Derivatives (Tables)

6 Months Ended

Jun. 30, 2018

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Energy-Related Derivatives

At June 30, 2018, 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(*)	701	2022	2029
Alabama Power	82	2022	—
Georgia Power	174	2022	—
Gulf Power	13	2020	—
Mississippi Power	66	2022	—
Southern Power	14	2020	—
Southern Company Gas(*)	352	2020	2029

(*) 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 3.9 billion mmBtu and short natural gas positions of 3.6 billion mmBtu as of June 30, 2018, which is also included in Southern Company's total volume.

Schedule of Interest Rate Derivatives

At June 30, 2018, 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 June 30, 2018
	(in millions)					(in millions)
Fair Value Hedges of Existing Debt
Southern Company(*)	$	300	2.75%	3-month LIBOR + 0.92%	June 2020	$	(6	)
Southern Company(*)	1,500		2.35%	1-month LIBOR + 0.87%	July 2021	(57		)
Georgia Power	500		1.95%	3-month LIBOR + 0.76%	December 2018	(3		)
Georgia Power	200		4.25%	3-month LIBOR + 2.46%	December 2019	(3		)
Southern Company Consolidated	$	2,500				$	(69	)

(*) Represents the Southern Company parent entity.

Schedule of Foreign Currency Derivatives

At June 30, 2018, the following foreign currency derivatives were outstanding:

	Pay Notional		Pay Rate	Receive Notional		Receive Rate	Hedge Maturity Date	Fair Value Gain (Loss) at June 30, 2018
	(in millions)			(in millions)				(in millions)
Cash Flow Hedges of Existing Debt
Southern Power	$	677	2.95%	€	600	1.00%	June 2022	$	54
Southern Power	564		3.78%	500		1.85%	June 2026	55
Total	$	1,241		€	1,100			$	109

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 June 30, 2018						As of December 31, 2017
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	$	16		$	12		$	10		$	43
Other deferred charges and assets/Other deferred credits and liabilities	5			27			7			24
Assets held for sale, current/Liabilities held for sale, current	—			8			—			—
Assets held for sale/Liabilities held for sale	—			4			—			—
Total derivatives designated as hedging instruments for regulatory purposes	$	21		$	51		$	17		$	67
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	2		$	3		$	3		$	14
Other deferred charges and assets/Other deferred credits and liabilities	1			1			—			—
Interest rate derivatives:
Other current assets/Other current liabilities	—			15			1			4
Other deferred charges and assets/Other deferred credits and liabilities	—			53			—			34
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			23
Other deferred charges and assets/Other deferred credits and liabilities	132			—			129			—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	135		$	95		$	133		$	75
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	239		$	272		$	380		$	437
Other deferred charges and assets/Other deferred credits and liabilities	189			246			170			215
Total derivatives not designated as hedging instruments	$	428		$	518		$	550		$	652
Gross amounts recognized	$	584		$	664		$	700		$	794
Gross amounts offset(a)	$	(306	)	$	(489	)	$	(405	)	$	(598	)
Net amounts recognized in the Balance Sheets(b)	$	278		$	175		$	295		$	196

	As of June 30, 2018						As of December 31, 2017
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		$	3		$	2		$	6
Other deferred charges and assets/Other deferred credits and liabilities	2			6			2			4
Total derivatives designated as hedging instruments for regulatory purposes	$	8		$	9		$	4		$	10
Gross amounts recognized	$	8		$	9		$	4		$	10
Gross amounts offset	$	(4	)	$	(4	)	$	(4	)	$	(4	)
Net amounts recognized in the Balance Sheets	$	4		$	5		$	—		$	6
Georgia Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	5		$	5		$	2		$	9
Other deferred charges and assets/Other deferred credits and liabilities	2			14			4			10
Total derivatives designated as hedging instruments for regulatory purposes	$	7		$	19		$	6		$	19
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	—		$	5		$	—		$	4
Other deferred charges and assets/Other deferred credits and liabilities	—			1			—			1
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	—		$	6		$	—		$	5
Gross amounts recognized	$	7		$	25		$	6		$	24
Gross amounts offset	$	(7	)	$	(7	)	$	(6	)	$	(6	)
Net amounts recognized in the Balance Sheets	$	—		$	18		$	—		$	18
Gulf Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities	$	—		$	8		$	—		$	14
Other deferred charges and assets/Other deferred credits and liabilities	—			4			—			7
Total derivatives designated as hedging instruments for regulatory purposes	$	—		$	12		$	—		$	21
Gross amounts recognized	$	—		$	12		$	—		$	21
Gross amounts offset	$	—		$	—		$	—		$	—
Net amounts recognized in the Balance Sheets	$	—		$	12		$	—		$	21

