Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2016

Summary of Significant Accounting Policies [Line Items]

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



	2016			2015			Note
	(in millions)
Retiree benefit plans	$	3,959		$	3,440		(a,n)
Deferred income tax charges	1,590			1,514			(b)
Asset retirement obligations-asset	1,080			481			(b,n)
Environmental remediation-asset	491			78			(j,n)
Other regulatory assets	355			299			(k)
Remaining net book value of retired assets	351			283			(o)
Under recovered regulatory clause revenues	273			142			(g)
Loss on reacquired debt	243			248			(c)
Property damage reserves-asset	206			92			(i)
Kemper IGCC	201			216			(h)
Vacation pay	182			178			(f,n)
Long-term debt fair value adjustment	155			—			(p)
Deferred PPA charges	141			163			(e,n)
Nuclear outage	97			88			(g)
Fuel-hedging-asset	35			225			(d,n)
Other cost of removal obligations	(2,774		)	(1,177		)	(b)
Deferred income tax credits	(219		)	(187		)	(b)
Over recovered regulatory clause revenues	(203		)	(261		)	(g)
Property damage reserves-liability	(177		)	(178		)	(l)
Other regulatory liabilities	(110		)	(35		)	(m)
Asset retirement obligations-liability	(10		)	(45		)	(b,n)
Total regulatory assets (liabilities), net	$	5,866		$	5,564

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 15 years. See Note 2 for additional information.


(b)	Asset retirement and other cost of removal obligations 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 70 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities.


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


(d)	Recorded over the life of the underlying hedged purchase contracts, which generally do not exceed five years. Upon final settlement, actual costs incurred are recovered through fuel and energy cost recovery mechanisms.


(e)	Recovered over the life of the PPA for periods up to seven years.


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


(g)	Recorded and recovered or amortized as approved or accepted by the appropriate state PSCs or other applicable regulatory agencies over periods generally not exceeding ten years.


(h)	Includes $97 million of regulatory assets currently in rates to be recovered over periods of two, seven, or 10 years. For additional information, see Note 3 under "Integrated Coal Gasification Combined Cycle – Rate Recovery of Kemper IGCC Costs – Regulatory Assets and Liabilities."


(i)	Previous under-recovery as of December 2013 is recorded and recovered or amortized as approved by the Georgia PSC through 2019. Amortization of $185 million related to the under-recovery from January 2014 through December 2016 will be determined by the Georgia PSC in the 2019 base rate case. See Note 3 for additional information.


(j)	Recovered through environmental cost recovery mechanisms when the remediation is performed or the work is performed.


(k)	Comprised of numerous immaterial components including deferred income tax charges - Medicare subsidy, cancelled construction projects, building and generating plant leases, property tax, and other miscellaneous assets. These costs are recorded and recovered or amortized as approved by the appropriate state PSCs over periods generally not exceeding 50 years.


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


(m)	Comprised of numerous immaterial components including retiree benefit plans, fuel-hedging gains, and other liabilities that are recorded and recovered or amortized as approved by the appropriate state PSCs or other applicable regulatory agencies generally over periods not exceeding 4 years.


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


(o)	Amortized as approved by the appropriate state PSCs over periods generally up to 11 years.


(p)	Recorded in relation to the Merger. Recovered over the remaining life of the original debt issuances, which range up to 22 years. For additional information see Note 12 under "Southern Company – Merger with Southern Company Gas."

Property Plant and Equipment

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



	2016		2015
	(in millions)
Electric utilities:
Generation	$	48,836	$	41,648
Transmission	11,156		10,544
Distribution	18,418		17,670
General	4,629		4,377
Plant acquisition adjustment	126		123
Electric utility plant in service	83,165		74,362
Natural gas distribution utilities:
Transportation and distribution	11,996		—
Utility plant in service	95,161		74,362
Information technology equipment and software	544		222
Communications equipment	424		418
Storage facilities	1,463		—
Other	824		116
Total other plant in service	3,255		756
Total plant in service	$	98,416	$	75,118

Assets Acquired Under Capital Leases

Assets acquired under a capital lease are included in property, plant, and equipment and are further detailed in the table below:



