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INCOME TAXES
 12 Months Ended
Dec. 31, 2024
Income Tax Disclosure [Abstract]  
INCOME TAXES INCOME TAXES
Southern Company files a consolidated federal income tax return and the Registrants file various state income tax returns, some of which are combined or unitary. Under a joint consolidated income tax allocation agreement, each Southern Company subsidiary's current and deferred tax expense is computed on a stand-alone basis, and each subsidiary is allocated an amount of tax similar to that which would be paid if it filed a separate income tax return except for certain credit utilization and state apportionment results. In accordance with IRS regulations, each company is jointly and severally liable for the federal tax liability.
Current and Deferred Income Taxes
Details of income tax provisions are as follows:
2024
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern Power Southern Company Gas
(in millions)
Federal —
Current$221 $357 $200 $32 $(112)$84 
Deferred387 (111)211 2 106 86 
Total federal
608 246 411 34 (6)170 
State —
Current152 103 52 (1)6 42 
Deferred209 11 140 14 (13)46 
Total state
361 114 192 13 (7)88 
Total$969 $360 $603 $47 $(13)$258 
2023
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Federal —
Current$54 $242 $205 $49 $(320)$62 
Deferred299 (257)195 (26)334 68 
Total federal
353 (15)400 23 14 130 
State —
Current41 82 37 1 (1)24 
Deferred102 14 11 12 (1)57 
Total state
143 96 48 13 (2)81 
Total$496 $81 $448 $36 $12 $211 
2022
Southern CompanyAlabama PowerGeorgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
(in millions)
Federal —
Current$10 $54 $38 $42 $(43)$122 
Deferred455 259 152 (16)56 (3)
Total federal
465 313 190 26 13 119 
State —
Current27 14 (21)— 2 42 
Deferred303 96 201 11 5 19 
Total state
330 110 180 11 7 61 
Total$795 $423 $370 $37 $20 $180 
Southern Company's and Southern Power's ITCs and PTCs generated in the current tax year and carried forward from prior tax years that cannot be utilized or transferred in the current tax year are reclassified from current to deferred taxes in federal income tax expense in the tables above. Southern Power's ITCs and PTCs reclassified in this manner were immaterial in 2024 and 2023 and $17 million in 2022. Southern Power received $71 million, $332 million, and $49 million of cash related to federal ITCs under renewable energy initiatives in 2024, 2023, and 2022, respectively. See "Deferred Tax Assets and Liabilities" herein for additional information.
In accordance with regulatory requirements, deferred federal ITCs for the traditional electric operating companies are amortized over the average life of the related property, with such amortization normally applied as a credit to reduce depreciation and amortization in the statements of income. Southern Power's and the natural gas distribution utilities' deferred federal ITCs, as well as certain state ITCs for Nicor Gas, are amortized to income tax expense over the life of the respective asset. ITCs amortized in 2024, 2023, and 2022 were immaterial for the traditional electric operating companies and Southern Company Gas and were as follows for Southern Company and Southern Power:
Southern CompanySouthern Power
(in millions)
2024$109 $58 
202384 58 
202283 58 
When Southern Power recognizes tax credits, the tax basis of the asset is reduced by 50% of the ITCs received, which, together with the deferred credit, results in a net deferred tax asset. Southern Power has elected to recognize the tax benefit of this basis difference as a reduction to income tax expense in the year in which the plant reaches commercial operation.
State ITCs and other state credits, which are recognized in the period in which the credits are generated, reduced Georgia Power's income tax expense by $44 million in 2024, $49 million in 2023, and $53 million in 2022.
Southern Power's federal and state PTCs, which are recognized in the period in which the credits are generated, reduced Southern Power's income tax expense by $32 million in 2024, $26 million in 2023, and $27 million in 2022.
In 2024, Alabama Power, Georgia Power, and Southern Power entered into transferability agreements with non-affiliated parties to sell ITCs and PTCs at a discount to the generated credit value in 2024, 2025, and 2026. Georgia Power and Southern Power received cash of $11 million and $24 million, respectively, from credits transferred during the year. The discount will be recorded as a reduction in tax credits recognized in the financial statements. The Southern Company system continues to explore the ability to efficiently monetize its tax credits through third-party transferability agreements.
Pursuant to the Vogtle Joint Ownership Agreements, Georgia Power paid $131 million in 2024 and $39 million in 2023 to the other Vogtle Owners for advanced nuclear PTCs for Plant Vogtle Unit 3 and 4, which were utilized and not reflected as a reduction to current income tax expense. The gains recognized in both periods were recorded in income tax benefit and were immaterial.
Effective Tax Rate
Southern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity at the traditional electric operating companies, flowback of excess deferred income taxes at the regulated utilities, and federal income tax benefits from ITCs and PTCs primarily at Southern Power, Georgia Power, and Alabama Power.
