Aaron Abramovitz - Director, IR Tom Fanning - Chairman, President & CEO Art Beattie - EVP & CFO Paul Bowers - Chairman, President & CEO of Georgia Power Steve Kuczynski - President & CEO of Southern Nuclear Stan Connally - Chairman, President & CEO of Gulf Power Mark Crosswhite - President & CEO of Alabama Power Drew Evans - CEO, Southern Company Gas Buzz Miller - CEO, Southern Power

Julien Dumoulin-Smith - UBS Ali Agha - SunTrust Andy Levi - Avon Capital Michael Lapides - Goldman Sachs Paul Patterson - Glenrock Associates Steve Fleishman - Wolfe Research Jim von Riesemann - Mizuho Mike Weinstein - Credit Suisse Paul Debbas - Value Line

Thank you all for joining us for Southern Company's 2016 Analyst Day. In just a moment, I am going to turn it over to Tom Fanning, Chairman, President & Chief Executive Officer of Southern Company. Let me remind you that we will make forward-looking statements today in addition to providing historical information. Various important factors that 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 and in this meeting. Reconciliations to the applicable GAAP measure are included in the financial information and slides we released this morning, and available at investor.southerncompany.com. And with that, Tom, you’ve got the floor.

Well done for the fascinating prohibiting segment right there. All right. Hey, welcome everybody. Thank you for being here. I know you could be a lot other places, and I know it's a busy day. So we appreciate you investing your time here. We have a great agenda, I think. One of the things I want to you know has been, especially 2016, has been last 12 months hyper-active at Southern. I think we’ve, from the times that I’ve talked to you in the past about the ebbs and flows of earnings, from the challenges we faced, from the event risk and everything else, this is a period where, in my opinion, Southern is as good as it's ever been. And in fact, for the first time ever, we are extending our notion of what is long-term growth. We have great transparency, great space, in what we’re able to deliver. And in fact we’re getting to a point where it's going to be a little hard to knock us off of what we could do. I must repeat what Aaron said, I can't, to tell you what certainty what the future will bring and everything else. However, I believe Southern Company is positioned as well today as it's been in my history, and that goes back a long way. Let's go on to my stuff. So much of what you hear around our industry is not based in that. You get all day long and you live in the idea as we do, our competitive intelligence group at Southern, with models and we are trying to identify what the ebbs and flows of the Company will, and what the risk tolerances are, and everything else. I must say that what makes Southern unique is our how’s it's not our what's? And you say while the how’s come on it in so many respects, the bunch of pabulum or whatever propaganda, it's not, it is fundamentally important. You may remember when I was CFO, people kept asking me how can you have such constructive relationship. It is because we believe in the dogma of customers in the middle of everything we do. It is the face that if redeliver the best price, 12% now below national averages, the best reliability we do by a wide margin, the best customer service, the top core customer satisfaction utilities in the United States by our customer value benchmark survey are ours, the top four. Then Southern Company earns a constructive relationship. And by the way, when we did Southern Company Gas, now the AGL Resources, one of the things always worried about was a peer group that Southern Company is greater in Southeast and we can just go anywhere well in fact AGL Resources under Drew's leadership and that whole chain there also earns terrific relationship with their regulators so there when we came to Illinois they talk about getting that deal approved in New Jersey, Maryland and Virginia. Some of them again they already had a dead rock of a reputation of a great company and we stepped in and I think it followed through very easily. So when you think about the event risk of trying to get something approved it's not about listen they are saying that it's time to look at my spread sheet it's all about personal relationships. When you think about the relationship we have with the DOE and how we were able to help with getting more funding to care for. It's all about relationships. We are active in Washington. We are active in every state in which we do business. And we are active whether we have a transaction in front of them or not. That is the way we do business. At the end of the day, based on our values, what we believe is that we must be a great citizen wherever we serve. We must make the communities better off before because we’re there. And we do that relentlessly. That is the Company who Southern Company is. That matters in long-term success. Don’t ever underestimate that. So I'm going to move away from the how’s, but I'm telling that is the bedrock, that's why that's the first light-up here. Then now I'm going to tell you why I believe Southern Company is good positioned as it's ever been. And it really goes to this. Southern Company have had this terrific dogma again of having exceedingly low risk, now it's now without, but exceedingly a low risk and regular, predictable, and sustainable earning. When I look at history and if you look at in on an X-basis adjusted, what have you, we are one of two companies that has in-history never missed our projections. And we have the narrowest range of just about anybody out there. What I'm trying to tell you is why I can't say that's going to happen in the future, I believe it will, but I can't tell you that it will, who knows what will happen. But some have begun, we are conservative and when we tell you something, it's what we believe and we follow through on it. You saw earnings today. We're going to have a great year this year, I believe. But its' all predicated on this model. So if you look at 2015 just about all of our earnings are under the state regulated electric utilities and we have earned constructive regulation in each one of those states. I would argue it's the best franchise in the United States. Now even beyond the state regulated electric utilities, we have Southern Power, which has provided long-term contracted business models. In other words, long-term bilateral contracts, credit worthy counterparties, no fuel risk, no transmission risk. We are replicating the same business risk in that model. You know we don’t believe in the merchant model. We don’t like that stuff. We don’t chase that. We don’t do crazy transactions. We stay right in the middle of the road, low risk, regular predictable, sustainable. And as a result, the TSR that we deliver I think is high quality earnings. Now we've been really busy in ’16 and always smoke, we added a gas company. We added a pipeline. And we added something called PowerSecure, what’s all that about. Well, before I get into those transactions, let me just assure you that the business model is the same. In other words, we’re replicating, we’re continuing, let me say, the Southern Power business model on steroids, good haven’t. Two years ago, we did $800 million of CapEx, most being renewables at Southern Power. A year ago, we did $2.5 billion. This year we’re doing $4.5 billion. But that’s not going to continue. It’s going to be more like$1.5 billion going forward, we’re pivoting towards one. But we’re not moving away from the long-term bilateral credit worthy counterparty, no fuel risk, et cetera, et cetera. The 5% there is even interesting. And I know they said 5% state regulated long-term contracted. I would argue the predominant amount of that 5% is as well. So, for example, Drew Evan, CEO of Southern Company Gas will show you that one slog of that 5% is our Georgia Natural Gas subsidiary. That is in the retail gas business in the State of Georgia. But, son of a gun, that is not a volatile business. If you look at it year-over-year, over-year, over-year, it is regular, predictable and sustainable, okay. It is not a very volatile business. The other thing that’s in there that also makes up a big slog of what is that 5% is PowerSecure. You may have seen last week we were on slog five coming out a little bit of a media day, the idea of a strategic venture with Bloom. So, we invested around $400 million in the Bloom effort. Those contracts are likewise, 15 years long. The best companies on the other side, credit worthy, we featured in that presentation, Home Depot. And you heard Carol Tomé, the CFO of Home Depot, talk about how important it was to have this notion of a distributed infrastructure business. In this case, the Bloom technology married-up with the proprietary storage technology that Southern, mean that PowerSecure provides. And we think there is a lot of follow-on business with this notion of long-term asset contract. So we’re following exactly the same model. Just because its grain, just because it's not part of 95 doesn’t mean we’re not staying for the same dogma. Now, I could take you through a lot of detail. And in fact, what Southern Company does, we take around the management counts. We actually work hard and I do this with my Board and as well, what we called our beliefs. Now this is like the tip of the iceberg. We actually take the whole company through a very in-depth set of belief around how we’re trying to run our business. What will the future bring? And we typically look at two kind of timeframes here. One timeframe has been dealing with around the year 2025. What do we believe the near-term impacts are going to be, and then we go on to 2040-2050 kind of environment, and why is that matter. Well, we’ve always tried to start with what is the correct long-term answer. And then we make the short term work. This is not a company that chases quarterly earnings, or even annual earnings. We really believe in the sanctity of long-term planning and we try to build our business in that way. Now, all of us know that it’s hard to figure out what’s going to happen next year, much less than 10 years from now. And haven’t forbid what’s going to happen by 2050. But we do know there are execrable changes that we must provide options to face. That is, we know, that there's a trend in the United States to a low or no carbon future. Southern Company is doing more than anybody in the United States to prepare for that future. We know that while the Clean Power Plan right now is under legal review, something like that may emerge. And we stand ready to play offence in that environment, not defense. We know that technology is changing at a pace faster than any of us, even as you're sitting here, no. We know the customer requirements are changing, see Home Depot. Now we could try and stop it. I'll have to say keep the ways-off the beach, or we could figure out a way to create options, not big bets, little bets, that will enable us manage whatever risk comes. We know it's coming in an effective way. There's nobody else in the United States in our industry doing these kinds of things. And I'm very proud of that. Let me go through these real quickly, you must know that there's a wealth of robust thinking around this. And we do this annually, formally. We do it regularly on an ongoing basis. Real quick, nuke. So this is the generation side of business. Let me go through them quick. We know, if you believe in a low to no carbon future carbon in America that nuclear is really important. We're proud to be leading America in building Vogtle 3 and 4. It's going great. It's going to be really hard to build new nukes. Now, we'll create options to build new nukes. But keeping our hands in that is really important. And we are doing beautifully in the new nuclear that we're building at Vogtle 3 and 4. We'll see how that emerges in the future. The next one is coal. We're advancing 21st century coal. We know we've been through our bumps and bruises on that but son of a gun I’m proud to tell you today that it is working right now. Unit A is producing electricity right now using syngas. So, the technology works. We know that there's regulatory work to do to get it finally and right, and we know that's a big challenge. But otherwise, the technology works. And we're thinking about while it may be hard to replicate that elsewhere in the United States, using that technology in our view, licensing it oversees, we've struck agreement in Serbia, Romania, Poland, South Korea, China, this technology is relevant elsewhere. Otherwise, without this kind of forward thinking in terms of using coal with advanced technologies, the most advanced in the world that our proprietary robust research and development arm has created here at Southern. We know that certainly coal will ebb as an generation resource to the future. So, then you look at renewable. We're one of the biggest owners of solar in the United States. Remember, strategically, we saw that that had some relevance back in the Southeast, that with our first way to invest in renewables. We weren’t an initial mover in wind because it was not directly applicable to the Southeast. And what you've seen the intervening years, certainly during my tenure at Southern as Chairman, is that all the sudden we're starting to buy wind over the wire, Georgia Power, Alabama Power, Gulf Power, all now buy wind resources over a long-haul transmission. And so we've gotten in that business. And we're making a pivot now away from solar. We'll still do some solar. But away from solar in the wind, and we'll talk about that later. When I think about now the future issues around renewables and around base-load, gas becomes a dominant solution. On our own, forget Southern Gas, on our own, we were about the third or fourth largest consumer of natural gas in United States. That’s the transition of the fleet. Remember, before I took over, we were about 70% coal, 16% gas. Now, I don’t know, 48% to 50% natural gas and about 28% or so maybe 30% coal, depending on the weather. Probably when our coal assets are little more than we thought we would, just because we had an extraordinarily hot summer. But it is clear that gas is becoming more important. And when I think about the future, it's actually Clean Power Plan and everything else. We know that renewables have intermittency. And we know in order to handle intermittency, we need BTs. And by the way, coal is probably eroding in importance as a base-load facility. And it's really hard to build new nuclear. And so, we’re losing base-load that will lead more CC. And those CCs will run harder than they ever have. And you know our capacity factor during the third quarter of our CCs was nearly 80%. They run like champion, the best reliability in the United States. We can do this stuff, that’s where make is going. And the other thing is when I say with nuclear and coal and renewables and natural gas energy efficiencies the cleanest kilowatt hours, the one you never consume. Son of a gun, we know that technology enabling, customers requiring, we will jump over the meter, what has formally been make, move, and sale then to a meter and then a customer does something on the meter. We now put make, move and sales on the customer premises. And son of a gun, PowerSecure was our bet there. We have a small bet for us. But we see a tremendously evolving market. And my sense was the worst thing we can do, the riskiest thing we could do in that environment, is do nothing. You will see that our projections going-forward for energy sales is declining. This model you will see, this 5% growth rate, is based on 0% to 1% energy sales. We are robust within that range. And we’re adding 1% new customers. That says our energy usage is either zero to negative 1, that’s what our model, that’s what our 5% highly confident projections are based on. If that is happening, what should we do? And so what we have done is made a reasonably small bet with PowerSecure. Now we just added Bloom. And we are seeing more and more is the ability to recapture some of that share by having assets on the customer premise, long-term bilateral contracts, credit worthy counterparties, the best customers you can think in the United States, people, especially that have pristine reliability requirements. Now, at least at this point, we are not able to say who all they are, Hope Depot, came out. But think about other companies in the United States that have the most pristine reliability requirements. You know who they are, if you think about it. We do business there today. And what we are doing is building a business for the future. Again, that is regular predictable and sustainable. In the move side, we have always -- if you guys look at our CapEx program, good happens. I mean, we have for years, spent about $1 billion year on CapEx on the T&D business. And we’re continuing that. We are not in some -- I remember after the blackout in the Midwest and the Northeast this was a build rigid instead of third world transmission system, garbage. If you look at Southern Company’s operation of the grid, it's terrific. And we’ve been an early adaptor of things like smart grid. And we’ve done an early adaptor of smart meters and all this stuff. I mean we’ve done that forever. Now to add to that the idea of move with a distribution system, buying AGL Resources now, Southern Companies Gas. We bought the best LDC, the biggest LDC in the United States. And when you look at Atlanta Gas Light, the LDC that covers Georgia, think about the synergies. And when you think about the notion that they’re able to show a tremendous growth rate, 10% or so, into the next decade, these are under safety related pipeline replacement programs under tariffs. This is not risky business. This is not some crazy I’ve got a placeholder out here. This is business we should do as America and we’re doing it. And by the way, when you look at strategy and you look at more of the move segment, as the third largest consumer of natural gas, now we’ve added AGL Resources, now certainly going to be a wholly smokes for the most important natural gas company in United States. We know that pipelines have been a big deal across the United States. And the two theories I’ve talked to you about; one was north to south kind of Marcellus to the south; and the other was west to east that cheap gas out there in Taxes, in Oklahoma, in Arkansas, and a variety of other places, and bringing it east. And so we’ve been looking for some time at pipeline deals. And we’ve kept in contact with all these folks, all the time. I talk about this relationship business. Rich Kander and I probably visit once in a year, comes to my office, sit around, drink coffee and yuck it up. And among all the transactions that we looked at, striking a strategic relationship with Kinder Morgan with the Southern Natural Gas pipeline made perfect sense to us. It is replicated in these financials you will see. To us, it looks like an annuity. It is strategically located. It gives us an option for future growth. The projections you will see include virtually no future growth. We’re not depending on any kind of huge new pipeline deal. We’ve talked about options and we kind of know the transactions we’re adding on, but they’re not enormous. They’re not big. You’ll see this stuff later. When you add, Southern Natural Gas into the Southern, we put it under the leadership of Drew and his team in Southern Company Gas. We think that is a terrific business for us. Now, when we think about adding Southern Power all that we have a real good foundation to grow. But that is basically our move business, the selling consume really goes to PowerSecure. This notion of technology and they covers and require, playing-offense, long-term contract. That is what we believe. We will continue to focus on R&D. Before I’ve gotten this job, R&D was all kind of, not all, but majority and Larry Monroe, where is Larry? Right there. Larry was voted the 16th most important guy over the last 25 years in the industry, and he runs our R&D effort. That’s essential that who we are. In the past, our R&D has been focused on protecting coal, environmental controls and they’ve done a great job. The R&D now has been very oriented to the future, and thinking about how we can make electricity viable and grow in this digital edge. So, before I got here, we were generation, we were wholesale transmission, distribution customer service. And now we basically occupy the full value chain. When I think again about the strategy of make, move and sale, nuclear, coal, natural gas, renewables energy efficiency, we’re replacing our big best, just look at the CapEx. It's in natural gas input structure, not the commodity. And it is around renewables. That is where we are making our big bets. I think those are darn good bets. We're creating an option on the far right side of this chain. And I think it is a option well-placed. So, when I say we’re in as good shape as we've been in some years, wholly smoke, we're showing 5% growth. Remember even when I first started as CFO, we were building Vogtle and building Kemper, and spending CapEx and compared to our net amount of capital, we’re able to talk about earnings per share growth rates in the 5% to 7%. And then as we got bigger and the CapEx started to wane, our growth rates started to get smaller. And then we had bonus depreciation. And then we dropped our earnings per share growth to 3% to 4%. We didn’t sit here and tell you we're just going to fill it up with stuff we don’t know what it is. We always tell you what we believe. We were 3% to 4%. With natural gas, with Southern Company Gas, we did -- we increased it up to 4% to 5% and with sauna and PowerSecure. And unexpected success with Southern Power, we’re able to say to you now. We are robust, 5% long-term growth rate. Now, not 5%, you all know that, that's a number, that’s a point, that's equilibrium. Equilibrium is the point in time in which you move through. So we’ll be around 5%. But 5% is our best guess as to where we're going to go, not 4% to 5%, 5%. And because we've done so much in 2016, or actually last 12-months till now, we have removed a bulk-load of event risk from this projection. Let’s just go through it real quick. Southern’s high growths opportunities I told you $800 million to $2.5 billion to $4.5 billion, and now buzz our estimated for the foreseeable future for the next five years about $1.5 billion. Is there upside to that yes, maybe? So that means going 5% is better. I think we’ll do the $1.5 billion. When you look at -- I'm an old finance guy, 40% of my career at Southern now, I'm 36 years in Southern, I always felt I'm getting older. But it was in the finance side. And I used to say, I actually went to Harvard and did all the stuff and one of these programs. So there is no value creation in finance. Always people want to sell you stuff. The investment banking community loves to sell you pots and pans, and they tell you, you could do yiled-cos, and you do MLPs, and you can do this and you can do that, garbage. We believe in fundamental finance. I will argue, however, in my experience for the first time, the finance group here at Southern has actually created value. And what they've done we made a little bit of a bet around AGL. We did a cash deal. Now some people ran around and said oh man you are just levering up, garbage. We have reduced and preserved the financial integrity at Southern. We've replaced the equity. We have coverages that are attractive going on. The op-cos are doing fine. Southern Company has an attractive credit profile. And so, we've replaced that equity, we're moving forward. We did landmark financing. And when you think about the creativity at this Group, these were creative deals but they were not crazy, trendy, sexy deals. We rather identified pockets of investors in which to create room to do other financing. And when we did this cash deal for AGL, we replaced the equity at prices better than we thought. And when we did the debt deals, we did debt deals better than we thought. And we did it in a way that now somebody help me here, what’s the total debt portfolio at Southern, how big is it? How many billions? $41 billion, 3.9% cost with a 16 year or so average life. Do you have stuff in your seat? You will show that as the best debt portfolio in the United States in our industry, hands down nobody even close. From an EVA standpoint, what a time to raise $20 billion, maybe we’re lucky. But in this case, I think we were lucky and good. Let’s go forward to some more of that. Southern Company Gas we already talked about. I think it’s a 10% growth business. And I think that with our investment under these regular, predictable, sustainable, regimes of safety related pipeline replacement programs, we’re going to continue to do well. SONAT is an annuity that gives us an option for future growth should we chose to exercise it. Plant Ratcliffe, thanks the lord, today, we are producing electricity on that first of a kind technology. We have passed the test, I think, that it will work. Now we still have to go COD, and we get that, and we’re projecting today that our best estimate is November 30th. But we’re moving ahead. You can see it working. And now our attention will focus to getting in it right, that conversation has already begun, how we’re going to do that. And then Vogtle. Let’s talk real quick. We just had a very important settlement that was reached agreement with the stats, subject to commission approval. Paul, do you want to say anything about that?

