Company: SOJE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000092122-25-000076
Chunk: 353

Company: SOUTHERN CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 2
Chunk 353
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 FINANCIAL CONDITIONAND RESULTS OF OPERATIONS (Continued)

Wholesale Electric Revenues

Second Quarter 2025 vs. Second Quarter 2024Year-to-Date 2025 vs. Year-to-Date 2024(change in millions)(% change)(change in millions)(% change)$548.6$22718.9

In the second quarter 2025, wholesale electric revenues were $681 million compared to $627 million for the corresponding period in 2024. For year-to-date 2025, wholesale electric revenues were $1.4 billion compared to $1.2 billion for the corresponding period in 2024. The increases in the second quarter and year-to-date 2025 were due to increases in energy revenues of $60 million and $239 million, respectively, partially offset by decreases in capacity revenues of $6 million and $12 million, respectively. The increases in energy revenues were primarily due to fuel and purchased power price increases. The decreases in capacity revenues were primarily due to net decreases in MW capacity under contract from natural gas PPAs at Southern Power, partially offset by higher non-fuel revenues from wholesale capacity contracts at Georgia Power.

Wholesale electric revenues consist of revenues from PPAs and short-term opportunity sales. Wholesale electric revenues from PPAs (other than solar and wind PPAs) have both capacity and energy components. Capacity revenues generally represent the greatest contribution to net income and are designed to provide recovery of fixed costs plus a return on investment. Energy revenues will vary depending on fuel prices, the market prices of wholesale energy compared to 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. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Energy sales from solar and wind PPAs do not have a capacity charge and customers either purchase the energy output of a dedicated renewable facility through an energy charge or through a fixed price related to the energy. As a result, the ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors. Wholesale electric revenues at Mississippi Power include FERC-regulated municipal and rural association sales under cost-based tariffs as well as market-based sales. Short-term opportunity sales are made at market-based rates