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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2021March 31, 2022
OR
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from           to            
Commission
File Number		Registrant,
State of Incorporation,
Address and Telephone Number		I.R.S. Employer
Identification No.
1-3526The Southern Company58-0690070
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
1-3164Alabama Power Company63-0004250
(An Alabama Corporation)
600 North 18th Street
Birmingham, Alabama 35203
(205) 257-1000
1-6468Georgia Power Company58-0257110
(A Georgia Corporation)
241 Ralph McGill Boulevard, N.E.
Atlanta, Georgia 30308
(404) 506-6526
001-11229Mississippi Power Company64-0205820
(A Mississippi Corporation)
2992 West Beach Boulevard
Gulfport, Mississippi 39501
(228) 864-1211
001-37803Southern Power Company58-2598670
(A Delaware Corporation)
30 Ivan Allen Jr. Boulevard, N.W.
Atlanta, Georgia 30308
(404) 506-5000
1-14174Southern Company Gas58-2210952
(A Georgia Corporation)
Ten Peachtree Place, N.E.
Atlanta, Georgia 30309
(404) 584-4000

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Securities registered pursuant to Section 12(b) of the Act:
RegistrantTitle of Each ClassTrading
Symbol(s)		Name of Each Exchange
on Which Registered
The Southern CompanyCommon Stock, par value $5 per shareSONew York Stock Exchange
(NYSE)
The Southern CompanySeries 2016A 5.25% Junior Subordinated Notes due 2076SOJBNYSE
The Southern CompanySeries 2017B 5.25% Junior Subordinated Notes due 2077SOJCNYSE
The Southern Company2019 Series A Corporate UnitsSOLNNYSE
The Southern CompanySeries 2020A 4.95% Junior Subordinated Notes due 2080SOJDNYSE
The Southern CompanySeries 2020C 4.20% Junior Subordinated Notes due 2060SOJENYSE
The Southern CompanySeries 2021B 1.875% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due 2081SO 81NYSE
Alabama Power Company5.00% Series Class A Preferred StockALP PR QNYSE
Georgia Power CompanySeries 2017A 5.00% Junior Subordinated Notes due 2077GPJANYSE
Southern Power CompanySeries 2016A 1.000% Senior Notes due 2022SO/22BNYSE
Southern Power CompanySeries 2016B 1.850% Senior Notes due 2026SO/26ANYSE
Indicate by check mark whether the registrants (1) have filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes þ No ¨
Indicate by check mark whether the registrants have submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrants were required to submit such files). Yes þ No ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
RegistrantLarge Accelerated FilerAccelerated
Filer		Non-accelerated FilerSmaller
Reporting
Company		Emerging
Growth
Company
The Southern CompanyX
Alabama Power CompanyX
Georgia Power CompanyX
Mississippi Power CompanyX
Southern Power CompanyX
Southern Company GasX
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No þ (Response applicable to all registrants.)
RegistrantDescription of Common StockShares Outstanding at June 30, 2021March 31, 2022
The Southern CompanyPar Value $5 Per Share1,058,825,8141,062,524,675 
Alabama Power CompanyPar Value $40 Per Share30,537,500 
Georgia Power CompanyWithout Par Value9,261,500 
Mississippi Power CompanyWithout Par Value1,121,000 
Southern Power CompanyPar Value $0.01 Per Share1,000 
Southern Company GasPar Value $0.01 Per Share100 
This combined Form 10-Q is separately filed by The Southern Company, Alabama Power Company, Georgia Power Company, Mississippi Power Company, Southern Power Company, and Southern Company Gas. Information contained herein relating to any individual registrant is filed by such registrant on its own behalf. Each registrant makes no representation as to information relating to the other registrants.
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TABLE OF CONTENTS
  Page
4
87
PART I—FINANCIAL INFORMATION
Item 1.
109
Item 2.
9786
Item 3.
156128
Item 4.
156128
PART II—OTHER INFORMATION
Item 1.
157129
Item 1A.
157129
Item 2.Unregistered Sales of Equity Securities and Use of ProceedsInapplicable
Item 3.Defaults Upon Senior SecuritiesInapplicable
Item 4.Mine Safety DisclosuresInapplicable
Item 5.Other InformationInapplicable
Item 6.
157129
161132
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DEFINITIONS
TermMeaning
2019 ARPAlternate Rate Plan approved by the Georgia PSC in 2019 for Georgia Power for the years 2020 through 2022
AFUDCAllowance for funds used during construction
Alabama PowerAlabama Power Company
Amended and Restated Loan Guarantee AgreementLoan guarantee agreement entered into by Georgia Power with the DOE in 2014, as amended and restated in March 2019, under which the proceeds of borrowings may be used to reimburse Georgia Power for Eligible Project Costs incurred in connection with its construction of Plant Vogtle Units 3 and 4
AROAsset retirement obligation
Atlanta Gas LightAtlanta Gas Light Company, a wholly-owned subsidiary of Southern Company Gas
Atlantic Coast PipelineAtlantic Coast Pipeline, LLC, a joint venture to construct and operate a natural gas pipeline in which Southern Company Gas held a 5% interest through March 24, 2020
BechtelBechtel Power Corporation, the primary contractor for the remaining construction activities for Plant Vogtle Units 3 and 4
Bechtel AgreementThe 2017 construction completion agreement between the Vogtle Owners and Bechtel
CCRCoal combustion residuals
Chattanooga GasChattanooga Gas Company, a wholly-owned subsidiary of Southern Company Gas
CODCommercial operation date
Contractor Settlement AgreementThe December 31, 2015 agreement between Westinghouse and the Vogtle Owners resolving disputes between the Vogtle Owners and the EPC Contractor under the Vogtle 3 and 4 Agreement
COVID-19The novel coronavirus disease declared a pandemic by the World Health Organization and the Centers for Disease Control and Prevention in March 2020
CWIPConstruction work in progress
DaltonCity of Dalton, Georgia, an incorporated municipality in the State of Georgia, acting by and through its Board of Water, Light, and Sinking Fund Commissioners
Dalton PipelineA pipeline facility in Georgia in which Southern Company Gas has a 50% undivided ownership interest
DOEU.S. Department of Energy
ECCRGeorgia Power's Environmental Compliance Cost Recovery tariff
ECO PlanMississippi Power's environmental compliance overview plan
ELG RulesThe EPA's steam electric effluent limitations guidelines (ELG) rule (finalized in 2015) and the ELG reconsideration rule (finalized in October 2020)
Eligible Project CostsCertain costs of construction relating to Plant Vogtle Units 3 and 4 that are eligible for financing under the loan guarantee program established under Title XVII of the Energy Policy Act of 2005
EPAU.S. Environmental Protection Agency
EPC ContractorWestinghouse and its affiliate, WECTEC Global Project Services Inc.; the former engineering, procurement, and construction contractor for Plant Vogtle Units 3 and 4
FERCFederal Energy Regulatory Commission
FFBFederal Financing Bank
FFB Credit FacilitiesNote purchase agreements among the DOE, Georgia Power, and the FFB and related promissory notes which provide for two multi-advance term loan facilities
FitchFitch Ratings, Inc.
Form 10-KAnnual Report on Form 10-K of Southern Company, Alabama Power, Georgia Power, Mississippi Power, Southern Power, and Southern Company Gas for the year ended December 31, 2020,2021, as applicable
GAAPU.S. generally accepted accounting principles
Georgia PowerGeorgia Power Company
GRAMAtlanta Gas Light's Georgia Rate Adjustment Mechanism
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DEFINITIONS
(continued)
TermMeaning
Guarantee Settlement AgreementThe June 9, 2017 settlement agreement between the Vogtle Owners and Toshiba related to certain payment obligations of the EPC Contractor guaranteed by Toshiba
Gulf PowerGulf Power Company, until January 1, 2019 a wholly-owned subsidiary of Southern Company; effective January 1, 2021, Gulf Power Company merged with and into Florida Power and Light Company, with Florida Power and Light Company remaining as the surviving company
Heating Degree DaysA measure of weather, calculated when the average daily temperatures are less than 65 degrees Fahrenheit
Heating SeasonThe period from November through March when Southern Company Gas' natural gas usage and operating revenues are generally higher
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DEFINITIONS
(continued)
TermMeaning
HLBVHypothetical liquidation at book value
IGCCIntegrated coal gasification combined cycle, the technology originally approved for Mississippi Power's Kemper County energy facility
IICIntercompany Interchange Contract
IRPIntegrated resource plan
ITAACInspections, Tests, Analyses, and Acceptance Criteria, standards established by the NRC
ITCInvestment tax credit
JEAJacksonville Electric Authority
Jefferson IslandJefferson Island Storage and Hub, L.L.C, which owns a natural gas storage facility in Louisiana consisting of two salt dome caverns; a subsidiary of Southern Company Gas through December 1, 2020
KWHKilowatt-hour
LIBORLondon Interbank Offered Rate
LIFOLast-in, first-out
LOCOMLower of weighted average cost or current market price
LTSALong-term service agreement
MarketersMarketers selling retail natural gas in Georgia and certificated by the Georgia PSC
MEAG PowerMunicipal Electric Authority of Georgia
Mississippi PowerMississippi Power Company
Mississippi Power Rate Case Settlement AgreementSettlement agreement between Mississippi Power and the Mississippi Public Utilities Staff approved by the Mississippi PSC in March 2020 related to Mississippi Power's base rate case filed in 2019
mmBtuMillion British thermal units
Moody'sMoody's Investors Service, Inc.
MRAMunicipal and Rural Associations
MWMegawatt
natural gas distribution utilitiesSouthern Company Gas' natural gas distribution utilities (Nicor Gas, Atlanta Gas Light, Virginia Natural Gas, and Chattanooga Gas)
NCCRGeorgia Power's Nuclear Construction Cost Recovery tariff
NDRAlabama Power's Natural Disaster Reserve
Nicor GasNorthern Illinois Gas Company, a wholly-owned subsidiary of Southern Company Gas
NRCU.S. Nuclear Regulatory Commission
NYMEXNew York Mercantile Exchange, Inc.
OCIOther comprehensive income
PennEast PipelinePennEast Pipeline Company, LLC, a joint venture to construct and operate a natural gas pipeline in which Southern Company Gas has a 20% ownership interest
PEPMississippi Power's Performance Evaluation Plan
Pivotal LNGPivotal LNG, Inc., through March 24, 2020, a wholly-owned subsidiary of Southern Company Gas
PowerSecurePowerSecure, Inc., a wholly-owned subsidiary of Southern Company
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DEFINITIONS
(continued)
TermMeaning
PowerSouthPowerSouth Energy Cooperative
PPAPower purchase agreements, as well as, for Southern Power, contracts for differences that provide the owner of a renewable facility a certain fixed price for the electricity sold to the grid
PSCPublic Service Commission
PTCProduction tax credit
Rate CNPAlabama Power's Rate Certificated New Plant, consisting of Rate CNP New Plant, Rate CNP Compliance, and Rate CNP PPA
Rate ECRAlabama Power's Rate Energy Cost Recovery
Rate RSEAlabama Power's Rate Stabilization and Equalization
RegistrantsSouthern Company, Alabama Power, Georgia Power, Mississippi Power, Southern Power Company, and Southern Company Gas
ROEReturn on equity
S&PS&P Global Ratings, a division of S&P Global Inc.
SAVESteps to Advance Virginia's Energy, an infrastructure replacement program at Virginia Natural Gas
SCSSouthern Company Services, Inc., the Southern Company system service company and a wholly-owned subsidiary of Southern Company
SECU.S. Securities and Exchange Commission
SEGCOSouthern Electric Generating Company, 50% owned by each of Alabama Power and Georgia Power
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DEFINITIONS
(continued)
TermMeaning
SequentSequent Energy Management, L.P. and Sequent Energy Canada Corp., until July 1, 2021, wholly-owned subsidiaries of Southern Company Gas through June 30, 2021
SNGSouthern Natural Gas Company, L.L.C., a pipeline system in which Southern Company Gas has a 50% ownership interest
SOFRSecured Overnight Financing Rate
Southern CompanyThe Southern Company
Southern Company GasSouthern Company Gas and its subsidiaries
Southern Company Gas CapitalSouthern Company Gas Capital Corporation, a 100%-owned subsidiary of Southern Company Gas
Southern Company power poolThe operating arrangement whereby the integrated generating resources of the traditional electric operating companies and Southern Power (excluding subsidiaries) are subject to joint commitment and dispatch in order to serve their combined load obligations
Southern Company systemSouthern Company, the traditional electric operating companies, Southern Power, Southern Company Gas, Southern Electric Generating Company,SEGCO, Southern Nuclear, SCS, Southern Communications Services, Inc., PowerSecure, and other subsidiaries
Southern HoldingsSouthern Company Holdings, Inc., a wholly-owned subsidiary of Southern Company
Southern NuclearSouthern Nuclear Operating Company, Inc., a wholly-owned subsidiary of Southern Company
Southern PowerSouthern Power Company and its subsidiaries
SouthStarSouthStar Energy Services, LLC (a Marketer), a wholly-owned subsidiary of Southern Company Gas
SP SolarSP Solar Holdings I, LP, a limited partnership indirectly owning substantially all of Southern Power's solar and battery energy storage facilities, in which Southern Power has a 67% ownership interest
SP WindSP Wind Holdings II, LLC, a holding company owning a portfolio of eight operating wind facilities, in which Southern Power is the controlling partner in a tax equity arrangement
Subsidiary RegistrantsAlabama Power, Georgia Power, Mississippi Power, Southern Power, and Southern Company Gas
Tax ReformThe impact of the Tax Cuts and Jobs Act, which became effective on January 1, 2018
ToshibaToshiba Corporation, the parent company of Westinghouse
traditional electric operating companiesAlabama Power, Georgia Power, and Mississippi Power
VCMVogtle Construction Monitoring
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DEFINITIONS
(continued)
TermMeaning
VIEVariable interest entity
Virginia CommissionVirginia State Corporation Commission
Virginia Natural GasVirginia Natural Gas, Inc., a wholly-owned subsidiary of Southern Company Gas
Vogtle 3 and 4 AgreementAgreement entered into with the EPC Contractor in 2008 by Georgia Power, acting for itself and as agent for the Vogtle Owners, and rejected in bankruptcy in July 2017, pursuant to which the EPC Contractor agreed to design, engineer, procure, construct, and test Plant Vogtle Units 3 and 4
Vogtle OwnersGeorgia Power, Oglethorpe Power Corporation, MEAG Power, and Dalton
Vogtle Services AgreementThe June 2017 services agreement between the Vogtle Owners and the EPC Contractor, as amended and restated in July 2017, for the EPC Contractor to transition construction management of Plant Vogtle Units 3 and 4 to Southern Nuclear and to provide ongoing design, engineering, and procurement services to Southern Nuclear
WACOGWeighted average cost of gas
WestinghouseWestinghouse Electric Company LLC
Williams Field Services GroupWilliams Field Services Group, LLC
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
This Quarterly Report on Form 10-Q contains forward-looking statements. Forward-looking statements include, among other things, statements concerning the potential and expected effects of the continued COVID-19 pandemic, regulated rates, the strategic goals for the business, customer and sales growth, economic conditions, cost recovery and other rate actions, projected equity ratios, current and proposed environmental regulations and related compliance plans and estimated expenditures, pending or potential litigation matters, access to sources of capital, financing activities, completion dates and costs of construction projects, matters related to the abandonment of the Kemper IGCC, completion of announced acquisitions, filings with state and federal regulatory authorities, and estimated construction plans and expenditures. In some cases, forward-looking statements can be identified by terminology such as "may," "will," "could," "would," "should," "expects," "plans," "anticipates," "believes," "estimates," "projects," "predicts," "potential," or "continue" or the negative of these terms or other similar terminology. There are various factors that could cause actual results to differ materially from those suggested by the forward-looking statements; accordingly, there can be no assurance that such indicated results will be realized. These factors include:

•the impact of recent and future federal and state regulatory changes, including tax, environmental, and other laws and regulations to which Southern Company and its subsidiaries are subject, as well as changes in application of existing laws and regulations;
•the potential effects of the continued COVID-19 pandemic, including, but not limited to, those described in Item 1A "Risk Factors" of the Form 10-K;
•the extent and timing of costs and legal requirements related to CCR;
•current and future litigation or regulatory investigations, proceedings, or inquiries, including litigation and other disputes related to the Kemper County energy facility;
•the effects, extent, and timing of the entry of additional competition in the markets in which Southern Company's subsidiaries operate, including from the development and deployment of alternative energy sources;
•variations in demand for electricity and natural gas;
•available sources and costs of natural gas and other fuels;fuels and commodities;
•the ability to complete necessary or desirable pipeline expansion or infrastructure projects, limits on pipeline capacity, and operational interruptions to natural gas distribution and transmission activities;
•transmission constraints;
•effects of inflation;
•the ability to control costs and avoid cost and schedule overruns during the development, construction, and operation of facilities or other projects, including Plant Vogtle Units 3 and 4 (which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale) and Plant Barry Unit 8, due to current andand/or future challenges which include, but are not limited to, changes in labor costs, availability, and productivity; challenges with management of contractors or vendors; subcontractor performance; adverse weather conditions; shortages, delays, increased costs, or inconsistent quality of equipment, materials, and labor; contractor or supplier delay; delays due to judicial or regulatory action; nonperformance under construction, operating, or other agreements; operational readiness, including specialized operator training and required site safety programs; engineering or design problems;problems or any remediation related thereto; design and other licensing-based compliance matters, including, for nuclear units, inspections and the timely submittal by Southern Nuclear of the ITAAC documentation for each unit and the related investigations, reviews, and approvals by the NRC necessary to support NRC authorization to load fuel; challenges with start-up activities, including major equipment failure, or system integration; and/or operational performance; and challenges related to the COVID-19 pandemic;
•the ability to overcome or mitigate the current challenges at Plant Vogtle Units 3 and 4, as described in Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" in Item 1 herein, that could further impact the cost and schedule for the project;
•legal proceedings and regulatory approvals and actions related to construction projects, such as Plant Vogtle Units 3 and 4 and Plant Barry Unit 8, and pipeline projects, including PSC approvals and FERC and NRC actions;
•under certain specified circumstances, a decision by holders of more than 10% of the ownership interests of Plant Vogtle Units 3 and 4 not to proceed with construction and the ability of other Vogtle Owners to tender a portion of their ownership interests to Georgia Power following certain construction cost increases;
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
(continued)
•in the event Georgia Power becomes obligated to provide funding to MEAG Power with respect to the portion of MEAG Power's ownership interest in Plant Vogtle Units 3 and 4 involving JEA, any inability of Georgia Power to receive repayment of such funding;
•the ability to construct facilities in accordance with the requirements of permits and licenses (including satisfaction of NRC requirements), to satisfy any environmental performance standards and the requirements of tax credits and other incentives, and to integrate facilities into the Southern Company system upon completion of construction;
•investment performance of the employee and retiree benefit plans and nuclear decommissioning trust funds;
•advances in technology, including the pace and extent of development of low- to no-carbon energy technologies and negative carbon concepts;
•performance of counterparties under ongoing renewable energy partnerships and development agreements;
•state and federal rate regulations and the impact of pending and future rate cases and negotiations, including rate actions relating to ROE, equity ratios, additional generating capacity, and fuel and other cost recovery mechanisms;
•the ability to successfully operate the traditional electric utilities' generating,operating companies' and SEGCO's generation, transmission, and distribution facilities, Southern Power's generation facilities, and Southern Company Gas' natural gas distribution and storage facilities and the successful performance of necessary corporate functions;
•the inherent risks involved in operating and constructing nuclear generating facilities;
•the inherent risks involved in transporting and storing natural gas;
•the performance of projects undertaken by the non-utility businesses and the success of efforts to invest in and develop new opportunities;
•internal restructuring or other restructuring options that may be pursued;
•potential business strategies, including acquisitions or dispositions of assets or businesses, which cannot be assured to be completed or beneficial to Southern Company or its subsidiaries;
•the ability of counterparties of Southern Company and its subsidiaries to make payments as and when due and to perform as required;
•the ability to obtain new short- and long-term contracts with wholesale customers;
•the direct or indirect effect on the Southern Company system's business resulting from cyber intrusion or physical attack and the threat of physical attacks;
•interest rate fluctuations and financial market conditions and the results of financing efforts;
•access to capital markets and other financing sources;
•changes in Southern Company's and any of its subsidiaries' credit ratings;
•changes in the method of determining LIBOR or the replacement of LIBOR with an alternative reference rate;
•the ability of Southern Company'sthe traditional electric utilitiesoperating companies to obtain additional generating capacity (or sell excess generating capacity) at competitive prices;
•catastrophic events such as fires, earthquakes, explosions, floods, tornadoes, hurricanes and other storms, droughts, pandemic health events, political unrest, wars, or other similar occurrences;
•the direct or indirect effects on the Southern Company system's business resulting from incidents affecting the U.S. electric grid, natural gas pipeline infrastructure, or operation of generating or storage resources;
•impairments of goodwill or long-lived assets;
•the effect of accounting pronouncements issued periodically by standard-setting bodies; and
•other factors discussed elsewhere herein and in other reports (including the Form 10-K) filed by the Registrants from time to time with the SEC.
The Registrants expressly disclaim any obligation to update any forward-looking statements.
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PART I
Item 1. Financial Statements (Unaudited).
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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30, For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Operating Revenues:Operating Revenues:Operating Revenues:
Retail electric revenuesRetail electric revenues$3,599 $3,182 $6,941 $6,260 Retail electric revenues$3,613 $3,342 
Wholesale electric revenuesWholesale electric revenues546 472 1,091 889 Wholesale electric revenues664 545 
Other electric revenuesOther electric revenues175 168 346 320 Other electric revenues177 170 
Natural gas revenues (includes alternative revenue programs of
$2, $(2), $4, and $7, respectively)
677 636 2,371 1,885 
Natural gas revenues (includes alternative revenue programs of $— and $2, respectively)Natural gas revenues (includes alternative revenue programs of $— and $2, respectively)2,058 1,694 
Other revenuesOther revenues201 162 359 284 Other revenues136 159 
Total operating revenuesTotal operating revenues5,198 4,620 11,108 9,638 Total operating revenues6,648 5,910 
Operating Expenses:Operating Expenses:Operating Expenses:
FuelFuel848 621 1,696 1,257 Fuel1,111 848 
Purchased powerPurchased power217 200 424 381 Purchased power232 207 
Cost of natural gasCost of natural gas231 144 814 583 Cost of natural gas1,095 583 
Cost of other salesCost of other sales103 74 185 129 Cost of other sales69 82 
Other operations and maintenanceOther operations and maintenance1,438 1,203 2,810 2,498 Other operations and maintenance1,516 1,372 
Depreciation and amortizationDepreciation and amortization891 873 1,762 1,730 Depreciation and amortization892 871 
Taxes other than income taxesTaxes other than income taxes313 298 657 629 Taxes other than income taxes372 345 
Estimated loss on Plant Vogtle Units 3 and 4Estimated loss on Plant Vogtle Units 3 and 4460 149 508 149 Estimated loss on Plant Vogtle Units 3 and 4— 48 
(Gain) loss on dispositions, net(11)0 (54)(39)
Gain on dispositions, netGain on dispositions, net(23)(44)
Total operating expensesTotal operating expenses4,490 3,562 8,802 7,317 Total operating expenses5,264 4,312 
Operating IncomeOperating Income708 1,058 2,306 2,321 Operating Income1,384 1,598 
Other Income and (Expense):Other Income and (Expense):Other Income and (Expense):
Allowance for equity funds used during constructionAllowance for equity funds used during construction45 35 90 68 Allowance for equity funds used during construction51 46 
Earnings (loss) from equity method investments(40)30 5 72 
Earnings from equity method investmentsEarnings from equity method investments46 45 
Interest expense, net of amounts capitalizedInterest expense, net of amounts capitalized(450)(444)(901)(900)Interest expense, net of amounts capitalized(462)(450)
Impairment of leveraged leases(7)(154)(7)(154)
Other income (expense), netOther income (expense), net108 101 167 204 Other income (expense), net145 58 
Total other income and (expense)Total other income and (expense)(344)(432)(646)(710)Total other income and (expense)(220)(301)
Earnings Before Income TaxesEarnings Before Income Taxes364 626 1,660 1,611 Earnings Before Income Taxes1,164 1,297 
Income taxes (benefit)(12)5 178 150 
Income taxesIncome taxes173 190 
Consolidated Net IncomeConsolidated Net Income376 621 1,482 1,461 Consolidated Net Income991 1,107 
Dividends on preferred stock of subsidiariesDividends on preferred stock of subsidiaries4 4 7 7 Dividends on preferred stock of subsidiaries4 4 
Net income (loss) attributable to noncontrolling interests0 5 (33)(26)
Net loss attributable to noncontrolling interestsNet loss attributable to noncontrolling interests(45)(32)
Consolidated Net Income Attributable to
Southern Company		Consolidated Net Income Attributable to
Southern Company		$372 $612 $1,508 $1,480 Consolidated Net Income Attributable to
Southern Company		$1,032 $1,135 
Common Stock Data:Common Stock Data:Common Stock Data:
Earnings per share -Earnings per share -Earnings per share -
BasicBasic$0.35 $0.58 $1.42 $1.40 Basic$0.97 $1.07 
DilutedDiluted$0.35 $0.58 $1.41 $1.39 Diluted$0.97 $1.06 
Average number of shares of common stock outstanding (in millions)Average number of shares of common stock outstanding (in millions)Average number of shares of common stock outstanding (in millions)
BasicBasic1,061 1,058 1,060 1,057 Basic1,063 1,060 
DilutedDiluted1,067 1,063 1,066 1,065 Diluted1,069 1,066 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30, For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Consolidated Net IncomeConsolidated Net Income$376 $621 $1,482 $1,461 Consolidated Net Income$991 $1,107 
Other comprehensive income (loss):
Other comprehensive income:Other comprehensive income:
Qualifying hedges:Qualifying hedges:Qualifying hedges:
Changes in fair value, net of tax of
$5, $4, $(5), and $(26), respectively
14 10 (16)(75)
Reclassification adjustment for amounts included in net income,
net of tax of $(1), $(3), $17, and $10, respectively
(5)(9)50 29 
Changes in fair value, net of tax of $8 and $(10), respectivelyChanges in fair value, net of tax of $8 and $(10), respectively19 (30)
Reclassification adjustment for amounts included in net income,
net of tax of $6 and $18, respectively
Reclassification adjustment for amounts included in net income,
net of tax of $6 and $18, respectively
20 55 
Pension and other postretirement benefit plans:Pension and other postretirement benefit plans:Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income,
net of tax of $2, $1, $3, and $2, respectively
3 3 6 3 
Total other comprehensive income (loss)12 4 40 (43)
Reclassification adjustment for amounts included in net income,
net of tax of $1 and $1, respectively
Reclassification adjustment for amounts included in net income,
net of tax of $1 and $1, respectively
3 3 
Total other comprehensive incomeTotal other comprehensive income42 28 
Comprehensive IncomeComprehensive Income388 625 1,522 1,418 Comprehensive Income1,033 1,135 
Dividends on preferred stock of subsidiariesDividends on preferred stock of subsidiaries4 4 7 7 Dividends on preferred stock of subsidiaries4 4 
Comprehensive income (loss) attributable to noncontrolling interests0 5 (33)(26)
Comprehensive loss attributable to noncontrolling interestsComprehensive loss attributable to noncontrolling interests(45)(32)
Consolidated Comprehensive Income Attributable to
Southern Company		Consolidated Comprehensive Income Attributable to
Southern Company		$384 $616 $1,548 $1,437 Consolidated Comprehensive Income Attributable to
Southern Company		$1,074 $1,163 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, For the Three Months Ended March 31,
20212020 20222021
(in millions) (in millions)
Operating Activities:Operating Activities:Operating Activities:
Consolidated net incomeConsolidated net income$1,482 $1,461 Consolidated net income$991 $1,107 
Adjustments to reconcile consolidated net income to net cash provided from operating activities —Adjustments to reconcile consolidated net income to net cash provided from operating activities —Adjustments to reconcile consolidated net income to net cash provided from operating activities —
Depreciation and amortization, totalDepreciation and amortization, total1,949 1,916 Depreciation and amortization, total989 964 
Deferred income taxesDeferred income taxes(101)(218)Deferred income taxes40 140 
Utilization of federal investment tax credits224 0 
Mark-to-market adjustments136 36 
Allowance for equity funds used during constructionAllowance for equity funds used during construction(51)(46)
Pension, postretirement, and other employee benefitsPension, postretirement, and other employee benefits(115)(119)Pension, postretirement, and other employee benefits(123)(78)
Settlement of asset retirement obligationsSettlement of asset retirement obligations(228)(193)Settlement of asset retirement obligations(87)(109)
Stock based compensation expenseStock based compensation expense105 84 Stock based compensation expense85 83 
Estimated loss on Plant Vogtle Units 3 and 4Estimated loss on Plant Vogtle Units 3 and 4508 149 Estimated loss on Plant Vogtle Units 3 and 4— 48 
Storm damage accrualsStorm damage accruals112 117 Storm damage accruals52 54 
Impairment charges89 154 
Gain on dispositions, netGain on dispositions, net(20)(41)
Natural gas cost under recovery – long-termNatural gas cost under recovery – long-term(119)0 Natural gas cost under recovery – long-term162 (185)
Retail fuel cost under recovery – long-termRetail fuel cost under recovery – long-term(130)— 
Other, netOther, net(60)(96)Other, net7 114 
Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —
-Receivables-Receivables29 292 -Receivables(217)308 
-Prepayments-Prepayments(79)(102)-Prepayments(86)(98)
-Materials and supplies-Materials and supplies(28)(27)
-Natural gas for sale, net of temporary LIFO liquidation-Natural gas for sale, net of temporary LIFO liquidation375 182 -Natural gas for sale, net of temporary LIFO liquidation450 456 
-Natural gas cost under recovery-Natural gas cost under recovery(485)0 -Natural gas cost under recovery(40)(487)
-Other current assets-Other current assets36 (253)-Other current assets87 90 
-Accounts payable-Accounts payable(177)(467)-Accounts payable132 (216)
-Accrued taxes-Accrued taxes(157)258 -Accrued taxes(58)(212)
-Accrued compensation-Accrued compensation(238)(347)-Accrued compensation(470)(417)
-Accrued interest-Accrued interest(128)(90)
-Retail fuel cost over recovery-Retail fuel cost over recovery(146)174 -Retail fuel cost over recovery— (53)
-Customer refunds(59)(223)
-Other current liabilities-Other current liabilities(177)42 -Other current liabilities35 (63)
Net cash provided from operating activitiesNet cash provided from operating activities2,904 2,847 Net cash provided from operating activities1,592 1,242 
Investing Activities:Investing Activities:Investing Activities:
Business acquisitions, net of cash acquiredBusiness acquisitions, net of cash acquired(345)(81)Business acquisitions, net of cash acquired— (345)
Property additionsProperty additions(3,384)(3,202)Property additions(1,419)(1,678)
Nuclear decommissioning trust fund purchasesNuclear decommissioning trust fund purchases(930)(524)Nuclear decommissioning trust fund purchases(294)(550)
Nuclear decommissioning trust fund salesNuclear decommissioning trust fund sales926 519 Nuclear decommissioning trust fund sales289 546 
Proceeds from dispositions25 983 
Cost of removal, net of salvageCost of removal, net of salvage(184)(130)Cost of removal, net of salvage(227)(85)
Change in construction payables, netChange in construction payables, net(55)(103)Change in construction payables, net23 (116)
Payments pursuant to LTSAsPayments pursuant to LTSAs(114)(91)Payments pursuant to LTSAs(37)(60)
Other investing activitiesOther investing activities35 (26)Other investing activities110 45 
Net cash used for investing activitiesNet cash used for investing activities(4,026)(2,655)Net cash used for investing activities(1,555)(2,243)
Financing Activities:Financing Activities:Financing Activities:
Increase (decrease) in notes payable, net492 (1,170)
Increase in notes payable, netIncrease in notes payable, net137 182 
Proceeds —Proceeds —Proceeds —
Long-term debtLong-term debt4,646 4,293 Long-term debt700 2,150 
Short-term borrowingsShort-term borrowings850 325 
Common stockCommon stock24 59 Common stock38 14 
Short-term borrowings325 615 
Redemptions and repurchases —Redemptions and repurchases —Redemptions and repurchases —
Long-term debtLong-term debt(2,477)(2,444)Long-term debt(977)(384)
Short-term borrowingsShort-term borrowings(25)(190)Short-term borrowings(100)(25)
Capital contributions from noncontrolling interestsCapital contributions from noncontrolling interests343 172 Capital contributions from noncontrolling interests73 313 
Distributions to noncontrolling interestsDistributions to noncontrolling interests(113)(118)Distributions to noncontrolling interests(97)(46)
Payment of common stock dividendsPayment of common stock dividends(1,377)(1,332)Payment of common stock dividends(702)(678)
Other financing activitiesOther financing activities(167)(170)Other financing activities(115)(117)
Net cash provided from (used for) financing activitiesNet cash provided from (used for) financing activities1,671 (285)Net cash provided from (used for) financing activities(193)1,734 
Net Change in Cash, Cash Equivalents, and Restricted CashNet Change in Cash, Cash Equivalents, and Restricted Cash549 (93)Net Change in Cash, Cash Equivalents, and Restricted Cash(156)733 
Cash, Cash Equivalents, and Restricted Cash at Beginning of PeriodCash, Cash Equivalents, and Restricted Cash at Beginning of Period1,068 1,978 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period1,829 1,068 
Cash, Cash Equivalents, and Restricted Cash at End of PeriodCash, Cash Equivalents, and Restricted Cash at End of Period$1,617 $1,885 Cash, Cash Equivalents, and Restricted Cash at End of Period$1,673 $1,801 
Supplemental Cash Flow Information:Supplemental Cash Flow Information:Supplemental Cash Flow Information:
Cash paid (received) during the period for —Cash paid (received) during the period for —Cash paid (received) during the period for —
Interest (net of $43 and $41 capitalized for 2021 and 2020, respectively)$884 $852 
Interest (net of $23 and $21 capitalized for 2022 and 2021, respectively)Interest (net of $23 and $21 capitalized for 2022 and 2021, respectively)$515 $519 
Income taxes, netIncome taxes, net88 (8)Income taxes, net(8)(51)
Noncash transactions —Noncash transactions —Noncash transactions —
Accrued property additions at end of periodAccrued property additions at end of period943 828 Accrued property additions at end of period863 872 
Contributions from noncontrolling interestsContributions from noncontrolling interests89 9 Contributions from noncontrolling interests— 89 
Contributions of wind turbine equipmentContributions of wind turbine equipment82 17 Contributions of wind turbine equipment— 82 
Right-of-use assets obtained under leasesRight-of-use assets obtained under leases90 94 Right-of-use assets obtained under leases3 76 
Reassessment of right-of-use assets under operating leasesReassessment of right-of-use assets under operating leases40 — 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
AssetsAssetsAt June 30, 2021At December 31, 2020AssetsAt March 31, 2022At December 31, 2021
(in millions) (in millions)
Current Assets:Current Assets:Current Assets:
Cash and cash equivalentsCash and cash equivalents$1,582 $1,065 Cash and cash equivalents$1,662 $1,798 
Receivables —Receivables —Receivables —
Customer accountsCustomer accounts1,683 1,753 Customer accounts2,006 1,806 
Energy marketing0 516 
Unbilled revenuesUnbilled revenues643 672 Unbilled revenues638 711 
Other accounts and notesOther accounts and notes488 512 Other accounts and notes509 523 
Accumulated provision for uncollectible accountsAccumulated provision for uncollectible accounts(88)(118)Accumulated provision for uncollectible accounts(89)(78)
Materials and suppliesMaterials and supplies1,469 1,478 Materials and supplies1,571 1,543 
Fossil fuel for generationFossil fuel for generation475 550 Fossil fuel for generation411 450 
Natural gas for saleNatural gas for sale178 460 Natural gas for sale121 362 
Prepaid expensesPrepaid expenses538 276 Prepaid expenses739 330 
Assets from risk management activities, net of collateralAssets from risk management activities, net of collateral175 147 Assets from risk management activities, net of collateral405 151 
Regulatory assets – asset retirement obligationsRegulatory assets – asset retirement obligations224 214 Regulatory assets – asset retirement obligations241 219 
Natural gas cost under recoveryNatural gas cost under recovery485 0 Natural gas cost under recovery306 266 
Assets held for sale787 60 
Other regulatory assetsOther regulatory assets728 810 Other regulatory assets576 653 
Other current assetsOther current assets184 222 Other current assets201 231 
Total current assetsTotal current assets9,551 8,617 Total current assets9,297 8,965 
Property, Plant, and Equipment:Property, Plant, and Equipment:Property, Plant, and Equipment:
In serviceIn service112,783 110,516 In service116,259 115,592 
Less: Accumulated depreciationLess: Accumulated depreciation33,240 32,397 Less: Accumulated depreciation34,645 34,079 
Plant in service, net of depreciationPlant in service, net of depreciation79,543 78,119 Plant in service, net of depreciation81,614 81,513 
Nuclear fuel, at amortized costNuclear fuel, at amortized cost816 818 Nuclear fuel, at amortized cost839 824 
Construction work in progressConstruction work in progress9,264 8,697 Construction work in progress9,337 8,771 
Total property, plant, and equipmentTotal property, plant, and equipment89,623 87,634 Total property, plant, and equipment91,790 91,108 
Other Property and Investments:Other Property and Investments:Other Property and Investments:
GoodwillGoodwill5,280 5,280 Goodwill5,280 5,280 
Nuclear decommissioning trusts, at fair valueNuclear decommissioning trusts, at fair value2,457 2,303 Nuclear decommissioning trusts, at fair value2,403 2,542 
Equity investments in unconsolidated subsidiariesEquity investments in unconsolidated subsidiaries1,287 1,362 Equity investments in unconsolidated subsidiaries1,293 1,282 
Other intangible assets, net of amortization of $286 and $328, respectively466 487 
Leveraged leases569 556 
Other intangible assets, net of amortization of $317 and $307, respectivelyOther intangible assets, net of amortization of $317 and $307, respectively435 445 
Miscellaneous property and investmentsMiscellaneous property and investments494 398 Miscellaneous property and investments633 653 
Total other property and investmentsTotal other property and investments10,553 10,386 Total other property and investments10,044 10,202 
Deferred Charges and Other Assets:Deferred Charges and Other Assets:Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortizationOperating lease right-of-use assets, net of amortization1,775 1,802 Operating lease right-of-use assets, net of amortization1,693 1,701 
Deferred charges related to income taxesDeferred charges related to income taxes806 796 Deferred charges related to income taxes833 824 
Prepaid pension costsPrepaid pension costs1,772 1,657 
Unamortized loss on reacquired debtUnamortized loss on reacquired debt269 280 Unamortized loss on reacquired debt257 258 
Regulatory assets – asset retirement obligations, deferredRegulatory assets – asset retirement obligations, deferred4,931 4,934 Regulatory assets – asset retirement obligations, deferred5,683 5,466 
Other regulatory assets, deferredOther regulatory assets, deferred7,092 7,198 Other regulatory assets, deferred5,372 5,577 
Other deferred charges and assetsOther deferred charges and assets1,307 1,288 Other deferred charges and assets1,898 1,776 
Total deferred charges and other assetsTotal deferred charges and other assets16,180 16,298 Total deferred charges and other assets17,508 17,259 
Total AssetsTotal Assets$125,907 $122,935 Total Assets$128,639 $127,534 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

