v3.25.0.1
LEASES
 12 Months Ended
Dec. 31, 2024
Leases [Abstract]  
LEASES LEASES
Lessee
The Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.
As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. 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, 2024
Electric generating units(*)
$672 $56 $1,509 $— $— $— 
Real estate/land834 3 45 2 540 20 
Communication towers118 2 4 — — 21 
Railcars64 31 29 4 — — 
Other52 2 2 16 — — 
Total$1,740 $94 $1,589 $22 $540 $41 
At December 31, 2023
Electric generating units(*)
$670 $58 $1,028 $— $— $— 
Real estate/land871 4 54 2 546 28 
Communication towers123 1 4 — — 23 
Railcars64 32 27 5 — — 
Other60 3 2 18 — — 
Total$1,788 $98 $1,115 $25 $546 $51 
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial real estate leases have remaining terms of up to 20 years while the land leases have remaining terms of up to 44 years, including renewal periods.
Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 16 years.
Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended. Land leases associated with renewable energy facilities at Southern Power and communication tower leases for automated meter infrastructure at Nicor Gas include renewal periods reasonably certain of exercise resulting in an expected lease term at least equal to the expected life of the renewable energy facilities and the automated meter infrastructure, respectively.
Contracts that Contain a Lease
While not specifically structured as a lease, some of the PPAs at Alabama Power and Georgia Power are deemed to represent a lease of the underlying electric generating units when the terms of the PPA convey the right to control the use of the underlying assets. Amounts recorded for leases of electric generating units are generally based on the amount of scheduled capacity payments due over the remaining term of the PPA, which varies between three and 15 years. Georgia Power has several PPAs with Southern Power that Georgia Power accounts for as leases with a lease obligation of $893 million and $416 million at December 31, 2024 and 2023, respectively. The amount paid for energy under these affiliate PPAs reflects a price that would be paid in an arm's-length transaction as reviewed and approved by both the Georgia PSC and the FERC. Amounts related to the affiliate PPAs are eliminated in consolidation for Southern Company.
Short-term Leases
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Registrants generally recognize lease expense for these leases on a straight-line basis over the lease term.
Residual Value Guarantees
Residual value guarantees exist primarily in railcar leases at Alabama Power and Georgia Power, with Georgia Power's railcar leases terminating in June 2024. The amounts probable of being paid under those guarantees are included in the lease payments. All such amounts were immaterial at December 31, 2024 and 2023.
Lease and Nonlease Components
For all asset categories, with the exception of electric generating units, gas pipelines, and real estate leases, the Registrants combine lease payments and any nonlease components, such as asset maintenance, for purposes of calculating the lease obligation and the ROU asset.
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, 2024
Operating Leases
Operating lease ROU assets, net$1,386 $84 $1,331 $8 $484 $38 
Operating lease obligations - current$200 $14 $169 $4 $29 $11 
Operating lease obligations - non-current1,253 76 1,159 4 511 30 
Total operating lease obligations(*)
$1,453 $90 $1,328 $8 $540 $41 
Finance Leases
Finance lease ROU assets, net$254 $4 $227 $14 $— $— 
Finance lease obligations - current$9 $1 $20 $1 $— $— 
Finance lease obligations - non-current278 3 241 13 — — 
Total finance lease obligations $287 $4 $261 $14 $— $— 
At December 31, 2023
Operating Leases
Operating lease ROU assets, net$1,432 $87 $884 $9 $488 $47 
Operating lease obligations - current$183 $12 $135 $3 $29 $11 
Operating lease obligations - non-current1,307 81 740 6 517 40 
Total operating lease obligations(*)
$1,490 $93 $875 $9 $546 $51 
Finance Leases
Finance lease ROU assets, net$272 $5 $203 $15 $— $— 
Finance lease obligations - current$11 $2 $18 $1 $— $— 
Finance lease obligations - non-current287 3 222 15 — — 
Total finance lease obligations$298 $5 $240 $16 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024 and $566 million, $58 million, and $813 million, respectively, at December 31, 2023.
If not presented separately on the Registrants' balance sheets, amounts related to leases are presented as follows: operating lease ROU assets, net are included in "other deferred charges and assets"; operating lease obligations are included in "other current liabilities" and "other deferred credits and liabilities," as applicable; finance lease ROU assets, net are included in "plant in service"; and finance lease obligations are included in "securities due within one year" and "long-term debt," as applicable.
Lease costs for 2024, 2023, and 2022, 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)
2024
Lease cost
Operating lease cost(*)
$248 $19 $190 $4 $27 $12 
Finance lease cost:
Amortization of ROU assets20 2 23 1 — — 
Interest on lease obligations15 — 15 1 — — 
Total finance lease cost35 2 38 2 — — 
Short-term lease costs 37 15 15 — — — 
Variable lease cost48 (1)77 — 4 — 
Total lease cost $368 $35 $320 $6 $31 $12 
2023
Lease cost
Operating lease cost(*)
$252 $16 $192 $5 $34 $12 
Finance lease cost:
Amortization of ROU assets24 2 19 1 — — 
Interest on lease obligations14 — 17 — — — 
Total finance lease cost38 2 36 1 — — 
Short-term lease costs40 16 16 — — — 
Variable lease cost47 — 74 — 4 — 
Total lease cost$377 $34 $318 $6 $38 $12 
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 costs64 44 13 — — — 
Variable lease cost125 13 105 — 5 — 
Sublease income(1)— — — — — 
Total lease cost$521 $117 $348 $7 $37 $15 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $108 million, $5 million, and $168 million, respectively, in 2024, $112 million, $4 million, and $174 million, respectively, in 2023, and $162 million, $48 million, and $180 million, respectively, in 2022.
Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs, including $45 million, $42 million, and $45 million in 2024, 2023, and 2022, respectively, from finance leases which are included in purchased power on Georgia Power's statements of income, of which $22 million, $21 million, and $21 million was included in purchased power, affiliates in 2024, 2023, and 2022, respectively.
