Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 2462

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 3
Chunk 2462
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 do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clauses. See Note 2 to the financial statements under "Mississippi Power – Fuel Cost Recovery" and Note 1 to the financial statements under "Fuel Costs" for additional information.

Fuel expense decreased $75 million, or 14.5%, in 2024 as compared to 2023 primarily due to a 10.8% decrease in the average cost of natural gas per KWH generated and a 7.1% decrease in the volume of KWHs generated by natural gas.

Purchased power expense increased $14 million, or 63.6%, in 2024 as compared to 2023 primarily due to a 56.7% increase in the volume of KWHs purchased and a 3.0% increase in the average cost per KWH purchased.

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 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.

Other Operations and Maintenance Expenses

Other operations and maintenance expenses increased $8 million, or 2.2%, in 2024 as compared to 2023. The increase was primarily due to increases of $10 million in reliability reserve accruals, $6 million in generation expenses primarily associated with non-outage costs, and $4 million in certain compensation and benefits expenses. These increases were partially offset by decreases of $12 million associated with previously deferred Plant Ratcliffe expenses that fully amortized in December 2023 and $4 million associated with the Kemper County energy facility largely due to a decrease in dismantlement costs in 2024 when compared to 2023. See Notes 2 and 3 to the financial statements under "Mississippi Power – Reliability Reserve Accounting Order" and "Other Matters – Mississippi Power," respectively, for additional information.

Interest Expense, Net of Amounts Capitalized

Interest expense, net of amounts capitalized increased $6 million, or 8.5%, in 2024 as compared to 2023. The increase was primarily due to increases of approximately $4 million related to higher average outstanding borrowings and $2 million related to higher interest rates. See FINANCIAL CONDITION AND LIQUIDITY – "Sources of Capital"