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THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
Liabilities and Stockholders' EquityLiabilities and Stockholders' EquityAt June 30, 2021At December 31, 2020Liabilities and Stockholders' EquityAt March 31, 2022At December 31, 2021
(in millions) (in millions)
Current Liabilities:Current Liabilities:Current Liabilities:
Securities due within one yearSecurities due within one year$2,829 $3,507 Securities due within one year$1,193 $2,157 
Notes payableNotes payable1,402 609 Notes payable2,330 1,440 
Energy marketing trade payables0 494 
Accounts payableAccounts payable2,075 2,312 Accounts payable2,251 2,169 
Customer depositsCustomer deposits467 487 Customer deposits454 479 
Accrued taxes —Accrued taxes —Accrued taxes —
Accrued income taxesAccrued income taxes40 130 Accrued income taxes57 50 
Other accrued taxesOther accrued taxes589 699 Other accrued taxes415 641 
Accrued interestAccrued interest510 513 Accrued interest404 533 
Accrued compensationAccrued compensation770 1,025 Accrued compensation574 1,070 
Asset retirement obligationsAsset retirement obligations684 585 Asset retirement obligations695 697 
Liabilities held for sale677 0 
Operating lease obligationsOperating lease obligations245 241 Operating lease obligations245 250 
Other regulatory liabilitiesOther regulatory liabilities416 509 Other regulatory liabilities711 563 
Other current liabilitiesOther current liabilities956 968 Other current liabilities1,105 872 
Total current liabilitiesTotal current liabilities11,660 12,079 Total current liabilities10,434 10,921 
Long-term DebtLong-term Debt47,828 45,073 Long-term Debt50,633 50,120 
Deferred Credits and Other Liabilities:Deferred Credits and Other Liabilities:Deferred Credits and Other Liabilities:
Accumulated deferred income taxesAccumulated deferred income taxes8,710 8,175 Accumulated deferred income taxes9,506 8,862 
Deferred credits related to income taxesDeferred credits related to income taxes5,593 5,767 Deferred credits related to income taxes5,365 5,401 
Accumulated deferred ITCsAccumulated deferred ITCs2,247 2,235 Accumulated deferred ITCs2,196 2,216 
Employee benefit obligationsEmployee benefit obligations2,004 2,213 Employee benefit obligations1,526 1,550 
Operating lease obligations, deferredOperating lease obligations, deferred1,604 1,611 Operating lease obligations, deferred1,521 1,503 
Asset retirement obligations, deferredAsset retirement obligations, deferred9,983 10,099 Asset retirement obligations, deferred11,016 10,990 
Accrued environmental remediation208 216 
Other cost of removal obligationsOther cost of removal obligations2,190 2,211 Other cost of removal obligations2,030 2,103 
Other regulatory liabilities, deferredOther regulatory liabilities, deferred256 251 Other regulatory liabilities, deferred526 485 
Other deferred credits and liabilitiesOther deferred credits and liabilities587 480 Other deferred credits and liabilities966 816 
Total deferred credits and other liabilitiesTotal deferred credits and other liabilities33,382 33,258 Total deferred credits and other liabilities34,652 33,926 
Total LiabilitiesTotal Liabilities92,870 90,410 Total Liabilities95,719 94,967 
Redeemable Preferred Stock of SubsidiariesRedeemable Preferred Stock of Subsidiaries291 291 Redeemable Preferred Stock of Subsidiaries291 291 
Total Stockholders' Equity (See accompanying statements)
Total Stockholders' Equity (See accompanying statements)
32,746 32,234 
Total Stockholders' Equity (See accompanying statements)
32,629 32,276 
Total Liabilities and Stockholders' EquityTotal Liabilities and Stockholders' Equity$125,907 $122,935 Total Liabilities and Stockholders' Equity$128,639 $127,534 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.
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SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Southern Company Common Stockholders' EquitySouthern Company Common Stockholders' Equity
Number of
Common Shares		Common StockAccumulated
Other
Comprehensive Income
(Loss)		 Number of
Common Shares		Common StockAccumulated
Other
Comprehensive Income
(Loss)
IssuedTreasuryPar ValuePaid-In CapitalTreasuryRetained EarningsNoncontrolling InterestsTotal IssuedTreasuryPar ValuePaid-In CapitalTreasuryRetained EarningsAccumulated
Other
Comprehensive Income
(Loss)		Noncontrolling InterestsTotal
(in millions) (in millions)
Balance at December 31, 20191,054 (1)$5,257 $11,734 $(42)$10,877 $(321)$4,254 $31,759 
Balance at December 31, 2020Balance at December 31, 20201,058 (1)$5,268 $11,834 $(46)$11,311 $(395)$4,262 $32,234 
Consolidated net income (loss)Consolidated net income (loss)— — — — — 868 — (31)837 Consolidated net income (loss)— — — — — 1,135 — (32)1,103 
Other comprehensive income (loss)— — — — — — (47)— (47)
Stock issued3 — 9 43 — — — — 52 
Stock-based compensation— — — 5 — — — — 5 
Cash dividends of $0.62 per share— — — — — (655)— — (655)
Capital contributions from
noncontrolling interests		— — — — — — — 16 16 
Distributions to noncontrolling interests— — — — — — — (48)(48)
Other— — — — (2)(2)1 — (3)
Balance at March 31, 20201,057 (1)5,266 11,782 (44)11,088 (367)4,191 31,916 
Consolidated net income— — — — — 612 — 5 617 
Other comprehensive incomeOther comprehensive income— — — — — — 4 — 4 Other comprehensive income— — — — — — 28 — 28 
Stock issuedStock issued— — — 7 — — — — 7 Stock issued2 — 5 9 — — — — 14 
Stock-based compensationStock-based compensation— — — 11 — — — — 11 Stock-based compensation— — — 9 — — — — 9 
Cash dividends of $0.64 per shareCash dividends of $0.64 per share— — — — — (677)— — (677)Cash dividends of $0.64 per share— — — — — (678)— — (678)
Capital contributions from
noncontrolling interests		Capital contributions from
noncontrolling interests		— — — — — — — 165 165 Capital contributions from
noncontrolling interests		— — — — — — — 403 403 
Distributions to noncontrolling interestsDistributions to noncontrolling interests— — — — — — — (70)(70)Distributions to noncontrolling interests— — — — — — — (46)(46)
OtherOther— — — (13)— 1 — — (12)Other— — — 2 — — — (1)1 
Balance at June 30, 20201,057 (1)$5,266 $11,787 $(44)$11,024 $(363)$4,291 $31,961 
Balance at March 31, 2021Balance at March 31, 20211,060 (1)$5,273 $11,854 $(46)$11,768 $(367)$4,586 $33,068 
16
Table of ContentsIndex to Financial Statements
SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Southern Company Common Stockholders' Equity
Number of
Common Shares		Common StockAccumulated
Other
Comprehensive Income
(Loss)
IssuedTreasuryPar ValuePaid-In CapitalTreasuryRetained EarningsNoncontrolling InterestsTotal
(in millions)
Balance at December 31, 20201,058 (1)$5,268 $11,834 $(46)$11,311 $(395)$4,262 $32,234 
Balance at December 31, 2021Balance at December 31, 20211,061 (1)$5,279 $11,950 $(47)$10,929 $(237)$4,402 $32,276 
Consolidated net income (loss)Consolidated net income (loss)— — — — — 1,135 — (32)1,103 Consolidated net income (loss)— — — — — 1,032 — (45)987 
Other comprehensive income— — — — — — 28 — 28 
Stock issued2 — 5 9 — — — — 14 
Stock-based compensation— — — 9 — — — — 9 
Cash dividends of $0.64 per share— — — — — (678)— — (678)
Capital contributions from
noncontrolling interests		— — — — — — — 403 403 
Distributions to noncontrolling interests— — — — — — — (46)(46)
Other— — — 2 — — — (1)1 
Balance at March 31, 20211,060 (1)5,273 11,854 (46)11,768 (367)4,586 33,068 
Consolidated net income— — — — — 372 — — 372 
Other comprehensive incomeOther comprehensive income— — — — — — 12 — 12 Other comprehensive income— — — — — — 42 — 42 
Stock issuedStock issued— — 1 9 — — — — 10 Stock issued3 — 7 31 — — — — 38 
Stock-based compensationStock-based compensation— — — 22 — — — — 22 Stock-based compensation— — — 6 — — — — 6 
Cash dividends of $0.66 per shareCash dividends of $0.66 per share— — — — — (699)— — (699)Cash dividends of $0.66 per share— — — — — (702)— — (702)
Capital contributions from
noncontrolling interests		Capital contributions from
noncontrolling interests		— — — — — — — 29 29 Capital contributions from
noncontrolling interests		— — — — — — — 73 73 
Distributions to noncontrolling interestsDistributions to noncontrolling interests— — — — — — — (68)(68)Distributions to noncontrolling interests— — — — — — — (98)(98)
OtherOther— — — 1 (2)1 — — 0 Other— — — 7 (2)2 — — 7 
Balance at June 30, 20211,060 (1)$5,274 $11,886 $(48)$11,442 $(355)$4,547 $32,746 
Balance at March 31, 2022Balance at March 31, 20221,064 (1)$5,286 $11,994 $(49)$11,261 $(195)$4,332 $32,629 
The accompanying notes as they relate to Southern Company are an integral part of these condensed consolidated financial statements.

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ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30,For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Operating Revenues:Operating Revenues:Operating Revenues:
Retail revenuesRetail revenues$1,354 $1,223 $2,706 $2,427 Retail revenues$1,379 $1,352 
Wholesale revenues, non-affiliatesWholesale revenues, non-affiliates85 54 178 111 Wholesale revenues, non-affiliates114 92 
Wholesale revenues, affiliatesWholesale revenues, affiliates24 7 55 26 Wholesale revenues, affiliates65 32 
Other revenuesOther revenues93 81 176 152 Other revenues91 83 
Total operating revenuesTotal operating revenues1,556 1,365 3,115 2,716 Total operating revenues1,649 1,559 
Operating Expenses:Operating Expenses:Operating Expenses:
FuelFuel263 199 554 415 Fuel333 291 
Purchased power, non-affiliatesPurchased power, non-affiliates48 49 97 89 Purchased power, non-affiliates67 50 
Purchased power, affiliatesPurchased power, affiliates39 30 69 49 Purchased power, affiliates26 30 
Other operations and maintenanceOther operations and maintenance413 342 775 690 Other operations and maintenance409 361 
Depreciation and amortizationDepreciation and amortization214 202 425 402 Depreciation and amortization215 211 
Taxes other than income taxesTaxes other than income taxes101 102 203 208 Taxes other than income taxes104 103 
Total operating expensesTotal operating expenses1,078 924 2,123 1,853 Total operating expenses1,154 1,046 
Operating IncomeOperating Income478 441 992 863 Operating Income495 513 
Other Income and (Expense):Other Income and (Expense):Other Income and (Expense):
Allowance for equity funds used during constructionAllowance for equity funds used during construction12 11 24 22 Allowance for equity funds used during construction16 12 
Interest expense, net of amounts capitalizedInterest expense, net of amounts capitalized(84)(83)(168)(171)Interest expense, net of amounts capitalized(89)(84)
Other income (expense), netOther income (expense), net33 26 62 48 Other income (expense), net36 32 
Total other income and (expense)Total other income and (expense)(39)(46)(82)(101)Total other income and (expense)(37)(40)
Earnings Before Income TaxesEarnings Before Income Taxes439 395 910 762 Earnings Before Income Taxes458 473 
Income taxesIncome taxes104 93 213 177 Income taxes107 110 
Net IncomeNet Income335 302 697 585 Net Income351 363 
Dividends on Preferred StockDividends on Preferred Stock4 4 7 7 Dividends on Preferred Stock4 4 
Net Income After Dividends on Preferred StockNet Income After Dividends on Preferred Stock$331 $298 $690 $578 Net Income After Dividends on Preferred Stock$347 $359 


CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30,For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Net IncomeNet Income$335 $302 $697 $585 Net Income$351 $363 
Other comprehensive income (loss):
Other comprehensive income:Other comprehensive income:
Qualifying hedges:Qualifying hedges:Qualifying hedges:
Reclassification adjustment for amounts included in net income,
net of tax of $0, $0, $1, and $1, respectively
1 1 2 2 
Total other comprehensive income (loss)1 1 2 2 
Changes in fair value, net of tax of $(1) and $—, respectivelyChanges in fair value, net of tax of $(1) and $—, respectively(1)— 
Reclassification adjustment for amounts included in net income,
net of tax of $— and $—, respectively
Reclassification adjustment for amounts included in net income,
net of tax of $— and $—, respectively
1 1 
Total other comprehensive incomeTotal other comprehensive income— 1 
Comprehensive IncomeComprehensive Income$336 $303 $699 $587 Comprehensive Income$351 $364 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
1816
    Table of Contents                                Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months Ended June 30, For the Three Months Ended March 31,
20212020 20222021
(in millions) (in millions)
Operating Activities:Operating Activities:Operating Activities:
Net incomeNet income$697 $585 Net income$351 $363 
Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, totalDepreciation and amortization, total496 484 Depreciation and amortization, total250 248 
Deferred income taxesDeferred income taxes87 38 Deferred income taxes35 33 
Pension, postretirement, and other employee benefitsPension, postretirement, and other employee benefits(39)(50)Pension, postretirement, and other employee benefits(48)(29)
Settlement of asset retirement obligationsSettlement of asset retirement obligations(104)(100)Settlement of asset retirement obligations(38)(49)
Retail fuel cost under recovery – long-termRetail fuel cost under recovery – long-term(46)— 
Other, netOther, net(35)24 Other, net(27)(14)
Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —
-Receivables-Receivables(85)6 -Receivables(4)40 
-Fossil fuel stock-Fossil fuel stock21 (38)-Fossil fuel stock23 38 
-Prepayments-Prepayments(53)(62)-Prepayments(85)(73)
-Materials and supplies(7)(38)
-Other current assets-Other current assets(37)(34)-Other current assets(10)(16)
-Accounts payable-Accounts payable(236)(232)-Accounts payable(237)(299)
-Accrued taxes-Accrued taxes20 197 -Accrued taxes102 104 
-Accrued compensation-Accrued compensation(60)(75)-Accrued compensation(99)(105)
-Retail fuel cost over recovery-Retail fuel cost over recovery(18)66 -Retail fuel cost over recovery— (18)
-Other current liabilities-Other current liabilities(63)(97)-Other current liabilities(13)(9)
Net cash provided from operating activitiesNet cash provided from operating activities584 674 Net cash provided from operating activities154 214 
Investing Activities:Investing Activities:Investing Activities:
Property additionsProperty additions(844)(686)Property additions(343)(466)
Nuclear decommissioning trust fund purchasesNuclear decommissioning trust fund purchases(473)(160)Nuclear decommissioning trust fund purchases(72)(310)
Nuclear decommissioning trust fund salesNuclear decommissioning trust fund sales473 160 Nuclear decommissioning trust fund sales72 310 
Cost of removal, net of salvageCost of removal, net of salvage(56)(29)Cost of removal, net of salvage(60)(23)
Change in construction payablesChange in construction payables25 (53)Change in construction payables39 32 
Other investing activitiesOther investing activities(18)(15)Other investing activities(1)(9)
Net cash used for investing activitiesNet cash used for investing activities(893)(783)Net cash used for investing activities(365)(466)
Financing Activities:Financing Activities:Financing Activities:
Proceeds —
Senior notes600 0 
Pollution control revenue bonds0 87 
Proceeds — Senior notesProceeds — Senior notes700 — 
Redemptions —
Senior notes(200)0 
Pollution control revenue bonds0 (87)
Redemptions — Senior notesRedemptions — Senior notes(550)— 
Capital contributions from parent companyCapital contributions from parent company624 610 Capital contributions from parent company625 600 
Payment of common stock dividendsPayment of common stock dividends(492)(479)Payment of common stock dividends(254)(246)
Other financing activitiesOther financing activities(26)(15)Other financing activities(17)(13)
Net cash provided from financing activitiesNet cash provided from financing activities506 116 Net cash provided from financing activities504 341 
Net Change in Cash, Cash Equivalents, and Restricted CashNet Change in Cash, Cash Equivalents, and Restricted Cash197 7 Net Change in Cash, Cash Equivalents, and Restricted Cash293 89 
Cash, Cash Equivalents, and Restricted Cash at Beginning of PeriodCash, Cash Equivalents, and Restricted Cash at Beginning of Period530 894 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period1,060 530 
Cash, Cash Equivalents, and Restricted Cash at End of PeriodCash, Cash Equivalents, and Restricted Cash at End of Period$727 $901 Cash, Cash Equivalents, and Restricted Cash at End of Period$1,353 $619 
Supplemental Cash Flow Information:Supplemental Cash Flow Information:Supplemental Cash Flow Information:
Cash paid during the period for —Cash paid during the period for —Cash paid during the period for —
Interest (net of $7 capitalized for both 2021 and 2020)$154 $161 
Income taxes, net171 0 
Interest (net of $4 and $3 capitalized for 2022 and 2021, respectively)Interest (net of $4 and $3 capitalized for 2022 and 2021, respectively)$110 $93 
Noncash transactions —Noncash transactions —Noncash transactions —
Accrued property additions at end of periodAccrued property additions at end of period191 147 Accrued property additions at end of period188 198 
Right-of-use assets obtained under leasesRight-of-use assets obtained under leases2 3 Right-of-use assets obtained under leases1 1 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
17
Table of ContentsIndex to Financial Statements
ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
AssetsAt March 31, 2022At December 31, 2021
(in millions)
Current Assets:
Cash and cash equivalents$1,353 $1,060 
Receivables —
Customer accounts417 410 
Unbilled revenues127 138 
Affiliated36 37 
Other accounts and notes64 55 
Accumulated provision for uncollectible accounts(15)(14)
Fossil fuel stock136 159 
Materials and supplies550 548 
Prepaid expenses126 41 
Other regulatory assets191 208 
Other current assets131 67 
Total current assets3,116 2,709 
Property, Plant, and Equipment:
In service33,333 33,135 
Less: Accumulated provision for depreciation10,451 10,313 
Plant in service, net of depreciation22,882 22,822 
Nuclear fuel, at amortized cost246 247 
Construction work in progress1,249 1,147 
Total property, plant, and equipment24,377 24,216 
Other Property and Investments:
Nuclear decommissioning trusts, at fair value1,257 1,325 
Equity investments in unconsolidated subsidiaries57 57 
Miscellaneous property and investments126 126 
Total other property and investments1,440 1,508 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization97 108 
Deferred charges related to income taxes243 240 
Prepaid pension and other postretirement benefit costs546 513 
Regulatory assets – asset retirement obligations1,663 1,547 
Other regulatory assets, deferred1,717 1,807 
Other deferred charges and assets371 334 
Total deferred charges and other assets4,637 4,549 
Total Assets$33,570 $32,982 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

18
Table of ContentsIndex to Financial Statements
ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's EquityAt March 31, 2022At December 31, 2021
 (in millions)
Current Liabilities:
Securities due within one year$201 $751 
Accounts payable —
Affiliated194 309 
Other372 459 
Customer deposits106 106 
Accrued taxes200 98 
Accrued interest77 100 
Accrued compensation124 219 
Asset retirement obligations322 320 
Other regulatory liabilities148 215 
Other current liabilities128 125 
Total current liabilities1,872 2,702 
Long-term Debt9,631 8,936 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes3,619 3,573 
Deferred credits related to income taxes1,959 1,968 
Accumulated deferred ITCs86 88 
Employee benefit obligations179 171 
Operating lease obligations64 66 
Asset retirement obligations, deferred4,013 4,014 
Other cost of removal obligations144 192 
Other regulatory liabilities, deferred224 210 
Other deferred credits and liabilities56 58 
Total deferred credits and other liabilities10,344 10,340 
Total Liabilities21,847 21,978 
Redeemable Preferred Stock291 291 
Common Stockholder's Equity (See accompanying statements)
11,432 10,713 
Total Liabilities and Stockholder's Equity$33,570 $32,982 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.
19
    Table of Contents                                Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED BALANCE SHEETSSTATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
AssetsAt June 30, 2021At December 31, 2020
(in millions)
Current Assets:
Cash and cash equivalents$727 $530 
Receivables —
Customer accounts402 429 
Unbilled revenues180 152 
Affiliated40 31 
Other accounts and notes80 66 
Accumulated provision for uncollectible accounts(25)(43)
Fossil fuel stock214 235 
Materials and supplies550 546 
Prepaid expenses94 42 
Other regulatory assets221 226 
Other current assets88 33 
Total current assets2,571 2,247 
Property, Plant, and Equipment:
In service32,390 31,816 
Less: Accumulated provision for depreciation10,229 10,009 
Plant in service, net of depreciation22,161 21,807 
Nuclear fuel, at amortized cost254 270 
Construction work in progress978 866 
Total property, plant, and equipment23,393 22,943 
Other Property and Investments:
Nuclear decommissioning trusts, at fair value1,251 1,157 
Equity investments in unconsolidated subsidiaries64 63 
Miscellaneous property and investments127 131 
Total other property and investments1,442 1,351 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization130 151 
Deferred charges related to income taxes237 235 
Regulatory assets – asset retirement obligations1,437 1,441 
Other regulatory assets, deferred2,168 2,162 
Other deferred charges and assets313 273 
Total deferred charges and other assets4,285 4,262 
Total Assets$31,691 $30,803 
Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
(in millions)
Balance at December 31, 202031 $1,222 $5,413 $3,194 $(19)$9,810 
Net income after dividends on
   preferred stock		— — — 359 — 359 
Capital contributions from parent company— — 602 — — 602 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (246)— (246)
Balance at March 31, 202131 $1,222 $6,015 $3,307 $(18)$10,526 
Balance at December 31, 202131 $1,222 $6,056 $3,448 $(13)$10,713 
Net income after dividends on
   preferred stock		— — — 347 — 347 
Capital contributions from parent company— — 626 — — 626 
Cash dividends on common stock— — — (254)— (254)
Balance at March 31, 202231 $1,222 $6,682 $3,541 $(13)$11,432 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

20
    Table of Contents                                Index to Financial Statements
ALABAMA
GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETSSTATEMENTS OF INCOME (UNAUDITED)
 For the Three Months Ended March 31,
 20222021
 (in millions)
Operating Revenues:
Retail revenues$2,017 $1,787 
Wholesale revenues66 43 
Other revenues125 140 
Total operating revenues2,208 1,970 
Operating Expenses:
Fuel419 313 
Purchased power, non-affiliates150 144 
Purchased power, affiliates206 136 
Other operations and maintenance517 474 
Depreciation and amortization351 338 
Taxes other than income taxes125 116 
Estimated loss on Plant Vogtle Units 3 and 4— 48 
Total operating expenses1,768 1,569 
Operating Income440 401 
Other Income and (Expense):
Allowance for equity funds used during construction32 31 
Interest expense, net of amounts capitalized(107)(104)
Other income (expense), net50 41 
Total other income and (expense)(25)(32)
Earnings Before Income Taxes415 369 
Income taxes30 18 
Net Income$385 $351 
Liabilities and Stockholder's EquityAt June 30, 2021At December 31, 2020
 (in millions)
Current Liabilities:
Securities due within one year$616 $311 
Accounts payable —
Affiliated290 316 
Other378 545 
Customer deposits106 104 
Accrued taxes173 152 
Accrued interest93 90 
Accrued compensation176 212 
Asset retirement obligations296 254 
Other regulatory liabilities37 108 
Other current liabilities119 107 
Total current liabilities2,284 2,199 
Long-term Debt8,649 8,558 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes3,390 3,273 
Deferred credits related to income taxes1,988 2,016 
Accumulated deferred ITCs91 94 
Employee benefit obligations173 214 
Operating lease obligations100 119 
Asset retirement obligations, deferred3,651 3,720 
Other cost of removal obligations291 335 
Other regulatory liabilities, deferred93 124 
Other deferred credits and liabilities53 50 
Total deferred credits and other liabilities9,830 9,945 
Total Liabilities20,763 20,702 
Redeemable Preferred Stock291 291 
Common Stockholder's Equity (See accompanying statements)
10,637 9,810 
Total Liabilities and Stockholder's Equity$31,691 $30,803 
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 For the Three Months Ended March 31,
 20222021
 (in millions)
Net Income$385 $351 
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $3 and $—, respectively9 — 
Reclassification adjustment for amounts included in net income,
   net of tax of $1 and $—, respectively
1 2 
Total other comprehensive income10 2 
Comprehensive Income$395 $353 
The accompanying notes as they relate to AlabamaGeorgia Power are an integral part of these condensed financial statements.
21
    Table of Contents                                Index to Financial Statements
ALABAMA POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
(in millions)
Balance at December 31, 201931 $1,222 $4,755 $3,001 $(23)$8,955 
Net income after dividends on
   preferred stock		— — — 280 — 280 
Capital contributions from parent company— — 612 — — 612 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (239)— (239)
Balance at March 31, 202031 1,222 5,367 3,042 (22)9,609 
Net income after dividends on
   preferred stock		— — — 298 — 298 
Capital contributions from parent company— — 1 — — 1 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (239)— (239)
Balance at June 30, 202031 $1,222 $5,368 $3,101 $(21)$9,670 
Balance at December 31, 202031 $1,222 $5,413 $3,194 $(19)$9,810 
Net income after dividends on
   preferred stock		— — — 359 — 359 
Capital contributions from parent company— — 602 — — 602 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (246)— (246)
Balance at March 31, 202131 1,222 6,015 3,307 (18)10,526 
Net income after dividends on
   preferred stock		— — — 331 — 331 
Capital contributions from parent company— — 26 — — 26 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (246)— (246)
Other— — — (1)— (1)
Balance at June 30, 202131 $1,222 $6,041 $3,391 $(17)$10,637 
The accompanying notes as they relate to Alabama Power are an integral part of these condensed financial statements.

