Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015, the following interest rate derivatives were outstanding:



	Notional Amount			Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date		Fair Value Gain (Loss) December 31, 2015
	(in millions)							(in millions)
Cash Flow Hedges of Forecasted Debt
	$	1,000		3-month LIBOR	2.37%	November 2026		$	1
	1,000			3-month LIBOR	2.70%	November 2046		(1		)
	200			3-month LIBOR	2.93%	October 2025		(15		)
	80			3-month LIBOR	2.32%	December 2026		1
Cash Flow Hedges of Existing Debt
	250			3-month LIBOR + 0.32%	0.75%	March 2016		—
	200			3-month LIBOR + 0.40%	1.01%	August 2016		—
Fair Value Hedges of Existing Debt
	250			1.30%	3-month LIBOR + 0.17%	August 2017		1
	300			2.75%	3-month LIBOR + 0.92%	June 2020		2
	250			5.40%	3-month LIBOR + 4.02%	June 2018		1
	200			4.25%	3-month LIBOR + 2.46%	December 2019		2
	500			1.95%	3-month LIBOR + 0.76%	December 2018		(3		)
Derivatives not Designated as Hedges
	65		(a,d)	3-month LIBOR	2.50%	October 2016	(e)	1
	47		(b,d)	3-month LIBOR	2.21%	October 2016	(e)	1
	65		(c,d)	3-month LIBOR	2.21%	November 2016	(f)	1
Total	$	4,407						$	(8	)


(a)	Swaption at RE Tranquillity LLC. See Note 12 for additional information.


(b)	Swaption at RE Roserock LLC. See Note 12 for additional information.


(c)	Swaption at RE Garland Holdings LLC. See Note 12 for additional information.


(d)	Amortizing notional amount.


(e)	Represents the mandatory settlement date. Settlement amount will be based on a 15-year amortizing swap.


(f)	Represents the mandatory settlement date. Settlement amount will be based on a 12-year amortizing swap.

At December 31, 2015 and 2014, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:	Other current assets	$	3	$	7	Liabilities from risk management activities	$	130	$	118
	Other deferred charges and assets	—		—		Other deferred credits and liabilities	87		79
Total derivatives designated as hedging instruments for regulatory purposes		$	3	$	7		$	217	$	197
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:	Other current assets	$	3	$	—	Liabilities from risk management activities	$	2	$	—
Interest rate derivatives:	Other current assets	19		7		Liabilities from risk management activities	23		17
	Other deferred charges and assets	—		1		Other deferred credits and liabilities	7		7
Total derivatives designated as hedging instruments in cash flow and fair value hedges		$	22	$	8		$	32	$	24
Derivatives not designated as hedging instruments
Energy-related derivatives:	Other current assets	$	1	$	6	Liabilities from risk management activities	$	1	$	4
Interest rate derivatives:	Other current assets	3		—		Liabilities from risk management activities	—		—
Total derivatives not designated as hedging instruments		$	4	$	6		$	1	$	4
Total		$	29	$	21		$	250	$	225

Amounts related to energy-related derivative contracts and interest rate derivative contracts at December 31, 2015 and 2014 are presented in the following tables.



Fair Value
Assets	2015			2014			Liabilities	2015			2014
	(in millions)							(in millions)
Energy-related derivatives presented in the Balance Sheet ^(a)	$	7		$	13		Energy-related derivatives presented in the Balance Sheet ^(a)	$	220		$	201
Gross amounts not offset in the Balance Sheet ^(b)	(6		)	(9		)	Gross amounts not offset in the Balance Sheet ^(b)	(6		)	(9		)
Net energy-related derivative assets	$	1		$	4		Net energy-related derivative liabilities	$	214		$	192
Interest rate derivatives presented in the Balance Sheet ^(a)	$	22		$	8		Interest rate derivatives presented in the Balance Sheet ^(a)	$	30		$	24
Gross amounts not offset in the Balance Sheet ^(b)	(9		)	(8		)	Gross amounts not offset in the Balance Sheet ^(b)	(9		)	(8		)
Net interest rate derivative assets	$	13		$	—		Net interest rate derivative liabilities	$	21		$	16


(a)	The Company does not offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.


