Q1 2024 The Southern Co Earnings Call
Robert: Good afternoon. My name is Robert, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Southern Company first quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise.
Good afternoon, My name is Robert and I'll be your conference operator today.
Robert: At this time I would like to welcome everyone to the Southern company first quarter 'twenty 'twenty four earnings call.
Robert: All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there'll be a question and answer session.
Robert: After the speaker's remarks, there will be a question and answer session. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Scott Gammill, Vice President, Investor Relations, and Treasurer. Please go ahead, sir.
Scott Gammill: If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
Scott Gammill: A reminder, this conference is being recorded I would now like to turn the call over to Mr. Scott Campbell, Vice President Investor Relations and Treasurer. Please go ahead Sir.
Scott Gammill: Thank you, Rob. Good afternoon, and welcome to Southern Company's first quarter 2024 earnings call. Joining me today are Chris Womack, Chairman, President, and Chief Executive Officer of Southern Company, and Dan Tucker, Chief Financial Officer. Let me remind you, we'll be making forward-looking statements today, in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q, and subsequent filings.
Scott Gammill: Thank you Rob good afternoon, and welcome to Southern Company's first quarter 2024 earnings call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company, and Dan Tucker Chief Financial Officer.
Scott Gammill: Let me remind you we'll be making forward looking statements today in addition to providing historical information.
Scott Gammill: Various important factors could cause actual results to differ materially from those indicated in the forward looking statements, including those discussed in our Form 10-K Form 10-Q and subsequent filings.
Scott Gammill: In addition, we'll present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I'll turn the call over to Chris Womack.
Scott Gammill: In addition, we will present non-GAAP financial information on this call reconciliations to the applicable GAAP measure are included in the financial information. We released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at Investor that Southern company Dot Com.
Scott Gammill: At this time I'll turn the call over to Chris Womack. Thank.
Christopher C. Womack: Thank you, Scott. Good afternoon, and thank you for joining us for what is such an exciting time for our company. On Monday, we announced that Plant Vogel Unit 4 successfully achieved commercial operation. Units 3 and 4 now deliver more than 2200 megawatts of reliable 24-7 carbon-free energy and are designed to do so for decades to come. With all four units operational, the Vogel site is now the largest generator of clean energy in the country.
Christopher C. Womack: Thank you Scott good afternoon, and thank you for joining us for what is such an exciting time for our company.
Christopher C. Womack: Monday, we announced that plant Vogtle unit four successfully achieved commercial operation.
Christopher C. Womack: Units three and four now deliver more than 200 megawatts of reliable 24, 7% carbon free energy kind of designed to do so for decades to come.
Christopher C. Womack: With all four units operational the Bogo side is now our largest generator of clean energy in the country.
Christopher C. Womack: I cannot be prouder of our team's perseverance and commitment to getting Vogel Unit 3 and 4 completed with the standard of quality clearly demonstrated by Unit 3's performance since it reached in-service last July, along with our own team. Success on this historic project required the hard work and dedication of tens of thousands of American craft workers and engineers, a committed group of co-owners and regulators who had the courage to support new nuclear power when others did not.
Christopher C. Womack: I cannot be prouder of our team's perseverance and commitment to getting vogtle units three and four completed with the standard of quality clearly demonstrated by unit Three's performance since it reached in service last July.
Christopher C. Womack: Along with our own team succeed.
Christopher C. Womack: Success on this historic project required the hard work and dedication of tens of thousands of American craft workers and engineers.
Christopher C. Womack: Group of co owners and regulators, who had the courage to support new nuclear when others did not.
Christopher C. Womack: While it was not our mission when we embarked on this project, and while it was at times an arduous journey, we have proven that new nuclear power is achievable in the United States. With ever-increasing demands for carbon-free energy and the burgeoning demand for reliable 24-7 energy to support our digital economy and society, we believe our country will need more nuclear energy. So the importance of this project for Georgia and our nation cannot be understated.
Christopher C. Womack: It was not our mission when we embarked on this project and while it was at times and arduous journey.
Christopher C. Womack: We have proven that new nuclear is achievable in the United States.
Christopher C. Womack: With ever increasing demands for carbon free energy and the burgeoning demand for reliable 24, seven energy to support our digital economy and society, we believe our country will need more nuclear energy.
Christopher C. Womack: So the importance of this project for Georgia, and our nation cannot be understated.
Christopher C. Womack: This is what history, this is what making history looks like. These are the first new nuclear units built from the ground up here in the United States in over 30 years, and we are proud to be the company that saw it through. Dan, I'll now turn the call over to you for a financial update. Thanks, Chris.
Speaker Change: This is what history. This is what making history it looks like these.
Dan: These are the first new nuclear unit is built from the ground up here in the United States and over 30 years.
Dan: And we are proud to be the company that saw it through <unk>.
Christopher C. Womack: Dan I will not turn the call over to you for a financial update.
Daniel S. Tucker: Thanks, Chris, and good afternoon, everyone. For the first quarter of 2024, our adjusted EPS was $1.03 per share, $0.24 higher than the first quarter of 2023, and $0.13 above our. The primary drivers of our performance for the quarter compared to last year were investments in our state-regulated utilities and weather that was less mild for our electric utilities than in the first quarter of 2023. This is somewhat offset by higher interest expense and appreciation. A complete reconciliation of our year-over-year earnings is included in the materials we released this morning.
Dan: Thanks, Chris and good afternoon, everyone.
Daniel S. Tucker: For the first quarter of 2024, our adjusted EPS was $1 <unk> per share 24 cents higher than the first quarter of 2023, and <unk> 13 cents above our estimate.
Daniel S. Tucker: The primary drivers of our performance for the quarter compared to last year, where investments in our state regulated utilities and whether that was less miles for our electric utilities than in the first quarter of 2023.
Daniel S. Tucker: This was somewhat offset by higher interest expense and depreciation.
Daniel S. Tucker: Complete reconciliation of our year over year earnings is included in the materials. We released this morning.
Daniel S. Tucker: All our businesses experienced a strong start for 2024, driving our results meaningfully higher than our estimate of $0.90 per share. While there were several factors for this performance versus our estimate, one worth highlighting is the higher-than-expected weather-adjusted electricity sales in our commercial customer class. This was driven by a combination of our strong local economies and increased usage by many of our existing data center customers. Sales to data centers were up over 12% for the quarter compared to last year.
Speaker Change: All our businesses experienced a strong start for 2024.
Daniel S. Tucker: Driving our results meaningfully higher than our estimate of 90 per share.
Daniel S. Tucker: While there were several factors for this performance versus our estimate one worth highlighting is the higher than expected weather adjusted electricity sales and our commercial customer class.
Daniel S. Tucker: This was driven by a combination of our strong local economies as well as increased usage by many of our existing data center customers sales to data centers were up over 12% for the quarter compared to last year.
Daniel S. Tucker: Overall, whether normal retail electric sales to all classes were 1.7% higher than the first quarter of 2023, industrial sales are beginning to show signs of recovery following a soft 2023 with year-to-date increases led by the lumber and paper industries. The Southeast regional labor supply remains above pre-pandemic levels. Employment growth is strong, and unemployment is low, averaging approximately 3% across our regulated electric jurisdiction. A favorable business climate and increased expansion of manufacturing are attracting new households to the Southeast, driving continued net in-migration and customer growth.
Daniel S. Tucker: Overall weather normal retail electric sales to all classes were one 7% higher than the first quarter of 2023 <unk>.
Daniel S. Tucker: Industrial sales are beginning to show signs of recovery following a soft 2023 with a year to date increases led by the lumber and paper industries.
Daniel S. Tucker: The southeast regional labor supply remains above pre pandemic levels employment growth is strong and unemployment is low averaging approximately 3% across our regulated electric jurisdictions of.
Daniel S. Tucker: A favorable business climate and increased expansion of manufacturing is attracting new households to the southeast driving continued net in migration and customer growth.
Daniel S. Tucker: Before turning the call back over to Chris, I'd like to highlight our most recent dividend increase. Last week, the Southern Company Board of Directors approved an $0.08 per share increase in our annual common dividend, raising the annualized rate to $2.88 per share. This action marks the 23rd executive increase, and this will now be 77 consecutive years, dating all the way back to 1948, that Southern Company has paid a dividend that is equal to or greater than the previous year.
Speaker Change: Before turning the call back over to Chris I'd like to highlight our most recent dividend increase last week, the Southern company Board of directors.
Daniel S. Tucker: Proved and <unk> <unk> per share increase in our annual common dividend.
Daniel S. Tucker: <unk> the annualized rate to $2 88 per share.
Daniel S. Tucker: This action marks the 23rd consecutive increase and this will now be 77 consecutive years dating all the way back to $19 48.
Daniel S. Tucker: Southern company has paid a dividend that is equal to or greater than the previous year.
Daniel S. Tucker: This remarkable track record remains an important part of Southern Company's value proposition. And one quick note, our adjusted EPS estimate for the second quarter is $0.90 per share. Chris, I'll turn the call back over to you. Thank you, Dan.
Daniel S. Tucker: This remarkable track record remains an important part of southern company's value proposition.
Daniel S. Tucker: And one quick note our adjusted EPS estimate for the second quarter is 90 per share Chris I'll turn the call back over to you. Thank you Dan.
Christopher C. Womack: Our system performed extremely well, and that's a testament to our team's collective commitment to serving customers reliably across our business, especially as we meet the demands of the extraordinary growth that we're seeing. Particularly within our southeast footprint, we continue to see strong economic development activity, with first quarter investment announcements representing the second highest first quarter on record, as our teams continue to work closely with our states and local development authorities to attract new business.
Daniel S. Tucker: Our system performed extremely well.
Christopher C. Womack: And that's a testament to our team's collective commitment to serving customers reliably across our business.
Christopher C. Womack: Especially as we meet the demands of the extraordinary growth that we're seeing.
Christopher C. Womack: This growth continues to reflect a diverse mix of sectors, with recent announcements including automotive suppliers, Flooring and Glass Manufacturers, Data Centers, and Mixed-Use Developers. During our year-end earnings call in February, we updated our forecast to reflect projected retail electric sales growth that is accelerating to a projected growth rate of approximately 6% from 2025 to 2028. The underlying Georgia Power Projected Sales Growth Rate is approximately 9% over this same period. As we look ahead, we're encouraged to see signs of incremental growth also materializing in Alabama and Mississippi.
Christopher C. Womack: Particularly within our southeast footprint, we continue to see strong economic development activity with first quarter investment announcements, representing the second highest first quarter on record as our teams continue to work closely with our states and local development authorities to attract new businesses.
Christopher C. Womack: This growth continues to reflect a diverse mix of sectors with recent announcements, including automotive suppliers flooring and glass manufacturers data centers and mixed use developments.
Christopher C. Womack: During our year end earnings call in February we updated our forecast to reflect projected retail electric sales growth that is accelerating to a projected growth rate of approximately 6% from 2025 to 2028.
