GEORGIA POWER CO

Georgia Power's net income in the third quarter 2024 was $1.1 billion compared to $0.8 billion for the corresponding period in 2023. For year-to-date 2024, net income was $2.2 billion compared to $1.5 billion for the corresponding period in 2023. The increases were primarily due to higher retail revenues associated with the inclusion of Plant Vogtle Units 3 and 4 in retail rates and base tariff increases in accordance with the 2022 ARP and an after-tax charge of $120 million in the third quarter 2023 related to the construction of Plant Vogtle Units 3 and 4. Also contributing to the increase for year-to-date 2024 was warmer weather in the second quarter 2024 as compared to the corresponding period in 2023. See Note 2 to the financial statements under "Georgia Power" in Item 8 of the Form 10-K for additional information.

In the third quarter 2024, retail revenues were $3.2 billion compared to $3.0 billion for the corresponding period in 2023. For year-to-date 2024, retail revenues were $7.9 billion compared to $7.1 billion for the corresponding period in 2023. Details of the changes in retail revenues were as follows:

Revenues associated with changes in rates and pricing increased in the third quarter and year-to-date 2024 when compared to the corresponding periods in 2023. The increases were primarily due to the inclusion of Plant Vogtle Units 3 and 4 in retail rates net of the elimination of the NCCR tariff, base tariff increases in accordance with the 2022 ARP, and higher contributions from commercial and industrial customers with variable demand-driven pricing. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction – Regulatory Matters" herein and Note 2 to the financial statements under "Georgia Power" in Item 8 of the Form 10-K for additional information.

Revenues attributable to changes in sales decreased in the third quarter 2024 and increased for year-to-date 2024 when compared to the corresponding periods in 2023. Weather-adjusted residential KWH sales decreased 2.1% and 0.4% in the third quarter and year-to-date 2024, respectively, primarily due to decreased customer usage, partially offset by customer growth. Weather-adjusted commercial KWH sales increased 0.6% and 2.5% in the third quarter and year-to-date 2024, respectively, primarily due to increased customer usage, primarily driven by existing data centers, and customer growth. Weather-adjusted industrial KWH sales decreased 0.4% in the third quarter 2024 primarily due to decreases in the paper and electronics sectors, partially offset by increases in the transportation and pipeline sectors. Weather-adjusted industrial KWH sales were flat for year-to-date 2024 primarily due to increases in the transportation and pipeline sectors, offset by decreases in the paper and electronics sectors.

Fuel revenues and costs are allocated between retail and wholesale jurisdictions. Retail fuel cost recovery revenues decreased in the third quarter and year-to-date 2024 when compared to the corresponding periods in 2023 due to lower recoverable fuel costs. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these fuel cost recovery provisions, fuel revenues generally equal fuel expenses and do not affect net income. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements under "Georgia Power – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues

In the third quarter 2024, wholesale revenues were $78 million compared to $69 million for the corresponding period in 2023. For year-to-date 2024, wholesale revenues were $198 million compared to $147 million for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily due to increases of $20 million and $59 million, respectively, related to net additional capacity from wholesale capacity contracts and $28 million and $53 million, respectively, related to the volume of KWH sales associated with higher market demand, partially offset by decreases of $36 million and $57 million, respectively, related to the average cost per KWH sold due to lower Southern Company system fuel and purchased power prices.

Wholesale revenues from sales to non-affiliates consist of PPAs and short-term opportunity sales. Wholesale revenues from PPAs have both capacity and energy components. Wholesale capacity revenues from PPAs are recognized in amounts billable under the contract terms and provide for recovery of fixed costs and a return on investment. Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Georgia Power's and the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Short-term opportunity sales are made at market-based rates that generally provide a margin above Georgia Power's variable cost of energy.

Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. Energy revenues related to these transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost.

Other Revenues

In the third quarter 2024, other revenues were $209 million compared to $172 million for the corresponding period in 2023. For year-to-date 2024, other revenues were $610 million compared to $516 million for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily due to increases of $13 million and $55 million, respectively, in unregulated sales primarily associated with power delivery construction and maintenance, energy conservation projects, renewables, and outdoor lighting, $6 million and $17 million, respectively, in regulated outdoor lighting sales, $6 million and $16 million, respectively, in transmission revenues, $8 million and $9 million, respectively, in pole attachment revenues, $4 million and $7 million, respectively, in solar program fees, and $2 million and $7 million, respectively, in customer fees, partially offset by net increases $7 million and $18 million, respectively, in realized losses associated with price stability products for retail customers on variable demand-driven pricing tariffs.

In the third quarter 2024, total fuel and purchased power expenses were $829 million compared to $928 million for the corresponding period in 2023. The decrease was due to $60 million of credits recorded to nuclear fuel expense resulting from litigation related to nuclear fuel disposal costs, a net decrease of $33 million related to the average cost of fuel and purchased power, and a decrease of $6 million related to the volume of KWHs generated and purchased.

