What is the estimated financial impact of Hurricane Katrina on Southern Company and its subsidiaries?

Mississippi Power estimates total repair costs between $245 million and $295 million and expects revenue reductions of $12-$14 million in Q3 2005 and $10-$12 million in Q4 2005. Alabama Power estimates repair costs between $70 million and $85 million. While these impacts are material to Mississippi Power, Southern Company and Alabama Power do not currently expect a material impact on their consolidated net income, pending regulatory recovery of costs.

Are the repair costs for Hurricane Katrina covered by insurance?

Mississippi Power is pursuing recovery from its insurance carriers, but the amount of recovery cannot be estimated at this time. Both subsidiaries are also seeking regulatory approval to defer uninsured storm-related costs to mitigate their financial impact.

What is the status of power restoration for affected customers?

Mississippi Power had restored power to all customers who could receive it by September 10, 2005, but is still working on restoration for approximately 19,500 customers. Alabama Power restored power to all customers able to receive it by September 7, 2005.

Did Hurricane Katrina affect any power generation facilities?

Yes, Mississippi Power's Plant Watson sustained damage. The coal-fired units are expected to return to service by the end of 2005, and the gas units are being evaluated for repairs expected to be completed before the summer of 2006.

SOUTHERN CO 8-K SEC Disclosure

Summary

This 8-K filing reports the significant impact of Hurricane Katrina on Southern Company's subsidiaries, Alabama Power Company and Mississippi Power Company, which occurred on August 29, 2005. The hurricane caused extensive damage to the transmission and distribution facilities of both utilities, leading to widespread power outages across their service territories. Mississippi Power experienced full customer outages initially and is still working to restore power to some customers, with estimated repair costs ranging from $245 million to $295 million. Alabama Power also restored power to a large percentage of its affected customers and estimates repair costs between $70 million and $85 million. Both subsidiaries are seeking recovery of storm-related costs through insurance and regulatory deferrals. Mississippi Power has requested approval to defer uninsured costs above its accumulated provision for property damage, and Alabama Power intends to seek similar approval. The financial impact of these repairs, along with anticipated reductions in retail and wholesale sales revenues due to outages, is expected to be material to Mississippi Power, while Southern Company and Alabama Power currently project no material impact on their consolidated net income for the upcoming quarters and year-end, subject to regulatory approvals and recovery efforts. The company emphasizes its adequate liquidity to manage these costs.

Key Highlights

1Hurricane Katrina caused substantial damage to the transmission and distribution facilities of Alabama Power and Mississippi Power.
2Mississippi Power estimated total repair costs to be between $245 million and $295 million, with ongoing restoration efforts for approximately 19,500 customers.
3Alabama Power estimated total repair costs for Hurricane Katrina damage to be between $70 million and $85 million.
4Mississippi Power's Plant Watson sustained damage, with coal-fired units expected back by year-end 2005 and gas units by summer 2006.
5Both subsidiaries are seeking regulatory approval to defer uninsured storm-related costs, with potential material financial impacts if not approved.
6Mississippi Power anticipates a reduction in retail and wholesale sales revenues of $12 million to $14 million for Q3 2005 and $10 million to $12 million for Q4 2005.
7Southern Company management believes it has adequate liquidity to meet obligations, including costs associated with Hurricane Katrina.

SOUTHERN CO 8-K Report, Corporate Update (Sep 27, 2005)

Summary

Key Highlights

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