Christopher C. Womack: The underlying Georgia power projected sales growth rate is approximately 9% over the same period. As we look ahead. We are encouraged to see the signs of incremental growth also materializing in Alabama and Mississippi.
Christopher C. Womack: A little more than two weeks ago, the Georgia Public Service Commission approved a stipulated agreement among Georgia Power, the Public Service Commission staff, and multiple intervenors in the 2023 IRP update docket. This approval affirms the need to quickly procure and deploy several thousand megawatts of resources to serve customers for rapidly growing projected electricity demands by the winter of 2026 and 2027. Georgia Power was also authorized to build and own a balanced collection of resources, including new natural gas combustion turbines and battery energy storage systems, while also providing for an accelerated RFP process for incremental battery energy storage systems.
Christopher C. Womack: A little more than two weeks ago, the Georgia Public Service Commission approved a stipulated agreement among <unk>.
Christopher C. Womack: But the power of the public Service Commission staff and multiple intervenors in the 2023 RP update docket.
Christopher C. Womack: This approval to firms that need to quickly procure and deploy several thousand megawatts of resources to serve customers rapidly growing projected electricity demand by the winter of 2026 and 2027.
Christopher C. Womack: Georgia Power was also authorized to build and own a balanced collection of resources, including new natural gas combustion turbines and battery energy storage systems, while also providing for an accelerated RFP process for incremental battery energy storage systems.
Christopher C. Womack: The constructiveness and timeliness of decisions like this are a testament to the quality of our southeastern state's regulatory environment and our ability to meet the projected rapid demand growth garnering headlines across the country. Coinciding with Georgia Power's 2023 IRP update filing last fall and the release of our sales forecast in February, external attention, including from the investment community, has focused on several key questions. How do you know the load in your forecast is real?
Christopher C. Womack: The constructive newness and timeliness of decisions like this are a testament to.
Christopher C. Womack: The quality of our southeastern states from regulatory environments, and our ability to meet the projected rapid demand growth garnering headlines across the country.
Christopher C. Womack: Coinciding with Georgia, Power's 2023, Rps update filing last fall and at least of our sales forecast in February.
Christopher C. Womack: External attention, including from the investment community is focused on several key questions.
Christopher C. Womack: How do you know the load in your forecast is real.
Christopher C. Womack: How do you know you're pricing this new load appropriately.
Christopher C. Womack: And what protections are in place at the forecasted low does not materialize.
Christopher C. Womack: How do you know you're pricing this new load appropriately? And what protections are in place if the forecasted load does not materialize? Those are all very important questions, and the answers are all fundamental to how Southern Company has run our electric utilities for a very, very, very long time. We'll address each one of those questions in just a moment. First,
Christopher C. Womack: Those are all very important questions and the answers are all fundamentals and how southern company has run iron electric utilities for a very very very long time, we.
Christopher C. Womack: We will address each one to each one of those questions in just a moment.
Christopher C. Womack: I want to share with you what we believe are the four key characteristics required to successfully navigate this tremendous growth opportunity. We believe Southern Company is positioned as well or better than any utility company in the country on these four fronts. It requires supportive states and constructive regulation.
Christopher C. Womack: <unk>.
Christopher C. Womack: I want to share with you what we believe are the four key characteristics required to successfully navigate this tremendous growth opportunity.
Christopher C. Womack: We believe southern company is positioned as well or better than any utility company in the country on these four fronts.
Christopher C. Womack: First it requires supportive states and constructive regulation.
Christopher C. Womack: Our states continue to be great economic development partners, and they have advanced economic policies that support healthy growth. When it comes to utility regulation, our states are among the best in the country at balancing the needs of customers while helping ensure utilities provide real value to customers in the form of clean, safe, reliable, and affordable energy. Second, it requires institutional wherewithal.
Christopher C. Womack: Our states continue to be great economic development partners and they have advanced economic policies that support healthy growth.
Christopher C. Womack: When it comes to utility regulation, our states are among the best in the country had balancing the needs of customers, while helping ensure utilities provide real value to customers in the form of clean safe reliable and affordable energy.
Christopher C. Womack: Second it requires institutional wherewithal.
Christopher C. Womack: We have vast expertise and experience in deploying energy infrastructure. We've been investing billions to improve the resilience of our electric and gas transmission and distribution networks. In recent years, across our subsidiaries and across the country, we've built thousands of megawatts of energy supply in the form of new solar, wind, and battery facilities, advanced microgrids, a state-of-the-art combined cycle natural gas plant, and the only new nuclear units built in this country in more than a generation. These, along with the existing electric and gas infrastructure we operate, have served customers with a superior measure of reliability and resilience We have the people, we have the experience, and we have the scale to be successful.
Christopher C. Womack: We have vast expertise and experienced deploying energy infrastructure.
Christopher C. Womack: We've been investing billions to improve the resilience of our electric and gas transmission and distribution networks in recent years across asset city areas and across the country. We built thousands of megawatts of energy supply in the form of new solar wind and battery facilities advanced micro grids.
Christopher C. Womack: Our state of the art combined cycle natural gas plant and the only new nuclear units built in this country and more than a generation.
Christopher C. Womack: These new assets, along with the existing electric and gas infrastructure, we operate have serve customers with a superior measure of reliability and resilience.
Christopher C. Womack: We have the people.
Christopher C. Womack: We have the experience and we have the scale to be successful.
Christopher C. Womack: The third requirement is a flexible pricing framework. Our electric utilities, working with existing customers approved by their respective public service commissions, have a history of being able to price new large load projects appropriately, even in periods of high demand and challenging market conditions. These frameworks are designed to benefit all customers. For example, Georgia Power's Real-Time Pricing Rate, or RTP, which was pioneered decades ago, allows for the flexibility to price individual customers based on their unique load profile and risk characteristics.
Christopher C. Womack: The requirement is a flexible pricing framework.
Christopher C. Womack: Utilities, working with existing customers improve by their respective public service commissions have a history of being able to price new large load projects appropriately even in periods of high demand and challenging market conditions.
Christopher C. Womack: These frameworks are designed to benefit all customers.
Christopher C. Womack: For example, Georgia Power's real time pricing right, RTP, which was pioneer decades ago allows for the flexibility to price individual customers based on their unique low profile and risk characteristics.
Christopher C. Womack: And finally, success in this environment requires experience and discipline, experience understanding utility economics and the true marginal cost to serve new customers, experience identifying and mitigating the risk inherent in new or expanding large load customers, and experience in Competing for New Load with an objective of Capturing Tangible Economic Benefit for Customers and States. I have experienced.
Christopher C. Womack: And finally success in this environment requires experienced and disciplined.
Christopher C. Womack: Experience understanding utility economics, and the true marginal cost to serve new customers.
Christopher C. Womack: Space, identifying and mitigating the risk inherent and new or expanding large load customers and experienced and competing for new load with an objective of capturing tangible economic benefits for customers and states.
Christopher C. Womack: I experience.
Christopher C. Womack: Combined with the robust models and tools we employ, they are partially a product of the competitive economic environment we've navigated in the Southeast for decades. For example, in Georgia, most new large load customers can choose their electricity supplier. Over the years, we've been the chosen provider. More often than not, however, it is the load we did not win or perhaps did not even choose to compete for that reflects our discipline and experience. By offering prices designed to recover the marginal cost to serve new loads, we seek to protect all other customers and, importantly, maintain our credibility with our regulators and state policymakers. I'll now turn back to Dan to address those three key stakeholder questions pertaining to this extraordinary growth opportunity.
Christopher C. Womack: Bind with a robust models and tools we employ.
Christopher C. Womack: Partially a product of the competitive economic environment.
Christopher C. Womack: <unk> navigated in the southeast for decades for example, in Georgia, most new large load customers can choose their electricity supplier over.
Christopher C. Womack: Over the years, we have been the chosen provider more often than not however.
Christopher C. Womack: Is the loan we did not win or perhaps did not even choose to compete for that reflects our discipline and experience.
Christopher C. Womack: By offering prices designed to recover the marginal cost to serve new loads, we seek to protect all other customers and importantly, maintain our credibility with our regulators and state policymakers.
Christopher C. Womack: Now turn back to Dan to address those three key stakeholder questions pertaining to this extraordinary growth opportunity.
Daniel S. Tucker: Thanks, Chris. So how do we know the load in our forecast is real? The short answer is that we've already incorporated risk adjustments to the forecast. One could argue it's conservative.
Dan: Thanks, Chris So how do we know the load in our forecast is real the short answer is that we've already incorporated risk adjustments to the forecast one could argue with a conservative view, we would say our forecasts are informed by our experience and by our continuous engagement with prospective new and existing.
Daniel S. Tucker: We would say our forecasts are informed by our experience and by our continuous engagement with prospective, new, and existing customers. We've included a visual representation of our process in the slide deck. Typically, our forecast appropriately represents only a portion of the full potential load we might ultimately serve. If a customer has not formally communicated state-specific project details with our company, they're not included in the forecast. If they have a choice of utility provider within the state that they have chosen, which is the case in each of our states.
Daniel S. Tucker: <unk>, we've included a visual representation of our process in the slide deck.
Daniel S. Tucker: Typically our forecast appropriately represents only a portion of the full potential load we might ultimately serve if.
Daniel S. Tucker: If a customer has not formally communicated state specific project details with our company.
Daniel S. Tucker: They are not included in the forecast.
Daniel S. Tucker: They have a choice of utility provider within the state that they have chosen which is the case in each of our states.
Daniel S. Tucker: They are either not included or only included at a reduced probability weighted level. Importantly, even once a customer has committed to one of our utilities, we further risk adjust the forecast based on the likelihood of delays on the customer side, whether those are construction delays or delays in ramping up production. And lastly, we further risk adjust the forecast based on the history of announced loads being higher than actual customer loads. Lower actual customer loads often result from technology improvements, economic conditions, or other factors.
Daniel S. Tucker: They are either not included or only included at a reduced probability weighted level.
Daniel S. Tucker: Importantly, even once a customer has committed to one of our utilities, we further risk adjust our forecast based on the likelihood of delays on the customer side, whether those are construction delays or delays in ramping up production.
Daniel S. Tucker: And lastly, we further risk adjust our forecast based on our history of Enel fluids being higher than actual customer loads lower actual customer loads, often result from technology improvements economic conditions or other factors.
Daniel S. Tucker: All of that to say, we believe our forecast is the best representation of expected future demand. And with the potential for additional new customers to choose our states and utilities, there's potential for our forecast to be higher down the road. Next, I'll discuss price.
Daniel S. Tucker: All of that to say, we believe our forecast is the best representation of expected future demand and with the potential for additional new customers to choose our states and utilities there is potential for our forecast to be higher down the road.
Daniel S. Tucker: Next I'll discuss pricing when it comes to knowing that we're pricing this load appropriately with a view towards protecting existing customers. Several of the factors Chris mentioned, a moment ago are key.
