2008 Summer Operating Expected Conditions Bulk Power Operations Power Coordination Center Bulk Power Operations Power Coordination Center

TOPICS 2007 Review 2008 SOCO Balancing Authority (BA) Area  Summer Weather Forecast  Peak Demand Forecast  Transmission Overview  Summer Preparations The information contained in this presentation has been gathered from many sources to provide a general overview of expected summer operating conditions. While the data contained is believed to be accurate, Southern Companies assume no responsibility for its accuracy or any use by other parties.

2007 Review: Summer Forecast Summer 2007 Forecast –About 1 degree above normal in SOCO Balancing Authority (BA) Area. –Hot May, June, early July with Drought relieved by moisture from tropical storms late July and August. Tropical Cyclones 2007 –Forecast for Big tropical cyclone year. Focus on Atlantic Coast and Northern Gulf of Mexico. –15 tropical cyclones; 9 hurricanes; 4 intense hurricanes. Loads Forecast 2007 –Projected 2007 SOCO BA Area Peak… 44,650 MW … In July? –Adequate Reserves should be available at peak. Calls For Interruptible Customers not expected.

2007 Review: What we actually saw in 2007 Extreme Heat late summer into fall: August [+3 0 ] 13 days above 100 0, September [+3 0 ], and October [+4 0 ]. No hurricanes in service territory Extreme Drought, no relief in Fall months. New Peak load of 48,008 MWs in the SBA, 15 Days above 2006 Peak.

Set new peak on 8/22/07 48,008 MW 2007 Review: Peak Day

2007 SBA Peak Data (includes Dalton Utilities, MEAG, GTC,SOCO) Interchange Interchange -414 Interchange +250 Duke -50 SCEG +100 SCPSA Interchange ,008 MW 15:19 VACAR TVA ENTERGY FLORIDA SBA Load (Inst.) 48,008 MW Net Interchange 1,585 MW Other (Dynamic Schedules, Freq. Bias, etc) 47 MW SBA Net Peak 49,640 MW (Not for billing purposes) 2007 Review: Peak Day

(Not for billing purposes) Generation Output at PeakReserves Base Generation FP&PA0185 Hydro CT's IPP's11075 Total

- Historical Peak Data Temperature Demand 8/30 8/18 7/22 7/28 6/24 8/12 8/17 7/12 7/18 8/26 7/14 7/26 8/7 8/22 (Not for billing purposes)

- 15 Days above 2006 Peak Temperature Demand (Not for billing purposes)

Hrs. SBA Load > 40,000 MW Lots of hours at high loads...

(Not for billing purposes) SBA Loads Overview

2008 SOCO Balancing Authority (BA) Area Summer Weather Forecast “The trouble with weather forecasting is that it's right too often for us to ignore it and wrong too often for us to rely on it.” Patrick Young

1.Interior Southeast Drought Continues but with “likely improvement” expected. 2.Summer thunderstorm regime and tropical rains should ease drought. 3.Climate Impact Company expects subtropical/tropical rainfall events to prevent drought intensification this summer season Drought Outlook

1.Lack of super-dry regime leading into summer season. 2.Increasing summer thunderstorms and tropical moisture will suppress summer heat. Southern Company APR-SEP 2008 Climate Parameter: System Precipitation

1.Forecast considerably less hot than Summer 2008 extreme heat regime rated “near normal” as opposed to record heat last year. Southern Company Extreme Heat # of Days Forecast above 94 0

Slightly warmer-than-normal summer. Warmest month compared to normal is June. July/August close to normal. Much different from last summer, lacking month-to-month extremes and lack of (record) heat. Key is rainfall that suppresses heat and eases affect of drought on the temperature pattern. If subtropical/tropical rainfall events fail to occur, a hotter summer is likely. Risk of affects from tropical cyclones at above normal risk this year Summer Forecast Summary

Weather Terminology (en Español ) Neutral Phase ENSO (El Nino Southern Oscillation) Indicates periods of low westerly shear across the North Atlantic tropics enhancing tropical cyclone development and intensification. The leading indicator of tropical cyclone activity is the Neutral ENSO phase. Cyclones is a catch-all term for all tracked tropical storms. El Nino (ENSO warm phase) Pacific warmer, T-showers heat upper atmosphere, increased westerly shear in Atlantic tropics. Current cycle 1995 to Warmer Atlantic. Absent El Nino, more storms likely. La Nina (ENSO cold phase) Pacific cooler, fewer T- showers, less shear in Atlantic tropics. Western shear Stronger westerly winds at upper atmospheric levels can shear the tops from developing storms.

