ALABAMA POWER CO

Overview

See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY– "Overview" in Item 7 of the Form 10-K for additional information. The financial condition of each Registrant remained stable at September 30, 2026. The Registrants intend to continue to monitor their access to short-term and long-term capital markets as well as their bank credit arrangements to meet future capital and liquidity needs. See "Cash Requirements," "Sources of Capital," and "Financing Activities" herein for additional information.

At the end of the third quarter 2026, the market price of Southern Company's common stock was $82.89 per share (based on the closing price as reported on the NYSE) and the book value was $36.12 per share, representing a market-to-book ratio of 229%, compared to $87.20, $32.18, and 271%, respectively, at the end of 2025. Southern Company's common stock dividend in the third quarter 2026 was $0.76 per share compared to $0.74 per share in the third quarter 2025.

Cash Requirements

See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 of the Form 10-K for a description of the Registrants' significant cash requirements.

The Registrants' significant cash requirements include estimated capital expenditures associated with their construction programs. The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental laws and regulations; the outcome of any legal challenges to environmental rules; changes in electric generating plants, including unit retirements and replacements and adding or changing fuel sources at existing electric generating units or extending the retirement dates of certain generating plants, to meet regulatory requirements; changes in FERC rules and regulations; state regulatory agency approvals; changes in the expected environmental compliance program; changes in legislation, regulation, and/or tariff policy; the cost, availability, and efficiency of construction labor, equipment, and materials; project scope and design changes; abnormal weather; delays in construction due to public or political considerations or judicial or regulatory action; storm impacts; and the cost of capital. In addition, there can be no assurance that the Registrants' costs related to capital expenditures and AROs (as applicable) will be fully recovered. Additionally, expenditures associated with Southern Power's planned acquisitions may vary due to market opportunities and the execution of its growth strategy.

In October 2026, Alabama Power's Board of Directors approved updates to its construction program to reflect new estimated amounts of $2.5 billion for 2027, $2.6 billion for 2028, $2.3 billion for 2029, $2.4 billion for 2030, and $2.8 billion for 2031. These amounts include capital expenditures related to nuclear fuel and LTSAs. These amounts also include estimated capital expenditures to comply with environmental laws and regulations, but do not include any potential compliance costs associated with any future regulation of CO 2 emissions from fossil fuel-fired electric generating units.

In the first quarter 2026, Southern Power committed to development projects to uprate certain turbines at the Franklin and Wansley natural gas facilities. The remaining aggregate construction costs for these projects are expected to be between $560 million and $620 million. See Note (K) to the Condensed Financial Statements under "Southern Power – Natural Gas Turbine Uprate Projects" herein for additional information regarding Southern Power's construction projects.

Long-term debt maturities and the interest payable on long-term debt each represent a significant cash requirement for the Registrants. See "Financing Activities" herein for information on changes in the Registrants' long-term debt balances since December 31, 2025.

Fuel and purchased power costs represent a significant component of funding ongoing operations for the traditional electric operating companies and Southern Power. Fuel costs include purchases of coal (for the traditional electric operating companies) and natural gas (for the traditional electric operating companies and Southern Power), as well as the related transportation and storage. Since December 31, 2025, Alabama Power, Georgia Power, and Southern Power have entered into additional commitments for natural gas primarily related to Alabama Power's conversion of Plant Barry Unit 5 from coal to natural gas, Georgia Power's ongoing construction of generation projects, and additional firm transportation capacity for certain Southern Power natural gas facilities. Total estimated costs for these additional fuel commitments at September 30, 2026 are provided in the table below. See Note (B) to the Condensed Financial Statements under "Georgia Power – Construction" herein and Note 2 to the financial statements under "Alabama Power – Environmental Accounting Order" in Item 8 of the Form 10-K for additional information.

