Energy Innovation

Forecasting Growth

We focus on providing clean, safe, reliable and affordable electricity. Integral to this mission is knowledge of our market and the demand for electricity. We forecast economic growth to ensure that we have the generation and transmission equipment and skilled employees needed to provide reliable and affordable electricity in our southeastern U.S. markets.

This section details how we will meet forecasts through diversifying fuel options, building renewable resources, championing energy efficiency and new nuclear plants.

A key performance indicator for previous performance in meeting forecasts is equivalent forced outage rate. This rate indicates the likelihood of forced outages that are not storm-related. We rank in the top quartile, well above industry averages, and have led our industry peers for six years running and eight of the last nine. See Equivalent Forced Outage Rate »

• Generation — Over the next three years, Southern Company's traditional operating companies plan to add more than 500 megawatts of capacity and an additional 1,000 megawatts by 2018. This new capacity represents Southern's commitment to invest in long-term fuel diversity through 21st century clean coal and nuclear and is complimented by the recent addition at its traditional operating companies of 2,500 MW of natural gas capacity. Further, Southern's wholesale subsidiary, Southern Power, has added or announced over 300 megawatts of capacity from solar and biomass resources and over 700 megawatts of natural gas capacity since 2010. In all, Southern Company will have added enough capacity to power over one million homes by 2018.
• Transmission and Distribution —Since 2000, we have invested $12.1 billion to upgrade and expand our transmission and distribution infrastructure. Over the next three years, we plan to invest $4.0 billion more to help ensure that we maintain our high leel of reliability and keep electricity flowing to the increasing number of customers in our region.

Legislative and Regulatory Participation

Forecasting and planning go hand in hand with participation in the legislative and regulatory process, especially related to proposed laws or rules that impact our customers and shareholders. In addition to working with state and local legislators and policy-makers, we maintain an office and staff in Washington, D.C., to interact with Congress and with agencies including:

• Federal Energy Regulatory Commission
• Federal Communications Commission
• Nuclear Regulatory Commission
• Department of Energy
• Department of Defense
• Environmental Protection Agency

We use outside firms to assist our efforts and support coalitions and trade organizations that engage in lobbying activities. Expenses associated with operating our Washington office in 2012 were about $15.5 million. We also participate in the regulatory process through industry groups and committees to communicate our positions. These groups and committees include the Utility Air Regulatory Group, the Utility Water Act Group, the Utility Solid Waste Activities Group and Edison Electric Institute.

Contributions to the following 527 organizations were made in 2012:

• $100,000 Republican Governors Association
• $100,000 Democratic Governors Association
• $15,000 Republican State Leadership Committee

Southern Company sponsors political action committees that make contributions to candidates for public office using funds voluntarily donated by employees. This money is contributed to candidates of various parties, other political action committees and political organizations such as the Republican and Democratic national committees. Information on Political Action Committee federal contributions is publicly available through the Federal Elections Commission at www.fec.gov.