The Registrants are exposed to market risks, including commodity price risk, interest rate risk, weather risk, and occasionally foreign currency exchange rate risk. To manage the volatility attributable to these exposures, each company nets its exposures, where possible, to take advantage of natural offsets and enters into various derivative transactions for the remaining exposures pursuant to each company's policies in areas such as counterparty exposure and risk management practices. Each company's policy is that derivatives are to be used primarily for hedging purposes and mandates strict adherence to all applicable risk management policies. Derivative positions are monitored using techniques including, but not limited to, market valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are recognized at fair value in the balance sheets as either assets or liabilities and are presented on a net basis. See Note 13 for additional fair value information. In the statements of cash flows, any cash impacts of settled energy-related and interest rate derivatives are recorded as operating activities. Any cash impacts of settled foreign currency derivatives are classified as operating or financing activities to correspond with the classification of the hedged interest or principal, respectively. See Note 1 under "Financial Instruments" for additional information.

The Subsidiary Registrants enter into energy-related derivatives to hedge exposures to electricity, natural gas, and other fuel price changes. However, due to cost-based rate regulations and other various cost recovery mechanisms, the traditional electric operating companies and the natural gas distribution utilities have limited exposure to market volatility in energy-related commodity prices. Each of the traditional electric operating companies and certain of the natural gas distribution utilities of Southern Company Gas manage fuel-hedging programs, implemented per the guidelines of their respective state PSCs or other applicable state regulatory agencies, through the use of financial derivative contracts, which are expected to continue to mitigate price volatility. The traditional electric operating companies (with respect to wholesale generating capacity) and Southern Power have limited exposure to market volatility in energy-related commodity prices because their long-term sales contracts shift substantially all fuel cost responsibility to the purchaser. However, the traditional electric operating companies and Southern Power may be exposed to market volatility in energy-related commodity prices to the extent any uncontracted capacity is used to sell electricity. Southern Company Gas retains exposure to price changes that can, in a volatile energy market, be material and can adversely affect its results of operations.

Southern Company Gas also enters into weather derivative contracts as economic hedges in the event of warmer-than-normal weather. Exchange-traded options are carried at fair value, with changes reflected in natural gas revenues. Non-exchange-traded options are accounted for using the intrinsic value method. Changes in the intrinsic value for non-exchange-traded contracts are reflected in natural gas revenues.

•Regulatory Hedges – Energy-related derivative contracts designated as regulatory hedges relate primarily to the traditional electric operating companies' and the natural gas distribution utilities' fuel-hedging programs, where gains and losses are initially recorded as regulatory liabilities and assets, respectively, and then are included in fuel expense as the underlying fuel is used in operations and ultimately recovered through an approved cost recovery mechanism.

•Cash Flow Hedges – Gains and losses on energy-related derivatives designated as cash flow hedges (which are mainly used to hedge anticipated purchases and sales) are initially deferred in AOCI before being recognized in the statements of income in the same period and in the same income statement line item as the earnings effect of the hedged transactions.

Some energy-related derivative contracts require physical delivery as opposed to financial settlement, and this type of derivative is both common and prevalent within the electric and natural gas industries. When an energy-related derivative contract is settled physically, any cumulative unrealized gain or loss is reversed and the contract price is recognized in the respective line item representing the actual price of the underlying goods being delivered.

At December 31, 2024, the net volume of energy-related derivative contracts for natural gas positions, together with the longest hedge date over which the respective entity is hedging its exposure to the variability in future cash flows for forecasted transactions and the longest non-hedge date for derivatives not designated as hedges, were as follows:

(*)Southern Company Gas' derivative instruments include both long and short natural gas positions. A long position is a contract to purchase natural gas and a short position is a contract to sell natural gas. Southern Company Gas' volume represents the net of long natural gas positions of 90 million mmBtu and short natural gas positions of 7 million mmBtu at December 31, 2024, which is also included in Southern Company's total volume.

In addition to the volumes discussed above, the traditional electric operating companies and Southern Power enter into physical natural gas supply contracts that provide the option to sell back excess natural gas due to operational constraints. The maximum expected volume of natural gas subject to such a feature is 15 million mmBtu for Southern Company, which includes 4 million mmBtu for Alabama Power, 6 million mmBtu for Georgia Power, 2 million mmBtu for Mississippi Power, and 3 million mmBtu for Southern Power.

Southern Company and certain subsidiaries may enter into interest rate derivatives to hedge exposure to changes in interest rates. Derivatives related to existing variable rate securities or forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and presented on the same income statement line item as the earnings effect of the hedged transactions. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item. Fair value gains or losses on derivatives that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.


