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LEASES (Tables)
 12 Months Ended
Dec. 31, 2021
Leases [Abstract]  
Major categories of lease obligations The major categories of lease obligations are as follows:
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
At December 31, 2021
Electric generating units$802 $104 $1,217 $— $— $— 
Real estate/land876 3 49 2 526 45 
Communication towers156 2 4 — — 24 
Railcars32 10 20 2 — — 
Other103 5 1 24 — 1 
Total$1,969 $124 $1,291 $28 $526 $70 
At December 31, 2020
Electric generating units$941 $146 $1,368 $— $— $— 
Real estate/land815 4 53 2 451 61 
Communication towers158 2 3 — — 20 
Railcars42 16 23 3 — — 
Other127 7 5 23 — 1 
Total$2,083 $175 $1,452 $28 $451 $82 
Balance sheet amounts recorded for operating and financing leases
Balance sheet amounts recorded for operating and finance leases are as follows:
Southern CompanyAlabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
At December 31, 2021
Operating Leases
Operating lease ROU assets, net$1,701 $108 $1,157 $10 $479 $70 
Operating lease obligations - current$250 $54 $156 $4 $28 $11 
Operating lease obligations - non-current1,503 66 999 6 497 59 
Total operating lease obligations(*)
$1,754 $121 $1,155 $10 $525 $70 
Finance Leases
Finance lease ROU assets, net$197 $4 $104 $17 $— $— 
Finance lease obligations - current$16 $1 $10 $1 $— $— 
Finance lease obligations - non-current199 3 126 17 — — 
Total finance lease obligations $215 $4 $136 $18 $— $— 
At December 31, 2020
Operating Leases
Operating lease ROU assets, net$1,802 $151 $1,308 $9 $415 $81 
Operating lease obligations - current$241 $51 $151 $2 $25 $15 
Operating lease obligations - non-current1,611 119 1,156 7 426 67 
Total operating lease obligations(*)
$1,852 $170 $1,307 $9 $451 $82 
Finance Leases
Finance lease ROU assets, net$218 $5 $115 $19 $— $— 
Finance lease obligations - current$17 $1 $9 $1 $— $— 
Finance lease obligations - non-current214 4 136 18 — — 
Total finance lease obligations$231 $5 $145 $19 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $802 million, $104 million, and $1.11 billion, respectively, at December 31, 2021 and $941 million, $146 million, and $1.25 billion, respectively, at December 31, 2020.
Lease costs and other information
Lease costs for 2021, 2020, and 2019, which includes both amounts recognized as operations and maintenance expense and amounts capitalized as part of the cost of another asset, are as follows:
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2021
Lease cost
Operating lease cost(*)
$313 $58 $208 $2 $33 $19 
Finance lease cost:
Amortization of ROU assets21 1 11 1 — — 
Interest on lease obligations11 — 16 1 — — 
Total finance lease cost32 1 27 2 — — 
Short-term lease costs 48 15 24 — — — 
Variable lease cost96 4 83 — 5 — 
Sublease income1 — — — — — 
Total lease cost $490 $78 $342 $4 $38 $19 
2020
Lease cost
Operating lease cost(*)
$309 $55 $212 $3 $29 $19 
Finance lease cost:
Amortization of ROU assets26 1 15 — — — 
Interest on lease obligations11 — 16 — — — 
Total finance lease cost37 1 31 — — — 
Short-term lease costs39 11 26 — — — 
Variable lease cost91 4 76 — 7 — 
Sublease income— (1)— — — — 
Total lease cost$476 $70 $345 $3 $36 $19 
2019
Lease cost
Operating lease cost(*)
$310 $54 $206 $3 $28 $18 
Finance lease cost:
Amortization of ROU assets28 1 15 — — — 
Interest on lease obligations12 — 18 — — — 
Total finance lease cost40 1 33 — — — 
Short-term lease costs48 19 22 — — — 
Variable lease cost105 6 85 — 7 — 
Sublease income— (1)— — — — 
Total lease cost$503 $79 $346 $3 $35 $18 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $165 million, $47 million, and $184 million, respectively, in 2021, $161 million, $43 million, and $184 million, respectively, in 2020, and $149 million, $41 million, and $174 million, respectively, in 2019.
