Document:

Exhibit 10.27
                                 EXECUTION COPY
                             PUBLIC RELEASE VERSION

                                 ENERGY CONTRACT

                           Dated as of March 28, 2002

                                     Between

                             SOUTHERN POWER COMPANY

                                    as Seller

                                       And

                          DYNEGY POWER MARKETING, INC.

                                  as Purchaser

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                                TABLE OF CONTENTS

<S>                                                                                                             <C>
ARTICLE 1:  DEFINITIONS...........................................................................................1

ARTICLE 2:  TERM OF AGREEMENT.....................................................................................9
     2.1    Filing of Agreement...................................................................................9
     2.2    Termination Date......................................................................................9
     2.3    Effect of Termination.................................................................................9
     2.4    Effective Date........................................................................................9

ARTICLE 3:  DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF CONTACT CAPACITY AND ENERGY..................9
     3.1    Determination of Contract Capacity....................................................................9
     3.2    Sale and Purchase of Contract Capacity................................................................9
     3.3    Sale and Purchase of Contract Energy.................................................................10
     3.4    Source of Contract Energy............................................................................10

ARTICLE 4:  SELLER'S RESOURCES AND CURTAILMENTS..................................................................10
     4.1    Specified Seller's Resources.........................................................................10
     4.2    Pre-Scheduled Excused Hours..........................................................................10
     4.3    Permits; Compliance with Laws........................................................................12
     4.4    Administrative Procedures and Administrative Committee...............................................12
     4.5    Provision of Contract Capacity and Contract Energy...................................................12

ARTICLE 5:  PAYMENTS.............................................................................................16
     5.1    Reservation Payment..................................................................................16
     5.2    Energy Payment.......................................................................................16
     5.3    Conversion Payment...................................................................................16
     5.4    Performance Bonus....................................................................................16
     5.5    Additional Payments..................................................................................18
     5.6    Regulatory...........................................................................................18
     5.7    Wholesale Generation Rates...........................................................................19

ARTICLE 6:  SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO SELLER'S RESOURCES, TITLE AND RISK OF LOSS...............19
     6.1    Scheduling...........................................................................................19
     6.2    Replacement Gas......................................................................................19
     6.3    Southern's Rights to the Specified Seller's Resources................................................21
     6.4    Title and Risk of Loss...............................................................................21

ARTICLE 7:  TRANSMISSION SERVICE.................................................................................21
     7.1    DYPM Obligations and Assumption of Transmission Risk.................................................22
     7.2    Southern Obligations.................................................................................22
     7.3    Imbalances and Penalties.............................................................................22

ARTICLE 8:  METERING.............................................................................................22
     8.1    Metering.............................................................................................22

ARTICLE 9:  BILLING AND PAYMENT..................................................................................22
     9.1    Timing; Method of Payment............................................................................22
     9.2    Late Payment.........................................................................................23
     9.3    Disputed Billings....................................................................................23
     9.4    Adjustments..........................................................................................23
     9.5    Audit Rights.........................................................................................23

ARTICLE 10:  CHANGE IN LAW.......................................................................................23
     10.1      Limitations.......................................................................................23
     10.2      Determination.....................................................................................23
     10.3      Initiation of Surcharge...........................................................................23
     10.4      Timing............................................................................................24
     10.5      Contest and Dialogue..............................................................................24

ARTICLE 11:  LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY......................................................24
     11.1      Costs, Taxes and Charges..........................................................................24
     11.2      Indemnification...................................................................................24
     11.3      Limitation of Liability...........................................................................24

ARTICLE 12:  FORCE MAJEURE EVENT.................................................................................25
     12.1      Force Majeure Event Defined.......................................................................25
     12.2      Applicability of Force Majeure Event..............................................................26
     12.3      Effect of Force Majeure Event.....................................................................26
     12.4      Other Effects of Force Majeure Events.............................................................26

ARTICLE 13:  EVENT OF DEFAULT....................................................................................27
     13.1      Event of Default..................................................................................27
     13.2      Exclusive Remedies................................................................................28

ARTICLE 14:  CREDITWORTHINESS AND SECURITY.......................................................................29
     14.1      Guaranty in Favor of Southern.....................................................................29
     14.2      Negative Watch Credit Support in Favor of Southern................................................29
     14.3      Credit Support in Favor of Southern for Junk Rating...............................................30
     14.4      Post December 31, 2005 Provisions.................................................................30
     14.5      Guaranty in Favor of DYPM.........................................................................31
     14.6      Negative Watch Credit Support in Favor of DYPM....................................................31
     14.7      Credit Support in Favor of DYPM for Junk Rating...................................................32
     14.8      Post June 1, 2005 Provisions......................................................................32

ARTICLE 15:  DELIVERY EXCUSE.....................................................................................32
     15.1      Definition........................................................................................32
     15.2      No Breach for Delivery Excuse.....................................................................33

ARTICLE 16:  REPRESENTATIONS AND WARRANTIES......................................................................33
     16.1      Execution.........................................................................................33
     16.2      Permits...........................................................................................33
     16.3      Binding Obligations...............................................................................33
     16.4      Execution and Consummation........................................................................34
     16.5      Actions and Proceedings...........................................................................34
     16.6       Processor........................................................................................34

ARTICLE 17:  ASSIGNMENT..........................................................................................34
     17.1      General Rule......................................................................................34
     17.2      Consent Required..................................................................................34

ARTICLE 18:  DISPUTE RESOLUTION..................................................................................34
     18.1      Senior Officers...................................................................................35
     18.2      Arbitration.......................................................................................35
     18.3      Binding Nature of Proceedings.....................................................................35

ARTICLE 19:  MISCELLANEOUS.......................................................................................36
     19.1      Governing Law; Waiver of Jury Trial...............................................................36
     19.2      Confidentiality...................................................................................36
     19.3      Survivorship of Obligations.......................................................................37
     19.4      Notice of Proceedings.............................................................................37
     19.5      No Third Party Beneficiaries......................................................................37
     19.6      Section Headings Not to Affect Meaning............................................................37
     19.7      Computation of Time...............................................................................37
     19.8      Interest..........................................................................................38
     19.9      Entire Agreement..................................................................................38
     19.10     Counterparts......................................................................................38
     19.11     Amendments........................................................................................38
     19.12     Waivers...........................................................................................38
     19.13     No Partnership Created............................................................................38
     19.14     Character of Sale.................................................................................38
     19.15     Notices...........................................................................................38
     19.16     Survival..........................................................................................40
     19.17     Construction......................................................................................40
     19.18     Imaged Agreement..................................................................................40
     19.19     GDP-IPD...........................................................................................41
     19.20     Higher Heating Value..............................................................................41

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APPENDIX A

APPENDIX B

APPENDIX C

APPENDIX D

APPENDIX E

APPENDIX F

APPENDIX G

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                                 ENERGY CONTRACT
                                     BETWEEN
                             SOUTHERN POWER COMPANY
                                       AND
                          DYNEGY POWER MARKETING, INC.

         This ENERGY CONTRACT is made and entered into as of this 28th day of
March, 2002 (the "Execution Date"), by and between SOUTHERN POWER COMPANY
(hereafter referred to as "Southern" or "Seller"), a Delaware corporation having
its principal office and place of business at 600 North 18th Street, Birmingham,
Alabama 35233, and DYNEGY POWER MARKETING, Inc., (hereinafter referred to as
"DYPM"), a corporation organized and existing under the laws of the State of
Texas having its principal office and place of business at 1000 Louisiana St.,
Suite 5800, Houston, TX 77002. (Southern and DYPM are hereafter referred to
individually and collectively as a "Party" or the "Parties," respectively.)

                                    RECITALS:

         DYPM desires to purchase and Southern desires to sell, Contract
Capacity and Contract Energy in accordance with this Agreement for the period
from June 1, 2005 through May 31, 2030.

         Subject to the terms and conditions of this Agreement, Southern will
deliver and sell to DYPM, and DYPM will accept and purchase from Southern,
Contract Capacity and Contract Energy from Seller's Resources as provided in
this Agreement.

         NOW THEREFORE, in consideration of the foregoing recitals and the
mutual covenants and agreements hereinafter set forth, the receipt and
sufficiency of which are hereby acknowledged, the Parties agree as follows:

                                    ARTICLE 1

                                   DEFINITIONS

         The following terms shall have the respective meanings set forth below.

         "Administrative Committee" has the meaning set forth in Section 4.4.2.

         "Administrative Procedures" has the meaning set forth in Section 4.4.1.

         "Affiliate" shall mean, with respect to a corporation, partnership or
other entity, each such other corporation, partnership or other entity that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, such corporation, partnership,
or other entity.

         "Agreement" means this Energy Contract, including, to the extent
applicable, any amendments and appendices hereto that the Parties may execute
now or at any time in the future.

         "Alternate Delivery Point" means a point of delivery as agreed to by
the Parties for the delivery of Contract Capacity and Scheduled Energy from
Replacement Seller's Resources.

         "Annual ENDH" means [redacted] for each Contract Year.

         "Billing Month" means each Month during the Term beginning with the
second Month of the first Contract Year and includes the Month immediately
following the expiration or early termination of this Agreement.

                  "BTU" means British Thermal Units.

         "Business Day" means any Day on which Federal Reserve Member Banks in
New York, New York are open for business. A Business Day shall begin at 0800 CPT
and end at 1700 CPT.

         "Central Prevailing Time" or "CPT" means the local time at any point in
Birmingham, Alabama.

         "Change-in-Law" means a Law (including a new or changed interpretation
of an existing Law by a Government Agency, or an interpretation by a Government
Agency previously unknown to Southern) that becomes effective after the date of
the Agreement and generally affects the cost of electric generation [redacted].
Examples of a Change in Law include (but are not limited to): (i) Laws
pertaining to changes in environmental Laws that seek to decrease existing
limits (e.g., NOx) or to establish limits for currently uncontrolled substances
(e.g., CO2); and (ii) Laws pertaining to the imposition of energy taxes on
wholesale power sales. A Change in Law does not include changes in: (i) income
taxes; (ii) taxes assessed or imposed by a county or municipal authority (such
as ad valorem taxes); (iii) franchise and occupational taxes; or (iv) Laws that
have unique application to the Specified Seller's Resources.

         "Commercially Reasonable" or "Commercially Reasonable Efforts" means,
with respect to any purchase, sale, decision, or other action made, attempted or
taken by a Party, such efforts as a reasonably prudent business would undertake
for the protection of its own interest under the conditions affecting such
purchase, sale, decision, or other action, including without limitation,
electric system reliability and stability, the amount of notice of the need to
take such action, the duration and type of the purchase or sale or other action,
and the commercial environment in which such purchase, sale, decision, or other
action occurs.

         "Contest" means with respect to any Person, a contest of: (i) any
Governmental Approval, acts or omissions by any Government Agency or any related
matters; or (ii) the amount or validity of any claim pursued by such Person in
good faith and by appropriate legal, administrative or other proceedings
diligently conducted, so long as the contesting Party could not reasonably be
expected to be prevented from performing its material obligations under this
Agreement pending the outcome of such contest.

         "Contract Capacity" has the meaning set forth in Section 3.1.

         "Contract Energy" has the meaning set forth in Section 3.3.

         "Contract Heat Rate" means [redacted].

         "Contract Year" means: (i) for the first Contract Year, the Effective
Date of Service through May 31, 2006; and (ii) for each Contract Year
thereafter, each twelve (12) Month period thereafter beginning June 1 and ending
May 31.

         "Conversion Payment" has the meaning set forth in Section 5.3

         "Day" means the twenty-four (24) hour period beginning and ending at
2400 CPT.

         "Delivered Energy" means the amounts of energy, expressed in MWhs, that
are delivered by Southern from Seller's Resources in accordance with this
Agreement.

         "Delivery Excuse" has the meaning set forth in Section 15.1.

         "Delivery Point" means the Interconnection Point(s) or such Alternate
Delivery Point(s) connected with the Southern Company Transmission System as may
be mutually agreed upon by Southern and DYPM.

         "Determination Period" has the meaning set forth in Section 4.5.1(b).

         "DYPM" has the meaning set forth in the introductory paragraph hereof.

          "Effective Date of Service" means June 1, 2005.

         "Eligible Guaranty" has the meaning set forth in Section 14.1.

         "Eligible Guaranty Threshold" has the meaning set forth in Section
14.1.

         "Emergency Condition" means a condition or situation (not principally
caused by Southern) that presents an imminent physical threat of danger to life,
health or property, or a situation in which delivery of Scheduled Energy to the
Delivery Point could reasonably be expected to cause a significant disruption on
the Southern Company Transmission System.

         "ENDH" means an excused non-delivery hour (or portion of an hour) in
which an Unavailability has occurred for which Southern accumulates ENDH
pursuant to Section 4.5.2. ENDH for any hour shall equal the ratio of the amount
of Contract Capacity associated with the Scheduled Energy not provided to the
Contract Capacity for such hour.

         "ENDH Accumulated" means, for a Month, the number of Equivalent ENDH
accumulated pursuant to Section 4.5.4.

         "ENDH Available" means, for any point in time in any Month, the number
of ENDH (or partial ENDH) that are available for accumulation pursuant to
Southern's election under Section 4.5.2. The amount of ENDH Available in any
Month shall be equal to the difference between Annual ENDH for the Contract Year
in which such Month occurs and the sum of (i) ENDH Accumulated during such Month
(before the point of calculation) and (ii) ENDH Accumulated during all of the
Months elapsed during such Contract Year preceding the Month in which the
calculation is made.

         "Energy Payment" means the payment for Delivered Energy to be made by
DYPM to Southern as calculated in Section 5.2.

         "Energy Price" means, [redacted].

         "Equivalent ENDH" has the meaning set forth in Section 4.5.4.

         "Event of Default" has the meaning set forth in Section 13.1.

         "Execution Date" has the meaning set forth in the introductory
paragraph hereof.

         "Extended Outage Period" has the meaning set forth in Section 4.5.1(b).

         "Extended Unavailability" has the meaning set forth in Section 4.5.6.

         "FERC" means the Federal Energy Regulatory Commission, or any successor
to its functions.

         "Force Majeure Event" has the meaning set forth in Section 12.1.

         "Force Majeure Hour" shall occur in any hour (or portion of an hour) in
which a Force Majeure Event occurs or is continuing. During a Force Majeure
Hour, if the energy available from the Seller's Resources (as measured in hourly
amounts and expressed in MWh) is greater than zero but less than the amount of
Scheduled Energy, then a partial Force Majeure Hour shall be determined equal to
the ratio of the amount of Contract Capacity not available from the Seller's
Resources in such hour due to the Force Majeure Event to the Contract Capacity
that would have been available for such hour absent such Force Majeure Event.

         "Gas" means Natural Gas.

                  "Gas Index" means [redacted]

                  "GDP-IPD" means the Gross Domestic Product Implicit Price
Deflator published in the National Income and Product Account by the U.S.
Department of Commerce.

                  "Government Agency" means any federal, state, local,
territorial or municipal government and any department, commission, board,
bureau, agency, instrumentality, judicial or administrative body thereof.

         "Governmental Approval" means any authorization, consent, approval,
license, ruling, permit, exemption, variance, order, judgment, decree,
declarations of or regulation of any Government Agency relating to Seller's
Resources or to the execution, delivery or performance of this Agreement.

         "Guarantor" has the meaning set forth in 13.1.2.

         "Guaranty" means a Guaranty or other instrument guaranteeing a Party's
obligations under this Agreement as contemplated under Article 14.

         "Hour Block" means any period within a Day that is comprised of either
a succession of Off Peak Hours or a succession of On Peak Hours.

         "Imaged Agreement" has the meaning set forth in Section 19.18.

         "Increased Electricity Costs" means the additional costs and expenses
of electric power hereunder that result from utilizing Commercially Reasonable
Efforts to comply with or recognize a Change in Law (or cumulative Changes in
Law). For purposes of calculating the Increased Electricity Costs for any
Contract Year associated with capitalized expenditures (determined in accordance
with Generally Accepted Accounting Principles), the Parties will at that time
establish an appropriate levelized fixed charge rate (incorporating in
appropriate proportions: (i) Southern Company's cost of equity, as determined by
a mutually agreeable third party; and (ii) Southern's cost of debt in the cost
of capital calculation used to develop that rate) for application to the
original capital cost. This calculation will represent the total cost associated
with the capital expenditures. Any costs and expenses not otherwise reflected in
a levelized fixed charge rate calculation shall be treated as Increased
Electricity Costs as incurred.

         "Interconnection Point" means the substation(s) where the Specified
Seller's Resources are physically interconnected to the Southern Company
Transmission System.
         "kW" means kilowatt(s).

         "kWh" means kilowatt hour(s).

                  "Law" means any statute, law, requirement, rule or regulation
imposed by a Government Agency, whether in effect now or at any time in the
future.

                  "MMBTU" means million BTU.

                  "MW" means megawatt(s).

                  "MWh" means megawatt hour(s).

                  "Major Bank" means the Federal Reserve Bank of Atlanta,
                    Georgia.

         "Month" means a calendar month.

         "Monthly Weighting Factor" means, for any Month, the weighting factor
set forth opposite such Month in the table below:

                                    Month              Weighting Factor

                                    January...................[redacted]

                                    February..................[redacted]

                                    March.....................[redacted]

                                    April.....................[redacted]

                                    May.......................[redacted]

                                    June......................[redacted]

                                    July......................[redacted]

                                    August....................[redacted]

                                    September.................[redacted]

                                    October...................[redacted]

                                    November..................[redacted]

                                    December..................[redacted]

         "NERC" means the North American Electric Reliability Council, or any
successor to its functions.

         "Non-Summer DPF" has the meaning set forth in Section 5.4.2.

         "Non-Summer PAF" has the meaning set forth in Section 5.4.2.

         "Non-Summer Performance Bonus" has the meaning set forth in Section
5.4.2.

         "OATT" means the Open Access Transmission Tariff of Southern Companies
or a successor tariff governing transmission on the Southern Company
Transmission System that has been accepted by FERC, as the same may be changed
or amended from time to time.

         "Off Peak Hour" means: (i) any hour from 2200 CPT to 0600 CPT, Monday
through and including Friday; (ii) any hour during any holiday recognized by
NERC; and (iii) any hour during Saturday and Sunday.

         "On Peak Hour" means any hour from 0600 CPT to 2200 CPT, Monday through
and including Friday, excluding any hour of any holiday recognized by NERC.

         "Peak Period" means, for each Contract Year, the Months of June, July,
August, September, January and February.

         "Performance Payment" means [redacted].

         "Person" means any individual, corporation, limited liability
corporation, partnership, joint venture, trust, unincorporated organization,
Government Agency or other entity.

         "Pre-Scheduled Excused Hours" means hours in which the Specified
Seller's Resources are unavailable for Scheduling, as such hours are designated
and scheduled in accordance with Section 4.2.

         "Prime Rate" means, for any Day on which the calculation of an interest
amount begins under this Agreement, the "Prime Rate" specified for such Day (or,
if such Day is not a Business Day, on the first Business Day following such Day)
under the "Money Rate" table of the Wall Street Journal. In the event that the
Wall Street Journal ceases to report a Prime Rate, the Prime Rate for purposes
of this Agreement shall be the prime rate (or its functional equivalent) charged
by the Major Bank in the United States of America.

         "Prudent Industry Practices" means any of the practices, methods,
standards and acts (including the practices, methods and acts engaged in or
approved by a significant portion of the electric power industry in the United
States) that, at a particular time, in the exercise of reasonable judgment in
light of the facts known or that should reasonably have been known at the time a
decision was made, could have been expected to accomplish the desired result
consistent with good business practices, reliability, economy, safety and
expedition, and which practices, methods, standards and acts generally conform
to operation and maintenance standards recommended by equipment suppliers and
manufacturers, applicable design limits and applicable Governmental Approvals
and Laws.

         "Replacement Gas Price" has the meaning set forth in Section 6.2.1.

         "Replacement Cost" means, [redacted].

         "Replacement Seller's Resources" means [redacted].

         "Replacement Value" has the meaning set forth in Section 13.2.4.

         "Reservation Payment" has the meaning set forth in Section 5.1.

         "Schedule" means the right of DYPM to schedule the delivery of
Scheduled Energy in accordance with this Agreement. Any form of the term
Schedule (e.g., "Scheduled" or "Scheduling") shall refer to the exercise of such
right by DYPM.

         "Scheduled Energy" means the amounts of energy, expressed in MWh,
Scheduled by DYPM to be delivered by Southern in accordance with this Agreement.

         "Scheduling Constraints" has the meaning set forth in Appendix B.

         "Seller" has the meaning set forth in the introductory paragraph
hereof.

         "Seller Election Period" has the meaning set forth in Section 4.5.1(b).

         "Seller's  Resources" means: (i) the Specified Seller's  Resources;
and/or (ii) the Replacement  Seller's Resources.

                  "Southern" has the meaning set forth in the introductory
paragraph hereof.

                  "Southern Company" means The Southern Company, a publicly held
corporation organized and existing under the laws of the State of Delaware and
having its principal place of business in Atlanta, Georgia.

         "Southern Company  Transmission" means the functional  transmission
division of Southern Company Services, Inc., or any successor transmission
provider.

         "Southern Company Transmission System" means the integrated
transmission systems of the electric operating companies of Southern Company, as
such systems may be modified or expanded from time-to-time, as well as any
successor transmission system(s).

         "Specified Seller's Resources" means the physical generating
resource(s) (including any adjacent and/or associated facilities or equipment
and including non-generating facilities) designated by Southern in its sole
discretion pursuant to Section 4.1 from which Southern may provide the Contract
Capacity and Scheduled Energy that: (i) is interconnected to the Southern
Company Transmission System; (ii) will comply with applicable Laws as of the
Effective Date of Service; and (iii) is a Gas fired combined cycle facility.

         "Summer DPF" has the meaning set forth in Section 5.4.1.

         "Summer PAF" has the meaning set forth in Section 5.4.1.

         "Summer Performance Bonus" has the meaning set forth in Section 5.4.1.

         "Taxes" means any or all ad valorem, property, occupational, severance,
emissions, generation, first use, conservation, energy, transmission, utility,
gross receipts, privilege, sales, use, excise and other taxes, governmental
charges, licenses, fees, permits and assessments, and taxes based on net income
or net worth.

         "Term" means the period from the Execution Date through May 31, 2030,
or such earlier date on which this Agreement is terminated in accordance with
its terms.

         "Unavailability" means any time in which the Specified Seller's
Resources (or any part thereof) are physically incapable of providing all or a
portion of Scheduled Energy for reasons other than a Force Majeure Event or
Delivery Excuse.

         "Undelivered Energy" means that quantity of Scheduled Energy that
Southern fails to deliver to the Delivery Point in response to a Schedule for
which ENDH is not accumulated and which failure is not attributable to a Force
Majeure Event or Delivery Excuse.

         "VOM Charge" means [redacted]

                                    ARTICLE 2

                                TERM OF AGREEMENT

2.1 Filing of Agreement. This Agreement shall be filed with the FERC on or
before such date as may be required by Law. To the extent practicable, any such
filing shall be made under a request for confidential treatment. This Agreement
shall not be contingent on such filing.

2.2      Termination  Date.  Unless  earlier  terminated  in  accordance  with
its  terms,  this  Agreement  shall continue in effect from the Execution Date
through May 31, 2030.

         2.3 Effect of Termination. Subject to the exercise of a non-defaulting
Party's rights under Section 13.2, in the event that this Agreement is
terminated, the rights and obligations of the Parties hereunder shall continue
unaffected until the termination is effective in accordance with the terms and
conditions thereof. Any such termination shall not relieve DYPM of its
obligation to pay any unpaid invoices for any Contract Capacity made available
and Contract Energy supplied prior to the effective date of such termination, or
relieve Southern of its obligation to provide Contract Capacity and to deliver
Scheduled Energy (or pay a Performance Payment) prior to the effective date of
such termination.

         2.4 Effective Date. This Agreement shall become effective on the
Execution Date without regard to the status of the construction of the Specified
Seller's Resources, permits relating to the Specified Seller's Resources, or
with respect to any other condition that could affect the construction,
operation or existence of the Specified Seller's Resources.

                                    ARTICLE 3

 DETERMINATION OF CONTRACT CAPACITY; SALE AND PURCHASE OF CONTRACT CAPACITY
                                   AND ENERGY

         3.1 Determination of Contract Capacity. The Contract Capacity shall
equal [redacted] for the Term of this Agreement. The Contract Capacity shall not
be subject to adjustment during the Term for any reason, including the
performance of the Specified Seller's Resources, and re-designation of the
Specified Seller's Resources.

         3.2 Sale and Purchase of Contract Capacity. Subject to the terms and
conditions of this Agreement, beginning on the Effective Date of Service and
until the end of the Term, Southern shall make available and sell to DYPM at the
Delivery Point, and DYPM shall accept and purchase, the Contract Capacity.

         3.3 Sale and Purchase of Contract Energy. Subject to the terms and
conditions of this Agreement, beginning on the Effective Date of Service and
until the end of the Term, Southern shall deliver and sell to DYPM, and DYPM
shall accept and purchase from Southern, energy at the Delivery Point up to the
Contract Capacity ("Contract Energy").

         3.4      Source of Contract Energy.   [redacted].

                                    ARTICLE 4

                       SELLER'S RESOURCES AND CURTAILMENTS

         4.1      Specified Seller's Resources.

                  4.1.1 At any time prior to January 1, 2003, Southern shall by
notice to DYPM designate, in its sole discretion, the Specified Seller's
Resources. Southern shall perform all of Southern's obligations hereunder
relative to Specified Seller's Resources in accordance with Prudent Industry
Practices and the terms of this Agreement.

                  4.1.2 Southern may from time to time during the Term request a
change in the designation of Specified Seller's Resources made pursuant to
Section 4.1.1. Southern shall make such requested change no later than six (6)
Months prior to the commencement of a particular Contract Year, which change if
accepted by DYPM as provided below, shall result in the newly designated
resource becoming the Specified Seller's Resource(s) for the upcoming Contract
Year and thereafter until an additional request is made by Southern and accepted
by DYPM. Following the receipt of a request to change the designation of the
Specified Seller's Resource(s), DYPM may, in its sole discretion, elect to
accept or reject the requested re-designation. DYPM shall indicate its decision
to accept or reject the proposed re-designation within thirty (30) Days of
DYPM's receipt, provided however, that if DYPM fails to respond during such
period DYPM shall be deemed to have rejected the requested re-designation.
Nothing in this Agreement shall require Southern to request a change in
designation hereunder, and any such request shall be made at Southern's sole
discretion.

         4.2      Pre-Scheduled Excused Hours.

                  4.2.1(a) Scheduling of Pre-Scheduled Excused Hours. On or
before April 1 prior to each Contract Year, DYPM shall provide to Southern a
non-binding proposed schedule of energy for each Month of such Contract Year.
Within one hundred twenty (120) Days after receiving DYPM's proposed schedule,
Southern shall submit to DYPM a proposed schedule of Pre-Scheduled Excused Hours
for the applicable Contract Year. The proposed schedule of Pre-Scheduled Excused
Hours shall give due consideration to, and shall take into account, the proposed
schedule submitted by DYPM; provided, however, that in no event shall Southern's
proposed schedule provide for any Pre-Scheduled Excused Hours during a Peak
Period without the prior written consent of DYPM. Within thirty (30) Days after
receiving Southern's proposed schedule of Pre-Scheduled Excused Hours, DYPM may
request, in writing, that Southern reschedule any such Pre-Scheduled Excused
Hours. Following receipt of such request of DYPM, Southern shall inform DYPM as
to whether it can accommodate DYPM's request and, if so, shall further advise
DYPM of the good faith estimated costs that will be incurred by Southern in
connection with accommodating the request of DYPM to re-schedule the
Pre-Scheduled Excused Hours. DYPM shall then within five (5) Days of the receipt
of the estimated costs provided by Southern determine whether Southern should
reschedule the Pre-Scheduled Excused Hours. Without regard to any prior
estimate, DYPM shall reimburse Southern for all Commercially Reasonable costs
related to such change in schedule. While Southern must use Commercially
Reasonable Efforts to accommodate a request of DYPM to re-schedule any
Pre-Scheduled Excused Hours, Southern may elect to decline rescheduling if, in
Southern's Commercially Reasonable judgment, it would cause a failure on the
part of Southern to observe Prudent Industry Practices, or if the proposed
re-schedule would cause Southern to incur costs which DYPM is unwilling to
reimburse. If Southern makes the election not to accommodate a request of DYPM
to reschedule Pre-Scheduled Excused Hours, DYPM may propose an alternate
schedule for Pre-Scheduled Excused Hours, in which case Southern and DYPM shall
continue to negotiate the rescheduling of Pre-Scheduled Excused Hours as
provided above, but in no event shall such negotiation continue after September
30 of the Contract Year for which such Pre-Scheduled Excused Hours are
scheduled. In addition to the foregoing, within thirty (30) Days after the
beginning of each Contract Year, Southern shall provide to DYPM a non-binding
schedule of Pre-Scheduled Excused Hours for the next three (3) Contract Years.

                  (b) Pre-Scheduled Excused Hours for any Contract Year shall
not exceed [redacted]. If, however, during any Contract Year, Southern does not
utilize its allocation of Pre-Scheduled Excused Hours for that Contract Year,
then the unused portion of Pre-Scheduled Excused Hours (the "Banked
Pre-Scheduled Excused Hours") may be carried forward to the next succeeding
Contract Year and may be utilized by Southern in addition to the regular
allotment of Pre-Scheduled Excused Hours. The total of all available
Pre-Scheduled Excused Hours available to Southern during any Contract Year,
including the hours that comprise Banked Pre-Scheduled Excused Hours may not
exceed [redacted]. Unless otherwise agreed by the Administrative Committee,
Banked Pre-Scheduled Excused Hours may only be utilized by Southern during a
Contract Year in which utilization of such Banked Pre-Scheduled Excused Hours is
necessary for Southern, in Southern's Commercially Reasonable judgment, to
comply with Prudent Industry Practices.

                  4.2.2 Accumulation of Pre-Scheduled Excused Hours. DYPM and
Southern shall include procedures with respect to the logging and record keeping
of actual Pre-Scheduled Excused Hours elapsed during any Month in the
Administrative Procedures agreed upon pursuant to Section 4.4.

                  4.2.3 No Scheduling during Pre-Scheduled Excused Hours or
Banked Pre-Scheduled Excused Hours. DYPM shall not have the right to submit a
Schedule during any Pre-Scheduled Excused Hour or Banked Pre-Scheduled Excused
Hour.

