Contingencies and Regulatory Matters (Tables)

6 Months Ended

Jun. 30, 2017

Commitments and Contingencies Disclosure [Abstract]

Georgia Power's preliminary assessment results indicate that its proportionate share of the remaining estimated cost to complete Plant Vogtle Units 3 and 4 ranges as follows:



Preliminary in-service dates
Unit 3	February 2021			–	March 2022
Unit 4	February 2022			–	March 2023
	(in billions)
Preliminary estimated cost to complete	$	3.9		–	$	4.6
CWIP as of June 30, 2017	4.5				4.5
Guarantee Obligations	(1.7		)		(1.7		)
Estimated capital costs	$	6.7		–	$	7.4
Vogtle Cost Settlement Agreement Revised Forecast	(5.7		)		(5.7		)
Estimated net additional capital costs	$	1.0		–	$	1.7



	Preliminary Cancellation Cost Estimate
	(in billions)
CWIP as of June 30, 2017	$	4.5
Financing costs collected, net of tax	1.4
Cancellation costs^(*)	0.4
Total	$	6.3


(*)	The estimate for cancellation costs includes, but is not limited to, costs to terminate contracts for construction and other services, as well as costs to secure the Plant Vogtle Units 3 and 4 construction site.

Recovery Balance of Each Regulatory Clause

The balance of each regulatory clause recovery on the balance sheet follows:



Regulatory Clause	Balance Sheet Line Item	June 30, 2017		December 31, 2016
		(in millions)
Rate CNP Compliance^(*)	Deferred under recovered regulatory clause revenues	$	6	$	9
Rate CNP PPA	Over recovered regulatory clause revenues	1		—
	Deferred under recovered regulatory clause revenues	—		142
Retail Energy Cost Recovery	Other regulatory liabilities, current	11		76
Natural Disaster Reserve	Other regulatory liabilities, deferred	56		69


(*)	In accordance with an accounting order issued on February 17, 2017 by the Alabama PSC, Alabama Power reclassified $36 million of its under recovered balance for Rate CNP Compliance to a deferred regulatory asset account.

The balance of each regulatory clause recovery on the balance sheet follows:



Regulatory Clause	Balance Sheet Line Item	June 30, 2017		December 31, 2016
		(in millions)
Fuel Cost Recovery	Under recovered regulatory clause revenues	$	7	$	—
Fuel Cost Recovery	Other regulatory liabilities, current	—		15
Purchased Power Capacity Recovery	Under recovered regulatory clause revenues	5		—
Environmental Cost Recovery	Under recovered regulatory clause revenues	12		13
Energy Conservation Cost Recovery	Under recovered regulatory clause revenues	2		4

Current And Actual Cost Estimate

Mississippi Power's Kemper IGCC 2010 project estimate, cost estimate at the time of project suspension (which includes the impacts of the Mississippi Supreme Court's (Court) decision discussed herein under "Rate Recovery of Kemper IGCC Costs – 2013 MPSC Rate Order"), and actual costs incurred as of June 30, 2017, all of which include 100% of the costs for the Kemper IGCC, are as follows:



Cost Category	2010 Project Estimate^(a)		Cost Estimate at Suspension^(b)			June 30, 2017 Actual Costs
	(in billions)
Plant Subject to Cost Cap^(c)(e)	$	2.40	$	5.95		$	5.68
Lignite Mine and Equipment	0.21		0.23			0.23
CO₂ Pipeline Facilities	0.14		0.11			0.11
AFUDC^(d)	0.17		0.85			0.85
Combined Cycle and Related Assets Placed in Service – Incremental^(e)	—		0.05			0.05
General Exceptions	0.05		0.10			0.08
Deferred Costs^(e)	—		0.23			0.23
Additional DOE Grants^(f)	—		(0.14		)	(0.14		)
Total Kemper IGCC	$	2.97	$	7.38		$	7.09


(a)	Represents the certificated cost estimate adjusted to include the certificated estimate for the CO₂ pipeline facilities approved in 2011 by the Mississippi PSC, as well as the lignite mine and equipment, AFUDC, and general exceptions.


(b)	Represents actual costs through June 30, 2017 and projected costs at the time of project suspension, including estimated post-in-service costs which were expected to be subject to the cost cap.

(c)

The 2012 MPSC CPCN Order approved a construction cost cap of up to $2.88 billion, net of the Initial DOE Grants and excluding the cost of the lignite mine and equipment, the cost of the CO₂ pipeline facilities, AFUDC, and certain general exceptions, including change of law, force majeure, and beneficial capital (which exists when Mississippi Power demonstrates that the purpose and effect of the construction cost increase is to produce efficiencies that will result in a neutral or favorable effect on customers relative to the original proposal for the CPCN) (Cost Cap Exceptions). The Cost Estimate at Suspension and the Actual Costs include non-incremental operating and maintenance costs related to the combined cycle and associated common facilities placed in service in August 2014 that are subject to the $2.88 billion cost cap and exclude post-in-service costs for the lignite mine. See "Rate Recovery of Kemper IGCC Costs – 2013 MPSC Rate Order" herein for additional information.

(d)

Mississippi Power's 2010 Project Estimate included recovery of financing costs during construction rather than the accrual of AFUDC. This approach was not approved by the Mississippi PSC as described in "Rate Recovery of Kemper IGCC Costs – 2013 MPSC Rate Order." The Cost Estimate at Suspension also reflects the impact of a settlement agreement with the wholesale customers for cost-based rates under FERC's jurisdiction. See "FERC Matters" herein for additional information.

(e)

Non-capital Kemper IGCC-related costs incurred during construction were initially deferred as regulatory assets. Some of these costs are included in current rates and are being recognized through income; however, such costs remained in the Cost Estimate at Suspension and are reflected in the Actual Costs at June 30, 2017. The equity return associated with assets placed in service and other non-CWIP accounts deferred for regulatory purposes, as well as the wholesale portion of debt carrying costs, whether deferred or recognized through income, was not included in the Cost Estimate at Suspension or in the Actual Costs at June 30, 2017. At June 30, 2017, such deferred amounts totaled $33 million and $1 million, respectively.


(f)	On April 8, 2016, Mississippi Power received approximately $137 million in additional grants from the DOE for the Kemper IGCC (Additional DOE Grants).