This is Paul Bowers, CEO at Georgia Power. So many of you already had some conversations today with us about that settlement in page 24 in your book you’ll see an online of what that really means. It reemphasize what Tom said about the constructive regulatory environment, trying to de-risk, if you will, the future of Vogtle construction as we go through the process. Go back to last year. We had the litigation, settled the litigation, which gave us the opportunity to have a conversation with Public Service Commission in George about prudence. Going through the last nine months or so, we were able to have an agreement with staff that is outlined on our page 24, which really gives you some idea of what we’re going to do with this plan associated with the additional calls, and associated with $1 billion. So that really has de-risked, given there’s certainty about what we want to do with this plan.

And let’s reinforce the head line on Vogtle that we are relentless about. It is the notion that when that plant was ordered to be built, we thought it would be a 12% price increase. We still believe that it's going to be somewhere at the end of the day, a 6% to 7% pricing.

Exactly right.

That’s it. And it’s gone beautifully. And we’re on schedule.

Absolutely...

And we’ve gotten the litigation settled. We’ve got an increased cost associated with that litigation approved. Well, not approved yet, recommended to be approved by the commission.

So the commission will -- the staff has made the recommendation to commissioners while take it up hopefully before the end of the year, and vote on stipulation.

Thank you, Paul. Steve Kuczynski, runs in my opinion the best nuclear fleet in America now. Steve, tell us about the progress on 3 and 4.

So progress on construction, getting it built is going very well. We are particularly encouraged about our progress on the second unit as expected. First unit tackles the new construction challenges, and we leverage those learnings over into the second unit. And we're service, as we typically would, expect on a major construction project, a very strong improvement productivity and construction progress. So, we’re retiring risk in construction and we're retiring risk in operations. And we're fortunate to have the same technology, the AP1000s, being started up in China. They're exactly two years ahead of us. So, two years from now, we'll be in the exact same spot they will be. And they're progressing through start-up, looking to load-fuel here in the next month or two. And that is progressing as expected. So, we're bringing down risks on both construction and operations. And we have folks on the ground full-time in China, watching that start-up. So, we get the best learnings out of that. And the key individuals out of Westinghouse house and floor that actually built the plant in China, they're sequencing two our facility in order to bring that additional expertise to make sure we're successful. So, I think we're well positioned for our June of 19th and June of 20th, bringing these units to operation.

Fantastic, thanks for that. Acquisition of PowerSecure, so you've seen the material, I’ve always asked -- one person ask me, why are you talking about PowerSecure if it's so small? Interesting, how much secure is this window on the world? And we thought it was an important small but important bet, nevertheless, for us to make. And that is I'm not just going to let these sales erode, 0% to 1% is what's robust in this model. So, what we do? What PowerSecure has been so far, I call it, distributed infrastructure, broadly. So, it's been distributed generation. They do things in a proprietary way in terms of back-up generation, in terms of variety of products and services, including storage proprietary. They do a terrific job. The thing that we were so attracted to with PowerSecure is they have built a book of business with 200 firms, many of which want to remain secret, particularly with respect to proprietary technology and what's on campus, so that they maintain a commercial advantage. Anywhere these guys have gone, they've gotten repeat business. They have built a following among the finest companies in America, especially those with pristine reliability requirements that we think gives us the ability to reproduce in a sustainable way. And then it's not just distributed generation, it goes to things like energy efficiency, and broadly, utility infrastructure, micro grids, all kinds of things. So, what they needed, they were a publicly traded company, successful. They needed somebody big. One of the things Southern Company has done so well for so long I go back to customer satisfaction. Our key accounts team has been voted regularly among the best in the United States. These are our very biggest customers. And by the way, we can take now PowerSecure and link them with our key accounts and take this business anywhere in the United States. And by striking it, strategic relationship with somebody like Bloom, son of a gun, we can put Bloom generators over here and we can build a book of business now with your storage technology. And by the way now we can expand that to the full range of what is distributed infrastructure. And we will do all of that under long-term bilateral contract, taking no fuel risk, taking no transmission risk, building a book of business very similar to what we've done at Southern Power, just little miniature little deals. We think this is exciting. And I just mentioned Bloom, depth to breadth. It's been a terrific business so far. It's very small to us, right now. But think out it as a cheap option for the future in a way that beats what maybe eroding sales in this whole industry. And so I finish with this slide. And I love this. Value is a function of risk and return. This is my belief, so this is not fact. It is a belief. Southern Company has traded at a premium, whereas until we started on the Vogtle plant and the Kemper plant. So it's not going to be traded at a PE premium for a long time. And I understand with the proceed risk associated with Vogtle and Kemper, and a variety of other things we were facing, I think you can see that we can make the case that not only, and I talked oh gosh, and remember how I talked about the flattening earnings curve. And remember I use the expression the debt, the debit has been filled in, the curve has been raise. Many of the important risk factors around our big transactions have moved away. So I am still remain, I didn’t miss that. But when you look at the predominance of our story, it is inescapable in my opinion that risk is reduced in this Company significantly. And then you look at return. And now we are not three to four, we are not four to five, we are five, and that’s not point estimate. I understand it's going to vary around five. I get that. But from a risk return standpoint, value in our PE premium should be restored, that’s my opinion. My job is to show results to you where you’re going to bet on it dependably. But I think we’re there. And I think we’re moving forward in a constructive way. So thank you. What I am going to do now is turnover to a series of presentations to my teammates here. I guess first is, Mark Crosswhite, CEO of Alabama Power, Stan Connally, CEO of Gulf Power, and they will talk to you about the integrated regulated business. Go get him, Phil

