The Southern Company (NYSE:SO) Q3 2025 Earnings Call Transcript

The Southern Company (NYSE:SO) Q3 2025 Earnings Call Transcript October 30, 2025

The Southern Company beats earnings expectations. Reported EPS is $1.6, expectations were $1.51.

Operator: Good afternoon. My name is Diego, and I will be your conference operator today. At this time, I would like to welcome everyone to The Southern Company Third Quarter 2025 Earnings Call. [Operator Instructions] Please note, this conference is being recorded. I will now turn the call over to Greg MacLeod, Director, Investor Relations. Thank you. Please go ahead, sir.

Greg MacLeod: Thanks, Diego. Good afternoon, and welcome to The Southern Company’s Third quarter 2025 earnings call. Joining me today are Chris Womack, Chairman, President and Chief Executive Officer of Southern Company; and David 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-Qs 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’ll turn the call over to Chris.

Christopher Womack: Thank you, Greg, and good afternoon to everyone, and we thank you for joining us for today’s update. Southern Company continues to perform exceptionally well. As you can see from the materials that we released this morning, we reported strong adjusted earnings results for the third quarter, meaningfully above the estimate provided last quarter, and we expect to deliver on our financial objectives for 2025. And I have to say Southern Company has an incredibly bright future ahead. Our state-regulated electric and gas utilities continue to provide long-term value to the more than 9 million customers across the Southeast and beyond with reliable and affordable energy. The vertically integrated markets in which our electric utilities operate continue to provide transparent and orderly processes and have consistently supported our ability to meet the needs of our growing economies and electric demand while providing premier reliability and resilient service day in and day out.

We’ve done all of this while keeping customers’ rates more than 10% below the national average. Further, the rate plan extension at Georgia Power, which freezes base rates until at least 2029, excluding the recovery of storm-related costs, is a testament to the benefits of a constructive regulatory framework and our focus on balancing growth and affordability. Customers continue to be at the center of everything we do. Our focus on the customer underpins our disciplined approach to forecasting, pricing, contracting and deploying resources to serve this once-in-a-generation growth opportunity. And we continue to execute on those plans for the benefits of all of our customers. Over the last 2 months, we have 4 contracts with large load customers across Georgia and Alabama, representing over 2 gigawatts of demand.

Consistent with our approach across Southern Company, these contracts include pricing and terms that are designed to pay for the incremental cost to serve new customer demand while also benefiting and protecting existing customers, helping to ensure growth does not come at the expense of affordability. I will now turn the call over to David to give an update on our financial performance.

David Poroch: Thanks, Chris, and good afternoon, everyone. For the third quarter of 2025, our adjusted EPS was $1.60 per share, $0.10 above our estimate and $0.17 higher than the third quarter of 2024. The primary drivers for our performance for the quarter compared to last year were continued investment in our state-regulated utilities, along with strong customer growth and increased customer usage. These positive drivers were partially offset by milder than normal year-over-year weather, higher depreciation and amortization and higher interest costs. For the 9 months ended September 30, 2025, our adjusted EPS was $3.76 compared to adjusted earnings of $3.56 for the same period in 2024. Year-to-date, revenue grew at our state-regulated electrics, partially influenced by customer growth and higher usage, which has added $0.12 year-over-year.

A complete reconciliation of year-over-year earnings is included in the materials we released this morning. Our adjusted EPS estimate for the fourth quarter is $0.54 per share, which, combined with our year-to-date performance, would represent full year adjusted earnings at the top of our 2025 annual guidance range of $4.30 per share. Turning now to retail electricity sales. Year-to-date weather-normal retail electricity sales were 1.8% higher compared to the first 3 quarters of 2024. Year-over-year weather-normal retail electricity sales, which are on pace for the highest annual increase since 2010, excluding the pandemic, demonstrate growth across all 3 customer classes. In the third quarter alone, the commercial sector grew 3.5% on a weather-normal basis compared to the third quarter of 2024.

This growth was driven partially by increased sales to existing and new customers — and new data centers, which were up 17%. Weather-normal residential sales also showed strong growth and were 2.7% higher than in the third quarter of 2024, bolstered by the addition of roughly 12,000 new electric customers in the quarter, substantially higher than historical trends. Electricity sales to individual customers also demonstrated continued strength, growing 1.5% in the quarter compared to the prior year. Year-to-date, all of our largest industrial customer segments are up year-over-year, including primary metals, paper and transportation segments, which were each up 4% or higher through the first 3 quarters. Economic development activity across our electric service territories remains robust with 22 companies making announcements to either establish or expand operations in our service territories during the third quarter, generating nearly 5,000 potential new jobs and representing expected capital investments totaling approximately $2.8 billion.