	As of June 30, 2018						As of December 31, 2017
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	$	2		$	3		$	1		$	6
Other deferred charges and assets/Other deferred credits and liabilities	1			6			1			3
Total derivatives designated as hedging instruments for regulatory purposes	$	3		$	9		$	2		$	9
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets/Other current liabilities	$	—		$	—		$	1		$	—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	—		$	—		$	1		$	—
Gross amounts recognized	$	3		$	9		$	3		$	9
Gross amounts offset	$	(2	)	$	(2	)	$	(2	)	$	(2	)
Net amounts recognized in the Balance Sheets	$	1		$	7		$	1		$	7
Southern Power
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Other current assets/Other current liabilities	$	2		$	2		$	3		$	11
Other deferred charges and assets/Other deferred credits and liabilities	1			1			—			—
Foreign currency derivatives:
Other current assets/Other current liabilities	—			23			—			23
Other deferred charges and assets/Other deferred credits and liabilities	132			—			129			—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	135		$	26		$	132		$	34
Derivatives not designated as hedging instruments
Energy-related derivatives:
Other current assets/Other current liabilities	$	—		$	—		$	—		$	2
Gross amounts recognized	$	135		$	26		$	132		$	36
Gross amounts offset	$	(2	)	$	(2	)	$	(3	)	$	(3	)
Net amounts recognized in the Balance Sheets	$	133		$	24		$	129		$	33

	As of June 30, 2018						As of December 31, 2017
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	$	3		$	1		$	5		$	8
Other deferred charges and assets/Other deferred credits and liabilities	—			1			—			—
Total derivatives designated as hedging instruments for regulatory purposes	$	3		$	2		$	5		$	8
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	$	—		$	1		$	—		$	3
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities/Liabilities from risk management activities-current	$	239		$	272		$	379		$	434
Other deferred charges and assets/Other deferred credits and liabilities	189			246			170			215
Total derivatives not designated as hedging instruments	$	428		$	518		$	549		$	649
Gross amounts of recognized	$	431		$	521		$	554		$	660
Gross amounts offset(a)	$	(291	)	$	(474	)	$	(390	)	$	(583	)
Net amounts recognized in the Balance Sheets(b)	$	140		$	47		$	164		$	77

(a) Gross amounts offset include cash collateral held on deposit in broker margin accounts of $183 million and $193 million as of June 30, 2018 and December 31, 2017, respectively.

(b) Net amounts of derivative instruments outstanding exclude premium and intrinsic value associated with weather derivatives of $3 million and $11 million as of June 30, 2018 and December 31, 2017, respectively.

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

At June 30, 2018 and December 31, 2017, 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 June 30, 2018
Derivative Category and Balance Sheet Location	Southern Company(*)			Alabama Power			Georgia Power			Gulf Power			Mississippi Power			Southern Company Gas(*)
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(4	)	$	(1	)	$	(1	)	$	(8	)	$	(1	)	$	(1	)
Other regulatory assets, deferred	(20		)	(4		)	(11		)	(4		)	(5		)	—
Assets held for sale, current	(8		)	—			—			—			—			—
Assets held for sale	(4		)	—			—			—			—			—
Other regulatory liabilities, current	8			4			—			—			—			4
Total energy-related derivative gains (losses)	$	(28	)	$	(1	)	$	(12	)	$	(12	)	$	(6	)	$	3

(*) Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $2 million at June 30, 2018.

Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet at December 31, 2017
Derivative Category and Balance Sheet Location	Southern Company(*)			Alabama Power			Georgia Power			Gulf Power			Mississippi Power			Southern Company Gas(*)
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(34	)	$	(4	)	$	(7	)	$	(14	)	$	(5	)	$	(4	)
Other regulatory assets, deferred	(18		)	(3		)	(6		)	(7		)	(2		)	—
Other regulatory liabilities, current	7			—			—			—			—			7
Other regulatory liabilities, deferred	1			1			—			—			—			—
Total energy-related derivative gains (losses)	$	(44	)	$	(6	)	$	(13	)	$	(21	)	$	(7	)	$	3

(*) Fair value gains and losses recorded in regulatory assets and liabilities include cash collateral held on deposit in broker margin accounts of $6 million at December 31, 2017.

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

For the three and six months ended June 30, 2018 and 2017, the pre-tax effects of cash flow hedge accounting on accumulated OCI were as follows:

Gain (Loss) Recognized in OCI on Derivative	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(in millions)						(in millions)
Southern Company
Energy-related derivatives	$	—		$	(9	)	$	12		$	(20	)
Interest rate derivatives	—			(1		)	(2		)	(1		)
Foreign currency derivatives	(73		)	71			(21		)	67
Total	$	(73	)	$	61		$	(11	)	$	46
Southern Power
Energy-related derivatives	$	(1	)	$	(7	)	$	10		$	(15	)
Foreign currency derivatives	(73		)	71			(21		)	67
Total	$	(74	)	$	64		$	(11	)	$	52
Southern Company Gas
Energy-related derivatives	$	1		$	(2	)	$	2		$	(4	)

Schedule of Cash Flow Hedging Instruments, Statements of Financial Performance and Financial Position, Location

