply how Look, conservative is is there I that in here. decisions any more economic to have incredibly

will that, And rise of capital given budget is our that so unreasonable to incremental that continue all certainly it load. not to serve

And that so pressure rate words, your base. there using be could certainly upward, on

David Arcaro

of makes I the you manufacturing little these commercial That that -- about about and could rate the to lot where you're are has that being rest system a And thinking on the revenue customers it. Are bit the from elaborate covered by system. of when others the Got there or ends thinking of these sounded a impacts, investment opposite if be on data other growth? you kind was bringing you're wondering in up how grid It low-priced center like load opportunities that that coming new pressure of you're customers see a sense. lot here? is such downward within

could little So see you on how time? you over a if elaborate rates bit progressing I'm wondering

Daniel Tucker

ahead, Chris. Yes. No, go

Christopher Womack

more resources do No, the expect sales serve. cost these customer should to needed see that growth for offset we'll and We our experience. think to we of than rate the that the additional decreases customers with

downward this customers one things pay we And attention of opportunity and so we -- on board. are the growth a the of we of do sales put affordability there is internal. our rates And is benefits having think to something that the lot we to, for across pressure

each fact, putting how that's we is, so to want we project. that make in sure evaluate pressure of downward kind rates. on see it how I And and

Daniel Tucker

utility our risks was one about the opportunity greatest year facing ago, all tremendous probably this was outlook. a affordability. of company of as think every a you We derisk to this see If where

Operator

the from of Our Jeremy is JPMorgan. next Tonet with question line

Jeremy Tonet

the main of I step the now, funding could in much at that But in, the side, than debt by the contributor of to start. debt debt less big on wanted what's it kind I Just the just the I if It up the like several issuance? billion looks was Power wondering plan XXXX I there IRP funding driven holdco, increase think there. to Georgia guess, before. expected and understand come

on holdco issuance step-up So guess, just kind the curious, of expectations. debt I

Daniel Tucker

Yes.

as being financing largely it's contribution. right? well, plans, -- Power's Jeremy, ultimately, through company plan, by And we're all with So I the shares. equity kind new in terms the CapEx mean, partially driven of parent our that planned with not while Georgia funding certainly directly funded of equity change is new the versus it's certainly

debt So there. there's incremental

magnitude parent largely the by company overall of is And the then issuances maturities. just driven

billion a If pages the there's, of in over $X look you maturities I think, beyond, couple worth same time of period.

the much smaller. that's new is kind So amount money of

Jeremy Tonet

just Georgia And to it. thoughts here. able any curious PSC Got the on if elections share you're

you to see shape all for the far Do what guys could pending election? November elections. you think of the kind timing you guess, the kind ballot elections from before in as of how in expect do as Just I the you think Or it November? happen general curious, those inside state up comes Just there?

Christopher Womack

that the still have I mean is in court matter idea. I system. no

it, And so insight at we'll play time. just observe to how out But like I going this no are. have you that's into

Jeremy Tonet

it. Got And a I quick could. just if one, last

Power you how in Georgia RFP process you think Georgia IRP, the are there? in and stacks an I running If up, guess, process guys Power Southern -- RFP

Daniel Tucker

just or resources. a of all comes Jeremy, plan. or also the is self-build answering siding, and generally, said when these to it over Look, options our IRA in likely kind Whether happen this it's plays going in position But in of more this function of time. subsequent mean, be to it or things I out in to will a it's electric later before, we've much that, utilities particular not RFP competitive the customer-specific a it's something RFP those

'XX, 'XX that towards We're end opportunity. where not becomes back resource. a of kind the real not talking 'XX plan So to really maybe the a of even

Operator

Our line Evercore. Durgesh next of is from question with Chopra the

Durgesh Chopra

a like to as that after like decision? is what of in range? you is outcome Just way a in into But looks and await was April for see April just to the what I understand we can. baked current look Georgia [indiscernible] plan trying I'm us there for decision? the what a plan, is And if give us terms -- the What Just IRP? that capital there successful to