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)
2024
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$243 $19 $186 $4 $33 $12 
Operating cash flows from finance leases15 — 21 — — — 
Financing cash flows from finance leases11 2 23 1 — — 
ROU assets obtained under operating leases146 11 609 — 10 1 
Reassessment of ROU assets under operating leases(7)— — — (7)— 
ROU assets obtained under finance leases1 — 44 — — — 
2023
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$253 $17 $199 $5 $33 $12 
Operating cash flows from finance leases15 — 22 — — — 
Financing cash flows from finance leases18 2 16 1 — — 
ROU assets obtained under operating leases100 30 26 1 7 7 
ROU assets obtained under finance leases3 3 18 — — — 
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 — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2024
Weighted-average remaining lease term in years:
Operating leases16.410.27.94.332.36.8
Finance leases16.02.710.110.9N/AN/A
Weighted-average discount rate:
Operating leases 4.73 %5.04 %4.73 %3.83 %4.88 %3.84 %
Finance leases4.86 %4.05 %5.8 %2.74 %N/AN/A
At December 31, 2023
Weighted-average remaining lease term in years:
Operating leases17.211.17.54.633.17.0
Finance leases16.74.310.611.9N/AN/A
Weighted-average discount rate:
Operating leases4.68 %5.02 %4.58 %3.67 %4.89 %3.80 %
Finance leases4.85 %3.93 %5.95 %2.74 %N/AN/A
Maturities of lease liabilities are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2025$239 $18 $228 $4 $31 $12 
2026212 15 224 3 29 9 
2027190 12 223 1 29 4 
2028170 9 217 — 29 3 
2029138 7 196 — 30 4 
Thereafter1,255 56 511 1 978 15 
Total2,204 117 1,599 9 1,126 47 
Less: Present value discount 751 27 271 1 586 6 
Operating lease obligations $1,453 $90 $1,328 $8 $540 $41 
Finance leases:
2025$28 $2 $39 $2 $— $— 
202627 1 41 2 — — 
202726 1 41 1 — — 
202825 — 42 1 — — 
202925 — 42 1 — — 
Thereafter290 — 139 9 — — 
Total421 4 344 16 — — 
Less: Present value discount134 — 83 2 — — 
Finance lease obligations$287 $4 $261 $14 $— $— 
Payments made under PPAs at Georgia Power for energy generated from certain renewable energy facilities accounted for as operating and finance leases are considered variable lease costs and are therefore not reflected in the above maturity analysis.
At December 31, 2024, Georgia Power has two affiliate PPAs with Southern Power that have not yet commenced and will be accounted for as leases. The PPAs each have a term of 10 years and are expected to commence in 2025 and 2028. The estimated total obligations associated with these PPAs is $83 million. Southern Company Gas has executed an 11.5-year building lease agreement that will commence during the first half of 2025. The lease has a total obligation of approximately $105 million.
Lessor
The Registrants are each considered lessors in various arrangements that have been determined to contain a lease due to the customer's ability to control the use of the underlying asset owned by the applicable Registrant. For the traditional electric operating companies, these arrangements consist of outdoor lighting contracts accounted for as operating leases with initial terms of up to 10 years, after which the contracts renew on a month-to-month basis at the customer's option. For Georgia Power, these arrangements also include PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 15 years. For Mississippi Power, these arrangements also include a tolling arrangement related to an electric generating unit accounted for as a sales-type lease with a remaining term of 14 years. For Southern Power, these arrangements consist of PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 22 years and PPAs related to battery energy storage facilities accounted for as sales-type leases with remaining terms of up to 17 years. Southern Company Gas is the lessor in operating leases related to gas pipelines with remaining terms of up to 18 years. For Southern Company, these arrangements also include PPAs related to fuel cells accounted for as operating leases with remaining terms of up to 9 years.
Lease income for 2024, 2023, and 2022, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2024
Lease income - interest income on sales-type leases$24 $— $— $15 $9 $— 
Lease income - operating leases136 9 28 3 88 36 
Variable lease income417 1 — — 450 — 
Total lease income$577 $10 $28 $18 $547 $36 
2023
Lease income - interest income on sales-type leases$24 $— $— $14 $10 $— 
Lease income - operating leases164 35 29 2 85 37 
Variable lease income406 1 — — 437 — 
Total lease income$594 $36 $29 $16 $532 $37 
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 
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 related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power. Scheduled payments to be received under outdoor lighting contracts' initial terms, tolling arrangements, and PPAs accounted for as leases are presented in the following maturity analyses.
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
At December 31, 2024
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2025$52 $24 $15 
202638 23 15 
202737 22 15 
202836 21 15 
202935 20 15 
Thereafter302 132 170 
Total undiscounted cash flows$500 $242 $245 
Net investment in sales-type lease(*)
297 139 158 
Difference between undiscounted cash flows and discounted cash flows$203 $103 $87 
(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2024 and 2023, respectively) and other property and investments ($129 million and $138 million at December 31, 2024 and 2023, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2024 and 2023, respectively) and net investment in sales-type leases ($143 million and $148 million at December 31, 2024 and 2023, respectively) on the balance sheets.
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Southern
Power		Southern Company Gas
 (in millions)
2025$117 $6 $142 $35 
2026111 5 148 29 
2027109 4 150 28 
2028109 4 161 28 
2029112 3 164 28 
Thereafter621 31 506 326 
Total$1,179 $53 $1,271 $474 
Southern Power receives payments for renewable energy under PPAs accounted for as operating leases that are considered contingent rents and are therefore not reflected in the table above. Alabama Power and Southern Power allocate revenue to the nonlease components of PPAs based on the stand-alone selling price of capacity and energy. The undiscounted cash flows to be received under contracts accounted for as operating leases at Georgia Power and Mississippi Power are immaterial.
Southern Company Leveraged Lease
At December 31, 2024, a subsidiary of Southern Holdings had one leveraged lease agreement, which relates to energy generation, with an expected remaining term of seven years. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt, related to this investment. Southern Company wrote off the related investment balance in 2020 following an evaluation of the recoverability of the lease receivable and the expected residual value of the generation assets at the end of the lease.
In June 2022, the Southern Holdings subsidiary operating the generating plant for the lessee provided notice to the lessee to terminate the related operating and maintenance agreement effective June 30, 2023. Subsequently, the lessee failed to make the semi-annual lease payment due in December 2022. As a result, the Southern Holdings subsidiary was unable to make its corresponding payment to the holders of the underlying non-recourse debt related to the generation assets. The parties to the lease entered into forbearance agreements which suspended the related contractual rights of the parties while they continued restructuring negotiations, during which the termination date for the operating and maintenance agreement was delayed until July 31, 2023. The negotiations were completed in July 2023, resulting in the Southern Holdings subsidiary agreeing to continue operating the plant for the lessee until the lessee's associated power off-take agreement ends in 2032, subject to certain terms and
conditions. The restructuring had no material impact on Southern Company's financial statements. Southern Company will continue to monitor the operational performance of the underlying assets and evaluate the ability of the lessee to continue to meet its obligations, including those associated with a future closure or retirement of the generation assets and associated properties, including the dry ash landfill.
LEASES LEASES
Lessee
The Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.
As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. 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, 2024
Electric generating units(*)
$672 $56 $1,509 $— $— $— 
Real estate/land834 3 45 2 540 20 
Communication towers118 2 4 — — 21 
Railcars64 31 29 4 — — 
Other52 2 2 16 — — 
Total$1,740 $94 $1,589 $22 $540 $41 
At December 31, 2023
Electric generating units(*)
$670 $58 $1,028 $— $— $— 
Real estate/land871 4 54 2 546 28 
Communication towers123 1 4 — — 23 
Railcars64 32 27 5 — — 
Other60 3 2 18 — — 
Total$1,788 $98 $1,115 $25 $546 $51 
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial real estate leases have remaining terms of up to 20 years while the land leases have remaining terms of up to 44 years, including renewal periods.
Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 16 years.
Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended. Land leases associated with renewable energy facilities at Southern Power and communication tower leases for automated meter infrastructure at Nicor Gas include renewal periods reasonably certain of exercise resulting in an expected lease term at least equal to the expected life of the renewable energy facilities and the automated meter infrastructure, respectively.
Contracts that Contain a Lease
While not specifically structured as a lease, some of the PPAs at Alabama Power and Georgia Power are deemed to represent a lease of the underlying electric generating units when the terms of the PPA convey the right to control the use of the underlying assets. Amounts recorded for leases of electric generating units are generally based on the amount of scheduled capacity payments due over the remaining term of the PPA, which varies between three and 15 years. Georgia Power has several PPAs with Southern Power that Georgia Power accounts for as leases with a lease obligation of $893 million and $416 million at December 31, 2024 and 2023, respectively. The amount paid for energy under these affiliate PPAs reflects a price that would be paid in an arm's-length transaction as reviewed and approved by both the Georgia PSC and the FERC. Amounts related to the affiliate PPAs are eliminated in consolidation for Southern Company.
Short-term Leases
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Registrants generally recognize lease expense for these leases on a straight-line basis over the lease term.
Residual Value Guarantees
Residual value guarantees exist primarily in railcar leases at Alabama Power and Georgia Power, with Georgia Power's railcar leases terminating in June 2024. The amounts probable of being paid under those guarantees are included in the lease payments. All such amounts were immaterial at December 31, 2024 and 2023.
Lease and Nonlease Components
For all asset categories, with the exception of electric generating units, gas pipelines, and real estate leases, the Registrants combine lease payments and any nonlease components, such as asset maintenance, for purposes of calculating the lease obligation and the ROU asset.
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, 2024
Operating Leases
Operating lease ROU assets, net$1,386 $84 $1,331 $8 $484 $38 
Operating lease obligations - current$200 $14 $169 $4 $29 $11 
Operating lease obligations - non-current1,253 76 1,159 4 511 30 
Total operating lease obligations(*)
$1,453 $90 $1,328 $8 $540 $41 
Finance Leases
Finance lease ROU assets, net$254 $4 $227 $14 $— $— 
Finance lease obligations - current$9 $1 $20 $1 $— $— 
Finance lease obligations - non-current278 3 241 13 — — 
Total finance lease obligations $287 $4 $261 $14 $— $— 
At December 31, 2023
Operating Leases
Operating lease ROU assets, net$1,432 $87 $884 $9 $488 $47 
Operating lease obligations - current$183 $12 $135 $3 $29 $11 
Operating lease obligations - non-current1,307 81 740 6 517 40 
Total operating lease obligations(*)
$1,490 $93 $875 $9 $546 $51 
Finance Leases
Finance lease ROU assets, net$272 $5 $203 $15 $— $— 
Finance lease obligations - current$11 $2 $18 $1 $— $— 
Finance lease obligations - non-current287 3 222 15 — — 
Total finance lease obligations$298 $5 $240 $16 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024 and $566 million, $58 million, and $813 million, respectively, at December 31, 2023.
If not presented separately on the Registrants' balance sheets, amounts related to leases are presented as follows: operating lease ROU assets, net are included in "other deferred charges and assets"; operating lease obligations are included in "other current liabilities" and "other deferred credits and liabilities," as applicable; finance lease ROU assets, net are included in "plant in service"; and finance lease obligations are included in "securities due within one year" and "long-term debt," as applicable.
Lease costs for 2024, 2023, and 2022, 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)
2024
Lease cost
Operating lease cost(*)
$248 $19 $190 $4 $27 $12 
Finance lease cost:
Amortization of ROU assets20 2 23 1 — — 
Interest on lease obligations15 — 15 1 — — 
Total finance lease cost35 2 38 2 — — 
Short-term lease costs 37 15 15 — — — 
Variable lease cost48 (1)77 — 4 — 
Total lease cost $368 $35 $320 $6 $31 $12 
2023
Lease cost
Operating lease cost(*)
$252 $16 $192 $5 $34 $12 
Finance lease cost:
Amortization of ROU assets24 2 19 1 — — 
Interest on lease obligations14 — 17 — — — 
Total finance lease cost38 2 36 1 — — 
Short-term lease costs40 16 16 — — — 
Variable lease cost47 — 74 — 4 — 
Total lease cost$377 $34 $318 $6 $38 $12 
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 costs64 44 13 — — — 
Variable lease cost125 13 105 — 5 — 
Sublease income(1)— — — — — 
Total lease cost$521 $117 $348 $7 $37 $15 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $108 million, $5 million, and $168 million, respectively, in 2024, $112 million, $4 million, and $174 million, respectively, in 2023, and $162 million, $48 million, and $180 million, respectively, in 2022.
Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs, including $45 million, $42 million, and $45 million in 2024, 2023, and 2022, respectively, from finance leases which are included in purchased power on Georgia Power's statements of income, of which $22 million, $21 million, and $21 million was included in purchased power, affiliates in 2024, 2023, and 2022, respectively.
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)
2024
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$243 $19 $186 $4 $33 $12 
Operating cash flows from finance leases15 — 21 — — — 
Financing cash flows from finance leases11 2 23 1 — — 
ROU assets obtained under operating leases146 11 609 — 10 1 
Reassessment of ROU assets under operating leases(7)— — — (7)— 
ROU assets obtained under finance leases1 — 44 — — — 
2023
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$253 $17 $199 $5 $33 $12 
Operating cash flows from finance leases15 — 22 — — — 
Financing cash flows from finance leases18 2 16 1 — — 
ROU assets obtained under operating leases100 30 26 1 7 7 
ROU assets obtained under finance leases3 3 18 — — — 
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 — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2024
Weighted-average remaining lease term in years:
Operating leases16.410.27.94.332.36.8
Finance leases16.02.710.110.9N/AN/A
Weighted-average discount rate:
Operating leases 4.73 %5.04 %4.73 %3.83 %4.88 %3.84 %
Finance leases4.86 %4.05 %5.8 %2.74 %N/AN/A
At December 31, 2023
Weighted-average remaining lease term in years:
Operating leases17.211.17.54.633.17.0
Finance leases16.74.310.611.9N/AN/A
Weighted-average discount rate:
Operating leases4.68 %5.02 %4.58 %3.67 %4.89 %3.80 %
Finance leases4.85 %3.93 %5.95 %2.74 %N/AN/A
Maturities of lease liabilities are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2025$239 $18 $228 $4 $31 $12 
2026212 15 224 3 29 9 
2027190 12 223 1 29 4 
2028170 9 217 — 29 3 
2029138 7 196 — 30 4 
Thereafter1,255 56 511 1 978 15 
Total2,204 117 1,599 9 1,126 47 
Less: Present value discount 751 27 271 1 586 6 
Operating lease obligations $1,453 $90 $1,328 $8 $540 $41 
Finance leases:
2025$28 $2 $39 $2 $— $— 
202627 1 41 2 — — 
202726 1 41 1 — — 
202825 — 42 1 — — 
202925 — 42 1 — — 
Thereafter290 — 139 9 — — 
Total421 4 344 16 — — 
Less: Present value discount134 — 83 2 — — 
Finance lease obligations$287 $4 $261 $14 $— $— 
Payments made under PPAs at Georgia Power for energy generated from certain renewable energy facilities accounted for as operating and finance leases are considered variable lease costs and are therefore not reflected in the above maturity analysis.
