PRESS RELEASE: Moody's Puts Southern And Three Utilities On Review For Possible Downgrade

The following is a press release from Moody's Investors Service: Approximately $12 Billion of Debt Securities Affected New York, June 17, 2010 -- Moody's Investors Service placed the ratings of The Southern Company (A3 Senior Unsecured); Georgia Power Company (A2 Senior Unsecured); Gulf Power Company (A2 Senior Unsecured); Mississippi Power Company (A1 Senior Unsecured); and Southern Company Capital Funding, Inc. (A3 Senior Unsecured) on review for possible downgrade. Moody's also placed The Southern Company and Southern Company Funding Corporations' Prime-1 short-term rating for commercial paper and Georgia Power Company, Gulf Power Company, and Mississippi Power Company's VMIG-1 variable rate demand obligation ratings on review for possible downgrade. Moody's does not expect the review to result in more than a one notch downgrade of any of these ratings. Moody's affirmed the ratings and stable outlooks of Alabama Power Company (A2 Senior Unsecured); Southern Power Company (Baa1 Senior Unsecured); and Southern Electric Generating Company (A2 Senior Unsecured). "The review of the ratings of Georgia Power Company reflects cash flow coverage metrics that are below Moody's parameters for its current rating category and a higher business and operating risk profile resulting from new nuclear construction", said Michael G. Haggarty, Senior Vice President. The review also considers the utility's vulnerability to higher costs from possible carbon regulation and renewable portfolio requirements, a challenging Georgia economy, and an earned return that has been below its allowed return on equity in recent years. The review will focus on the status of its new nuclear construction project, including issues related to the shield building redesign and a possible delay in the receipt of its Construction and Operating License from the Nuclear Regulatory Commission into 2012, and the progress on reaching final agreement with the Department of Energy on a loan guarantee for this project. The review will also consider the impact that Georgia Power's substantial capital expenditure program will have on cash flow coverage ratios and the utility's prospects for obtaining significant rate relief in its upcoming rate case. The review of the ratings of Gulf Power Company considers cash flow coverage metrics that are weak for its rating; high capital expenditure requirements for environmental compliance that are expected to remain elevated for the next several years; a continued weak Florida economy; and the recently perceived decline in both the political and regulatory environment for credit supportiveness for investor-owned utilities in Florida. The review will focus on the prospects for improvement in Gulf Power's cash flow coverage metrics; the company's plans for financing its large capital expenditure program; the impact that the BP oil spill will have on the tourism and other commercial businesses in the Florida panhandle; and the effect that the continued regulatory and political uncertainty in Florida will have on the company's regulatory plans going forward. The review of the ratings of Mississippi Power Company is prompted by the company's decision to move forward with construction of the $2.4 billion Kemper County Integrated Gasification Combined Cycle (IGCC) plant following conditional approval from the Mississippi Public Service Commission. The review will focus on the impact that this project will have on the business and operating risk profile of the company and on cash flow coverage metrics over the next several years; the conditions imposed by the Mississippi Public Service Commission in approving the project; and the mitigating effect that investment tax credits and other federal incentives will have on the company's plans for financing the project. The review of the ratings of The Southern Company reflects the review of the ratings of three of its four utility subsidiaries and the higher business and operating risk profile of these utilities. The review will consider the magnitude of the equity contributions and other financial support to be required by the parent company to finance projects at the utilities, the company's still small but potentially growing renewable energy businesses outside of the Southeast, including a biomass project in Texas and a solar project in New Mexico. The review of the rating of Southern Company Capital Funding, Inc. reflects the guarantee of its debt by The Southern Company. The review of the ratings of Southern Company Funding Corporation reflects the review of the ratings of three of the five operating companies participating in this finance subsidiary's commercial paper program. The affirmation of the ratings and stable rating outlook on Alabama Power Company reflects robust financial metrics that are strong for its rating and manageable capital expenditures, as it is one of the few large Southeast utilities without the need to construct major new generation over the near term. The stable outlook on the ratings of Southern Electric Generating Company reflects the guarantee of its debt by Alabama Power Company. The affirmation of the ratings and stable rating outlook on Southern Power Company considers its high percentage of contracted revenues, strong counterparty credit quality, cash flow coverage metrics that are consistent, predictable, and adequate for its Baa1 rating, and manageable capital expenditures barring major acquisitions or new construction projects. Ratings placed under review for possible downgrade include: The Southern Company's A3 senior unsecured and Issuer Rating, and Prime-1 short-term rating for commercial paper; Georgia Power Company's A2 senior unsecured and Issuer Rating, Baa1 preferred stock, VMIG 1 variable rate demand obligation, and the A3 trust preferred rating of Georgia Power Capital Trust VII; Gulf Power Company's A2 senior unsecured and Issuer Rating, Baa1 preferred stock, and VMIG 1 variable rate demand obligation; Mississippi Power Company's A1 senior unsecured and Issuer Rating, A3 preferred stock, and VMIG 1 variable rate demand obligation; Southern Company Capital Funding's A3 senior unsecured; Southern Company Funding Corporation's Prime-1 short-term rating for commercial paper. The last rating action on The Southern Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company and Southern Company Capital Funding was on September 1, 2009, when their rating outlooks were changed to negative from stable. The last rating action on Alabama Power Company, Southern Power Company, Southern Company Funding Corp., and Southern Electric Generating Company was on September 1, 2009 when their ratings and stable outlooks were affirmed. The principal methodology used in rating these issuers was Moody's Regulated Electric and Gas Utilities, published in August 2009, and available on www.moodys.com in the Ratings Methodologies sub-directory under the Research and Ratings tab. Other methodologies and factors that may have been considered in the process of rating these issuers can also be found in the Ratings Methodologies sub-directory on Moody's website. The Southern Company is a utility holding company headquartered in Atlanta, Georgia and the parent company of utility subsidiaries Alabama Power Company, Georgia Power Company, Gulf Power Company, Mississippi Power Company, Southern Electric Generating Company, wholesale power company Southern Power Company, financing subsidiary Southern Company Capital Funding, Inc., and commercial paper issuer Southern Company Funding Corporation. Copyright 2010 Moody's Investors Service, Inc. and/or its licensors and affiliates (collectively, "MOODY'S"). All rights reserved. CREDIT RATINGS ARE MOODY'S INVESTORS SERVICE, INC.'S ("MIS") CURRENT OPINIONS OF THE RELATIVE FUTURE CREDIT RISK OF ENTITIES, CREDIT COMMITMENTS, OR DEBT OR DEBT-LIKE SECURITIES. MIS DEFINES CREDIT RISK AS THE RISK THAT AN ENTITY MAY NOT MEET ITS CONTRACTUAL, FINANCIAL OBLIGATIONS AS THEY COME DUE AND ANY ESTIMATED FINANCIAL LOSS IN THE EVENT OF DEFAULT. 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