Thank you, Tom, and good morning. So I present these four companies, Mark and I, and we want to acknowledge our Paul Bowers and Anthony Wilson, and the hard work they do at these operating companies. And as you think about what Tom said, the long history Southern Company has had, these four regulated retail state jurisdictions have had an incredibly valuable part of Southern Company's history, and we’ll continue doing that. We’ve been a part of helping create this economic atmosphere of growth in our jurisdictions for at least 90-years in every one of our companies, dating back to the early part of the 20th century. And we’ve been supporting that Southern value proposition. But it starts with, like Tom said, that customer and community value proposition. And we thought we just start by talking about some of those very fundamentals that makes customers and communities successful as we get started here.

So Stan said that we’ve been serving out here the country for about 100 years now. We have been successful over that time by focusing on the fundamentals. You can see here what we do safety over the past 11 years or so, our core investment rate is down about 50%, so we’re operating safer than ever. Reliability, keep the lights on. We keep the lights on 99.9% of the time, industry leading reliability. And when there is a hurricane or severe weather, our folks will recognize across the industry for their ability to restore service very quickly. Customer satisfaction, Tom mentioned it several times. We have the highest levels of customer satisfaction. We track it relentlessly. And our Company is always at the top of that, the store base. Affordable prices, that’s certainly something that we know we have to deliver. We’re focused very much on keeping our prices affordable. All of this focus on the fundamentals, allows us to have a constructive regulatory environment in each of our states. For the remainder of our presentation, Stan and I are going to talk about our service areas. We’re going to talk about our capital investment, and we’re going to talk about the constructive regulatory environments. Service areas, we recognize, and Tom’s slide started-off by saying we’re bigger than our bottom line. We really believe that. We know we’re only as successful as the communities we serve. So, we work very hard to make sure they are successful. It is encourage, and I would say even expected at all of our companies that employees are very engaged in their community. And you will find that’s a common theme at each of our operating companies. Which you’ll also see that we do more than just encourage our employees to be involved, we invest in our communities. We invest in education. We invest in work force development. We invest in arts and culture, trying to make our service areas better placed us to live. Make them stronger, because we recognize if our communities are stronger, we’re stronger.

Yes, I mean, it literally is a piece of our strategy. It’s not just redirect. And one place we put our money where our mouths are is economic development, helping drive business investment, helping drive job growth, in these communities. So, every single one of us have a team that engages with the local economic developers, state economic development groups. Mark and I, as well and Anthony and Paul, all hold prominent roles in our state-wide economic development organizations. And as you can see from some of the emblems on the slide, we also offer business recruitment tools, site selection type tools for prospects considering our states. And look, we’re having some successes. Just last week, in Georgia Power, and some helps just announced up to 1,800 technology based jobs at a technology center at Midtown Atlanta that they will grow in over a period of time, another example of that technology sector that’s growing in the Southeast. About six weeks ago, in Gulf jurisdiction in Panama City Florida, Eastern Shipbuilding announced that they had been selected for the first phase of a coastguard contract to build their new offshore petrol cutters. The first of what could be 25 ships built like there in Panama City. So, we’re having some successes in the Southeast. And by the way, as we were going through with our merger with AGL Resources, now Southern Company Gas, our work in the economic development space was one of those things of interest as we talked to the various jurisdictions about what we do in the Southeast and how we can share those practices across our new spaces. And, our pipeline for projects remains fairly robust going forward. So, we’re encouraged that we’ll continue to have opportunities to bring new growth and new job growth into the Southeast. I want to transition now and talk more specifically about electricity use in our four state jurisdictions. You can see from the chart, we serve and proudly server 4.6 million customers across our four states. And what’s interesting is, you see the balance of the energy sales mix, is roughly a third, a third, a third, third residential, a third commercial, and a third industrial. And we believe, while this will vary across every state every jurisdiction, the net migration into the Southeast remains positive. So we’re looking for customer growth of about 1% going forward. Now, at the same time, use for customer, customer usage trends are slowing that growth a bit, specifically across the sectors. For instance, in the residential sector. We’ve seen a share shift, if you will, in the housing market, 10% to 15% more multi-family type customers than we've seen historically in that residential sector. And of course those are smaller spaces use less energy. You look at both commercial and residential sectors. The energy efficiency, the energy productivity is ongoing, more efficient lighting, more efficient major appliances in those spaces. And then if you think about our largest commercial-industrial customers, many of them have corporate goals now, much like many of you probably do, to reduce energy usage or transition to some distributed energy resources. And look by the way that gives rise to the opportunity in the power secure business line that we have now. Now transitioning to industrial. Certainly, we have seen strong industrial growth since the end of the recession. Now that has levelled off somewhat, particularly this year. I'll give you a couple of highlights. In the manufacturing sector, particularly manufacturing employment in the Southeast has been positive. About 1.5% growth in manufacturing employment compared to the rest of United States where we've seen it go down, about 0.3%. The highlight there would be our transportation sector. We continue to seek modest growth in the transportation industries in the Southeast led by global and domestic growth in vehicle demand. On the other side, in the commodities sector and particularly the steel industry, we’ve seen some decline year-over-year. Think about the drivers for that low oil prices, strong dollar, weak demand, excess global capacity, all impacts that commodity sector. But I'll note back to the slide we just talked to you about before on economic development. Every single year we are looking for opportunities to influence that industrial sector through economic development growth and as well we also know that the economy overall will impact industrial sales. And Tom has already it, 0% to 1% sales growth over this period is what we're projecting. And we continue to hope to influence that through economic development growth. Mark, go ahead.

Now, we’re going to talk about our capital investment. So Stan talked about our customer growth. Customer growth is certainly a component that leads to capital investment. But that's not all of it. We also invest in capital to better serve our customers or reduce the operating cost. Good examples of that would be things like self-feeding networks with a smart grid where we see we can make investments that will better serve customers or bring the cost to serve them down overtime. Another major component of our capital investment will be compliance cost, especially environmental compliance. And as you see the chart down at the bottom, you will see our projection for the next five years of capital investment at the operating companies. You will see us declining somewhat. Well, it's declining because Vogtle 3 and 4 will be winding up during this time period. And many of our major environmental programs will have had the major capital investments made through this time period. Point to emphasize here and I think Tom alluded to, but he didn’t say it directly. The Clean Power Plan and compliance is not included in these numbers. These numbers are known environmental, or all compliance plans included, not the Clean Power Plan. Clean Power Plan could have some impact in the later years and even beyond of this capital investment. There is more detailed information material about the breakdown of the capital investment.

Well just speaking right up on the capital growth. Certainly, as you do that incremental capital growth, we're seeing modest growth in our rate base. And you can see over this time frame, 2.6% growth over the time period. And we hope to continue to execute on that. And as Mark said, it does not include any response to the Clean Power Plan. Now underpinning our ability to invest that capital must be a constructive regulatory environment. And we certainly all feel as though we have constructive regulatory environments in our four respective states. I’ll pick-up quickly and just talk about the Gulf situation. I’ll skip down the page a bit. Many of you know Gulf Power Company filed its 2016 rate-case about three weeks ago. It’s using a forward-looking test year, using 2017 as that test year. And we would anticipate that we have an outcome on that in the spring or early summer of next year. At the same time, currently right now at Gulf, we have our annual clause filings that something we do every year. And certainly hope to have a constructive outcome there. We’ve already talked about Kemper, a good bit. Anthony and the team are working very hard to ensure an outcome there that’s constructive. And as well, they have annual filings they too will be going through over the next few months. They are PEP filing in their clause filings.

For Alabama, Alabama has a right mechanism, called right stabilization and equalization, RSE. It’s been in effect since 1982. It is a forward-looking test year process that we go through every year where we’re making our filings to Alabama Power between now and December 1st, dealing with RSE and any clause filings that need to be made. Georgia, Paul has already talked about the Vogtle prudence case. So I won’t go into that. We put on here 2019 rate-case and 2019 RSE. And what we want to convey there is we recognize that we’re always subject to regulatory view and regulatory process. But we don’t see anything on the horizon at Georgia Power in a substantial manner, between now and 2019. So, we think we have handled the major issue that Georgia Power is facing into that time. Okay, solid returns on investment. So you will see that over the past five years, we have had stable solid returns among the operating companies; predictable, sustainable reliable returns, as Tom would say. How do we continue that going forward? Well, first, we continue to focus on the fundamentals, customer service, reliability, safety, we’re working in our communities. We also mitigate our O&M escalation. We rain-in inflation in our O&M costs. We are doing that through things now like alternate payment locations where we’re putting payment locations and banks, grocery stores, pharmacies, where if the customer would like, they can go there and pay their bill rather than having to come into an office. Overtime, that is going to help us control our O&M costs. Executing there, will lead to constructive regulatory results, and will us to continue to earn solid sustainable returns going forward.

Okay, just to wrap up. Certainly, we’ve talked a lot about the Southern value proposition, and we’ll continue doing that through today. But a fundamental for us and for all of our team is staying focused on that customer value proposition, which is supported by those very fundamentals that Mark hit early on, service and reliability. We must stay focused there. We’ve got significant accomplishments on our major projects. You’ve heard, Paul talk about Vogtle, Tom talked about Kemper, both in the construction and regulatory arenas, made great progress there. And we anticipate even great progress going forward. Mark said it, we’ve got visibility on our allowed returns over the near term, particularly at our two largest subsidiaries, Georgia Power and Alabama Power, over the near-term. That robust capital program is ongoing. I’ll remind you it does not include our response to the Clean Power Plan. That creates the upside over the long-term. And then certainly all four of us are supremely focused on delivering those sustainable returns in support of that value proposition, going forward. So, with that, I think we're ready to transition to one of our teammates.

Well, that wraps up our portion. There is a short change of plan. I think we're going to have a brief break. And here comes the break-master right here to tell us what we're going to do.

Yes, we're going to [Technical Difficulty] in the interest everybody's comfort and hunger and coffee. So, I want to keep on going. Well, let's take a quick 10 minute break. Just make it quick. [BREAK] If everybody could take their seats, we will get started again. Okay, guys welcome back. Our next presenter is CEO of Southern Company Gas, Drew Evans.