At December 31, 2024, Georgia Power has two affiliate PPAs with Southern Power that have not yet commenced and will be accounted for as leases. The PPAs each have a term of 10 years and are expected to commence in 2025 and 2028. The estimated total obligations associated with these PPAs is $83 million. Southern Company Gas has executed an 11.5-year building lease agreement that will commence during the first half of 2025. The lease has a total obligation of approximately $105 million.
Lessor
The Registrants are each considered lessors in various arrangements that have been determined to contain a lease due to the customer's ability to control the use of the underlying asset owned by the applicable Registrant. For the traditional electric operating companies, these arrangements consist of outdoor lighting contracts accounted for as operating leases with initial terms of up to 10 years, after which the contracts renew on a month-to-month basis at the customer's option. For Georgia Power, these arrangements also include PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 15 years. For Mississippi Power, these arrangements also include a tolling arrangement related to an electric generating unit accounted for as a sales-type lease with a remaining term of 14 years. For Southern Power, these arrangements consist of PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 22 years and PPAs related to battery energy storage facilities accounted for as sales-type leases with remaining terms of up to 17 years. Southern Company Gas is the lessor in operating leases related to gas pipelines with remaining terms of up to 18 years. For Southern Company, these arrangements also include PPAs related to fuel cells accounted for as operating leases with remaining terms of up to 9 years.
Lease income for 2024, 2023, and 2022, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2024
Lease income - interest income on sales-type leases$24 $— $— $15 $9 $— 
Lease income - operating leases136 9 28 3 88 36 
Variable lease income417 1 — — 450 — 
Total lease income$577 $10 $28 $18 $547 $36 
2023
Lease income - interest income on sales-type leases$24 $— $— $14 $10 $— 
Lease income - operating leases164 35 29 2 85 37 
Variable lease income406 1 — — 437 — 
Total lease income$594 $36 $29 $16 $532 $37 
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 
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 related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power. Scheduled payments to be received under outdoor lighting contracts' initial terms, tolling arrangements, and PPAs accounted for as leases are presented in the following maturity analyses.
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
At December 31, 2024
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2025$52 $24 $15 
202638 23 15 
202737 22 15 
202836 21 15 
202935 20 15 
Thereafter302 132 170 
Total undiscounted cash flows$500 $242 $245 
Net investment in sales-type lease(*)
297 139 158 
Difference between undiscounted cash flows and discounted cash flows$203 $103 $87 
(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2024 and 2023, respectively) and other property and investments ($129 million and $138 million at December 31, 2024 and 2023, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2024 and 2023, respectively) and net investment in sales-type leases ($143 million and $148 million at December 31, 2024 and 2023, respectively) on the balance sheets.
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Southern
Power		Southern Company Gas
 (in millions)
2025$117 $6 $142 $35 
2026111 5 148 29 
2027109 4 150 28 
2028109 4 161 28 
2029112 3 164 28 
Thereafter621 31 506 326 
Total$1,179 $53 $1,271 $474 
Southern Power receives payments for renewable energy under PPAs accounted for as operating leases that are considered contingent rents and are therefore not reflected in the table above. Alabama Power and Southern Power allocate revenue to the nonlease components of PPAs based on the stand-alone selling price of capacity and energy. The undiscounted cash flows to be received under contracts accounted for as operating leases at Georgia Power and Mississippi Power are immaterial.
Southern Company Leveraged Lease
At December 31, 2024, a subsidiary of Southern Holdings had one leveraged lease agreement, which relates to energy generation, with an expected remaining term of seven years. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt, related to this investment. Southern Company wrote off the related investment balance in 2020 following an evaluation of the recoverability of the lease receivable and the expected residual value of the generation assets at the end of the lease.
In June 2022, the Southern Holdings subsidiary operating the generating plant for the lessee provided notice to the lessee to terminate the related operating and maintenance agreement effective June 30, 2023. Subsequently, the lessee failed to make the semi-annual lease payment due in December 2022. As a result, the Southern Holdings subsidiary was unable to make its corresponding payment to the holders of the underlying non-recourse debt related to the generation assets. The parties to the lease entered into forbearance agreements which suspended the related contractual rights of the parties while they continued restructuring negotiations, during which the termination date for the operating and maintenance agreement was delayed until July 31, 2023. The negotiations were completed in July 2023, resulting in the Southern Holdings subsidiary agreeing to continue operating the plant for the lessee until the lessee's associated power off-take agreement ends in 2032, subject to certain terms and
conditions. The restructuring had no material impact on Southern Company's financial statements. Southern Company will continue to monitor the operational performance of the underlying assets and evaluate the ability of the lessee to continue to meet its obligations, including those associated with a future closure or retirement of the generation assets and associated properties, including the dry ash landfill.
LEASES LEASES
Lessee
The Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.
As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. 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, 2024
Electric generating units(*)
$672 $56 $1,509 $— $— $— 
Real estate/land834 3 45 2 540 20 
Communication towers118 2 4 — — 21 
Railcars64 31 29 4 — — 
Other52 2 2 16 — — 
Total$1,740 $94 $1,589 $22 $540 $41 
At December 31, 2023
Electric generating units(*)
$670 $58 $1,028 $— $— $— 
Real estate/land871 4 54 2 546 28 
Communication towers123 1 4 — — 23 
Railcars64 32 27 5 — — 
Other60 3 2 18 — — 
Total$1,788 $98 $1,115 $25 $546 $51 
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial real estate leases have remaining terms of up to 20 years while the land leases have remaining terms of up to 44 years, including renewal periods.
Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 16 years.
Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended. Land leases associated with renewable energy facilities at Southern Power and communication tower leases for automated meter infrastructure at Nicor Gas include renewal periods reasonably certain of exercise resulting in an expected lease term at least equal to the expected life of the renewable energy facilities and the automated meter infrastructure, respectively.