Clearly, between robust customer growth, increasing customer usage in the commercial and industrial segments and the flourishing economic development activity in our service territories, the economy in the Southeast remains strong and extremely well positioned. Transitioning to our financing, I’d like to take an — I’d like to give an update on our activities for the quarter, including the progress made addressing our future equity needs. In the third quarter, we issued $4 billion of long-term debt across Alabama Power, Georgia Power, Southern Company Gas and Southern Power. The quality and credit strength of our subsidiaries continues to draw a robust investor interest. Strong demand for our subsidiary securities ultimately translates into lower interest costs, which will provide benefits to customers at our regulated subsidiaries over the long term.

With these issuances, combined with what we issued in the first half of the year, we have fully satisfied our long-term debt financing needs for 2025 at each of our subsidiaries. On the equity financing front, we continue to be opportunistic in our proactive approach and have made significant progress on our plans to source equity in a disciplined and credit-supportive manner. This approach reflects our steadfast commitment to credit quality, including our strong investment-grade credit ratings across all 3 major rating agencies. We plan to continue utilizing equity or equity equivalents in support of our path towards 17% FFO to debt within our planning horizon. Recall this long-term credit quality objective is intended to provide cushion to the quantitative credit metric targets provided by the rating agencies.

As a reminder, on our July earnings call, we highlighted a cumulative equity need of $9 billion through 2029 to fund our $76 billion capital investment plan in a credit supportive manner. Since our last earnings call, we priced an additional $1.8 billion of equity through forward sales agreements under our at-the-market or ATM program. These forward equity contracts contain final settlement dates that extend through mid-2027 with the ability to call sooner if we choose. This progress and flexibility it provides significantly reduces risk in our financing plans. When considering these ATM forward sales, other hybrid security issuances and past and projected issuances under our internal equity plans, we have solidified over $7 billion of our $9 billion equity need through 2029.

We are extremely well positioned to address the remaining amounts in a shareholder-friendly manner. Looking ahead and as we continue to take steps to require strong customer protections and credit provisions, our pipeline of large load data centers and manufacturers continues to be robust. Across our electric subsidiaries, the total pipeline remains more than 50 gigawatts of potential incremental load by mid-2030s. Recall that our disciplined approach to forecasting assumes that only a fraction of this load pipeline materializes. As Chris mentioned earlier, in just the last 2 months, we have 4 contracts across Southern Company system that represent over 2 gigawatts of load. As you can see, projects within our pipeline are maturing into executed contracts, which, along with their associated load ramps over the next several years, solidifies a substantial portion of our total forecasted electric sales growth of 8% annually through 2029, including average annual growth at Georgia Power of 12% through the same period.

Across Alabama, Georgia and Mississippi, we now have contracts in place with large load customers, representing 7 gigawatts through 2029, which ultimately ramp to 8 gigawatts in the 2030s, and we are in advanced discussions for several more gigawatts of load. I’ll now turn the call back over to Chris for further insights into the progress we are making on our plans.

Christopher Womack: Thank you, David. As David noted, we have made great progress with signing new large load contracts. Just last month, as a part of Georgia Power’s ongoing RFP certification proceedings, Georgia Power filed an update to its load forecast. This update forecast continues to project the capacity need consistent with the 10 gigawatts of capacity resources being requested, which include 5 natural gas combined cycle units and 11 battery energy storage facilities. These proceedings are scheduled to have a final determination by the commission by the end of this year. Separately, Alabama Power, following approvals from the Alabama Public Service Commission and the Federal Energy Regulatory Commission has completed the acquisition of the 900-megawatt Lindsay Hill natural gas generating facility to serve projected long-term capacity needs in the state.

In addition, construction continues on approximately 2.5 gigawatts of new generation in both Georgia and Alabama, which includes 3 natural gas combustion turbines and 7 battery storage facilities, all of which are projected to go online over the next 2 years. Further, the South System 4 expansion at Southern Natural Gas within our Southern Company Gas subsidiary continues to move forward and will provide a valuable resource in serving the projected growth in our service territories. It is clear that we continue to make great progress executing on our plan as we deliver exceptional value to customers and investors. Consistent with our past practice and representative of our continued discipline, we expect to provide a complete update to our long-term plan during our fourth quarter 2025 earnings call this coming February.

