POWR Powersecure International, Inc.

PROXY STATEMENT

This proxy statement contains information relating to a special meeting of stockholders of PowerSecure International, Inc. which we refer to as “PowerSecure”, the “Company”, “we”, “us” or “our”. The special meeting will be held on May 5, 2016, at 9:00 a.m. local time, at the offices of PowerSecure located at 9400 Globe Center Drive, Suite 116, Morrisville, North Carolina 27560. We are furnishing this proxy statement to stockholders of the Company as part of the solicitation of proxies by the Company’s board of directors, which we refer to as the “Board”, for use at the special meeting and at any adjournments or postponements thereof. This proxy statement is dated April 7, 2016 and is first being mailed to our stockholders on or about April 7, 2016.

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SUMMARY TERM SHEET

This summary term sheet highlights selected information in this proxy statement and may not contain all of the information about the merger that is important to you. We have included page references in parentheses to direct you to more complete descriptions of the topics presented in this summary term sheet. You should carefully read this proxy statement in its entirety, including the annexes hereto and the other documents to which we have referred you, for a more complete understanding of the matters being considered at the special meeting. You may obtain, without charge, copies of documents incorporated by reference into this proxy statement by following the instructions under the section of this proxy statement entitled “Where You Can Find Additional Information” beginning on page 76.

The Parties

(page 16)

PowerSecure is a leading provider of utility and energy technologies to electric utilities, and their industrial, institutional and commercial customers. PowerSecure provides products and services in the areas of Interactive Distributed Generation ^® (IDG ^® ), solar energy, energy efficiency and utility infrastructure. The Company is a pioneer in developing IDG ^® power systems with sophisticated smart grid capabilities, including the ability to (1) forecast electricity demand and electronically deploy the systems to deliver more efficient, and environmentally friendly, power at peak power times, (2) provide utilities with dedicated electric power generation capacity to utilize for demand response purposes and (3) provide customers with the most dependable standby power in the industry. Our proprietary distributed generation system designs utilize a range of technologies to deliver power, including renewables. The Company’s energy efficiency products and services include energy efficient lighting solutions that utilize LED technologies to improve lighting quality, and the design, installation and maintenance of energy conservation measures which the Company offers, primarily as a subcontractor, to large energy service company providers, called ESCOs, for the benefit of commercial, industrial and institutional customers as end users and directly to retailers. PowerSecure also provides electric utilities with transmission and distribution infrastructure maintenance and construction services, and engineering and regulatory consulting services.

The Southern Company, which we refer to as “Southern Company”, owns all of the outstanding common stock of Alabama Power Company, Georgia Power Company, Gulf Power Company and Mississippi Power Company, each of which is an operating public utility company. These companies supply electric service in the states of Alabama, Georgia, Florida and Mississippi. In addition, Southern Company owns all of the common stock of Southern Power Company, which is also an operating public utility company. Southern Power Company constructs, acquires, owns and manages generation assets, including renewable energy projects and sells electricity at market-based rates in the wholesale market. Southern Company is a Fortune 500 company and a member of the S&P 500 Index.

PSMS Corp., which we refer to as “Merger Sub”, is a wholly-owned indirect subsidiary of Southern Company formed solely for the purpose of effecting the merger. Upon the consummation of the merger, Merger Sub will cease to exist.

The Merger

(page 22)

The Company, Southern Company and Merger Sub entered into an Agreement and Plan of Merger, which we refer to as the “merger agreement”, on February 24, 2016. A copy of the merger agreement is attached as Annex A to this proxy statement and is incorporated herein by reference. Under the terms of the merger agreement, subject to the satisfaction or waiver (if permissible under applicable law) of specified conditions, Merger Sub will be merged with and into the Company, which we refer to as the “merger”. The Company will survive the merger as a wholly-owned indirect subsidiary of Southern Company.

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Upon the consummation of the merger, each share of the Company’s common stock, par value $.01 per share, which we refer to as “Company common stock”, that is issued and outstanding immediately prior to the effective time of the merger, which we refer to as the “effective time”, other than shares owned by the Company as treasury stock, shares owned by a subsidiary of the Company and shares owned by stockholders who have properly demanded appraisal rights under the General Corporation Law of the State of Delaware, which we refer to as the “DGCL”, will be converted into the right to receive $18.75 in cash, which we refer to as the “merger consideration”, without interest and less any applicable withholding taxes.

The Special Meeting

(page 17)

The special meeting will be held on May 5, 2016, at 9:00 a.m. local time, at the offices of PowerSecure located at 9400 Globe Center Drive, Suite 116, Morrisville, North Carolina 27560. At the special meeting, you will be asked to, among other things, vote for the adoption of the merger agreement, the nonbinding compensation proposal (as described below under “ Questions and Answers About the Special Meeting and the Merger—What proposals will be considered at the special meeting? ”) and, if necessary or appropriate, the adjournment of the special meeting proposal. Please see the section of this proxy statement entitled “ The Special Meeting ” for additional information on the special meeting, including how to vote your shares of Company common stock.

Stockholders Entitled to Vote; Vote Required to Adopt the Merger Agreement

(page 18)

You may vote at the special meeting if you owned any shares of Company common stock at the close of business on April 7, 2016, the record date for the special meeting. As of the close of business on the record date, there were 22,508,173 shares of Company common stock outstanding and entitled to vote, held by 145 stockholders of record. You may cast one vote for each share of Company common stock that you held on the record date on each of the proposals presented in this proxy statement. The adoption of the merger agreement by the Company’s stockholders requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote at the special meeting.

Recommendation of the Board; Reasons for Recommending the Adoption of the Merger Agreement

(page 30)

After careful consideration, the Board unanimously approved the merger agreement and resolved to recommend that the Company’s stockholders vote to adopt the merger agreement. Accordingly, the Board unanimously recommends a vote “FOR” the proposal to adopt the merger agreement. The Board also unanimously recommends a vote “FOR” the nonbinding compensation proposal and “FOR” the approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

The Board has determined that the merger and the other transactions contemplated by the merger agreement are advisable and fair to and in the best interests of the Company’s stockholders. For a discussion of the material factors that the Board considered in resolving to recommend that the Company’s stockholders vote to adopt the merger agreement, please see the section of this proxy statement entitled “ The Merger—Reasons for Recommending the Adoption of the Merger Agreement ” beginning on page 30.

Opinion of Financial Advisor

(page 34 and Annex B)

J.P. Morgan Securities LLC, which we refer to as “J.P. Morgan”, delivered its opinion to the Board that, as of February 24, 2016 and based upon and subject to the factors, assumptions and limitations set forth therein, the $18.75 in cash per share of Company common stock to be paid to the holders of the outstanding shares of Company common stock pursuant to the merger agreement was fair, from a financial point of view, to such holders.

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The full text of the written opinion of J.P. Morgan, dated February 24, 2016, which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated herein by reference. The Company urges stockholders to read the opinion in its entirety. J.P. Morgan’s opinion is addressed to the Board, is directed only to the merger consideration to be paid to the holders of the Company’s common stock in the merger and does not constitute a recommendation as to how any holder of Company common stock should vote with respect to the merger agreement or any other matter. The summary of the opinion set forth in this proxy statement is qualified in its entirety by reference to the full text of such opinion.

For a more complete description, please see the section of this proxy statement entitled “ The Merger—Opinion of J.P. Morgan ” beginning on page 34.

Certain Effects of the Merger

(page 40)

Upon the consummation of the merger, Merger Sub will be merged with and into the Company, and the Company will continue to exist following the merger as a wholly-owned indirect subsidiary of Southern Company.

Following the consummation of the merger, shares of Company common stock will no longer be traded on the New York Stock Exchange, which we refer to as the “NYSE”, or any other public market, and the registration of shares of Company common stock under the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act”, will be terminated.