Contracts that Contain a Lease
While not specifically structured as a lease, some of the PPAs at Alabama Power and Georgia Power are deemed to represent a lease of the underlying electric generating units when the terms of the PPA convey the right to control the use of the underlying assets. Amounts recorded for leases of electric generating units are generally based on the amount of scheduled capacity payments due over the remaining term of the PPA, which varies between three and 15 years. Georgia Power has several PPAs with Southern Power that Georgia Power accounts for as leases with a lease obligation of $893 million and $416 million at December 31, 2024 and 2023, respectively. The amount paid for energy under these affiliate PPAs reflects a price that would be paid in an arm's-length transaction as reviewed and approved by both the Georgia PSC and the FERC. Amounts related to the affiliate PPAs are eliminated in consolidation for Southern Company.
Short-term Leases
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Registrants generally recognize lease expense for these leases on a straight-line basis over the lease term.
Residual Value Guarantees
Residual value guarantees exist primarily in railcar leases at Alabama Power and Georgia Power, with Georgia Power's railcar leases terminating in June 2024. The amounts probable of being paid under those guarantees are included in the lease payments. All such amounts were immaterial at December 31, 2024 and 2023.
Lease and Nonlease Components
For all asset categories, with the exception of electric generating units, gas pipelines, and real estate leases, the Registrants combine lease payments and any nonlease components, such as asset maintenance, for purposes of calculating the lease obligation and the ROU asset.
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, 2024
Operating Leases
Operating lease ROU assets, net$1,386 $84 $1,331 $8 $484 $38 
Operating lease obligations - current$200 $14 $169 $4 $29 $11 
Operating lease obligations - non-current1,253 76 1,159 4 511 30 
Total operating lease obligations(*)
$1,453 $90 $1,328 $8 $540 $41 
Finance Leases
Finance lease ROU assets, net$254 $4 $227 $14 $— $— 
Finance lease obligations - current$9 $1 $20 $1 $— $— 
Finance lease obligations - non-current278 3 241 13 — — 
Total finance lease obligations $287 $4 $261 $14 $— $— 
At December 31, 2023
Operating Leases
Operating lease ROU assets, net$1,432 $87 $884 $9 $488 $47 
Operating lease obligations - current$183 $12 $135 $3 $29 $11 
Operating lease obligations - non-current1,307 81 740 6 517 40 
Total operating lease obligations(*)
$1,490 $93 $875 $9 $546 $51 
Finance Leases
Finance lease ROU assets, net$272 $5 $203 $15 $— $— 
Finance lease obligations - current$11 $2 $18 $1 $— $— 
Finance lease obligations - non-current287 3 222 15 — — 
Total finance lease obligations$298 $5 $240 $16 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024 and $566 million, $58 million, and $813 million, respectively, at December 31, 2023.
If not presented separately on the Registrants' balance sheets, amounts related to leases are presented as follows: operating lease ROU assets, net are included in "other deferred charges and assets"; operating lease obligations are included in "other current liabilities" and "other deferred credits and liabilities," as applicable; finance lease ROU assets, net are included in "plant in service"; and finance lease obligations are included in "securities due within one year" and "long-term debt," as applicable.
Lease costs for 2024, 2023, and 2022, 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)
2024
Lease cost
Operating lease cost(*)
$248 $19 $190 $4 $27 $12 
Finance lease cost:
Amortization of ROU assets20 2 23 1 — — 
Interest on lease obligations15 — 15 1 — — 
Total finance lease cost35 2 38 2 — — 
Short-term lease costs 37 15 15 — — — 
Variable lease cost48 (1)77 — 4 — 
Total lease cost $368 $35 $320 $6 $31 $12 
2023
Lease cost
Operating lease cost(*)
$252 $16 $192 $5 $34 $12 
Finance lease cost:
Amortization of ROU assets24 2 19 1 — — 
Interest on lease obligations14 — 17 — — — 
Total finance lease cost38 2 36 1 — — 
Short-term lease costs40 16 16 — — — 
Variable lease cost47 — 74 — 4 — 
Total lease cost$377 $34 $318 $6 $38 $12 
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 costs64 44 13 — — — 
Variable lease cost125 13 105 — 5 — 
Sublease income(1)— — — — — 
Total lease cost$521 $117 $348 $7 $37 $15 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $108 million, $5 million, and $168 million, respectively, in 2024, $112 million, $4 million, and $174 million, respectively, in 2023, and $162 million, $48 million, and $180 million, respectively, in 2022.
Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs, including $45 million, $42 million, and $45 million in 2024, 2023, and 2022, respectively, from finance leases which are included in purchased power on Georgia Power's statements of income, of which $22 million, $21 million, and $21 million was included in purchased power, affiliates in 2024, 2023, and 2022, respectively.
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)
2024
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$243 $19 $186 $4 $33 $12 
Operating cash flows from finance leases15 — 21 — — — 
Financing cash flows from finance leases11 2 23 1 — — 
ROU assets obtained under operating leases146 11 609 — 10 1 
Reassessment of ROU assets under operating leases(7)— — — (7)— 
ROU assets obtained under finance leases1 — 44 — — — 
2023
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$253 $17 $199 $5 $33 $12 
Operating cash flows from finance leases15 — 22 — — — 
Financing cash flows from finance leases18 2 16 1 — — 
ROU assets obtained under operating leases100 30 26 1 7 7 
ROU assets obtained under finance leases3 3 18 — — — 
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 — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2024
Weighted-average remaining lease term in years:
Operating leases16.410.27.94.332.36.8
Finance leases16.02.710.110.9N/AN/A
Weighted-average discount rate:
Operating leases 4.73 %5.04 %4.73 %3.83 %4.88 %3.84 %
Finance leases4.86 %4.05 %5.8 %2.74 %N/AN/A
At December 31, 2023
Weighted-average remaining lease term in years:
Operating leases17.211.17.54.633.17.0
Finance leases16.74.310.611.9N/AN/A
Weighted-average discount rate:
Operating leases4.68 %5.02 %4.58 %3.67 %4.89 %3.80 %
Finance leases4.85 %3.93 %5.95 %2.74 %N/AN/A
Maturities of lease liabilities are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2025$239 $18 $228 $4 $31 $12 
2026212 15 224 3 29 9 
2027190 12 223 1 29 4 
2028170 9 217 — 29 3 
2029138 7 196 — 30 4 
Thereafter1,255 56 511 1 978 15 
Total2,204 117 1,599 9 1,126 47 
Less: Present value discount 751 27 271 1 586 6 
Operating lease obligations $1,453 $90 $1,328 $8 $540 $41 
Finance leases:
2025$28 $2 $39 $2 $— $— 
202627 1 41 2 — — 
202726 1 41 1 — — 
202825 — 42 1 — — 
202925 — 42 1 — — 
Thereafter290 — 139 9 — — 
Total421 4 344 16 — — 
Less: Present value discount134 — 83 2 — — 
Finance lease obligations$287 $4 $261 $14 $— $— 
Payments made under PPAs at Georgia Power for energy generated from certain renewable energy facilities accounted for as operating and finance leases are considered variable lease costs and are therefore not reflected in the above maturity analysis.
