Aaron Abramovitz - The Southern Co. Thomas A.

Fanning - The Southern Co. Arthur P.

Beattie - The Southern Co.

Greg Gordon - Evercore Group LLC Angie Storozynski - Macquarie Capital (USA), Inc. Paul Fremont - Mizuho Securities USA, Inc.

Michael Weinstein - Credit Suisse Securities (USA) LLC Stephen Calder Byrd - Morgan Stanley & Co. LLC Ali Agha - SunTrust Robinson Humphrey, Inc.

Michael Lapides - Goldman Sachs & Co. LLC Jonathan Philip Arnold - Deutsche Bank Securities, Inc.

Paul Patterson - Glenrock Associates LLC Kamal B. Patel - Wells Fargo Securities LLC Ashar Hasan Khan - Visium Asset Management LP Andrew Stuart Levi - Avon Capital/Millennium Partners Steve Fleishman - Wolfe Research LLC Praful Mehta - Citigroup Global Markets, Inc.

Julien Dumoulin-Smith - Bank of America Merrill Lynch Dan Jenkins - State of Wisconsin Investment Board

Thank you, Colin. Welcome to Southern Company's third quarter 2017 earnings call.

Joining me this afternoon are Tom Fanning, Chairman, President and Chief Executive Officer of Southern Company, and Art Beattie, Chief Financial Officer. Let me remind you that we will make forward-looking statements today in addition to providing historical information.

Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in our Form 10-K and subsequent filings. In addition, we will present non-GAAP financial information on this call.

Reconciliations to the applicable GAAP measure are included in the financial information we released this morning as well as the slides for this conference call. The slides we will discuss during today's call may be reviewed on our Investor Relations website at investor.southerncompany.com.

At this time, I'll turn the call over to Tom Fanning.

Good afternoon and thank you for joining us. As always, we appreciate your interest in Southern Company.

Our premier, state-regulated electric and gas utilities and Southern Power performed well during the third quarter and they remain on track to deliver on their targets for 2017 on an adjusted basis. Before Art provides a complete overview of our financial results, I'd like to first provide updates on what's happened since our last call.

First, for Plant Vogtle. On August 31, Georgia Power filed VCM 17 with the Georgia Public Service Commission, which in line with our co-owners, recommends completion of Vogtle Units 3 and 4.

Georgia Power expects Unit 3 to be in service by November 2021 and Unit 4 to be in service by November 2022 with an estimated total cost for Georgia Power for both units of $8.8 billion. Factoring in expected payments under the Toshiba parent guarantee, the new total net cost of the project is estimated to be $7.1 billion, which is an increase of $1.4 billion over their previous estimate.

In the 17th VCM filing, Georgia Power is requesting the PSC to confirm that: one, the revised cost and schedule estimates are reasonable; two, the 2016 prudence stipulation remains in effect; three, the certified cost is not a cap; and four, Georgia Power is not the guarantor of the Toshiba parent guarantee. A schedule for all of the proceedings has been approved and a decision by the PSC is expected in early February 2018.

Georgia Power continues to work on mitigating project risks and mitigating the overall cost of the project to its customers. On September 29, Georgia Power received a conditional commitment for an additional $1.67 billion from the Department of Energy to expand the Vogtle 3 and 4 loan guarantee program.

Final issuance of the additional loan guarantees is subject to the satisfaction of a number of conditions and is not expected to occur prior to the end of the first quarter of 2018. Including this commitment, the total loan guarantees are expected to provide more than $500 million in present value benefit to Georgia Power customers.

On October 2, Georgia Power and the co-owners received the first and largest payment from Toshiba under its parent guarantee obligation, totaling $300 million of which $137 million is Georgia Power's share. Earlier today, we received the second scheduled payment.

While we anticipate Toshiba will fulfill its remaining obligations over the next three-plus years, Georgia Power and the co-owners have been actively evaluating and preparing for the option of monetizing its rights in the remaining Toshiba guarantee payments and its bankruptcy claims against Westinghouse. Any monetization transaction is subject to DoE review and approval under Georgia Power's Loan Guarantee Agreement.

We believe the process could be complete before the end of this year, effectively eliminating this risk for the owners and our customers. Turning to construction, the primary success factor for this project going forward will be productivity in the field.

Throughout the transaction of the site from Westinghouse control to Southern Nuclear control, productivity trended in the right direction and we have even seen that trend continue in support of the updated schedule. This continued improvement can be attributed to several factors, including improved leadership in the field, improved work package management and continuous monitoring and communication of performance.

A contract with Bechtel to serve as the prime construction contractor was finalized two weeks ago and we see another incremental step towards improved site performance. Let's move now to our recent announcement regarding Southern Company Gas.

A few weeks ago, Southern Company Gas entered into asset purchase agreement with South Jersey Industries for the utility operating assets of Elizabethtown Gas and Elkton Gas. We anticipate closing these transactions by the end of the third quarter of 2018 subject to regulatory approvals and other customary closing conditions.

The total proceeds of $1.7 billion will be used to reduce external financing needs for both Southern Company Gas and Southern Company, and we expect the transaction to support our EPS growth and credit metric objectives. We are gratified to have a buyer like South Jersey Industries, which is committed to providing the same level of outstanding service and reliability that Elizabethtown Gas and Elkton Gas customers are accustomed to receiving today.

We believe this is a value-maximizing transaction for all parties involved. I'll turn the call over now to Art for a financial and economic review.

Thanks, Tom. Good afternoon, everyone.

As you can see from the materials released this morning, we reported earnings for the third quarter of 2017 of $1.07 per share, compared to earnings of $1.18 per share in the third quarter of 2016. For the nine months ended September 30, 2017, we reported earnings of $0.35 per share compared with earnings of $2.40 a share for the same period in 2016.

Excluding the charges associated with the Kemper project, Wholesale Gas Services, acquisition and integration costs, as well as other items described in our earnings materials, earnings for the third quarter of 2017 and the nine-month period ended September 2017 were $1.12 per share and $2.51 per share respectively. This compares with $1.27 and $2.62 per share for the same periods in 2016.

Major earnings drivers to our adjusted results for the third quarter of 2017 included retail revenue effects at Southern Company's state-regulated electric businesses, offset by milder weather, timing of Southern Power tax credits, increased interest expense and increased shares. As for the earnings estimate for the next quarter, we estimate that we will earn $0.46 per share in the fourth quarter of 2017, which would have us at $2.97 per share or just above the middle of our range for the year-end 2017 on an adjusted basis.

Moving now to an economic review of the third quarter. Economic growth remains encouraging, both nationally and in our service territories.

U.S. has now experienced 83 consecutive months of job growth and employment, and our footprint continues to outpace the national average.

The Southern Company system is experiencing strong residential customer growth at a rate of 1%, with the most robust growth occurring in Florida and Georgia. In the commercial sector, we continue to see expansion of square footage across our footprint including office space, warehouses and data centers.

Offsetting these positive trends is the ongoing adoption of new technology and energy-efficient equipment and appliances, especially HVAC and lighting, in both the residential and commercial sectors. In addition, the advancement of digital commerce continues to negatively impact prospects for growth in the commercial sector.