Daniel S. Tucker: When it comes to knowing that we're pricing this load appropriately, with a view to protecting existing customers, several of the factors Chris mentioned a moment ago are key. We use our experience and robust tools to ascertain the expected marginal cost to serve each new customer and incorporate that into our flexible pricing mechanism. We price the load in a manner that helps ensure the marginal cost will be borne by the new customer.
Daniel S. Tucker: We use our experience and robust tools to ascertain the expected marginal cost to serve each new customer and incorporate that into our flexible pricing mechanisms. We priced the load in a manner that helps ensure the marginal cost will be borne by the new customer.
Daniel S. Tucker: Sometimes, as is the case with Georgia Power's recent growth, we are able to provide new large load customers with competitive market pricing that also provides meaningful benefits back to existing customers. These benefits are not only driven by carefully constructed market prices. They're also a function of a robust, long-term, integrated resource planning process and Georgia Power's ability to use existing resources to serve a large portion of the new demand while only needing to incrementally invest to meet higher peak demands.
Daniel S. Tucker: Sometimes as is the case with Georgia Power's recent growth.
Daniel S. Tucker: We're able to provide new large load customers with competitive market pricing that also provides meaningful benefits back to existing customers.
Daniel S. Tucker: These benefits are not only driven by carefully constructed market pricing.
Daniel S. Tucker: There are also a function of a robust long term integrated resource planning process, and Georgia Power's ability to use existing resources to serve a large portion of the new demand, while only needing to incrementally invest to meet higher peak demands.
Daniel S. Tucker: The stipulation the Georgia PSC recently approved includes a commitment by Georgia Power for these customer benefits to be incorporated into the 2025 rate case. Our approach to pricing has never been more important given the current macroeconomic backdrop.
Daniel S. Tucker: The stipulation the Georgia PSC recently approved includes a commitment by Georgia power for these customer benefits to be incorporated into the 2025 rate case.
Daniel S. Tucker: Our approach to pricing has never been more important given the current macroeconomic backdrop affordability is a key tenant of our customer centric business model and we work hard to ensure new customer demands don't place additional burdens on those less able to afford it.
Daniel S. Tucker: Affordability is a key tenet of our customer-centric business model, and we work hard to ensure new customer demands don't place additional burdens on those less able to afford them. Lastly, the risk question, what protections are in place for forecasted load that does not materialize? I've already described how we've risk-adjusted the forecast itself.
Daniel S. Tucker: Lastly, the risk question what protections are in place are forecasted load does not materialize.
Daniel S. Tucker: I already described how we've risk adjusted the forecast itself. The other major risk mitigation pertain the local infrastructure improvements at our portfolio of supply resources.
Daniel S. Tucker: The other major risk mitigations pertain to local infrastructure improvements and our portfolio of supply resources. These new large load customers often require significant local distribution system improvements, and these improvements often provide limited incremental benefit to other customers. As a result, we require most new large load customers to pay for these improvements up front, helping ensure other customers are protected. When it comes to supply resources, the risk mitigation comes in the form of the diversity of our resources; purchase resources or PPAs can expire without being renewed; older owned resources, which might require additional investments or higher maintenance O&M spend to remain available over the long term, can be retired earlier.
Daniel S. Tucker: As new large load customers often require significant local distribution system improvements and these improvements often provide limited incremental benefit to other customers.
Daniel S. Tucker: As a result, we require most large new large load customers.
Daniel S. Tucker: Pay for these improvements upfront, helping ensure other customers are protected.
Daniel S. Tucker: When it comes to supply resources, the risk mitigation comes in the form of the diversity of our resources purchased resources or Ppas can expire without being renewed.
Daniel S. Tucker: Older owned resources, which might require additional investments are higher maintenance O&M spend to remain available over the long term can be retired earlier.
Daniel S. Tucker: Decisions and risk strategies like these are a key aspect of the multi-year integrated resource planning processes in each of our states. With robust long-term planning comes optionality in future decision making. Said differently, planning for 20 years of resource needs every three years helps ensure that customers benefit from a flexible resource plan that is equally focused on reliability and affordability. Chris, I'll turn the call back over to you to wrap up our prepared remarks. Thanks, Daniel.
Daniel S. Tucker: Decisions and risk strategies like these are a key aspect of the multi year integrated resource planning processes in each of our states.
Daniel S. Tucker: With robust long term planning comes Optionality and future decision, making.
Chris: Said differently planning for 20 years of resource needs every three years helps ensure that customers benefit from a flexible resource plan that is equally focused on reliability and affordability.
Daniel S. Tucker: Chris I'll turn the call back over to you to wrap up our prepared remarks. Thanks Dan.
Christopher C. Womack: Before taking your questions this afternoon, I'd like to first take a moment to reinforce that as we serve these growing energy needs, we also remain focused on achieving our long-term greenhouse gas reduction goals, including net zero greenhouse gas emissions by 2050. Working closely with each of our states and with an unrelenting focus on safely and reliably serving our customers' needs, we continue to make responsible economic resource decisions over the long term. For example, over 80% of the resource additions planned across our system, totaling nearly 10,000 megawatts from 2023 to 2030, are zero carbon emitting resources.
Chris: Before taking your questions. This afternoon I'd like to first take a moment to reinforce that as we serve these growing energy needs. We also remain focused on achieving our long term greenhouse gas reduction goals, including net zero greenhouse gas emissions by 2050 working closely with each of our states.
Christopher C. Womack: And with an unrelenting focus on safely and reliably serving our customers' needs. We continue to make responsible economic resource decisions over the long term.
Christopher C. Womack: For example over.
Christopher C. Womack: 80% of the resources additions plan across our system totaling nearly 10000 megawatts from 2023% to 2030, Orange zero carbon emitting resources.
Christopher C. Womack: We have accomplished some wonderful things in recent weeks, and we are even more excited about our future. We have seven quality state regulated utilities with long track records of outstanding operational and financial performance that deliver over 90% of our earnings. Along with a few quality complementary businesses, we believe we have the ideal portfolio to support our long-term objective. Southern Company's value proposition has never been more attractive. Our team has never been stronger, and we are positioned as well as we ever have been. As I said earlier, we have the people, the experience, and the scale for sustained, sustained long-term success. Thank you, as always, for your interest in Southern Company. Robert, we're now ready to take questions. Thank you.
Christopher C. Womack: We have accomplished some wonderful things in recent weeks and.
Christopher C. Womack: And we are even more excited about our future.
Christopher C. Womack: We have seven quality state regulated utilities.
Christopher C. Womack: With long track records of outstanding operational and financial performance that deliver over 90% of our earnings.
Christopher C. Womack: Along with a few quality complementary businesses. We believe we have the ideal portfolio to support our long term objectives.
Christopher C. Womack: Southern company's value proposition has never been more attractive.
Robert: Our team has never been stronger.
Robert: And we are positioned as well as we ever have been.
Speaker Change: As I said earlier, we have the people.
Christopher C. Womack: The experience and the scale for sustained sustained long term success. Thank you as always for your interest in southern company.
Christopher C. Womack: Robert we're now ready to take questions.
Robert: Thank you. At this time, we'll be conducting a question and answer session. If you'd like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star 2 if you'd like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing star 1.
Robert: Thank you. Thank you at this time.
Robert: <unk> and answer session.
Carly Davenport: One moment, please, while we poll for questions. Our first question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
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Carly Davenport: For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star Keith one moment, please while we poll up for questions.
Carly Davenport: Hey Carly, how's it going? Thanks so much for taking the questions today. Good to see the strong sales growth coming in during the quarter. I guess just as we think about the impact to earnings from some of these volumes, are there any sensitivities that you can provide around the commercial load or the data center load specifically there?
Carly Davenport: Hi, first question comes from Carly Davenport with Goldman Sachs. Please proceed with your question.
Carly Davenport: Hey, Thanks, Charlie Thanks Bill.
Carly Davenport: How's it going thanks, so much for taking the questions today. Thank you.
Carly Davenport: Good to see the strong sales growth coming in during the quarter I guess, just as we think about the impact to earnings from some of these volumes are there any sensitivities that you can provide around the commercial load or the data siloed specifically there.
Daniel S. Tucker: Yeah, absolutely. So just as big as a bread box.
Carly Davenport: Yeah, absolutely so just.
Daniel S. Tucker: <unk> is a bread box.
Daniel S. Tucker: So it's roughly, if you think about our total sales, and nd of the average price, you're talking about, you know, $40 million for a 1% change and our overall sales. Now, for the vast majority of what's showing up here, whether it's data centers, some of these other large load industrial customers, it may skew slightly below that. So really, it's somewhere in the range of $20 to $40 million for a 1% change in sales.
Speaker Change: So it's roughly.
Daniel S. Tucker: If you think about our total sales.
Daniel S. Tucker: The average price you are talking about.
Daniel S. Tucker: $40 million for a 1% change in our overall sales now for the vast majority of what's showing up here, whether it's data centers. Some of these other large load industrial customers. It may skew slightly below that so really it's somewhere in the range of $20 million to $40 million.
Daniel S. Tucker: For 1% change in sales.
Carly Davenport: Got it. That's super helpful. Thank you. And then, I guess just as a follow-up, as you think about the recent commission approvals on the 23 Georgia IRP filing, do you see any incremental capital needed relative to what you previously laid out on the fourth quarter call?
Speaker Change: Got it that's super helpful. Thank you.
Carly Davenport: And then I guess just as a follow up as you think about the recent commission approvals on the 23, Georgia IOP filing do you see any incremental capital needed relative to what you previously laid out on the fourth quarter call.
Daniel S. Tucker: So there will be some additions based on the approval, Carly, and that largely pertains to the additional storage resources, the battery energy storage system. So, if you recall, we included two very specific projects in our outlook, but the commission actually approved 500 megawatts of own storage, which is a little more than double what we had assumed. And so total dollars, you know, it's gonna rain, it's gonna be, I'm gonna give you a big rain.
Carly Davenport: So there will be some additions based on the approval currently and that largely pertains to the additional storage resources. The battery energy storage system. So if you recall what we included was two very specific projects and our outlook, but the commission actually approved.
Daniel S. Tucker: 500 megawatts of owned storage, which is a little more than double what we had assumed and so total dollars.
Daniel S. Tucker: It's going to rain, it's going to be I'm going to give you a big range.
Daniel S. Tucker: And I'm going to throw in here, if you didn't see, we also announced an expansion of one of our solar projects at Southern Power. So that also was not included in our forecast back in February. So all told, you're somewhere above $500 million, a little south of a billion probably.
Daniel S. Tucker: And I'm going to throw in here.
Daniel S. Tucker: If you didn't see we also announced an expansion of one of our solar projects in southern power. So that also was not included.
Daniel S. Tucker: And our forecast back in February so all told you're somewhere above $500 million, a little south of 1 billion problems.
Daniel S. Tucker: And what we'll do, we don't want to get too far ahead of the regulatory processes. There are specific certification processes to go through. So we'll let all that play out and then update our forecast more formally later on. That's it. Thanks.