At December 31, 2024, Georgia Power has two affiliate PPAs with Southern Power that have not yet commenced and will be accounted for as leases. The PPAs each have a term of 10 years and are expected to commence in 2025 and 2028. The estimated total obligations associated with these PPAs is $83 million. Southern Company Gas has executed an 11.5-year building lease agreement that will commence during the first half of 2025. The lease has a total obligation of approximately $105 million.
Lessor
The Registrants are each considered lessors in various arrangements that have been determined to contain a lease due to the customer's ability to control the use of the underlying asset owned by the applicable Registrant. For the traditional electric operating companies, these arrangements consist of outdoor lighting contracts accounted for as operating leases with initial terms of up to 10 years, after which the contracts renew on a month-to-month basis at the customer's option. For Georgia Power, these arrangements also include PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 15 years. For Mississippi Power, these arrangements also include a tolling arrangement related to an electric generating unit accounted for as a sales-type lease with a remaining term of 14 years. For Southern Power, these arrangements consist of PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 22 years and PPAs related to battery energy storage facilities accounted for as sales-type leases with remaining terms of up to 17 years. Southern Company Gas is the lessor in operating leases related to gas pipelines with remaining terms of up to 18 years. For Southern Company, these arrangements also include PPAs related to fuel cells accounted for as operating leases with remaining terms of up to 9 years.
Lease income for 2024, 2023, and 2022, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2024
Lease income - interest income on sales-type leases$24 $— $— $15 $9 $— 
Lease income - operating leases136 9 28 3 88 36 
Variable lease income417 1 — — 450 — 
Total lease income$577 $10 $28 $18 $547 $36 
2023
Lease income - interest income on sales-type leases$24 $— $— $14 $10 $— 
Lease income - operating leases164 35 29 2 85 37 
Variable lease income406 1 — — 437 — 
Total lease income$594 $36 $29 $16 $532 $37 
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 
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 related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power. Scheduled payments to be received under outdoor lighting contracts' initial terms, tolling arrangements, and PPAs accounted for as leases are presented in the following maturity analyses.
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
At December 31, 2024
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2025$52 $24 $15 
202638 23 15 
202737 22 15 
202836 21 15 
202935 20 15 
Thereafter302 132 170 
Total undiscounted cash flows$500 $242 $245 
Net investment in sales-type lease(*)
297 139 158 
Difference between undiscounted cash flows and discounted cash flows$203 $103 $87 
(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2024 and 2023, respectively) and other property and investments ($129 million and $138 million at December 31, 2024 and 2023, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2024 and 2023, respectively) and net investment in sales-type leases ($143 million and $148 million at December 31, 2024 and 2023, respectively) on the balance sheets.
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Southern
Power		Southern Company Gas
 (in millions)
2025$117 $6 $142 $35 
2026111 5 148 29 
2027109 4 150 28 
2028109 4 161 28 
2029112 3 164 28 
Thereafter621 31 506 326 
Total$1,179 $53 $1,271 $474 
Southern Power receives payments for renewable energy under PPAs accounted for as operating leases that are considered contingent rents and are therefore not reflected in the table above. Alabama Power and Southern Power allocate revenue to the nonlease components of PPAs based on the stand-alone selling price of capacity and energy. The undiscounted cash flows to be received under contracts accounted for as operating leases at Georgia Power and Mississippi Power are immaterial.
Southern Company Leveraged Lease
At December 31, 2024, a subsidiary of Southern Holdings had one leveraged lease agreement, which relates to energy generation, with an expected remaining term of seven years. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt, related to this investment. Southern Company wrote off the related investment balance in 2020 following an evaluation of the recoverability of the lease receivable and the expected residual value of the generation assets at the end of the lease.
In June 2022, the Southern Holdings subsidiary operating the generating plant for the lessee provided notice to the lessee to terminate the related operating and maintenance agreement effective June 30, 2023. Subsequently, the lessee failed to make the semi-annual lease payment due in December 2022. As a result, the Southern Holdings subsidiary was unable to make its corresponding payment to the holders of the underlying non-recourse debt related to the generation assets. The parties to the lease entered into forbearance agreements which suspended the related contractual rights of the parties while they continued restructuring negotiations, during which the termination date for the operating and maintenance agreement was delayed until July 31, 2023. The negotiations were completed in July 2023, resulting in the Southern Holdings subsidiary agreeing to continue operating the plant for the lessee until the lessee's associated power off-take agreement ends in 2032, subject to certain terms and
conditions. The restructuring had no material impact on Southern Company's financial statements. Southern Company will continue to monitor the operational performance of the underlying assets and evaluate the ability of the lessee to continue to meet its obligations, including those associated with a future closure or retirement of the generation assets and associated properties, including the dry ash landfill.
LEASES LEASES
Lessee
The Registrants recognize leases with a term of greater than 12 months on the balance sheet as lease obligations, representing the discounted future fixed payments due, along with ROU assets that will be amortized over the term of each lease.
As lessee, the Registrants lease certain electric generating units (including renewable energy facilities), real estate/land, communication towers, railcars, and other equipment and vehicles. 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, 2024
Electric generating units(*)
$672 $56 $1,509 $— $— $— 
Real estate/land834 3 45 2 540 20 
Communication towers118 2 4 — — 21 
Railcars64 31 29 4 — — 
Other52 2 2 16 — — 
Total$1,740 $94 $1,589 $22 $540 $41 
At December 31, 2023
Electric generating units(*)
$670 $58 $1,028 $— $— $— 
Real estate/land871 4 54 2 546 28 
Communication towers123 1 4 — — 23 
Railcars64 32 27 5 — — 
Other60 3 2 18 — — 
Total$1,788 $98 $1,115 $25 $546 $51 
(*)Amounts related to affiliate leases are eliminated in consolidation for Southern Company. See "Contracts that Contain a Lease" herein for additional information.
Real estate/land leases primarily consist of commercial real estate leases at Southern Company, Georgia Power, and Southern Company Gas and various land leases primarily associated with renewable energy facilities at Southern Power. The commercial real estate leases have remaining terms of up to 20 years while the land leases have remaining terms of up to 44 years, including renewal periods.
Communication towers are leased for the installation of equipment to provide cellular phone service to customers and to support the automated meter infrastructure programs at the traditional electric operating companies and Nicor Gas. Communication tower leases have remaining terms of up to 16 years.