Nationally, economic activity in the manufacturing sector expanded in September at the fastest pace in 13 years, and the ISM Manufacturing Index climbed to 60.8, its highest reading since May of 2004. In the Southern Company footprint, we have seen electricity sales increase in primary metals and chemicals, with 6 of our top 10 industrial sectors showing positive momentum.

Economic development activity in our service territories has been robust. Daimler has announced plans to expand its Alabama operations with a $1 billion investment in infrastructure and in 600 new jobs at its Global Logistics Center, all of which is expected to support the manufacture of electric SUVs by 2020.

In Georgia, the Anthem Technology Center is expected to add 1,800 new IT jobs with the potential for 3,000 jobs over time, and online retailer ASOS will create 1,600 new jobs in its fulfillment center. Looking ahead, we anticipate that the rebuilding and repair work associated by the damage sustained from recent hurricanes should help sustain economic growth in our territories through the end of 2017 and early 2018, and automakers are already reporting higher sales as residents of Texas and Florida replace vehicles destroyed by flooding.

Let me now update you on our financing plans for the remainder of 2017 and provide you insights into 2018 and beyond. At our 2016 Analyst Day, we outlined cumulative equity needs of approximately $1.4 billion from 2017 through 2021.

Much has changed since last October and our equity needs for the remainder of 2017 and forward continue to evolve. For 2017, while our Kemper charges generated an incremental $1 billion need for equity to rebalance our capital structure, the pending sale of Elizabethtown Gas and Elkton Gas as well as the potential monetization of the remaining Toshiba obligation have greatly mitigated that incremental need.

Here are a few other key drivers expected to change our equity needs in the future. First, Southern Power secured tax equity for the Cactus Flats wind project announced in July and will likely explore the same financing vehicle for future renewable projects.

The use of third-party tax equity is expected to significantly reduce the amount of debt in common equity deployed by Southern Power over the forecast horizon. Moreover, the use of third party tax equity is not expected to diminish Southern Power's contribution to Southern Company's EPS growth.

Additionally, we are considering launching a process to sell a minority equity interest in Southern Power's portfolio of solar assets. We are very proud of the leadership position we have taken in utility-scale solar across the U.S., and we continue to view these assets as an integral part of Southern Power and Southern Company.

However, we believe this portfolio has tremendous value in the market, considering the quality of long-dated contracts tied to the underlying assets. Selling up to one-third of our interest in the portfolio represents a clear opportunity to extract value from the market and redeploy capital in a manner that further supports our overall financial objectives.

We will likely initiate a sale process some time before year-end with a potential closing in mid-2018. The updated cost and schedule for Vogtle 3 and 4 will also have an impact on our longer term financing plans.

While the potential monetization of the Toshiba obligation would greatly reduce project risk and mitigate near-term financing needs, it would not have a significant impact on our longer term financing plan. We do, however, expect increased debt and equity needs for Vogtle 3 and 4 as a result of the incremental $1.4 billion of capital costs.

Any incremental equity from Vogtle's change in cost and schedule will be part of Georgia Power's retail capital structure. Finally, as we've alluded to in the past, we are actively evaluating opportunities to modernize our basic business operations as our customers' needs evolve.

Our objective as always is to improve the way we serve our customers while maintaining affordable prices. We anticipate these initiatives would have the added benefits of strengthening the long-term EPS growth contribution of our state-regulated utilities.

These modernization opportunities could increase our long-term funding requirements. We look forward to sharing with you our updated long-term capital and financing plans as well as our long-term EPS growth projections on our fourth quarter call in February.

I'll now turn the call back over to Tom for his closing remarks.

Thanks Art. In closing, we continue to see Southern Company Gas performing exactly as expected, complementing our outstanding electric operations including our competitive generation subsidiary, Southern Power.

In our state jurisdictions, we continue to foster constructive regulatory relationships as evidenced by several positive rate outcomes this year. As we look ahead to 2018 and beyond, we are well positioned to deliver value to our investors over the long-term.

Finally, I would be remiss not to mention the catastrophic weather events that occurred during the third quarter, including Hurricane Irma and its impact on customers in our service region especially those in Georgia and Alabama. We experienced roughly 1.7 million outages system-wide that we were able to restore service in less than five days for customers who could accept service.

Thanks to the close collaboration and tireless efforts of line crews and staff from all of our operating companies as well as others across the electric utility industry. Prior to that, we were pleased to contribute to efforts to help restore power outside of our own service territory in wake of damage incurred by Hurricane Harvey.

Both of these recent restoration efforts represent an unprecedented collaboration between investor-owned utilities, municipal utilities and co-ops, along with tremendous support and cooperation for the United States Government. As a matter of fact, U.S.

Department of Energy Secretary, Rick Perry, was a valued participant in all of our daily teleconferences, offering unfailing help at every opportunity. Thanks once again for joining us this afternoon.

We will now move on to the question-and-answer portion of the call. Operator, we're now ready to take questions.

Hi, Greg.

Good afternoon guys.

Hi Greg.

Can I ask some questions with regard to the financing plan? Is the reason why you're not formally updating the plan today, simply sort of trying to give us some direction on puts and takes because we don't know yet about the go, no-go decision on Vogtle and once we get that, you'll be able to sort of lay it out more clearly for us?

Yes, that, Greg, plus any modernization initiatives that might come about included in the plan or excluded from the plan. There's lots of moving parts yet, so this is just a preview, but we'll give you more to chew on in the next call.

Sale of the minority interest in solar's and the other one. Yeah, we'll have a better idea later.

Okay, right. Because you guys had said relative to Kemper, that you needed a $1 billion of equity this year, but you never said you needed a $1 billion of common stock.

You just needed to find a $1 billion of cash, right? So the Elizabethtown deal, that's not going to close till late next year so that's not part of what you need now, but the third-party tax equity, the minority interest sale, the monetization bringing some cash forward from Toshiba, all those things could theoretically severely limit or even maybe eliminate the need for common equity in the short run, right?

Or wrong?

You're correct. We think we can eliminate the need in the short run.

The monetization will actually equal itself out over time, but it will certainly help in the short run.

Okay. That was my main question, guys.

Thank you.

You're welcome.

Thank you.

Hello, Angie.

How are you? I never ask M&A questions, but I will this time around.

So, okay. So just bear with me, okay?

So you are pursuing your construction of your project in Georgia, the nuclear project. There will be some lessons learned from it.

You, for now, have the 5% earnings growth objective, which could go higher and why not attempt to grow those earnings through an acquisition in South Carolina? You are better positioned than anybody else to potentially offer continued construction of this V.C.

Summer project, maybe not now, but in the future, applying some lessons learned from the Vogtle construction. You have an incredible operation track record.

There is a utility there that needs help, so just talk me through why that would not be a rational course of events for you guys?

Yeah. Angie, thanks for the question.

Look, I mean you've known us for decades, I bet. You can't really comment on any specific opportunity.

As with Elizabethtown, as with AGL, we really pay attention to those being both a disciplined seller and buyer. We use roughly the same kind of threshold, et cetera.