         4.3      Permits; Compliance with Laws.

                  4.3.1 Governmental Approvals. Subject to the right of Contest,
each Party shall, at its expense, acquire and maintain in effect all
Governmental Approvals necessary for it to perform its obligations under this
Agreement.

                  4.3.2 Compliance by Southern. Subject to the right of Contest,
Southern shall at all times comply with all Laws and Governmental Approvals
applicable to Southern and/or to the Specified Seller's Resources necessary for
Southern to perform its obligations under this Agreement.

                  4.3.3 Compliance by DYPM. Subject to the right of Contest,
DYPM shall at all times comply with all Laws and Governmental Approvals
applicable to DYPM necessary for DYPM to perform its obligations under this
Agreement.

         4.4      Administrative Procedures and Administrative Committee.

                  4.4.1 Administrative Procedures. DYPM and Southern shall
develop written Administrative Procedures no later than thirty (30) Days before
the Effective Date of Service. The Administrative Procedures shall establish the
protocol under which the Parties shall perform their respective responsibilities
under this Agreement, including method of Day-to-Day communications, key
personnel lists, logging and tracking of hours of Unavailability, Pre-Scheduled
Excused Hours, Force Majeure Hours, ENDH Accumulated, hours of Delivery Excuse,
and daily capacity level and energy reports.

                  4.4.2 Administrative Committee. DYPM and Southern shall form a
committee to act in matters relating to the performance of their respective
obligations under this Agreement ("Administrative Committee"). Each Party shall
appoint one representative and one alternate representative to serve on the
Administrative Committee. The Parties shall notify each other in writing of such
appointments and any changes thereto. The Administrative Committee shall have no
authority to modify the terms or conditions of this Agreement. The
Administrative Committee shall meet as frequently as it deems necessary, and all
of its decisions must be the unanimous decision of the representatives. The
Administrative Committee may consult with representatives of the Southern
Company Transmission System as appropriate in reaching its decisions.

                  4.4.3 Southern shall disclose to the Administrative Committee
any condition or defect in or with respect to the Specified Seller's Resources
of which it is actually aware and that may reasonably be expected to cause the
Specified Seller's Resource to be unable to provide Scheduled Energy; provided,
however, that the foregoing shall not be construed to require Southern to make
inspections of the Specified Seller's Resources.

         4.5      Provision of Contract Capacity and Contract Energy.

                  4.5.1    Unavailability.

                  (a)      Notification.  Southern shall promptly notify DYPM
after  discovering  any  circumstance that could reasonably be expected to
result in an Unavailability.

                  (b)      Periods  of  Unavailability.  In  the  event  of an
Unavailability,  the  period  after commencement of such Unavailability shall
be divided into two distinct, contiguous periods:

     (i)  The  period   beginning  at  the  time  of  the   occurrence   of  the
Unavailability  until the earlier of the removal of the  Unavailability  or 2400
CPT of the Day in which such  occurrence  happens  shall be  referred  to as the
"Determination Period"; and

     (ii) The period from the end of the Determination  Period until the removal
of the Unavailability shall be referred to as the "Extended Outage Period".

The four hour period immediately following the occurrence of an Unavailability
(which may include a portion of the Determination Period and/or the Extended
Outage Period) shall be referred to as the "Seller Election Period"; provided,
however, that if the Unavailability is resolved, the Seller Election Period
shall end at such time.

                  (c) Circumstances of Unavailability. With regard to any
Unavailability that results in an Extended Outage Period, as soon as practicable
after the commencement of such Extended Outage Period, Southern shall notify
DYPM of:

     (i) The cause (or if not known,  Southern's  best estimate of the cause) of
the Unavailability;

     (ii) The  proposed  corrective  action  that can be  taken by  Southern  to
resolve the Unavailability; and

     (iii)  Southern's  best  estimate of the expected  duration of the Extended
Outage Period.

In addition, Southern shall advise DYPM of any material information relating to
the cause, duration and resolution of an Unavailability as soon as practicable
after such information becomes known to Southern whether before or after the
commencement of an Extended Outage Period. Southern shall have an ongoing
obligation to keep DYPM advised as to any significant changes with respect to
the information provided pursuant to this subsection (c). Southern's estimate of
the duration of an Unavailability shall be based on the best information then
available to Southern. Southern shall promptly notify DYPM of any expected
changes in the period of the Unavailability and shall continue its investigation
in a Commercially Reasonable manner for the duration of such Unavailability.

(d) Obligations of Southern. Consistent with Prudent Industry Practices,
Southern shall use Commercially Reasonable Efforts to avoid Unavailability and
to minimize the duration of any Unavailability.

                  4.5.2    Southern Elections during an Unavailability.

               (a)  Seller  Election   Period.   Within   [redacted]  after  the
          commencement  of the Seller  Election  Period,  Southern shall provide
          telephonic  (or  acceptable  electronic)  notice to DYPM of whether it
          will, to the extent of the Unavailability, either:

                           [redacted]

Notwithstanding the occurrence of an Unavailability, [redacted]. Such action by
Southern during the Carry Period shall not constitute an election for purposes
of the Seller Election Period. Once made, however, such election shall apply for
the remainder of the Seller Election Period, with appropriate recognition for
Southern's actions (if any) during the Carry Period.

                  (b) Determination Period. Within [redacted] after the
commencement of an Unavailability, Southern shall, for each Hour Block within
the Determination Period (but only for those hours not covered by an election in
the Seller Election Period) and subject to Section 4.5.2(d), provide telephonic
(or acceptable electronic) notice to DYPM (along with notice of the election for
the first Day of the Extended Outage Period as required by Section 4.5.2(c)) of
whether it will, to the extent of the Unavailability, either:

                           [redacted].

                  (c) Extended Outage Period. For each Day of an Extended Outage
Period, Southern shall, for each Hour Block within such Day (but only for those
hours not covered by an election in the Seller Election Period) and subject to
Section 4.5.2(d), provide telephonic (or acceptable electronic) notice to DYPM
of whether it will, to the extent of the Unavailability, either:
                           [redacted].

Notice under this subsection (c) shall be provided by Southern no later than:
(i) for the first Day of the Extended Outage Period, the time that notice is
provided under Section 4.5.2(b); and (ii) for all other Days of the Extended
Outage Period, thirty (30) minutes after receipt of DYPM's Schedule for such Day
under Section 6.1 (but no earlier than 0800 CPT). In addition, upon the
commencement of the Extended Outage Period, Southern shall provide DYPM a
non-binding projection of its anticipated elections under this subsection (c)
for each Day of the expected duration of the Extended Outage Period.

(d)      Hour Block Elections.  [redacted]
         --------------------

                  (e)      Failure to Make Elections.  [redacted].
                           -------------------------

                  (f) Schedule Changes during an Unavailability. For any hour of
any Day during an Unavailability, if DYPM changes a Schedule provided pursuant
to Section 6.1 after 0900 CPT of the previous Day so that Scheduled Energy is
greater in such hour than contemplated at 0900 CPT of such previous Day (such
greater amount being referred to as "Increased Scheduled Energy"),
notwithstanding any other provision of this Section 4.5.2, Southern shall have
the right, by providing telephonic (or electronic) notice to DYPM thirty (30)
minutes after Southern receives DYPM's notice of such change, to either:
[redacted]. If Southern does not make an election under this subsection (f) for
any hour, Southern shall be deemed to have elected to cover Increased Scheduled
Energy for such hour in the same manner as its elections under Section 4.5.2(a),
(b) and (c). An election made by Southern (or deemed to have been made) under
this subsection (f) shall only apply to Increased Scheduled Energy and shall not
alter elections for Scheduled Energy made under Section 4.5.2(a), (b) and (c).

               (g) DYPM Right to Purchase  Undelivered  Energy.  With respect to
          any Unavailability,  DYPM shall have the right to purchase Undelivered
          Energy using Commercially Reasonable Efforts [redacted].

                  (h) Exclusive Remedy. Southern's sole and exclusive liability
and DYPM's sole and exclusive remedy for an Unavailability shall be determined
by the election(s) chosen (or deemed to have been chosen) by Southern in
accordance with this Section 4.5.2.

4.5.3    Performance in Accordance with Elections.

                  For any hour of an Unavailability, Southern shall be required
to [redacted], but only to the extent that DYPM has properly requested and is
entitled to receive Scheduled Energy for such hour in accordance with the terms
of this Agreement.

4.5.4    Calculation of Equivalent ENDH.

                  For any hour in which Southern [redacted].

4.5.5    Example Calculations.

                  To demonstrate the application of provisions related to
[redacted], example calculations are set forth in Appendix B.

4.5.6    Extended Unavailability.

                  [redacted].

                  4.5.7    Force Majeure Event.

(a) No Obligation to Deliver. For any hour in which a Force Majeure Event
affecting the Specified Seller's Resources or the facilities up to and at the
Interconnection Point(s) is occurring or is continuing, to the extent that such
event prevents Southern from delivering Scheduled Energy, Southern shall not be
obligated to deliver, and DYPM shall not be entitled to receive, Scheduled
Energy. In such event, to the extent of such Force Majeure Event, Southern shall
not be required to make any of the elections under Section 4.5.2 [redacted].

(b)      Adjustment of Reservation Payment.  [redacted].
         ---------------------------------

4.5.8    Delivery Excuse.

                  (a) No Obligation to Deliver. For any hour in which a Delivery
Excuse is occurring or is continuing, to the extent of such Delivery Excuse,
Southern shall not be obligated to deliver, and DYPM shall not be entitled to
receive, Scheduled Energy. In such event, to the extent of the Delivery Excuse,
Southern shall not be required to make any of the elections under Section 4.5.2
and shall not be required to [redacted].

                  (b) Continuation of DYPM Obligations. DYPM shall not be
relieved of its performance obligations hereunder during a Delivery Excuse,
including its obligation to pay Southern the Reservation Payment, even if such
Delivery Excuse continues for the remainder of the Term.

4.5.9    Delivery from Specified Seller's Resources.

                  Under no circumstance shall Southern be permitted to
accumulate ENDH, claim an Unavailability, or claim a Force Majeure Event to the
extent Southern is able, in a manner that is consistent with Prudent Industry
Practices, to provide Scheduled Energy from the Specified Seller's Resources as
required hereunder.

                                    ARTICLE 5

                                    PAYMENTS

               5.1  Reservation  Payment.  Commencing on the  Effective  Date of
          Service  and for each Month of the Term,  DYPM shall pay to Southern a
          Reservation  Payment  for  the  Contract  Capacity.   The  Reservation
          Payments for each Month are set forth in Appendix A.

               5.2 Energy  Payment.  Commencing on the Effective Date of Service
          and for each Month of the Term,  DYPM shall pay to  Southern an Energy
          Payment.  The  Energy  Payment  for each  Month  shall be equal to the
          product of: [redacted].

         5.3 Conversion Payment. Commencing on the Effective Date of Service and
  for each Month of the Term, DYPM shall pay to Southern a Conversion Payment.
  The Conversion Payment shall be equal to the sum across all hours of a Month
  of: [redacted]. The Conversion Payment shall be calculated on an hourly basis
  and accumulated to determine the monthly total. For purposes of this
  calculation, a Replacement Energy Block is defined as that quantity of
  Delivered Energy (in MWh) provided from Replacement Seller's Resources
  associated with a certain Replacement Gas Price established pursuant to
  Section 6.2.

               5.4 Performance  Bonus. For the Term of this Agreement,  Southern
          shall receive a Summer Performance Bonus and a Non-Summer  Performance
          Bonus, if applicable.

                  5.4.1    Summer Performance Bonus

                  The Summer Performance Bonus will be calculated based on the
Months of June through August of each Contract Year and shall be paid by DYPM to
Southern within thirty (30) Days after August 31 of each Contract Year. The
Summer Performance Bonus shall be calculated as follows:

         Summer
         Performance
         Bonus              = [redacted]

         where:

         Summer PAF is the performance adjustment factor corresponding to the
         calculated summer delivery performance factor ("Summer DPF") set forth
         in the Table below:

Summer DPF                                       Summer PAF

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

         Summer DPF is computed as follows:

         Summer DPF = [redacted].

                  5.4.2    Non-Summer Performance Bonus

                  The Non-Summer Performance Bonus will be calculated based on
the Months of September through May of each Contract Year and shall be paid by
DYPM to Southern within thirty (30) Days after May 31 of each Contract Year. The
Non-Summer Performance Bonus shall be calculated as follows:

         Non-Summer
         Performance
         Bonus              = [redacted]

         where:

         Non-Summer PAF is the performance adjustment factor corresponding to
         the calculated non-summer delivery performance factor ("Non-Summer
         DPF") set forth in the Table below:

Non-Summer DPF                                   Non-Summer PAF

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

[redacted]                                       [redacted]

         Non-Summer DPF is computed as follows:

         Non-Summer DPF = [redacted].

                  5.4.3 Notwithstanding the foregoing, the sum of the Summer
Performance Bonus and the Non-Summer Performance shall not exceed [redacted].

               5.5 Additional Payments. In addition to the payments specified in
          this  Article 5, the Parties  shall pay as all amounts due pursuant to
          the other provisions of this Agreement.

               5.6 Regulatory.

                  5.6.1 The Parties anticipate that this Agreement will be filed
with and accepted by FERC as a market based contract, and thus this Agreement
shall not be contingent on FERC acceptance. Having freely negotiated and agreed
upon the economic bargain among them as set forth hereunder, Southern and DYPM
waive all rights under Sections 205 and 206 of the Federal Power Act to effect a
change in the Agreement. Moreover, it is the Parties' mutual intent that FERC be
precluded, to the fullest extent permitted by law, from altering this Agreement
in any way. Notwithstanding the foregoing, if at any time FERC takes some action
that reduces the economic benefit of this Agreement to Southern as contemplated
on the Execution Date ("Original Economic Benefit"), Southern shall be deemed to
have retained rights under Section 205 to file for changes in the Agreement, but
only to the extent required to restore the Original Economic Benefit.

                  5.6.2 Southern may exercise its Section 205 rights provided
under Section 5.6.1 if at any time it reasonably determines in its sole
discretion that the application of FERC's ratemaking practices and procedures
may support the restoration of some or all of the Original Economic Benefit.
Before exercising such rights, Southern shall negotiate with DYPM in an effort
to reach mutual agreement regarding amendments to this Agreement that would
restore some or all of the Original Economic Benefit. Southern shall file any
resulting amendments for acceptance by FERC, and DYPM shall actively support
such filing(s). If the Parties are unable to agree upon such amendment(s),
Southern shall be entitled to make unilateral filing(s) at FERC to modify the
Agreement in order to restore some or all of the Original Economic Benefit. In
this latter event, DYPM shall actively support Southern's filing and its right
to recover the Original Economic Benefit; however, DYPM reserves the right to
propose modifications based on a good faith belief that such filing implements
revisions that would exceed the Original Economic Benefit.

                  5.6.3 Any amendment(s) or unilateral filing(s) contemplated
hereunder shall restore the Original Economic Benefit (or any allowed portion
thereof) for the remainder of the Term, including any portion of the Original
Economic Benefit associated with prior periods (with interest). Nothing in this
Agreement is intended to or shall restrict the number of times that Southern may
exercise the above-described Section 205 rights during the Term or within any
specific time frame.

               5.7 Wholesale  Generation  Rates. All payments  specified in this
          Section  5  are  the   unbundled   power  sales  rates  for  wholesale
          generation. Transmission related services are addressed in Article 7.

                                    ARTICLE 6

 SCHEDULING, SOUTHERN'S AND DYPM'S RIGHTS TO SELLER'S RESOURCES, TITLE AND
                                  RISK OF LOSS

         6.1      Scheduling.

                  6.1.1 Daily Schedule. On each Business Day, Southern shall
inform DYPM before [redacted] of the amount of Contract Energy expected to be
available from the Specified Seller's Resources for each hour of the following
Day that is a Business Day, and any intervening Day. DYPM shall provide Southern
its Schedule for each hour of each Day(s) on or before [redacted] of the
previous Business Day. Such Schedule shall be consistent with the Scheduling
Constraints and the terms of this Agreement. [redacted] DYPM shall be
responsible for complying with all transmission reservation, scheduling and
tagging requirements (whether under the OATT or other industry scheduling
requirements or standards) associated with the delivery of Scheduled Energy at
and after the Delivery Point. All costs and expenses (including penalties)
associated with a Schedule and Scheduled Energy at and beyond the Delivery Point
shall be the sole responsibility of DYPM unless caused by Southern.

                  6.1.2 Delivery of Scheduled Energy. Subject to Southern's
elections (if any) in Section 4.5.2, Southern shall deliver Scheduled Energy to
the Delivery Point in accordance with DYPM's Schedule.

                  6.1.3    Minimum  Amount  of  Scheduled  Energy.  Any
Schedule  submitted  by  DYPM  under  this Agreement for any hour must be for
a minimum of 150 MW.

         6.2      Replacement Gas.

                  6.2.1 Within [redacted] after receiving DYPM's Schedule for
the next Day under Section 6.1.1 (but no earlier than [redacted], Southern shall
notify DYPM (either telephonic or electronic) whether it will cover DYPM's
Schedule utilizing Replacement Seller's Resources. If Southern provides notice
that it will cover some portion of the Schedule with Replacement Seller's
Resources, within [redacted] after receiving such notice by Southern, DYPM shall
offer a delivered price (in $/MMBTU) ("Replacement Gas Price") for the amount of
Gas (in MMBTU) that would have been required by the Specified Seller's Resources
to produce the energy to be served by Replacement Seller's Resources
("Replacement Gas"). Within [redacted] of receiving such price, Southern shall
then elect to: (i) treat the price offered by DYPM as the Replacement Gas Price
(including for purposes of Section 5.3); or (ii) treat the price offered by DYPM
as the Replacement Gas Price (including for purposes of Section 5.3) and require
DYPM to cause one of its Affiliates to deliver Replacement Gas at alternate
delivery points, provided that Southern shall compensate such Affiliate for the
additional actual costs (if any) incurred to deliver to such alternate points in
lieu of delivery to the Specified Seller's Resources. In the case of (ii),
Southern shall receive and purchase from DYPM's Affiliate, and DYPM shall cause
one of its Affiliates to supply and sell to Southern, the Replacement Gas at the
Replacement Gas Price, at such alternate delivery point(s) specified by Southern
(such transaction to be performed pursuant to another contemporaneous agreement
between the Parties). DYPM's Affiliates shall use Commercially Reasonable
Efforts to arrange for the delivery to the alternate delivery point(s);
provided, however, that Southern bears the risk to the extent the delivery
arrangements associated with delivery to Specified Seller's Resources are not
adequate for delivering to the alternate delivery point(s).

                  6.2.2 In the event that DYPM increases the amount of Scheduled
Energy (or submits a Schedule where none existed) (such increased amount being
referred to as the "Increased Scheduled Energy") for any hour after it has
submitted the Schedule for such hour pursuant to the second sentence of Section
6.1 (or after 0900 CPT if no Schedule was submitted), then Southern shall notify
DYPM (either telephonic or electronic) whether it will cover DYPM's Schedule
utilizing Replacement Seller's Resources. If Southern provides notice that it
will cover some portion (or all) of the Increased Scheduled Energy with
Replacement Seller's Resources, the Parties shall follow the procedures set
forth in Section 6.2.1 with regard to establishing a Replacement Gas Price and,
if required by Southern, accomplishing the delivery of Replacement Gas by an
Affiliate of DYPM to alternate delivery point(s); provided, however, the
Administrative Committee shall establish the pertinent time frames for
communications of the Parties in this regard.

                  6.2.3 In the event that DYPM decreases the amount of Scheduled
Energy for any hour in which Southern has previously notified DYPM that it will
provide some portion of Scheduled Energy from Replacement Seller's Resources,
and to the extent that Southern determines (consistent with Scheduling
Constraints and the terms of this Agreement) that the requested decrease will
not be accommodated by lowering the output of the Specified Seller's Resources,
Southern shall decrease the amount of Scheduled Energy provided from Replacement
Seller's Resources (the amount of such decrease from Replacement Seller's
Resources being referred to as the "Decreased Replacement Energy"). Southern
shall propose to DYPM a delivered price (in $/MMBTU) ("Decreased Replacement Gas
Price") for the amount of Gas (in MMBTU) that would have been required to
produce the Decreased Replacement Energy at the Specified Seller's Resources
("Decreased Replacement Gas"). After receiving such price, DYPM shall then elect
to: (i) treat the price offered by Southern as the Decreased Replacement Gas
Price and not require Southern to deliver Decreased Replacement Gas; or (ii)
treat the price offered by Southern as the Decreased Replacement Gas Price and
require Southern to deliver Decreased Replacement Gas at alternate delivery
points, provided that DYPM shall compensate Southern for the additional actual
costs (if any) incurred to deliver Decreased Replacement Gas to such alternate
delivery points in lieu of delivery to the Specified Seller's Resources. In the
case of (ii), DYPM shall receive and purchase from Southern, and Southern shall
supply and sell to DYPM, the Decreased Replacement Gas at the Decreased
Replacement Gas Price, at such alternate delivery point(s) specified by DYPM
(such transaction to be performed pursuant to another contemporaneous agreement
between the Parties). Southern will use Commercially Reasonable Efforts to
arrange for delivery to the alternate delivery point(s); provided, however, that
DYPM bears the risk to the extent the delivery arrangements associated with
delivery to the Specified Seller's Resources are not adequate to arrange for
deliveries to the alternate delivery point(s). In addition, the Parties shall
calculate a Replacement Gas Adjustment. The Replacement Gas Adjustment shall
equal the product of: (i) the Replacement Gas Price less the Decreased
Replacement Gas Price; and (ii) the Decreased Replacement Gas. If the
Replacement Gas Adjustment is positive, then DYPM shall owe such amount to
Southern. If the Replacement Gas Adjustment is negative, then Southern shall owe
the absolute value of such amount to DYPM. In the event that there are multiple
Replacement Gas Prices applicable to multiple Replacement Gas quantities for any
hour (pursuant to Section 6.2.1 and 6.2.2), for the purposes of calculating the
Replacement Gas Adjustment, the Replacement Gas Price(s) shall be utilized in
the order they were established until the entire quantity of Decreased
Replacement Gas is satisfied with corresponding quantities of Replacement Gas.
The Administrative Committee shall establish the pertinent time frames for
communications of the Parties under this Section 6.2.3.

                  6.2.4 In the event that Southern elects to pay Performance
Payments for any hour pursuant to Section 4.5.2, the Parties shall follow
procedures consistent with those set forth in Section 6.2.1 and/or Section 6.2.2
in order to establish a Replacement Gas Price for calculating the applicable
Conversion Payment and, if required by Southern, accomplishing the delivery of
Replacement Gas by an Affiliate of DYPM to alternate delivery point(s);
provided, however, the Administrative Committee shall establish the pertinent
time frames for communications of the Parties in this regard. Any decreases in
Scheduled Energy covered by Performance Payments shall be treated consistent
with Section 6.2.3.

         6.3 Southern's Rights to the Specified Seller's Resources. During any
time for which DYPM has not submitted (or is not permitted to submit) a Schedule
or during any time when Scheduled Energy is not provided from the Specified
Seller's Resources, Southern shall have the right to dispatch the Specified
Seller's Resources for its own purposes to the extent not Scheduled (or
permitted to be Scheduled) or Scheduled Energy is not provided from the
Specified Seller's Resources, including for the purpose of supplying energy to
third parties. Any Schedule provided by DYPM in accordance with the terms of
this Agreement (including Section 6.1) shall have priority over Southern's
schedule.

         6.4 Title and Risk of Loss. Southern shall be deemed to be in exclusive
control of the Scheduled Energy prior to the Delivery Point. DYPM shall be
deemed to be in exclusive control of the Scheduled Energy at and after the
Delivery Point. Custody, title and risk of loss of Contract Capacity and
Scheduled Energy shall transfer from Southern to DYPM at the Delivery Point.

                                    ARTICLE 7

                              TRANSMISSION SERVICE

         7.1 DYPM Obligations and Assumption of Transmission Risk. DYPM, or its
designee, shall arrange, obtain, contract, and pay for any and all transmission
service and ancillary services required (including service under the OATT) to
deliver the Contract Capacity and Scheduled Energy from and beyond the Delivery
Point. During transmission curtailments, Southern will cooperate to assist DYPM
in modifying deliveries of Scheduled Energy with less restrictive notice
provisions than those set forth in Article 6; provided, however, Southern shall
have no liability or obligation to the extent it does not allow DYPM to deviate
from such notice requirements. Notwithstanding anything set forth in Section 7.2
or elsewhere to the contrary, it is DYPM's sole and exclusive responsibility at
all times to arrange, obtain, contract and pay for any and all transmission and
ancillary services required to deliver any energy hereunder from and beyond the
Delivery Point. DYPM assumes all risk associated with the availability, adequacy
and cost of such transmission service and ancillary services.

         7.2 Southern Obligations. Southern, or its designee, shall arrange,
obtain, contract, and pay for any transmission service required to deliver
Contract Capacity and Scheduled Energy (whether from the Specified Seller's
Resources or Replacement Seller's Resources) to the Delivery Point. Southern
will also be responsible for securing and maintaining an interconnection
agreement with the applicable transmission provider that allows Southern to
deliver Scheduled Energy from Seller's Specified Resources to the
Interconnection Point.

         7.3 Imbalances and Penalties. Any penalties or imbalances resulting
from actions or inactions of DYPM (or any third party to which DYPM may be
supplying the capacity and energy provided hereunder) will be the responsibility
of DYPM. Any penalties or imbalances resulting from actions or inactions of
Southern will be the responsibility of Southern.

                                    ARTICLE 8

                                    METERING

         8.1.     Metering.  All  quantities  of  energy  delivered  under
this  Agreement  shall be  measured  in  accordance with Prudent Industry
Practices.

                                    ARTICLE 9

                               BILLING AND PAYMENT

         9.1 Timing; Method of Payment. The billing Party will submit to the
   other Party, as promptly as practicable after the first of each Billing
   Month, an invoice (by mail, facsimile or electronic means) for transactions
   and the amounts due under the terms of this Agreement for the preceding
   Month. Bills for each Billing Month shall be due and payable on the tenth
   (10th) Day after the Day on which the billed Party receives the invoice,
   unless otherwise agreed. Payment shall be made, on or before the due date, to
   the billing Party in accordance with the invoice in immediately available
   funds through wire transfer, or other mutually agreeable method.
         9.2 Late Payment. Amounts that are owed by a Party shall, if not
   remitted within the time period specified under Section 9.1, be subject to a
   late payment charge equal to the interest calculated pursuant to Section
   19.8, accrued and payable on a monthly basis with respect to the unpaid
   amount. Such late payment charge shall accrue from the due date of such
   amount until the date on which it is paid.

         9.3      Disputed Billings.   [redacted].

         9.4 Adjustments. If any overcharge or undercharge in any form
   whatsoever shall at any time be found and the invoice therefor has been paid,
   the Party that has been paid the overcharge shall refund the amount of the
   overcharge to the other Party, and the Party that has been undercharged shall
   pay the amount of the undercharge to the other Party, within thirty (30) Days
   after final determination thereof; provided, however, that no retroactive
   adjustment shall be made for any overcharge or undercharge unless written
   notice of the same is provided to the other Party within a period of
   twenty-four (24) Months from the date of the invoice in which such overcharge
   or undercharge was first included. Any such adjustments shall be made with
   interest calculated in accordance with Section 19.8 from the date that the
   undercharge or overcharge actually occurred.

         9.5 Audit Rights. The Parties shall keep complete and accurate records,
   meter readings and memoranda of their operations under this Agreement and
   shall maintain such data for a period of at least two (2) years after the
   completion of each Billing Month hereunder; provided, however, records
   relating to a disputed matter shall be retained until the dispute is
   resolved. Such records shall be available for inspection and audit by the
   other Party upon reasonable request and during regular Business hours.

                                   ARTICLE 10

                                  CHANGE IN LAW

         10.1 Limitations. The Parties acknowledge that during the term of this
Agreement, Changes in Law that increase Southern's cost of providing capacity
and/or energy hereunder could occur. During the Term, Southern will be
responsible for up to a total of [redacted] of Increased Electricity Costs
("Cost Threshold"). Notwithstanding the foregoing, any Increased Electricity
Costs in any Contract Year in excess of [redacted] will be paid by DYPM through
an additional payment or surcharge (the "Change in Law Surcharge"). Once
Southern has incurred Increased Electricity Costs up to the Cost Threshold, DYPM
shall pay for all Increased Electricity Costs through the Change in Law
Surcharge, as provided below. In lieu of the Change in Law Surcharge, the
Parties may agree on other payment mechanisms whereby DYPM shall pay for
Increased Electricity Costs. Alternatively, the Parties may mutually agree on
certain reductions in DYPM's rights to purchase Contract Capacity and Scheduled
Energy in lieu of payment of Increased Electricity Costs.

          10.2 Determination. [redacted]

         10.3 Initiation of Surcharge. In the event that total Increased
Electricity Costs for any Contract Year will exceed [redacted], or if the Cost
Threshold will be exceeded, Southern shall provide DYPM with written notice of a
proposed Change in Law Surcharge. No earlier than [redacted] thereafter,
Southern may initiate the Change in Law Surcharge consistent with such notice.

     10.4 Timing. [redacted].

     10.5 Contest and Dialogue.  [redacted].  Whenever either Party  anticipates
the possibility of a Change in Law, it may request  meeting(s) to engage in open
dialogue with the other to exchange ideas regarding potential courses of action.

                                   ARTICLE 11

                 LIABILITY ALLOCATION; LIMITATIONS ON LIABILITY

         11.1 Costs, Taxes and Charges. Except as otherwise provided in this
   Agreement, in addition to all other amounts due and payable under this
   Agreement: (i) Southern shall be responsible for all costs, Taxes, and
   charges of any kind relating to the delivery of energy, capacity,
   transmission, and/or related services prior to the Delivery Point (by way of
   clarification of the foregoing, Taxes prior to the Delivery Point include: ad
   valorem taxes on the Specified Seller's Resources; income taxes on Southern
   or its property; and taxes on payments made to Southern under this
   Agreement); and (ii) DYPM shall be responsible for all costs, Taxes, and
   charges of any kind relating to the delivery of energy, capacity,
   transmission, and/or related services at and after the Delivery Point (by way
   of clarification of the foregoing, Taxes at and after the Delivery Point
   include: income taxes on DYPM or its property, and any taxes incurred in
   connection with downstream sales of the Scheduled Energy). Each Party shall
   provide the other Party upon written request a certificate of exemption or
   other reasonably satisfactory evidence of exemption if any exemption from or
   reduction of any Tax is applicable. Each Party shall exercise Commercially
   Reasonable Efforts to obtain and to cooperate in obtaining any exemption from
   or reduction of any Tax.

