Derivatives (Tables)

9 Months Ended

Sep. 30, 2017

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Energy-Related Derivatives

At September 30, 2017, 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(*)	463	2021	2024
Alabama Power	66	2020	—
Georgia Power	159	2021	—
Gulf Power	28	2020	—
Mississippi Power	44	2021	—
Southern Power	13	2018	—
Southern Company Gas(*)	153	2020	2024

(*) Southern Company's and Southern Company Gas' derivative instruments include both long and short natural gas positions. A long position is a contract to purchase natural gas and a short position is a contract to sell natural gas. Southern Company Gas' volume represents the net of long natural gas positions of 3.3 billion mmBtu and short natural gas positions of 3.1 billion mmBtu as of September 30, 2017, which is also included in Southern Company's total volume.

Schedule of Interest Rate Derivatives

At September 30, 2017, 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 September 30, 2017
	(in millions)					(in millions)
Cash Flow Hedges of Existing Debt
Mississippi Power	$	900	1-month LIBOR	0.79%	March 2018	$	2
Fair Value Hedges of Existing Debt
Southern Company(*)	300		2.75%	3-month LIBOR + 0.92%	June 2020	—
Southern Company(*)	1,500		2.35%	1-month LIBOR + 0.87%	July 2021	(19		)
Georgia Power	250		5.40%	3-month LIBOR + 4.02%	June 2018	—
Georgia Power	500		1.95%	3-month LIBOR + 0.76%	December 2018	(2		)
Georgia Power	200		4.25%	3-month LIBOR + 2.46%	December 2019	—
Southern Company Consolidated	$	3,650				$	(19	)

(*) Represents the Southern Company parent entity.

Schedule of Foreign Currency Derivatives

At September 30, 2017, the following foreign currency derivatives were outstanding:

	Pay Notional		Pay Rate	Receive Notional		Receive Rate	Hedge Maturity Date	Fair Value Gain (Loss) at September 30, 2017
	(in millions)			(in millions)				(in millions)
Cash Flow Hedges of Existing Debt
Southern Power	$	677	2.95%	€	600	1.00%	June 2022	$	42
Southern Power	564		3.78%	500		1.85%	June 2026	38
Total	$	1,241		€	1,100			$	80

Fair Value of Energy-Related Derivatives and Interest Rate Derivatives

The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:

	As of September 30, 2017						As of December 31, 2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)						(in millions)
Southern Company
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	21		$	25		$	73		$	27
Other deferred charges and assets/Other deferred credits and liabilities	13			23			25			33
Total derivatives designated as hedging instruments for regulatory purposes	$	34		$	48		$	98		$	60
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	8		$	6		$	23		$	7
Interest rate derivatives:
Other current assets/Other current liabilities	5			1			12			1
Other deferred charges and assets/Other deferred credits and liabilities	—			23			1			28
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			25
Other deferred charges and assets/Other deferred credits and liabilities	103			—			—			33
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	116		$	53		$	36		$	94
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	271		$	254		$	489		$	483
Other deferred charges and assets/Other deferred credits and liabilities	115			103			66			81
Interest rate derivatives:
Other current assets/Other current liabilities	—			—			1			—
Total derivatives not designated as hedging instruments	$	386		$	357		$	556		$	564
Gross amounts recognized	$	536		$	458		$	690		$	718
Gross amounts offset(*)	$	(275	)	$	(351	)	$	(462	)	$	(524	)
Net amounts recognized in the Balance Sheets	$	261		$	107		$	228		$	194