	Asset Balances at December 31,
	2016			2015
	(in millions)
Office building	$	61		$	61
Nitrogen plant	83			83
Computer-related equipment	63			61
Gas pipeline	6			6
Less: Accumulated amortization	(69		)	(59		)
Balance, net of amortization	$	144		$	152

Asset Retirement Obligations and Other Costs of Removal

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



	2016			2015
	(in millions)
Balance at beginning of year	$	3,759		$	2,201
Liabilities incurred	66			662
Liabilities settled	(171		)	(37		)
Accretion	162			115
Cash flow revisions	698			818
Balance at end of year	$	4,514		$	3,759

Accumulated Provisions for Decommissioning

At December 31, 2016 and 2015, the accumulated provisions for the external decommissioning trust funds were as follows:



	External Trust Funds
	2016		2015
	(in millions)
Plant Farley	$	790	$	734
Plant Hatch	511		487
Plant Vogtle Units 1 and 2	303		288

Estimated Cost of Decommissioning

The estimated costs of decommissioning as of December 31, 2016 based on the most current studies, which were performed in 2013 for Alabama Power's Plant Farley and in 2015 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	2076		2075		2079
	(in millions)
Site study costs:
Radiated structures	$	1,362	$	678	$	568
Spent fuel management	—		160		147
Non-radiated structures	80		64		89
Total site study costs	$	1,442	$	902	$	804

Schedule of Finite-Lived and Infinite-Lived Intangible Assets

At December 31, 2016, other intangible assets were as follows:



	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net
		(in millions)
Other intangible assets subject to amortization:
Customer relationships	11-26 years	$	268	$	(32	)	$	236
Trade names	5-28 years	158		(5		)	153
Patents	3-10 years	4		—			4
Backlog	5 years	5		(1		)	4
Storage and transportation contracts	1-5 years	64		(2		)	62
Software and other	1-12 years	2		—			2
PPA fair value adjustments	19-20 years	456		(22		)	434
Total other intangible assets subject to amortization		$	957	$	(62	)	$	895
Other intangible assets not subject to amortization:
Federal Communications Commission licenses		75		—			75
Total other intangible assets		$	1,032	$	(62	)	$	970

Future Amortization Expense for Intangible Assets

As of December 31, 2016, the estimated amortization associated with other intangible assets is as follows:



	Amortization
	(in millions)
2017	$	108
2018	93
2019	74
2020	63
2021	56

Future Amortization Expense for Intangible Liabilities

The estimated amortization associated with the intangible liabilities that will be recorded in natural gas revenues is as follows:



	Amortization
	(in millions)
2017	$	29
2018	24
2019	17

Net Investments in Leveraged Leases

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



	2016			2015
	(in millions)
Net rentals receivable	$	1,481		$	1,487
Unearned income	(707		)	(732		)
Investment in leveraged leases	774			755
Deferred taxes from leveraged leases	(309		)	(303		)
Net investment in leveraged leases	$	465		$	452

Components of Income from Leveraged Leases

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



	2016			2015			2014
	(in millions)
Pretax leveraged lease income	$	25		$	20		$	24
Income tax expense	(9		)	(7		)	(9		)
Net leveraged lease income	$	16		$	13		$	15

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, 2015	$	(48	)	$	—	$	(82	)	$	(130	)
Current period change	(67		)	—		17			(50		)
Balance at December 31, 2016	$	(115	)	$	—	$	(65	)	$	(180	)

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:



	2016			2015			Note
	(in millions)
Retiree benefit plans	$	947		$	903		(i,j)
Deferred income tax charges	526			522			(a,k)
Under/(over) recovered regulatory clause revenues	76			(97		)	(d)
Nuclear outage	70			53			(d)
Remaining net book value of retired assets	69			76			(l)
Vacation pay	69			66			(c,j)
Loss on reacquired debt	68			75			(b)
Other regulatory assets	50			53			(f)
Asset retirement obligations	12			(40		)	(a)
Fuel-hedging losses	1			55			(e,j)
Other cost of removal obligations	(684		)	(722		)	(a)
Natural disaster reserve	(69		)	(75		)	(h)
Deferred income tax credits	(65		)	(70		)	(a)
Other regulatory liabilities	(23		)	(8		)	(e,g)
Total regulatory assets (liabilities), net	$	1,047		$	791

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 other cost of 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 10 years. See Note 3 under "Retail Regulatory Matters" for additional information.


