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 and our service territories, and 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 this 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.
Systemwide, 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 a 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 toward 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, the Southern Company 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 and 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 are hearing me.
Hey, Nick.
We can hear you, Nick.
How's it going? Now that you have higher visibility on contracted megawatts and load ramps, specifically into 2028 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 remain committed on the regulatory front? Maybe you can 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. With 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.
Thanks, Christopher C. Womack, and hey, 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. We clearly 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 1 to 2 GW away from selling out the capacity that we had approved in Georgia last year. We are going to work through that process, and the success that we have had in signing these contracts gives us durability toward the future and additional confidence in being able to deliver on our goals well into the next decade.
Thanks for those thoughts. On the 3 GW you are finalizing in late stages, is that within the 2030 window, or is it after? What are the key milestones you still need to get through on those 3 GW that are finalizing?
Those contracts are likely to go into 2028 and beyond. Like every other large data center project or large load customer, they will have a ramp-up period. A couple of the projects we are working on would initiate ramp-up in 2028 and bring us into the next decade.
Thank you, 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? Christopher, on Southern Power, the existing tolling agreements are going to start to roll off. I know there is an opportunity to repurpose that capacity toward serving 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?
Shahriar, we have discussed this on prior calls. As these contracts begin to roll off and expire, there is opportunity for recontracting. The team is having conversations with a host of different counterparties, understanding we need creditworthy counterparties. In terms of pricing compared to where they were contracted historically, and where the market is today, we do see upside opportunities. That upside will contribute to the durability and length of our long-term plan. We will continue to pursue these opportunities as contracts expire and recontracting opportunities present themselves.
Got it. These would not just be typical tolling agreements; they would include energy and capacity, I assume under a long-term PPA, correct? Also, regarding new nuclear: with lessons learned between units 3 and 4 and current attention to large-scale reactors, should there be any financial backing from the government to help take on some cost-overrun risk? Is that something Southern would be interested in through the backend? Any color on potentially participating in a consortium or licensing blueprints?
Thank you very much. I have talked a lot about the importance of new nuclear helping this country meet the moment we have in front of us. I do think that as we look into the 2030s, the country needs to have more nuclear units in operation, particularly in the mid-2030s. I want to compliment the administration for actions they have taken on the regulatory front, bringing groups together around long-lead-time items. We are having many conversations with them about how to make new nuclear a reality. Southern Company is not going to be next; let me be clear about that. But we are going to continue to work constructively and aggressively with this administration and with many other parties to see how we can get this done, because it is important from an energy policy and economic standpoint.
Are you finding traction with hyperscalers taking on cost-overrun risk above budgeted amounts for these AP1000s?
I do not want to get ahead of a firm conclusion, but yes, we are having conversations with hyperscalers about what role they could play in this conversation and 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. You have talked in the past about potential upside on the capital plan related to FERC pipeline investments. Anything new on that front in terms of timing, especially as you think about incremental RFPs that could point to incremental gas plant builds?
Great question. With the contracts we are signing and growth in the Southeast, we see opportunities in our FERC-regulated pipeline investments. As opportunities continue to grow, we see the possibility of expanded investments in that area. The RFPs we have in place and these regulatory processes will help inform those investments, and we see great potential in the Southeast to continue to grow those investments.
Carly, infrastructure across the Southeast is needed to support the growth here. There is more to be done, and we see real opportunity for pipeline expansion opportunities to align with the needs portrayed in our RFPs.
That is really helpful. On the RFPs you have ongoing for generation needs through 2032, did those filings already contemplate some of the progression in the load pipeline that you have seen over the last quarter? Is there potential room for upside even incremental to the incremental RFPs if you think about the conversion of the pipeline?
I like the phrase 'incremental to the incremental.' The opportunities we see are well baked into the RFPs. We talked about our load forecast and the conservative processes we use to project need. As we continue to sign these contracts, that will be the foundation for the RFPs in Alabama and Georgia. There is certainly potential to procure more generation than we have identified right now, but we cannot get ahead of the process. There is thorough screening, structure, good vetting, and everyone will have an opportunity to participate in those processes. Also, it is worth reminding that we do not use placeholders in our capital plan; we do not get ahead of our regulators. The upside we have talked about is not in our capital plan right now. The RFPs open in Alabama and Georgia are not contemplated in our capital forecast at the moment.
One thing to add: the OpenAI contract in Georgia pushes us beyond our recently approved capacity by about 1 GW, so that underscores where we are and what the upside opportunities are.
Got it. Very clear. Thank you guys 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 for taking my question. Just a quick follow-up on Carly's question. My understanding is that any new incremental 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, and the RFP is 2 to 6 GW, can you frame whether this could be 4 to 5 plus GW of generation that we should think about? I do not want to put the cart in front of the horse, but I want to level set what is in the plan and what the opportunity is.