Daniel Tucker

to XX% megawatts stop kind Yes. any roughly that getting of the we've that of regulatory of this that of proposed. fair short brick-and-mortar ahead where it's characterized It's question, included of here. I megawatts the in a Durgesh. processes is But were We've of want terms kind

getting include it we just pretty And is to rounding. the without a so didn't associated in be meaningful the the lost way capital characterize for with ahead me won't incremental It's what best number. anything of that say

Durgesh Chopra

how growth. debt? finance about as about be some Dan. there? about we're got appreciate think And getting incremental again, tons what equity of our strong thinking that, CapEx, lines, when But I percentage we CapEx upside. should then Understood. load sort of You've models, [ Any it for just higher could financed? we versus along just those high a guidance think Is there level, rule ]

Daniel Tucker

Yes.

we I opportunities. with think of update additional is representative what done this how think pretty about we've

let's equity capital we plan, $XXX call added year a roughly $X of of this on We've every billion added that average. So billion of million $X year.

if a range improve, our represents is what maintain of pretty credit XX% in equity is already that kind to and to of that's good well but think the marginally So just really not XX% consolidated we maintain, representative profile place. ratio necessary really

Operator

Our next with line the Scotiabank. of Andrew question is from Weisel

Andrew Weisel

'XX. follow-up more couple $XXX clarify, we It saying there's in of of slides. more $XXX potentially quick that's year per just rate of the through like million of a A to sounds you're One, the as CapEx? think through Should per That's and going year. really. equity that of kind 'XX run just if questions, million forward

Daniel Tucker

Yes.

refer what us $XXX that what to plan. million our on turning we represents is as internal So

the through incremental rate. needs of billion So our DRIP, associated it with run And capital. shares with that's through new the it's just $X and to the up well XXX(k), happens pretty issuing our match about

at also market maintain the We as an typically flexibility. plan

again, is to which into everything ATMs source there's tap CapEx that finance emerges, And given we've possible, the certainly ] so described, extent reasonably we'll the [ the that. incremental that to help

Andrew Weisel

Okay. good. Very

CapEx Next, the on update.

I Just that to solar? anything for would it. include sorry that missed be Alabama Does clarify, Or and incremental? if

Daniel Tucker

would that no Yes. be included. still There's new No, solar rate-based incremental.

there the remained our outlook. projections in terms conservative So in we've of

going to Andrew, quickly back, just real hey, And the equity question.

Just kind percent. it financing is year of clear put the only wasn't X-year year. to to plans And shares fraction kind of a plan every increase of yes, point every a a out out, we on leaving average maybe the on there, because since average,

kind the in rounding. of also that's So

Andrew Weisel

may. per good. Sounds share, last One about growth, you've one, $X.XX Dividend very X%. I at if been consistent

any point is in time the you at Given reconsider outlook, trajectory? the CapEx which might there

Daniel Tucker

terrific Another question.

of we dividend So of of and had the possibility kind XX% we into rate service, kind Vogtle of kind in alluded got state had once the -- growth into of somewhere. we're X a to of steady and below kind the reevaluating

way Given to issuing where are, one current in of perhaps the dividend. equity the sources of were increase our efficient circumstances we modest is of place in a equity, continue we remain most the to

So reasonable I we've remain the a been the on. future, trajectory the trajectory for think is expectation foreseeable will for on

Operator

Our line of next Anthony Crowdell the is from question Mizuho. with

Anthony Crowdell

customer, trying you with typically lower-margin data large one bills. has maybe centers the get growth. If it customer data all And I helping that are the finally growth could just rate investment like we're a and going to seems one figure looking touched quick the But pitch maybe all out helped. in on and some I up sector, earlier, load It load seems guess, question, to we this on requirement. some we're centers at design

on my issue? impact bigger going is and -- go -- you question think just you don't is, design fights if be rate bill it or that deeper into and bigger I to an that's