And so we'll apply that logic wherever we look and you know that we have an active radar screen. As I've said before in many different earnings calls, and one-on-ones and everything else, these deals are extraordinarily hard to get done.

In order to balance the different objectives, first of customers, then of the companies and all the other external public, any attempt like this is a bit of a long putt. Certainly, time will tell, but I think that's probably my best answer right now.

Okay...

There's so many – especially there, there are so many moving pieces, it's just hard to see through them right now.

Understood. And my second question is, so I understand that there is – you have partners at the Vogtle project and the DoE needs to opine on the monetization of the Toshiba securitization, Toshiba proceeds.

Is that the reason why it's taking longer than what we saw with SCANA?

Yeah. As a normal course of financing, that the Toshiba guarantee is a part of the security package, underlying the DoE loan guarantees.

And so we have to get a approval of essentially a change in the security package, not only for the existing loans outstanding, but anything new in the new commitment by DoE. OMB has a say in that and it's just taking some time for OMB to process a change in the security package.

My belief is that they will get there and we will get this done. It's just taking a little bit of process.

Okay. That's all I have.

Thank you.

Yes, ma'am. Thank you.

Hello, Paul.

Hey. Good call.

I guess, there still are open regulatory matters in Mississippi. If there were to be any further disallowances as were recommended by some of the intervener parties in that proceeding, should shareholders expect that you would infuse additional equity into Mississippi Power, or is that off the table?

We pretty much said consistently that we're going to protect the financial integrity of Mississippi Power along the way. We'll see what unfolds.

The process right now though, Paul, and everybody should understand, in a very painful way, we've taken the gasifier off the table. What's remaining to be evaluated under this rate process is a combined cycle asset that has been delivering round numbers about one-third of the energy to the customers in Mississippi Power, has had a reliability circumstance that is something less than 1% of equivalent outage rate where industry averages maybe three times or more times that.

So this is a terrific asset, an economic asset and we expect to be treated fairly.

And then sort of as a follow-up on that, I mean, under what circumstances would you potentially consider selling Mississippi Power, if any?

Well, I think I answered that question with Angie's question too, Paul. Listen, in representing the interest of shareholders, we try to be exceedingly disciplined whether we buy or sell, and that goes to companies, that goes to assets, that goes to everything we do.

So taking all that into account, what is the best mix of Southern Company assets for the benefit of our long-term growth rate, our risk return profile, ultimately inuring to the benefit of shareholders. That's just the best way to leave that question, I think.

Okay. That's it for me.

Thank you.

Thank you sir.

Hi, Tom. How are you doing?

Hey, Michael. How are you?

All right. Hey, do you have any indication as to how the monetization of the payments would be treated by regulators?

Is this going to be a refund? Are they looking for refunds?

Or are they going to allow you to keep it on the balance sheet and help finance the project?

We've had discussions with regulators, but there's been no finalization of that. What we would recommend is that they apply it to the construction work in progress balance and that would provide for a rate reduction in their NCCR rate, which would benefit customers in the short run and will accrue AFUDC once we pass this $4.4 billion benchmark.

Right. The fact that the DoE loan guarantees have this as one of their provisions, does that prevent regulators from trying to even attempt to refund it to customers in some way?

Don't believe so. I think those would all be independent.

Okay. All right.

Yeah, you know the Georgia Commission has had a long track record of constructive regulation for the long-term benefit of customers. I think they'll follow that practice.

Okay. Thank you very much.

Yes, sir. Thank you.

Hey, Stephen.

Hi, good afternoon. I wanted to just explore the potential for further cost cutting at the different utility businesses.

When we look at the cost structure in some of your utilities, did you see you have some potential there? But I'm just curious, I imagine that's an ongoing thing that you all think about, but is there anything specific that could be under way or that you could be thinking about further in terms of further cutting O&M cost at your utility businesses?

Yeah. Stephen, I think we should think about a better way to put those actions in context.

We call this our modernization plan and largely, what we're doing is displacing O&M with capital. Why is that?

What we're able to do now, we've been employing a business model for 100 years or more in the Southeast and what we see are opportunities now because technology is enabling it and because certain customers are requiring it, we're thinking about how to displace a historical practice, for example, in Georgia, being in every small town in the state with perhaps a more modern way to connect with customers. Interestingly, while we have reduced our local office physical presence in the state of Georgia, we have expanded our points of presence with customers, largely through technology.

I think almost four times, I think that's about the right number. And interestingly also, we were very uncertain as to the effect that these changes may have in our customer base.

I think last year, Georgia Power was named the most trusted utility in America and so we think those kinds of changes have helped. That's kind of in the customer-facing business.

We're also evaluating changes in our generating fleet. Now, we have a long-term plan that speaks to kind of a transition between now and say, 2050, to the low to no carbon future that thinks about, what do we believe about nuclear, what do we believe about coal, the importance of natural gas infrastructure and renewables, and so you continue to see us exercise the latest thinking on technology improvements to our operation.

The final thing I will say is this business model of making, moving and selling energy up to a meter and then having kind of a relationship where the customer does something with the energy on the other side of the meter and sends us a check every month, is changing. And that is, we have created, I think, a very important, but rather small, at least at this point, option with PowerSecure where in effect, we're taking some small steps what I would call creative destruction.

That is creating the make, move and sell on the customer premises, allowing customers more control and we're doing this largely in areas that aren't in the Southeast. In other words, in the Southeast, we provide customers with the very best reliability, the lowest prices and the best service again in the United States.

Once again, I think our top five utilities in customer satisfaction were our five utilities including Southern in that. And I think that's giving us another opportunity to think about the advent of technology in displacing what otherwise has been, what I would call, traditional service.

We continue to seek ways – as Art mentioned, earlier in response to, I think it was Michael's call, but it was the idea of thinking more and more about how our CapEx budget may be impacted by these modernization efforts, along with that, in order to keep – because every time you add CapEx, that does an increase to the customer bill, we're going to try and make reductions in O&M to keep customer bills indifferent and still provide better reliability, better cost, better service.

Yeah. Stephen, one other comment in that regard, if you look at our consolidated as-reported earnings, it shows a pretty hefty increase in non-fuel O&M year-over-year, on a year-to-date basis, but most of that increase is due to the inclusion of Southern Gas, which was not in last year's year-to-date number.

So if I look at the electric operating companies' same period, they're down almost 6% year-over-year. So, there are a lot of moving parts in that regard.

And let me throw one more idea. We've done this in years past, haven't talked about it in my recent memory.

We have this program in place where we include optionality into our spending. And so recall this year, I want to say this quarter, Art, we had $0.10 of weather year-over-year that was negative.

In other words, yes, this year's weather in the third quarter was reasonably normal, but last year, it was exceedingly hot. And I think year-to-date, it was something like $0.23, $0.26, what was it?

$0.23.

$0.23. We've been able to maintain our earnings through effective cost management.