22
Table of ContentsIndex to Financial Statements

GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF INCOMECASH FLOWS (UNAUDITED)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Operating Revenues:
Retail revenues$2,026 $1,760 $3,813 $3,435 
Wholesale revenues36 25 80 51 
Other revenues163 143 302 268 
Total operating revenues2,225 1,928 4,195 3,754 
Operating Expenses:
Fuel343 226 656 458 
Purchased power, non-affiliates144 133 288 262 
Purchased power, affiliates149 122 285 251 
Other operations and maintenance542 463 1,015 928 
Depreciation and amortization342 354 680 707 
Taxes other than income taxes118 108 235 221 
Estimated loss on Plant Vogtle Units 3 and 4460 149 508 149 
Total operating expenses2,098 1,555 3,667 2,976 
Operating Income127 373 528 778 
Other Income and (Expense):
Allowance for equity funds used during construction30 20 61 40 
Interest expense, net of amounts capitalized(106)(105)(210)(216)
Other income (expense), net42 31 83 63 
Total other income and (expense)(34)(54)(66)(113)
Earnings Before Income Taxes93 319 462 665 
Income taxes (benefit)(50)11 (32)27 
Net Income$143 $308 $494 $638 
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Net Income$143 $308 $494 $638 
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of
   $0, $0, $0, and $(1), respectively
0 0 0 (2)
Reclassification adjustment for amounts included in net income,
   net of tax of $1, $1, $1, and $1, respectively
1 2 3 3 
Total other comprehensive income (loss)1 2 3 1 
Comprehensive Income$144 $310 $497 $639 
 For the Three Months Ended March 31,
 20222021
 (in millions)
Operating Activities:
Net income$385 $351 
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total397 384 
Deferred income taxes(6)(86)
Pension, postretirement, and other employee benefits(63)(43)
Settlement of asset retirement obligations(41)(49)
Storm damage accruals53 53 
Retail fuel cost under recovery – long-term(84)— 
Estimated loss on Plant Vogtle Units 3 and 4— 48 
Other, net(85)(19)
Changes in certain current assets and liabilities —
-Receivables— 176 
-Prepaid income taxes(36)— 
-Other current assets22 4 
-Accounts payable39 (74)
-Accrued taxes(78)(110)
-Accrued compensation(79)(68)
-Accrued interest(43)(34)
-Other current liabilities(20)(44)
Net cash provided from operating activities361 489 
Investing Activities:
Property additions(749)(775)
Nuclear decommissioning trust fund purchases(221)(241)
Nuclear decommissioning trust fund sales217 236 
Cost of removal, net of salvage(140)(40)
Change in construction payables, net of joint owner portion14 (103)
Proceeds from dispositions56 1 
Other investing activities14 9 
Net cash used for investing activities(809)(913)
Financing Activities:
Increase in notes payable, net410 145 
Proceeds —
Senior notes— 750 
Short-term borrowings450 — 
Redemptions and repurchases —
Senior notes(400)(325)
FFB loan(24)(25)
Capital contributions from parent company445 330 
Payment of common stock dividends(423)(412)
Other financing activities(17)(19)
Net cash provided from financing activities441 444 
Net Change in Cash, Cash Equivalents, and Restricted Cash(7)20 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period33 9 
Cash, Cash Equivalents, and Restricted Cash at End of Period$26 $29 
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $16 and $15 capitalized for 2022 and 2021, respectively)$139 $128 
Noncash transactions —
Accrued property additions at end of period459 445 
Right-of-use assets obtained under operating leases1 3 
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
2322
    Table of Contents                                Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWSBALANCE SHEETS (UNAUDITED)
 For the Six Months Ended June 30,
 20212020
 (in millions)
Operating Activities:
Net income$494 $638 
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total772 800 
Deferred income taxes(309)(202)
Allowance for equity funds used during construction(61)(40)
Pension, postretirement, and other employee benefits(59)(55)
Settlement of asset retirement obligations(100)(78)
Storm damage accruals107 107 
Estimated loss on Plant Vogtle Units 3 and 4508 149 
Other, net90 19 
Changes in certain current assets and liabilities —
-Receivables(73)(73)
-Fossil fuel stock55 (52)
-Materials and supplies(46)(61)
-Other current assets15 (26)
-Accounts payable83 0 
-Accrued taxes14 87 
-Accrued compensation(39)(69)
-Retail fuel cost over recovery(113)109 
-Customer refunds(6)(159)
-Other current liabilities(19)30 
Net cash provided from operating activities1,313 1,124 
Investing Activities:
Property additions(1,575)(1,650)
Nuclear decommissioning trust fund purchases(458)(365)
Nuclear decommissioning trust fund sales453 359 
Cost of removal, net of salvage(73)(62)
Change in construction payables, net of joint owner portion(72)(48)
Proceeds from dispositions3 143 
Other investing activities(8)(36)
Net cash used for investing activities(1,730)(1,659)
Financing Activities:
Increase (decrease) in notes payable, net250 (25)
Proceeds —
Senior notes750 1,500 
Pollution control revenue bonds0 53 
FFB loan371 519 
Short-term borrowings0 250 
Redemptions and repurchases —
Senior notes(325)(950)
Pollution control revenue bonds(69)(148)
FFB loan(45)(32)
Capital contributions from parent company368 500 
Payment of common stock dividends(824)(771)
Other financing activities(19)(27)
Net cash provided from financing activities457 869 
Net Change in Cash, Cash Equivalents, and Restricted Cash40 334 
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period9 52 
Cash, Cash Equivalents, and Restricted Cash at End of Period$49 $386 
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $30 and $22 capitalized for 2021 and 2020, respectively)$182 $180 
Income taxes, net139 0 
Noncash transactions —
Accrued property additions at end of period476 478 
Right-of-use assets obtained under operating leases3 29 
AssetsAt March 31, 2022At December 31, 2021
 (in millions)
Current Assets:
Cash and cash equivalents$26 $33 
Receivables —
Customer accounts, net561 547 
Unbilled revenues216 231 
Joint owner accounts60 116 
Affiliated12 25 
Other accounts and notes35 44 
Fossil fuel stock231 248 
Materials and supplies681 670 
Regulatory assets – storm damage4 48 
Regulatory assets – asset retirement obligations200 178 
Assets from risk management activities162 48 
Other regulatory assets248 241 
Other current assets124 130 
Total current assets2,560 2,559 
Property, Plant, and Equipment:
In service41,592 41,332 
Less: Accumulated provision for depreciation13,029 12,854 
Plant in service, net of depreciation28,563 28,478 
Nuclear fuel, at amortized cost593 577 
Construction work in progress7,086 6,688 
Total property, plant, and equipment36,242 35,743 
Other Property and Investments:
Nuclear decommissioning trusts, at fair value1,146 1,217 
Equity investments in unconsolidated subsidiaries51 50 
Miscellaneous property and investments74 69 
Total other property and investments1,271 1,336 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization1,120 1,157 
Deferred charges related to income taxes557 550 
Prepaid pension costs608 563 
Deferred under recovered fuel clause revenues494 410 
Regulatory assets – asset retirement obligations, deferred3,781 3,688 
Other regulatory assets, deferred2,067 1,964 
Other deferred charges and assets506 491 
Total deferred charges and other assets9,133 8,823 
Total Assets$49,206 $48,461 
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

23
Table of ContentsIndex to Financial Statements
GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's EquityAt March 31, 2022At December 31, 2021
 (in millions)
Current Liabilities:
Securities due within one year$275 $675 
Notes payable860 — 
Accounts payable —
Affiliated548 757 
Other873 702 
Customer deposits257 259 
Accrued taxes196 335 
Accrued interest93 136 
Accrued compensation124 232 
Operating lease obligations156 156 
Asset retirement obligations314 317 
Other regulatory liabilities336 280 
Other current liabilities292 254 
Total current liabilities4,324 4,103 
Long-term Debt13,088 13,109 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes3,155 3,019 
Deferred credits related to income taxes2,303 2,321 
Accumulated deferred ITCs326 328 
Employee benefit obligations390 402 
Operating lease obligations, deferred989 999 
Asset retirement obligations, deferred6,526 6,507 
Other deferred credits and liabilities456 439 
Total deferred credits and other liabilities14,145 14,015 
Total Liabilities31,557 31,227 
Common Stockholder's Equity (See accompanying statements)
17,649 17,234 
Total Liabilities and Stockholder's Equity$49,206 $48,461 
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.
24
    Table of Contents                                Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED BALANCE SHEETSSTATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
AssetsAt June 30, 2021At December 31, 2020
 (in millions)
Current Assets:
Cash and cash equivalents$49 $9 
Receivables —
Customer accounts601 621 
Unbilled revenues334 233 
Joint owner accounts98 123 
Affiliated27 21 
Other accounts and notes40 67 
Accumulated provision for uncollectible accounts(3)(26)
Fossil fuel stock223 278 
Materials and supplies631 592 
Regulatory assets – storm damage150 213 
Regulatory assets – asset retirement obligations183 166 
Other regulatory assets240 248 
Other current assets140 143 
Total current assets2,713 2,688 
Property, Plant, and Equipment:
In service40,408 39,682 
Less: Accumulated provision for depreciation12,540 12,251 
Plant in service, net of depreciation27,868 27,431 
Nuclear fuel, at amortized cost562 548 
Construction work in progress7,062 6,857 
Total property, plant, and equipment35,492 34,836 
Other Property and Investments:
Nuclear decommissioning trusts, at fair value1,207 1,145 
Equity investments in unconsolidated subsidiaries51 51 
Miscellaneous property and investments66 63 
Total other property and investments1,324 1,259 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization1,236 1,308 
Deferred charges related to income taxes535 527 
Regulatory assets – asset retirement obligations, deferred3,281 3,291 
Other regulatory assets, deferred2,550 2,692 
Other deferred charges and assets494 479 
Total deferred charges and other assets8,096 8,297 
Total Assets$47,625 $47,080 
 Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
 (in millions)
Balance at December 31, 20209 $398 $12,361 $3,789 $(47)$16,501 
Net income— — — 351 — 351 
Capital contributions from parent company— — 332 — — 332 
Other comprehensive income— — — — 2 2 
Cash dividends on common stock— — — (412)— (412)
Balance at March 31, 20219 $398 $12,693 $3,728 $(45)$16,774 
Balance at December 31, 20219 $398 $14,153 $2,724 $(41)$17,234 
Net income— — — 385 — 385 
Capital contributions from parent company— — 443 — — 443 
Other comprehensive income— — — — 10 10 
Cash dividends on common stock— — — (423)— (423)
Balance at March 31, 20229 $398 $14,596 $2,686 $(31)$17,649 
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

25
    Table of Contents                                Index to Financial Statements
GEORGIA
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETSSTATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
 
Liabilities and Stockholder's EquityAt June 30, 2021At December 31, 2020
 (in millions)
Current Liabilities:
Securities due within one year$627 $542 
Notes payable310 60 
Accounts payable —
Affiliated587 597 
Other755 753 
Customer deposits268 276 
Accrued taxes322 407 
Accrued interest138 130 
Accrued compensation164 233 
Operating lease obligations152 151 
Asset retirement obligations321 287 
Over recovered fuel clause revenues0 113 
Other regulatory liabilities277 228 
Other current liabilities230 254 
Total current liabilities4,151 4,031 
Long-term Debt13,023 12,428 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes3,138 3,272 
Deferred credits related to income taxes2,463 2,588 
Accumulated deferred ITCs322 273 
Employee benefit obligations518 586 
Operating lease obligations, deferred1,111 1,156 
Asset retirement obligations, deferred5,962 5,978 
Other deferred credits and liabilities391 267 
Total deferred credits and other liabilities13,905 14,120 
Total Liabilities31,079 30,579 
Common Stockholder's Equity (See accompanying statements)
16,546 16,501 
Total Liabilities and Stockholder's Equity$47,625 $47,080 
For the Three Months Ended March 31,
 20222021
 (in millions)
Operating Revenues:
Retail revenues$217 $204 
Wholesale revenues, non-affiliates68 63 
Wholesale revenues, affiliates42 33 
Other revenues8 7 
Total operating revenues335 307 
Operating Expenses:
Fuel and purchased power132 106 
Other operations and maintenance76 68 
Depreciation and amortization45 47 
Taxes other than income taxes29 31 
Total operating expenses282 252 
Operating Income53 55 
Other Income and (Expense):
Interest expense, net of amounts capitalized(13)(14)
Other income (expense), net10 8 
Total other income and (expense)(3)(6)
Earnings Before Income Taxes50 49 
Income taxes8 4 
Net Income and Comprehensive Income$42 $45 
The accompanying notes as they relate to GeorgiaMississippi Power are an integral part of these condensed financial statements.
26
    Table of Contents                                Index to Financial Statements
GEORGIA POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
 Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total
 (in millions)
Balance at December 31, 20199 $398 $10,962 $3,756 $(51)$15,065 
Net income— — — 331 — 331 
Capital contributions from parent company— — 502 — — 502 
Other comprehensive income (loss)— — — — (1)(1)
Cash dividends on common stock— — — (385)— (385)
Balance at March 31, 20209 398 11,464 3,702 (52)15,512 
Net income— — — 308 — 308 
Capital contributions from parent company— — 1 — — 1 
Other comprehensive income— — — — 2 2 
Cash dividends on common stock— — — (386)— (386)
Balance at June 30, 20209 $398 $11,465 $3,624 $(50)$15,437 
Balance at December 31, 20209 $398 $12,361 $3,789 $(47)$16,501 
Net income— — — 351 — 351 
Capital contributions from parent company— — 332 — — 332 
Other comprehensive income— — — — 2 2 
Cash dividends on common stock— — — (412)— (412)
Balance at March 31, 20219 398 12,693 3,728 (45)16,774 
Net income— — — 143 — 143 
Capital contributions from parent company— — 40 — — 40 
Other comprehensive income— — — — 1 1 
Cash dividends on common stock— — — (412)— (412)
Balance at June 30, 20219 $398 $12,733 $3,459 $(44)$16,546 
The accompanying notes as they relate to Georgia Power are an integral part of these condensed financial statements.

27
Table of ContentsIndex to Financial Statements

MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF INCOMECASH FLOWS (UNAUDITED)
For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Operating Revenues:
Retail revenues$219 $199 $422 $398 
Wholesale revenues, non-affiliates54 52 117 103 
Wholesale revenues, affiliates25 25 57 47 
Other revenues5 7 14 11 
Total operating revenues303 283 610 559 
Operating Expenses:
Fuel91 83 192 162 
Purchased power11 7 16 12 
Other operations and maintenance76 67 144 142 
Depreciation and amortization44 46 91 88 
Taxes other than income taxes32 30 63 59 
Total operating expenses254 233 506 463 
Operating Income49 50 104 96 
Other Income and (Expense):
Interest expense, net of amounts capitalized(14)(15)(29)(31)
Other income (expense), net11 6 20 14 
Total other income and (expense)(3)(9)(9)(17)
Earnings Before Income Taxes46 41 95 79 
Income taxes8 2 12 8 
Net Income$38 $39 $83 $71 
CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Net Income$38 $39 $83 $71 
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of
   $0, $0, $0, and $0, respectively
0 0 0 (1)
Reclassification adjustment for amounts included in net income,
   net of tax of $0, $0, $0, and $0, respectively
0 0 1 1 
Total other comprehensive income (loss)0 0 1 0 
Comprehensive Income$38 $39 $84 $71 
For the Three Months Ended March 31,
 20222021
 (in millions)
Operating Activities:
Net income$42 $45 
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total55 53 
Deferred income taxes(5)4 
Other, net17 (14)
Changes in certain current assets and liabilities —
-Receivables(7)7 
-Retail fuel cost under recovery(11)— 
-Other current assets(11)1 
-Accounts payable(9)(30)
-Accrued taxes(63)(75)
-Accrued compensation(18)(16)
-Other current liabilities(6)(13)
Net cash used for operating activities(16)(38)
Investing Activities:
Property additions(45)(45)
Construction payables(8)(8)
Payments pursuant to LTSAs(8)(7)
Other investing activities(7)(7)
Net cash used for investing activities(68)(67)
Financing Activities:
Increase in notes payable, net25 29 
Capital contributions from parent company50 100 
Payment of common stock dividends(43)(39)
Net cash provided from financing activities32 90 
Net Change in Cash, Cash Equivalents, and Restricted Cash(52)(15)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period61 39 
Cash, Cash Equivalents, and Restricted Cash at End of Period$9 $24 
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest$22 $16 
Noncash transactions — Accrued property additions at end of period17 26 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
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    Table of Contents                                Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF CASH FLOWSBALANCE SHEETS (UNAUDITED)
For the Six Months Ended June 30,
 20212020
 (in millions)
Operating Activities:
Net income$83 $71 
Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, total106 92 
Settlement of asset retirement obligations(12)(9)
Other, net(16)(4)
Changes in certain current assets and liabilities —
-Other current assets(3)(13)
-Accounts payable(33)(19)
-Accrued taxes(51)(21)
-Accrued compensation(10)(15)
-Retail fuel cost over recovery(15)(1)
-Other current liabilities(8)(10)
Net cash provided from operating activities41 71 
Investing Activities:
Property additions(90)(111)
Construction payables(3)(14)
Payments pursuant to LTSAs(14)(10)
Other investing activities(10)(10)
Net cash used for investing activities(117)(145)
Financing Activities:
Increase (decrease) in notes payable, net(25)4 
Proceeds —
Senior notes525 0 
Short-term borrowings0 40 
Pollution control revenue bonds0 34 
Other long-term debt0 100 
Redemptions —
Senior notes0 (275)
Short-term borrowings0 (40)
Pollution control revenue bonds0 (41)
Capital contributions from parent company101 75 
Return of capital to parent company0 (74)
Payment of common stock dividends(79)0 
Other financing activities(7)(1)
Net cash provided from (used for) financing activities515 (178)
Net Change in Cash, Cash Equivalents, and Restricted Cash439 (252)
Cash, Cash Equivalents, and Restricted Cash at Beginning of Period39 286 
Cash, Cash Equivalents, and Restricted Cash at End of Period$478 $34 
Supplemental Cash Flow Information:
Cash paid during the period for —
Interest (net of $0 capitalized for both 2021 and 2020)$31 $33 
Income taxes, net7 0 
Noncash transactions — Accrued property additions at end of period31 21 
AssetsAt March 31, 2022At December 31, 2021
 (in millions)
Current Assets:
Cash and cash equivalents$9 $61 
Receivables —
Customer accounts, net65 37 
Unbilled revenues36 34 
Affiliated17 29 
Other accounts and notes30 28 
Fossil fuel stock30 28 
Materials and supplies72 70 
Assets from risk management activities94 28 
Other regulatory assets61 54 
Other current assets10 13 
Total current assets424 382 
Property, Plant, and Equipment:
In service5,149 5,106 
Less: Accumulated provision for depreciation1,626 1,591 
Plant in service, net of depreciation3,523 3,515 
Construction work in progress111 127 
Total property, plant, and equipment3,634 3,642 
Other Property and Investments177 179 
Deferred Charges and Other Assets:
Deferred charges related to income taxes30 31 
Prepaid pension costs85 79 
Regulatory assets – asset retirement obligations235 232 
Other regulatory assets, deferred298 317 
Accumulated deferred income taxes115 118 
Other deferred charges and assets127 100 
Total deferred charges and other assets890 877 
Total Assets$5,125 $5,080 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

28
Table of ContentsIndex to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's EquityAt March 31, 2022At December 31, 2021
 (in millions)
Current Liabilities:
Securities due within one year$1 $1 
Notes payable25 — 
Accounts payable —
Affiliated58 81 
Other53 47 
Accrued taxes56 120 
Accrued compensation20 36 
Asset retirement obligations28 30 
Other regulatory liabilities120 59 
Other current liabilities55 65 
Total current liabilities416 439 
Long-term Debt1,510 1,510 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes462 464 
Deferred credits related to income taxes269 269 
Employee benefit obligations88 88 
Asset retirement obligations, deferred161 160 
Other cost of removal obligations194 195 
Other regulatory liabilities, deferred84 64 
Other deferred credits and liabilities24 24 
Total deferred credits and other liabilities1,282 1,264 
Total Liabilities3,208 3,213 
Common Stockholder's Equity (See accompanying statements)
1,917 1,867 
Total Liabilities and Stockholder's Equity$5,125 $5,080 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
29
    Table of Contents                                Index to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETSSTATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
AssetsAt June 30, 2021At December 31, 2020
 (in millions)
Current Assets:
Cash and cash equivalents$478 $39 
Receivables —
Customer accounts, net38 34 
Unbilled revenues42 38 
Affiliated26 32 
Other accounts and notes30 32 
Fossil fuel stock25 24 
Materials and supplies68 65 
Other regulatory assets53 60 
Other current assets41 20 
Total current assets801 344 
Property, Plant, and Equipment:
In service5,053 5,011 
Less: Accumulated provision for depreciation1,556 1,545 
Plant in service, net of depreciation3,497 3,466 
Construction work in progress126 146 
Total property, plant, and equipment3,623 3,612 
Other Property and Investments180 151 
Deferred Charges and Other Assets:
Deferred charges related to income taxes31 32 
Regulatory assets – asset retirement obligations213 201 
Other regulatory assets, deferred375 388 
Accumulated deferred income taxes123 129 
Other deferred charges and assets66 55 
Total deferred charges and other assets808 805 
Total Assets$5,412 $4,912 
 Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings (Accumulated Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Total
 (in millions)
Balance at December 31, 20201 $38 $4,460 $(2,754)$(2)$1,742 
Net income— — — 45 — 45 
Capital contributions from parent company— — 100 — — 100 
Cash dividends on common stock— — — (39)— (39)
Balance at March 31, 20211 $38 $4,560 $(2,748)$(2)$1,848 
Balance at December 31, 20211 $38 $4,582 $(2,753)$— $1,867 
Net income— — — 42 — 42 
Capital contributions from parent company— — 51 — — 51 
Cash dividends on common stock— — — (43)— (43)
Balance at March 31, 20221 $38 $4,633 $(2,754)$— $1,917 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

30
Table of ContentsIndex to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholder's EquityAt June 30, 2021At December 31, 2020
 (in millions)
Current Liabilities:
Securities due within one year$421 $406 
Notes payable0 25 
Accounts payable —
Affiliated71 63 
Other66 109 
Accrued taxes63 114 
Accrued interest15 15 
Accrued compensation24 34 
Asset retirement obligations36 27 
Over recovered regulatory clause liabilities12 34 
Other regulatory liabilities62 49 
Other current liabilities51 40 
Total current liabilities821 916 
Long-term Debt1,512 1,013 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes460 447 
Deferred credits related to income taxes283 287 
Employee benefit obligations102 113 
Asset retirement obligations, deferred135 150 
Other cost of removal obligations193 194 
Other regulatory liabilities, deferred26 15 
Other deferred credits and liabilities31 35 
Total deferred credits and other liabilities1,230 1,241 
Total Liabilities3,563 3,170 
Common Stockholder's Equity (See accompanying statements)
1,849 1,742 
Total Liabilities and Stockholder's Equity$5,412 $4,912 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.
31
Table of ContentsIndex to Financial Statements
MISSISSIPPI POWER COMPANY
CONDENSED STATEMENTS OF COMMON STOCKHOLDER'S EQUITY (UNAUDITED)
 Number of
Common
Shares
Issued		Common
Stock		Paid-In
Capital		Retained
Earnings (Accumulated Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Total
 (in millions)
Balance at December 31, 20191 $38 $4,449 $(2,832)$(3)$1,652 
Net income— — — 32 — 32 
Capital contributions from parent company— — 76 — — 76 
Return of capital to parent company— — (37)— — (37)
Other— — (1)— — (1)
Balance at March 31, 20201 38 4,487 (2,800)(3)1,722 
Net income— — — 39 — 39 
Return of capital to parent company— — (37)— — (37)
Balance at June 30, 20201 $38 $4,450 $(2,761)$(3)$1,724 
Balance at December 31, 20201 $38 $4,460 $(2,754)$(2)$1,742 
Net income— — — 45 — 45 
Capital contributions from parent company— — 100 — — 100 
Cash dividends on common stock— — — (39)— (39)
Balance at March 31, 20211 38 4,560 (2,748)(2)1,848 
Net income— — — 38 — 38 
Capital contributions from parent company— — 2 — — 2 
Cash dividends on common stock— — — (39)— (39)
Other— — — (1)1 0 
Balance at June 30, 20211 $38 $4,562 $(2,750)$(1)$1,849 
The accompanying notes as they relate to Mississippi Power are an integral part of these condensed financial statements.

32
    Table of Contents                                Index to Financial Statements

SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30, For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Operating Revenues:Operating Revenues:Operating Revenues:
Wholesale revenues, non-affiliatesWholesale revenues, non-affiliates$373 $343 $728 $629 Wholesale revenues, non-affiliates$426 $355 
Wholesale revenues, affiliatesWholesale revenues, affiliates112 92 193 178 Wholesale revenues, affiliates105 81 
Other revenuesOther revenues5 4 9 7 Other revenues8 4 
Total operating revenuesTotal operating revenues490 439 930 814 Total operating revenues539 440 
Operating Expenses:Operating Expenses:Operating Expenses:
FuelFuel140 102 281 209 Fuel232 141 
Purchased powerPurchased power25 18 46 32 Purchased power21 20 
Other operations and maintenanceOther operations and maintenance111 77 211 156 Other operations and maintenance105 101 
Depreciation and amortizationDepreciation and amortization132 121 251 239 Depreciation and amortization120 119 
Taxes other than income taxesTaxes other than income taxes12 10 24 19 Taxes other than income taxes13 12 
(Gain) loss on dispositions, net0 0 (39)(39)
Gain on dispositions, netGain on dispositions, net(2)(39)
Total operating expensesTotal operating expenses420 328 774 616 Total operating expenses489 354 
Operating IncomeOperating Income70 111 156 198 Operating Income50 86 
Other Income and (Expense):Other Income and (Expense):Other Income and (Expense):
Interest expense, net of amounts capitalizedInterest expense, net of amounts capitalized(37)(38)(75)(77)Interest expense, net of amounts capitalized(37)(38)
Other income (expense), netOther income (expense), net1 1 8 4 Other income (expense), net2 7 
Total other income and (expense)Total other income and (expense)(36)(37)(67)(73)Total other income and (expense)(35)(31)
Earnings Before Income TaxesEarnings Before Income Taxes34 74 89 125 Earnings Before Income Taxes15 55 
Income taxes (benefit)Income taxes (benefit)(2)6 (11)13 Income taxes (benefit)(12)(10)
Net IncomeNet Income36 68 100 112 Net Income27 65 
Net income (loss) attributable to noncontrolling interests0 5 (33)(26)
Net loss attributable to noncontrolling interestsNet loss attributable to noncontrolling interests(45)(32)
Net Income Attributable to Southern PowerNet Income Attributable to Southern Power$36 $63 $133 $138 Net Income Attributable to Southern Power$72 $97 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Net Income$36 $68 $100 $112 
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of
   $2, $4, $(8), and $(17), respectively
6 11 (26)(50)
Reclassification adjustment for amounts included in net income,
   net of tax of $(3), $(5), $13, and $5, respectively
(9)(15)38 13 
Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income,
   net of tax of $1, $0, $1, and $0, respectively
0 1 1 1 
Total other comprehensive income (loss)(3)(3)13 (36)
Comprehensive Income33 65 113 76 
Comprehensive income (loss) attributable to noncontrolling interests0 5 (33)(26)
Comprehensive Income Attributable to Southern Power$33 $60 $146 $102 
 For the Three Months Ended March 31,
 20222021
 (in millions)
Net Income$27 $65 
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $(6) and $(11), respectively(17)(33)
Reclassification adjustment for amounts included in net income,
   net of tax of $7 and $15, respectively
22 48 
Pension and other postretirement benefit plans:
Reclassification adjustment for amounts included in net income,
   net of tax of $— and $—, respectively
— 1 
Total other comprehensive income5 16 
Comprehensive Income32 81 
Comprehensive loss attributable to noncontrolling interests(45)(32)
Comprehensive Income Attributable to Southern Power$77 $113 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
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SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
 
For the Six Months Ended June 30, For the Three Months Ended March 31,
20212020 20222021
(in millions) (in millions)
Operating Activities:Operating Activities:Operating Activities:
Net incomeNet income$100 $112 Net income$27 $65 
Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, totalDepreciation and amortization, total264 251 Depreciation and amortization, total126 125 
Deferred income taxesDeferred income taxes(20)(34)Deferred income taxes12 (8)
Utilization of federal investment tax credits205 0 
Amortization of investment tax creditsAmortization of investment tax credits(29)(30)Amortization of investment tax credits(15)(15)
(Gain) loss on dispositions, net(39)(39)
Gain on dispositions, netGain on dispositions, net(2)(39)
Other, netOther, net(18)(31)Other, net(3)(4)
Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —
-Receivables-Receivables(91)(67)-Receivables11 23 
-Prepaid income taxes-Prepaid income taxes28 73 -Prepaid income taxes(8)16 
-Other current assets-Other current assets2 (8)-Other current assets— 3 
-Accounts payable-Accounts payable14 (29)-Accounts payable(21)19 
-Accrued taxes-Accrued taxes8 16 -Accrued taxes7 5 
-Other current liabilities-Other current liabilities(13)(19)-Other current liabilities(17)(3)
Net cash provided from operating activitiesNet cash provided from operating activities411 195 Net cash provided from operating activities117 187 
Investing Activities:Investing Activities:Investing Activities:
Business acquisitions, net of cash acquiredBusiness acquisitions, net of cash acquired(345)(81)Business acquisitions, net of cash acquired— (345)
Property additionsProperty additions(224)(101)Property additions(19)(147)
Proceeds from dispositionsProceeds from dispositions17 660 Proceeds from dispositions29 17 
Change in construction payablesChange in construction payables(14)(4)Change in construction payables(31)(7)
Payments pursuant to LTSAsPayments pursuant to LTSAs(47)(31)Payments pursuant to LTSAs(15)(27)
Other investing activitiesOther investing activities12 47 Other investing activities(1)5 
Net cash provided from (used for) investing activities(601)490 
Net cash used for investing activitiesNet cash used for investing activities(37)(504)
Financing Activities:Financing Activities:Financing Activities:
Decrease in notes payable, net(56)(357)
Increase (decrease) in notes payable, netIncrease (decrease) in notes payable, net(3)140 
Proceeds — Senior notesProceeds — Senior notes400 0 Proceeds — Senior notes— 400 
Redemptions —
Short-term borrowings0 (100)
Senior notes0 (300)
Return of capital to parent companyReturn of capital to parent company(271)0 Return of capital to parent company— (271)
Capital contributions from noncontrolling interestsCapital contributions from noncontrolling interests343 172 Capital contributions from noncontrolling interests73 313 
Distributions to noncontrolling interestsDistributions to noncontrolling interests(113)(118)Distributions to noncontrolling interests(97)(46)
Payment of common stock dividendsPayment of common stock dividends(102)(100)Payment of common stock dividends(49)(51)
Other financing activitiesOther financing activities(5)(5)Other financing activities— (7)
Net cash provided from (used for) financing activitiesNet cash provided from (used for) financing activities196 (808)Net cash provided from (used for) financing activities(76)478 
Net Change in Cash, Cash Equivalents, and Restricted CashNet Change in Cash, Cash Equivalents, and Restricted Cash6 (123)Net Change in Cash, Cash Equivalents, and Restricted Cash4 161 
Cash, Cash Equivalents, and Restricted Cash at Beginning of PeriodCash, Cash Equivalents, and Restricted Cash at Beginning of Period183 279 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period135 182 
Cash, Cash Equivalents, and Restricted Cash at End of PeriodCash, Cash Equivalents, and Restricted Cash at End of Period$189 $156 Cash, Cash Equivalents, and Restricted Cash at End of Period$139 $343 
Supplemental Cash Flow Information:Supplemental Cash Flow Information:Supplemental Cash Flow Information:
Cash paid (received) during the period for —Cash paid (received) during the period for —Cash paid (received) during the period for —
Interest (net of $2 and $7 capitalized for 2021 and 2020, respectively)$91 $96 
Interest (net of $— and $1 capitalized for 2022 and 2021, respectively)Interest (net of $— and $1 capitalized for 2022 and 2021, respectively)$29 $26 
Income taxes, netIncome taxes, net(189)(5)Income taxes, net(8)(2)
Noncash transactions —Noncash transactions —Noncash transactions —
Contributions from noncontrolling interestsContributions from noncontrolling interests89 9 Contributions from noncontrolling interests— 89 
Contributions of wind turbine equipmentContributions of wind turbine equipment82 17 Contributions of wind turbine equipment— 82 
Accrued property additions at end of periodAccrued property additions at end of period59 38 Accrued property additions at end of period46 60 
Right-of-use assets obtained under operating leasesRight-of-use assets obtained under operating leases65 30 Right-of-use assets obtained under operating leases— 65 
Reassessment of right-of-use assets under operating leasesReassessment of right-of-use assets under operating leases40 — 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
32
Table of ContentsIndex to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
AssetsAt March 31, 2022At December 31, 2021
 (in millions)
Current Assets:
Cash and cash equivalents$130 $107 
Receivables —
Customer accounts, net160 139 
Affiliated26 51 
Other21 29 
Materials and supplies108 106 
Prepaid income taxes468 27 
Other current assets49 46 
Total current assets962 505 
Property, Plant, and Equipment:
In service14,594 14,585 
Less: Accumulated provision for depreciation3,341 3,241 
Plant in service, net of depreciation11,253 11,344 
Construction work in progress49 45 
Total property, plant, and equipment11,302 11,389 
Other Property and Investments:
Intangible assets, net of amortization of $114 and $109, respectively278 282 
Equity investments in unconsolidated subsidiaries56 86 
Net investment in sales-type leases159 161 
Total other property and investments493 529 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization517 479 
Prepaid LTSAs219 210 
Income taxes receivable, non-current23 20 
Other deferred charges and assets250 258 
Total deferred charges and other assets1,009 967 
Total Assets$13,766 $13,390 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
33
Table of Contents                    ��           Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholders' EquityAt March 31, 2022At December 31, 2021
 (in millions)
Current Liabilities:
Securities due within one year$666 $679 
Notes payable208 211 
Accounts payable —
Affiliated82 92 
Other67 85 
Accrued taxes21 14 
Accrued interest32 32 
Other current liabilities121 140 
Total current liabilities1,197 1,253 
Long-term Debt2,999 3,009 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes661 215 
Accumulated deferred ITCs1,600 1,614 
Operating lease obligations535 497 
Other deferred credits and liabilities218 204 
Total deferred credits and other liabilities3,014 2,530 
Total Liabilities7,210 6,792 
Total Stockholders' Equity (See accompanying statements)
6,556 6,598 
Total Liabilities and Stockholders' Equity$13,766 $13,390 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
34
    Table of Contents                                Index to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETSSTATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total Common
Stockholders' Equity		Noncontrolling InterestsTotal
(in millions)
Balance at December 31, 2020$914 $1,522 $(67)$2,369 $4,262 $6,631 
Net income (loss)— 97 — 97 (32)65 
Return of capital to parent company(271)— — (271)— (271)
Other comprehensive income— — 16 16 — 16 
Cash dividends on common stock— (51)— (51)— (51)
Capital contributions from
   noncontrolling interests		— — — — 403 403 
Distributions to noncontrolling interests— — — — (46)(46)
Other(2)1 (1)(2)(1)(3)
Balance at March 31, 2021$641 $1,569 $(52)$2,158 $4,586 $6,744 
AssetsAt June 30, 2021At December 31, 2020
 (in millions)
Current Assets:
Cash and cash equivalents$165 $182 
Receivables —
Customer accounts, net168 125 
Affiliated52 37 
Other48 27 
Materials and supplies101 157 
Prepaid income taxes153 11 
Other current assets56 36 
Total current assets743 575 
Property, Plant, and Equipment:
In service14,372 13,904 
Less: Accumulated provision for depreciation2,991 2,842 
Plant in service, net of depreciation11,381 11,062 
Construction work in progress250 127 
Total property, plant, and equipment11,631 11,189 
Other Property and Investments:
Intangible assets, net of amortization of $99 and $89, respectively292 302 
Equity investments in unconsolidated subsidiaries84 19 
Total other property and investments376 321 
Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortization476 415 
Prepaid LTSAs179 155 
Accumulated deferred income taxes0 262 
Income taxes receivable, non-current31 25 
Other deferred charges and assets272 293 
Total deferred charges and other assets958 1,150 
Total Assets$13,708 $13,235 
Balance at December 31, 2021$638 $1,585 $(27)$2,196 $4,402 $6,598 
Net income (loss)— 72 — 72 (45)27 
Other comprehensive income— — 5 5 — 5 
Cash dividends on common stock— (49)— (49)— (49)
Capital contributions from
   noncontrolling interests		— — — — 73 73 
Distributions to noncontrolling interests— — — — (98)(98)
Balance at March 31, 2022$638 $1,608 $(22)$2,224 $4,332 $6,556 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
35
Table of ContentsIndex to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
Liabilities and Stockholders' EquityAt June 30, 2021At December 31, 2020
 (in millions)
Current Liabilities:
Securities due within one year$1,012 $299 
Notes payable119 175 
Accounts payable —
Affiliated75 65 
Other90 92 
Accrued taxes —
Accrued income taxes7 8 
Other accrued taxes20 22 
Accrued interest24 32 
Other current liabilities116 132 
Total current liabilities1,463 825 
Long-term Debt3,036 3,393 
Deferred Credits and Other Liabilities:
Accumulated deferred income taxes221 123 
Accumulated deferred ITCs1,643 1,672 
Operating lease obligations488 426 
Other deferred credits and liabilities167 165 
Total deferred credits and other liabilities2,519 2,386 
Total Liabilities7,018 6,604 
Total Stockholders' Equity (See accompanying statements)
6,690 6,631 
Total Liabilities and Stockholders' Equity$13,708 $13,235 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
36
Table of ContentsIndex to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total Common
Stockholders' Equity		Noncontrolling InterestsTotal
(in millions)
Balance at December 31, 2019$909 $1,485 $(26)$2,368 $4,254 $6,622 
Net income (loss)— 75 — 75 (31)44 
Other comprehensive income (loss)— — (33)(33)— (33)
Cash dividends on common stock— (50)— (50)— (50)
Capital contributions from
   noncontrolling interests		— — — — 16 16 
Distributions to noncontrolling interests— — — — (48)(48)
Balance at March 31, 2020909 1,510 (59)2,360 4,191 6,551 
Net income— 63 — 63 5 68 
Other comprehensive income (loss)— — (3)(3)— (3)
Cash dividends on common stock— (50)— (50)— (50)
Capital contributions from
   noncontrolling interests		— — — — 165 165 
Distributions to noncontrolling interests— — — — (70)(70)
Other(2)— — (2)— (2)
Balance at June 30, 2020$907 $1,523 $(62)$2,368 $4,291 $6,659 
37
Table of ContentsIndex to Financial Statements
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
Paid-In
Capital		Retained
Earnings		Accumulated
Other
Comprehensive
Income (Loss)		Total Common
Stockholders' Equity		Noncontrolling InterestsTotal
(in millions)
Balance at December 31, 2020$914 $1,522 $(67)$2,369 $4,262 $6,631 
Net income (loss)— 97 — 97 (32)65 
Return of capital to parent company(271)— — (271)— (271)
Other comprehensive income— — 16 16 — 16 
Cash dividends on common stock— (51)— (51)— (51)
Capital contributions from
   noncontrolling interests		— — — — 403 403 
Distributions to noncontrolling interests— — — — (46)(46)
Other(2)1 (1)(2)(1)(3)
Balance at March 31, 2021641 1,569 (52)2,158 4,586 6,744 
Net income— 36 — 36 — 36 
Other comprehensive income (loss)— — (3)(3)— (3)
Cash dividends on common stock— (51)— (51)— (51)
Capital contributions from
   noncontrolling interests		— — — — 29 29 
Distributions to noncontrolling interests— — — — (68)(68)
Other2 — 1 3 — 3 
Balance at June 30, 2021$643 $1,554 $(54)$2,143 $4,547 $6,690 
The accompanying notes as they relate to Southern Power are an integral part of these condensed consolidated financial statements.
38
    Table of Contents                                Index to Financial Statements

SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
 
For the Three Months Ended June 30,For the Six Months Ended June 30, For the Three Months Ended March 31,
2021202020212020 20222021
(in millions)(in millions) (in millions)
Operating Revenues:Operating Revenues:Operating Revenues:
Natural gas revenues (includes revenue taxes of
$23, $22, $77, and $69, respectively)
$675 $638 $2,367 $1,878 
Natural gas revenues (includes revenue taxes of $71 and $54, respectively)Natural gas revenues (includes revenue taxes of $71 and $54, respectively)$2,058 $1,692 
Alternative revenue programsAlternative revenue programs2 (2)4 7 Alternative revenue programs— 2 
Total operating revenuesTotal operating revenues677 636 2,371 1,885 Total operating revenues2,058 1,694 
Operating Expenses:Operating Expenses:Operating Expenses:
Cost of natural gasCost of natural gas231 144 814 583 Cost of natural gas1,095 583 
Other operations and maintenanceOther operations and maintenance233 220 532 479 Other operations and maintenance305 299 
Depreciation and amortizationDepreciation and amortization133 123 263 243 Depreciation and amortization137 130 
Taxes other than income taxesTaxes other than income taxes49 47 130 118 Taxes other than income taxes100 81 
Total operating expensesTotal operating expenses646 534 1,739 1,423 Total operating expenses1,637 1,093 
Operating IncomeOperating Income31 102 632 462 Operating Income421 601 
Other Income and (Expense):Other Income and (Expense):Other Income and (Expense):
Earnings (loss) from equity method investments(52)30 (11)72 
Earnings from equity method investmentsEarnings from equity method investments40 41 
Interest expense, net of amounts capitalizedInterest expense, net of amounts capitalized(59)(57)(118)(114)Interest expense, net of amounts capitalized(61)(60)
Other income (expense), netOther income (expense), net(14)12 (78)21 Other income (expense), net16 (63)
Total other income and (expense)Total other income and (expense)(125)(15)(207)(21)Total other income and (expense)(5)(82)
Earnings (Loss) Before Income Taxes(94)87 425 441 
Income taxes (benefit)(29)16 92 95 
Net Income (Loss)$(65)$71 $333 $346 
Earnings Before Income TaxesEarnings Before Income Taxes416 519 
Income taxesIncome taxes97 121 
Net IncomeNet Income$319 $398 
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED)
 
 For the Three Months Ended June 30,For the Six Months Ended June 30,
 2021202020212020
 (in millions)(in millions)
Net Income (Loss)$(65)$71 $333 $346 
Other comprehensive income (loss):
Qualifying hedges:
Changes in fair value, net of tax of
   $3, $(1), $3, and $(8), respectively
8 (1)9 (21)
Reclassification adjustment for amounts included in net income,
   net of tax of $0, $0, $1, and $2, respectively
0 1 3 6 
Total other comprehensive income (loss)8 0 12 (15)
Comprehensive Income (Loss)$(57)$71 $345 $331 
 For the Three Months Ended March 31,
 20222021
 (in millions)
Net Income$319 $398 
Other comprehensive income:
Qualifying hedges:
Changes in fair value, net of tax of $10 and $—, respectively26 1 
Reclassification adjustment for amounts included in net income,
   net of tax of $(2) and $1, respectively
(6)3 
Total other comprehensive income20 4 
Comprehensive Income$339 $402 
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Six Months Ended June 30, For the Three Months Ended March 31,
20212020 20222021
(in millions) (in millions)
Operating Activities:Operating Activities:Operating Activities:
Net incomeNet income$333 $346 Net income$319 $398 
Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —Adjustments to reconcile net income to net cash provided from operating activities —
Depreciation and amortization, totalDepreciation and amortization, total263 243 Depreciation and amortization, total137 130 
Deferred income taxesDeferred income taxes110 40 Deferred income taxes5 160 
Mark-to-market adjustmentsMark-to-market adjustments137 34 Mark-to-market adjustments(38)64 
Impairment of PennEast Pipeline investment82 0 
Natural gas cost under recovery – long-termNatural gas cost under recovery – long-term(119)0 Natural gas cost under recovery – long-term162 (185)
Other, netOther, net15 11 Other, net41 5 
Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —Changes in certain current assets and liabilities —
-Receivables-Receivables262 344 -Receivables(115)74 
-Natural gas for sale, net of temporary LIFO liquidation-Natural gas for sale, net of temporary LIFO liquidation375 182 -Natural gas for sale, net of temporary LIFO liquidation450 456 
-Prepaid income taxes-Prepaid income taxes(129)14 -Prepaid income taxes34 (51)
-Natural gas cost under recovery-Natural gas cost under recovery(485)0 -Natural gas cost under recovery(40)(487)
-Other current assets-Other current assets7 (8)-Other current assets39 17 
-Accounts payable-Accounts payable(42)(176)-Accounts payable(23)(7)
-Accrued taxes-Accrued taxes54 10 
-Accrued compensation17 (31)
-Other current liabilities-Other current liabilities(104)47 -Other current liabilities(1)(34)
Net cash provided from operating activitiesNet cash provided from operating activities722 1,046 Net cash provided from operating activities1,024 550 
Investing Activities:Investing Activities:Investing Activities:
Property additionsProperty additions(635)(647)Property additions(247)(251)
Cost of removal, net of salvageCost of removal, net of salvage(44)(31)Cost of removal, net of salvage(20)(16)
Change in construction payables, netChange in construction payables, net(5)(47)
Investment in unconsolidated subsidiaries(3)(78)
Proceeds from dispositions0 178 
Other investing activitiesOther investing activities14 8 Other investing activities1 6 
Net cash used for investing activitiesNet cash used for investing activities(668)(570)Net cash used for investing activities(271)(308)
Financing Activities:Financing Activities:Financing Activities:
Increase (decrease) in notes payable, net210 (321)
Decrease in notes payable, netDecrease in notes payable, net(577)(127)
Proceeds — Short-term borrowingsProceeds — Short-term borrowings300 0 Proceeds — Short-term borrowings— 300 
Redemptions —Redemptions —Redemptions —
Senior notes(300)0 
Short-term borrowingsShort-term borrowings(100)— 
Medium-term notesMedium-term notes(30)0 Medium-term notes— (30)
Capital contributions from parent companyCapital contributions from parent company60 186 Capital contributions from parent company39 39 
Payment of common stock dividendsPayment of common stock dividends(265)(266)Payment of common stock dividends(130)(132)
Net cash used for financing activities(25)(401)
Net cash provided from (used for) financing activitiesNet cash provided from (used for) financing activities(768)50 
Net Change in Cash, Cash Equivalents, and Restricted CashNet Change in Cash, Cash Equivalents, and Restricted Cash29 75 Net Change in Cash, Cash Equivalents, and Restricted Cash(15)292 
Cash, Cash Equivalents, and Restricted Cash at Beginning of PeriodCash, Cash Equivalents, and Restricted Cash at Beginning of Period19 49 Cash, Cash Equivalents, and Restricted Cash at Beginning of Period48 19 
Cash, Cash Equivalents, and Restricted Cash at End of PeriodCash, Cash Equivalents, and Restricted Cash at End of Period$48 $124 Cash, Cash Equivalents, and Restricted Cash at End of Period$33 $311 
Supplemental Cash Flow Information:Supplemental Cash Flow Information:Supplemental Cash Flow Information:
Cash paid (received) during the period for —Cash paid (received) during the period for —Cash paid (received) during the period for —
Interest (net of $3 and $4 capitalized for 2021 and 2020, respectively)$127 $119 
Interest (net of $2 capitalized for both 2022 and 2021)Interest (net of $2 capitalized for both 2022 and 2021)$55 $52 
Income taxes, netIncome taxes, net100 (4)Income taxes, net— (1)
Noncash transactions — Accrued property additions at end of periodNoncash transactions — Accrued property additions at end of period137 123 Noncash transactions — Accrued property additions at end of period107 95 
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.
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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
 
AssetsAssetsAt June 30, 2021At December 31, 2020AssetsAt March 31, 2022At December 31, 2021
(in millions)(in millions)
Current Assets:Current Assets:  Current Assets:  
Cash and cash equivalentsCash and cash equivalents$37 $17 Cash and cash equivalents$31 $45 
Receivables —Receivables —  Receivables —  
Energy marketing0 516 
Customer accountsCustomer accounts283 353 Customer accounts603 462 
Unbilled revenuesUnbilled revenues74 219 Unbilled revenues245 278 
Affiliated3 4 
Other accounts and notesOther accounts and notes31 51 Other accounts and notes52 49 
Accumulated provision for uncollectible accountsAccumulated provision for uncollectible accounts(45)(40)Accumulated provision for uncollectible accounts(51)(39)
Natural gas for saleNatural gas for sale178 460 Natural gas for sale121 362 
Prepaid expensesPrepaid expenses162 48 Prepaid expenses88 114 
Assets from risk management activities, net of collateralAssets from risk management activities, net of collateral22 118 Assets from risk management activities, net of collateral53 33 
Natural gas cost under recoveryNatural gas cost under recovery485 0 Natural gas cost under recovery306 266 
Assets held for sale736 0 
Other regulatory assetsOther regulatory assets97 102 Other regulatory assets104 136 
Other current assetsOther current assets40 38 Other current assets47 49 
Total current assetsTotal current assets2,103 1,886 Total current assets1,599 1,755 
Property, Plant, and Equipment:Property, Plant, and Equipment:  Property, Plant, and Equipment:  
In serviceIn service18,051 17,611 In service19,035 18,880 
Less: Accumulated depreciationLess: Accumulated depreciation4,942 4,821 Less: Accumulated depreciation5,159 5,067 
Plant in service, net of depreciationPlant in service, net of depreciation13,109 12,790 Plant in service, net of depreciation13,876 13,813 
Construction work in progressConstruction work in progress790 648 Construction work in progress768 684 
Total property, plant, and equipmentTotal property, plant, and equipment13,899 13,438 Total property, plant, and equipment14,644 14,497 
Other Property and Investments:Other Property and Investments:Other Property and Investments:
GoodwillGoodwill5,015 5,015 Goodwill5,015 5,015 
Equity investments in unconsolidated subsidiariesEquity investments in unconsolidated subsidiaries1,189 1,290 Equity investments in unconsolidated subsidiaries1,178 1,173 
Other intangible assets, net of amortization of $138 and $195, respectively44 51 
Other intangible assets, net of amortization of $148 and $145, respectivelyOther intangible assets, net of amortization of $148 and $145, respectively34 37 
Miscellaneous property and investmentsMiscellaneous property and investments19 19 Miscellaneous property and investments19 19 
Total other property and investmentsTotal other property and investments6,267 6,375 Total other property and investments6,246 6,244 
Deferred Charges and Other Assets:Deferred Charges and Other Assets:Deferred Charges and Other Assets:
Operating lease right-of-use assets, net of amortizationOperating lease right-of-use assets, net of amortization72 81 Operating lease right-of-use assets, net of amortization67 70 
Prepaid pension costsPrepaid pension costs183 175 
Other regulatory assets, deferredOther regulatory assets, deferred697 615 Other regulatory assets, deferred508 689 
Other deferred charges and assetsOther deferred charges and assets197 235 Other deferred charges and assets130 130 
Total deferred charges and other assetsTotal deferred charges and other assets966 931 Total deferred charges and other assets888 1,064 
Total AssetsTotal Assets$23,235 $22,630 Total Assets$23,377 $23,560 
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

Liabilities and Stockholder's EquityLiabilities and Stockholder's EquityAt June 30, 2021At December 31, 2020Liabilities and Stockholder's EquityAt March 31, 2022At December 31, 2021
(in millions)(in millions)
Current Liabilities:Current Liabilities:Current Liabilities:
Securities due within one yearSecurities due within one year$48 $333 Securities due within one year$46 $47 
Notes payableNotes payable834 324 Notes payable532 1,209 
Energy marketing trade payables0 494 
Accounts payable —Accounts payable —Accounts payable —
AffiliatedAffiliated50 56 Affiliated40 58 
OtherOther311 373 Other349 361 
Customer depositsCustomer deposits75 90 Customer deposits72 95 
Accrued taxesAccrued taxes79 83 Accrued taxes191 124 
Accrued interestAccrued interest55 58 Accrued interest68 59 
Accrued compensationAccrued compensation105 106 Accrued compensation66 110 
Temporary LIFO liquidationTemporary LIFO liquidation182 0 Temporary LIFO liquidation209 — 
Liabilities held for sale677 0 
Other regulatory liabilitiesOther regulatory liabilities39 122 Other regulatory liabilities72 8 
Other current liabilitiesOther current liabilities125 150 Other current liabilities140 155 
Total current liabilitiesTotal current liabilities2,580 2,189 Total current liabilities1,785 2,226 
Long-term DebtLong-term Debt6,234 6,293 Long-term Debt6,814 6,855 
Deferred Credits and Other Liabilities:Deferred Credits and Other Liabilities:Deferred Credits and Other Liabilities:
Accumulated deferred income taxesAccumulated deferred income taxes1,413 1,265 Accumulated deferred income taxes1,568 1,555 
Deferred credits related to income taxesDeferred credits related to income taxes831 847 Deferred credits related to income taxes808 816 
Employee benefit obligationsEmployee benefit obligations267 283 Employee benefit obligations168 176 
Operating lease obligationsOperating lease obligations59 67 Operating lease obligations58 59 
Other cost of removal obligationsOther cost of removal obligations1,673 1,649 Other cost of removal obligations1,692 1,683 
Accrued environmental remediationAccrued environmental remediation208 216 Accrued environmental remediation189 197 
Other deferred credits and liabilitiesOther deferred credits and liabilities41 54 Other deferred credits and liabilities120 77 
Total deferred credits and other liabilitiesTotal deferred credits and other liabilities4,492 4,381 Total deferred credits and other liabilities4,603 4,563 
Total LiabilitiesTotal Liabilities13,306 12,863 Total Liabilities13,202 13,644 
Common Stockholder's Equity (See accompanying statements)
Common Stockholder's Equity (See accompanying statements)
9,929 9,767 
Common Stockholder's Equity (See accompanying statements)
10,175 9,916 
Total Liabilities and Stockholder's EquityTotal Liabilities and Stockholder's Equity$23,235 $22,630 Total Liabilities and Stockholder's Equity$23,377 $23,560 
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.


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SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDER'S EQUITY (UNAUDITED)
Paid-In
Capital		Retained
Earnings
(Accumulated Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Total
(in millions)
Balance at December 31, 2019$9,697 $(198)$7 $9,506 
Net income— 275 — 275 
Return of capital to parent company(2)— — (2)
Other comprehensive income (loss)— — (15)(15)
Cash dividends on common stock— (133)— (133)
Balance at March 31, 20209,695 (56)(8)9,631 
Net income— 71 — 71 
Capital contributions from parent company200 — — 200 
Cash dividends on common stock— (133)— (133)
Balance at June 30, 2020$9,895 $(118)$(8)$9,769 
Paid-In
Capital		Retained
Earnings
(Accumulated Deficit)		Accumulated
Other
Comprehensive
Income (Loss)		Total
(in millions)
Balance at December 31, 2020Balance at December 31, 2020$9,930 $(141)$(22)$9,767 Balance at December 31, 2020$9,930 $(141)$(22)$9,767 
Net incomeNet income— 398 — 398 Net income— 398 — 398 
Capital contributions from parent companyCapital contributions from parent company57 �� — 57 Capital contributions from parent company57 — — 57 
Other comprehensive incomeOther comprehensive income— — 4 4 Other comprehensive income— — 4 4 
Cash dividends on common stockCash dividends on common stock— (132)— (132)Cash dividends on common stock— (132)— (132)
Balance at March 31, 2021Balance at March 31, 20219,987 125 (18)10,094 Balance at March 31, 20219,987 125 (18)10,094 
Net loss— (65)— (65)
Capital contributions from parent company25 — — 25 
Other comprehensive income— — 8 8 
Cash dividends on common stock— (133)— (133)
Balance at June 30, 2021$10,012 $(73)$(10)$9,929 
Balance at December 31, 2021Balance at December 31, 2021$10,024 $(132)$24 $9,916 
Net incomeNet income— 319 — 319 
Capital contributions from parent companyCapital contributions from parent company50 — — 50 
Other comprehensive incomeOther comprehensive income— — 20 20 
Cash dividends on common stockCash dividends on common stock— (130)— (130)
Balance at March 31, 2022Balance at March 31, 2022$10,074 $57 $44 $10,175 
The accompanying notes as they relate to Southern Company Gas are an integral part of these condensed consolidated financial statements.

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
FOR
THE SOUTHERN COMPANY AND SUBSIDIARY COMPANIES
ALABAMA POWER COMPANY
GEORGIA POWER COMPANY
MISSISSIPPI POWER COMPANY
SOUTHERN POWER COMPANY AND SUBSIDIARY COMPANIES
SOUTHERN COMPANY GAS AND SUBSIDIARY COMPANIES
(UNAUDITED)


INDEX TO THE NOTES TO THE CONDENSED FINANCIAL STATEMENTS
NotePage
A
4542
B
4845
C
5752
D
6055
E
6758
F
6960
G
7061
H
7162
I
7464
J
7969
K
9183
L
9383



INDEX TO APPLICABLE NOTES TO FINANCIAL STATEMENTS BY REGISTRANT
The following unaudited notes to the condensed financial statements are a combined presentation; however, information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf and each Registrant makes no representation as to information related to the other Registrants. The list below indicates the Registrants to which each footnote applies.
RegistrantApplicable Notes
Southern CompanyA, B, C, D, E, F, G, H, I, J, K, L
Alabama PowerA, B, C, D, F, G, H, I, J
Georgia PowerA, B, C, D, F, G, H, I, J
Mississippi PowerA, B, C, D, F, G, H, I, J
Southern PowerA, C, D, E, F, G, H, I, J, K
Southern Company GasA, B, C, D, E, F, G, H, I, J, K, L