For year-to-date 2024, total fuel and purchased power expenses were $2.3 billion compared to $2.4 billion for the corresponding period in 2023. The decrease was due to a net decrease of $75 million related to the average cost of fuel and purchased power and $60 million of credits recorded to nuclear fuel expense resulting from litigation related to nuclear fuel disposal costs, partially offset by an increase of $81 million related to the volume of KWHs generated and purchased.

Fuel and purchased power energy transactions do not have a significant impact on earnings since these fuel expenses are generally offset by fuel revenues through Georgia Power's fuel cost recovery mechanism. See Note 2 to the financial statements under "Georgia Power – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.

Details of Georgia Power's generation and purchased power were as follows:

(a)Excludes KWHs generated from test period energy at Plant Vogtle Units 3 and 4 prior to their respective in-service dates. The related fuel costs were charged to CWIP in accordance with FERC guidance. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information on Plant Vogtle Units 3 and 4.

(b)Excludes $60 million of credits recorded in the third quarter 2024 to nuclear fuel expense resulting from litigation related to nuclear fuel disposal costs. See Note (C) to the Condensed Financial Statements under "Nuclear Fuel Disposal Costs" herein for additional information.

(c)Average cost of purchased power includes fuel purchased by Georgia Power for tolling agreements where power is generated by the provider.

Fuel

In the third quarter 2024, fuel expense was $451 million compared to $576 million for the corresponding period in 2023. The decrease was primarily due to $60 million of credits recorded to nuclear fuel expense resulting from litigation related to nuclear fuel disposal costs and decreases of 12.0% in the average cost per KWH generated by coal, 7.7% in the average cost per KWH generated by natural gas, and 4.9% in the volume of KWHs generated by natural gas, partially offset by increases of 23.8% in the volume of KWHs generated by nuclear and 17.2% in the average cost per KWH generated by nuclear.

For year-to-date 2024, fuel expense was $1.3 billion compared to $1.4 billion for the corresponding period in 2023. The decrease was primarily due to $60 million of credits recorded to nuclear fuel expense resulting from litigation related to nuclear fuel disposal costs and decreases of 15.5% in the average cost per KWH generated by coal, 7.1% in the volume of KWHs generated by natural gas, and 5.2% in the average cost per KWH generated by natural gas, partially offset by increases of 34.4% in the volume of KWHs generated by nuclear, 22.8% in the average cost per KWH generated by nuclear, and 16.5% in the volume of KWHs generated by coal.

Purchased Power – Non-Affiliates

In the third quarter 2024, purchased power expense from non-affiliates was $174 million compared to $131 million for the corresponding period in 2023. For year-to-date 2024, purchased power expense from non-affiliates was $466 million compared to $397 million for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily due to increases of 20.3% and 22.4%, respectively, in the volume of KWHs purchased as Georgia Power and other Southern Company system units generally dispatched at a higher cost than available market resources. Partially offsetting the increase for year-to-date 2024 was a decrease of 7.8% in the average cost per KWH purchased primarily due to lower natural gas prices.

Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.

Purchased Power – Affiliates

In the third quarter 2024, purchased power expense from affiliates was $204 million compared to $221 million for the corresponding period in 2023. For year-to-date 2024, purchased power expense from affiliates was $567 million compared to $579 million for the corresponding period in 2023. The decreases for the third quarter and year-to-date 2024 were primarily due to decreases of 9.9% and 8.0%, respectively, in the volume of KWHs purchased as Southern Company system units generally dispatched at a higher cost than available market resources, partially offset by capacity purchased through a new PPA with Mississippi Power. Also partially offsetting the decrease for year-to-date 2024 was an increase of 5.2% in the average cost per KWH purchased.

See Note (B) to the Condensed Financial Statements under "Georgia Power – Integrated Resource Plans" herein for additional information.

Energy purchases from affiliates will vary depending on the demand and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, all as approved by the FERC.

In the third quarter 2024, other operations and maintenance expenses were $613 million compared to $512 million for the corresponding period in 2023. The increase was primarily due to increases of $47 million in transmission and distribution costs primarily associated with line maintenance and billing adjustments with integrated transmission system owners, $43 million in generation expenses largely associated with non-outage maintenance costs resulting from Plant Vogtle Unit 4 being placed in service in April 2024, and $9 million in unregulated power delivery construction and maintenance contracts. Partially offsetting the increase was a decrease of $7 million in certain employee compensation and benefit expenses.