Daniel S. Tucker: And what we'll do we don't want we don't want to get too far ahead of the regulatory processes. There's specific certification processes to go through so we'll let all of that play out and then update our forecast more formally later on.
Carly Davenport: Understood. Thanks so much for the call. You bet, Carly. Thank you.
Speaker Change: Understood. Thanks, so much for the color.
Speaker Change: You bet. Thank you.
Steve Fleishman: Our next question is from Steve Fleishman with Wolf Research. Please proceed with your question.
Carly Davenport: Our next question is from Steve Fleishman with Wolfe Research. Please proceed with your question.
Steve Fleishman: Dave.
Steve Fleishman: Hi can you hear me.
Steve Fleishman: Yeah, Steve, we can hear you. Yeah, great. Okay. Well, first, congrats on getting Volvo. Are we up and running? Thank you. That's great.
Steve Fleishman: Yes, we can hear you yeah, great Okay, well first congrats.
Steve Fleishman: Getting volatile will be up and running.
Steve Fleishman: Thank you so that's great.
Steve Fleishman: And, uh, I guess just, Just, I know on the last call, you talked about better sales growth, and you raised the cutbacks. And now there's a little bit more potentially to, and that's a con up, you know, reaffirmed squarely in the 5 to 7%, and I know you're a big company, and obviously it's a lot to move the needle. 5 to 7%. But just, is it fair to say that, as you are adding this capital, at least within this range of 5 to 7, there are some benefits to adding the capital even net of financing?
Speaker Change: And I guess just.
Steve Fleishman: Just.
Steve Fleishman: No on the last call you talked to the.
Steve Fleishman: The better sales growth and you raised the Capex and now theres, a little bit more potentially to come.
Steve Fleishman: And then kind of.
Steve Fleishman: No.
Steve Fleishman: Reaffirms squarely in the 5% to 7%.
Steve Fleishman: And I know, you're a big company and obviously it has a lot to move the needle.
Steve Fleishman: The 5% to 7%, but just.
Steve Fleishman: Is it fair to say that as you are.
Steve Fleishman: Adding this capital that at least within this range of five to seven years some.
Steve Fleishman: Benefits of adding the capital net of financing.
Daniel S. Tucker: Yeah, look, I think it's fair to characterize everything that is occurring, and particularly if the momentum continues in what we're seeing, I would characterize that as adding an upward bias to where we are from an earnings perspective. And you kind of said it, Steve.
Speaker Change: Yeah look I think it's fair.
Daniel S. Tucker: Fair to characterize that everything that is occurring and particularly if the momentum continues and what we're seeing I would characterize that as <unk>.
Daniel S. Tucker: Adding an upward bias to where we are from an earnings perspective, and you kind of said, it's Steve and we certainly saw your commentary in your note yesterday it's.
Daniel S. Tucker: And we certainly saw your commentary in your note yesterday. It's We are a big company. We are issuing equity. But even with all of that, these incremental investments should have an accretive effect. I think it's just too soon to say exactly what that means, but an upward bias absolutely exists, particularly if this momentum continues. Now, and does that mean a changing growth rate? Probably not. Does it mean maybe that growth rate is off by some, you know, higher number later down the road? Probably so.
Daniel S. Tucker: We are a big company, we are issuing equity, but even with all of that these incremental investments should have an accretive effect.
Daniel S. Tucker: But it's.
Daniel S. Tucker: I think it's just too soon to say exactly what that means but an upward bias.
Daniel S. Tucker: Absolutely exists, particularly if this momentum continues.
Daniel S. Tucker: Now does that mean change in growth rate, probably not does it mean, maybe that growth rate is off of some higher number later down the road probably so.
Daniel S. Tucker: And Steve, the only thing I'd add is that we talked before about not just raising growth rates, but it's about the durability and the length of the runway. How we extend the runway is something that we are keenly focused on, as we've talked to you many times about. And I think that that's clearly an opportunity that we are afforded by this added growth.
Speaker Change: And Steve the only thing I'd add is we've talked to you before about not just about raising growth rates, but it's about the durability and the length. How we extend the runway is something that we are keenly focused on as we've talked to you. Many times about and I think that that's clearly an opportunity that we are afforded by.
Daniel S. Tucker: By this added growth and then the only thing I'd add is also the thing that we're really gratified to see as part of this whole dynamic is a de risking of our outlook because of these customer benefits. The affordability equation equation is greatly improved and thats a good thing.
Christopher C. Womack: And then the only thing I'd add is also the thing that we are really gratified to see as part of this whole dynamic is a de-risking of our outlook. Because of these customer benefits, the affordability equation is greatly improved, and that's a good thing for the long-term sustainability of our business.
Christopher C. Womack: For the long term sustainability of our business.
Christopher C. Womack: And Steve, one thing I'd add, I mean, one of the things that we talked about in our prepared remarks, and we've talked to you more about how we use this opportunity to make sure we put downward pressure on rates across our customer classes and make sure that we price this new load in the right way. And I think we've demonstrated our ability to do that and have the resources and tools to do that going forward. So it provides additional excitement for us as we go forward.
Speaker Change: <unk> only thing I would add I mean, one of the things that we talked about in our prepared remarks, and we've talked to you more about how do we use this opportunity to make sure we put downward pressure on rates for across our customer classes in and making sure that we price this new load in the right way and I think.
Christopher C. Womack: We've demonstrated our ability to do that and having to.
Christopher C. Womack: Resources and tools to do that going forward. So.
Christopher C. Womack: This additional excitement for us as we go forward.
Christopher C. Womack: OK. Now that I've talked. And then just a different topic, just to go back to the last call. Since then, we've had, I think, a bill on the commissioner status. I don't know if we've had an update on the election court case. And then there was that bill about bringing back the Consumer Council there. Just can you update us on all those developments? Yeah.
Christopher C. Womack: Okay.
Christopher C. Womack: Paul.
Christopher C. Womack: And then just.
Christopher C. Womack: Different topic, just on I think we should go back to last call.
Christopher C. Womack: Since then we've had I.
Christopher C. Womack: I think the bill.
Christopher C. Womack: Bill on the.
Christopher C. Womack: Commissioner status.
Christopher C. Womack: I don't know if we've had an update on kind of the election Court cases.
Christopher C. Womack: And then there was that bill about bringing back to consumer Council. There just can you update us on all those developments.
Christopher C. Womack: Yeah, the Consumer Advocacy Group inside of the commission, that bill was not passed by the legislature. However, the legislature did pass a bill that provided what I think is some certainty around the election cycle going forward for the commissioners. I mean, there was some confusion, chaos, and time and schedule got a little tight because of the court cases. And so, as a result, the legislature did pass a bill that laid out the order and schedule of elections for commissioners between 25 and 28.
Christopher C. Womack: Yes.
Christopher C. Womack: Consumer accounts tomorrow consumer advocacy group.
Christopher C. Womack: Inside of the commission that Bill was not passed by the legislature.
Christopher C. Womack: The legislature did pass a bill that provided what I think is some certainty around the election cycle going forward for the commissioners.
Christopher C. Womack: There was some confusion chaos in time and schedule got a little short.
Christopher C. Womack: Because of the court cases.
Christopher C. Womack: And so as a result, the legislature did pass a bill that laid out the ordering schedule of elections for commissioners.
Christopher C. Womack: And so the thing about that that I think is very instructive is that the current commission in Georgia will be the commission that will sit to review Georgia Power's 25 IRP as well as the Georgia 25 rate case. So there is order and schedule for the commission for the next two to three years, with three out to 28.
Christopher C. Womack: Between 25% and 28 and so the thing about that that I think is very instructive is that the current commission.
Christopher C. Womack: In Georgia will be the commission that will sit to review, Georgia, Power's 25, RFP as well as George 25 rate case.
Christopher C. Womack: So there is order.
Christopher C. Womack: And schedule for the commission for the next.
Christopher C. Womack: Two to three years with three after 2008.
Steve Fleishman: Okay, and then just last question going back to the data center update, which which was very helpful. Just, you know, we're hearing from a lot of other utilities about data center growth that they're seeing and, Obviously, you're, you're number you're kind of somewhat at the forefront of that, but just You mentioned some cases taking deposits or taking money to kind of lock that in, or, you know, that the customers to pay up front, but just, You know, how are you trying to assess the risk of some of the customers, you know, putting themselves in line in six different regions, and then in the end only picking two of them, and just, you know, making sure that you're not on the losing end of that or, or just trying to kind of put that into your assessment of risk.
Christopher C. Womack: Okay.
Christopher C. Womack: And then just last question going back to the data center update, which which was very helpful.
Steve Fleishman: Just we're hearing from a lot of other utilities about data center growth that they're seeing.
Steve Fleishman: Obviously your number you are kind of somewhat at the forefront of that but just.
Steve Fleishman: It.
Steve Fleishman: You mentioned in some cases, taking deposits or taking money to kind of lock that in.
Steve Fleishman: That the customers that pay upfront, but just.
Steve Fleishman: How are you trying to assess the risk of some of the customers.
Steve Fleishman: But putting themself in line in six different.
Steve Fleishman: Regions and then in the end only picking two of them.
Steve Fleishman: And just.
Steve Fleishman: Making sure that.
Steve Fleishman: You are not losing any of that or.
Steve Fleishman: Trying to kind of put that into your <unk>.
Steve Fleishman: Assessment of risks.
Daniel S. Tucker: Yeah, Steve, I think that's what we try to capture a little bit. And what we laid out on slide 11 of our deck, it's, we're not counting on those that could potentially still be me trying to put multiple states or utilities on the hook, really, until we have a pretty firm line of sight. And that could be because, you know, the bilateral conversation and commitment between them and our utilities, it's really not solidly in there. There may be some degree of risk adjusted, or kind of probability weighted aspect, just because there's so much activity out there. But we feel pretty good about, again, I hate to use the word, but it's, I think our forecast is fairly conservative in that regard.
Steve Fleishman: Yes, I think thats, what we tried to capture a little bit and what we laid out in the eye.
Daniel S. Tucker: Slide 11 of our deck.
Daniel S. Tucker: We're not counting on those that could potentially still be.
Daniel S. Tucker: <unk> tried to put multiple states are utilities on the hook really until we have pretty firm line of sight and that by.
Daniel S. Tucker: Bilateral conversation a commitment between them and our utilities, it's really not solidly in there there may be some degree of risk adjusted or kind of probability.
Daniel S. Tucker: Probability weighted aspect just because theres so much activity out there, but we feel pretty good about again I hate to use the word but it's I think our forecast is fairly conservative in that regard.
Steve Fleishman: Okay, now that's helpful. Thank you very much.
Daniel S. Tucker: Okay.
Steve Fleishman: That's helpful. Thank you very much.
Speaker Change: Thanks, Dave.
Shahriar Pourreza: Our next question is from Shahriar Pourreza with Guggenheim Partners. Please proceed with your question.
Steve Fleishman: Our next question is from Shar <unk> with Guggenheim Partners. Please proceed with your question.