         11.2 Indemnification. Unless otherwise agreed in writing by the
   Parties, Southern and DYPM shall each defend, indemnify and save harmless the
   other and their respective officers, directors, servants, agents, employees
   and representatives from and against any and all claims, demands, costs or
   expenses (including reasonable attorneys' fees) for loss, damage or injury to
   any person, property or interest arising out of or in any way related to this
   Agreement to the extent such loss, damage or injury occurs on its own side of
   the Delivery Point, irrespective of negligence, whether actual or claimed, of
   the other. Nothing in this Agreement shall create a contractual relationship
   between one Party and the customers of the other Party, nor shall it create a
   duty of any kind to such customers.

         11.3     Limitation of Liability.

                  11.3.1 there are no warranties under this agreement EXCEPT TO
   THE EXTENT SPeciFICALLy set forth HEREIN. the parties hereby specifically
   disclaim and exclude all implied warranties, including the implied warranties
   of merchantability and of fitness for a particular purpose.

                  11.3.2 NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR
  CONSEQUENTIAL, INCIDENTAL, PUNITIVE, EXEMPLARY OR INDIRECT DAMAGES SUFFERED BY
  THAT PARTY OR BY ANY CUSTOMER OF THAT PARTY, FOR lost profits or other
  business interruption damages, WHETHER BY VIRTUE OF ANY STATUTE, IN TORT OR
  CONTRACT, UNDER ANY PROVISION OF INDEMNITY OR OTHERWISE. THE PARTIES INTEND
  THAT THE LIMITATIONS HEREIN IMPOSED ON REMEDIES AND THE MEASURE OF DAMAGES BE
  WITHOUT REGARD TO THE CAUSE OR CAUSES RELATED THERETO, INCLUDING, WITHOUT
  LIMITATION, THE NEGLIGENCE OF ANY PARTY, WHETHER SUCH NEGLIGENCE BE SOLE,
  JOINT OR CONCURRENT, OR ACTIVE OR PASSIVE. TO THE EXTENT ANY DAMAGES REQUIRED
  TO BE PAID HEREUNDER ARE LIQUIDATED, THE PARTIES ACKNOWLEDGE THAT THE DAMAGES
  ARE DIFFICULT OR IMPOSSIBLE TO DETERMINE, THAT OTHERWISE OBTAINING AN ADEQUATE
  REMEDY IS INCONVENIENT, AND THAT THE LIQUIDATED DAMAGES CONSTITUTE A
  REASONABLE APPROXIMATION OF THE HARM OR LOSS.

                  11.3.3 In the event that any provision of this Section 11.3 is
held to be invalid or unenforceable, this Section shall be void and of no effect
solely to the extent of such invalidity or unenforceability, and no claim
arising out of such invalidity or lack of enforceability shall be made by one
Party against the other or its officers, agents, or employees. Notwithstanding
the foregoing, this Section 11.3 shall not limit or negate the right of either
Party to be fully indemnified as provided in Section 11.2 or limit the remedies
available for an Event of Default.

                                   ARTICLE 12

                               FORCE MAJEURE event

         12.1     Force Majeure Event Defined.

                  12.1.1 General Rule. As used herein, an Event of Force Majeure
means an unforeseeable cause(s) beyond the reasonable control of and without the
fault or negligence of the Party claiming Force Majeure, including but not
limited to acts of God, strike, flood, earthquake, storm, fire, lightning,
epidemic, war, riot, civil disturbance, sabotage, terrorism, change in law or
applicable regulation subsequent to the Execution Date and action or inaction by
any federal, state or local legislative, executive, administrative or judicial
agency or body which, by exercise of due foresight such Party could not
reasonably have expected and which, by the exercise of due diligence, it is
unable to overcome.

          12.1.2  Exceptions.  Notwithstanding  anything  contained  in  Section
     12.1.1, the term Force Majeure shall not include any of the following:

[redacted]

         12.2     Applicability of Force Majeure Event.

         Neither Party shall be in breach or liable for any delay or failure in
its performance under this Agreement (except for such Party's performance of its
payment obligations hereunder, which shall not be excused by any Force Majeure
Event) to the extent such performance is prevented or delayed due to a Force
Majeure Event, provided that:

                  12.2.1 The non-performing Party shall give the other Party
written notice within three (3) Business Days of the commencement of the Force
Majeure Event, with available details to be supplied within [redacted] after the
commencement of the Force Majeure Event further describing the particulars of
the occurrence of the Force Majeure Event;

                  12.2.2 The delay in performance shall be of no greater scope
and of no longer duration than is directly caused by the Force Majeure Event;

                  12.2.3 The Party whose performance is delayed or prevented
shall proceed with Commercially Reasonable Efforts to overcome the events or
circumstances preventing or delaying performance and shall, as requested (but
not more often than weekly), provide written progress reports to the other Party
during the period that performance is delayed or prevented describing actions
taken and to be taken to remedy the consequences of the Force Majeure Event, the
schedule for such actions and the expected date by which performance shall no
longer be affected by the Force Majeure Event; and

                  12.2.4 When the performance of the Party claiming the Force
Majeure Event is no longer being delayed or prevented, that Party shall give the
other Party written notice to that effect.

         12.3     Effect of Force Majeure Event.

                  12.3.1 Except for the obligation of either Party to make any
required payments under this Agreement, the Parties shall be excused from
performing their respective obligations under this Agreement and shall not be
liable in damages or otherwise if and to the extent that they are unable to so
perform or are prevented from performing by a Force Majeure Event.

                  12.3.2   [redacted]

         12.4 Other Effects of Force Majeure Events. If any Force Majeure Event
claimed by a Party shall continue for more than [redacted] from the date of
notice provided by such Party in Section 12.2.1, then the other Party may, at
any time following the end of such period, terminate this Agreement upon written
notice to the affected Party. Upon such termination, neither Party shall have
any further obligation to the other Party except as to payment of any costs and
liabilities incurred prior to the effective date of such termination. Any notice
of termination under this Section must be received during the period that
performance continues to be delayed or prevented by the Force Majeure Event.

                                   ARTICLE 13

                                EVENT OF DEFAULT

          13.1 Event of  Default.  The  occurrence  of any one of the  following
     shall constitute an "Event of Default":

                  13.1.1 The failure by a Party to make payment to the other
Party for amounts due under this Agreement after said amounts have become due
and payable and such failure is not cured within [redacted] after receiving
written notice from the Party to which such payments are due;

                  13.1.2 A Party or any Party guaranteeing such Party's
obligations hereunder (a "Guarantor") shall: (i) admit in writing its inability
to pay its debts as such debts become due; (ii) make a general assignment or an
arrangement or composition with or for the benefit of its creditors; (iii) fail
to controvert in a timely and appropriate manner, or acquiesce in writing to,
any petition filed against such Party or such Guarantor under any bankruptcy or
similar law; (iv) take any action for the purpose of effectuating any of the
foregoing; or (v) fails to comply with the terms and conditions of its Guaranty;

                  13.1.3 A proceeding or case shall be commenced, without the
application or consent of the Party or its Guarantor, in any court of competent
jurisdiction, seeking: (i) its liquidation, reorganization of its debts,
dissolution or winding-up, or the composition or readjustment of its debts; (ii)
the appointment of a receiver, custodian, liquidator or the like of the Party or
its Guarantor or of all or any substantial part of its assets or the assets of
its Guarantor; or (iii) similar relief in respect of such Party or its Guarantor
under any law relating to bankruptcy, insolvency, reorganization of its debts,
winding-up, composition or adjustment of debt;

          13.1.4 The  failure of any Party to comply  with the  requirements  of
     Article 14 regarding creditworthiness and/or security;

          13.1.5  The  failure  of a Party to comply  with the  requirements  of
     Article 17 regarding assignment;

                  13.1.6 Any representation or warranty made by a Party under
Article 16 proves to have been false or misleading in any material respect and
such representation or warranty is not made true within twenty (20) Days after
notice thereof to such Party; provided, however, that the cure must also remove
any adverse effect on the non-defaulting Party;

                  13.1.7 A Party shall fail to pay when due (subject to any
applicable cure or grace period), whether by acceleration or otherwise, any
principal or interest on indebtedness aggregating in excess of [redacted] in
principal amount; or any indebtedness aggregating in excess of [redacted] shall
be declared due and payable or be required to be prepaid (other than by a
regularly scheduled payment) prior to the stated maturity of such indebtedness;
or

                  13.1.8 The material failure by a Party to comply with any
material provision of this Agreement (other than the events described above and
those for which a remedy is expressly provided) if such failure is not the
result of a Force Majeure Event, an Unavailability or is not otherwise excused
in accordance with this Agreement, and such failure continues uncured for
[redacted] after written notice thereof switch order from the other Party;
provided, however, if such failure is not capable of being cured within such
period of [redacted] with the exercise of reasonable diligence, then such cure
period shall be extended for an additional reasonable period of time (not to
exceed [redacted]), so long as the Party is exercising reasonable diligence to
cure such failure.

         13.2     Exclusive Remedies.

                  13.2.1 Upon the occurrence of an Event of Default and at all
times during any applicable cure period, for so long as such Event of Default is
continuing (or as long as the defaulting Party is attempting to cure during such
cure period), the non-defaulting Party's sole and exclusive remedy shall be to
suspend its performance under this Agreement and/or declare an Early Termination
Date as provided below.

                  13.2.2 If an Event of Default has occurred, the non-defaulting
Party shall have the right, in its sole discretion, by no more than [redacted]
notice to the defaulting Party, to designate a Day no earlier than the Day such
notice is effective as the date on which the Agreement shall terminate ("Early
Termination Date"). Subject to Section 19.3, this Agreement shall terminate on
the Early Termination Date and neither Party shall have any further liability or
obligation to the other hereunder, except as provided in Sections 13.2.3 or
13.2.4 below, as applicable.

          13.2.3  Southern's  notice under Section  13.2.2 shall indicate one of
     the following  elections:  [redacted] payment; or (ii) receive a continuing
     damage  payment.  In the event Southern  elects to receive the  [redacted],
     DYPM shall pay Southern  such amount  within three (3) Business  Days after
     the Early Termination Date as liquidated  damages for all claims associated
     with the Event of  Default  under  this  Agreement.  In the event  Southern
     elects to receive the continuing  damage payment,  Southern shall calculate
     an amount equal to: [redacted].

          13.2.4  With  fifteen  (15) Days after  DYPM's  notice  under  Section
     13.2.2, the Parties shall each select an independent party to determine the
     [redacted] of the Agreement. Within thirty (30) Days after such notice, the
     two independent parties shall select a third independent party to determine
     the [redacted] of the Agreement.  Within sixty (60) Days after such notice,
     the three (3)  independent  parties  shall  provide the Parties  with their
     respective estimates of the [redacted]. The actual [redacted]. If one Party
     disputes the actual [redacted],  within five (5) Business Days of notice of
     the actual [redacted] determined by the independent parties, such Party may
     submit the dispute for resolution pursuant to the arbitration procedures of
     Article  18.  If  the  actual  [redacted]  ultimately  used  is  the  value
     determined by the three independent parties,  then such value cannot exceed
     a net present  value (using a discount  rate of 8%) of [redacted] as of the
     Early  Termination  Date. If the actual  [redacted]  ultimately used is the
     value determined  pursuant to arbitration,  then such value cannot exceed a
     net present  value (using a discount  rate of 8%) of  [redacted]  as of the
     date  of the  arbitrators'  decision.  If the  final  determination  of the
     [redacted]  indicates  that a  payment  is owed to DYPM,  then  the  actual
     [redacted]  will be paid by Southern to DYPM within three (3) Business Days
     of  such  determination.  If the  final  determination  of  the  [redacted]
     indicates  that a payment  would be owed to  Southern  absent  the Event of
     Default  by  Southern,  then  although  the  [redacted]  to DYPM  would  be
     negative,  neither  Party  shall be  required  to pay the other any  amount
     hereunder. As used herein, [redacted].

                                   ARTICLE 14

                          CREDITWORTHINESS AND SECURITY

         14.1 Guaranty in Favor of Southern. Simultaneously with the execution
of this Agreement, DYPM shall cause Dynegy Holdings Inc., the parent company of
DYPM, to execute and deliver a Guaranty Agreement in the form of that attached
hereto as Appendix D (DYPM Guaranty). If at any time during the Term, the long
term senior unsecured indebtedness of Dynegy Holdings Inc. (or the provider of
an Eligible Guaranty) has or drops to a rating below either (i) Baa3 by Moody's
Investors Service ("Moody's") (or future equivalent) or BBB- by Standard &
Poor's Ratings Group ("S&P") (or future equivalent), then DYPM shall provide a
substitute guaranty in form and substance substantially similar to the DYPM
Guaranty (the "Eligible Guaranty") issued by an entity with a long term senior
unsecured indebtedness rating of at or above both (i) Baa3 by Moody's (or future
equivalent) and (ii) BBB- by S&P (or future equivalent) (the "Eligible Guaranty
Threshold"). DYPM shall provide such Eligible Guaranty within ten (10) Days of
receipt of notice from Southern that DYPM is required to provide an Eligible
Guaranty due to the downgrade to a rating below either (i) Baa3 by Moody's (or
future equivalent) or (ii) BBB- by S&P (or future equivalent). If DYPM is unable
to provide an Eligible Guaranty to Southern during such ten (10) Day period,
then DYPM and Dynegy Holdings Inc. must be and remain in compliance with and
Southern must receive the security and payments as required by the terms of
Section 14.3 and 14.4 below.

         14.2 Negative Watch Credit Support in Favor of Southern. If at any time
during the period beginning on the date hereof through December 31, 2005, the
long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the provider
of an Eligible Guaranty) has or drops to a rating of either (i) Baa3 by Moody's
(or future equivalent) and Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty), its credit rating or indebtedness is on watch for possible downgrade
by Moody's (or future equivalent) or (ii) BBB- by S&P (or future equivalent) and
Dynegy Holdings Inc. (or the provider of an Eligible Guaranty), its credit
rating or indebtedness is on negative CreditWatch by S&P (or future equivalent),
then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible Guaranty)
shall within three (3) Business Days after such event provide to and maintain in
favor of Southern a letter of credit issued by an issuer reasonably acceptable
to Southern in the amount of [redacted] in substantially the form of Appendix E
hereto unless a [redacted] letter of credit has been properly issued and remains
in effect in accordance with the first sentence of Section 14.3 or 14.4 below.
Without limiting the foregoing, if at any time during the period June 1, 2005
through December 31, 2005, the long term senior unsecured indebtedness of Dynegy
Holdings Inc. (or the provider of an Eligible Guaranty) has or drops to a rating
of either (i) Baa3 by Moody's (or future equivalent) and Dynegy Holdings Inc.
(or the provider of an Eligible Guaranty), its credit rating or indebtedness is
on watch for possible downgrade by Moody's (or future equivalent) or (ii) BBB-
by S&P (or future equivalent) and Dynegy Holdings Inc. (or the provider of an
Eligible Guaranty), its credit rating or indebtedness is on negative CreditWatch
by S&P (or future equivalent), then DYPM or Dynegy Holdings Inc. (or the
provider of an Eligible Guaranty) shall within three (3) Business Days after
such event provide or cause to be provided to Southern a [redacted] payment in
lieu of the last twenty-four (24) months of monthly Reservation Payments unless
the monthly Reservation Payments to Southern under this Agreement are
immediately and thereafter remain increased by $150,000 per month.

         14.3 Credit Support in Favor of Southern for Junk Rating. If at any
time during the period beginning on the date hereof through December 31, 2005,
the long term senior unsecured indebtedness of Dynegy Holdings Inc. (or the
provider of an Eligible Guaranty) has or drops to a rating of below either (i)
Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) shall within three (3) Business Days after such event provide to and
maintain in favor of Southern a letter of credit issued by an issuer reasonably
acceptable to Southern in the amount of [redacted] in substantially the form of
Appendix E hereto unless a [redacted] letter of credit has been properly issued
and remains in effect in accordance with the first sentence of Section 14.2
above or Section 14.4 below. Without limiting the foregoing, if at any time
during the period June 1, 2005 through December 31, 2005, the long term senior
unsecured indebtedness of Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) has or drops to a rating of below either (i) Baa3 by Moody's (or
future equivalent) or (ii) BBB- by S&P (or future equivalent), then DYPM or
Dynegy Holdings Inc. (or the provider of an Eligible Guaranty) shall, unless the
monthly Reservation Payments to Southern under this Agreement are immediately
and thereafter remain increased by [redacted] per month, within three (3)
Business Days after such event provide or cause to be provided to Southern
either (i) a [redacted] in lieu of the last forty-eight (48) months of monthly
Reservation Payments or (ii) a [redacted] payment in lieu of the last
twenty-four (24) months of monthly Reservation Payments subject to the
restriction that this option (ii) shall not be available unless the monthly
Reservation Payments to Southern under this Agreement are immediately and
thereafter remain increased by [redacted] per month.

         14.4 Post December 31, 2005 Provisions. If at any time after December
31, 2005, the long term senior unsecured indebtedness of Dynegy Holdings Inc.
(or the provider of an Eligible Guaranty) has or drops to a rating below either
(i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent), then DYPM or Dynegy Holdings Inc. (or the provider of an Eligible
Guaranty) shall within three (3) Business Days after such event provide to and
maintain in favor of Southern a letter of credit issued by an issuer reasonably
acceptable to Southern in the amount of [redacted] in substantially the form of
Appendix E hereto, unless a [redacted] letter of credit has been properly issued
and remains in effect in accordance with the first sentence of Section 14.2 or
14.3 above.

         14.5 Guaranty in Favor of DYPM. If hereafter Southern's net worth
(calculated by subtracting Southern's liabilities (net of intercompany loans)
from Southern's total assets (excluding goodwill) as such terms are determined
in accordance with GAAP) falls below [redacted], Southern shall provide to DYPM
a guaranty from an entity with a long term senior unsecured indebtedness rating
at or above (i) Baa3 by Moody's (or future equivalent) and (ii) BBB- by S&P (or
future equivalent) in substantially the form of Appendix F (Southern Guaranty)
in an amount equal to seventy percent (70%) of the amount by which [redacted]
exceeds Southern's net worth (the "Shortfall Amount") or, at Southern's option,
Southern shall deliver to DYPM a letter of credit in the Shortfall Amount in
substantially the form of Appendix G hereto. If at any time during the Term, the
long term senior unsecured indebtedness of the provider of the Southern Guaranty
has or drops to a rating below either (i) Baa3 by Moody's (or future equivalent)
or (ii) BBB- by S&P (or future equivalent), then Southern shall provide a
Southern Guaranty issued by an entity with a long term senior unsecured
indebtedness rating at or above the Eligible Guaranty Threshold. Southern shall
provide such Southern Guaranty within ten (10) Days of receipt of notice from
DYPM that Southern is required to provide a Southern Guaranty due to the
downgrade below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB-
by S&P (or future equivalent). If Southern is unable to provide a Southern
Guaranty during the applicable periods described above, then Southern shall
provide and maintain substitute collateral of a value equal to the Shortfall
Amount in form and substance reasonably satisfactory to DYPM which security
shall cover and secure Southern's obligations under this Agreement. The
foregoing substitute collateral shall be replenished so that at all times
substitute collateral of a value equal to the Shortfall Amount is securing
Southern's obligations to DYPM until such time as a Southern Guaranty is
provided. If at any time a Southern Guaranty becomes available, Southern may
elect to provide such Southern Guaranty in replacement of any security
previously provided. Once a Southern Guaranty is provided, any security
previously provided by Southern shall be immediately returned or cancelled as
the case may be, at which time the Southern Guaranty shall remain in place until
the latter of it is terminated in accordance with its terms or until such time
as collateral is again required and provided due to the downgrades of the
provider of the Southern Guaranty to a level below the Eligible Guaranty
Threshold.

         14.6 Negative Watch Credit Support in Favor of DYPM. If at any time
prior to June 1, 2005, the long term senior unsecured indebtedness of Southern
has or drops to a rating of either (i) Baa3 by Moody's (or future equivalent)
and Southern, its credit rating or indebtedness is on watch for possible
downgrade by Moody's (or future equivalent) or (ii) BBB- by S&P (or future
equivalent) and Southern, its credit rating or indebtedness is on negative
CreditWatch by S&P (or future equivalent), then Southern shall within three (3)
Business Days after such event provide to and maintain in favor of DYPM either
(1) a letter of credit issued by an issuer reasonably acceptable to DYPM in an
amount of [redacted] in substantially the form of Appendix G hereto or (2) a
guaranty from an entity with a long term senior unsecured indebtedness rating at
or above (i) Baa3 by Moody's (or future equivalent) and (ii) BBB- by S&P (or
future equivalent) in the form of Appendix F (Southern Guaranty), unless a
letter of credit or guaranty has been properly issued and remain in effect in
accordance with Section 14.7 or 14.8 below.

         14.7 Credit Support in Favor of DYPM for Junk Rating. If at any time
prior to June 1, 2005, the long term senior unsecured indebtedness of Southern
has or drops to a rating of below either (i) Baa3 by Moody's (or future
equivalent) or (ii) BBB- by S&P (or future equivalent), then Southern shall
within three (3) Business Days after such event provide to and maintain in favor
of DYPM either (1) a letter of credit issued by an issuer reasonably acceptable
to DYPM in an amount of [redacted] in substantially the form of Appendix G
hereto or (2) a guaranty from an entity with a long term senior unsecured
indebtedness rating at or above (i) Baa3 by Moody's (or future equivalent) and
(ii) BBB- by S&P (or future equivalent) in the form of Appendix F (Southern
Guaranty), unless a letter of credit or guaranty has been properly issued and
remains in effect in accordance with Section 14.6 above or Section 14.8 below.

         14.8 Post June 1, 2005 Provisions. If at any time on or after June 1,
2005, the long term senior unsecured indebtedness of Southern has or drops to a
rating below either (i) Baa3 by Moody's (or future equivalent) or (ii) BBB- by
S&P (or future equivalent), then Southern shall provide to and maintain in favor
of DYPM either (1) a letter of credit issued by an issuer reasonably acceptable
to DYPM in the amount of [redacted] in substantially the form of Appendix G
hereto or (2) guaranty from an entity with a long term senior unsecured
indebtedness rating at or above (i) Baa3 by Moody's (or future equivalent) and
(ii) BBB- by S&P (or future equivalent) in the form of Appendix F (Southern
Guaranty), unless a letter of credit or guaranty has been properly issued and
remains in effect in accordance with Section 14.6 or Section 14.7 above.

                                   ARTICLE 15

                                 DELIVERY EXCUSE

         15.1 Definition. As used in this Agreement, "Delivery Excuse" means:
(i) any Event of Default of DYPM under this Agreement or any event which, with
the giving of notice or lapse of time or both, would become an Event of Default
under this Agreement; (ii) the failure of any portion of Gas supply intended for
Specified Seller's Resources under any Gas supply agreement to which Southern is
a party (other than a failure resulting from a default or failure to perform by
Southern or one of its Affiliates) for any reason or the failure of Gas supply
to an alternate gas delivery point(s) (as required by Section 6.2), provided,
however, that failures to supply to alternate delivery point(s) for reasons
beyond DYPM's control shall not constitute a Delivery Excuse; or (iii) the
delivery of Gas to the Specified Seller's Resources that does not meet the
specifications of applicable transportation pipelines serving the Specified
Seller's Resources; (iv) any failure or inability of DYPM to acquire and
maintain adequate transmission service for the delivery of energy; and (v) any
Emergency Condition. Prior to the Effective Date of Service, Southern and DYPM
(or its Affiliate(s)) shall enter into an agreement for the supply of Gas by
DYPM (or its Affiliate(s)) for use by Specified Seller's Resource(s). Nothing
contained in this Agreement or elsewhere shall require Southern to replace,
either in whole or in part, any failure of Gas supply under any Gas supply
agreement (including such an agreement with DYPM or its Affiliate(s)) or
arrangement with any other Gas supply arrangement.

         15.2 No Breach for Delivery Excuse. Southern shall not be liable for or
deemed in breach of this Agreement to the extent a Delivery Excuse has occurred
or is continuing, even if the duration of such Delivery Excuse is for the
remainder of the Term of this Agreement; provided that the following shall apply
with regard to a condition that would result in a Delivery Excuse:

               (i) Each Party shall promptly notify the other after  discovering
          any  condition or  circumstance  that could  reasonably be expected to
          lead to a Delivery  Excuse.  Upon  either  Party  becoming  aware of a
          condition that constitutes a Delivery Excuse, that Party shall provide
          the other Party with prompt  written  notice of such  condition,  with
          details  further  describing  the  particulars  of the condition to be
          supplied within twelve (12) Days after commencement of such condition;

               (ii) Any delay in performance shall be of no greater scope and of
          no longer duration than is directly caused by the Delivery Excuse; and

               (iii) When a Party becomes aware that the condition  constituting
          a Delivery  Excuse no longer exists,  such Party shall promptly notify
          the  other  when  the  condition  of  Delivery  Excuse  is  no  longer
          preventing such Party's performance under this Agreement.

                                   ARTICLE 16

                         REPRESENTATIONS AND WARRANTIES

               16.1. Execution.  Each Party represents and warrants to the other
          Party that: (i) it has all the necessary corporate and legal power and
          authority  and has been duly  authorized  by all  necessary  corporate
          action to enable it to lawfully  execute,  deliver  and perform  under
          this Agreement; and (ii) it is a valid legal entity duly organized and
          validly  existing in good standing  under the laws of the state of its
          formation and is qualified to do business in the State of Alabama;

               16.2.  Permits.  Each Party  represents and warrants to the other
          Party that it will hold all permits,  licenses or approvals  necessary
          to lawfully  perform its  obligations  contained  herein in the manner
          prescribed by this Agreement.

               16.3 Binding  Obligations.  Each Party represents and warrants to
          the  other  Party  that  this  Agreement  is  the  valid  and  binding
          obligation of such Party, enforceable against such Party in accordance
          with its  terms,  except  as such  enforceability  may be  limited  by
          bankruptcy,  insolvency or other  equitable laws affecting  creditor's
          rights.

               16.4  Execution  and  Consummation.  Each  Party  represents  and
          warrants to the other Party that the  execution  and  delivery of this
          Agreement,  the consummation of the transactions  contemplated  hereby
          and the  fulfillment  of and  compliance  with the  provisions of this
          Agreement  do not  and  will  not  conflict  with  any  of the  terms,
          conditions or provisions of any law or partnership agreement, or other
          evidence of indebtedness or any other agreement or instrument to which
          it is a party or by  which  it or any of its  property  is  bound,  or
          result in a breach or default under any of the foregoing.

               16.5 Actions and Proceedings.  Each Party represents and warrants
          to the other  that there is no pending  or, to the  knowledge  of such
          Party, threatened action or proceeding affecting such Party before any
          Government  Agency that  purports to adversely  affect the validity or
          enforceability of this Agreement.

               16.6  Processor.   With  respect  to  the  purchase  of  Contract
          Capacity,  DYPM  represents  and  warrants  that  it  is  a  producer,
          processor,  commercial  user or merchant  handling  energy,  and it is
          entering  into the  transactions  contemplated  by this  Agreement for
          purposes related to its business as such.

                                   ARTICLE 17

                                   ASSIGNMENT

         17.1 General Rule. This Agreement shall be binding upon and inure to
the benefit of the permitted successors and assigns of the Parties hereto.
Except as set forth in Section 17.2, no permitted sale, assignment, transfer or
other disposition shall release or discharge DYPM or Southern from its
obligations under this Agreement, but all such obligations shall also be assumed
by the successor or assign of the Party hereto.

         17.2 Consent Required. Neither Party shall assign its interest in this
Agreement in whole or part without the prior written consent of the other Party,
such consent not to be unreasonably withheld or delayed; provided, however,
that, notwithstanding the foregoing, either Party may assign this Agreement to
its parent, or to any direct or indirect wholly-owned subsidiary of such parent
and, upon the approval of the creditworthiness and the ability to perform of
such assignee by the non-assigning Party (which approval shall not be
unreasonably withheld or delayed), the assignor shall be released and discharged
from its obligations under this Agreement. Either Party may collaterally assign
this Agreement to any lender or financial institution without the written
consent of the other Party. Each Party agrees to provide such consents to
collateral assignment as may be reasonably requested by the other Party;
provided that neither Party shall be obligated to provide a consent to
collateral assignment that would have the effect of materially altering the
obligations of such Party under this Agreement.

                                   ARTICLE 18

                               DISPUTE RESOLUTION

         18.1     Senior Officers.

                  18.1.1 Each of the Parties will designate in writing to the
other Parties a representative who will be authorized to resolve any dispute
arising under this Agreement in an equitable manner and, unless otherwise
expressly provided herein, to exercise the authority of such Party to make
decisions by mutual agreement.

                  18.1.2 If such designated representatives are unable to
resolve a dispute under this Agreement, such dispute will be referred by each
Party's representative, respectively, to a designated senior officer.

                  18.1.3 The Parties hereto agree: (i) to attempt to resolve all
disputes arising hereunder promptly, equitably and in a good faith manner; and
(ii) to provide each other with reasonable access during normal business hours
to any and all non-privileged and non-confidential records, information and data
pertaining to any such dispute. Non-confidential information shall be made
available to a Party pursuant to a confidentiality agreement acceptable to the
disclosing Parties.