Good morning. Thank you for returning. As Aaron said, my name is Drew Evans. I’m the President Southern Company Gas. And for those you that I don’t or haven’t had the chance to meet, I’ve been at AGL Resources, the predecessor of Southern Company Gas for 15years, and prior to that actually spent 10 years in the Southern system. So I’m recycled Southern employee, and very glad to be back. My goal today is to orient you, maybe some of these for the first time on what Southern Company Gas is. And I think it would probably be to my advantage to give you a little bit of background or backdrop in terms of the construction of the natural gas business, in particular, not a lot of detail but just enough to be dangerous. The traditional natural gas business is simply broken down into three primary segments. We’ve always talked about, obvious, the upstream, midstream and downstream. The upstream segment is the production segment, exploration production. And that probably has undergone the single largest change of anything in the energy industry. If you think about 2007 and 2008, natural gas prices were rising pretty drastically, traditional production was inshore, offshore, deepwater, and a relatively depleting resource. But we always say in the gas business, nothing saw the high prices like high prices. And in the 2008-2009 sort of shale revolution, a very significant, watershed changes has occurred that has significant implications for both the midstream segment and the downstream segments that we operate. I would tell you though that it is not simply just an issue of fracing, it’s actually a trio of technologies between hydraulic fracturing, micro seismic, or 3D seismic, but also probably most importantly, directional drilling. And if you think about the footprint requirements of the exploration production business, they have decreased dramatically. And so the environmental impact of this activity is pretty significantly lessened. And it’s also led to what we know today, which is to have today, which is probably 50 year or 100 years worth of reasonably priced natural gas supply. It had some other implications too though, because we’ve typically thought about natural gas coming from production areas in the Gulf of Mexico, maybe Rockies, moving into the market areas of New England, and Mid-Atlantic. And because of the change in production to the Pennsylvania, Ohio areas, Marcellus and Utica shales, were going to see a change in how that natural gas is piped into markets. And so, hence our participation in pennies, Atlantic Coast, Dalton, and some of the other projects -- other three projects, which I’ll show you today. It’s also had a significant change from a customer perspective as well. And so, our customer bills are virtually half of what they were in 2008, which gives us a really nice opportunity to modernize the underlying infrastructure that’s in ground for that distribution business. This is not a new set of things in terms of customer safety. It’s an opportunity for us to accelerate some of those programs, so that we can use replacement of bare steel, cast iron, and what we would call vintage plastics that were installed, much of this pipelines are pre-2000 -- actually, pre-1983, 1990s. So today the business is that we operate, I won’t talk about E&P, because we’re not in the production business. We do view that has moved from exploration principally to production and become a manufacturing process. So we leave that for a different set of investors, sort of different set of operators. Our principal businesses were in the midstream and downstream segments. And in fact, our principal and core business is downstream delivery of natural gas to end-use customers. And I'll spend most of my time talking about that today. For those of you who remember the legacy AGL Resources, we are still the largest operator of distribution businesses in the United States. We serve 4.6 million customers. So, in context, that's probably one out of every 15-meters in the United States is now a Southern Company Gas customer. Our rate mechanisms will move largely to straight-fixed variable rate design, that's means a fixed cost recovery happens in the base charge and then natural gas as a pass-through. That's an interesting feature, an important feature from our perspective, because it means we have an incentive for conservation in our industry. And we talk much less about total retail sales to customers and more about number of connected customers, or modernization to the underlying infrastructure. And as I said, because we’ve talked about lack of sales growth over two or three decades in the business, it was a very logical extension for regulators to move to straight fixed variable rate design. And if you think about the composition of our bill to a typical customer, depending on the geography, the fixed portion of that bill may only be 20% of what the customer is. And the fixed charge may represent only about the total charges to those customers, and still leaves with us with a pretty opportunity to invest in infrastructure without really material impact on our customer base. We operate in seven jurisdictions, the two largest certainly are Illinois and Georgia. We view all of our regulatory jurisdictions as being highly constructive, and we've enjoyed very good rate making-in very opportunity in each of our states. And we think what follows through is just a really nice sustainable period of capital investment. And we anticipate growing our rate base, almost doubling our rate base, in the next seven or eight years. And you can see the relative size of each of these in contribution. So, when we talk about the investment, we will invest somewhere in the neighborhood of $1 billion worth of CapEx in each of our -- in the totality of distribution companies over the next five to 10 years. About 80% of the capital deployment that we'll do over the rate of depreciation will occur in a rider-based program. These are not new concepts. And in fact I would tell you that Georgia has been a very progressive and constructive jurisdiction, in particular, enjoys this in our state as well. And their goal, 20 years ago, was to remove all of the bare steel and cast iron out of the Georgia system. These are 1950s-1960s technologies that are much more prone to leasing. So we've environmental and safety implications to having this type of pipe in our system. In Georgia, over a 12 year period, we were able to completely replace and remove all of the bare steel and cast iron. That happened in an year prior to gas prices being as low as they are today, and so very difficult lease for that state to take. We're now seeing though the same constructive mechanisms put in place in each of our jurisdictions. And I’d point you in particular into Nicor Gas where we've got investing in Illinois, which is a very protective and productive project that will undergo from now until 2023 to remove in that jurisdiction, principally bare steel. Atlanta Gas Light will see multiple programs over the next decade or so where we’ll remove vintage plastics, material called aldehyde A, which was put into the '70s that has embrittlement issues, and really deserves a more modern plastic in its place. And then in Elizabethtown Gas, we proposed a smart programs since our New Jersey jurisdiction we will remove the bare steel, principally cast iron in that jurisdiction, and that program could run through 2027. All of these programs are founded in customer's safety, certainly in modernization of the system. And we think the rider-based mechanism is the most constructive way to do it. We will have certain constructions in even some of these Elizabeth -- the smart program play is just proposed even some of these may have to move into a more normalized rate cycle. But today, this is probably the best way for modernization. These are not finite. I would tell you that of our 80,000 miles of pipeline that we operate today about 1,500 miles of that system are still bare steel and cast iron. We’d like to see those generations of pipe remove first. But I would tell you that aldehyde A, the vintage plastics, represent about another 3,000 miles on top of that, and are just starting to get dealt within these programs, principally in Georgia. So, a significant amount of opportunity, we think for pretty descent duration. We’ve entered into one of our first rate cases in a number of years, that’s Elizabethtown Gas and so that’s a filing that’s outstanding. We’re looking for $19 million rate increase there, related principally to pipeline that was put in service in that jurisdiction. We’ve been very good about combating inflations in our business. And today, it still operate one of the most sufficient gas distribution to the United States. We measure in O&M per customer, and O&M per customer tends to be in the $150 to $175 per customer range. So very efficient across, if you look, across the utility industry. For LDCs, these are our core principal areas of focus; safety, reliability, and customer satisfaction. Just like in the power business is essential, having constructive regulatory relationships leads to constructive regulatory mechanisms. We’re focused in all seven states in a constructive way. Our number one goal is to minimize the lag in capital deployment. And one of the things that we think we’ll see is some maintenance of ROE in the 10% range over the long-term, so this is the LDC business in total. The second major segment that we operate today, and it's become a much larger segment, because of the inclusion of SONAT is the gas mid-stream business. And this includes both inner-state pipelines and underground gas storages. We find the pipeline tends to enjoy slightly higher ROEs. These are FERC regulated assets, and returns tend to be in 11% to 12% range. We’ve focused our investments, principally in areas where we serve customers. And so if you think about SONAT, as Tom described it, between the two legacy companies, we represent more than half of the total transportation on the SONAT system in any given year. It makes sense for us to own and operate that system for the benefit of our customer base. As we re-pipe Marcellus and Utica shale gases into our other service territory, we’re also going to embark on some constructions through partnerships. But these are all done on a demand driven basis. And so unlike some of the pipeline investments that you will see announced today, which are producer push, we’re focused on areas where good portion of the demand, and in general, our ownerships reflect the amount of gas that we’ll be shipping on that pipe for quite some time to come. And so we are doing three constructions today, Dalton has begun, has received, FERC certificate, and has begun construction. It's a movement of gas on the -- from the Transco system up into the northern portions of our distribution territory in Georgia, it allows us to access Marcellus gas as we see displacement down the Transco line. Atlantic Coast is the partnership with the number of large utilities moving gas into the Virginia area that construction will commence probably in the next year or so, and with commercial delivery sometime in 2019. It's much larger pipe and we are a 5% owner of it now along with the Dominion and Duke. PennEast is a pipeline that will serve it, our franchise is in the New Jersey area and it's a collection of really nice LDCs in that region principally New Jersey resources South Jersey industry and like, so again really focusing on demand pool rather than producer push investments. It’s important to note that this slide does a 90% of that capacity is under contract with investment grade counterparties and so our intent is not to invest spectacle pipe construction, not to focus on producer push and really focus on full. We’ve got a placeholder in here and certainly it’s in our business plan, there are number of things that that can represent whether it’s an expansion of the Sonat system or construction related to the Sonat system support to power generation interest of Southern. We do think that probably shale gas needs to play a larger role in supply in Illinois and southern of number of opportunities there where we might see some enhancements of systems or some minor constructions that would do it. So, a number of things we think that probably fit into this placeholder, but wanted to make sure we reserve capital appropriately to be some expansion. And then finally, we’ve got a third segment which is gas marketing services and Tom alluded to this, and this also a downstream segment, its principal business is the delivery of natural gas to retail sale of natural gas. As many of you know Georgia at the system completely unbundled and separated distribution from the sale to customers in 1998, we’ve been a major participant in that market and had garnered about 30% market share. As Tom said, it’s been a competitive business over that 14 year or 15 year period, but we’ve seen very stable earnings out of retail sales in Georgia. We’re also selling gas in Illinois as well because of our participation there with the franchise with Nicor. That business was supplemented when we purchased Nicor in 2011 with the services business, that services business is a warranty services company that helps customers to makes better choices when they are having to make choices in their homes around their equipment and efficiency. And so both of these we think can be exploited pretty nicely within the Southern system in total and businesses that will focus on, but we say think the characteristic of this is much annuity like. Our growth is going to be driven largely by capital investment. There is no question about it, and this gives you a better sense of where the total deployment will be over the next five years at least. Our run-rate in the utilities will be about $1 billion a year. We think there is some persistency to that need, and as I said the vast majority of it is underwriter base programs. We’ll also have the constructions for the three pipelines that we’ve talked about Dalton, PennEast and Atlantic Coast. I think that brings the good set of diversity to that capital investment in total and those single project represents any concern for concentration, and we hope to find things in 2020, 2021 timeframe, that will supplement to that, and as I said that we’ll likely see some larger expansion some of the pipeline replacements that were doing today. All of this leads to what we view is very stable predictable and diversified earnings growth. If you look at the compensation of our growth expectations and we do have very high expectations for growth, our range here is 8 to 10, Tom, I talk about 10 this morning certainly a growth rate that we are very comfortable about given the investments that we have to make, but no single piece of that growth shows concentration. Of the 54% will come out of distribution about some portion of that will be rate case related the vast majority of it is going to be rider based. Highly contracted mid-stream pipes are about a third of that total growth rate the. Biggest driver there will be the finalization of Atlantic Coast certainly PennEast and the completion of Dalton which will occur over the next 12 to 18 months. And then finally gas marketing services, we've seen 3% to 4% growth in that business over a 10 to 12 year time frame. We continue to have an expectation in that range here. We'll take questions at the end, but I think we'll let you with the highlights which is we represent a very interesting growth vehicle I think within Southern. Southern had interest in acquiring gas. I would say the Tom is one of the few executives who doesn’t stand with those honest crop in front of the big cold pile. I think he has been very progressive and looking at the energy needs and demands of the customer base and we represent a very logical addition to that what is the powerhouse of Southern Company and I'm very-very pleased in front of the family again. So with that, I'll turn it over to Buzz Miller of Southern Power. Thank you.

