管理層發言
Good afternoon. My name is Christine, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company's Second Quarter 2026 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. As a reminder, this conference is being recorded. I would now like to turn the call over to Mr. Gregg MacLeod, Director of Investor Relations. Please go ahead, sir.
Thank you, Christine. Good afternoon, and welcome to Southern Company's second quarter 2026 Earnings Call. Joining me today are Christopher C. Womack, Chairman, President and Chief Executive Officer of Southern Company, and David P. Poroch, Chief Financial Officer. Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K, Form 10-Q, and subsequent securities filings. In addition, we will present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call, which are both available on our Investor Relations website at investor.southerncompany.com. At this time, I will turn the call over to Christopher C. Womack.
Thank you, Greg. Good afternoon, everyone, and thank you for joining us for today's update. As you can see from the materials that were released this morning, Southern Company continues to perform exceptionally well, which supports a very bright future. We reported strong adjusted earnings results for the second quarter with each of our businesses contributing to performance meaningfully above the estimate we provided last quarter. The extraordinary economic development momentum and demand for power across our Southeast region we have seen for the past several years continues, particularly from data centers and other large load customers, and our utilities are capturing this growth in a way that meaningfully benefits the customers and communities we are privileged to serve and supports our long-term outlook. In just the last quarter, there were three projects across the state of Alabama; Alabama Power added approximately 3 GW, while Georgia Power signed a 3.2 GW, 25-year contract for electric service with OpenAI at its recently announced site near Savannah, Georgia. This site, which is expected to take electric service in phases beginning in 2028, features 1 GW of flexible demand response helping to support reliable energy for all customers when demand is highest. Combined, these four projects, representing 6 GW of newly contracted customer load, along with agreements previously signed, bring our total contracted large load agreements across our electric subsidiaries to over 17 GW by the mid-2030s. These projects are not just bringing in substantial construction work. They are creating thousands of permanent jobs and generating billions of dollars of investment for the local economies in our service territories. We are proud to responsibly support this growth in a way that benefits the communities we serve. In Alabama, the three new contracts were a clear confirmation of the continued economic development momentum building across all our electric service territories and our differentiated large load capabilities. Increasingly, our vertically integrated, state-regulated model supports our ability to provide reliable power with speed and is an important differentiator for our new and existing customers. Our success attracting significant growth is a testament to the benefits that this model affords all of our customers. As a comprehensive one-stop shop for power solutions and economic development, our electric operating companies utilize long-range integrated system planning processes to coordinate timely development of generation, transmission, and distribution assets through well-structured and transparent regulatory processes that are designed to serve growth reliably. The Southeast, with its robust network of transportation and logistics infrastructure, diverse workforce, and a constructive business climate, continues to be highly attractive for all forms of economic development, including hyperscalers, data center developers, and other large industrial manufacturers. Looking ahead, the opportunities for additional new large load and data center customer growth remain robust. New projects continue to be added to our prospective pipeline of large industrial and data center projects, which remains well above 75 GW. We are encouraged by the continued progression of potential large load projects in varying stages of advanced development. Beyond the 17 GW already contracted there are an additional 8 GW of projects in late stages, including 3 GW projected to be finalized in the near term. Clearly, the benefits of our approach are resonating with both new customers and several repeat large load customers during a time of increasing power demand. We are privileged to support this transformative growth. David, I will now turn the call over to you for an update on our financial performance.
