ALABAMA POWER CO

(B)REGULATORY MATTERS

See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information relating to regulatory matters.

The recovery balances for retail fuel and storm/property damage for the traditional electric operating companies and natural gas cost for Southern Company Gas at March 31, 2026 and December 31, 2025 were as follows:

(*)Mississippi Power also has wholesale MRA and Market Based (MB) fuel cost recovery factors. At March 31, 2026 and December 31, 2025, wholesale MRA fuel cost under recovery was $9 million and $6 million, respectively, and was included in customer accounts receivable, net on Mississippi Power's balance sheets. The wholesale MB fuel cost recovery wasimmaterial for both periods presented.

Power to the People Act

In December 2025, the Alabama PSC issued a consent order to keep retail rates stable through 2027. On April 2, 2026, the State of Alabama enacted legislation providing that retail base rates established and in place on October 1, 2026 may not be increased before January 1, 2029 for utilities that are regulated by the Alabama PSC and that provide retail electric service. The ultimate outcome of this matter cannot be determined at this time.

Reliability Reserve Accounting Order

In accordance with the notification provided to the Alabama PSC through its annual Rate RSE filing indicating plans to use $60 million of the reliability reserve, Alabama Power utilized $21 million of its reliability reserve during the first quarter 2026 for reliability-related transmission, distribution, and generation expenses. At March 31, 2026, Alabama Power's reliability reserve balance was $163 million.

Environmental Accounting Order

As a result of the planned conversion of Plant Barry Unit 5 from coal to natural gas, the unit's net book value no longer meets the criteria to be considered probable of abandonment, and, in the first quarter 2026, approximately $307 million was reclassified from other utility plant, net to plant in service on Alabama Power's and Southern Company's balance sheets.

Integrated Resource Plans

Certification Requests

On March 25, 2026, Georgia Interfaith Power & Light, Park Avenue Baptist Church, Unitarian Universalist Church of Savannah, Sierra Club, Adrien Webber, and Southern Alliance for Clean Energy filed a petition with the Fulton County Superior Court appealing the Georgia PSC's December 19, 2025 approval of Georgia Power's request for certification of resources totaling 9,885 MWs (2025 All-Source Certification). The petition requests a reversal of the 2025 All-Source Certification, including a decertification of at least 757 MWs of resources. Georgia Power believes the appeal has no merit; however, the ultimate outcome of this matter cannot be determined at this time.

2025 IRP

On April 23, 2026, pursuant to the final order for Georgia Power's 2025 IRP, Georgia Power filed for approval to issue a request for proposals seeking 2,000 MWs to 6,000 MWs of resources to meet capacity needs in 2032 and 2033. Georgia Power projects a decision from the Georgia PSC regarding issuance in the second quarter 2026. The ultimate outcome of this matter cannot be determined at this time.

Fuel Cost Recovery

On each of March 13, 2026 and April 15, 2026, Georgia Power filed an Interim Fuel Rider (IFR) notification and plan informing the Georgia PSC that Georgia Power's under recovered fuel balance accumulated since May 31, 2023 exceeded $200 million (IFR Threshold), as established in a Georgia PSC stipulation approved in 2023, as of February 28, 2026 and March 31, 2026, respectively. Georgia Power did not propose a fuel cost recovery rate change pursuant to these IFR notifications and plans and is required to monitor and report to the Georgia PSC monthly as long as the under recovered fuel balance is above the IFR Threshold. Georgia Power expects the Georgia PSC to make a final decision on its February 2026 fuel case on May 28, 2026. The ultimate outcome of this matter cannot be determined at this time.

Construction

At March 31, 2026, Georgia Power had recorded approximately $3.7 billion of combined capital costs, excluding AFUDC, for the projects reflected in the table below approved by the Georgia PSC through the 2023 IRP Update and certification requests in September and December 2025 authorized through its 2022 IRP. The total certified amounts related to these projects are approximately $19.5 billion, excluding AFUDC. The ultimate outcome of these matters cannot be determined at this time.

(a)Subsequent to March 31, 2026, Georgia Power completed construction of the 50-MW Moody battery energy storage facility.

(b)Pursuant to the 2023 IRP Update, cost recovery over the certified amount is limited.

Performance Evaluation Plan

On March 16, 2026, Mississippi Power submitted its annual retail PEP Evaluation Report for 2026 to the Mississippi PSC, which affirmed its request filed in November 2025 for a 1.8%, or $20 million, annual increase in revenues, primarily due to increases in investment and depreciation. In accordance with the PEP rate schedule, the increase became effective with the first billing cycle of January 2026, subject to refund. The Mississippi PSC is expected to render a final decision in the second quarter 2026. The ultimate outcome of this matter cannot be determined at this time.

Integrated Resource Plans

On March 9, 2026, in compliance with its IRP requirements, Mississippi Power submitted its mid-point update to its 2024 IRP to the Mississippi PSC, indicating that the retirement dates of Plant Daniel Unit 2 and Plant Watson Unit 4 will extend beyond 2028.

The remaining net book value of Plant Daniel Unit 1 was approximately $124 million at March 31, 2026, and Mississippi Power is continuing to depreciate Plant Daniel Unit 1 using approved rates. Mississippi Power expects to reclassify the net book value remaining at retirement to a regulatory asset to be amortized over a period to be determined by the Mississippi PSC in future proceedings, consistent with a 2020 order. The ultimate outcome of this matter cannot be determined at this time.

Environmental Compliance Overview Plan

On April 14, 2026, the Mississippi PSC approved Mississippi Power's annual ECO Plan filing for 2026, resulting in a $2 million annual increase in revenues effective with the first billing cycle of May 2026.

System Restoration Rider

On March 2, 2026, Mississippi Power submitted its annual SRR filing for 2026 to the Mississippi PSC, indicating no change in retail rates. The filing includes a request to increase the minimum annual SRR accrual from $13.5 million to $13.7 million. The ultimate outcome of this matter cannot be determined at this time.

Reliability Reserve Accounting Order

On March 16, 2026, through its annual PEP Evaluation Report, Mississippi Power notified the Mississippi PSC of its intent to use approximately $8 million of its retail reliability reserve balance during 2026. During the first quarter 2026, Mississippi Power utilized the retail reliability reserve in the amount of $6 million for reliability-related generation, transmission, and distribution expenses. At March 31, 2026, Mississippi Power's retail reliability reserve balance was $52 million. See "Performance Evaluation Plan" herein for information regarding Mississippi Power's annual PEP filing.