Sources of Capital

See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital" in Item 7 of the Form 10-K for additional information. Southern Company intends to meet its future capital needs through operating cash flows, borrowings from financial institutions, and debt, hybrid, and/or equity issuances. Equity capital can be provided from any combination of Southern Company's stock plans, private placements, or public offerings.

The Subsidiary Registrants plan to obtain the funds to meet their future capital needs from sources similar to those they used in the past, which were primarily from operating cash flows, external securities issuances, borrowings from financial institutions, and equity contributions from Southern Company. In addition, Alabama Power and Georgia Power plan to utilize borrowings from the FFB. Operating cash flows provide a substantial portion of the Registrants' cash needs. See Note (F) to the Condensed Financial Statements under "DOE Loan Guarantee Borrowings" herein for additional information.

The amount, type, and timing of any financings during the remainder of 2026, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals (for certain of the Subsidiary Registrants), and other factors. See "Cash Requirements" and "Financing Activities" herein for additional information.

By regulation, Nicor Gas is restricted, up to its retained earnings balance, in the amount it can dividend or loan to affiliates and is not permitted to make money pool loans to affiliates. At September 30, 2026, the amount of subsidiary retained earnings restricted to dividend totaled $2.0 billion. This restriction did not impact Southern Company Gas' ability to meet its cash obligations, nor does management expect such restriction to materially impact Southern Company Gas' ability to meet its currently anticipated cash obligations.

Certain Registrants' current liabilities frequently exceed their current assets because of long-term debt maturities and the periodic use of short-term debt as a funding source, as well as significant seasonal fluctuations in cash needs. The Registrants generally plan to refinance long-term debt as it matures. The following table shows the amount by which current liabilities exceeded current assets at September 30, 2026 for the applicable Registrants:

The Registrants believe the need for working capital can be adequately met by utilizing operating cash flows, as well as commercial paper, lines of credit, and short-term bank notes, as market conditions permit. In addition, under certain circumstances, the Subsidiary Registrants may utilize equity contributions and/or loans from Southern Company.

Bank Credit Arrangements

At September 30, 2026, unused committed credit arrangements with banks were as follows:

(a)Includes $15 million at Alabama Property Company, a wholly-owned subsidiary of Alabama Power. Alabama Power is not party to this arrangement.

(b)Georgia Power had $26 million of letters of credit outstanding under an uncommitted letter of credit facility at September 30, 2026.

(c)At September 30, 2026, Southern Power also had two continuing letters of credit facilities for standby letters of credit, of which $21 million was unused. In addition, Southern Power Company had $23 million of letters of credit outstanding under an uncommitted letter of credit facility at September 30, 2026. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities.

(d)Includes $798 million and $800 million at Southern Company Gas Capital and Nicor Gas, respectively.

Subject to applicable market conditions, the Registrants, Nicor Gas, and SEGCO expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, the Registrants, Nicor Gas, and SEGCO may extend the maturity dates and/or increase or decrease the lending commitments thereunder.

A portion of the unused credit with banks is allocated to provide liquidity support to certain revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. At September 30, 2026, outstanding variable rate demand revenue bonds of the traditional electric operating companies with allocated liquidity support totaled approximately $1.5 billion (comprised of approximately $796 million at Alabama Power, $653 million at Georgia Power, and $58 million at Mississippi Power). In addition, at September 30, 2026, Georgia Power had approximately $170 million of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months. Variable rate demand revenue bonds and fixed rate revenue bonds required to be remarketed within the next 12 months are classified as long-term debt on the balance sheets as a result of available long-term committed credit.

See Note 8 to the financial statements in Item 8 of the Form 10-K and Note (F) to the Condensed Financial Statements under "Bank Credit Arrangements" herein for additional information.

Short-term Borrowings

The Registrants, Nicor Gas, and SEGCO make short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Southern Power's subsidiaries are not issuers or obligors under its commercial paper program. Commercial paper and short- term bank term loans are included in notes payable in the balance sheets. Details of the Registrants' short-term borrowings were as follows:

(*)Average and maximum amounts are based upon daily balances during the three-month period ended September 30, 2026.

