Introduction (Policies)

9 Months Ended

Sep. 30, 2013

Nuclear Decommissioning [Policy Text Block]

Nuclear Decommissioning

See Note 1 to the financial statements of Southern Company and Alabama Power under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.

In September 2013, Alabama Power received a 2013 decommissioning cost site study for Plant Farley. Site study cost is the estimate to decommission a facility as of the site study year. The estimated costs of decommissioning based on the 2013 site study are as follows:



Decommissioning periods:
Beginning year	2037
Completion year	2076



	(in millions)
Site study costs:
Radiated structures	$	1,362
Non-radiated structures	80
Total site study costs	$	1,442

The decommissioning cost estimates are based on prompt dismantlement and removal of the plant from service. The actual decommissioning costs may vary from the above estimates due to changes in the assumed date of decommissioning, changes in NRC requirements, or changes in the assumptions used in making these estimates.

For ratemaking purposes, Alabama Power's decommissioning costs are based on the site study. Significant assumptions used to determine these costs for ratemaking were an escalation rate of 4.5% and a trust earnings rate of 7.0%, net of fees and taxes. The next site study is expected to be conducted in 2018.

Amounts previously contributed to the external trust funds are currently projected to be adequate to meet the decommissioning obligations. Alabama Power will continue to provide site specific estimates of the decommissioning costs and related projections of funds in the external trust to the Alabama PSC and, if necessary, would seek the Alabama PSC's approval to address any changes in a manner consistent with the NRC and other applicable requirements.

Asset Retirement Obligation [Abstract]

Asset Retirement Obligations and Environmental Cost, Policy [Policy Text Block]

Asset Retirement Obligations

See Note 1 to the financial statements of Southern Company and Alabama Power under "Asset Retirement Obligations and Other Costs of Removal" in Item 8 of the Form 10-K for additional information.

Asset retirement obligations (ARO) are computed as the present value of the ultimate costs for an asset's future retirement and are recorded in the period in which the liability is incurred. In September 2013, Alabama Power received a new ARO liability cost study for the decommissioning of Plant Farley based on the 2013 site study, which increased the estimated ARO liability by approximately $102 million.

As of September 30, 2013 and 2012, details of the ARO related to the decommissioning of Plant Farley included in Southern Company's and Alabama Power's Condensed Balance Sheets herein are as follows:



	2013		2012
	(in millions)
Balance at beginning of year	$	589	$	553
Liabilities incurred	—		—
Liabilities settled	—		(1		)
Accretion	29		28
Cash flow revisions	102		—
Balance at end of period	$	720	$	580

- Definition

Disclosure of accounting policy for (1) legal obligations associated with the disposal or removal of a long-lived asset from service that result from the acquisition, construction, or development or from the normal operation of a long-lived asset (except obligations of a lessee in connection with leased property that are minimum lease payments or contingent rentals, or obligations that arise solely from a plan to sell or otherwise dispose of a long-lived asset); and (2) certain environmental remediation liabilities that resulted from the improper or other-than-normal operation of a long-lived asset. This accounting policy may address (1) whether the related remediation costs are expensed or capitalized, (2) whether the obligation is measured on a discounted basis, (3) the event, situation, or set of circumstances that generally triggers recognition of loss contingencies arising from the entity's environmental remediation-related obligations, and (4) the timing of recognition of any recoveries.

+ References+ Details