A reconciliation of the federal statutory income tax rate to the effective income tax (benefit) rate is as follows:
2024
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
Federal statutory rate21.0 %21.0 %21.0 %21.0 %21.0 %21.0 %
State income tax, net of federal deduction3.6 5.0 1.7 4.4 (2.3)7.0 
Changes in valuation allowance, net of federal benefit
1.9 — 3.1 — — — 
Employee stock plans' dividend deduction(0.4)— — — — — 
Non-deductible book depreciation0.6 0.6 0.7 0.3 — — 
Flowback of excess deferred income taxes(3.9)(5.3)(2.2)(6.5)— (2.2)
AFUDC-Equity(0.8)(0.7)(1.0)— — — 
Federal PTCs(2.8)(0.1)(3.7)— (17.2)— 
ITC amortization(1.2)(0.1)(0.2)— (26.4)— 
Noncontrolling interests0.6 — — — 17.1 — 
Other(0.1)— (0.2)— 0.2 — 
Effective income tax (benefit) rate18.5 %20.4 %19.2 %19.2 %(7.6)%25.8 %
2023
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
Federal statutory rate21.0 %21.0 %21.0 %21.0 %21.0 %21.0 %
State income tax, net of federal deduction2.9 5.2 2.1 4.9 (0.7)7.8 
Changes in valuation allowance, net of federal benefit
(0.3)— (0.6)— — — 
Employee stock plans' dividend deduction(0.5)— — — — — 
Non-deductible book depreciation0.7 0.7 0.8 0.4 — — 
Flowback of excess deferred income taxes(9.2)(19.8)(2.6)(10.2)— (2.6)
AFUDC-Equity(1.1)(1.2)(1.2)— — — 
Federal PTCs(1.2)— (1.4)— (7.4)— 
ITC amortization(1.3)(0.1)(0.1)— (19.0)— 
Noncontrolling interests0.6 — — — 11.1 — 
Other(0.2)(0.2)(0.3)0.1 0.1 (0.6)
Effective income tax rate11.4 %5.6 %17.7 %16.2 %5.1 %25.6 %
2022
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
Federal statutory rate21.0 %21.0 %21.0 %21.0 %21.0 %21.0 %
State income tax, net of federal deduction7.8 4.8 3.3 4.4 1.9 6.4 
Changes in valuation allowance, net of federal benefit
(1.6)— 3.2 — — — 
Employee stock plans' dividend deduction(0.5)— — — — — 
Non-deductible book depreciation0.6 0.5 0.6 0.3 — — 
Flowback of excess deferred income taxes(6.6)(1.9)(9.6)(7.8)— (2.5)
AFUDC-Equity(1.1)(0.8)(1.5)— — — 
Federal PTCs— — — — (6.6)— 
ITC amortization(1.3)(0.1)(0.1)— (17.2)(0.1)
Noncontrolling interests0.5 — — — 8.4 — 
Other— 0.3 — 0.3 (0.1)(0.9)
Effective income tax rate18.8 %23.8 %16.9 %18.2 %7.4 %23.9 %
Deferred Tax Assets and Liabilities
The tax effects of temporary differences between the carrying amounts of assets and liabilities in the financial statements of the Registrants and their respective tax bases, which give rise to deferred tax assets and liabilities, are as follows:
December 31, 2024
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Deferred tax liabilities —
Accelerated depreciation$9,828 $2,583 $3,810 $344 $1,309 $1,575 
Property basis differences3,025 1,497 918 192 — 412 
Employee benefit obligations1,067 362 470 54 13 60 
AROs727 458 221 — — — 
Under recovered fuel and natural gas costs 318 13 305 — — — 
Regulatory assets –
AROs1,886 658 1,193 35 — — 
Employee benefit obligations746 191 237 35 — 35 
Remaining book value of retired assets360 168 187 5 — — 
Storm damage reserves
216 — 216 — — — 
Premium on reacquired debt57 8 48 1 — — 
Other678 171 187 61 1 201 
Total deferred income tax liabilities18,908 6,109 7,792 727 1,323 2,283 
Deferred tax assets —
AROs2,613 1,116 1,414 35 — — 
CAMT carryforwards
40 — 18 — — 104 
ITC and PTC carryforwards1,380 48 719 — 384 — 
Employee benefit obligations897 196 279 49 16 87 
Estimated loss on plants under construction773 — 773 — — — 
Estimated loss on regulatory disallowance20 — — — — 20 
Other state deferred tax attributes366 — 26 224 49 16 
Federal effect of net state deferred tax liabilities402 197 100 — 23 107 
Other property basis differences176 — 75 — 85 — 
State effect of federal deferred taxes126 126 — — — — 
Other partnership basis differences60 — — — 60 — 
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)18 18 — — — — 
Long-term debt fair value adjustment73 — — — — 73 
Other comprehensive losses48 3 — — 1 — 
Other601 227 160 50 20 86 
Total deferred income tax assets7,593 1,931 3,564 358 638 493 
Valuation allowance(333)— (157)(41)(27)(6)
Net deferred income tax assets7,260 1,931 3,407 317 611 487 
