Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 528

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 7
Chunk 528
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s generated and purchased.

Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Alabama Power's energy cost recovery clause. Alabama Power, along with the Alabama PSC, continuously monitors the under/over recovered balance to determine whether adjustments to billing rates are required. See Note 2 to the financial statements under "Alabama Power – Rate ECR" for additional information.

Fuel

Fuel expense was $1.4 billion in 2024, an increase of $59 million, or 4.5%, compared to 2023. The increase was primarily due to a 23.1% increase in the volume of KWHs generated by natural gas, an 8.4% increase in the volume of KWHs generated by coal, and a 9.6% decrease in the volume of KWHs generated by hydro facilities as a result of less rainfall, partially offset by an 8.7% decrease in the average cost per KWH generated by natural gas, which excludes tolling agreements, and a 7.8% decrease in the average cost per KWH generated by coal.

Purchased Power – Non-Affiliates

Purchased power expense from non-affiliates was $199 million in 2024, a decrease of $54 million, or 21.3%, compared to 2023. The decrease was primarily due to a 31.3% decrease in the volume of KWHs purchased as a result of a PPA that ended in May 2023 and the availability of Plant Barry Unit 8 and Central Alabama Generating Station generation, partially offset by a 12.5% increase in the average cost per KWH purchased.

Energy purchases from non-affiliates 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 electric service territory, and the availability of the Southern Company system's generation.

Purchased Power – Affiliates

Purchased power expense from affiliates was $175 million in 2024, a decrease of $76 million, or 30.3%, compared to 2023. The decrease was primarily due to a 42.4% decrease in the volume of KWHs purchased due to the availability of Plant Barry Unit 8 and Central Alabama Generating Station generation and a reduction in capacity-related expenses due to lower capacity needs in 2024, partially offset by a 21.0%