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Joint Ownership Agreements
12 Months Ended
Dec. 31, 2017
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
Alabama Power owns an undivided interest in Units 1 and 2 at Plant Miller and related facilities jointly with PowerSouth Energy Cooperative, Inc. Georgia Power owns undivided interests in Plants Vogtle, Hatch, Wansley, and Scherer in varying amounts jointly with one or more of the following entities: Oglethorpe Power Corporation (OPC), MEAG Power, the City of Dalton, Georgia, acting by and through its Board of Water, Light, and Sinking Fund Commissioners, doing business as Dalton Utilities, Florida Power & Light Company, and Jacksonville Electric Authority. In addition, Georgia Power has joint ownership agreements with OPC for the Rocky Mountain facilities. In August 2016, Georgia Power sold its 33% ownership interest in the Intercession City combustion turbine unit to Duke Energy Florida, LLC. Southern Power owns an undivided interest in Plant Stanton Unit A and related facilities jointly with the Orlando Utilities Commission, Kissimmee Utility Authority, and Florida Municipal Power Agency. Southern Company Gas has a 50% undivided ownership interest in the Dalton Pipeline jointly with The Williams Companies, Inc.
At December 31, 2017, Alabama Power's, Georgia Power's, Southern Power's, and Southern Company Gas' percentage ownership and investment (exclusive of nuclear fuel) in jointly-owned facilities in commercial operation with the above entities were as follows:
Facility (Type)
Percent
Ownership
 
Plant in Service
 
Accumulated
Depreciation
 
CWIP
 
 
 
(in millions)
Plant Vogtle (nuclear) Units 1 and 2
45.7
%
 
$
3,564

 
$
2,141

 
$
70

Plant Hatch (nuclear)
50.1

 
1,321

 
595

 
87

Plant Miller (coal) Units 1 and 2
91.8

 
1,717

 
619

 
54

Plant Scherer (coal) Units 1 and 2
8.4

 
261

 
93

 
8

Plant Wansley (coal)
53.5

 
1,053

 
335

 
72

Rocky Mountain (pumped storage)
25.4

 
182

 
132

 

Plant Stanton (combined cycle) Unit A
65.0

 
155

 
55

 

Dalton Pipeline (natural gas pipeline)
50.0

 
241

 
2

 
13


Georgia Power also owns 45.7% of Plant Vogtle Units 3 and 4, which are currently under construction and had a CWIP balance of $3.3 billion as of December 31, 2017. See Note 3 under "Nuclear Construction" for additional information.
Alabama Power and Georgia Power have contracted to operate and maintain their jointly-owned facilities, except for Rocky Mountain, as agents for their respective co-owners. Southern Power has a service agreement with SCS whereby SCS is responsible for the operation and maintenance of Plant Stanton Unit A. The companies' proportionate share of their plant operating expenses is included in the corresponding operating expenses in the statements of income and each company is responsible for providing its own financing.
Southern Company Gas entered into an agreement to lease its 50% undivided ownership in the Dalton Pipeline that became effective when it was placed in service on August 1, 2017. Under the lease, Southern Company Gas will receive approximately $26 million annually for an initial term of 25 years. The lessee is responsible for maintaining the pipeline during the lease term and for providing service to transportation customers under its FERC-regulated tariff.
ALABAMA POWER CO  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
The Company and Georgia Power own equally all of the outstanding capital stock of SEGCO, which owns electric generating units with a total rated capacity of 1,020 MWs, as well as associated transmission facilities. SEGCO uses natural gas as the primary fuel source for 1,000 MWs of its generating capacity. The capacity of these units is sold equally to the Company and Georgia Power under a power contract. The Company and Georgia Power make payments sufficient to provide for the operating expenses, taxes, interest expense, and ROE. The Company's share of purchased power totaled $76 million in 2017, $55 million in 2016, and $76 million in 2015 and is included in "Purchased power from affiliates" in the statements of income. The Company accounts for SEGCO using the equity method.
In addition, the Company has guaranteed unconditionally the obligation of SEGCO under an installment sale agreement for the purchase of certain pollution control facilities at SEGCO's generating units, pursuant to which $25 million principal amount of pollution control revenue bonds are outstanding. The Company has guaranteed $100 million principal amount of unsecured senior notes issued by SEGCO for general corporate purposes. These senior notes mature on December 1, 2018. Georgia Power has agreed to reimburse the Company for the pro rata portion of such obligations corresponding to its then proportionate ownership of stock of SEGCO if the Company is called upon to make such payment under its guarantee.
At December 31, 2017, the capitalization of SEGCO consisted of $95 million of equity and $125 million of long-term debt on which the annual interest requirement is $4 million. In addition, SEGCO had short-term debt outstanding of $14 million. SEGCO paid $24 million of dividends in 2017 and 2016 compared to an immaterial amount in 2015, of which one-half of each was paid to the Company. In addition, the Company recognizes 50% of SEGCO's net income.
The Company, which owns and operates a generating unit adjacent to the SEGCO generating units, has a joint ownership agreement with SEGCO for the ownership of an associated gas pipeline. The Company owns 14% of the pipeline with the remaining 86% owned by SEGCO.
In addition to the Company's ownership of SEGCO and joint ownership of an associated gas pipeline, the Company's percentage ownership and investment in jointly-owned generating plants at December 31, 2017 were as follows:
Facility
Total MW Capacity
 
