Southern Co. Says Capital Plan Could Near $100 Billion, Launches $1.75 Billion Equity Unit Sale

Southern Company wants to spend a lot more money, and it is already lining up the financing.

On its third-quarter earnings call, held Nov. 5, executives said the five-year capital plan could grow to roughly $100 billion. The company identified about $4 billion in additions on top of the $81 billion base plan it rolled out in February. On Thursday, Nov. 12, it announced a $1.75 billion equity units sale.

What is driving the spending

Data centers. Southern reported that data center electricity use rose 59% year over year in the third quarter and 52% for the first nine months of 2026. The figure measures power actually consumed, not just power promised in a contract.

Weather-normalized retail sales grew 3.5% in the quarter and 2.7% year to date. Commercial sales rose 7.3%. The company added about 15,000 new residential customers. Q3 retail electric revenues came to $6.6 billion.

Signed large-load contracts total about 21 gigawatts. Alabama Power and Georgia Power each added roughly 2 GW since the second quarter. Another 7 GW is in late-stage talks across Alabama, Georgia and Mississippi, and contracted capacity is not the same as electricity delivered.

The $4 billion in added investment includes 400 MW of uprates at existing natural gas plants and an expansion of the Southeast Connector gas pipeline. Georgia Power also won approval in the quarter for an agreement with Google to expand nuclear capacity through uprates over several years. The company is bidding on new generation contracts in Alabama and Georgia.

CFO David Poroch said that if company-owned resources are selected and authorized by regulators, "this could represent substantial incremental investment."

The earnings

Adjusted earnings per share were $1.94, up $0.34 from a year earlier. Year-to-date adjusted EPS is $4.40 against $3.76 in the same period of 2025. Management lifted its full-year outlook to $4.70, which is 9% growth and $0.10 above the top of the original 2026 guidance range. That figure rests on a fourth-quarter estimate of $0.30, which is a management projection, not a result.

Southern said it will update its financial outlook through 2031 in February.

The financing

The Nov. 12 announcement covers 35 million equity units at $50 each. Each unit bundles a contract to buy Southern common stock in December 2029 with interests in two series of remarketable senior notes. No shares are issued now, and the company says it expects no EPS dilution unless the stock trades above a threshold price.

Proceeds are earmarked for privately negotiated repurchases of Southern's 4.50% convertible notes due 2027, about $461.2 million of which is outstanding, and to repay roughly $776 million in short-term debt. The rest goes to general corporate purposes. BofA Securities and Barclays are joint book-running managers.

This follows about $2.4 billion in convertible notes raised in August, which also went partly to buy back older convertibles and pay down short-term debt. Analysts have flagged ongoing share issuance and convertible use as a risk, and hedging by noteholders could move the price of the common stock and the units.

The political question in Georgia

The midterms changed the map. Anger over energy costs, including electricity bills, helped Democrats win Congress and many state leadership posts, including Georgia's governor's office and a majority on the Public Service Commission, the body that decides what Georgia Power can build and charge for.

CEO Chris Womack said he is not worried. "I feel pretty confident about what we have in place," he said. He said he has not heard "any talk about retroactive" data center freezes or "looking backwards" at signed contracts.

Poroch made the financial case. Even if data centers ramp slower than planned, he said, contracts carry minimum bills covering at least 100% of the cost being added to the system. "Before the kilowatt moves over the meter, we are recovering our costs embedded in those minimum bills," he said.

That is the company's account of its own contracts. The details of those minimum-bill terms are what ratepayers and the new Georgia commission majority would need to test. The company's own risk discussion lists regulatory uncertainty in Georgia and generation cost inflation.

Womack also pointed to large loads beyond data centers, including Airbus, Audi and Mitsubishi Power, which plans a major expansion of its gas turbine plant in Savannah.

What comes next

The equity units sale has been announced, not completed. The bigger tests are in the Georgia and Alabama generation bids, where regulators must authorize any company-owned resources, and in February, when Southern says it will publish its refreshed outlook and may raise the upper end of near-term earnings guidance ranges.