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LEASES (Tables)
 12 Months Ended
Dec. 31, 2022
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, 2022
Electric generating units(*)
$760 $59 $1,163 $— $— $— 
Real estate/land885 4 54 2 542 36 
Communication towers141 2 4 — — 23 
Railcars34 12 18 3 — — 
Other79 4 1 21 — 1 
Total$1,899 $81 $1,240 $26 $542 $60 
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 
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
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, 2022
Operating Leases
Operating lease ROU assets, net$1,531 $71 $1,007 $9 $489 $57 
Operating lease obligations - current$197 $9 $151 $4 $28 $9 
Operating lease obligations - non-current1,388 67 851 5 514 51 
Total operating lease obligations(*)
$1,585 $76 $1,002 $9 $542 $60 
Finance Leases
Finance lease ROU assets, net$292 $5 $205 $16 $— $— 
Finance lease obligations - current$18 $2 $16 $1 $— $— 
Finance lease obligations - non-current296 3 222 16 — — 
Total finance lease obligations $314 $5 $238 $17 $— $— 
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 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $652 million, $59 million, and $952 million, respectively, at December 31, 2022 and $802 million, $104 million, and $1.11 billion, respectively, at December 31, 2021.
Lease costs and other information
Lease costs for 2022, 2021, and 2020, 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)
2022
Lease cost
Operating lease cost(*)
$297 $59 $198 $5 $32 $15 
Finance lease cost:
Amortization of ROU assets23 1 15 1 — — 
Interest on lease obligations13 — 17 1 — — 
Total finance lease cost36 1 32 2 — — 
Short-term lease costs 64 44 13 — — — 
Variable lease cost125 13 105 — 5 — 
Sublease income(1)— — — — — 
Total lease cost $521 $117 $348 $7 $37 $15 
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 costs48 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 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $162 million, $48 million, and $180 million, respectively, in 2022, $165 million, $47 million, and $184 million, respectively, in 2021, and $161 million, $43 million, and $184 million, respectively, in 2020.
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)
2022
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$303 $58 $206 $5 $30 $14 
Operating cash flows from finance leases11 — 20 1 — — 
Financing cash flows from finance leases16 1 10 1 — — 
ROU assets obtained under operating leases56 10 17 9 — 3 
Reassessment of ROU assets under operating leases16 — — — 16 — 
ROU assets obtained under finance leases118 2 116 — — — 
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 under operating leases64 3 9 — 72 7 
ROU assets obtained under finance leases3 — — — — — 
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 under operating leases227 63 32 — 51 4 
ROU assets obtained under finance leases10 2 — — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2022
Weighted-average remaining lease term in years:
Operating leases17.313.08.14.734.011.0
Finance leases17.46.411.812.9N/AN/A
Weighted-average discount rate:
Operating leases 4.51 %4.87 %4.52 %3.49 %4.86 %3.79 %
Finance leases4.87 %3.00 %8.06 %2.74 %N/AN/A
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 leases4.41 %4.37 %4.45 %2.74 %5.20 %3.61 %
Finance leases4.82 %3.09 %10.81 %2.74 %N/AN/A
Maturities of operating lease liabilities
Maturities of lease liabilities are as follows:
At December 31, 2022
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2023$248 $12 $191 $4 $36 $11 
2024201 10 165 2 28 11 
2025181 9 138 2 28 11 
2026159 6 135 1 28 8 
2027143 5 135 — 29 3 
Thereafter1,497 64 440 1 1,009 31 
Total2,429 106 1,204 10 1,158 75 
Less: Present value discount 844 30 202 1 616 15 
Operating lease obligations $1,585 $76 $1,002 $9 $542 $60 
Finance leases:
2023$33 $2 $35 $2 $— $— 
202422 1 27 2 — — 
202526 1 35 2 — — 
202626 1 36 2 — — 
202726 — 36 2 — — 
Thereafter345 — 187 10 — — 
Total478 5 356 20 — — 
Less: Present value discount164 — 118 3 — — 
Finance lease obligations$314 $5 $238 $17 $— $— 
Maturities of finance lease liabilities
Maturities of lease liabilities are as follows:
At December 31, 2022
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2023$248 $12 $191 $4 $36 $11 
2024201 10 165 2 28 11 
2025181 9 138 2 28 11 
2026159 6 135 1 28 8 
2027143 5 135 — 29 3 
Thereafter1,497 64 440 1 1,009 31 
Total2,429 106 1,204 10 1,158 75 
Less: Present value discount 844 30 202 1 616 15 
Operating lease obligations $1,585 $76 $1,002 $9 $542 $60 
Finance leases:
2023$33 $2 $35 $2 $— $— 
202422 1 27 2 — — 
202526 1 35 2 — — 
202626 1 36 2 — — 
202726 — 36 2 — — 
Thereafter345 — 187 10 — — 
Total478 5 356 20 — — 
Less: Present value discount164 — 118 3 — — 
Finance lease obligations$314 $5 $238 $17 $— $— 
Lease income, operating leases
Lease income for 2022, 2021, and 2020, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2022
Lease income - interest income on sales-type leases$25 $— $— $15 $10 $— 
Lease income - operating leases208 77 32 2 85 36 
Variable lease income417 1 — — 448 — 
Total lease income$650 $78 $32 $17 $543 $36 
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 
Lease income, sales-type leases and Power Purchase Agreements
Lease income for 2022, 2021, and 2020, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2022
Lease income - interest income on sales-type leases$25 $— $— $15 $10 $— 
Lease income - operating leases208 77 32 2 85 36 
Variable lease income417 1 — — 448 — 
Total lease income$650 $78 $32 $17 $543 $36 
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 
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 had 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. 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, 2022
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2023$39 $24 $15 
202438 23 15 
202537 22 15 
202636 21 15 
202735 20 15 
Thereafter364 164 200 
Total undiscounted cash flows$549 $274 $275 
Net investment in sales-type lease(*)
326 157 169 
Difference between undiscounted cash flows and discounted cash flows$223 $117 $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 ($15 million and $12 million at December 31, 2022 and 2021, respectively) and net investment in sales-type leases ($154 million and $161 million at December 31, 2022 and 2021, respectively) 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 are as follows:
At December 31, 2022
Southern
Company		Alabama
Power		Southern
Power		Southern Company Gas
 (in millions)
2023$145 $34 $88 $36 
2024114 6 90 34 
2025105 5 74 29 
2026104 3 73 29 
2027104 3 74 28 
Thereafter796 23 166 382 
Total$1,368 $74 $565 $538 
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 2021 and 2020 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."
20212020
(in millions)
Pretax leveraged lease income (loss)$17 $(180)
Income tax benefit (expense)(5)98 
Net leveraged lease income (loss)$12 $(82)