Analysis of Cash Flows

Net cash flows provided from (used for) operating, investing, and financing activities for the nine months ended September 30, 2026 and 2025 are presented in the following table:

Fluctuations in cash flows from financing activities vary from year to year based on capital needs and the maturity or redemption of securities.

Net cash provided from operating activities increased $675 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to higher net income after non-cash adjustments and the timing of vendor payments, partially offset by the timing of customer receivable collections and materials and supplies purchases.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to the Subsidiary Registrants' construction programs.

The net cash provided from financing activities for the nine months ended September 30, 2026 was primarily related to issuances of common stock through the settlement of forward sale contracts and net issuances of long-term debt, partially offset by common stock dividend payments. See Note (F) to the Condensed Financial Statements under "Equity Distribution Agreement" herein for additional information.

Net cash provided from operating activities increased $304 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to higher net income after non-cash adjustments, customer refunds in 2025 associated with a nuclear fuel disposal cost award, and the timing of fossil fuel stock purchases and vendor payments, partially offset by the timing of customer receivable collections and the monetization of §45U PTCs in 2025. See Note 3 to the financial statements under "Nuclear Fuel Disposal Costs" in Item 8 of the Form 10-K for additional information.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to gross property additions, partially offset by contributions in aid of construction.

The net cash used for financing activities for the nine months ended September 30, 2026 was primarily related to common stock dividend payments, partially offset by capital contributions from Southern Company.

Net cash provided from operating activities increased $167 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to the timing of vendor payments, partially offset by the timing of customer receivable collections.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to gross property additions.

The net cash provided from financing activities for the nine months ended September 30, 2026 was primarily related to capital contributions from Southern Company, net borrowings from the FFB, and net issuances of senior notes, partially offset by common stock dividend payments and the repayment of bank loans. See Note (F) to the Condensed Financial Statements under "DOE Loan Guarantee Borrowings" herein for additional information.

Net cash provided from operating activities decreased $34 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to the timing of customer receivable collections and funds received in 2025 as part of the Plant Daniel acquisition, partially offset by increased fuel cost recovery.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to gross property additions.

The net cash provided from financing activities for the nine months ended September 30, 2026 was primarily related to the issuance of a bank term loan, capital contributions from Southern Company, and net issuance of senior notes, partially offset by common stock dividend payments.

Net cash provided from operating activities increased $407 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to higher net income after non-cash adjustments and an increase in the utilization of federal tax credit carryforwards.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to ongoing construction activities. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.

The net cash provided from financing activities for the nine months ended September 30, 2026 was primarily related to capital contributions from Southern Company and net issuance of senior notes, partially offset by common stock dividend payments, a reduction in commercial paper borrowings, and net distributions to noncontrolling interests.

Net cash provided from operating activities increased $147 million for the nine months ended September 30, 2026 as compared to the corresponding period in 2025 primarily due to increased billings, the timing of customer receivable collections, and higher natural gas cost recovery as a result of higher natural gas prices, partially offset by higher volumes of natural gas purchases and the timing of payments for natural gas.

The net cash used for investing activities for the nine months ended September 30, 2026 was primarily related to construction of transmission and distribution assets recovered through base rates.

The net cash used for financing activities for the nine months ended September 30, 2026 was primarily related tocommon stock dividend payments, a reduction in commercial paper borrowings, and maturities of first mortgage bonds, partially offset by the issuance of junior subordinated notes and the net issuance of senior notes.

Significant Balance Sheet Changes

•an increase of $6.3 billion in total property, plant, and equipment primarily related to the Subsidiary Registrants' construction programs;

•an increase of $5.9 billion in total stockholders' equity primarily related to net income and issuances of common stock largely through the settlement of forward sale contracts, partially offset by common stock dividend payments;

•an increase of $1.2 billion in long-term debt (including securities due within one year) primarily due to net issuances of senior notes, a net increase in finance lease obligations largely resulting from a lease modification at Georgia Power, and net borrowings from the FFB, partially offset by net redemptions of junior subordinated notes and net repayments of bank loans;

•an increase of $652 million in customer accounts receivable primarily due to seasonal billings and the timing of customer collections at the traditional electric operating companies; and

•an increase of $567 million in other deferred credits and liabilities primarily due to net receipts of contributions in aid of construction for transmission and generation facilities.