Net deferred income taxes (assets)/liabilities$11,648 $4,178 $4,385 $410 $712 $1,796 
Recognized in the balance sheets:
Accumulated deferred income taxes – assets$(82)$— $— $(82)$— $— 
Accumulated deferred income taxes – liabilities$11,730 $4,178 $4,385 $492 $712 $1,796 
December 31, 2023
Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Deferred tax liabilities —
Accelerated depreciation$9,683 $2,566 $3,628 $339 $1,346 $1,576 
Property basis differences2,647 1,444 812 188 — 189 
Employee benefit obligations979 321 446 49 12 74 
AROs833 476 314 — — — 
Under recovered fuel and natural gas costs601 80 508 13 — — 
Regulatory assets –
AROs1,902 667 1,196 39 — — 
Employee benefit obligations797 213 260 37 — 11 
Remaining book value of retired assets369 143 221 5 — — 
Premium on reacquired debt63 9 53 1 — — 
Other700 182 223 43 2 191 
Total deferred income tax liabilities18,574 6,101 7,661 714 1,360 2,041 
Deferred tax assets —
AROs2,735 1,143 1,510 39 — — 
ITC and PTC carryforwards1,387 12 691 — 481 — 
Employee benefit obligations985 224 316 52 10 89 
Estimated loss on plants under construction857 — 857 — — — 
Estimated loss on regulatory disallowance
26 — — — — 26 
Other state deferred tax attributes363 — 13 231 49 8 
Federal effect of net state deferred tax liabilities418 215 92 — 27 101 
Other property basis differences197 — 83 — 97 — 
State effect of federal deferred taxes115 115 — — — — 
Other partnership basis differences85 — — — 85 — 
Regulatory liability associated with the Tax Reform Legislation (not subject to normalization)34 30 — 3 — — 
Long-term debt fair value adjustment79 — — — — 79 
Other comprehensive losses67 4 4 — 6 — 
Other538 188 152 57 18 74 
Total deferred income tax assets7,886 1,931 3,718 382 773 377 
Valuation allowance(206)— (75)(41)(27)(7)
Net deferred income tax assets7,680 1,931 3,643 341 746 370 
Net deferred income taxes (assets)/liabilities$10,894 $4,170 $4,018 $373 $614 $1,671 
Recognized in the balance sheets:
Accumulated deferred income taxes – assets$(96)$— $— $(96)$— $— 
Accumulated deferred income taxes – liabilities$10,990 $4,170 $4,018 $469 $614 $1,671 
The traditional electric operating companies and the natural gas distribution utilities have tax-related regulatory assets (deferred income tax charges) and regulatory liabilities (deferred income tax credits). The regulatory assets are primarily attributable to tax benefits flowed through to customers in prior years, deferred taxes previously recognized at rates lower than the current enacted tax law, and taxes applicable to capitalized interest. The regulatory liabilities are primarily attributable to deferred taxes previously recognized at rates higher than the current enacted tax law and to unamortized ITCs. See Note 2 for each Registrant's related balances at December 31, 2024 and 2023.
Tax Credit Carryforwards
Federal ITC/PTC carryforwards at December 31, 2024 were as follows:
Southern CompanyAlabama
Power		Georgia
Power		Southern
Power
(in millions)
Federal ITC/PTC carryforwards$765 $48 $147 $384 
Tax year in which federal ITC/PTC carryforwards begin expiring2031203220312035
Year by which federal ITC/PTC carryforwards are expected to be utilized2028202820282028
The estimated tax credit utilization reflects the various transactions described in Note 15 and could be impacted by numerous factors, including the acquisition or construction of additional renewable projects, changes in taxable income projections, transfer of eligible credits, potential income tax rate changes, and remaining final guidance on the IRA. In the third quarter 2023 and the second quarter 2024, Georgia Power started generating advanced nuclear PTCs for Plant Vogtle Units 3 and 4, respectively, beginning on each unit's respective in-service date. In addition, pursuant to the Vogtle Joint Ownership Agreements, Georgia Power is purchasing advanced nuclear PTCs for Plant Vogtle Unit 3 and 4 from the other Vogtle Owners. See Note 2 under "Georgia Power – Nuclear Construction" for additional information on Plant Vogtle Units 3 and 4.