	As of September 30, 2017						As of December 31, 2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)						(in millions)
Alabama Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	6		$	4		$	13		$	5
Other deferred charges and assets/Other deferred credits and liabilities	3			3			7			4
Total derivatives designated as hedging instruments for regulatory purposes	$	9		$	7		$	20		$	9
Gross amounts recognized	$	9		$	7		$	20		$	9
Gross amounts offset	$	(5	)	$	(5	)	$	(8	)	$	(8	)
Net amounts recognized in the Balance Sheets	$	4		$	2		$	12		$	1
Georgia Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	10		$	3		$	30		$	1
Other deferred charges and assets/Other deferred credits and liabilities	8			8			14			7
Total derivatives designated as hedging instruments for regulatory purposes	$	18		$	11		$	44		$	8
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	1		$	1		$	2		$	—
Other deferred charges and assets/Other deferred credits and liabilities	—			2			—			3
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	1		$	3		$	2		$	3
Gross amounts recognized	$	19		$	14		$	46		$	11
Gross amounts offset	$	(10	)	$	(10	)	$	(8	)	$	(8	)
Net amounts recognized in the Balance Sheets	$	9		$	4		$	38		$	3
Gulf Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	—		$	13		$	4		$	12
Other deferred charges and assets/Other deferred credits and liabilities	—			9			1			17
Total derivatives designated as hedging instruments for regulatory purposes	$	—		$	22		$	5		$	29
Gross amounts recognized	$	—		$	22		$	5		$	29
Gross amounts offset	$	—		$	—		$	(4	)	$	(4	)
Net amounts recognized in the Balance Sheets	$	—		$	22		$	1		$	25

	As of September 30, 2017						As of December 31, 2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)						(in millions)
Mississippi Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	1		$	4		$	2		$	6
Other deferred charges and assets/Other deferred credits and liabilities	2			3			2			5
Total derivatives designated as hedging instruments for regulatory purposes	$	3		$	7		$	4		$	11
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	2		$	—		$	2		$	—
Other deferred charges and assets/Other deferred credits and liabilities	—			—			1			—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	2		$	—		$	3		$	—
Gross amounts recognized	$	5		$	7		$	7		$	11
Gross amounts offset	$	(3	)	$	(3	)	$	(3	)	$	(3	)
Net amounts recognized in the Balance Sheets	$	2		$	4		$	4		$	8
Southern Power
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	8		$	4		$	18		$	4
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			25
Other deferred charges and assets/Other deferred credits and liabilities	103			—			—			33
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	111		$	27		$	18		$	62
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	1		$	—		$	3		$	1
Interest rate derivatives:
Other current assets/Other current liabilities	—			—			1			—
Total derivatives not designated as hedging instruments	$	1		$	—		$	4		$	1
Gross amounts recognized	$	112		$	27		$	22		$	63
Gross amounts offset	$	(1	)	$	(1	)	$	(5	)	$	(5	)
Net amounts recognized in the Balance Sheets	$	111		$	26		$	17		$	58

	As of September 30, 2017						As of December 31, 2016
Derivative Category and Balance Sheet Location	Assets			Liabilities			Assets			Liabilities
	(in millions)						(in millions)
Southern Company Gas
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	4		$	1		$	24		$	3
Other deferred charges and assets/Other deferred credits and liabilities	—			—			1			—
Total derivatives designated as hedging instruments for regulatory purposes	$	4		$	1		$	25		$	3
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	—		$	2		$	4		$	3
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	270		$	254		$	486		$	482
Other deferred charges and assets/Other deferred credits and liabilities	115			103			66			81
Total derivatives not designated as hedging instruments	$	385		$	357		$	552		$	563
Gross amounts of recognized	$	389		$	360		$	581		$	569
Gross amounts offset(*)	$	(251	)	$	(327	)	$	(435	)	$	(497	)
Net amounts recognized in the Balance Sheets	$	138		$	33		$	146		$	72

(*) Gross amounts offset include cash collateral held on deposit in broker margin accounts of $76 million and $62 million as of September 30, 2017 and December 31, 2016, respectively.

Pre-tax Effects of Unrealized Derivative Gains (Losses) Arising from Energy-Related Derivative Instruments

At September 30, 2017 and December 31, 2016, 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 in the Balance Sheet at September 30, 2017
Derivative Category and Balance Sheet Location	Southern Company(b)			Alabama Power			Georgia Power			Gulf Power			Mississippi Power			Southern Company Gas(c)
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(18	)	$	(1	)	$	—		$	(13	)	$	(3	)	$	(1	)
Other regulatory assets, deferred	(12		)	(1		)	(1		)	(9		)	(1		)	—
Other regulatory liabilities, current(a)	14			3			7			—			—			4
Other regulatory liabilities, deferred(b)	2			1			1			—			—			—
Total energy-related derivative gains (losses)	$	(14	)	$	2		$	7		$	(22	)	$	(4	)	$	3

(a) Georgia Power includes other regulatory liabilities, current in other current liabilities.