See "Financing Activities" and Note (F) to the Condensed Financial Statements under "Equity Distribution Agreement," and "DOE Loan Guarantee Borrowings," and "Georgia Power Lease Modification" herein for additional information.

•an increase of $933 million in common stockholder's equity primarily due to net income and capital contributions from Southern Company, partially offset by dividends paid to Southern Company;

•an increase of $432 million in total property, plant, and equipment primarily related to the construction of transmission and distribution facilities;

•an increase of $420 million in other deferred credits and liabilities primarily due to contributions in aid of construction to be used for the construction of transmission and generation facilities; and

•an increase of $417 million in customer accounts receivable primarily due to seasonal billings and the timing of customer collections, as well as an increase in receivables related to contributions in aid of construction.

•an increase of $6.6 billion in total property, plant, and equipment primarily related to the construction of generation, transmission, and distribution facilities;

•an increase of $5.2 billion in common stockholder's equity primarily due to capital contributions from Southern Company and net income, partially offset by dividends paid to Southern Company; and

•an increase of $2.5 billion in long-term debt (including securities due within one year) primarily due to a net increase in finance lease obligations largely resulting from a lease modification, net borrowings from the FFB, and net issuances of senior notes, partially offset by the repayment of bank loans.

See "Financing Activities – Georgia Power," Note (B) to the Condensed Financial Statements under "Georgia Power – Construction," and Note (F) to the Condensed Financial Statements under "DOE Loan Guarantee Borrowings" and "Georgia Power Lease Modification" herein for additional information.

•an increase of $160 million in long-term debt (including securities due within one year) primarily due to the issuance of a bank term loan and net issuance of senior notes;

•an increase of $157 million in common stockholder's equity related to net income and capital contributions from Southern Company, partially offset by dividends paid to Southern Company;

•an increase of $63 million in cash and cash equivalents, as reflected in the statements of cash flows and discussed further under "Analysis of Cash Flows – Mississippi Power" herein;

•an increase of $60 million in total property, plant, and equipment primarily related to the construction of transmission and distribution facilities; and

•a decrease of $60 million in other deferred credits and liabilities primarily due to contributions in aid of construction used for transmission and distribution facilities.

See "Financing Activities – Mississippi Power" herein for additional information.

•an increase of $297 million in cash and cash equivalents, as reflected in the statements of cash flows and discussed further under "Analysis of Cash Flows – Southern Power" herein;

•increases of $216 million in accumulated deferred income taxes and $115 million in prepaid income taxes primarily related to the expected utilization of tax credits;

•a decrease of $215 million in total property, plant, and equipment primarily due to the continued depreciation of assets and accelerated depreciation associated with wind repowering projects, partially offset by continued construction projects;

•an increase of $177 million in total stockholders' equity primarily due to capital contributions from Southern Company, partially offset by dividends paid to Southern Company and net distributions to noncontrolling interests; and

•a decrease of $138 million in notes payable due to a reduction in commercial paper borrowings.

See Note (K) to the Condensed Financial Statements under "Southern Power – Wind Repowering Projects" herein for additional information.

•an increase of $915 million in total property, plant, and equipment primarily due to the construction of transmission and distribution assets;

•a decrease of $516 million in total accounts receivable primarily due to seasonal billings and the timing of customer collections, partially offset by increases in base rates and natural gas prices;

•an increase of $511 million in long-term debt (including securities due within one year) primarily due to the issuance of junior subordinated notes and the net issuance of senior notes, partially offset by maturities of first mortgage bonds;

•a decrease of $208 million in notes payable due to a reduction in commercial paper borrowings; and

•an increase of $207 million in common stockholder's equity primarily due to net income, partially offset by dividends paid to Southern Company.

