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2020EEI ESG/SustainabilityReporting TemplateNovember 2020

IntroductionAs Southern Company works to achieve a net zero carbonfuture, we remain committed to our core principles ofproviding clean, safe, reliable and affordable energy toour customers and communities. Southern Company’scommitment to delivering energy and energy solutionsincludes conserving and protecting the environmenttoday and for future generations. We actively engage allour stakeholders – including customers and stockholders– in a productive, transparent conversation about how weare strategically planning for the future while deliveringvalue and growth.Southern Company is a holding company that conducts itsbusiness through its subsidiaries. Accordingly, unless thecontext otherwise requires, references in this documentto Southern Company’s operations, such as generatingactivities, greenhouse gas (GHG) emissions, customersand employment practices, refer to those operationsconducted through its subsidiaries.Our Net-Zero GoalIn May 2020, we updated our long-term GHG emissionsreduction goal for our electric and gas operations to net zeroemissions by 2050, and we already have made significantprogress towards our 2030 goal of reducing emissions by50%. Since setting our decarbonization goals in 2018, we havecontinued to evaluate various pathways to achieve our goalsand have engaged in the evolving dialogue regarding theglobal need to achieve net zero emissions by midcentury. Wecurrently expect to achieve our interim 50% reduction goalas early as 2025. We are committed to providing programs toour customers to help accelerate our path to net zero.We believe our path to net zero by 2050 will be achievedthrough:»Using natural gas to support the transition to alower emitting generating fleet»Expanding zero-carbon resources, includingrenewables and nuclear»Enhancing energy efficiency programs»Including negative carbon strategiesESG StrategyInvesting in the futureWe are one of the only U.S. utilities pursuing an “all ofthe above” net zero energy strategy. Developing andmaintaining a diversified energy portfolio is essential tosuccessfully reducing emissions while also maintainingreliability and affordability for our customers. Since2007, we have significantly transformed the SouthernCompany system’s electricity generation mix, with coaldecreasing from 69% to 22% and renewables increasingfrom 1% to 12% of our annual energy mix in 2019.In our state-regulated service territories, we workwith Public Service Commissions to ensure that we cancontinue to provide clean, safe, reliable and affordableenergy. As described in our 2018 report, we use ascenario planning process to inform electricity resourceplanning decisions. There are multiple options evaluatedto meet any energy and reliability needs, which couldinclude asset retirements, power purchase agreements,the acquisition of existing generation assets or theconstruction of new generation units. By utilizing ourMaking progress toward our decarbonization goals2007GHG 020 EEI ESG/Sustainability Reporting Template l November 2020203050%Reduction2050Net ZeroGHG Emissions1

Annual energy mix*1%Percent of 100% electricitygeneration 9%20%0%10%20072017Renewables16%22%2018Natural GasNuclear2019Coal* Annual energy mix represents all of the energy the Southern Company system uses to serve its retail and wholesale customers during the year.It is not meant to represent delivered energy mix to any particular retail customer or class of customers. Annual energy mix percentages includenon-affiliate power purchase agreements.scenario planning process and working through ourregulators to make decisions in the best interest of ourcustomers, we help to minimize risk in our investmentdecisions. For more than 10 years, the Southern Companyretail electric utilities have utilized a wide set of fueland carbon price scenarios to inform resource planningdecisions. We are developing an additional carbon pricescenario to include in our planning process that starts at 50/metric ton and escalates annually.The scenario planning process has been instrumentalin our decisions to economically retire coal units, addzero-carbon capacity in the form of renewables andnuclear and add more efficient natural gas capacity toour portfolio. In employing this robust and analyticalapproach, GHG emissions have dropped by 44% since2007, and electricity remains affordable and reliable inour service territories.Just TransitionSouthern Company has, in the best interest of customers,retired or converted to natural gas 73% of its coal units since2010, and we expect to continue reducing coal capacity asmarket forces enable replacement with more economiclow-carbon and zero-carbon resources. It has always beenan imperative for Southern Company to prioritize thewell-being of our employees, customers and communities.2020 EEI ESG/Sustainability Reporting Template l November 2020During a time of transition and transformation, theimportance of this philosophy is magnified. Our goals areto keep employees through retraining or reassignment, tominimize economic disruption in the communities throughthe attraction of new businesses and redevelopment ofretirement sites and to maintain clean, safe and reliableelectricity for our customers.Carbon Reduction SolutionsSouthern Company remains committed to findingtechnology solutions for a carbon-constrained future. Asan industry leader in research and development (R&D)for over 50 years, Southern Company is well-positionedto facilitate the transition to a net zero future. Thecommitment to a net zero future will demand thedevelopment of transformational technology solutionsand their integration throughout our business. Our focusis to deliver technologies that eliminate carbon emissionswhile also increasing customer value and providingaffordable energy.Conserving natural resources is important to SouthernCompany, which is why we have managed land fornatural water filtration, flood buffering, soil health,biodiversity and climate resilience benefits for manyyears. Paired with our other carbon-reducing efforts,natural sequestration can serve as a sink to reduce2