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


(f)	Comprised of components including generation site selection/evaluation costs, PPA capacity (to be recovered over the next 12 months), and other miscellaneous assets. Recorded as accepted by the Alabama PSC. Capitalized upon initialization of related construction projects, if applicable.


(g)	Comprised of components including mine reclamation and remediation liabilities and fuel-hedging gains. 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 are $16 million for 2016 and $17 million for 2015 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)	Recorded and amortized as approved by the Alabama PSC for a period up to 11 years.

Property Plant and Equipment

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



	2016		2015
	(in millions)
Generation	$	13,551	$	12,820
Transmission	3,921		3,773
Distribution	6,707		6,432
General	1,840		1,713
Plant acquisition adjustment	12		12
Total plant in service	$	26,031	$	24,750

Asset Retirement Obligations and Other Costs of Removal

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



	2016			2015
	(in millions)
Balance at beginning of year	$	1,448		$	829
Liabilities incurred	5			402
Liabilities settled	(25		)	(3		)
Accretion	73			53
Cash flow revisions	32			167
Balance at end of year	$	1,533		$	1,448

Accumulated Provisions for Decommissioning

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



	2016		2015
	(in millions)
External trust funds	$	790	$	734
Internal reserves	19		20
Total	$	809	$	754

Estimated Cost of Decommissioning

The estimated costs of decommissioning as of December 31, 2016 based on the most current study performed in 2013 for Plant Farley 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

Southern Company Gas [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:



	Successor			Predecessor
	2016			2015			Note
	(in millions)			(in millions)
Deferred income tax credits	$	(22	)	$	(27	)	(a)
Long-term debt fair value adjustment	154			66			(b)
Environmental remediation - asset	411			401			(h)
Under recovered regulatory clause revenues	118			69			(c)
Financial instrument hedging - asset	—			30			(d,h)
Other regulatory assets	58			47			(e)
Other cost of removal obligations	(1,616		)	(1,591		)	(a)
Financial instrument hedging - liability	(21		)	—			(d,h)
Other regulatory liabilities	(18		)	(20		)	(f)
Retiree benefit plans	325			125			(g,h)
Over recovered regulatory clause revenues	(104		)	(87		)	(c)
Total regulatory assets (liabilities), net	$	(715	)	$	(987	)

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


(a)	Deferred income tax assets and liabilities are amortized over the related property lives, which range up to 30 years.


(b)	Recovered over the remaining life of the original debt issuances, which range up to 22 years.


(c)	Recorded and recovered or amortized as approved or accepted by the applicable state regulatory agencies over periods not exceeding nine years.


(d)	Financial instrument-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, actual costs incurred are recovered, and actual income earned is refunded through the energy cost recovery clause.


(e)	Comprised of several components including unamortized loss on reacquired debt, weather normalization, franchise gas, and deferred depreciation expense, which are recovered or amortized as approved by the applicable state regulatory agencies over periods generally not exceeding ten years.


(f)	Comprised of several components including energy efficiency programs and unamortized bond issuance costs which are recovered or amortized as approved by the applicable state regulatory agencies over periods generally not exceeding four years.


(g)	Recovered and amortized over the average remaining service period which range up to 11 years. See Note 2 for additional information.


(h)	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:



	Successor		Predecessor
	2016		2015
	(in millions)		(in millions)
Utility plant in service	$	11,996	$	9,912
Information technology equipment and software	324		415
Storage facilities	1,463		1,255
Other	725		570
Total other plant in service	2,512		2,240
Total plant in service	$	14,508	$	12,152

Schedule of Finite-Lived and Infinite-Lived Intangible Assets

Goodwill and other intangible assets consisted of the following:



		Successor - At December 31, 2016
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net
		(in millions)
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships	11-14 years	$	221	$	(30	)	$	191
Trade names	10-28 years	115		(2		)	113
Wholesale gas services
Storage and transportation contracts	1-5 years	64		(2		)	62
Total intangible assets subject to amortization		$	400	$	(34	)	$	366

Goodwill:
Gas distribution operations^(*)		$	4,702	$	—		4,702
Gas marketing services		1,265		—			1,265
Total goodwill		$	5,967	$	—		$	5,967

(*) Measurement period adjustments were recorded in acquisition accounting during the fourth quarter 2016 that resulted in a net $30 million increase to goodwill.