Shahriar Pourreza: Hey Shah. Hey guys. Hey guys, Hey Chris. Can you just follow up from Steve's question a little bit on the timing of sort of any guidance updates around that sort of that quote-unquote upside bias you just kind of reference. I guess what's the trigger event, whether you guide to the top and rebase higher and grow five to seven off of that. I guess I'm just trying to figure out what would move that needle. What's the event?
Shahriar Pourreza: Hey, Sharp, Hey, guys, Hey, guys Hey, Chris.
Shahriar Pourreza: Ken can you just just a follow up from Steve's question. Just can you elaborate a little bit on the timing of sort of any guidance updates around that sort of that quote unquote upside bias you just kind of reference I guess, what's the trigger event, whether you whether you guide to the top end of Rebase hire and grow 5% to seven off of that I guess I'm just trying to figure out what would.
Shahriar Pourreza: Move that needle what's the event.
Daniel S. Tucker: Yeah, so importantly, Shahriar, the way I characterize that is that if we continue to see this momentum, right, then it's certainly not the cards we have today. The cards we have today have greatly improved our overall profile. It's added that durability.
Speaker Change: Yeah. So importantly, shar the way I'd characterize that is that if we.
Daniel S. Tucker: To see this momentum right. So it's certainly not the cards. We have today, that's because yesterday have greatly improved our overall profile. It's added that durability, it's massively derisk kind of the outlook, but it's going to take continued momentum on this front.
Daniel S. Tucker: It's a massively de-risked kind of outlook. But it's going to take continued momentum on this front, you know, more investment, and more sales growth over the long term. And then just in the disciplined way we do, we're not going to make updates like that kind of entry year, right? I mean, to the extent there's an update to be provided, it's going to be on our fourth quarter call. And it's going to have to be with pretty, as big a company as we are, pretty significant needle moving event within the profile.
Daniel S. Tucker: More investment more sales growth over the long term and then just in the disciplined way we do.
Daniel S. Tucker: Not going to make updates like that kind of entry year right I mean to the extent there is an update to be provided its going to be in our fourth quarter call and it's going to have to be with.
Daniel S. Tucker: As Big a company as we are pretty significant needle moving event.
Daniel S. Tucker: Within the profile.
Christopher C. Womack: Okay, that's perfect. And then Chris, maybe just a quick one for you. There's been obviously kind of a debate in the industry around sort of behind the meter and in front of the meter, and the language from some of the hyperscalers seems to show a little bit of a preference around self-generation and self-supply with some backup capacity, which can obviously impact some of the demand numbers as we're thinking about things more prospectively, right? I guess, Chris, what conversations are you having around this as you kind of engage with new customers?
Speaker Change: Okay. That's perfect and then Chris maybe just quick one for you Theres been obviously kind of a debate in the industry around sort of the behind the meter and in front of the meter and language from some of the hyperscale or it seemed to show a little bit of a preference around self generation and self supply with some backup capacity, which can obviously.
Christopher C. Womack: The impact some of the demand numbers as we're thinking about things more prospectively right I guess I guess, what conversations are you having around this as you kind of engage with new customers.
Christopher C. Womack: Thanks. Sure. I'd say we haven't had a lot of conversations that cover all of those options and all of those considerations. I mean, I think as you talk to these hyperscales, these data centers, one, they want power. They want resilience. They want reliability. Some of them want it clean. And they recognize the demand that they're putting on load in certain locations. And so their considerations, do they self-generate?
Christopher C. Womack: Yes.
Chris: So I'd say, we're having we have and having a lot of conversation that cover and.
Christopher C. Womack: All of those options and all of those considerations.
Christopher C. Womack: I think as you talk to these hyperscale data centers.
Christopher C. Womack: One they want the power.
Christopher C. Womack: They want resilience they want the reliability some of them.
Christopher C. Womack: <unk>.
Christopher C. Womack: And they recognize the demand that they are putting on on on load in certain locations and so their considerations do any staff generate.
Christopher C. Womack: Do they want support from behind the meter. So I think you go across the continuum of options are reflects kind of the conversations that we're having with them wanting to understand what their needs are but also to help them understand our business and how we provide service and how we how we operate as a company.
Christopher C. Womack: Do they want support from behind the meter? So I think you go across the continuum of options or reflect kind of the conversations that we're having with them, one, to understand what their needs are but also to help them understand our business and how we provide service and how we operate as a company. Yeah, I mean, we want to serve them as customers. But I think we're also at a period where there's just a lot of disruption in education that's occurring in the marketplace today.
Christopher C. Womack: We're trying to.
Christopher C. Womack: Want to serve them as customers, but I think we're also in a period, where there's just a lot of instruction education.
Christopher C. Womack: That's occurring in the marketplace today.
Christopher C. Womack: And so the thing about our company is, with all the complementary subsidiaries that we have in this portfolio, we have the opportunity to support them and help them in multiple different ways. So I think that's another aspect of our portfolio that's pretty exciting as we look at it. This Demand and What's Happening in the Marketplace Today and that we have resources and capabilities to serve them and support them in a number of different ways.
Christopher C. Womack: So the thing about our companies with all of the complementary.
Christopher C. Womack: Subsidiaries that we have in this portfolio, we have the opportunity to support them and help them in multiple different ways. So I think that's another aspect of our of our portfolio that's pretty exciting as we look at.
Christopher C. Womack: This demand and what's happening in the marketplace today and that we have resources and capabilities to serve them and support them in a number of different ways.
Shahriar Pourreza: Got it. That's perfect. That's all the questions I have.
Speaker Change: Got it that's perfect. That's all the questions I had thanks guys I appreciate it thanks.
Shahriar Pourreza: Thanks, guys. I appreciate it. Thanks, y'all. Thanks, Shar.
Shahriar Pourreza: Sure.
Nicholas Campanella: Our next question comes from Nick Campanella with Barclays. Please proceed with your question.
Shahriar Pourreza: Our next question comes from Nick Campanella with Barclays. Please proceed with your question.
Nicholas Campanella: Hey, good afternoon, everyone. Hey, and congrats on Vogel. Really, really exciting stuff. Thanks, man.
Nicholas Campanella: Hey, good afternoon, everyone.
Nicholas Campanella: Congrats on Vogtle.
Nicholas Campanella: Okay.
Nicholas Campanella: Thanks, Matt Yeah, absolutely so on the sales growth.
Nicholas Campanella: Yeah, absolutely. So, on the sales growth, you kind of talked about things bubbling up in other jurisdictions just outside of outside of Georgia. And can you just kind of remind us what you're assuming there? What's embedded in the plan versus where the upside of those figures could go?
Nicholas Campanella: You've kind of talked about things.
Nicholas Campanella: Things Bubbling up in other jurisdictions, just outside of outside of Georgia, and can you just kind of remind us what you're assuming there and what's embedded in the plan versus where the upside to those figures go.
Christopher C. Womack: I don't think there's anything embedded in the plan. I think it's about announcements that we will see forthcoming. We know, I think there was an announcement today in Alabama of a 200-megawatt facility that Meta just announced. And then you also saw some legislation in Mississippi that was providing incentives for data centers and other hyperscalers to come to Mississippi. So we see it coming, but that activity, those projects, are not assumed and are not included in the forecast as we talk about them today.
Speaker Change: I don't think there's anything embedded in the plan I think it's about announcements and that we see forthcoming we know I think there was an announcement today in Alabama to.
Christopher C. Womack: 200 megawatt facility that matter.
Christopher C. Womack: Announce and then you saw <unk>.
Christopher C. Womack: So some legislation in Mississippi.
Christopher C. Womack: That was providing incentives for data centers and Hyperscale as you come to Mississippi. So we.
Christopher C. Womack: We see it coming.
Christopher C. Womack: But that that activity those projects had not assumed and not included in the forecast as we talk about it today.
Nicholas Campanella: That's very clear. And then, and then Dan, I just want to wrap up that that $500 million to a billion dollar figure that you were kind of discussing on the CapEx side, understand this is outside the plan now. And, you know, probably not coming to your yearly update.
Christopher C. Womack: That's very clear.
Speaker Change: And then Dan I, just wrapping in that 500 to a $1 billion figure that you were discussing on the Capex side understand this is outside the plan now.
Nicholas Campanella: Probably not come into your yearly update but just how do we think about the credit implications and I know last quarter. I think you said you were 14% to 15% <unk> to debt and 24 with a 60 basis point improvement every.
Nicholas Campanella: Every year thereafter is that still the way to kind of think about the uplift here.
Nicholas Campanella: The next few years, maybe you could comment on that.
Daniel S. Tucker: Yeah, absolutely, Nick. Yeah, that profile we described in the fourth quarter that kind of ramps from that 14 last year up to, you know, 17 in the back half of the plan is absolutely still the profile to watch. As this incremental capital opportunity emerges, what we'll do is issue sufficient equity, probably through something like an ATM and through our plans, to kind of restore the metrics to where they would otherwise be without that incremental capital. And again, kind of going back to Steve's question, yes, even doing that, this incremental CapEx will have an accretive effect.
Daniel S. Tucker: But just how do we think about the credit implications? And I think, you know, last quarter, I think you said you were 14 to 15% FFO to debt in 24 with a 60 basis point improvement every year thereafter. Is that still the way to kind of think about the uplift here? Over the next few years? Maybe you could comment on that. Yeah, absolutely, Nick. Yeah, that profile we described.
Dan: Yes, absolutely next year that that profile. We described in the fourth quarter that kind of ramps from that 14 last year up to 17 in the back half of the plan is absolutely still the profile to watch as this incremental capital opportunity emerges.
Speaker Change: We'll do as issues sufficient equity probably through something like an ATM and through our plans to kind of restore the metrics to where they would've otherwise been without that incremental capex and again kind of going back to Steve's question, yes, even doing that this incremental capex will have an accretive effect.
Speaker Change: Alright, Thanks, a lot.
Daniel S. Tucker: Yes.
Durgesh Chopra: Our next question comes from Durgesh Chopra with Evercore ISI. Please proceed with your
Daniel S. Tucker: Our next question comes from <unk> Chopra with Evercore ISI. Please proceed with your question.
Durgesh Chopra: Hey guys, thank you for taking my questions and congratulations on Unit 4. Thank you. It's always good to hear from you. Thanks, Chris.
Durgesh Chopra: Hey, guys. Thank you for taking my questions and congrats in a unit for Hollister, Yes always good to hear from you.
Durgesh Chopra: Thanks, Chris Thanks, Dan.
Durgesh Chopra: So again, just I was curious, in your commentary, you mentioned 12% growth in data center sales growth. Can you break that for us? How much of that is new data centers? Versus is that? Or is it just existing data centers using newer ones?
Durgesh Chopra: I was curious.
Durgesh Chopra: In your commentary you mentioned, 12% growth from data center sales growth can you break that for us how much of that is new data centers or is that or is it just existing data centers using your technology.
