The paragraph introduces Southern Company's Third Quarter 2024 Earnings Call, led by conference operator Julian, with speakers including Greg MacLeod, Chris Womack, and Dan Tucker. It mentions that forward-looking statements will be made, along with non-GAAP financial information. The information and slides are available on the company's Investor Relations website. Chris Womack appreciates the company's performance in the third quarter, highlighting the dedicated response of employees during Hurricane Helene, particularly in Georgia.

The paragraph describes the severe impact of Hurricane Helene on Southern Company's service areas in Georgia, marking it as the most destructive storm in Georgia Power's history. The hurricane caused widespread devastation, affecting 53 of Georgia's 159 counties and resulting in over 1.5 million power outages due to significant damage to transmission infrastructure, including nearly 12,000 utility poles and 1,500 miles of downed wires. A workforce of over 20,000, with help from across North America, worked tirelessly to restore power. The destruction required extensive rebuilding of the utility infrastructure in the affected regions.

The paragraph highlights the successful restoration efforts of utility partners and dedicated crews following Hurricane Helene, with 95% of power restored within eight days and over 0.5 million customers receiving power in the first 48 hours. Georgia Power, Atlanta Gas Light, and Southern Company are aiding affected communities in Eastern Georgia. Customer focus and community commitment are emphasized by Chris, who expresses pride in the team's efforts. Dan Tucker then discusses the financial aspect, estimating the recovery cost at approximately $1.1 billion, affected by inflation and the storm's unprecedented damage.

The paragraph discusses the financial results of a company for the third quarter and the first nine months of 2024. It notes that adjusted earnings per share (EPS) for the third quarter were $1.43, slightly higher than the previous year, driven by investment in state-regulated utilities and customer growth, though offset by higher expenses. For the first nine months of 2024, adjusted EPS were $3.56, up from $3.01 in 2023, largely due to contrasting weather conditions between the two years. The company estimates fourth-quarter adjusted EPS of $0.49, aiming for a full-year adjusted EPS of $4.05. Excluding Hurricane Helene-related impacts, weather-normalized retail electricity sales were flat compared to the previous year. Additionally, there is an acknowledgment that cost estimates for cleanup and restoration efforts might change as final expenses are determined.

The Southeast economy showed strong performance in the recent quarter, with increased electricity sales in chemical, pipeline, and transportation sectors, and a 10% rise in data center power usage. Though residential electricity usage per customer decreased slightly, there were significant customer additions in both electric and natural gas services. Economic development remains strong, with 42 companies establishing or expanding operations in the area, leading to over 5,000 potential jobs and capital investments of $2.6 billion. Alabama Power had its best quarter in years, with growth in metals, renewable energy, and chemicals. The development pipeline for new industrial and commercial customers is expanding, with Georgia Power expected to see load additions growing to over 36 gigawatts by the mid-2030s. Chris Womack expressed pride in the operational and financial results achieved, despite challenges like a historic storm, highlighting the team's dedication.

The paragraph highlights the positive outlook for the company and industry due to supportive states and regulations, positioning them well for anticipated energy demand growth. The company is committed to partnering with states and communities through a disciplined approach and orderly planning to benefit all stakeholders, including customers. During the Q&A session, Carly Davenport from Goldman Sachs inquires about storm cost recovery, specifically the $1.1 billion estimate. Dan Tucker responds, noting while details on regulatory processes can't be assumed, historically, cost recovery has been effective and timely. All current costs are deferred, with more work needed to finalize estimates.

The paragraph discusses the financial aspects and categorization of costs related to a rebuild project, distinguishing between capital expenses and operational costs. Carly Davenport asks about load growth and commitments in Georgia, specifically in the context of an upcoming IRP filing. Dan Tucker responds, highlighting the ongoing momentum and increase in commitments, noting that Georgia Power's quarterly filings with the PSC aim to provide better visibility. He mentions that the load pipeline has grown significantly, with commitments reaching 8,000 megawatts by the mid-2030s, compared to 3,600 megawatts reported in the previous fall's filing.

In this paragraph, Chris Womack emphasizes the importance of maintaining an orderly and diligent process when bringing projects online, especially as the company prepares for future large load filings and Integrated Resource Planning. Carly Davenport acknowledges the clarity of this explanation, and the discussion then shifts to a question from Shar Pourreza of Guggenheim Partners. Shar inquires about Southern Power's approach to resource adequacy and whether there are opportunities to renegotiate and extend contracts as they expire. Dan Tucker responds by clarifying Southern Power's strategy of maintaining a risk profile similar to the regulated business, focusing on long-term contracts with creditworthy counterparties and avoiding fuel risk.

