Company: SOJE
Filing Date: 2025-07-31
Form Type: 10-Q
Source: 0000092122-25-000076
Chunk: 418

Company: SOUTHERN CO
Filing Date: 2025-07-31
Form: 10-Q
Item: Item 2
Chunk 418
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IAL CONDITIONAND RESULTS OF OPERATIONS (Continued)

There are certain contracts that could require collateral, but not accelerated payment, in the event of a credit rating change of certain Registrants to BBB and/or Baa2 or below. These contracts are primarily for physical electricity and natural gas purchases and sales, fuel purchases, fuel transportation and storage, energy price risk management, transmission, interest rate management, and equipment purchases related to construction of facilities.

The maximum potential collateral requirements under these contracts at June 30, 2025 were as follows:

Credit RatingsSouthern   Company(*)Alabama PowerGeorgia PowerMississippi PowerSouthern   Power(*)Southern Company Gas(in millions)At BBB and/or Baa2$34 $1 $— $— $33 $— At BBB- and/or Baa3456 2 36 — 417 — At BB+ and/or Ba1 or below3,626 421 2,352 274 1,351 14 

(*)Southern Power has PPAs that could require collateral, but not accelerated payment, in the event of a downgrade of Southern Power's credit. The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $106 million of cash collateral posted related to PPA requirements at June 30, 2025.

The amounts in the previous table for the traditional electric operating companies and Southern Power include certain agreements that could require collateral if either Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of the Registrants to access capital markets and would be likely to impact the cost at which they do so.

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