New clean coal technology plant reaches milestone with formal signing of agreement

Wednesday, February 22, 2006, ATLANTA – Southern Company and the U.S. Department of Energy have signed a cooperative agreement to formally launch the design and construction of an advanced 285-megawatt integrated gasification combined cycle facility in central Florida, which will be the cleanest, most efficient generating technology in the world today using coal as its fuel source.

Southern Company, in partnership with Orlando Utilities Commission (OUC) and Kellogg Brown and Root (KBR), will develop the facility through its Southern Power subsidiary, which builds, owns, and manages the company’s competitive generation assets. It will be located at OUC’s Stanton Energy Center in Orange County, Fla., near Orlando. “For more than a decade, we have been involved with the DOE and other partners in the development of clean coal technology,” said David Ratcliffe, Southern Company’s chairman, president and chief executive officer. “We are excited about the opportunity to now apply new technology to generate power more cleanly and efficiently using our nation’s abundant coal reserves.”

The plant, which is part of the energy department’s Clean Coal Power Initiative, will turn coal into gas for generating electricity, while significantly reducing emissions of sulfur dioxide, nitrogen oxides and mercury. The plant will use state-of-the-art emission controls, showcasing the cleanest, most efficient coal-fired power technology in the world, including the transport gasifier technology that Southern Company, KBR, DOE and others have been developing at the Power Systems Development Facility near Wilsonville, Ala.

“OUC is enthusiastic about the potential of this new form of coal gasification,” said Ken Ksionek, OUC General Manager and CEO. “We feel that this technology has the potential to be the cleanest, most efficient, least cost coal-based generation option available for the foreseeable future.”

The transport gasifier offers a simpler, more robust method for generating energy from coal than other available alternatives. It is unique among coal gasification technologies in that it is cost-effective when handling low rank coal, as well as coals with high moisture or high ash content. These coals make up half the proven U.S. and worldwide reserves. In addition, the technology produces 20 percent to 25 percent less carbon dioxide, on average, than coal-based generation in place today.

“Southern Company’s involvement in this coal gasification project signifies the company’s continued commitment to identify and apply cleaner methods for using coal,” said Paul Bowers, president of Southern Company Generation. “Developing new generation technologies using an abundant, critical fuel source such as coal is key to meeting the rising demand for energy. We’re excited about our partnership with OUC and the DOE to prepare the state of Florida and our nation for the challenges ahead.

“It’s not enough, however, to just develop new technologies,” Bowers continued. “They also must be marketed and shared worldwide. Southern Company and KBR will be working together to meet that goal.”

The National Energy Technology Laboratory will manage the project for the DOE. Initial funding of $13.8 million will support project activities through March 2007. The total cost of the 10-year project is an estimated $557 million, of which the Energy Department will contribute $235 million and the remaining costs will be shared by Southern Company and the other partners. The expected date for commercial operation is 2010.

With 4.2 million customers and more than 40,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) 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 and a growing competitive generation company, 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 six 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 www.southerncompany.com.

Established in 1923 and owned by the citizens of Orlando, OUC—The Reliable One provides electric and water services to more than 190,000 customers in Orlando, St. Cloud and parts of unincorporated Orange and Osceola counties. OUC is the second-largest public power utility in Florida. With a longstanding commitment to the environment – and a history of operating power plants that are among the cleanest in the nation – OUC has invested more than $200 million in state-of-the-art environmental protection equipment to safeguard the air, water and quality of life in Central Florida. Visit OUC’s Web site at www.ouc.com.

KBR, a subsidiary of Halliburton (NYSE: HAL) is a global engineering, construction, technology and services company. With a vision to Transform Resources into Value, KBR’s Energy and Chemicals division helps meet the world’s demand for energy and petroleum products by providing services to the upstream and downstream industries. Whether transforming oil and gas into liquefied natural gas (LNG), gas to liquids (GTL), refined products, petrochemicals and ammonia; or coal into emerging energy sources, KBR Energy and Chemicals delivers value to its customers, stakeholders, employees and the communities where they live and work. KBR employs more than 60,000 people in 43 countries around the world. Visit the company’s World Wide Web site at www.halliburton.com.

Contact Information

Lynn Wallace

Southern Company

Contact via E-mail