Company Ownership
 
 
Plant in Service
 
Accumulated Depreciation
 
Construction Work in Progress
 
 
 
 
 
 
(in millions)
Greene County
500

 
60.00
%
(1) 
 
$
172

 
$
65

 
$
2

Plant Miller
 
 
 
 
 
 
 
 
 
 
Units 1 and 2
1,320

 
91.84
%
(2) 
 
1,717

 
619

 
54

(1)
Jointly owned with an affiliate, Mississippi Power.
(2)
Jointly owned with PowerSouth Energy Cooperative, Inc.
The Company has contracted to operate and maintain its jointly-owned facilities as agent for their co-owners. The Company's proportionate share of its plant operating expenses is included in operating expenses in the statements of income and the Company is responsible for providing its own financing.
GEORGIA POWER CO  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
The Company and Alabama Power own equally all of the outstanding capital stock of SEGCO, which owns electric generating units with a total rated capacity of 1,020 MWs, as well as associated transmission facilities. SEGCO uses natural gas as the primary fuel source for 1,000 MWs of its generating capacity. The capacity of these units is sold equally to the Company and Alabama Power under a power contract. The Company and Alabama Power make payments sufficient to provide for the operating expenses, taxes, interest expense, and an ROE. The Company's share of purchased power totaled $78 million in 2017, $57 million in 2016, and $78 million in 2015 and is included in purchased power, affiliates in the statements of income. The Company accounts for SEGCO using the equity method. See Note 7 under "Guarantees" for additional information.
The Company owns undivided interests in Plants Vogtle, Hatch, Wansley, and Scherer in varying amounts jointly with one or more of the following entities: Oglethorpe Power Corporation (OPC), MEAG Power, the City of Dalton, Georgia, acting by and through its Board of Water, Light, and Sinking Fund Commissioners, doing business as Dalton Utilities, Florida Power & Light Company, Jacksonville Electric Authority, and Gulf Power. Under these agreements, the Company has been contracted to operate and maintain the plants as agent for the co-owners and is jointly and severally liable for third party claims related to these plants. In addition, the Company jointly owns the Rocky Mountain pumped storage hydroelectric plant with OPC, which is the operator of the plant. In August 2016, the Company sold its 33% ownership interest in the Intercession City combustion turbine unit to Duke Energy Florida, LLC.
At December 31, 2017, the Company's percentage ownership and investment (exclusive of nuclear fuel) in jointly-owned facilities in commercial operation with the above entities were as follows:
Facility (Type)
Company Ownership
 
Plant in Service
 
Accumulated Depreciation
 
CWIP
 
 
 
(in millions)
Plant Vogtle (nuclear)
 
 
 
 
 
 
 