The paragraph discusses Southern Power's natural gas generation portfolio, which is largely secured with contracts through the end of the decade. There is potential to renew or extend these contracts sooner, and current contract rates have doubled compared to the past, presenting a long-term opportunity for improved returns. Southern Power is interested in expanding capacity and is receiving inquiries from various customers about adding new assets, both natural gas and renewables, across different markets. The company serves a mix of load-serving entities, including investor-owned utilities, municipalities, co-ops, and large commercial and industrial customers through structured contracts. Although they are exploring expansion opportunities, they are committed to maintaining disciplined practices, such as securing long-term contracts with creditworthy counterparties and avoiding fuel risk. There is no strict cap on Southern Power's growth potential, indicating significant opportunities for expansion.

The paragraph discusses the focus on maintaining a disciplined approach in managing the regulated utility business and wholesale generation business, emphasizing that the growth of Southern Power is not expected to surpass that of the utility business. Shar Pourreza inquires about cost estimations related to an upcoming General Rate Case (GRC) and its impact on customer bills and affordability. Dan Tucker responds that it's too early to determine the exact capital versus operating and maintenance (O&M) split of the $1.1 billion estimate for storm recovery costs. He highlights the significant rebuilding involved and stresses that the company will maintain discipline without making assumptions about regulatory processes and associated risks.

The paragraph discusses a conversation primarily involving Dan Tucker and Ross Fowler, along with a mention of Nick Campanella. Ross Fowler, from Bank of America, inquires about the typical cash recovery lag for storm recovery processes in Georgia, citing past experiences with hurricanes. Dan Tucker explains that the Public Service Commission (PSC) has various tools to manage these situations, and recovery periods have historically ranged from a couple of years to six years, depending on the storm's magnitude and other factors affecting rates. The conversation then transitions to Nick Campanella from Barclays, who comments on the increasing load outlook, noting that 36 gigawatts is a significant figure and that there's upward pressure on this outlook each quarter.

Dan Tucker addresses a question about potential revisions to growth rate expectations and emphasizes that no immediate changes are anticipated to the current 5% to 7% growth rate. The growth outlook is long-term, focused on 36 gigawatts by the mid-2030s, and any acceleration opportunities are also long-term. While acknowledging moving parts that could influence future growth, Tucker suggests that the sales growth might be higher than 6% in the latter half of their plan. He notes that an updated plan, including a new capital plan, will be shared in February, which might reveal a higher growth rate.

In the paragraph, the speakers discuss updates to their company's capital plan, including Southern Power projects, Georgia Power's Integrated Resource Plan (IRP) updates, and a pipeline opportunity. These updates contribute roughly $3 billion to the existing $48 billion plan, with potential for additional investments in the future. The discussion includes considerations on the company's nuclear generation outlook, re-licensing, uprating opportunities, and a possible multi-state framework. The focus is on using the IRP to explore economic and reliable ways to serve customers by evaluating scenarios based on environmental rules, natural gas costs, and capital costs.

The paragraph discusses the potential consideration of nuclear power as a future energy option. While scenario models might indicate nuclear uprate or new nuclear units as solutions, they are not current recommendations or paths. The paragraph emphasizes the importance of nuclear energy but highlights the need for improved risk mitigation before proceeding. This requires changes at the federal level and collaboration with large technology companies. The speaker, likely from a company like Southern Company, stresses that they are in talks with these companies about various energy solutions, not just nuclear, but they won't pursue nuclear options until risks are minimized. The text indicates that substantial work must be done at the federal level to embrace nuclear energy safely.

The paragraph discusses the cautious approach being taken towards nuclear developments due to the need to mitigate risks before proceeding. It highlights a focus on progress and collaboration between the federal government and hyperscalers to address these risks. Chris Womack acknowledges past experiences, particularly with Vanguard, and emphasizes the necessity of finding solutions to protect shareholders and customers. An unidentified analyst, Julien, inquires about the timeline and development stage, noting that it seems preliminary compared to peers, and Chris Womack confirms the assessment, emphasizing risk management as a priority.