So I guess, and I'm describing these, there are kind of tactical changes and what I was describing earlier are kind of strategic changes in our cost structure. We've demonstrated year over year, over year, and if you look at almost any company, our actual performance compared to our guidance, we almost always hit it, we can't guarantee that for the future, but if you look at our track record, Southern Company is one of the most predictable and reliable earnings performers in the industry.

Very, very helpful. And then just shifting over to Vogtle, I was thinking just about the Bechtel involvement here, and in the case of SCANA, SCANA had an independent assessment done of the project.

Have you all engaged any independent assessments of the project? Or has it really just been part of the core team that has been developing the budget, i.e., is there an outside party that's been taking a separate look?

Or is it really just been the entire project team sort of together, if that makes sense?

Absolutely, yeah. No along the way, I won't speak to SCANA's issues.

Our issues are very clear and that is, we've had Dr. Bill Jacobs, who is the independent monitor for the staff, the commission in Georgia.

He's a terrific guy. He's had complete access to everything that we've done.

He sits in the meetings with us. Gosh, I mean, all along the way, we've been exceedingly transparent with the commission and through him, with us and the staff as to all of the issues, whether they are cost, whether they are schedule going forward, everything has been on the table really through all of these VCM processes and it's easy, go look at the testimony.

Further, as we went through this decision of whether to go, no-go, we've had lots of independent evaluations. We wanted to really cover this kind of idea soup to nuts, and so we've had a firm called Kenrich involved.

PwC made an independent assessment. And of course, Fluor and Bechtel both made independent assessments.

The Bechtel assessment ultimately has provided the foundation upon which we have a new commercial relationship where they have significant fees at risk. So, I think we've been, A, exceedingly transparent; and B, we've used that information not only in the past, but using it in the future to create, I think, an effective commercial relationship.

That's very helpful, thanks. That's all I had.

Yep, thank you.

Hey, Ali.

Hey, Tom. Good afternoon.

Good afternoon.

First question. I just wanted to be clear as you laid out on slide 16.

When you're looking at the equity for this year versus the original $575 million, looks like we will end up at $750 million. Is that accurate, am I reading that right?

That's correct.

Okay. And so then again, from a high-level perspective, you laid out the various things that have moved around, the asset sales, potential monetization, et cetera.

When you put it all together, I mean is it fair to say the message is that net-net, your needs are likely less than what you were previously thinking or is that not fair to think?

I think near-term, we have certainly – as we've said before, near-term, they are a lot less than what we had outlined on our last call. But as you go through time, especially related to the increased cost associated with Vogtle, the potential increase in modernization efforts, which are all part of our upcoming plan that we'll talk more about in February.

So, yeah, there's lot of moving parts, but I think you're getting the gist of it. And all that slide was intended to do is to let you know that there's a lot of stuff going on.

Yeah, but those big gas utility sales, the monetization of part of the solar portfolio, the tax equity, these were again, I think, things that you had not been pushing for earlier. So even with the Vogtle increase and with the modernization, it just seems that there's more cash coming in, but maybe that's not the case.

I just wanted to be clear if that was (38:51)

It is clear. There is more cash coming in.

I think the other thing that we need to make very clear is that when we think about any marginal equity increases in the future, the vast majority of them will be associated with this modernization effort in the operating companies, so those will represent additions for regulated investments.

Okay. And on a separate note, looking at the trends in your weather-normalized sales, you're down 1.3% in the third quarter, but down 1% year-to-date, versus your expectation, but still flat to slightly up for the year.

Just wondering how your thoughts have changed both near-term and long-term when you're thinking about your weather-normalized load outlook?

Well, I think this year is partially explained, at least in the quarter, by the hurricane, which you could technically call it weather, but we don't pull that out specifically and residential weather normal sales were down 2%. I think some of that was influenced by the hurricane and the outages associated with that.

Industrially, it's not been as strong as we thought it would be, but we expect that the momentum for the rest of this year and into 2018 will be stronger. So that number could improve by year-end.

When we think about our long-term forecast, we're still kind of in the low – we always say, I think last year, 0 to 1%, but right now, I think for 2017, we had estimated 0.3%. And we'll update you on our new forecast in our plan in February.

Yeah, and those of you that are into the trivia, during the storm we lost in Georgia 9% of our load; for the month 2.2%; for the quarter 0.7%. So that kind of gives you the magnitude of the storm effects.

I see. Last question.

Tom, also wanted to clarify, you were talking about some tactical moves you can make on O&M as storm and other costs come in. Should we view those as temporary, one-time in nature?

Is there a permanency attached to that? Or how should we think about the O&M cost increase off the 2017 base going forward?

Yeah, Ali, we've been doing this really going back – I mean, I started this back when I was CFO of Mississippi Power, for heaven sakes, but we call it our flexible budgeting system where we identify things that we just have to do, we identify things that we want to do, and then if we had, for example, favorable weather, higher revenues, these are things that we would tee up and only do if we have the opportunity to do them. So we actually kind of fourth-rank O&M and we have a sense of priority over time.

And really, since I've been CFO of Southern, so now that goes back, gosh, a decade or more, we do this comprehensively across the system. And it's enabled us in a very kind of sensible, orderly way where we get biggest bang for the buck to be able to handle variations in the economy and in weather.

And we do that up to a confidence level and it's worked exceedingly well. Interestingly, with the gives and takes of weather, some years are hotter and some years aren't, we're able to satisfy what we think is a normalized O&M spending over a period of time.

So some years it's up, some years it's down, and overall we've been able to deliver the results we need. And the demonstration of that is this reliability we have, the customer satisfaction we have, and the fact that we maintain low rate through this period.

It's been exceedingly, exceedingly beneficial.

Understood. Thank you.

Yeah, sir, thank you.

Hey, Michael.

Hey, Tom. Thank you guys for taking my question.

One on Vogtle and then one on the gas business. On Vogtle, you've still got multiple years of construction left before you complete the project.

Whether it be a project management or be it your contract with Bechtel or others, how do you protect Georgia Power and Georgia Power's partners from continuing to have even more project delays and even more cost inflation on the project?

Well, number one, a lot of the variance in the estimate is already taken out. In other words, 95% of the equipment is already on-site.

We have a healthy contingency included in the estimate, not only in cost contingency but also schedule contingency. We have incentive structures in the commercial relationship with Bechtel.

I think Bechtel has given us an improved productivity set of metrics, which are all showing us since we've taken over the site from Westinghouse and Fluor that they're all headed in the right direction. And that is based on a schedule that calls for six months of contingency.

So, in other words, if you think about it, the filing we're making, it's kind of a 29-month schedule extension. We're providing our own metrics for kind of a 23-month; therefore, a six-month contingency schedule.

All of those things right now are pointing in the right direction. The real key to our success going forward and being able to hit these numbers really is going to go to commodity type of equipment and wire and pipes and stuff like that, but most importantly, the efficiency of labor at the site.

The other thing I'll just say is that this company, me personally, have had a terrific relationship with Sean McGarvey over the years. The U.S.

Building Trades has been a terrific partner in executing Vogtle 3 and 4. They were enormous supporters of ours through this very turbulent period with Westinghouse, and I think they understand that their ability to execute in a favorable way is critical to our overall success.