		Predecessor - At December 31, 2015
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Other Intangible Assets, Net
		(in millions)
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships	11-14 years	$	132	$	(57	)	$	75
Trade names	10-28 years	45		(11		)	34
Total intangible assets subject to amortization		$	177	$	(68	)	$	109

Goodwill:
Gas distribution operations		$	1,640	$	—		$	1,640
Gas marketing services		173		—			173
Total goodwill		$	1,813	$	—		$	1,813

Future Amortization Expense for Intangible Assets

As of December 31, 2016, the estimated amortization associated with other intangible assets is as follows:



	Amortization
	(in millions)
2017	$	73
2018	58
2019	40
2020	28
2021	21

Future Amortization Expense for Intangible Liabilities

The estimated amortization associated with the intangible liabilities that will be recorded in natural gas revenues is as follows:



	Amortization
	(in millions)
2017	$	29
2018	24
2019	17

Schedule of Inventory, Lower of Cost or Market Adjustment

As indicated in the following table, for any declines considered to be other than temporary, the Company recorded LOCOM adjustments to cost of natural gas to reduce the value of its natural gas inventories to market value.



	Successor		Predecessor
	July 1, 2016 to December 31, 2016		January 1, 2016 to June 30, 2016		2015		2014
	(in millions)		(in millions)
Gas marketing services	$	—	$	—	$	3	$	4
Wholesale gas services	1		3		19		73
All other	—		—		1		—
Total	$	1	$	3	$	23	$	77

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:



	2016			2015			Note
	(in millions)
Retiree benefit plans, net	$	160		$	147		(a,b)
PPA charges	141			163			(b,c)
Closure of ash ponds	75			29			(b,d)
Remaining book value of retired assets	66			4			(e)
Deferred income tax charges	56			59			(f)
Environmental remediation	44			46			(b,d)
Regulatory asset, offset to other cost of removal	29			29			(g)
Deferred return on transmission upgrades	25			10			(g)
Fuel-hedging assets, net	24			104			(b,h)
Other regulatory assets, net	18			16			(i)
Loss on reacquired debt	18			15			(j)
Asset retirement obligations, net	7			(1		)	(b,f)
Other cost of removal obligations	(278		)	(262		)	(f)
Property damage reserve	(40		)	(38		)	(e)
Over recovered regulatory clause revenues	(23		)	(22		)	(k)
Deferred income tax credits	(2		)	(3		)	(f)
Total regulatory assets (liabilities), net	$	320		$	296

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


(c)	Recovered over the life of the PPA for periods up to seven years.


(d)	Recovered through the environmental cost recovery clause when the remediation or the work is performed.


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


(f)	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.


(g)	Recorded as authorized by the Florida PSC in a settlement agreement approved in December 2013 (2013 Rate Case Settlement Agreement). See Note 3 for additional information.


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


(i)	Comprised primarily of vacation pay. Other regulatory assets costs, with the exception of vacation pay, are recorded and recovered or amortized as approved by the Florida PSC. Vacation pay, including banked holiday pay, does not earn a return as offset in rate base by a corresponding liability; it is recorded as earned by employees and recovered as paid, generally within one year.


(j)	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.


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

Property Plant and Equipment

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



	2016		2015
	(in millions)
Generation	$	3,001	$	2,974
Transmission	706		691
Distribution	1,241		1,196
General	191		182
Plant acquisition adjustment	1		2
Total plant in service	$	5,140	$	5,045

Asset Retirement Obligations and Other Costs of Removal

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



	2016			2015
	(in millions)
Balance at beginning of year	$	130		$	17
Liabilities incurred	1			105
Liabilities settled	(1		)	(1		)
Accretion	4			2
Cash flow revisions	2			7
Balance at end of year	$	136		$	130

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:



	2016			2015			Note
	(in millions)
Retiree benefit plans	$	1,348		$	1,307		(a, j)
Deferred income tax charges	681			683			(b, j)
Loss on reacquired debt	137			150			(c, j)
Asset retirement obligations	893			411			(b, j)
Vacation pay	91			91			(d, j)
Cancelled construction projects	44			56			(e)
Remaining net book value of retired assets	166			171			(f)
Storm damage reserves	206			92			(g)
Other regulatory assets	97			110			(h)
Other cost of removal obligations	3			(31		)	(b)
Deferred income tax credits	(121		)	(105		)	(b, j)
Other regulatory liabilities	(39		)	(2		)	(i, j)
Total regulatory assets (liabilities), net	$	3,506		$	2,933

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 13 years. See Note 2 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 70 years. Asset retirement and removal liabilities will be settled and trued up following completion of the related activities. Included in the deferred income tax assets is $26 million for the retiree Medicare drug subsidy, which is recovered and amortized, as approved by the Georgia PSC, through 2022.


(c)	Recovered over either the remaining life of the original issue or, if refinanced, over the remaining life of the new issue, which currently does not exceed 36 years.


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


(e)	Costs associated with construction of environmental controls that will not be completed as a result of unit retirements are being amortized as approved by the Georgia PSC over periods not exceeding nine years or through 2022.

(f)

Amortized as approved by the Georgia PSC over periods not exceeding 10 years or through 2024. The net book value of Plant Mitchell Unit 3 at December 31, 2016 was $12 million, which will continue to be amortized through December 31, 2019 as provided in the 2013 ARP. Amortization of the remaining net book value of Plant Mitchell Unit 3 at December 31, 2019, which is expected to be approximately $5 million, and $31 million related to obsolete inventories of certain retired units will be determined by the Georgia PSC in the 2019 base rate case. See Note 3 under "Retail Regulatory Matters – Integrated Resource Plan" for additional information.


(g)	Previous under-recovery as of December 2013 is recorded and recovered or amortized as approved by the Georgia PSC through 2019. Amortization of $185 million related to the under-recovery from January 2014 through December 2016 will be determined by the Georgia PSC in the 2019 base rate case. See Note 3 for additional information.

(h)

Comprised of several components including deferred nuclear outages, environmental remediation, building lease, and demand-side management tariff under-recovery. Deferred nuclear outages are recorded and recovered or amortized over the outage cycles of each nuclear unit, which does not exceed 24 months. The building lease is recorded and recovered or amortized as approved by the Georgia PSC through 2020. The amortization of environmental remediation and demand-side management tariff under-recovery of $46 million at December 31, 2016 will be determined by the Georgia PSC in the 2019 base rate case.


(i)	Comprised primarily of fuel-hedging gains, which upon final settlement are refunded through the Company's fuel cost recovery mechanism.


(j)	Generally not earning a return as they are excluded from rate base or are 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:



	2016		2015
	(in millions)
Generation	$	16,668	$	15,386
Transmission	5,779		5,355
Distribution	9,553		9,151
General	1,813		1,921
Plant acquisition adjustment	28		28
Total plant in service	$	33,841	$	31,841

Asset Retirement Obligations and Other Costs of Removal

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



	2016			2015
	(in millions)
Balance at beginning of year	$	1,916		$	1,255
Liabilities incurred	—			6
Liabilities settled	(123		)	(30		)
Accretion	77			56
Cash flow revisions	662			629
Balance at end of year	$	2,532		$	1,916

Accumulated Provisions for Decommissioning

The site study costs and external trust funds for decommissioning as of December 31, 2016 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	2075		2079
	(in millions)
Site study costs:
Radiated structures	$	678	$	568
Spent fuel management	160		147
Non-radiated structures	64		89
Total site study costs	$	902	$	804
External trust funds	$	511	$	303

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:



	2016			2015			Note
	(in millions)
Kemper IGCC	$	201		$	216		(h)
Retiree benefit plans – regulatory assets	173			163			(a,g)
Asset retirement obligations	83			70			(c)
Deferred income tax charges	362			291			(c)
Remaining net book value of retired assets	53			36			(b)
Property tax	37			27			(d)
Plant Daniel Units 3 and 4	33			29			(j)
Other regulatory assets	42			27			(e,g)
Fuel-hedging (realized and unrealized) losses	7			50			(f,g)
Property damage	(68		)	(64		)	(i)
Other cost of removal obligations	(170		)	(167		)	(c)
Other regulatory liabilities	(16		)	(11		)	(b)
Total regulatory assets (liabilities), net	$	737		$	667

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)	Other regulatory liabilities is comprised of numerous immaterial components including deferred income tax credits and other miscellaneous liabilities that are recorded and refunded or amortized as approved by the Mississippi PSC generally over periods not exceeding one year.