Effects on the Company if Merger is Not Completed

(page 41)

In the event that the proposal to adopt the merger agreement does not receive the required approval from the Company’s stockholders, or if the merger is not completed for any other reason, the Company’s stockholders will not receive any payment for their shares of Company common stock in connection with the merger. Instead, the Company will remain an independent public company and stockholders will continue to own their shares of Company common stock. Under certain circumstances, if the merger agreement is terminated, the Company may be obligated to pay to Southern Company a termination fee or to reimburse Southern Company for its expenses. Please see the section of this proxy statement entitled “ The Merger Agreement—Termination Fee and Reimbursement of Expenses ” beginning on page 63.

Treatment of Equity Awards

(page 52)

Stock Options .

At the effective time, each option to purchase Company common stock (each, a “stock option”), whether vested or unvested, that is outstanding immediately prior to the effective time will be deemed fully vested and be cancelled and converted into the right to receive a cash amount equal to the product of (a) the total number of shares of Company common stock subject to such stock option immediately prior to the effective time multiplied by (b) the excess, if any, of $18.75 over the per share exercise price of the stock option, less any applicable withholding taxes. Any stock option with a per share exercise price greater than $18.75 will be cancelled at the effective time for no consideration.

Restricted Shares, RSUs and PSUs.

Except as described below under the section of this proxy statement entitled “ Interests of the Company’s Directors and Executive Officers in the Merger—Hinton Letter Agreement ,” at the effective time, each award of restricted Company common stock (“restricted shares”), restricted stock units (“RSUs”) or performance stock

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units (“PSUs”) that is outstanding immediately prior to the effective time will be deemed fully vested and be cancelled and converted into the right to receive $18.75 in cash in respect of each share of Company common stock covered by the award. Each PSU will be deemed vested based on the target level of achievement of the performance goals applicable to such PSU.

Please see the section of this proxy statement entitled “ The Merger Agreement—Treatment of Equity Awards ” beginning on page 52 for additional information.

Interests of the Company’s Directors and Executive Officers in the Merger

(page 41)

Details of the beneficial ownership of Company common stock of the Company’s directors and executive officers are set out in the section of this proxy statement entitled “ Security Ownership of Certain Beneficial Owners and Management ” beginning on page 65. In addition to their interests in the merger as stockholders, certain of the Company’s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. In considering the proposals to be voted on at the special meeting, you should be aware of these interests. The members of the Board were aware of and considered these interests, among other matters, in evaluating and reaching its decision to approve the merger agreement and determining that the merger and the other transactions contemplated by the merger agreement are advisable and fair to and in the best interests of the Company’s stockholders, and in resolving to recommend that the Company’s stockholders vote to adopt the merger agreement. These interests include:

For more information, please see the section of this proxy statement entitled “ The Merger—Interests of the Company’s Directors and Executive Officers in the Merger ” beginning on page 41.

No Financing Condition

(page 60)

There is no financing condition to the merger.

Conditions to the Merger

(page 61)

Each party’s obligation to effect the merger is subject to the satisfaction at or prior to the effective time of the following conditions:

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Each party’s obligation to consummate the merger is also subject to certain additional conditions, including:

In addition, Southern Company’s obligation to consummate the merger is also subject to the following condition:

Prior to the effective time, each of the Company and Southern Company may waive any of the conditions to its obligation to consummate the merger even though one or more of the conditions described above has not been met, except where waiver is not permissible under applicable law.

Regulatory Waiting Periods and Approvals Required for the Merger

(page 49)

The merger is subject to the requirements of the HSR Act, which prevents Southern Company and the Company from completing the merger until required information and materials are furnished to the Antitrust Division of the United States Department of Justice (“DOJ”) and the United States Federal Trade Commission (“FTC”) and the HSR Act waiting period is terminated or expires. On March 10, 2016, Southern Company and the Company filed the requisite notification and report forms under the HSR Act with the DOJ and the FTC. On March 30, 2016, the FTC granted early termination of the waiting period under the HSR Act with respect to the merger.

The merger agreement generally requires each party to use reasonable best efforts to resolve objections that may be asserted under any law that would delay, prevent, enjoin or otherwise prohibit the transactions contemplated by the merger agreement, subject to certain limitations (as described under “ The Merger Agreement—Efforts to Obtain Regulatory Approvals ”).

Subject to certain limitations, either party may terminate the merger agreement if the merger is not consummated by November 30, 2016, which we refer to as the “outside date”.

No Solicitation by the Company

(page 57)

The merger agreement generally restricts the Company’s ability to solicit alternative proposals (as defined below under “The Merger Agreement — No Solicitation by the Company” ) from (including by furnishing information to) third parties, or participate in discussions or negotiations with third parties regarding an alternative proposal. Under certain circumstances, however, and in compliance with certain obligations contained in the merger agreement, the Company is permitted to engage in negotiations with, and provide information to, third parties making an unsolicited alternative proposal that the Board determines in good faith, after consultation with its outside financial and legal advisors, constitutes or is reasonably likely to result in a superior proposal (as

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defined below under “ The Merger Agreement — No Solicitation by the Company ”). Under certain circumstances prior to the adoption of the merger agreement by the Company’s stockholders, the Board may effect a change in recommendation (as described below under “The Merger Agreement—Changes in the Board’s Recommendation” ) and the Company may terminate the merger agreement in order to enter into a definitive agreement with respect to a superior proposal, upon payment by the Company of a $12,000,000 termination fee to Southern Company.

Termination of the Merger Agreement

(page 62)

The merger agreement may be terminated at any time prior to the effective time in the following circumstances:

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Termination Fee and Reimbursement of Expenses

(page 63)

If the merger agreement is terminated under certain specified circumstances, the Company will be required to pay Southern Company a termination fee of $12,000,000. In certain circumstances, the Company would be required to reimburse Southern Company’s expenses up to $1,000,000 (which reimbursement would reduce on a dollar-for-dollar basis any termination fee subsequently payable by the Company).

Appraisal Rights

(page 68 and Annex C)

Under the DGCL, PowerSecure stockholders who do not vote for the adoption of the merger agreement have the right to seek appraisal of the fair value of their shares in cash as determined by the Delaware Court of Chancery, but only if they comply fully with all of the applicable requirements of the DGCL, which are summarized in this proxy statement. Any appraisal amount determined by the court could be more than, the same as, or less than the value of the merger consideration. Any PowerSecure stockholder intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to the Company prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified under the DGCL will result in the loss of appraisal rights. Because of the complexity of the DGCL relating to appraisal rights, if you are considering exercising your appraisal right we encourage you to seek the advice of your own legal counsel. See “ Appraisal Rights of Stockholders ” on page 68. A copy of Section 262 of the DGCL is attached as Annex C to this proxy statement and is incorporated by reference herein.

Material U.S. Federal Income Tax Consequences

(page 47)

The receipt of cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes and may also be a taxable transaction under applicable state, local or foreign income or other tax laws. Generally, for U.S. federal income tax purposes, if you are a U.S. holder (defined below in the section of this proxy statement entitled “ The Merger—Material U.S. Federal Income Tax Consequences of the Merger ”), you will recognize gain or loss equal to the difference, if any, between the amount of cash you receive pursuant to the merger (including any cash required to be withheld for tax purposes) and your adjusted tax basis in the shares of Company common stock converted into cash pursuant to the merger. If you are a non-U.S. holder (defined below in the section of this proxy statement entitled “ The Merger—Material U.S. Federal Income Tax Consequences of the Merger ”), the receipt of cash pursuant to the merger will generally not be a taxable transaction to you under U.S. federal income tax laws unless you have certain connections to the United States, but may be a taxable transaction to you under non-U.S. federal income tax laws, and you are encouraged to seek tax advice regarding such matters. Because individual circumstances may differ, we recommend that you consult your own tax advisor to determine the particular tax effects of the merger to you.

You should read the section of this proxy statement entitled “ The Merger—Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 47 for a more complete discussion of the material U.S. federal income tax consequences of the merger.

Additional Information

(page 76)

You can find more information about the Company in the periodic reports and other information we file with the Securities and Exchange Commission (the “SEC”). The information is available at the SEC’s public reference facilities and at the website maintained by the SEC at www.sec.gov . See “ Where You Can Find Additional Information ” beginning on page 76.