         18.2 Arbitration. All disputes arising under, out of, or in relation to
any provision of this Agreement that are not resolved pursuant to Section 18.1
within 30 Days after either Party's receipt of notice referring the dispute to
the senior officers of the Parties (and in any event within the time which legal
or equitable proceedings based on such claim, dispute, or controversy would not
be barred by the applicable statute of limitations) will be submitted upon
written request of any Party to binding arbitration. Each Party will have the
right to designate an arbitrator of its choice, who need not be from the
American Arbitration Association ("AAA") panel of arbitrators but who (a) will
be an expert in the independent power electric generation field and (b) will not
be and will not have been previously an employee or agent of or consultant or
counsel to either Party and will not have a direct or indirect interest in
either Party or the subject matter of the arbitration. Such designation will be
made by notice to the other Party and to the AAA within ten (10) Days or, in the
case of payment disputes, five (5) Days after the date of the giving of notice
of the demand for arbitration. The arbitrators designated by the Parties will
designate a third arbitrator, who will have a background in legal and judicial
matters (and who will act as chairman), within ten (10) Days or, in the case of
payment disputes, five (5) Days after the date of the designation of the last of
the arbitrators to be designated by the Parties, and the arbitration will be
decided by the three arbitrators. If the two arbitrators cannot or do not select
a third independent arbitrator within such period, either Party may apply to the
AAA for the purpose of appointing any person listed with the AAA as the third
independent arbitrator under the expedited rules of the AAA. Such arbitration
will be held in alternating locations of the home offices of the Parties,
commencing with DYPM's home office, or in any other mutually agreed upon
location. The rules of the AAA will apply to the extent not inconsistent with
the rules herein specified. Each Party will bear its own expenses (including
attorneys' fees) with respect to the arbitration, unless the arbitrator decides
on a different allocation of expenses. The arbitrators will designate the Party
to bear the expenses of the arbitrators or the respective amounts of such
expense to be borne by each Party.

         18.3 Binding Nature of Proceedings. Each Party understands that this
Agreement contains an agreement to arbitrate with respect to specified disputes.
After signing this Agreement, each Party understands that it will not be able to
bring a lawsuit concerning any dispute that may arise that is covered by this
arbitration provision. Instead, each Party agrees to submit any such dispute to
arbitration pursuant to Section 18.2. Any award of the arbitrator may be
enforced by the Party in whose favor such award is made in any court of
competent jurisdiction.

                                   ARTICLE 19

                                  MISCELLANEOUS

         19.1     Governing Law; Waiver of Jury Trial.

                  19.1.1 THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ALABAMA, EXCLUSIVE OF ITS CONFLICTS OF
LAW PROVISIONS, AND, TO THE EXTENT APPLICABLE, BY THE FEDERAL LAW OF THE UNITED
STATES OF AMERICA. BY CHOOSING TO HAVE THIS AGREEMENT GOVERNED BY AND CONSTRUED
UNDER THE LAW OF THE STATE OF ALABAMA, THE PARTIES ARE IN NO WAY SUBMITTING TO
OR INCORPORATING INTO THIS AGREEMENT ANY ALABAMA STATUTE, REGULATION, OR ORDER,
OR ANY OF THE SAME INVOLVING THE GENERATION, SALE, PURCHASE OR TRANSMISSION OF
ELECTRIC CAPACITY OR ELECTRIC ENERGY IN, OR FOR CONSUMPTION IN, THE STATE OF
ALABAMA.

                  19.1.2 EACH PARTY HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.

         19.2     Confidentiality.

                  19.2.1 Until such time as the terms of the Agreement are
readily accessible by the public (other than due to the fault of a Party),
neither Party shall disclose the terms of this Agreement to any third party
(other than such Party's (or its Affiliates') employees, lenders, legal counsel,
accountants, or other advisors), except in order to comply with any applicable
law, order, regulatory or exchange rule. Each Party shall notify the other Party
of any proceeding of which it is aware that may result in disclosure and shall
use reasonable efforts to prevent or limit such disclosure. Notwithstanding the
foregoing, either Party may disclose the terms and conditions of this Agreement
to any third party providing permanent or construction financing with respect to
the Specified Seller's Resources (in the case of Southern) or with respect to
other financing obtained by a Party. In connection with a disclosure to any
third party financiers, the disclosing Party shall take such steps as may be
reasonably required to limit the scope of such disclosure and to ensure that
disclosure is not subsequently made by any such financier.

                  19.2.2 Anything in this Section 19.2 to the contrary
notwithstanding, the Parties agree and acknowledge that, in the course of
performance under this Agreement, the Parties may exchange confidential and
proprietary information (including financial information related to the
Agreement). Each Party agrees and covenants that any and all information it
receives in connection with its performance under this Agreement that the
disclosing Party has designated as confidential will be kept confidential and
shall not be disclosed by the receiving Party to any third party without the
express written consent of the disclosing Party, except in order to comply with
any applicable law, order, regulatory or exchange rule. Any filing by a Party
pursuant to any of the foregoing in compliance with applicable law, order,
regulatory or exchange rule, shall be made under a request for confidential
treatment (unless the filing Party reasonably believes such a request would be
futile) and the other Party shall have the opportunity to review such filing
prior to its dissemination. Neither Party shall issue a press release or similar
disclosure with respect to the existence of this Agreement or its contents
without first obtaining the written consent of the other Party, which consent
shall not be unreasonably withheld.

         19.3 Survivorship of Obligations. The termination or cancellation of
this Agreement shall not discharge any Party from any obligation it owes the
other Party under this Agreement by reason of any transaction, loss, cost,
damage, expense or liability occurring, accruing or arising prior to such
termination. It is the intent of the Parties that any such obligation owed
(whether the same shall be known or unknown as of the termination or
cancellation of this Agreement) will survive the termination or cancellation of
this Agreement in favor of the Party to which such obligation is owed. The
Parties also intend that the indemnification and limitation of liability
provisions contained in Section 11.2 shall remain operative and in full force
and effect.

         19.4 Notice of Proceedings. Each Party, to the extent it has pertinent
knowledge, shall promptly notify the other Party of any pending or anticipated
federal or state regulatory, judicial or administrative actions, including but
not limited to notice of violations, arising directly out of, caused by, or
related to the Specified Seller's Resources, including any generation equipment
comprising the Specified Seller's Resources, that could materially and adversely
affect either Party's ability to carry out its obligations under this Agreement.

         19.5 No Third Party Beneficiaries. This Agreement is not intended to,
and shall not, create rights, remedies or benefits of any character whatsoever
in favor of any Persons, corporations, associations, or entities other than the
Parties, and the rights and obligations of each of the Parties under this
Agreement are solely for the use and benefit of, and may be enforced solely by
the Parties, their successors in interest or permitted assigns.

         19.6 Section Headings Not to Affect Meaning. The descriptive headings
of the various Articles and Sections of this Agreement have been inserted for
convenience of reference only and shall in no way modify or restrict any of the
terms and provisions thereof.

         19.7 Computation of Time. In computing any period of time prescribed or
allowed by this Agreement, the designated period of time shall begin to run on
the Day immediately following the Day of the act, event or default that
precipitated the running of the designated period of time. The designated period
shall expire on the last Day of the period so computed unless that Day is not a
Business Day, in which event the period shall run until the end of the next
Business Day.

         19.8 Interest. Whenever the provisions of this Agreement require the
calculation of an interest rate, such rate shall be computed at an annual rate
equal to the Prime Rate as of the date on which the calculation begins, but not
to exceed the maximum rate which may be lawfully charged. Interest on
obligations arising under this Agreement shall be compounded quarterly based on
a calendar quarter.

         19.9 Entire Agreement. This Agreement constitutes the entire agreement
between the Parties relating to the subject matter hereof and supersedes any
other agreements, written or oral, between the Parties concerning such subject
matter.

         19.10 Counterparts. This Agreement may be executed simultaneously in
multiple counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument.

     19.11  Amendments.  This Agreement may only be amended by written agreement
signed by duly authorized representatives of the Parties.

         19.12 Waivers. Waivers of the provisions of this Agreement or excuses
of any violations of the Agreement shall be valid only if in writing and signed
by an authorized officer of the Party issuing the waiver or excuse. A waiver or
excuse issued under one set of circumstances shall not extend to other
occurrences under similar circumstances.

         19.13 No Partnership Created. Any provision of this Agreement to the
contrary notwithstanding, the Parties do not intend to create hereby any joint
venture, partnership, association taxable as a corporation, or other entity for
the conduct of any business for profit. If it should appear that one or more
changes to this Agreement would be required in order not to create an entity
referenced in the preceding sentence, the Parties agree to negotiate promptly
and in good faith with respect to such changes.

         19.14 Character of Sale. The sale of Contract Capacity and Contract
Energy hereunder shall not constitute a sale, lease, transfer or conveyance to
DYPM or any other party of any contractual rights or ownership interests in any
generating unit or other equipment comprising the Specified Seller's Resources,
nor does the sale of Contract Capacity and Contract Energy hereunder constitute
a dedication of ownership of any generating unit or other equipment comprising
the Specified Seller's Resources.

         19.15 Notices. Any notice, demand, request, payment, statement, or
correspondence provided for in this Agreement, or any notice which a Party may
desire to give to the other, shall be in writing (unless otherwise expressly
provided by this Agreement) and shall be considered duly delivered when received
by hand delivery, first-class mail, facsimile, or by overnight delivery, at the
addresses listed below; provided, however, if actual delivery occurs at a time
other than between the hours of 0800 and 1700 CPT on a Business Day (each a
"Business Hour"), delivery shall be deemed to have occurred in the next Business
Hour after actual delivery.

(i)      To Southern:

                  Southern Power Company
                  270 Peachtree Street
                  Atlanta, Georgia  30303
                  Attention:     Chief Financial Officer

                  Telephone:     404-506-5243
                  Facsimile:     404-506-0333

         With a copy to:

                  Southern Company Generation and Energy Marketing
                  270 Peachtree Street
                  Atlanta, Georgia  30303
                  Attention:  Vice President

                  Telephone:        404-506-0357

                  Payment by Wire:   Bank of America
                  ABA  111000012
                  Account #:  3751237789

(ii)     To DYPM

                  Dynegy Power Marketing, Inc.
                  1000 Louisiana Street, Suite 5800
                  Houston, Texas 77002
                  Attention:     Asset Management

                  Telephone:     (713) 507-6400
                  Facsimile:     (713) 767-5931

         With copies to:

                  Dynegy Power Marketing, Inc.
                  1000 Louisiana Street, Suite 5800
                  Houston, Texas 77002

                  Attention:  General Counsel

                  Telephone:        (713) 507-6832
                  Facsimile:        (713) 507-6986

                           And

                  Dynegy Power Marketing, Inc.
                  125 Townpark Drive, Suite 175
                  Kennesaw, Georgia 30144

                  Attention:  Vice President

                  Telephone:        (770) 420-6851
                  Facsimile:        (770) 420-6855

                  Payment by Wire:
                  For the Acct. of Dynegy Power Marketing
                  The First National Bank of Chicago
                  ABA # 071 000 013
                  Account # 552 7651

         Invoices:

                  Dynegy Power Marketing, Inc.
                  1000 Louisiana Street, Suite 5800
                  Houston, Texas  77002-5050
                  Attn: Accounts Payable-Electric
                  Facsimile:        713-767-5958

         Each Party shall provide the other Party with all names, addresses,
telephone and facsimile numbers necessary for its performance under this
Agreement; and either Party may change the information set forth in this Section
19.15 by giving written notice to the other Party in the manner prescribed by
such section.

         19.16 Survival. Any provision(s) of this Agreement that expressly comes
into or remains in force following the termination or expiration of this
Agreement shall survive the termination or expiration of this Agreement.

         19.17 Construction. The language used in this Agreement is the product
of both Parties' efforts. Accordingly, each Party irrevocably waives the benefit
of any rule of contract construction that disfavors the drafter of a contract or
the drafter of specific language in a contract.

         19.18 Imaged Agreement. Any original executed Agreement, schedule
confirmation or other related document may be photocopied and stored on computer
tapes and disks (the "Imaged Agreement"). The Imaged Agreement, if introduced as
evidence on paper, the schedule confirmation, if introduced as evidence in
automated facsimile form, the transaction tape, if introduced as evidence in its
original form and as transcribed onto paper, and all computer records of the
foregoing, if introduced as evidence in printed format, in any judicial,
arbitration, mediation or administrative proceedings, will be admissible as
between the Parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form. Neither Party
shall object to the admissibility of the transaction tape, the schedule
confirmation or the Imaged Agreement (or photocopies of the transcription of the
transaction tape, the schedule confirmation or the Imaged Agreement) on the
basis that such were not originated or maintained in documentary form under
either the hearsay rule, the best evidence rule or other rule of evidence.

         19.19 GDP-IPD. In connection with the calculations under this Agreement
that are referenced to increases based on the values of GDP-IPD, the base value
for all GDP-IPD inflation calculations will be the Implicit Price Deflator
published quarterly by the U.S. Department of Commerce in Table 5 (Quantity and
Price Indexes for Gross Domestic Product) in the Bureau of Economic Analysis
("BEA") National Income and Product Accounts Tables for the first quarter of
2005, as revised by the BEA. The escalation adjustments will be made by dividing
the GDP-IPD for the first calendar quarter preceding the beginning of a new
Contract Year (as revised by the BEA and reported prior to May 31 for the
upcoming Contract Year) by the base GDP-IPD (as revised) from the first calendar
quarter of 2005.

     19.20 Higher Heating Value. All Gas quantities  referenced  herein shall be
in terms of the higher heating value of natural gas.

                      [The next page is the signature page]

<PAGE>

IN WITNESS WHEREOF, Southern and DYPM have caused this Agreement to be executed
in duplicate by their respective duly authorized officers as of the Execution
Date.

SOUTHERN POWER COMPANY

By:            ___________________________________

NAME:     Douglas E. Jones

Title:        Vice President

                                    ........
DYNEGY POWER MARKETING, INC.

By:           ___________________________________

NAME:     Matthew K. Schatzman

Title:        President

<PAGE>

                                   APPENDIX A

                           Payment Schedule[redacted]

<PAGE>

                                   APPENDIX B

                             Scheduling Constraints
                                   [redacted]

<PAGE>

                                   APPENDIX C

           ENDH Allowance and Performance Payment Sample Calculations

                                   [redacted]

<PAGE>

                                   APPENDIX D

                               Guaranty Agreement

         [redacted]

<PAGE>

                                   APPENDIX E

                        Proposed Form of Letter of Credit
                                   [redacted]

<PAGE>

                                   APPENDIX F

                               Guaranty Agreement

                                   [redacted]

<PAGE>

                                   APPENDIX G

                        Proposed Form of Letter of Credit

[redacted]Exhibit 10.28

                              THE SOUTHERN COMPANY

                              EMPLOYEE SAVINGS PLAN

                             As Amended and Restated

                            Effective January 1, 2002

<PAGE>

                                TABLE OF CONTENTS

ARTICLE I   PURPOSE............................................................1

ARTICLE II   DEFINITIONS.......................................................2
         2.1      Account......................................................2
         2.2      Actual Contribution Percentage Test..........................2
         2.3      Actual Deferral Percentage...................................2
         2.4      Actual Deferral Percentage Test..............................2
         2.5      Affiliated Employer..........................................2
         2.6      Aggregate Account............................................2
         2.7      Aggregation Group............................................3
         2.8      Annual Addition..............................................3
         2.9      Average Actual Deferral Percentage...........................3
         2.10     Average Contribution Percentage..............................3
         2.11     Beneficiary..................................................4
         2.12     Board of Directors...........................................4
         2.13     Break-in-Service Date........................................4
         2.14     Code.........................................................4
         2.15     Committee....................................................4
         2.16     Common Stock.................................................4
         2.17     Company......................................................4
         2.18     Compensation.................................................4
         2.19     Contribution Percentage......................................5
         2.20     Determination Date...........................................5
         2.21     Determination Year...........................................5
         2.22     Direct Rollover..............................................5
         2.23     Distributee..................................................5
         2.24     Elective Employer Contribution...............................5
         2.25     Eligible Employee............................................6
         2.26     Eligible Participant.........................................6
         2.27     Eligible Retirement Plan.....................................6
         2.28     Eligible Rollover Distribution...............................7
         2.29     Employee.....................................................7
         2.30     Employer Matching Contribution...............................7
         2.31     Employing Company............................................7
         2.32     Enrollment Date..............................................7
         2.33     ERISA........................................................7
         2.34     Excess Aggregate Contributions...............................7
         2.35     Excess Deferral Amount.......................................7
         2.36     Excess Deferral Contributions................................8
         2.37     Highly Compensated Employee..................................8
         2.38     Hour of Service..............................................8
         2.39     Investment Fund..............................................8
         2.40     Key Employee.................................................8
         2.41     Limitation Year..............................................8
         2.42     Look-Back Year...............................................8
         2.43     Mirant.......................................................8
         2.44      Mirant Services.............................................8
         2.45      Mirant Stock................................................8
         2.46     Mirant Stock Account.........................................8
         2.47     Mirant Stock Fund............................................8
         2.48     Non-Highly Compensated Employee..............................8
         2.49     Normal Retirement Date.......................................9
         2.50     One-Year Break in Service....................................9
         2.51     Participant..................................................9
         2.52     Permissive Aggregation Group.................................9
         2.53     Plan.........................................................9
         2.54     Plan Year....................................................9
         2.55     Present Value of Accrued Retirement Income...................9
         2.56     Required Aggregation Group...................................9
         2.57     Rollover Contribution........................................9
         2.58     SCEM........................................................10
         2.59     SEPCO.......................................................10
         2.60     SEPCO Plan..................................................10
         2.61     SEPCO Transferred Account...................................10
         2.62     Super-Top-Heavy Group.......................................10
         2.63     Surviving Spouse............................................10
         2.64     Top-Heavy Group.............................................10
         2.65     Transferred ESOP Account....................................10
         2.66     Trust or Trust Fund.........................................10
         2.67     Trust Agreement.............................................10
         2.68     Trustee.....................................................10
         2.69     Valuation Date..............................................10
         2.70     Voluntary Participant Contribution..........................11
         2.71     Year of Service.............................................11

ARTICLE III  PARTICIPATION....................................................12
         3.1      Eligibility Requirements....................................12
         3.2      Participation upon Reemployment.............................12
         3.3      No Restoration of Previously Distributed Benefits...........12
         3.4      Loss of Eligible Employee Status............................12
         3.5      Military Leave..............................................12

ARTICLE IV  ELECTIVE EMPLOYER CONTRIBUTIONS AND VOLUNTARY PARTICIPANT
         CONTRIBUTIONS........................................................13
         4.1      Elective Employer Contributions.............................13
         4.2      Maximum Amount of Elective Employer Contributions...........13
         4.3      Distribution of Excess Deferral Amounts.....................13
         4.4      Additional Rules Regarding Elective Employer
                  Contributions...............................................14
         4.5      Section 401(k) Nondiscrimination Tests......................15
         4.6      Voluntary Participant Contributions.........................18
         4.7      Manner and Time of Payment of Elective Employer
                  Contributions and Voluntary Participant Contributions.......18
         4.8      Change in Contribution Rate.................................18
         4.9      Change in Contribution Amount...............................18
         4.10     Rollover Contributions and Direct Transfers from the
                  SEPCO and ECMC Plans........................................18
         4.11     Rollovers from Other Plans..................................19

ARTICLE V  EMPLOYER MATCHING CONTRIBUTIONS....................................20
         5.1      Amount of Employer Matching Contributions...................20
         5.2      Payment of Employer Matching Contributions..................20
         5.3      Limitations on Employer Matching Contributions and
                  Voluntary Participant Contributions.........................20
         5.4      Multiple Use Limitation.....................................22
         5.5      Reversion of Employing Company Contributions................23
         5.6      Correction of Prior Incorrect Allocations and
                  Distributions...............................................23

ARTICLE VI  LIMITATIONS ON CONTRIBUTIONS......................................24
         6.1      Section 415 Limitations.....................................24
         6.2      Correction of Contributions in Excess of Section 415
                  Limits......................................................24
         6.3      Combination of Plans........................................25

ARTICLE VII  SUSPENSION OF CONTRIBUTIONS......................................26
         7.1      Suspension of Contributions.................................26
         7.2      Resumption of Contributions.................................26

ARTICLE VIII  INVESTMENT OF CONTRIBUTIONS.....................................27
         8.1      Investment Funds............................................27
         8.2      Investment of Participant Contributions.....................27
         8.3      Investment of Employer Matching Contributions...............27
         8.4      Investment of Earnings......................................27
         8.5      Transfer of Assets between Funds............................28
         8.6      Change in Investment Direction..............................28
         8.7      Section 404(c) Plan.........................................28
         8.8      Mirant Stock Fund...........................................28

ARTICLE IX  MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS...............29
         9.1      Establishment of Accounts...................................29
         9.2      Valuation of Investment Funds...............................30
         9.3      Rights in Investment Funds..................................30

ARTICLE X  VESTING............................................................31
         10.1     Vesting.....................................................31

ARTICLE XI  WITHDRAWALS AND LOANS.............................................32
         11.1     Withdrawals by Participants.................................32
         11.2     Notice of Withdrawal........................................33
         11.3     Form of Withdrawal..........................................33
         11.4     Minimum Withdrawal..........................................33
         11.5     Source of Withdrawal........................................33
         11.6     Requirement of Hardship.....................................33
         11.7     Loans to Participants.......................................35
         11.8     Special Waiver for Participants Employed in the
                  United Kingdom..............................................37

ARTICLE XII  DISTRIBUTION TO PARTICIPANTS.....................................38
         12.1     Distribution upon Retirement................................38
         12.2     Distribution upon Disability................................39
         12.3     Distribution upon Death.....................................39
         12.4     Designation of Beneficiary in the Event of Death............39
         12.5     Distribution upon Termination of Employment.................40
         12.6     Commencement of Benefits....................................40
         12.7     Transfer between Employing Companies........................41
         12.8     Distributions to Alternate Payees...........................41
         12.9     Requirement for Direct Rollovers............................42
         12.10    Consent and Notice Requirements.............................42
         12.11    Form of Payment.............................................43
         12.12    Partial Distribution upon Termination of Employment.........43
         12.13    Distribution of Dividends Payable on Common Stock...........43

ARTICLE XIII  ADMINISTRATION OF THE PLAN......................................45
         13.1     Membership of Committee.....................................45
         13.2     Acceptance and Resignation..................................45
         13.3     Transaction of Business.....................................45
         13.4     Responsibilities in General.................................45
         13.5     Committee as Named Fiduciary................................45
         13.6     Rules for Plan Administration...............................46
         13.7     Employment of Agents........................................46
         13.8     Co-Fiduciaries..............................................46
         13.9     General Records.............................................46
         13.10    Liability of the Committee..................................46
         13.11    Reimbursement of Expenses and Compensation of
                  Committee...................................................47
         13.12    Expenses of Plan and Trust Fund.............................47
         13.13    Responsibility for Funding Policy...........................47
         13.14    Management of Assets........................................47
         13.15    Notice and Claims Procedures................................48
         13.16    Bonding.....................................................48
         13.17    Multiple Fiduciary Capacities...............................48
         13.18    Change in Administrative Procedures.........................48

ARTICLE XIV  TRUSTEE OF THE PLAN..............................................49
         14.1     Trustee.....................................................49
         14.2     Purchase of Common Stock....................................49
         14.3     Voting of Common Stock......................................49
         14.4     Voting of Other Investment Fund Shares......................50
         14.5     Uninvested Amounts..........................................50
         14.6     Independent Accounting......................................50

ARTICLE XV  AMENDMENT AND TERMINATION OF THE PLAN.............................51
         15.1     Amendment of the Plan.......................................51
         15.2     Termination of the Plan.....................................51
         15.3     Merger or Consolidation of the Plan.........................52
         15.4     Transfer of Plan Assets.....................................52

ARTICLE XVI  TOP-HEAVY REQUIREMENTS...........................................53
         16.1     Top-Heavy Plan Requirements.................................53
         16.2     Determination of Top-Heavy Status...........................53
         16.3     Minimum Allocation for Top-Heavy Plan Years.................54

ARTICLE XVII  GENERAL PROVISIONS..............................................55
         17.1     Plan Not an Employment Contract.............................55
         17.2     No Right of Assignment or Alienation........................55
         17.3     Payment to Minors and Others................................55
         17.4     Source of Benefits..........................................56
         17.5     Unclaimed Benefits..........................................56
         17.6     Governing Law...............................................56

ARTICLE XVIII  SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES ATTRIBUTABLE
         TO ACCRUED BENEFITS TRANSFERRED FROM THE SEPCO PLAN..................57
         18.1     SEPCO Transferred Accounts..................................57
         18.2     In-Service Withdrawals from SEPCO Transferred
                  Accounts....................................................57
         18.3     Loans from SEPCO Transferred Accounts.......................57
         18.4     Distribution of SEPCO Transferred Accounts..................57
         18.5     Code Section 411(d)(6) Protected Benefits...................59

<PAGE>

                              THE SOUTHERN COMPANY

                              EMPLOYEE SAVINGS PLAN

                             As Amended and Restated

                            Effective January 1, 2002

                                    ARTICLE I

                                     PURPOSE

         The purpose of the Plan is to encourage employee thrift, to create
added employee interest in the affairs of The Southern Company, to provide a
means for becoming a shareholder in The Southern Company, to supplement
retirement and death benefits, and to create a competitive compensation program
for employees through the establishment of a formal plan under which
contributions by and on behalf of Participants are supplemented by contributions
of Employing Companies. This Plan is intended to be a stock bonus plan, and all
contributions made by an Employing Company to this Plan are expressly
conditioned upon the deductibility of such contributions under Code Section 404.
In addition, with the exception of the portion of the Plan that is invested in
the common stock of Mirant Corporation, the Plan is also intended to be an
employee stock ownership plan, as defined in Code Section 4975(e)(7) and ERISA
Section 407(d)(6), and is designed to invest primarily in qualifying employer
securities, as defined in Code Section 409(l). The Plan was originally effective
March 1, 1976, and was most recently amended and restated effective as of
January 1, 2002 to incorporate a variety of plan design and other changes.

<PAGE>

                                   ARTICLE II

                                   DEFINITIONS

         All references to articles, sections, subsections, and paragraphs shall
be to articles, sections, subsections, and paragraphs of this Plan unless
another reference is expressly set forth in this Plan. Any words used in the
masculine shall be read and be construed in the feminine where they would so
apply. Words in the singular shall be read and construed in the plural, and all
words in the plural shall be read and construed in the singular in all cases
where they would so apply.

         For purposes of this Plan, unless otherwise required by the context,
the following terms shall have the meanings set forth opposite such terms:

          2.1 "Account" shall mean the total amount credited to the account of a
Participant, as described in Section 9.1.

          2.2 "Actual Contribution Percentage Test" shall mean the test
described in Section 5.3(a).

         2.3 "Actual Deferral Percentage" shall mean the ratio (expressed as a
percentage) of Elective Employer Contributions on behalf of an Eligible
Participant for the Plan Year to the Eligible Participant's compensation for the
Plan Year. For the purpose of determining an Eligible Participant's Actual
Deferral Percentage for a Plan Year, the Committee may elect to consider an
Eligible Participant's compensation for (a) the entire Plan Year or (b) that
portion of the Plan Year in which the Eligible Participant was eligible to have
Elective Employer Contributions made on his behalf, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The Actual
Deferral Percentage of an Eligible Participant who does not have Elective
Employer Contributions made on his behalf shall be zero.

          2.4 "Actual Deferral Percentage Test" shall mean the test described in
Section 4.5(a).

         2.5 "Affiliated Employer" shall mean an Employing Company and (a) any
corporation which is a member of a controlled group of corporations (as defined
in Section 414(b) of the Code) which includes such Employing Company, (b) any
trade or business (whether or not incorporated) which is under common control
(as defined in Section 414(c) of the Code) with such Employing Company, (c) any
organization (whether or not incorporated) which is a member of an affiliated
service group (as defined in Section 414(m) of the Code) which includes such
Employing Company, and (d) any other entity required to be aggregated with such
Employing Company pursuant to regulations under Section 414(o) of the Code.
Notwithstanding the foregoing, for purposes of applying the limitations of
Article VI, the term Affiliated Employer shall be adjusted as required by Code
Section 415(h).

          2.6 "Aggregate Account" shall mean with respect to a Participant as of
the Determination Date, the sum of the following:

                  (a) the Account balance of such Participant as of the most
         recent valuation occurring within a twelve-month period ending on the
         Determination Date;

                  (b) an adjustment for any contributions due as of the
         Determination Date;

                  (c) any Plan distributions, including unrelated rollovers and
         plan-to-plan transfers (ones which are both initiated by the Employee
         and made from a plan maintained by one employer to a plan maintained by
         another employer), but not related rollovers or plan-to-plan transfers
         (ones either not initiated by the Employee or made to a plan maintained
         by the same employer), made within the one-year period ending on the
         Determination Date. The preceding sentence shall also apply to
         distributions under a terminated plan which if it had not been
         terminated would have been required to be included in an Aggregation
         Group. In the case of a distribution made for a reason other than
         severance from employment (or separation from service), death or
         disability, this provision shall be applied by substituting "five-year
         period" for "one-year period";

                  (d) any Employee contributions, whether voluntary or
         mandatory;

                  (e) unrelated rollovers and plan-to-plan transfers to this
         Plan accepted prior to January 1, 1984; and

                  (f) related rollovers and plan-to-plan transfers to this Plan.

          2.7 "Aggregation Group" shall mean either a Required Aggregation Group
or a Permissive Aggregation Group.

         2.8 "Annual Addition" shall mean the amount allocated to a
Participant's Account and accounts under all defined contribution plans
maintained by the Affiliated Employers during a Limitation Year that constitutes

                  (a) Affiliated Employer contributions,

                  (b) Voluntary Participant Contributions,

                  (c) forfeitures, if any, allocated to a Participant's Account
         or accounts under all defined contribution plans maintained by the
         Affiliated Employers, and

                  (d) amounts described in Sections 415(l)(1) and 419A(d)(2) of
         the Code.

         2.9 "Average Actual Deferral Percentage" shall mean the average
(expressed as a percentage) of the Actual Deferral Percentages of the Eligible
Participants in a group.

         2.10 "Average Contribution Percentage" shall mean the average
(expressed as a percentage) of the Contribution Percentages of the Eligible
Participants in a group.

         2.11 "Beneficiary" shall mean any person(s) who, or estate(s),
trust(s), or organization(s) which, in accordance with the provisions of Section
12.4, become entitled to receive benefits upon the death of a Participant.

          2.12 "Board of Directors" shall mean the Board of Directors of
Southern Company Services, Inc.

          2.13 "Break-in-Service Date" means the earlier of:

                  (a) the date on which an Employee terminates employment, is
         discharged, retires, or dies; or

                  (b) the last day of an approved leave of absence including any
         extension.

         For purposes of subsection (a) above, an Employee who ceases to be
eligible to participate in the Plan pursuant to paragraph (5) of Section 2.25
shall be deemed to have experienced a termination of employment as of the date
as of which Section 2.25(5) first applies.

