FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2020

Assets and Liabilities Measured at Fair Value on a Recurring Basis

As of September 30, 2020, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:


	Fair Value Measurements Using:
As of September 30, 2020:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Southern Company
Assets:
Energy-related derivatives(a)	$	488	$	218	$	117	$	—	$	823
Interest rate derivatives	—		20		—		—		20
Foreign currency derivatives	—		29		—		—		29
Investments in trusts:(b)(c)
Domestic equity	754		137		—		—		891
Foreign equity	71		220		—		—		291
U.S. Treasury and government agency securities	—		268		—		—		268
Municipal bonds	—		99		—		—		99
Pooled funds – fixed income	—		17		—		—		17
Corporate bonds	15		376		—		—		391
Mortgage and asset backed securities	—		79		—		—		79
Private equity	—		—		—		68		68
Cash and cash equivalents	1		—		—		—		1
Other	25		6		—		—		31
Cash equivalents	2,750		11		—		—		2,761
Other investments	9		19		—		—		28
Total	$	4,113	$	1,499	$	117	$	68	$	5,797
Liabilities:
Energy-related derivatives(a)	$	521	$	155	$	75	$	—	$	751

Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		19		—		19
Total	$	521	$	178	$	94	$	—	$	793


	Fair Value Measurements Using:
As of September 30, 2020:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Alabama Power
Assets:
Energy-related derivatives	$	—	$	23	$	—	$	—	$	23
Nuclear decommissioning trusts:(b)
Domestic equity	477		128		—		—		605
Foreign equity	71		64		—		—		135
U.S. Treasury and government agency securities	—		21		—		—		21
Municipal bonds	—		1		—		—		1
Corporate bonds	15		159		—		—		174
Mortgage and asset backed securities	—		27		—		—		27
Private equity	—		—		—		68		68
Other	6		—		—		—		6
Cash equivalents	825		11		—		—		836
Other investments	—		19		—		—		19
Total	$	1,394	$	453	$	—	$	68	$	1,915
Liabilities:
Energy-related derivatives	$	—	$	6	$	—	$	—	$	6



Georgia Power
Assets:
Energy-related derivatives	$	—	$	31	$	—	$	—	$	31

Nuclear decommissioning trusts:(b)(c)
Domestic equity	277		1		—		—		278
Foreign equity	—		153		—		—		153
U.S. Treasury and government agency securities	—		247		—		—		247
Municipal bonds	—		98		—		—		98
Corporate bonds	—		217		—		—		217
Mortgage and asset backed securities	—		52		—		—		52
Other	19		6		—		—		25
Cash equivalents	485		—		—		—		485
Total	$	781	$	805	$	—	$	—	$	1,586
Liabilities:
Energy-related derivatives	$	—	$	9	$	—	$	—	$	9


	Fair Value Measurements Using:
As of September 30, 2020:	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Net Asset Value as a Practical Expedient (NAV)		Total
	(in millions)
Mississippi Power
Assets:
Energy-related derivatives	$	—	$	18	$	—	$	—	$	18

Cash equivalents	36		—		—		—		36
Total	$	36	$	18	$	—	$	—	$	54
Liabilities:
Energy-related derivatives	$	—	$	7	$	—	$	—	$	7



Southern Power
Assets:
Energy-related derivatives	$	—	$	5	$	—	$	—	$	5
Foreign currency derivatives	—		29		—		—		29
Cash equivalents	149		—		—		—		149
Total	$	149	$	34	$	—	$	—	$	183
Liabilities:
Energy-related derivatives	$	—	$	1	$	—	$	—	$	1
Foreign currency derivatives	—		23		—		—		23
Contingent consideration	—		—		19		—		19
Total	$	—	$	24	$	19	$	—	$	43

Southern Company Gas
Assets:
Energy-related derivatives(a)	$	488	$	141	$	117	$	—	$	746

Non-qualified deferred compensation trusts:
Domestic equity	—		8		—		—		8
Foreign equity	—		3		—		—		3
Pooled funds – fixed income	—		17		—		—		17
Cash equivalents	1		—		—		—		1
Cash equivalents and restricted cash	113		—		—		—		113

Total	$	602	$	169	$	117	$	—	$	888
Liabilities:
Energy-related derivatives(a)	$	521	$	132	$	75	$	—	$	728

(a)Energy-related derivatives exclude cash collateral of $70 million.

(b)Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

(c)Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. As of September 30, 2020, approximately $25 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.

Schedule of Increase (Decrease) In Fair Value Of Funds

The fair value of the funds, including reinvested interest and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for the three and nine months ended September 30, 2020 and 2019. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.


Fair value increases (decreases)	Three Months Ended September 30, 2020		Three Months Ended September 30, 2019		Nine Months Ended September 30, 2020		Nine Months Ended September 30, 2019
	(in millions)
Southern Company	$	108	$	27	$	85	$	255
Alabama Power	66		15		24		140
Georgia Power	42		12		61		115

Financial Instruments for Which Carrying Amount Did Not Equal Fair Value

As of September 30, 2020, other financial instruments for which the carrying amount did not equal fair value were as follows:


	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas(*)
	(in millions)
Long-term debt, including securities due within one year:
Carrying amount	$	49,743	$	9,113	$	12,700	$	1,402	$	4,155	$	6,461
Fair value	56,739		10,741		15,052		1,562		4,535		7,640

(*)The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the lives of the respective bonds.

Fair Value of Commodity Derivative Contracts that Include a Significant Unobservable Component

The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.


	Three Months Ended September 30, 2020		Nine Months Ended September 30, 2020
	(in millions)
Beginning balance	$	80	$	14
Transfers to Level 3	—		70
Transfers from Level 3	(2)		(5)
Instruments realized or otherwise settled during period	(9)		(16)
Changes in fair value	(27)		(21)
Ending balance	$	42	$	42