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Litigation Relating to the Merger

(page 49)

A putative class action lawsuit challenging the merger has been filed on behalf of PowerSecure stockholders in North Carolina state court. The lawsuit alleges that the directors of PowerSecure breached their fiduciary duties to PowerSecure stockholders by engaging in a flawed process to sell PowerSecure, by agreeing to sell PowerSecure for inadequate consideration and by agreeing to improper deal protection terms in the merger agreement. In addition, the lawsuit alleges that the entity defendants aided and abetted these breaches of fiduciary duty. The lawsuit seeks, among other things, an injunction barring the merger, an accounting for damages and attorneys’ fees. The defendants believe that the lawsuit is without merit.

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QUESTIONS AND ANSWERS ABOUT THE SPECIAL MEETING AND THE MERGER

The following questions and answers are intended to briefly address some commonly asked questions regarding the special meeting and the merger. These questions and answers may not address all the questions that may be important to you as a stockholder. You should read the more detailed information contained elsewhere in this proxy statement, the annexes to this proxy statement and the documents referred to or incorporated by reference in this proxy statement.

The exchange of shares of Company common stock for cash pursuant to the merger will be a taxable transaction for U.S. federal income tax purposes. Please see the section of this proxy statement entitled “ The Merger—Material U.S. Federal Income Tax Consequences of the Merger ” beginning on page 47 for a more detailed description of the United States federal income tax consequences of the merger. You should consult your own tax advisor for a full understanding of how the merger will affect your federal, state, local or non-U.S. taxes.

If you plan to attend the meeting, please note that you will need to present government-issued identification showing your name and photograph ( i.e ., a driver’s license or passport), and, if you are an institutional investor, evidence showing your representative capacity for such entity, in each case to be verified against our stockholder list as of the record date for the meeting. In addition, if your shares are held in the name of a broker, you will need a valid proxy from such entity or a recent brokerage statement or letter from such entity reflecting your stock ownership as of the record date for the special meeting.

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The approval of the nonbinding compensation proposal requires that the number of votes cast in favor of the proposal exceeds the votes cast opposing the proposal. Assuming a quorum is present at the special meeting, abstentions, failures to vote and “broker non-votes” will have no effect on the outcome of the nonbinding compensation proposal.

The approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement, requires that the number of votes cast in favor of the proposal exceed the votes cast opposing the proposal. Assuming a quorum is present at the special meeting, abstentions, failures to vote and “broker non-votes” will have no effect on the outcome of the adjournment proposal.

For a discussion of the factors that the Board considered in resolving to recommend that the Company’s stockholders vote to adopt the merger agreement, please see the section of this proxy statement entitled “ The

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Merger—Reasons for Recommending the Adoption of the Merger Agreement ” beginning on page 30. In addition, in considering the recommendation of the Board with respect to the merger agreement, you should be aware that some of the Company’s directors and executive officers have interests that may be different from, or in addition to, the interests of the Company’s stockholders generally. Please see the section of this proxy statement entitled “ The Merger—Interests of the Company’s Directors and Executive Officers in the Merger ” beginning on page 41.

If you are a stockholder of record and you submit a proxy card or voting instructions but do not direct how to vote on each item, the persons named as proxies will vote in favor of the proposal to adopt the merger agreement, the nonbinding compensation proposal and the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

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Assuming a quorum is present at the special meeting, abstentions, failures to vote and “broker non-votes” will have no effect on the outcome of the nonbinding compensation proposal and the proposal to approve the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

However, if your shares are held in “street name” through a broker, nominee, fiduciary or other custodian, you must contact your broker, nominee, fiduciary or other custodian to determine how to revoke your proxy.

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If you received a householded mailing and you would like to have additional copies of this proxy statement mailed to you, or you would like to opt out of this practice for future mailings, please submit your request to Investor Relations, by phone at (919) 556-3056, by mail to PowerSecure International, Inc., 1609 Heritage Commerce Court, Wake Forest, North Carolina 27587, or by e-mail to info@powersecure.com . We will promptly send additional copies of this proxy statement upon receipt of any such request.

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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

To the extent any statements made in this proxy statement contain information that is not historical, these statements are forward-looking statements and are subject to uncertainties and risks. These forward-looking statements relate to, among other things, the expected benefits of the merger such as efficiencies, cost savings, growth potential, market profile, financial strength and the expected timing of the completion of the transaction. Forward-looking statements often include words such as “anticipate,” “assume,” “believe,” “can,” “could,” “estimate,” “expect,” “forecast,” “future,” “goal,” “indicate,” “intend,” “may,” “outlook,” “plan,” “potential,” “predict,” “project,” “proposed,” “seek,” “should,” “target,” “would” or similar expressions. In addition, any statements that refer to expectations, projections or other characterizations of future events or circumstances are forward-looking statements. Although certain of these statements set out herein are indicated above, all of the statements in this document that contain forward-looking statements are qualified by these cautionary statements. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, such statements involve risks and uncertainties, and undue reliance should not be placed on such statements. Certain material factors or assumptions are applied in making forward-looking statements, including, but not limited to, factors and assumptions regarding the items outlined above. Actual results may differ materially from those expressed or implied in such statements. Important factors that could cause actual results to differ materially from these expectations include, among other things, the following: the failure to receive, on a timely basis or otherwise, the required approvals in connection with the merger by the Company’s stockholders and federal antitrust authorities (including the terms of such approvals); the risk that another condition to closing of the merger may not be satisfied; and other risk factors relating to the energy industry, as detailed from time to time in the Company’s reports filed with the SEC. There can be no assurance that the transaction will in fact be consummated.

Additional information about these factors and about the material factors or assumptions underlying such forward-looking statements may be found in the body of this proxy statement, as well as under Item 1.A in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2015 and in our other filings with the SEC incorporated by reference herein. The Company cautions that the foregoing list of important factors that may affect future results is not exhaustive. When relying on forward-looking statements to make decisions with respect to the Company, investors and stockholders should carefully consider the foregoing factors and other uncertainties and potential events. All subsequent written and oral forward-looking statements concerning the transaction or other matters attributable to the Company or any other person acting on its behalf are expressly qualified in their entirety by the cautionary statements referenced above.

There also may be other factors that we do not anticipate or that we do not recognize are material that could cause results to differ materially from expectations. Forward-looking statements speak only as of the date they are made. The Company expressly disclaims any obligation to update or revise any forward-looking statement, whether as a result of future events, new information or otherwise, except as required by law.

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THE PARTIES

PowerSecure International, Inc.

PowerSecure is a leading provider of utility and energy technologies to electric utilities, and their industrial, institutional and commercial customers. PowerSecure provides products and services in the areas of Interactive Distributed Generation ^® (IDG ^® ), solar energy, energy efficiency and utility infrastructure. The Company is a pioneer in developing IDG ^® power systems with sophisticated smart grid capabilities, including the ability to (1) forecast electricity demand and electronically deploy the systems to deliver more efficient, and environmentally friendly, power at peak power times, (2) provide utilities with dedicated electric power generation capacity to utilize for demand response purposes and (3) provide customers with the most dependable standby power in the industry. Our proprietary distributed generation system designs utilize a range of technologies to deliver power, including renewables. The Company’s energy efficiency products and services include energy efficient lighting solutions that utilize LED technologies to improve lighting quality, and the design, installation and maintenance of energy conservation measures which the company offers, primarily as a subcontractor, to large energy service company providers, called ESCOs, for the benefit of commercial, industrial and institutional customers as end users and directly to retailers. PowerSecure also provides electric utilities with transmission and distribution infrastructure maintenance and construction services, and engineering and regulatory consulting services. PowerSecure’s corporate headquarters is located at 1609 Heritage Commerce Court, Wake Forest, North Carolina 27587, its telephone number is (919) 556-3056 and its internet address is www .powersecure.com .