Annual Tropical Activity during (2005 was Neutral ENSO)

Probability of a major hurricane striking the Gulf and East Coast is lowering from above normal to slightly above normal. Probability of AL/GA being affected by a tropical cyclone is above normal. Risk of major hurricane lowers. Forecast trend is toward normal. Key #1: Risk of weak El Nino developing has increased late summer/early autumn. Key#2: Weak El Nino increases upper shear limiting seasonal activity amount (toward long-term normal). The long-term normal is 11 storms, 6 hurricanes and 3 intense hurricanes Storm Forecast

“You don't need a weather man to know which way the wind blows.” Bob Dylan Tropical Cyclone Forecast for 2008

Year Observed Tropical Cyclones Forecast Tropical Cyclones Observed Hurricanes Forecast Hurricanes Observed Intense Hurricanes Forecast Intense Hurricanes Hurricane Season Forecast versus Actual

Summer 2008 Forecast –Slightly warmer than normal in Southern Balancing Authority Area. –Warmest month compared to normal is June. July/August close to normal. –Drought relieved by summertime thunderstorm regime and eventually affects from tropical cyclones. Tropical Cyclones 2008 –La Nina has ended and risk of weak El Nino late summer/early autumn has increased. Forecast exceeds all historical climatology. –13 tropical cyclones; 7 hurricanes; 3 intense hurricanes. –Early season activity in the Gulf of Mexico. Bulk of hurricanes during August – September period Summer Weather Forecast Highlights

46,308 MW Based On The Current Summer 2008 Weather Forecast & 95 0 F August early The Projected 2008 Summer Peak Demand for the Southern Balancing Authority Area Is: : To occur on : 2008 SBA Peak Demand Forecast

2008 Total Transfer Capability (TTC) / ATC Imports (Southern Company Ownership Share. Posted values as of ) June: 2073 / 1218 July: 2013 / 1158 August: 1700 / 845 June: 1774 / 209 July: 1766 / 151 August: 2026 / 511 June: 1168 / 358 July: 1212 / 374 August: 1107 / 338 June: 620 / 427 July: 620 / 427 August: 620 / 427 Southern Company VACAR TVA ENTERGY FLORIDA (units in MW)

New Homeland-Kettle Creek 230 kV TL Reconstruct tie line between Gulf and Progress Energy (FPC) Sinai-Woodruff 115 kV (new tie line) Replaces Scholz-Wooduff 115 kV New Sinai Cemetery 230/115 kV transformer Continued Improvements (~$ million/year) Note: Conasauga – Bradley (TVA) 500 kV is the new tie line between Georgia and TVA Replaces Conasauga -Sequoyah 500 KV tie line 2008 Notable Transmission Additions

Interruptible Service Summit –Scheduled for May 27 to ensure Readiness for Summer. Reliability Alert Simulation Exercise: –Held April 30 to ensure Readiness for Summer. –Communication Systems and Backups are tested. –PCC Initiates and Conducts with Plants, TCC’s, Fleet Ops, and Neighboring Control Areas. Simulation Includes: –Loss Of Normal Communication Systems. –Load Shed Simulation Summer Preparations

Operator Training –Reliability Desk Meeting was held on April 28. –Nuclear Grid Training, Southeastern Sub-region Black Start, Bugout drills, OASIS training. –32+ hours of emergency training. Drought Preparations –Arrangements w/Regulatory Agencies in place, if needed. –Reduced Hydro considered in Modeling Analysis. Tool Enhancements –New check-out tool in place. OPCO Critical Maintenanc e 2008 Summer Preparations (cont’d)

–Loads will be large, but handled proficiently. Projected 2008 SBA Peak… 46,308 MW… In August? Operators monitor the system continuously and are prepared to respond with appropriate operating procedures. –Interfaces are heavily utilized and will be busy. Occasional Import reductions possible, especially if significant outages or fuel (dispatch) volatility. Export capability is available if market develops. –Adequate Reserves should be available at peak. Assuming 3% EFOR and hydro available day. Prolonged drought may limit hydro and may lead to temperature limits at some plants. Purchases expected to supplement designated resources. Calls For Interruptible Customers not expected. Summary: 2008 Summer Preparations

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