Derivatives (Tables)

3 Months Ended

Mar. 31, 2013

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of derivatives

At March 31, 2013, 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 date for derivatives not designated as hedges, were as follows:

	Net Purchased mmBtu	Longest Hedge Date	Longest Non-Hedge Date
	(in millions)
Southern Company	259	2017	2017
Alabama Power	58	2017	—
Georgia Power	90	2017	—
Gulf Power	70	2017	—
Mississippi Power	36	2017	—
Southern Power	5	—	2017

Notional amount of interest rate derivatives

At March 31, 2013, the following interest rate derivatives were outstanding:

	Notional Amount		Interest Rate Received		Interest Rate Paid		Hedge Maturity Date	Fair Value Gain (Loss) March 31, 2013
	(in millions)							(in millions)
Fair value hedges of existing debt
Southern Company	$	350	4.15	%	3-month LIBOR  + 1.96%	(a)	May 2014	$	10

(a) Weighted average

Total deferred gains and losses are expected to be amortized into earnings

The following table reflects the estimated pre-tax gains (losses) that will be reclassified from AOCI to interest expense for the next 12-month period ending March 31, 2014, together with the longest date that total deferred gains and losses are expected to be amortized into earnings.

Registrant	Estimated Gain (Loss) to be Reclassified for the 12 Months Ending March 31, 2014			Total Deferred Gains (Losses) Amortized  Through
	(in millions)
Southern Company	$	(12	)	2037
Alabama Power	(3		)	2035
Georgia Power	(3		)	2037
Gulf Power	(1		)	2020
Mississippi Power	(1		)	2022
Southern Power	(4		)	2016

Fair value of energy-related derivatives and interest rate derivatives

At March 31, 2013, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:

Asset Derivatives at March 31, 2013
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern   Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets	$	25	$	7	$	6	$	9	$	3
Other deferred charges and assets	20		5		7		5		3
Total derivatives designated as hedging instruments for regulatory purposes	$	45	$	12	$	13	$	14	$	6	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets	$	7	$	—	$	—	$	—	$	—	$	—
Other deferred charges and assets	3		—		—		—		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	10	$	—	$	—	$	—	$	—	$	—
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities	$	3	$	—	$	—	$	—	$	—	$	3
Other deferred charges and assets	2		—		—		—		—		2
Total derivatives not designated as hedging instruments	$	5	$	—	$	—	$	—	$	—	$	5
Total asset derivatives	$	60	$	12	$	13	$	14	$	6	$	5

Liability Derivatives at March 31, 2013
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern   Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Liabilities from risk management activities	$	36	$	5	$	17	$	8	$	6
Other deferred credits and liabilities	26		2		11		8		5
Total derivatives designated as hedging instruments for regulatory purposes	$	62	$	7	$	28	$	16	$	11	N/A
Derivatives not designated as hedging instruments
Energy-related derivatives:
Liabilities from risk management activities	$	1	$	—	$	—	$	—	$	—	$	1
Total liability derivatives	$	63	$	7	$	28	$	16	$	11	$	1

At December 31, 2012, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:

Asset Derivatives at December 31, 2012
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern   Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets	$	10	$	2	$	6	$	1	$	1
Other deferred charges and assets	13		3		5		3		2
Total derivatives designated as hedging instruments for regulatory purposes	$	23	$	5	$	11	$	4	$	3	N/A
Derivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:
Other current assets	$	7	$	—	$	—	$	—	$	—	$	—
Other deferred charges and assets	3		—		—		—		—		—
Total derivatives designated as hedging instruments in cash flow and fair value hedges	$	10	$	—	$	—	$	—	$	—	$	—
Derivatives not designated as hedging instruments
Energy-related derivatives:
Assets from risk management activities	$	1	$	—	$	—	$	—	$	—	$	1
Other deferred charges and assets	2		—		—		—		—		2
Total derivatives not designated as hedging instruments	$	3	$	—	$	—	$	—	$	—	$	3
Total asset derivatives	$	36	$	5	$	11	$	4	$	3	$	3

Liability Derivatives at December 31, 2012
	Fair Value
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern   Power
	(in millions)
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Liabilities from risk management activities	$	74	$	14	$	30	$	17	$	13
Other deferred credits and liabilities	35		4		15		10		6
Total derivatives designated as hedging instruments for regulatory purposes	$	109	$	18	$	45	$	27	$	19	N/A
Derivatives not designated as hedging instruments
Energy-related derivatives:
Liabilities from risk management activities	$	1	$	—	$	—	$	—	$	—	$	1
Other deferred credits and liabilities	1		—		—		—		—		1
Total derivatives not designated as hedging instruments	$	2	$	—	$	—	$	—	$	—	$	2
Total liability derivatives	$	111	$	18	$	45	$	27	$	19	$	2

Balance sheet offsetting

Balance Sheet Offsetting

The derivative contracts of Southern Company, the traditional operating companies, and Southern Power are not subject to master netting arrangements or similar agreements and are reported gross on each registrant's financial statements. Some of these energy-related and interest rate derivative contracts contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Amounts related to energy-related derivative contracts are presented in the following tables. Interest rate derivatives presented in the tables above do not have amounts available for offset and are therefore excluded from the offsetting disclosure tables below.