Other information with respect to cash and noncash activities related to leases, as well as weighted-average lease terms and discount rates, is as follows:
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2021
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$308 $58 $211 $2 $28 $19 
Operating cash flows from finance leases9 — 17 1 — — 
Financing cash flows from finance leases17 1 9 1 — — 
ROU assets obtained in exchange for new operating lease obligations64 3 9 — 72 7 
ROU assets obtained in exchange for new finance lease obligations 3 — — — — — 
2020
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$310 $55 $215 $3 $28 $18 
Operating cash flows from finance leases9 — 18 — — — 
Financing cash flows from finance leases22 1 11 — — — 
ROU assets obtained in exchange for new operating lease obligations227 63 32 — 51 4 
ROU assets obtained in exchange for new finance lease obligations10 2 — — — — 
2019
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$323 $54 $210 $3 27 18 
Operating cash flows from finance leases10 — 19 — — — 
Financing cash flows from finance leases32 1 13 — — — 
ROU assets obtained in exchange for new operating lease obligations118 7 21 — 2 19 
ROU assets obtained in exchange for new finance lease obligations35 2 24 — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2021
Weighted-average remaining lease term in years:
Operating leases15.99.18.76.132.810.5
Finance leases18.08.78.513.9N/AN/A
Weighted-average discount rate:
Operating leases 4.41 %4.37 %4.45 %2.74 %5.20 %3.61 %
Finance leases4.82 %3.09 %10.81 %2.74 %N/AN/A
At December 31, 2020
Weighted-average remaining lease term in years:
Operating leases14.57.89.46.532.19.8
Finance leases18.29.79.514.9N/AN/A
Weighted-average discount rate:
Operating leases4.44 %4.14 %4.37 %3.26 %5.45 %3.67 %
Finance leases4.79 %3.20 %10.81 %2.74 N/AN/A
Maturities of operating lease liabilities
Maturities of lease liabilities are as follows:
At December 31, 2021
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2022$307 $59 $205 $4 $37 $14 
2023238 9 201 2 29 11 
2024195 7 164 1 29 11 
2025174 6 136 1 29 11 
2026154 5 133 1 30 8 
Thereafter1,575 69 566 2 995 31 
Total2,643 155 1,405 11 1,149 86 
Less: Present value discount 889 34 250 1 624 16 
Operating lease obligations $1,754 $121 $1,155 $10 $525 $70 
Finance leases:
2022$25 $2 $25 $2 $— $— 
202322 1 25 2 — — 
202419 1 25 2 — — 
202516 — 25 2 — — 
202616 — 26 1 — — 
Thereafter231 — 83 13 — — 
Total329 4 209 22 — — 
Less: Present value discount114 — 73 4 — — 
Finance lease obligations$215 $4 $136 $18 $— $— 
Maturities of finance lease liabilities
Maturities of lease liabilities are as follows:
At December 31, 2021
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2022$307 $59 $205 $4 $37 $14 
2023238 9 201 2 29 11 
2024195 7 164 1 29 11 
2025174 6 136 1 29 11 
2026154 5 133 1 30 8 
Thereafter1,575 69 566 2 995 31 
Total2,643 155 1,405 11 1,149 86 
Less: Present value discount 889 34 250 1 624 16 
Operating lease obligations $1,754 $121 $1,155 $10 $525 $70 
Finance leases:
2022$25 $2 $25 $2 $— $— 
202322 1 25 2 — — 
202419 1 25 2 — — 
202516 — 25 2 — — 
202616 — 26 1 — — 
Thereafter231 — 83 13 — — 
Total329 4 209 22 — — 
Less: Present value discount114 — 73 4 — — 
Finance lease obligations$215 $4 $136 $18 $— $— 
Lease income, operating leases
Lease income for 2021, 2020, and 2019, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2021
Lease income - interest income on sales-type leases$15 $— $— $14 $1 $— 
Lease income - operating leases223 82 42 2 85 35 
Variable lease income429 — — — 456 — 
Total lease income$667 $82 $42 $16 $542 $35 
2020
Lease income - interest income on sales-type leases$16 $— $— $12 $— $— 
Lease income - operating leases208 45 58 2 87 35 
Variable lease income419 — — — 449 — 
Total lease income$643 $45 $58 $14 $536 $35 
2019
Lease income - interest income on sales-type leases$9 $— $— $9 $— $— 
Lease income - operating leases273 24 71 — 160 35 
Variable lease income403 — — — 434 — 
Total lease income$685 $24 $71 $9 $594 $35 
Lease income, sales-type leases and Power Purchase Agreements
Lease income for 2021, 2020, and 2019, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2021
