Power ”Today’s Vision & Tomorrows Reality”

SESSION 1 Power ”Today’s Vision & Tomorrows Reality” Session Presenter Ed DayEVP - Engineering & Construction Southern Company Generation

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. 2

The scale of the Electric Utility Industry in the U.S. Total Assets ($ Billions) Capital Intensity for select U.S. sectors 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 3

For example, Southern Company is planning to invest $14.4 B over the next 3 years 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 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 4

The industry will face financial strain due to the significant scale of capital expenditures 85% 70% $15 B 53% 33% 16% $10 B $5 B 2 Utility Credit Ratings 3-Year Capital Expenditures as Percent of Market Capitalization for UTY Companies 1 1970 2007 A 28% AAA, AA 80% BBB or Lower 71% A 17% 3-year Capital Expenditures 3-year Capital Expenditures / Market Capitalization (%) 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 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. 5

Tomorrow’s Challenges (here Today) • Increasing costs • Capital projects plus O&M: • Commodity escalations • Material & equipment cost increases • Longer lead times • Labor: availability, costs, and quality • Limited number of contractors and suppliers • Environmental Regulation Uncertainty • SO2 – NOx – Hg – CO2 • New and existing generation decisions • Coal – IGCC – Nuclear – Gas – Renewables • Unit retirements and replacements • Fuel cost increases and volatility

Percent Change in Price of Construction Materials 60.0 51.8% 50.0 47.2% 44.0% 40.0 36.0% 30.0 25.0% Percentages 20.0 10.0 3.0% 0.0% -1.3% -3.8% 0.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 -10.0 Percent Change Per Year Total Change

Sizeable Material Requirements(examples) • Environmental Project (2 unit site): • Steel: 10,000 tons • Concrete: 45,000 yds3 • Site Grading: 2,000,000 yds3 • Elec./Control cable: 300 miles • New Generation: • Nuclear (2 units): • Steel: 20,000 tons • Concrete: 280,000 yds3 • Site Grading: 9,000,000 yds3 • Elec./Control cable: 950 miles • Combined Cycle 2x1: • Steel: 5,000 tons • Concrete: 15,000 yds3 • Site Grading: 500,000 yds3 • Elec./Control cable: 220 miles

Southern CompanyPeak Craft Labor Demands Enviro 6000 New Gen O&M 5000 4000 Craft 3000 2000 1000 0 2007 2008 2009 2010 2011

New Administration '05 '06 '08 '07 '09 '10 BART rules Timeline for Regulatory Requirements Under the CAA for the Utility Industry NO2 Primary NAAQS Ozone SO2/NO2 * Litigation SO2/NO2 Secondary NAAQS “Marginal” Ozone NAAQS Attainment Date SO2 Primary NAAQS Revised Ozone NAAQS “Basic” Ozone NAAQS Attainment Date Final 8-hr NAAQS Designations CAIR Issued* Ozone Attainment Demonstration SIPs due “Moderate” Ozone NAAQS Attainment Date Next Ozone NAAQS Revision 1-hr NAAQS Revoked* CAIR FIP&126 Rule CAIR SIPs Due CAIR Phase I Seasonal NOx Cap CAIR Phase II Seasonal NOx Cap '04 '11 '12 '16 '13 '15 '17 '18 '14 Revised PM-2.5 NAAQS PM-2.5 Attainment Demonstration SIPs due CAMR Issued* CAMR Phase I Hg Cap ??? CAIR Phase II Annual SO2 & NOx Caps Next PM-2.5 NAAQS Revision Hg De-listing Reconsid. Completion Mercury De-listing Rule* Mercury CEMs required ??? New PM-2.5 NAAQS Designations CAIR Phase I Annual NOx Cap CAIR Phase I Annual SO2 Cap Regional Haze SIPs due: BART & Reasonable Progress PM-2.5 Attainment Date Final PM-2.5 NAAQS Designations Second Regional Haze SIPs due PM2.5 Haze Mercury -- adapted from Wegman (EPA 2003)

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 New generation capacity is a primary driver of new capital requirements 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. 11

New baseload generation technology is also critical to the success of reducing CO2 emissions 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 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 12

Companies must be proactive in aggressively pursuing these options now 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 Generation plants have long lead times requiring coordinated long term planning CCS requires significant lead time before the technology will be commercially viable 13

Looking Forward • Continued project growth: • Advanced planning and engineering is required • Sourcing flexibility for equipment and services • Need for qualified contractors and suppliers • Efficient utilization of labor • Opportunities / Risks • Future load growth with reliability standards • Regulatory uncertainty • Economic uncertainty • Capital and O&M spending decisions • Fuel diversity through technology development

Delivering Value in a Changing Environment “The electric utility industry in 1970 coped with a host of increasingly difficult problems. Fortunately, although The Southern Company system experienced its share of such industry difficulties asfuel shortagesand environmental concerns, our companies were affected less adversely than the public may have inferred as a result of nationwide news coverage during the year.” “Even the most casual observer of current events during 1970 became aware of the variety of problems being encountered by the U.S. electric utility industry. Public concern over fuel shortages, power supply, inadequacies, need for increased revenues, and ecological considerations – more visible through increased national news coverage – amplified the concern already being shown by the nation’s producers of electric power.” 1970 Southern Company Annual Report

Power ”Today’s Vision & Tomorrows Reality”