atmospheric carbon dioxide concentrations. SouthernCompany is evaluating deploying natural carbonsequestration solutions to meet a net zero carbon futureincluding: afforestation, avoided deforestation and landmanagement practices.Our reports Planning for a low-carbon future andImplementation and action towards net zero detailSouthern Company’s efforts in the development ofsolutions to reduce GHG emissions.Natural GasPutting Safety FirstSafety begins with setting rigorous operating standards,providing our neighbors with natural gas safety guidelinesand following the latest public health protocols. Thishelps ensure a safe and secure environment for ouremployees who continue to serve on the frontlines,those working remotely and for the customers theyall serve. By equipping our team members with safetytraining, tools and the resources necessary to keep ourcommunities safe, they can respond when called upon.Our employees, including our CEO, are held accountablefor leak response performance and pipeline replacementprojects, among other safety measures, as part of ourannual Performance Pay Program.2020 EEI ESG/Sustainability Reporting Template l November 2020We also continually monitor and perform regularinspections of our systems to ensure safety, security,reliability and resiliency. We perform leakage surveysof our pipelines in accordance with Federal PipelineSafety Regulations. That means our transmission linesand business districts are surveyed annually and theremaining distribution pipelines are surveyed on either athree- or five-year schedule according to the regulation.Leakage surveys are conducted using a combination ofaerial, vehicular, and foot surveys with electronic leakdetection equipment.Concerning leak repair protocols, leaks are monitored andrepaired in accordance with federal and state regulatoryrequirements. Repairs on hazardous leaks are startedimmediately upon discovery. Non-hazardous leaks thathave the potential to become hazardous are repairedwithin 12-15 months of discovery.Our two largest natural gas distribution companies,Nicor Gas and Atlanta Gas Light, also participate in theAmerican Gas Association (AGA) Peer Review program, avoluntary safety and operation practices program thatallows participants to be reviewed by their peers, shareleading practices and receive valuable feedback to helpenhance safety and efficiencies.Southern Company Gas leverages best-in-classtechnology to help ensure the safety of its system.For example, working with the state’s Public Service3

Commission, Atlanta Gas Light was one of the first inthe nation to proactively replace infrastructure that wasat a higher risk for leaks or was no longer fit for servicewith modern materials. We completed replacement of allcast iron and unprotected steel pipe in 2013 and all pre1974 vintage plastic pipe in 2017. Since then we completedretirement of all cast iron pipes in the remainder of oursystem and replaced more than 800 miles of vintageplastic pipe. These infrastructure modernization programssignificantly decreased Southern Company Gas’ emissions.Our safety training, operating standards and monitoringmeet and exceed all state and federal regulations. That’sbecause putting safety first is not just a top priority,it’s our number one value. This commitment to safetyearned us the American Gas Association’s 2019 AccidentPrevention Certificate, acknowledging our achievementin having one of the lowest DART (Days Away, Restrictedor Transferred) incident rates in the country.Reducing Our Environmental FootprintOur efforts to maintain safe, reliable service has alsoenabled us to minimize our environmental impact. Between1998 and 2018, Southern Company Gas worked closely withstate commissioners to strategically invest more than 2.2billion in infrastructure replacements and improvements2020 EEI ESG/Sustainability Reporting Template l November 2020that reduced annual methane emissions from our natural gasdistribution companies by 50%. This accomplishment wasachieved while experiencing 20% growth in the distributionsystem. In addition to providing tremendous reliability andsafety benefits, this infrastructure improvement programallows Southern Company Gas distribution to delivernatural gas at almost 99.9% efficiency.As a founding member of Our Nation’s Energy (ONE)Future, we support reducing fugitive methane emissionsacross the entire natural gas supply chain (fromproduction through consumption) to 1% or less. In Octoberof 2019, our local distribution company Virginia NaturalGas announced plans to be the first natural gas utilityin America to provide customers with natural gas that is100% sourced, transported and distributed by companiesthat have pledged to reduce GHG emissions to lessthan 1% across the natural gas value chain. Based onONE Future’s methodology, our natural gas distributionoperations’ fugitive methane intensity for 2019 is only0.135%, well below ONE Future's 2025 goal of 0.44% forlocal distribution companies.For nearly three decades, Southern Company Gashas reported natural gas methane emissions throughEnvironmental Protection Agency’s (EPA) Gas STARvoluntary reporting program.4