Renewal options exist in many of the leases. The expected term used in calculating the lease obligation generally reflects only the noncancelable period of the lease unless it is considered reasonably certain that the lease will be extended. Land leases associated with renewable energy facilities at Southern Power and communication tower leases for automated meter infrastructure at Nicor Gas include renewal periods reasonably certain of exercise resulting in an expected lease term at least equal to the expected life of the renewable energy facilities and the automated meter infrastructure, respectively.
Contracts that Contain a Lease
While not specifically structured as a lease, some of the PPAs at Alabama Power and Georgia Power are deemed to represent a lease of the underlying electric generating units when the terms of the PPA convey the right to control the use of the underlying assets. Amounts recorded for leases of electric generating units are generally based on the amount of scheduled capacity payments due over the remaining term of the PPA, which varies between three and 15 years. Georgia Power has several PPAs with Southern Power that Georgia Power accounts for as leases with a lease obligation of $893 million and $416 million at December 31, 2024 and 2023, respectively. The amount paid for energy under these affiliate PPAs reflects a price that would be paid in an arm's-length transaction as reviewed and approved by both the Georgia PSC and the FERC. Amounts related to the affiliate PPAs are eliminated in consolidation for Southern Company.
Short-term Leases
Leases with an initial term of 12 months or less are not recorded on the balance sheet; the Registrants generally recognize lease expense for these leases on a straight-line basis over the lease term.
Residual Value Guarantees
Residual value guarantees exist primarily in railcar leases at Alabama Power and Georgia Power, with Georgia Power's railcar leases terminating in June 2024. The amounts probable of being paid under those guarantees are included in the lease payments. All such amounts were immaterial at December 31, 2024 and 2023.
Lease and Nonlease Components
For all asset categories, with the exception of electric generating units, gas pipelines, and real estate leases, the Registrants combine lease payments and any nonlease components, such as asset maintenance, for purposes of calculating the lease obligation and the ROU asset.
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, 2024
Operating Leases
Operating lease ROU assets, net$1,386 $84 $1,331 $8 $484 $38 
Operating lease obligations - current$200 $14 $169 $4 $29 $11 
Operating lease obligations - non-current1,253 76 1,159 4 511 30 
Total operating lease obligations(*)
$1,453 $90 $1,328 $8 $540 $41 
Finance Leases
Finance lease ROU assets, net$254 $4 $227 $14 $— $— 
Finance lease obligations - current$9 $1 $20 $1 $— $— 
Finance lease obligations - non-current278 3 241 13 — — 
Total finance lease obligations $287 $4 $261 $14 $— $— 
At December 31, 2023
Operating Leases
Operating lease ROU assets, net$1,432 $87 $884 $9 $488 $47 
Operating lease obligations - current$183 $12 $135 $3 $29 $11 
Operating lease obligations - non-current1,307 81 740 6 517 40 
Total operating lease obligations(*)
$1,490 $93 $875 $9 $546 $51 
Finance Leases
Finance lease ROU assets, net$272 $5 $203 $15 $— $— 
Finance lease obligations - current$11 $2 $18 $1 $— $— 
Finance lease obligations - non-current287 3 222 15 — — 
Total finance lease obligations$298 $5 $240 $16 $— $— 
(*)Includes operating lease obligations related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $567 million, $55 million, and $1.3 billion, respectively, at December 31, 2024 and $566 million, $58 million, and $813 million, respectively, at December 31, 2023.
If not presented separately on the Registrants' balance sheets, amounts related to leases are presented as follows: operating lease ROU assets, net are included in "other deferred charges and assets"; operating lease obligations are included in "other current liabilities" and "other deferred credits and liabilities," as applicable; finance lease ROU assets, net are included in "plant in service"; and finance lease obligations are included in "securities due within one year" and "long-term debt," as applicable.
Lease costs for 2024, 2023, and 2022, 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)
2024
Lease cost
Operating lease cost(*)
$248 $19 $190 $4 $27 $12 
Finance lease cost:
Amortization of ROU assets20 2 23 1 — — 
Interest on lease obligations15 — 15 1 — — 
Total finance lease cost35 2 38 2 — — 
Short-term lease costs 37 15 15 — — — 
Variable lease cost48 (1)77 — 4 — 
Total lease cost $368 $35 $320 $6 $31 $12 
2023
Lease cost
Operating lease cost(*)
$252 $16 $192 $5 $34 $12 
Finance lease cost:
Amortization of ROU assets24 2 19 1 — — 
Interest on lease obligations14 — 17 — — — 
Total finance lease cost38 2 36 1 — — 
Short-term lease costs40 16 16 — — — 
Variable lease cost47 — 74 — 4 — 
Total lease cost$377 $34 $318 $6 $38 $12 
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 costs64 44 13 — — — 
Variable lease cost125 13 105 — 5 — 
Sublease income(1)— — — — — 
Total lease cost$521 $117 $348 $7 $37 $15 
(*)Includes operating lease costs related to PPAs at Southern Company, Alabama Power, and Georgia Power totaling $108 million, $5 million, and $168 million, respectively, in 2024, $112 million, $4 million, and $174 million, respectively, in 2023, and $162 million, $48 million, and $180 million, respectively, in 2022.
Georgia Power has variable lease payments that are based on the amount of energy produced by certain renewable generating facilities subject to PPAs, including $45 million, $42 million, and $45 million in 2024, 2023, and 2022, respectively, from finance leases which are included in purchased power on Georgia Power's statements of income, of which $22 million, $21 million, and $21 million was included in purchased power, affiliates in 2024, 2023, and 2022, respectively.