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
(A) INTRODUCTION
The condensed quarterly financial statements of each Registrant included herein have been prepared by such Registrant, without audit, pursuant to the rules and regulations of the SEC. The Condensed Balance Sheets at December 31, 20202021 have been derived from the audited financial statements of each Registrant. In the opinion of each Registrant's management, the information regarding such Registrant furnished herein reflects all adjustments, which, except as otherwise disclosed, are of a normal recurring nature, necessary to present fairly the results of operations for the periods ended June 30, 2021March 31, 2022 and 2020.2021. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations, although each Registrant believes that the disclosures regarding such Registrant are adequate to make the information presented not misleading. Disclosures which would substantially duplicate the disclosures in the Form 10-K and details which have not changed significantly in amount or composition since the filing of the Form 10-K are generally omitted from this Quarterly Report on Form 10-Q unless specifically required by GAAP. Therefore, these Condensed Financial Statements should be read in conjunction with the financial statements and the notes thereto included in the Form 10-K. Due to the seasonal variations in the demand for energy and other factors, including the impacts of the COVID-19 pandemic, operating results for the periods presented are not necessarily indicative of the operating results to be expected for the full year.
Certain prior year data presented in the financial statements have been reclassified to conform to the current year presentation. These reclassifications had no impact on the overall results of operations, financial position, or cash flows of any Registrant.
Goodwill and Other Intangible Assets
Goodwill at June 30, 2021March 31, 2022 and December 31, 20202021 was as follows:
Goodwill
(in millions)
Southern Company$5,280 
Southern Company Gas:
Gas distribution operations$4,034 
Gas marketing services981 
Southern Company Gas total$5,015 
Goodwill is not amortized, but is subject to an annual impairment test induring the fourth quarter of theeach year, and on an interim basis as events and changes in circumstances occur.or more frequently if impairment indicators arise.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Other intangible assets were as follows:
At June 30, 2021At December 31, 2020
Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net		Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net
(in millions)(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships$212 $(142)$70 $212 $(135)$77 
Trade names64 (35)29 64 (31)33 
Storage and transportation contracts(*)
0 0 0 64 (64)0 
PPA fair value adjustments390 (99)291 390 (89)301 
Other11 (10)1 10 (9)1 
Total other intangible assets subject to amortization$677 $(286)$391 $740 $(328)$412 
Other intangible assets not subject to amortization:
Federal Communications Commission licenses75 — 75 75 — 75 
Total other intangible assets$752 $(286)$466 $815 $(328)$487 
Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments$390 $(99)$291 $390 $(89)$301 
Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships$156 $(124)$32 $156 $(119)$37 
Trade names26 (14)12 26 (12)14 
Wholesale gas services
Storage and transportation contracts(*)
0 0 0 64 (64)0 
Total other intangible assets subject to amortization$182 $(138)$44 $246 $(195)$51 
(*)See Note (K) under "Southern Company Gas" for information regarding the sale of Sequent.
At March 31, 2022At December 31, 2021
Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net		Gross Carrying AmountAccumulated AmortizationOther
Intangible Assets, Net
(in millions)(in millions)
Southern Company
Other intangible assets subject to amortization:
Customer relationships$212 $(152)$60 $212 $(150)$62 
Trade names64 (41)23 64 (38)26 
PPA fair value adjustments390 (114)276 390 (109)281 
Other11 (10)1 11 (10)1 
Total other intangible assets subject to amortization$677 $(317)$360 $677 $(307)$370 
Other intangible assets not subject to amortization:
Federal Communications Commission licenses75 — 75 75 — 75 
Total other intangible assets$752 $(317)$435 $752 $(307)$445 
Southern Power
Other intangible assets subject to amortization:
PPA fair value adjustments$390 $(114)$276 $390 $(109)$281 
Southern Company Gas
Other intangible assets subject to amortization:
Gas marketing services
Customer relationships$156 $(132)$24 $156 $(130)$26 
Trade names26 (16)10 26 (15)11 
Total other intangible assets subject to amortization$182 $(148)$34 $182 $(145)$37 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Amortization associated with other intangible assets was as follows:
Three Months EndedSix Months Ended
June 30, 2021
(in millions)
Southern Company(a)
$10 $21 
Southern Power(b)
5 10 
Southern Company Gas(c)
3 7 
Three Months Ended
March 31, 2022
(in millions)
Southern Company(a)
$10 
Southern Power(b)
5 
Southern Company Gas3 
(a)Includes $5 million and $10 million for the three and six months ended June 30, 2021, respectively, recorded as a reduction to operating revenues.
(b)Recorded as a reduction to operating revenues.
(c)Relates to gas marketing services.
Cash, Cash Equivalents, and Restricted Cash
The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the condensed balance sheets that total to the amount shown in the condensed statements of cash flows for the applicable Registrants:
Southern
Company		Southern PowerSouthern
Company Gas		Southern
Company		Southern
Power		Southern
Company Gas
June 30, 2021December 31, 2020June 30, 2021June 30, 2021December 31, 2020March 31, 2022December 31, 2021March 31, 2022December 31, 2021March 31, 2022December 31, 2021
(in millions)(in millions)(in millions)(in millions)
Cash and cash equivalentsCash and cash equivalents$1,582 $1,065 $165 $37 $17 Cash and cash equivalents$1,662 $1,798 $130 $107 $31 $45 
Cash and cash equivalents classified as held for sale8 0 0 8 0 
Restricted cash(a):
Restricted cash(a):
Restricted cash(a):
Other current assetsOther current assets2 2 0 2 2 Other current assets2 2 — — 2 2 
Other deferred charges and assetsOther deferred charges and assets24 0 24 0 0 Other deferred charges and assets9 29 9 29 — — 
Total cash, cash equivalents, and restricted cash(b)
Total cash, cash equivalents, and restricted cash(b)
$1,617 $1,068 $189 $48 $19 
Total cash, cash equivalents, and restricted cash(b)
$1,673 $1,829 $139 $135 $33 $48 
(a)For Southern Power, restricted cash reflects $9 million and $10 million at March 31, 2022 and December 31, 2021, respectively, held to fund estimated construction completion costs at the Deuel Harvest wind facility and $19 million at December 31, 2021 related to tax equity contributions restricted until the Garland battery energy storage facility achieved final contracted capacity. For Southern Company Gas, reflects restricted cash held as collateral for workers' compensation, life insurance, and long-term disability insurance. For Southern Power, reflects restricted cash held for construction payables.
(b)Total may not add due to rounding.
Natural Gas for Sale
With the exception of Nicor Gas, Southern Company Gas' natural gas distribution utilities recordGas records natural gas inventories on a WACOG basis. For any declines in market prices below the WACOG considered to be other than temporary, an adjustment is recorded to reduce the value of natural gas inventories to market value. Nicor Gas' natural gas inventory is carried at cost on a LIFO basis. Inventory decrements occurring during the year that are restored prior to year end are charged to cost of natural gas at the estimated annual replacement cost. Inventory decrements that are not restored prior to year end are charged to cost of natural gas at the actual LIFO cost of the inventory layers liquidated.
Southern Company Gas recorded no material adjustments to natural gas inventories for either period presented. Nicor Gas' inventory decrement at June 30, 2021March 31, 2022 is expected to be restored prior to year end.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Depreciation and Amortization
See Note 5 to the financial statements under "Depreciation and Amortization – Southern Power" in Item 8 of the Form 10-K for additional information.
Effective January 1, 2022, Southern Power revised the depreciable lives of its wind generating facilities from up to 30 years to up to 35 years. This revision resulted in an immaterial decrease in depreciation for the three months ended March 31, 2022 and is expected to result in an immaterial decrease in annual depreciation for 2022.
(B) REGULATORY MATTERS
See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information relating to regulatory matters.
The recovery balances for certain retail regulatory clauses of the traditional electric operating companies and Southern Company Gas at June 30, 2021March 31, 2022 and December 31, 20202021 were as follows:
Regulatory ClauseRegulatory ClauseBalance Sheet Line ItemJune 30,
2021		December 31, 2020Regulatory ClauseBalance Sheet Line ItemMarch 31,
2022		December 31, 2021
(in millions)(in millions)
Alabama PowerAlabama PowerAlabama Power
Rate CNP ComplianceRate CNP ComplianceOther regulatory liabilities, current$1 $28 Rate CNP ComplianceOther regulatory assets, deferred$12 $16 
Rate CNP PPARate CNP PPAOther regulatory assets, deferred64 58 Rate CNP PPAOther regulatory assets, deferred84 84 
Retail Energy Cost RecoveryOther regulatory liabilities, current0 18 
Other regulatory assets, deferred54 0 
Natural Disaster ReserveOther regulatory liabilities, deferred36 77 
Retail Energy Cost Recovery(*)
Retail Energy Cost Recovery(*)
Other regulatory assets, deferred46 126 
Georgia PowerGeorgia PowerGeorgia Power
Fuel Cost RecoveryFuel Cost RecoveryOver recovered fuel clause revenues$0 $113 Fuel Cost RecoveryDeferred under recovered fuel clause revenues$494 $410 
Other deferred charges and assets21 0 
Mississippi PowerMississippi Power
Mississippi Power
Fuel Cost RecoveryFuel Cost RecoveryOver recovered regulatory clause liabilities$9 $24 Fuel Cost RecoveryOther customer accounts receivable$16 $4 
Ad Valorem TaxAd Valorem TaxOther regulatory assets, current12 11 Ad Valorem TaxOther regulatory assets, current12 12 
Other regulatory assets, deferred45 41 Other regulatory assets, deferred33 37 
Property Damage ReserveOther regulatory liabilities, deferred0 4 
Other regulatory assets, deferred5 0 
Southern Company GasSouthern Company GasSouthern Company Gas
Natural Gas Cost Recovery(*)
Other regulatory liabilities$5 $88 
Natural Gas Cost RecoveryNatural Gas Cost RecoveryNatural gas cost under recovery$306 $266 
Natural gas cost under recovery485 0 Other regulatory assets, deferred44 207 
Other regulatory assets, deferred119 0 Other regulatory liabilities, current13 — 
(*)The significant change duringIn accordance with an Alabama PSC order issued on February 1, 2022, Alabama Power applied $126 million of its 2021 Rate RSE refund to reduce the six months ended June 30, 2021 was primarily driven by an increase in the cost of gas purchased in February 2021 resulting from Winter Storm Uri.Rate ECR under recovered balance.
Alabama Power
Certificate of Convenience and Necessity
EnergyOn March 25, 2022, the FERC approved Alabama Gasp, Inc., and the Sierra Club filed requests for reconsideration and rehearing with the Alabama PSC regarding the certificate of convenience and necessity (CCN) issued to Alabama Power in August 2020, which authorized, among other things, the construction of Plant Barry Unit 8 and thePower's acquisition of the Central AlabamaCalhoun Generating Station. In December 2020,Station, which is expected to be completed by September 30, 2022. The completion of the acquisition remains subject to approval by the Alabama PSC issued an order denying the requests. On January 7, 2021, Energy Alabama and Gasp, Inc. filed a judicial appeal regarding both the Alabama PSC's August 2020 CCN order and the December 2020 order denying reconsideration and rehearing. On March 9, 2021, the Circuit Court of Montgomery County, Alabama granted a motion by Alabama Power to intervene in the appeal. At June 30, 2021, expenditures associated with the construction of Plant Barry Unit 8 included in CWIP totaled approximately $188 million.PSC. The ultimate outcome of this matter cannot be determined at this time.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Plant Greene County
Alabama Power jointly owns Plant Greene County with an affiliate, Mississippi Power. See Note 5 under "Joint Ownership Agreements" in Item 8 of the Form 10-K for additional information.
On April 15, 2021, Mississippi Power filed its 2021 IRP with the Mississippi PSC, which includes a schedule to retire its 40% ownership interest in Plant Greene County Units 1 and 2 in December 2025 and 2026, respectively, consistent with each unit's remaining useful life. Mississippi Power's IRP is subject to a review period during which the Mississippi PSC may note any deficiencies which could require re-evaluation or resubmission of the IRP. If no deficiencies are noted, the Mississippi PSC's review will conclude on August 13, 2021.
The Plant Greene County unit retirements identified by Mississippi Power require the completion of transmission and system reliability improvements, as well as agreement by Alabama Power. Alabama Power will continue to monitor the status of Mississippi Power's IRP and associated regulatory processes, as well as the transmission and system reliability improvements. Currently, Alabama Power plans to retire Plant Greene County Units 1 and 2 at the dates indicated. The ultimate outcome of this matter cannot be determined at this time.
Rate NDR
Based on an order from the Alabama PSC, when Alabama Power's NDR balance falls below $50 million, a reserve establishment charge will be activated and the ongoing reserve maintenance charge will be concurrently suspended until the NDR balance reaches $75 million. At June 30, 2021, Alabama Power's NDR balance was $36 million. As a result, effective with October 2021 billings, the reserve maintenance charge component of Rate NDR will be suspended and the reserve establishment charge will be activated. Alabama Power expects to collect approximately $4 million in the fourth quarter 2021 and $16 million annually under Rate NDR until the NDR balance is restored to $75 million.
Georgia Power
Rate Plan
Effective January 1, 2021, Georgia Power reduced its amortization of costs associated with CCR AROs by approximately $90 million as approved by the Georgia PSC in conjunction with Georgia Power's annual compliance filings.
In February 2020, the Georgia PSC denied a motion for reconsideration filed by the Sierra Club regarding the Georgia PSC's decision in the 2019 ARP allowing Georgia Power to recover compliance costs for CCR AROs,AROs. The Superior Court of Fulton County subsequently affirmed the Georgia PSC's decision and, in December 2020,October 2021, the Georgia Court of Appeals affirmed the Superior Court of Fulton County affirmed the decision of the Georgia PSC. On January 5,County's order. In December 2021, the Sierra Club filed a noticepetition for writ of appeal withcertiorari to the Georgia Court of Appeals.Supreme Court. The ultimate outcome of this matter cannot be determined at this time.
See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information regarding Georgia Power's AROs.
Plant Vogtle Unit 3 and Common Facilities Rate ProceedingIntegrated Resource Plan
On June 15, 2021,In light of the ongoing supply chain challenges in the solar industry, Georgia Power filed an application withamended the Georgia PSC970 MWs of utility-scale PPAs authorized in its 2019 Integrated Resource Plan to adjust retail base rates to includeextend by one year the portion of costs related to its investment in Plant Vogtle Unit 3 and common facilities shared between Plant Vogtle Units 3 and 4 (Common Facilities) previously deemed prudent by the Georgia PSC ($2.38 billion), as well as the related costs of operation.
The request includes an annual rate increase totaling approximately $370 million to be effective the month after Unit 3 is placed in service. Unit 3 is projected to be placed in service in the second quarter 2022. This increase will be partially offset by a decrease in the NCCR tariff of approximately $116 million expected to be effective January 1, 2022. In addition, an estimated $45 million of fuel cost savings related to Unit 3 is already incorporated in Georgia Power's current fuel cost recovery rates.
49
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Georgia Power also is requesting to defer some of its 2022 financing costs (approximately $42 million) relatingin-service dates for solar generation resources to the remaining portionend of the total Unit 3 and Common Facilities construction costs not being recovered through the NCCR tariff until Unit 4 costs are placed in retail base rates.
The Georgia PSC is scheduled to issue a final order in this proceeding on November 2, 2021. The ultimate outcome of this matter cannot be determined at this time. See "Nuclear Construction" herein for additional information on Plant Vogtle Units 3 and 4.
Deferral of Incremental COVID-19 Costs
In June 2021, Georgia Power performed a review of bad debt amounts deferred under the Georgia PSC-approved methodology, including consideration of actual amounts repaid by customers from arrears and installment plans after the disconnection moratorium period ended in July 2020. As a result of the review, Georgia Power reduced the balance of deferred incremental costs by approximately $20 million. At June 30, 2021, the incremental costs deferred totaled approximately $20 million, including approximately $2 million of incremental bad debt costs and $18 million of other incremental costs. The period over which these costs will be recovered is expected to be determined in Georgia Power's next base rate case. The ultimate outcome of this matter cannot be determined at this time.2024.
Nuclear Construction
In 2009, the Georgia PSC certified construction of Plant Vogtle Units 3 and 4, in which Georgia Power holds a 45.7% ownership interest. In 2012, the NRC issued the related combined construction and operating licenses, which allowed full construction of the 2 AP1000 nuclear units (with electric generating capacity of approximately 1,100 MWs each) and related facilities to begin. Until March 2017, construction on Plant Vogtle Units 3 and 4 continued under the Vogtle 3 and 4 Agreement, which was a substantially fixed price agreement.
In connection with the EPC Contractor's bankruptcy filing in March 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, entered into several transitional arrangements to allow construction to continue. In July 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, entered into the Vogtle Services Agreement, whereby Westinghouse provides facility design and engineering services, procurement and technical support, and staff augmentation on a time and materials cost basis. The Vogtle Services Agreement provides that it will continue until the start-up and testing of Plant Vogtle Units 3 and 4 are complete and electricity is generated and sold from both units. The Vogtle Services Agreement is terminable by the Vogtle Owners upon 30 days' written notice.
In October 2017, Georgia Power, acting for itself and as agent for the other Vogtle Owners, executed the Bechtel Agreement, a cost reimbursable plus fee arrangement, whereby Bechtel is reimbursed for actual costs plus a base fee and an at-risk fee, which is subject to adjustment based on Bechtel's performance against cost and schedule targets. Each Vogtle Owner is severally (not jointly) liable for its proportionate share, based on its ownership interest, of all amounts owed to Bechtel under the Bechtel Agreement. The Vogtle Owners may terminate the Bechtel Agreement at any time for their convenience, provided that the Vogtle Owners will be required to pay amounts related to work performed prior to the termination (including the applicable portion of the base fee), certain termination-related costs, and, at certain stages of the work, the applicable portion of the at-risk fee. Bechtel may terminate the Bechtel Agreement under certain circumstances, including certain Vogtle Owner suspensions of work, certain breaches of the Bechtel Agreement by the Vogtle Owners, Vogtle Owner insolvency, and certain other events.
See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K for information on the Amended and Restated Loan Guarantee Agreement, including applicable covenants, events of default, and mandatory prepayment events, and conditions to borrowing.events.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Cost and Schedule
Georgia Power's approximate proportionate share of the remaining estimated capital cost to complete Plant Vogtle Units 3 and 4, including contingency, through June 2022the end of the first quarter 2023 and Marchthe fourth quarter 2023, respectively, is as follows:
(in millions)
Base project capital cost forecast(a)(b)
$9,09610,294 
Construction contingency estimate119107 
Total project capital cost forecast(a)(b)
9,21510,401 
Net investment at June 30, 2021March 31, 2022(b)
(7,856)(8,715)
Remaining estimate to complete$1,3591,686 
(a)Includes approximately $570$590 million of costs that are not shared with the other Vogtle Owners.Owners and approximately $440 million of incremental costs under the cost-sharing and tender provisions of the joint ownership agreements described below. Excludes financing costs expected to be capitalized through AFUDC of approximately $290$377 million, of which $143$221 million had been accrued through June 30, 2021.March 31, 2022.
(b)Net of $1.7 billion received from Toshiba under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds.
Georgia Power estimates that its financing costs for construction of Plant Vogtle Units 3 and 4 will total approximately $3.2$3.4 billion, of which $2.7$3.0 billion had been incurred through June 30, 2021.March 31, 2022.
As part of its ongoing processes, Southern Nuclear continues to evaluate cost and schedule forecasts on a regular basis to incorporate current information available, particularly in the areas of engineering support, commodity installation, system turnovers and related test results, and workforce statistics. Southern Nuclear establishes aggressive target values for monthly construction production and system turnover activities. Southern Nuclear'sactivities, which are reflected in the site work plans continue to reflect this approach in support of safely completing Units 3 and 4, while achieving the required construction quality.plans.
In mid-March 2020, Southern Nuclear began implementing policies and procedures designed to mitigate the risk of transmission of COVID-19 at the construction site, including worker distancing measures; isolating individuals who tested positive for COVID-19, showed symptoms consistent with COVID-19, were being tested for COVID-19, or were in close contact with such persons; requiring self-quarantine; and adopting additional precautionary measures. Since March 2020, the number of active COVID-19 cases at the site has fluctuated consistent with the surrounding area and impacted productivity levels and pace of activity completion. Thecompletion, with the site has experienced an overall declineexperiencing peaks in the number of active cases since a peak in January 2021. The lower productivity levels2021, August 2021, and slower pace of activity completion experienced since March 2020 contributed to a backlog to the aggressive site work plan established at the beginning of 2020.January 2022. Georgia Power estimates the productivity impacts of the COVID-19 pandemic have consumed approximately three to four months of schedule margin previously embedded in the site work plan for Unit 3 and Unit 4. In addition,As of March 31, 2022, Georgia Power's proportionate share of the estimated incremental cost associated with COVID-19 mitigation actions and impacts on construction productivity is estimated to be between $160 million and $200 million and is included in the total project continued to face challenges including, but not limited to, higher than expected absenteeism; overallcapital cost forecast. The continuing effects of the COVID-19 pandemic could further disrupt or delay construction and subcontractor labor productivity; system turnovertesting activities at Plant Vogtle Units 3 and testing activities; and electrical equipment and commodity installation. As a result of these factors, in January 2021, Southern Nuclear further extended certain milestone dates, including the start of hot functional testing and fuel4.
Fuel load for Unit 3 from those establishedis projected during the third quarter or the fourth quarter 2022 with an in-service date projected during the fourth quarter 2022 or the first quarter 2023. Unit 3's projected schedule primarily depends on improvements in October 2020.
Followingoverall construction productivity and production levels, the January 2021 milestone extensions, Southern Nuclear has been performing additionalvolume and completion of construction remediation work, completion of work packages, including inspection records, and other documentation necessary to ensure qualitysubmit the remaining ITAACs and design standards are met as system turnovers are completed to support hot functional testing andbegin fuel load, the pace of system and area turnovers, and the progression of startup and other testing. An in-service date during the third quarter or the fourth quarter 2023 for Unit 3. Hot functional testing for4 is projected. Unit 3 was completed in July 2021. As a result of challenges including, but not limited to,4's projected schedule primarily depends on overall construction productivity and production levels improving as well as appropriate levels of craft laborers, particularly electricians and pipefitters, being added and maintained. Any further delays could result in later in-service dates.
During the first quarter 2022, established construction remediation work,contingency totaling $43 million was assigned to the base capital cost forecast for costs primarily associated with construction productivity, the pace of system turnovers, spent fuel pool repairs, and the timeframesupport resources for Units 3 and duration for hot functional and other testing, at the end of the second quarter 2021, Southern Nuclear further extended certain milestone dates, including the fuel load for4.
As Unit 3 completes system turnover from those established in January 2021. The siteconstruction and moves to testing and transition to operations, ongoing and potential future challenges include construction productivity, completion of construction remediation work, plan currently targets fuel load for Unit 3 in the fourth quarter 2021 and an in-service date of March 2022. As the site work plan includes minimal margin to these milestone dates, an in-service date in the second quarter 2022 for Unit 3 is projected, although any further delays could result in a later in-service date.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Ascompletion of work packages, including inspection records, and other documentation necessary to submit the result of productivity challenges, at the end of the second quarter 2021, Southern Nuclear also further extended milestone dates forremaining ITAACs and begin fuel load, and final component and pre-operational tests. As Unit 4 from those established in January 2021. The site work plan targets an in-service dateprogresses through construction and continues to transition into testing, ongoing and potential future challenges include the pace and quality of November 2022 and primarily depends on overall construction productivity and production levels significantly improving as well as appropriate levelselectrical installation; availability of craft laborers, particularly electricians and pipefitters, being added and maintained. Assupervisory resources, including the site work plan includes minimal margintemporary diversion of such resources to the milestone dates, an in-service date in the first quarter 2023 for Unit 4 is projected, although any further delays could result in a later in-service date.
As of March 31, 2021, approximately $84 million of the construction contingency established in the fourth quarter 2020 was assigned to the base capital cost forecast for costs primarily associated with the schedule extension forsupport Unit 3 to December 2021, construction productivity, support resources,efforts; the pace of work package closures and construction remediation work. Georgia Power increased its total capital cost forecast as of March 31, 2021 by adding $48 million to the remaining construction contingency. Considering the factors above, during the second quarter 2021, all of the remaining construction contingency previously established and an additional $341 million was assigned to the base capital cost forecast for costs primarily associated with the schedule extensions for Units 3 and 4 described above, construction remediation work for Unit 3, and construction productivity and support resources for Units 3 and 4. Georgia Power also increased its total capital cost forecast as of June 30, 2021 by adding $119 million to replenish construction contingency.
After considering the significant level of uncertainty that exists regarding the future recoverability of these costs since the ultimate outcome of these matters is subject to the outcome of future assessments by management, as well as Georgia PSC decisions in future regulatory proceedings, Georgia Power recorded pre-tax charges to income in the first quarter 2021system turnovers; and the second quarter 2021timeframe and duration of $48 million ($36 million after tax)hot functional and $460 million ($343 million after tax), respectively, for the increases in the total project capital cost forecast. As and when these amounts are spent, Georgia Power may request the Georgia PSC to evaluate those expenditures for rate recovery.
In addition, the continuing effects of the COVID-19 pandemic could further disrupt or delay construction and testing activities at Plant Vogtle Units 3 and 4. Georgia Power's proportionate share of the estimated incremental cost associated with COVID-19 mitigation actions and impacts on construction productivity is currently estimated to be between $160 million and $200 million and is included in the total project capital cost forecast.
other testing. As construction, including subcontract work, continues on both Units 3 and testing and system turnover activities increase,4, ongoing or future challenges withinclude management of contractors and vendors; subcontractor performance; supervision of craft labor and related productivity, particularly in the installation of electrical, mechanical, and instrumentation and controls commodities, ability to attract and retain craft labor, and/or related cost escalation; and procurement fabrication, delivery, assembly, installation, system turnover, and therelated installation. New challenges may arise, particularly as Units 3 and 4 move into initial testing and start-up, including anywhich may result in required engineering changes or any remediation related thereto, ofto plant systems, structures, or components (some of which are based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale), including the spent fuel pools, any of which. The ongoing and potential future challenges described above may require additional labor and/or materials; or other issues could continue or arise and change the projected schedule and estimated cost.
There have been technical and procedural challenges to the construction and licensing of Plant Vogtle Units 3 and 4 at the federal and state level and additional challenges may arise. In addition, certain license amendment requests have been filed and approved or are pending before the NRC. Processes are in place that are designed to ensure compliance with the requirements specified in the Westinghouse Design Control Document and the combined construction and operating licenses, including inspections by Southern Nuclear and the NRC that occur throughout construction. In connection with the additional construction remediation work described above, Southern Nuclear reviewed the project's construction quality programs and, where needed, is implementing improvement plans consistent with these processes. In June 2021,On March 25, 2022, the NRC began acompleted its follow-up inspection related to the November 2021 final significance report on its special inspection to review the root cause of this additional construction remediation work and the corresponding corrective action plans. Findings resulting from this or other inspections could require additional remediation and/or furtherThe NRC oversight. In addition, certain license amendment requests have been filedclosed the two white findings identified in November 2021 and approved or are pending before the NRC. On March 15, 2021, the NRC denied the Blue Ridge Environmental Defense League's (BREDL) December 2020 motion to reopen proceedings on BREDL's petition challenging a requested license amendment, which has been issued by the NRC staff.
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In September 2020, Southern Nuclear notified the NRC of its intent to load fuel forreturned Vogtle Unit 3 in 2021. to the NRC's baseline inspection program.
Various design and other licensing-based compliance matters, including the timely submittal by Southern Nuclear of the ITAAC documentation for each unit and the related reviews and approvals by the NRC necessary to support NRC authorization to load fuel, have arisen or may arise, which may result in additional license amendments or require other resolution. If any license amendment requests or other licensing-based compliance issues, including inspections and ITAACs, are not resolved in a timely manner, there may be delays in the project schedule that could result in increased costs.
The ultimate outcome of these matters cannot be determined at this time. However, any extension of the in-service date beyond the secondfirst quarter 20222023 for Unit 3 or the firstfourth quarter 2023 for Unit 4, including the current level of cost sharing described below, is currently estimated to result in additional base capital costs for Georgia Power of approximately $25up to $60 million per month for Unit 3 and approximately $15$40 million per month for Unit 4, as well as the related AFUDC.AFUDC and any additional related construction, support resources, or testing costs. While Georgia Power is not precluded from seeking retail recovery of any future capital cost forecast increase other than the amounts related to the cost-sharing and tender provisions of the joint ownership agreements described below, management will ultimately determine whether or not to seek recovery. Any further changes to the capital cost forecast that are not expected to be recoverable through regulated rates will be required to be charged to income and such charges could be material.
Joint Owner Contracts
In November 2017, the Vogtle Owners entered into an amendment to their joint ownership agreements for Plant Vogtle Units 3 and 4 to provide for, among other conditions, additional Vogtle Owner approval requirements. Effective in August 2018, the Vogtle Owners further amended the joint ownership agreements to clarify and provide procedures for certain provisions of the joint ownership agreements related to adverse events that require the vote of the holders of at least 90% of the ownership interests in Plant Vogtle Units 3 and 4 to continue construction (as amended, and together with the November 2017 amendment, the Vogtle Joint Ownership Agreements). The Vogtle Joint Ownership Agreements also confirm that the Vogtle Owners' sole recourse against Georgia Power or Southern
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Nuclear for any action or inaction in connection with their performance as agent for the Vogtle Owners is limited to removal of Georgia Power and/or Southern Nuclear as agent, except in cases of willful misconduct.
As a result of an increase in the total project capital cost forecast and Georgia Power's decision not to seek rate recovery of the increase in the base capital costs in conjunction with the nineteenth VCM report in 2018, the holders of at least 90% of the ownership interests in Plant Vogtle Units 3 and 4 were required to vote to continue construction. In September 2018, the Vogtle Owners unanimously voted to continue construction of Plant Vogtle Units 3 and 4.
Amendments to the Vogtle Joint Ownership Agreements
In connection with a September 2018 vote by the voteVogtle Owners to continue construction, Georgia Power entered into (i) a binding term sheet (Vogtle Owner Term Sheet) with the other Vogtle Owners and MEAG Power's wholly-owned subsidiaries MEAG Power SPVJ, LLC (MEAG SPVJ), MEAG Power SPVM, LLC (MEAG SPVM), and MEAG Power SPVP, LLC (MEAG SPVP) to take certain actions which partially mitigate potential financial exposure for the other Vogtle Owners, including additional amendments to the Vogtle Joint Ownership Agreements and the purchase of PTCs from the other Vogtle Owners at pre-established prices, and (ii) a term sheet (MEAG Term Sheet) with MEAG Power and MEAG SPVJ to provide up to $300 million of funding with respect to MEAG SPVJ's ownership interest in Plant Vogtle Units 3 and 4 under certain circumstances. In January 2019, Georgia Power, MEAG Power, and MEAG SPVJ entered into an agreement to implement the provisions of the MEAG Term Sheet. In February 2019, Georgia Power, the other Vogtle Owners, and MEAG Power's wholly-owned subsidiaries MEAG SPVJ, MEAG SPVM, and MEAG SPVP entered into certain amendments to the Vogtle Joint Ownership Agreements to implement the provisions of the Vogtle Owner Term Sheet (Global Amendments).