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

(c) Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $1 million at September 30, 2017.

Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet at December 31, 2016
Derivative Category and Balance Sheet Location	Southern Company(c)			Alabama Power			Georgia Power		Gulf Power			Mississippi Power			Southern Company Gas(c)
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(16	)	$	(1	)	$	—	$	(9	)	$	(5	)	$	(1	)
Other regulatory assets, deferred	(19		)	—			—		(16		)	(3		)	—
Other regulatory liabilities, current(a)	56			8			29		1			1			17
Other regulatory liabilities, deferred(b)	12			4			7		—			—			1
Total energy-related derivative gains (losses)	$	33		$	11		$	36	$	(24	)	$	(7	)	$	17

(a) Georgia Power includes other regulatory liabilities, current in other current liabilities.

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

(c) Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $8 million at December 31, 2016.

Pre-tax Effects of Interest Rate Derivatives, Designated as Cash Flow Hedging Instruments

For the three months ended September 30, 2017 and 2016, the pre-tax effects of energy-related derivatives, interest rate derivatives, and foreign currency 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
	2017			2016				2017			2016
	(in millions)							(in millions)
Southern Company
Energy-related derivatives	$	(6	)	$	—		Depreciation and amortization	$	(6	)	$	1
Interest rate derivatives	(1		)	(6		)	Interest expense, net of amounts capitalized	(5		)	(6		)
Foreign currency derivatives	46			37			Interest expense, net of amounts capitalized	(5		)	(6		)
							Other income (expense), net(*)	43			7
Total	$	39		$	31			$	27		$	(4	)
Alabama Power
Interest rate derivatives	$	—		$	—		Interest expense, net of amounts capitalized	$	(2	)	$	(2	)
Georgia Power
Interest rate derivatives	$	—		$	—		Interest expense, net of amounts capitalized	$	(1	)	$	(1	)
Mississippi Power
Interest rate derivatives	$	(1	)	$	(1	)	Interest expense, net of amounts capitalized	$	—		$	—
Southern Power
Energy-related derivatives	$	(6	)	$	—		Depreciation and amortization	$	(6	)	$	1
Foreign currency derivatives	46			37			Interest expense, net of amounts capitalized	(5		)	(6		)
							Other income (expense), net(*)	43			7
Total	$	40		$	37			$	32		$	2
Southern Company Gas
Interest rate derivatives	$	—		$	(5	)	Interest expense, net of amounts capitalized	$	—		$	—

(*) The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.

For the nine months ended September 30, 2017 and 2016, the pre-tax effects of energy-related derivatives, interest rate derivatives, and foreign currency 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
	2017			2016				2017			2016
	(in millions)							(in millions)
Southern Company
Energy-related derivatives	$	(26	)	$	(1	)	Depreciation and amortization	$	(12	)	$	1
Interest rate derivatives	(2		)	(189		)	Interest expense, net of amounts capitalized	(15		)	(13		)
Foreign currency derivatives	114			(1		)	Interest expense, net of amounts capitalized	(17		)	(7		)
							Other income (expense), net(*)	139			(13		)
Total	$	86		$	(191	)		$	95		$	(32	)
Alabama Power
Interest rate derivatives	$	—		$	(3	)	Interest expense, net of amounts capitalized	$	(5	)	$	(5	)
Georgia Power
Interest rate derivatives	$	—		$	—		Interest expense, net of amounts capitalized	$	(3	)	$	(3	)
Gulf Power
Energy-related derivatives	$	(1	)	$	—		Depreciation and amortization	$	—		$	—
Interest rate derivatives	(1		)	(7		)	Interest expense, net of amounts capitalized	—			—
Total	$	(2	)	$	(7	)		$	—		$	—
Mississippi Power
Interest rate derivatives	$	—		$	(1	)	Interest expense, net of amounts capitalized	$	(1	)	$	(1	)
Southern Power
Energy-related derivatives	$	(21	)	$	(1	)	Depreciation and amortization	$	(12	)	$	1
Interest rate derivatives	—			—			Interest expense, net of amounts capitalized	—			(1		)
Foreign currency derivatives	114			(1		)	Interest expense, net of amounts capitalized	(17		)	(7		)
							Other income (expense), net(*)	139			(13		)
Total	$	93		$	(2	)		$	110		$	(20	)

(*) The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.

