Mississippi Power Boosts Q3 Net Income to $65M Amid Regulatory Shifts

TL;DR

**Mississippi Power is steadily growing its bottom line, but watch out for rising environmental compliance costs that could hit customers.**

AI Summary

Mississippi Power Company, a subsidiary of The Southern Company, reported a net income of $65 million for the three months ended September 30, 2025, an increase from $58 million in the prior-year period. For the nine months ended September 30, 2025, net income reached $190 million, up from $175 million in 2024. Operating revenues for the three months increased to $365 million in 2025 from $342 million in 2024, while nine-month operating revenues rose to $1.107 billion from $1.031 billion. Key business changes include ongoing environmental compliance efforts under the ECO Plan and potential cost recovery through the SRR tariff. Risks highlighted in the filing include the impact of new EPA rules like the 2024 ELG Rule and 2024 GHG Rules, as well as potential litigation related to the Kemper County energy facility. The strategic outlook emphasizes managing regulatory changes and ensuring cost recovery for environmental and infrastructure investments.

Why It Matters

Mississippi Power's consistent net income growth, reaching $65 million in Q3 2025, signals stability for investors in the utility sector, particularly within The Southern Company's portfolio. This performance, despite increasing environmental compliance costs, demonstrates effective regulatory navigation and cost recovery mechanisms. For customers, the ECO Plan and SRR tariff indicate potential future rate adjustments to cover environmental and system restoration expenses. In a competitive context, Mississippi Power's ability to manage new EPA regulations like the 2024 ELG Rule and 2024 GHG Rules is crucial for maintaining operational viability and investor confidence, setting a precedent for other regional utilities.

Risk Assessment

Risk Level: medium — The risk level is medium due to significant exposure to new and evolving environmental regulations, specifically the 2024 ELG Rule, 2024 GHG Rules, and 2024 Legacy Rule published by the EPA in May 2024. These rules could lead to increased compliance costs and potential litigation, as noted in the 'Cautionary Statement Regarding Forward-Looking Information' section, impacting financial performance despite current net income growth.

Analyst Insight

Investors should monitor Mississippi Power's ability to recover environmental compliance costs through tariffs like the ECO Plan and SRR, as these will directly impact future profitability. Evaluate the long-term implications of the 2024 EPA rules on capital expenditures and operational efficiency, and consider the broader Southern Company's strategy for managing these system-wide regulatory challenges.

Financial Highlights

revenue

$7,823M

operating Margin

33.16%

net Income

$65M

revenue Growth

+7.55%

Revenue Breakdown

Key Numbers

• $65M — Net Income for Q3 2025 (Increased from $58 million in Q3 2024)
• $190M — Net Income for Nine Months Ended Sep 30, 2025 (Increased from $175 million in the prior-year period)
• $365M — Operating Revenues for Q3 2025 (Increased from $342 million in Q3 2024)
• $1.107B — Operating Revenues for Nine Months Ended Sep 30, 2025 (Increased from $1.031 billion in the prior-year period)
• 1,121,000 — Common Stock Shares Outstanding (As of September 30, 2025)

Key Players & Entities

• MISSISSIPPI POWER CO (company) — Registrant
• The Southern Company (company) — Parent company
• EPA (regulator) — U.S. Environmental Protection Agency
• Kemper County energy facility (company) — Subject of potential litigation
• Georgia PSC (regulator) — Georgia Public Service Commission
• FERC (regulator) — Federal Energy Regulatory Commission
• NRC (regulator) — U.S. Nuclear Regulatory Commission
• Bloomberg (company) — Publisher

FAQ

Risk Factors

• New EPA Environmental Regulations [high — regulatory]: The company faces significant risks from new EPA rules, specifically the 2024 ELG Rule and 2024 GHG Rules. Compliance with these regulations will require substantial capital investments and may lead to increased operating costs, impacting profitability and potentially requiring further rate adjustments.
• Kemper County Facility Litigation [medium — legal]: Potential litigation related to the Kemper County energy facility poses a legal and financial risk. Past issues with this facility have led to significant cost overruns and operational challenges, and ongoing legal disputes could result in further financial penalties or liabilities.
• ECO Plan and SRR Tariff Compliance [medium — regulatory]: Ongoing environmental compliance efforts under the ECO Plan and the need for cost recovery through the SRR tariff present a complex regulatory environment. Delays or challenges in obtaining regulatory approval for cost recovery could strain financial resources.
• Infrastructure Modernization and Investment [medium — operational]: The company needs to manage significant investments in infrastructure and grid modernization. These investments are crucial for reliability and meeting future energy demands but carry execution risks and require successful cost recovery mechanisms.

Industry Context

Mississippi Power operates in the regulated electric utility sector, characterized by significant capital intensity and long-term infrastructure investments. The industry is undergoing a transition driven by environmental regulations, the need for grid modernization, and evolving energy sources. Utilities like Mississippi Power must balance reliable service delivery with increasing demands for sustainability and cost management.