As previously disclosed, pursuantPursuant to the Global Amendments: (i) each Vogtle Owner must pay its proportionate share of qualifying construction costs for Plant Vogtle Units 3 and 4 based on its ownership percentage up to the estimated cost at completion (EAC) for Plant Vogtle Units 3 and 4 which formed the basis of Georgia Power's forecast of $8.4 billion in the nineteenth VCM plus $800 million; (ii) Georgia Power will be responsible for 55.7% of actual qualifying construction costs between $800 million and $1.6 billion over the EAC in the nineteenth VCM
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(resulting (resulting in $80 million of potential additional costs to Georgia Power), with the remaining Vogtle Owners responsible for 44.3% of such costs pro rata in accordance with their respective ownership interests; and (iii) Georgia Power will be responsible for 65.7% of qualifying construction costs between $1.6 billion and $2.1 billion over the EAC in the nineteenth VCM (resulting in a further $100 million of potential additional costs to Georgia Power), with the remaining Vogtle Owners responsible for 34.3% of such costs pro rata in accordance with their respective ownership interests. If the EAC is revised and exceeds the EAC in the nineteenth VCM by more than $2.1 billion, each of the other Vogtle Owners will have a one-time option at the time the project budget cost forecast is so revised to tender a portion of its ownership interest to Georgia Power in exchange for Georgia Power's agreement to pay 100% of such Vogtle Owner's remaining share of total construction costs in excess of the EAC in the nineteenth VCM plus $2.1 billion.
For purposes of the foregoing provisions, qualifying construction costs will not include costs (i) resulting from force majeure events, including epidemics and quarantines, governmental actions or inactions (or significant delays associated with issuance of such actions) that affect the licensing, completion, start-up, operations, or financing of Plant Vogtle Units 3 and 4, administrative proceedings or litigation regarding ITAAC or other regulatory challenges to commencement of operation of Plant Vogtle Units 3 and 4, and changes in laws or regulations governing Plant Vogtle Units 3 and 4, (ii) legal fees and legal expenses incurred due to litigation with contractors or subcontractors that are not subsidiaries or affiliates of Southern Company, and (iii) additional costs caused by requests from the Vogtle Owners other than Georgia Power, except for the exercise of a right to vote granted under the Vogtle Joint Ownership Agreements, that increase costs by $100,000 or more.
In addition, pursuant to the Global Amendments, the holders of at least 90% of the ownership interests in Plant Vogtle Units 3 and 4 must vote to continue construction if certain adverse events occur, including, among other events: (i) the bankruptcy of Toshiba; (ii) the termination or rejection in bankruptcy of certain agreements, including the Vogtle Services Agreement, the Bechtel Agreement, or the agency agreement with Southern Nuclear; (iii) Georgia Power's public announcement of its intention not to submit for rate recovery any portion of its investment in Plant Vogtle Units 3 and 4 or the Georgia PSC determines that any of Georgia Power's costs relating to the construction of Plant Vogtle Units 3 and 4 will not be recovered in retail rates, excluding any additional amounts paid by Georgia Power on behalf of the other Vogtle Owners pursuant to the Global Amendments described above and the first 6% of costs during any six-month VCM reporting period that are disallowed by the Georgia PSC for
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recovery, or for which Georgia Power elects not to seek cost recovery, through retail rates; and (iv) an incremental extension of one year or more overfrom the most recently approved schedule.seventeenth VCM report estimated in-service dates of November 2021 and November 2022 for Units 3 and 4, respectively. The schedule extension announced in February 2022 triggered the requirement for a vote to continue construction. Effective February 25, 2022, all of the Vogtle Owners had voted to continue construction.
Georgia Power and the other Vogtle Owners do not agree on either the starting dollar amount for the determination of cost increases subject to the cost-sharing and tender provisions of the Global Amendments or the extent to which COVID-19-related costs impact those provisions. Based on the definition in the Global Amendments, Georgia Power believes the starting dollar amount is $18.38 billion and the current project capital cost forecast exceeds the cost-sharing provision threshold, but not the tender provision threshold. The other Vogtle Owners have notified Georgia Power that they believe the current project capital cost forecast exceeds the cost-sharing thresholds and triggers the tender provisions under the Global Amendments. Georgia Power recorded a pre-tax charge to income in the fourth quarter 2021 of approximately $440 million ($328 million after tax) associated with these cost-sharing and tender provisions, which is included in the total project capital cost forecast. Georgia Power may be required to record further pre-tax charges to income of up to approximately $460 million associated with these provisions based on the current project capital cost forecast. Georgia Power's incremental charges associated with these provisions, which relate to the other Vogtle Owners' share of costs, will not be recovered from retail customers. In October 2021, Georgia Power and the other Vogtle Owners entered into an agreement to clarify the process for the tender provisions of the Global Amendments to provide for a decision between 120 and 180 days after the tender option is triggered, which the other Vogtle Owners assert occurred on February 14, 2022.
Georgia Power's ownership interest in Plant Vogtle Units 3 and 4 continues to be 45.7%; however, it could increase if one or more of the other Vogtle Owners exercise the option to tender a portion of their ownership interest to Georgia Power and require Georgia Power to pay 100% of the remaining share of the costs necessary to complete Plant Vogtle Units 3 and 4. Georgia Power's incremental ownership interest would be calculated and conveyed to Georgia Power after Plant Vogtle Units 3 and 4 are placed in service.
The ultimate outcome of these matters cannot be determined at this time.
Regulatory Matters
In 2009, the Georgia PSC voted to certify construction of Plant Vogtle Units 3 and 4 with a certified capital cost of $4.418 billion. In addition, in 2009 the Georgia PSC approved inclusion of the Plant Vogtle Units 3 and 4 related CWIP accounts in rate base, and the State of Georgia enacted the Georgia Nuclear Energy Financing Act, which allows Georgia Power to recover financing costs for Plant Vogtle Units 3 and 4. Financing costs are recovered on all applicable certified costs through annual adjustments to the NCCR tariff up to the certified capital cost of $4.418 billion. At June 30, 2021,March 31, 2022, Georgia Power had recovered approximately $2.6$2.8 billion of financing costs. Financing costs related to capital costs above $4.418 billion are being recognized through AFUDC and are expected to be recovered through retail rates over the life of Plant Vogtle Units 3 and 4; however, Georgia Power willis not recordrecording AFUDC related to any capital costs in excess of the total deemed reasonable by the Georgia PSC (currently $7.3 billion) and not requested for rate recovery. In November 2020,2021, the Georgia PSC approved Georgia Power's request to decrease the NCCR tariff by $142$78 million annually, effective January 1, 2021.2022.
Georgia Power is required to file semi-annual VCM reports with the Georgia PSC by February 28 and August 31 of each year. In 2013, in connection with the eighth VCM report, the Georgia PSC approved a stipulation between Georgia Power and the staff of the Georgia PSC to waive the requirement to amend the Plant Vogtle Units 3 and 4 certificate in accordance with the 2009 certification order until the completion of Plant Vogtle Unit 3, or earlier if deemed appropriate by the Georgia PSC and Georgia Power.
In 2016, the Georgia PSC voted to approve a settlement agreement (Vogtle Cost Settlement Agreement) resolving certain prudency matters in connection with the fifteenth VCM report. In December 2017, the Georgia PSC voted to approve (and issued its related order on January 11, 2018) Georgia Power's seventeenth VCM report and modified the Vogtle Cost Settlement Agreement. The Vogtle Cost Settlement Agreement, as modified by the January 11,
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2018 order, resolved the following regulatory matters related to Plant Vogtle Units 3 and 4: (i) none of the $3.3 billion of costs incurred through December 31, 2015 and reflected in the fourteenth VCM report should be disallowed from rate base on the basis of imprudence; (ii) the Contractor Settlement Agreement was reasonable and prudent and none of the $0.3 billion paid pursuant to the Contractor Settlement Agreement should be disallowed from rate base on the basis of imprudence; (iii) (a) capital costs incurred up to $5.68 billion would be presumed to
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be reasonable and prudent with the burden of proof on any party challenging such costs, (b) Georgia Power would have the burden to show that any capital costs above $5.68 billion were prudent, and (c) a revised capital cost forecast of $7.3 billion (after reflecting the impact of payments received under the Guarantee Settlement Agreement and related customer refunds) was found reasonable; (iv) construction of Plant Vogtle Units 3 and 4 should be completed, with Southern Nuclear serving as project manager and Bechtel as primary contractor; (v) approved and deemed reasonable Georgia Power's revised schedule placing Plant Vogtle Units 3 and 4 in service in November 2021 and November 2022, respectively; (vi) confirmed that the revised cost forecast does not represent a cost cap and that a prudence proceeding on cost recovery will occur following Unit 4 fuel load, consistent with applicable Georgia law; (vii) reduced the ROE used to calculate the NCCR tariff (a) from 10.95% (the ROE rate setting point authorized by the Georgia PSC in the 2013 alternate rate plan) to 10.00% effective January 1, 2016, (b) from 10.00% to 8.30%, effective January 1, 2020, and (c) from 8.30% to 5.30%, effective January 1, 2021 (provided that the ROE in no case will be less than Georgia Power's average cost of long-term debt); (viii) reduced the ROE used for AFUDC equity for Plant Vogtle Units 3 and 4 from 10.00% to Georgia Power's average cost of long-term debt, effective January 1, 2018; and (ix) agreed that uponeffective the first month after Unit 3 reachingreaches commercial operation, retail base rates would be adjusted to include the costs related to Unit 3 and common facilities deemed prudent in the Vogtle Cost Settlement Agreement.Agreement (see Note 2 to the financial statements under "Georgia Power – Plant Vogtle Unit 3 and Common Facilities Rate Proceeding" in Item 8 of the Form 10-K for additional information). The January 11, 2018 order also stated that if Plant Vogtle Units 3 and 4 are not commercially operational by June 1, 2021 and June 1, 2022, respectively, the ROE used to calculate the NCCR tariff will be further reduced by 10 basis points each month (but not lower than Georgia Power's average cost of long-term debt) until the respective Unit is commercially operational. The ROE reductions negatively impacted earnings by approximately $150$270 million in 20202021 and are estimated to have negative earnings impacts of approximately $270 million, $270$300 million and $90$265 million in 2021, 2022 and 2023, respectively. In its January 11, 2018 order, the Georgia PSC also stated if other conditions change and assumptions upon which Georgia Power's seventeenth VCM report are based do not materialize, the Georgia PSC reserved the right to reconsider the decision to continue construction.
The Georgia PSC has approved 23 VCM reports covering periods through June 30, 2020 and is scheduled to vote onIn the August 2021 order approving the twenty-fourth VCM report, in August 2021, including total construction capital costs incurred through December 31, 2020 of $8.7 billion (before $1.7 billion of payments received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds). On July 28, 2021, Georgia Power and the staff of the Georgia PSC reachedapproved a stipulated agreement providing for approval ofstipulation addressing the twenty-fourth VCM report as well as a change to future VCM proceedings. Beginningfollowing matters: (i) beginning with its twenty-fifth VCM report, which Georgia Power expects to file with the Georgia PSC by August 31, 2021, Georgia Power will continue to report to the Georgia PSC all costs incurred during the period for review and will include a request for approval of costs up to the $7.3 billion determined to be reasonable in the Georgia PSC's seventeenth VCM order. Under the stipulation,order and (ii) Georgia Power will not seek rate recovery of the $0.7 billion increase to the base capital cost forecast included in the nineteenth VCM report and charged to income by Georgia Power in the second quarter 2018. In addition, the stipulation confirms Georgia Power may request verification orand approval of costs above $7.3 billion prior tofor inclusion in rate base at a later time, but no earlier than the Georgia PSC's prudence review contemplated by the seventeenth VCM order. order described previously.
The twenty-fifthGeorgia PSC has approved 25 VCM reports covering periods through June 30, 2021. These reports reflect total construction capital costs incurred of $7.9 billion (net of $1.7 billion of payments received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds), of which the Georgia PSC has verified and approved $7.3 billion as described above. Georgia Power filed its twenty-sixth VCM report will reflectwith the revisedGeorgia PSC on February 17, 2022, reflecting $584 million of additional construction capital costs incurred through December 31, 2021 and the total capital cost forecast discusseddescribed above. See "Plant Vogtle Unit 3 and Common Facilities Rate Proceeding" herein for information on Georgia Power's request to adjust retail base rates to include a portion of costs related to its investment in Plant Vogtle Unit 3 and Common Facilities.
The ultimate outcome of these matters cannot be determined at this time.
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Mississippi Power
Performance Evaluation Plan
On June 8, 2021, theMarch 15, 2022, Mississippi PSC approved Mississippi Power'sPower submitted its annual retail PEP filing for 2021, resulting in an2022 to the Mississippi PSC, which requested a 1.9%, or approximately $18 million, annual increase in revenues, of approximately $16 million, or 1.8%, whichprimarily due to increases in investment, operations and maintenance expenses, and depreciation and amortization. In accordance with the PEP rate schedule, the rate increase became effective with the first billing cycle of April 2021 in accordance with the PEP rate schedule.
Integrated Resource Plan
In December 2020, the Mississippi PSC issued an order in the Reserve Margin Plan docket requiring Mississippi Power2022, subject to incorporate into its 2021 IRP a schedule reflecting the retirement of 950 MWs of fossil-steam generation
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by year-end 2027 to reduce Mississippi Power's excess reserve margin. On April 15, 2021, Mississippi Power filed its 2021 IRP with the Mississippi PSC.refund. The filing includes a schedule to retire Plant Watson Unit 4 (268 MWs) and Mississippi Power's 40% ownership interest in Plant Greene County Units 1 and 2 (103 MWs each) in December 2023, 2025, and 2026, respectively, consistent with each unit's remaining useful life in the most recent approved depreciation studies. In addition, the schedule reflects the early retirement of Mississippi Power's 50% undivided ownership interest in Plant Daniel Units 1 and 2 (502 MWs) by the end of 2027. The Plant Greene County unit retirements require the completion by Alabama Power of transmission and system reliability improvements, as well as agreement by Alabama Power.
The remaining net book value of Plant Daniel Units 1 and 2 was approximately $522 million at June 30, 2021. Mississippi Power expects to reclassify the net book value remaining at retirement to a regulatory asset to be amortized over a period to be determined by the Mississippi PSC in futurerelated proceedings consistent with the December 2020 order. The Plant Watson and Greene County units are expected to conclude in summer 2022; however, the ultimate outcome of this matter cannot be fully depreciated upon retirement.determined at this time.
The 2021 IRP is subject toAd Valorem Tax Adjustment
On April 13, 2022, Mississippi Power submitted its annual ad valorem tax adjustment filing for 2022, which requested a review period during which the Mississippi PSC may note any deficiencies which could require re-evaluation or resubmission of the IRP. If no deficiencies are noted, the Mississippi PSC's review will conclude on August 13, 2021.
$5 million annual increase in revenues. The ultimate outcome of this matter cannot be determined at this time.
Environmental Compliance Overview Plan
On June 8, 2021, the Mississippi PSC approved Mississippi Power's ECO Plan filing for 2021, resulting in an annual decrease in revenues of approximately $9 million, primarily due to a change in the amortization periods of certain regulatory assets and liabilities. The rate decrease became effective with the first billing cycle of July 2021.
Ad Valorem Tax Adjustment
On April 6, 2021, the Mississippi PSC approved Mississippi Power's annual ad valorem tax adjustment filing for 2021, which requested an annual increase in revenues of approximately $28 million, including approximately $19 million of ad valorem taxes previously recovered through PEP in accordance with the Mississippi Power Rate Case Settlement Agreement. The rate increase became effective with the first billing cycle of May 2021.
Southern Company Gas
Infrastructure Replacement Programs and Capital Projects
Capital expenditures incurred under specific infrastructure replacement programs and capital projects during the first sixthree months of 20212022 were as follows:
UtilityProgramSixThree Months Ended June 30, 2021March 31, 2022
(in millions)
Nicor GasInvesting in Illinois$17951 
Virginia Natural GasSteps to Advance Virginia's Energy2214 
Atlanta Gas LightSystem Reinforcement Rider14 
Chattanooga GasPipeline Replacement Program1 
Total$20180 
Atlanta Gas Light
On April 28, 2021, Atlanta Gas Light filed its first Integrated Capacity and Delivery Plan (i-CDP) with the Georgia PSC, which includes a series of ongoing and proposed pipeline safety, reliability, and growth programs for the next 10 years (2022 through 2031), as well as the required capital investments and related costs to implement the programs. The i-CDP reflects capital investments totaling approximately $0.5 billion to $0.6 billion annually.
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Recovery of the related revenue requirements will be included in either subsequent annual GRAM filings or the new System Reinforcement Rider for authorized large pressure improvement and system reliability projects. The Georgia PSC is scheduled to vote on this matter in November 2021. The ultimate outcome of this matter cannot be determined at this time.
Virginia Natural Gas
On April 6, 2021, the Virginia Commission approved a motion filed by Virginia Natural Gas to withdraw the application for its 9.5-mile interconnect project due to a change in the capacity needs of one of the project's customers. No further action is necessary and this matter is now concluded.
Rate Proceedings
Virginia Natural Gas
On May 10, 2021, Virginia Natural Gas, the Virginia Commission staff, and other intervenors entered into a stipulation agreement related to Virginia Natural Gas' June 2020 general rate case filing, which allows for a $43 million increase in annual base rate revenues, including $14 million related to the recovery of investments under the SAVE program, based on a ROE of 9.5% and an equity ratio of 51.9%. On July 8, 2021, the hearing examiner issued a report recommending adoption of the stipulation agreement. The Virginia Commission is expected to rule on this matter by September 2021. Interim rate adjustments became effective as of November 1, 2020, subject to refund, based on Virginia Natural Gas' original request for an increase of approximately $50 million. The ultimate outcome of this matter cannot be determined at this time.
Atlanta Gas Light
On July 21, 2021, Atlanta Gas Light filed its annual GRAM filing with the Georgia PSC. The filing requests an annual base rate increase of $49 million based on the projected 12-month period beginning January 1, 2022. The proposed rate increase may be updated pending the resolution of Atlanta Gas Light's i-CDP filing. Resolution of the GRAM filing is expected by December 31, 2021, with the new rates to become effective January 1, 2022. The ultimate outcome of this matter cannot be determined at this time. See "Infrastructure Replacement Programs and Capital Projects – Atlanta Gas Light" herein for additional information.
Deferral of Incremental COVID-19 Costs
Nicor Gas
On March 18, 2021, the Illinois Commission approved a phased-in schedule for disconnections related to non-payment. Nicor Gas began certain disconnections in late April 2021 and resumed normal disconnections in June 2021. Nicor Gas will continue certain flexible credit and collection procedures through the third quarter 2021.
(C) CONTINGENCIES
See Note 3 to the financial statements in Item 8 of the Form 10-K for information relating to various lawsuits and other contingencies.
General Litigation Matters
The Registrants are involved in various matters being litigated and regulatory matters. The ultimate outcome of such pending or potential litigation or regulatory matters against each Registrant and any subsidiaries cannot be determined at this time; however, for current proceedings not specifically reported herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings would have a material effect on such Registrant's financial statements.
The Registrants believe the pending legal challenges discussed below have no merit; however, the ultimate outcome of these matters cannot be determined at this time.
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Southern Company
In February 2017, Jean Vineyard and Judy Mesirov each filed a shareholder derivative lawsuit in the U.S. District Court for the Northern District of Georgia. Each of these lawsuits names as defendants Southern Company, certain of its directors, certain of its current and former officers, and certain former Mississippi Power officers. In 2017, these 2 shareholder derivative lawsuits were consolidated in the U.S. District Court for the Northern District of
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Georgia. The complaints allege that the defendants caused Southern Company to make false or misleading statements regarding the Kemper County energy facility cost and schedule. Further, the complaints allege that the defendants were unjustly enriched and caused the waste of corporate assets and also allege that the individual defendants violated their fiduciary duties.
In May 2017, Helen E. Piper Survivor's Trust filed a shareholder derivative lawsuit in the Superior Court of Gwinnett County, Georgia that names as defendants Southern Company, certain of its directors, certain of its current and former officers, and certain former Mississippi Power officers. The complaint alleges that the individual defendants, among other things, breached their fiduciary duties in connection with schedule delays and cost overruns associated with the construction of the Kemper County energy facility. The complaint further alleges that the individual defendants authorized or failed to correct false and misleading statements regarding the Kemper County energy facility schedule and cost and failed to implement necessary internal controls to prevent harm to Southern Company. In August 2019, the court granted a motion filed by the plaintiff in July 2019 to substitute a new named plaintiff, Martin J. Kobuck, in place of Helen E. Piper Survivor's Trust.
The plaintiffs in each of these cases seek to recover, on behalf of Southern Company, unspecified actual damages and, on each plaintiff's own behalf, attorneys' fees and costs in bringing the lawsuit. The plaintiffs also seek certain changes to Southern Company's corporate governance and internal processes. In 2018,On January 21, 2022, the plaintiffs in the federal court in each caseaction filed a motion for preliminary approval of settlement, together with an executed stipulation of settlement, which applies to both actions. On March 11, 2022, the U.S. District Court for the Northern District of Georgia entered an order staying each lawsuit until 30 days afterpreliminarily approving the settlement. The proposed settlement consists of a securities class action filed in January 2017 againstan aggregate payment by Southern Company, certainCompany's insurers of its currentapproximately $4.5 million for attorneys' fees and former officers, and certain former Mississippi Power officers. In September 2020, the plaintiffs in each case filed a status report noting the settlementexpenses, as well as adoption of various corporate governance reforms by Southern Company. The terms of the securities class actionproposed settlement and informing the court thatcorporate governance reforms remain subject to final approval by the parties had scheduled mediation, which occurred in November 2020. The parties in each case did not reach settlement but continue to explore possible resolution. Each case is stayed while the parties discuss potential resolution.court.
Georgia Power
In 2011, plaintiffs filed a putative class action against Georgia Power in the Superior Court of Fulton County, Georgia alleging that Georgia Power's collection in rates of amounts for municipal franchise fees (which fees are paid to municipalities) exceeded the amounts allowed in orders of the Georgia PSC and alleging certain state law claims. This case has been ruled upon and appealed numerous times over the last several years. In one recent appeal, the Georgia Supreme Court remanded the case and noted that the trial court could refer the matter to the Georgia PSC to interpret its tariffs. Following a motion by Georgia Power, in February 2019, the Superior Court of Fulton County ordered the parties to submit petitions to the Georgia PSC for a declaratory ruling and also conditionally certified the proposed class. In March 2019, Georgia Power and the plaintiffs filed petitions with the Georgia PSC seeking confirmation of the proper application of the municipal franchise fee schedule pursuant to the Georgia PSC's orders. Also in March 2019, Georgia Power appealed the class certification decision to the Georgia Court of Appeals. In October 2019, the Georgia PSC issued an order that found Georgia Power has appropriately implemented the municipal franchise fee schedule. In March 2020, the Georgia Court of Appeals vacated the Superior Court of Fulton County's February 2019 order granting conditional class certification and remanded the case to the Superior Court of Fulton County for further proceedings. In September 2020, the plaintiffs and Georgia Power each filed motions for summary judgment and the plaintiffs renewed their motion for class certification. On March 16, 2021, the Superior Court of Fulton County granted class certification and Georgia Power's motion for summary judgment. On March 22, 2021,judgment and the plaintiffs filed a notice of appeal, and, onappeal. In April 2, 2021, Georgia Power filed a notice of cross appeal on the issue of class certification. In December 2021, the Georgia Court of Appeals affirmed the Superior Court's ruling that granted summary judgment to Georgia Power and dismissed Georgia Power's cross appeal on the issue of class certification as moot. Also in December 2021, the plaintiffs filed a petition for writ of certiorari to the Georgia Supreme Court. The amount of any possible losses cannot be estimated at this time because, among other factors, it is unknown whether any losses would be subject to recovery from any municipalities.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
In July 2020, a group of individual plaintiffs filed a complaint in the Superior Court of Fulton County, Georgia against Georgia Power alleging that releases from Plant Scherer have impacted groundwater, surface water, and air, resulting in alleged personal injuries and property damage. The plaintiffs seek an unspecified amount of monetary damages including punitive damages, a medical monitoring fund, and injunctive relief. Georgia Power has filed multiple motions to dismiss the complaint. In September 2020,October 2021, 3 additional complaints were filed in the Superior Court of Monroe County, Georgia against Georgia Power alleging that releases from Plant Scherer have impacted groundwater and air, resulting in alleged personal injuries and property damage. The plaintiffs seek an unspecified amount of monetary damages including punitive damages. In November 2021, Georgia Power filed a motionnotice to dismiss.remove the 3 cases pending in the Superior Court of Monroe County, Georgia to the U.S. District Court for the Middle District of Georgia. On February 7, 2022, 4 additional complaints were filed in the Superior Court of Monroe County, Georgia against Georgia Power seeking damages for alleged personal injuries or property damage. On March 9, 2022, Georgia Power filed a notice to remove the 4 cases pending in the Superior Court of Monroe
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
County, Georgia to the U.S. District Court for the Middle District of Georgia. The amount of any possible losses from these matters cannot be estimated at this time.
Mississippi Power
In 2018, Ray C. Turnage and 10 other individual plaintiffs filed a putative class action complaint against Mississippi Power and the 3 then-serving members of the Mississippi PSC in the U.S. District Court for the Southern District of Mississippi.Mississippi, which was amended in March 2019 to include 4 additional plaintiffs. Mississippi Power received Mississippi PSC approval in 2013 to charge a mirror CWIP rate premised upon including in its rate base pre-construction and construction costs for the Kemper IGCC prior to placing the Kemper IGCC into service. The Mississippi Supreme Court reversed that approval and ordered Mississippi Power to refund the amounts paid by customers under the previously-approved mirror CWIP rate. The plaintiffs allege that the initial approval process, and the amount approved, were improper.improper and make claims for gross negligence, reckless conduct, and intentional wrongdoing. They also allege that Mississippi Power underpaid customers by up to $23.5 million in the refund process by applying an incorrect interest rate. The plaintiffs seek to recover, on behalf of themselves and their putative class, actual damages, punitive damages, pre-judgment interest, post-judgment interest, attorney's fees, and costs. In response to Mississippi Power and the Mississippi PSC each filing a motion to dismiss, the plaintiffs filed an amended complaint in March 2019. The amended complaint included 4 additional plaintiffs and additional claims for gross negligence, reckless conduct, and intentional wrongdoing. Mississippi Power and the Mississippi PSC each filed a motion to dismissdistrict court dismissed the amended complaint, which occurred in May 2020 and March 2020, respectively. Alsocomplaint; however, in March 2020, the plaintiffs filed a motion seeking to name the new members of the Mississippi PSC, the Mississippi Development Authority, and Southern Company as additional defendants and add a cause of action against all defendants based on a dormant commerce clause theory under the U.S. Constitution. In July 2020, the plaintiffs filed a motion for leave to file a third amended complaint, which included the same federal claims as the proposed second amended complaint, as well as several additional state law claims based on the allegation that Mississippi Power failed to disclose the annual percentage rate of interest applicable to refunds. In November 2020, the district court denied each of the plaintiffs' pending motions and entered final judgment in favor of Mississippi Power. OnIn January 22, 2021, the district court denied further motions by the plaintiffs to vacate the judgment and to file a revised second amended complaint. OnIn February 19, 2021, the plaintiffs filed a notice of appeal with the U.S. Court of Appeals for the Fifth Circuit. On March 21, 2022, the U.S. Court of Appeals for the Fifth Circuit issued an opinion affirming the dismissal of the claims against the Mississippi PSC defendants but reversing the dismissal of the claims against Mississippi Power. The appellate court remanded the case to the U.S. District Court for the Southern District of Mississippi for further proceedings. The appellate court's decision is not final until the opportunity for rehearing en banc is resolved. An adverse outcome in this proceeding could have a material impact on Mississippi Power's financial statements.
See Note 3 to the financial statements under "Other Matters – Mississippi Power – Kemper County Energy Facility" in Item 8 of the Form 10-K for additional information.
Environmental Remediation
The Southern Company system must comply with environmental laws and regulations governing the handling and disposal of waste and releases of hazardous substances. Under these various laws and regulations, the Southern Company system could incur substantial costs to clean up affected sites. The traditional electric operating companies and the natural gas distribution utilities in Illinois and Georgia have each received authority from their respective state PSCs or other applicable state regulatory agencies to recover approved environmental remediation costs through regulatory mechanisms. These regulatory mechanisms are adjusted annually or as necessary within limits approved by the state PSCs or other applicable state regulatory agencies.
Georgia Power's environmental remediation liability was $15$16 million and $17 million at both June 30, 2021March 31, 2022 and December 31, 2020.2021, respectively. Georgia Power has been designated or identified as a potentially responsible party at sites governed by the Georgia Hazardous Site Response Act and/or by the federal Comprehensive Environmental Response, Compensation, and Liability Act, and assessment and potential cleanup of such sites is expected.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas' environmental remediation liability was $247 million and $245$249 million at June 30, 2021both March 31, 2022 and December 31, 2020, respectively,2021 based on the estimated cost of environmental investigation and remediation associated with known former manufactured gas plant operating sites.
The ultimate outcome of these matters cannot be determined at this time; however, as a result of the regulatory treatment for environmental remediation expenses described above, the final disposition of these matters is not expected to have a material impact on the financial statements of the applicable Registrants.
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Other Matters
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PennEast Pipeline Project
Work continues with state and federal agencies to obtain the required permits to begin construction of the PennEast Pipeline. On June 29, 2021, the U.S. Supreme Court ruled in favor of PennEast Pipeline regarding its federal eminent domain authority over lands in which a state has property rights interests.NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
Southern Company Gas tests its equity method investments for impairment whenever events or changes in circumstances indicate that the investment may be impaired. Following the U.S. Supreme Court ruling, during the second quarter 2021, Southern Company Gas management reassessed the project construction timing, including the anticipated timing for receipt of the FERC certificate and all remaining state and local permits for both Phase 1 (the construction of 68 miles of pipe entirely within Pennsylvania) and Phase 2 (the construction of the remaining 50 miles in Pennsylvania and New Jersey), as well as potential challenges thereto, and performed an impairment analysis. The outcome of the analysis resulted in a pre-tax impairment charge of $82 million ($58 million after tax). The ultimate outcome of the PennEast Pipeline construction project cannot be determined at this time. See Note (E) under "Southern Company Gas" for additional information.(UNAUDITED)
SNG