Units 1 and 2
45.7
%
 
$
3,564

 
$
2,141

 
$
70

Plant Hatch (nuclear)
50.1

 
1,321

 
595

 
87

Plant Wansley (coal)
53.5

 
1,053

 
335

 
72

Plant Scherer (coal)
 
 
 
 
 
 
 
Units 1 and 2
8.4

 
261

 
93

 
8

Unit 3
75.0

 
1,232

 
468

 
26

Rocky Mountain (pumped storage)
25.4

 
182

 
132

 


The Company's proportionate share of its plant operating expenses is included in the corresponding operating expenses in the statements of income and the Company is responsible for providing its own financing.
The Company also owns 45.7% of Plant Vogtle Units 3 and 4, which are currently under construction and had a CWIP balance of $3.3 billion as of December 31, 2017. See Note 3 under "Retail Regulatory Matters – Nuclear Construction" for additional information.
GULF POWER CO  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
The Company and Mississippi Power jointly own Plant Daniel Units 1 and 2, which together represent capacity of 1,000 MWs. Plant Daniel is a generating plant located in Jackson County, Mississippi. In accordance with the operating agreement, Mississippi Power acts as the Company's agent with respect to the construction, operation, and maintenance of these units.
The Company and Georgia Power jointly own the 818-MW capacity Plant Scherer Unit 3. Plant Scherer is a generating plant located near Forsyth, Georgia. In accordance with the operating agreement, Georgia Power acts as the Company's agent with respect to the construction, operation, and maintenance of the unit.
At December 31, 2017, the Company's percentage ownership and investment in these jointly-owned facilities were as follows:
 
Plant Scherer
Unit 3 (coal)
 
Plant Daniel Units 1 & 2 (coal)
 
(in millions)
Plant in service
$
374

 
 
$
696

Accumulated depreciation
147

 
 
225

Construction work in progress
9

 
 
4

Company ownership
25
%
 
 
50
%

The Company's proportionate share of its plant operating expenses is included in the corresponding operating expenses in the statements of income and the Company is responsible for providing its own financing.
MISSISSIPPI POWER CO  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
The Company and Alabama Power own, as tenants in common, Units 1 and 2 (total capacity of 500 MWs) at Greene County Steam Plant, which is located in Alabama and operated by Alabama Power. Additionally, the Company and Gulf Power, own as tenants in common, Units 1 and 2 (total capacity of 1,000 MWs) at Plant Daniel, which is located in Mississippi and operated by the Company. At December 31, 2017, the Company's percentage ownership and investment in these jointly-owned facilities in commercial operation were as follows:
Generating
Plant
Company
Ownership
 
Plant in Service
 
Accumulated
Depreciation
 
CWIP
 
 
 
(in millions)
 
 
Greene County
 
 
 
 
 
 
 
Units 1 and 2
40
%
 
$
164

 
$
55

 
$
1

Daniel
 
 
 
 
 
 
 