Thanks, Christopher C. Womack, and good afternoon, everyone. For the second quarter of 2026, our adjusted EPS was $1.13 per share, $0.21 higher than the second quarter of 2025 and $0.13 above our estimate. The primary drivers of our performance for the current quarter compared to last year included increased usage and customer growth, along with higher AFUDC from ongoing construction projects, higher earnings from equity method investments, and tax-related impacts at our state-regulated electric utilities. The improved results in the second quarter compared to the second quarter of 2025 were also supported by contributions from Southern Company Gas and some of our smaller complementary businesses, including PowerSecure, where the distributed generation, backup generation, and bridge power solutions markets continue to expand. This was partially offset by interest expense from higher debt balances and dilution from additional shares outstanding. A complete reconciliation of year-over-year earnings is included in the materials we released this morning. Combined with our first quarter results, our adjusted EPS for the first half of the year is $2.46, well above our year-to-date expectations. With customer rates held stable at our two largest subsidiaries, this strong performance continues to be driven by increased sales and customer growth and strong execution across each of our regulated businesses and Southern Power. These results exemplify Southern Company's commitment to delivering for customers and investors. Looking towards the second half of the year, we anticipate this momentum continuing and now project our full-year 2026 adjusted earnings to be near or at the top of our 2026 adjusted EPS guidance range of $4.50 to $4.60. Our adjusted EPS estimate for the third quarter is $1.50 per share. Turning now to retail electricity sales, year to date, weather-normal retail electricity sales were 2.3% higher than the first half of 2025, consistent with the trends observed earlier this year. This represents the highest retail sales growth through June we have seen in nearly two decades. Year to date, weather-normal retail electricity sales are higher across all customer classes, bolstered by continued residential customer additions, diverse industrial and manufacturing expansions, and significantly increasing usage from data centers. Approximately 11,000 new electric residential customers were added in the quarter, bringing our net electric customer adds to over 40,000 in the last year. Manufacturing and reshoring trends, particularly in Alabama, in the primary metals, stone, clay, glass, and pipeline segments, supported continued industrial strength. Weather-normal commercial sales grew 7.4% in the second quarter, bringing year-to-date weather-normal commercial sales to 6% higher than the first half of 2025. Notably, data center usage was 55% higher compared to the second quarter of 2025 and is now up 49% year to date, primarily due to accelerating load ramps from our large load customers. System-wide, our data center load now exceeds 1.2 GW, an increase of more than 500 megawatts over the prior year, and we expect this trend to continue accelerating as our 17 GW of contracted demand comes online. As Chris mentioned earlier, economic development activity in the Southeast continues to be strong. In the last quarter alone, announcements were made for nearly $14 billion of investment and more than 3,000 new jobs, led by several new data center facilities in Alabama and a new Amazon warehouse in Georgia. The projects announced in the second quarter marked the second-highest investment level ever recorded in our electric territories, underscoring the strength of regional trends in economic development and, ultimately, helping shape future growth opportunities. Turning to our infrastructure buildout, the continued success of our operating territories in attracting significant new load is driving the need for additional new power generation and infrastructure across our Southeast region. Over the past several years, we have worked constructively with regulators to meet the demand for a growing system, securing approvals for 10 GW of new company-owned generation resources, including thermal, battery, and solar resources, as well as hundreds of miles of new transmission lines. With the first two of several battery sites in service and benefiting customers, and work on the three combustion turbines and Plant Yates advancing towards completion in the coming quarters, we continue to execute on the construction of our portfolio of new-build generation projects. As our projected incremental load needs grow beyond our system's current and expected supply of generation capacity into the next decade, we remain well positioned to respond. Ongoing requests for proposals, or RFPs, at both Alabama Power and Georgia Power are underway for potential additional generation resources to help ensure that we can continue to provide reliable and affordable service to all customers. These transparent and orderly processes are designed to facilitate a timely and cost-effective procurement of new generation needs in the early 2030s. To the extent that company-owned resources are selected through these active RFP processes and ultimately authorized by the respective public service commissions, these new generation investments would represent substantial incremental investment upon our current base capital plan. As future capital investment opportunities materialize, we remain committed to funding incremental capital investments in a credit-supportive manner. We continue to proactively address our identified equity needs to support our path towards 17% FFO to debt by 2029. In the second quarter, we sourced an additional $700 million of equity through our at-the-market, or ATM, program with forward contracts to settle at our discretion through 2028. Together with the significant amount of equity previously sourced, we have reduced our projected remaining equity need by 2030 to $1.1 billion. Our proactive, shareholder-friendly equity strategy combined with our disciplined approach in the debt capital markets and access to low-cost DOE loans continues to position us well towards our goal of efficiently meeting our future financing needs and achieving our long-term credit objectives. I will now turn the call back over to Christopher C. Womack.