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)
2024
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$243 $19 $186 $4 $33 $12 
Operating cash flows from finance leases15 — 21 — — — 
Financing cash flows from finance leases11 2 23 1 — — 
ROU assets obtained under operating leases146 11 609 — 10 1 
Reassessment of ROU assets under operating leases(7)— — — (7)— 
ROU assets obtained under finance leases1 — 44 — — — 
2023
Other information
Cash paid for amounts included in the measurements of lease obligations:
Operating cash flows from operating leases$253 $17 $199 $5 $33 $12 
Operating cash flows from finance leases15 — 22 — — — 
Financing cash flows from finance leases18 2 16 1 — — 
ROU assets obtained under operating leases100 30 26 1 7 7 
ROU assets obtained under finance leases3 3 18 — — — 
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 — — — 
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
At December 31, 2024
Weighted-average remaining lease term in years:
Operating leases16.410.27.94.332.36.8
Finance leases16.02.710.110.9N/AN/A
Weighted-average discount rate:
Operating leases 4.73 %5.04 %4.73 %3.83 %4.88 %3.84 %
Finance leases4.86 %4.05 %5.8 %2.74 %N/AN/A
At December 31, 2023
Weighted-average remaining lease term in years:
Operating leases17.211.17.54.633.17.0
Finance leases16.74.310.611.9N/AN/A
Weighted-average discount rate:
Operating leases4.68 %5.02 %4.58 %3.67 %4.89 %3.80 %
Finance leases4.85 %3.93 %5.95 %2.74 %N/AN/A
Maturities of lease liabilities are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
Maturity Analysis
Operating leases:
2025$239 $18 $228 $4 $31 $12 
2026212 15 224 3 29 9 
2027190 12 223 1 29 4 
2028170 9 217 — 29 3 
2029138 7 196 — 30 4 
Thereafter1,255 56 511 1 978 15 
Total2,204 117 1,599 9 1,126 47 
Less: Present value discount 751 27 271 1 586 6 
Operating lease obligations $1,453 $90 $1,328 $8 $540 $41 
Finance leases:
2025$28 $2 $39 $2 $— $— 
202627 1 41 2 — — 
202726 1 41 1 — — 
202825 — 42 1 — — 
202925 — 42 1 — — 
Thereafter290 — 139 9 — — 
Total421 4 344 16 — — 
Less: Present value discount134 — 83 2 — — 
Finance lease obligations$287 $4 $261 $14 $— $— 
Payments made under PPAs at Georgia Power for energy generated from certain renewable energy facilities accounted for as operating and finance leases are considered variable lease costs and are therefore not reflected in the above maturity analysis.
At December 31, 2024, Georgia Power has two affiliate PPAs with Southern Power that have not yet commenced and will be accounted for as leases. The PPAs each have a term of 10 years and are expected to commence in 2025 and 2028. The estimated total obligations associated with these PPAs is $83 million. Southern Company Gas has executed an 11.5-year building lease agreement that will commence during the first half of 2025. The lease has a total obligation of approximately $105 million.
Lessor
The Registrants are each considered lessors in various arrangements that have been determined to contain a lease due to the customer's ability to control the use of the underlying asset owned by the applicable Registrant. For the traditional electric operating companies, these arrangements consist of outdoor lighting contracts accounted for as operating leases with initial terms of up to 10 years, after which the contracts renew on a month-to-month basis at the customer's option. For Georgia Power, these arrangements also include PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 15 years. For Mississippi Power, these arrangements also include a tolling arrangement related to an electric generating unit accounted for as a sales-type lease with a remaining term of 14 years. For Southern Power, these arrangements consist of PPAs related to electric generating units accounted for as operating leases with remaining terms of up to 22 years and PPAs related to battery energy storage facilities accounted for as sales-type leases with remaining terms of up to 17 years. Southern Company Gas is the lessor in operating leases related to gas pipelines with remaining terms of up to 18 years. For Southern Company, these arrangements also include PPAs related to fuel cells accounted for as operating leases with remaining terms of up to 9 years.
Lease income for 2024, 2023, and 2022, is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
 (in millions)
2024
Lease income - interest income on sales-type leases$24 $— $— $15 $9 $— 
Lease income - operating leases136 9 28 3 88 36 
Variable lease income417 1 — — 450 — 
Total lease income$577 $10 $28 $18 $547 $36 
2023
Lease income - interest income on sales-type leases$24 $— $— $14 $10 $— 
Lease income - operating leases164 35 29 2 85 37 
Variable lease income406 1 — — 437 — 
Total lease income$594 $36 $29 $16 $532 $37 
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 
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 related to PPAs is included in wholesale revenues for Alabama Power, Georgia Power, and Southern Power. Scheduled payments to be received under outdoor lighting contracts' initial terms, tolling arrangements, and PPAs accounted for as leases are presented in the following maturity analyses.
The undiscounted cash flows expected to be received for in-service leased assets under the leases are as follows:
At December 31, 2024
Southern CompanyMississippi PowerSouthern
Power
 (in millions)
2025$52 $24 $15 
202638 23 15 
202737 22 15 
202836 21 15 
202935 20 15 
Thereafter302 132 170 
Total undiscounted cash flows$500 $242 $245 
Net investment in sales-type lease(*)
297 139 158 
Difference between undiscounted cash flows and discounted cash flows$203 $103 $87 
(*)For Mississippi Power, included in other current assets ($10 million and $10 million at December 31, 2024 and 2023, respectively) and other property and investments ($129 million and $138 million at December 31, 2024 and 2023, respectively) on the balance sheets. For Southern Power, included in other current assets ($15 million and $15 million at December 31, 2024 and 2023, respectively) and net investment in sales-type leases ($143 million and $148 million at December 31, 2024 and 2023, respectively) on the balance sheets.
The undiscounted cash flows to be received under operating leases and contracts accounted for as operating leases are as follows:
At December 31, 2024
Southern
Company		Alabama
Power		Southern
Power		Southern Company Gas
 (in millions)
2025$117 $6 $142 $35 
2026111 5 148 29 
2027109 4 150 28 
2028109 4 161 28 
2029112 3 164 28 
Thereafter621 31 506 326 
Total$1,179 $53 $1,271 $474 
Southern Power receives payments for renewable energy under PPAs accounted for as operating leases that are considered contingent rents and are therefore not reflected in the table above. Alabama Power and Southern Power allocate revenue to the nonlease components of PPAs based on the stand-alone selling price of capacity and energy. The undiscounted cash flows to be received under contracts accounted for as operating leases at Georgia Power and Mississippi Power are immaterial.
Southern Company Leveraged Lease
At December 31, 2024, a subsidiary of Southern Holdings had one leveraged lease agreement, which relates to energy generation, with an expected remaining term of seven years. Southern Company receives federal income tax deductions for depreciation and amortization, as well as interest on long-term debt, related to this investment. Southern Company wrote off the related investment balance in 2020 following an evaluation of the recoverability of the lease receivable and the expected residual value of the generation assets at the end of the lease.
In June 2022, the Southern Holdings subsidiary operating the generating plant for the lessee provided notice to the lessee to terminate the related operating and maintenance agreement effective June 30, 2023. Subsequently, the lessee failed to make the semi-annual lease payment due in December 2022. As a result, the Southern Holdings subsidiary was unable to make its corresponding payment to the holders of the underlying non-recourse debt related to the generation assets. The parties to the lease entered into forbearance agreements which suspended the related contractual rights of the parties while they continued restructuring negotiations, during which the termination date for the operating and maintenance agreement was delayed until July 31, 2023. The negotiations were completed in July 2023, resulting in the Southern Holdings subsidiary agreeing to continue operating the plant for the lessee until the lessee's associated power off-take agreement ends in 2032, subject to certain terms and
conditions. The restructuring had no material impact on Southern Company's financial statements. Southern Company will continue to monitor the operational performance of the underlying assets and evaluate the ability of the lessee to continue to meet its obligations, including those associated with a future closure or retirement of the generation assets and associated properties, including the dry ash landfill.