Southern Company, DOE Agree to Conditional Nuclear Loan Guarantee Terms

PRNewswire -- Southern Company Chairman, President and CEO David M. Ratcliffe on June 18 announced that the company's Georgia Power subsidiary has reached an agreement with the U.S. Department of Energy (DOE) to accept terms for a conditional commitment for loan guarantees.

"This will provide Georgia Power customers significant savings," said Georgia Power President and CEO Mike Garrett.

President Obama and DOE Secretary Steven Chu announced the award of the conditional loan guarantees to Georgia Power on February 16.

"This is another step forward on the road to nuclear power playing a prominent role in America's energy future," said Ratcliffe. "Nuclear energy is vital in any effort to make meaningful reductions in greenhouse gas emissions and meet this nation's rising demand for electricity. This conditional commitment is an endorsement of the company's performance as a safe, efficient nuclear operator with strong financial integrity."

The new units will be located at Plant Vogtle near Waynesboro, Ga., where the company already owns and operates two nuclear units. The conditional commitment is for loan guarantees that would apply to future borrowings related to the construction of Vogtle units 3 and 4.

Total guaranteed borrowings would not exceed 70 percent of the company's eligible projected costs, or approximately $3.4 billion, and are expected to be funded by the Federal Financing Bank. Any guaranteed borrowings would be full recourse to Georgia Power and secured by a first priority lien on the company's 45.7 percent ownership interest in the two new units.

Final approval and issuance of the loan guarantees are subject to receipt of the Combined Operating License from the U.S. Nuclear Regulatory Commission (NRC), completion of final agreements, the receipt of any other required regulatory approvals and satisfaction of other conditions. The company received an early site permit and limited work authorization from the NRC for the two additional units in 2009, and site work has begun.

The additions of units 3 and 4 are expected to produce approximately 3,500 jobs during construction and 800 permanent jobs once the units begin operation.

Along with Georgia Power's existing portion of the two 1,100-megawatt reactors, the remaining ownership is split among Oglethorpe Power Corporation, the Municipal Electric Authority of Georgia and Dalton Utilities. Georgia Power's share of the project cost is currently projected at approximately $6.1 billion, which includes approximately $1.7 billion of financing costs to be collected during construction.

The DOE loan guarantees are expected to save Georgia Power's customers millions in interest costs annually over the expected life of any guaranteed borrowings, based on preliminary estimates. The actual amount of the interest savings will depend upon the final terms and the timing of the specific borrowings and cannot be determined at this time.

Units 3 and 4 are expected to begin commercial operation in 2016 and 2017, respectively. Southern Nuclear, a subsidiary of Southern Company, will oversee the construction as well as operate the two new units for Georgia Power and the other owners. Southern Nuclear currently operates Plant Vogtle's two existing nuclear power units as well as Georgia Power's Plant Hatch nuclear facility near Baxley, Ga., and Alabama Power's Plant Farley nuclear facility near Dothan, Ala.

Georgia Power is the largest subsidiary of Southern Company. The company is an investor-owned, tax-paying utility with rates well below the national average. Georgia Power serves 2.3 million customers in all but four of Georgia's 159 counties.

With 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE:SO) is the premier energy company serving the Southeast. A leading U.S. producer of electricity, Southern Company owns electric utilities in four states and a growing competitive generation company, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices below the national average. Southern Company is consistently listed among the top U.S. electric service providers in customer satisfaction by the American Customer Satisfaction Index (ACSI). Visit our Web site at www.southerncompany.com.

Cautionary Note Regarding Forward-Looking Statements:

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning the conditional commitment and DOE loan guarantees, estimated cost savings from DOE loan guarantees, and projected costs of construction and in service dates for Vogtle units 3 and 4. Southern Company and Georgia Power caution that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company and Georgia Power; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in the Annual Reports on Form 10-K of Southern Company and Georgia Power for the year ended December 31, 2009, and subsequent securities filings, could cause actual results to differ materially from management expectations as suggested by such forward-looking information: timely receipt of necessary regulatory approvals related to the Plant Vogtle expansion, including Georgia Public Service Commission and NRC approvals; interest rate fluctuations and financial market conditions, including the credit ratings of Southern Company and Georgia Power; satisfaction of all conditions to the final issuance and approval of DOE loan guarantees, including negotiation of final agreements, continuing due diligence by the DOE and receipt of any required regulatory approvals; and the ability to control costs and avoid delays in the construction of Plant Vogtle units 3 and 4, including risks related to shortages and inconsistent quality of equipment, materials and labor, work stoppages, contractor or supplier non-performance under construction or other agreements, adverse weather conditions, unforeseen engineering problems, changes in project design or scope, environmental and geological conditions, and unanticipated cost increases. Southern Company and Georgia Power expressly disclaim any obligation to update any forward-looking information.