Thank you, David. We are truly in transformative times for the energy industry and our nation, and Southern Company has continually demonstrated that we are executing on this extraordinary growth in a way that protects and benefits customers and communities. Last week, Southern Company's electric system was proud to formally reinforce this commitment by joining the National Ratepayer Protection Pledge alongside several other utilities. This pledge aligns with the Southern Company system's well-established approach to serving growth in a responsible manner while maintaining rate stability and reliability for millions of households and small businesses across the Southeast. We are confident the approach we are taking will deliver lasting benefits as we deliver rate stability for our customers. Recall, the framework under which we approach contracting with large load customers includes pricing with minimum bills to cover at least 100% of the incremental cost to serve. Large load customers are paying their full share. We also include provisions with strong protections in the form of termination payments backed by significant high credit quality collateral requirements that provide an additional layer of security. This large load contracting structure helps ensure investors and customers are protected while providing meaningful savings for existing customers. With retail base rates held stable in both Georgia and Alabama until 2029, and significant customer benefits identified and committed to based on previously signed large load contracts, we are demonstrating that when growth is done right, everyone benefits. Across our businesses, we continue to demonstrate exceptional execution and meaningful progress delivering on this growth. Southern Company has a bright future, especially when considering the strength of the Southeast economy, the likelihood of additional large load contracts, incremental capital investment opportunities across our state-regulated utilities, and our ability to capture value across the energy value chain through Southern Power, investments in southeastern natural gas infrastructure, and distributed and bridge power opportunities through complementary businesses like PowerSecure. This extraordinary growth continues to strengthen our business fundamentals and expand capital investment opportunities well into the next decade, and we continue to see momentum building in support of an improving growth outlook into the future. The success we have had in the first half of the year positions us exceptionally well to deliver on our near-term objectives while reinforcing and strengthening our confidence in our long-term outlook and our goal to be towards the top half of our long-term earnings trajectory. Ultimately, this is a long-term business in which capital is deployed to serve customers for many decades as we deliver for the communities we serve each and every day as we work towards our goal to provide sustainable long-term growth and outstanding financial integrity year after year. We are well positioned to continue executing with a discipline that is rooted in our long-standing commitment to our customers and investors alike. As we conclude our prepared remarks today, I want to emphasize Southern Company's commitment to making the communities that we have the privilege to serve better off because we are there. As a partner to the communities and cities where we operate, we were proud to help support Atlanta's efforts over the last two months in hosting eight FIFA World Cup matches on the world stage. The success was a culmination of years of hard work by local, regional, and state leadership and included significant investment in local infrastructure to welcome hundreds of thousands of visitors to Atlanta. This event was an excellent showcase for the Southeastern United States and an opportunity to continue building upon the momentum that defines this region, which will have an impact that will resonate for decades to come. Operator? We are now ready to take questions.
分析師問答
Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press two if you would like to remove your question from the queue. Participants using speaker equipment may need to pick up your handset. One moment, please, while we poll for questions. Our first question comes from the line of Nick Campanella with Barclays. Please proceed with your question.
Hey, good afternoon. Hope you can hear me. Just now that you have higher visibility on contracted megawatts and load ramps, specifically 2028 increased, and 2030 increased by a few gigawatts here, how does that incremental sales revenue and visibility impact your ability to maybe extend or stay out further and stay committed on the regulatory front? Could you talk to that a little bit? Thanks.
Thanks. Let me start, then I will turn it to David. As we said in our prepared remarks, we do expect to be at the top half of our long-term earnings trajectory. As we think about that, we think about the opportunity that provides for us in terms of meeting our long-term outlook. Clearly, as we think about rate proceedings or regulatory proceedings, those are conversations we will have with regulatory bodies. But as we have extended our rate stability focus in both Georgia and Alabama, we think it creates optionality for us to continue to provide rate stability for our customers.
Yeah. Thanks, Christopher C. Womack, and good afternoon, Nick. Great question. As we work through these processes with the success that we have had in signing these contracts, it does give us a great deal of flexibility in enhancing the benefits for customers. Clearly, we have the ability to look for more generation capacity through the structured processes that we have in Alabama and Georgia. As we have talked about in the past, we are probably about one or two gigawatts away from, if you will, selling out the capacity that we had approved in Georgia last year. So now we are going to work through that process. The success that we have had in signing these contracts really gives us some durability toward the future and additional confidence in being able to deliver on our goals well into the next decade.
Thank you. Thanks, Nick.
Our next question comes from the line of Shahriar Pourreza with Wells Fargo. Please proceed with your question.
