Derivatives (Tables)

3 Months Ended

Mar. 31, 2016

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivatives

At March 31, 2016, the net volume of energy-related derivative contracts for natural gas positions for the Southern Company system, together with the longest hedge date over which the respective entity is hedging its exposure to the variability in future cash flows for forecasted transactions and the longest non-hedge date for derivatives not designated as hedges, were as follows:

	Net Purchased mmBtu	Longest Hedge Date	Longest Non-Hedge Date
	(in millions)
Southern Company	235	2020	2017
Alabama Power	60	2019	—
Georgia Power	65	2019	—
Gulf Power	74	2020	—
Mississippi Power	28	2018	—
Southern Power	8	2016	2017

Notional amount of interest rate derivatives

At March 31, 2016, the following interest rate derivatives were outstanding:

	Notional Amount			Interest Rate Received	Weighted Average Interest Rate Paid	Hedge Maturity Date		Fair Value Gain (Loss) at March 31, 2016
	(in millions)							(in millions)
Cash Flow Hedges of Forecasted Debt
Southern Company	$	1,500		3-month LIBOR	2.14%	November 2026		$	(55	)
Southern Company	1,200			3-month LIBOR	2.60%	November 2046		(127		)
Gulf Power	80			3-month LIBOR	2.32%	December 2026		(4		)
Cash Flow Hedges of Existing Debt
Georgia Power	200			3-month LIBOR + 0.40%	1.01%	August 2016		—
Fair Value Hedges on Existing Debt
Southern Company	250			1.30%	3-month LIBOR + 0.17%	August 2017		1
Southern Company	300			2.75%	3-month LIBOR + 0.92%	June 2020		10
Georgia Power	250			5.40%	3-month LIBOR + 4.02%	June 2018		3
Georgia Power	200			4.25%	3-month LIBOR + 2.46%	December 2019		6
Georgia Power	500			1.95%	3-month LIBOR + 0.76%	December 2018		5
Derivatives not Designated as Hedges
Southern Power	65		(a,d)	3-month LIBOR	2.50%	October 2016	(e)	—
Southern Power	47		(b,d)	3-month LIBOR	2.21%	October 2016	(e)	—
Southern Power	65		(c,d)	3-month LIBOR	2.21%	November 2016	(f)	—
Total	$	4,657						$	(161	)

(a) Swaption at RE Tranquillity LLC. See Note 12 to the financial statements of Southern Company and Note 2 to the financial statements of Southern Power in Item 8 of the Form 10-K for additional information.

(b) Swaption at RE Roserock LLC. See Note 12 to the financial statements of Southern Company and Note 2 to the financial statements of Southern Power in Item 8 of the Form 10-K for additional information.

(c) Swaption at RE Garland Holdings LLC. See Note 12 to the financial statements of Southern Company and Note 2 to the financial statements of Southern Power in Item 8 of the Form 10-K for additional information.

(d) Amortizing notional amount.

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

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

Fair value of energy-related derivatives and interest rate derivatives

At March 31, 2016, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:

Asset Derivatives at March 31, 2016
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets	$	2	$	1	$	1	$	—	$	—
Other deferred charges and assets	5		2		3		—		—
Total derivatives designated as hedging instruments for regulatory purposes	$	7	$	3	$	4	$	—	$	—	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets(*)	$	4	$	—	$	—	$	—	$	—	$	4
Interest rate derivatives:
Other current assets	18		—		7		—		—		—
Other deferred charges and assets	14		—		7		—		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	36	$	—	$	14	$	—	$	—	$	4
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets(*)	$	1	$	—	$	—	$	—	$	—	$	1
Interest rate derivatives:
Other current assets(*)	1		—		—		—		—		1
Total derivatives not designated as hedging instruments	$	2	$	—	$	—	$	—	$	—	$	2
Total asset derivatives	$	45	$	3	$	18	$	—	$	—	$	6

(*) Southern Power includes current assets related to derivatives in "Assets from risk management activities."

