INCOME TAXES (Tables)

12 Months Ended

Dec. 31, 2019

Income Tax Disclosure [Abstract]

Details of income tax provisions

Details of income tax provisions are as follows:

	2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Federal —
Current	$	156	$	61	$	264	$	(6	)	$	(717	)	$	(120	)
Deferred	1,237		125		180		26			647			195
	1,393		186		444		20			(70		)	75
State —
Current	275		12		6		(1		)	1			37
Deferred	130		72		22		11			13			18
	405		84		28		10			14			55
Total	$	1,798	$	270	$	472	$	30		$	(56	)	$	130

	2018
	Southern Company			Alabama Power		Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Federal —
Current	$	167		$	91	$	393		$	(567	)	$	85		$	334
Deferred	231			123		(249		)	575			(154		)	33
	398			214		144			8			(69		)	367
State —
Current	188			26		81			(10		)	(9		)	131
Deferred	(137		)	51		(11		)	(100		)	(86		)	(34		)
	51			77		70			(110		)	(95		)	97
Total	$	449		$	291	$	214		$	(102	)	$	(164	)	$	464

	2017
	Southern Company			Alabama Power		Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Federal —
Current	$	(62	)	$	136	$	256		$	194		$	(566	)	$	103
Deferred	(6		)	336		504			(753		)	(312		)	170
	(68		)	472		760			(559		)	(878		)	273
State —
Current	37			23		116			—			(110		)	27
Deferred	173			73		(46		)	27			49			67
	210			96		70			27			(61		)	94
Total	$	142		$	568	$	830		$	(532	)	$	(939	)	$	367

Summary of amortization of tax credits

ITCs amortized in 2019, 2018, and 2017 were immaterial for the traditional electric operating companies and Southern Company Gas and were as follows for Southern Company and Southern Power:

	Southern Company		Southern Power
	(in millions)
2019	$	181	$	151
2018	87		58
2017	79		57

Schedule of effective income tax reconciliation

A reconciliation of the federal statutory income tax rate to the effective income tax rate is as follows:

	2019
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%
State income tax, net of federal deduction	4.9		4.9		1.0		4.3		4.0		6.1
Employee stock plans' dividend deduction	(0.4	)	—		—		—		—		—
Non-deductible book depreciation	0.3		0.6		0.5		0.4		—		—
Flowback of excess deferred income taxes	(2.1	)	(5.3	)	—		(12.6	)	—		(6.0	)
AFUDC-Equity	(0.4	)	(0.8	)	(0.6	)	(0.1	)	—		—
ITC basis difference	(0.1	)	—		—		—		(1.9	)	—
Amortization of ITC	(0.8	)	(0.1	)	(0.1	)	(0.1	)	(16.1	)	(0.1	)
Tax impact from sale of subsidiaries	5.1		—		—		—		(27.6	)	(1.4	)
Noncontrolling interests	—		—		—		—		0.8		—
Other	—		(0.4	)	(0.3	)	4.9		(0.6	)	(1.4	)
Effective income tax (benefit) rate	27.5	%	19.9	%	21.5	%	17.8	%	(20.4	)%	18.2	%

	2018
	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
Federal statutory rate	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%	21.0	%
State income tax, net of federal deduction	1.8		5.0		5.5		(65.1	)	(90.8	)	9.2
Employee stock plans' dividend deduction	(1.0	)	—		—		—		—		—
Non-deductible book depreciation	0.8		0.6		1.2		0.7		—		—
Flowback of excess deferred income taxes	(4.0	)	(1.8	)	—		(4.1	)	—		(3.0	)
AFUDC-Equity	(1.0	)	(1.0	)	(1.4	)	—		—		—
ITC basis difference	(0.6	)	—		—		—		(0.2	)	—
Federal PTCs	(4.7	)	—		—		—		(156.6	)	—
Amortization of ITC	(2.0	)	(0.1	)	(0.2	)	(0.2	)	(55.4	)	(0.1	)
Tax impact from sale of subsidiaries	8.6		—		—		—		—		28.5
Tax Reform Legislation	(1.4	)	—		(4.9	)	(26.3	)	96.1		(0.4	)
Noncontrolling interests	(0.4	)	—		—		—		(14.9	)	—
Other	(0.8	)	(0.1	)	0.1		(1.4	)	2.0		0.3
Effective income tax (benefit) rate	16.3	%	23.6	%	21.3	%	(75.4	)%	(198.8	)%	55.5	%