For year-to-date 2024, other operations and maintenance expenses were $1.6 billion compared to $1.5 billion for the corresponding period in 2023. The increase was primarily due to increases of $87 million in generation expenses primarily associated with non-outage maintenance costs resulting from Plant Vogtle Units 3 and 4 being placed in service in July 2023 and April 2024, respectively, $68 million in transmission and distribution costs primarily associated with line maintenance and billing adjustments with integrated transmission system owners, $25 million in unregulated power delivery construction and maintenance contracts, $18 million in customer service and sales costs, and $7 million in expenses associated with unregulated energy conservation projects. Partially offsetting the increase were an increase of $92 million in gains from sales of integrated transmission system assets and decreases of $26 million in technology infrastructure and application production costs and $15 million in certain employee compensation and benefit expenses.

See Note (B) to the Condensed Financial Statements under "Georgia Power – Transmission Asset Sales" and " – Nuclear Construction" herein for additional information.

In the third quarter 2024, depreciation and amortization was $462 million compared to $429 million for the corresponding period in 2023. For year-to-date 2024, depreciation and amortization was $1.3 billion compared to $1.2 billion for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily due to increases of $51 million and $125 million, respectively, associated with additional plant in service, partially offset by decreases of $15 million and $45 million, respectively, in amortization of regulatory assets related to CCR AROs as approved in the 2024 compliance filing under the terms of the 2022 ARP. See Note 2 to the financial statements under "Georgia Power – Rate Plans" in Item 8 of the Form 10-K for additional information.

In the third quarter 2024, taxes other than income taxes were $177 million compared to $144 million for the corresponding period in 2023. For year-to-date 2024, taxes other than income taxes were $488 million compared to $406 million for the corresponding period in 2023. The increases for the third quarter and year-to-date 2024 were primarily due to increases of $12 million and $38 million, respectively, in property taxes primarily resulting from an increase in the assessed value of property, decreases of $16 million and $25 million, respectively, in property taxes capitalized primarily due to Plant Vogtle Unit 4 being placed in service in April 2024, and increases of $5 million and $19 million, respectively, in municipal franchise fees resulting from higher retail revenues. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information on Plant Vogtle Unit 4.

Estimated Loss on Plant Vogtle Units 3 and 4

Georgia Power recorded pre-tax charges (credits) to income related to the estimated probable loss on Plant Vogtle Units 3 and 4 totaling $(21) million in the second quarter 2024 and $160 million in the third quarter 2023. These charges (credits) reflected revisions to the total project capital cost forecast for the construction and completion of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.

For year-to-date 2024, allowance for equity funds used during construction was $108 million compared to $121 million for the corresponding period in 2023. The decrease was primarily due to Plant Vogtle Units 3 and 4 being placed in service in July 2023 and April 2024, respectively, partially offset by an increase in capital expenditures subject to AFUDC. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information on Plant Vogtle Units 3 and 4.

In the third quarter 2024, interest expense, net of amounts capitalized was $184 million compared to $166 million for the corresponding period in 2023. The increase was primarily associated with a decrease of $7 million in AFUDC debt primarily related to Plant Vogtle Unit 4, an increase of $6 million related to higher average outstanding borrowings, and a decrease of $6 million in net deferred financing costs related to Plant Vogtle Unit 3.

For year-to-date 2024, interest expense, net of amounts capitalized was $543 million compared to $472 million for the corresponding period in 2023. The increase was primarily associated with increases of approximately $30 million related to higher interest rates and $29 million related to higher average outstanding borrowings and a decrease of $21 million in AFUDC debt primarily related to Plant Vogtle Units 3 and 4, partially offset by an increase of $5 million in net deferred financing costs related to Plant Vogtle Unit 3.

See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction – Regulatory Matters" and FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" and "Financing Activities" herein for additional information.

Other Income (Expense), Net

In the third quarter 2024, other income (expense), net was $52 million compared to $45 million for the corresponding period in 2023. The increase was primarily due to increases of $3 million in customer charges related to contributions in aid of construction and $3 million in unrealized gains associated with price stability products for retail customers on variable demand-driven pricing tariffs.

For year-to-date 2024, other income (expense), net was $156 million compared to $125 million for the corresponding period in 2023. The increase for year-to-date 2024 was primarily due to an increase of $12 million in customer charges related to contributions in aid of construction, a $7 million charge in the second quarter 2023 under a stipulation approved by the Georgia PSC related to Georgia Power's fuel cost recovery case, and an increase of $5 million in non-service cost-related retirement benefits income. See Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Fuel Cost Recovery" for additional information.

In the third quarter 2024, income taxes were $246 million compared to $200 million for the corresponding period in 2023. For year-to-date 2024, income taxes were $516 million compared to $345 million for the corresponding period in 2023. The increases were primarily due to higher pre-tax earnings, partially offset by increases of $23 million and $73 million in the generation of advanced nuclear PTCs in the third quarter and year-to-date 2024, respectively. The increase for year-to-date 2024 also reflects a $56 million increase in charges to a valuation allowance on certain state tax credit carryforwards, partially offset by $33 million from the recognition of certain state tax positions from amended returns. See Note (G) to the Condensed Financial Statements herein for additional information.