Lease income - interest income on sales-type leases$15 $— $— $14 $1 $— 
Lease income - operating leases223 82 42 2 85 35 
Variable lease income429 — — — 456 — 
Total lease income$667 $82 $42 $16 $542 $35 
2020
Lease income - interest income on sales-type leases$16 $— $— $12 $— $— 
Lease income - operating leases208 45 58 2 87 35 
Variable lease income419 — — — 449 — 
Total lease income$643 $45 $58 $14 $536 $35 
2019
Lease income - interest income on sales-type leases$9 $— $— $9 $— $— 
Lease income - operating leases273 24 71 — 160 35 
Variable lease income403 — — — 434 — 
Total lease income$685 $24 $71 $9 $594 $35 
During 2021, Southern Power completed construction of a portion of the Garland and Tranquillity battery energy storage facilities' assets and recorded losses totaling $40 million upon commencement of the related PPAs, which Southern Power accounts for as sales-type leases. The losses were due to ITCs retained and expected to be realized by Southern Power and its partners in these projects, and no estimated residual asset value was assumed in calculating the losses. Each lease has an initial term of 20 years. Upon commencement of the leases, the book values of the related assets totaling $210 million were derecognized from CWIP and lease receivables were recorded. At December 31, 2021, the current portion of the lease receivables totaling $12 million is included in other current assets and the long-term portion totaling $161 million is included in miscellaneous property and investments on Southern Company's balance sheet and net investment in sales-type leases on Southern Power's consolidated balance sheet. The transfers represented noncash investing transactions for purposes of the statement of cash flows. See Note 15 under "Southern Power" for additional information.
Undiscounted cash flows to be received under tolling arrangements accounted for as sales-type leases
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
At December 31, 2021
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2022$37 $25 $12 
202339 24 15 
202438 23 15 
202537 22 15 
202636 21 15 
Thereafter390 183 207 
Total undiscounted cash flows$577 $298 $279 
Net investment in sales-type lease(*)
340 167 173 
Difference between undiscounted cash flows and discounted cash flows$237 $131 $106 
(*)For Mississippi Power, included in other current assets and other property and investments on the balance sheets. For Southern Power, included in other current assets and net investment in sales-type leases on the balance sheet.
Undiscounted cash flows to be received under PPAs accounted for as operating leases
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases (adjusted for intercompany eliminations) are as follows:
At December 31, 2021
Southern
Company		Alabama
Power		Georgia PowerSouthern
Power		Southern Company Gas
 (in millions)
2022$188 $76 $8 $87 $35 
2023139 32 2 88 35 
2024107 5 — 90 33 
2025100 3 — 74 28 
202699 3 — 73 28 
Thereafter883 23 — 240 407 
Total$1,516 $142 $10 $652 $566 
Schedule of net investment in domestic and international leveraged leases
Southern Company's net investment in leveraged leases at December 31, 2020 consisted of the following:
December 31, 2020(*)
(in millions)
Net rentals receivable$734 
Unearned income(178)
Investment in leveraged leases556 
Deferred taxes from leveraged leases(7)
Net investment in leveraged leases$549 
(*)Excludes the investment classified as held for sale. See Note 15 under "Southern Company" for additional information.
Summary of the components of income from leveraged leases
The following table provides a summary of the components of income related to leveraged lease investments. Income was impacted in all periods presented by the impairment charges discussed below and in Note 15 under "Southern Company." Income in 2021 does not include the impacts of the sale and terminations of leveraged lease projects discussed in Note 15 under "Southern Company."
202120202019
(in millions)
Pretax leveraged lease income (loss)$17 $(180)$11 
Income tax benefit (expense)(5)98 — 
Net leveraged lease income (loss)$12 $(82)$11