The paragraph is a conversation about the potential for nuclear power uprates within certain power companies, including Georgia Power and Alabama Power. Chris Womack acknowledges the significant risks associated with nuclear power and the need to mitigate these risks before proceeding with opportunities. Dan Tucker explains to Jeremy Tonet from JPMorgan that they have six legacy nuclear units with uprate potential, although historically, uprates have not been economically viable. However, recent legislation, including the IRA, could make them more feasible. The evaluation of uprates is ongoing, and they may be proposed as viable options in the future, though they still require substantial capital and time but carry less risk than new nuclear projects.

The paragraph involves a discussion about coal retirement timelines and carbon capture technology concerning Southern Company. Chris Womack explains that coal retirements will be influenced by EPA regulations and that Southern Company is considering these rules during its planning processes. Regarding carbon capture, the company historically focused on coal but has shifted attention to natural gas due to its key role in electricity generation. Southern Company continues to invest in carbon capture research, acknowledging more work is needed to make these technologies scalable, and is collaborating with the utility and oil and gas industries. The conversation highlights the ongoing commitment to developing carbon capture solutions and the importance of natural gas in the energy future.

The paragraph is from a discussion about a gas pipeline project involving Southern Natural and various stakeholders. Dan Tucker explains that they can't disclose specific details due to proprietary and contractual constraints, but indicates that their entities are already significant participants in the current pipeline and foresee a substantial role in its expansion. The project is expected to conclude towards the end of the decade. Jeremy Tonet acknowledges the information, followed by a new question from Paul Fremont about the potential addition of fossil generation at Southern Power due to customer demand. Chris Womack confirms that the company's model will guide any considerations regarding this possibility.

The paragraph discusses Southern Power's strategy for evaluating projects, emphasizing the importance of partnering with creditworthy counterparties and avoiding fuel risk. Dan Tucker highlights the need to address environmental regulations and pipeline infrastructure challenges, ensuring that project risks are mitigated and aligned with their business model. Chris Womack stresses the importance of maintaining discipline and adhering to the company's philosophy amidst market enthusiasm and growth opportunities. Paul Fremont inquires about the financial implications of committed load, to which Dan Tucker responds that most of it is funded by specific customers, suggesting a positive impact on customer bills while maintaining a disciplined approach to mutual benefits.

In the paragraph, Paul Fremont inquires about the potential legal challenges related to the expansion of the SONAT pipeline. Dan Tucker acknowledges that while there may be susceptibilities to legal challenges, 90% of the project involves brownfield development, largely focusing on compression and looping, which reduces the legal risks. The discussion then shifts to Durgesh Chopra's question about Small Modular Reactor (SMR) technology. Chris Womack from the company highlights their longstanding investment and research partnerships in SMR and advanced nuclear technologies, noting that despite the significant work underway, only a few projects are currently advancing.

The paragraph discusses the ongoing efforts and discussions about advancing nuclear technology. The speaker acknowledges that while there is much interest and talk about nuclear advancements, more work, particularly in design and engineering, is needed before achieving commercial viability. The company is actively engaged in these developments but is cautious about committing to a single nuclear technology at this stage. Additionally, there is a discussion about storm costs, with no initial reserves for a recent storm, adding to a balance needing recovery. Lastly, there is a question about the timeline for building a gas unit to meet demand, to which Dan Tucker begins to respond, inviting Chris to add input.

The paragraph involves a discussion about a company's proactive measures in handling long-lead time equipment for gas generation projects, emphasizing their advanced positioning in supply chain management. Chris Womack cites a successful past project, Barry 8 in Alabama, which completed in just over three years, highlighting positive experiences with similar constructions. Travis Miller raises a question on the difference in supply chain timing between transmission and distribution (T&D) and generation. Dan Tucker responds that while lead times for large transformers and other major equipment are longer now, the company has the situation under control with proper planning. Paul Patterson joins in, affirming that the company sees potential upside to their expected sales growth and related capital expenditures, to which Dan Tucker agrees.

In the conversation between Dan Tucker and Paul Patterson, Paul asks about the impact of anticipated sales growth on earnings and how to view these prospects. Dan explains that any changes in outlook will be long-term, with significant effects expected only in 2028 and beyond, emphasizing the importance of regulatory processes. Paul also inquires about the returns on deferred storm costs, to which Dan replies that these are typically calculated at the company's cost of capital, but the commission can adjust based on the situation. The conversation ends with mutual appreciation.

Chris Womack expressed gratitude to participants for joining the call and shared excitement about the company's performance in the first three quarters of the year. He extended well wishes for a happy Halloween before the operator concluded the teleconference.

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