	2017
	Southern Company		Alabama Power		Georgia Power		Mississippi Power(*)		Southern Power		Southern Company Gas
Federal statutory rate	35.0	%	35.0	%	35.0	%	(35.0	)%	35.0	%	35.0	%
State income tax, net of federal deduction	12.5		4.5		2.0		0.6		(22.2	)	10.0
Employee stock plans' dividend deduction	(4.0	)	—		—		—		—		—
Non-deductible book depreciation	3.1		0.9		0.7		0.1		—		—
Flowback of excess deferred income taxes	(0.3	)	—		(0.1	)	—		—		(0.2	)
AFUDC-Equity	(2.6	)	(1.0	)	(0.6	)	—		—		—
AFUDC-Equity portion of Kemper IGCC charge	15.7		—		—		5.3		—		—
ITC basis difference	(1.7	)	—		—		—		(10.0	)	—
Federal PTCs	(12.1	)	—		—		—		(72.5	)	—
Amortization of ITC	(4.2	)	(0.2	)	(0.1	)	—		(20.6	)	(0.2	)
Tax Reform Legislation	(25.6	)	0.3		(0.4	)	11.9		(416.1	)	15.0
Noncontrolling interests	(1.4	)	—		—		—		(8.6	)	—
Other	(1.1	)	0.1		0.2		—		(10.7	)	0.6
Effective income tax (benefit) rate	13.3	%	39.6	%	36.7	%	(17.1	)%	(525.7	)%	60.2	%

(*)

Represents effective income tax benefit rate for Mississippi Power due to a loss before income taxes in 2017.

Tax effects between the carrying amounts of assets and liabilities

The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements of the Registrants and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:

	December 31, 2019
	Southern Company			Alabama Power		Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	8,711		$	2,402	$	3,058		$	315		$	1,422		$	1,288
Property basis differences	1,843			912		643			143			—			133
Federal effect of net state deferred tax assets	—			—		—			24			—			—
Leveraged lease basis differences	236			—		—			—			—			—
Employee benefit obligations	704			242		351			38			12			12
Premium on reacquired debt	83			13		70			—			—			—
Regulatory assets –
Storm damage reserves	109			—		109			—			—			—
Employee benefit obligations	1,174			311		403			55			—			45
Remaining book value of retired assets	341			174		159			8			—			—
AROs	1,723			613		1,066			44			—			—
AROs	814			360		405			—			—			—
Other	523			134		81			68			11			198
Total deferred income tax liabilities	16,261			5,161		6,345			695			1,445			1,676
Deferred tax assets —
Federal effect of net state deferred tax liabilities	277			162		63			—			24			56
Employee benefit obligations	1,385			334		488			72			5			111
Other property basis differences	230			—		65			—			146			—
ITC and PTC carryforward	2,098			11		435			—			1,445			—
Other partnership basis difference	169			—		—			—			169			—
Other comprehensive losses	112			8		18			—			10			—
AROs	2,537			973		1,471			44			—			—
Estimated loss on plants under construction	283			—		283			—			—			—
Other deferred state tax attributes	402			—		13			251			72			8
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)	401			240		133			28			—			—
Other	786			173		154			56			46			287
Total deferred income tax assets	8,680			1,901		3,123			451			1,917			462
Valuation allowance	(137		)	—		(35		)	(41		)	(36		)	(5		)
Net deferred income tax assets	8,543			1,901		3,088			410			1,881			457
Net deferred income taxes (assets)/liabilities	$	7,718		$	3,260	$	3,257		$	285		$	(436	)	$	1,219
Recognized in the balance sheets:
Accumulated deferred income taxes – assets	$	(170	)	$	—	$	—		$	(139	)	$	(551	)	$	—
Accumulated deferred income taxes – liabilities	$	7,888		$	3,260	$	3,257		$	424		$	115		$	1,219

