Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2012

Summary of Significant Accounting Policies [Line Items]

Regulatory Assets and Liabilities

Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to:

	2012			2011			Note
	(in millions)
Deferred income tax charges	$	1,318		$	1,293		(a)
Deferred income tax charges — Medicare subsidy	72			77			(j)
Asset retirement obligations-asset	141			117			(a,h)
Asset retirement obligations-liability	(71		)	(42		)	(a,h)
Other cost of removal obligations	(1,225		)	(1,196		)	(a)
Deferred income tax credits	(212		)	(225		)	(a)
State income tax credits	(36		)	(62		)	(k)
Loss on reacquired debt	309			285			(b)
Vacation pay	165			160			(c,h)
Under recovered regulatory clause revenues	38			50			(d)
Over recovered regulatory clause revenues	(18		)	(28		)	(d)
Building leases	40			43			(f)
Generating plant outage costs	30			38			(l)
Under recovered storm damage costs	38			43			(d)
Property damage reserves	(193		)	(206		)	(g)
Cancelled construction projects	65			12			(m)
Power purchase agreement charges	138			95			(h,n)
Fuel hedging-asset	118			249			(d)
Fuel hedging-liability	(24		)	(13		)	(d)
Other regulatory assets	204			183			(d)
Environmental remediation-asset	74			71			(g,h)
Environmental remediation-liability	(8		)	(8		)	(g)
Other regulatory liabilities	(14		)	(30		)	(d,i)
Retiree benefit plans	3,373			2,959			(e,h)
Total regulatory assets (liabilities), net	$	4,322		$	3,865

Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows:

(a) Asset retirement and removal assets and liabilities are recorded, deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 65 years. Asset retirement and removal assets and liabilities will be settled and trued up following completion of the related activities. At December 31, 2012, other cost of removal obligations included $31 million that will be amortized during 2013 in accordance with an Alternate Rate Plan for Georgia Power for the years 2011 through 2013 (2010 ARP). See Note 3 under "Retail Regulatory Matters – Georgia Power – Rate Plans" for additional information.

(b) Recovered over either the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years.

(c) Recorded as earned by employees and recovered as paid, generally within one year. This includes both vacation and banked holiday pay.

(d) Recorded and recovered or amortized as approved or accepted by the appropriate state PSCs over periods generally not exceeding 10 years.

(e) Recovered and amortized over the average remaining service period which may range up to 15 years. See Note 2 for additional information.

(f) Recovered over the remaining lives of the buildings through 2026.

(g) Recovered as storm restoration and potential reliability-related expenses or environmental remediation expenses are incurred as approved by the appropriate state PSCs.

(h) Not earning a return as offset in rate base by a corresponding asset or liability.

(i) Recovered and amortized as approved or accepted by the appropriate state PSC over the life of the contract.

(j) Recovered and amortized as approved by the appropriate state PSCs over periods not exceeding 15 years.

(k) Additional tax benefits resulting from the Georgia state income tax credit settlement that are being amortized over a 21-month period that began in April 2012, in accordance with a Georgia PSC order.

(l) Recovered over the respective operating cycles, which range from 18 months to 10 years. See "Property, Plant, and Equipment" herein for additional information.

(m) Costs associated with construction of environmental controls that will not be completed as a result of unit retirements and deferred in accordance with the 2010 ARP. Amortization is expected to begin January 1, 2014, subject to approval by the Georgia PSC.

(n) Recovered over the life of the power purchase agreement (PPA) for periods up to 14 years.

Property Plant and Equipment

The Southern Company system's property, plant, and equipment in service consisted of the following at December 31:

	2012		2011
	(in millions)
Generation	$	33,444	$	31,751
Transmission	8,747		8,240
Distribution	15,958		15,458
General	4,208		3,413
Plant acquisition adjustment	124		124
Utility plant in service	62,481		58,986
Information technology equipment and software	230		220
Communications equipment	430		428
Other	110		110
Other plant in service	770		758
Total plant in service	$	63,251	$	59,744

Asset Retirement Obligations and Other Costs of Removal

Details of the asset retirement obligations included in the balance sheets are as follows:

	2012			2011
	(in millions)
Balance at beginning of year	$	1,344		$	1,266
Liabilities incurred	45			1
Liabilities settled	(16		)	(13		)
Accretion	112			82
Cash flow revisions	272			8
Balance at end of year	$	1,757		$	1,344

Accumulated Provisions for Decommissioning

At December 31, 2012, the accumulated provisions for decommissioning were as follows:

	Plant Farley		Plant Hatch		Plant Vogtle Units 1 and 2
	(in millions)
External trust funds	$	604	$	435	$	256
Internal reserves	22		—		—
Total	$	626	$	435	$	256

Estimated Cost of Decommissioning

The estimated costs of decommissioning based on the most current studies, which were performed in 2008 for Alabama Power's Plant Farley and in 2012 for the Georgia Power plants, were as follows for Alabama Power's Plant Farley and Georgia Power's ownership interests in Plant Hatch and Plant Vogtle Units 1 and 2:

	Plant Farley		Plant Hatch		Plant Vogtle Units 1 and 2
Decommissioning periods:
Beginning year	2037		2034		2047
Completion year	2065		2068		2072
	(in millions)
Site study costs:
Radiated structures	$	1,060	$	680	$	568
Non-radiated structures	72		51		76
Total site study costs	$	1,132	$	731	$	644

Net Investments from Leveraged Lease

Southern Company's net investment in domestic and international leveraged leases consists of the following at December 31:

	2012			2011
	(in millions)
Net rentals receivable	$	1,214		$	1,216
Unearned income	(544		)	(567		)
Investment in leveraged leases	670			649
Deferred taxes from leveraged leases	(278		)	(277		)
Net investment in leveraged leases	$	392		$	372

Components of Income from Leveraged Lease

A summary of the components of income from the leveraged leases follows:

	2012			2011			2010
	(in millions)
Pretax leveraged lease income	$	21		$	25		$	18
Income tax expense	(8		)	(9		)	(8		)
Net leveraged lease income	$	13		$	16		$	10

Accumulated Other Comprehensive Income (Loss) Balances, Net of Tax Effects

Accumulated OCI (loss) balances, net of tax effects, were as follows:

	Qualifying Hedges			Marketable Securities		Pension and Other Postretirement Benefit Plans			Accumulated Other Comprehensive Income (Loss)
	(in millions)
Balance at December 31, 2011	$	(44	)	$	3	$	(70	)	$	(111	)
Current period change	(1		)	—		(11		)	(12		)
Balance at December 31, 2012	$	(45	)	$	3	$	(81	)	$	(123	)

Southern Power [Member]

Summary of Significant Accounting Policies [Line Items]

Future Amortization Expense for PPAs

The amortization expense for the PPAs is as follows:

	Amortization   Expense
	(in millions)
2012	$	1.7
2013	2.5
2014	2.5
2015	2.5
2016	2.4
2017 and beyond	36.0
Total	$	47.6

Mississippi Power [Member]

Summary of Significant Accounting Policies [Line Items]

Regulatory Assets and Liabilities

Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to:

	2012			2011			Note
	(in thousands)
Retiree benefit plans	$	162,293		$	130,678		(a,g)
Property damage	(58,789		)	(64,748		)	(i)
Deferred income tax charges	68,175			21,000			(c)
Property tax	27,882			18,484			(d)
Vacation pay	9,635			9,128			(e,g)
Loss on reacquired debt	9,815			7,171			(k)
Plant Daniel Units 3 and 4 regulatory assets	12,386			3,945			(j)
Other regulatory assets	2,035			132			(b)
Fuel hedging (realized and unrealized) losses	20,906			54,103			(f,g)
Asset retirement obligations	9,353			9,057			(c)
Deferred income tax credits	(11,157		)	(12,081		)	(c)
Other cost of removal obligations	(143,461		)	(126,424		)	(c)
Fuel hedging (realized and unrealized) gains	(2,519		)	(162		)	(f,g)
Kemper IGCC regulatory assets	36,047			20,684			(h)
Other regulatory liabilities	—			(693		)	(b)
Deferred income tax charges — Medicare subsidy	4,868			5,521			(l)
Total regulatory assets (liabilities), net	$	147,469		$	75,795

Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows:

(a) Recovered and amortized over the average remaining service period which may range up to 14 years. See Note 2 for additional information.

(b) Recorded and recovered as approved by the Mississippi PSC.

(c) Asset retirement and removal assets and liabilities and deferred income tax assets are recovered, and removal assets and deferred income tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal assets and liabilities will be settled and trued up following completion of the related activities.

(d) Recovered through the ad valorem tax adjustment clause over a 12-month period beginning in April of the following year.

(e) Recorded as earned by employees and recovered as paid, generally within one year. This includes both vacation and banked holiday pay.

(f) Fuel hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed two years. Upon final settlement, costs are recovered through the Energy Cost Management clause (ECM).