As always, this update will include refreshes to our 5-year capital investment outlook, sales forecast and financing plans as well as our 2026 and long-term EPS guidance. Consistent with our comments throughout 2025, as a part of that communication, we expect to provide additional clarity on our long-term earnings trajectory, which, as we’ve highlighted before, could translate into increasing the base from where our long-term EPS growth starts, which could be potentially as early as 2027. We have delivered exceptional operational and solid financial results through the first 3 quarters of the year. Just this week, Southern Company was named to Newsweek’s World’s Most Trustworthy Companies for 2025 list and was the highest ranked energy company in the United States on that list.

Recognized companies were identified in an independent survey, and our inclusion at the top of this list is a testament to the hard work and unwavering commitment of our employees to uphold our values and operate each day at the highest standards of integrity, transparency and accountability. We are honored by this recognition, and I am incredibly proud of our team and the execution across all of our businesses. In conclusion, we’re extraordinarily well positioned to finish the year strong. We have the team, we have the experience and the scale to capture and execute on the exciting opportunities in front of us. We really have a bright and exciting future ahead. Operator, we’re now ready to take questions.

Q&A Session

Operator: [Operator Instructions] And our first question comes from Steve Fleishman with Wolfe Research.

Steven Fleishman: I have no idea how I got on the list for questions because I didn’t ask one, but I appreciate that. I didn’t have any questions.

Operator: And your next question comes from Carly Davenport with Goldman Sachs.

Carly Davenport: Maybe to start just on the kind of load growth outlook in Georgia, I guess, as you continue to lock in contracts under the new tariff structure there, can you talk a little bit about the reception from customers to the new structure and also how you approach the minimum bill components and ensure cost recovery from investments to support that load?

David Poroch: Yes. Sure. Carly, thanks. Great question. Like we’ve talked about, we’ve moved into a mode working underneath the — at least the Georgia, working underneath the Georgia Public Service Commission, new rules that came into place in the spring. And what we’re finding is customers totally get it. They understand that these are long-term commitments that we are making to deploy resources to serve their needs. And I think these rules have really helped bring the more credit quality, more serious counterparties up to the front of the line. And we’ve just made great strides in structuring these contracts. And with these contracts, the ones that we’ve signed now, have brought to the table are great protections for customers and our investors.

The minimum bills cover all of our costs, whether or not the meter spins. And once they hit their ramps and they start moving up, it’s just very beneficial for the company and for our customers. So we’re really happy with the education effort that we’ve been able to accomplish over the past year. And that’s kind of the indicator as to why, to some extent, these contracts have taken a minute to get resolved just because we’re taking them along the journey of the structure and the need to be able to protect customers going forward through these contracts.

Carly Davenport: Great. Really helpful. And then maybe the follow-up, just on the Georgia regulatory environment, just with the upcoming certifications and potential for incremental needs on the generation side for approval. How are you thinking about potential impacts from the PSC election and those processes as you think about the longer-term plan?

Christopher Womack: Yes, Carly, let’s start with the election question first. Elections in Georgia for the 2 commission seats, they will be held next Tuesday. We’ve had a couple of weeks of early voting. I mean one of the things we talk a lot about in all of our states is that we have an incredibly long history of working constructively with whomever is in those seats. And the 5 seats that are occupied in Georgia, they’ve always brought different views and perspectives. And so we expect that will, in fact, be the same. And so we’ll work with whomever is there. And as those positions are filled, I mean, they keep the citizens in mind as well as we keep our customers in mind. So we have a lot of alignment there. So we’ve always constructively worked with whomever has been elected in those seats. Do you want to add further?

David Poroch: And Carly, you asked about status and kind of where we are. Recall that in September, Georgia Power filed an updated load forecast and testimony. And that load forecast, using the same methodologies as several months ago, discounting forecasted load and risk adjusting that, supported the need for the whole 10 gigawatts that we’re requesting. And that process is ongoing. So we’re going to have staff and other interveners file their testimony in the next couple of weeks, I think. And we’re scheduled to get a ruling from the commission, I think it’s December 19, latter part of December. But all that should be wrapped up, and we’ll see the results before year-end.

Operator: Your next question comes from Julien Dumoulin-Smith with Jefferies.