(b)	Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.

At December 31, 2015 and 2014, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows:



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2015			2014			Balance Sheet Location	2015		2014
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(130	)	$	(118	)	Other regulatory liabilities, current	$	3	$	7
	Other regulatory assets, deferred	(87		)	(79		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(217	)	$	(197	)		$	3	$	7

For the years ended December 31, 2015, 2014, and 2013, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
										Amount
Derivative Category	2015			2014			2013		Statements of Income Location	2015			2014			2013
	(in millions)									(in millions)
Interest rate derivatives	$	(22	)	$	(16	)	$	—	Interest expense, net of amounts capitalized	$	(9	)	$	(8	)	$	(14	)

Alabama Power [Member]

Energy-related derivative contracts

At December 31, 2015, the following interest rate derivative was outstanding:

Notional
Amount

Interest
Rate
Received

Weighted Average Interest
Rate Paid

Hedge
Maturity
Date

Fair Value
Gain (Loss)
December 31,
2015

(in millions)

Cash Flow Hedges of Forecasted Debt

200

3-month
LIBOR

2.93%

October 2025

(15

)

At December 31, 2015, the net volume of energy-related derivative contracts for natural gas positions for the Company, together with the longest hedge date over which it is hedging its exposure to the variability in future cash flows for forecasted transactions and the longest date for derivatives not designated as hedges, were as follows:



Net Purchased mmBtu	Longest Hedge Date	Longest Non-Hedge Date
(in millions)
50	2018	—

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015 and 2014, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:	Other current assets	$	1	$	1	Liabilities from risk management activities	$	40	$	32
	Other deferred charges and assets	—		—		Other deferred credits and liabilities	15		21
Total derivatives designated as hedging instruments for regulatory purposes		$	1	$	1		$	55	$	53
Derivatives designated as hedging instruments in cash flow hedges
Interest rate derivatives:	Other current assets	$	—	$	—	Liabilities from risk management activities	$	15	$	8
Total		$	1	$	1		$	70	$	61

Some of these energy-related and interest rate derivative contracts contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Amounts related to energy-related derivative contracts at December 31, 2015 and 2014 are presented in the following tables. Interest rate derivatives presented in the tables above do not have amounts available for offset and are therefore excluded from the offsetting disclosure table below.



Fair Value
Assets	2015			2014		Liabilities	2015			2014
	(in millions)						(in millions)
Energy-related derivatives presented in the Balance Sheet ^(a)	$	1		$	1	Energy-related derivatives presented in the Balance Sheet ^(a)	$	55		$	53
Gross amounts not offset in the Balance Sheet ^(b)	(1		)	—		Gross amounts not offset in the Balance Sheet ^(b)	(1		)	—
Net energy-related derivative assets	$	—		$	1	Net energy-related derivative liabilities	$	54		$	53


(a)	The Company does not offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.


(b)	Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.

At December 31, 2015 and 2014, the pre-tax effect of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows:



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2015			2014			Balance Sheet Location	2015		2014
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(40	)	$	(32	)	Other current liabilities	$	1	$	1
	Other regulatory assets, deferred	(15		)	(21		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(55	)	$	(53	)		$	1	$	1

For the years ended December 31, 2015, 2014, and 2013, the pre-tax effect of interest rate derivatives designated as cash flow hedging instruments on the statements of income was as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships										Amount
Derivative Category	2015			2014			2013		Statements of Income Location	2015			2014			2013
	(in millions)									(in millions)
Interest rate derivatives	$	(7	)	$	(8	)	$	—	Interest expense, net of amounts capitalized	$	(3	)	$	(3	)	$	(3	)

Georgia Power [Member]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015, the following interest rate derivatives were outstanding:



	Notional Amount		Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date	Fair Value Gain (Loss) December 31, 2015
	(in millions)					(in millions)
Cash Flow Hedges of Existing Debt
	$	250	3-month LIBOR + 0.32%	0.75%	March 2016	$	—
	200		3-month LIBOR + 0.40%	1.01%	August 2016	—
Fair Value Hedges of Existing Debt
	250		5.40%	3-month LIBOR + 4.02%	June 2018	1
	200		4.25%	3-month LIBOR + 2.46%	December 2019	2
	500		1.95%	3-month LIBOR + .76%	December 2018	(3		)
Total	$	1,400				$	—

At December 31, 2015 and 2014, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:	Other current assets	$	2	$	6	Liabilities from risk management activities	$	12	$	23
	Other deferred charges and assets	—		1		Other deferred credits and liabilities	3		4
Total derivatives designated as hedging instruments for regulatory purposes		$	2	$	7		$	15	$	27
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:	Other current assets	$	5	$	5	Liabilities from risk management activities	$	—	$	9
	Other deferred charges and assets	—		1		Other deferred credits and liabilities	6		5
Total derivatives designated as hedging instruments in cash flow and fair value hedges		$	5	$	6		$	6	$	14
Total		$	7	$	13		$	21	$	41

Some of these energy-related and interest rate derivative contracts may contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Amounts related to energy-related derivative contracts and interest rate derivative contracts at December 31, 2015 and 2014 are presented in the following tables.



Fair Value
Assets	2015			2014			Liabilities	2015			2014
	(in millions)							(in millions)
Energy-related derivatives presented in the Balance Sheet ^(a)	$	2		$	7		Energy-related derivatives presented in the Balance Sheet ^(a)	$	15		$	27
Gross amounts not offset in the Balance Sheet ^(b)	(2		)	(7		)	Gross amounts not offset in the Balance Sheet ^(b)	(2		)	(7		)
Net energy-related derivative assets	$	—		$	—		Net energy-related derivative liabilities	$	13		$	20
Interest rate derivatives presented in the Balance Sheet ^(a)	$	5		$	6		Interest rate derivatives presented in the Balance Sheet ^(a)	$	6		$	14
Gross amounts not offset in the Balance Sheet ^(b)	(4		)	(6		)	Gross amounts not offset in the Balance Sheet ^(b)	(4		)	(6		)
Net interest rate derivative assets	$	1		$	—		Net interest rate derivative liabilities	$	2		$	8


(a)	The Company does not offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.


(b)	Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2015			2014			Balance Sheet Location	2015		2014
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(12	)	$	(23	)	Other regulatory liabilities, current	$	2	$	6
	Other regulatory assets, deferred	(3		)	(4		)	Other deferred credits and liabilities	—		1
Total energy-related derivative gains (losses)		$	(15	)	$	(27	)		$	2	$	7

For the years ended December 31, 2015, 2014, and 2013, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)								Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
										Amount
Derivative Category	2015			2014			2013		Statements of Income Location	2015			2014			2013
	(in millions)									(in millions)
Interest rate derivatives	$	(15	)	$	(8	)	$	—	Interest expense, net of amounts capitalized	$	(3	)	$	(3	)	$	(3	)

Gulf Power [Member]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015, the following interest rate derivative was outstanding:

Notional
Amount

Interest
Rate
Received

Weighted Average Interest
Rate Paid

Hedge
Maturity
Date

Fair Value
Gain (Loss)
December 31,
2015

(in millions)

Cash Flow Hedges of Forecasted Debt

3-month LIBOR

2.32%

December 2026

At December 31, 2015 and 2014, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:	Other current assets	$	—	$	—	Liabilities from risk management activities	$	49	$	37
	Other deferred charges and assets	—		—		Other deferred credits and liabilities	51		35
Total derivatives designated as hedging instruments for regulatory purposes		$	—	$	—		$	100	$	72
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:	Other current assets	$	1	$	—	Liabilities from risk management activities	$	—	$	—
Total		$	1	$	—		$	100	$	72

interest rate derivatives presented in the tables above do not have amounts available for offset.