See "Financing Activities – Southern Company Gas" herein for additional information.

Financing Activities

The following table outlines long-term debt financing activities for the first nine months of 2026:

(a)Includes reductions in finance lease obligations resulting from cash payments under finance leases and, for Georgia Power, principal amortization payments totaling $64 million for FFB borrowings. See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K for additional information.

(b)Represents reductions in affiliate finance lease obligations at Georgia Power, which are eliminated in Southern Company's consolidated financial statements.

Except as otherwise described herein, the Registrants used the proceeds of debt issuances for their redemptions and maturities shown in the table above, to repay short-term indebtedness, and for general corporate purposes, including working capital. The Subsidiary Registrants also used the proceeds for their construction programs.

In addition to any financings that may be necessary to meet capital requirements and contractual obligations, the Registrants plan to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.

During the first nine months of 2026, Southern Company issued approximately 44.9 million shares of common stock primarily through forward sale contract settlements and employee equity compensation plans. Proceeds from settlements of the forward sale contracts totaled approximately $3.8 billion. See Note (F) to the Condensed Financial Statements under "Equity Distribution Agreement" herein for additional information.

In January 2026, Southern Company redeemed all $1.25 billion aggregate principal amount of its Series 2020B 4.00% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due January 15, 2051.

Also in January 2026, Southern Company borrowed $100 million pursuant to a short-term uncommitted bank credit arrangement bearing interest at a floating rate, which was repaid in June 2026.

In March 2026, Southern Company issued $1.3 billion aggregate principal amount of Series 2026A 6.00% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due April 1, 2058.

In July 2026, Southern Company repaid at maturity $1.75 billion aggregate principal amount of its Series 2016E 3.25% Senior Notes.

Also in July 2026, Southern Company borrowed $200 million pursuant to a short-term uncommitted bank credit arrangement bearing interest at a floating rate, which was repaid in August 2026.

In August 2026, Southern Company issued approximately $833.8 million aggregate principal amount of Series 2026A 2.125% Convertible Senior Notes due December 15, 2027 and approximately $1.898 billion aggregate principal amount of Series 2026B 3.50% Convertible Senior Notes due September 15, 20297 in private offerings. Southern Company used a portion of the proceeds from these issuances to repurchase approximately $368.7 million of the remaining approximately $829.9 million aggregate principal amount outstanding of its Series 2024A 4.50% Convertible Senior Notes due June 15, 2027. See Note (F) to the financial statements under "Convertible Senior Notes" herein for additional information.

In September 2026, Southern Company redeemed all $1.0 billion aggregate principal amount of its Series 2021A 3.75% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due September 15, 2051.

In March 2026, Alabama Power repaid at maturity its three bank term loan agreements with an aggregate principal amount of $45 million.

In February 2026, Georgia Power borrowed $250 million pursuant to a short-term uncommitted bank credit arrangement which is payable on demand, following specified notice by the bank, and bears interest at a rate agreed upon by Georgia Power and the bank from time to time. In March 2026, April 2026, and May 2026, Georgia Power repaid the short-term uncommitted bank credit arrangement in installments of $50 million, $50 million, and $150 million, respectively.

In March 2026, Georgia Power made initial borrowings under a multi-advance term loan facility with the FFB in an aggregate principal amount of approximately $1.0 billion at an interest rate of 5.041% through the final maturity date of December 10, 2055. The proceeds were used to reimburse Georgia Power for eligible costs relating to certain generation, battery energy storage, and transmission facilities. See Note (F) to the Condensed Financial Statements under "DOE Loan Guarantee Borrowings" herein for additional information.

In April 2026, Georgia Power repaid at maturity $325 million aggregate principal amount of its Series 2016A 3.25% Senior Notes.