         In the case of an individual who is absent from work for maternity or
paternity reasons, such individual shall not incur a Break-in-Service Date
earlier than the expiration of the second anniversary of the first date of such
absence; provided, however, that the twelve-consecutive-month period beginning
on the first anniversary of the first date of such absence shall not constitute
a Year of Service. For purposes of this paragraph, an absence from work for
maternity or paternity reasons means an absence (a) by reason of the pregnancy
of the Employee, (b) by reason of a birth of a child of the Employee, (c) by
reason of the placement of a child with the Employee in connection with the
adoption of such child by such Employee, or (d) for purposes of caring for such
child for a period beginning immediately following such birth or placement.

         2.14 "Code" shall mean the Internal Revenue Code of 1986, as amended,
or any successor statute, and the rulings and regulations promulgated
thereunder. In the event an amendment to the Code renumbers a section of the
Code referred to in this Plan, any such reference automatically shall become a
reference to such section as renumbered.

          2.15 "Committee" shall mean the committee appointed pursuant to
Section 13.1 to serve as plan administrator.

          2.16 "Common Stock" shall mean the common stock of The Southern
Company.

          2.17 "Company" shall mean Southern Company Services, Inc., and its
successors.

          2.18 "Compensation" shall mean the salary or wages of a Participant,
including all amounts contributed by an Employing Company to The Southern
Company Flexible Benefits Plan on behalf of a Participant pursuant to a salary
reduction arrangement under such plan, plus monthly shift and monthly seven-day
schedule differentials, geographic premiums, monthly customer service premiums,
monthly nuclear plant premiums, sales commissions paid under a sales commission
payment program sponsored by an Employing Company for sales commissioned based
employees, and overtime pay resulting from fluctuations in a Participant's
weekly hours worked pursuant to a pre-determined flexible work schedule
established or approved by an Employing Company that is intended to produce, on
average, forty (40) hour work weeks, and before deduction of taxes, social
security, etc., but excluding all awards under any incentive pay plans sponsored
by the Employing Company, including but not limited to, The Southern Company
Performance Pay Plan, The Southern Company Productivity Improvement Plan, and
The Southern Company Executive Productivity Improvement Plan, overtime pay
(except as specifically included above), any hourly shift differentials,
substitution pay, such amounts which are reimbursements to a Participant paid by
any Employing Company, including but not limited to, reimbursement for such
items as moving expenses and travel and entertainment expenses, and imputed
income for automobile expenses, tax preparation expenses and health and life
insurance premiums paid by the Employing Company.

         The Compensation of each Participant taken into account for purposes of
this Plan shall not exceed the applicable limit under Code Section 401(a)(17).

         2.19 "Contribution Percentage" shall mean the ratio (expressed as a
percentage), of the sum of the Voluntary Participant Contributions and Employer
Matching Contributions under the Plan on behalf of the Eligible Participant for
the Plan Year to the Eligible Participant's compensation for the Plan Year. For
the purpose of determining an Eligible Participant's Contribution Percentage for
a Plan Year, the Committee may elect to consider an Eligible Participant's
compensation for (a) the entire Plan Year or (b) that portion of the Plan Year
in which the individual is an Eligible Participant, provided that such election
is applied uniformly to all Eligible Participants for the Plan Year. The
Contribution Percentage of an Eligible Participant who does not make Voluntary
Participant Contributions or have Employer Matching Contributions made on his
behalf shall be zero.

         2.20 "Determination Date" shall mean with respect to a Plan Year, the
last day of the preceding Plan Year.

          2.21 "Determination Year" shall mean the Plan Year being tested.

          2.22 "Direct Rollover" shall mean a payment by the Plan to the
Eligible Retirement Plan specified by the Distributee.

         2.23 "Distributee" shall include an Employee or former Employee. In
addition, the Employee's or former Employee's surviving spouse and the
Employee's or former Employee's spouse or former spouse who is an alternate
payee under a qualified domestic relations order, as defined in Section 414(p)
of the Code, are Distributees with regard to the interest of the spouse or
former spouse.

         2.24 "Elective Employer Contribution" shall mean contributions made
pursuant to Section 4.1 during the Plan Year by an Employing Company, at the
election of the Participant, in lieu of cash compensation and shall include
contributions made pursuant to a salary reduction agreement.

         2.25 "Eligible Employee" shall mean an Employee who is employed by an
Employing Company and (a) who was eligible to be included in the Plan on January
1, 1991, or (b) who is a regular full-time, regular part-time, or cooperative
education employee other than:

                  (1)      an individual who is classified by an Employing
                           Company as a leased employee, regardless of whether
                           such classification is determined to be in error;

                  (2)      any Employee who is represented by a collective
                           bargaining agent unless the representatives of his
                           bargaining unit and the Employing Company mutually
                           agree to participation in the Plan subject to its
                           terms by members of his bargaining unit;

                  (3)      an individual who is a cooperative education employee
                           and who first performs an Hour of Service on or after
                           January 1, 1995;

                  (4)        an individual who is classified by the Employing
                             Company as a temporary employee (who was not
                             eligible to be included in the Plan on January 1,
                             1991) or an independent contractor, regardless of
                             whether such classification is determined to be in
                             error. Effective September 1, 1998, any individual
                             classified by the Employing Company as a temporary
                             employee shall be excluded from the Plan,
                             regardless of any prior inclusion in the Plan and
                             regardless of whether the "temporary employee"
                             classification is determined to be in error; and

                    (5)      an individual who is employed by Mirant Services.

         2.26 "Eligible Participant" shall mean an Eligible Employee who is
authorized to have Elective Employer Contributions or Voluntary Participant
Contributions allocated to his Account for the Plan Year.

         2.27 "Eligible Retirement Plan" shall mean an individual retirement
account described in Section 408(a) of the Code, an individual retirement
annuity described in Section 408(b) of the Code, an annuity plan described in
Section 403(a) of the Code, a plan described in Section 403(b) of the Code, a
plan described in Section 457(b) of the Code which is maintained by a state, an
agency or instrumentality of a state or political subdivision of a state and
which agrees to separately account for amounts transferred into such plan from
this Plan, or a qualified trust described in Section 401(a) of the Code that
accepts the Distributee's Eligible Rollover Distribution. This definition of
Eligible Retirement Plan shall also apply in the case of a distribution to a
surviving spouse, or to a spouse or former spouse who is the alternate payee
under a qualified domestic relations order, as defined in Code Section 414(p).

         2.28 "Eligible Rollover Distribution" shall mean any distribution of
all or any portion of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: (a) any distribution that is
one of a series of substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the Distributee, the
joint lives (or joint life expectancies) of the Distributee and the
Distributee's Beneficiary, or for a specified period of 10 years or more; (b)
any distribution to the extent such distribution is required under Section
401(a)(9) of the Code; (c) the portion of any distribution that is not
includable in gross income (determined without regard to the exclusion from net
unrealized appreciation with respect to employer securities); and (d) any
hardship distribution described in Section 401(k)(2)(B)(i)(IV) of the Code.

         2.29 "Employee" shall mean each individual who is employed by an
Affiliated Employer under common law and each individual who is required to be
treated as an employee pursuant to the "leased employee" rules of Code Section
414(n) other than a leased employee described in Code Section 414(n)(5).

         2.30 "Employer Matching Contribution" shall mean a contribution made by
an Employing Company pursuant to Section 5.1 with respect to Elective Employer
Contributions and Voluntary Participant Contributions made on behalf of each
Participant each payroll period.

         2.31 "Employing Company" shall mean the Company and any affiliate or
subsidiary of The Southern Company which the Board of Directors may from time to
time determine to bring under the Plan and which shall adopt the Plan, and any
successor of them. The Employing Companies are set forth on Appendix A to the
Plan as updated from time to time. No such entity shall be treated as an
Employing Company prior to the date it adopts the Plan.

          2.32 "Enrollment Date" shall mean the first day of each payroll
period.

         2.33 "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, or any successor statute, and the rulings and regulations
promulgated thereunder. In the event an amendment to ERISA renumbers a section
of ERISA referred to in this Plan, any such reference automatically shall become
a reference to such section as renumbered.

         2.34 "Excess Aggregate Contributions" shall mean the amount referred to
in Code Section 401(m)(6)(B) with respect to a Participant. In no event may the
Excess Aggregate Contributions for any Highly Compensated Employee exceed the
amount of the Employer Matching Contributions or Voluntary Participant
Contributions made on behalf of the Highly Compensated Employee for the Plan
Year.

         2.35 "Excess Deferral Amount" shall mean the amount of Elective
Employer Contributions for a calendar year that exceed the Code Section 402(g)
limits as allocated to this Plan pursuant to Section 4.3(b).

         2.36 "Excess Deferral Contributions" shall mean the amount of Elective
Employer Contributions on behalf of a Highly Compensated Employee referred to in
Code Section 401(k)(8)(B).

         2.37 "Highly Compensated Employee" shall mean (in accordance with and
subject to Code Section 414(q) and any regulations, rulings, notices or
procedures thereunder), with respect to any Plan Year: (1) any Employee who was
a five percent (5%) owner of The Southern Company or an Affiliated Employer (as
determined pursuant to Code Section 416) during the Plan Year or the immediately
preceding Plan Year, or (2) any Employee who earned more than $80,000 in the
preceding Plan Year. The $80,000 amount shall be adjusted for inflation and for
short Plan Years, pursuant to Code Section 414(q). The Employer may, at its
election, limit Employees earning more than $80,000 to only those Employees who
fall within the "top-paid group," as defined in Code Section 414(q) excluding
those employees described in Code Section 414(q)(8) for such purpose. In
determining whether an Employee is a Highly Compensated Employee, the Committee
may make any elections authorized under applicable regulations, rulings,
notices, or revenue procedures.

         2.38 "Hour of Service" shall mean each hour for which an Employee is
paid, or entitled to payment, for the performance of duties for an Affiliated
Employer.

         2.39 "Investment Fund" shall mean any one of the funds described in
Article VIII which constitutes part of the Trust Fund.

         2.40 "Key Employee" shall mean any Employee or former Employee (and his
Beneficiary) who is a key employee within the meaning of Code Section 416(i)(1).

         2.41       "Limitation Year" shall mean the Plan Year.

          2.42 "Look-Back Year" shall mean the Plan Year preceding the
Determination Year.

          2.43 "Mirant" shall mean Mirant Corporation, any subsidiary of Mirant
Corporation, or any successor thereto.

         2.44        "Mirant Services" shall mean Mirant Services, LLC.

         2.45       "Mirant Stock" shall mean the common stock of Mirant.

         2.46 "Mirant Stock Account" shall mean the total amount credited to the
Account of a Participant as described in Section 9.1(c).

         2.47 "Mirant Stock Fund" shall mean, effective April 2, 2001, the fund
established to hold Mirant Stock as described in Section 8.8.

          2.48 "Non-Highly Compensated Employee" shall mean an Employee who is
not a Highly Compensated Employee.

         2.49 "Normal Retirement Date" shall mean the first day of the month
following a Participant's sixty-fifth (65th) birthday.

         2.50 "One-Year Break in Service" shall mean each
twelve-consecutive-month period within the period commencing with an Employee's
Break-in-Service Date and ending on the date the Employee is again credited with
an Hour of Service.

         2.51 "Participant" shall mean (a) an Eligible Employee who has elected
to participate in the Plan as provided in Article III and whose participation in
the Plan at the time of reference has not been terminated as provided in the
Plan, (b) an Employee or former Employee who has ceased to be a Participant
under (a) above, but for whom an Account is maintained under the Plan, (c) an
Eligible Employee who has made a Rollover Contribution to this Plan to the
extent that the Provisions of the Plan apply to such Rollover Contribution of
the Eligible Employee, and (d) an Employee or former Employee for whom a
Transferred ESOP Account is maintained under the Plan.

         2.52 "Permissive Aggregation Group" shall mean a group of plans
consisting of the Required Aggregation Group and, at the election of the
Affiliated Employers, such other plan or plans not required to be included in
the Required Aggregation Group, provided the resulting group, taken as a whole,
would continue to satisfy the provisions of Code Section 401(a)(4) or 410.

         2.53 "Plan" shall mean The Southern Company Employee Savings Plan
(known as the Employee Savings Plan for The Southern Company System prior to
January 1, 1991), as described herein or as from time to time amended.

         2.54 "Plan Year" shall mean the twelve-month period commencing January
1st and ending on the last day of December next following.

         2.55 "Present Value of Accrued Retirement Income" shall mean an amount
determined solely for the purpose of determining if the Plan, or any other plan
included in a Required Aggregation Group of which the Plan is a part, is top
heavy in accordance with Code Section 416.

         2.56 "Required Aggregation Group" shall mean those plans that are
required to be aggregated as determined under this Section 2.56. In determining
a Required Aggregation Group hereunder, each plan of the Affiliated Employers in
which a Key Employee is a participant and each other plan of the Affiliated
Employers which enables any plan in which a Key Employee participates to meet
the requirements of Code Section 410 or 401(a)(4) will be required to be
aggregated.

         2.57 "Rollover Contribution" shall mean that portion of an eligible
rollover distribution that an Eligible Employee elects to contribute to this
Plan in accordance with the requirements of Section 4.11. The Plan will accept a
direct rollover of an eligible rollover distribution from (a) a qualified plan
described in Code Section 401(a) or 403(a), (b) an annuity contract described in
Code Section 403(b), or (c) an eligible plan under Code Section 457(b) In
addition, the Plan will accept a Rollover Contribution from a conduit individual
retirement account or annuity ("IRA"). However, in no event shall the Plan
accept after-tax employee contributions as a Rollover Contribution.

         2.58       "SCEM" shall mean Southern Company Energy Marketing, L.P.

         2.59       "SEPCO" shall mean Savannah Electric and Power Company.

         2.60 "SEPCO Plan" shall mean the Employee Savings Plan of Savannah
Electric and Power Company as in effect December 31, 1992.

         2.61 "SEPCO Transferred Account" shall mean the total amount credited
to the account of a Participant as described in Section 9.1(b).

         2.62 "Super-Top-Heavy Group" shall mean an Aggregation Group that would
be a Top-Heavy Group if 90% were substituted for 60% in Section 2.64.

         2.63 "Surviving Spouse" shall mean the person to whom the Participant
is married on the date of his death, if such spouse is then living, provided
that the Participant and such spouse shall have been married throughout the one
(1) year period ending on the date of the Participant's death.

          2.64 "Top-Heavy Group" shall mean an Aggregation Group in which, as of
the Determination Date, the sum of:

                  (a) the Present Value of Accrued Retirement Income of Key
         Employees under all defined benefit plans included in that group, and

                    (b) the Aggregate Accounts of Key Employees under all
         defined contribution plans included in the group, exceeds 60% of a
         similar sum determined for all employees.

         2.65 "Transferred ESOP Account" shall mean the total amount credited to
the Account of a Participant as described in Section 9.1(d).

          2.66 "Trust" or "Trust Fund" shall mean the trust established pursuant
to the Trust Agreement.

         2.67 "Trust Agreement" shall mean the trust agreement between the
Company and the Trustee, as described in Article XIV.

         2.68 "Trustee" shall mean the person or corporation designated as
trustee under the Trust Agreement, including any successor or successors.

          2.69 "Valuation Date" shall mean each business day of the New York
Stock Exchange.

         2.70 "Voluntary Participant Contribution" shall mean a contribution
made pursuant to Section 4.6 during the Plan Year.

         2.71 "Year of Service" shall mean a twelve-month period of employment
as an Employee, including any fractions thereof. Calculation of the twelve-month
periods shall commence with the Employee's first day of employment, which is the
date on which an Employee first performs an Hour of Service, and shall terminate
on his Break-in-Service Date. Thereafter, if he has more than one period of
employment as an Employee, his Years of Service for any subsequent period shall
commence with the Employee's reemployment date, which is the first date
following a Break-in-Service Date on which the Employee performs an Hour of
Service, and shall terminate on his next Break-in-Service Date. An Employee who
has a Break-in-Service Date and resumes employment with the Affiliated Employers
within twelve months of his Break-in-Service Date shall receive a fractional
Year of Service for the period of such cessation of employment.

         Notwithstanding anything in this Section 2.71 to the contrary, an
Employee shall not receive credit for more than one Year of Service with respect
to any twelve-consecutive-month period.

<PAGE>

                                   ARTICLE III

                                  PARTICIPATION

         3.1 Eligibility Requirements. Each Eligible Employee who was an active
Participant on December 31, 2001 shall continue to be an active Participant in
the Plan on January 1, 2002, provided he remains an Eligible Employee. Each
other Eligible Employee may elect to participate in the Plan as of any
Enrollment Date after the Employee's first day of employment as an Eligible
Employee or as soon as administratively practicable thereafter. An Eligible
Employee shall make an election to participate by authorizing deductions from or
reduction of his Compensation as contributions to the Plan in accordance with
Article IV, and directing the investment of such contributions in accordance
with Article VIII. Such Compensation deduction and/or reduction authorization
and investment direction shall be made in accordance with the procedures
established by the Committee.

         3.2 Participation upon Reemployment. If an Employee terminates his
employment with an Affiliated Employer and is subsequently reemployed as an
Eligible Employee, he may elect to become an active Participant in the Plan as
of the date of his reemployment or as soon as administratively practicable
thereafter.

         3.3 No Restoration of Previously Distributed Benefits. A Participant
who has terminated his employment with the Affiliated Employers and who has
received a distribution of the amount credited to his Account pursuant to
Section 12.5 shall not be entitled to restore the amount of such distribution to
his Account if he is reemployed and again becomes a Participant in the Plan.

         A Participant whose benefit under the Plan was transferred to a
qualified plan maintained by Mirant Services as a result of the spin-off of
Mirant from the Southern Company controlled group on April 2, 2001 shall not be
entitled to restoration of the amount of such transfer upon his subsequent
reemployment by an Affiliated Employer.

         3.4 Loss of Eligible Employee Status. If a Participant loses his status
as an Eligible Employee, but remains an Employee, such Participant shall be
ineligible to participate and shall be deemed to have elected to suspend making
Voluntary Participant Contributions or to have Elective Employer Contributions
made on his behalf.

         3.5 Military Leave. Notwithstanding any provision of the Plan to the
contrary, contributions, benefits, and service credit with respect to qualified
military service will be provided in accordance with Section 414(u) of the Code.
Loan repayments will be suspended under the Plan as permitted under Section
414(u)(4) of the Code.

<PAGE>

                                   ARTICLE IV

                       ELECTIVE EMPLOYER CONTRIBUTIONS AND

                       VOLUNTARY PARTICIPANT CONTRIBUTIONS

         4.1 Elective Employer Contributions. An Eligible Employee who meets the
participation requirements of Article III may elect on a form provided by the
Employing Company to have his Compensation reduced by a whole percentage of his
Compensation, which percentage shall not be less than one percent (1%) nor more
than sixteen percent (16%) (eight percent (8%) for a Highly Compensated
Employee) of his Compensation, such Elective Employer Contribution to be
contributed to his Account under the Plan.

         4.2 Maximum Amount of Elective Employer Contributions. The maximum
amount of Elective Employer Contributions that may be made on behalf of a
Participant during any Plan Year to this Plan or any other qualified plan
maintained by an Employing Company shall not exceed the dollar limitation set
forth in Section 402(g) of the Code in effect at the beginning of such Plan
Year.

         4.3        Distribution of Excess Deferral Amounts

                    (a) In General. Notwithstanding any other provision of the
         Plan, Excess Deferral Amounts and income allocable thereto shall be
         distributed (and any corresponding Employer Matching Contributions
         shall be forfeited) no later than April 15, 2002, and each April 15
         thereafter, to Participants who allocate (or are deemed to allocate)
         such amounts to this Plan pursuant to (b) below for the preceding
         calendar year. Excess Deferral Amounts that are distributed shall not
         be treated as an Annual Addition. Any Employer Matching Contributions
         forfeited pursuant to this subsection (a) shall be applied, subject to
         Section 6.1, toward funding Employing Company contributions (for the
         Plan Year immediately following the Plan Year to which such forfeited
         Employer Matching Contributions relate) or distributed, as directed by
         the Committee, to the extent permitted by applicable law.

                    (b) Assignment. The Participant's allocation of amounts in
         excess of the Code Section 402(g) limits to this Plan shall be in
         writing; shall be submitted to the Committee no later than March 1;
         shall specify the Participant's Excess Deferral Amount for the
         preceding calendar year; and shall be accompanied by the Participant's
         written statement that if such amounts are not distributed, such Excess
         Deferral Amount, when added to amounts deferred under other plans or
         arrangements described in Section 401(k), 408(k), 408(p), 402(h)(1)(B),
         457, 501(c)(18), or 403(b) of the Code, exceeds the limit imposed on
         the Participant by Section 402(g) of the Code for the year in which the
         deferral occurred. A Participant is deemed to notify the Committee of
         any Excess Deferral Amounts that arise by taking into account only
         those deferrals under this Plan and any other plans of an Affiliated
         Employer.

                    (c) Determination of Income or Loss. The Excess Deferral
         Amount distributed to a Participant with respect to a calendar year
         shall be adjusted for income or loss through the last day of the Plan
         Year or the date of distribution, as determined by the Committee. The
         income or loss allocable to Excess Deferral Amounts is the sum of:

                             (1) income or loss allocated to the Participant's
                    Account for the taxable year multiplied by a fraction, the
                    numerator of which is such Participant's Excess Deferral
                    Amount for the year and the denominator is the Participant's
                    Account balance attributable to Elective Employer
                    Contributions, minus any income or plus any loss occurring
                    during the Plan Year; and

                             (2) if the Committee shall determine in its sole
                    discretion, ten percent (10%) of the amount determined under
                    (1) above multiplied by the number of whole calendar months
                    between the end of the Plan Year and the date of the
                    distribution, counting the month of distribution if
                    distribution occurs after the 15th of the month.

                   Notwithstanding the above, the Committee may designate any
         reasonable method for computing the income or loss allocable to Excess
         Deferral Amounts, provided that the method does not violate Section
         401(a)(4) of the Code, is used consistently for all Participants and
         for all corrective distributions under the Plan for the Plan Year, and
         is used by the Plan for allocating income or loss to Participants'
         Accounts.

                   (d) Maximum Distribution Amount. The Excess Deferral Amount,
         which would otherwise be distributed to the Participant, shall, if
         there is a loss allocable to such Excess Deferral Amount, in no event
         be less than the lesser of the Participant's Account under the Plan
         attributable to Elective Employer Contributions or the Participant's
         Elective Employer Contributions for the Plan Year.

         4.4        Additional Rules Regarding Elective Employer Contributions.
                    ----------------------------------------------------------

         Salary reduction agreements shall be governed by the following:

                    (a) A salary reduction agreement shall apply to payroll
         periods during which such salary reduction agreement is in effect. The
         Committee, in its discretion, may establish administrative procedures
         whereby the actual reduction in Compensation may be made to coincide
         with each payroll period of the Employing Company, or at such other
         times as the Committee may determine.

                    (b) The Employing Company may amend or revoke its salary
         reduction agreement with any Participant at any time, if the Employing
         Company determines that such revocation or amendment is necessary to
         ensure that a Participant's additions for any Plan Year will not exceed
         the limitations of Sections 4.2 and 6.1 of the Plan or to ensure that
         the Actual Deferral Percentage Test is satisfied.

                    (c) Except as required under (b) above, and under Section
         4.5(b) below, no amounts attributable to Elective Employer
         Contributions may be distributed to a Participant or his Beneficiary
         from his Account prior to the earlier of:

                  (1)      the severance from employment, death or disability of
                           the Participant;

                  (2)      the attainment of age 59 1/2 by the Participant;

                  (3)      the termination of the Plan without establishment of
                           a successor plan;

                  (4)      a financial hardship of the Participant pursuant to
                           Section 11.6 of the Plan;

                  (5)      the date of a sale by an Employing Company to an
                           entity that is not an Affiliated Employer of
                           substantially all of the assets (within the meaning
                           of Code Section 409(d)(2)) with respect to a
                           Participant who continues employment with the
                           corporation acquiring such assets; or

                  (6)      the date of the sale by an Employing Company or an
                           Affiliated Employer of its interest in a subsidiary
                           (within the meaning of Code Section 409(d)(3)) to an
                           entity which is not an Affiliated Employer with
                           respect to the Participant who continues employment
                           with such subsidiary.

         4.5      Section 401(k) Nondiscrimination Tests.

                  (a) Actual Deferral Percentage Test. The Plan shall satisfy
         the nondiscrimination test of Section 401(k)(3) of the Code, under
         which no Elective Employer Contributions shall be made that would cause
         the Actual Deferral Percentage for Eligible Participants who are Highly
         Compensated Employees to exceed the following:

                           (1) The Average Actual Deferral Percentage for the
         Eligible Participants who are Highly Compensated Employees in the
         current Plan Year shall not exceed the Average Actual Deferral
         Percentage for the prior Plan Year for Eligible Participants who were
         Non-Highly Compensated Employees for the prior Plan Year multiplied by
         1.25; or

                           (2) The Average Actual Deferral Percentage for
         Eligible Participants who are Highly Compensated Employees in the
         current Plan Year shall not exceed the Average Actual Deferral
         Percentage for Eligible Participants who were Non-Highly Compensated
         Employees in the prior Plan Year multiplied by two (2), provided that
         the Average Actual Deferral Percentage for Eligible Participants who
         are Highly Compensated Employees in the current Plan Year does not
         exceed the Average Actual Deferral Percentage for the prior Plan Year
         for Eligible Participants who were Non-Highly Compensated Employees in
         the prior Plan Year by more than two (2) percentage points.

                  (b)      Distribution of Excess Deferral Contributions.
                           ---------------------------------------------

                           (1) In General. The Excess Deferral Contributions for
                  a Highly Compensated Employee for a Plan Year which are to be
                  distributed shall be distributed such that the Highly
                  Compensated Employee with the highest amount of Elective
                  Employer Contributions for the Plan Year shall be reduced to
                  the extent required to:

                                    (A) distribute the total amount of Excess
                           Deferral Contributions, or

                                    (B) cause the amount of such Highly
                           Compensated Employee's Elective Employer
                           Contributions to equal the amount of Elective
                           Employer Contributions of the Highly Compensated
                           Employee with the next highest amount of Elective
                           Employer Contributions for the Plan Year.

          This process must be repeated until all Excess Deferral Contributions
are distributed.

                           Excess Deferral Contributions plus any income and
                  minus any loss allocable thereto shall be distributed (and any
                  corresponding Employer Matching Contribution shall be
                  forfeited) to Participants on whose behalf such Excess
                  Deferral Contributions were made within two and one-half
                  (2-1/2) months after the last day of the Plan Year in which
                  such excess amounts arose, and in any event not later than the
                  last day of the Plan Year following the close of the Plan Year
                  for which such contributions were made. Distribution of Excess
                  Deferral Contributions shall be made to Highly Compensated
                  Employees in accordance with this Section 4.5(b). Any Employer
                  Matching Contributions forfeited pursuant to this Subsection
                  (b)(1) shall be applied, subject to Section 6.1, toward
                  funding Employing Company contributions (for the Plan Year
                  immediately following the Plan Year to which such forfeited
                  Employer Matching Contributions relate) or distributed, as
                  directed by the Committee, to the extent permitted by
                  applicable law.

                           (2) Determination of Income or Loss. Excess Deferral
                  Contributions to be distributed shall be adjusted for any
                  income or loss through the last day of the Plan Year or the
                  date of distribution, as determined by the Committee. The
                  income or loss allocable to such Excess Deferral Contributions
                  is the sum of:

                                    (A) income or loss allocated to the
                           Participant's Account for the taxable year multiplied
                           by a fraction, the numerator of which is the
                           Participant's Excess Deferral Contributions to be
                           distributed for the year and the denominator is the
                           Participant's Account balance attributable to
                           Elective Employer Contributions, minus any income or
                           plus any loss occurring during the Plan Year; and

                                    (B) if the Committee shall determine in its
                           sole discretion, ten percent (10%) of the amount
                           determined under (A) above multiplied by the number
                           of whole calendar months between the end of the Plan
                           Year and the date of the distribution, counting the
                           month of distribution if distribution occurs after
                           the 15th of the month.

                           Notwithstanding the above, the Committee may
                  designate any reasonable method for computing the income or
                  loss allocable to Excess Deferral Contributions, provided that
                  the method does not violate Section 401(a)(4) of the Code, is
                  used consistently for all Participants and for all corrective
                  distributions under the Plan for the Plan Year, and is used by
                  the Plan for allocating income or loss to Participants'
                  Accounts.

                           (3) Maximum Distribution Amount. The Excess Deferral
                  Contributions which would otherwise be distributed to the
                  Participant shall be adjusted for income; shall be reduced, in
                  accordance with regulations, by the Excess Deferral Amount
                  distributed to the Participant; and shall, if there is a loss
                  allocable to the Excess Deferral Contributions, in no event be
                  less than the lesser of the Participant's Account under the
                  Plan attributable to Elective Employer Contributions or the
                  Participant's Elective Employer Contributions for the Plan
                  Year.

                  (c)      Special Rules.
                           --------------

                           (1) For purposes of this Section 4.5, the Actual
                  Deferral Percentage for any Eligible Participant who is a
                  Highly Compensated Employee for the Plan Year and who is
                  eligible to have deferral contributions allocated to his
                  account under two (2) or more plans or arrangements described
                  in Section 401(k) of the Code that are maintained by an
                  Affiliated Employer shall be determined as if all such
                  deferral contributions were made under a single arrangement.
                  If a Highly Compensated Employee participates in two (2) or
                  more cash or deferred arrangements that have different plan
                  years, all cash or deferred arrangements ending with or within
                  the same calendar year shall be treated as a single
                  arrangement. Notwithstanding the foregoing, certain plans
                  shall be treated as separate if mandatorily disaggregated
                  under Code Section 401(k).

                           (2) In the event that this Plan satisfies the
                  requirements of Code Section 401(k), 401(a)(4), or 410(b) only
                  if aggregated with one or more other plans, or if one or more
                  other plans satisfy the requirements of Code Section 401(k),
                  401(a)(4), or 410(b) only if aggregated with this Plan, then
                  the actual deferral percentages shall be determined as if all
                  such plans were a single plan.

         4.6 Voluntary Participant Contributions. An Eligible Employee who meets
the participation requirements of Article III may elect in accordance with the
procedures established by the Committee to contribute to his Account a Voluntary
Participant Contribution consisting of any whole percentage of his Compensation,
which percentage is not less than one percent (1%) nor more than sixteen percent
(16%) of his Compensation. The maximum Voluntary Participant Contribution shall
be reduced by the percent, if any, which is contributed as an Elective Employer
Contribution on behalf of such Participant under Section 4.1. Notwithstanding
the above, a Highly Compensated Employee may contribute not less than one
percent (1%) nor more than three percent (3%) of his Compensation as a Voluntary
Participant Contribution.