All right. Good morning. I am Buzz Miller, for those who don’t know me and I'm very fortunate to be leading Southern Power right now. It's very exciting time for us. The first thing, I want to do is to take us through a little bit of history of Southern Power. A lot of this is just reemphasizing what Tom was saying in his opening presentation. After spin of merit in early 2000, Southern Power was established and it was established very simply as you see and you've heard. Lower risk, long-term contracts, credit worthy counterparties, minimal fuel risk transmission risk, and back in that time period gas was just emerging as a dominant solution, and our focus was on the super Southeast, and so that's why we did business for basically the first decade. New into that decade renewables were emerging as a dominant solution. Company took a hard look you have solar, you have wind and at that time our basis of looking at things was that utility scale solar was really a match for what I've just said for our business model. Ability to go and get long-term contracts, credit worthy counting parties and very and obviously the low fuel risk there on solar. Thinking that some day we would use it in the southeast the first projects were out west we have partnerships with Ted Turner's group at Cimarron. We've continued that partnership today. We've expanded to other partners as we got beyond that five year period. You can see in 2016, we had a huge amount of growth in the 2015 and 2016. We've expanding the solar partners we have. We've got that multiple going on now. We've gotten into wind now likewise we are with wind partners and expanding our list of partner that we work there, so we have a very diverse portfolio. Overall, now Southern Power has over 12,000 megawatts of capacity, still 75% of our portfolio is natural gas, but on an investment weighted basis, most of our investment is on the renewable side. But all of that is with strong contracts, strong counterparties. This slide emphasizes our contract coverage on average is about 17 years right now. For all of our portfolios, our investment weighted coverage for 10-year contract is greater than 90% and you can see the strength of our counter parties, as we continue to stick to what we said, we’re going to do and execute our business. With the growing megawatts becomes realization that we are a large operating company and with more than 12,000 megawatts, it’s important that we operate, maintenance our assets with the same excellent fashion, the retail business is done for years. And so we have a fantastic operating, Tom talked about gas fleet, Southern Power gas fleet is predominately GE. GE is best performing fleet I believe worldwide. We have a fabulous safety records. We have had zero reportable injuries at Southern Power in the past three years. And implementing the renewables our solar and wind are performing as expected as we evaluated. And I’d say this will be a key going forward because we have to keep delivering on this for the energy margin as we go forward. And looking forward, you breakdown our business in the solar, wind, gas right now. Going forward, solar is going to be a little more difficult to do. The impacts of the market PPA prices are driving down. Solar panels are getting pretty much dumped across the market. So the combined, the low PPA prices we combined with our tax position; and solar right now is likely not going to be something we pursue a lot of. If there is project that meets out requirements or in investment, we would certainly do that. So we begin the pivot to win and Tom has talk a lot about. We expect that to continue. We did that in a big way this year. We’ll continue with that going forward. We have a much more attractive financial profile for us the way PTCs play out. We’re looking much likely did on the solar. We’re working with wind developers, but also the turbine compliers to see what sort of strategic partnerships we can have. Now many of you know that on the wind side of things, there is a Safe Harbor provision so we can get the tax credits going forward. We’re working with turbine suppliers now to make sure reposition ourselves going forward the best way possible on investment. And you know we invested in Mendota in Minnesota gas plant. As we move forward the next several years, acquisitions are likely what we’re able to do on the gas side as clean power plants kicks in and we talk about as other environmental issues kick-in, maybe new build comes back into the equation but for right now with pipe gas acquisitions. The purpose for this slide really to combine our business model that we want credit worthy counterparties, we want long-term contract, and we’re pivoting toward wind and gas acquisition you're pretty much directly to the center of the country and to the west. And that’s where most of our business will be in the upcoming years. So what does this mean going forward for us? We mentioned, Tom, mentioned the huge growth in capital investments $4.4 billion this year, a point out -- a good chunk of that goes for projects that come in at the end of year and help us serve us in 2017 and beyond. But going forward to meet our growth requirements for income and to keep our credit metrics in line and all included, it's about a $1.5 billion we've targeted going forward to the next five years. And what that means to Southern Power net income, we're leveling out, you can see from '16 to '17 we're leveling out. I'll point out that in '16 a lot of that is ITC impacts on net income. As we go to '17, ITC impacts drop off drastically. And we stayed at leveled income profile and that is basically from operating our existing assets out there. We expect about a 12% cumulative growth rate for the next five years; in 2021 looking at about $500 million net income for Southern Power. Overall, our goal is to stay in that 10% to 15% range of Southern Company income and we think we can do that, we'll execute on that as I said. And with that, I'll turn it over to Art Beattie.

Thank you, Buzz. Good morning. I want to thank you all again for being here today. I know it's a bit of your time and I appreciate you listening to our story. I know it was probably 30 seconds after you either look at our materials online or actually picked up your book, you looked at my slides, you know everything I'm going to tell you but that's okay, it's going to be a little a anticlimactic for you. But that's the way it is. My job today is to try to mop up, make a story out of which you've heard today. I feel a little bit like the guy with the groom behind the bride pushing and making sure all of the loose ends are tied up. But you've heard Tom talk about this morning, the overarching strategy of Southern and how with our addition of Southern Gas with the Southern Natural Gas Pipeline and our success at Southern Power, the things that we're doing in our Electric Operating Companies and the even addition of PowerSecure are all going to lengthening and strengthening our earnings profile for the future and actually diversify our risk profile at the same time. He talked about greater than 95% of income in 2021, it's expecting to come from the state regulated electric and gas utilities and our long term contracted businesses. That's who Southern is. Our strides have not changed. We're still the same company we've always been, we're little broader, we're little deeper, but same story is going to help support our regular, predictable, sustainable earnings growth as we move into the future and we think that's what our plan reflects today. I'm going to start today with a review, a quick review of quarterly earnings. We reported this morning; as reported earnings of a $1.18 compared to a $1.05 in the third quarter of 2015, a pickup of $0.13 on an as reported basis; and year-to-date $2.39 against $2.30, a pickup of $0.09 on an as reported basis. If we exclude all the extraordinary items and we exclude the other items that actually get us to be consistent with what we guide to this year, we earned a $1.28 on the quarter versus a $1.17 last year, pickup at $0.11. We earn 2.64 on year-to-date basis compared to 2.45 a year ago, so we had an excellent quarter. And here that show one another drivers here, allow the drivers in the quarter were weather and other revenue affects at our traditional operating companies, Southern Power, a certainly a piece of that applies as well adding $0.08 year-over-year and then offset by financings to support that growth that we have incurred this year. As we normally do in the third quarter, we gave you guidance for the remainder of 2016 and our guidance is pretty simple. We expect to be at a very top-end of our range. And for those of you want to do the math, it's about $0.24 a share what we expect to earn in our fourth quarter, obviously excluding everything that listed at the bottom of that slide. When we build a plan, a financial at Southern and these are some of the financial objectives that we include, obviously our ultimate objective is to produce a superior risk adjusted return to shareholders. But we also pay attention to our financial integrity that’s has taken the ground that we put. We look to be able to produce strong return on our invested capital in each of our company and we are obviously looking for regular, predictable, sustainable earnings and dividend growth over the timeframe. And I think that you will see our 2017 plan actually supports all of these elements as we move forward. Our plan certainly include a healthy level of CapEx, these are the summation of all the numbers that you heard by business unit this morning, it's about $25 billion dollars over three years and that $39 billion over five years. So that’s majority of it going into the electric business basically new generation, transmission, distribution and in environmental projects. You heard Buzz talk about his investments in Southern Power begun half year going into a wind, gas and possibly more solar. You have heard Drew talk about the investments in Southern Gas and pipe replacement programs in the various restrictions. So, we got a very healthy capital budget that help to support the growth rate of our earnings overtime and I’ll remind you again that none of this includes anything for power plant, there are no capital expenditures in their work so ever. Our financing program supports the capital program. We are going to raise about $10.5 billion of net financing over the next five years. You can see the slide there. We actually have a little bit of equity in there about a 1.5 billion of equity and about $9 billion of debt over that timeframe. Now as a remainder, we still have a little bit of equity to issue this year, we expect to issue another $550 million of equity to help support a contribution to Unidentified Company Representative pension plans to help our funding ratios in that regard. As our capital plans were changed, certainly will reflect that in our financing programs, but you can believe that we will pay attention to the same drivers around financial integrity as we do so. Our FFO to debt over the timeframe is greater than 16% so we feel very good about the support around the debt program and our financial integrity. What we have raised or expect to in the next five years actually payable and comparison that what we have actually done this year. By the end of this year Southern will have raised nearly $20 billion in both the debt and equity capital markets, it’s been a fantastic year for us and even there is two sounds that lists some of the things. But I will call demand some of the diversity that we put in place utilization of green bonds and Georgia Power, Southern Power, leadership retail hybrids and we’ve done all of this to create room for the $8.5 billion debt deal that we did in May of this year that help raised funds for the confirmation of the Southern Gas transaction. So, we’ve had a great year. If we’ve look to the amount of money that we’ve raised so far this year in debt markets it’s been almost $15 billion average rate 2.8%, average life of about 15 years. So it’s been very low cost capital and that helps support the profile that we continue to have, Southern Company we talked earlier, $41 billion of debt outstanding average life of 16 years, average rate of 3.9%. That goes two things, certainly helps keeps customers rates low but it also help support our long-term strengthen and lengthen proposition around earnings. When we talk about earnings and earnings guidance, Tom mentioned that this morning, we’ve always been very thumbs up about what we tell you based on the circumstances that we see, we didn’t saw around bonus depreciation. We did so when we saw our capital program beginning to flatten out, we’ve always been that way. And with that in mind, I’ll take you back to the time we announced the AGL transaction. We basically stated that we would raise our growth rate from 3% to 4%, to 4% to 5%. And as we move into the 2017, as Tom has already intent to you we’re going to raise our growth rate from 4% to 5% to 5% and that produces an earnings guidance range of 290 to 302 for the next year. And on the strength of everything that we have chatted about, we believe that we have a trajectory that supports a longer half way to growth around that 5%. Now certainly there will be variation around that 5%, but we think the 5% growth is what best describes our opportunity given the circumstances that we see in front of us. Our plan also includes something from the dividend perspective. When we announced the AGL transaction, we basically also stated that we thought that we could raise the annual increase in the dividend from $0.07 a year to $0.08 a year and our plan includes the actual increase in that dividend, even where the increase in the dividend rate our ability to cover that from a cash flow perspective has improved about 15% from the prior 15 years that we are seeing from 2002 to 2016, our cash flow covers dividend has increased by 15%. And also think it’s important to remember that 95% of this dividend is covered by the businesses that we have described this morning, state regulated, electric and gas utilities and long-term contracted business models all go to support the dividend that we’ll pay over the next five years. This particular slide helps to break a ground for you. The slides on the left actually are the contributions bad company with bad segment towards the 5% growth rate. But I also think it's important to remember at least on the right side of this. That the companies they were supporting their dividends are basically on the right side. This additional up codes will support basically two thirds of the dividend. While the other companies Southern Power, Southern Gas, and all of our companies, who will support the other one third of the dividend, 95% again supported by those definitions I mentioned earlier. So to sum it up, I think we've got a very strong and resilient plan. We've provided for increase in earnings growth we've provided for an increase of dividend growth, we paid very close attention to our financial integrities, we've given you a lengthened outlook rather than three years with not out five years, and we think from a risk perspective we're actually in very good shape which is diversified our jurisdictions. We've had recent success on our major projects. But we feel very good about where we are from a risk perspective but we think it's strongly supports our regular predictable sustainable business prospects for our investors and for waiting for a superior risk adjusted return for those investors. And with that, I will turn it back to Tom.

Yes, it's really just the notion that we have added there we are now we've been exceedingly hyper active in 2016. We have added that hangs together from a logic standpoint but the strategy I think is clear this energy infrastructure business that we are in as you've heard. When you look at it and you go and got it makes sense transparent and if anything with improved growth we've reduced risk, we're moving forward. I think that business is terrific when you look at our business model there is very little kind of new big placeholders in order to achieve. We really do have this now there is risk around it, I admit it. But that business model works I'm very proud of it. Q - Julien Dumoulin-Smith: For us just to kick it off on the Southern Power side the kind of rewind on the presentation a little bit. What kinds of ROEs, is there good rules down that we should be speaking about when you look at that capital plan and translating back to the earnings growth. Now, I know you guys provide its 12% earnings CAGR, you've provided, you can back into it, but I like to hear it from you guys I think about ROE or earnings?