The Southern Company

Southern Company is the premier energy company serving the Southeast through its subsidiaries. Southern Company owns all of the outstanding common stock of Alabama Power Company, Georgia Power Company, Gulf Power Company and Mississippi Power Company, each of which is an operating public utility company. These companies supply electric service in the states of Alabama, Georgia, Florida and Mississippi. In addition, Southern Company owns all of the common stock of Southern Power Company, which is also an operating public utility company. Southern Power Company constructs, acquires, owns and manages generation assets, including renewable energy projects and sells electricity at market-based rates in the wholesale market. Southern Company is a Fortune 500 company and a member of the S&P 500 Index. Its corporate headquarters is located at 30 Ivan Allen Jr. Boulevard, N.W., Atlanta, Georgia 30308, its telephone number is (404) 506-5000 and its internet address is www.southerncompany.com .

PSMS Corp.

PSMS Corp., which we refer to as “Merger Sub”, is a wholly-owned indirect subsidiary of Southern Company and was formed in Delaware in February 2016, solely for the purpose of effecting the merger. Merger Sub has engaged in no business activities to date and it has no material assets or liabilities of any kind, other than those incident to its formation and those incurred in connection with the merger. Upon the consummation of the merger, Merger Sub will cease to exist. The address of Merger Sub is 30 Ivan Allen Jr. Boulevard, N.W., Atlanta, Georgia 30308, and its telephone number is (404) 506-5000.

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THE SPECIAL MEETING

We are furnishing this proxy statement to the Company’s stockholders as part of the solicitation of proxies by the Board for use at the special meeting and at any adjournments or postponements thereof.

Date, Time and Place

The special meeting will be held on May 5, 2016, at 9:00 a.m. local time, at the offices of PowerSecure located at 9400 Globe Center Drive, Suite 116, Morrisville, North Carolina 27560.

If you plan to attend the meeting, please note that you will need to present government-issued identification showing your name and photograph ( i.e. , a driver’s license or passport), and, if you are an institutional investor, evidence showing your representative capacity for such entity, in each case to be verified against our stockholder list as of the record date for the meeting. In addition, if your shares are held in the name of a broker, you will need a valid proxy from such entity or a recent brokerage statement or letter from such entity reflecting your stock ownership as of the record date for the meeting.

Purpose of the Special Meeting

The special meeting is being held for the following purposes:

A copy of the merger agreement is attached as Annex A to this proxy statement.

Recommendation of the Board

The Board carefully reviewed and considered the terms and conditions of the merger agreement, the merger and the other transactions contemplated by the merger agreement. The Board unanimously approved the merger agreement, determined that the merger and the other transactions contemplated by the merger agreement are advisable and fair to and in the best interests of the Company’s stockholders, directed that the merger agreement be submitted for adoption at a duly held meeting and resolved to recommend that the Company’s stockholders vote to adopt the merger agreement. Accordingly, the Board unanimously recommends a vote “FOR” the proposal to adopt the merger agreement. For a discussion of the material factors that the Board considered in resolving to recommend that the Company’s stockholders vote to adopt the merger agreement, please see the section of this proxy statement entitled “ The Merger—Reasons for Recommending the Adoption of the Merger Agreement ”.

The Board also unanimously recommends a vote “FOR” the nonbinding compensation proposal and “FOR” the approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement.

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Record Date and Stockholders Entitled to Vote

Only holders of record of Company common stock as of the close of business on April 7, 2016, the record date for the special meeting, are entitled to vote the shares of Company common stock they held on the record date at the special meeting. As of the close of business on the record date, there were 22,508,173 shares of Company common stock outstanding and entitled to vote, held by 145 stockholders of record. Each stockholder is entitled to one vote for each share of Company common stock held by such stockholder on the record date on each of the proposals presented in this proxy statement.

Quorum

The Company’s Bylaws provide that the presence, in person or by proxy, of holders of a majority of the votes entitled to be cast at the special meeting constitutes a quorum for the transaction of business. Abstentions will be counted for purposes of determining the presence of a quorum. “Broker non-votes” will not be counted for purposes of determining the presence of a quorum unless the broker has been instructed to vote on at least one of the proposals presented in this proxy statement.

A “broker non-vote” occurs on a matter when a broker, bank or other holder of shares you own in “street name” is not permitted to vote on that particular matter without instructions from you, you do not give such instructions and the broker or other nominee indicates on its proxy card, or otherwise notifies us, that it does not have authority to vote its shares on that matter. You must follow instructions from your broker to authorize it to vote with respect to the proposal to adopt the merger agreement, the nonbinding compensation proposal or the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

In the event that a quorum is not present at the special meeting, or if there are insufficient votes to adopt the merger agreement at the time of the special meeting, we expect that the special meeting will be adjourned or postponed to solicit additional proxies.

Vote Required

Adoption of the Merger Agreement

The adoption of the merger agreement requires the affirmative vote of the holders of a majority of the outstanding shares of Company common stock entitled to vote at the special meeting, voting together as a single voting group. Under the merger agreement, the receipt of such required vote is a condition to the consummation of the merger.

The failure to vote your shares of Company common stock, abstentions and “broker non-votes” will have the same effect as a vote “AGAINST” the proposal to adopt the merger agreement.

Approval of the Nonbinding Compensation Proposal

The approval of the nonbinding compensation proposal requires that the number of votes cast in favor of the proposal exceeds the number of votes cast opposing the proposal. Assuming a quorum is present at the special meeting, abstentions, failures to vote and “broker non-votes” will have no effect on the outcome of the nonbinding compensation proposal. This is an advisory vote only and will not be binding on the Company or the Board.

Approval of the Adjournment of the Special Meeting

The approval of the adjournment of the special meeting, if necessary or appropriate, to solicit additional proxies if there are insufficient votes at the time of the special meeting to adopt the merger agreement, requires the affirmative vote of the holders of a majority of the voting shares represented at the special meeting, without further notice other than by announcement at the meeting.

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Voting Procedures

Whether or not you plan to attend the special meeting and regardless of the number of shares you own, your careful consideration of, and vote on, the proposal to adopt the merger agreement is important and we encourage you to vote promptly.

To ensure that your shares are voted at the special meeting, we recommend that you provide voting instructions promptly by proxy, even if you plan to attend the special meeting and vote in person, using one of the following three methods:

If you are the record holder of your shares or your shares are held in street name, then telephone and Internet voting will be accessible until 11:59 p.m. Eastern time on May 4, 2016. Telephone and Internet voting are available 24 hours a day.

Stockholders of the Company who hold their shares in “street name” by a broker, nominee, fiduciary or other custodian should refer to the proxy card or other information forwarded by their broker, nominee, fiduciary or other custodian for instructions on how to vote their shares.

If you have any questions or need assistance voting your shares, please contact MacKenzie Partners, Inc., PowerSecure’s proxy solicitor for the special meeting, toll-free at (800)  322-2885 or via email at proxy@mackenziepartners.com.

How Proxies Are Voted

If you complete and submit your proxy card or voting instructions, the persons named as proxies will follow your instructions. If you are a stockholder of record and you submit a proxy card or voting instructions but do not direct how to vote on each item, the persons named as proxies will vote in favor of the proposal to adopt the merger agreement, the nonbinding compensation proposal and the proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

Revocation of Proxies

You have the right to revoke your proxy at any time prior to the time your shares are voted at the special meeting. If you are a stockholder of record, your proxy can be revoked in several ways:

However, if your shares are held in “street name” through a broker, nominee, fiduciary or other custodian, you must contact your broker, nominee, fiduciary or other custodian to determine how to revoke your proxy.

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Voting in Person

If you plan to attend the special meeting and vote in person, you will be given a ballot at the special meeting. Please note that admission to the special meeting is limited to the Company’s stockholders or their representatives.

For holders of record of Company common stock, upon your arrival at the meeting location, you will need to present identification to be admitted to the meeting. If you are a stockholder who is an individual, you will need to present government-issued identification showing your name and photograph ( i.e. , a driver’s license or passport), or, if you are representing an institutional investor, you will need to present government-issued photo identification and professional evidence showing your representative capacity for such entity. In each case, we will verify such documentation with our record date stockholder list. We reserve the right to limit the number of representatives who may attend the special meeting. Cameras and electronic recording devices are not permitted at the special meeting.