Liability Derivatives at March 31, 2016
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Liabilities from risk management activities(*)	$	124	$	37	$	9	$	49	$	29
Other deferred credits and liabilities	74		12		2		45		15
Total derivatives designated as hedging instruments for regulatory purposes	$	198	$	49	$	11	$	94	$	44	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Liabilities from risk management activities(*)	$	2	$	—	$	—	$	—	$	—	$	2
Interest rate derivatives:
Liabilities from risk management activities(*)	193		—		—		5		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	195	$	—	$	—	$	5	$	—	$	2
Derivatives not designated as hedging instruments
Energy-related derivatives:
Liabilities from risk management activities(*)	$	1	$	—	$	—	$	—	$	—	$	1
Total liability derivatives	$	394	$	49	$	11	$	99	$	44	$	3

(*) Georgia Power, Mississippi Power, and Southern Power include current liabilities related to derivatives in "Other current liabilities."

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

Asset Derivatives at December 31, 2015
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets	$	3	$	1	$	2	$	—	$	—	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets(*)	$	3	$	—	$	—	$	—	$	—	$	3
Interest rate derivatives:
Other current assets	19		—		5		1		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	22	$	—	$	5	$	1	$	—	$	3
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets(*)	$	1	$	—	$	—	$	—	$	—	$	1
Interest rate derivatives:
Other current assets(*)	3		—		—		—		—		3
Total derivatives not designated as hedging instruments	$	4	$	—	$	—	$	—	$	—	$	4
Total asset derivatives	$	29	$	1	$	7	$	1	$	—	$	7

(*) Southern Power includes current assets related to derivatives in "Assets from risk management activities."

Liability Derivatives at December 31, 2015
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Liabilities from risk management activities(*)	$	130	$	40	$	12	$	49	$	29
Other deferred credits and liabilities	87		15		3		51		18
Total derivatives designated as hedging instruments for regulatory purposes	$	217	$	55	$	15	$	100	$	47	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Liabilities from risk management activities(*)	$	2	$	—	$	—	$	—	$	—	$	2
Interest rate derivatives:
Liabilities from risk management activities	23		15		—		—		—		—
Other deferred credits and liabilities	7		—		6		—		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	32	$	15	$	6	$	—	$	—	$	2
Derivatives not designated as hedging instruments
Energy-related derivatives:
Liabilities from risk management activities(*)	$	1	$	—	$	—	$	—	$	—	$	1
Total liability derivatives	$	250	$	70	$	21	$	100	$	47	$	3

(*) Georgia Power, Mississippi Power, and Southern Power include current liabilities related to derivatives in "Other current liabilities."

Offsetting disclosure tables

Amounts related to energy-related derivative contracts and interest rate derivative contracts at March 31, 2016 and December 31, 2015 are presented in the following tables.

Derivative Contracts at March 31, 2016
	Fair Value
	Southern Company			Alabama Power			Georgia Power			Gulf Power		Mississippi Power		Southern Power
	(in millions)
Assets
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	12		$	3		$	4		$	—	$	—	$	5
Gross amounts not offset in the Balance Sheet (b)	(10		)	(3		)	(3		)	—		—		(2		)
Net energy-related derivative assets	$	2		$	—		$	1		$	—	$	—	$	3
Interest rate derivatives:
Interest rate derivatives presented in the Balance Sheet (a)	$	33		$	—		$	14		$	—	$	—	$	1
Gross amounts not offset in the Balance Sheet (b)	(21		)	—			—			—		—		—
Net interest rate derivative assets	$	12		$	—		$	14		$	—	$	—	$	1
Liabilities
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	201		$	49		$	11		$	94	$	44	$	3
Gross amounts not offset in the Balance Sheet (b)	(10		)	(3		)	(3		)	—		—		(2		)
Net energy-related derivative liabilities	$	191		$	46		$	8		$	94	$	44	$	1
Interest rate derivatives:
Interest rate derivatives presented in the Balance Sheet (a)	$	193		$	—		$	—		$	5	$	—	$	—
Gross amounts not offset in the Balance Sheet (b)	(21		)	—			—			—		—		—
Net interest rate derivative liabilities	$	172		$	—		$	—		$	5	$	—	$	—

(a) None of the registrants offsets 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.