In May 2026, Georgia Power issued $150 million aggregate principal amount of additional Series 2025B

4.85% Senior Notes due March 15, 2031, $600 million aggregate principal amount of Series 2026A Floating Rate Senior Notes due November 22, 2027, and $550 million aggregate principal amount of Series 2026B 4.60% Senior Notes due June 15, 2029.

In June 2026, Georgia Power repaid at maturity both of its long-term floating rate bank loans totaling $400 million.

In August 2026, Georgia Power purchased and held $40 million aggregate principal amount of Development Authority of Monroe County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Scherer Project), First Series 2009. In September 2026, Georgia Power reoffered these bonds to the public.

In September 2026, Georgia Power repaid at maturity its obligations with respect to approximately $10 million aggregate principal amount of Development Authority of Floyd County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Hammond Project), First Series 1996, and approximately $4 million aggregate principal amount of Development Authority of Heard County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Wansley Project), First Series 1996.

Also in September 2026, Georgia Power repaid at maturity $400 million aggregate principal amount of its Series 2025A Floating Rate Senior Notes.

In March 2026, Mississippi Power issued approximately $75 million aggregate principal amount of Series 2026A Floating Rate Senior Notes due May 15, 2076.

In July 2026, Mississippi Power repaid at maturity $65 million aggregate principal amount of its Series 2023A 5.64% Senior Notes.

Also in July 2026, Mississippi Power entered into a $150 million floating rate bank term loan, which matures in January 2028.

In June 2026, Southern Power issued $600 million aggregate principal amount of Series 2026A 4.80% Senior Notes due June 15, 2031.

Also in June 2026, Southern Power repaid at maturity €500 million (approximately $564 million) aggregate principal amount of its Series 2016B 1.85% Senior Notes.

In May 2026, Southern Company Gas Capital issued $500 million aggregate principal amount of Series 2026A 6.05% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due September 15, 2056, guaranteed by Southern Company Gas.

In June 2026, Southern Company Gas Capital repaid at maturity $350 million aggregate principal amount of its 3.250% Senior Notes.

Also in June 2026, Nicor Gas repaid at maturity $100 million aggregate principal amount of its 2.66% Series First Mortgage Bonds.

In August 2026, Nicor Gas repaid at maturity $50 million aggregate principal amount of its 1.42% Series First Mortgage Bonds.

In September 2026, Southern Company Gas Capital issued $550 million aggregate principal amount of Series 2026A 5.00% Senior Notes due October 1, 2029.

Subsequent to September 30, 2026, Nicor Gas issued in a private placement $50 million aggregate principal amount of 5.46% Series First Mortgage Bonds due October 9, 2029 and $75 million aggregate principal amount of 5.55% Series First Mortgage Bonds due October 9, 2031. Pursuant to the same agreement, Nicor Gas agreed to issue in a private placement in December 2026 $75 million aggregate principal amount of 5.80% Series First Mortgage Bonds due December 8, 2036 and $100 million aggregate principal amount of 6.25% Series First Mortgage Bonds due December 8, 2056.

Credit Rating Risk

At September 30, 2026, the Registrants did not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade.

There are certain contracts that could require collateral, but not accelerated payment, in the event of a credit rating change of certain Registrants to BBB and/or Baa2 or below. These contracts are primarily for physical electricity and natural gas purchases and sales, fuel purchases, fuel transportation and storage, energy price risk management, transmission, interest rate management, and equipment purchases related to construction of facilities.

The maximum potential collateral requirements under these contracts at September 30, 2026 were as follows:

(*)Southern Power has PPAs that could require collateral, but not accelerated payment, in the event of a downgrade of Southern Power's credit. The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $106 million of cash collateral posted related to PPA requirements at September 30, 2026.

The amounts in the previous table for the traditional electric operating companies and Southern Power include certain agreements that could require collateral if either Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of the Registrants to access capital markets and would be likely to impact the cost at which they do so.