For stockholders holding shares in “street name”, in addition to providing identification as outlined for record holders above, you will need a valid proxy from your broker or a recent brokerage statement or letter from your broker reflecting your stock ownership as of the record date. Otherwise, you will not be permitted to attend the special meeting. If your shares are held in the name of a broker, you must obtain and bring to the special meeting a proxy card issued in your name from the broker to be able to vote at the special meeting.

Appraisal Rights

Under the DGCL, PowerSecure stockholders who do not vote for the adoption of the merger agreement have the right to seek appraisal of the fair value of their shares in cash as determined by the Delaware Court of Chancery, but only if they comply fully with all of the applicable requirements of the DGCL, which are summarized in this proxy statement. Any appraisal amount determined by the court could be more than, the same as, or less than the value of the merger consideration. Any PowerSecure stockholder intending to exercise appraisal rights must, among other things, submit a written demand for appraisal to the Company prior to the vote on the adoption of the merger agreement and must not vote or otherwise submit a proxy in favor of adoption of the merger agreement. Failure to follow exactly the procedures specified under the DGCL will result in the loss of appraisal rights. Because of the complexity of the DGCL relating to appraisal rights, if you are considering exercising your appraisal right we encourage you to seek the advice of your own legal counsel. See “ Appraisal Rights of Stockholders ” on page 68. A copy of Section 262 of the DGCL is attached as Annex C to this proxy statement.

Solicitation of Proxies

The Company will pay the costs of soliciting proxies from its stockholders. In addition to this mailing, proxies may be solicited by directors, officers or employees of the Company in person, by telephone or electronic transmission. None of the directors, officers or employees will be directly compensated for such services. The Company has retained MacKenzie Partners, Inc. to assist in the distribution and solicitation of proxies. The Company will pay MacKenzie Partners, Inc. a fee of approximately $12,500, plus reasonable expenses, for these services.

The extent to which these proxy soliciting efforts will be undertaken depends entirely upon how promptly proxies are submitted. You should submit your proxy without delay by mail, by telephone or via the Internet. The Company also reimburses brokers, nominees, fiduciaries or other custodians for their expenses in sending these materials to you and getting your voting instructions.

Adjournments and Postponements

Although it is not currently expected, the special meeting may be adjourned in the absence of a quorum by the affirmative vote of holders of a majority of the shares of Company common stock having voting power present in person or represented by proxy at the special meeting.

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Even if a quorum is present, the special meeting could also be adjourned in order to provide more time to solicit additional proxies in favor of adoption of the merger agreement if sufficient votes are cast in favor of proposal to adjourn the special meeting, if necessary or appropriate, to solicit additional proxies.

If the adjournment is for more than 30 days or if after the adjournment a new record date is set for the adjourned meeting, a notice of the adjourned meeting must be given to each stockholder of record entitled to vote at the special meeting.

Voting by Company Directors and Executive Officers

As of the close of business on April 7, 2016, the record date for the special meeting, the Company’s directors and executive officers owned, in the aggregate, 1,002,982 shares of Company common stock (including restricted shares but excluding other equity awards), or collectively approximately 4.5% of the outstanding shares of Company common stock. The Company’s directors and executive officers have informed us that they intend, as of the date hereof, to vote all of their shares of Company common stock in favor of the matters before our stockholders as described in this proxy statement. Certain of the Company’s directors and executive officers have interests in the merger that may be different from, or in addition to, the interests of the Company’s stockholders generally. For more information, please see the section of this proxy statement entitled “ The Merger—Interests of the Company’s Directors and Executive Officers in the Merger ” beginning on page 41.

Assistance

If you have any questions or need assistance voting your shares, please contact MacKenzie Partners, Inc., PowerSecure’s proxy solicitor for the special meeting, toll-free at (800) 322-2885 or via email at proxy@mackenziepartners.com.

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THE MERGER

Overview

The Company is seeking the adoption by its stockholders of the merger agreement the Company entered into on February 24, 2016 with Southern Company and Merger Sub. Under the terms of the merger agreement, subject to the satisfaction or (if permissible under applicable law) waiver of specified conditions, Merger Sub will be merged with and into the Company, with the Company surviving the merger as a wholly-owned indirect subsidiary of Southern Company. The Board has unanimously approved the merger agreement, determined that the merger and the transactions contemplated by the merger agreement are advisable and fair to and in the best interests of the Company’s stockholders, directed that the merger agreement be submitted to the Company’s stockholders for adoption at a duly held meeting and resolved to recommend that the Company’s stockholders vote in favor of the proposal to adopt the merger agreement.

Upon the consummation of the merger, each share of Company common stock issued and outstanding immediately prior to the effective time, other than shares owned by the Company as treasury stock, shares owned by a subsidiary of the Company and shares owned by stockholders who have properly demanded appraisal rights under the DGCL, will be converted into the right to receive $18.75 in cash, without interest and less any applicable withholding taxes.

Background of the Merger

The Board and senior management of PowerSecure regularly review and evaluate the Company’s strategic business plan and the possibility of pursuing various strategic transactions as part of their ongoing efforts to strengthen the Company’s business, grow the Company and enhance stockholder value, taking into account financial, industry, competitive and other conditions. As an essential component of our strategy, the Board and senior management continuously assess the Company’s business needs and opportunities, including potential acquisitions and divestitures, as well as existing business line expansions, in order to complement and expand the Company’s existing business and operations. As part of this process, from time to time, the Board and senior management have reviewed potential strategic alternatives, including strategic acquisitions and divestitures, a sale of the Company and remaining an independent, stand-alone entity.

PowerSecure has provided services to the Southern Company system at various times over the past ten years, including at present two large-scale solar projects being completed by PowerSecure for the benefit of Georgia Power’s customers.

Throughout the course of this business relationship, PowerSecure and Southern Company have from time to time engaged in discussions regarding their existing business relationship and whether there are opportunities to expand this relationship in a manner that would be mutually beneficial for the two companies and their respective customers and stockholders. At one such meeting that occurred on May 12, 2015 and was attended by Sidney Hinton, President and Chief Executive Officer of PowerSecure, John D. Bluth, Senior Vice President of Investor Relations and Corporate Communications of PowerSecure, Mark S. Lantrip, Chairman, President and Chief Executive Officer of Southern Company Services, Inc., a subsidiary of Southern Company (“Southern Company Services”), James Y. Kerr II, Executive Vice President, General Counsel and Chief Compliance Officer of Southern Company, and Christine M. Thom, Strategic Support Director at Southern Company Services, the parties discussed possible mutual opportunities for business collaborations and expansion of the relationship, including but not limited to the possibility of a strategic transaction in which Southern Company would acquire PowerSecure, but no specific form of transaction or valuation was discussed. Southern Company Services management also expressed an interest in learning more about PowerSecure’s business in order to help determine whether the parties should continue to explore a potential business collaboration.

On May 22, 2015, Mr. Kerr sent a draft confidentiality agreement to Mr. Bluth, which Southern Company Services and PowerSecure negotiated during the ensuing week and executed on June 1, 2015. Following the

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execution of the confidentiality agreement, PowerSecure provided certain non-public information, primarily background information about PowerSecure and its operations primarily intended to educate Southern Company about PowerSecure’s business, to Southern Company Services through in-person and telephonic meetings between each party’s senior management teams, and through email.

On June 2, 2015, Mr. Hinton met with Mr. Lantrip and Ms. Thom to continue discussions regarding a possible relationship between the two companies, including a possible strategic transaction, but no specific form of transaction or valuation was discussed.

On June 16, 2015, Mr. Hinton sent to Mr. Lantrip certain non-public materials about PowerSecure’s business and business outlook.