(c)	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 49 years. Asset retirement and removal assets and liabilities will be settled and trued up following completion of the related activities.


(d)	The retail portion of property taxes is recovered through the ad valorem tax adjustment clause over a 12-month period beginning in April of the following year. See Note 3 under "Retail Regulatory Matters – Ad Valorem Tax Adjustment" for additional information.


(e)	Other regulatory assets is comprised of numerous immaterial components including vacation pay, loss on reacquired debt, and other miscellaneous assets. These costs are recorded and recovered or amortized as approved by the Mississippi PSC over periods which may range up to 50 years.


(f)	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 ECM.


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


(h)	Includes $97 million of regulatory assets currently in rates to be recovered over periods of two, seven, or 10 years. For additional information, see Note 3 under "Integrated Coal Gasification Combined Cycle – Rate Recovery of Kemper IGCC Costs – Regulatory Assets and Liabilities."


(i)	For additional information, see Note 1 under "Provision for Property Damage."


(j)	The difference between the revenue requirement under the purchase option and the revenue requirement assuming operating lease accounting treatment for the extended term is deferred and amortized over a 10-year period beginning October 2021.

Property Plant and Equipment

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



	2016		2015
	(in millions)
Generation	$	2,632	$	2,723
Transmission	712		688
Distribution	916		891
General	520		503
Plant acquisition adjustment	85		81
Total plant in service	$	4,865	$	4,886

Asset Retirement Obligations and Other Costs of Removal

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



	2016			2015
	(in millions)
Balance at beginning of year	$	177		$	48
Liabilities incurred	15			101
Liabilities settled	(23		)	(3		)
Accretion	5			4
Cash flow revisions	5			27
Balance at end of year	$	179		$	177

Southern Power [Member]

Summary of Significant Accounting Policies [Line Items]

Property Plant and Equipment

The primary assets in property, plant, and equipment are generating facilities, which generally have estimated useful lives as follows:



Generating facility	Useful life
Natural gas	Up to 45 years
Biomass	Up to 40 years
Solar	Up to 35 years
Wind	Up to 30 years

Asset Retirement Obligations and Other Costs of Removal

Details of the AROs included on the consolidated balance sheets are as follows:



	2016		2015
	(in millions)
Balance at beginning of year	$	21	$	13
Liabilities incurred	42		7
Accretion	1		1
Balance at end of year	$	64	$	21

Future Amortization Expense for Intangible Assets

The amortization expense for each of the next five years is as follows:



	Amortization Expense
	(in millions)
2017	$	25
2018	25
2019	25
2020	25
2021	25

Schedule of Revenue by Major Customers by Reporting Segments

The following table shows the percentage of total revenues for the top three customers:



	2016		2015		2014
Georgia Power	16.5	%	15.8	%	10.1	%
Duke Energy Corporation	7.8	%	8.2	%	9.1	%
San Diego Gas & Electric Company	5.7	%	6.1	%	2.9	%
FPL	—	%	10.7	%	9.7	%

Composite AFUDC Rates [Member] | Southern Company Gas [Member]

Summary of Significant Accounting Policies [Line Items]

Property Plant and Equipment

The Company's AFUDC composite rates are as follows:



	Successor		Predecessor
	July 1, 2016 through December 31,		January 1, 2016 through June 30,		Years ended December 31,
	2016		2016		2015		2014
Atlanta Gas Light	4.05	%	4.05	%	8.10	%	8.10	%
Chattanooga Gas^(*)	3.71		3.71		7.41		7.41
Elizabethtown Gas^(*)	0.84		0.84		1.69		0.44
Nicor Gas^(*)	1.50		1.50		0.82		0.24


(*)	Variable rate is determined by the FERC method of AFUDC accounting.