As a 50% equity investor in SNG, Southern Company Gas is required to make additional capital contributions as necessary pursuant to the terms of its operating agreement with SNG. Southern Company Gas previously committed to fund up to $150 million as a contingent capital contribution if SNG was unable to refinance or otherwise satisfy $300 million of debt maturing in June 2021. On April 29, 2021, SNG successfully refinanced the debt obligation. See Note (E) under "Southern Company Gas" for additional information.
(D) REVENUE FROM CONTRACTS WITH CUSTOMERS AND LEASE INCOME
Revenue from Contracts with Customers
The Registrants generate revenues from a variety of sources, some of which are not accounted for as revenue from contracts with customers, such as leases, derivatives, and certain cost recovery mechanisms. See Note 1 to the financial statements under "Revenues" in Item 8 of the Form 10-K for additional information on the revenue policies of the Registrants. See "Lease Income" herein and Note (J) for additional information on revenue accounted for under lease and derivative accounting guidance, respectively.
The following table disaggregates revenue from contracts with customers for the three months ended March 31, 2022 and 2021:
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Three Months Ended March 31, 2022
Operating revenues
Retail electric revenues
Residential$1,525 $634 $821 $70 $— $— 
Commercial1,178 375 738 65 — — 
Industrial727 323 334 70 — — 
Other26 4 20 2 — — 
Total retail electric revenues3,456 1,336 1,913 207 — — 
Natural gas distribution revenues
Residential1,016 — — — — 1,016 
Commercial270 — — — — 270 
Transportation337 — — — — 337 
Industrial32 — — — — 32 
Other129 — — — — 129 
Total natural gas distribution revenues1,784 — — — — 1,784 
Wholesale electric revenues
PPA energy revenues342 59 32 3 251 — 
PPA capacity revenues134 39 12 3 81 — 
Non-PPA revenues58 64 9 102 73 — 
Total wholesale electric revenues534 162 53 108 405 — 
Other natural gas revenues
Gas marketing services243 — — — — 243 
Other natural gas revenues16 — — — — 16 
Total natural gas revenues259 — — — — 259 
Other revenues225 48 95 9 8 — 
Total revenue from contracts with customers6,258 1,546 2,061 324 413 2,043 
Other revenue sources(a)
390 103 147 11 126 15 
Total operating revenues$6,648 $1,649 $2,208 $335 $539 $2,058 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The following table disaggregates revenue from contracts with customers for the three and six months ended June 30, 2021 and 2020:
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Three Months Ended June 30, 2021
Operating revenues
Retail electric revenues
Residential$1,469 $553 $852 $64 $0 $0 
Commercial1,176 386 724 66 0 0 
Industrial728 334 321 73 0 0 
Other23 4 17 2 0 0 
Total retail electric revenues3,396 1,277 1,914 205 0 0 
Natural gas distribution revenues
Residential311 0 0 0 0 311 
Commercial73 0 0 0 0 73 
Transportation247 0 0 0 0 247 
Industrial8 0 0 0 0 8 
Other59 0 0 0 0 59 
Total natural gas distribution revenues698 0 0 0 0 698 
Wholesale electric revenues
PPA energy revenues209 38 16 2 158 0 
PPA capacity revenues118 29 14 1 75 0 
Non-PPA revenues55 25 3 75 78 0 
Total wholesale electric revenues382 92 33 78 311 0 
Other natural gas revenues
Wholesale gas services578 0 0 0 0 578 
Gas marketing services63 0 0 0 0 63 
Other natural gas revenues10 0 0 0 0 10 
Total natural gas revenues651 0 0 0 0 651 
Other revenues295 52 137 7 5 0 
Total revenue from contracts with customers5,422 1,421 2,084 290 316 1,349 
Other revenue sources(a)
1,179 135 141 13 174 731 
Other adjustments(b)
(1,403)0 0 0 0 (1,403)
Total operating revenues$5,198 $1,556 $2,225 $303 $490 $677 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Six Months Ended June 30, 2021
Operating revenues
Retail electric revenues
Residential$2,936 $1,181 $1,627 $128 $0 $0 
Commercial2,294 758 1,410 126 0 0 
Industrial1,397 654 606 137 0 0 
Other47 9 34 4 0 0 
Total retail electric revenues6,674 2,602 3,677 395 0 0 
Natural gas distribution revenues
Residential925 0 0 0 0 925 
Commercial243 0 0 0 0 243 
Transportation536 0 0 0 0 536 
Industrial24 0 0 0 0 24 
Other155 0 0 0 0 155 
Total natural gas distribution revenues1,883 0 0 0 0 1,883 
Wholesale electric revenues
PPA energy revenues422 81 30 7 313 0 
PPA capacity revenues237 58 27 4 150 0 
Non-PPA revenues119 57 12 162 139 0 
Total wholesale electric revenues778 196 69 173 602 0 
Other natural gas revenues
Wholesale gas services2,168 0 0 0 0 2,168 
Gas marketing services257 0 0 0 0 257 
Other natural gas revenues17 0 0 0 0 17 
Total natural gas revenues2,442 0 0 0 0 2,442 
Other revenues542 97 249 14 9 0 
Total revenue from contracts with customers12,319 2,895 3,995 582 611 4,325 
Other revenue sources(a)
2,488 220 200 28 319 1,745 
Other adjustments(b)
(3,699)0 0 0 0 (3,699)
Total operating revenues$11,108 $3,115 $4,195 $610 $930 $2,371 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Three Months Ended June 30, 2020
Operating revenues
Retail electric revenues
Residential$1,430 $549 $817 $64 $0 $0 
Commercial1,103 353 689 61 0 0 
Industrial642 302 273 67 0 0 
Other23 6 15 2 0 0 
Total retail electric revenues3,198 1,210 1,794 194 0 0 
Natural gas distribution revenues
Residential239 0 0 0 0 239 
Commercial58 0 0 0 0 58 
Transportation234 0 0 0 0 234 
Industrial5 0 0 0 0 5 
Other49 0 0 0 0 49 
Total natural gas distribution revenues585 0 0 0 0 585 
Wholesale electric revenues
PPA energy revenues167 28 7 2 134 0 
PPA capacity revenues108 25 13 1 71 0 
Non-PPA revenues50 5 2 73 59 0 
Total wholesale electric revenues325 58 22 76 264 0 
Other natural gas revenues
Wholesale gas services341 0 0 0 0 341 
Gas marketing services57 0 0 0 0 57 
Other natural gas revenues8 0 0 0 0 8 
Total natural gas revenues406 0 0 0 0 406 
Other revenues251 44 119 6 4 0 
Total revenue from contracts with customers4,765 1,312 1,935 276 268 991 
Other revenue sources(a)
728 53 (7)7 171 518 
Other adjustments(b)
(873)0 0 0 0 (873)
Total operating revenues$4,620 $1,365 $1,928 $283 $439 $636 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company GasSouthern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)(in millions)
Six Months Ended June 30, 2020
Three Months Ended March 31, 2021Three Months Ended March 31, 2021
Operating revenuesOperating revenuesOperating revenues
Retail electric revenuesRetail electric revenuesRetail electric revenues
ResidentialResidential$2,801 $1,103 $1,577 $121 $0 $0 Residential$1,468 $628 $776 $64 $— $— 
CommercialCommercial2,247 717 1,409 121 0 0 Commercial1,117 372 686 59 — — 
IndustrialIndustrial1,323 623 555 145 0 0 Industrial668 320 284 64 — — 
OtherOther46 11 31 4 0 0 Other24 5 17 2 — — 
Total retail electric revenuesTotal retail electric revenues6,417 2,454 3,572 391 0 0 Total retail electric revenues3,277 1,325 1,763 189 — — 
Natural gas distribution revenuesNatural gas distribution revenuesNatural gas distribution revenues
ResidentialResidential736 0 0 0 0 736 Residential614 — — — — 614 
CommercialCommercial188 0 0 0 0 188 Commercial170 — — — — 170 
TransportationTransportation499 0 0 0 0 499 Transportation288 — — — — 288 
IndustrialIndustrial17 0 0 0 0 17 Industrial16 — — — — 16 
OtherOther144 0 0 0 0 144 Other97 — — — — 97 
Total natural gas distribution revenuesTotal natural gas distribution revenues1,584 0 0 0 0 1,584 Total natural gas distribution revenues1,185 — — — — 1,185 
Wholesale electric revenuesWholesale electric revenuesWholesale electric revenues
PPA energy revenuesPPA energy revenues326 55 15 4 259 0 PPA energy revenues212 43 13 4 156 — 
PPA capacity revenuesPPA capacity revenues213 52 25 2 136 0 PPA capacity revenues119 29 13 3 75 — 
Non-PPA revenuesNon-PPA revenues100 24 4 142 117 0 Non-PPA revenues67 32 9 88 61 — 
Total wholesale electric revenuesTotal wholesale electric revenues639 131 44 148 512 0 Total wholesale electric revenues398 104 35 95 292 — 
Other natural gas revenuesOther natural gas revenuesOther natural gas revenues
Wholesale gas servicesWholesale gas services737 0 0 0 0 737 Wholesale gas services1,590 — — — — 1,590 
Gas marketing servicesGas marketing services220 0 0 0 0 220 Gas marketing services194 — — — — 194 
Other natural gas revenuesOther natural gas revenues15 0 0 0 0 15 Other natural gas revenues7 — — — — 7 
Total natural gas revenuesTotal natural gas revenues972 0 0 0 0 972 Total natural gas revenues1,791 — — — — 1,791 
Other revenuesOther revenues441 78 214 13 7 0 Other revenues249 46 113 8 4 — 
Total revenue from contracts with customersTotal revenue from contracts with customers10,053 2,663 3,830 552 519 2,556 Total revenue from contracts with customers6,900 1,475 1,911 292 296 2,976 
Other revenue sources(a)
Other revenue sources(a)
1,599 53 (76)7 295 1,343 
Other revenue sources(a)
1,306 84 59 15 144 1,014 
Other adjustments(b)
Other adjustments(b)
(2,014)0 0 0 0 (2,014)
Other adjustments(b)
(2,296)— — — — (2,296)
Total operating revenuesTotal operating revenues$9,638 $2,716 $3,754 $559 $814 $1,885 Total operating revenues$5,910 $1,559 $1,970 $307 $440 $1,694 
(a)Other revenue sources relate to revenues from customers accounted for as derivatives and leases, alternative revenue programs at Southern Company Gas, and cost recovery mechanisms and revenues that meet other scope exceptions for revenues from contracts with customers at the traditional electric operating companies.
(b)Other adjustments relate to the cost of Southern Company Gas' energy and risk management activities. Wholesale gas services revenues are presented net of the related costs of those activities on the statement of income. See Notes (K)Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K and Note (L) under "Southern Company Gas" for information on the sale of Sequent and components of wholesale gas services' operating revenues, respectively.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Contract Balances
The following table reflects the closing balances of receivables, contract assets, and contract liabilities related to revenues from contracts with customers at June 30, 2021March 31, 2022 and December 31, 2020:2021:
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Accounts Receivable
At June 30, 2021$2,271 $633 $887 $85 $129 $368 
At December 31, 20202,614 632 806 77 112 788 
Contract Assets
At June 30, 2021$98 $0 $36 $0 $1 $0 
At December 31, 2020158 2 71 0 0 0 
Contract Liabilities
At June 30, 2021$67 $5 $37 $1 $1 $0 
At December 31, 202061 6 27 1 1 1 
Southern CompanyAlabama PowerGeorgia PowerMississippi PowerSouthern PowerSouthern Company Gas
(in millions)
Accounts Receivable
At March 31, 2022$2,571 $616 $695 $85 $128 $865 
At December 31, 20212,504 589 736 73 149 753 
Contract Assets
At March 31, 2022$81 $2 $31 $— $— $— 
At December 31, 2021117 2 63 — 1 — 
Contract Liabilities
At March 31, 2022$72 $3 $13 $2 $1 $— 
At December 31, 202157 4 14 — 1 — 
At June 30, 2021March 31, 2022 and December 31, 2020,2021, Georgia Power had contract assets primarily related to unregulated service agreements, where payment is contingent on project completion, as well as, at December 31, 2020, contract assets related to fixed retail customer fixed bill programs, where the payment is contingent upon Georgia Power's continued performance and the customer's continued participation in the program over a one-year contract term.term, and unregulated service agreements, where payment is contingent on project completion. Contract liabilities for Georgia Power relate to cash collections recognized in advance of revenue for unregulated service agreements. Southern Company's unregulated distributed generation business had $60$47 million and $81$50 million of contract assets and $24$54 million and $27$39 million of contract liabilities at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively, for outstanding performance obligations.
Revenues recognized by Southern Company in the three and six months ended June 30, 2021,March 31, 2022, which were included in contract liabilities at December 31, 2020,2021, were $12 million and $21 million, respectively, and immaterial for all other Registrants.
Remaining Performance Obligations
The traditional electric operating companies and Southern PowerSubsidiary Registrants have long-term contracts with customers in which revenues are recognized as performance obligations are satisfied over the contract term. These contracts primarily relate to PPAs wherebyFor the traditional electric operating companies and Southern Power, providethese contracts primarily relate to PPAs whereby electricity and generation capacity are provided to a customer. The revenue recognized for the delivery of electricity is variable; however, certain PPAs include a fixed payment for fixed generation capacity over the term of the contract. Southern Company's unregulated distributed generation business also has partially satisfied performance obligations related to certain fixed price contracts. Revenues from contracts with customers related to these performance obligations remaining at June 30, 2021March 31, 2022 are expected to be recognized as follows:
2021 (remaining)2022202320242025Thereafter2022 (remaining)2023202420252026Thereafter
(in millions)(in millions)
Southern CompanySouthern Company$354 $464 $343 $327 $307 $2,667 Southern Company$529 $459 $351 $321 $307 $2,345 
Alabama PowerAlabama Power23 31 24 7 5 0 Alabama Power24 24 7 5 — — 
Georgia PowerGeorgia Power41 58 39 23 21 41 Georgia Power55 55 26 22 11 21 
Southern PowerSouthern Power165 323 281 297 281 2,644 Southern Power252 294 310 294 299 2,339 
Revenue expected to be recognized for performance obligations remaining at March 31, 2022 was immaterial for Mississippi Power and Southern Company Gas.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Revenue expected to be recognized for performance obligations remaining at June 30, 2021 was immaterial for Mississippi Power and Southern Company Gas.
Lease Income
Lease income for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 is as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company GasSouthern
Company		Alabama PowerGeorgia PowerMississippi
Power		Southern PowerSouthern Company Gas
(in millions) (in millions)
For the Three Months Ended June 30, 2021
For the Three Months Ended March 31, 2022For the Three Months Ended March 31, 2022
Lease income - interest income on sales-type leasesLease income - interest income on sales-type leases$4 $0 $0 $4 $0 $0 Lease income - interest income on sales-type leases$6 $— $— $4 $2 $— 
Lease income - operating leasesLease income - operating leases56 21 10 0 21 9 Lease income - operating leases51 20 8 — 21 9 
Variable lease incomeVariable lease income128 (1)0 0 138 0 Variable lease income84 — — — 90 — 
Total lease incomeTotal lease income$188 $20 $10 $4 $159 $9 Total lease income$141 $20 $8 $4 $113 $9 
For the Six Months Ended June 30, 2021
For the Three Months Ended March 31, 2021For the Three Months Ended March 31, 2021
Lease income - interest income on sales-type leasesLease income - interest income on sales-type leases$7 $0 $0 $7 $0 $0 Lease income - interest income on sales-type leases$3 $— $— $3 $— $— 
Lease income - operating leasesLease income - operating leases112 41 21 1 42 17 Lease income - operating leases55 21 10 — 21 9 
Variable lease incomeVariable lease income212 0 0 0 228 0 Variable lease income84 — — — 90 — 
Total lease incomeTotal lease income$331 $41 $21 $8 $270 $17 Total lease income$142 $21 $10 $3 $111 $9 
For the Three Months Ended June 30, 2020
Lease income - interest income on sales-type leases$3 $0 $0 $3 $0 $0 
Lease income - operating leases47 6 15 0 21 9 
Variable lease income126 0 0 0 136 0 
Total lease income$176 $6 $15 $3 $157 $9 
For the Six Months Ended June 30, 2020
Lease income - interest income on sales-type leases$6 $0 $0 $5 $0 $0 
Lease income - operating leases97 13 30 0 45 17 
Variable lease income200 0 0 0 215 0 
Total lease income$303 $13 $30 $5 $260 $17 
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 for Alabama Power and Southern Power is included in wholesale revenues.
Lease Receivables
Mississippi Power completed construction of additional leased assets under an existing sales-type lease during the second quarter 2021. Upon completion of construction, the book value of $35 million was transferred from CWIP to lease receivables and is primarily included in other property and investments at June 30, 2021. The transfer represents a noncash investing transaction for purposes of the statements of cash flows.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(E) CONSOLIDATED ENTITIES AND EQUITY METHOD INVESTMENTS
See Note 7 to the financial statements in Item 8 of the Form 10-K for additional information.
Southern Power
Variable Interest Entities
Southern Power has certain subsidiaries that are determined to be VIEs. Southern Power is considered the primary beneficiary of these VIEs because it controls the most significant activities of the VIEs, including operating and maintaining the respective assets, and has the obligation to absorb expected losses of these VIEs to the extent of its equity interests.
SP Solar and SP Wind
At June 30, 2021March 31, 2022 and December 31, 2020,2021, SP Solar had total assets of $6.2$6.0 billion and $6.1 billion, respectively, total liabilities of $382$407 million and $387$408 million, respectively, and noncontrolling interests of $1.1 billion. Cash distributions from SP Solar are allocated 67% to Southern Power and 33% to Global Atlantic in accordance with their partnership interest percentage. Under the terms of the limited partnership agreement, distributions without limited partner consent are limited to available cash and SP Solar is obligated to distribute all such available cash to its partners each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves.
At June 30, 2021March 31, 2022 and December 31, 2020,2021, SP Wind had total assets of $2.3 billion, and $2.4 billion, respectively, total liabilities of $140$180 million and $138$130 million, respectively, and noncontrolling interests of $42 million and $43 million, respectively.$41 million. Under the terms of the limited liability agreement, distributions without Class A member consent are limited to available cash and SP Wind is obligated to distribute all such available cash to its members each quarter. Available cash includes all cash generated in the quarter subject to the maintenance of appropriate operating reserves. Cash distributions from SP Wind are generally allocated 60% to Southern Power and 40% to the 3 financial investors in accordance with the limited liability agreement.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Power consolidates both SP Solar and SP Wind, as the primary beneficiary, since it controls the most significant activities of each entity, including operating and maintaining their assets. Certain transfers and sales of the assets in the VIEs are subject to partner consent and the liabilities are non-recourse to the general credit of Southern Power. Liabilities consist of customary working capital items and do not include any long-term debt.
Other Variable Interest Entities
Southern Power has other consolidated VIEs that relate to certain subsidiaries that have either sold noncontrolling interests to tax-equitytax equity investors or acquired less than a 100% interest from facility developers. These entities are considered VIEs because the arrangements are structured similar to a limited partnership and the noncontrolling members do not have substantive kick-out rights.
At June 30, 2021March 31, 2022 and December 31, 2020,2021, the other VIEs had total assets of $1.9$1.8 billion and $1.1$1.9 billion, respectively, total liabilities of $249$248 million and $110$263 million, respectively, and noncontrolling interests of $913$876 million and $454$886 million, respectively. Under the terms of the partnership agreements, distributions of all available cash are required each month or quarter and additional distributions require partner consent.
Equity Method Investments
At June 30, 2021March 31, 2022 and December 31, 2020,2021, Southern Power had equity method investments in wind and battery energy storage projects totaling $84$56 million and $19$86 million, respectively. Earnings (loss) from these investments were immaterial for both periods presented. During the first quarter 2022, Southern Power sold an equity method investment in a wind project and received proceeds of $31 million. The gain associated with the transaction was immaterial.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas
Equity Method Investments
The carrying amounts of Southern Company Gas' equity method investments at June 30, 2021March 31, 2022 and December 31, 20202021 and related earnings (loss) from those investments for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 were as follows:
Investment BalanceInvestment BalanceJune 30, 2021December 31, 2020Investment BalanceMarch 31, 2022December 31, 2021
(in millions)(in millions)
SNGSNG$1,143 $1,167 SNG$1,138 $1,129 
PennEast Pipeline(*)
13 91 
Other33 32 
Other(*)
Other(*)
40 44 
TotalTotal$1,189 $1,290 Total$1,178 $1,173 
(*)Investment balanceBalance at June 30, 2021March 31, 2022 reflects a pre-tax impairment charge of $82$4 million ($58 million after tax) recorded in the second quarter 2021. See Note (C) under "Other Matters – Southern Company Gas" for additional information.distribution from PennEast Pipeline.
Three Months Ended June 30,Six Months Ended June 30,
Earnings (Loss) from Equity Method Investments2021202020212020
(in millions)
SNG$28 $28 $66 $65 
PennEast Pipeline(a)(b)
(81)1 (79)3 
Other(a)(c)
1 1 2 4 
Total$(52)$30 $(11)$72 
Three Months Ended March 31,
Earnings from Equity Method Investments20222021
(in millions)
SNG$39 $38 
Other(*)
1 3 
Total$40 $41 
(a)(*)Earnings primarily result from AFUDC equity recorded by the project entity.
(b)Includes a pre-tax impairment charge of $82 million ($58 million after tax) for the three and six months ended June 30, 2021. See Note (C) under "Other Matters – Southern Company Gas" for additional information.
(c)On March 24, 2020, Southern Company Gas completed the sale of its interests in Atlantic Coast Pipeline and Pivotal LNG. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(F) FINANCING
Bank Credit Arrangements
See Note 8 to the financial statements under "Bank Credit Arrangements" in Item 8 of the Form 10-K for additional information.
At June 30, 2021,March 31, 2022, committed credit arrangements with banks were as follows:
ExpiresExpires
CompanyCompany20212022202320242026TotalUnusedDue within One YearCompany2022202420252026TotalUnusedExpires within One Year
(in millions)(in millions)
Southern Company parentSouthern Company parent$0 $0 $0 $0 $2,000 $2,000 $1,999 $0 Southern Company parent$— $— $— $2,000 $2,000 $1,998 $— 
Alabama PowerAlabama Power3 525 0 0 700 1,228 1,228 3 Alabama Power— 550 — 700 1,250 1,250 — 
Georgia PowerGeorgia Power0 0 0 0 1,750 1,750 1,728 0 Georgia Power— — — 1,750 1,750 1,726 — 
Mississippi PowerMississippi Power0 0 125 150 0 275 250 0 Mississippi Power— 150 125 — 275 255 — 
Southern Power(a)
Southern Power(a)
0 0 0 0 600 600 568 0 
Southern Power(a)
— — — 600 600 568 — 
Southern Company Gas(b)
Southern Company Gas(b)
0 250 0 0 1,500 1,750 1,747 250 
Southern Company Gas(b)
250 — — 1,500 1,750 1,747 250 
SEGCOSEGCO0 30 0 0 0 30 30 30 SEGCO30 — — — 30 30 30 
Southern CompanySouthern Company$3 $805 $125 $150 $6,550 $7,633 $7,550 $283 Southern Company$280 $700 $125 $6,550 $7,655 $7,574 $280 
(a)Does not include Southern Power Company's 2 $75 million and $60 million continuing letter of credit facilities for standby letters of credit, expiring in 2023 and 2025, respectively, of which $23$11 million and $1$19 million, respectively, was unused at June 30, 2021.March 31, 2022. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities.
(b)Southern Company Gas, as the parent entity, guarantees the obligations of Southern Company Gas Capital, which is the borrower of $800 million of the arrangement expiring in 2026 and all $250 million of the arrangement expiring in 2022. Southern Company Gas' committed credit arrangement expiring in 2026 also includes $700 million for which Nicor Gas is the borrower and which is restricted for working capital needs of Nicor Gas. Pursuant to the multi-year credit arrangement expiring in 2026, the allocations between Southern Company Gas Capital and Nicor Gas may be adjusted.
As reflected in the table above, in May 2021, Southern Company, AlabamaMarch 2022, Mississippi Power Georgia Power, and Southern Power each amended and restated certain of its multi-year$125 million revolving credit arrangements,arrangement, which among other things, extended the maturity dates from 2024 to 2026. Alabama Power also decreased the borrowing capacity under its credit arrangement now maturing in 2026 from $800 million to $700 million. Also in May 2021, Southern Company Gas Capital, along with Nicor Gas, amended and restated their multi-year credit arrangement to extend the maturity date from 20242023 to 20262025 and decrease the aggregateallows for borrowing capacity from $1.75 billion to $1.5 billion. In addition, Southern Company Gas Capital entered into a new $250 million credit arrangement, which is guaranteed by Southern Company Gas, that matures in 2022. In June 2021, Mississippi Power amended and restated certain of its multi-year credit arrangements aggregating $150 million, which, among other things, extended the maturity dates from 2022 to 2024.based on term SOFR.
Subject to applicable market conditions, Southern Company and its subsidiaries expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, Southern Company and its subsidiaries may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
These bank credit arrangements, as well as the term loan arrangements of the Registrants, Nicor Gas, and SEGCO, contain covenants that limit debt levels and contain cross-acceleration or, in the case of Southern Power, cross-default provisions to other indebtedness (including guarantee obligations) that are restricted only to the indebtedness of the individual company. Such cross-default provisions to other indebtedness would trigger an event of default if Southern Power defaulted on indebtedness or guarantee obligations over a specified threshold. Such cross-acceleration provisions to other indebtedness would trigger an event of default if the applicable borrower defaulted on indebtedness, the payment of which was then accelerated. At June 30, 2021,March 31, 2022, the Registrants, Nicor Gas, and SEGCO were in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
SEGCO were in compliance with all such covenants. None of the bank credit arrangements contain material adverse change clauses at the time of borrowings.
A portion of the unused credit with banks is allocated to provide liquidity support to the revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. The amount of variable rate revenue bonds of the traditional electric operating companies outstanding requiring liquidity support at June 30, 2021March 31, 2022 was approximately $1.4$1.5 billion (comprised of approximately $854$789 million at Alabama Power, $550$672 million at Georgia Power, and $34 million at Mississippi Power). In addition, at June 30, 2021,March 31, 2022, Georgia Power and Mississippi Power had approximately $105$330 million and $50 million, respectively, of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months.
Earnings per Share
For Southern Company, the only differences in computing basic and diluted earnings per share are attributable to awards outstanding under stock-based compensation plans and the equity units issued in 2019. Earnings per share dilution resulting from stock-based compensation plans and the equity units issuance is determined using the treasury stock method. See Note 8 to the financial statements under "Equity Units" in Item 8 of the Form 10-K for information on the equity units and Note 12 to the financial statements in Item 8 of the Form 10-K for information on stock-based compensation plans. Shares used to compute diluted earnings per share were as follows:
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
202120202021202020222021
(in millions) (in millions)
As reported sharesAs reported shares1,061 1,058 1,060 1,057 As reported shares1,063 1,060 
Effect of stock-based compensationEffect of stock-based compensation6 5 6 7 Effect of stock-based compensation6 6 
Effect of equity units0 0 0 1 
Diluted sharesDiluted shares1,067 1,063 1,066 1,065 Diluted shares1,069 1,066 
For all periods presented, anAn immaterial number of stock-based compensation awards was not included in the diluted earnings per share calculation because the awards were anti-dilutive for the three months ended March 31, 2022 and 2021.
(G) INCOME TAXES
See Note 10 to the financial statements in Item 8 of the Form 10-K for additional tax information.
Current and Deferred Income Taxes
Tax Credit and Net Operating Loss Carryforwards
Southern Company had federal ITC and PTC carryforwards (primarily related to Southern Power) totaling $1.3 billion at June 30, 2021 compared to $1.4 billion at December 31, 2020.
The federal ITC and PTC carryforwards begin expiring in 2034 and 2032, respectively, but are expected to be fully utilized by 2024. The utilization of each Registrant's estimated tax credit and state net operating loss carryforwards and related valuation allowances could be impacted by numerous factors, including the acquisition of additional renewable projects, an increase in Georgia Power's ownership interest percentage in Plant Vogtle Units 3 and 4, the purchase of rights to additional PTCs of Plant Vogtle Units 3 and 4 pursuant to certain joint ownership agreements, changes in taxable income projections, and potential income tax rate changes. See Note (B) and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information on Plant Vogtle Units 3 and 4.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
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.
Details of significant changes in the effective tax rate for the applicable Registrants are provided herein.
GeorgiaMississippi Power
GeorgiaMississippi Power's effective tax benefit rate was (6.9)%16.4% for the sixthree months ended June 30, 2021March 31, 2022 compared to an effective tax rate of 4.0%8.4% for the corresponding period in 2020.2021. The effective tax rate decreaseincrease was primarily due to higher charges to earningsa decrease in 2021 associated with the constructionflowback of Plant Vogtle Units 3 and 4. See Note (B) under "Georgia Power – Nuclear Construction" for additional information.excess deferred income taxes beginning in April 2021.
Southern Power
Southern Power's effective tax benefit rate was (12.8)(80.0)% for the sixthree months ended June 30, 2021March 31, 2022 compared to an effective tax rate of 10.5%(17.3)% for the corresponding period in 2020.2021. The effective tax rate decrease was primarily due to lower pre-tax earnings and higher wind PTCs in 2022, partially offset by changes in state apportionment methodology resulting from tax legislation enacted by the State of Alabama in February 2021, as well as the tax impact from the sale of Plant Mankato in January 2020. See Note 15 to the financial statements under "Southern Power" in Item 8 of the Form 10-K for additional information.2021.
(H) RETIREMENT BENEFITS
The Southern Company system has a qualified defined benefit, trusteed, pension plan covering substantially all employees, with the exception of employees at PowerSecure. The qualified pension plan is funded in accordance with requirements of the Employee Retirement Income Security Act of 1974, as amended (ERISA). NaNNo mandatory contributions to the qualified pension plan are anticipated for the year ending December 31, 2021.2022. The Southern Company system also provides certain non-qualified defined benefits for a select group of management and highly compensated employees, which are funded on a cash basis. In addition, the Southern Company system provides certain medical care and life insurance benefits for retired employees through other postretirement benefit plans. The traditional electric operating companies fund other postretirement trusts to the extent required by their respective regulatory commissions. Southern Company Gas has a separate unfunded supplemental retirement health care plan that provides medical care and life insurance benefits to employees of discontinued businesses.
During the first quarter 2022, the qualified pension plan achieved the predetermined funding threshold whereby the asset allocation was adjusted to invest a larger portion of the portfolio in fixed rate debt securities.
See Note 11 to the financial statements in Item 8 of the Form 10-K for additional information.
On each Registrant's condensed statements of income, the service cost component of net periodic benefit costs is included in other operations and maintenance expenses and all other components of net periodic benefit costs are included in other income (expense), net. Components of the net periodic benefit costs for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 are presented in the following tables.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company GasSouthern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
(in millions)(in millions)
Three Months Ended June 30, 2021
Three Months Ended March 31, 2022Three Months Ended March 31, 2022
Pension PlansPension PlansPension Plans
Service costService cost$108 $25 $28 $5 $3 $9 Service cost$103 $25 $26 $4 $2 $9 
Interest costInterest cost86 21 26 4 1 6 Interest cost102 24 31 5 2 7 
Expected return on plan assetsExpected return on plan assets(297)(71)(94)(13)(4)(22)Expected return on plan assets(316)(77)(99)(15)(4)(22)
Amortization:Amortization:Amortization:
Prior service costsPrior service costs0 0 1 0 0 0 Prior service costs— — — — — (1)
Regulatory assetRegulatory asset0 0 0 0 0 4 Regulatory asset— — — — — 4 
Net (gain)/loss79 20 25 3 1 3 
Net lossNet loss60 16 18 3 1 2 
Net periodic pension cost (income)Net periodic pension cost (income)$(24)$(5)$(14)$(1)$1 $0 Net periodic pension cost (income)$(51)$(12)$(24)$(3)$1 $(1)
Postretirement BenefitsPostretirement BenefitsPostretirement Benefits
Service costService cost$6 $2 $1 $0 $0 $1 Service cost$6 $1 $2 $— $— $— 
Interest costInterest cost9 2 3 1 0 1 Interest cost10 3 4 — — 1 
Expected return on plan assetsExpected return on plan assets(19)(7)(6)(1)0 (2)Expected return on plan assets(20)(8)(7)— — (2)
Amortization:Amortization:Amortization:
Prior service costs(1)0 0 0 0 0 
Regulatory assetRegulatory asset0 0 0 0 0 1 Regulatory asset— — — — — 2 
Net (gain)/loss1 0 0 0 0 0 
Net periodic postretirement benefit cost (income)Net periodic postretirement benefit cost (income)$(4)$(3)$(2)$0 $0 $1 Net periodic postretirement benefit cost (income)$(4)$(4)$(1)$— $— $1 
Six Months Ended June 30, 2021
Pension Plans
Service cost$217 $51 $56 $9 $5 $18 
Interest cost173 41 52 8 2 12 
Expected return on plan assets(595)(143)(188)(27)(7)(43)
Amortization:
Prior service costs0 0 1 0 0 (1)
Regulatory asset0 0 0 0 0 8 
Net (gain)/loss157 41 50 7 2 6 
Net periodic pension cost (income)$(48)$(10)$(29)$(3)$2 $0 
Postretirement Benefits
Service cost$12 $3 $3 $0 $0 $1 
Interest cost17 4 6 1 0 2 
Expected return on plan assets(38)(14)(13)(1)0 (4)
Amortization:
Prior service costs(1)0 0 0 0 0 
Regulatory asset0 0 0 0 0 3 
Net (gain)/loss2 0 1 0 0 (1)
Net periodic postretirement benefit cost (income)$(8)$(7)$(3)$0 $0 $1 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company GasSouthern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern PowerSouthern Company Gas
(in millions)(in millions)
Three Months Ended June 30, 2020
Three Months Ended March 31, 2021Three Months Ended March 31, 2021
Pension PlansPension PlansPension Plans
Service costService cost$94 $22 $24 $4 $2 $8 Service cost$109 $26 $28 $4 $2 $9 
Interest costInterest cost108 25 34 5 2 7 Interest cost87 20 26 4 1 6 
Expected return on plan assetsExpected return on plan assets(275)(66)(87)(12)(3)(20)Expected return on plan assets(298)(72)(94)(14)(3)(21)
Amortization:Amortization:Amortization:
Prior service costsPrior service costs0 0 1 0 0 0 Prior service costs— — — — — (1)
Regulatory assetRegulatory asset0 0 0 0 0 4 Regulatory asset— — — — — 4 
Net (gain)/loss67 18 21 3 0 3 
Net lossNet loss78 21 25 4 1 3 
Net periodic pension cost (income)Net periodic pension cost (income)$(6)$(1)$(7)$0 $1 $2 Net periodic pension cost (income)$(24)$(5)$(15)$(2)$1 $— 
Postretirement BenefitsPostretirement BenefitsPostretirement Benefits
Service costService cost$6 $1 $2 $1 $0 $1 Service cost$6 $1 $2 $— $— $— 
Interest costInterest cost14 3 5 1 0 4 Interest cost8 2 3 — — 1 
Expected return on plan assetsExpected return on plan assets(18)(7)(6)(1)0 (2)Expected return on plan assets(19)(7)(7)— — (2)
Amortization:Amortization:Amortization:
Prior service costs(1)0 0 0 0 0 
Regulatory assetRegulatory asset0 0 0 0 0 1 Regulatory asset— — — — — 2 
Net (gain)/lossNet (gain)/loss0 0 0 0 0 (1)Net (gain)/loss1 — 1 — — (1)
Net periodic postretirement benefit cost (income)Net periodic postretirement benefit cost (income)$1 $(3)$1 $1 $0 $3 Net periodic postretirement benefit cost (income)$(4)$(4)$(1)$— $— $— 
Six Months Ended June 30, 2020
Pension Plans
Service cost$188 $44 $48 $8 $4 $16 
Interest cost216 50 67 10 3 15 
Expected return on plan assets(550)(132)(174)(25)(6)(39)
Amortization:
Prior service costs1 0 1 0 0 (1)
Regulatory asset0 0 0 0 0 8 
Net (gain)/loss134 36 43 6 1 5 
Net periodic pension cost (income)$(11)$(2)$(15)$(1)$2 $4 
Postretirement Benefits
Service cost$11 $3 $3 $1 $0 $1 
Interest cost27 6 10 1 0 6 
Expected return on plan assets(36)(14)(13)(1)0 (4)
Amortization:
Prior service costs(1)0 0 0 0 0 
Regulatory asset0 0 0 0 0 3 
Net (gain)/loss1 0 1 0 0 (2)
Net periodic postretirement benefit cost (income)$2 $(5)$1 $1 $0 $4 