	Notional Amount		Weighted Average Interest Rate Paid	Interest Rate Received	Hedge Maturity Date	Fair Value Gain (Loss) December 31, 2024
	(in millions)					(in millions)


Fair Value Hedges of Existing Debt
Southern Company parent	$	400	1-month SOFR + 0.80%	1.75%	March 2028	$	(42)
Southern Company parent	1,000		1-month SOFR + 2.48%	3.70%	April 2030	(143)
Southern Company Gas	500		1-month SOFR + 0.49%	1.75%	January 2031	(84)
Southern Company	$	1,900				$	(269)

For cash flow hedges of interest rate derivatives, the estimated pre-tax gains (losses) expected to be reclassified from AOCI to interest expense for the year ending December 31, 2025 are $(13) million for Southern Company and immaterial for the traditional electric operating companies and Southern Company Gas. Deferred gains and losses related to interest rate derivatives are expected to be amortized into earnings through 2054 for Southern Company, Georgia Power, and Mississippi Power, 2052 for Alabama Power, and 2046 for Southern Company Gas.

Southern Company and certain subsidiaries, including Southern Power, may enter into foreign currency derivatives to hedge exposure to changes in foreign currency exchange rates, such as that arising from the issuance of debt denominated in a currency other than U.S. dollars. Derivatives related to forecasted transactions are accounted for as cash flow hedges where the derivatives' fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time and on the same income statement line as the earnings effect of the hedged transactions, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Derivatives related to existing fixed rate securities are accounted for as fair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are both recorded directly to earnings on the same income statement line item, including foreign currency gains or losses arising from changes in the U.S. currency exchange rates. Southern Company has elected to exclude the cross-currency basis spread from the assessment of effectiveness in the fair value hedges of its foreign currency risk and record any difference between the change in the fair value of the excluded components and the amounts recognized in earnings as a component of OCI.


	Pay Notional		Pay Rate	Receive Notional		Receive Rate	Hedge Maturity Date	Fair Value Gain (Loss) December 31, 2024
	(in millions)			(in millions)				(in millions)
Cash Flow Hedges of Existing Debt
Southern Power	$	564	3.78%	€	500	1.85%	June 2026	$	(51)
Fair Value Hedges of Existing Debt
Southern Company parent	1,476		3.39%	1,250		1.88%	September 2027	(167)
Southern Company	$	2,040		€	1,750			$	(218)

The Registrants enter into derivative contracts that may contain certain provisions that permit intra-contract netting of derivative receivables and payables for routine billing and offsets related to events of default and settlements. Southern Company and certain subsidiaries also utilize master netting agreements to mitigate exposure to counterparty credit risk. These agreements may contain provisions that permit netting across product lines and against cash collateral. The fair value amounts of derivative assets and liabilities on the balance sheets are presented net to the extent that there are netting arrangements or similar agreements with the counterparties.


	2024				2023
Derivative Category and Balance Sheet Location	Assets		Liabilities		Assets		Liabilities
	(in millions)
Southern Company
Energy-related derivatives designated as hedging instruments for regulatory purposes

Current	$	33	$	82	$	12	$	198
Non-current	42		40		31		117


Total derivatives designated as hedging instruments for regulatory purposes	75		122		43		315
Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Current	4		3		—		29
Non-current	4		—		3		4
Interest rate derivatives:
Current	—		61		—		74
Non-current	—		208		—		190
Foreign currency derivatives:
Current	—		36		—		34
Non-current	—		182		—		88
Total derivatives designated as hedging instruments in cash flow and fair value hedges	8		490		3		419
Energy-related derivatives not designated as hedging instruments

Current	5		3		8		8
Non-current	1		—		1		2


Total derivatives not designated as hedging instruments	6		3		9		10
Gross amounts recognized	89		615		55		744
Gross amounts offset(a)	(44)		(61)		(23)		(85)
Net amounts recognized in the Balance Sheets(b)	$	45	$	554	$	32	$	659

Alabama Power
Energy-related derivatives designated as hedging instruments for regulatory purposes

Current	$	11	$	30	$	6	$	69
Non-current	15		12		9		41
Total derivatives designated as hedging instruments for regulatory purposes	26		42		15		110



Gross amounts offset	(19)		(19)		(10)		(10)
Net amounts recognized in the Balance Sheets	$	7	$	23	$	5	$	100


	2024				2023
Derivative Category and Balance Sheet Location	Assets		Liabilities		Assets		Liabilities
	(in millions)
Georgia Power
Energy-related derivatives designated as hedging instruments for regulatory purposes

Current	$	6	$	32	$	2	$	82
Non-current	13		9		10		42
Total derivatives designated as hedging instruments for regulatory purposes	19		41		12		124