Julien Dumoulin-Smith: Chris, can we talk about the rebasing? You use the same language again about as early as ’27. And a lot of folks are very curious to understand what the metrics that you’re looking at, whether it’s operational or regulatory or just frankly, incremental signed data center deals to get you comfortable to make it more of a firmer time line for that rebasing. Any thoughts that you’d observe here on how you’re thinking about that time line?

Christopher Womack: Julien, I mean, I think we’ve said. I mean there’s not kind of an exact list. I mean there are a lot of things that we’re going to look at to make that decision. I mean how is the economy performing, what’s happening with interest rates? I mean where are we with large load contracts? I mean just a number of factors, I think, that has to go into that consideration to give us the confidence and certainty to make that kind of decision. And so I mean, as we said before, I mean, clearly, there’s a lot more meat on the bone in terms of where we are and how that decision needs to be made. But yes, I mean, that’s something we’ll work through, and we’ll give you more clarity on that in our February call for next year.

Julien Dumoulin-Smith: Awesome. Excellent. And a little bit more of a nitpicky question. The $9 billion of equity you guys talked about here a second ago, in theory, if you were to get this incremental $5 billion, how do you think about that being reflected in that $9 billion?

David Poroch: The upside that we discussed in the second quarter call, Julien, you mean?

Julien Dumoulin-Smith: Yes. That’s all in there, right?

David Poroch: No. Actually, the upside to the extent that the Georgia Public Service Commission approves all of our request, we had talked about that being about another $4 billion of incremental capital. And that’s likely to be financed kind of in that neighborhood of about 40% equity going forward. So once we get clarity on that, we’ll be able to execute on that plan.

Julien Dumoulin-Smith: And there’s a little rounding out there, right, between the $4 billion and the $5 billion with gas, I think it is, if I understand all the number?

David Poroch: You’re exactly right, Julien. The $4 billion relates specifically to the remainder at request at the Georgia Public Service Commission. And we’ve talked about opportunities within our FERC-regulated jurisdictions in the gas infrastructure business, and that’s about $1 billion. So you’re exactly on point.

Operator: Your next question comes from Shar Pourreza with Wells Fargo.

Shahriar Pourreza: So just real quick on — let me just shift gears to Southern Power. I mean, obviously, there is a lot of opportunities there, and you’ve got existing tolling agreements that start to expire. I guess. I guess, is there — how do we think about just the assets, the value of the assets, the pricing environment? Have conversations started? And are there opportunities to renegotiate these tolls ahead of the expirations, just given the value of the assets?

David Poroch: Yes. So like we’ve talked about, we’ve got a very large portion of these contracts under long term — of these assets under long-term contracts, about 95% or so through 2029. And you’re absolutely right. There’s — where those opportunities exist, we’re — toward the end of those contracts, we’ll start having some conversations to renegotiate those and renew those where appropriate. And we’re looking at a couple of live data points, right, in our — in the RFP that was recently approved in Georgia. Southern Power on a competitive bid basis won 2 PPAs that go into effect in the early 2030s. And those are repriced about 2 — almost 3x kind of where they sit today. So assuming that, that market holds, we see great opportunity out in the future as those contracts lay off and then we can renegotiate those and recommit those assets in the future.

Shahriar Pourreza: Got it. Okay. Perfect. And then just lastly, just obviously, you guys talked about the amount of gas that’s needed in the Southeast. Just around the SNG pipeline expansion, any thoughts on timing there? How are the conversations going with the counterparties?

David Poroch: The SNG expansion is going well on track. I think we’ve talked about that being about a $3 billion investment, 100% dollars. We’re a 50% owner of that. And so that project is going as scheduled, and we expect great interest in contracting that capacity. That pipe runs kind of, if you will, through our backyard, and we see that pipe being able to just serve our needs as well as a number of other needs through the — around the adjoining states. So looking forward to getting that project taken care of.

Shahriar Pourreza: Okay. Perfect. And then just lastly, if I could just slip one quick one on the equity question. Chris, there’s been obviously some pretty healthy transactions that have been done around partial asset sales. Some of your peers have done it. They have been successful. It’s been accretive. But just want to get a sense on have you considered sort of other avenues versus these equity or equity-like instruments and even can some parts of Southern Power be opportunities there? We’re just focusing on equity and equity-like.