In round numbers you read about a 100 basis points onto it as compared to an integrative regulator return. Julien Dumoulin-Smith: So to say, have you taken you that 12% earned ROE at the utility for instance? You would say 13%.

That we are adding a 100 basis points. Julien Dumoulin-Smith: Okay, but it goes to 10. There is the slide in the appendix I believe behind above the slide. I think it gives you idea about contract length because whatever IRR might be it’s going to see a function of contract length, how long it is. Longer term contracts we’ll have lower IRRs and then shorter contracts will have higher IRR.

Every project has a unique hurdle rate. So don’t go and thinking that it’s one number. I’m giving you, for the portfolio, it’s about 100 basis points ROE as compared to the traditional electric utility business. Julien Dumoulin-Smith: Got it. And that’s an ROE, not in IRR?

Yes. Julien Dumoulin-Smith: Sorry. I'll stick with the same subject. Looking at the year-over-year puts and takes, 2016, 2017, onwards, given the roll off in the solar ITCs, I know we've talked about it before, where do we stand today in terms of that ITC roll off 2016, 2017 and how do we think about the earnings contributions? Is that a good flatline number in 2017 going forward in terms of ITCs?

Just what Buzz showed you? It would be somewhere. We think Southern Power is going to be what somewhere between 300 million, $330 million? Where’d Buzz go? And remember what we told you at other earnings call. When we show this enormous growth and ’16 CapEx is 4.4 billion, a big number. We said a lot of dedicated to ’17, that’s what just seeing. That’s why we don’t have the dividend anymore. Julien Dumoulin-Smith: Right, so just said differently, definitely good stable flat line number offer which to grow, there is not really?

And in fact when you look at the growth of Southern Power and we expected the 1.5 billion deployment every year, it’s a nice ratable increase. We work very hard to make this thing in the fashion that we building our business model. In fact, both our businesses are. Southern Gas is the same way. If you really want to think about caveman kind of math, you’ve got a slug of capital at the growth business there and a slug of capital at the growth business there and that’s the way it works. Julien Dumoulin-Smith: Got it. One last higher level question for you. As you think about, you kind of effectively narrowed your growth range to the top-end. How do you think about the risk reduction of the business profile in tandem with that? So the question that comes to my mind is I suppose you’ve got some wood to chop in Mississippi for instance next year et cetera. How do you think about all the very straight that go into that to narrow the range ultimately?

So right now, Anthony Wilson, where are you? Anthony right there, CEO of Mississippi Power. He can talk to you a little bit. We have already started some conversations. Remember, our relationship with virtually everybody we touches kind of real not discrete is continues. So we’ve already started, so I don’t want to front run a lot of stuff, but I would argue that this plan, I almost liken it to women’s gymnastics and the balance beam. It’s kind of hard to not this plan also balancing. I think this plan is robust to reasonable outcomes. Let’s get Greg and then, Ali, we will come to you.

Thanks. Just a quick follow-up on that and then second question. So at a high level was increasing competition for these types of lower risk long-term contracted types of deals, right? You’re in that business now. Dominion’s there. Duke’s there. Con Ed’s there. NextEra has been there for years. So what competitive advantage are you bringing to the table that’s you’re able to execute these deals add hurdle rates look competitive when we hear anecdotal evidence all the time that the equity IRRs on these things are getting compressed pretty fast?

Well, it’s simple. Because the best example I'm going to use is first Solar. When we think about us starting -- I think I've just done Fleischmann [ph] about this. Even when we started solar, we were actually very careful, we were almost pedantic sometimes. We don't rush and do fast and all that stuff. When we started on the solar effort, we started in conjunction with Ted Turner and we started developing relationship all over. We held Internal Solar Summit and we studied, and we studied and finally when we saw execution start to occur in the kind of vein that we enjoy, we started to move quickly and at scale. We developed relationship with First Solar where not only did we have kind of the relationship where they would develop and we would step in the operation, we also worked with them steadily on improving their development of power sales contracts in permitting and transmission. And so, we actually coached up worked with the folks that we developed and developed significant relationships. And First Solar has borne through for us and there is others. We're doing the same with Wind right now. If you have the advantage of having scale and of having an intimate understanding as to what it takes to step into a deal, the developers are going to be much successful, much more efficient and effective in what they do. We believe developing those relationships is where I started the slide that does matter, this is not a company run by a spreadsheet. You can't do that business with spreadsheet. You're going to hand up with a million different contracts with no ideas to how to administer them. We believe in risk management before we step into the contract and we think that: who are your big kind of wind guys going forward? Where are the big relationships you're working on?

So, we started with the Apex end the last year we've done another deal with them. NV Energy we just announced deal with and we have another wind partnered that we haven’t announced yet, but before the end of the year couple of more wind projects with another partner.

Point there is we're not everything that everybody especially we go scale, we go to people that we can repeat the business model particularly focused on the quality of the power sales contracts in permitting.

My second question switching gears just to Mississippi Power in Kemper, so you said that you're optimistic, you'll be moving to commercial operation there, can you tell us what the discreet steps are from here to there and then when you file the rate case next year, can you just explain us what do you -- what you're base line assumption is in terms of outcomes, it's a little bit complex, because you've wholesale rate base, retail rate base, stuff that was back to you -- can you comment on that?

Let me give you the steps, in terms of -- I don't want to front run any rate case, we're going to file a rate case that when we'll file it, we'll describe it to you. Before we thought I really don't want to go there Craig [ph]. And what they've said so, they're really pretty clear, our estimate as we disclosed, our best estimate of COD and service as the end of November, we're producing electricity out of A; B comes online. We think we've learned a lot and A we'll move B through the add to gas clean up system, deliver syngas to the turbines. The turbines are actually running great on syngas and they actually blended it, we've run at 100% syngas, we do now all sorts of testing right now, so it's really going well. Our best belief is November 30th, I mean they can slide a week or two or whatever but the unknown is unknown as what we've always said to you. Assuming everything works our best gas at November 30th. Close on, we'll file essentially in accounting order that will us to defer cost from COD to final rates in place. It will defer cost and essentially create and accounting, we will do that with a commission. And then we want to demonstrate unlike some other kind of circumstances, we actually want to demonstrate performance on these units. So that when we do file and when we finally get an outcome, we can show that this thing works, used and useful. I think it's really important and I think we are going to be able to demonstrate that.

Thank you.

That's about all I want to go into. I don’t want to firm on rate case but whoever.

Ali Agha of SunTrust. Tom, two questions, first, when I look at your CapEx forecast for 2021, it comes down in the last few years, is it fair to say that the 5% EPS growth rate kind of follows that packing so it's more front end load and then slows down in the last couple of years?

It's really pretty way below overtime and that’s what gives us great confidence about this. It's about 5% growth rate all the way through.

Okay.

And here it's interesting about that growth rate when you look at that CapEx recall, whenever I just say about that are flattening EPS growth rate there was the debit I talked about all that’s gone, we have eliminated the debits, we have lose the curve off by investing in a growth business in gas and growth business in Southern Power, we have an newly especially in Sonat and we have growth opportunities on top of that. Anything material beyond what we are saying is in this plan and that was low response to the clean power plant at there. That’s amazing stuff. No kind of big assessment on some brand new environmental regulation which could occur depending on what administration comes in. We have got Southern Power at 1.5 billion. We just did a 4.5 billion. I actually feel good about where we are and would incorporate the slowing growth factor the CapEx is anything other than the absence of the response between power plant wouldn’t surprise me at all and in the future 2021, who know that we have a cleaning power plant and that was going to have to start adding from gas particularly in response of that. But it's not in the plan.

Okay. And my second question 2016 was a very active year for you in terms of acquisitions. As you plan your outlook through 2021, our acquisitions contemplated, you look at the state of the industry, you expect more consolidation, is Southern a player or are you distinct out of that and just executing on your current portfolio?

Yes, you know I have answered the M&A question, things like for 100 years and the M&A question remains the same, what fundament of this plan is it doesn’t depend on anything like that. And so as we have said before we are big easier shop and then order for us to do any sort of acquisition is got to make sense from cost of capital and return on capital. This plan doesn’t need anything new now, we have suggested around the Sonat acquisition and our specific assets that we are considering we will see how that goes, we haven't really talked about that much ourselves. But that’s not an enormous big deal at least a size that we think is easily adjust and if it doesn’t happens we are still okay. In terms of other new deals, I think all we have done when you look at that asset, we created optionality. We are no more or less interested in M&A than we were before. And when you think about 2016 it looks like that there was a flurry of activity, it’s just so happen the opportunities arriving and down there they were. The one little bit of quick mover was AGL, the pipeline we’ve been talking about for about two years, and really it was interesting we could have continued on that course, but when AGL happen that gave us even a better set of cards in which to deal with pipeline transactions because now we move from the third or fourth largest consumer natural gas, now to the most important natural gas company in the United States I think. Now, PowerSecure is another one, in this PowerSecure again was not material in my sense excepted with strategically was important because when we started again looking at these kind of slowing and flagging sales of electricity, we can either just let it happen or try and play it off it. And I swear to you, I think our business model will make perfect sense on the customer premises, the customer don’t want to get involve in our business we think there is terrific capital deployment opportunity by marrying with these guys is, with customer reach oh and by the way when we did AGL natural set of company gas we doubled our customer reach. So, now we’re 4.5 million to 9 million. And they procure natural gas. You know what balloon uses natural gas and so have Southern Power, you have synergy with gas and then you have the reputation of financial and integrity of Southern Company. And channel count reach, there is tremendous synergies potential. Southern PowerSecure is no big right now, but it is a terrific valuable option. Yes, Andy.

Hi, good morning. It's Andy Levi from Avon Capital. Just on the gas side, the 8% to 10% growth rate that you put out there and that’s earnings per share or net income or income? We just break that down a little bit like for Sonat kind of where the starting point is on net income and how much that could grow on an annual basis. And then for AGL, does that growth rate of net income also include cost synergies from Georgia operations in just general in that 8% to 10% growth?

Let me hit the simple.

I want to double count the cost savings.

Remember I describe Sonat as an annuity, what it looks like. But remember I said it’s an annuity that has an option for future growth that’s how I alluded to Sonat. So, most of the otherwise intrinsic growth is coming out of safety related pipeline replacement program.

Yes. Andy it’s like -- it’s all in there, okay. So, to the degree that they get any cost savings from the merger that they could fall between Georgia Power and really Georgia, AGL and Southern Gas enjoys it. That’s only the opportunity is where we have any overlap. Two degree Georgia Power yes those savings are Southern Gas gets those savings those get reflected in those numbers. I can give you any specific number there because we’re still under process or determining what those could be.

And can you talk about the level of cost savings on even it's kind of a broad level how much should we kind of incorporated over the next two years to three years. And then Sonat what is the starting point of that income?

I’m sorry.

For Sonat what is the starting point of net income?

So, I think either Mark Lantrip or -- can talk more ratably about potential savings here or even Ron himself.

So, the savings that we expect to get from the merger for AGL are baked into the numbers now were midway I would say we're about third way through the integration process and so we will go run it will run through 2018 we're just now beginning to work for some integration issues around the systems we are integrating as much as we can operationally realize this is gas company not a electric company so you don’t have the same benefit but you would have by bringing in the same kind of operational characteristics but they are some in Georgia and we are going through holiday and lows right now and figuring out how to do those things better and we will enjoying. And there is really to variable to synergies one is just as straight over old related synergy and Mark those are going as expected or we did better. The second is top line synergies and those are going a little bit better and I think about bloom and other things. I don’t remember the number on that so it sounds about that.

Little less than that.

[Indiscernible]

Yes, that's right I mean most of the synergies for AGL and Southern it will be on a shared services really and things like IT, some HR, some of accounting beyond there. There will be some small synergies in the Georgia territories.

All right, Tom. Thank you for taking the question and hosting the day. Michael Lapides with Goldman here. You've given pretty robust net income guidance for Southern Power and Southern Gas. Just kind of back of the on blow map when implied given your 5% overall in EPS growth pretty low growth that the electric utility. Can you just talk about how you expect EPS growth and rate base growth at the electric subsidiaries? What you're formally expecting proposed as a percentage growth. Do you think rate base growth and EPS growth moved up more step with each other or there are any differentiation there, and if so what?