Daniel S. Tucker: So it's about three quarters existing data centers and then a little bit of the other quarter kind of coming from new data centers year over year. So we're seeing both. We're seeing a continued ramp up of new facilities and existing facilities ramping up their
Speaker Change: So its about three quarters of existing data centers, and then a little bit the other quarter kind of coming from new data centers year over year.
Daniel S. Tucker: So we're seeing both we're seeing a continued ramp up of new facilities existing facilities ramping up their usage.
Durgesh Chopra: Um, cool. And just one quick follow-up on the legislative front. I'm not sure if the House Bill will actually be passed and signed into law, but that talks about kind of suspending the, I believe, sales tax exemption on data. Maybe can you just address that, where does that sit, and what does it mean? Yeah, I mean, I think that means it passed, and now it's sitting on the governor's desk, and so I'm waiting to see what happens there.
Daniel S. Tucker: Right.
Daniel S. Tucker: And then just.
Speaker Change: One quick follow up on the Legislative front.
Durgesh Chopra: I'm not sure if the house Bill 192, it was actually passed and signed into law and that talks to kind of suspending the.
Speaker Change: I believe the sales tax exemption on data centers, maybe can you just address that.
Durgesh Chopra: Or does that sit and what implications if any you see on the on the data center growth in Georgia, Yes, I think that it passed and now sitting on the Governor's desk and so waiting to see what happens there.
Durgesh Chopra: I think one of the things the government wants to do is let economic development activities know that Georgia is still open for business. And so I think that's one of the key factors in consideration that he'll pay attention to as he makes a decision on that bill. But right now, I don't know what will happen, but it's there for him to take action on. And so we're waiting, just like everybody else, to see what happens. [inaudible] Thank you.
Durgesh Chopra: Yes.
Durgesh Chopra: One of the things that the government wants to do is let let economic development activities note that George is still open for business and so I think thats one of the key factors in consideration that he will pay attention to as it looks.
Durgesh Chopra: As he makes a decision on that bill.
Durgesh Chopra: Right now I don't know what will happen, but it's there for him to him to take action on and so we're waiting just like everybody else to see what happens.
Speaker Change: That's fair, Thanks, Chris and Dan. Thank you. Thank you. Thank you Peter gifts.
Durgesh Chopra: Thank you. Thank you.
Jeremy Bryan Tonet: Our next question comes from Jeremy Tonet with JP Morgan. Please proceed with your question.
Durgesh Chopra: Our next question comes from Jeremy Tonet with Jpmorgan. Please proceed with your question.
Jeremy Bryan Tonet: Good afternoon.
Jeremy Bryan Tonet: Jeremy? Good afternoon.
Jeremy Bryan Tonet: Hey, Jeremy afternoon.
Jeremy Bryan Tonet: Congratulations on Votable Unit 4 there. Just wanted to continue with, I guess, the topic du jour, and given the notably higher than expected load growth and earnings in ongoing data center investment in your service territory, just wondering how this impacts, I guess, future generation mix and specifically coal plant retirement dates, given what's happening here. Is there, could there be deferrals, or just any thoughts on that?
Jeremy Bryan Tonet: Hey, congratulations on Vogtle unit four there.
Jeremy Bryan Tonet: Just wanted to.
Jeremy Bryan Tonet: With I guess the topic as you are and given the notably higher than expected load growth in earnings.
Jeremy Bryan Tonet: Ongoing data center investment in your service territory, just wondering how you think this impacts I guess.
Jeremy Bryan Tonet: To your generation mix and specifically coal plant retirement dates given.
Jeremy Bryan Tonet: What's happening here is there.
Jeremy Bryan Tonet: Could there be deferrals or just any thoughts on that.
Jeremy Bryan Tonet: I mean, I think that that's a lot to come and I would add one more factor there.
Christopher C. Womack: I think that's a lot to come. And I'd add one more factor there.
Christopher C. Womack: New EPA rules, and we saw the suite of announcements.
Christopher C. Womack: Came out of EPA last week, which we are reviewing.
Christopher C. Womack: And many of the rules, we think are practical in terms of aligning with the kind of demand that we see forthcoming.
Christopher C. Womack: And also from a technology standpoint, some expectations that they are advocating and putting forward don't align necessarily with reality.
Christopher C. Womack: So theres a lot of I think a lot of issues that are up in the air.
Christopher C. Womack: At the state level I think as we look at how we respond to the demand how we respond to this need all of those considerations must be on the table in terms of new generation <unk>.
Christopher C. Womack: As to the existing generation.
Christopher C. Womack: Does it get extended what happens there all of that has to be on the table, but we also have to factor in what.
Christopher C. Womack: It's the new EPA rules. And we saw the suite of announcements that came out of EPA last week, which we are reviewing. And many of the rules we think are impractical, in terms of aligning with the kind of demand that we see forthcoming. And also from a technology standpoint, some expectations that they are advocating and putting forward don't necessarily align with reality.
Christopher C. Womack: What are the potential new rules from the environmental Protection agency, So I would say.
Christopher C. Womack: So there's a lot of, I think, a lot of issues that are up in the air at the state level. I think as we look at how we respond to the demand, how we respond to this need, all those considerations must be on the table in terms of new generation, what happens to the existing generation, does it get extended, what happens there. All of that has to be on the table, but we also have to factor in what potential new rules from the Environmental Protection Agency might be. So I would say all of that is very subject to further consideration as we move forward through all the processes that will be a part of it.
Christopher C. Womack: All of that is very subject to further consideration as we move forward through all the processes that will be a part of.
Jeremy Bryan Tonet: That that makes sense. And how do you think about the feasibility of carbon capture in your territory?
Speaker Change: That makes sense.
Jeremy Bryan Tonet: How do you think about the feasibility of.
Jeremy Bryan Tonet: Carbon capture in your territories.
Christopher C. Womack: Geologically, yeah, I mean, there are places down on the coast, the Mobile area, some parts of Mississippi where we have the geology for sequestration, but once again, I think as you look at what is somewhat predicated on some of these rules and the expectations and what the desires are, I'm not sure the technology available at a commercial scale to do what they're asking us to do, I think there are a lot of questions there I think they're impractical at this time.
Jeremy Bryan Tonet: Okay.
Jeremy Bryan Tonet: Geologically, yes, I mean, there are places down on the coast.
Christopher C. Womack: The mobile area and some parts of Mississippi, where we have the geology for for sequestration, but once again I think as you look at what is somewhat predicated in some of the rules and the expectations and what the desires are.
Christopher C. Womack: Is the technology available at a commercial scale to do what they are asking us to do I think there are a lot of questions. There. So I think it's I'd.
Christopher C. Womack: And so I think there's more work to be done and more conversation to be had about how they how they should go forward. But we've got, we're still doing the analysis because it's a lot of pages, a lot of work. And then we've got to decide what we do going forward in terms of litigation, and whether it's with our states, whether it's with the other different associations. So there's a lot of work to be done there, a lot more conversations to be had.
Christopher C. Womack: I go back to this room and I think they are impractical at this time.
Christopher C. Womack: So I think there is more work to be done and more conversations to be had about how they how they should go forward, but we've got we see.
Christopher C. Womack: Still doing the analysis, because it's a lot of pages a lot of work.
Christopher C. Womack: And then we got to decide what we do going forward in terms of.
Christopher C. Womack: Litigation and whether it's with our stage with as with the other different associations. So theres a lot of work to be done there a lot more conversations to be had.
Jeremy Bryan Tonet: Got it. That's very helpful. Thanks. And one last one, if I could just, you know, given the new fuels' ability to offer base load that is very, you know, suitable for data center and other demand as such, just wondering any updated thoughts on the viability of that technology down the road and how Southern thinks about that.
Speaker Change: Got it that's very helpful. Thanks, and one last one if I could just given.
Jeremy Bryan Tonet: Nucor's ability to offer a baseload that is very suitable for data center and other demand as such just wondering any updated thoughts on the viability of that technology down the road and.
Jeremy Bryan Tonet: Southern thinks about that thanks.
Christopher C. Womack: I mean, I can give you my speech if you'd like to hear it. I mean, the country is going to need more nuclear power. I mean, there's clearly no technology better suited to support the demands of this increasingly digital economy and society. And so I think the federal government has got to step in and provide great leadership to incentivize companies to move in that direction. I'd also say, and we're going to celebrate what we've done at Vogel for a very long time before we give any consideration to any more. But we think others, I think, have the opportunity and should really look at this country has to look at new nuclear power to go forward to meet this growing demand.
Speaker Change: I mean I can give you my speech, if you'd like to hear it.
Christopher C. Womack: I mean, the country is going to need more nuclear.
Christopher C. Womack: There is clearly no no technology better suited to.
Christopher C. Womack: To support the demands of this increasingly digital economy and society.
Christopher C. Womack: And so I think the federal government has got to step in and provide great leadership to insert.
Christopher C. Womack: Companies to move in that direction.
Christopher C. Womack: Bob.
Christopher C. Womack: I would also say we are going to celebrate what we've done at Vogel for a very long time before we give any consideration to any any.
Christopher C. Womack: More.
Christopher C. Womack: But we think others.
Christopher C. Womack: They have the opportunity and should.
Christopher C. Womack: If you really look at this country has to look at new nuclear to go forward to meet this growing demand.
Jeremy Bryan Tonet: Makes sense. Thank you for that. I'll leave it there.
Speaker Change: Makes sense. Thank you for that I'll leave it there.
Speaker Change: Thank you.
Anthony Crowdell: Our next question comes from Anthony Crowdell with Mizzouho Securities. Please proceed with your question. Hey, good afternoon.
Jeremy Bryan Tonet: Our next question comes from Anthony <unk> with Mizuho Securities. Please.
Anthony Crowdell: With your question.
Anthony Crowdell: Yeah, I think that last question was asking you about Vogel 5 and 6, but I'm not sure. I guess just a quick one.
Anthony Crowdell: Hey, good afternoon.
Anthony Crowdell: I think that last question was asking you about Volvo five and six but I'm not sure.
Anthony Crowdell: But I guess just a quick one last last month it was approval.
Anthony Crowdell: Last month there was approval, overwhelmingly approved by the Georgia Public Service Commission, of the IRP. But just curious, any commentary on some of the language related to rate increases? And you guys have laid out, especially on the slides, great information on how you're navigating the challenges of adding all this infrastructure, but, you know, focus on the
Anthony Crowdell: Overwhelm overwhelmingly approved the Georgia Public Service Commission, the IRB, but just curious any commentary on some of the language.
Anthony Crowdell: Weighted to rate increases.
Anthony Crowdell: Guys have laid out, especially on the slides great information on how you're navigating the challenges of adding all this infrastructure, but focus on the customer Bill and just if you could tie that to the language on what are the approved drug.
Anthony Crowdell: Any approval with.
Anthony Crowdell: Maybe no more bill increases.