	December 31, 2018
	Southern Company			Alabama Power		Georgia Power			Mississippi Power			Southern Power			Southern Company Gas
	(in millions)
Deferred tax liabilities —
Accelerated depreciation	$	8,461		$	2,236	$	3,005		$	335		$	1,483		$	1,176
Property basis differences	1,807			865		633			162			—			134
Federal effect of net state deferred tax assets	—			—		—			36			—			—
Leveraged lease basis differences	253			—		—			—			—			—
Employee benefit obligations	477			149		290			25			6			6
Premium on reacquired debt	88			14		74			—			—			—
Regulatory assets –
Storm damage reserves	111			—		111			—			—			—
Employee benefit obligations	975			260		344			45			—			45
Remaining book value of retired assets	56			6		39			11			—			—
AROs	1,232			276		925			31			—			—
AROs	1,210			607		575			—			—			—
Other	537			171		102			57			34			132
Total deferred income tax liabilities	15,207			4,584		6,098			702			1,523			1,493
Deferred tax assets —
Federal effect of net state deferred tax liabilities	260			155		71			—			22			46
Employee benefit obligations	1,273			286		444			62			7			150
Other property basis differences	251			—		61			—			172			—
ITC and PTC carryforward	2,730			11		430			—			2,128			—
Alternative minimum tax carryforward	62			—		—			32			21			—
Other partnership basis difference	162			—		—			—			162			—
Other comprehensive losses	82			10		3			—			—			—
AROs	2,442			883		1,500			31			—			—
Estimated loss on plants under construction	346			—		283			63			—			—
Other deferred state tax attributes	415			—		19			251			72			—
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)	294			130		127			29			—			8
Other	731			147		140			47			47			285
Total deferred income tax assets	9,048			1,622		3,078			515			2,631			489
Valuation allowance	(123		)	—		(42		)	(41		)	(27		)	(12		)
Net deferred income tax assets	8,925			1,622		3,036			474			2,604			477
Net deferred income taxes (assets)/liabilities	$	6,282		$	2,962	$	3,062		$	228		$	(1,081	)	$	1,016
Recognized in the balance sheets:
Accumulated deferred income taxes – assets	$	(276	)	$	—	$	—		$	(150	)	$	(1,186	)	$	—
Accumulated deferred income taxes – liabilities	$	6,558		$	2,962	$	3,062		$	378		$	105		$	1,016

Summary of tax credit carryforwards

Federal ITC/PTC carryforwards at December 31, 2019 were as follows:

	Southern Company		Alabama Power		Georgia Power		Southern Power
	(in millions)
Federal ITC/PTC carryforwards	$	1,751	$	11	$	88	$	1,445
Year in which federal ITC/PTC carryforwards begin expiring	2032		2033		2032		2036
Year by which federal ITC/PTC carryforwards are expected to be utilized	2024		2022		2022		2024

Summary of operating loss carryforward

At December 31, 2019, the state and local NOL carryforwards for Southern Company's subsidiaries were as follows:

Company/Jurisdiction	Approximate NOL Carryforwards		Approximate Net State Income Tax Benefit		Tax Year NOL Begins Expiring
	(in millions)
Mississippi Power
Mississippi	$	5,099	$	201	2031
Southern Power
Oklahoma	830		39		2035
Florida	258		11		2033
South Carolina	56		2		2034
Other states	21		2		Various
Southern Power Total	$	1,165	$	54
Other(*)
Georgia	171		7		2020
New York	220		11		2035
New York City	207		15		2035
Other states	368		18		Various
Southern Company Total	$	7,230	$	306

(*)

Represents other Southern Company subsidiaries. Alabama Power, Georgia Power, and Southern Company Gas did not have material state or local NOL carryforwards at December 31, 2019.

Changes in unrecognized tax benefits

Unrecognized tax benefits changes in 2018 and 2017 for Southern Company, Mississippi Power, and Southern Power are provided below. The remaining Registrants did not have any material unrecognized tax benefits for the periods presented.

	Southern Company			Mississippi Power			Southern Power
	(in millions)
Unrecognized tax benefits at December 31, 2016	$	484		$	465		$	17
Tax positions changes –
Increase from current periods	10			—			—
Increase from prior periods	10			2			—
Decrease from prior periods	(196		)	(177		)	(17		)
Reductions due to settlements	(290		)	(290		)	—
Unrecognized tax benefits at December 31, 2017	18			—			—
Tax positions changes –
Decrease from prior periods	(18		)	—			—
Unrecognized tax benefits at December 31, 2018	$	—		$	—		$	—

Impact on effective tax rate

The impact on the effective tax rate of Southern Company, if recognized, was as follows for 2017:

	Southern Company
	(in millions)
2017
Tax positions impacting the effective tax rate	$	18
Tax positions not impacting the effective tax rate	—
Balance of unrecognized tax benefits	$	18