(g) Not earning a return as offset in rate base by a corresponding asset or liability.

(h) For additional information, see Note 3 under "Integrated Coal Gasification Combined Cycle."

(i) For additional information, see Note 1 under "Provision for Property Damage" and Note 3 under "Retail Regulatory Matters – System Restoration Rider."

(j) Recovered and amortized over a 10-year period ending October 2021, as approved by the Mississippi PSC for the difference between the revenue requirement under the purchase option and the revenue requirement assuming operating lease accounting treatment for the extended term.

(k) Recovered over the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years.

(l) Recovered and amortized over a 10-year period beginning in 2012, as approved by the Mississippi PSC for the retail portion and a five-year period for the wholesale portion, as approved by FERC.

Property Plant and Equipment

The Company's property, plant, and equipment in service consisted of the following at December 31:

	2012		2011
	(in thousands)
Generation	$	1,363,269	$	1,362,567
Transmission	563,037		497,202
Distribution	802,718		784,655
General	225,723		176,408
Plant acquisition adjustment	81,412		81,408
Total plant in service	$	3,036,159	$	2,902,240

Purchase of the Plant Daniel Combined Cycle Generating Units

The fair value of the debt was determined using a discounted cash flow model based on the Company's borrowing rate at the closing date. The fair value is considered a Level 2 disclosure for financial reporting purposes. Accordingly, Plant Daniel Units 3 and 4 were reflected in the Company's financial statements as follows:

	(in thousands)
Assumption of debt obligations	$	270,000
Fair value adjustment at date of purchase	76,051
Total debt	346,051
Cash payment for the purchase	84,803
Total value of Plant Daniel Units 3 and 4	$	430,854

Asset Retirement Obligations and Other Costs of Removal

Details of the ARO included in the balance sheets are as follows:

	2012			2011
	(in thousands)
Balance at beginning of year	$	19,148		$	18,601
Liabilities incurred	20,989			137
Liabilities settled	(282		)	(644		)
Accretion	1,874			1,054
Cash flow revisions	386			—
Balance at end of year	$	42,115		$	19,148

Gulf Power [Member]

Summary of Significant Accounting Policies [Line Items]

Regulatory Assets and Liabilities

Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to:

	2012			2011			Note
	(in thousands)
Deferred income tax charges	$	46,788		$	44,533		(a)
Deferred income tax charges — Medicare subsidy	3,678			4,005			(b)
Asset retirement obligations	(5,793		)	(5,653		)	(a,j)
Other cost of removal obligations	(213,413		)	(214,598		)	(a)
Deferred income tax credits	(6,515		)	(8,113		)	(a)
Loss on reacquired debt	16,400			14,437			(c)
Vacation pay	9,238			8,973			(d,j)
Under recovered regulatory clause revenues	3,523			3,133			(e)
Over recovered regulatory clause revenues	(17,092		)	(27,950		)	(e)
Property damage reserve	(31,956		)	(30,473		)	(f)
Fuel hedging (realized and unrealized) losses	29,038			43,071			(g,j)
Fuel hedging (realized and unrealized) gains	(4,358		)	(197		)	(g,j)
PPA charges	137,568			94,986			(j,k)
Generation site selection/evaluation costs	1,344			20,415			(l)
Other regulatory assets	9,690			1,675			(e,j)
Environmental remediation	60,452			61,625			(h,j)
PPA credits	(7,502		)	(7,536		)	(j,k)
Other regulatory liabilities	(534		)	(798		)	(f)
Retiree benefit plans, net	141,429			116,091			(i,j)
Total regulatory assets (liabilities), net	$	171,985		$	117,626

Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows:

(a) Asset retirement and removal assets and liabilities are recorded, deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 65 years. Asset retirement and removal assets and liabilities will be settled and trued up following completion of the related activities.

(b) Recovered and amortized over periods not exceeding 14 years.

(c) Recovered over either the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 40 years.

(d) Recorded as earned by employees and recovered as paid, generally within one year. This includes both vacation and banked holiday pay.

(e) Recorded and recovered or amortized as approved by the Florida PSC, generally within one year.

(f) Recorded and recovered or amortized as approved by the Florida PSC.

(g) Fuel hedging assets and liabilities are recognized over the life of the underlying hedged purchase contracts, which generally do not exceed five years. Upon final settlement, costs are recovered through the fuel cost recovery clause.

(h) Recovered through the environmental cost recovery clause when the remediation is performed.

(i) Recovered and amortized over the average remaining service period which may range up to 14 years. See Note 2 for additional information.

