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Revenue from Contracts with Customers and Lease Income
 9 Months Ended
Sep. 30, 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 and nine months ended September 30, 2021 and 2020:
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Three Months Ended September 30, 2021
Operating revenues
Retail electric revenues
Residential$1,974 $750 $1,138 $86 $— $— 
Commercial1,432 471 882 79 — — 
Industrial902 394 428 80 — — 
Other24 4 18 2 — — 
Total retail electric revenues4,332 1,619 2,466 247 — — 
Natural gas distribution revenues
Residential218 — — — — 218 
Commercial55 — — — — 55 
Transportation239 — — — — 239 
Industrial 6 — — — — 6 
Other31 — — — — 31 
Total natural gas distribution revenues549 — — — — 549 
Wholesale electric revenues
PPA energy revenues359 61 41 2 261 — 
PPA capacity revenues125 14 14 1 97 — 
Non-PPA revenues63 54 3 120 134 — 
Total wholesale electric revenues547 129 58 123 492 — 
Other natural gas revenues
Gas marketing services45 — — — — 45 
Other natural gas revenues11 — — — — 11 
Total natural gas revenues56 — — — — 56 
Other revenues248 53 112 8 9 — 
Total revenue from contracts with customers5,732 1,801 2,636 378 501 605 
Other revenue sources(a)
506 103 220 — 178 18 
Total operating revenues$6,238 $1,904 $2,856 $378 $679 $623 
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Nine Months Ended September 30, 2021
Operating revenues
Retail electric revenues
Residential$4,910 $1,931 $2,765 $214 $— $— 
Commercial3,727 1,229 2,293 205 — — 
Industrial2,299 1,048 1,034 217 — — 
Other70 13 51 6 — — 
Total retail electric revenues11,006 4,221 6,143 642 — — 
Natural gas distribution revenues
Residential1,143 — — — — 1,143 
Commercial298 — — — — 298 
Transportation775 — — — — 775 
Industrial 29 — — — — 29 
Other187 — — — — 187 
Total natural gas distribution revenues2,432 — — — — 2,432 
Wholesale electric revenues
PPA energy revenues782 143 71 9 575 — 
PPA capacity revenues375 86 41 4 247 — 
Non-PPA revenues181 108 14 283 273 — 
Total wholesale electric revenues1,338 337 126 296 1,095 — 
Other natural gas revenues
Wholesale gas services2,168 — — — — 2,168 
Gas marketing services303 — — — — 303 
Other natural gas revenues27 — — — — 27 
Total natural gas revenues2,498 — — — — 2,498 
Other revenues792 150 362 22 18 — 
Total revenue from contracts with customers18,066 4,708 6,631 960 1,113 4,930 
Other revenue sources(a)
2,979 311 419 28 497 1,763 
Other adjustments(b)
(3,699)— — — — (3,699)
Total operating revenues$17,346 $5,019 $7,050 $988 $1,610 $2,994 
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Three Months Ended September 30, 2020
Operating revenues
Retail electric revenues
Residential$2,019 $752 $1,183 $84 $— $— 
Commercial1,354 447 833 74 — — 
Industrial783 358 352 73 — — 
Other22 5 15 2 — — 
Total retail electric revenues4,178 1,562 2,383 233 — — 
Natural gas distribution revenues
Residential170 — — — — 170 
Commercial41 — — — — 41 
Transportation224 — — — — 224 
Industrial 4 — — — — 4 
Other35 — — — — 35 
Total natural gas distribution revenues474 — — — — 474 
Wholesale electric revenues
PPA energy revenues214 40 13 2 165 — 
PPA capacity revenues136 26 15 1 95 — 
Non-PPA revenues59 10 3 93 68 — 
Total wholesale electric revenues409 76 31 96 328 — 
Other natural gas revenues
Wholesale gas services431 — — — — 431 
Gas marketing services38 — — — — 38 
Other natural gas revenues7 — — — — 7 
Total natural gas revenues476 — — — — 476 
Other revenues218 33 115 6 4 — 
Total revenue from contracts with customers5,755 1,671 2,529 335 332 950 
Other revenue sources(a)
968 58 88 1 191 630 
Other adjustments(b)
(1,103)— — — — (1,103)
Total operating revenues$5,620 $1,729 $2,617 $336 $523 $477 
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Nine Months Ended September 30, 2020
Operating revenues
Retail electric revenues
Residential$4,802 $1,839 $2,760 $203 $— $— 
Commercial3,589 1,152 2,242 195 — — 
Industrial2,081 956 907 218 — — 
Other68 16 46 6 — — 
Total retail electric revenues10,540 3,963 5,955 622 — — 
Natural gas distribution revenues
Residential906 — — — — 906 
Commercial229 — — — — 229 
Transportation723 — — — — 723 
Industrial 21 — — — — 21 
Other179 — — — — 179 
Total natural gas distribution revenues2,058 — — — — 2,058 
Wholesale electric revenues
PPA energy revenues550 94 38 7 425 — 
PPA capacity revenues339 78 30 3 231 — 
Non-PPA revenues159 33 7 235 184 — 
Total wholesale electric revenues1,048 205 75 245 840 — 
Other natural gas revenues
Wholesale gas services1,168 — — — — 1,168 
Gas marketing services258 — — — — 258 
Other natural gas revenues22 — — — — 22 
Total natural gas revenues1,448 — — — — 1,448 
Other revenues677 117 329 19 11 — 
Total revenue from contracts with customers15,771 4,285 6,359 886 851 3,506 
Other revenue sources(a)
2,604 160 12 9 486 1,973 
Other adjustments(b)
(3,117)— — — — (3,117)
Total operating revenues$15,258 $4,445 $6,371 $895 $1,337 $2,362 
(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 Notes (K) and (L) under "Southern Company Gas" for information on the sale of Sequent and components of wholesale gas services' operating revenues, respectively.
