The operator, Robert, welcomes everyone to the Southern Company First Quarter 2024 Earnings Call and introduces the speakers, Scott Gammill, Chris Womack, and Dan Tucker. Scott Gammill reminds listeners that forward-looking statements will be made and non-GAAP financial information will be presented. Chris Womack, the Chairman, President, and CEO of Southern Company, announces that plant Vogtle 4 has successfully achieved commercial operation, making the Vogtle site the largest generator of clean energy in the country.

The speaker expresses pride in their team's perseverance and commitment to completing Vogtle Units 3 and 4, with Unit 3 performing well since its launch. They acknowledge the hard work of American workers and support from co-owners and regulators, and believe that new nuclear energy is achievable in the US. The speaker then hands over to Dan for a financial update, and explains that their adjusted EPS for the first quarter of 2024 was $1.03 per share, driven by investments in state-regulated utilities and less mild weather. This was offset by higher interest expense and depreciation.

The third paragraph discusses the factors that contributed to the company's performance, such as higher electricity sales in the commercial customer class and signs of recovery in industrial sales. The Southeast region has a strong economy and low unemployment, attracting new households and driving customer growth. The company's board of directors also approved a dividend increase, marking the 23rd consecutive increase and 77th consecutive year of paying dividends. The estimated adjusted EPS for the second quarter is $0.90 per share. The call is then turned back over to Chris Womack.

The company's system performed well, thanks to their team's commitment to serving customers and meeting the demands of growth. They continue to see strong economic development in their Southeast footprint, with a diverse mix of sectors. Retail electric sales are projected to grow at a rate of 6% from 2025-2028, with Georgia Power's projected growth rate at 9%. The Georgia Public Service Commission recently approved a plan to procure and deploy resources to meet growing electricity demands, including new natural gas combustion turbines and battery energy storage systems.

Southern Company's recent decision to meet projected demand growth in the Southeastern states is a testament to the quality of the regulatory environment and ability to make timely decisions. External attention has focused on how the company will handle the forecasted load, pricing, and potential risks. The company believes they are well-positioned for this growth opportunity due to supportive states, constructive regulation, institutional expertise, and investments in energy infrastructure.

The company has built new energy supply facilities and has a history of providing reliable service. They also have experience in pricing new large load projects and competing for new customers. This is due to their experience in navigating a competitive economic environment in the Southeast.

The speaker states that their company has been chosen as the provider for most opportunities, but they have sometimes lost or not competed for certain loads. They offer prices to protect their customers and maintain credibility with regulators. The speaker then turns to Dan to address how they know their load forecast is accurate, explaining that they have incorporated risk adjustments and only include a portion of potential load. They also risk adjust based on customer delays and past history of announced loads being higher than actual loads. Overall, they believe their forecast is the most accurate representation of expected demand.

In this paragraph, the speaker discusses the potential for higher forecasted load due to new customers and the importance of pricing in protecting existing customers. They mention using tools to determine marginal costs and offering competitive market pricing. The speaker also highlights the benefits of Georgia Power's recent growth and their commitment to incorporating customer benefits into future rate cases. They stress the importance of affordability and mention risk mitigations through infrastructure improvements and supply resources.

The company requires new large load customers to pay for distribution system improvements upfront to protect other customers, and they prioritize resource diversity in their long-term planning to mitigate risk. They are also committed to achieving their greenhouse gas reduction goals and are focused on adding zero carbon emitting resources in the future.

The speaker discusses Southern Company's strong portfolio and long-term objectives. They mention their seven state-regulated utilities and complementary businesses that contribute to their success. They thank the audience for their interest and then take questions. The first question is about the impact of sales growth on earnings, and the speaker provides a sensitivity range of $20-40 million for a 1% change in sales.

On a recent call, Southern Company's Dan Tucker discussed the company's recent commission approvals on the 23 Georgia IRP filing. He mentioned that there will be some incremental capital needed, likely between $500 million to $1 billion, due to the approval of additional storage resources and an expansion of a solar project. The company will update their forecast later on. A question was then asked about the company's sales growth and CapEx, to which the company reaffirmed their previous guidance of 5% to 7%.

The company believes that adding capital will have a positive impact on earnings and could potentially lead to an upward bias in the future. This could result in a longer runway for growth and a derisking of their outlook. The company also plans to use this opportunity to lower rates for customers.

