Company: SOJE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000092122-25-000076
Chunk: 404

Company: SOUTHERN CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 2
Chunk 404
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 PTCs for solar and wind power projects, which were originally set to run through 2032. Such projects must now either begin construction by July 2026 or be fully operational by the end of 2027 in order to claim the applicable tax credits. Nuclear, hydropower, and geothermal energy projects maintain tax credits under the new law. Battery energy storage projects retain their full tax credit through 2033, with a gradual phase-out by 2036. The OBBB adds new restrictions for tax credits for renewable facilities that are owned or influenced by a prohibited foreign entity or receive material assistance from a prohibited foreign entity. Following enactment of the OBBB, the president issued an executive order directing the U.S. Treasury to issue new and revised wind and solar tax credit guidance within 45 days. Additionally, the IRS is expected to issue significant guidance on the tax provisions in the OBBB. Southern Company is still assessing and will continue to monitor the impacts of the OBBB. The ultimate outcome of this legislation cannot be determined at this time.

Georgia State Tax Legislation

On April 15, 2025, the State of Georgia enacted tax legislation that reduced the corporate income tax rate from 5.39% to 5.19% effective for the 2025 tax year. This legislation reduced the amount of Southern Company's and certain subsidiaries' income tax expense in the State of Georgia and existing state net accumulated deferred tax liabilities, increased regulatory liabilities at Georgia Power and Southern Company Gas, and reduces Georgia Power's ability to utilize certain state tax credits in the State of Georgia. The legislation did not have a material impact on the net income of the applicable Registrants in 2025.

Zero-Emission Nuclear Power Production Tax Credit

Alabama Power and Georgia Power have nuclear generating facilities that qualify for Internal Revenue Code §45U PTCs for the 2024 tax year that are expected to be claimed on Southern Company's consolidated tax return by October 15, 2025. The base credit amounts are $75 million, $36 million, and $39 million for Southern Company, Alabama Power, and Georgia Power, respectively, which have been recorded as a regulatory liability. Additionally, each company may qualify for the prevailing wage multiplier which would allow Southern Company, Alabama Power, and Georgia Power to claim §45U PTCs totaling $373 million, $180 million, and $193 million, respectively. The §45U PTC is available for tax years 2024 to 2032 and is subject