         4.7 Manner and Time of Payment of Elective Employer Contributions and
Voluntary Participant Contributions. Contributions made in accordance with
Sections 4.1 and 4.6 will be made only through payroll deductions and will be
effective as of the payroll period commencing as soon as practicable after the
date on which the Participant elects to commence participation in the Plan.
Contributions shall be remitted to the Trustee as of the earliest date on which
such contributions can reasonably be segregated from each Employing Company's
general assets, but in any event not later than the fifteenth (15th) business
day of the month following the month during which such amounts would otherwise
have been payable to the Participant in cash or such earlier time as may be
prescribed by applicable law.

         4.8 Change in Contribution Rate. A Participant may prospectively change
the percentage of his Compensation that he has authorized as the Elective
Employer Contribution to be made on his behalf or his Voluntary Participant
Contribution to another permissible percentage in accordance with the procedures
established by the Committee. Such election shall be effective as soon as
practicable after it is made.

         4.9 Change in Contribution Amount. In the event of a change in the
Compensation of a Participant, the percentage of the Elective Employer
Contribution made on his behalf or his Voluntary Participant Contribution
currently in effect shall be applied as soon as practicable with respect to such
changed Compensation without action by the Participant.

          4.10 Rollover Contributions and Direct Transfers from the SEPCO and
ECMC Plans.

                    (a) A Participant shall be entitled to transfer (or cause to
         be transferred directly from the trustee) to the Trust to be held as
         part of his Account all or a portion of the fair market value of the
         cash or other property a Participant receives in the distribution of
         his accrued benefits under the Profit Sharing Plan for Electric City
         Merchandise Company, Inc. ("ECMC Plan"), reduced by any voluntary
         participant contributions under such plan. Such rollover contribution
         may only be made within sixty (60) days following the date the
         Participant receives the distribution (or within such additional period
         as may be provided under Section 408 of the Code if the Participant
         shall have made a timely deposit of the distribution in an individual
         retirement account). No such rollover contribution or trustee to
         Trustee transfer shall be made by a Participant (or on his behalf) if
         not otherwise permissible under the Code or if such rollover
         contribution or transfer would subject this Plan to the requirements of
         Section 401(a)(11)(A) of the Code.

                    Notwithstanding the foregoing, the Trustee is specifically
         authorized to accept any rollover accounts under the terms of the SEPCO
         Plan as are necessary to reflect a Participant's interest in the Plan
         resulting from the merger of the SEPCO Plan into this Plan effective as
         of January 1, 1993. Any such rollover account shall be held as part of
         the Participant's Account and shall be subject to the requirements of
         Article XVIII.

                    (b) Any amounts so transferred to the Trust shall be
         entitled to share in earnings or losses of the Trust in the same manner
         as other Employing Company contributions to the Trust.

                    (c) The portion of a Participant's Account attributable to
         any rollover contribution or trustee to Trustee transfer shall be
         distributed with the balance of the Participant's Account pursuant to
         Article XII of the Plan.

           4.11 Rollovers from Other Plans. An Eligible Employee who is hired or
rehired and has received a distribution of his interest in a retirement plan of
a former employer, or a distribution of the interest of his deceased spouse in a
retirement plan of his spouse's former employer, under circumstances meeting the
requirements of Section 402(c)(4) of the Code relating to eligible rollover
distributions from qualified plans, including plans established under Code
Section 403(b) or 457(b), may elect to deposit all or any portion (as designated
by such Eligible Employee) of the amount of such distribution as a Rollover
Contribution to this Plan. A Rollover Contribution may be made only within 60
days following the date the Eligible Employee receives the distribution from the
plan of his former employer (or within such additional period as may be provided
under Section 408 of the Code if the Eligible Employee shall have made a timely
deposit of the distribution in an individual retirement account) and within 18
months after the date of his employment or reemployment with an Employing
Company. However, the 18-month requirement shall not apply with respect to
Rollover Contributions attributable to the distribution of the interest of an
Eligible Employee's deceased spouse in a retirement plan of the spouse's former
employer.

         The Committee shall establish rules and procedures to implement this
Section 4.11, including without limitation, such procedures as may be
appropriate to permit the Committee to verify the tax qualified status of the
plan of the former employer and compliance with any applicable provisions of the
Code relating to such contributions. The amount contributed to the Trustee
pursuant to this Section 4.11 shall be placed in the Eligible Employee's
Rollover Contribution subaccount for the benefit of the Eligible Employee
pursuant to Section 9.1. The Eligible Employee shall have a fully vested
interest in the balance of his Rollover Contribution subaccount at all times and
such Rollover Contribution subaccount shall share in the earnings, gains, and
losses of the Trust Fund as set forth in Article IX of the Plan. An Employee
shall be entitled to a distribution of his Rollover Contribution subaccount
pursuant to the applicable provisions of Articles XI and XII hereof.

<PAGE>

                                    ARTICLE V

                         EMPLOYER MATCHING CONTRIBUTIONS

         5.1 Amount of Employer Matching Contributions. The Board of Directors,
in its sole and absolute discretion, shall determine the amount of Employer
Matching Contributions that shall be made by each Employing Company on behalf of
each Participant in its employ. The amount of Employer Matching Contributions
shall be fixed by resolutions of the Board of Directors and communicated to each
Employing Company prior to the first day of each Plan Year.

          5. 2 Payment of Employer Matching Contributions. Except as provided
herein, Employer Matching Contributions shall be remitted to the Trustee as soon
as practicable after the payroll period to which they relate.

          5. 3 Limitations on Employer Matching Contributions and Voluntary
Participant Contributions.

                  (a) Actual Contribution Percentage Test. The Plan shall
         satisfy the nondiscrimination test of Section 401(m) of the Code, under
         which the Average Contribution Percentage for Eligible Participants
         shall not exceed (1) or (2) as follows:

                           (1) The Average Contribution Percentage for Eligible
                  Participants who are Highly Compensated Employees in the
                  current Plan Year shall not exceed the Average Contribution
                  Percentage for the prior Plan Year for Eligible Participants
                  who were Non-Highly Compensated Employees in the prior Plan
                  Year multiplied by 1.25; or

                           (2) The Average Contribution Percentage for Eligible
                  Participants who are Highly Compensated Employees in the
                  current Plan Year shall not exceed the Average Contribution
                  Percentage for Eligible Participants who were Non-Highly
                  Compensated Employees in the prior Plan Year multiplied by two
                  (2), provided that the Average Contribution Percentage for
                  Eligible Participants who are Highly Compensated Employees in
                  the current Plan Year does not exceed the Average Contribution
                  Percentage for the prior Plan Year for Eligible Participants
                  who were Non-Highly Compensated Employees in the prior Plan
                  Year by more than two (2) percentage points.

                  (b)      Distribution of Excess Aggregate Contributions.
                           ----------------------------------------------

                           (1) In General. The Excess Aggregate Contributions
                  for a Highly Compensated Employee for a Plan Year which are to
                  be distributed shall be distributed such that the Highly
                  Compensated Employee with the highest amount of Matching
                  Employer Contributions and Voluntary Participant Contributions
                  shall be reduced to the extent required to:

                                    (A) distribute the total amount of Excess
                           Aggregate Contributions, or

                                    (B) cause the amount of such Highly
                           Compensated Employee's Employer Matching
                           Contributions and Voluntary Participant Contributions
                           to equal the amount of Employer Matching
                           Contributions and Voluntary Participant Contributions
                           of the Highly Compensated Employee with the next
                           highest amount of Employer Matching Contributions and
                           Voluntary Participant Contributions for the Plan
                           Year.

                           This process must be repeated until all Excess
Aggregate Contributions are distributed.

                           Excess Aggregate Contributions, plus any income and
                  minus any loss allocable thereto, shall be distributed (or, if
                  forfeitable, forfeited) within 2-1/2 months after the last day
                  of the Plan Year in which such excess amounts arose, and in
                  any event not later than the last day of the following Plan
                  Year, to Participants to whose Accounts such Excess Aggregate
                  Contributions were allocated for the Plan Year. Excess
                  Aggregate Contributions shall be treated as Annual Additions.

                           (2) Determination of Income or Loss. Excess Aggregate
                  Contributions to be distributed shall be adjusted for any
                  income or loss through the last day of the Plan Year or the
                  date of distribution, as determined by the Committee. The
                  income or loss allocable to such Excess Aggregate
                  Contributions is the sum of:

                                    (A) income or loss allocated to the
                           Participant's Account attributable to Voluntary
                           Participant Contributions and Employer Matching
                           Contributions to be distributed for the Plan Year
                           multiplied by a fraction, the numerator of which is
                           the Participant's Excess Aggregate Contributions for
                           the year and the denominator is the Participant's
                           Account balance attributable to Voluntary Participant
                           Contributions and Employer Matching Contributions,
                           minus any income or plus any loss occurring during
                           the Plan Year; and

                                    (B) if the Committee shall determine in its
                           sole discretion, ten percent (10%) of the amount
                           determined under (1) above multiplied by the number
                           of whole calendar months between the end of the Plan
                           Year and the date of the distribution, counting the
                           month of distribution if distribution occurs after
                           the 15th of the month.

                           Notwithstanding the above, the Committee may
                  designate any reasonable method for computing the income or
                  loss allocable to Excess Aggregate Contributions, provided
                  that the method does not violate Section 401(a)(4) of the
                  Code, is used consistently for all Participants and for all
                  corrective distributions under the Plan for the Plan Year, and
                  is used by the Plan for allocating income or loss to
                  Participants' Accounts.

                           (3) Accounting for Excess Aggregate Contributions.
                  Excess Aggregate Contributions shall be distributed first from
                  Voluntary Participant Contributions allocated to the
                  Participant's Account and any corresponding Employer Matching
                  Contribution shall also be forfeited and then, if necessary,
                  distributed from the remaining Employer Matching Contribution
                  allocated to the Participant's Account.

                  (c)      Special Rules.

                           (1) The Contribution Percentage for any Eligible
                  Participant who is a Highly Compensated Employee for the Plan
                  Year and who is eligible to make voluntary participant
                  contributions, to receive employer matching contributions, or
                  to make deferral contributions under two or more plans
                  described in Section 401(a) of the Code or arrangements
                  described in Section 401(k) of the Code that are maintained by
                  an Affiliated Employer shall be determined as if all such
                  contributions were made under a single plan.

                           (2) In the event that this Plan satisfies the
                  requirements of Code Section 401(m), 401(a)(4), or 410(b) only
                  if aggregated with one or more other plans, or if one or more
                  other plans satisfy the requirements of Code Section 401(m),
                  401(a)(4), or 410(b) only if aggregated with this Plan, then
                  the contribution percentages shall be determined as if all
                  such plans were a single plan.

                           (3) The determination and treatment of the
                  Contribution Percentage of any Eligible Participant shall
                  satisfy such other requirements as may be prescribed by the
                  Secretary of the Treasury.

         5. 4 Multiple Use Limitation. If both the Average Actual Deferral
Percentage and the Average Contribution Percentage of the Highly Compensated
Employees exceed 1.25 of the Average Actual Deferral Percentage and the Average
Contribution Percentage of the Non-Highly Compensated Employees and if one or
more Highly Compensated Employees makes Elective Employer Contributions and
receives Employer Matching Contributions, and the sum of the Actual Deferral
Percentage and Actual Contribution Percentage of those Highly Compensated
Employees subject to either or both tests exceed the aggregate limit as defined
in Treasury Regulation Section 1.401(m)-2, then the Employer Matching
Contribution of those Highly Compensated Employees who participate in the cash
or deferred arrangement will be reduced (beginning with such Highly Compensated
Employee whose Employer Matching Contribution is the highest) so that the
aggregate limit is not exceeded. For purposes of determining if the aggregate
limit has been exceeded, the Actual Deferral Percentage and the Contribution
Percentage of the Highly Compensated Employees shall be determined after any
corrections required to meet the Actual Deferral Percentage Test and the Actual
Contribution Percentage Test.

          5. 5 Reversion of Employing Company Contributions. Employing Company
contributions computed in accordance with the provisions of this Plan shall
revert to the Employing Company under the following circumstances:

                  (a) In the case of an Employing Company contribution which is
         made by reason of a mistake of fact, such contribution upon written
         direction of the Employing Company shall be returned to the Employing
         Company within one year after the payment of the contribution.

                  (b) If any Employing Company contribution is determined to be
         nondeductible under Section 404 of the Code, then such Employing
         Company contribution, to the extent that it is determined to be
         nondeductible, upon written direction of the Employing Company shall be
         returned to the Employing Company within one year after the
         disallowance of the deduction.

         The amount which may be returned to the Employing Company under this
Section 5.7 is the excess of (1) the amount contributed over (2) the amount that
would have been contributed had there not occurred a mistake of fact or
disallowance of the deduction. Earnings attributable to the excess contribution
shall not be returned to the Employing Company, but losses attributable thereto
shall reduce the amount to be so returned. If the withdrawal of the amount
attributable to the mistaken contribution would cause the balance of the Account
of any Participant to be reduced to less than the balance which would have been
in the Account had the mistaken amount not been contributed, then the amount to
be returned to the Employing Company shall be limited so as to avoid such
reduction.

         5.6 Correction of Prior Incorrect Allocations and Distributions.
Notwithstanding any provisions contained herein to the contrary, in the event
that, as of any Valuation Date, adjustments are required in any Participants'
Accounts to correct any incorrect allocation of contributions or investment
earnings or losses, or such other discrepancies in Account balances that may
have occurred previously, the Employing Companies may make additional
contributions to the Plan to be applied to correct such incorrect allocations or
discrepancies. The additional contributions shall be allocated by the Committee
to adjust such Participants' Accounts to the value which would have existed on
said Valuation Date had there been no prior incorrect allocation or
discrepancies. The Committee shall also be authorized to take such other actions
as it deems necessary to correct prior incorrect allocations or discrepancies in
the Accounts of Participants under the Plan.

<PAGE>

                                   ARTICLE VI

                          LIMITATIONS ON CONTRIBUTIONS

         6.1 Section 415 Limitations. Notwithstanding any provision of the Plan
to the contrary, except to the extent permitted under Code Section 414(v), the
total Annual Additions allocated to the Account (and the accounts under all
defined contribution plans maintained by an Affiliated Employer) of any
Participant for any Limitation Year in accordance with Code Section 415 and the
regulations thereunder, which are incorporated herein by this reference, shall
not exceed the lesser of the following amounts:

                  (a) one hundred percent (100%) of the Participant's
         compensation (as defined in Code Section 415(c)(3) and any rulings and
         regulations thereunder) in the Limitation Year; or

                  (b) $40,000 (as adjusted pursuant to Code Section
         415(d)(1)(C)).

         The Annual Addition for any Plan Year beginning before January 1, 1987
shall not be recomputed to treat all Voluntary Participant Contributions as an
Annual Addition.

         6.2 Correction of Contributions in Excess of Section 415 Limits. If the
Annual Additions for a Participant exceed the limits of Section 6.1 as a result
of the allocation of forfeitures, if any, a reasonable error in estimating a
Participant's annual compensation for purposes of the Plan, a reasonable error
in determining the amount of elective deferrals (within the meaning of Section
402(g)(3) of the Code) that may be made with respect to any individual, or under
other limited facts and circumstances that the Commissioner of the Treasury
finds justify the availability of the rules set forth in this Section 6.2, the
excess amounts shall not be deemed Annual Additions if they are treated in
accordance with any one or more or any combination of the following:

                    (a)      distribute to the Participant that portion, or all,
                             of his Elective Employer Contributions (as adjusted
                             for income and loss) as is necessary to ensure
                             compliance with Section 6.1;

                    (b)      return to the Participant that portion, or all, of
                             his Voluntary Participant Contributions (as
                             adjusted for income and loss) as is necessary to
                             ensure compliance with Section 6.1; and

                    (c)      forfeiture of that portion, or all, of the Employer
                             Matching Contributions (as adjusted for income and
                             loss) and any forfeitures of Employer contributions
                             that were allocated to the Participant's Account
                             (as adjusted for income and loss), as is necessary
                             to ensure compliance with Section 6.1.

         Any amounts distributed or returned to the Participant under (a) or (b)
above shall be disregarded for purposes of the Actual Deferral Percentage Test
and for purposes of the Actual Contribution Percentage Test.

         Any amounts forfeited under this Section 6.2 shall be held in a
suspense account and shall be applied, subject to Section 6.1, toward funding
the Employer Matching Contributions for the next succeeding Plan Year. Such
application shall be made prior to any Employing Company contributions and prior
to any Employer Matching Contributions that would constitute Annual Additions.
No income or investment gains and losses shall be allocated to the suspense
account provided for under this Section 6.2. If any amount remains in a suspense
account provided for under this Section 6.2 upon termination of this Plan, such
amount will revert to the Employing Companies notwithstanding any other
provision of this Plan.

         6.3 Combination of Plans. If an Employee participates in more than one
defined contribution plan maintained by an Affiliated Employer and his Annual
Additions exceed the limitations of Section 6.1, corrective adjustments shall be
made first under this Plan and then, to the extent necessary, under The Southern
Company Performance Sharing Plan and then, to the extent necessary, under The
Southern Company Employee Stock Ownership Plan.

<PAGE>

                                   ARTICLE VII

                           SUSPENSION OF CONTRIBUTIONS

         7.1 Suspension of Contributions. A Participant may (on a prospective
basis) voluntarily suspend the Elective Employer Contributions made on his
behalf and his Voluntary Participant Contributions in accordance with the
procedures established by the Committee. Such suspension shall be effective as
soon as practicable after it is made. Whenever Elective Employer Contributions
made on a Participant's behalf and Voluntary Participant Contributions are
suspended, Employer Matching Contributions shall also be suspended.

         7.2 Resumption of Contributions. A Participant may terminate
prospectively any such suspension in accordance with the procedures established
by the Committee. Such resumption of contributions shall be effective as soon as
practicable after the election to terminate prospectively the suspension is
made. There shall be no make up of any contributions by a Participant or by an
Employing Company with respect to a period of suspension.

<PAGE>

                                  ARTICLE VIII

                           INVESTMENT OF CONTRIBUTIONS

         8.1 Investment Funds. The Investment Funds shall be selected from time
to time by the Pension Fund Investment Review Committee of the Southern Company
System. In addition to such other Investment Funds selected by the Pension Fund
Investment Review Committee, the Investment Funds shall include the "Company
Stock Fund". The Company Stock Fund shall be invested and, subject to Section
12.13 of the Plan, reinvested in Common Stock, provided that funds applicable to
the purchase of Common Stock pending investment of such funds may be temporarily
invested in short-term United States Government obligations, other obligations
guaranteed by the United States Government, commercial paper, or certificates of
deposit, and, if the Trustee so determines, may be transferred to money market
funds utilized by the Trustee for qualified employee benefit trusts.

         8.2 Investment of Participant Contributions. Each Participant shall
direct, at the time he elects to participate in the Plan and at such other times
as may be directed by the Committee or pursuant to Section 8.6, that his
Elective Employer Contributions and Voluntary Participant Contributions be
invested in one or more of the Investment Funds, provided such investments are
made in one-percent (1%) increments.

          8.3 Investment of Employer Matching Contributions. Employer Matching
Contributions shall be invested entirely in the Company Stock Fund and shall
remain invested in the Company Stock Fund except as follows:

                           (a) Any Participant whose employment with the
                  Affiliated Employers is terminated as a result of his
                  retirement pursuant to the defined benefit pension plan of an
                  Affiliated Employer may elect to invest the amount credited to
                  his Employer Matching Contribution subaccount in any of the
                  Investment Funds under this Plan as provided in Section 8.5;
                  and

                           (b) Any Participant may elect at any time on or after
                  the fifth anniversary of the Enrollment Date on which he first
                  became a Participant in this Plan to invest a portion of the
                  amount credited to his Employer Matching Contribution
                  subaccount in any of the Investment Funds under this Plan as
                  provided in Section 8.5, except that the amount subject to
                  such election attributable to Common Stock may not exceed
                  fifty percent (50%) of the amount of Common Stock credited to
                  his Employer Matching Contribution subaccount at the time the
                  election is made.

         8.4 Investment of Earnings. Except as provided in Section 12.13 of the
Plan, interest, dividends, if any, and other distributions received by the
Trustee with respect to an Investment Fund shall be invested in such Investment
Fund.

         8.5 Transfer of Assets between Funds. A Participant may direct in
accordance with the provisions of this Section 8.5 and such procedures
established by the Committee that all of his interest in an Investment Fund or
Funds attributable to amounts in his Account (including Employer Matching
Contributions other than those required to be invested in the Company Stock Fund
pursuant to Section 8.3) or any portion of such amount (expressed in number of
shares, whole dollar amounts, or one-percent (1%) increments) to the credit of
his Account be transferred and invested by the Trustee as of such date in any
other Investment Fund as designated by the Participant. Such direction shall be
effective as soon as practicable after it is made.

         8.6 Change in Investment Direction. Any investment direction given by a
Participant shall continue in effect until changed by the Participant. A
Participant may change his investment direction as to the future contributions
and allocations to his Account (other than Employer Matching Contributions) in
accordance with the procedures established by the Committee, and such direction
shall be effective as soon as practicable after it is made.

         8.7 Section 404(c) Plan. This Plan is intended to be a plan described
in ERISA Section 404(c) and shall be interpreted in accordance with Department
of Labor Regulations Section 1.404c-1, which is incorporated herein by this
reference. The Committee shall take such actions as it deems necessary or
appropriate in its discretion to cause the Plan to comply with such
requirements, including, but not limited to, providing Participants with the
right to request and receive written confirmation of their investment
instructions. Further, the Committee shall take such actions as it deems
necessary or appropriate in its discretion (a) to ensure that confidentiality
procedures with respect to a Participant's ownership of Common Stock and the
exercise of ownership rights with respect to such Common Stock are adequate and
utilized, and (b) to appoint an independent fiduciary to carry out such actions
as the Committee determines involve the potential for undue influence on
Participants with regard to the direct or indirect exercise of shareholder
rights with respect to Common Stock.

         8.8 Mirant Stock Fund. All Mirant Stock received by the Plan pursuant
to Sections 9.1(c) and 9.1(d) shall be held in a "Mirant Stock Fund."
Participants may direct investments out of the Mirant Stock Fund and into the
other Investment Funds in accordance with the procedures of this Article VIII.
However, Participants may not direct investments into the Mirant Stock Fund and,
should a Participant elect to direct investments out of the Mirant Stock Fund,
he may not again direct any amount attributable to such investments back into
the Mirant Stock Fund. In no event shall the Mirant Stock Fund remain as an
Investment Fund under the Plan later than the end of the calendar quarter which
includes the five-year anniversary of the date Mirant Stock is first held in the
Mirant Stock Fund. The Mirant Stock Fund shall be treated as a portion of the
Plan which is not an employee stock ownership plan in accordance with Treasury
Regulation Section 1.410(b)-7(c)(2).

<PAGE>

                                   ARTICLE IX

               MAINTENANCE AND VALUATION OF PARTICIPANTS' ACCOUNTS

         9.1        Establishment of Accounts.

                    (a) An Account shall be established for each Participant. In
         addition, subaccounts shall be established for each Participant to
         reflect all Elective Employer Contributions, Voluntary Participant
         Contributions, Employer Matching Contributions, Rollover Contributions,
         and rollover contributions from the SEPCO Plan (and the earnings and/or
         losses on each subaccount). Each Participant will be furnished a
         statement of his Account at least annually and upon any distribution.

                    (b) The Committee shall also establish a subaccount known as
         a Participant's SEPCO Transferred Account to reflect the Participant's
         interest in the Plan resulting from the merger of the SEPCO Plan into
         this Plan effective as of January 1, 1993. To the extent that a
         Participant's Salary Deferral Account, Employer Contribution Account,
         and Rollover Account (as those terms were defined under the SEPCO
         Plan), were transferred to this Plan from the SEPCO Plan, such accounts
         shall retain their character as participant deferral, employer, or
         rollover contributions, respectively, and the Committee shall establish
         and maintain such bookkeeping accounts as it deems necessary to account
         for such contributions, and any subsequent earnings or losses
         attributable thereto, under this Plan.

                    (c) Upon the distribution by the Southern Company to its
         shareholders of the Mirant Stock held by the Southern Company pursuant
         to a tax-free spin-off under Code Section 355 or such similar
         transaction, the Committee shall establish a subaccount known as a
         Participant's "Mirant Account" to reflect the Participant's interest in
         the Mirant Stock received by the Plan (other than Mirant Stock
         transferred to the Plan as described in Section 9.1(d)) pursuant to
         such transaction. To the extent that shares of Mirant Stock are
         attributable to Common Stock in a Participant's subaccounts which
         reflect Elective Employer Contributions, Voluntary Participant
         Contributions, Employer Matching Contributions, Rollover Contributions,
         and amounts in a Participant's SEPCO Transferred Account, the shares of
         Mirant Stock attributable to each shall retain their character as
         Elective Employer Contributions, Voluntary Participant Contributions,
         Employer Matching Contributions, Rollover Contributions, and amounts in
         a Participant's SEPCO Transferred Account, respectively, and the
         Committee shall establish and maintain such bookkeeping accounts as it
         deems necessary to account for such Mirant Stock, and any subsequent
         earnings or losses attributable thereto, under this Plan.

                    (d) Upon the transfer to the Plan of the Mirant Stock
         distributed to The Southern Company Employee Stock Ownership Plan
         ("ESOP") in connection with a transaction described in Section 9.1(c),
         the Committee shall establish a subaccount known as a Participant's
         "Transferred ESOP Account" to reflect the Participant's interest in the
         Plan attributable to the Mirant Stock transferred to the Plan from the
         ESOP. The Committee shall establish and maintain separate bookkeeping
         accounts within the Transferred ESOP Account for amounts attributable
         to the Mirant Stock that was distributed on Common Stock which had been
         held in the ESOP for more than two years as of the date of transfer,
         amounts attributable to Mirant Stock that was distributed on Common
         Stock which had been held in the ESOP for more than one year but less
         than two years as of the date of transfer, and amounts attributable to
         Mirant Stock that was distributed on Common Stock which had been held
         in the ESOP for less than one year as of the date of transfer,
         respectively.

         9.2 Valuation of Investment Funds. Except as provided in Section 12.13
of the Plan, a Participant's Account in respect of his interest in each
Investment Fund shall be credited or charged, as the case may be, as of each
Valuation Date with the dividends, income, gains, appreciation, losses,
depreciation, forfeitures, expenses, and other transactions with respect to such
Investment Fund for the Valuation Date as of which such credit or charge
accrued. Such credits or charges to a Participant's Account shall be made in
such proportions and by such method or formula as shall be deemed by the
Committee to be necessary or appropriate to account for each Participant's
proportionate beneficial interest in the Trust Fund in respect of his interest
in each Investment Fund. Investments of each Investment Fund shall be valued at
their fair market values as of each Valuation Date as determined by the Trustee,
and such valuation shall conclusively establish such value.

         9.3 Rights in Investment Funds. Nothing contained in this Article IX
shall be deemed to give any Participant any interest in any specific property in
any Investment Fund or any interest, other than the right to receive payments or
distributions in accordance with the Plan or the right to instruct the Trustee
how to vote Common Stock as provided in Section 14.3.

<PAGE>

                                    ARTICLE X

                                     VESTING

          10.1 Vesting. The amount to the credit of a Participant's Account
shall at all times be fully vested and nonforfeitable.

<PAGE>

                                   ARTICLE XI

                              WITHDRAWALS AND LOANS

         11.1       Withdrawals by Participants.
                    ---------------------------

                    (a) Subject to the provisions of Article XII, this Section
         11.1, and Sections 11.2 through 11.6, a Participant may make
         withdrawals from his Account effective as of any Valuation Date in the
         order of priority listed below:

                             (1) All or a portion of the value of his Account
                    attributable to Voluntary Participant Contributions (not
                    including any earnings or appreciation thereon) made prior
                    to January 1, 1987;

                             (2) All amounts described above, plus all or a
                    portion of the value of his Account attributable to
                    Voluntary Participant Contributions, plus a ratable portion
                    of the earnings and/or appreciation on Voluntary Participant
                    Contributions;

                             (3) All amounts described above, plus effective
                    April 1, 1997, all or a portion of the value of his Account
                    attributable to Rollover Contributions (including earnings
                    and appreciation thereon);

                             (4) All amounts described above, plus the value of
                    his Transferred ESOP Account as described in Section 9.1(d);
                    provided, however, that the amount in his Transferred ESOP
                    Account attributable to Mirant Stock that was distributed on
                    Common Stock which had been held in the ESOP for less than
                    two years as of the date of transfer may not be distributed
                    until the first day of the month following the two-year
                    anniversary of the date such Common Stock was contributed to
                    the ESOP;

                             (5) All amounts described above, plus up to fifty
                    percent (50%) of the value of his Account attributable to
                    Employer Matching Contributions (including earnings and
                    appreciation thereon) allocated to his Account; provided,
                    however, that said Participant shall have participated in
                    the Plan for not less than sixty (60) months at the time of
                    the withdrawal;

                             (6)(A) For Participants who have not attained age
                    59 1/2 or separated from service with the Affiliated
                    Employers (within the meaning of Code Section
                    401(k)(2)(B)(i)(I)), all amounts described above, plus all
                    or a portion of the value of his Account attributable to
                    Elective Employer Contributions (not including any earnings
                    or appreciation thereon for Plan Years beginning after
                    December 31, 1988); and

                             (B) For Participants who have attained age 59 1/2
                    or separated from service with the Affiliated Employers
                    (within the meaning of Code Section 401(k)(2)(B)(i)(I)), all
                    amounts described above, plus all or a portion of the value
                    of his Account attributable to any earnings or appreciation
                    on Elective Employer Contributions.

         For purposes of this Section 11.1, any individual who becomes a
         Participant solely because a Transferred ESOP Account is established on
         behalf of such individual shall be treated as participating in the Plan
         as of the date such Transferred ESOP Account is established.

                    (b) Notwithstanding the foregoing, withdrawals from a
         Participant's SEPCO Transferred Account shall be made in accordance
         with Article XVIII.

         11.2 Notice of Withdrawal. Notice of withdrawal must be given by a
Participant in accordance with the procedures established by the Committee, and
if such withdrawal would constitute an eligible rollover distribution (within
the meaning of Code Section 402(c)(4)), the consent and notice requirements of
Section 12.10 must be satisfied. Payment of a withdrawal shall be made as soon
as practicable and in accordance with Section 12.10, if applicable.