Christopher Womack

we as on But there work think then with downward as always look growth at provides at I look new be pressure I will mean -- customers, as we these we the customers, we issues. always us opportunity in this to increased there's have rates. sales, and think

of with [indiscernible] And these so customers we their in pricing. work on terms will

this see supports I we'll pressure the for mean, put once to opportunity us and to increased company. again, downward fact, I does downward all pressure rates. just go the sales our on that to downward in customer overall But the opportunity that back happen, each pressure across to ensure of fundamentals put customer base on they growth, evaluate that, across customer rates how

Daniel Tucker

That Yes. price else. everyone do beginning And appropriately these many lot of Anthony, what gives the a the over for it of things. us is reliable, data resilient prioritize opportunity service it other to to benefit centers appears are

Christopher Womack

making the timing, at look the there other go that that demand, to sure we the appropriately customers. And factors we'll those are service will size, price into

Operator

Our the Seaport. question is with Storozynski Angie from of line next

Agnieszka Storozynski

-- step Great. I'm -- is know data asking again, questions just just back. I a everybody just on maybe I centers, guess but that taking

preference connected Or the wants a you actually sources? your Do somebody backup to power non-emitting you data they own grid? resources. for have when Do use a for they do to as develop source. that they, territory, locate in So center do get some just see instance, more service they power their

the -- in dynamics data centers understand of Again, [indiscernible] to just trying being to again, added Georgia. those

Christopher Womack

yes, they them we lot considerations them, to what Angie, And that system, there are. renewable into are may that the mix. about a we'll recognizing with connect on to decision. have locations, we have them the be do of with conversations yes, conversations where are go that made upgrade But and those our And want grid. resources

conversations So service. into also final there the are pricing impact those ultimately go for a decisions of then engineering that that lot of conversations, that detailed making kind really

Agnieszka Storozynski

use self-supply, it's But first So Power, a not as source they Georgia of again, power. example, right? for

Christopher Womack

that's Yes, correct. Absolutely.

Agnieszka Storozynski

and this I over then been secondly, Okay. over. know question again, asked And has

hard yet and Just and impact emerging pronounced having getting our the you're point absorbs that to is help growth growth. the just that earnings -- for bigger years, load a it vantage because outer Is higher so like this sort from drag an of your interest growth? imagine no on your from again, expense that load impact load growth? believe not earnings markets of Georgia there's the again, pace it from is especially is And I growth, on even those don't

Daniel Tucker

Certainly, where is bigger a why around actually for going we've a to question investing. higher longer this we a in forward. load we're were Yes, investing headwind serve said this things. it's is before, your think what in But Angie, a dynamic interest or the and certainly, year we're to few relative ago, in environment, bigger I

So usage. growth Southern used. hours the Power, keep in the growth X% kilowatt mind, That's Company Georgia for and kilowatt in sales total the for X% hour that's

the serve peaks. invest do is What we to

you're got range. growth We've in lot resources. deployment. just largely add net-net, seeing that XX/X. the incrementally than different to serve a may comfortably little the and that's capital a looks of peaks, And to We to have we're resources the that in X% so X% what And

Operator

is Our Paul Fremont the with from next line of question Ladenburg.

Paul Fremont

Congratulations quarter. on the good

to of the XXXX, in an sort X% or change to growth impact to target? your growth sales that would Just were rate higher clarify, X% you change get not have potentially if after --

Daniel Tucker

No.

Paul Fremont

is is capital gas spending Okay. with that's shifted And you Great. of And you're share to from there us the the going anticipating spending gas roughly Nicor being that then [indiscernible]? other happen sort unchanged. I what any to noticed Illinois? of Can in is

Christopher Womack

have Atlanta got you see think in mean, Georgia. around to capital opportunities in I I it just we right. the spending some yes, increased the here And operations

So we think investments going that allows that be forward. gas to stable

to just think right. you've it I spoken So

Daniel Tucker

be is the deployed related. do that's make any and compliance And just we changes majority successful be we map also as of the -- capital. And the navigating us, that to a jurisdiction forward got while in outcome of bit for are Yes. Nicor Illinois mind, there road terms as to going capital vast sure mean provided I we've fair. things to a huge, disappointing, to for how keep in of in in deploy modest, a Gas

And so so first kind not do of to in much there's only the place.

