Georgia political landscape and rate stability
Q: How does the company build confidence in its plan given the change in the Georgia PSC and the upcoming end of the rate settlement in 2028?
A: Chris Womack stated the company is confident in its performance and growth, focusing on affordability and sharing benefits with customers. He noted they will remain disciplined and conservative with forward-looking guidance.
Q: What is the ability to offer further rate stay-outs in Georgia or Alabama?
A: Chris Womack noted that a filing is due in 2028 and it is premature to speculate on future filings. He emphasized the company's focus on rate stability and using tools like energy efficiency and demand-side management to address affordability.
Q: Can you clarify the rate plan regarding the flat rate commitment?
A: Chris Womack confirmed the company has committed to holding base rates flat in Alabama and Georgia until at least 2029.
Capital plan, funding, and guidance
Q: Does the cash flow from large load contracts mitigate equity needs, and is 40% still the right target?
A: Chris Womack confirmed that 40% remains the right target for equity as they work toward their goal of 17% FFO to debt by 2029.
Q: Is the potential raise of the upper end of near-term guidance an extension or an increase to those ranges?
A: David Poroch explained that raising the upper end of guidance for 2027 and 2028 provides a higher starting point for the 7% to 8% growth path starting in 2028.
Q: Does the raised guidance rest on the $85 billion plan or include RFP capital?
A: David Poroch stated that momentum across the territory and signed contracts support growth, while RFPs represent capital needs in the 2030s.
Large load pipeline and economic development
Q: How quickly does the 75 gigawatt pipeline refill?
A: Chris Womack noted the pipeline continues to replenish with significant interest across Georgia, Alabama, and Mississippi, though they will continue to risk-adjust the projects.
Q: Does the election result create opportunities for the company as other states potentially slow down large load business?
A: Chris Womack stated it is premature to speculate on policy implications, noting they have seen a steady flow of engagement since 2022.
Data center risks and policy
Q: Is there risk to data center investments from political rhetoric regarding potential pauses?
A: Chris Womack expressed confidence in existing contracts, noting there has been no talk of retroactive changes and that these are contracted loads.
Q: What is the procedural view on potential data center pauses?
A: Chris Womack suggested a wait-and-see approach, emphasizing that data centers pay at least their full share and do not cost existing customers.
Q: Will new leaders be receptive to the benefits of large load customers?
A: Chris Womack expressed confidence in the company's ability to educate policymakers, noting they have already engaged with the Governor-elect to explain the process and benefits.
Operational reliability and collateral
Q: How does the Alabama earnings deferral mechanism work?
A: David Poroch explained it is analogous to storm damage accounting, designed to be flexible and worked out with the commission, likely flowing through the latter part of contract lives.
Q: How much collateral is posted for the $25 billion of requirements by 2030?
A: David Poroch stated they have several billion dollars in hand, utilizing various forms like parent guarantees and letters of credit from highly capitalized banking institutions.
Q: How do you balance reliability needs with large load growth?
A: Chris Womack noted that reliability work is continuous and that minimum bills in contracts ensure costs are recovered regardless of customer ramp rates.
Southern Power and customer composition
Q: What is the status of Southern Power opportunities?
A: David Poroch and Chris Womack noted ongoing negotiations and opportunities across the country, emphasizing the unit's focus on long-term contracts with creditworthy counterparties.
Q: What is the composition of the data center and cloud customer bucket?
A: David Poroch noted a mix of web hosting and hyperscalers, with a trend toward campus models where customers expand relationships over time.
Capital cost assumptions and renewables
Q: Is there inflation in the $2 billion per gigawatt assumption?
A: David Poroch acknowledged upward pressure but stated $2 billion plus remains a decent benchmark for the capital cost of generating assets.
Q: How does the load forecast align with RFP capacity?
A: David Poroch noted that Georgia load suggests they will be near the top end of the 2 to 6 gigawatt range, while the Alabama process continues into 2027.
Q: Are there opportunities to invest more in renewable energy?
A: Chris Womack stated that renewables, batteries, and hydro are part of the company's consideration as they respond to load growth, noting they expect to have 600 megawatts of battery storage by the end of the decade.