Derivative Contracts at March 31, 2013
	Fair Value
	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power			Southern   Power
	(in millions)
Assets
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	50		$	12		$	13		$	14		$	6		$	5
Gross amounts not offset in the Balance Sheet (b)	(39		)	(5		)	(13		)	(10		)	(5		)	(1		)
Net energy-related derivative assets	$	11		$	7		$	—		$	4		$	1		$	4
Liabilities
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	63		$	7		$	28		$	16		$	11		$	1
Gross amounts not offset in the Balance Sheet (b)	(39		)	(5		)	(13		)	(10		)	(5		)	(1		)
Net energy-related derivative liabilities	$	24		$	2		$	15		$	6		$	6		$	—

(a) None of the registrants offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.

(b) Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.

Derivative Contracts at December 31, 2012
	Fair Value
	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power			Southern   Power
	(in millions)
Assets
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	26		$	5		$	11		$	4		$	3		$	3
Gross amounts not offset in the Balance Sheet (b)	(23		)	(4		)	(11		)	(4		)	(2		)	(1		)
Net energy-related derivative assets	$	3		$	1		$	—		$	—		$	1		$	2
Liabilities
Energy-related derivatives:
Energy-related derivatives presented in the Balance Sheet (a)	$	111		$	18		$	45		$	27		$	19		$	2
Gross amounts not offset in the Balance Sheet (b)	(23		)	(4		)	(11		)	(4		)	(2		)	(1		)
Net energy-related derivative liabilities	$	88		$	14		$	34		$	23		$	17		$	1

(a) None of the registrants offset fair value amounts for multiple derivative instruments executed with the same counterparty on the balance sheets; therefore, gross and net amounts of derivative assets and liabilities presented on the balance sheets are the same.

(b) Includes gross amounts subject to netting terms that are not offset on the balance sheets and any cash/financial collateral pledged or received.

Pre-tax effect of unrealized derivative gains (losses)

At March 31, 2013 and December 31, 2012, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred on the balance sheets were as follows:

Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet at March 31, 2013
Derivative Category and Balance Sheet Location	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(36	)	$	(5	)	$	(17	)	$	(8	)	$	(6	)
Other regulatory assets, deferred	(26		)	(2		)	(11		)	(8		)	(5		)
Other regulatory liabilities, current	25			7			6			9			3
Other regulatory liabilities, deferred	20			5			—			5			3
Other deferred credits and liabilities(a)	—			—			7			—			—
Total energy-related derivative gains (losses)	$	(17	)	$	5		$	(15	)	$	(2	)	$	(5	)

(a) Georgia Power includes Other regulatory liabilities, deferred in Other deferred credits and liabilities.

Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet at December 31, 2012
Derivative Category and Balance Sheet Location	Southern Company			Alabama Power			Georgia Power			Gulf Power			Mississippi Power
	(in millions)
Energy-related derivatives:
Other regulatory assets, current	$	(74	)	$	(14	)	$	(30	)	$	(17	)	$	(13	)
Other regulatory assets, deferred	(35		)	(4		)	(15		)	(10		)	(6		)
Other regulatory liabilities, current	10			2			6			1			1
Other regulatory liabilities, deferred	13			3			—			3			2
Other deferred credits and liabilities(a)	—			—			5			—			—
Total energy-related derivative gains (losses)	$	(86	)	$	(13	)	$	(34	)	$	(23	)	$	(16	)

(a) Georgia Power includes Other regulatory liabilities, deferred in Other deferred credits and liabilities

Pre-tax effect of derivatives designated as cash flow hedging instruments

For the three months ended March 31, 2013 and 2012, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:

Derivatives in Cash Flow Hedging Relationships	Gain (Loss) Recognized in OCI on Derivative (Effective Portion)					Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
						Statements of Income Location	Amount
	2013		2012				2013			2012
	(in millions)						(in millions)
Southern Company
Interest rate derivatives	$	—	$	6		Interest expense, net of amounts capitalized	$	(5	)	$	(3	)
Alabama Power
Interest rate derivatives	$	—	$	7		Interest expense, net of amounts capitalized	$	(1	)	$	—
Georgia Power
Interest rate derivatives	$	—	$	—		Interest expense, net of amounts capitalized	$	(1	)	$	(1	)
Mississippi Power
Interest rate derivatives	$	—	$	(1	)	Interest expense, net of amounts capitalized	$	—		$	—
Southern Power
Interest rate derivatives	$	—	$	—		Interest expense, net of amounts capitalized	$	(3	)	$	(2	)

Fair value of derivative liabilities with contingent features

At March 31, 2013, the fair value of derivative liabilities with contingent features, by registrant, was as follows:

	Southern Company		Alabama Power		Georgia Power		Gulf Power		Mississippi Power		Southern Power
					(in millions)
Derivative liabilities	$	1	$	—	$	2	$	—	$	—	$	—