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Study: Billions Needed to Deliver Wind Power to Eastern Interconnection

/PRNewswire/ -- The Joint Coordinated System Plan (JCSP'08), the first step of a transmission and generation system expansion analysis of the majority of the Eastern Interconnection, estimates the electricity sector will need over $80 billion in new transmission infrastructure to obtain 20% of the region's electricity from wind generation.

This initial analysis, which was performed with participation from major transmission owners and operators in the Eastern U.S., looked at two scenarios to examine transmission and generation possibilities between 2008 and 2024. The first, a Reference Scenario, assumes "business as usual" with respect to wind development, with approximately 5% of the region's energy coming from wind. The second was a 20% Wind Energy Scenario and was based on the U.S. Department of Energy's Eastern Wind Integration and Transmission Study.

"We believe that, although JCSP'08 examined a small set of scenarios with limited variables, this study nonetheless gives a clear idea of the scale of commitment it will take to integrate large amounts of renewable resources into the grid," said John Bear, President and CEO of the Midwest ISO. "This is information we believe that our leaders need to consider as they begin work under a new administration and start defining our energy future."

JCSP'08 estimates that incorporating 5% wind energy (the "Reference Scenario") will require the addition of approximately 10,000 miles of new extra-high voltage transmission at a cost of approximately $50 billion, in addition to nearly $700 billion in total generation capital costs by 2024.

The 20% Wind Energy Scenario is estimated to require 15,000 miles of new extra-high voltage lines, at an estimated cost of $80 billion, in addition to $1.1 trillion in total generation capital costs by 2024.

Under both scenarios, the generation capital costs would be borne by developers, while the funding source for the needed transmission is not known at this time.

The study represents the collaborative efforts of Midwest ISO, Southwest Power Pool, Inc., PJM Interconnection, the Tennessee Valley Authority, Mid- Continent Area Power Pool (MAPP), and participants within SERC Reliability Corporation (SERC). Among the key features of the study are:

-- It used a collaborative, transparent, stakeholder process to develop and screen assumptions and postulate transmission expansion possibilities.

-- It used a common approach with system condition assumptions to characterize the majority of the Eastern Interconnection in a single multi- regional analysis, rather than conducting parallel, region-specific analyses.

-- It used study tools and databases that are in common use in the electric power industry.

As previously stated, this is only the initial phase of the analysis that must be performed to derive the most effective and efficient answer. A follow- on phase of the study will be initiated in the first quarter of 2009 to investigate additional scenarios that must be analyzed to develop a better understanding of the possible solutions available, perform a detailed reliability assessment, better refine the existing assumptions, and recommended new transmission facilities and the costs and benefits.

Members of the JCSP'08 plan to present the full study to the Federal Energy Regulatory Commission, Congressional representatives and staffers for their consideration during the first few months of the new administration.

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ExxonMobil to Invest over $1 Billion to Increase Cleaner Diesel Supply

(BUSINESS WIRE)--ExxonMobil Refining & Supply today announced it will invest more than $1 billion in three refineries to increase the supply of cleaner burning diesel by about six million gallons per day. The company will construct new units and modify existing facilities at its Baton Rouge, Louisiana; Baytown, Texas; and Antwerp, Belgium, refineries.

“This underscores the company's ongoing commitment to meeting the growing needs of the marketplace, while, at the same time, providing cleaner burning fuels to consumers. Our increase in diesel production at these three sites will be equal to the diesel produced from about four average-size refineries,” said Sherman Glass, President, Refining & Supply. “In combination with cleaner-burning engines and the latest vehicle emissions control technologies, this low sulfur diesel reduces emissions in both on-road transportation, and off-road industrial sectors.”

This investment is the latest phase in ExxonMobil's efforts to increase supplies and reduce the sulfur content of both motor gasoline and diesel. In 2000, the company began an integrated approach to convert and modify refineries, terminals and pipelines to provide ultra low sulfur fuel products.

By 2010, the refineries’ modifications and expansions are expected to be completed, increasing production of diesel with sulfur levels of 15 parts per million (ppm) or less.

About ExxonMobil Refining & Supply

ExxonMobil Refining & Supply operates a global network of reliable and efficient manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, lubricants, and other high-value products and feedstocks to our customers around the world.

About ExxonMobil Baytown, Baton Rouge and Antwerp Refineries

* The Baytown Refinery is the largest oil refinery in the United States, with a crude capacity of approximately 567,000 barrels per day.
* The Baton Rouge Refinery is the second-largest oil refinery in the United States, with a crude capacity of approximately 503,000 barrels per day.
* The Antwerp Refinery is the second largest ExxonMobil refinery in Europe, with a crude capacity of approximately 305,000 barrels per day.

CAUTIONARY STATEMENT: Business plans discussed in this release are forward-looking statements. Actual future results, including capital expenditures and the impact of refinery upgrades, could differ materially due to changes in applicable law or regulation; changes in supply and demand for diesel fuels; the outcome of commercial negotiations; technical or operating factors; and other factors discussed under the heading "Factors Affecting Future Results" on the "Investors" section of our website at www.exxonmobil.com.

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