Who Is Southern Power? Stephen Gowland Business Development Manager Southern Power Acquisitions February 16, 2017

For more than a century, Southern Company has been building the future of energy. We deliver the energy resources and solutions our customers and communities need to drive growth and prosperity. How we do our work is just as important as what we do. Our uncompromising values are key to our sustained success. They guide our behavior and ensure we put the needs of those we serve at the center of all we do. At Southern Company, Our Values will guide us to make every decision, every day, in the right way.

by investing in clean energy solutions for the customers we serve. Who is Southern Power? Southern Power is a leading U.S. wholesale energy provider meeting the electricity needs of municipalities, electric cooperatives, investor-owned utilities and other energy customers. We help build the future of energy as America’s premier wholesale energy partner by investing in clean energy solutions for the customers we serve. Surpassing 12,600 MW* of generation capacity, we represent the largest renewable and gas-fired fleet in the Southern Company system. Southern Power is the third largest electric operating company by generation capacity, net income and total assets. *Includes all announced projects through Bethel

Southern Company Overview

Southern Power Organizational Structure

Southern Power Business Model Southern Company’s unregulated wholesale provider of electricity Build or buy assets covered by long-term contracts with creditworthy counterparties Minimize fuel and transmission risks using pass-through contract provisions Target long term partnerships that leverage our superior performance Maintain BBB+ credit rating Contract Coverage Profile1 Investment-weighted2 Contract Metrics 5-year coverage: 92% 10-year coverage: 91% Average contract length: 17 years 2015 Financials Operating Revenue: $1.4 billion Net Income: $215 million Total Assets: $8.9 billion As of September 30, 2016 Investment based on the respective generation facilities' net book value (or expected in-service value for facilities under construction or being acquired) as the investment amount

By the Numbers 12,610 total MW* 3,290 MW renewable energy* Operations in 11 states Over 460 employees 1,726 MW at 27 facilities 115 MW at 1 facility 9,320 MW at 10 facilities 1,448 MW at 7 facilities *Includes all announced projects through Bethel

Our Customers We work each day to build strong relationships and provide service that is second to none to more than 50 energy providers serving millions of end users across the United States. Making a sustainable impact is about more than "business as usual." It's about caring for our customers personally. The organizations we serve are more than just customers. They are our friends, families and neighbors.

Southern Power Growth 2015 2016 2017 2014 2013 2012 2010 2009 Solar Natural Gas Wind Biomass Under Development

Acquisitions and Renewables Overview 11

Mission and Approach The primary mission of Acquisitions and Renewables: Locate, pursue, and execute quality, profitable acquisitions that provide material net income for Southern Company Maintain discipline and adhere to SPC’s low risk business model Actively pursue gas, solar, wind, and battery acquisitions in the U.S. and Canada that maintain or improve SPC’s portfolio’s contract coverage SPC approaches the acquisitions market through relationships with key market players Target relationships that lead to opportunities and leverage 1 opportunity to more Share our objectives and build our reputation (competitive value, reasonable negotiators) Prioritize and pursue projects based on disciplined criteria PPA, Offtaker credit, Regulatory Status, Permits, Development Maturity, Construction/Execution Risk SPC’s strengths create opportunities for new projects Track record of execution has established us as a leader in the market (renewables) Renewables - 4 primary keys: tax appetite, cost of capital, structures, execution certainty Gas fired development expertise, major equipment procurement efficiency, and operational practices Why acquire vs. develop? Short runway/timeline to additional income Compared to full project development, costs and resources are minimized Quicker access to projects in markets less familiar to SPC where there are many developers with local advantages and head-start on project development Natural fit for renewables as most developers NEED to sell their projects 12

Typical Timeline 2-4 months Acquisition Process Typical Timeline 2-4 months Type of Acquisitions Risk Profile @ development Full development risk exposure/ failed outcomes @ NTP Construction, schedule and operational risk exposure @ COD Performance and operational risk exposure @ operating Operational risk exposure Primary Contracts PPA: Typically we inherit with little to no ability to change EPC: O&M: TSA: SMA: PSA/MIPSA: Acquisition team leads negotiations and incorporates due diligence findings LLC/Partnership: Acquisition team leads and makes as consistent as possible with existing LLCs Step 1: High Level Screen (1 Week) Acquisition team screens projects Step 2: Detailed Screening (2-3 Weeks) Projects are assessed at a high level by functional area(s) and fatal flaws are identified Step 3: Indicative Bid (2-3 Weeks) Indicative bid based on the seller’s model If bid is acceptable then the parties negotiate term sheet and enter [exclusive] negotiations. Step 4: Due Diligence and Negotiation of Prime Contracts (4-8 Weeks) All functional areas evaluate project, refine SPC’s valuation, remove or mitigate risk, and negotiate agreements Step 5: Acquisition Execute the purchase of a facility when the business case is sufficiently complete (approved by the Management Council), SPC Board approval is received, and final deal documents are complete and CPs to close are satisfied Generation development reviews and helps negotiate 13

Team Approach Gas Acquisitions also require our team to work with HR to absorb existing plant staff 14