Southern Company Announces Purchase of Florida Power Plant From Constellation Energy

ATLANTA, June 8 /PRNewswire-FirstCall/ -- Southern Company announced today that it has completed the purchase from Constellation Energy of a 680-megawatt dual-fueled simple-cycle generating plant in Cocoa, Fla., for $206 million plus certain closing costs and adjustments. As announced in April, Southern Company subsidiary Southern Power signed a Purchase and Sale Agreement with Constellation Energy to purchase Oleander Power Plant. Since then, both parties have received all necessary regulatory approvals and the purchase is now complete.

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Plant Oleander is now owned and operated by Southern Power, the subsidiary of Southern Company that owns, builds, acquires and markets energy in the competitive wholesale supply arena. Southern Power is part of Southern Company Generation, the business unit of Southern Company that oversees both retail and wholesale generation and generation services.

Plant Oleander is located in the growing Florida market, which is part of Southern Company Generation's competitive wholesale growth strategy, according to Ronnie Bates, president and chief executive officer of Southern Power.

"Acquisition of this facility, with its outstanding record of operations performance and with its output fully covered with two premier utilities in Florida, clearly demonstrates Southern Power's ability to execute our focused business strategy through our disciplined approach to growing our business in targeted markets," said Bates.

"The purchase of Oleander Power Plant is a good strategic fit for Southern Company in several respects," Bates explained. "The acquisition of Plant Oleander expands our wholesale competitive generation business in the growing Florida market. Also, the purchase fits our risk profile, with the plant's output covered in the near term by wholesale power contracts with creditworthy customers.

"Plant Oleander is a well-run plant with highly qualified employees, and we look forward to continuing to provide reliable, low-cost electricity to the plant's customers," said Bates. "We also are excited about the opportunity to serve additional customers in Florida."

Through Southern Company Generation, Southern Company operates 272 generating units in 68 fossil plants. Among these units is the Stanton Combined Cycle Unit A, a 633-megawatt combined cycle generating unit located near Orlando, Fla. Southern Power co-owns the plant with Orlando Utilities Commission, Florida Municipal Power Agency and Kissimmee Utility Authority.

The GE gas turbine technology at Plant Oleander is similar to technology at numerous Southern Company Generation plants. The facility is fueled primarily by natural gas. Gas-fired simple-cycle and combined-cycle technology is among the cleanest and most efficient methods of producing electricity.

Plant Oleander supplies electricity through long-term wholesale contracts to Florida Power and Light (FPL) and Seminole Electric Cooperative, Inc. With the purchase of the facility completed, Southern Power assumes responsibility for these contracts. Southern Company has existing long-term wholesale power agreements with FPL as well as with other customers in Florida.

With more than 4 million customers and nearly 39,000 megawatts of generating capacity, Atlanta-based Southern Company is the premier super-regional energy company in the Southeast and a leading U.S. producer of electricity. Southern Company owns electric utilities in four states, a growing competitive generation company and a competitive retail natural gas business, as well as fiber optics and wireless communications. Southern Company brands are known for excellent customer service, high reliability and retail electric prices that are 15 percent below the national average. Southern Company has been ranked the nation's top energy utility in the American Customer Satisfaction Index five years in a row. Southern Company has more than 500,000 shareholders, making its common stock one of the most widely held in the United States. Visit the Southern Company Web site at http://www.southerncompany.com/ .

Forward-Looking Statements Note:

Certain information contained in this release is forward-looking information based on current expectations and plans that involve risks and uncertainties. Forward-looking information includes, among other things, statements concerning our competitive wholesale business and growth strategies. Southern Company and Southern Power caution that there are certain factors that can cause actual results to differ materially from the forward-looking information that has been provided. The reader is cautioned not to put undue reliance on this forward-looking information, which is not a guarantee of future performance and is subject to a number of uncertainties and other factors, many of which are outside the control of Southern Company and Southern Power; accordingly, there can be no assurance that such suggested results will be realized.

The following factors, in addition to those discussed in our Annual Report on Form 10-K for the year ended Dec. 31, 2004, and subsequent securities filings, could cause results to differ materially from management expectations as suggested by such forward-looking information: the impact of recent and future federal and state regulatory change, including legislative and regulatory initiatives regarding deregulation and restructuring of the electric utility industry, and also changes in environmental, tax and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations; current and future litigation, regulatory investigations, proceedings or inquiries, including the pending EPA civil actions against certain Southern Company subsidiaries, IRS audits and Mirant-related matters; the effects, extent and timing of the entry of additional competition in the markets in which Southern Company's subsidiaries operate; variations in demand for electricity and gas, including those relating to weather, the general economy and population and business growth (and declines); available sources and costs of fuels; ability to control costs; investment performance of Southern Company's employee benefit plans; advances in technology; state and federal rate regulations and the impact of pending and future rate cases and negotiations; the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities; internal restructuring or other restructuring options that may be pursued; potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries; the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due; the ability to obtain new short- and long-term contracts with neighboring utilities; the direct or indirect effect on Southern Company's or its subsidiaries' business resulting from terrorist incidents and the threat of terrorist incidents; interest rate fluctuations and financial market conditions and the results of financing efforts, including Southern Company's and its subsidiaries' credit ratings; the ability of Southern Company and its subsidiaries to obtain additional generating capacity at competitive prices; catastrophic events such as fires, earthquakes, floods, hurricanes or other similar occurrences; the direct or indirect effects on Southern Company's or its subsidiaries' business resulting from incidents similar to the August 2003 power outage in the Northeast; and the effect of accounting pronouncements issued periodically by standard-setting bodies. Southern Company and its subsidiaries expressly disclaim any obligation to update any forward-looking information.