Derivative Contracts at December 31, 2015
	Fair Value
	Southern Company			Alabama Power			Georgia Power			Gulf Power		Mississippi Power		Southern Power
	(in millions)
Assets
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	7		$	1		$	2		$	—	$	—	$	4
Gross amounts not offset in the Balance Sheet (b)	(6		)	(1		)	(2		)	—		—		(1		)
Net energy-related derivative assets	$	1		$	—		$	—		$	—	$	—	$	3
Interest rate derivatives:
Interest rate derivatives presented in the Balance Sheet (a)	$	22		$	—		$	5		$	1	$	—	$	4
Gross amounts not offset in the Balance Sheet (b)	(9		)	—			(4		)	—		—		—
Net interest rate derivative assets	$	13		$	—		$	1		$	1	$	—	$	4
Liabilities
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	220		$	55		$	15		$	100	$	47	$	3
Gross amounts not offset in the Balance Sheet (b)	(6		)	(1		)	(2		)	—		—		(1		)
Net energy-related derivative liabilities	$	214		$	54		$	13		$	100	$	47	$	2
Interest rate derivatives:
Interest rate derivatives presented in the Balance Sheet (a)	$	30		$	15		$	6		$	—	$	—	$	—
Gross amounts not offset in the Balance Sheet (b)	(9		)	—			(4		)	—		—		—
Net interest rate derivative liabilities	$	21		$	15		$	2		$	—	$	—	$	—

(a) None of the registrants offsets 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.

Pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments

At March 31, 2016 and December 31, 2015, 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:

Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet at March 31, 2016
Derivative Category and Balance Sheet Location	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(124	)	$	(37	)	$	(9	)	$	(49	)	$	(29	)
Other regulatory assets, deferred	(74		)	(12		)	(2		)	(45		)	(15		)
Other regulatory liabilities, current (a)	2			1			1			—			—
Other regulatory liabilities, deferred (b)	5			2			3			—			—
Total energy-related derivative gains (losses)	$	(191	)	$	(46	)	$	(7	)	$	(94	)	$	(44	)

(a) Southern Company, Alabama Power, and Georgia Power include other regulatory liabilities, current in other current liabilities.

(b) Georgia Power includes other regulatory liabilities, deferred in other deferred credits and liabilities.

Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet at December 31, 2015
Derivative Category and Balance Sheet Location	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(130	)	$	(40	)	$	(12	)	$	(49	)	$	(29	)
Other regulatory assets, deferred	(87		)	(15		)	(3		)	(51		)	(18		)
Other regulatory liabilities, current(*)	3			1			2			—			—
Total energy-related derivative gains (losses)	$	(214	)	$	(54	)	$	(13	)	$	(100	)	$	(47	)

(*) Southern Company, Alabama Power, and Georgia Power include other regulatory liabilities, current in other current liabilities.

Pre-tax effects of interest rate derivatives, designated as cash flow hedging instruments

For the three months ended March 31, 2016 and 2015, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments 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)
							Statements of Income Location	Amount
	2016			2015				2016			2015
	(in millions)							(in millions)
Southern Company
Interest rate derivatives	$	(190	)	$	(29	)	Interest expense, net of amounts capitalized	$	(3	)	$	(2	)
Alabama Power
Interest rate derivatives	$	(4	)	$	(6	)	Interest expense, net of amounts capitalized	$	(1	)	$	(1	)
Georgia Power
Interest rate derivatives	$	—		$	(23	)	Interest expense, net of amounts capitalized	$	(1	)	$	(1	)
Gulf Power
Interest rate derivatives	$	(5	)	$	—		Interest expense, net of amounts capitalized	$	—		$	—

Pre-tax effects of interest rate derivatives, designated as fair value hedging instruments

For the three months ended March 31, 2016 and 2015, the pre-tax effects of interest rate derivatives designated as fair value hedging instruments were as follows:

Derivatives in Fair Value Hedging Relationships
		Gain (Loss)
Derivative Category	Statements of Income Location	2016		2015
		(in millions)
Southern Company
Interest rate derivatives:	Interest expense, net of amounts capitalized	$	20	$	7
Georgia Power
Interest rate derivatives:	Interest expense, net of amounts capitalized	$	14	$	6