         11.3 Form of Withdrawal. All distributions under this Article XI shall
be made in the form of cash, provided that with respect to any distribution
which is attributable to Common Stock the Participant shall have the right to
demand that such portion of the distribution be made in the form of Common Stock
to the extent of the whole number of shares of Common Stock in his Account. Such
demand must be made in accordance with the procedures established by the
Committee.

         11.4 Minimum Withdrawal. No distribution under this Article XI shall be
permitted in an amount which has a value of less than $300, unless the value of
the amount available under the selected option is less than $300, in which case
such available amount will be distributed.

         11.5 Source of Withdrawal. Withdrawals shall be made in accordance with
the instructions of the Participant from each of the Investment Funds in which
the amount to be distributed is invested. The value of the amount to be
distributed under any option listed in Section 11.1 shall be determined as soon
as practicable in accordance with the procedures established by the Committee.

         11.6       Requirement of Hardship.
                    -----------------------

                    (a) Except as provided in (e) below, a withdrawal pursuant
         to Section 11.1(a)(6)(A), in addition to the other requirements of
         Article XI, shall be permitted only if the Committee determines that
         the withdrawal is to be made on account of an immediate and heavy
         financial need of the Participant, the amount of the withdrawal does
         not exceed such financial need, and the amount of the withdrawal is not
         reasonably available from other resources of the Participant.

                  (b) For purposes of this Section 11.6, the following shall be
         deemed to be immediate and heavy financial needs:

                           (1) Medical expenses described in Section 213(d) of
                  the Code, including but not limited to, expenses for

                                    (i) The diagnosis, cure, mitigation,
                           treatment, or prevention of disease, or for the
                           purpose of affecting any structure or function of the
                           body;

                                    (ii) transportation primarily for and
                           essential to such expenses referred to in (i) above;
                           or

                                    (iii) insurance (including amounts paid as
                           premiums under part B of Title XVIII of the Social
                           Security Act) relating to medical expenses referred
                           to in (i) or (ii) above, provided such expenses are
                           incurred by the Participant, the Participant's spouse
                           or any person whom the Participant may properly claim
                           as a dependent on his federal income tax return or
                           are necessary for such persons to obtain the medical
                           care described above; or

                           (2) Purchase (excluding mortgage payments) of a
                  principal residence for the Participant; or

                             (3) Payment of tuition, related educational fees,
                    and room and board expenses, for the next twelve (12) months
                    of post-secondary education for the Participant, the
                    Participant's spouse or child or children, or any person the
                    Participant may properly claim as a dependent on his federal
                    income tax return; or

                           (4) The need to prevent eviction of the Participant
                  from his principal residence or foreclosure on the mortgage of
                  the Participant's principal residence; or

                             (5) Any other need which the Commissioner of the
                    Internal Revenue Service, through the publication of revenue
                    rulings, notices, or other documents of general
                    applicability, deems to be immediate and heavy.

                    (c) For purposes of this Section 11.6, a withdrawal shall be
         deemed necessary to satisfy an immediate and heavy financial need if:

                             (1) The distribution is not in excess of the amount
                    of the immediate and heavy financial need of the
                    Participant, including any amounts necessary to pay any
                    federal, state, or local income taxes or penalties
                    reasonably anticipated to result from the distribution;

                           (2) The Participant has obtained all distributions
                  and all nontaxable loans currently available to him under all
                  plans maintained by an Affiliated Employer;

                             (3) The Participant agrees to suspend all elective
                    employer contributions and voluntary participant
                    contributions to all plans of an Affiliated Employer for at
                    least six (6) months after receipt of the distribution under
                    this Section 11.6; and

                             (4) The Participant agrees not to make elective
                    contributions to this Plan or any other qualified or
                    non-qualified deferred compensation plan sponsored by an
                    Affiliated Employer (including stock purchase, stock option
                    or similar plans) during the Participant's taxable year
                    immediately following the taxable year of the hardship
                    distribution in excess of the Participant's applicable
                    elective deferral limits under Section 402(g) of the Code
                    for such taxable year less the amount for the taxable year
                    of the hardship distribution.

                    (d) When all suspensions pursuant to this Section 11.6 are
         ended, Elective Employer Contributions and/or Voluntary Participant
         Contributions may be resumed by the Participant (if the Participant is
         then eligible and elects to resume such contributions) beginning with
         the Participant's first payroll period commencing after all suspensions
         are ended, and Employer Matching Contributions by his Employing Company
         also shall be resumed. There shall be no make up of any contributions
         by a Participant or by an Employing Company with respect to a period of
         suspension.

                    (e) Notwithstanding (a) above, if a Participant has attained
         age 59 1/2 or severed from employment with the Affiliated Employers
         (within the meaning of Code Section 401(k)(2)(B)(i)(I)), he shall be
         permitted to make a withdrawal pursuant to Section 11.1(a)(6)(A), even
         if such withdrawal is not on account of hardship.

         11.7       Loans to Participants.

                    (a) The Committee may, in its sole discretion, direct the
         Trustee to make a loan or loans from the Trust Fund to any Participant
         (other than a Participant with an existing Plan loan in arrears) (1)
         who is an Employee on the active payroll of an Employing Company or is
         a cooperative education employee, (2) who is receiving long-term
         disability payments under a plan maintained by his Employing Company,
         (3) who is on a leave of absence authorized by his Employing Company,
         or (4) who is a party in interest as defined in Section 3(14) of ERISA.
         All loan applications shall be made in accordance with the procedures
         established by the Committee, which shall form a part of this Plan.
         Such procedures shall establish the terms and conditions of loans under
         the Plan, including the events constituting default, and shall be
         consistent with the provisions of this Section 11.7.

                    (b) The total amount of all loans outstanding to any one
         Participant under all qualified plans maintained by an Affiliated
         Employer shall not exceed the lesser of (1) $50,000, reduced by the
         excess of the highest outstanding balance of loans from all qualified
         plans maintained by an Affiliated Employer during the twelve-month
         period ending on the day before a loan is made, over the outstanding
         balance of any loans to the Participant from all qualified plans
         maintained by an Affiliated Employer on the date the loan is made, or
         (2) fifty percent (50%) of such Participant's Account as of the
         Valuation Date coinciding with or next following the date the loan
         application is made. The minimum amount of any loan shall not equal
         less than $1,000.

                    (c) The principal amount of a loan shall be obtained pro
         rata from each Investment Fund in which the Participant's Account is
         invested at that time such loan is obtained.

                    (d) The Committee shall adopt and follow uniform and
         nondiscriminatory procedures in making loans under this Plan to make
         certain that such loans (1) are available to all Participants on a
         reasonably equivalent basis, (2) are not made available to Highly
         Compensated Employees, officers, or shareholders in an amount greater
         than the amount made available to other Participants, (3) bear a
         reasonable rate of interest, and (4) are adequately secured. The
         repayment of such loans by any Participant who is an Employee on the
         active payroll of an Employing Company shall be made through payroll
         deduction. The minimum amount of any loan repayment shall not equal
         less than $20.00, and such repayment shall extend for a period certain
         of at least twelve (12) months (unless repaid in full), but not to
         exceed fifty-eight (58) months, expressed in any number of whole months
         (including the month the loan is made). The term of any loan may be for
         a period certain of more than fifty-eight (58) months, but not to
         exceed fifteen (15) years, only if the proceeds of such loan are used
         to acquire any dwelling used or, within a reasonable period of time, to
         be used as the principal residence of the Participant.

                    (e) The Committee shall direct the Trustee to obtain from
         the Participant such note and adequate security as it may require. All
         loans made pursuant to this Section 11.7 shall be secured by the
         Participant's Account, and no other types of collateral may be used to
         secure a loan from the Plan. Notwithstanding the provisions of Section
         17.2, if a Participant defaults on a loan under the Plan or if the
         Participant's employment terminates prior to full repayment thereof, in
         addition to any other remedy provided in the loan instruments or by
         law, the Committee may direct the Trustee to charge against that
         portion of the Participant's Account which secures the loan the amount
         required to fully repay the loan. Under no circumstances, however,
         shall any unpaid loan be charged against a Participant's Account until
         permitted by applicable law. This Section authorizes only the making of
         bona fide loans and not distributions, and before resort is made
         against a Participant's Account for his failure to repay any loan, such
         other reasonable efforts to collect the same shall be made by the
         Committee as it deems reasonable and practical under the circumstances.

                    (f) No distribution shall be made to any Participant unless
         and until all unpaid loans to such Participant have either been paid in
         full or deducted from the Participant's Account.

                    (g) All loans made under this Section 11.7 shall be
         considered earmarked investments of the Participant's Account, and any
         repayment of principal and interest shall be reinvested in accordance
         with the Participant's investment direction in effect on the date of
         such repayment pursuant to Article VIII of the Plan.

         11.8 Special Waiver for Participants Employed in the United Kingdom. A
Participant shall be entitled to sign a waiver of his right to make withdrawals
or loans from his Account under the provisions of this Article XI with respect
to the Elective Employer Contributions and Employer Matching Contributions
credited to his Account to the extent necessary to ensure that such
contributions are not taxable in the United Kingdom. The purpose of such waiver
is to meet the requirements of the Department of Inland Treasury of the United
Kingdom for excluding such Elective Employer and Employer Matching Contributions
from taxable income in the United Kingdom. Such waiver shall be made on a form
prescribed by the Committee from time to time in accordance with the
requirements of the Department of Inland Treasury of the United Kingdom.

<PAGE>

                                   ARTICLE XII

                          DISTRIBUTION TO PARTICIPANTS

         12.1       Distribution upon Retirement.

                    (a) Subject to the provisions of Article XVIII, if a
         Participant's employment with the Affiliated Employers is terminated as
         a result of his retirement pursuant to the defined benefit pension plan
         of an Affiliated Employer, in addition to the withdrawal options under
         Section 11.1, the entire balance credited to his Account shall be
         payable to him in the manner set forth in this Section 12.1 at such
         time requested by the Participant pursuant to Section 12.6 and in
         accordance with the procedures established by the Committee. The
         distribution shall commence as soon as practicable after the Valuation
         Date selected by the Participant in one of the following ways:

                             (1)     In a single lump sum distribution; or

                             (2) In annual installments not to exceed twenty
                    (20), as selected by the Participant, or the Participant's
                    life expectancy. The amount of cash and/or the number of
                    shares of Common Stock and/or Mirant Stock in each
                    installment shall be equal to the proportionate value as of
                    each Valuation Date immediately preceding payment of the
                    balance then to the credit of the Participant in his Account
                    determined by dividing the amount credited to his Account as
                    of such Valuation Date by the number of payments remaining
                    to be made.

                    If a Participant who is receiving installment payments shall
         establish to the satisfaction of the Committee, in accordance with
         principles and procedures established by the Committee which are
         applicable to all persons similarly situated, that a financial
         emergency exists in his affairs, such as illness or accident to the
         Participant or a member of his immediate family or other similar
         contingency, the Committee may, for the purpose of alleviating such
         emergency, accelerate the time of payment of some or all of the
         remaining installments. If a Participant dies before receiving all of
         the amount to the credit of his Account in accordance with this
         paragraph (2), the amount remaining to the credit of his Account at his
         death shall be distributed to his Beneficiary as soon as practicable in
         accordance with Section 12.4.

                    (b) Notwithstanding a Participant's election to defer the
         receipt of the benefits under (a) above, the Committee shall direct
         payment in a single lump sum to such Participant if the balance of his
         Account does not exceed $5,000 in accordance with the requirements of
         Code Section 411(a)(11). The Committee shall not cash-out any
         Participant whose Account balance exceeds $5,000 without the written
         consent of the Participant.

         12.2 Distribution upon Disability. If a Participant's employment with
the Affiliated Employers is terminated prior to his Normal Retirement Date by
reason of his total and permanent disability, as determined by the Social
Security Administration and evidenced in a writing provided to the Committee,
such disabled Participant, in addition to the withdrawal options under Section
11.1, shall be entitled to receive the entire value credited to his Account at
such time as requested by the Participant or such legal representative pursuant
to Section 12.6 and in accordance with the procedures established by the
Committee. Any distribution pursuant to this Section 12.2 shall be made in a
single lump sum as soon as practicable after the selected Valuation Date.

         Notwithstanding the foregoing, the Committee shall direct payment in a
single lump sum to such Participant or his legal representative if the balance
of such Participant's Account does not exceed $5,000 in accordance with the
requirements of Code Section 411(a)(11).

         12.3 Distribution upon Death. If a Participant's employment with the
Affiliated Employers is terminated by reason of death, the entire balance
credited to the Participant's Account shall be distributed as soon as
practicable to the Participant's surviving Beneficiary or Beneficiaries in a
lump sum.

         12.4 Designation of Beneficiary in the Event of Death. A Participant
may designate a Beneficiary or Beneficiaries (who may be designated
contingently) to receive all or part of the amount credited to his Account in
case of his death before his receipt of all of his benefits under the Plan,
provided that the Beneficiary of a married Participant shall be the
Participant's Surviving Spouse, unless such Surviving Spouse shall consent in a
writing witnessed by a notary public, which writing acknowledges the effect of
the Participant's designation of a Beneficiary other than such Surviving Spouse.
However, if such Participant establishes to the satisfaction of the Committee
that such written consent may not be obtained because the Surviving Spouse
cannot be located or because of such other circumstances as the Secretary of the
Treasury may by regulations prescribe, a designation by such Participant without
the consent of the Surviving Spouse shall be valid.

         Any consent necessary under this Section 12.4 shall be valid and
effective only with respect to the Surviving Spouse who signs the consent or, in
the event of a deemed consent, only with respect to a designated Surviving
Spouse.

         A designation of Beneficiary may be revoked by the Participant without
the consent of any Beneficiary (or the Participant's Surviving Spouse) at any
time before the commencement of the distribution of benefits. A Beneficiary
designation or change or revocation of a Beneficiary designation shall be made
in accordance with the procedures established by the Committee.

         If no designated Beneficiary shall be living at the death of the
Participant and/or such Participant's Beneficiary designation is not valid and
enforceable under applicable law or the procedures of the Committee, such
Participant's Beneficiary or Beneficiaries shall be the person or persons in the
first of the following classes of successive preference, if then living:

                    (a)      the Participant's spouse on the date of his death,

                    (b)      the Participant's children, equally,

                    (c)      the Participant's parents, equally,

                    (d)      the Participant's brothers and sisters, equally, or

                    (e)      the Participant's executors or administrators.

Payment to such one or more persons shall completely discharge the Plan and the
Trustee with respect to the amount so paid.

         12.5       Distribution upon Termination of Employment.
                    -------------------------------------------

                    (a) If a Participant's employment with the Affiliated
         Employers is terminated for any reason other than in accordance with
         Sections 12.1, 12.2, and 12.3, the balance to the credit of the
         Participant's Account shall be payable in a single lump sum. Such lump
         sum distribution shall be made as soon as practicable after the
         Participant's termination of employment, provided that one of the
         following conditions is met:

                           (1) the Participant's Account Balance does not exceed
                  $5,000 in accordance with Code Section 411(a)(11), or

                           (2) in accordance with Section 12.10, the Participant
                  elects to receive a distribution of his Account.

                    (b) A Participant who does not receive a distribution under
         Section 12.5(a)(1) may elect to defer the commencement of the
         distribution of his Account following the termination of his employment
         until a later Valuation Date, provided that such distribution shall
         commence not later than the date required under Section 12.6 of the
         Plan. In addition to the withdrawal options under Section 11.1, any
         deferred distribution shall commence as soon as practicable after the
         Valuation Date selected by the Participant.

         12.6       Commencement of Benefits.
                    ------------------------

                    (a) Notwithstanding any other provision of the Plan, and
         except as further provided in Section 12.6(b) below, if the Participant
         does not elect to defer commencement of his benefit payments, the
         payment of his benefits shall begin at the Participant's election no
         later than the sixtieth (60th) day after the close of the Plan Year in
         which the latest of the following events occurs:

                           (1) the Participant attains the earlier of age
                  sixty-five (65) or his Normal Retirement Date,

                           (2) the Participant's tenth (10th) anniversary of
                  participation under the Plan, or

                           (3) the Participant's severance from employment with
                  the Affiliated Employers.

                    (b) In no event shall the distribution of amounts in a
         Participant's Account commence later than the April 1 of the calendar
         year following the later of the calendar year in which the Participant
         attains age 70 1/2 or terminates employment with the Affiliated
         Employers, in accordance with regulations prescribed by the Secretary
         of the Treasury. The foregoing requirements in this Section 12.6(b)
         shall not be applied to restrict the implementation of any written
         designation given to the Committee by a Participant prior to January 1,
         1984, with regard to the method of distribution of his Account, if such
         method was permissible under the Plan and Code prior to January 1,
         1984. Notwithstanding the foregoing, the payment of benefits to a
         Participant who is a five percent (5%) owner of The Southern Company or
         an Affiliated Employer (as determined pursuant to Code Section 416)
         with respect to the Plan Year ending in the calendar year in which the
         Participant attains age 70 1/2 shall begin not later than April 1, of
         the calendar year following the calendar year in which the Participant
         attains age 70 1/2 regardless of the Participant's termination from
         employment. In addition, any Participant who attains age 70 1/2 on or
         after January 1, 1996, but prior to January 1, 1999, may elect to have
         payment of his benefits begin no later than April 1 of the calendar
         year following the calendar year during which the Participant attains
         age 70 1/2, regardless of the Participant's termination of employment.]

                    Any distribution made under this Plan shall be made in
         accordance with the minimum distribution requirements of Code Section
         401(a)(9), including the incidental death benefits requirements under
         Code Section 401(a)(9)(G) and the Treasury Regulations thereunder.

                  With respect to distributions under the Plan made in calendar
         years beginning on or after January 1, 2001, the Plan will apply the
         minimum distribution requirements of Code Section 401(a)(9) in
         accordance with the regulations under Code Section 401(a)(9) that were
         proposed in January 2001, notwithstanding any provision of the Plan to
         the contrary. This amendment shall continue in effect until the end of
         the last calendar year beginning before the effective date of final
         regulations under Code Section 401(a)(9) or such other date specified
         in guidance published by the Internal Revenue Service.

         12.7 Transfer between Employing Companies. A transfer by a Participant
from one Employing Company to another Employing Company shall not affect his
participation in the Plan. A transfer by a Participant from an Employing Company
to an Affiliated Employer that is not an Employing Company shall not be deemed
to be a termination of employment with an Employing Company.

         12.8 Distributions to Alternate Payees. If the Participant's Account
under the Plan shall become subject to any domestic relations order which (a) is
a qualified domestic relations order satisfying the requirements of Section
414(p) of the Code and (b) requires the immediate distribution in a single lump
sum of the entire portion of the Participant's Account required to be segregated
for the benefit of an alternate payee, then the entire interest of such
alternate payee shall be distributed in a single lump sum within ninety (90)
days following the Employing Company's notification to the Participant and the
alternate payee that the domestic relations order is qualified under Section
414(p) of the Code, or as soon as practicable thereafter. Such distribution to
an alternate payee shall be made even if the Participant has not separated from
the service of the Affiliated Employers. Any other distribution pursuant to a
qualified domestic relations order shall not be made earlier than the
Participant's termination of service, or his attainment of age fifty (50), if
earlier, and shall not commence later than the date the Participant's (or his
Beneficiary's) benefit payments otherwise commence. Such distribution to an
alternate payee shall be made only in a manner permitted under Articles XI or
XII of the Plan and only to the extent the Participant would be eligible for
such distribution option.

         12.9 Requirement for Direct Rollovers. Notwithstanding any provision of
the Plan to the contrary that would otherwise limit a Distributee's election
under this Article XII, a Distributee may elect, at the time and in the manner
prescribed by the Committee, to have any portion of an Eligible Rollover
Distribution paid directly to an Eligible Retirement Plan specified by the
Distributee in a Direct Rollover.

         12.10 Consent and Notice Requirements. If the value of the vested
portion of a Participant's Account derived from Employing Company and Employee
contributions exceeds $5,000 determined in accordance with the requirements of
Code Section 411(a)(11), the Participant must consent to any distribution of
such vested account balance prior to his Normal Retirement Date. The consent of
the Participant shall be obtained within the ninety-day period ending on the
first day of the first period for which an amount is payable as an annuity or in
any other form under this Plan.

         The Committee shall notify the Participant of the right to defer any
distribution until the Participant's Account balance is no longer immediately
distributable. Such notification shall include a general description of the
material features and an explanation of the relative values of the operational
forms of benefit available under the Plan in a manner that would satisfy the
notice requirements of Section 417(a)(3) of the Code; such notification shall be
provided no less than 30 days and no more than 90 days prior to the annuity
starting date.

         Distributions may commence less than 30 days after the notice required
under Section 1.411(a)-11(c) of the Treasury Regulations is given, provided
that:

                  (a)      the Committee informs the Participant that the
                           Participant has a right to a period of at least 30
                           days after receiving the notice to consider the
                           decision of whether or not to elect a distribution
                           and a particular distribution option, and

                  (b)      the Participant, after receiving the notice,
                           affirmatively elects a distribution.

         12.11 Form of Payment. All distributions under this Article XII shall
be made in the form of cash, provided that the person entitled to such
distribution may demand that the portion of any distribution which is
attributable to Common Stock or Mirant Stock be distributed in the form of such
Common Stock or Mirant Stock, respectively, to the extent of the whole number of
shares in the Participant's Account, with a cash adjustment for any fractional
shares.

         12.12 Partial Distribution upon Termination of Employment. If a
Participant's employment with the Affiliated Employers is terminated and such
Participant is deemed not to have separated from service within the meaning of
Code Section 401(k)(2)(B)(i)(I), such Participant, in addition to the withdrawal
options available under Article XI, shall be entitled to elect a lump sum
distribution of the entire balance to the credit of his Account less the amount
credited to his Elective Employer Contribution subaccount. The amounts credited
to his Elective Employer Contribution subaccount may be distributed in a lump
sum distribution at such time permitted pursuant to Code Section 401(k)(2)(B)(i)
and Section 4.4(c) hereof. Such lump sum distributions shall otherwise be
subject to this Article XII.

         12.13 Distribution of Dividends Payable on Common Stock. Each
Participant may elect whether (i) to receive a cash distribution of all or a
portion of the dividends payable on the shares of Common Stock credited to the
Participant's Account as of the record date of the Common Stock or (ii) to have
such dividends paid to the Plan and reinvested in Common Stock credited to the
Participant's Account. The election of a Participant whether to receive a cash
distribution of dividends shall remain in effect until such election is changed
by the Participant. In the event a Participant fails to make an election with
respect to the dividends payable on any shares of Common Stock credited to the
Participant's Account, such Participant shall be deemed to have elected to have
the dividends payable on such shares paid to the Plan and reinvested in Common
Stock credited to the Participant's Account. Upon the death of a Participant,
such Participant shall be deemed to have elected to have the dividends payable
on all shares of Common Stock credited to the Participant's Account reinvested
in Common Stock, notwithstanding any election in effect at the time of the
Participant's death.

         A Participant may change his election whether to receive a cash
distribution of dividends at any time. However, with respect to each dividend on
Common Stock, the election, or deemed election, of a Participant which is in
effect on the last day of the first month in the calendar quarter which includes
the record date for such dividend (the "Election Deadline") shall apply with
respect to the dividends payable on the shares of Common Stock credited to the
Participant's Account on such record date. In any event, all elections and
deemed elections shall be irrevocable as of the Election Deadline. Participants
are 100% vested in dividends payable on Common Stock. Payment of cash
distributions under this Section 12.13 shall be made to the Plan and to
Participants, as the case may be, as soon as administratively practicable
following the payable date of the dividends. The Committee may establish such
administrative procedures as it deems necessary or appropriate to effect the
elections under this Section 12.13.

         In addition to the foregoing, with respect to dividends paid in 2001 to
the Plan on the shares of Common Stock credited to a Participant's Account as of
any record date in 2001 which were not distributed in cash to such Participant
("Accumulated 2001 Dividends"), such Participant may elect in accordance with
the requirements of this paragraph and procedures established by the Committee
whether (i) to receive a cash distribution of all or a portion of his
Accumulated 2001 Dividends or (ii) to have such Accumulated 2001 Dividends
remain invested in the Participant's Account. In the event a Participant fails
to make an election with respect to Accumulated 2001 Dividends, such Participant
shall be deemed to have elected to have such dividends remain invested in the
Participant's Account. Any election, or deemed election, whether to receive a
cash distribution of Accumulated 2001 Dividends shall be irrevocable as of the
deadline established by the Committee by which Participants must make an
election with respect to Accumulated 2001 Dividends. The payment of cash
distributions of Accumulated 2001 Dividends shall be made to Participants after
a reasonable election period but in any event within ninety (90) days after the
end of the Plan Year ending on December 31, 2001. The Committee may establish
such administrative procedures as it deems necessary or appropriate to effect
the distribution of Accumulated 2001 Dividends, including limiting the amount of
Accumulated 2001 Dividends a Participant may receive in cash based on the
balance of the various subaccounts in the Participant's Account (as described in
Section 9.1) at the time the distribution is made and designating the Investment
Funds from which such distributions are withdrawn. The provisions of this
paragraph shall not apply to dividends paid to the Plan in 2001 which the
Participant elected in 2001 to receive in cash.

<PAGE>

                                  ARTICLE XIII

                           ADMINISTRATION OF THE PLAN

         13.1 Membership of Committee. The Plan shall be administered by the
Committee, which shall consist of the individuals then serving in the positions
of Vice President, System Compensation and Benefits of The Southern Company;
Senior Vice-President, Human Resources of The Southern Company; and Comptroller
of The Southern Company or any other position or positions that succeed to the
duties of the foregoing positions. The Committee shall be chaired by the Senior
Vice-President, Human Resources of The Southern Company and may select a
Secretary (who may, but need not, be a member of the Committee) to keep its
records or to assist it in the discharge of its duties.

         13.2 Acceptance and Resignation. Any person appointed to be a member of
the Committee shall signify his acceptance in writing to the Chairman of the
Committee. Any member of the Committee may resign by delivering his written
resignation to the Committee and such resignation shall become effective upon
delivery or upon any later date specified therein.

         13.3 Transaction of Business. A majority of the members of the
Committee at the time in office shall constitute a quorum for the transaction of
business at any meeting. Any determination or action of the Committee may be
made or taken by a majority of the members present at any meeting thereof or
without a meeting by a resolution or written memorandum concurred in by a
majority of the members then in office.

         13.4 Responsibilities in General. The Committee shall administer the
Plan and shall have the discretionary authority, power, and the duty to take all
actions and to make all decisions necessary or proper to carry out the Plan and
to control and manage the operation and administration of the Plan. The
Committee shall have the discretion to interpret the Plan, including any
ambiguities herein, and to determine the eligibility for benefits under the Plan
in its sole discretion. The determination of the Committee as to any question
involving the general administration and interpretation of the Plan shall be
final, conclusive, and binding on all persons, except as otherwise provided
herein or by law, and may be relied upon by the Company, all Employing
Companies, the Trustee, the Participants, and their Beneficiaries. Any
discretionary actions to be taken under the Plan by the Committee with respect
to Employees and Participants or with respect to benefits shall be uniform in
their nature and applicable to all persons similarly situated.

         13.5 Committee as Named Fiduciary. For the purpose of compliance with
the provisions of ERISA, the Committee shall be deemed the administrator of the
Plan as the term "administrator" is defined in ERISA, and the Committee shall
be, with respect to the Plan, a named fiduciary as that term is defined in
ERISA. For the purpose of carrying out its duties, the Committee may, in its
discretion, allocate its responsibilities under the Plan among its members and
may, in its discretion, designate persons (in writing or otherwise) other than
members of the Committee to carry out such responsibilities of the Committee
under the Plan as it may see fit.

         13.6 Rules for Plan Administration. The Committee may make and enforce
rules and regulations for the administration of the Plan consistent with the
provisions thereof and may prescribe the use of such forms or procedures as it
shall deem appropriate for the administration of the Plan.

         13.7 Employment of Agents. The Committee may employ independent
qualified public accountants, as such term is defined in ERISA, who may be
accountants to The Southern Company and any Affiliated Employer, legal counsel
who may be counsel to The Southern Company and any Affiliated Employer, other
specialists, and other persons as the Committee deems necessary or desirable in
connection with the administration of the Plan. The Committee and any person to
whom it may delegate any duty or power in connection with the administration of
the Plan, the Company and the officers and directors thereof shall be entitled
to rely conclusively upon and shall be fully protected in any action omitted,
taken, or suffered by them in good faith in reliance upon any independent
qualified public accountant, counsel, or other specialist, or other person
selected by the Committee, or in reliance upon any tables, evaluations,
certificates, opinions, or reports which shall be furnished by any of them or by
the Trustee.

         13.8 Co-Fiduciaries. It is intended that to the maximum extent
permitted by ERISA, each person who is a fiduciary (as that term is defined in
ERISA) with respect to the Plan shall be responsible for the proper exercise of
his own powers, duties, responsibilities, and obligations under the Plan and the
Trust, as shall each person designated by any fiduciary to carry out any
fiduciary responsibilities with respect to the Plan or the Trust. No fiduciary
or other person to whom fiduciary responsibilities are allocated shall be liable
for any act or omission of any other fiduciary or of any other person delegated
to carry out any fiduciary or other responsibility under the Plan or the Trust.

         13.9 General Records. The Committee shall maintain or cause to be
maintained an Account (and any separate subaccount) which accurately reflects
the interest of each Participant, as provided for in Section 9.1, and shall
maintain or cause to be maintained all necessary books of account and records
with respect to the administration of the Plan. The Committee shall mail or
cause to be mailed to Participants reports to be furnished to Participants in
accordance with the Plan or as may be required by ERISA. Any notices, reports,
or statements to be given, furnished, made, or delivered to a Participant shall
be deemed duly given, furnished, made, or delivered when addressed to the
Participant and delivered to the Participant in person or mailed by ordinary
mail to his address last communicated to the Committee (or its delegate) or of
his Employing Company.

         13.10 Liability of the Committee. In administering the Plan, except as
may be prohibited by ERISA, neither the Committee nor any person to whom it may
delegate any duty or power in connection with administering the Plan shall be
liable for any action or failure to act except for its or his own gross
negligence or willful misconduct; nor for the payment of any amount under the
Plan; nor for any mistake of judgment made by him or on his behalf as a member
of the Committee; nor for any action, failure to act, or loss unless resulting
from his own gross negligence or willful misconduct; nor for the neglect,
omission, or wrongdoing of any other member of the Committee. No member of the
Committee shall be personally liable under any contract, agreement, bond, or
other instrument made or executed by him or on his behalf as a member of the
Committee.