The speaker discusses the company's ability to demonstrate their capabilities and excitement for the future. They also provide updates on developments regarding the Commissioner status and election court cases. Lastly, they mention the growth of data centers and the company's approach to securing customers through upfront payments.

The company is trying to assess the risk of customers potentially choosing multiple regions and utilities, but they are not counting on these potential deals until there is a firm commitment. The company believes their forecast is conservative and there is a potential for an "upside bias" in their guidance if the current momentum continues.

The company is focusing on long-term growth and will only provide updates on their progress during their fourth quarter call. They are having discussions with hyperscale data centers about their power needs and are considering various options, such as self-generation and behind-the-meter support. There is a lot of education and instruction happening in the marketplace currently.

The company's portfolio of complementary subsidiaries allows them to support and help each other in multiple ways, which is exciting given the current market demand. There have been recent announcements in other jurisdictions that could lead to sales growth, but these projects are not included in the current forecast. The potential $500 million to $1 billion in additional CapEx may have credit implications, but this will not be addressed in the upcoming yearly update.

Durgesh Chopra, an analyst from Evercore ISI, congratulates the company on their acquisition of Unit 4 and asks about their data center sales growth. Dan Tucker, a representative from the company, explains that the growth is mainly coming from existing data centers, with a small portion from new facilities. Durgesh also asks about the status of House Bill 1192, which would suspend the sales tax exemption on data centers, but it is unclear if it has been passed and signed into law.

The speaker addresses the potential impact of a recently passed bill on data center growth in Georgia, stating that the government wants to assure economic development activities that the state is still open for business. They also mention the uncertainty surrounding the bill and the potential impact of new EPA rules on future generation mix and coal plant retirement dates.

The speaker discusses the various considerations that need to be taken into account at the state level when responding to the demand for energy, including potential new rules from the Environmental Protection Agency. They also mention the feasibility of carbon capture, and the potential for nuclear technology to meet the demand for base load energy for data centers and other purposes. However, they also mention that more analysis and conversations are needed before making any decisions.

In the paragraph, Chris Womack discusses the need for more nuclear technology to support the demands of a digital economy and society. He also mentions the success of Vogtle and the potential for other companies to invest in new nuclear technology. The following question is about the Georgia Public Service Commission's approval of the IRP and its language on rate increases, to which Dan Tucker responds by emphasizing the commitment to ensuring affordability for customers.

The speaker, Chris Womack, discusses the Southeast Energy exchange market and its success in moving around excess capacity among participants. He clarifies that the market does not signal anything more than its intended purpose. The Southern Towers project is fully contracted and may benefit from the current high power curves in other markets. Womack also mentions that hyperscalers are interested in net zero power contracts.

The speaker discusses the potential for Southern Power to participate in negotiations and plug into the Mississippi Power Grid while addressing the carbon footprint with solar or other resources. They also mention that Southern Power will evaluate opportunities to serve load-serving entities and that there will be more opportunities in the future. A question is asked about the potential impact of HB 1192, and the speaker suggests that it may not affect the addition of data centers in Georgia but that it is difficult to predict due to the competitive nature of economic development.

Ryan Levine asks about the time frame for data center companies to make a decision on where to build, as well as updates on pending construction projects mentioned in a previous testimony.

Dan Tucker and Chris Womack discuss the ongoing construction of data centers and the potential for future updates to the IRP process. Georgia has a scheduled RFP in 2025 and will provide quarterly updates to the commission on emerging load demands. The customer preference for carbon resources may also factor into the location decisions for data centers.

Chris Womack and Dan Tucker of Georgia Power discuss the increasing demand for carbon-free resources and energy in the state. They mention their plans to continue building additional carbon-free resources and to work with customers who are requesting 24/7 carbon-free options. They also mention the transparency of their transition plans and the potential for T&D investment and transmission opportunities as the company adds new resources and transitions its fleet. They also note the need for additional gas infrastructure to support the generation resources. The Alabama and Mississippi IRP schedules are not mentioned in this paragraph.

The speaker discusses the upcoming processes in Mississippi and Alabama and mentions the success of the company's underlying business. They emphasize their focus on fundamentals and serving customers as the key to their success. The call concludes with thanks to participants and the operator.

The paragraph is informing the reader that they can end the communication now.

This summary was generated with AI and may contain some inaccuracies.