Christopher Womack: Shar, we don’t comment on kind of speculative transactions or rumors or kind of these broad questions. We’re always looking to see who is the best owner of a given asset. And that’s something that we’ll always look around corners and make those kinds of decisions. And I think it’s a little bit premature. But yes, I mean, that’s something that we’ll always give deep considerations to. We like our cards. We like the portfolio that we have. But I mean, there’s some things we’ll always take a look at.

Operator: Your next question comes from Anthony Crowdell with Mizuho Securities.

Anthony Crowdell: Two easy ones, 2 softballs. You talked about on the fourth quarter call, you’re going to give us a capital refresh and, I guess, potentially an update on the EPS CAGR. And I think you mentioned, I don’t want to put words in your mouth about maybe talking about the base starting in ’27. My question is, do we get — will we also get 2027 guidance on the fourth quarter call?

David Poroch: Anthony, we’ve been talking about this opportunity for a good little while. And as we’ve seen this kind of momentum around developing these contracts come to fruition, it is pretty unique. And those contracts that we’ve talked about are kind of coming into play in the latter part of our planning horizon. So we do expect to be able to share some clarity on that. Like Chris talked about, a lot of things are in the mix. And as we move forward in getting these contracts taken care of, we’ll be able to share what that clarity looks like in February.

Anthony Crowdell: Great. And then just last question. And I apologize I have the timing wrong. I believe from your last call to this call I believe Moody’s put the holding company on a negative outlook. Your equity needs had already announced before. Does that negative outlook or maybe change the view of maybe pulling forward or the timing of that remainder $2 billion of equity?

David Poroch: Yes. No. We’ve got what we believe is a really good path to get towards 17% FFO to debt. And let’s remember, the fundamental belief at Southern that a premium equity starts with being a high-quality credit. And so it’s important that we’re going to retain these ratings that we have. And we’d look to be able to build cushion toward that 16% threshold. That’s our downgrade threshold. So our path is getting closer to 17%. And we see these qualitative factors and quantitative factors improving. The executing on the equity issuances is really encouraging, bringing these contracts to fruition is encouraging. And we’re just going to continue to be proactive and disciplined in this approach. And we’re going to continue to share our progress with the rating agencies to make sure that they’re aware of where we’re getting — where we’re going towards 17% over the planning horizon.

Operator: Your next question comes from Jeremy Tonet with JPMorgan.

Jeremy Tonet: Just wanted to — just one quick question here with regards to nuclear. I think Southern has talked in the past the importance of nuclear development for the future of the country. And we’ve seen support from the federal government start to move things forward in different parts of the country. Just wondering if there’s any specific actions out there, support from the federal government or are there entities that would make expanding Vogtle or pursuing SMR more attractive to Southern?

Christopher Womack: First of all, let me say I was incredibly excited about the actions that the administration took with Westinghouse and Cameco and Brookfield in terms of that collaboration. I mean, I think all of those things are very important to bring forth new nuclear in this country. And with this incredibly growing demand, I think it’s so important that we take the steps necessary to build new units in this country. And so between the action taken announced yesterday, a couple of days ago as well as the President’s executive orders on the regulatory side, all those things, I think, are very important and very instrumental in helping support the development of new nuclear in this country because as you look at bringing these new units on, these units could have 60- to 80-year lives.

And so that will take us in — meet the current future demand, but also demand into the next century. So this is incredibly important to recognize the steps in the leadership role that the government must take to address risk and find ways to help mitigate that risk. So I think it’s incredibly important and really excited about the steps that are being taken by this administration.

Operator: Your next question comes from Andrew Weisel with Scotiabank.

Andrew Weisel: Forgive me, I’m not sure if I heard an answer to that last question. Does all of that federal government activity change your appetite? I appreciate the industry commentary, but what about your appetite?

Christopher Womack: Not at this time.

Andrew Weisel: Okay. But that wasn’t my original question. My original question was on Slide 9, I’m interested. So you showed the demand from large load customers for 2029 and then the mid-30s. What strikes me is it’s a fairly small change, only 1 incremental gigawatt is contracted and 1 additional gigawatt of committed. How much of that would you say is the same projects ramping up their demand versus an incremental project or projects coming online between those years? And then to what degree would you say the small increase is conservatism or risk adjusting or however you want to call it? It just seems like a fairly small delta relative to the trends and commentary.