What is up, Shahriar? How are you doing?
Yeah. Good. How are you doing? I wanted to ask about Southern Power. The existing tolling agreements are going to start to roll off. I know there is obviously an opportunity to repurpose the capacity toward serving the hyperscalers. Can you discuss how you are thinking about that opportunity set? Have conversations with the hyperscalers begun with these assets? Would any opportunities be captured within your existing 75 GW pipeline? What does this mean to the plan?
Yeah. Shahriar, we have talked about this on a number of calls in terms of the opportunity as these contracts begin to roll off and expire—the opportunity for recontracting. The team is now in the midst of having those conversations with a host of different counterparties. You understand our risk profile there in terms of making sure that they are creditworthy counterparties. In terms of where they were contracted from a pricing standpoint and where the market is today, we do see upside opportunities in pricing that will contribute to the durability and the length of our long-term plan. That will contribute to the durability of our long-term plan. We are going to continue to pursue this opportunity as we move down that path and as these contracts expire and the opportunities for recontracting present themselves.
Got it. And these would not just be typical tolling agreements. They would be on the energy and capacity side, I am assuming under a long-term PPA. Correct? And then, Christopher, on new nuclear, with lessons learned between units 3 and 4 and the attention to large-scale reactors, should there be any financial backing from the government in helping take on some of the cost-overrun risk? Is that something Southern would be interested in—through the back end, participating in a consortium, or are you just looking to license the blueprints? Any color on potentially participating?
Shahriar, thank you very much. You have heard me talk a lot about the importance of new nuclear helping this country meet this incredible moment that is in front of us. As we look into the 2030s, this country needs to have, particularly in the mid-2030s, some more nuclear units in operation. I have to give a great big shout-out and compliment to the administration for a number of actions they have taken on the regulatory front, bringing groups together around long-lead-time items and a lot of other actions. We are having a lot of conversations with them about how to make this a reality. Let me be clear: Southern Company is not going to be next, but we are going to continue to work constructively and, I would say, pretty aggressively with this administration and with a lot of other parties to see how we can get this done. It is important from an energy policy standpoint and for the economy to meet this moment and meet the demand that we see in the marketplace today.
Just a follow-up: are you finding traction with the hyperscalers taking on cost-overrun risk above budgeted amounts for these AP1000s?
I do not want to get ahead of any firm conclusion, but yes, we are having conversations with them about what role they can play in this equation.
Fantastic. Thank you, guys so much. I appreciate it. See you soon.
Our next question comes from the line of Carly Davenport with Goldman Sachs. Please proceed with your question.
Hey, Carly.
Hey, good afternoon. Thanks for taking the questions. Maybe to start, you have talked in the past about the potential for upside on the capital plan related to FERC pipeline investments. Anything new on that front in terms of timing, especially as you think about the incremental RFPs that maybe could point to some incremental gas plant builds?
Sure, Carly. Great question. With the contracts that we are signing and the growth in the Southeast region, we definitely see opportunities in our FERC-related, FERC-regulated pipeline investments. As the opportunities continue to grow, we do see the possibility of expanded investments in those areas. The RFPs that we have in place and the processes that we have in our regulated jurisdictions will help inform that, but we see great potential in the Southeast to continue to grow those investments.
Carly, the only thing I would add is that infrastructure across the Southeast is needed to support this growth that is here and for the growth that is to come. There is more to be done, and we think there is real opportunity for us in terms of pipeline expansion opportunities to align with the needs portrayed in our RFPs.
Got it. That is really helpful. Just to follow up on the RFPs that you have ongoing for the generation needs through 2032: did those filings already contemplate some of the progression in the load pipeline you have seen over the last quarter or so? Is there potential room for upside even incremental to the incremental RFPs if you think about the conversion of the pipeline?
Incremental to the incremental—I like that term. The opportunities we see are well baked into the RFPs. We talk about our load forecast and the processes that we use to project that need in a conservative way. As we continue to sign these contracts, that is the foundation for the RFPs we have in both Alabama and Georgia, and there is certainly potential to procure more generation than we have identified right now. We cannot get ahead of the process. There is thorough screening, structured vetting, and everyone will have an opportunity to participate in those processes. I also remind you that there are no placeholders in our capital plan. We do not get ahead of our regulators, so the upside that we have talked about is not in our capital plan right now. The RFPs that are open in Alabama and Georgia are not currently contemplated in our capital forecast.