Rate base growth I believe is certainly going to be lower obviously. We are going to quit adding the year ago complete the global projects by 19 and 20 so the curve on that goes down the other items in the budget would be normal transmission distribution maintenance project improvements for customer service around that. The additional environmental projects most of that related to ash pond, it's included in there some of those are still preliminary in terms of their estimate so it reflects what we know today in terms of those dollars. But those could move around a bit but that's really where there growth rate is coming from in the electric outflows. What they are trying to do is to offset that capital program they put in place in electric operating companies to mitigate that would cost and flows so that they can hold the price down to customers at a reasonable level at or below inflation.

But it is pretty clear the operating headers are going at much slower rate and math is really pretty simple if you backend in the manner they are going slower now what is excellent is this response to the clean power plant Clean Power Plan. Pretty clear to me that the generation portfolio of America will change and we’ll just see how that goes, don’t want to front run how that’s going to happen certainly not in front of this political season. But there again, if you start seeing things like cash generation showing up in the 20s at this place otherwise either eroding or slow growing base load or CTs necessary to meet intermittency, it appears to me gas is going to have to grow. That’s not in the plan.

Paul Patterson, I wanted to ask you about Kemper. One of the commissioners in Mississippi is asking whether it might dispatch or not production costs look like they are higher and what have you. Can you give us a flavor for what you think the production cost, just pure production costs for saving gas will be? And then number two, you mentioned I think a demonstration for used and useful. It seems like there’s substantial ramp, when should we think about that what your plan in terms of being able to show that it is used and useful? What time I guess, time period?

Look, I think as we move through the start-up process, as we not over dominate normally expected to start-up process, we think it moves beautifully. Like for example when A went through the asset gas cleanout system, remember that was one of the big issue went through it right away, went through it first time. Look, I think we’re going to be able to demonstrate using useful very easily. This plant is going to work, it is working. And so now we get B on and we integrate. Remember what we always said the first things hasn’t been as much as an issue, we’re only talk this is years ago and how one of the big risk with enormous plan was the integration of a whole lot of different systems. Now we were combined segment three different systems, this one has something like ’14. So they’re being integrated, actually that’s going very well expected. I think the used and useful collection is going to be demonstrated in between DOD and when we file the rate case and actually through the rate case. It will continue to improve it performance, I think pretty dramatically over the year, we’ll be able to demonstrate that this during that time frame. I think we’ll be able to demonstrate that, I think we follow data around availability and other things. Kim could tell you more about that. But if you want, you look at the file and we just made an informational filing, Anthony here a couple weeks ago, we’ll be able to demonstrate. Now with respect to the energy, the energy is variable and it depends on whole host of factors included in the off take of what is CO2 valued at, remember that valued at index of the price of oil. And I think in the past and other earnings call, I don’t see any reason why this is change. But at 100 bucks of barrel, I think this thing was ordered, I think we produced energy in the low $1, $1.25 something like that. With oil at around 50 bucks, I seem to remember was about 260, 270 per million BTU. Now natural gas, so here the other thing, the energy that comes off of Kemper is going to be much more stable. It’s not going to be as volatile as natural gas. We are already seeing natural gas pop up. What’s the latest? So you tell me, there is the host of factors selling forward.

Hi Tom, Steve Fleishman, Just one question, I guess just following on the Kemper who has couple of reports, updates and has something about improvement projects that you'd like to do, could you talk a little about what those are?

Sure, engineer thing engineers. There's really kind of two things. Along the vein and in fact a lot of, a lot of, many of the cost increases we've had along the way through construction which improved on the original design. Or I would say put a valve here or I would say had another duplicative system over here. So, along the way we had added to the process. They've identified things right now that we believe we will add even after COD and before filing or even into the next year. It's just different things and really the idea is kind of two fold, one is to improve the immediate performance of the plant, really going to Paul's question, that goes to what would be the availability out of the box and how can we perform it? And the second point really goes to a sustainable question. Whenever you have a prop for example we tripped the gas turbine over the weekend, well it wasn't because it wasn't running well, and since here we're going through a bunch of regime of tests, that we switched between -- remember this could be a dual field plan, and we switched between syngas and natural gas, blah, blah, blah, blah, and when we switched to natural gas, it trips some logic and the computer code, okay, so we take it down, fix it and improve it. Other things we can do along the way that less than the frequency of those kinds of events. That's what we're talking about.

And then I guess is there any kind of scale size of those or it is just to be….

Haven't disclosed them, but I wouldn't now.

we have not put any numbers add on that Steve, we're still evaluating what those could be and certainly it has to go towards operational improvement of the plan, safety of the plan, those are the priorities that we're putting forward at this time.

[Indiscernible]

I'm not going to comment.

We have included we think reasonable estimates around all these things in our plant and we think our plan is robust to any reasonable outcome that we can see.

And then just one following up question on the Southern Power kind of part of the investment plan, so with a 1.5 billion a year, just can you give us -- I think you said Tom that you think it's a conservative number and it could be a lot higher but it's really hard to know what that number is going to be so maybe just a little more color on how we should think about that number being reasonable number over the period?

I think it's a reasonable number. The ebbs and flows around that number, the pluses and minuses. So, in the last two years, we did 2.5 billion and 4.5 billion round numbers and now we're going to down to 1.5 billion, well. Could we do more? Sure. It kind of goes to some of the other questions people raised and that is, what is the IRR that's available out there? Under what conditions can you do it? Will there be opportunities, bigger than a 1.5 billion? Sure. Which ones do we want to do? We're in a carry forward position on tax credits, that's no secret. And so we always have to assess our IRRs for any project based on the time weighted value of cash flow. We think the best estimate we have right now is a 1.5 billion per year going forward. And that's what we've got in the model. If there's something upside to that, yes, potentially we'll see. Are there downsides to that? Sure. But that's what we think is a right number.

Tom, Jim von Riesemann from Mizuho. Can you talk a little bit about your thinking around ESCOs and how that business model has evolved from the late '90s, early 2000s to today, energy service companies?

Yes. Okay. Okay now what makes sure what kind of things start there.

PowerSecure what's different today versus back in the late 90s early?

Absolutely, okay this is not the -- we are do about this a little bit. Who was it somebody in summer we got to recapture the word service, okay. But when we take it my having had the scarves of the SO energy services business that is not what we are doing. Now PowerSecure provides terrific service to customers, all right. I am down plating services but these are not split to say is deal. This is not some crazy variable boy I hope it works kind of same. This is return on and return of capital we covered over the life of the contract with minimal to know few risk. It's not the old ESCOs of the 80s, and 90s, okay, not what it is. This is a program that we are putting place that will replicate what we are doing in Southern Power, it is energy infrastructure in this case it is distributed energy infrastructure.

Where is the IP?

We own the IP this infrastructure that we are doing today is we are not assimilating other people solutions and driving out some alternative financing package. We only happy around that these are our solutions reengineered gone out long this Fortune 500 accounts with, so we are really in rich position to bring value to the table.

Sidney, give us just a quick dimensioning of how many Fortune whatever, whatever, whatever…

We are five of the top 25 Fortune 500 accounts and that may not sound impressive because we have had no balance sheet. So we had to have a lot of happy, where in the just as accounting -- when Southern Company instantly solve that issue first, we sort of eight of the top 25 a grocery change and again goes back, as a counterparty we want to get credit for us. But very, very rich in IP and that's how we won so many large accounts. So the top data centers, it's should be stunning, we're not allowed to disclose, we'll be stunning the number one they were in with.

And I know we are talking a lot of that that show it's a strategic option, this is now a big player right now in Southern Company's earnings. But we think with the way of technology is revolving, we think the way customers behaving, energy infrastructure on their premises we think maybe particularly important, this is our small bid, our options on playing more and more offset otherwise low sale.

Thanks Tom. Mike Weinstein from Credit Suisse. While back to Georgia regulators had always expressed interest in new nuclear beyond [indiscernible], I am just wondering in light of the settlement they came out, how was that settlement shifted or how is it shifted, what's the new thinking now on following new peer?

I think the answer to that question really centers on what untimely come down from congress with respect to any sort of price or cost of carbon implied into the nation's future generation portfolio. If you believe there will be a price or cost of carbon implied in the United States, nuclear immediately becomes really important I mean really important, because all of that said total starts to erode faster. Gas has a really important place, but it has a little bit of feeling. You are going to have build new in the future, now is it in the 20, probably in the 30s and beyond. As an option to becomes really important, but I think you’re talking probably in the third. Did I get your question?

Regulators in Georgia, as a result of segment process to be indicated or thinking at all.

I don’t think, so I think, the State of Georgia has been terrific through this whole process. Really I have Obama Administration and Congress for haven’t say. Department of energy have our new that Ernie Moniz who is the best Energy Statutory we’ve ever had. They have been resolute in supporting Vogtle through with construction and I think we’ll continue to have a good showing there. I think whether it is Clinton or Trump going forward, you will still see support out of the administration, America needs nuclear they all stop. Now, we have terrific track record to talk about on Vogtle 3 and 4 the fact that number one, we've settled the litigation. We’ve improved the performance of the contractors on the site and now we have pending commission approval, a resolution on prudence at Vogtle, terrific positive stuff. All that does is solidify, what has always been a constructed posture by the state, the commission, the governor, the general assembly anything else in Georgia. Does that change their view on the future? No.

The one thing on the question, go back to that. Through this integrated resource plan, they've preserved to option at Stuart County, allowing us to collect $99 million over the next three to five years and perfecting that option. So, they have preserve given an outcome that happens on see clean power plant and/or calls to carbon. I preserve that option for State of Georgia.

Yes. All it did is it just made it more real. You got here. Let’s get some as ask question first.

Paul Debbas from Value Line. How much re-contracting risk is there a Southern Power and what happens if you get to the point, where you can renew or extent the contract?

Well, the data point, we try to use to eliminate that question, we watch that right hawk -- is this notion of 90% of our capacity is covered over, it was about 10 years. So that’s how much re-contracting risk there is. We believe the contract that are expiring our largely gas higher contract. So we think there will be a market there. The variance with respect to this plan is not significant. Just make sure, I got you too guys, anyone else, so I just want to other folk’s person.

Tom, this is a follow up on that. Are your Southern Power plants fully paid for by the time initial contract rose up.

I’m sorry.

Are your Southern Power plants fully paid for by the time the first contract goes up or do you relay on some other contractor?

I would say the significant amount of the original investment is paid off or PPA period conditional but this fully paid off here some level of free cash flow, it goes back to pay that investment maybe the renewal asset a lot of that.

Renewal is a really reach cash flow going forward.

You’ve initially Vogtle will be going to be 12% rate increase, now it’s 6 to 7, where is the delta there that’s kind of time decide just interest rates?

Sure, we disclose, it's actually a number of things, production tax credits, we are giving a full allocation before it was going to be split up. We've got loan guarantees that weren’t assured and actually our performance on the loan guarantees has been much better than we expected. There were significant parts of the first contract if you remember when we first entered into this contract there was some expectation of inflation and in fact some expectations may have been in excess of 4% to 5% as inflation did not show its head, as measured by certainly index, it defused us both between the contractor and Georgia Power to fit. What was otherwise a variable index and so we fix them to our advantage. That's what the delta is.

My question is on ratings, do you know how long would you forgive you to covere as a negative outlook and also see operating targets for the whole co and Southern Company Gas?

I didn’t hear your question. Can you ask again?

How long it will take or how long will you get you through the get rid of the negative outlook?

I'm sorry I'm absolutely not understanding you.

Alright, what's the negative outlook on reduce.

The negative outlook I think you want to ask. I don’t know we need to work with that.

