Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2021

Schedule of Assets and Liabilities Measured at Fair Value

At September 30, 2021, 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:
At September 30, 2021	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)	$	75	$	425	$	—	$	—	$	500
Interest rate derivatives	—		25		—		—		25
Foreign currency derivatives	—		20		—		—		20
Investments in trusts:(b)(c)
Domestic equity	738		237		—		—		975
Foreign equity	167		183		—		—		350
U.S. Treasury and government agency securities	—		352		—		—		352
Municipal bonds	—		48		—		—		48
Pooled funds – fixed income	—		14		—		—		14
Corporate bonds	2		472		—		—		474
Mortgage and asset backed securities	—		92		—		—		92
Private equity	—		—		—		123		123
Cash and cash equivalents	5		—		—		—		5
Other	29		13		—		—		42
Cash equivalents	1,498		9		—		—		1,507
Other investments	9		26		—		—		35
Total	$	2,523	$	1,916	$	—	$	123	$	4,562
Liabilities:
Energy-related derivatives(a)	$	27	$	17	$	—	$	—	$	44
Interest rate derivatives	—		16		—		—		16
Foreign currency derivatives	—		43		—		—		43
Contingent consideration	—		—		16		—		16
Other	—		13		—		—		13
Total	$	27	$	89	$	16	$	—	$	132


	Fair Value Measurements Using:
At September 30, 2021	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	$	—	$	104	$	—	$	—	$	104
Interest rate derivatives	—		5		—		—		5
Nuclear decommissioning trusts:(b)
Domestic equity	444		227		—		—		671
Foreign equity	167		—		—		—		167
U.S. Treasury and government agency securities	—		22		—		—		22
Municipal bonds	—		1		—		—		1
Corporate bonds	2		243		—		—		245
Mortgage and asset backed securities	—		22		—		—		22
Private equity	—		—		—		123		123
Other	6		—		—		—		6
Cash equivalents	443		9		—		—		452
Other investments	—		26		—		—		26
Total	$	1,062	$	659	$	—	$	123	$	1,844
Liabilities:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4



Georgia Power
Assets:
Energy-related derivatives	$	—	$	166	$	—	$	—	$	166

Nuclear decommissioning trusts:(b)(c)
Domestic equity	294		1		—		—		295
Foreign equity	—		180		—		—		180
U.S. Treasury and government agency securities	—		330		—		—		330
Municipal bonds	—		47		—		—		47
Corporate bonds	—		229		—		—		229
Mortgage and asset backed securities	—		70		—		—		70
Other	23		13		—		—		36
Cash equivalents	240		—		—		—		240
Total	$	557	$	1,036	$	—	$	—	$	1,593
Liabilities:
Energy-related derivatives	$	—	$	4	$	—	$	—	$	4


	Fair Value Measurements Using:
At September 30, 2021	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	$	—	$	105	$	—	$	—	$	105

Cash equivalents	121		—		—		—		121
Total	$	121	$	105	$	—	$	—	$	226
Liabilities:
Energy-related derivatives	$	—	$	3	$	—	$	—	$	3



Southern Power
Assets:
Energy-related derivatives	$	—	$	10	$	—	$	—	$	10
Foreign currency derivatives	—		20		—		—		20

Total	$	—	$	30	$	—	$	—	$	30
Liabilities:
Energy-related derivatives	$	—	$	2	$	—	$	—	$	2
Foreign currency derivatives	—		11		—		—		11
Contingent consideration	—		—		16		—		16
Other	—		13		—		—		13
Total	$	—	$	26	$	16	$	—	$	42

Southern Company Gas
Assets:
Energy-related derivatives(a)	$	75	$	40	$	—	$	—	$	115
Interest rate derivatives	—		6		—		—		6
Non-qualified deferred compensation trusts:
Domestic equity	—		9		—		—		9
Foreign equity	—		3		—		—		3
Pooled funds – fixed income	—		14		—		—		14
Cash equivalents	5		—		—		—		5


Total	$	80	$	72	$	—	$	—	$	152
Liabilities:
Energy-related derivatives(a)	$	27	$	4	$	—	$	—	$	31
Interest rate derivatives	—		4		—		—		4

Total	$	27	$	8	$	—	$	—	$	35

(a)Excludes cash collateral of $(20) 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. At September 30, 2021, approximately $57 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 nine months ended September 30, 2021 and 2020. 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, 2021		Three Months Ended September 30, 2020		Nine Months Ended September 30, 2021		Nine Months Ended September 30, 2020
	(in millions)
Southern Company	$	9	$	108	$	173	$	85
Alabama Power	15		66		133		24
Georgia Power	(6)		42		40		61

Schedule of Financial Instruments for which Carrying Amount Did Not Equal Fair Value

At September 30, 2021, 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 billions)
Long-term debt, including securities due within one year:
Carrying amount	$	51.9	$	9.1	$	13.6	$	1.6	$	4.0	$	6.8
Fair value	57.6		10.4		15.2		1.7		4.4		7.8

(*)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 remaining lives of the respective bonds, the latest being through 2043.

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

The following table provides a reconciliation of Southern Company Gas' Level 3 contracts during the three and nine months ended September 30, 2021.


	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	(in millions)
Beginning balance	$	18	$	28


Instruments realized or otherwise settled during period	—		(6)
Changes in fair value	—		(4)
Sale of Sequent	(18)		(18)
Ending balance	$	—	$	—