Daniel S. Tucker: Yeah, Anthony, this is Dan. Look, I think largely the commentary you heard was simply focused on affordability and ensuring that the benefits that Georgia Power said were there end up being reflected in customer rates. And that's exactly what the stipulation does, providing that commitment so that when we file the 2025 rate case, one of those moving parts is going to include incorporating those economic benefits for all customers into that calculation. That's great; that's all I had.
Anthony Crowdell: Yes, Anthony this is Dan look I think largely the.
Daniel S. Tucker: Any commentary you heard was simply focused on affordability and ensuring that the benefits that Georgia power said, where there ended up reflected in customer rates and that's exactly what the stipulation does is provide that commitment so that when we file the 2025 rate case, one of those moving parts.
Daniel S. Tucker: <unk> is going to include incorporating those economic benefits for all customers into that calculation.
Anthony Crowdell: Great, that's all I had.
Speaker Change: Great that's all I had.
Speaker Change: Congrats again.
Speaker Change: Thank you.
Angie Storozynski: Our next question comes from Angie Storzynski with Seaport Global. Please proceed with your question.
Anthony Crowdell: Our next question comes from Angie <unk> with Seaport Global. Please proceed with your question.
Angie Storozynski: Hi Angie. Thank you. Thank you. Thank you.
Angie Storozynski: Angie Thanks, Thank you.
Christopher C. Womack: So first, maybe about the Southeast Energy Exchange Market. When it was first created, I thought that it was a sign that maybe there's some excess power in your neck of the woods and that you're trying to distribute it to other parts of the Southeast. Now I'm thinking the other way, that maybe there's a way to move some power into Georgia to actually address the low growth. Again, I'm just clearly fishing for any upside potential associated with this newly created power market.
Angie Storozynski: So first maybe.
Christopher C. Womack: About.
Christopher C. Womack: The southeast energy exchange market so.
Christopher C. Womack: When it was first created.
Christopher C. Womack: That was a sign that maybe there's some extra power in your neck of fluids, and then youre trying to distribute it.
Christopher C. Womack: Other parts of the southeast now I'm thinking that way.
Christopher C. Womack: Maybe there is a way to move Sunpower.
Christopher C. Womack: Into Georgia to actually address the load growth again, I'm, just clearly fishing for any.
Christopher C. Womack: Potential associated with this.
Christopher C. Womack: Create a tight market.
Christopher C. Womack: And, Angie, I think it is what it is. I mean, it was intended to move around, around the partners' and participants' excess capacity. And so that's what it has been doing, and I think it has been, has been very successful. But I don't think it signals anything more than that. I mean, that simply is, it's doing what we intended it to do with all the participants. And so we'll continue to utilize that
Andy: And Andy.
Speaker Change: Andy I think it is what it is I mean, it was intended to move around around the partners and participants excess capacity.
Christopher C. Womack: And so that's what it has been doing is I think has been has been very successful, but I don't think it signals anything more than that I mean that simply is.
Christopher C. Womack: Doing what we intended to do with all the participants and so we will continue to utilize that now how does this factor into to the additional growth I mean, we will step back and look at it but it doesn't signal anything more than what we intended to be when we made all the filings and got all the approvals.
Christopher C. Womack: Now, how does it factor into the additional growth? I mean, we'll step back and look at it, but it doesn't signal anything more than what we intended it to be when we made all the filings and got all the approvals.
Angie Storozynski: Yeah, and just really just to create a more nimble market for those intermittent resources to make sure that customers, wherever they're needed, benefit from that very, very low cost energy.
Christopher C. Womack: It is really just to create a more nimble market for those intermittent resources to make sure that customers wherever it's needed benefit from that very very low cost energy.
Daniel S. Tucker: And so, you know, on a similar vein here, about Southern Power. I understand that it's fully contracted for now. And I'm just wondering, you know, when you have some open capacity there which could potentially benefit from this, you know, run-up and forward power curves that we're seeing in other markets? That's number one. And number two is, so when you hear hyperscalers talk about contracting for demand for a supply of power, they do talk about net zero, right?
Angie Storozynski: Yes.
Angie Storozynski: And so.
Daniel S. Tucker: So we're in a similar vein here about southern powers I understand that it is fully contracted for now and I'm just wondering when Wendy do you have some open capacity, there, which could potentially benefit from this run up in forward power curves that we're seeing in other markets. That's number one and number two is so so.
Daniel S. Tucker: What we need here Hyperscale, let's talk about contract before the night for a supply of power. They do talk about net zero right. So I'm wondering is there a way for us.
Daniel S. Tucker: So I'm wondering, is there a way for Southern Power to, for example, participate in these negotiations, for example, plug into the Mississippi power grid, but address the, you know, the carbon footprint of that supply by building contract-based solar or some other resources that could basically provide the carbon-free offset?
Daniel S. Tucker: Southern powder for example participate in deep negotiations for example, plug into the Mississippi power grid.
Daniel S. Tucker: Address the.
Daniel S. Tucker: The carbon footprint of that supply with that building.
Daniel S. Tucker: Tract based solar or some other resources that could basically provide via the carpenter.
Daniel S. Tucker: Tree offsets.
Daniel S. Tucker: Yeah, look, so I'll start with the second question. First, look, Southern Power is always going to evaluate opportunities to serve load-serving entities, right? And so to the extent those opportunities present themselves in any of our jurisdictions where it makes sense, we'll evaluate that. And we've seen that happen in the past, particularly in Georgia, on the first question in terms of the kind of the portfolio.
Speaker Change: Yes look I'll start with the second question first.
Daniel S. Tucker: Southern power is always going to evaluate opportunities.
Daniel S. Tucker: To serve load serving entities right and so to the extent those opportunities present themselves in any of our jurisdictions, where it makes sense, we'll evaluate that and you've seen that happened in the past, particularly in Georgia.
Daniel S. Tucker: The first question in terms of the kind of the portfolio. Yes look it's very highly covered the next five years, but if you think about five years out that's the end of the decade.
Angie Storozynski: Yeah, look, it's highly covered the next five years. But if you think about five years out, that's the end of the decade. That's when other resource needs begin to emerge. That's when you start seeing utilities around the southeast begin to consider, you know, how long will their coal assets be on the ground. So I think once you start looking toward the end of the decade and into the 30s, Southern Power will have a lot of opportunity to take advantage of what we're seeing today.
Angie Storozynski: In other resource needs begin to emerge that's when you start seeing utilities around the southeast begin to consider.
Angie Storozynski: How long will they are coal assets beyond the ground. So I think once you start looking towards the end of the decade into the Thirty's Southern power will have a lot of opportunity to take advantage of what we're seeing today.
Paul Fremont: Great. Thank you. Thank you, Angie. Our next question comes from Paul Fremont with Ladenburg. Please proceed with your question.
Speaker Change: Great. Thank you.
Paul Fremont: Thank you Angie.
Paul Fremont: Our next question comes from Paul Fremont with Ladenburg. Please proceed with your question.
Paul Fremont: Hey, Paul.
Paul Fremont: Hey, uh, congrats on Vogel. It was great seeing both units and commercial operations. So, great job. I guess my first question is on HB 1192. If the governor were to sign the bill, would that essentially slow down the addition of data centers in the state of Georgia or put you at a relative or put your state at a relative disadvantage to other states?
Paul Fremont: Hey.
Paul Fremont: On an bogle, great thing both units and commercial operation So.
Paul Fremont: Great job there.
Paul Fremont: Yeah.
Paul Fremont: Yes. My first question is on HP $11 92, if the governor were to find the bill.
Paul Fremont: Would that essentially slow down.
Paul Fremont: The addition of data centers in the state of Georgia or put you at a relative or what your stated at a relative disadvantage to other states.
Christopher C. Womack: Paul, I mean, I think it's hard to answer that question, but I would think not. But also, I think you have to look at the competitive nature of economic development across states and where does it put Georgia, and then what signal does it send? But also, I think it's a big question about resilience and the ability to meet the demands of these customers, and not just reliably, but to provide them with the resilience they expect and demand.
Speaker Change: And I think it's hard to answer that question, Alex I would think not but also I think you have to look at the competitive nature of economic development across across states.
Christopher C. Womack: Where does it where does it put GA and then what signal does it sent.
Christopher C. Womack: But also I think it's about.
Christopher C. Womack: Big question about resilience and the ability to meet.
Christopher C. Womack: The demands of these customers and not just reliably but providing them the.
Christopher C. Womack: They expect in a demand.
Christopher C. Womack: But I think it's, I think just the straight answer to your question, I think it's probably not, but I think at the same time, it's the competitive nature of economic development by states that I think you have to, the state would have to evaluate very closely.
Christopher C. Womack: But I think it's.
Christopher C. Womack: Just straight answer to your question I think it's probably not but I think at the same time.
Christopher C. Womack: It's competitive nature of that can I development by states that I think you have to see what happens.
Christopher C. Womack: After evaluating very closely.
Paul Fremont: And then my other question has to do with sort of the tougher EPA rules. If those were ultimately to be adopted, does that mean you need to accelerate the time frame for coal plant retirements?
Christopher C. Womack: And then my other question has to do with sort of the tougher EPA rule.
Paul Fremont: If those ultimately were to be adopted does that do you need to accelerate the timeframe for a coal plant retirements.
Christopher C. Womack: And, Paul, like I said, we're evaluating those rules as we speak today, and, I mean, I think there's a lot. I mean, there's a lot we've kind of gotten to very quickly on the gas side in terms of capacity factors and the expectations for carbon capture. I mean, I think there's more work for us to do in terms of the coal implications, but at first blush, like I said, I think they're impractical, and it probably, yeah, would make it more difficult to run coal units as well anymore.
Paul Fremont: And I am proud that we are evaluating those rules as we speak today.
Christopher C. Womack: And I think there's a lot there's a lot we've kind of gotten to very quickly on the gas side in terms of capacity factors and the expectations for carbon capture I think.
Christopher C. Womack: Theres more work for us to do in terms of.
Christopher C. Womack: The colon implications, but at first.
Christopher C. Womack: Blush like I say I think they are impractical and it probably yes, it would make it more difficult to.
Christopher C. Womack: To run coal units as well any longer.
Paul Fremont: Great. I think that's it for me.
Paul Fremont: Great I think that's it for me thank you.
Paul Fremont: Very good. Thank you, Paul.
Paul Fremont: Thank you. Very good. Thank you
Speaker Change: Thank you Paul.
Ryan Levine: Our next question is from Ryan Levine with Citi. Please proceed with your question.
Paul Fremont: Our next question is from Ryan Levin with Citi. Please proceed with your question.
Ryan Levine: Hi everybody. Hi, what timeframe or cadence do you expect some of these data center companies that are shopping multiple jurisdictions to make a decision? And then, in terms of in-development projects, it looks like there were three pending construction at the time of the stipulated agreement testimony. Have those pending construction data centers started construction, or any update you could provide on that?
Ryan Levine: Yes, hi, everybody.
Speaker Change: Hey, Brian.
