David Ratcliffe Chairman, President and CEO Southern Company

1. The Scale and Scope of the Electricity System: The Need for Baseload Generation EPRI 2008 Summer Seminar August 4, 2008 David Ratcliffe Chairman, President and CEO Southern Company

2. Cautionary Statement Regarding Forward-Looking Information NOTE: Much of the information contained in this presentation is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning customer growth, earnings per share growth, environmental regulations and expenditures, dividend payout ratios, estimated construction and other expenditures, sales growth, fuel cost recovery, renewable energy capability, and completion of construction and other projects. Southern Company cautions that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside of the control of Southern Company; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company’s Annual Report on Form 10-Q for the year ended March 31, 2008, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, and implementation of the Energy Policy Act of 2005, environmental laws including regulation of emissions of sulfur, nitrogen, mercury, carbon, soot or particulate matter and other substances, and also changes in tax and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, FERC matters, IRS audits and Mirant matters; the effects, extent and timing of the entry of additional competition in the markets in which Southern Company’s subsidiaries operate; variations in demand for electricity, including those relating to weather, the general economy, population and business growth (and declines), and the effects of energy conservation measures; available sources and costs of fuels; effects of inflation; ability to control costs; investment performance of Southern Company’s employee benefit plans; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to fuel and storm restoration cost recovery; the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due; the ability to obtain new short- and long-term contracts with neighboring utilities; the direct or indirect effect on Southern Company’s business resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company’s and its subsidiaries’ credit ratings; the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, explosions, floods, hurricanes ,droughts, pandemic health events such as an avian influenza, or other similar occurrences; the direct or indirect effects on Southern Company’s business resulting from incidents similar to the August 2003 power outage in the Northeast; and the effect of accounting pronouncements issued periodically by standard-setting bodies. Southern Company and its subsidiaries expressly disclaim any obligation to update any forward-looking information.

3. The Scale of Southern Company Generation Transmission Distribution • 42,000 MW • 79 power plants • 27,000 line miles • 3,400 substations • 154,000 line miles • 3.6 million poles Financial Regional People • $539 B gross product in the region we operate • 120,000 square mile territory • $27.0 B market capitalization • $15.4 B revenues • 4.4 million customers • 26,000 employees

4. The scale of the Electric Utility Industry in the U.S. • There are more than 3,000 electric utilities with combined assets of more than $800 billion • The industry is a mixture of large and small companies where the top 10 companies, by total assets, serve 1/3 of the customers • Regardless of size, we are all facing common challenges of meeting future growth and reliability needs in a very capital intensive industry Total Assets ($ Billions) Capital Intensity for select U.S. sectors

5. Total = $14.4 B Transmission & Distribution $4.1 B Environmental $3.9 B New Generation $2.5 B Existing Generation, Nuclear Fuel, and Other $3.9 B For example, Southern Company is planning to invest $14.4 B over the next 3 years Significant resources will be required • 30 million man-hours, equivalent to 5,500 craft labor persons per year • 125,000 tons of steel • 5,000 miles of cable • 150,000 cubic yards of concrete

6. The industry will face financial strain due to the significant scale of capital expenditures • The Philadelphia Utility Index (UTY) companies are projecting $197 billion in capital expenditures over the next 3 years, representing more than half their total equity value • Credit ratings have declined since the last wave of significant baseload construction 2 Utility Credit Ratings 3-Year Capital Expenditures as Percent of Market Capitalization for UTY Companies 1 1970 2007 85% 70% A 28% $15 B 53% AAA, AA 80% 33% 16% $10 B BBB or Lower 71% $5 B A 17% 3-year Capital Expenditures 3-year Capital Expenditures / Market Capitalization (%) Sources: 1 Bloomberg (2008-07-15) and individual company filings and Investor Relations presentations 2 Standard & Poor’s Industry Report Card, America's Electric Utilities: Past, Present & Future, 8th Edition, by Hyman, Robert C.; Andrew S.; and Leonard S.

7. New generation capacity is a primary driver of new capital requirements • Demand for electricity will increase 30 percent by 2030 according to the U.S. EIA – which requires 213,000 MW of new capacity • The scale of this need requires baseload generation • “Fuel diversity is key to affordable and reliable electricity.  A diverse fuel mix protects electric companies and consumers...” -- EEI • Fuel markets have become increasingly volatile The ability to build baseload generation is a critical component for the future of the electric utility industry 1 Price increases are illustrated using the following commodities: Oil: West Texas Intermediate Crude (WTI), Gas: Historical Henry Hub, Coal: Central Appalachian.

8. New baseload generation technology is also critical to the success of reducing CO2 emissions • We must be able to develop and deploy technologies that reduce greenhouse gases while making sure that electricity remains reliable and affordable • “The availability of carbon capture and storage and nuclear generation in the full portfolio provide large-scale supply-side emissions reductions, protecting the electricity market and limiting the rise in wholesale electricity prices.” -- EPRI1 Technical potential for reducing CO2 emissions by 1.3 billion metric tons by 20302 Advanced Nuclear Coal 18% 13% CCS Renewables 27% 18% Efficiency 13% PHEV/DER 11% 1 The Full Portfolio, by Revis James , Director of the EPRI Energy Technology Assessment Center, in EEI’s Electric Perspectives, January/February 2008 edition. 2 EPRI 2008 Analysis

9. Companies must be proactive in aggressively pursuing these options now • Generation plants have long lead times requiring coordinated long term planning • CCS requires significant lead time before the technology will be commercially viable Nuclear 10-12 years Pulverized Coal 8-10 years IGCC 6-7 years Transmission Line1 8-10 years Engineering & Permitting Construction 1 Construction and interconnectivity requirements for a 100 mile transmission line

10. Keys to successful deployment of advanced baseload technology • Technology Investment • Nuclear • CCS • IGCC • Renewables and energy efficiency New Baseload Generation • Regulatory • Clear public policy • Collaborative relationships • Cost recovery, including R&D • CWIP • Financial • Investment tax credits • Production tax credits • DOE loan guarantees • Returns commensurate with risk • Access to capital

11. EPRI demonstration projects are critical to advanced baseload generation

12. 2010 2012 2014 2016 2018 2030 2020 CCS Technology Development Path Pilot Performance & CostReduction Large Demos Engineering &Operation Full-Scale Demos Reliability Commercial 2020 goalCoal = NGCC • Daniel Phase II • Regional Partnerships Ph II • WE Energies CAP • J Power KS1 • Burger ECO2 • CRC @ PSDF TechnologyMaturity • Only 1 announced project – AEP Northeastern CAP • SCS 25 MW Advanced Amine • AEP Mountaineer CAP • Basin Electric ECO2 2008 $$$$$ $$$$$$ $$$$$$$ R&D requirements of approximately $2 billion per year for 10 years

13. Industry actions necessary for success • Educate • Continue to educate stakeholders about the reality of the challenge, what is required, and the cost • Collaborate • Continue to collaborate to obtain funding, address permitting and liability uncertainties, and incent investment • Deliver • Commit to a prompt execution of step wise technology scale up leading to commercial availability 13

14. The Scale and Scope of the Electricity System: The Need for Baseload Generation EPRI 2008 Summer Seminar August 4, 2008 David Ratcliffe Chairman, President and CEO Southern Company