Revenue from Contracts with Customers and Lease Income

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers and Lease Income

REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME

Revenue from Contracts with Customers

The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. See Note 1 to the financial statements under "Revenues" in Item 8 of the Form 10-K for additional information on the revenue policies of the Registrants. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.

The following table disaggregates revenue from contracts with customers for the three months ended March 31, 2021 and 2020:

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Three Months Ended March 31, 2021
Operating revenues
Retail electric revenues
Residential	$	1,468	$	628	$	776	$	64	$	—	$	—
Commercial	1,117		372		686		59		—		—
Industrial	668		320		284		64		—		—
Other	24		5		17		2		—		—
Total retail electric revenues	3,277		1,325		1,763		189		—		—
Natural gas distribution revenues
Residential	614		—		—		—		—		614
Commercial	170		—		—		—		—		170
Transportation	288		—		—		—		—		288
Industrial	16		—		—		—		—		16
Other	97		—		—		—		—		97
Total natural gas distribution revenues	1,185		—		—		—		—		1,185
Wholesale electric revenues
PPA energy revenues	212		43		13		4		156		—
PPA capacity revenues	119		29		13		3		75		—
Non-PPA revenues	67		32		9		88		61		—
Total wholesale electric revenues	398		104		35		95		292		—
Other natural gas revenues
Wholesale gas services	1,590		—		—		—		—		1,590
Gas marketing services	194		—		—		—		—		194
Other natural gas revenues	7		—		—		—		—		7
Total natural gas revenues	1,791		—		—		—		—		1,791
Other revenues	249		46		113		8		4		—
Total revenue from contracts with customers	6,900		1,475		1,911		292		296		2,976
Other revenue sources(a)	1,306		84		59		15		144		1,014
Other adjustments(b)	(2,296)		—		—		—		—		(2,296)
Total operating revenues	$	5,910	$	1,559	$	1,970	$	307	$	440	$	1,694

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Three Months Ended March 31, 2020
Operating revenues
Retail electric revenues
Residential	$	1,370	$	553	$	760	$	57	$	—	$	—
Commercial	1,146		364		720		62		—		—
Industrial	680		321		281		78		—		—
Other	23		5		16		2		—		—
Total retail electric revenues	3,219		1,243		1,777		199		—		—
Natural gas distribution revenues
Residential	496		—		—		—		—		496
Commercial	130		—		—		—		—		130
Transportation	264		—		—		—		—		264
Industrial	12		—		—		—		—		12
Other	97		—		—		—		—		97
Total natural gas distribution revenues	999		—		—		—		—		999
Wholesale electric revenues
PPA energy revenues	159		27		9		2		125		—
PPA capacity revenues	105		27		12		1		66		—
Non-PPA revenues	51		19		2		69		58		—
Total wholesale electric revenues	315		73		23		72		249		—
Other natural gas revenues
Wholesale gas services	396		—		—		—		—		396
Gas marketing services	163		—		—		—		—		163
Other natural gas revenues	7		—		—		—		—		7
Total natural gas revenues	566		—		—		—		—		566
Other revenues	192		37		95		5		3		—
Total revenue from contracts with customers	5,291		1,353		1,895		276		252		1,565
Other revenue sources(a)	868		(2)		(70)		1		123		825
Other adjustments(b)	(1,141)		—		—		—		—		(1,141)
Total operating revenues	$	5,018	$	1,351	$	1,825	$	277	$	375	$	1,249

(a)Other revenue sources relate to revenues from customers accounted for as derivatives and leases, alternative revenue programs at Southern Company Gas, and cost recovery mechanisms and revenues that meet other scope exceptions for revenues from contracts with customers at the traditional electric operating companies.

(b)Other adjustments relate to the cost of Southern Company Gas' energy and risk management activities. Wholesale gas services revenues are presented net of the related costs of those activities on the statement of income. See Note (L) under "Southern Company Gas" for additional information on the components of wholesale gas services' operating revenues.

Contract Balances

The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at March 31, 2021 and December 31, 2020:

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
Accounts Receivable
As of March 31, 2021	$	2,375	$	567	$	679	$	87	$	85	$	778
As of December 31, 2020	2,614		632		806		77		112		788
Contract Assets
As of March 31, 2021	$	106	$	1	$	47	$	—	$	—	$	—
As of December 31, 2020	158		2		71		—		—		—
Contract Liabilities
As of March 31, 2021	$	75	$	4	$	34	$	1	$	1	$	1
As of December 31, 2020	61		6		27		1		1		1

As of March 31, 2021 and December 31, 2020, Georgia Power had contract assets primarily related to unregulated service agreements, where payment is contingent on project completion, and fixed retail customer bill programs, where the payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for certain unregulated service agreements. Alabama Power had contract liabilities for outstanding performance obligations primarily related to pole attachment and extended service agreements. Southern Company's unregulated distributed generation business had $55 million and $81 million of contract assets and $34 million and $27 million of contract liabilities at March 31, 2021 and December 31, 2020, respectively, for outstanding performance obligations.

Revenues recognized in the three months ended March 31, 2021, which were included in contract liabilities at December 31, 2020, were immaterial for all Registrants.

Remaining Performance Obligations

The traditional electric operating companies and Southern Power have long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. These contracts primarily relate to PPAs whereby the traditional electric operating companies and Southern Power provide electricity and generation capacity to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related to certain fixed price contracts. Revenues from contracts with customers related to these performance obligations remaining at March 31, 2021 are expected to be recognized as follows:

	2021 (remaining)		2022		2023		2024		2025		Thereafter
	(in millions)
Southern Company	$	485	$	408	$	340	$	327	$	307	$	2,666
Alabama Power	24		31		24		7		5		—
Georgia Power	57		51		36		24		21		41
Southern Power	213		287		280		296		280		2,644

Revenue expected to be recognized for performance obligations remaining at March 31, 2021 was immaterial for Mississippi Power and Southern Company Gas.

Lease Income

Lease income for the three months ended March 31, 2021 and 2020 is as follows:

	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Power		Southern Company Gas
	(in millions)
For the Three Months Ended March 31, 2021
Lease income - interest income on sales-type leases	$	3	$	—	$	—	$	3	$	—	$	—
Lease income - operating leases	55		21		10		—		21		9
Variable lease income	84		—		—		—		90		—
Total lease income	$	142	$	21	$	10	$	3	$	111	$	9
For the Three Months Ended March 31, 2020
Lease income - interest income on sales-type leases	$	3	$	—	$	—	$	3	$	—	$	—
Lease income - operating leases	51		6		16		—		24		9
Variable lease income	74		—		—		—		80		—
Total lease income	$	128	$	6	$	16	$	3	$	104	$	9

Lease payments received under tolling arrangements and PPAs consist of either scheduled payments or variable payments based on the amount of energy produced by the underlying electric generating units. Lease income for Alabama Power and Southern Power is included in wholesale revenues.