Units 1 and 2
50
%
 
$
713

 
$
189

 
$
4


The Company's proportionate share of plant operating expenses is included in the statements of operations and the Company is responsible for providing its own financing.
SOUTHERN POWER CO  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
The Company is a 65% owner of Plant Stanton A, a natural gas-fired combined-cycle unit with a nameplate capacity of 659 MWs. The unit is co-owned by the Orlando Utilities Commission (28%), the Florida Municipal Power Agency (3.5%), and the Kissimmee Utility Authority (3.5%). The Company has a service agreement with SCS whereby SCS is responsible for the operation and maintenance of Plant Stanton A. As of December 31, 2017, $155 million was recorded in plant in service with associated accumulated depreciation of $55 million. These amounts represent the Company's share of total plant assets and each owner is responsible for providing its own financing. The Company's proportionate share of Plant Stanton A's operating expense is included in the corresponding operating expenses in the consolidated statements of income.
SOUTHERN Co GAS  
Jointly Owned Utility Plant Interests [Line Items]  
JOINT OWNERSHIP AGREEMENTS
JOINT OWNERSHIP AGREEMENTS
In 2014, the Company entered into a construction and ownership arrangement associated with the Dalton Pipeline through which the Company has a 50% undivided ownership interest jointly with The Williams Companies, Inc. in the 115-mile Dalton Pipeline to serve as an extension of the Transco natural gas pipeline system into northwest Georgia. The Company also entered into an agreement to lease its 50% undivided ownership in the Dalton Pipeline that became effective when it was placed in service on August 1, 2017. Under the lease, the Company will receive approximately $26 million annually for an initial term of 25 years. The lessee is responsible for maintaining the pipeline during the lease term and for providing service to transportation customers under its FERC-regulated tariff. At December 31, 2017, the net book value of the Company's 50% share of the pipeline was $252 million and is reflected in total property, plant, and equipment in the balance sheet. At December 31, 2016, the net book value of the Company's 50% share of the pipeline was $124 million and is reflected in construction work in progress in the balance sheet.
Variable Interest Entities
SouthStar, previously a joint venture owned 85% by the Company and 15% by Piedmont, was the only VIE for which the Company was the primary beneficiary, prior to October 2016 when the Company completed its purchase of Piedmont's remaining interest in SouthStar.
In 2015, Georgia Natural Gas Company (GNG), a 100%-owned, direct subsidiary of the Company, notified Piedmont of its election, pursuant to a change in control of SouthStar, to purchase Piedmont's 15% interest in SouthStar at fair market value. This purchase was contingent upon the closing of the merger between Piedmont and Duke Energy Corporation (Duke Energy). In October 2016, after Piedmont and Duke Energy completed their merger, GNG completed its purchase of Piedmont's interest in SouthStar and paid a purchase price of $160 million and $15 million for Piedmont's share of SouthStar's 2016 earnings through the date of acquisition.
At December 31, 2015, the Company presented the noncontrolling interest related to Piedmont's interest in SouthStar as a component in equity. During the first quarter 2016, the Company reclassified its noncontrolling interest, whose redemption was beyond the Company's control, as a contingently redeemable noncontrolling interest. Upon Piedmont and Duke Energy obtaining the necessary merger approval, the Company deemed this noncontrolling interest to be mandatorily redeemable and reclassified it to a current liability during the third quarter 2016. The roll-forwards of the redeemable noncontrolling interest for the successor period of July 1, 2016 through December 31, 2016 and the predecessor period of January 1, 2016 through June 30, 2016 are detailed below:
Predecessor –
(in millions)
Balance at December 31, 2015
$

Reclassification of noncontrolling interest to contingently redeemable noncontrolling interest
46

Net income attributable to noncontrolling interest
14

Distribution to noncontrolling interest
(19
)
Balance at June 30, 2016
$
41

Successor –
(in millions)
Balance at July 1, 2016
$
174

Reclassification of contingently redeemable noncontrolling interest to mandatorily redeemable
noncontrolling interest
(174
)
Balance at December 31, 2016
$


The Company's cash flows used for financing activities included SouthStar's distribution to Piedmont for its portion of SouthStar's annual earnings from the previous year, which generally occurred in the first quarter of each year. For the successor period of July 1, 2016 through December 31, 2016, SouthStar made a distribution of $15 million upon completion of the purchase of Piedmont's interest in SouthStar. For the predecessor periods of January 1, 2016 through June 30, 2016 and the year ended December 31, 2015, SouthStar distributed to Piedmont $19 million and $18 million, respectively.
Equity Method Investments
The carrying amounts of the Company's equity method investments as of December 31, 2017 and 2016 and related income from those investments for the successor periods of the year ended December 31, 2017 and July 1, 2016 through December 31, 2016 and predecessor periods of January 1, 2016 through June 30, 2016 and the year ended December 31, 2015 were as follows:
Balance Sheet Information
December 31, 2017
 
 
December 31, 2016
 
(in millions)
SNG(*)
$
1,262

 
 
$
1,394

Triton
42

 
 
44

Horizon Pipeline
30

 
 
30

PennEast Pipeline
57

 
 
22

Atlantic Coast Pipeline
41

 
 
33

Pivotal JAX LNG, LLC
44

 
 
16

Other
1

 
 
2

Total
$
1,477

 
 
$
1,541

(*)
Includes a $104 million decrease at December 31, 2017 related to the impact of the Tax Reform Legislation and new income tax apportionment factors in several states resulting from the Company's inclusion in the consolidated Southern Company state tax filings.
 