Well, we've always been founds up of those gas and retailers and everything which is going on and every new transaction that we go through we've hopped all the agencies about it and so we are in constant communication about what our strategies are and where we are going so again it's up to them to evaluate that we're certainly pushing to get the changes put in place but that's certainly up to them. We think fundamentally over the past year our risk posture has changed for the better. For the questions I might go please repeat to them in it. I'll go Julien, then Andy and then Mike here we go. Julien. Julien Dumoulin-Smith: Just going back to Mike's question from before a little bit on Georgia. SCANA opted to pursue a new tax election recently why not follows to given that it seems like it reduces burden of the backend? And then separately and probably more importantly Fleur [ph] talked about our hiring ramp broadly. Should we expect the update going aforementioned of the schedules at a certain point in time again this is more of a procedural kind of issue?

So the 174 is a really an excess thing while let me hit that one first it is the 174 tax deduction. You are we've been very clear about our belief that Camper County is absolutely eligible for the deductions. And so that's where our primary focused has to the extent SCANA is successful on making that claim we certainly will follow through on global but we believe I'm not going to comment on summer that's their business. We absolutely believe that the structure of those research and experimental tax deductions are certainly suitable for Kemper and that is where we have focused. Steve, do you want to hit the schedule or Paul or either one of you?

I think comments with regard to schedule, there is always ongoing evaluation of the schedule we don’t not anticipate any changes any way, but certainly there will be variations on some milestones between here and there and it’s normal part of construction?

There you talk a little bit about the learning curve, the benefits of going 2, 3 and then 4, the placement we just made.

So just to give an anecdote on what’s been realize as you go from what is for the next our largest module CA20 which was set few years back and unit three, I think is about 16 hours or so from lift to actually sets and it took 58 minutes do it on unit four. And it’s just remarkable improvements just in quality and doing things in second time and so we’re trying to leverage that and pretty much everything that we go do, so unit four is actually staffed with less people and getting higher productivity based on that.

And then one more comment on balance of the plant.

Yes, balance of the plan is going very, very well. So cooling towers are in, turbine building is going to start to show to be close here soon, all the structures stills in and focused just remains on Nuclear Island but feel really good about the progress. But particularly the learnings that we see from three to four and SCANA sees the same learnings.

You made a comment about ramping up. We have already got a thousand people more this year at Vogtle 3 and 4, so that ramping up already occurred for us.

One quick, a little detail on the ROE from the Southern Power piece, if I look just the guidance, I need 10% and 12% net income or what have you about 40 million a year growth rate top of the range 12%. If I think about 1.5 billion if we’re talking about, is it right to assume about a 40% equity layer there because when I trying you that math, it comes out somewhat less than a 13% ROE. That is why I’m trying to get at is it IRR or an ROE that we are getting like a 6% to 7% number?

Bill, do want to go after that. I think it just some of the tax impacts that impact Southern Power specifically.

Yes. Okay. I think actually a question for earlier. We are talking about an average ROE overtime exceeding the retail businesses. I tend to think about that really an hour, a couple of two hour. Both return in any given year of the business, it’s going to be a function of the types of capacity technology and so on. That premium over retail isn’t overtime return, I average already in time in IRR. So I think the front in the new investments maybe we’ll less than that, let me greater that later on and that’s give us some mixture of the project technology to bring added. So that’s the quick answer why your math has come in a little bit les.

From a leverage perspective 40% is a good number use still.

Yes. I mean, we’re not levering up Southern Power to achieve a result if that is the question. Andy?

Andy Levi from Avon Capital. Just a few financial questions, so Southern Power is growing 8% to 12%, I know 12% a year, excuse me. The gas companies are growing 8% to 10% a year. But I don’t see for the core utility, electric utility, how much should that be growing here?

Yes, there is on slide in my group where due to the percentage of the 5% that those range, those concentric ranges. So you can back into it that way. I believe what you're seeing the net income growth over that timeframe would be just a bit above 2%.

And then on the financing plan, I see, I guess that'll be [indiscernible] lease up equity that's you're going to put out there, what is the target equity ratio at Southern Company that you're targeting?

Well right now we're in the mid-30s and by the '21 timeframe it'll creep up a bit little taller between 35 and 40.

And at Southern Company.

Southern Company.

Michael Lapides with Goldman. Two questions, one are we seeing a structural shift in the ability to build significant gas pipelines from this country for nimbi regions, good old fashioned Nimbi citing, permeating etc. what do we do about that and how do you manage through that as you think about Southern Company gas growth rate? That's first kind of question although it probably has subsets. The other one is the one place we don't really see Southern involved is in independent electric transmission outside of the traditional operating companies, can you just talk about that business in general.

Two very interesting questions. And you know what, I would -- let's differentiate pipe. Look, we make it our business especially since I've been in this role to engage constructively with the environmental community. So I'm talking about Sierra Club and NRDC, and ADF, Union of Concerned Scientists and States and everybody else. They have had an important voice and how America is thinking about evolving its generation fleet. And I think we've had very constructive conversations. And I think listening to them is important because I think that does help drive a lot of positivity that comes out of the administration, certainly depending on who wins and all that. So, it's kind of important to not only use our own lands but look to the lands of others and how that may impact where this future is going because it certainly has had an effect on coal. It has an effect I think on gas going forward in a more important way. But I think it is irrefutable that we need gas today more importantly as coal wind down and it's hard to build nuclear and we add more intermittent resources in form of renewable. I'd make that point. So, from the challenge of building pipes, I want to break that into two different ideas, one is pipes required to support what I think will be the natural evolution of the generation fleet of America is going to be easier to do, then pipes required to export gas through LNG facilities. So, totally different ballgame I think on part of the environmentalist community because at one hand pipes require to build new gas plant that will enhance the retirement of coal or sub plant what is otherwise a slow growing nuclear fleet America or perhaps the case of some other companies, that are disappearing nuclear fleet, they're going to need more pipes. We can't do it all with energy efficiency in just renewable. So, we're going to need those pipes in order to handle this transition, very clear. The question on pipes for export, totally different question, So as it's a terrific question and may we have been very -- we try to be very thoughtful about that, I mean when go this believe you should think about as our believe are grounded this is one of the believe that we didn’t showed you. But there is a difference between price of export price to require to enhance transition of the fleet. Did I hit that one for you?

Yes.

The other question was?

Independent electric transmission, just it's a one thing we don’t see Southern Company.

So here is the -- and I think there is a generally well-known I am going to stay away from anything confidential, but you must know that there are lots of win deals particularly, one of the challenge of the win, I said this before is that when requires -- when this best located where they are few people and therefore you need to move the win resource necessary to where the load centers are, okay. Solar not like that so we can wave where the people are, generally speaking. When we think about there are lots of potential deals in the United States that depend on long haul contracted transmission systems in order to comfort the development of big scale win resources the United States. If there was a contract or transmission which gave us our degree of certainty when we think about merchant's model, Southern Company does not like the merchant model. But if there was a long term contract that supported the development of transmission that probably goes hand-in-hand with the development of large scale win resources, yes we would be open to that. But it's a chicken and the egg thing. So this is very difficult business, number one in order to develop long halt contracted transmission, not merchant transmission contracted transmission you got to make sure your line up at the same time, this big scale that you need big scale win in order to justify building a transmission line. You need a lineup that win resources would a thing for the energy and when you need to be able to handle all other different state issues that you tried to build that transmission lock. Are we open to it, sure, it would happen to built consistent where our business model. Okay. There are lots of proposals out there and we talk all the time, hard to do with deal though.

I will just throw this one out there so if Trump does win, any thoughts on kind of energy policy aspects anything that would matter to you guys?

Well, listen we have made it point to be involved in both campaigns in terms of just breathing them on what we believe the correct energy policy is and I think that will be a little careful. I am cheering EEI, so I want to -- I am talking specifically from my book right now, not EEI, okay. One of the most important guys in developing energy policy right now in the Trump campaign, it's been representative from the State of North, Kevin Cramer. We have made our business to have a relationship with Kevin Cramer before. He got into this role in the Trump campaign. Kevin also visited as did a Clinton's representative, the business round table recently. And I think, Kevin is right on the money. He is the guy that is faithful to the Southern dogma of all the above. I think he is reasonable and I think he is the guy we absolutely can work with, he is a great public survey, very thoughtful and understand the importance of all the above in Americas future, he is a terrific guy.

I believe that Southern Company was ones the first or second largest consumer full among utilities. So you probably have a significant ash ponds issue. Could you elaborate a little bit more about that in terms of how you recovering that, how many years you’re thinking about and maybe also where you are on the learning curve and dealing with this?

And Paul, I'll get you to comment. Paul is -- because of the Georgia jurisdiction kind of the most advanced on this issue. All of our companies, Alabama Power, Mississippi Power, Gulf Power Georgia have all been very proactive on this issue and dealing with each of our commission. And the best way to kind of talk this through is with Paul. But I’ll say, in fact, I said two years ago in Annual Meeting that we would effectively close all of our ash ponds in a proactive way. Paul going forward and I’ll just start off with two kind of again principle or part of our dogma and that is any ash pond near water system or river or something like that we would remove. Otherwise, we will use advance technology and he can talk better than technology to close in place. It’s not just cash it’s advanced technology. And you just got rolling about APB at Georgia that he'll think about.

So, Barry, when you look at the ash pond programs specifically for Georgia. We had a 29 ash ponds of which all want be regulated by the state EPD, which gives more stringent regulation regime and they have on the national level. National level what is that 18 of our ash ponds have been regulated now it’s not. Our regulatory standpoint think about cost compliance, you have stay through that’s allow you to comply or you have to comply an allocate costs back in turn to recovery. It is Federal Trade Commission for those things or happening. We are removing all the ash located next upon in rivers or one away from rivers and we also or putting the advance engineering technology to ensure no ground source water to go down strain, so we’re contain from an advance engineering.

For example, subterranean barriers things like that.

And that is also cover in the new role coming out of Georgia. But all those advance technology is going to be influent. Art, did you want to comment on that recovery?

Yes, Barry, a lot of these assets or part of asset retirement obligations. So the customer speaks for them over the life of the assets. So those are accelerate reductions to rate based overtime originally begin to accelerate pay the cash out to do this, it’s actually an increase to rate base. We call a capital investment rather than CapEx because that’s distinguished with this try to make that they both active same and better.

You should understand that am I try to coming out when I did, as I did. With really granted and nothing more than looking after the customer first, they can sure the community is better off, because where there, we take the obligation of safety and environmental the extremely seriously and we’re proactive on that. That’s why I came out way for anybody has become a hot topic. We always put the community for us and we think this is an important obligation. We take it seriously and we have a great constructive relationship in our states. Mark, you would be the next biggest. Do you have anything you want to say or is that covered?

From padding, how are you thinking about the 5% growth rate projection in terms of sensitivity to the loan growth projections 1% was a 100 just higher moreover you see.

Yes, and that's part of our resilient fleet comment. Basically we know that the Opcos [ph] are going to have trouble in top line growth and see over to 1% industrials will pay a large role in there because they move around so much at least in the negative fashion this year but as we look at it the companies are going to exercise additional capital investments to serve their customers better and try to offset that with cost management to keep a price under control. So we believe our 5% growth rate is true to that scenario.

You ask the question about its higher. Yes, what here again I'll go back to my comment and it's kind of hard to knock about the balance seen here what is really translates to would be the kind of an acceleration of new generation, kind of where you would see it first. Otherwise it would be an effect on O&M that would be how two effects would be I still think there is upside and downsides around this 5% that's why we didn’t say 4 to 6 and else we said 5 and would kind of hang with that. Yes there is some upside there. What else you want to talk about. I saw the Atlanta Falcon beat the Green Bay Packers yesterday. Matt Ryan, he was awesome anything else? Okay, will listen let me disclose like this we know that was an investment of time on your part. Thank you so much and thank you for being loyal shareholders. Those of you that aren’t I hope you are now I think it's a heck of a story and I'm so proud to represent this team that's team in the industry so many opportunities to go forward in the path and look forward in the future in a positive way. Thank you very much. I think we've got one stead up at here it's being stead up. Yes, stay for lunch we'll all hang around.

Thanks everyone.