(j) Not earning a return as offset in rate base by a corresponding asset or liability.

(k) Recovered over the life of the PPA for periods up to 14 years.

(l) Deferred pursuant to Florida Statute while the Company continues to evaluate certain potential new generation projects.

Property Plant and Equipment

The Company's property, plant, and equipment in service consisted of the following at December 31:

	2012		2011
	(in thousands)
Generation	$	2,598,773	$	2,283,494
Transmission	429,341		368,542
Distribution	1,069,065		1,030,546
General	161,379		161,322
Plant acquisition adjustment	2,286		2,542
Total plant in service	$	4,260,844	$	3,846,446

Asset Retirement Obligations and Other Costs of Removal

Details of the asset retirement obligations included in the balance sheets are as follows:

	2012			2011
	(in thousands)
Balance at beginning of year	$	10,729		$	11,470
Liabilities incurred	—			106
Liabilities settled	(107		)	(1,050		)
Accretion	507			545
Cash flow revisions	4,926			(342		)
Balance at end of year	$	16,055		$	10,729

Georgia Power [Member]

Summary of Significant Accounting Policies [Line Items]

Regulatory Assets and Liabilities

Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to:

	2012			2011			Note
	(in millions)
Retiree benefit plans	$	1,331		$	1,197		(a, j)
Deferred income tax charges	695			713			(b)
Deferred income tax charges — Medicare subsidy	43			47			(c)
Loss on reacquired debt	190			178			(d)
Asset retirement obligations	131			108			(b, j)
Fuel hedging (realized and unrealized) losses	49			104			(e)
Vacation pay	85			82			(f, j)
Building leases	40			43			(g)
Cancelled construction projects	65			12			(h)
Other regulatory assets	100			108			(c)
Other cost of removal obligations	(94		)	(141		)	(b)
Deferred income tax credits	(115		)	(122		)	(b)
State income tax credits	(36		)	(62		)	(i)
Other regulatory liabilities	(13		)	(13		)	(d, e)
Total regulatory assets (liabilities), net	$	2,471		$	2,254

Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows:

(a) Recovered and amortized over the average remaining service period which may range up to 14 years. See Note 2 under "Pension Plans" and "Other Postretirement Benefits" for additional information.

(b) Asset retirement and other cost of removal obligations and deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 65 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. At December 31, 2012, other cost of removal obligations included $31 million that will be amortized during 2013 in accordance with the Company's Alternate Rate Plan for the years 2011 through 2013 (2010 ARP). See Note 3 under "Retail Regulatory Matters – Rate Plans" for additional information.

(c) Recorded and recovered or amortized as approved by the Georgia PSC over periods generally not exceeding 10 years.

(d) Recovered over either the remaining life of the original issue or, if refinanced, over the life of the new issue, which may range up to 50 years.

(e) Fuel hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed three years. Upon final settlement, actual costs incurred are recovered through the Company's fuel cost recovery mechanism.

(f) Recorded as earned by employees and recovered as paid, generally within one year. This includes both vacation and banked holiday pay.

(g) See Note 6 under "Capital Leases." Recovered over the remaining lives of the buildings through 2026.

(h) Costs associated with construction of environmental controls that will not be completed as a result of unit retirements and deferred in accordance with the 2010 ARP. Amortization is expected to begin January 1, 2014, subject to approval by the Georgia PSC.

(i) Additional tax benefits resulting from the Georgia state income tax credit settlement that are being amortized over a 21-month period that began in April 2012, in accordance with a Georgia PSC order. See Note 5 under "Current and Deferred Income Taxes" for additional information.

(j) Not earning a return as offset in rate base by a corresponding asset or liability.

Property Plant and Equipment

The Company's property, plant, and equipment in service consisted of the following at December 31:

	2012		2011
	(in millions)
Generation	$	14,567	$	13,675
Transmission	4,581		4,355
Distribution	8,373		8,125
General	1,695		1,621
Plant acquisition adjustment	28		28
Total plant in service	$	29,244	$	27,804

Asset Retirement Obligations and Other Costs of Removal

Details of the asset retirement obligations included in the balance sheets are as follows:

	2012			2011
	(in millions)
Balance at beginning of year	$	757		$	712
Liabilities incurred	24			—
Liabilities settled	(15		)	(9		)
Accretion	72			45
Cash flow revisions	267			9
Balance at end of year	$	1,105		$	757

Accumulated Provisions for Decommissioning

The site study costs and external trust funds for decommissioning as of December 31, 2012 based on the Company's ownership interests were as follows:

	Plant Hatch		Plant Vogtle   Units 1 and 2
Decommissioning periods:
Beginning year	2034		2047
Completion year	2068		2072
	(in millions)
Site study costs:
Radiated structures	$	549	$	453
Spent fuel management	131		115
Non-radiated structures	51		76
Total site study costs	$	731	$	644
External trust funds	$	435	$	256

Alabama Power [Member]

Summary of Significant Accounting Policies [Line Items]

Regulatory Assets and Liabilities

Regulatory assets and (liabilities) reflected in the balance sheets at December 31 relate to:

	2012			2011			Note
	(in millions)
Deferred income tax charges	$	525		$	532		(a,k)
Loss on reacquired debt	93			84			(b)
Vacation pay	61			59			(c,j)
Under/(over) recovered regulatory clause revenues	34			47			(d)
Fuel hedging (realized and unrealized) losses	18			48			(e)
Other regulatory assets	51			46			(f,l)
Asset retirement obligations	(64		)	(35		)	(a)
Other cost of removal obligations	(759		)	(703		)	(a)
Deferred income tax credits	(79		)	(83		)	(a)
Fuel hedging (realized and unrealized) gains	(5		)	(1		)	(e)
Mine reclamation and remediation	(8		)	(8		)	(g)
Nuclear outage	33			38			(d)
Natural disaster reserve	(103		)	(110		)	(h)
Other regulatory liabilities	(5		)	(20		)	(d,l)
Retiree benefit plans	911			822			(i,j)
Total regulatory assets (liabilities), net	$	703		$	716

Note: The recovery and amortization periods for these regulatory assets and (liabilities) are as follows:

(a) Asset retirement and removal assets and liabilities are recorded, deferred income tax assets are recovered, and deferred income tax liabilities are amortized over the related property lives, which may range up to 50 years. Asset retirement and removal assets and liabilities will be settled and trued up following completion of the related activities.

(b) Recovered over the remaining life of the original issue, which may range up to 50 years.

(c) Recorded as earned by employees and recovered as paid, generally within one year. This includes both vacation and banked holiday pay.

(d) Recorded and recovered or amortized as approved or accepted by the Alabama PSC over periods not exceeding five years.

(e) Fuel hedging assets and liabilities are recorded over the life of the underlying hedged purchase contracts, which generally do not exceed three years. Upon final settlement, actual costs incurred are recovered through the energy cost recovery clause.

(f) Recorded as accepted by the Alabama PSC. Capitalized upon initialization of related construction projects, if applicable.

(g) Recorded as accepted by the Alabama PSC. Mine reclamation and remediation liabilities will be settled following completion of the related activities.

(h) Utilized as storm restoration and potential reliability-related expenses are incurred, as approved by the Alabama PSC.

(i) Recovered and amortized over the average remaining service period which may range up to 15 years. See Note 2 for additional information.

(j) Not earning a return as offset in rate base by a corresponding asset or liability.

(k) Included in the deferred income tax charges is $21 million for the retiree Medicare drug subsidy, which is recovered and amortized, as approved by the Alabama PSC, over the average remaining service period which may range up to 15 years.

(l) Recovered and amortized as approved or accepted by the Alabama PSC over the life of the contract.

Property Plant and Equipment

The Company's property, plant, and equipment in service consisted of the following at December 31:

	2012		2011
	(in millions)
Generation	$	11,110	$	10,982
Transmission	3,137		2,998
Distribution	5,714		5,517
General	1,434		1,300
Plant acquisition adjustment	12		12
Total plant in service	$	21,407	$	20,809

Asset Retirement Obligations and Other Costs of Removal

Details of the asset retirement obligations included in the balance sheets are as follows:

	2012			2011
	(in millions)
Balance at beginning of year	$	553		$	520
Liabilities incurred	—			—
Liabilities settled	(1		)	(2		)
Accretion	37			35
Balance at end of year	$	589		$	553

Accumulated Provisions for Decommissioning

At December 31, 2012, the accumulated provisions for decommissioning were as follows:

	(in millions)
External trust funds	$	604
Internal reserves	22
Total	$	626

Estimated Cost of Decommissioning

The estimated costs of decommissioning based on the most current study performed in 2008 for Plant Farley are as follows:

Decommissioning periods:
Beginning year	2037
Completion year	2065

	(in millions)
Site study costs:
Radiated structures	$	1,060
Non-radiated structures	72
Total site study costs	$	1,132