For Southern Company Gas, the pre-tax effect of energy related derivatives and interest rate derivatives designated as cash flow hedging instruments recognized in OCI and those reclassified from accumulated OCI into earnings for the successor nine months ended September 30, 2017, the successor period of July 1, 2016 through September 30, 2016, and the predecessor period of January 1, 2016 through June 30, 2016 were as follows:

	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	Nine Months Ended September 30, 2017			Statements of Income Location	Nine Months Ended September 30, 2017
	(in millions)				(in millions)
Energy-related derivatives	$	(4	)	Cost of natural gas	$	—

	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)							Gain (Loss) Reclassified from Accumulated OCI into Income (Effective Portion)
	Successor			Predecessor				Successor		Predecessor
Derivatives in Cash Flow Hedging Relationships	July 1, 2016 through September 30, 2016			January 1, 2016 through June 30, 2016			Statements of Income Location	July 1, 2016 through September 30, 2016		January 1, 2016 through June 30, 2016
	(in millions)			(in millions)				(in millions)		(in millions)
Energy-related derivatives	$	—		$	—		Cost of natural gas	$	—	$	(1	)
Interest rate derivatives	(5		)	(64		)	Interest expense, net of amounts capitalized	—		—
Total	$	(5	)	$	(64	)		$	—	$	(1	)

Pre-tax Effect of Interest Rate and Energy Related Derivatives

For the three and nine months ended September 30, 2017 and 2016, the pre-tax effects of energy-related derivatives and interest rate derivatives not designated as hedging instruments on the statements of income were as follows:

		Gain (Loss)
		Three Months Ended September 30,					Nine Months Ended September 30,
Derivatives in Non-Designated Hedging Relationships	Statements of Income Location	2017			2016		2017			2016
		(in millions)					(in millions)
Southern Company
Energy Related derivatives:	Natural gas revenues(*)	$	(17	)	$	—	$	48		$	—
	Cost of natural gas	2			6		(2		)	6
Total derivatives in non-designated hedging relationships		$	(15	)	$	6	$	46		$	6

(*) Excludes gains (losses) recorded in cost of natural gas associated with weather derivatives of $15 million for the nine months ended September 30, 2017 and immaterial amounts for all other periods presented.

		Gain (Loss)
		Successor			Successor		Successor			Successor		Predecessor
Derivatives in Non-Designated Hedging Relationships	Statements of Income Location	Three Months Ended September 30, 2017			Three Months Ended September 30, 2016		Nine Months Ended September 30, 2017			July 1, 2016 through September 30, 2016		January 1, 2016 through June 30, 2016
		(in millions)			(in millions)		(in millions)			(in millions)
Southern Company Gas
Energy Related derivatives:	Natural gas revenues(*)	$	(17	)	$	—	$	48		$	—	$	(1	)
	Cost of natural gas	2			6		(2		)	6		(62		)
Total derivatives in non-designated hedging relationships		$	(15	)	$	6	$	46		$	6	$	(63	)

(*) Excludes gains recorded in cost of natural gas associated with weather derivatives of $15 million for the successor nine months ended September 30, 2017 and immaterial amounts for all other periods presented.

Pre-tax Effects of Interest Rate Derivatives, Designated as Fair Value Hedging Instruments

For the three and nine months ended September 30, 2017 and 2016, 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)
		Three Months Ended September 30,						Nine Months Ended September 30,
Derivative Category	Statements of Income Location	2017			2016			2017			2016
		(in millions)						(in millions)
Southern Company
Interest rate derivatives:	Interest expense, net of amounts capitalized	$	(5	)	$	(9	)	$	(6	)	$	15
Georgia Power
Interest rate derivatives:	Interest expense, net of amounts capitalized	$	—		$	(5	)	$	(1	)	$	10