The OpenAI contract in Georgia pushes us beyond our recently approved capacity by right around 1 GW, so that is real in terms of where we are and what the upside opportunities are.
Got it. Very clear. Thank you for the time.
Our next question comes from the line of Stephen D’Ambrisi with RBC Capital Markets. Please proceed with your question.
Hi, Stephen.
Hey, good afternoon. Thanks very much for taking my question. Just a quick follow-up on Carly's question. My understanding is that any new incremental load, especially large load in Alabama, would drive incremental generation requirements. We have the RFP outstanding, but if the load forecast is up 3 GW in the quarter and OpenAI is at least 1 GW, with the RFP range 2 to 6 GW, is the range beyond that as well? Can you frame whether this is 4 to 5 plus gigawatts of generation that could be required? Just trying to level set what is in the plan and what the opportunity is.
Great question. You are thinking about it directionally correct. We have got the newly signed contracts in Alabama—that is about 3 GW right there. We are about 1 GW or so oversubscribed in Georgia based on what we have signed. A decent rule of thumb is about $2 billion of capital opportunity, a little bit above, related to 1 GW of new generating capacity. That covers a broad range of different generating sources for us. So think about that as you model potential capital opportunities going forward.
That is very helpful. In terms of the finalizing in late-stage pipeline projects, how do those finalizing gigawatts filter into the RFP? What is the timeline for when those loads would energize and when we have to think about resources to serve those? Just trying to sequence it out.
Those projects will vary project by project. As we finalize those agreements and they are certified by the commissions, they will factor into the RFP process to match up with the year in which those resources are needed. Once those contracts are finalized and projects are approved, we will provide an updated load forecast and additional information through the relevant proceedings to show how it all lines up and matches the needs. That will inform the new opportunities going forward.
And to add, as we work through those processes, to the extent the company selects to provide that generation resource, we will probably start feathering in some spend. It is not currently contemplated in our projections in the 2028 timeframe; that will start to feather in as we build out generation to come online in the 2030–2031 timeline.
That is very helpful. Thanks, Christopher C. Womack and David P. Poroch. Appreciate the time.
Our next question comes from the line of Jeremy Tonet with JPMorgan. Please proceed with your question.
Hey, Jeremy.
Hi. Good afternoon. Just wanted to pivot to Mississippi for a minute. We have had recent stakeholder conversations in the state where it seems like the state is particularly receptive to incremental data center activity. I was curious about your outlook there, the opportunity set, and what you see down the pipeline in Mississippi.
As we have said before, we have talked for a number of quarters about seeing this momentum migrate west, and you are clearly seeing that now in Alabama. We have seen success with 100 MW projects in Mississippi. Our pipeline reflects that ongoing and increasing activity in Mississippi territory.
Got it. Thank you for that. On OpenAI again, with demand response at that site, how is demand response fitting into your conversations across projects overall in the pipeline? Do you factor that into your assumptions going forward?
Great question. Demand response enters into all those conversations, and we would like to see it continue and stay flexible. It is one of the great aspects our three electric jurisdictions have where we are not limited to just a tariff; we can negotiate bilateral contracts that leverage the flexibility the hyperscalers want and price that appropriately. This is a great trend and part of every conversation we have.
Early on in our conversations with hyperscalers, we raise technical requirements and how their operations would impact the system and the grid—not just being a taker but creating flexibility to provide benefits to the entire grid. As we look at the broader conversation about data centers, these points need to be communicated more broadly: the value, benefits, and flexibility and how they support the grid and communities. There is an incredibly positive narrative here that needs to be told more strongly to dispel misinformation.
Got it. Makes sense. Thank you.
Our next question comes from the line of Steven Fleishman with Wolfe Research. Please proceed with your question.
I am doing well, thanks. Could you remind me, in Georgia, for OpenAI and other customers who may not be investment grade or strong investment grade, how do the tariffs work from a credit standpoint for large load tariffs?
