Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 2301

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 2
Chunk 2301
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 ITC. Starting in 2023 and through 2032, the IRA provides for a 30% ITC for stand-alone energy storage projects. For wind projects placed in service in 2022 through 2032, the IRA provides for a 100% PTC, adjusted for inflation annually. For projects placed in service before 2022, the 2024 PTC rate is 2.9 cents per KWH. For projects placed in service in 2022 and later, the 2024 PTC rate is 3 cents per KWH. The same PTC rate applies for solar projects for which the PTC option has been elected. To realize the full value of ITCs and PTCs, the IRA requires satisfaction of prevailing wage and apprenticeship requirements.

In April 2024, the IRS issued final regulations related to the transfer of tax credits. In 2024, Alabama Power, Georgia Power, and Southern Power entered into purchase and sale agreements with non-affiliated parties to sell ITCs and PTCs at a discount to the generated credit value in 2024, 2025, and 2026. The discount will be recorded as a reduction in tax credits recognized in the financial statements. The Southern Company system continues to explore the ability to efficiently monetize tax credits through third-party transferability agreements. See Note 10 to the financial statements for additional information.

Alabama Power and Georgia Power have nuclear generating facilities that may qualify to generate and claim PTCs under the IRA beginning in 2024.

On September 12, 2024, the U.S. Treasury Department and the IRS issued a notice of proposed regulations that would address the application of the CAMT. Southern Company is evaluating the proposed regulations and is subject to the CAMT for the 2024 tax year, primarily driven by tax deductions for Georgia Power's storm restoration costs and the natural gas safe harbor tax accounting method change, based on interpretations of the early CAMT guidance. The CAMT will primarily be satisfied by tax credits for the 2024 tax year. The CAMT impacts operating cash flows of certain Registrants but will not impact the Registrants' net income. See Note 2 to the financial statements under "Georgia Power – Storm Damage Recovery" for additional information on Georgia Power's storm restoration costs. Also see "Natural Gas Safe Harbor Method" herein and Note 10 to the financial statements for additional information.

Implementation of the IRA provisions related to existing nuclear generating facilities and CAMT is subject to the