Paul Fremont

think because funded the we my to debt when of respect growth, be rate speaking, rate the growth rate by is tends by Great. And last to base of generally to portion equity. the growth, level base base or dilution question. a either parent there then parent I mean, with EPS to portion equity or

growth, of is So your target? help for base the how possible sort sort at high growth X% rate you would to you achieve? Or of understand, can you end us of it achieve

Daniel Tucker

question, Great Paul. Yes.

and billion -- I we think equates issuing, that year also of and incremental then We the a again, very all at stack how up earlier, I comfortable a forecast. that shares of a we're X in kind things last percentage conservative base. ], to of X% as but approximately achievable were mentioned of the growth added rounding. $X kind that. It's net-net, fraction this was feel capital it's in it we characterize rate We've these is So just to [

Operator

is from next of Travis question the with Morningstar. Our Miller line

Travis Miller

that do my follow up to I one of was You've questions. of on dividend, questions. my answered it almost all want

what couple at expect Did a I you dividend more hear for of clarify to least earnings stay years. growth would correctly? to the that growth you said, Just below

Daniel Tucker

Yes. Yes, Travis.

You did.

growth And so of cadence several $X.XX again, per has been year for years. our

subject I to of it's think it's oversight reasonable all to expect continue, and approval. course, Board's the that to

long will period that of hopefully into from what But very on goes a during us comfortably the do payout ratio is of high which XXs perspective. period brings CapEx, take for this a time, down us

good is and that place and what the think what's a looks that's forecast X%. below like Right just continued I the evaluate to so And be, appropriate. with we'll now, year it modest which reasonable expectation every growth, is

Travis Miller

Yes.

growth. link a does whatever operating growth? demand we lot for correlation then what there Is Or Should growth? cost similar the growth you or get And Put a there there? if way, about of talk increase good. obviously, also in is not a another percent operating mean tight annual X see very a demand costs? demand there Okay,

Daniel Tucker

certainly, gas relationship, the plant, that the also extent structure to that revenues maintenance net we're part component we're on to call lines, that's existing these we're that the the is Yes. There's the will certainly cost incremental and but there's new to rates. a of I along with put to new it a comes such rates ensuring correlation, that. But building new the pressure some downward distribution extent building opportunity a cover wouldn't result transmission O&M

Operator

line the with is Citi. question Levine of next from Ryan Our

Ryan Levine

by changes freeing meaningful opportunity were targeted and the COD initiatives you time in any highlighted, the all current Or guidance April spending as up reduce that these the opportunities given below management see process? progresses? are O&M for do the tabled, attention personnel some Vogtle's With Georgia to IRP

Christopher Womack

about of I growth keep that more be across because down also I pricing at cost hand to again, I because always mean, so on ongoing expenses. of rates finding once looking think to looking in also look efficient to we're to efforts -- opportunities No. and affordability, and O&M making there's drive -- we but to we the being the finding our mean as our drive sure mean, efficient. ways sales focused from down terms and we're of internal customer growth, of more ways

advantage where gas see sure we making fuel natural now. are of take prices I mean full you pricing. Also

entire more is find focus efficient. the finding across down ongoing to mean, to O&M I looking on of ways in continuous drive exercise that So and always an portfolio, terms that we'll be ways

Daniel Tucker

a a as just all X costs completing cost. Vogtle associated and the And is with nuance, X Yes. capital

O&M aren't costs so are that opportunity an reduce. to those And

Christopher Womack

cost I'd making us paying the thing customers of Yes. the product. but focused focus on we've attention it And our that hasn't we the on had that the expect, to add, service but being provide kept fundamentals, even this Vogtle, from also though last sure to