At December 31, 2024, Southern Company and Georgia Power also had approximately $515 million and $472 million, respectively, in net state investment and other net state tax credit carryforwards for the State of Georgia that will expire between tax years 2024 and 2033 and are not expected to be fully utilized. Southern Company and Georgia Power have a net state valuation allowance of $161 million and $124 million, respectively, associated with these carryforwards, which increased during 2024 by $101 million and $64 million, respectively.
At December 31, 2024, Southern Company and certain subsidiaries also had approximately $40 million in net CAMT carryforwards that have an indefinite carryforward period and are expected to be fully utilized by 2031.
The ultimate outcome of these matters cannot be determined at this time.
Net Operating Loss Carryforwards
At December 31, 2024, the net state income tax benefit of state and local NOL carryforwards and associated valuation allowances for Southern Company's subsidiaries were as follows:
Company/JurisdictionApproximate Net State Income Tax Benefit of NOL CarryforwardsTax Year NOL
Begins Expiring
Net State Valuation Allowance for NOL Carryforwards
(in millions)(in millions)
Mississippi Power
Mississippi $178 2032$(32)
Southern Power
Oklahoma$26 2035$(11)
Florida10 2034(10)
Other states2 
2034
— 
Southern Power Total$38 $(21)
Other(*)
New York$11 2036$(11)
New York City14 2036(14)
Other states24 
2025
(4)
Southern Company Total$265 $(82)
(*)Represents other non-registrant Southern Company subsidiaries. Alabama Power, Georgia Power, and Southern Company Gas did not have material state or local NOL carryforwards at December 31, 2024.
Certain state NOLs are not expected to be fully utilized prior to expiration. The ultimate outcome of these matters cannot be determined at this time.
Unrecognized Tax Benefits
Changes in unrecognized tax benefits for the periods presented were as follows:
Southern
Company
Georgia
Power
Southern
Company Gas
(in millions)
Unrecognized tax benefits at December 31, 2021$47 $— $— 
Tax positions changes —
Increase from prior periods33 — 32 
Unrecognized tax benefits at December 31, 202280 — 32 
Tax positions changes —
Increase from prior periods88 86 2 
Statute of limitations expiration(52)(9)— 
Unrecognized tax benefits at December 31, 2023
116 77 34 
Tax positions changes —
Increase from prior periods10 — 10 
Decrease from prior periods
(44)(43)— 
Unrecognized tax benefits at December 31, 2024
$82 $34 $44 
The unrecognized tax positions increase from prior periods for 2022 is primarily related to the amendment of certain 2018 state tax filing positions related to Southern Company Gas dispositions. If accepted by the states, these positions would decrease Southern Company's and Southern Company Gas' annual effective tax rates. The ultimate outcome of these unrecognized tax benefits is dependent on acceptance by each state and is not expected to be resolved within the next 12 months.
The unrecognized tax positions increase from prior periods for 2023 is primarily related to the amendment of certain 2019 through 2021 state tax filing positions related to tax credit utilization, a portion of which decreased in the fourth quarter 2023 due to a statute of limitations expiration. If effective settlement of the positions is favorable, these positions would decrease Southern Company's and Georgia Power's annual effective tax rates. The ultimate outcome of this unrecognized tax benefit, which is expected to be resolved within the next 12 months, is dependent on acceptance by the state or expiration of related statute of limitations.
The unrecognized tax positions reductions due to statute of limitations expiration for 2023 primarily relate to a 2019 state tax filing position to exclude certain gains from 2019 dispositions from taxation in a certain unitary state. This tax position and related interest was recognized in the fourth quarter 2023 and decreased Southern Company's annual effective tax rate.
The unrecognized tax positions increase from prior periods for 2024 is primarily related to a certain state tax filing position at Southern Company Gas. If effective settlement of this position is favorable, this position would decrease Southern Company's and Southern Company Gas' annual effective tax rates. The ultimate outcome is dependent on acceptance by the state.
The unrecognized tax positions decrease from prior periods for 2024 is primarily related to the 2019 and 2020 amended state filing positions related to tax credit utilization at Georgia Power.
All of the Registrants classify interest on tax uncertainties as interest expense. Accrued interest for all tax positions was immaterial for all years presented. None of the Registrants accrued any penalties on uncertain tax positions.
The IRS has finalized its audits of Southern Company's consolidated federal income tax returns through 2023. Southern Company is a participant in the Compliance Assurance Process of the IRS. The IRS selected six Southern Power partnership returns for exam for the 2020 and 2021 tax years. One audit for 2021 is still under review, and the remaining audits have been closed with no change. The ultimate outcome of this matter cannot be determined at this time. The audits for the Registrants' state income tax returns have either been concluded, or the statute of limitations has expired, for years prior to 2018.