DERIVATIVES (Tables)
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12 Months Ended |
Dec. 31, 2024 |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] |
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| Schedule of energy-related derivatives |
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: | | | | | | | | | | | | | | | | | | | Net
Purchased
mmBtu | | Longest
Hedge
Date | | Longest
Non-Hedge
Date | | (in millions) | | | | | Southern Company(*) | 431 | | 2030 | | 2028 | | Alabama Power | 123 | | 2027 | | — | | Georgia Power | 116 | | 2027 | | — | | Mississippi Power | 103 | | 2028 | | — | | Southern Power | 6 | | 2030 | | 2025 | Southern Company Gas(*) | 83 | | 2027 | | 2028 |
(*)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.
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| Notional amount of interest rate derivatives |
At December 31, 2024, the following interest rate derivatives were outstanding: | | | | | | | | | | | | | | | | | | | 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) | |
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| Schedule of foreign exchange contracts |
At December 31, 2024, the following foreign currency derivatives were outstanding: | | | | | | | | | | | | | | | | | | | | | | 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) | |
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| Fair value of energy-related derivatives and interest rate derivatives |
The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected as either assets or liabilities in the balance sheets (included in "Other" or shown separately as "Risk Management Activities") as follows: | | | | | | | | | | | | | | | | 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 | |
(a)Gross amounts offset includes cash collateral held on deposit in broker margin accounts of $17 million and $62 million at December 31, 2024 and 2023, respectively. (b)Net amounts of derivative instruments outstanding exclude immaterial premium and intrinsic value associated with weather derivatives for all periods presented.
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| Pre-tax effects on the balance sheets |
At December 31, 2024 and 2023, the pre-tax effects of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred were as follows: | | | | | | | | | | | | | | | | | | | 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) | |
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| Pre-tax effects of hedging on AOCI |
For the years ended December 31, 2024, 2023, and 2022, the pre-tax effects of cash flow and fair value hedge accounting on AOCI for the applicable Registrants were as follows: | | | | | | | | | | | | | 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 | |
(*)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.
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| Pre-tax effect of interest rate and energy related derivatives |
The pre-tax effects of cash flow and fair value hedge accounting on income for the years ended December 31, 2024, 2023, and 2022 were as follows: | | | | | | | | | | | | | | | | | 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) | |
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| Schedule of fair value hedging instruments, statements of financial performance and financial position, location |
At December 31, 2024 and 2023, the following amounts were recorded on the balance sheets related to cumulative basis adjustments for fair value hedges: | | | | | | | | | | | | | | | | | | | 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 | | | | | | | |
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| Pre-tax effect of interest rate and energy related derivatives |
The pre-tax effects of energy-related derivatives not designated as hedging instruments on the statements of income of Southern Company and Southern Company Gas for the years ended December 31, 2024, 2023, and 2022 were as follows: | | | | | | | | | | | | | | | | | | | | | | | 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) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
(*)Excludes the impact of weather derivatives recorded in natural gas revenues of $12 million, $15 million, and $(7) million for 2024, 2023 and 2022, respectively, as they are accounted for based on intrinsic value rather than fair value.
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