Great question and a good way to think about it. The way you are thinking about it is directionally correct. We have the newly signed contracts in Alabama that will inform this—about 3 GW of contracts signed. We are about 1 GW or so oversubscribed in Georgia based on what we have signed. A reasonable rule of thumb to think about capital opportunities is about $2 billion, give or take, related to roughly 1 GW of new generating capacity, which covers a broad range of different generating sources for us.
That is very helpful. In terms of the finalizing late-stage pipeline, how do those finalizing gigawatts filter into the RFP and what's the timeline for when those loads would energize and when we should think about resources to serve those?
Those projects will vary project by project. As we finalize agreements and they are certified and approved by the commissions, they will factor into the RFP process to match up with the year those resources are needed. When we are in a position to provide finalized contracts, that information will be forthcoming. We will also provide updated load forecasts as these proceedings progress, which will help show how things line up with needs and new opportunities going forward.
To add, as we work through those processes, if the company is selected to provide generation resources, we will probably start feathering in some spend. That is also not currently contemplated in our projections for the 2028 time frame. That will start to feather in as we build out generation coming online in the 2030–2031 timeline.
That is very helpful. Thanks, Christopher C. Womack and David P. Poroch. Appreciate the time.
Very good. Thanks. Have a good day.
Our next question comes from the line of Jeremy Tonet with JPMorgan. Please proceed with your question.
Hey, Jeremy.
Hi, good afternoon. I wanted to pivot to Mississippi. Recent stakeholder conversations suggest the state is particularly receptive to incremental data center activity more than usual. Can you talk about the outlook there and the opportunity set in Mississippi?
We have talked over several quarters about this momentum migrating west. You are seeing that now in Alabama, and we have seen success with 100 MW projects in Mississippi. Our pipeline also reflects increasing activity in the Mississippi territory.
Got it. Thanks. On OpenAI and demand response, how is demand response fitting into your conversations and projects 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 strengths our three electric jurisdictions have, where we are not limited to just a tariff; we can negotiate bilateral contracts that leverage the flexibility and demand these hyperscalers want and price that appropriately. This is a great trend and is part of every conversation we have.
Early in conversations with hyperscalers, we raise technical requirements and how their operations would impact the system and the grid, not just being a taker but also creating flexibility to provide benefits to the entire grid. As we look at data centers, we must communicate value, benefits, and flexibility more broadly to demonstrate how they support the grid and communities. There is an incredibly positive narrative to be told here, and we should emphasize those benefits to dispel misinformation.
Makes sense. Thank you.
Our next question comes from the line of Steven Fleishman with Wolfe Research. Please proceed with your question.
I'm doing well, thanks. In Georgia, for OpenAI and other customers who may not be investment-grade credits, how do the tariffs work from a credit standpoint for large load customers?
Remember the four pillars under which we are negotiating and structuring these contracts in our territories. 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 forms of collateral depending on counterparty credit quality. If a parent guarantee works, that may be acceptable; for counterparties that are not investment-grade, we will look to lines of credit, surety bonds, and other combinations. The collateral portfolio we accept will put us in about an A- or better position. Keep in mind, you asked specifically about OpenAI, and the aggregate collateral for the portfolio on full ramp is about $20.8 billion. We are in a strong position with flexibility to determine acceptable collateral that puts us at roughly A- or better.
That is very clear. The RFP timelines—can you remind us of the timelines for finalizing answers and approvals?
The process will 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 projects are selected, certification processes 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 Georgia and Alabama proceedings to be roughly aligned.
Last question on Georgia: you've highlighted economic and customer rate benefits from data centers, but there has been political noise, particularly from some Democrats. Can you give a lay of the land and whether appreciation is growing for the benefits to offset some pushback?
Look at the OpenAI announcement and how it played out in the community. They highlighted the project benefits, rate stability, and economic benefits. There is noise across the country about data centers, and some local moratoriums may exist in certain counties. However, we continue to see progress and approvals in our territory. Hyperscalers and utilities need to do a better job explaining benefits and dispelling misinformation on social media. The pipeline remains very full and continues to grow and advance across our territory.
Steven, let me clarify one thing. I had been discussing collateral and the portfolio; the $21 billion figure I referenced is the collateral for the whole 17 GW portfolio. I apologize for any confusion on speaking specifically about OpenAI earlier.
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, good afternoon. Congrats on the OpenAI deal. Regarding the gigawatt of demand response, is this the first time you've done something like that? Have you quantified the long-term savings for customers, and is it more about accelerating speed to market for the center, or do the rest of the customer base see benefits?
The rest of the customer base will see benefits across the project. During peak load periods, having flexible demand response lets us shave the peak. As we operate the system on a minute-by-minute and second-by-second basis, we try to put online the most economical resource to serve load. That flexibility is tremendous value to the entire system and grid, so it is an incredible benefit.
Was this the first time you have done that for a data center?
Yes, this is the first time we have structured it in this way for a data center.