On July 7, 2015, Mr. Hinton and Eric Dupont, Executive Vice President and Chief Financial Officer of PowerSecure, had a telephonic conversation with certain members of senior management and other employees of Southern Company Services to review presentation materials about PowerSecure’s business and operations previously provided by PowerSecure to Southern Company Services.

During July and August 2015, members of senior management of PowerSecure continued to provide certain non-public information and materials to, and responded orally and by email to inquiries from, certain members of senior management of Southern Company Services regarding PowerSecure’s background, business, operations and financial results and projections, in an effort to help educate Southern Company on PowerSecure’s operations and prospects, and to evaluate potential synergistic opportunities between the two companies.

On September 8 and September 9, 2015, the Board, at its regularly scheduled quarterly meeting, which was also attended by certain members of senior management and by a representative of Kegler Brown Hill + Ritter (“Kegler Brown”), PowerSecure’s outside general counsel, authorized management and certain members of the Board to meet with investment bankers regarding PowerSecure’s strategic alternatives, and to provide a recommendation to the full Board regarding potential engagement of one or more investment banking firms to conduct a strategic review of PowerSecure.

On September 11, 2015, Messrs. Hinton and Dupont had a telephone conference with John J. Robinson, Vice President Business Development and Strategy Support at Southern Company Services, and Ms. Thom to commence a process for Southern Company Services to conduct more detailed due diligence with respect to PowerSecure.

On September 28, 2015, Messrs. Hinton and Dupont had a telephone conference with representatives of Southern Company Services to review and discuss Southern Company Services’s due diligence investigation of PowerSecure.

On October 7 and October 12, 2015, certain members of the Board and of senior management, as well as Kegler Brown, met with several investment banking firms, including J.P. Morgan, regarding the potential engagement of an investment banking firm to advise PowerSecure in connection with PowerSecure’s review of its strategic alternatives.

On October 22, 2015, Mr. Hinton had a telephone conference with Mr. Robinson regarding PowerSecure’s business and prospects and various due diligence items.

On November 5, 2015, Mr. Dupont and a representative of Hein & Associates LLP (“Hein”), PowerSecure’s independent registered public accounting firm, had a telephone conference with representatives of Deloitte & Touche LLP (“Deloitte”), Southern Company’s independent auditing firm, regarding due diligence matters.

On November 9 and November 10, 2015, representatives of Deloitte and Hein met for a due diligence review of Hein’s audit work papers on PowerSecure. On November 11, 2015, representatives of Deloitte met at PowerSecure’s offices with senior management of PowerSecure regarding certain due diligence items.

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On November 12, 2015, the Board, along with certain members of senior management and Kegler Brown, had a follow-up meeting with J.P. Morgan to discuss its potential engagement for purposes of exploring PowerSecure’s strategic alternatives.

On November 12, 2015, certain members of senior management of PowerSecure had a telephone conference with certain senior members of management of Southern Company Services to discuss due diligence matters, and particularly those pertaining to PowerSecure’s financial results and prospects.

On December 3, 2015, Messrs. Hinton and Dupont and Christopher T. Hutter, Executive Vice President and Chief Operating Officer of PowerSecure, along with Kegler Brown, met with certain members of senior management of Southern Company Services along with other Southern Company Services employees and representatives of Jones Day, Southern Company’s outside counsel, to discuss Southern Company Services’s due diligence investigation.

On December 7, 2015, Messrs. Hinton, Hutter and Dupont had a due diligence telephone conference with certain members of senior management of Southern Company Services.

On December 8, 2015, the Board, at its regular quarterly meeting that was also attended by certain members of senior management and by Kegler Brown, authorized PowerSecure to engage J.P. Morgan to serve as PowerSecure’s investment banking advisor, to assist PowerSecure in its review of strategic alternatives, including the evaluation of a possible sale of PowerSecure.

On December 8, 2015, PowerSecure and J.P. Morgan signed two investment banking engagement letters, one letter regarding the evaluation of PowerSecure’s strategic alternatives and the other letter regarding J.P. Morgan’s engagement in the event of a sale of PowerSecure.

On December 10, 2015, Messrs. Hinton, Hutter and Dupont, along with Kegler Brown, had a due diligence telephone conference with certain members of Southern Company Services’s senior management and Jones Day.

On December 14, 2015, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and counsel from Kegler Brown, to discuss the initiation of PowerSecure’s review of potential strategic alternatives, including alternatives that involved the Company continuing on a stand-alone basis and alternatives that involved a sale of the Company. J.P. Morgan discussed the timeline for the project, including for a review of strategic alternatives and for a sale of the Company. During the meeting, counsel from Kegler Brown reviewed with the directors their fiduciary duties in the context of considering a potential sale of the Company, should the Board determine to pursue such a transaction.

On December 17, 2015, Mr. Hinton met with certain members of senior management of Southern Company Services to continue the discussions regarding Southern Company’s interest in a strategic transaction with PowerSecure and certain items of due diligence. While no specific form of transaction, valuation or form of consideration was proposed, Mr. Hinton communicated PowerSecure’s general expectations regarding valuations that could potentially form the basis for negotiation of a transaction.

Near the end of December 2015, Thomas A. Fanning, Southern Company’s Chairman, President and Chief Executive Officer, contacted Mr. Hinton to advise him that Southern Company’s senior leadership was interested in evaluating a potential acquisition of PowerSecure, and to ask Mr. Hinton if he would be willing to meet with Southern Company leadership in order to present the business and prospects of PowerSecure and to discuss the potential benefits and synergies of a strategic transaction. Mr. Hinton attended such meetings on January 11 and 12, 2016, during which he discussed the background, business, operations and prospects of PowerSecure and the potential synergies of a strategic transaction, and the parties explored areas of mutual opportunities.

On January 11, 2016, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and Kegler Brown, to discuss the process PowerSecure

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would undertake in connection with a potential proposal from Southern Company to acquire PowerSecure. The Board determined that such a process should include reviewing valuation, strategic alternatives and sensitivity analyses, potential discussions and negotiations between senior management, J.P. Morgan and Southern Company. The Board also determined that the process should include a “market check” consisting of J.P. Morgan contacting other potential acquirors to gauge their interest in a potential transaction with the Company, thorough evaluation of any proposals, with the assistance of J.P. Morgan and outside counsel, and the Company’s senior management and advisors keeping the Board updated on a regular basis. To that end, the Board directed J.P. Morgan to prepare a list of companies that could potentially be interested in acquiring PowerSecure. During the meeting, Kegler Brown further reviewed with the directors their fiduciary duties in the context of considering a potential sale of the Company, should the Board determine to pursue such a transaction.

On January 15, 2016, Mr. Hinton met with Mr. Robinson and Ms. Thom to continue the discussions regarding Southern Company’s interest in a strategic transaction with PowerSecure and certain items of due diligence.

On January 18, 2016, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and Kegler Brown, to discuss the market check process which the Board had previously authorized, including reviewing a list of potential strategic and financial acquirors that could potentially be interested in a transaction with PowerSecure. J.P. Morgan provided a list of potential acquirors, and the Board and management evaluated, and provided input and suggestions with respect to, the potential acquirors, with a focus on reaching out to companies most likely to be interested in acquiring the company at the highest price. The Board directed J.P. Morgan to reach out to those potential candidates to determine if they would be interested in an acquisition of PowerSecure, and if so, to provide an indication of the valuation at which they would be willing to transact. Kegler Brown again advised the Board of its fiduciary duties in connection with evaluating a potential sale of the company.

On January 20 and January 22, 2016, representatives of J.P. Morgan contacted the parties that had been discussed with the Board in order to gauge their interest in a potential acquisition of, or other strategic transaction with PowerSecure. The Company’s identity was only disclosed to potential buyers that demonstrated interest in considering a potential transaction.

On January 25, 2016, a party that had been contacted by J.P. Morgan, referred to herein as Party A, indicated an interest in exploring a possible strategic transaction with PowerSecure and signed a confidentiality agreement. On January 26, 2016, J.P. Morgan delivered to Party A marketing materials and financial information regarding PowerSecure. On January 28, J.P. Morgan had follow-up discussions with Party A regarding the Company. On February 1 and February 2, 2016, certain members of senior management of PowerSecure and representatives of J.P. Morgan held telephonic meetings regarding PowerSecure with Party A in which they discussed the Company’s business, operations, products and services, markets, financial results and projections, among other topics.