Yeah. Remember the roughly four pillars under which we are structuring these contracts. You have long-term contracts—the OpenAI contract is 25 years. Our minimum bills cover 100% of the incremental cost to serve. There are default provisions tied to collateral. We have flexibility in terms of the forms of collateral we can take from counterparties. If a parent guarantee works depending on the credit quality, we will work with that. But in instances where they are not at the investment-grade level we want, we will look to lines of credit, surety bonds, or other combinations. The collateral portfolio we are going to take to back up these contracts will put us at about an A- or better position. Keep in mind, you asked about OpenAI specifically: that is about $20.8 billion of collateral that will be in the aggregate on full ramp. So we are in a really good spot, and we have flexibility to determine what collateral is acceptable to us so that it puts us in a position of about A- or better.
That is very clear, thank you. The RFPs—can you remind us the timelines for finalizing answers and approvals?
The process is going to play out through most of the rest of the summer into the fall. By year-end, we should have a good idea of what projects were selected through the RFP process. Once those projects are selected, that will move into a certification process that will take place throughout much of 2027. The latter part of 2027 should provide good clarity as to what actually gets certified. Alabama's timeline is fairly similar, so you can expect both proceedings in Georgia and Alabama to run on similar timeframes.
Okay. Then last question on Georgia: you highlighted benefits both economic and for customer rates of the data centers, but there has been political noise, particularly from some Democrats. Can you give us some sense of the political landscape there and whether appreciation is growing for the benefits to offset pushback?
I would suggest you look at the OpenAI announcement and how it played out with that community. It highlighted the project, the rate stability and benefits, and the economic community benefits. There is noise across the country about data centers, and there may be moratoriums in some counties, but you continue to see projects advance and get approved in our territory. Hyperscalers and the industry need to do a better job of explaining benefits and value and dispelling misinformation on social media. The pipeline remains very full and continues to grow.
Steven, let me clarify one thing: when I was discussing collateral earlier, I was referring to the entire portfolio. The 17 GW portfolio has about $21 billion of aggregate collateral. I recognized you were speaking specifically to the OpenAI contract, and I wanted to clarify that distinction.
That is very helpful. Thanks so much.
Our next question comes from the line of Andrew Marc Weisel with Scotiabank. Please proceed with your question.
Hi, Andrew.
Hey, everyone. Good afternoon. Congrats on the OpenAI deal. I want to follow up on the gigawatt of demand response. I agree that is a great resource. Am I right this is the first time you are doing something like that? The press release talks about long-term savings for customers—have you quantified that? Is it more about accelerating speed to market for the center, or does the rest of the customer base see any benefits?
The rest of the customer base will see benefits across the entire project. By shifting load during peak periods, we can shave the peak and operate the system more economically on a minute-by-minute basis. That is tremendous value and benefit to the entire system. Having that resource be flexible is an incredible value and benefit to the grid as we operate our system.
Okay, great. Was this the first time you have done that for a data center?
Yes. This is the first time we have implemented that scale of flexible demand response in a data center contract.
Then on equity: I know you have been active. You settled $2 billion of the ATM priced in 2025 and you have priced $700 million that will settle through 2028. Any guidance on how to think about the pace of equity and when it will hit over the next few years? Will dilution be ratable or accelerated?
There are a lot of moving parts in decisions on how to draw equity commitments. They are available to us on short notice, so we have flexibility to manage our liquidity. Generally, we want to shape equity draws to mirror our capital outlays for construction, and it dovetails into our plan to get near 17% FFO to debt by 2029. We have settled about $2 billion recently, and we will continue to execute in a shareholder-friendly manner that protects credit quality and draws on equity as needs and opportunities arise.
Okay. Fair enough. Thank you.
Our next question comes from the line of Julien Patrick Dumoulin-Smith with Jefferies. Please proceed with your question.
Julien Dumoulin-Smith, hey there.
Hey, what is going on, guys? I wanted to take this in the direction of rates and rate cases. With ongoing success, how do you think about the opportunity here in Georgia and Alabama, especially Georgia? There is a regular cadence to these cases and a desire to possibly update tariffs and structure. Is there an opportunity to come back with a bigger rate credit? Last year the number was north of half a billion—could you do what you did before and effectively sidestep the revenue process?