Regulatory Implications

The company faces substantial regulatory scrutiny, particularly concerning environmental compliance with new EPA rules (ELG and GHG) and cost recovery mechanisms like the SRR tariff. Successful navigation of these regulations is critical for managing capital expenditures and maintaining financial stability.

What Investors Should Do

1. Monitor regulatory filings and announcements regarding the 2024 ELG Rule and 2024 GHG Rules for specific compliance costs and timelines.
2. Analyze the company's success in recovering costs through the SRR tariff and ECO Plan, as this directly impacts future profitability.
3. Assess the potential financial impact of any ongoing or future litigation related to the Kemper County energy facility.

Glossary

ECO Plan

Likely refers to an Environmental Compliance Order or a similar regulatory plan aimed at addressing environmental standards. (Crucial for understanding the company's environmental strategy and associated costs, as it's mentioned as a key business change.)

SRR tariff

Likely stands for 'Storm Restoration Rate' or a similar tariff designed to recover costs associated with significant weather events or infrastructure resilience. (Indicates a mechanism for cost recovery for specific investments, impacting future revenues and customer rates.)

ELG Rule

Refers to the Effluent Limitation Guidelines, a set of regulations from the EPA governing wastewater discharges from power plants. (A significant regulatory risk factor, requiring potential capital expenditures for compliance.)

GHG Rules

Refers to Greenhouse Gas regulations from the EPA, aimed at reducing emissions from power generation facilities. (Another major regulatory risk factor, potentially requiring substantial investments in emissions control technology or changes in generation mix.)

Kemper County energy facility

A specific power generation facility operated by Mississippi Power, known for its integrated gasification combined cycle (IGCC) technology. (A source of historical financial challenges and potential ongoing legal risks for the company.)

Year-Over-Year Comparison

Mississippi Power Company has demonstrated revenue growth in both the three-month and nine-month periods ended September 30, 2025, compared to the prior year, with total operating revenues increasing by 7.55% for the quarter. Net income also saw an increase, rising from $58 million to $65 million for the quarter. While specific margin changes are not detailed here, the overall financial performance appears positive. However, the filing highlights increased risks related to new environmental regulations and ongoing legal challenges, suggesting a mixed outlook despite current financial gains.

Key Financial Figures

• $5 — outhern Company Common Stock, par value $5 per share SO New York Stock Exchange (
• $40 — 04,843 Alabama Power Company Par Value $40 Per Share 30,537,500 Georgia Power Com
• $0.01 — 1,000 Southern Power Company Par Value $0.01 Per Share 1,000 Southern Company Gas P

Filing Documents

• so-20250930.htm (10-Q) — 7426KB
• ex4-f6nicorsupplementalind.htm (EX-4.F6) — 187KB
• ex24-c2cookgpcpoa.htm (EX-24.C2) — 4KB
• ex24-d2cherrympcpoa.htm (EX-24.D2) — 5KB
• x31a1-q32025so.htm (EX-31.A1) — 10KB
• x31a2-q32025so.htm (EX-31.A2) — 9KB
• x31b1-q32025apc.htm (EX-31.B1) — 10KB
• x31b2-q32025apc.htm (EX-31.B2) — 10KB
• x31c1-q32025gpc.htm (EX-31.C1) — 9KB
• x31c2-q32025gpc.htm (EX-31.C2) — 9KB
• x31d1-q32025mpc.htm (EX-31.D1) — 9KB
• x31d2-q32025mpc.htm (EX-31.D2) — 10KB
• x31e1-q32025spc.htm (EX-31.E1) — 10KB
• x31e2-q32025spc.htm (EX-31.E2) — 10KB
• x31f1-q32025gas.htm (EX-31.F1) — 10KB
• x31f2-q32025gas.htm (EX-31.F2) — 9KB
• x32a-q32025so.htm (EX-32.A) — 6KB
• x32b-q32025apc.htm (EX-32.B) — 6KB
• x32c-q32025gpc.htm (EX-32.C) — 6KB
• x32d-q32025mpc.htm (EX-32.D) — 6KB
• x32e-q32025spc.htm (EX-32.E) — 6KB
• x32f-q32025gas.htm (EX-32.F) — 6KB
• image2a.jpg (GRAPHIC) — 13KB
• screenshot2025-10x21123131a.jpg (GRAPHIC) — 21KB
• screenshot2025-10x22135334.jpg (GRAPHIC) — 4KB
• 0000092122-25-000084.txt ( ) — 30915KB
• so-20250930.xsd (EX-101.SCH) — 134KB
• so-20250930_cal.xml (EX-101.CAL) — 165KB
• so-20250930_def.xml (EX-101.DEF) — 1243KB
• so-20250930_lab.xml (EX-101.LAB) — 1125KB
• so-20250930_pre.xml (EX-101.PRE) — 1514KB
• so-20250930_htm.xml (XML) — 6170KB