Ryan Levine: Okay, what timeframe or cadence do you expect some of these data center companies Theyre shopping in multiple jurisdictions to make a decision and then in terms of in development projects. It looks like there is three and then construction.
Ryan Levine: At the time of the stipulated agreement testimony.
Ryan Levine: And then construction data centers.
Ryan Levine: Construction or any update you can provide us on that.
Daniel S. Tucker: I don't know that we have the specific construction updates, Ryan, but I will tell you just in general. This is, I mean, think of it as a continuous kind of waterfall, right? There are always data centers coming in and exploring and then committing. And so it's just an ongoing thing. Yeah, so right now, we've got 12 under construction that total about 2400 megawatts.
Speaker Change: I don't know that we have the specific construction updates, Brian but I will tell you just in general this is.
Daniel S. Tucker: I mean think of it as a continuous kind of waterfall right I mean, there are always.
Daniel S. Tucker: Data centers coming in and exploring and then committing and so it's just it's an ongoing thing.
Daniel S. Tucker: Yes, So we've got right now Theres 12 under construction totaled about 2400 megawatts.
Daniel S. Tucker: Okay.
Christopher C. Womack: So that includes one or two that are still pending. Okay, and then given that that continuous nature, the extent that the momentum were to continue to build, is there a timeframe that you may seek to reengage the updated IRP process, or any kind of framework you may apply to assess when when additional resources may need to be get approval for?
Daniel S. Tucker: That includes.
Daniel S. Tucker: One or two that are still pending.
Christopher C. Womack: And then given the continuous nature the extent that momentum were to continue to build is there a timeframe that you may seek to reengage. The updated IRB process or any kind of framework you may apply to assess when when additional resources may need to be.
Christopher C. Womack: Get approval for.
Christopher C. Womack: I think we said before, you know, Georgia has an IRP in 2025. And so they'll factor in new requests, new demands, new load. During that proceeding, Alabama and Mississippi will make similar decisions in their processes, based on the demands and requests that they receive as well.
Christopher C. Womack: I think we've said we said before in Georgia has a RFP in 2025 and so.
Christopher C. Womack: Factor in new request new demands.
Christopher C. Womack: New loan due in that proceeding.
Christopher C. Womack: Alabama, and Mississippi will do.
Christopher C. Womack: Make similar decisions in their processes.
Christopher C. Womack: Based on the demands and requests that they received as well.
Daniel S. Tucker: Coming out of this last process, Ryan, part of the stipulation is that Georgia will kind of keep the staff and commission updated a little more, not real time, but on a quarterly basis kind of leading up to the next formal process. That way, everyone kind of has a line of sight as to what is emerging.
Christopher C. Womack: Coming out of this last process Ryan.
Daniel S. Tucker: There was a part of the stipulation is the Georgia will kind of keep the staff and commission updated a little more about real time, but on a quarterly basis is kind of leading up to the next formal process that way.
Daniel S. Tucker: Glenn.
Daniel S. Tucker: Has line of sight as to what is emerging because it goes back to some of the points. We laid out in the prepared remarks is this is this load real and so I think that quarterly update helps give the commission and the staff the information they need to to give confirmation of the reality of this loan.
Daniel S. Tucker: Because it goes back to some of the points we laid out in the prepared remarks, is this load real? And so I think that quality update helps give the commission and the staff the information they need to give confirmation of the reality of this load.
Daniel S. Tucker: And that next regular filing is scheduled for next January, January of 26, or 25 rather, sorry.
Daniel S. Tucker: Next regular filing is scheduled for next January January of 2025, rather sorry.
Ryan Levine: And then last question for me in terms of the customer preference for lower carbon resources, any stipulations or any requirements that as they're looking to decide [inaudible] You know, I mean, early on, we saw a lot of requests for 24 seven carbon free. Lately, we see the request for Do you have power. And like I said, we continue to build additional carbon free resources. And so we'll continue to work with them. But right now, I think there's just a simple desire and request for resources for energy. And we're very transparent.
Daniel S. Tucker: And then last question for me in terms of the customer preference for our carbon resources.
Ryan Levine: Yes, any stipulations or any requirements that they are speaking to you specifically as you're looking at to decide what locations to.
Ryan Levine: Locate their data centers.
Ryan Levine: I mean early on we saw a lot of requests for $24 seven carbon free of late we see the request for do you have power.
Ryan Levine: Like I said, we continue to build additional carbon free free resources.
Ryan Levine: So we will continue to work with them, but right now I think there is just a simple design and request for.
Ryan Levine: For resources for energy and we're very transparent about our own transition plans and I think that is an opportunity for them to kind of latch onto transitioning along with us.
Christopher C. Womack: And we're very transparent about our own transition plans, and I think that is an opportunity for them to kind of latch on to transitioning along with us.
Ryan Levine: Great, thanks for taking my questions.
Speaker Change: Great. Thanks for taking my questions.
Ryan Levine: Okay.
Travis Miller: Our next question comes from Travis Miller with Morningstar. Please proceed with your
Ryan Levine: Our next question comes from Travis Miller with Morningstar. Please proceed with your question.
Travis Miller: Thank you. Have a good afternoon. Also, congratulations on Vogel, and I thought it was a very good choice of words, arduous, in your prepared remarks. Appreciate that. Yeah, we chose that word very carefully.
Travis Miller: Thank you Jonathan.
Travis Miller: Thank you also also congrats on the logo on it.
Travis Miller: Good choice awards arduous in your prepared remarks.
Travis Miller: Appreciate it.
Travis Miller: Shows that we're very careful.
Travis Miller: I thought. On the load forecast and specifically the George IRP, what does that mean for T&D investment? Is there upside there in addition to the generation upside you talked about?
Speaker Change: I figured.
Travis Miller:
Travis Miller: On the load forecast and specifically given the George Iot what does that mean for T&D investment is there upside there. In addition to the generational play you talked about.
Daniel S. Tucker: Yeah, and so if you remember, Travis, part of our year-end update on the capital plan, which totaled $5 billion of increased capital, there was a big piece of that that was also transmission. And that will continue to be part of the long-term planning discussions we have with our states. Absolutely. As we add new resources, transmission considerations have to take place. Absolutely. As our fleet transitions from, you know, its current state to its future state, transmission considerations are part of that. So there will clearly be transmission opportunities along the way.
Travis Miller: Yes.
Travis Miller: If you remember Travis are part of our our year end update on the capital plan.
Daniel S. Tucker: $5 billion of increased capital there was a big piece of that was also transmission and that will continue to be part of the long term planning the discussions we have with our states absolutely as we add new resources transmission considerations have to take place absolutely as our fleet transitions from.
Daniel S. Tucker: Its current state to its future state transmission considerations are part of that so there will clearly be transmission opportunities along the way here.
Christopher C. Womack: And I will also add, I mean, there's got to be some additional build out of gas infrastructure as well. There's a lot more infrastructure that's got to be built to support the generation resources to meet this demand.
Daniel S. Tucker: And I'll also add I mean, there's got to be some additional build out of gas infrastructure as well.
Christopher C. Womack: So.
Christopher C. Womack: There's a lot of lot more infrastructure, that's got to be built to support the generation resources to meet this demand.
Travis Miller: Yeah, sure. Okay.
Speaker Change: Yeah sure, Okay and then.
Speaker Change: Can you remind us the Alabama, and Mississippi AARP schedules.
Travis Miller: And then in addition to that would you expect to have similar issues to come up is what came up in Georgia in those states or is there something different going on there.
Daniel S. Tucker: And then, can you remind us of the Alabama and Mississippi IRP schedules? And then, in addition to that, would you expect some similar issues to come up as what came up in Georgia in those states? Or is there something different going on there?
Speaker Change: Well, we don't want to get too far ahead of exactly what it will look like in terms of if there is suddenly this accelerated load, but so the next schedule of processes, We got Mississippi will launch a process in April.
Daniel S. Tucker: Or are they lost the process in April rather than going through that now in Alabama will have one next spring 2025.
Daniel S. Tucker: Yeah, well, we don't want to get too far ahead of exactly what it will look like in terms of, you know, if there's suddenly this accelerated load, but so the next scheduled processes we have Mississippi will launch a process in April, or they lost the process in April, rather, they're going through that now, and Alabama will have one next spring 2025. Okay.
Travis Miller: Okay, perfect. Thanks so much. I appreciate it. You bet.
Speaker Change: Okay perfect. Thanks, so much I appreciate it you bet.
Speaker Change: Thank you.
Robert: And that concludes today's question and answer session. Sir, are there any closing remarks?
Speaker Change: And that concludes today's question and answer session third are there any closing remarks.
Christopher C. Womack: You know, I think it's Let me close by saying this. Understandably, I mean, Vogel 3 and 4, the journey that we've been through took a lot of attention from our stakeholders, and it meant fewer conversations, focus on our underlying business, and the success of our online business. The fact is, all along, we continued to execute at a very high level across our portfolio and delivered strong results; reliability and customer service were outstanding; investments in critical financial structure structures were made in every jurisdiction. We successfully navigated our regulatory processes and received constructive outcomes.
Speaker Change: I think its let.
Christopher C. Womack: Let me talk about.
Christopher C. Womack: But by saying this.
Christopher C. Womack: Understandably Vogtle, three and four the journey that.
Christopher C. Womack: That we've been through took a lot of attention from from our stakeholders and it met few conversations.
Christopher C. Womack: Focus on our underlying business and the success of our online business.
Christopher C. Womack: Fact is all along we continue to execute at a very high level.
Christopher C. Womack: Cross our portfolio and delivered strong results.
Christopher C. Womack: Reliability and customer service were outstanding investments in critical infrastructure structure. We've made in every jurisdiction, we successfully navigating a regulatory processes and received constructive outcomes.
Christopher C. Womack: Now as we look ahead, and what's next, it is this: a continued unrelenting focus on the fundamentals with customers at the center of everything that we do. Serving the growing load we're experiencing is what we were built for, and our model is designed to turn that growth into value for all stakeholders, customers, and investors alike. That is what the employees of Southern Companies do. It might sound boring to some. But it's exciting for us. Thank you for spending time with us today, and operator, that's the end of this call. Thank you very much.
Christopher C. Womack: Now as we look ahead and what's next is this.
Christopher C. Womack: And continued unrelenting focus on the fundamentals with customers at the center of everything that we do.
Christopher C. Womack: Serving the growing low we're experiencing is what we were built for a model designed to turn that growth into value for all stakeholders customers and investors alike.
Christopher C. Womack: That is what the employees of southern companies do it.
Christopher C. Womack: Might sound boring to some.
Christopher C. Womack: But it's exciting for us.
Christopher C. Womack: Thank you for spending time with us today and operator, that's the end of this call. Thank you very much.
Robert: Thank you, sir. Ladies and gentlemen, this concludes the Southern Company first quarter 2024 earnings call. You may now disconnect.
Speaker Change: Thank you, Sir ladies and gentlemen, this concludes the southern company first quarter 2024 earnings call. You may now disconnect. Thank you.