And I believe that everything they can do to help in that endeavor will be done. So if you line up kind of commercial incentives, improved metrics, the type of work, the kind of cooperation we're having with the skilled labor on-site, I think we're feeling pretty good, but those are kinds of big variables.

And when you think about the commercial metrics, and I don't recall what you put in the public domain on this, is it simply there's upside for Bechtel to finish the project on time and either on budget or even below budget, or is there sharing in the downside where if there are incremental project cost creeps due to inflation or just being able to execute a challenging project schedule is there downside for them where they share in the downside along with Georgia Power, Oglethorpe, and the other owners?

Yeah. Michael, no.

We think we've taken good estimate that allow for plenty of contingency. Their incentive is essentially half of their fee that is tied to both cost and schedule performance.

Got it. Okay.

I want to change topic a little bit to the gas midstream business. I mean, it's been a while since you bought half of SONAT from Kinder, and just curious about whether you're seeing offshoot opportunities now that you've had that exposure, and obviously since you've had AGL for a little bit of time as well, are you seeing offshoot opportunities in the Southeast where there's a potential need for it to move incremental gas, and it requires a midstream solution and you might be well positioned to partake in that?

So we have looked at some other things. We continue to get those questions.

Gas infrastructure is another one of the so-called prominent solutions with the technology revolution provided by directional drilling and fracking and when you just look at the energy values, it looks as if gas is going to be around for a long, long time. And then we're seeing these kind of new opportunities we've done with Bloom, which is a gas feed.

We have looked at some other gas pipelines in Georgia that we can speak to, but so far the kind of big interstate efforts, they haven't hit our thresholds. We did have a placeholder in the original SONAT obligations.

It was over $200 million. I want to say $240 million or so that dealt with an expansion to the Southern Natural Gas system through Fairburn, Georgia.

So we've done that. We have expanded even beyond our initial investment.

Southern Gas already has their own kind of projects underway, and we're executing on those. The big other ones are kind of still out there and I think people are still trying to figure out how to get them done.

Yeah. And the only reason I asked that question is now that one of the major nuclear projects doesn't look like it's going to go forward in South Carolina, it seems that that's a state that's going to start utilizing a lot more gas-fired generation than maybe it previously had and it's had a lot of very, very strong gas LDC demand over the last two to three years, two to four years.

And at some point, there will come a need to move gas in the South Carolina. And it strikes me, you're one of the three opportunities to do it.

Either SONAT goes further east or Transco has an incremental lateral or ACP comes down. I just didn't know if it's premature and kind of the cycle of all these things to even be thinking about stuff like that.

Yeah, Michael, that's a fascinating question and the way that we prefer to think about that is kind of as a region, how do we think this moves? Thinking about that question and its implication for just South Carolina may not be the optimal answer.

Okay. Thank you, Tom.

Much appreciate it.

You bet.

Hello Jonathan.

Hi, guys. Thank you for taking our call.

I just want to – on equity, your slide says the near-term needs are greatly mitigated and I think in Greg's question, you kind of endorsed the word eliminated or even said it, but does near-term mean 2018, or is it just 2017? It strikes me, you've kind of done the equity you were planning in 2017.

So presumably it means 2018, but I want to make sure I'm right on that.

Yeah. There are some details yet that have to be filled in and we'll give you on the next call, but I think you're thinking about it right.

2017 and then a lot of 2018 will be mitigated as well. We'll just have to wait and see until all the moving parts kind of settle down a little bit.

Thanks, Art. And then ...

And that source of equity and CapEx on the other side, we continue on the modernization efforts that are core to utilities.

That's right.

Right. And then just as we tie these things together, I mean, you obviously withdrew the slide you had last quarter that showed the step-down for Kemper but then the 5% growth that you reiterated.

Assuming that you're still – and then it was suggested in another question that you're pointing to the same, that or higher. Just you didn't say anything to that.

I was just curious whether you're endorsing that concept or...

Yeah, we are where we were.

Yeah.

We are where we were, Jonathan. We're still on a 5% long-term trajectory.

Of course, we'll update all this in the – whatever it is, the early February call next year.

Okay. And then just finally on Vogtle, thank you for the productivity metrics that you're showing.

It's very helpful, but can you give us a little insight sort of behind that summary number? Are there some subsets of that or do they all look similar or anything you can provide some extra color there?

Well, I think, Jonathan...

I think you said...

Yeah, I think you want to focus on where our critical path issues are and I think you would define that as the power block. That would be the nuclear island and the turbine building, and that's where we'll focus most keenly on productivity because those are the most important aspects of the unit in order to meet the schedules that we've outlined.

And right now, we're on goal with all those metrics, but you're right, there are different approaches to different aspects of construction around the site.

And it's a fascinating question as we sit through every two weeks or so in these project meetings. A lot of improving the pace of work is involved with opening up different work fronts.

And if you look at our site compared, for example, to other sites, you will see kind of broader expansion, which will ultimately help us in a variety of fronts, not only just putting concrete and rebar and iron on the ground, but also in the regulatory process as we kind of streamline (53:30) and a variety of other things. So Art's right.

I think the critical path for us right now is the nuclear island, but we're opening up a great deal of flexibility by moving on these other fronts, and that provides us a great deal of flexibility going forward in maintaining schedule.

Okay, and to make sure I understand the metric on slide six and your comment just before that it includes contingency. So if you were to hold that metric around 1, you'd effectively bring the plant on six months early.

Is that ...?

That's a 23-month schedule, that's right. And round numbers, fellows, correct me here, but I think if we were to bring it on in 29 months, this is around a 1.4 metric.

So if you're below 1.4, you're not eating into any sort of contingency.

That's helpful. Thank you, Tom.

All right. And I guess just finally, I think weren't we supposed to hear about the fire up of the Sanmen AP1000 by now?

I was curious if you guys have any insight into what may or may not be going on there?

Yeah, Jonathan. We know of no real technical reason why they haven't loaded fuel.

We can only surmise that it's just governmental approvals that they are waiting on.

Okay. Thank you.

Hey, Jonathan, excuse me, let me just be very clear. 1.4 is equal to a 29-month schedule, 1.0 is equal to a 23-month schedule.

If you're in between 1 and 1.4, that means you're in between 23 months and 29 months. I hope that's obvious, but just want to be very clear.

Hello, Paul.

Hey, how is it going?

Awesome.

Great. So just quickly here.

On Vogtle, it seems that there's a little bit more of a focus on the co-owners. I think they're going to be testifying at the hearing coming up.

And I don't recall that and maybe I just missed it. So let me know if – is that unusual or is that a change?

And could you just sort of maybe describe sort of the – there seems to be more of a focus in terms of the data requests, et cetera. I'm just wondering if you could elaborate what might be going on?

Well, listen, this is one of the most important projects in Georgia's economic history. And it was very clear to us, as we've been working through the challenges and now the opportunities available going forward, that we needed to be arm-in-arm.

It's interesting. We do have a shared interest: the co-ops, the munis, City of Dalton, and Georgia Power in seeing this thing through the right way.