David Poroch: Yes. No, I get where you’re coming from. What we wanted to try to display in this chart, so I appreciate your question, is that the entire 7 gigs on the 2029 column is included in the 2030 column. And so what we’re trying to reflect there is ramp-up, timing and our expectations and projections based on the contracts that we have as well as in the committed section, that’s reflective of the conversations that we’ve been having and the modeling that we’ve been doing through the negotiations. And so those ramp-ups do take a minute and those are projected to kind of be over about a 5-year period. It’s a little different from contract to contract because obviously, these are tailor-made contracts, bilateral negotiations, not necessarily at all a unique large load tariff. And so these are tailor-made and reflect our expectations around the ramp-up.

Operator: And your next question comes from David Arcaro with Morgan Stanley.

David Arcaro: So looking at the 10 gigawatt large load contracted or committed numbers by 2029, I guess, I was just wondering if there’s still a further opportunity to add on more gigawatts there to bring on more large load by the 2029 time frame? Or are you seeing system constraints or limits in terms of absorbing additional data centers in the near term?

Christopher Womack: I think the ability to bring on more is out there. I mean so the answer to your question is, yes, there’s more capacity, more opportunity. And yes, we are in advanced discussions, in advanced considerations with other large load companies in terms of looking at more possibilities. So yes, there are more upside opportunities for the latter part of this decade.

David Arcaro: Yes. Okay. Got it. Got it. And then I was just wondering if you could — could you characterize just maybe the plan for the next set of RFPs? Just looking forward for future generation needs, what years would those be representing in terms of when they come into service? And then when would you be potentially considering bringing forth those RFPs to take in the bids?

David Poroch: Sure. So remember, that ’25 IRP stipulation allowed for another all-source RFP to begin as early as 2026. And at the moment, we don’t really have any size or parameters. We’re just working through that and assessing our needs. We need to get through the processes in place at the moment, and then we’ll look to the future. And that could be in the early 2030s, maybe 2032-ish, but we’ll have to wait and see how that plays out, and we’ll have more clarity next year. But we’re really encouraged by the conversations that we’ve been having and the momentum continues to build, not just in Georgia, but around the service territories.

Operator: Your next question comes from Angie Storozynski with Seaport.

Agnieszka Storozynski: So my first question about contract-based gas fired new build. So in the past, you guys were saying that you’re still waiting to see demand or interest in like fully loaded economics for gas-fired new build for Southern Power. And I’m wondering if we’ve already achieved that point? Or is it still a waiting period?

David Poroch: For recontracting at Southern Power? I just want to make sure I understand the question.

Agnieszka Storozynski: No, so like building a brand new combined cycles for a hyperscaler or whoever under a long-term contract by Southern Power meeting your return expectations? If you’ve already seen offers at levels that you would consider interesting?

David Poroch: We continue to evaluate. And recall, I think we talked about it probably several times in the past that Southern Power, we run with a pretty high filter. We have high credit quality counterparties, long term in nature, locking up the capacity, no fuel risk. So as we find those opportunities that fit into that box, we’ll definitely pursue them. And at the moment, we’re just still evaluating.

Agnieszka Storozynski: So the answer is no, you haven’t seen them or you’re still sort of debating if the terms are attractive?

David Poroch: Yes, we’re evaluating and having some conversations around that.

Agnieszka Storozynski: Okay. And then second thing, and I know you have answered this question a couple of times already on this call about the nuclear new build. But it’s — and we keep hearing, especially from Westinghouse, right, that they are seeing interest in nuclear new build from large regulated utility operators in the U.S. And I know that it could be just preliminary discussions, but I mean, the Southeast seems to come up quite a bit. I mean I’m looking at the map. There are a few options here. So I’m just wondering, is it just, as I said, preliminary discussions? Or is it — you wouldn’t be the first one seemingly given what’s happening in South Carolina. But how should we brace for any potential announcements from you?

Christopher Womack: Yes. I mean I can’t speak for others, but I’ll speak for Southern Company. We are not there yet to make an announcement about a new nuclear plant. As we said many times in the past, we want to make sure that all risks are mitigated before we make that kind of decision. I’m excited about all the activity that’s occurring around the country with considerations about new nuclear. But until we find a way to get all the risks mitigated, I mean, that’s not a decision that we’re going to make. But we’re going to continue to work with the administration, work with other government agencies to talk about the importance and the role that new nuclear can play in meeting this growing demand. But being perfectly clear, no, we’re not in a position to make that decision at this point until we find ways to make sure all risks are mitigated.

Operator: Your next question comes from Paul Fremont with Ladenburg Thalmann.