Great. On equity, you settled about $2 billion of the ATM priced in 2025 and have priced $700 million that will settle through 2028. Any guidance on the pace of equity and when it will hit over the next few years? How should we think about year-by-year dilution and whether it will be ratable or accelerated?
There are a lot of moving parts in decisions about drawing on equity commitments. These commitments are available to us on short notice, so we have flexibility to manage liquidity. We generally want to shape drawings to mirror our capital outlays for construction and to support our path toward 17% FFO to debt by 2029. We've settled about $2 billion recently, which helps move us down that path. We will continue to act in the most shareholder-friendly manner, protect credit quality, and draw on equity as needs and opportunities arise.
Fair enough. We'll model it out. 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, sir.
Hey, thanks for the time. I wanted to take this in the direction of rates and rate cases. How do you think about opportunities in Georgia and Alabama, especially Georgia? There is a regular cadence to these cases and sometimes a desire to update tariffs and rate structure. Is there an opportunity to come back with bigger rate credit here? Is there a way to effectively sidestep the revenue process as you have done before?
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 customers. We are pleased to deliver rate stability to customers through 2028. As we continue to sign contracts, there will be conversations with the commissions about what is possible, but I will not get ahead of any process or conversation. Growth provides opportunities to benefit customers and continue to deliver rate stability. After the Fed decision and commentary about inflation and higher electric rates across the country, electric rates in our territory are not going up; we are delivering rate stability. Holding rates flat provides nominal savings for customers that should not be understated.
Clearly you've demonstrated a track record on that front. Regarding Alabama, how do you transpose this growth into rates? Will the CMP process be used to bring on some of the new capacity for the incremental 3 GW, and is there an equivalent process in Alabama?
Those projects will go through traditional proceedings to get projects certified. Alabama has a very orderly process for approving contracts and getting projects approved by the commission, and then incorporating them into rates through the RFP process. The long-term benefits for customers are material. There are great opportunities in Alabama.
Thank you, guys. Appreciate it.
Our next question comes from the line of Richard Sunderland with Truist Securities. Please proceed with your question.
Hey, Richard Sunderland.
Hey, good afternoon. Thanks for the time. Circling back to Southern Power: curious about the tone and interest on the remaining upgrades and the brownfield efforts. You had targeted an update later this year. Given the load trends, how is that trending? Are you still thinking about a Southern Power update this year?
Great question. We continue to evaluate those opportunities. Conversations with current counterparties and exploring opportunities with new counterparties at Southern Power are proving fruitful. Our business model is disciplined and structured; we do not build and hope someone shows up. We engage in disciplined conversations and vetting. There is potential to reprice contracts coming off and to take advantage of the upgrades we announced last quarter. As we continue those conversations, we will have better clarity on when and how we can execute additional upgrades.
We look forward to giving updates on activities under consideration at Southern Power. There are real opportunities there.
Turning back to sales growth and data center load added to the system recently, any learnings you would highlight from ramp-ups and sales trends, and how that might apply to your outlook for load growth and EPS guidance?
We have to work closely with projects on ramp rates because they may not match initial predictions. We work with them to understand ramp timing. Our minimum bills give us a form of decoupled revenue that provides stability. Operationally, we will continue to coordinate closely with customers on ramp rates and system implications. The load is real and we know it is coming, even if not immediately at full ramp.
To add, customers we have served for years have taught us a lot and that experience is informing new contracts. Protections like minimum bills are designed to be a distinct advantage that will protect customers and the company and deliver stability. We have crossed over the 1,000 MW line this quarter in data center and large-load customers, and the growth has been fantastic.
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? Also, where else in your service territory can a project of that size be constructed and become operational in a relatively short time?
These projects involve a lot of site evaluation: geography, topography, proximity to electric infrastructure, and availability of other energy resources. There is not a single set of criteria; we investigate many sites to see what works for the customer's needs. We are glad when projects work out and we have a number of meaningful sites available across our service territory for additional consideration. I won't disclose proprietary site details, but Savannah and Effingham County have proven to be excellent locations, supported by a strong local economy, Hyundai's plant, and the Port of Savannah, which continues to lead the country in shipping activity.
Understood. One quick question: regarding meeting future equity needs as you add to CapEx, any interest in taking minority interest investment from another partner to meet some of those needs?
We look at many structures, but at the moment we do not see a need for that. We like the alternatives we have, the receptiveness in the marketplace, and the opportunities for issuing securities. I do not see a need for minority equity partners in the foreseeable future.
Got it. Thanks a lot.
That will conclude today's question-and-answer session. Sir, are there any closing remarks?
Just let me thank everybody for joining us today. Let me conclude by saying it is an incredibly exciting first half of the year for Southern Company. It sets us up for the rest of the year and speaks to a bright future. Thank you for joining us today. Have a good rest of the day.
Ladies and gentlemen, this concludes The Southern Company's second quarter 2026 earnings call. You may now disconnect.