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Southern Company Plans Call with Financial Community - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good afternoon, ladies and gentlemen. I will be your conference operator today. At this time I would like to welcome everyone to the Georgia Power rate case settlement. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (OPERATOR INSTRUCTIONS) Thank you.

I would you now like to turn the conference over to Mr. Tom Fanning, Chief Financial Officer. Please go ahead, sir.

TOM FANNING, CFO, SOUTHERN COMPANY: Thanks very much. Thank you for joining us this afternoon to discuss the outcome of the Georgia Power Company rate case. With me today is Ann Daiss, Chief Accounting Officer at Georgia Power. Ann was the primary witness for Georgia Power during the rate case testimony and is here to provide additional details on the case and help answer any questions you might have.

Let me remind you we'll be making forward-looking statements today in addition to providing historical information. There are 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 SEC filings. As you may know, the Georgia Public Service Commission in a 3-2 decision yesterday morning voted to accept the agreement reached last month by the commission staff, Georgia Power, and other major parties in the rate case. The vote extends Georgia Power's rate plan for another three years, beginning on January 1, 2008, through December 31, 2010. The plan results in a base rate increase of $99.6 million, effective January 1, and the implementation of an environmental compliance cost recovery, ECCR we'll call it, tariff.

Levelized annual revenue requirements associated with the ECCR tariff total $222 million annually for the three-year period. Under the rate plan, the return on retail equity range remains 10.25%, to 12.25%, with provisions for sharing if retail earnings are above the range. In the sharing arrangement, one-third of retail earnings above 12.25% would be applied to the ECCR tariff and two-thirds would be applied to rate refunds for customers. That is a brief summary of the major elements of this three year settlement. I'll now ask Ann to take a few minutes to explain how this settlement is different from previous agreements and provide some additional information on the environmental cost recovery tariff. Ann?

ANN DAISS, CHIEF ACCOUNTING OFFICER, GEORGIA POWER: Thank you, Tom. This settlement is different from the previous rate plans, primarily because it came together sooner and was agreed to by more of the participants in the case than ever before. As a result of the settlement, Georgia Power's rates will remain significantly below the national average for all of its customer classes. As well as below the average rates in the Southeast. At the same time, the Company should be well-positioned to meet its financial and operational goals and to continue the infrastructure investments required to meet environmental regulations and anticipated growth in the state.

However, the biggest difference in the terms of this settlement agreement and other three-year rate plans the Company has operated under is the creation of the ECCR tariff. Not only does the ECCR tariff recover the budgeted cost of installing and operating new environmental compliance equipment, such...