Paul Fremont: First question is, I just want to understand the difference between contracted and committed. Is that just an ESA versus an LOA? Or what’s the distinction there?

David Poroch: Sure. So let’s maybe start with the contract. I mean that’s a signed agreement, hopefully pretty relatively self-explanatory. We’ve got a commitment to deliver based on the terms and conditions negotiated and parties have signed off and we’re moving forward. The RFS, request for service, that’s going through the process that we’ve described in the past, where you kind of start with an entity looking across the states, maybe they’ve selected Georgia. We start having conversations with them. We start getting through — they’re going to — within the state of Georgia, as an example, they’re going to pick Georgia Power versus other providers. That takes us to a new level of conversation. More collateral is posted. The process gets more involved.

Engineering studies are happening. And so the commitment then is as we’re negotiating terms and conditions, pricing, ramp-ups and other needs, that’s kind of like your last phase before you’re getting into actually signing a contract. So committed is very far down the road, and we’re working through Ts and Cs, finalizing engineering studies and on the verge of signing contracts.

Paul Fremont: Okay. So that’s sort of like finalizing agreements. Can you — would you be able to characterize then how many gigawatts would be in advanced stage negotiations? I think some of your peers provide that third layer of breakout.

David Poroch: Yes. So in that bucket, we’re probably in the neighborhood 12-ish gigs. I mean it’s fairly dynamic and it’s across the system.

Paul Fremont: Great. And then sort of last question for me. You are targeting or you’re guiding to 8% sales growth. What year would you expect to sort of achieve that level of sales growth?

David Poroch: That’s in the latter part of the horizon. I think we’ve talked about 2029 is the target for that, and we grow into that over time.

Operator: Your next question comes from Travis Miller with Morningstar.

Travis Miller: I’m back. So keeping with the large load popular topic here. If I run through those numbers that you broke out in terms of projects and gigawatts, it looks like average projects somewhere less than 0.5 gigawatt, maybe 300 to 500 megawatts. One, I was wondering if that’s kind of a fair assessment of what you’re seeing out there? And then, two, what is the extra 50 gigawatts or the next stage look like? We’ve heard some utilities talking about gigawatt projects, tech companies talking about multiple gigawatt projects. So I wonder if you could characterize the current customers and then the next step?

David Poroch: Okay. Yes. Thank you. So yes, I wouldn’t do just the straight math. I mean these are wide ranging. We’ve got some on the 100 megawatts of the scale, and then we’ve got a couple at the north of 1 gigawatt. And so they are really all over the place. And like we’ve talked about, I mean, each one of these are tailor-made contracts for their own specific needs. So I’d suggest resisting the simple math.

Travis Miller: Okay. That’s helpful there. And then the 50 gigawatts or the next stage, 40 or so gigawatts incremental, what are you seeing from those coming into the system requesting…

David Poroch: Like, like the whole pipeline. As we’ve talked about, those are in various stages. And as we build our forecast, we pretty heavily discount all of that through the various layers, if you will, of the contracting process. So yes, 50 gigawatts — north of 50 gigawatts is the universe in which we’re evaluating right now. And we have talked about a small portion of that coming to fruition as a contract.

Travis Miller: Okay. But still the same kind of range in terms of actual project, 100 megawatts to north of 1 gigawatts?

David Poroch: Yes. Yes, exactly.

Travis Miller: Okay. And then do these tend to be greenfield or brownfield? Are they expansions, whether it’s manufacturing or data center? Are they expansion projects or greenfield projects typically?

David Poroch: Both. Yes, it’s really all over the place. I mean we’ve got industrial customers making announcements that they’re expanding their capacity here in our service territories. We’ve got new businesses relocating or starting up. And then the data centers, some are expanding. I think we mentioned, I think, in our prepared comments that the portfolio of data centers that we’re serving today have grown at 17% year-over-year in the quarter. So really excited about what we’re seeing in both the portfolio that we’re serving today and the process of contracting and the diversity that those customers are bringing to the system.

Operator: And that will conclude today’s question-and-answer session. Sir, are there any closing remarks?

Christopher Womack: Again, let me thank everybody for joining us today on our call. And as we said before, we have a bright future, and we’re looking forward to what’s ahead. So thank you very much, and have a great day.

Operator: Thank you, sir. Ladies and gentlemen, this concludes The Southern Company Third Quarter 2025 Earnings Call. You may now disconnect.