On January 25, 2016, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and Kegler Brown. At that meeting, J.P. Morgan presented its preliminary analysis of PowerSecure’s potential strategic alternatives, on both a stand-alone basis and with respect to a potential sale of all or part of PowerSecure’s business, including a preliminary valuation analysis of PowerSecure pursuing various strategic alternatives. J.P. Morgan also provided an update to the Board on the market check process, including which potential candidates expressed an interest in exploring a strategic transaction or acquisition of PowerSecure and which candidates were still evaluating the opportunity. J.P. Morgan continued to update the Board of the progress and results of the market check process after the meeting.

On January 28, 2016, a party that had been contacted by J.P. Morgan referred to herein as Party B, indicated an interest in exploring a possible strategic transaction with PowerSecure and signed a confidentiality agreement. Later that day, J.P. Morgan delivered to Party B marketing materials and financial information regarding PowerSecure.

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On January 29, 2016, Mr. Hinton met with Messrs. Lantrip and Robinson and Ms. Thom to continue discussions regarding a potential acquisition of PowerSecure by Southern Company. Mr. Hinton reiterated to Southern Company his previous feedback regarding valuations that could potentially form the basis for negotiation of a transaction between the parties. During the meeting, the parties agreed that any post-transaction roles for Mr. Hinton or other PowerSecure executive officers should not be negotiated prior to the material terms of the transaction being agreed, including valuation.

On February 1, 2016, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and Kegler Brown, to review the expressions of interest from potential buyers received by PowerSecure and J.P. Morgan. J.P. Morgan reported that two of the companies, Party A and Party B, had entered into confidentiality agreements with PowerSecure and were reviewing the PowerSecure marketing materials and considering whether they were interested in pursuing a transaction with the Company. Because a proposal was anticipated to be made by Southern Company within the next few weeks, the Board instructed J.P. Morgan to send bid process letters to Party A and Party B to elicit from those parties the valuation at which they would be interested in exploring a transaction.

On February 1, 2016, representatives of J.P. Morgan delivered a bid process letter to representatives of each of Party A and Party B. The bid process letter instructed the bidders to deliver an indication of interest by February 5, 2016.

On February 4, 2016, representatives of Party A requested an extension of the bid deadline to February 9, 2016, which was granted.

On February 5, 2016, Party B submitted an indication of interest with respect to a transaction valuing PowerSecure at $15.00 per share.

On February 8, 2016, the Board held a telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and Kegler Brown in order for the Board to receive an update on discussions with Party A and Party B. J.P. Morgan reported that the Company had received an indication of interest from Party B and that Party A had requested an extension to bid until February 9 and had communicated that it was planning on submitting an indication of interest by that time. Also at the meeting, J.P. Morgan provided a financial review of the Party B’s indication of interest. At that meeting, the Board also determined to engage Wachtell, Lipton, Rosen & Katz (“Wachtell Lipton”) to act as PowerSecure’s special counsel in connection with its evaluation and negotiation of a potential strategic transaction.

On February 9, 2016, Messrs. Hinton and Dupont met with Messrs. Lantrip and Robinson to discuss possible structures of a potential transaction, due diligence and transaction valuation. Mr. Hinton encouraged the representatives of Southern Company to propose as high of a purchase price as possible as part of any potential transaction, and indicated that a proposed purchase price of at least approximately $20.00 per share would be necessary to position Southern Company to achieve a transaction with PowerSecure on an expedited basis, in light of the interest of other potential acquirors. Messrs. Lantrip and Robinson advised that the Southern Company board of directors was evaluating an offer to purchase PowerSecure that had been recommended by senior management of Southern Company, and that they expected to make that offer to PowerSecure the following day.

On February 10, 2016, Mr. Robinson called Mr. Hinton to orally convey that Southern Company was prepared to make a proposal to acquire PowerSecure in an all-cash transaction for $18.00 per share, and that such proposal would have the support of the Southern Company board. Mr. Hinton urged Southern Company to improve on its proposal. Mr. Robinson stated that he would carry that message back to senior management of Southern Company and explore if the proposal could be improved. Later in the day, Mr. Robinson contacted Mr. Hinton to orally convey that Southern Company had increased its offer to $18.75 per share, and that such proposal would have the support of the Southern Company board. Mr. Robinson asked Mr. Hinton to contact him before the next PowerSecure Board meeting if PowerSecure had any questions or needed clarification on

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Southern Company’s proposal. Mr. Hinton informed the Board and senior management, as well as representatives of J.P. Morgan, Kegler Brown and Wachtell Lipton, of the oral offer.

On February 10, 2016, Southern Company delivered a proposal letter to PowerSecure, indicating that Southern Company was prepared to acquire PowerSecure in an all-cash transaction for $18.75 per share, which represented a premium of 92.7% to the closing sale price of our common stock on February 10, 2016, which was $9.73, and a 70.1% premium to the 20-day volume weighted average trading price of our common stock as of such date. The letter also indicated that Southern Company was prepared to conduct confirmatory due diligence in an expeditious manner, and requested an exclusivity period of 45 days to conclude diligence and negotiate a mutually acceptable definitive merger agreement. Mr. Hinton provided a copy of the letter to the Board.

Later in the day on February 10, 2016, representatives of J.P. Morgan separately contacted certain members of senior management of Southern Company Services to discuss certain clarifying questions regarding the proposal letter.

Also on February 10, 2016, J.P. Morgan discussed with representatives of Party A their interest in a potential transaction and encouraged Party A to accelerate their potential timing.

On February 11, 2016, the Board held a special telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan, Kegler Brown and Wachtell Lipton, to discuss the proposal letter from Southern Company, including the proposed purchase price of $18.75 of per share and Southern Company’s request for a 45-day exclusivity period to complete its due diligence and negotiate definitive documents. The proposed price represented a 90% premium to the closing sale price of our common stock on the prior day. Prior to the Board meeting, the independent directors held an executive session with Kegler Brown in preparation for the full Board meeting. At the Board meeting, J.P. Morgan reviewed the proposal made by Southern Company, the proposal made by Party B, as well as an update on discussions with Party A. Kegler Brown and Wachtell Lipton again advised the Board of its fiduciary duties and engaged in a discussion with the Board regarding the key terms that would be expected to be included in a merger agreement with respect to a transaction. The Board further discussed Southern Company’s request for exclusivity for a period of 45 days. Following this discussion, the Board determined that Southern Company’s proposal was reasonably likely to lead to a transaction that would be in the best interests of the Company’s stockholders, and that J.P. Morgan should continue the market check process in order to determine if a transaction at an even higher valuation was reasonably obtainable. The Board directed senior management and PowerSecure’s advisors to proceed to seek to negotiate a more limited exclusivity agreement with Southern Company, and directed J.P. Morgan to continue the market check process with Party A and Party B by engaging in further discussions with both parties in order to seek the best possible proposals from each of them. The Board also instructed Mr. Hinton to communicate to Southern Company that the length of the proposed exclusivity period was not acceptable, but that PowerSecure would consider a much shorter exclusivity period if Southern Company would endeavor to reach a definitive agreement with the Company during that shorter timeframe.

Later on February 11, 2016, Mr. Hinton contacted Mr. Robinson in order to advise him of the Board’s feedback regarding the proposed exclusivity period. During this conversation, Mr. Hinton explained that, in light of other alternatives potentially available to PowerSecure, it was important to PowerSecure that the terms of any transaction with Southern Company either be negotiated or terminated within approximately ten days and that PowerSecure was prepared to commit its resources to reach that outcome and would expect Southern Company to do the same, should Southern Company wish to proceed with negotiations with the Company. That same evening, Mr. Robinson contacted Mr. Hinton to convey that Southern Company would be prepared to meet this timeline, and also requested a corresponding 10-day period of exclusivity to facilitate such negotiations, to commence on February 15, 2016.