Successor
 
Predecessor
Income Statement Information
Year ended December 31, 2017
 
July 1, 2016 through December 31, 2016
 
 
January 1, 2016 through June 30, 2016
 
Year ended December 31, 2015
 
(in millions)
 
(in millions)
SNG
$
88

 
$
56

 
 
$

 
$

Triton
4

 
2

 
 
1

 
4

Horizon Pipeline
2

 
1

 
 
1

 
2

Atlantic Coast Pipeline
6

 
1

 
 

 

PennEast Pipeline
6

 

 
 

 

Total
$
106

 
$
60

 
 
$
2

 
$
6


SNG
In September 2016, the Company, through a wholly-owned, indirect subsidiary, acquired a 50% equity interest in SNG, which is accounted for as an equity method investment. See Note 11 under "Investment in SNG" for additional information. Selected financial information of SNG as of December 31, 2017 and 2016 and for the year ended December 31, 2017 and for the period September 1, 2016 through December 31, 2016 is as follows:
 
As of December 31,
Balance Sheet Information
2017
 
2016
 
(in millions)
Current assets
$
82

 
$
95

Property, plant, and equipment
2,439

 
2,451

Deferred charges and other assets
121

 
129

Total Assets
$
2,642

 
$
2,675

 
 
 
 
Current liabilities
$
110

 
$
588

Long-term debt
1,102

 
706

Other deferred charges and other liabilities
76

 
22

Total Liabilities
$
1,288

 
$
1,316

 
 
 
 
Total Stockholders' Equity
1,354

 
1,359

Total Liabilities and Stockholders' Equity
$
2,642

 
$
2,675

Income Statement Information
Year ended December 31, 2017
 
September 1, 2016
through December 31, 2016
 
(in millions)
Revenues
$
544

 
$
230

Operating income
246

 
138

Net income
$
175

 
$
115


Other Investments
Triton
The Company has an investment in Triton, a cargo container leasing company, which is aggregated into its all other segment. Container equipment that is acquired by Triton is accounted for in tranches as defined in Triton's operating agreement and investors make capital contributions to Triton to invest in each of the tranches. As of December 31, 2017, the Company had invested in seven tranches established by Triton.
Horizon Pipeline
The Company owns an interest in a joint venture with Natural Gas Pipeline Company of America that is regulated by the FERC. Horizon Pipeline operates a 70-mile natural gas pipeline from Joliet, Illinois to near the Wisconsin/Illinois border. Nicor Gas typically contracts for 70% to 80% of the total annual capacity.
PennEast Pipeline 
In 2014, the Company entered into a partnership in which it holds a 20% ownership interest in an interstate pipeline company formed to develop and operate a 118-mile natural gas pipeline between New Jersey and Pennsylvania. The initial transportation capacity of 1.0 billion cubic feet (Bcf) per day, is under long-term contracts, mainly by public utilities and other market-serving entities, such as electric generation companies, in New Jersey, Pennsylvania, and New York. On January 19, 2018, the PennEast Pipeline project received FERC approval.
Atlantic Coast Pipeline
In 2014, the Company entered into a project in which it holds a 5% ownership interest in an interstate pipeline company formed to develop and operate a 594-mile natural gas pipeline in North Carolina, Virginia, and West Virginia with initial transportation capacity of 1.5 Bcf per day. On October 13, 2017, the Atlantic Coast Pipeline project received FERC approval.
Pivotal JAX LNG, LLC
The Company owns a 50% interest in a planned LNG liquefaction and storage facility in Jacksonville, Florida. Once construction is complete and the facility is operational, it will be outfitted with a 2.0 million gallon storage tank with the capacity to produce in excess of 120,000 gallons of LNG per day.