ATLANTA - June 26, 2008 - Southern Company today announced that it expects to record an after tax charge of approximately $70 million - $90 million in the second quarter of 2008 related to three residual investments from the 1990s, when the company pursued development of international energy projects. These international lease transactions, commonly known as "sale-in, lease-out" or "SILO" transactions, are no longer pursued by Southern Company or its subsidiaries.

In connection with an audit of the company's 2000 - 2003 tax returns, the Internal Revenue Service (IRS) challenged Southern Company's deductions related to the SILO transactions. In the third quarter of 2006, Southern Company paid the full amount of the disputed tax and the applicable interest on the SILO issue for tax years 2000 and 2001, and filed a claim for refund which was denied by the IRS. Following the IRS disallowance of the refund claim, Southern Company initiated litigation in the U.S. District Court for the Northern District of Georgia for a complete refund of tax and interest paid for the 2000 and 2001 tax years.

During the second quarter of 2008, decisions in favor of the IRS were reached in several court cases involving other tax payers with similar leveraged lease investments. Pursuant to the application of Financial Accounting Standards Board (FASB) Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48) and FASB Staff Position No. 13-2, "Accounting for a Change in the Timing of Cash Flows Relating to Income Taxes Generated by a Leveraged Lease Transaction" (FSP 13-2), management is required to assess, on a periodic basis, the likely outcome of the uncertain tax positions related to the SILOs.

Based on these accounting standards and management's review of the recent court decisions, Southern Company expects to record an after tax charge of approximately $70 million - $90 million in the second quarter of 2008. Of the total, approximately $20 million - $30 million is associated with the application of FIN 48 and represents additional interest expense related to tax returns for years 2000 - 2007 and approximately $50 million - $60 million represents non-cash charges related to the application of FSP 13-2. The charges related to FSP 13-2 reflect the reallocation of lease income and will be recognized as income over the remaining term of the affected leases. The tax benefit associated with the lease transactions represents timing differences that do not impact total net income over the life of the transactions. The ultimate impact on Southern Company's net income and cash flow will be dependent on the outcome of its pending litigation with the government and proposed legislation and cannot be determined at this time.

Chief Financial Officer Paul Bowers and Ron Hinson, senior vice president and chief accounting officer, will provide additional details for financial analysts at 11 a.m. EDT, on Friday, June 27.

Investors, media and the public may listen to a live Internet Webcast of the conference call at http://investor.southerncompany.com/ by clicking on the appropriate audio link. A replay of the Webcast will be available at the same site for 90 days.

About Southern Company

With nearly 4.4 million customers and more than 42,000 megawatts of generating capacity, Atlanta-based Southern Company (NYSE: SO) is the premier energy company serving the Southeast, one of America's fastest-growing regions. 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 significantly below the national average. Southern Company has been listed the top ranking U.S. electric service provider in customer satisfaction for nine consecutive years by the American Customer Satisfaction Index (ACSI). Visit our Web site at http://www.southerncompany.com/

Cautionary Note Regarding Forward-Looking Statements:

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 pending litigation and proposed legislation related to SILO transactions and expected charges for the second quarter, 2008. Southern Company cautions 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; accordingly, there can be no assurance that such suggested results will be realized. The following factors, in addition to those discussed in Southern Company's Annual Report on Form 10-K for the year ended December 31, 2007, could cause results to differ materially from management expectations as suggested by such forward-looking information: changes in tax and other laws and regulations to which Southern Company and any of its subsidiaries are subject, as well as changes in application of existing laws and regulations and current and future litigation, regulatory investigations, proceedings or inquiries, including IRS audits. Southern Company expressly disclaims any obligation to update any forward-looking information.

http://investor.southerncompany.com/

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Media Contact: Jason Cuevas, Southern Company Corporate Communications, (+1.404) 506.5333 or (+1.866) 506.5333, media@southerncompany.com