Company: SOJE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000092122-25-000076
Chunk: 384

Company: SOUTHERN CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 2
Chunk 384
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 repowering projects and an increase in other operations and maintenance expenses due to increases in scheduled outage expenses and generation maintenance, partially offset by higher revenues driven by higher market prices of energy and higher HLBV income associated with tax equity partnerships.

See Note (K) to the Condensed Financial Statements under "Southern Power – Wind Repowering Projects" herein and Note 15 to the financial statements under "Southern Power – Development Projects" in Item 8 of the Form 10-K for additional information.

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    Table of Contents                                Index to Financial StatementsMANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONAND RESULTS OF OPERATIONS (Continued)

Operating Revenues

Second Quarter 2025 vs. Second Quarter 2024Year-to-Date 2025 vs. Year-to-Date 2024(change in millions)(% change)(change in millions)(% change)$224.2$11611.6

Total operating revenues include PPA capacity revenues, which are derived primarily from long-term contracts associated with natural gas facilities, and PPA energy revenues derived from long-term contracts associated with Southern Power's generation facilities. To the extent Southern Power has capacity not contracted under a PPA, it may sell power into an accessible wholesale market, or, to the extent those generation assets are part of the FERC-approved IIC, it may sell power into the Southern Company power pool.

Natural Gas Capacity and Energy Revenue

Capacity revenues generally represent the greatest contribution to operating income and are designed to provide recovery of fixed costs plus a return on investment.

Energy is generally sold at variable cost or is indexed to published natural gas indices. Energy revenues will vary depending on the energy demand of Southern Power's customers and their generation capacity, as well as the market prices of wholesale energy compared to the cost of Southern Power's energy. Energy revenues also include fees for support services, fuel storage, and unit start charges. Increases and decreases in energy revenues under PPAs that are driven by fuel or purchased power prices are accompanied by an increase or decrease in fuel and purchased power costs and do not have a significant impact on net income.

Solar and Wind Energy Revenue

Southern Power's energy sales from solar and wind generating facilities are predominantly through long-term PPAs that do not have capacity revenue. Customers either purchase the energy output of a dedicated renewable facility through an energy charge or pay a fixed price related to the energy generated from the respective facility and sold to the grid. As a result, Southern Power