Julien, as you know, we do not get ahead of our regulators. We work constructively with them. Our goal is to keep rates as low as possible for our customers. We are thrilled with how we are delivering rate stability to our customers through 2028. As we continue to sign contracts, there will be conversations about what is possible, but I will not get ahead of any process or any commission conversation at this time. Growth provides incredible opportunities to benefit customers and to continue to deliver rate stability. I would remind you that being flat or frozen rates provides real nominal savings for customers as we hold rates flat going forward.
Clearly you have demonstrated a track record on that front. For Alabama, how do you think about this growth transposing into rates? The CMP process is how you bring on some of the new capacity for the incremental 3 GW. Is there an equivalent thought process in Alabama in terms of getting this load growth into rates?
They will go through the traditional proceedings to get projects certified through the CMP process. Alabama has an orderly process to approve contracts and get projects approved by the commission and into rates, as well as through their RFP process. There are great opportunities in Alabama and long-term benefits for customers from this growth.
Thank you, guys. I appreciate it.
Our next question comes from the line of Richard Sunderland with Truist Securities. Please proceed with your question.
Hey, Richard.
Hey, good afternoon. Thanks for the time. Circling back to Southern Power, I know you had some updates last quarter. Curious about the tone and interest on remaining upgrades and the brownfield efforts. You targeted an update later this year—given load trends, how is all of that trending? Are you still thinking about having some sort of Southern Power update this year?
Great question. We continue to evaluate those opportunities. Conversations with current counterparties as well as exploring new counterparties for Southern Power are proving fruitful. Keep in mind Southern Power's business model is disciplined and structured—we do not build something and wait to see who shows up. We continue to engage in conversations and see potential not only to reprice contracts rolling off but to take advantage of the upgrades we announced last quarter. As we continue these conversations, we will have better clarity on timing and execution for additional upgrades.
We look forward to giving you updates on the activities under consideration at Southern Power. There are real opportunities there.
And turning back to sales growth, you called out sales growth in the quarter and data center load added to the system recently. Any learnings from that ramp-up and the sales trends, particularly how that might apply to your outlook for load growth and running that through to EPS growth guidance?
One thing we see is the need to work very closely with these projects on ramp rates; they may not be what was predicted when projects were initially approved. We work closely with customers on their ramp rates and system implications. The minimum bills we have create some decoupling, as they cover incremental costs as we bring load online. The load is very real even if not present immediately, and we manage around that reality.
To add, customers we have served for years have taught us a lot and helped inform these new contracts. The protections we put in place, including minimum bills, will be a distinct advantage protecting customers and the company and delivering the stability we aim for. We crossed the 1,000 MW line this quarter, and growth in data centers and large load customers has been fantastic and very exciting.
Appreciate the time today. Thank you.
Our next question comes from the line of Travis Miller with Morningstar. Please proceed with your question.
Hey, Travis.
Thanks for the time. Going back to the OpenAI project: what made that location unique and why did both you and OpenAI decide that location could handle a project of this size? Are there other areas in your service territory where a project of that size can be constructed and operational in a similar timeframe?
These projects involve a lot of courting and evaluation of sites—geography, topography, proximity to electric infrastructure, and availability of other energy resources. There is not one set of criteria, but many investigations of sites to see what works for the customer's needs. We are glad when they work out, and we have a number of meaningful sites available for additional consideration across our service territory. I will not disclose specific proprietary site locations, but know that we have additional opportunities for similar projects. The Savannah area and Effingham County have proven to be strong sites for economic activity, supported by the Port of Savannah and other local investments.
Understood. One quick follow-up: in terms of meeting future equity needs as you add to CapEx, any interest in taking a minority interest investment from another partner to meet some of those needs?
We look at a lot of different structures, but at the moment we do not see that as a need. We like the options we have had in the market, and the ATM and other issuance receptiveness gives us flexibility. I do not see minority sales as a need for the foreseeable future.
Got it. Thank you.
And that will conclude today's question-and-answer session. Sir, are there any closing remarks?
Just let me thank everybody for joining us today. It has been an incredibly exciting first half of the year for Southern Company, and it sets us up for the rest of the year. It also speaks to what a bright future we have. Thank you for joining us today. Have a good rest of the day.
Thank you, sir. Ladies and gentlemen, this concludes The Southern Company's second quarter 2026 earnings call. You may now disconnect.