Company: SOJE
Filing Date: 2025-10-30
Form Type: 10-Q
Source: 0000092122-25-000084
Chunk: 41

Company: SOUTHERN CO
Filing Date: 2025-10-30
Form: 10-Q
Item: Item 1
Chunk 41
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al Separation Study (JSS) under Rate RSE, which allocates costs between retail and other electric services. For 2026, a revised JSS allocation factor will account for system capacity previously allocated to wholesale electric services that will be used for retail electric service starting January 1, 2026. In addition, Alabama Power is authorized to establish a regulatory asset to defer certain costs associated with this capacity for 2026, and those costs are estimated to be approximately $100 million. Beginning in 2027, Alabama Power will amortize the regulatory asset on a levelized basis over a period not exceeding 10 years.

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    Table of Contents                                Index to Financial StatementsNOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)(UNAUDITED)

Rate NDRBeginning with July 2025 billings, the NDR reserve maintenance charge was suspended and the reserve establishment charge was activated as a result of the NDR balance falling below $50 million. Alabama Power expects to collect $18 million in the second half of 2025 and approximately $36 million annually beginning in 2026 under Rate NDR unless the NDR balance exceeds $75 million. At September 30, 2025, Alabama Power's regulatory asset balance related to NDR was $4 million. Rate NDR is intended to allow recovery of any existing deferred storm-related operations and maintenance costs and any future reserve deficits over a 48-month period. The Alabama PSC gives Alabama Power authority to record a deficit balance in the NDR when costs of storm damage exceed any established reserve balance.Reliability Reserve Accounting OrderOn June 19, 2025, Alabama Power notified the Alabama PSC of its intent to use a portion of its $131 million reliability reserve balance during 2025. As a result, Alabama Power had usage of the reliability reserve in the amount of $30 million during the third quarter 2025 for reliability-related transmission, distribution, and generation expenses. At September 30, 2025, Alabama Power's reliability reserve balance was $101 million.Nuclear Production Tax Credits OrderOn October 7, 2025, the Alabama PSC issued an order authorizing Alabama Power to establish a regulatory liability for nuclear PTCs received through its nuclear generating facilities pursuant to Internal Revenue Code §45U for tax years 2024 through 2032. For the 2024 tax year, Alabama Power claimed §45U PTC