Over the course of February 11 and February 12, 2016, representatives of J.P. Morgan contacted representatives of Party A and Party B to encourage them to make a proposal at a significant valuation, in light of

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other interest in acquiring PowerSecure. Both Party A and Party B, separately, advised J.P. Morgan that they would not be able to propose a transaction at or near such a valuation at that time or in the reasonably foreseeable future.

On February 13 and February 14, 2016, Wachtell Lipton negotiated the terms of an exclusivity agreement with Jones Day that provided for an exclusivity period of ten days.

On February 15, 2016, the Board held a special telephonic meeting that was also attended by certain members of senior management, representatives of J.P. Morgan and representatives of Kegler Brown and Wachtell Lipton. At that meeting, J.P. Morgan updated the Board on the market check process, reviewed the terms of the Southern Company proposal and discussed with senior management and the Board the view that it was unlikely that Party A, Party B or any other party would be willing or able to match the $18.75 per share cash offer from Southern Company. In addition, the Board discussed the potential risks and benefits of entering into an exclusivity agreement with a reduced exclusivity period of ten days. The Board considered, among other things, the risk that Southern Company might decide not to continue to pursue a strategic opportunity with PowerSecure, whether Party A, Party B or any other interested potential counterparty would be able to complete due diligence and negotiate a definitive agreement within a reasonable time period and the potential risks of a broader solicitation of interest, including the harm that could accrue to the business of the Company in the event it became public that the Company was considering a transaction.

At the same meeting, representatives of J.P. Morgan summarized the Southern Company and Party A proposals. J.P. Morgan and representatives of Kegler Brown and Wachtell Lipton also discussed a potential transaction timeline, should the Board determine to pursue a transaction. Kegler Brown and Wachtell Lipton again advised the Board of its fiduciary duties in connection with considering a transaction.

At the conclusion of the meeting, the Board determined that it would be in the best interests of the Company and its stockholders to authorize management and the advisors to proceed to execute the exclusivity agreement as presented to the Board, and subsequently to negotiate a definitive merger agreement with Southern Company with respect to Southern Company’s proposal to acquire the Company for $18.75 per share. The Board directed senior management to oversee management day-to-day in the negotiations, and to consult with the Board as appropriate. At that time, no discussions had taken place between Southern Company and members of PowerSecure senior management regarding their potential roles with Southern Company following the completion of a transaction. With the purchase price having been agreed in principle, the Board advised Mr. Hinton and the other members of senior management that such discussions could commence if requested by Southern Company, but no agreements with respect to potential post-transaction roles with Southern Company should be reached without first being presented to the Board.

On the evening of February 15, 2016, after the Board meeting concluded, Mr. Hinton called Mr. Robinson to advise him that PowerSecure’s Board had determined to authorize management to enter into the 10-day exclusivity agreement and proceed to negotiations of a merger agreement. That same evening, the parties executed the exclusivity agreement.

On the evening of February 15, 2016, Jones Day delivered a first draft of the merger agreement to Wachtell Lipton. The parties and their representatives exchanged drafts and negotiated the terms of the merger agreement between February 15 and February 23, 2016. During that period, representatives from PowerSecure, Wachtell Lipton and Kegler Brown and representatives from Southern Company Services and Jones Day had various telephone conferences to review open items, discuss regulatory matters, complete due diligence and negotiate the final terms of the merger agreement.

On February 16, 2016, Messrs. Hinton, Hutter and Dupont had a telephone conference with certain members of senior management of Southern Company Services regarding merger negotiations planning and finalizing due diligence during the ten day exclusivity period.

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On February 19, 2016, Messrs. Hinton, Hutter and Dupont, along with Kegler Brown, had a telephone conference with members of senior management of Southern Company Services, and representatives of Jones Day, regarding certain confirmatory due diligence items.

On February 22, 2016, Mr. Hinton met with Messrs. Lantrip and other members of Southern Company Services’s senior management regarding Mr. Hinton’s post-transaction compensation arrangements.

On February 23, 2016, Messrs. Hinton, Hutter, Dupont, along with representatives of Wachtell Lipton and Kegler Brown, had a telephone conference with certain members of senior management of Southern Company Services, along with Jones Day, regarding Mr. Hinton’s post-transaction compensation arrangements, including the potential terms of a letter agreement (the “Hinton letter agreement”) to be entered into among Mr. Hinton, Southern Company and PowerSecure, which is described in more detail below under “ Interests of the Company’s Directors and Executive Officers in the Merger—Hinton Letter Agreement .”

Also on February 23, 2016, Wachtell Lipton and Jones Day engaged in further negotiations regarding the merger agreement. Based on discussions between representatives of Jones Day and Wachtell Lipton throughout that day, the parties reached agreement on all substantive transaction terms to the satisfaction of senior management of PowerSecure and Southern Company Services that evening.

On February 24, 2016, Southern Company delivered a proposed final form of the merger agreement to PowerSecure, and the parties resolved the treatment of certain employee and executive compensation matters, subject in all cases to approval of the Board.

On February 24, 2016, a joint meeting of the Board and the Compensation Committee of the Board was held, which was also attended by certain members of senior management and representatives of J.P. Morgan, Wachtell Lipton and Kegler Brown. During the meeting, representatives of Wachtell Lipton and Kegler Brown reviewed with the directors their fiduciary duties in the context of considering a potential sale of the Company. Representatives of Wachtell Lipton summarized the material terms of the draft merger agreement and the Hinton letter agreement.

At the same meeting, representatives of J.P. Morgan made a presentation to the Board in which it updated its financial analysis of the $18.75 per share merger consideration offered by Southern Company and rendered its oral opinion to the Board that, as of February 24, 2016 and based upon and subject to qualifications, assumptions and limitations set forth in the written opinion it subsequently delivered, the $18.75 in cash per share of Company common stock to be paid to the holders (other than Southern Company and its affiliates) of the outstanding shares of Company common stock pursuant to the merger agreement was fair from a financial point of view to such holders. The full text of the written opinion of J.P. Morgan, dated February 24, 2016 which sets forth the assumptions made, procedures followed, matters considered and limitations on the review undertaken in rendering its opinion, is attached as Annex B to this proxy statement and is incorporated by reference, and J.P. Morgan’s analysis is summarized below under “— Opinion of J.P. Morgan.”

Following discussion of the presentations by Wachtell Lipton, Kegler Brown and J.P. Morgan, and J.P. Morgan’s delivery of its oral opinion, and following deliberation by the Compensation Committee of the Board, the Compensation Committee approved the treatment of the Company’s equity compensation awards in the merger and the Hinton letter agreement. Following deliberation by the Board, the Board then unanimously approved the merger agreement, determined that the merger and the other transactions contemplated by the merger agreement are advisable and fair to and in the best interests of the Company’s stockholders, directed that the merger agreement be submitted to the Company’s stockholders for adoption at a duly held meeting, resolved to recommend that the Company’s stockholders vote to adopt the merger agreement and approved certain related matters.

In the afternoon of February 24, 2016, the Company and Southern Company executed the definitive merger agreement and the Company, Southern Company and Mr. Hinton executed the Hinton letter agreement. Later in the afternoon of February 24, 2016, the Company and Southern Company issued a joint press release announcing the parties’ entry into the merger agreement.

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Recommendation of the Board

At the special meeting of the Board on February 24, 2016, after careful consideration, including detailed discussions with the Company’s management and its outside financial and legal advisors, the Board unanimously:

Reasons for Recommending the Adoption of the Merger Agreement

As described above in the section entitled “ —Background of the Merger ”, prior to and in reaching this determination, the Board consulted with and received the advice of its financial advisor and outside counsel, discussed the proposed transaction with the Company’s management and considered a variety of factors weighing positively in favor of the merger, including the following material factors:

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The Board also considered a variety of risks and potentially negative factors concerning the merger and the merger agreement, including the following:

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