Southern Power has certain subsidiaries that are determined to be VIEs. Southern Power is considered the primary beneficiary of these VIEs because it controls the most significant activities of the VIEs, including operating and maintaining the respective assets, and has the obligation to absorb expected losses of these VIEs to the extent of its equity interests. In 2018, Southern Power sold noncontrolling interests in SP Solar and SP Wind. Southern Power continues to consolidate each entity, as the primary beneficiary of each VIE, since it controls the most significant activities of each entity, including operating and maintaining their assets. Transfers and sales of the assets in the VIEs are subject to limited partner consent and the liabilities are non-recourse to the general credit of Southern Power. Liabilities consist of customary working capital items and do not include any long-term debt.

In August 2019, Southern Power completed the acquisition of a majority interest in DSGP and gained control of its most significant activities. As a result, Southern Power became the primary beneficiary of this VIE and began accounting for it as a consolidated entity. See Note (K) under "Southern Power" for additional information.

At September 30, 2019, SP Solar had total assets of $6.5 billion, total liabilities of $383 million, and noncontrolling interests of $1.2 billion. Cash distributions from SP Solar are allocated 67% to Southern Power and 33% to Global Atlantic in accordance with their partnership interest percentage. Under the terms of the limited partnership agreement, distributions without limited partner consent are limited to available cash and SP Solar is obligated to distribute all such available cash to its partners each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves.

At September 30, 2019, SP Wind had total assets of $2.5 billion, total liabilities of $132 million, and noncontrolling interests of $46 million. Under the terms of the limited liability agreement, distributions without Class A member consent are limited to available cash and SP Wind is obligated to distribute all such available cash to its members each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves. Cash distributions from SP Wind are generally allocated 60% to Southern Power and 40% to the three financial investors in accordance with the limited liability agreement.

The carrying amounts of Southern Company Gas' equity method investments as of September 30, 2019 and December 31, 2018 and related income from those investments for the three- and nine-month periods ended September 30, 2019 and 2018 were as follows:



Investment Balance	September 30, 2019		December 31, 2018
	(in millions)
SNG^(a)	$	1,210	$	1,261
Atlantic Coast Pipeline^(b)	109		83
PennEast Pipeline	80		71
Other^(c)	88		123
Total	$	1,487	$	1,538



Earnings from Equity Method Investments	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019			Nine Months Ended September 30, 2018
	(in millions)
SNG	$	30	$	29	$	104		$	95
Atlantic Coast Pipeline	3		1		9			4
PennEast Pipeline	2		2		5			4
Other^(*)	—		2		(3		)	5
Total	$	35	$	34	$	115		$	108



Income Statement Information	Three Months Ended September 30, 2019		Three Months Ended September 30, 2018		Nine Months Ended September 30, 2019		Nine Months Ended September 30, 2018
	(in millions)
Revenues	$	152	$	145	$	473	$	451
Operating income	82		71		274		230
Net income	60		58		208		190

In 2014, Southern Company Gas entered into a joint venture, whereby it holds a 5% ownership interest in the Atlantic Coast Pipeline, an interstate pipeline company which will develop and operate a 605-mile natural gas pipeline in North Carolina, Virginia, and West Virginia with expected initial transportation capacity of 1.5 Bcf per day.

The Atlantic Coast Pipeline has experienced challenges to its permits since construction began in 2018. On October 4, 2019, the U.S. Supreme Court agreed to hear Atlantic Coast Pipeline's appeal of a lower court ruling that overturned a key permit for the project. The delays resulting from the permitting issues have impacted the cost and schedule for the project. As a result, total current project cost estimates have increased from between $7.0 billion and $7.8 billion ($350 million and $390 million for Southern Company Gas) to between $7.3 billion and $7.8 billion ($365 million and $390 million for Southern Company Gas), excluding financing costs. The operator of the joint venture has indicated that it currently expects to complete construction by the end of 2021 and place the project in service shortly thereafter.

Also in 2014, Southern Company Gas entered into a partnership in which it holds a 20% ownership interest in the PennEast Pipeline, an interstate pipeline company formed to develop and operate a 118-mile natural gas pipeline between New Jersey and Pennsylvania. The expected initial transportation capacity of 1.0 Bcf per day is under long-term contracts, mainly with public utilities and other market-serving entities, such as electric generation companies, in New Jersey, Pennsylvania, and New York.

On September 10, 2019, an appellate court ruled that the PennEast Pipeline does not have federal court eminent domain authority over lands in which a state has property rights interests. The joint venture is pursuing appellate and other options and is evaluating further next steps.

The ultimate outcome of these matters cannot be determined at this time; however, any work delays, whether caused by judicial or regulatory action, abnormal weather, or other conditions, may result in additional cost or schedule modifications or, ultimately, in project cancellation, which could result in an impairment of one or both of Southern Company Gas' investments and could have a material impact on Southern Company Gas' and Southern Company's financial statements.

On May 29, 2019, Southern Company Gas sold its investment in Triton, a cargo container leasing company that was aggregated into Southern Company Gas' all other segment. This disposition resulted in a pre-tax loss of $6 million and a net after-tax gain of $7 million as a result of reversing a $13 million federal income tax valuation allowance.