And I think that's what that's a reflection of is really a joint interest in a participation.

Okay. Okay.

And moving on, let me ask you this. Do you think there's any possibility that we'll get a settlement in this deflated VCM?

It's always possible. I've said that before in response to questions about settlements with Georgia's triennial filings, boy, always possible.

But it's a great practice, some might say therapeutic practice to allow the process to continue and unfold. It allows everybody a seat at the table.

Everyone's voice is relevant to be heard. I think we'll get the right conclusion whether we settle or not.

Okay. Okay.

And then on grid modernization, this comes as sort of interesting. I'm just wondering if you could sort of comment on perhaps the size of the potential grid modernization that you might be thinking about and the nature and perhaps if there's any tie-in with O&M there, just sort of what you guys are thinking about there and what might be the factors that lead you to go for that or not?

Well, they're directly linked to each other. To the degree we identify additional opportunities there, we'll have to identify the O&M that goes along with it from a timing perspective in order to minimize the impacts on rates.

So one will lead to the other. We have not outlined size at this point, Paul.

We will give you more detail on that on our next call. We're not quite through with our process yet.

Yeah. There's a comprehensive effort across the system to figure out how and when to do these different initiatives.

Stan Connally, currently CEO at Gulf Power is kind of leading that on behalf of all the CEOs, but I can tell you all the CEOs head different parts of this initiative. It's a really kind of exciting thing.

It's a way to modernize the company. And recall, this is really being driven by market changes, both in technology and customer requirements.

Okay. But I mean, when we think about this, is there any type of technological deployment that sort of stands out?

Or is it just a whole bunch of things? And what I meant about O&M, you were talking before about how capital business can save on O&M.

And I'm just wondering whether or not we have any sense as to whether or not some of this might pay for itself or sort of anything like that?

Sure. Gosh, yeah.

And in fact, the whole objective here is to deploy the technology CapEx. I gave the example earlier of kind of reducing physical locations in small towns with a manifold increase in points of presence to customers, making it easier for customers to do business with us and actually improving as a result their satisfaction and ultimately their trust in the company.

It really is a modernization as to how we approach the marketplace, but as you can imagine, this modernization goes into internal systems as well, not only generation and transmission and distribution, but even kind of supply chain, human resource, a variety of the so-called administrative areas. We're really pushing this notion of how can we modernize our operation and improve it for customers.

Okay. Great.

Thanks a lot.

You bet.

Hello, Kamal.

Good afternoon, gentlemen. How are you?

Terrific.

Had a couple of questions. Looking at the potential asset sales that you're evaluating, would you say that market value is at a fair premium to book value?

That's hard to answer. I mean it depends on the asset.

It was certainly fair in Elizabethtown.

Okay. And even with the solar portfolio, I guess, given the yieldco demand and the financial investor demand, it seems like that would be the case, is that not?

Yeah, we believe so. There are investors out there, we think they're looking for passive kind of deployment of capital into 20-year average life assets, very predictable, high-quality kind of cash flows coming off of that.

So we think there's value in the marketplace.

We think those kinds of structures have immense more value than say, a solar asset dependent upon an organized market.

Okay. And then looking at machinations in your equity issuance.

I understand the near-term needs to be mitigated, but looking longer term, where do you see yourself from an FFO to debt perspective at the holding company?

Well, we target that overall of our OpCo, so I think over the longer term, we certainly can achieve that target. That's the stake we have put in the ground in order to achieve and the use of proceeds from these asset sales.

We'll eliminate some equity need, but we'll also reduce debt as well to maintain our progress towards those targets.

And the target coverage ratio, we're aiming at?

16% FFO to debt.

Okay. Thanks for the time.

You bet. Thank you.

Ashar, glad to have you.

Hi. How are you guys doing?

Awesome.

Tom, Art, I wanted to go back to, I don't know if you can remind us some of these moving parts. The detriment from Kemper that was $0.08 to $0.10 that you had provided on the last slide in the second quarter call.

Could you remind us what that was made up of? How did you come up with that number?

Well, it was a piece of the fact that we no longer would have an earning asset related to the Kemper project, and the additional equity need that it would create from the write-off. So I don't have the splits for you, but I think we could get them to you.

$0.05 to $0.06 I think was the earning asset and then another $0.03 to $0.04 for the equity.

That's the round numbers.

Those are rough.

Okay. So now with the equity need being alleviated through some other mechanisms that we have come up with, does that make that $0.08 to $0.10 now of a lower drag as we look forward or no?

No. I still think it's still the best approach towards our earnings guidance for 2018 going forward.

It's still an early assessment yet. And we'll clear that up certainly in the next call, but it's still our best guess as to where we see ourselves going and what we're trying to achieve over the longer term.

Certainly gives us more flexibility with respect to changes in EPS growth and credit metrics. Our idea is to balance that, maintain our long-term commitment to shareholders.

Okay. Thank you so much.

Thank you.

You're welcome.

Hello, Andy.

Hi, guys. How you doing?

Great.

Good.

Just a couple questions. And this, maybe I should know but I don't.

On the asset sales, whether it's the solar or Elizabethtown or whatever else you may end up selling, is there any tax leakage on that, or basically, for whatever you sell it, because of NOLs or write-offs or whatever, that all goes into your pocket?

Yeah. Actually on Elizabethtown, we expect there will be a taxable gain, but oddly enough, it could result in a slight book loss, which is kind of odd, but that has to do with a lot of...

That's not cash, right?

The accretion.

Goodwill.

Goodwill. Excuse me.

Right.

And then, of course, it depends on what happens whether we do a transaction with the solar assets or not, but more than likely that would result in a tax gain as well.

And recall, since we're in an NOL, any taxes due are deferred.

Right.

Okay, so you will be able...

It's free for a period of time.

...to receive cash.

Yeah.

All right. Okay, so in the short run, next couple of years, that's all cash kind of in the door...

That's it.

...for your use. That was my question.

And then...

But a good time to ...

On that one, and then just thinking about kind of what you've been doing recently with various cash raises. Is one way to think about this, again, maybe I'm getting ahead of myself, but obviously you're talking about grid mod and we're going to get a revised CapEx forecast in the fourth quarter, but are you kind of getting rid of assets that are maybe not earning the same type of return that you would be able to earn on the regulated side, and so we probably should expect some type of significant cap raise and this is a way to redeploy the capital?

Or am I getting ahead of myself on that?

Well, we always look at who's the best owner of any asset, and that goes to whether we buy it or sell it, right? So we always kind of take, and that should be viewed as a long-term look, okay?

That's not a tactical thing. And we always also are very mindful of our impact with all the external publics that we face.

So for example, when we even considered Elizabethtown, and like I said, on the day that we announced the AGL Resources merger, I got calls. So that was always an attractive asset in the market for a variety of folks.

So as we think about going forward, it's going to be the combined math of all that. It really is kind of opportunistic, where do we think we are going to be in the next 5 to 10 years with that asset.

Where will somebody else be? And remember, that's not just returns, that's risk and return.

Value accretes to a function of risk and return. If we can reduce risk and improve returns, that's a home run.