Energy-related derivatives not designated as hedging instruments

Current	—		1		—		—
Non-current	—		—		1		—
Total derivatives not designated as hedging instruments	—		1		1		—
Gross amounts recognized	19		42		13		124
Gross amounts offset	(15)		(15)		(11)		(11)
Net amounts recognized in the Balance Sheets	$	4	$	27	$	2	$	113

Mississippi Power
Energy-related derivatives designated as hedging instruments for regulatory purposes

Current	$	5	$	15	$	3	$	27
Non-current	14		19		12		34
Total derivatives designated as hedging instruments for regulatory purposes	19		34		15		61






Gross amounts offset	(17)		(17)		(14)		(14)
Net amounts recognized in the Balance Sheets	$	2	$	17	$	1	$	47

Southern Power
Derivatives designated as hedging instruments in cash flow hedges
Energy-related derivatives:
Current	$	1	$	—	$	—	$	5
Non-current	3		—		3		—
Foreign currency derivatives:
Current	—		11		—		11
Non-current	—		40		—		11
Total derivatives designated as hedging instruments in cash flow hedges	4		51		3		27













Net amounts recognized in the Balance Sheets	$	4	$	51	$	3	$	27


	2024				2023
Derivative Category and Balance Sheet Location	Assets		Liabilities		Assets		Liabilities
	(in millions)
Southern Company Gas
Energy-related derivatives designated as hedging instruments for regulatory purposes

Current	$	11	$	5	$	1	$	20


Derivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:
Current	3		3		—		24
Non-current	1		—		—		4
Interest rate derivatives:
Current	—		17		—		20
Non-current	—		67		—		59
Total derivatives designated as hedging instruments in cash flow and fair value hedges	4		87		—		107
Energy-related derivatives not designated as hedging instruments

Current	5		2		7		8
Non-current	1		—		1		2
Total derivatives not designated as hedging instruments	6		2		8		10
Gross amounts recognized	21		94		9		137
Gross amounts offset(a)	7		(10)		12		(50)
Net amounts recognized in the Balance Sheets(b)	$	28	$	84	$	21	$	87


Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheets
Derivative Category and Balance Sheet Location	Southern Company		Alabama Power		Georgia Power		Mississippi Power		Southern Company Gas
	(in millions)
At December 31, 2024:
Energy-related derivatives:
Other regulatory assets, current	$	(61)	$	(23)	$	(26)	$	(11)	$	(1)
Other regulatory assets, deferred	(5)		—		—		(5)		—


Other regulatory liabilities, current	8		4		—		—		4
Other regulatory liabilities, deferred	8		3		4		1		—
Total energy-related derivative gains (losses)	$	(50)	$	(16)	$	(22)	$	(15)	$	3

At December 31, 2023:
Energy-related derivatives:
Other regulatory assets, current	$	(180)	$	(67)	$	(80)	$	(25)	$	(8)
Other regulatory assets, deferred	(87)		(32)		(33)		(22)		—

Other regulatory liabilities, current	9		4		—		1		4
Other regulatory liabilities, deferred	1		—		1		—		—
Total energy-related derivative gains (losses)	$	(257)	$	(95)	$	(112)	$	(46)	$	(4)


Gain (Loss) From Derivatives Recognized in OCI	2024		2023		2022
	(in millions)
Southern Company
Cash flow hedges:
Energy-related derivatives	$	(7)	$	(81)	$	3
Interest rate derivatives	23		(12)		46
Foreign currency derivatives	(40)		14		(105)
Fair value hedges(*):
Foreign currency derivatives	16		21		(24)
Total	$	(8)	$	(58)	$	(80)


Georgia Power
Cash flow hedges:
Interest rate derivatives	$	24	$	(2)	$	31
Mississippi Power
Cash flow hedges:
Interest rate derivatives	$	7	$	—	$	—
Southern Power
Cash flow hedges:
Energy-related derivatives	$	(1)	$	(18)	$	(15)
Foreign currency derivatives	(40)		14		(105)
Total	$	(41)	$	(4)	$	(120)
Southern Company Gas
Cash flow hedges:
Energy-related derivatives	$	(6)	$	(63)	$	18
Interest rate derivatives	(5)		—		—
Total	$	(11)	$	(63)	$	18


		Gain (Loss)
Statements of Income Location	Derivative Category	2024		2023		2022
		(in millions)
Southern Company
Cost of natural gas	Energy-related cash flow hedges	$	(40)	$	(44)	$	37
Other operations and maintenance	Energy-related cash flow hedges	(2)		(2)		—
Depreciation and amortization	Energy-related cash flow hedges	(6)		(23)		(5)
Interest expense, net of amounts capitalized	Interest rate cash flow hedges	(16)		(35)		(25)
	Foreign currency cash flow hedges	(12)		(11)		(19)
	Interest rate fair value hedges	(4)		37		(291)
Other income (expense), net	Foreign currency cash flow hedges	(33)		19		(83)
	Foreign currency fair value hedges	2		69		(106)
	Amount excluded from effectiveness testing recognized in earnings	(16)		(21)		24







