The Southern Company

Good afternoon. My name is Tommy, and I'll be a conference operator today. At this time, I would like to welcome everyone to the Southern Company Second Quarter 2022 earnings call. All lines have been placed on mute to prevent any background noise. After the speaker's remark, there will be a question and answer session. I would now like to return the call over to Mr. Scott Gamble, Investor Relations Director. Please go ahead, sir.

Thank you, Tommy. Good afternoon and welcome to Southern Company's second quarter 2022 earnings call. Joining me today are Tom Fanning, Chairman, President, and Chief Executive Officer of Southern Company, and Dan Tucker, Chief Financial Officer. Let me remind you, we'll be making forward-looking statements today in addition to providing historical information. Various important factors could cause actual results to differ materially from those indicated in the forward-looking statements, including those discussed in the Form 10-K form 10Qs, and subsequent filings. In addition, we'll present non-GAAP financial information on this call. Reconciliations to the applicable GAAP measure are included in the financial information we released this morning, as well as the slides for this conference call, which are both available on our investor relations website at investor.southerncompany.com. At this time, I'll turn the call over to Tom Fanning.

Thank you, Scott. Good afternoon, and thank you for joining us today. As you can see from the materials we released this morning, we reported strong adjusted earnings results for the second quarter, meaningfully ahead of the estimate provided last quarter. The economies within our southeast service territories remain strong, and we believe we are well positioned to achieve our financial objectives for 2022. Before turning the call over to Dan for a more detailed look at our financial performance, I'd first like to provide An update on the recent progress at Plant Vogel Units 3 and 4. The projected completion timeline forecast for both units remains within the ranges we provided the last two quarters, although at the end of those ranges. At Unit 3, we continue to progress with all necessary systems turned over from construction to testing, all inspection records related to ITACs complete, and the submittal of 51 ITACs since our last earnings call, including two which were just filed this morning. Two ITACs remain outstanding. Concurrent with our final ITAC submittals, we plan to submit the all ITAC complete letter to the NRC for Unit 3. This submittal should position us for receipt of the historic 103G finding from the NRC a few weeks later documenting that license acceptance criteria for Unit 3 have been met. Upon receipt of the 103G finding from the NRC, no further NRC findings are necessary for Southern Nuclear to load fuel or begin the startup sequence. Receiving the 103G letter is an important milestone but there's still more work to do before we load fuel. In the weeks ahead, we will be focusing on testing and surveillance, demobilization, finishing work, and documentation. To support an end service date at the end of the first quarter of 2023, we will need to complete this work and load fuel by the end of October. Turning to Unit 4. Direct construction is now approximately 96% complete, and progress continues in advance of cold hydro testing and hot functional testing. Electrical production, in particular electrical terminations, continues to be a key area of focus. We continue to add resources on site for this work, and we have a plan for transitioning electrical field engineers from Unit 3 as we continue our focus on increasing productivity and ensuring first quality, first time to support the upcoming testing and long-term operations. Timely Unit 3 fuel load and startup, along with a sustained improvement in Unit 4 electrical production over the next several months is necessary to support our December 2023 in-service objective. Moving now to cost, at the end of the second quarter, Georgia Power recorded an after-tax charge of $39 million, including replenishment of contingency and estimated incremental co-owner sharing impacts. Contingency allocated during the quarter is primarily related to procurement activities for remediation and a revised resource plan for Unit 4 that reflects updated productivity assumptions and the planned increase in craft and support resources. We're excited about the progress that we've seen at the site over the last several months and look forward to the transition of Unit 3 from construction to operations in the weeks ahead. Dan, I'll turn the call over to you.