That's what we're trying to do, is just balance the portfolio.

So really, it has nothing to do with some future CapEx opportunities at the utilities?

No.

Okay. I thought maybe it would be, okay.

And then my final question basically has to do with, when you give 2018 guidance and, again, don't want to get ahead of myself there too, but that will be off of – that's 5% where you reiterated. Will that be off of 2017's earnings or is there potentially some type of small rebase because of Kemper or something like that and then it would be off of that?

Yes, exactly. I mean the math that we've shown before, you take 2017, you grow it 5%, reduce $0.08 to $0.10, grow that at 5% forever.

That's kind of (1:08:38).

Okay. Got it.

Thank you very much.

You bet. Thank you.

Hello, Steve.

Yeah, hi, good afternoon. Hey, Tom.

Just one question on the – I guess, it ties in with the growth rate, but also with the Vogtle monetization and Toshiba monetization. Just you have this ROE reset thing that in 2021 for a period until the units are up.

Can monetization in some way help address that and just how are you going to deal with that in like a growth rate, are you not going to look out to that period? Because it's temporary anyway.

Our 5% long-term growth rate, it depends on how that resolves itself. Whether those two units are treated the same way or whether you split them or how you deploy the cash.

There's a few moving pieces in all that, but any consequence of, if we keep the settlement as is and we travel through, you will have just a brief divot in 2021 and 2022 , but you're back to the 5% when those things clear to in-service. It just looks like a year or two of underperforming against the 5%.

But they clear to service, you're right back at the 5%. Our long-term growth rate is 5%.

Okay. And then just is there a way that if you're able to get some of the money and kind of delay getting above that cost cap that you could limit this period.

I mean obviously if you get the plants up sooner, that limits the period but...

There is no cost cap per se.

Okay. It's all just based on timing.

Yeah.

That's correct.

That's right. Hey, Steve, the other thing.

I just want to be very clear about on this 5% and all that. We have been increasing dividends in a regular, predictable and sustainable way and that's because we believe in our long-term growth rate and even with the challenges that (1:10:54) at Kemper County, we increased the rate of growth from $0.07 to $0.08.

We are setting our – of course, this is ultimately the purview of the board, but ultimately our dividend policy is set on a belief of the long-term 5% trajectory, so any kind of one year deviation due to a regulatory construct won't have an impact per se on our long-term dividend strategy. And that ultimately is what drives value.

Okay. And then just, I'm curious, maybe you talked about this upfront, tax reform.

I'd be curious to kind of your view given you are so close to it. How you're feeling about the outcome coming out in a way that like some of the utility sector issues are addressed the right way, I guess particularly the bonus and interest deduction.

Yes, sir. So let me first say that Kevin McCarthy, Kevin Brady had been terrific in really pushing this thing forward and certainly we've met with all the folks in the Senate.

We understand and gotten the support in the White House. Here's my best guess.

It's worth a cup of coffee or whatever, but let me be parochial. Production tax credit.

I believe that there is unanimity in Congress in the House and ultimately in the Senate. I believe we'll get treated fairly and we will get either the timeline moved or eliminated for production tax credits for Vogtle.

Now stepping out of my parochialism, for the industry, I think we will follow what was done in 1986 and that is I believe that we will not be accorded expensing of CapEx for public utility property as was originally defined back in 1986. And we will follow some – what we came up with back then was ACRS – but some ratable depreciation schedule for taxes kind of as we have now.

And in exchange for that, we will retain the ability to deduct interest. That's where I believe we'll go out.

Okay. So it's kind of a carve-out for the utility industry...

Which has existed since...

...to reflect its unique rate-making.

Yeah. And it's been a very sensible kind of engagement with Congress and these guys have been terrific in listening.

Do you think the House will...

I'm sorry.

Will the House come out with that you think since this will be our first look at the bill.

Well, let's see. I mean I'm guessing right now, but I think it will.

Okay.

They're giving us a big benefit. Look I get the benefit of expensing CapEx.

It's just that our deployment of long-term capital is dependent largely upon generation and transmission and environmental expansion plans. We don't sway those one year or another based on tax benefits for heaven's sake.

Those are really put in place over decades really. However the elimination of interest deductibility has an immediate negative impact on customers' cost of energy, so they're giving us a benefit with capital expensing that really isn't a benefit and they're hurting customers in the near-term.

Especially energy bills tend to be the most kind of regressive form of tax. So the trade actually pays for itself.

Let's keep on the tax depreciation schedule for CapEx and let's retain interest deductibility. Congress gets that and it's really important for the most capital intensive industries in the world.

Okay. Thank you.

You bet.

Hello. Thank you for joining us.

Hi. Thank you and thank you for the marathon session, so appreciate it.

Always happy.

Yeah. So the tax reform point was actually very helpful color and perspective.

Just wanted to understand that if what you're saying plays out, and basically it's an interest or tax rate deduction or tax rate comes down, right, let say it comes down from 35% to 20%, the deductibility of interest expense at the holding company that tax shield will also then effectively come down?

That's right.

What does that mean for Southern, like are you looking at the holding company debt right now, and are you evaluating this – I saw in your plan you actually increased by $500 million the holding company debt. So wanted to just figure out how you're thinking about holding company debt given the tax reform and given the tax rates might actually come down.

Yeah, look it's a simultaneous equation. I mean, you've centered in on some important stuff.

But boy it goes to greater net income because more of it or less of it is subject to taxes. Overall, we believe this is a fair trade for the whole industry including Southern.

The other thing that's an impact to us is any sort of carry forward position or unused tax credit position gets extended with a lower tax rate but we've factored every bit of this into our financial plan.

Got you, and fair enough.

The other issue around the debt is junior subordinated debt, which will add some equity characteristics to it, from a rating agency perspective it's more friendly.

Got you. Thanks.

So, it will help you with your FFO to debt targets as well?

Yep.

Got you. And also in terms of the sale of this minority interest of solar projects, wanted to understand were you referencing that the sale price you potentially could get for the one-third interest sale would be higher than effectively your purchase prices for the same assets or have market prices been about the same?

Yeah, hey, you know what, we had a huge argument internally about this. We've all agreed, we're going to let the market kind of dictate what prices are.

We really would prefer not to get into any sort of market valuation of where that may get.

That's right.

We'll know soon enough. So thank you for your patience there.

Yeah, that's fine. And then just finally on that point when you get the proceeds, is there any plan to pay down part of the debt for the projects associated that are being sold.

So, if you're selling let's say one-third of a project, is one-third of the debt going to be paid down as well or is the debt going to stay at the full level?

Yeah, we finance even at Southern Power, we finance on a portfolio basis. So they've got 45% equity ratio.

We would use proceeds to reduce debt and equity.

And you got to understand the way we finance Southern Power is apart from say project financing, it's a much simpler approach and gives us a lot more flexibility than say a project finance structure.

Got you. Well, thanks so much guys.

You bet. Thank you.

Julien, how are you?

Hello?

Julien?

So, let's talk quickly here – I'd love to hear little bit more about the monetization here on the Southern Power side. Do you have any metrics that you might want to think about?

