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

2. 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.

3. 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

4. Southern Company Overview

6. Southern Power Organizational Structure

7. 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

8. 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

9. 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.

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

11. Acquisitions and Renewables Overview11

12. 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

13. 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

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