Joint Ownership Agreements

12 Months Ended

Dec. 31, 2016

Jointly Owned Utility Plant Interests [Line Items]

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: OPC, MEAG Power, the City of Dalton, Georgia, Florida Power & Light Company, and Jacksonville Electric Authority. In addition, Georgia Power has joint ownership agreements with OPC for the Rocky Mountain facilities. On August 31, 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.

At December 31, 2016, Alabama Power's, Georgia Power's, and Southern Power'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)	Percent Ownership		Plant in Service		Accumulated Depreciation		CWIP
			(in millions)
Plant Vogtle (nuclear) Units 1 and 2	45.7	%	$	3,545	$	2,111	$	74
Plant Hatch (nuclear)	50.1		1,297		585		81
Plant Miller (coal) Units 1 and 2	91.8		1,657		587		23
Plant Scherer (coal) Units 1 and 2	8.4		258		90		3
Plant Wansley (coal)	53.5		1,046		308		12
Rocky Mountain (pumped storage)	25.4		181		129		—
Plant Stanton (combined cycle) Unit A	65.0		155		58		—

Georgia Power also owns 45.7% of Plant Vogtle Units 3 and 4, which are currently under construction and had a CWIP balance of approximately $3.9 billion as of December 31, 2016. See Note 3 under "Regulatory Matters – Georgia Power – 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 has a 50% undivided ownership interest with The Williams Companies, Inc. in a 115-mile pipeline facility being constructed in northwest Georgia. The CWIP balance representing Southern Company Gas' share of construction costs was approximately $124 million as of December 31, 2016. Southern Company Gas also has an agreement to lease its 50% undivided ownership in the pipeline facility once it is placed in service, which is currently expected to be later in 2017. Under the lease, Southern Company Gas will receive approximately $26 million annually for an initial term of 25 years. The lessee will be responsible for maintaining the pipeline during the lease term and for providing service to transportation customers under its FERC-regulated tariff.

Alabama Power [Member]

Jointly Owned Utility Plant Interests [Line Items]

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. 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 $55 million in 2016, $76 million in 2015, and $84 million in 2014 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, 2016, the capitalization of SEGCO consisted of $108 million of equity and $125 million of long-term debt on which the annual interest requirement is $3 million. In addition, SEGCO had short-term debt outstanding of $38 million. SEGCO paid $24 million of dividends in 2016 compared to an immaterial amount in 2015 and 2014, of which one-half of each was paid to the Company. In addition, the Company recognizes 50% of SEGCO's net income.

SEGCO added natural gas as a fuel source for 1,000 MWs of its generating capacity in 2015. In April 2016, natural gas became the primary fuel source. The Company, which owns and operates a generating unit adjacent to the SEGCO generating units, has entered into 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, 2016 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⁾	$	168	$	66	$	1
Plant Miller
Units 1 and 2	1,320	91.84	%	⁽²⁾	1,657		587		23


(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 [Member]

Jointly Owned Utility Plant Interests [Line Items]

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. 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 a ROE. The Company's share of purchased power totaled $57 million in 2016, $78 million in 2015, and $84 million in 2014 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: OPC, MEAG Power, Dalton, 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. On August 31, 2016, the Company sold its 33% ownership interest in the Intercession City combustion turbine unit to Duke Energy Florida, LLC.

At December 31, 2016, 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	%	$	3,545	$	2,111	$	74
Plant Hatch (nuclear)	50.1		1,297		585		81
Plant Wansley (coal)	53.5		1,046		308		12
Plant Scherer (coal)
Units 1 and 2	8.4		258		90		3
Unit 3	75.0		1,203		458		23
Rocky Mountain (pumped storage)	25.4		181		129		—

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 approximately $3.9 billion as of December 31, 2016. See Note 3 under "Retail Regulatory Matters – Nuclear Construction" for additional information.

Gulf Power [Member]

Jointly Owned Utility Plant Interests [Line Items]

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, 2016, 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	$	398		$	680
Accumulated depreciation	143			202
Construction work in progress	7			7
Company ownership	25		%	50		%

Mississippi Power [Member]

Jointly Owned Utility Plant Interests [Line Items]

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, 2016, 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	%	$	165	$	48	$	—
Daniel
Units 1 and 2	50	%	$	695	$	173	$	15

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 [Member]

Jointly Owned Utility Plant Interests [Line Items]

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, 2016, $155 million was recorded in plant in service with associated accumulated depreciation of $58 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 Company Gas [Member]

Jointly Owned Utility Plant Interests [Line Items]

JOINT OWNERSHIP AGREEMENTS

In 2014, the Company entered into two arrangements associated with the Dalton Pipeline. The first was a construction and ownership agreement through which the Company has a 50% undivided ownership interest jointly with The Williams Companies, Inc. in the 115-mile Dalton Pipeline that is being constructed 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 once it is placed in service. Under the lease, the Company will receive approximately $26 million annually for an initial term of 25 years. The lessee will be responsible for maintaining the pipeline during the lease term and for providing service to transportation customers under its FERC-regulated tariff. Engineering design work is complete and construction began in September 2016. At December 31, 2016 and December 31, 2015, the Company's 50% share of construction costs was $124 million and $33 million, respectively, and is reflected in construction work in progress in the consolidated balance sheets.

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 3, 2016 when the Company completed its purchase of Piedmont's remaining interest in SouthStar.

In December 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). On February 12, 2016, GNG and Piedmont entered into a letter agreement pursuant to which GNG agreed to pay Piedmont $160 million as the fair value for Piedmont's entire ownership interest in SouthStar. After Piedmont and Duke Energy completed their merger in October 2016, GNG completed its purchase of Piedmont's interest in SouthStar on October 3, 2016 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 include 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 years ended December 31, 2015 and 2014, SouthStar distributed to Piedmont $19 million, $18 million, and $17 million, respectively.

Equity Method Investments

The carrying amounts of the Company's equity method investments as of December 31, 2016 and 2015 and related income from those investments for the successor period ended December 31, 2016 and predecessor periods ended June 30, 2016 and December 31, 2015 and 2014 were as follows:



Balance Sheet Information	Successor		Predecessor
	December 31, 2016		December 31, 2015
	(in millions)		(in millions)
SNG	$	1,394	$	—
Triton	44		49
Horizon Pipeline	30		14
PennEast Pipeline	22		9
Atlantic Coast Pipeline	33		7
Pivotal JAX LNG, LLC	16		—
Other	2		1
Total	$	1,541	$	80



Income Statement Information	Successor		Predecessor
	July 1, 2016 through December 31, 2016		January 1, 2016 through June 30, 2016		2015		2014
	(in millions)		(in millions)
SNG	$	56	$	—	$	—	$	—
Triton	2		1		4		6
Horizon Pipeline	1		1		2		2
Atlantic Coast Pipeline	1		—		—		—
Total	$	60	$	2	$	6	$	8

SNG

On September 1, 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 on this investment. Selected financial information of SNG since the Company's September 1, 2016 acquisition of a 50% equity interest is as follows:



Balance Sheet Information	As of December 31, 2016
	(in millions)
Current assets	$	95
Property, plant, and equipment	2,451
Deferred charges and other assets	129
Total Assets	$	2,675

Current liabilities	$	588
Long-term debt	706
Other deferred charges and other liabilities	22
Total Liabilities	$	1,316

Total Stockholders' Equity	1,359
Total Liabilities and Stockholders' Equity	$	2,675



Income Statement Information	September 1, 2016 through December 31, 2016
	(in millions)
Revenues	$	230
Operating income	$	138
Net income	$	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, 2016, 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.

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.

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.