For the three and six months ended June 30, 2018 and 2017, the pre-tax effects of cash flow and fair value hedge accounting on income were as follows:

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(in millions)						(in millions)
Southern Company
Depreciation and amortization	$	783		$	754		$	1,552		$	1,469
Gain (loss) on cash flow hedges(a)
Energy-related derivatives	1			(2		)	2			(6		)
Interest expense, net of amounts capitalized	(470		)	(424		)	(928		)	(840		)
Gain (loss) on cash flow hedges(a)
Interest rate derivatives	(6		)	(5		)	(11		)	(10		)
Foreign currency derivatives	(7		)	(5		)	(12		)	(12		)
Gain (loss) on fair value hedges(b)
Interest rate derivatives	(7		)	7			(31		)	(1		)
Other income (expense), net	78			52			138			98
Gain (loss) on cash flow hedges(a)(c)
Foreign currency derivatives	(73		)	79			(37		)	96
Cost of natural gas	228			232			949			951
Gain (loss) on cash flow hedges(a)
Energy-related derivatives	—			—			(2		)	—
Alabama Power
Interest expense, net of amounts capitalized	$	(80	)	$	(77	)	$	(158	)	$	(153	)
Gain (loss) on cash flow hedges(a)
Interest rate derivatives	(1		)	(2		)	(3		)	(3		)
Georgia Power
Interest expense, net of amounts capitalized	$	(102	)	$	(104	)	$	(208	)	$	(205	)
Gain (loss) on cash flow hedges(a)
Interest rate derivatives	(2		)	(1		)	(3		)	(3		)
Gain (loss) on fair value hedges(b)
Interest rate derivatives	2			—			(1		)	(1		)
Mississippi Power
Interest expense, net of amounts capitalized	$	(21	)	$	(17	)	$	(39	)	$	(37	)
Gain (loss) on cash flow hedges(a)
Interest rate derivatives	(1		)	—			(1		)	(1		)

Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging Relationships	For the Three Months Ended June 30,						For the Six Months Ended June 30,
	2018			2017			2018			2017
	(in millions)						(in millions)
Southern Power
Depreciation and amortization	$	125		$	129		$	240		$	247
Gain (loss) on cash flow hedges(a)
Energy-related derivatives	1			(2		)	2			(6		)
Interest expense, net of amounts capitalized	(46		)	(48		)	(93		)	(97		)
Gain (loss) on cash flow hedges(a)
Foreign currency derivatives	(7		)	(5		)	(12		)	(12		)
Other income (expense), net	2			2			5			(2		)
Gain (loss) on cash flow hedges(a)(c)
Foreign currency derivatives	(73		)	79			(37		)	96
Southern Company Gas
Cost of natural gas	$	228		$	232		$	949		$	951
Gain (loss) on cash flow hedges(a)
Energy-related derivatives	—			—			(2		)	—

(a) Amounts reflect gains or losses on cash flow hedges that were reclassified from accumulated OCI into income.

(b) For fair value hedges presented above, generally changes in the fair value of the derivative contracts are equal to changes in the fair value of the underlying debt and have no material impact on income.

(c) 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.

Schedule of Fair Value Hedging Instruments, Statements of Financial Performance and Financial Position, Location

As of June 30, 2018 and December 31, 2017, the following amounts were recorded on the balance sheets related to cumulative basis adjustments for fair value hedges:

	Carrying Amount of the Hedged Item						Cumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged Item
Balance Sheet Location of Hedged Items	As of June 30, 2018			As of December 31, 2017			As of June 30, 2018		As of December 31, 2017
	(in millions)						(in millions)
Southern Company
Securities due within one year	$	(497	)	$	(746	)	$	3	$	3
Long-term Debt	(2,528		)	(2,553		)	63		35
Georgia Power
Securities due within one year	$	(497	)	$	(746	)	$	3	$	3
Long-term Debt	(497		)	(498		)	3		1

Pre-tax Effect of Interest Rate and Energy Related Derivatives

For the three and six months ended June 30, 2018 and 2017, the pre-tax effects of energy-related derivatives not designated as hedging instruments on the statements of income were as follows:

		Gain (Loss)
		Three Months Ended June 30,						Six Months Ended June 30,
Derivatives in Non-Designated Hedging Relationships	Statements of Income Location	2018			2017			2018			2017
		(in millions)						(in millions)
Southern Company
Energy-related derivatives:	Natural gas revenues(*)	$	(28	)	$	16		$	(43	)	$	65
	Cost of natural gas	2			(2		)	4			(4		)
Total derivatives in non-designated hedging relationships		$	(26	)	$	14		$	(39	)	$	61
Southern Company Gas
Energy-related derivatives:	Natural gas revenues(*)	$	(28	)	$	16		$	(43	)	$	65
	Cost of natural gas	2			(2		)	4			(4		)
Total derivatives in non-designated hedging relationships		$	(26	)	$	14		$	(39	)	$	61

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