I mean, you all talk about net income historically, but I suppose in the other side of the world we talk CAFD, we talk EBITDA. Any kind of sense initially on how to try to size this up?

I know we're early days on this, but maybe kind of a consolidated basis, take a one-third of whatever metric you want to talk about?

Well, I think, Julien, the way we like to talk about it is we think there could be up to 26 solar projects included in this. There may be as much as 1,700 megawatts and these are 20-year average contract lives.

We just think that the cash flows for a passive investor, there's lots of interest in that, and that's kind of the target that we've outlined here.

And the other thing is, yes, we do talk net income because that translates directly into EPS, which translates directly into the stock value. We stay away from cash metrics.

We tried to do something that's easy for people to value and if you look at Southern Power's track record, historically, they regularly beat their internal objectives.

Got it. Should we think about...

As they did this year.

Absolutely. Let me check with you on this, I mean, is there something to be said about perhaps an acceleration on this business given the confidence or should we be thinking about this as kind of taking down the expectations thereby and sort of linearly saying, I'm going to sell down a chunk of this business and we'll swap that out with earnings elsewhere?

We'll go through this in detail in the next earnings call, but what you should expect is that Southern Power will contribute its previous share of EPS growth that it has all along. There is not at all an increase or a reduction.

We are keeping exactly with the plan that we laid out in October of 2016 in terms of EPS, contribution to Southern Company.

And our intent of selling this portion of solar assets is a one-time thing. There is no ongoing right that we would like to offer to that owner to buy future additions to the solar portfolio.

Excellent. Coming back to this earnings question.

Obviously, the gas storage assets have value to them. Maybe not necessarily reflected in kind of a traditional net income metric.

How do you think about that part of the overall gas business? I mean is that ultimately in the long-term core, if it doesn't turn around and what are the prospects for this across your specific storage footprint?

We don't think it's significant to our earnings picture, is the short answer. Hasn't been, don't think it will be.

Okay, fair enough. Actually, and then maybe, if I could try to summarize a little bit of what folks have been asking the last, almost hour-and-a-half here, can you give us a little bit of a sense of the big positives and negatives in terms of the cash flows that you're looking at against the equity need that you'd originally articulated?

Because you are obviously talking a lot about cash raise here, and not necessarily talking about big uses of cash outside of novel modernization program. Can you just maybe try to summarize that a little bit for us?

Yes. I mean, I don't know, I mean the pluses are the fact that we were opportunistic in the market.

We found a terrific buyer for Elizabethtown, and like I said, we had interest in that well before we had any equity need that Art started talking about. So that was really a culmination of a series of discussions over time.

Southern Power, using tax equity, certainly has an impact on our equity needs going forward and we're able to maintain our EPS contribution to the overall 5% growth rate of Southern along the way. The other thing is the sale of minority interest of the Southern Power solar portfolio, it's certainly another cash raise that will be I think interesting to us.

The monetization, as Art said before, the Toshiba guarantee, is really a time issue. In other words, we would have gotten that over 3-plus years, now we'll get it in a lump sum.

So that's just timing. In terms of equity needs, I think it's whatever's associated to support the credit metrics and Mississippi Power associated with Kemper.

Whatever we end up with approving with the Georgia Public Service Commission on Vogtle 3&4, and then the increases in CapEx and decreases in O&M associated with this business modernization plans in the OpCos. We will add all those pieces up, the puts and the takes, and have them in the financial plan first quarter next year.

Great. Thank you all very much.

Really appreciate it. Good luck.

You bet. Thank you.

Thanks for joining us.

Hey, Dan, thanks for joining us.

Good afternoon. So most of mine have been answered, but I have just a couple more around Vogtle.

In particular, one, I was wondering given the hornet's nest that's been stirred up in South Carolina, wondering around your VCM schedule with the Commission in Georgia, are you seeing any uptick in terms of the activity or aggressiveness in terms of interveners in that case?

Dan, I bet you can read that both ways, right? Certainly, we have to be aware of and responsive to any of the issues that come to Public in South Carolina.

I certainly can't comment on any of those for them, but I certainly can for us. The good news is that we've had this processed.

It's VCM processed. It's proven to be such a blessing and the way we have worked with Dr.

Jacobs has been so terrific. As well, every VCM process we've invited.

It's been a welcoming kind of exercise to have any and all the interveners participate in what is now VCM 17 for heaven's sake. So this has been all a good process, and so I don't think we've had these kind of surprises at the Georgia Public Service Commission.

So in general, I think we've been thoughtful in the process. The Commission has run a terrific kind of regime in evaluating Vogtle now over the years, and I think we have a thoughtful way to proceed and I think the other thing, just to be clear, when you look at the broad public support we have, whether it's statements by the Commission or the Governor or the legislature or the public polling that we do, our position is widely supported here in the state of Georgia.

And I will say, we've had tremendous support out of the federal government. You should know that I think at the federal government level, our continued participation in Vogtle really does have significant national security concerns, and I think that's why you've seen such terrific support, and loan guarantees and support for getting the production tax credit through.

We'll see how that ends up, but a host of other issues, the NRC, I should be very mindful to thank them and streamlining the ITAC process. We've eliminated a lot of the tests, or consolidated the tests, I should say.

And we just continue to get great kind of support going forward. We still have to execute.

There's still risk on the table. We completely get that, but boy, oh boy, I think this is a good external environment in which to move forward.

Okay. In response I think it that was to Michael, when you talked about, I know the productivity – you mentioned, I think, that 95% of the components are on the side, I was curious what are you still waiting to receive, commodities mostly?

Dan, most of those are commodities, wire, just equipment necessary to complete the construction of the assets. So, most of the major components are on the ground.

So none of the things are being...

Not that I'm aware of.

...whatever. Okay.

Yeah, your turbines are there. Panels are there, all the big stuff.

All the shield panels and whatever?

Yeah. Steam generators, all that big stuff is there.

Okay. And then just to verify, I think you mentioned a little bit, the nuclear island and turbine building.

I was wondering if you'd give a little more detail on what kind of the fourth quarter or before your next earnings call, what are the critical path items that are kind of scheduled for this next three months or so?

Yeah. Dan, we've got a slide in the appendix, I believe.

It's slide 13, that we'll outline a lot of that stuff for you, both the near term progress items and then horizon projects. And it outlines them for both Unit 3 and Unit 4.

And I think as Art said earlier, when you look at these kinds of things, when you see words like containment building, that is kind of pointing to critical path items.

Correct.

Okay. That's all I have.

Thank you.

Thank you, Dan.

Thank you, sir.

Yeah, I just want to thank everybody. It's an exciting time, and thank you for your patience.

I know we got a lot of positive activities going on right now and I know some of those positive activities are not going to be dimensionable until they're executed. We expect to see a lot more information on that in the next quarter and certainly, by our next earnings call, we'll have a much more thorough explanation as to the gives and takes and what that means to our growth rate going forward.

We feel very confident in our path. We're excited about the future and we appreciate your attention and participation as an investor.

Thanks very much.