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2015			2014			Balance Sheet Location	2015		2014
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(49	)	$	(37	)	Other regulatory liabilities, current	$	—	$	—
	Other regulatory assets, deferred	(51		)	(35		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(100	)	$	(72	)		$	—	$	—

Mississippi Power [Member]

For the years ended December 31, 2015, 2014, and 2013, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:



Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative						Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
Derivatives in Cash Flow Hedging Relationships	(Effective Portion)							Amount
Derivative Category	2015		2014		2013		Statements of Income Location	2015			2014			2013
	(in millions)							(in millions)
Interest rate derivatives	$	1	$	—	$	—	Interest expense, net of amounts capitalized	$	(1	)	$	(1	)	$	(1	)

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015 and 2014, the fair value of energy-related derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:	Other current assets	$	—	$	—	Other current liabilities	$	29	$	26
	Other deferred charges and assets	—		—		Other deferred credits and liabilities	18		19
Total derivatives designated as hedging instruments for regulatory purposes		$	—	$	—		$	47	$	45

energy-related derivatives presented in the table above did not have amounts available for offset.



	Unrealized Losses							Unrealized Gains
Derivative Category	Balance Sheet Location	2015			2014			Balance Sheet Location	2015		2014
		(in millions)							(in millions)
Energy-related derivatives:	Other regulatory assets, current	$	(29	)	$	(26	)	Other regulatory liabilities, current	$	—	$	—
	Other regulatory assets, deferred	(18		)	(19		)	Other regulatory liabilities, deferred	—		—
Total energy-related derivative gains (losses)		$	(47	)	$	(45	)		$	—	$	—

For the years ended December 31, 2015, 2014, and 2013, the pre-tax effects of derivatives designated as cash flow hedging instruments on the statements of operations were immaterial.

Southern Power [Member]

Fair value of energy-related derivatives and interest rate derivatives

At December 31, 2015, the following interest rate derivatives were outstanding:



	Notional Amount			Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date		Fair Value Gain (Loss) December 31, 2015
	(in millions)							(in millions)
Derivatives not Designated as Hedges
	$	65	(a,d)	3-month LIBOR	2.50%	October 2016	(e)	$	1
	47		(b.d)	3-month LIBOR	2.21%	October 2016	(e)	1
	65		(c,d)	3-month LIBOR	2.21%	November 2016	(f)	1
Total	$	177						$	3


(a)	Swaption at RE Tranquillity LLC. See Note 2 for additional information.


(b)	Swaption at RE Roserock LLC. See Note 2 for additional information.


(c)	Swaption at RE Garland Holdings LLC. See Note 2 for additional information.


(d)	Amortizing notional amount.


(e)	Represents the mandatory settlement date. Settlement amount will be based on a 15-year amortizing swap.


(f)	Represents the mandatory settlement date. Settlement amount will be based on a 12-year amortizing swap.

At December 31, 2015 and 2014, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:



	Asset Derivatives					Liability Derivatives
Derivative Category	Balance Sheet Location	2015		2014		Balance Sheet Location	2015		2014
		(in millions)					(in millions)
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:	Assets from risk management activities	$	3	$	—	Other current liabilities	$	2	$	—
Derivatives not designated as hedging instruments
Energy-related derivatives:	Assets from risk management activities	$	1	$	5	Other current liabilities	$	1	$	4
Interest rate derivatives:	Assets from risk management activities	3		—		Other current liabilities	—		—
Total derivatives not designated as hedging instruments		$	4	$	5		$	1	$	4
Total		$	7	$	5		$	3	$	4

Interest rate derivatives presented in the tables above do not have amounts available for offset and are therefore excluded from the offsetting disclosure tables below.



Fair Value
Assets	2015			2014		Liabilities	2015			2014
	(in millions)						(in millions)
Energy-related derivatives presented in the Balance Sheet ^(a)	$	4		$	5	Energy-related derivatives presented in the Balance Sheet ^(a)	$	3		$	4
Gross amounts not offset in the Balance Sheet ^(b)	(1		)	—		Gross amounts not offset in the Balance Sheet ^(b)	(1		)	—
Net energy-related derivative assets	$	3		$	5	Net energy-related derivative liabilities	$	2		$	4


(a)	The Company does not offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.


(b)	Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.