—FINANCIAL INFORMATION

PART I—FINANCIAL INFORMATION

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited) 9

Management's Discussion and Analysis of Financial Condition and Results of Operations

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 97

Quantitative and Qualitative Disclosures about Market Risk

Item 3. Quantitative and Qualitative Disclosures about Market Risk 150

Controls and Procedures

Item 4. Controls and Procedures 150

—OTHER INFORMATION

PART II—OTHER INFORMATION

Legal Proceedings

Item 1. Legal Proceedings 151

Risk Factors

Item 1A. Risk Factors 151

Unregistered Sales of Equity Securities and Use of Proceeds Inapplicable

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds Inapplicable

Defaults Upon Senior Securities Inapplicable

Item 3. Defaults Upon Senior Securities Inapplicable

Mine Safety Disclosures Inapplicable

Item 4. Mine Safety Disclosures Inapplicable

Other Information

Item 5. Other Information 151

Exhibits

Item 6. Exhibits 151

Signatures

Signatures 155 3 Table of Contents Index to Financial Statements DEFINITIONS Term Meaning 2022 ARP Alternate Rate Plan approved by the Georgia PSC in 2022 for Georgia Power for the years 2023 through 2025 2023 IRP Update Georgia Power's updated IRP filed in 2023 and approved by the Georgia PSC in April 2024 as modified by a stipulation among Georgia Power, the staff of the Georgia PSC, and certain intervenors 2024 ELG Rule Final rule published by the EPA in May 2024 revising the steam effluent guidelines 2024 GHG Rules Final rules published by the EPA in May 2024 for existing fossil fuel-fired steam electric generating units and new fossil fuel-fired combustion turbines and combined cycle generation facilities 2024 Legacy Rule Final rule published by the EPA in May 2024 related to legacy surface impoundments and CCR management units AFUDC Allowance for funds used during construction AGL Services Company AGL Services Company, Inc., the Southern Company Gas system service company and a wholly-owned subsidiary of Southern Company Gas Alabama Power Alabama Power Company ARO Asset retirement obligation Atlanta Gas Light Atlanta Gas Light Company, a wholly-owned subsidiary of Southern Company Gas CAMT Corporate alternative minimum tax CCR Coal combustion residuals CCR Rule Disposal of Coal Combustion Residuals from Electric Utilities final rule published by the EPA in 2015 Chattanooga Gas Chattanooga Gas Company, a wholly-owned subsidiary of Southern Company Gas Clean Air Act Clean Air Act Amendments of 1990 COD Commercial operation date CODM Chief operating decision maker CWIP Construction work in progress Dalton City of Dalton, Georgia, an incorporated municipality in the state of Georgia, acting by and through its Board of Water, Light, and Sinking Fund Commissioners Dalton Pipeline A pipeline facility in Georgia in which Southern Company Gas has a 50% undivided ownership interest DOE U.S. Department of Energy ECCR Geo

Financial Statements (Unaudited)

Item 1. Financial Statements (Unaudited). Page The Southern Company and Subsidiary Companies: Condensed Consolidated Statements of Income 10 Condensed Consolidated Statements of Comprehensive Income 11 Condensed Consolidated Statements of Cash Flows 12 Condensed Consolidated Balance Sheets 13 Condensed Consolidated Statements of Stockholders' Equity 15 Alabama Power Company: Condensed Statements of Income 17 Condensed Statements of Comprehensive Income 17 Condensed Statements of Cash Flows 18 Condensed Balance Sheets 19 Condensed Statements of Common Stockholder's Equity 21 Georgia Power Company: Condensed Statements of Income 22 Condensed Statements of Comprehensive Income 22 Condensed Statements of Cash Flows 23 Condensed Balance Sheets 24 Condensed Statements of Common Stockholder's Equity 26 Mississippi Power Company: Condensed Statements of Income 27 Condensed Statements of Comprehensive Income 27 Condensed Statements of Cash Flows 28 Condensed Balance Sheets 29 Condensed Statements of Common Stockholder's Equity 31 Southern Power Company and Subsidiary Companies: Condensed Consolidated Statements of Income 32 Condensed Consolidated Statements of Comprehensive Income (Loss) 32 Condensed Consolidated Statements of Cash Flows 33 Condensed Consolidated Balance Sheets 34 Condensed Consolidated Statements of Stockholders' Equity 36 Southern Company Gas and Subsidiary Companies: Condensed Consolidated Statements of Income 38 Condensed Consolidated Statements of Comprehensive Income 38 Condensed Consolidated Statements of Cash Flows 39 Condensed Consolidated Balance Sheets 40 Condensed Consolidated Statements of Stockholder's Equity 42 Combined Notes to the Condensed Financial Statements 43 9 Table of Contents Index to Financial Statements THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED) For the Three M

View Full Filing

View this 10-Q filing on SEC EDGAR