ALABAMA POWER CO

Mississippi Power's net income in the first quarter 2026 was $60 million compared to $55 million for the corresponding period in 2025. The increase was primarily due to higher retail revenues associated with changes in rates and pricing, partially offset by a decrease in other revenues and an increase in other operations and maintenance expenses.

In thefirst quarter 2026, retail revenues were $273 million compared to$248 million for the corresponding period in 2025. Details of the changes in retail revenues were as follows:

Changes in rates and pricing resulted in an increase in revenues in the first quarter 2026 as compared to the corresponding period in 2025 primarily due to increases in PEP rates. See Note 2 to the financial statements under "Mississippi Power – Performance Evaluation Plan" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under "Mississippi Power – Performance Evaluation Plan" herein for additional information.

Changes in sales resulted in an immaterial change in revenues in the first quarter 2026 as compared to the corresponding period in 2025. Weather-adjusted residential KWH sales decreased 1.8% primarily due to decreased customer usage. Weather-adjusted commercial KWH sales increased 1.5% primarily due to increased customer usage. Industrial KWH sales decreased 1.5% primarily due to decreases in the chemicals and oil and gas extraction sectors.

Fuel and other cost recovery revenues increased in the first quarter 2026 as compared to the corresponding period in 2025 primarily as a result of higher recoverable fuel costs. Recoverable fuel costs include fuel and purchased power expenses reduced by the fuel and emissions portion of wholesale revenues from energy sold to customers outside Mississippi Power's service territory. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of purchased power costs, and do not affect net income. See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Non-Affiliates

In the first quarter 2026, wholesale revenues from sales to non-affiliates were $87 million compared to $71 million for the corresponding period in 2025. The increase was due to a $9 million increase in opportunity sales, a $4 million increase associated with MRA customers primarily due to pricing and higher recoverable fuel costs, partially offset by milder weather, and a $3 million increase associated with new and existing power supply agreements.

Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Mississippi 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. Inaddition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and municipalities located in southeastern Mississippi under cost-based electric tariffs which are subject to regulation by the FERC. Short-term opportunity energy sales are also included in sales for resale to non-affiliates. These opportunity sales are made at market-based rates that generally provide a margin above Mississippi Power's variable cost to produce the energy. See Note 2 to the financial statements under "Mississippi Power – Municipal and Rural Associations Tariff" in Item 8 of the Form 10-K for additional information.

Wholesale Revenues – Affiliates

In the first quarter 2026, wholesale revenues from sales to affiliates were $97 million compared to $81 million for the corresponding period in 2025. The increase was primarily due to increases of $13 million related to the price of energy driven by natural gas prices and $3 million related to the volume of KWH sales.

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 or other contractual agreements, 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.

In the first quarter 2026, other revenues were $15 million compared to $20 million for the corresponding period in 2025. The decrease was primarily due to customer charges related to contributions in aid of construction included in rates in 2025.

In thefirst quarter 2026, total fuel and purchased power expenses were $205 million compared to$166 million for the corresponding period in 2025. Theincrease was primarily due to a $37 million increase related to the average cost of fuel and purchased power, of which $7 million is related to capacity.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clause.

Energy purchases 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. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.

Details of Mississippi Power's generation and purchased power and the related costs were as follows:

For first quarter 2026, other operations and maintenance expenses were $88 million compared to $84 million for the corresponding period in 2025. The increase was primarily due to increases of $5 million in generation expenses primarily associated with non-outage costs, $2 million in expenses associated with unregulated products and services, and $2 million related to distribution expenses, partially offset by a decrease of $6 million due to utilization of the retail reliability reserve to offset generation, transmission, and distribution expenses. See Note (B) to the Condensed Financial Statements under "Mississippi Power – Reliability Reserve Accounting Order" herein for additional information.