Contract Balances
The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at September 30, 2021 and December 31, 2020:
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Accounts Receivable
At September 30, 2021$2,343 $712 $904 $90 $170 $329 
At December 31, 20202,614 632 806 77 112 788 
Contract Assets
At September 30, 2021$165 $5 $103 $— $1 $— 
At December 31, 2020158 2 71 — — — 
Contract Liabilities
At September 30, 2021$65 $6 $39 $1 $2 $— 
At December 31, 202061 6 27 1 1 1 
At September 30, 2021 and December 31, 2020, Georgia Power had contract assets primarily related to 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, and unregulated service agreements, where payment is contingent on project completion. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for unregulated service agreements. Southern Company's unregulated distributed generation business had $55 million and $81 million of contract assets and $19 million and $27 million of contract liabilities at September 30, 2021 and December 31, 2020, respectively, for outstanding performance obligations.
Revenues recognized by Southern Company in the three and nine months ended September 30, 2021, which were included in contract liabilities at December 31, 2020, were $5 million and $25 million, respectively, and immaterial for all other 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 September 30, 2021 are expected to be recognized as follows:
2021 (remaining)2022202320242025Thereafter
(in millions)
Southern Company$156 $543 $347 $327 $307 $2,667 
Alabama Power13 32 24 7 5 — 
Georgia Power22 64 43 23 21 41 
Southern Power70 323 281 297 281 2,644 
Revenue expected to be recognized for performance obligations remaining at September 30, 2021 was immaterial for Mississippi Power
Lease Income
Lease income for the three and nine months ended September 30, 2021 and 2020 is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
For the Three Months Ended September 30, 2021
Lease income - interest income on sales-type leases$4 $— $— $4 $— $— 
Lease income - operating leases56 21 11 — 21 9 
Variable lease income143 — — — 151 — 
Total lease income$203 $21 $11 $4 $172 $9 
For the Nine Months Ended September 30, 2021
Lease income - interest income on sales-type leases$11 $— $— $10 $— $— 
Lease income - operating leases168 62 31 1 64 26 
Variable lease income355 — — — 379 — 
Total lease income$534 $62 $31 $11 $443 $26 
For the Three Months Ended September 30, 2020
Lease income - interest income on sales-type leases$3 $— $— $3 $— $— 
Lease income - operating leases50 11 14 — 21 9 
Variable lease income145 — — — 153 — 
Total lease income$198 $11 $14 $3 $174 $9 
For the Nine Months Ended September 30, 2020
Lease income - interest income on sales-type leases$8 $— $— $8 $— $— 
Lease income - operating leases148 24 44 1 66 26 
Variable lease income345 — — — 368 — 
Total lease income$501 $24 $44 $9 $434 $26 
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.
Lease Receivables
Mississippi Power
Mississippi Power completed construction of additional leased assets under an existing sales-type lease during the second quarter 2021. Upon completion of construction, the book value was transferred from CWIP to lease receivables. At September 30, 2021, the lease receivable related to the additional leased assets totaled $39 million and is primarily included in other property and investments. The transfer represents a noncash investing transaction for purposes of the statements of cash flows.
Southern Power
During the third quarter 2021, Southern Power completed construction of a portion of the Garland battery energy storage facility assets and recorded a $15 million loss upon commencement of the related PPA, which Southern
Power accounts for as a sales-type lease. The lease has an initial term of 20 years. Upon commencement of the lease, the $113 million book value of the assets was derecognized from CWIP and a lease receivable was recorded. At September 30, 2021, the current portion of the lease receivable of $8 million is included in other current assets and the long-term portion of $91 million is included in net investment in sales-type lease on the balance sheet. The transfer represented a noncash investing transaction for purposes of the statement of cash flows. The undiscounted cash flows expected to be received by Southern Power for assets under the lease are as follows:
At September 30, 2021
 (in millions)
2021 (remaining)$2 
20228 
20238 
20248 
20258 
20268 
Thereafter115 
Total undiscounted cash flows$157 
Net investment in sales-type lease(*)
99 
Difference between undiscounted cash flows and discounted cash flows$58 
(*)Included in other current assets and other property and investments on the balance sheet.
See Note (K) under "Southern Power" for additional information on the Garland battery energy storage facility.