Southern Power
Depreciation and amortization	Energy-related cash flow hedges	$	(6)	$	(23)	$	(5)
Interest expense, net of amounts capitalized	Foreign currency cash flow hedges	(12)		(11)		(19)
Other income (expense), net	Foreign currency cash flow hedges	(33)		19		(83)
Southern Company Gas
Cost of natural gas	Energy-related cash flow hedges	$	(40)	$	(44)	$	37
Other operations and maintenance	Energy-related cash flow hedges	(2)		(2)		—
Interest expense, net of amounts capitalized	Interest rate cash flow hedges	(1)		(19)		(4)
	Interest rate fair value hedges	(5)		6		(86)


	Carrying Amount of the Hedged Item				Cumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged Item
Balance Sheet Location of Hedged Items	At December 31, 2024		At December 31, 2023		At December 31, 2024		At December 31, 2023
	(in millions)				(in millions)
Southern Company

Long-term debt	$	(2,936)	$	(3,024)	$	242	$	235

Southern Company Gas

Long-term debt	$	(422)	$	(427)	$	75	$	70


		Gain (Loss)
Derivatives in Non-Designated Hedging Relationships	Statements of Income Location	2024		2023		2022
		(in millions)

Energy-related derivatives	Natural gas revenues(*)	$	—	$	—	$	(11)
	Cost of natural gas	94		59		(65)



Total derivatives in non-designated hedging relationships		$	94	$	59	$	(76)

The Registrants do not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade. There are certain derivatives that could require collateral, but not accelerated payment, in the event of various credit rating changes of certain Southern Company subsidiaries. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. At December 31, 2024, the Registrants had no collateral posted with derivative counterparties to satisfy these arrangements.

For Southern Company, the fair value of foreign currency derivative liabilities and interest rate derivative liabilities with contingent features, and the maximum potential collateral requirements arising from the credit-risk-related contingent features at a rating below BBB- and/or Baa3, was $72 million at December 31, 2024. For Southern Power, the fair value of foreign currency derivative liabilities with contingent features, and the maximum potential collateral requirements arising from the credit-risk-related contingent features at a rating below BBB- and/or Baa3, was $24 million at December 31, 2024. For the traditional electric operating companies and Southern Power, energy-related derivative liabilities with contingent features and the maximum potential collateral requirements arising from the credit-risk-related contingent features, at a rating below BBB- and/or Baa3, were immaterial at December 31, 2024. The maximum potential collateral requirements arising from the credit-risk-related contingent features for the traditional electric operating companies and Southern Power include certain agreements that could require collateral in the event that one or more Southern Company power pool participants has a credit rating change to below investment grade.

Alabama Power and Southern Power maintain accounts with certain regional transmission organizations to facilitate financial derivative transactions, and they may be required to post collateral based on the value of the positions in these accounts and the associated margin requirements. At December 31, 2024, cash collateral posted in these accounts was immaterial for Alabama Power and Southern Power. Southern Company Gas maintains accounts with brokers or the clearing houses of certain exchanges to facilitate financial derivative transactions. Based on the value of the positions in these accounts and the associated margin requirements, Southern Company Gas may be required to deposit cash into these accounts. At December 31, 2024, cash collateral held on deposit in broker margin accounts was $17 million.

The Registrants are exposed to losses related to financial instruments in the event of counterparties' nonperformance. The Registrants generally enter into agreements and material transactions with counterparties that have investment grade credit ratings by Moody's, S&P, or Fitch or with counterparties who have posted collateral to cover potential credit exposure. The Registrants have also established risk management policies and controls to determine and monitor the creditworthiness of counterparties in order to mitigate their exposure to counterparty credit risk.

Southern Company Gas uses established credit policies to determine and monitor the creditworthiness of counterparties, including requirements to post collateral or other credit security, as well as the quality of pledged collateral. Collateral or credit security is most often in the form of cash or letters of credit from an investment-grade financial institution, but may also include cash or U.S. government securities held by a trustee. Prior to entering a physical transaction, Southern Company Gas assigns its counterparties an internal credit rating and credit limit based on the counterparties' Moody's, S&P, and Fitch ratings, commercially available credit reports, and audited financial statements. Southern Company Gas may require counterparties to pledge additional collateral when deemed necessary.