Ryan Levine

hour then opportunities in -- than how growth forecast And that IRP you're there plan, And supply lower via much Georgia? And peak the cited? total process? [indiscernible] kilowatt hour the that constrain are Okay. growth you with any limitations is on that looking what's growth number the chains this how execute as could to

Daniel Tucker

for needed. given while the this Yes. our Look, coming we've on in of the scale seen kind terrific supply point where we chain, resources shape, and deploy just a little to I can -- think we're

we'll have on question, with follow Ryan. peak your up On to you that,

answer let's get Just the and then. with an connect Investor you team Relations

Operator

of Glenrock the question Patterson line Associates. Our next with Paul is from

Paul Patterson

that you Congratulations these have. opportunities on this guys

mean, of your based the physical assume they're economics have their construction large these price I It's know correct? they're if paying I mean, wouldn't that for activity, et -- it data this you essentially how it these prepared guys center this, doing that of cetera. activity, seemed actual on of going electricity. they're much of mind? be to obviously, respect be with they stuff, a a, part remarks, indicate using -- a power data move et the this centers, correct to Just to Is in in they I did determination that cetera, was that doing sort to mean, this. amount

Christopher Womack

their be. is kind with level are there we as once ultimate exactly the goes I mean price their of we will what service, value, all needs, understanding resiliency, the these projects those reliability, price mean, think into consideration all price they the I desires But may consideration I into the I and location, of go them, that sit as of -- out. know what will again, mean, yes, what of be. not things

a that's of with conversation negotiation, part of it. so the And we part the have that's that

Paul Patterson

they they they or case In be to respective their backup outage get Georgia? something, there to Okay. case commissions, commissions. an is state have regulatory power because have that approval have Is jurisdictions, because in some in own the there regulatory their from

Christopher Womack

said, mean, I we I I No. I mean. mean, -- like will

Daniel Tucker

customer-sided that that purpose, Paul, describing the in being proposed have the IRP, of dynamic those those Yes, not those other are you're it's same serve there's but kind some in the programs and evaluated states. been that

Paul Patterson

percentage where as is? about roughly mean, of rate how I rate data of the a just Do speaking, of kind a talking speaking, system average Then roughly Is getting? much Okay. let's we're say, with a when be mean I rate. of customer follow average center there system words, I'm other the versus for rule roughly, In thumb you the data what center you're just Power, saying? Georgia to that

Christopher Womack

so. I don't think

think plus well, bring we informed trade better secrets be as as more so. the case. that it online. think be could would -- now, some we may I projects be don't I Right I think And

Paul Patterson

a X% -- X-year that than other roughly you is lot 'XX jumps that looking Okay. terms higher when a it finally, is kind is in of Power, follow what you -- go In period, up saying? a ratable Then of for 'XX, hockey what Or is of 'XX what Do the stick instance, other follow number lot? I'm it In I I'm is and words, in if does sort see at number, mean, demand? 'XX that it's we're other terms of Georgia saying? words, a period you this over up period? the in 'XX a time? words, in for of just lot In that -- 'XX,

Daniel Tucker

But they're not proposals the resource 'XX and Yes. at why load to to of serve are see lot place It's It's -- for really in, to Georgia to begins then linear peak Power in sure and 'XX, say, the the it in, grow that which Paul. by 'XX from you into obviously make significant late winter really continues that, there. any a 'XX, is ratable, perfectly means. come fairly

Operator

closing question-and-answer session. Thank you. Sir, are will there And that today's conclude any remarks?

Christopher Womack

in Again, an had am future let company. And really me the exceptional say, Southern about this year I Company excited of XXXX.

us a you very joining today, me Let thank everybody thank and happy for day, wish much. everybody and

Operator

Company Fourth Earnings you, Quarter sir. Southern this Ladies Thank and Call. XXXX gentlemen, concludes the

You may a Have good disconnect. day. now

Christopher Womack

Thank very much. you

The Southern Company (SO) 15 Feb 242023 Q4 Earnings call transcript