         13.11 Reimbursement of Expenses and Compensation of Committee. Members
of the Committee shall be reimbursed by the Company for expenses they may
individually or collectively incur in the performance of their duties. Each
member of the Committee who is a full-time employee of the Company or of any
Employing Company shall serve without compensation for his services as such
member; each other member of the Committee shall receive such compensation, if
any, for his services as the Board of Directors may fix from time to time.

         13.12 Expenses of Plan and Trust Fund. The expenses of establishment
and administration of the Plan and the Trust Fund, including all fees of the
Trustee, auditors, and counsel, shall be paid by the Company or the Employing
Companies. Notwithstanding the foregoing, to the extent provided in the Trust
Agreement, certain administrative expenses may be paid from the Trust Fund
either directly or through reimbursement of the Company or the Employing
Companies. Any expenses directly related to the investments of the Trust Fund,
such as stock transfer taxes, brokerage commissions, or other charges incurred
in the acquisition or disposition of such investments, shall be paid from the
Trust Fund (or from the particular Investment Fund to which such fees or
expenses relate) and shall be deemed to be part of the cost of such securities
or deducted in computing the proceeds therefrom, as the case may be. Investment
management fees for the Investment Funds shall be paid from the particular
Investment Fund to which they relate either directly or through reimbursement of
the Company or the Employing Companies unless the Company or the Employing
Companies do not elect to receive reimbursement for payment of such expenses.
Taxes, if any, on any assets held or income received by the Trustee and transfer
taxes on the transfer of Common Stock from the Trustee to a Participant or his
Beneficiary shall be charged appropriately against the Accounts of Participants
as the Committee shall determine. Any expenses paid by the Company pursuant to
Section 13.11 and this section shall be subject to reimbursement by other
Employing Companies of their proportionate shares of such expenses as determined
by the Committee.

         13.13 Responsibility for Funding Policy. The Pension Fund Investment
Review Committee of The Southern Company System shall have responsibility for
providing a procedure for establishing and carrying out a funding policy and
method for the Plan consistent with the objectives of the Plan and the
requirements of Title I of ERISA.

         13.14 Management of Assets. The Committee shall not have responsibility
with respect to control or management of the assets of the Plan. The Trustee
shall have the sole responsibility for the administration of the assets of the
Plan as provided in the Trust Agreement, except to the extent that an investment
advisor (who qualifies as an Investment Manager as that term is defined in
ERISA) who is appointed by the Pension Fund Investment Review Committee shall
have responsibility for the management of the assets of the Plan, or some part
thereof (including powers to acquire and dispose of the assets of the Plan, or
some part thereof).

          13.15 Notice and Claims Procedures. Consistent with the requirements
of ERISA and the regulations thereunder of the Secretary of Labor from time to
time in effect, the Committee shall:

                    (a) provide adequate notice in writing to any Participant or
         Beneficiary whose claim for benefits under the Plan has been denied,
         setting forth specific reasons for such denial, written in a manner
         calculated to be understood by such Participant or Beneficiary, and

                    (b) afford a reasonable opportunity to any Participant or
         Beneficiary whose claim for benefits has been denied for a full and
         fair review of the decision denying the claim.

         13.16 Bonding. Unless otherwise determined by the Board of Directors or
required by law, no member of the Committee shall be required to give any bond
or other security in any jurisdiction.

         13.17 Multiple Fiduciary Capacities. Any person or group of persons may
serve in more than one fiduciary capacity with respect to the Plan, and any
fiduciary with respect to the Plan may serve as a fiduciary with respect to the
Plan in addition to being an officer, employee, agent, or other representative
of a party in interest, as that term is defined in ERISA.

         13.18 Change in Administrative Procedures. Notwithstanding any
provision in the Plan to the contrary, the Committee shall be authorized to take
whatever actions it deems necessary or appropriate in its discretion to
implement administrative procedures, including, but not limited to, suspending
plan participation (to the extent permitted by applicable law,) and suspending
changes in investment directions and fund transfers, even though otherwise
permitted or required under the Plan.

<PAGE>

                                   ARTICLE XIV

                               TRUSTEE OF THE PLAN

         14.1 Trustee. The Company has entered into a Trust Agreement with the
Trustee to hold the funds necessary to provide the benefits set forth in the
Plan. If the Board of Directors so determines, the Company may enter into a
Trust Agreement or Trust Agreements with additional trustees. Any Trust
Agreement may be amended by the Company from time to time in accordance with its
terms. Any Trust Agreement shall provide, among other things, that all funds
received by the Trustee thereunder will be held, administered, invested, and
distributed by the Trustee, and that no part of the corpus or income of the
Trust held by the Trustee shall be used for or diverted to purposes other than
for the exclusive benefit of Participants or their Beneficiaries, except as
otherwise provided in the Plan. Any Trust Agreement may also provide that the
investment and reinvestment of the Trust Fund, or any part thereof may be
carried out in accordance with directions given to the Trustee by any Investment
Manager or Investment Managers (as that term is defined in ERISA) who may be
appointed by the Pension Fund Investment Review Committee. The Board of
Directors may remove any Trustee or any successor Trustee, and any Trustee or
any successor Trustee may resign. Upon removal or resignation of a Trustee, the
Board of Directors shall appoint a successor Trustee.

         14.2 Purchase of Common Stock. As soon as practicable after receipt of
funds applicable to the purchase of Common Stock, the Trustee shall purchase
Common Stock or cause Common Stock to be purchased. Such Common Stock may be
purchased on the open market or by private purchase (including private purchases
directly from The Southern Company); provided that (a) no private purchase may
be made at any price greater than the last sale price or highest current
independent bid price, whichever is higher, for Common Stock on the New York
Stock Exchange, plus an amount equal to the commission payable in a stock
exchange transaction; (b) if such private purchase shall be a purchase of Common
Stock directly from The Southern Company, no commission shall be paid with
respect thereto unless such commission satisfies the requirements of Prohibited
Transaction Class Exemption 75-1; and (c) the Trustee may purchase Common Stock
directly from The Southern Company under The Southern Investment Plan, as from
time to time amended, or under any other similar plan made available to holders
of record of shares of Common Stock which may be in effect from time to time, at
the purchase price provided for in such plan. The Trustee may hold in cash, and
may temporarily invest funds applicable to the purchase of Common Stock in
short-term United States obligations, other obligations guaranteed by the United
States Government, commercial paper, or certificates of deposit, and if the
Trustee so determines, may transfer such funds to money market funds utilized by
the Trustee for qualified employee benefit trusts.

         14.3 Voting of Common Stock. Before each annual or special meeting of
shareholders of The Southern Company, there shall be sent to each Participant a
copy of the proxy soliciting material for the meeting, together with a form
requesting instructions to the Trustee on how to vote the shares of Common Stock
credited to such Participant's Account as of the record date of the Common
Stock. If a Participant does not provide the Trustee or its designated agent
with timely voting instructions for the Trustee, the Pension Fund Investment
Review Committee of The Southern Company System or its delegate may direct the
Trustee how to vote such Participant's shares. If the Pension Fund Investment
Review Committee of The Southern Company System or its delegate does not provide
the Trustee or its designated agent with timely voting instructions, the
Trustee, if required to do so by applicable law, may vote such Participant's
shares. The Pension Fund Investment Review Committee of The Southern Company
System or its delegate may direct the Trustee with respect to voting unallocated
shares of Common Stock, if any. If the Pension Fund Investment Review Committee
of The Southern Company System or its delegate does not provide the Trustee or
its designated agent with timely voting instructions, the Trustee, if required
to do so by applicable law, may vote such unallocated shares. Procedures similar
to those described above shall also apply to voting the Mirant Stock credited to
each Participant's Account.

         14.4 Voting of Other Investment Fund Shares. The Pension Fund
Investment Review Committee or its delegate may direct the Trustee with respect
to voting the shares in any Investment Fund other than the Company Stock Fund or
Mirant Stock Fund. To the extent an Investment Manager has been designated with
respect to an Investment Fund, such Investment Manager (and not the Pension Fund
Investment Review Committee) shall direct the Trustee with respect to voting the
shares in such Investment Fund. If the Investment Manager does not direct the
Trustee with respect to voting such shares, the Pension Fund Investment Review
Committee may direct the Trustee with respect to voting such shares. If the
Pension Fund Investment Review Committee does not provide the Trustee or its
designated agent with timely voting instructions, the Trustee, if required to do
so by applicable law, may vote such shares.

          14.5 Uninvested Amounts. The Trustee may keep uninvested an amount of
cash sufficient in its opinion to enable it to carry out the purposes of the
Plan.

          14.6 Independent Accounting. The Board of Directors shall select a
firm of independent public accountants to examine and report annually on the
financial position and the results of operation of the Trust forming a part of
the Plan.

<PAGE>

                                   ARTICLE XV

                      AMENDMENT AND TERMINATION OF THE PLAN

         15.1 Amendment of the Plan. The Plan may be amended or modified by the
Board of Directors pursuant to its written resolutions at any time and from time
to time; provided, however, that no such amendment or modification shall make it
possible for any part of the corpus or income of the Trust Fund to be used for
or diverted to purposes other than for the exclusive benefit of Participants or
their Beneficiaries under the Plan, including such part as is required to pay
taxes and administration expenses of the Plan. The Plan may also be amended or
modified by the Committee (a) if such amendment or modification does not involve
a substantial increase in cost to any Employing Company, or (b) as may be
necessary, proper, or desirable in order to comply with laws or regulations
enacted or promulgated by any federal or state governmental authority and to
maintain the qualification of the Plan under Sections 401(a) and 501(a) of the
Code and the applicable provisions of ERISA as provided in regulations
prescribed by the Secretary of the Treasury.

         No amendment to the Plan shall have the effect of decreasing a
Participant's vested interest in his Account, determined without regard to such
amendment, as of the later of the date such amendment is adopted or the date it
becomes effective. In addition, if the vesting schedule of the Plan is amended,
any Participant who has completed at least three (3) Years of Service and whose
vested interest is at any time adversely affected by such amendment may elect to
have his vested interest determined without regard to such amendment during the
election period defined under Section 411(a)(10) of the Code. Finally, no
amendment shall eliminate an optional form of benefit in violation of Code
Section 411(d)(6).

         15.2 Termination of the Plan. It is the intention of the Employing
Companies to continue the Plan indefinitely. However, the Board of Directors
pursuant to its written resolutions may at any time and for any reason suspend
or terminate the Plan or suspend or discontinue the making of contributions of
all Participants and of contributions by all Employing Companies. Any Employing
Company may, by action of its board of directors and approval of the Board of
Directors, suspend or terminate the making of contributions of Participants in
the employ of such Employing Company and of contributions by such Employing
Company.

         In the event of termination of the Plan or partial termination or upon
complete discontinuance of contributions under the Plan by all Employing
Companies or by any one Employing Company, the amount to the credit of the
Account of each Participant whose Employing Company shall be affected by such
termination or discontinuance shall be determined as of the next Valuation Date
and shall be distributed to him or his Beneficiary thereafter at such time or
times and in such nondiscriminatory manner as is determined by the Committee in
compliance with the restrictions on distributions set forth in Code Section
401(k).

         15.3 Merger or Consolidation of the Plan. The Plan shall not be merged
or consolidated with nor shall any assets or liabilities thereof be transferred
to any other plan unless each Participant of the Plan would (if the Plan then
terminated) receive a benefit immediately after the merger, consolidation, or
transfer which is equal to or greater than the benefit he would have been
entitled to receive immediately prior to the merger, consolidation, or transfer
(if the Plan had then terminated).

         15.4 Transfer of Plan Assets. Notwithstanding any provision of the Plan
to the contrary, upon the distribution by the Southern Company to its
shareholders of the Mirant Stock held by the Southern Company pursuant to a
tax-free spin-off under Code Section 355 or such similar transaction, the
Accounts of certain Participants who shall be identified in accordance with the
Employee Matters Agreement entered into between the Southern Company and Mirant
("Agreement") shall be transferred to a retirement plan established by Mirant
which is intended to constitute a qualified retirement plan under Code Section
401(a). The Committee shall determine the time of such transfers and shall
establish such rules and procedures as its deems necessary or appropriate to
effect the transfers, except that all actions with respect to the transfers
shall be taken in a manner consistent with the Agreement.

<PAGE>

                                   ARTICLE XVI

                             TOP-HEAVY REQUIREMENTS

         16.1 Top-Heavy Plan Requirements. For any Plan Year the Plan shall be
determined to be a top-heavy plan, the Plan shall provide the minimum allocation
requirement of Section 16.3.

         16.2       Determination of Top-Heavy Status.
                    ---------------------------------

                    (a) For any Plan Year commencing after December 31, 1983,
         the Plan shall be determined to be a top-heavy plan, if, as of the
         Determination Date, the sum of the Aggregate Accounts of Key Employees
         under this Plan exceeds 60% of the Aggregate Accounts of all Employees
         entitled to participate in this Plan.

                    (b) For any Plan Year commencing after December 31, 1983,
         the Plan shall be determined to be a super-top-heavy plan, if, as of
         the Determination Date, the sum of the Aggregate Accounts of Key
         Employees under this Plan exceeds 90% of the Aggregate Accounts of all
         Employees entitled to participate in this Plan.

                    (c) In the case of a Required Aggregation Group, each plan
         in the group will be considered a top-heavy plan if the Required
         Aggregation Group is a Top-Heavy Group. No plan in the Required
         Aggregation Group will be considered a top-heavy plan if the
         Aggregation Group is not a Top-Heavy Group.

                    In the case of a Permissive Aggregation Group, only a plan
         that is part of the Required Aggregation Group will be considered a
         top-heavy plan if the Permissive Aggregation Group is a Top-Heavy
         Group. A plan that is not part of the Required Aggregation Group but
         that has nonetheless been aggregated as part of the Permissive
         Aggregation Group will not be considered a top-heavy plan even if the
         Permissive Aggregation Group is a Top-Heavy Group.

                    (d) For purposes of this Article XVI, if any Employee is a
         non-Key Employee for any Plan Year, but such Employee was a Key
         Employee for any prior Plan Year, such Employee's Present Value of
         Accrued Retirement Income and/or Aggregate Account balance shall not be
         taken into account for purposes of determining whether this Plan is a
         top-heavy or super-top-heavy plan (or whether any Aggregation Group
         which includes this Plan is a Top-Heavy Group). In addition, if an
         Employee or former Employee has not performed any services for any
         Employing Company maintaining the Plan at any time during the one-year
         period ending on the Determination Date, the Aggregate Account and/or
         Present Value of Accrued Retirement Income shall be excluded in
         determining whether this Plan is a top-heavy or super-top-heavy plan.

                    (e) Only those plans of the Affiliated Employers in which
         the Determination Dates fall within the same calendar year shall be
         aggregated in order to determine whether such plans are top-heavy
         plans.

         16.3       Minimum Allocation for Top-Heavy Plan Years.
                    -------------------------------------------

                    (a) Notwithstanding anything herein to the contrary, for any
         top-heavy Plan Year, the Employing Company contribution allocated to
         the Account of each non-Key Employee shall be an amount not less than
         the lesser of: (1) 3% of such Participant's compensation for that Plan
         Year, or (2) a percentage of that Participant's compensation not to
         exceed the percentage at which contributions are made under the Plan
         for the Key Employee for whom such percentage is highest for that Plan
         Year.

                    (b) For purposes of the minimum allocation of Section
         16.3(a), the percentage allocated to the Account of any Key Employee
         shall be equal to the ratio of the Employing Company contributions
         allocated on behalf of such Key Employee divided by the compensation of
         such Key Employee for that Plan Year. Employer Matching Contributions
         shall be taken into account for purposes of satisfying the minimum
         contribution allocation requirements under Code Section 416(c)(2) and
         the Plan.

                    (c) For any top-heavy Plan Year, the minimum allocations of
         Section 16.3(a) shall be allocated to the Accounts of all non-Key
         Employees who are Participants and who are employed by the Affiliated
         Employers on the last day of the Plan Year.

                    (d) Notwithstanding the foregoing, in any Plan Year in which
         a non-Key Employee is a Participant in both this Plan and a defined
         benefit plan, and both such plans are top-heavy plans, the Affiliated
         Employers shall not be required to provide a non-Key Employee with both
         the full separate minimum defined benefit and the full separate defined
         contribution plan allocations. Therefore, if a non-Key Employee is
         participating in a defined benefit plan maintained by the Affiliated
         Employers and the minimum benefit under Code Section 416(c)(1) is
         provided the non-Key Employee under such defined benefit plan, the
         minimum allocation provided for above shall not be applicable, and no
         minimum allocation shall be made on behalf of the non-Key Employee.
         Alternatively, the Employing Company may satisfy the minimum allocation
         requirement of Code Section 416(c)(2) for the non-Key Employee by
         providing any combination of benefits and/or contributions that satisfy
         the safe harbor rules of Treasury Regulation Section 1.416-1(M-12).

<PAGE>

                                  ARTICLE XVII

                               GENERAL PROVISIONS

         17.1 Plan Not an Employment Contract. The Plan shall not be deemed to
constitute a contract between an Affiliated Employer and any Employee, nor shall
anything herein contained be deemed to give any Employee any right to be
retained in the employ of an Employing Company or to interfere with the right of
an Employing Company to discharge any Employee at any time and to treat him
without regard to the effect which such treatment might have upon him as a
Participant.

         17.2 No Right of Assignment or Alienation. Except as may be otherwise
permitted or required by law, no right or interest in the Plan of any
Participant or Beneficiary and no distribution or payment under the Plan to any
Participant or Beneficiary shall be subject in any manner to anticipation,
alienation, sale, transfer (except by death), assignment (either at law or in
equity), pledge, encumbrance, charge, attachment, garnishment, levy, execution,
or other legal or equitable process, whether voluntary or involuntary, and any
attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber,
charge, attach, garnish, levy, or execute or enforce any other legal or
equitable process against the same shall be void, nor shall any such right,
interest, distribution, or payment be in any way liable for or subject to the
debts, contracts, liabilities, engagements, or torts of any person entitled to
such right, interest, distribution, or payment. If any Participant or
Beneficiary is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, assign, pledge, encumber, or charge any such right, interest,
distribution, or payment, voluntarily or involuntarily, or if any action shall
be taken which is in violation of the provisions of the immediately preceding
sentence, the Committee may hold or apply or cause to be held or applied such
right, interest, distribution, or payment or any part thereof to or for the
benefit of such Participant or Beneficiary in such manner as is in accordance
with applicable law. In addition, a Participant's benefits may be offset
pursuant to a judgment, order, or decree issued (or settlement agreement entered
into) on or after August 5, 1997, if and to the extent that such offset is
permissible or required under Code Section 401(a)(13).

         Notwithstanding the above, the Committee and the Trustee shall comply
with any domestic relations order (as defined in Section 414(p)(1)(B) of the
Code) which is a qualified domestic relations order satisfying the requirements
of Section 414(p) of the Code. The Committee shall establish procedures for (a)
notifying Participants and alternate payees who have or may have an interest in
benefits which are the subject of domestic relations orders, (b) determining
whether such domestic relations orders are qualified domestic relations orders
under Section 414(p) of the Code, and (c) distributing benefits which are
subject to qualified domestic relations orders.

         17.3 Payment to Minors and Others. If the Committee determines that any
person entitled to a distribution or payment from the Trust Fund is an infant or
a minor, is incompetent, or is unable to care for his affairs by reason of
physical or mental disability, it may cause all distributions or payments
thereafter becoming due to such person to be made to any other person for his
benefit, without responsibility to follow the application of payments so made.
Payments made pursuant to this provision shall completely discharge the Company,
the Trustee, and the Committee with respect to the amounts so paid. No person
shall have any rights under the Plan with respect to the Trust Fund, or against
the Trustee or any Employing Company, except as specifically provided herein.

         17.4 Source of Benefits. The Trust Fund established under the Plan
shall be the sole source of the payments or distributions to be made in
accordance with the Plan. No person shall have any rights under the Plan with
respect to the Trust Fund, or against the Trustee or any Employing Company,
except as specifically provided herein.

         17.5 Unclaimed Benefits. If the Committee is unable, within five (5)
years after any distribution becomes payable to a Participant or Beneficiary, to
make or direct payment to the person entitled thereto because the identity or
whereabouts of such person cannot be ascertained, notwithstanding the mailing of
due notice to such person at his last known address as indicated by the records
of either the Committee or his Employing Company, then such benefit or
distribution will be disposed of as follows:

                  (a) If the whereabouts of the Participant is unknown to the
         Committee, distribution will be made to the Participant's Beneficiary
         or Beneficiaries.

                    Payment to such one or more persons shall completely
         discharge the Company, the Trustee, and the Committee with respect to
         the amounts so paid.

                    (b) If none of the persons described in (a) above, can be
         located, then the benefit payable under the Plan shall be forfeited and
         shall be applied to reduce future Employer Matching Contributions.
         Notwithstanding the foregoing sentence, such benefit shall be
         reinstated if a claim is made by the Participant or Beneficiary for the
         forfeited benefit.

         In the event the Committee makes or directs a payment to the person
entitled thereto but the check for such payment remains un-cashed for a period
of 180 days, the Committee shall take such actions as it deems reasonable to
determine the whereabouts of such person. If the whereabouts of the person is
unknown or the check remains un-cashed, the Committee shall direct that such
check be cancelled. In the event the person entitled to such payment
subsequently requests payment, the Committee shall direct such payment to such
person in the amount of the previous check.

         17.6 Governing Law. The provisions of the Plan and the Trust shall be
construed, administered, and enforced in accordance with the laws of the State
of Georgia, except to the extent such laws are preempted by the laws of the
United States.

<PAGE>

                                  ARTICLE XVIII

                    SPECIAL REQUIREMENTS FOR ACCOUNT BALANCES

                        ATTRIBUTABLE TO ACCRUED BENEFITS

                         TRANSFERRED FROM THE SEPCO PLAN

         18.1 SEPCO Transferred Accounts. Notwithstanding any other provisions
of this Plan to the contrary, a Participant's SEPCO Transferred Account shall be
subject to the requirements of this Article XVIII.

         18.2 In-Service Withdrawals from SEPCO Transferred Accounts. Except as
provided in this Section 18.2, a Participant shall be entitled to a distribution
of his SEPCO Transferred Account at the same time he is entitled to a
distribution of his Account under the applicable provisions of Article XII.

                    (a) Age 59 1/2. A Participant who has attained age 59 1/2
         shall have the right to withdraw all or a portion of his SEPCO
         Transferred Account in accordance with Section 11.6(e) provided that he
         shall have first withdrawn all other amounts available to him in
         accordance with the terms and order of priority set forth in Section
         11.1.

                    (b) Hardship. A Participant who meets the requirements for
         hardship set forth in Section 11.6 hereof shall be entitled to withdraw
         amounts determined necessary to relieve such hardship from his SEPCO
         Transferred Account, provided that he shall have first withdrawn all
         other amounts available to him in accordance with the terms and order
         of priority set forth in Section 11.1.

         18.3 Loans from SEPCO Transferred Accounts. Subject to the provisions
of Section 11.7, a Participant may request that a loan be made to him from his
SEPCO Transferred Account, provided, however, that the Participant has first
borrowed all other amounts available to him under the terms of the Plan.

         A Participant must obtain the consent of his or her spouse, if any, to
use any portion of his SEPCO Transferred Account as security for a loan. Within
the ninety-day period ending on the date on which a loan is made to a
Participant who is married, the Participant shall obtain and deliver to the
Committee the written consent of the Participant's spouse (1) to the loan, and
(2) to the reduction of the Participant's Account if the Participant's Account
is reduced because of nonpayment or other default with respect to the loan. No
further spousal consent shall be required in the event the Participant's Account
is subsequently reduced with respect to such loan, even if the Participant is
then married to a different spouse. A new spousal consent shall be required for
any subsequent loan to a Participant, if the Participant is then married.

         18.4 Distribution of SEPCO Transferred Accounts. Notwithstanding any
provisions of this Plan to the contrary, a Participant with a SEPCO Transferred
Account shall be paid the vested benefits of the SEPCO Transferred Account upon
retirement, death, total and permanent disability, or termination of employment
as provided herein.

                    (a) All benefits from a Participant's SEPCO Transferred
         Account shall be distributed in accordance with the distribution
         options available under Article XII, with applicable spousal consent as
         provided under the SEPCO Plan, unless a Participant elects payment of
         benefits in the form of a life annuity pursuant to a written election
         filed with the Committee prior to commencement of distribution of
         benefits. The provisions of this Section 18.4 shall take precedence
         over any conflicting provisions of the Plan and shall apply to any
         Participant who has a SEPCO Transferred Account and who elects to
         receive payment of his benefits from his SEPCO Transferred Account in
         the form of a life annuity. A married Participant electing to receive
         benefits in the form of a life annuity shall receive the value of his
         benefit in the form of a qualified joint and survivor annuity, which
         shall provide an annuity for the life of the Participant with a
         survivor annuity for the life of the Participant's spouse which is
         either 50% or 100%, as elected by the Participant, of the amount of the
         annuity which is payable during the joint lives of the Participant and
         the Participant's spouse, and which is the actuarial equivalent of a
         single life annuity for the life of the Participant. An unmarried
         Participant who elects a life annuity shall receive the value of his
         benefits from his SEPCO Transferred Account in the form of an annuity
         for his lifetime.

                    (b) If the Participant's interest is to be distributed in
         other than a single sum, the amount required to be distributed for each
         calendar year, beginning with distributions for the first Distribution
         Calendar Year, must at least equal the quotient obtained by dividing
         the Participant's Benefit by the Applicable Life Expectancy.

                    (c) The minimum distribution required for the Participant's
         first Distribution Calendar Year must be made on or before the
         Participant's Required Beginning Date. The minimum distribution for
         other calendar years, including the minimum distribution for the
         Distribution Calendar Year in which the Participant's Required
         Beginning Date occurs, must be made on or before December 31 of that
         Distribution Calendar Year.

                    (d) If the Participant's benefit is distributed in the form
         of an annuity purchased from an insurance company, distributions
         thereunder shall be made in accordance with the requirements of Section
         401(a)(9) of the Code and the proposed regulations thereunder.

                    (e)      Definitions.
                             -----------

                             (1) "Applicable Life Expectancy" means the life
                    expectancy calculated using the attained age of the
                    Participant as of the Participant's birthday in the
                    applicable calendar year reduced by one for each calendar
                    year which has elapsed since the date life expectancy was
                    first calculated. If life expectancy is being recalculated,
                    the applicable life expectancy shall be the life expectancy
                    as so recalculated. The applicable calendar year shall be
                    the first Distribution Calendar Year, and if life expectancy
                    is being recalculated such succeeding calendar year.

                             (2) "Distribution Calendar Year" means a calendar
                    year for which a minimum distribution is required. For
                    distributions beginning before the Participant's death, the
                    first Distribution Calendar Year is the calendar year
                    immediately preceding the calendar year which contains the
                    Participant's Required Beginning Date.

                             (3) "Participant's Benefit" means the account
                    balance as of the last valuation date in the calendar year
                    immediately preceding the Distribution Calendar Year
                    (valuation calendar year) increased by the amount of any
                    contributions or forfeitures allocated to the account
                    balance as of dates in the valuation calendar year after the
                    valuation date and decreased by distributions made in the
                    valuation calendar year after the valuation date. If any
                    portion of the minimum distribution for the first
                    Distribution Calendar Year is made in the second
                    Distribution Calendar Year on or before the Required
                    Beginning Date, the amount of the minimum distribution made
                    in the second Distribution Calendar Year shall be treated as
                    if it had been made in the immediately preceding
                    Distribution Calendar Year.

                             (4) "Required Beginning Date" means April 1st of
                    the calendar year following the calendar year in which the
                    Participant attains age 70-1/2, in accordance with
                    regulations prescribed by the Secretary of the Treasury.

                    (f) Notwithstanding anything contained herein to the
         contrary, the requirements of this Section shall apply to any
         distribution of a Participant's interest and will take precedence over
         any inconsistent provisions of this Plan. All distributions required
         under this Section shall be determined and made in accordance with the
         proposed regulations under Section 401(a)(9), including the minimum
         distribution incidental benefit requirement of Section 1.401(a)(9)-2 of
         the proposed regulations.

         18.5 Code Section 411(d)(6) Protected Benefits. Notwithstanding any of
the foregoing, the provisions of this Article XVIII to effectuate the merger of
the SEPCO Plan into this Plan shall not decrease a Participant's accrued
benefit, except to the extent permitted under Section 412(c)(8) of the Code, and
shall not reduce or eliminate Code Section 411(d)(6) protected benefits
determined immediately prior to the date of such merger. The Committee shall
disregard any part of this Article XVIII or the Plan to the extent that
application of such would fail to satisfy this paragraph. If the Committee
disregards any portion of this Article XVIII or the Plan because it would
eliminate a protected benefit, the Committee shall maintain a schedule of any
such impacted early retirement option or other optional forms of benefit and the
Plan shall continue such for the affected Participants. Notwithstanding the
foregoing, any optional form of benefit provided under this Plan solely as a
result of the merger of the SEPCO Plan into this Plan shall be eliminated to the
extent permitted and in accordance with the regulations prescribed by the
Secretary of the Treasury under Code Section 411(d)(6), provided that the
elimination of such optional form of benefit shall not be effective before the
earlier of (a) the 90th day after the Participant receives a summary of material
modification describing the elimination of such optional form of benefit or (b)
January 1, 2002.

<PAGE>

         IN WITNESS WHEREOF, the Company has caused this amendment and
restatement of The Southern Company Employee Savings Plan effective as of
January 1, 2002, to be executed this _______ day of __________________, 2002.

                          EMPLOYEE SAVINGS PLAN COMMITTEE

                            -------------------------------------

                            -------------------------------------

<PAGE>

                        APPENDIX A - EMPLOYING COMPANIES

         The Employing Companies as of January 1, 2002 are:

                  Alabama Power Company
                  Georgia Power Company
                  Gulf Power Company
                  Mississippi Power Company

                  Savannah Electric and Power Company
                  Southern Communications Services, Inc.
                  Southern Company Energy Solutions, Inc.
                  Southern Company Services, Inc.
                  Southern Nuclear Operating Company, Inc.

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