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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(I) FAIR VALUE MEASUREMENTS
At June 30, 2021,March 31, 2022, assets and liabilities measured at fair value on a recurring basis during the period, together with their associated level of the fair value hierarchy, were as follows:
Fair Value Measurements Using:Fair Value Measurements Using:
At June 30, 2021Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
At March 31, 2022At March 31, 2022Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
(in millions)(in millions)
Southern CompanySouthern CompanySouthern Company
Assets:Assets:Assets:
Energy-related derivatives(a)
Energy-related derivatives(a)
$656 $436 $28 $— $1,120 
Energy-related derivatives(a)
$74 $473 $— $— $547 
Interest rate derivativesInterest rate derivatives0 17 0 — 17 Interest rate derivatives— 17 — — 17 
Foreign currency derivatives0 55 0 — 55 
Investments in trusts:(b)(c)
Investments in trusts:(b)(c)
Investments in trusts:(b)(c)
Domestic equityDomestic equity812 236 0 — 1,048 Domestic equity754 202 — — 956 
Foreign equityForeign equity171 191 0 — 362 Foreign equity143 167 — — 310 
U.S. Treasury and government agency securitiesU.S. Treasury and government agency securities0 311 0 — 311 U.S. Treasury and government agency securities— 290 — — 290 
Municipal bondsMunicipal bonds0 45 0 — 45 Municipal bonds— 53 — — 53 
Pooled funds – fixed incomePooled funds – fixed income0 18 0 — 18 Pooled funds – fixed income— 10 — — 10 
Corporate bondsCorporate bonds4 453 0 — 457 Corporate bonds1 490 — — 491 
Mortgage and asset backed securitiesMortgage and asset backed securities0 92 0 — 92 Mortgage and asset backed securities— 88 — — 88 
Private equityPrivate equity0 0 0 102 102 Private equity— — — 156 156 
Cash and cash equivalentsCash and cash equivalents3 — — — 3 
OtherOther29 23 0 — 52 Other42 25 — — 67 
Cash equivalentsCash equivalents1,039 13 0 — 1,052 Cash equivalents1,182 17 — — 1,199 
Other investmentsOther investments9 30 0 — 39 Other investments9 32 — — 41 
TotalTotal$2,720 $1,920 $28 $102 $4,770 Total$2,208 $1,864 $— $156 $4,228 
Liabilities:Liabilities:Liabilities:
Energy-related derivatives(a)
Energy-related derivatives(a)
$664 $333 $10 $— $1,007 
Energy-related derivatives(a)
$3 $7 $— $— $10 
Interest rate derivativesInterest rate derivatives0 9 0 — 9 Interest rate derivatives— 139 — — 139 
Foreign currency derivativesForeign currency derivatives0 10 0 — 10 Foreign currency derivatives— 130 — — 130 
Contingent considerationContingent consideration0 0 16 — 16 Contingent consideration— — 14 — 14 
OtherOther— 13 — — 13 
TotalTotal$664 $352 $26 $— $1,042 Total$3 $289 $14 $— $306 
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Fair Value Measurements Using:Fair Value Measurements Using:
At June 30, 2021Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
At March 31, 2022At March 31, 2022Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
(in millions)(in millions)
Alabama PowerAlabama PowerAlabama Power
Assets:Assets:Assets:
Energy-related derivativesEnergy-related derivatives$0 $46 $0 $— $46 Energy-related derivatives$— $128 $— $— $128 
Nuclear decommissioning trusts:(b)
Nuclear decommissioning trusts:(b)
Nuclear decommissioning trusts:(b)
Domestic equityDomestic equity453 226 0 — 679 Domestic equity452 193 — — 645 
Foreign equityForeign equity171 0 0 — 171 Foreign equity143 — — — 143 
U.S. Treasury and government agency securitiesU.S. Treasury and government agency securities0 22 0 — 22 U.S. Treasury and government agency securities— 21 — — 21 
Municipal bondsMunicipal bonds0 1 0 — 1 Municipal bonds— 2 — — 2 
Corporate bondsCorporate bonds4 241 0 — 245 Corporate bonds1 253 — — 254 
Mortgage and asset backed securitiesMortgage and asset backed securities0 24 0 — 24 Mortgage and asset backed securities— 20 — — 20 
Private equityPrivate equity0 0 0 102 102 Private equity— — — 156 156 
OtherOther6 0 0 — 6 Other14 — — — 14 
Cash equivalentsCash equivalents507 13 0 — 520 Cash equivalents1,129 17 — — 1,146 
Other investmentsOther investments0 30 0 — 30 Other investments— 32 — — 32 
TotalTotal$1,141 $603 $0 $102 $1,846 Total$1,739 $666 $— $156 $2,561 
Liabilities:Liabilities:Liabilities:
Energy-related derivativesEnergy-related derivatives$0 $3 $0 $— $3 Energy-related derivatives$— $2 $— $— $2 
Georgia PowerGeorgia PowerGeorgia Power
Assets:Assets:Assets:
Energy-related derivativesEnergy-related derivatives$0 $73 $0 $— $73 Energy-related derivatives$— $179 $— $— $179 
Interest rate derivativesInterest rate derivatives— 12 — — 12 
Nuclear decommissioning trusts:(b)(c)
Nuclear decommissioning trusts:(b)(c)
Nuclear decommissioning trusts:(b)(c)
Domestic equityDomestic equity359 1 0 — 360 Domestic equity302 1 — — 303 
Foreign equityForeign equity0 188 0 — 188 Foreign equity— 165 — — 165 
U.S. Treasury and government agency securitiesU.S. Treasury and government agency securities0 289 0 — 289 U.S. Treasury and government agency securities— 269 — — 269 
Municipal bondsMunicipal bonds0 44 0 — 44 Municipal bonds— 51 — — 51 
Corporate bondsCorporate bonds0 212 0 — 212 Corporate bonds— 237 — — 237 
Mortgage and asset backed securitiesMortgage and asset backed securities0 68 0 — 68 Mortgage and asset backed securities— 68 — — 68 
OtherOther23 23 0 — 46 Other28 25 — — 53 
TotalTotal$382 $898 $0 $— $1,280 Total$330 $1,007 $— $— $1,337 
Liabilities:Liabilities:Liabilities:
Energy-related derivativesEnergy-related derivatives$0 $4 $0 $— $4 Energy-related derivatives$— $1 $— $— $1 
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(UNAUDITED)
Fair Value Measurements Using:Fair Value Measurements Using:
At June 30, 2021Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
At March 31, 2022At March 31, 2022Quoted Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)		Net Asset Value as a Practical Expedient (NAV)Total
(in millions)(in millions)
Mississippi PowerMississippi PowerMississippi Power
Assets:Assets:Assets:
Energy-related derivativesEnergy-related derivatives$0 $44 $0 $— $44 Energy-related derivatives$— $138 $— $— $138 
Cash equivalents455 0 0 — 455 
Total$455 $44 $0 $— $499 
Liabilities:Liabilities:Liabilities:
Energy-related derivativesEnergy-related derivatives$0 $3 $0 $— $3 Energy-related derivatives$— $2 $— $— $2 
Southern PowerSouthern PowerSouthern Power
Assets:Assets:Assets:
Energy-related derivativesEnergy-related derivatives$0 $4 $0 $— $4 Energy-related derivatives$— $8 $— $— $8 
Foreign currency derivatives0 55 0 — 55 
Total$0 $59 $0 $— $59 
Liabilities:Liabilities:Liabilities:
Foreign currency derivativesForeign currency derivatives$0 $10 $0 $— $10 Foreign currency derivatives$— $43 $— $— $43 
Contingent considerationContingent consideration0 0 16 — 16 Contingent consideration— — 14 — 14 
OtherOther— 13 — — 13 
TotalTotal$0 $10 $16 $— $26 Total$— $56 $14 $— $70 
Southern Company GasSouthern Company GasSouthern Company Gas
Assets:Assets:Assets:
Energy-related derivatives(a)
Energy-related derivatives(a)
$656 $269 $28 $— $953 
Energy-related derivatives(a)
$74 $20 $— $— $94 
Interest rate derivatives0 4 0 — 4 
Non-qualified deferred compensation trusts:Non-qualified deferred compensation trusts:Non-qualified deferred compensation trusts:
Domestic equityDomestic equity0 9 0 — 9 Domestic equity— 8 — — 8 
Foreign equityForeign equity0 3 0 — 3 Foreign equity— 2 — — 2 
Pooled funds – fixed incomePooled funds – fixed income0 18 0 — 18 Pooled funds – fixed income— 10 — — 10 
Cash equivalentsCash equivalents3 — — — 3 
TotalTotal$656 $303 $28 $— $987 Total$77 $40 $— $— $117 
Liabilities:Liabilities:Liabilities:
Energy-related derivatives(a)
Energy-related derivatives(a)
$664 $323 $10 $— $997 
Energy-related derivatives(a)
$3 $1 $— $— $4 
Interest rate derivativesInterest rate derivatives— 36 — — 36 
TotalTotal$3 0$37 0$— $— 0$40 
(a)Includes assets ($626 million, $260 million, and $28 million categorized as Level 1, 2, and 3, respectively) and liabilities ($657 million, $323 million, and $10 million categorized as Level 1, 2, and 3, respectively) related to Sequent, which were classified as held for sale at June 30, 2021. See Note (K) under "Southern Company Gas" and "Assets and Liabilities Held for Sale" for additional information. Excludes cash collateral of $41$36 million.
(b)Excludes receivables related to investment income, pending investment sales, payables related to pending investment purchases, and currencies. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.
(c)Includes investment securities pledged to creditors and collateral received and excludes payables related to the securities lending program. At June 30, 2021,March 31, 2022, approximately $48$72 million of the fair market value of Georgia Power's nuclear decommissioning trust funds' securities were on loan to creditors under the funds' managers' securities lending program. See Note 6 to the financial statements in Item 8 of the Form 10-K for additional information.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
See Note (K) under "Assets and Liabilities Held for Sale" for information regarding assets recorded at fair value on a nonrecurring basis.
Southern Company, Alabama Power, and Georgia Power continue to elect the option to fair value investment securities held in the nuclear decommissioning trust funds. The fair value of the funds, including reinvested interest and dividends and excluding the funds' expenses, increased (decreased) by the amounts shown in the table below for the sixthree months ended June 30, 2021March 31, 2022 and 2020.2021. The changes were recorded as a change to the regulatory assets and liabilities related to AROs for Georgia Power and Alabama Power, respectively.
Fair value increases (decreases)Fair value increases (decreases)Three Months Ended June 30, 2021Three Months Ended June 30, 2020Six Months Ended June 30, 2021Six Months Ended June 30, 2020Fair value increases (decreases)Three Months Ended March 31, 2022Three Months Ended March 31, 2021
(in millions)(in millions)
Southern CompanySouthern Company$125 $223 $164 $(23)Southern Company$(150)$39 
Alabama PowerAlabama Power77 124 118 (42)Alabama Power(67)41 
Georgia PowerGeorgia Power48 99 46 19 Georgia Power(83)(2)
Valuation Methodologies
The energy-related derivatives primarily consist of exchange-traded and over-the-counter financial products for natural gas and physical power products, including, from time to time, basis swaps. These are standard products used within the energy industry and are valued using the market approach. The inputs used are mainly from observable market sources, such as forward natural gas prices, power prices, implied volatility, and overnight index swap interest rates. Interest rate derivatives are also standard over-the-counter products that are valued using observable market data and assumptions commonly used by market participants. The fair value of interest rate derivatives reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future interest rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and occasionally, implied volatility of interest rate options. The fair value of cross-currency swaps reflects the net present value of expected payments and receipts under the swap agreement based on the market's expectation of future foreign currency exchange rates. Additional inputs to the net present value calculation may include the contract terms, counterparty credit risk, and discount rates. The interest rate derivatives and cross-currency swaps are categorized as Level 2 under Fair Value Measurements as these inputs are based on observable data and valuations of similar instruments. See Note (J) for additional information on how these derivatives are used.
For fair value measurements of the investments within the nuclear decommissioning trusts and the non-qualified deferred compensation trusts, external pricing vendors are designated for each asset class with each security specifically assigned a primary pricing source. For investments held within commingled funds, fair value is determined at the end of each business day through the net asset value, which is established by obtaining the underlying securities' individual prices from the primary pricing source. A market price secured from the primary source vendor is then evaluated by management in its valuation of the assets within the trusts. As a general approach, fixed income market pricing vendors gather market data (including indices and market research reports) and integrate relative credit information, observed market movements, and sector news into proprietary pricing models, pricing systems, and mathematical tools. Dealer quotes and other market information, including live trading levels and pricing analysts' judgments, are also obtained when available.
The NRC requires licensees of commissioned nuclear power reactors to establish a plan for providing reasonable assurance of funds for future decommissioning. See Note 6 to the financial statements under "Nuclear Decommissioning" in Item 8 of the Form 10-K for additional information.
Southern Power has contingent payment obligations related to certain acquisitions whereby it is primarily obligated to make generation-based payments to the seller, which commenced at the commercial operation of the respective facility and continue through 2026. The obligations are categorized as Level 3 under Fair Value Measurements as
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(UNAUDITED)
the fair value is determined using significant unobservable inputs for the forecasted facility generation in MW-hours, as well as other inputs such as a fixed dollar amount per MW-hour, and a discount rate. The fair value of contingent consideration reflects the net present value of expected payments and any periodic change arising from forecasted generation is expected to be immaterial.
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(UNAUDITED)
Southern Power also has payment obligations through 2040 whereby it must reimburse the transmission owners for interconnection facilities and network upgrades constructed to support connection of a Southern Power generating facility to the transmission system. The obligations are categorized as Level 2 under Fair Value Measurements as the fair value is determined using observable inputs for the contracted amounts and reimbursement period, as well as a discount rate. The fair value of the obligations reflects the net present value of expected payments.
"Other investments" include investments traded in the open market that have maturities greater than 90 days, which are categorized as Level 2 under Fair Value Measurements and are comprised of corporate bonds, bank certificates of deposit, treasury bonds, and/or agency bonds.
At June 30, 2021,March 31, 2022, the fair value measurements of private equity investments held in Alabama Power's nuclear decommissioning trusts that are calculated at net asset value per share (or its equivalent) as a practical expedient totaled $102$156 million and unfunded commitments related to the private equity investments totaled $67$84 million. Private equity investments include high-quality private equity funds across several market sectors and funds that invest in real estate assets. Private equity funds do not have redemption rights. Distributions from these funds will be received as the underlying investments in the funds are liquidated.
At June 30, 2021,March 31, 2022, other financial instruments for which the carrying amount did not equal fair value were as follows:
Southern
Company		Alabama PowerGeorgia PowerMississippi PowerSouthern Power
Southern Company Gas(*)
Southern
Company		Alabama PowerGeorgia PowerMississippi PowerSouthern Power
Southern Company Gas(*)
(in billions)(in billions)
Long-term debt, including securities due within one year:Long-term debt, including securities due within one year:Long-term debt, including securities due within one year:
Carrying amountCarrying amount$50.4 $9.3 $13.5 $1.9 $4.0 $6.3 Carrying amount$51.6 $9.8 $13.2 $1.5 $3.7 $6.9 
Fair valueFair value56.2 10.6 15.2 2.1 4.5 7.3 Fair value51.9 10.0 13.5 1.5 3.8 6.9 
(*)The long-term debt of Southern Company Gas is recorded at amortized cost, including the fair value adjustments at the effective date of the 2016 merger with Southern Company. Southern Company Gas amortizes the fair value adjustments over the remaining lives of the respective bonds, the latest being through 2043.
The fair values are determined using Level 2 measurements and are based on quoted market prices for the same or similar issues or on the current rates available to the Registrants.
Commodity Contracts with Level 3 Valuation Inputs
At June 30, 2021, Southern Company Gas had Level 3 physical natural gas forward contracts totaling $18 million related to Sequent, which were classified as held for sale. See Note (K) under "Southern Company Gas" and "Assets and Liabilities Held for Sale" for additional information. Since commodity contracts classified as Level 3 typically include a combination of observable and unobservable components, the changes in fair value may include amounts due in part to observable market factors, or changes to assumptions on the unobservable components. The following table includes transfers to Level 3, which represent the fair value of Southern Company Gas' commodity derivative contracts that include a significant unobservable component for the first time during the period.
Three Months Ended June 30, 2021Six Months Ended June 30, 2021
(in millions)
Beginning balance$28 $28 
Instruments realized or otherwise settled during period(4)(6)
Changes in fair value(6)(4)
Ending balance$18 $18 
Changes in fair value of Level 3 instruments represent changes in gains and losses for the periods that are reported on Southern Company Gas' statements of income in natural gas revenues.
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(UNAUDITED)
The valuation of certain commodity contracts requires the use of certain unobservable inputs. All forward pricing used in the valuation of such contracts is directly based on third-party market data, such as broker quotes and exchange settlements, when that data is available. If third-party market data is not available, then industry standard methodologies are used to develop inputs that maximize the use of relevant observable inputs and minimize the use of unobservable inputs. Observable inputs, including some forward prices used for determining fair value, reflect the best available market information. Unobservable inputs are updated using industry standard techniques such as extrapolation, combining observable forward inputs supplemented by historical market and other relevant data. Level 3 physical natural gas forward contracts include unobservable forward price inputs (ranging from $(0.06) to $0.38 per mmBtu). Forward price increases (decreases) at June 30, 2021 would have resulted in higher (lower) values on a net basis.
(J) DERIVATIVES
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company GasThe 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. ThroughPrior to the sale of Sequent on July 1, 2021, Southern Company Gas' wholesale gas operations used various contracts in its commercial activities that generally meetmet the definition of derivatives. For the traditional electric operating companies, Southern Power, and Southern Company Gas' other businesses, 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 (I) 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 to the financial statements under "Financial Instruments" in Item 8 of the Form 10-K for additional information. See Note (K)15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information regarding Southern Company Gas'the sale of Sequent.
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(UNAUDITED)
Energy-Related Derivatives
The traditional electric operating companies, Southern Power, and Southern Company GasSubsidiary 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 of operating margins in the event of warmer-than-normal weather. Exchange-traded options are carried at fair value, with changes reflected in operating 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 operating revenues.
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(UNAUDITED)
Energy-related derivative contracts are accounted for under one of three methods:
•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 accumulated OCI 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.
•Not Designated – Gains and losses on energy-related derivative contracts that are not designated or fail to qualify as hedges are recognized in the statements of income as incurred.
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.
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(UNAUDITED)
At June 30, 2021,March 31, 2022, 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		Net
Purchased
mmBtu		Longest
Hedge
Date		Longest
Non-Hedge
Date
(in millions)(in millions)
Southern Company(*)
Southern Company(*)
97820302031
Southern Company(*)
27920302025
Alabama PowerAlabama Power732024—Alabama Power652025—
Georgia PowerGeorgia Power1252024—Georgia Power752024—
Mississippi PowerMississippi Power852025—Mississippi Power712026—
Southern PowerSouthern Power920302022Southern Power42030—
Southern Company Gas(*)
Southern Company Gas(*)
68620242031
Southern Company Gas(*)
6420242025
(*)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 4.6 billion66.2 million mmBtu and short natural gas positions of 3.9 billion2.6 million mmBtu at June 30, 2021,March 31, 2022, which is also included in Southern Company's total volume. See Note (K) under "Southern Company Gas" for information regarding Southern Company Gas' sale of Sequent.
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 4418 million mmBtu for Southern Company, which includes 114 million mmBtu for Alabama Power, 136 million mmBtu for Georgia Power, 63 million mmBtu for Mississippi Power, and 145 million mmBtu for Southern Power.
For cash flow hedges of energy-related derivatives, the estimated pre-tax gains (losses) expected to be reclassified from accumulated OCI to earnings for the 12-month period ending June 30, 2022March 31, 2023 are $29 million for Southern Company, $26 million for Southern Company Gas, and immaterial for all other Registrants.
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(UNAUDITED)
Interest Rate Derivatives
Southern Company and certain subsidiaries may enter into interest rate derivatives to hedge exposure to changes in interest rates. The derivatives employed as hedging instruments are structured to minimize ineffectiveness. 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.
At June 30, 2021,March 31, 2022, the following interest rate derivatives were outstanding:
Notional
Amount		Interest
Rate
Received		Weighted
Average
Interest
Rate Paid		Hedge
Maturity
Date		Fair Value Gain (Loss) at June 30, 2021Notional
Amount		Interest
Rate
Received		Weighted
Average
Interest
Rate Paid		Hedge
Maturity
Date		Fair Value Gain (Loss) at March 31, 2022
(in millions) (in millions) (in millions) (in millions)
Cash Flow Hedges of Forecasted DebtCash Flow Hedges of Forecasted Debt
Georgia PowerGeorgia Power$200 1.87%—February 2032$8 
Georgia PowerGeorgia Power100 2.27%—November 20514 
Cash Flow Hedges of Existing DebtCash Flow Hedges of Existing DebtCash Flow Hedges of Existing Debt
Mississippi Power$60 1-month LIBOR0.58%December 2021$0 
Southern Company parentSouthern Company parent100 2.58%—April 2027(1)
Fair Value Hedges of Existing DebtFair Value Hedges of Existing DebtFair Value Hedges of Existing Debt
Southern Company parentSouthern Company parent400 1.75%1-month LIBOR + 0.68%March 20280 Southern Company parent400 1.75%1-month LIBOR + 0.68%March 2028(29)
Southern Company parentSouthern Company parent1,000 3.70%1-month LIBOR + 2.36%April 20304 Southern Company parent1,000 3.70%1-month LIBOR + 2.36%April
2030		(69)
Southern Company GasSouthern Company Gas500 1.75%1-month LIBOR + 0.38%January 20313 Southern Company Gas500 1.75%1-month LIBOR + 0.38%January 2031(35)
Southern CompanySouthern Company$1,960 $7 Southern Company$2,300 $(122)
For cash flow hedge interest rate derivatives, the estimated pre-tax gains (losses) expected to be reclassified from accumulated OCI to interest expense for the 12-month period ending June 30, 2022March 31, 2023 total $(23)$(20) million for Southern Company and are immaterial for all other Registrants. Deferred gains and losses related to interest rate derivatives are expected to be amortized into earnings through 2051 for the Southern Company, parent entity, 2051 for Alabama Power, 2044 forand Georgia Power, 2028 for Mississippi Power, and 2046 for Southern Company Gas.
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(UNAUDITED)
Foreign Currency Derivatives
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. The derivatives employedDerivatives related to existing fixed rate securities are accounted for as hedging instrumentsfair value hedges, where the derivatives' fair value gains or losses and hedged items' fair value gains or losses are structuredboth recorded directly to minimize ineffectiveness.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.
At June 30, 2021, Southern Power hadMarch 31, 2022, the following outstanding foreign currency derivatives designated as cash flow hedges of existing debt:were outstanding:
Pay NotionalPay
Rate		Receive NotionalReceive
Rate		Hedge
Maturity Date		Fair Value Gain (Loss) at June 30, 2021
(in millions)(in millions) (in millions)
$677 2.95%€600 1.00%June 2022$27 
564 3.78%500 1.85%June 202618 
$1,241 €1,100 $45 
Pay NotionalPay
Rate		Receive NotionalReceive
Rate		Hedge
Maturity Date		Fair Value Gain (Loss) at March 31, 2022
(in millions)(in millions) (in millions)
Fair Value Hedges of Existing Debt
Southern Company parent$1,476 3.39%€1,250 1.88%September 2027$(87)
Cash Flow Hedges of Existing Debt
Southern Power$677 2.95%€600 1.00%June 2022$(24)
Southern Power564 3.78%500 1.85%June 2026(19)
Southern Power total$1,241 €1,100 $(43)
Southern Company$2,717 €2,350 $(130)
The estimated pre-tax gains (losses)losses related to Southern Power's foreign currency derivatives accounted for as cash flow hedges expected to be reclassified from accumulated OCI to earnings for the 12-month period ending June 30, 2022March 31, 2023 are $17 million.
Derivative Financial Statement Presentation and Amounts
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company GasThe 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 sheetsheets are presented net to the extent that there are netting arrangements or similar agreements with the counterparties.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
The fair value of energy-related derivatives, interest rate derivatives, and foreign currency derivatives was reflected in the balance sheets as follows:
At June 30, 2021At December 31, 2020At March 31, 2022At December 31, 2021
Derivative Category and Balance Sheet LocationDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilitiesDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
(in millions)(in millions)
Southern CompanySouthern CompanySouthern Company
Derivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$130 $2 $24 $11 Assets from risk management activities/Other current liabilities$381 $1 $129 $30 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities54 8 18 19 Other deferred charges and assets/Other deferred credits and liabilities116 6 72 6 
Total derivatives designated as hedging instruments for regulatory purposesTotal derivatives designated as hedging instruments for regulatory purposes$184 $10 $42 $30 Total derivatives designated as hedging instruments for regulatory purposes$497 $7 $201 $36 
Derivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$13 $0 $3 $5 Assets from risk management activities/Other current liabilities$28 $2 $7 $5 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities1 0 0 0 Other deferred charges and assets/Other deferred credits and liabilities5 — 1 — 
Interest rate derivatives:Interest rate derivatives:Interest rate derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities17 0 20 0 Assets from risk management activities/Other current liabilities17 3 19 — 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities0 9 0 0 Other deferred charges and assets/Other deferred credits and liabilities— 136 — 29 
Foreign currency derivatives:Foreign currency derivatives:Foreign currency derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities27 10 0 23 Assets from risk management activities/Other current liabilities— 59 — 39 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities28 0 87 0 Other deferred charges and assets/Other deferred credits and liabilities— 71 — 40 
Total derivatives designated as hedging instruments in cash flow and fair value hedgesTotal derivatives designated as hedging instruments in cash flow and fair value hedges$86 $19 $110 $28 Total derivatives designated as hedging instruments in cash flow and fair value hedges$50 $271 $27 $113 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$8 $7 $388 $331 Assets from risk management activities/Other current liabilities$16 $2 $9 $4 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities0 0 270 232 Other deferred charges and assets/Other deferred credits and liabilities1 — 1 — 
Assets held for sale, current/Liabilities held for sale, current914 990 0 0 
Total derivatives not designated as hedging instrumentsTotal derivatives not designated as hedging instruments$922 $997 $658 $563 Total derivatives not designated as hedging instruments$17 $2 $10 $4 
Gross amounts recognizedGross amounts recognized$1,192 $1,026 $810 $621 Gross amounts recognized$564 $280 $238 $153 
Gross amounts offset(a)
Gross amounts offset(a)
(851)(892)(529)(557)
Gross amounts offset(a)
(45)(9)(25)(28)
Net amounts recognized in the Balance Sheets(b)
Net amounts recognized in the Balance Sheets(b)
$341 $134 $281 $64 
Net amounts recognized in the Balance Sheets(b)
$519 $271 $213 $125 
8374
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
At June 30, 2021At December 31, 2020At March 31, 2022At December 31, 2021
Derivative Category and Balance Sheet LocationDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilitiesDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
(in millions)(in millions)
Alabama PowerAlabama PowerAlabama Power
Derivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Other current assets/Other current liabilitiesOther current assets/Other current liabilities$31 $1 $7 $2 Other current assets/Other current liabilities$87 $— $30 $9 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities15 2 5 5 Other deferred charges and assets/Other deferred credits and liabilities41 2 25 2 
Total derivatives designated as hedging instruments for regulatory purposesTotal derivatives designated as hedging instruments for regulatory purposes$46 $3 $12 $7 Total derivatives designated as hedging instruments for regulatory purposes$128 $2 $55 $11 
Gross amounts recognized$46 $3 $12 $7 
Gross amounts offsetGross amounts offset(3)(3)(7)(7)Gross amounts offset(2)(2)(5)(5)
Net amounts recognized in the Balance SheetsNet amounts recognized in the Balance Sheets$43 $0 $5 $0 Net amounts recognized in the Balance Sheets$126 $— $50 $6 
Georgia PowerGeorgia PowerGeorgia Power
Derivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Other current assets/Other current liabilities$52 $1 $7 $5 
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$150 $— $54 $6 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities29 1 21 2 
Total derivatives designated as hedging instruments for regulatory purposesTotal derivatives designated as hedging instruments for regulatory purposes$179 $1 $75 $8 
Derivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedges
Interest rate derivatives:Interest rate derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$12 $— $— $— 
Total derivatives designated as hedging instruments in cash flow and fair value hedgesTotal derivatives designated as hedging instruments in cash flow and fair value hedges$12 $— $— $— 
Gross amounts recognizedGross amounts recognized$191 $1 $75 $8 
Gross amounts offsetGross amounts offset(1)(1)(8)(8)
Net amounts recognized in the Balance SheetsNet amounts recognized in the Balance Sheets$190 $— $67 $— 
Mississippi PowerMississippi Power
Derivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$94 $— $30 $3 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities21 3 8 8 Other deferred charges and assets/Other deferred credits and liabilities44 2 26 2 
Total derivatives designated as hedging instruments for regulatory purposesTotal derivatives designated as hedging instruments for regulatory purposes$73 $4 $15 $13 Total derivatives designated as hedging instruments for regulatory purposes$138 $2 $56 $5 
Gross amounts recognized$73 $4 $15 $13 
Gross amounts offsetGross amounts offset(4)(4)(12)(12)Gross amounts offset(2)(2)(4)(4)
Net amounts recognized in the Balance SheetsNet amounts recognized in the Balance Sheets$69 $0 $3 $1 Net amounts recognized in the Balance Sheets$136 $— $52 $1 
Mississippi Power
Derivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:
Other current assets/Other current liabilities$28 $0 $4 $3 
Other deferred charges and assets/Other deferred credits and liabilities16 3 5 6 
Total derivatives designated as hedging instruments for regulatory purposes$44 $3 $9 $9 
Gross amounts recognized$44 $3 $9 $9 
Gross amounts offset(3)(3)(7)(7)
Net amounts recognized in the Balance Sheets$41 $0 $2 $2 
8475
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
At June 30, 2021At December 31, 2020At March 31, 2022At December 31, 2021
Derivative Category and Balance Sheet LocationDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilitiesDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
(in millions)(in millions)
Southern PowerSouthern PowerSouthern Power
Derivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Other current assets/Other current liabilitiesOther current assets/Other current liabilities$4 $0 $2 $2 Other current assets/Other current liabilities$3 $— $2 $— 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities3 — 1 — 
Foreign currency derivatives:Foreign currency derivatives:Foreign currency derivatives:
Other current assets/Other current liabilitiesOther current assets/Other current liabilities27 10 0 23 Other current assets/Other current liabilities— 35 — 16 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities28 0 87 0 Other deferred charges and assets/Other deferred credits and liabilities— 8 — — 
Total derivatives designated as hedging instruments in cash flow and fair value hedgesTotal derivatives designated as hedging instruments in cash flow and fair value hedges$59 $10 $89 $25 Total derivatives designated as hedging instruments in cash flow and fair value hedges$6 $43 $3 $16 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Other current assets/Other current liabilitiesOther current assets/Other current liabilities$0 $0 $0 $1 Other current assets/Other current liabilities$2 $— $1 $— 
Total derivatives not designated as hedging instruments$0 $0 $0 $1 
Gross amounts recognizedGross amounts recognized$8 $43 $4 $16 
Gross amounts offsetGross amounts offset— — — — 
Net amounts recognized in the Balance SheetsNet amounts recognized in the Balance Sheets$59 $10 $89 $26 Net amounts recognized in the Balance Sheets$8 $43 $4 $16 
8576
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
At June 30, 2021At December 31, 2020At March 31, 2022At December 31, 2021
Derivative Category and Balance Sheet LocationDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilitiesDerivative Category and Balance Sheet LocationAssetsLiabilitiesAssetsLiabilities
(in millions)(in millions)
Southern Company GasSouthern Company GasSouthern Company Gas
Derivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposesDerivatives designated as hedging instruments for regulatory purposes
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$19 $0 $6 $1 Assets from risk management activities/Other current liabilities$49 $1 $15 $12 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities2 0 0 0 Other deferred charges and assets/Other deferred credits and liabilities3 — — — 
Total derivatives designated as hedging instruments for regulatory purposesTotal derivatives designated as hedging instruments for regulatory purposes$21 $0 $6 $1 Total derivatives designated as hedging instruments for regulatory purposes$52 $1 $15 $12 
Derivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedgesDerivatives designated as hedging instruments in cash flow and fair value hedges
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$9 $0 $1 $3 Assets from risk management activities/Other current liabilities$25 $2 $5 $5 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities1 0 0 0 Other deferred charges and assets/Other deferred credits and liabilities2 — — — 
Interest rate derivatives:Interest rate derivatives:Interest rate derivatives:
Assets from risk management activities/Liabilities from risk management activities-currentAssets from risk management activities/Liabilities from risk management activities-current4 0 0 0 Assets from risk management activities/Liabilities from risk management activities-current— — 6 — 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities— 36 — 6 
Total derivatives designated as hedging instruments in cash flow and fair value hedgesTotal derivatives designated as hedging instruments in cash flow and fair value hedges$14 $0 $1 $3 Total derivatives designated as hedging instruments in cash flow and fair value hedges$27 $38 $11 $11 
Derivatives not designated as hedging instrumentsDerivatives not designated as hedging instrumentsDerivatives not designated as hedging instruments
Energy-related derivatives:Energy-related derivatives:Energy-related derivatives:
Assets from risk management activities/Other current liabilitiesAssets from risk management activities/Other current liabilities$8 $7 $388 $330 Assets from risk management activities/Other current liabilities$14 $1 $8 $4 
Other deferred charges and assets/Other deferred credits and liabilitiesOther deferred charges and assets/Other deferred credits and liabilities0 0 270 232 Other deferred charges and assets/Other deferred credits and liabilities1 — 1 — 
Assets held for sale, current/Liabilities held for sale, current914 990 0 0 
Total derivatives not designated as hedging instrumentsTotal derivatives not designated as hedging instruments$922 $997 $658 $562 Total derivatives not designated as hedging instruments$15 $1 $9 $4 
Gross amounts of recognized$957 $997 $665 $566 
Gross amounts recognizedGross amounts recognized$94 $40 $35 $27 
Gross amounts offset(a)
Gross amounts offset(a)
(841)(882)(503)(531)
Gross amounts offset(a)
(40)(4)(8)(11)
Net amounts recognized in the Balance Sheets(b)
Net amounts recognized in the Balance Sheets(b)
$116 $115 $162 $35 
Net amounts recognized in the Balance Sheets(b)
$54 $36 $27 $16 
(a)Gross amounts offset include cash collateral held on deposit in broker margin accounts of $41$36 million and $28$3 million at June 30, 2021March 31, 2022 and December 31, 2020,2021, respectively.
(b)Net amounts of derivative instruments outstanding exclude immaterial premium and intrinsic value associated with weather derivatives for both periods presented.
The traditional electric operating companies had immaterial energy-relatedEnergy-related derivatives not designated as hedging instruments were immaterial for the traditional electric operating companies at June 30, 2021 andMarch 31, 2022. There were no such instruments for the traditional electric operating companies at December 31, 2020.2021.
8677
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
At June 30, 2021March 31, 2022 and December 31, 2020,2021, 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 Sheet
Derivative Category and Balance Sheet
Location		Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern Company Gas
 (in millions)
At June 30, 2021:
Energy-related derivatives:
Other regulatory liabilities, current$120 $31 $51 $28 $10 
Other regulatory liabilities, deferred46 13 18 14 1 
Total energy-related derivative gains (losses)$166 $44 $69 $42 $11 
At December 31, 2020:
Energy-related derivatives:
Other regulatory assets, deferred$(2)$0 $(1)$(1)$0 
Other regulatory liabilities, current12 5 2 1 4 
Other regulatory liabilities, deferred2 1 1 0 0 
Total energy-related derivative gains (losses)$12 $6 $2 $0 $4 
For the three and six months ended June 30, 2021 and 2020, the pre-tax effects of cash flow hedge accounting on accumulated OCI were as follows:
Gain (Loss) Recognized in OCI on DerivativeFor the Three Months Ended June 30,For the Six Months Ended June 30,
2021202020212020
(in millions)(in millions)
Southern Company
Energy-related derivatives$16 $(2)$20 $(6)
Interest rate derivatives(1)(1)2 (28)
Foreign currency derivatives4 17 (43)(65)
Total$19 $14 $(21)$(99)
Southern Power
Energy-related derivatives$5 $(2)$8 $(2)
Foreign currency derivatives4 17 (43)(65)
Total$9 $15 $(35)$(67)
Southern Company Gas
Energy-related derivatives$11 $0 $12 $(4)
Interest rate derivatives0 (1)0 (25)
Total$11 $(1)$12 $(29)
For the three and six months ended June 30, 2021 and 2020, the pre-tax effects of energy-related derivatives and interest rate derivatives designated as cash flow hedging instruments on accumulated OCI were immaterial for the other Registrants.
Regulatory Hedge Unrealized Gain (Loss) Recognized in the Balance Sheet
Derivative Category and Balance Sheet
Location		Southern
Company		Alabama
Power		Georgia
Power		Mississippi
Power		Southern Company Gas
 (in millions)
At March 31, 2022:
Energy-related derivatives:
Other regulatory liabilities, current$353 $87 $150 $94 $22 
Other regulatory liabilities, deferred111 39 28 42 2 
Total energy-related derivative gains (losses)$464 $126 $178 $136 $24 
At December 31, 2021:
Energy-related derivatives:
Other regulatory assets, current$(17)$(6)$— $— $(11)
Other regulatory liabilities, current107 28 48 27 4 
Other regulatory liabilities, deferred65 22 19 24 — 
Total energy-related derivative gains (losses)$155 $44 $67 $51 $(7)
8778
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
For the three and six months ended June 30,March 31, 2022 and 2021, the pre-tax effects of cash flow and 2020,fair value hedge accounting on accumulated OCI were as follows:
Gain (Loss) Recognized in OCI on DerivativeFor the Three Months Ended March 31,
20222021
(in millions)
Southern Company
Cash flow hedges:
Energy-related derivatives$42 $5 
Interest rate derivatives9 3 
Foreign currency derivatives(28)(47)
Fair value hedges(*):
Foreign currency derivatives4 — 
Total$27 $(39)
Georgia Power
Cash flow hedges:
Interest rate derivatives$12 $— 
Southern Power
Cash flow hedges:
Energy-related derivatives$5 $4 
Foreign currency derivatives(28)(47)
Total$(23)$(43)
Southern Company Gas
Cash flow hedges:
Energy-related derivatives$37 $1 
(*)Represents amounts excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in OCI.
For the three months ended March 31, 2022 and 2021, the pre-tax effects of interest rate derivatives designated as cash flow hedging instruments on accumulated OCI were immaterial for the other Registrants.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
For the three months ended March 31, 2022 and 2021, the pre-tax effects of cash flow and fair value hedge accounting on income were as follows:
Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging RelationshipsLocation and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging RelationshipsFor the Three Months Ended June 30,For the Six Months Ended June 30,Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging RelationshipsFor the Three Months Ended March 31,
Location and Amount of Gain (Loss) Recognized in Income on Cash Flow and Fair Value Hedging RelationshipsFor the Three Months Ended March 31,
202120202021202020222021
(in millions)(in millions)
Southern CompanySouthern CompanySouthern Company
Total cost of natural gasTotal cost of natural gas$231 $144 $814 $583 Total cost of natural gas$1,095 $583 
Gain (loss) on energy-related cash flow hedges(a)
Gain (loss) on energy-related cash flow hedges(a)
1 (1)(2)(8)
Gain (loss) on energy-related cash flow hedges(a)
9 (3)
Total depreciation and amortizationTotal depreciation and amortization891 873 1,762 1,730 Total depreciation and amortization892 871 
Gain (loss) on energy-related cash flow hedges(a)
Gain (loss) on energy-related cash flow hedges(a)
1 (1)4 (2)
Gain (loss) on energy-related cash flow hedges(a)
2 3 
Total interest expense, net of amounts capitalizedTotal interest expense, net of amounts capitalized(450)(444)(901)(900)Total interest expense, net of amounts capitalized(462)(450)
Gain (loss) on interest rate cash flow hedges(a)
Gain (loss) on interest rate cash flow hedges(a)
(7)(6)(14)(13)
Gain (loss) on interest rate cash flow hedges(a)
(7)(7)
Gain (loss) on foreign currency cash flow hedges(a)
Gain (loss) on foreign currency cash flow hedges(a)
(6)(6)(12)(12)
Gain (loss) on foreign currency cash flow hedges(a)
(6)(6)
Gain (loss) on interest rate fair value hedges(b)
Gain (loss) on interest rate fair value hedges(b)
(3)1 (12)30 
Gain (loss) on interest rate fair value hedges(b)
(123)(10)
Total other income (expense), netTotal other income (expense), net108 101 167 204 Total other income (expense), net145 58 
Gain (loss) on foreign currency cash flow hedges(a)(c)
Gain (loss) on foreign currency cash flow hedges(a)(c)
17 27 (43)(4)
Gain (loss) on foreign currency cash flow hedges(a)(c)
(25)(60)
Gain (loss) on foreign currency fair value hedgesGain (loss) on foreign currency fair value hedges(24)— 
Amount excluded from effectiveness testing recognized in earningsAmount excluded from effectiveness testing recognized in earnings(4)— 
Southern PowerSouthern PowerSouthern Power
Total depreciation and amortizationTotal depreciation and amortization$132 $121 $251 $239 Total depreciation and amortization$120 $119 
Gain (loss) on energy-related cash flow hedges(a)
Gain (loss) on energy-related cash flow hedges(a)
1 (1)4 (2)
Gain (loss) on energy-related cash flow hedges(a)
2 3 
Total interest expense, net of amounts capitalizedTotal interest expense, net of amounts capitalized(37)(38)(75)(77)Total interest expense, net of amounts capitalized(37)(38)
Gain (loss) on foreign currency cash flow hedges(a)
Gain (loss) on foreign currency cash flow hedges(a)
(6)(6)(12)(12)
Gain (loss) on foreign currency cash flow hedges(a)
(6)(6)
Total other income (expense), netTotal other income (expense), net1 1 8 4 Total other income (expense), net2 7 
Gain (loss) on foreign currency cash flow hedges(a)(c)
Gain (loss) on foreign currency cash flow hedges(a)(c)
17 27 (43)(4)
Gain (loss) on foreign currency cash flow hedges(a)(c)
(25)(60)
Southern Company GasSouthern Company Gas
Total cost of natural gasTotal cost of natural gas$1,095 $583 
Gain (loss) on energy-related cash flow hedges(a)
Gain (loss) on energy-related cash flow hedges(a)
9 — 
Total interest expense, net of amounts capitalizedTotal interest expense, net of amounts capitalized(61)(60)
Gain (loss) on interest rate cash flow hedges(a)
Gain (loss) on interest rate cash flow hedges(a)
(1)— 
Gain (loss) on interest rate fair value hedges(b)
Gain (loss) on interest rate fair value hedges(b)
(36)— 
(a)Reclassified from accumulated OCI into earnings.
(b)For fair value hedges, changes in the fair value of the derivative contracts are generally equal to changes in the fair value of the underlying debt and have no material impact on income.
(c)The reclassification from accumulated OCI into other income (expense), net completely offsets currency gains and losses arising from changes in the U.S. currency exchange rates used to record the euro-denominated notes.
For the three and six months ended June 30,March 31, 2022 and 2021, and 2020, the pre-tax effects of cash flow and fair value hedge accounting on income for energy-related derivatives and interest rate derivatives were immaterial for the traditional electric operating companies and Southern Company Gas.companies.
8880
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
At June 30, 2021March 31, 2022 and December 31, 2020,2021, the following amounts were recorded on the balance sheets related to cumulative basis adjustments for fair value hedges:
Carrying Amount of the Hedged ItemCumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged ItemCarrying Amount of the Hedged ItemCumulative Amount of Fair Value Hedging Adjustment included in Carrying Amount of the Hedged Item
Balance Sheet Location of Hedged ItemsBalance Sheet Location of Hedged ItemsAt June 30, 2021At December 31, 2020At June 30, 2021At December 31, 2020Balance Sheet Location of Hedged ItemsAt March 31, 2022At December 31, 2021At March 31, 2022At December 31, 2021
(in millions)(in millions)(in millions)(in millions)
Southern CompanySouthern CompanySouthern Company
Securities due within one year$0 $(1,509)$0 $(10)
Long-term debtLong-term debt(1,883)0 0 0 Long-term debt$(3,136)$(3,280)$126 $9 
Southern Company GasSouthern Company GasSouthern Company Gas
Long-term debtLong-term debt$(492)$0 $3 $0 Long-term debt$(459)$(493)$37 $2 
For the three and six months ended June 30,March 31, 2022 and 2021, and 2020, 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 were as follows:
Gain (Loss)Gain (Loss)
Three Months Ended June 30,Six Months Ended June 30,Three Months Ended March 31,
Derivatives in Non-Designated Hedging RelationshipsDerivatives in Non-Designated Hedging RelationshipsStatements of Income Location2021202020212020Derivatives in Non-Designated Hedging RelationshipsStatements of Income Location20222021
(in millions)(in millions)(in millions)
Energy-related derivatives:Energy-related derivatives:
Natural gas revenues(*)
$(103)$14 $(120)$84 Energy-related derivatives:
Natural gas revenues(*)
$2 $(17)
Cost of natural gas9 5 16 13 Cost of natural gas21 7 
Total derivatives in non-designated hedging relationshipsTotal derivatives in non-designated hedging relationships$(94)$19 $(104)$97 Total derivatives in non-designated hedging relationships$23 $(10)
(*)Excludes immaterial gains (losses) recorded in natural gas revenues associated with weather derivatives for all periods presented.
For the three and six months ended June 30,March 31, 2022 and 2021, the pre-tax effects of interest rate derivatives not designated as hedging instruments were immaterial for Southern Company and 2020,Southern Company Gas and the pre-tax effects of energy-related derivatives not designated as hedging instruments were immaterial for all other Registrants.
Contingent Features
Southern Company, the traditional electric operating companies, Southern Power, and Southern Company GasThe 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. At June 30, 2021,March 31, 2022, the Registrants had 0no collateral posted with derivative counterparties to satisfy these arrangements.
At June 30, 2021,For the applicable Registrants, had no interest rate derivative liabilities with contingent features. At June 30, 2021, the fair value of Southern Company Gas'interest rate and 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 June 30, 2021, the other Registrants had no energy-related derivative liabilities with contingent features.immaterial at March 31, 2022. 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. Following the sale of Gulf Power to NextEra Energy, Inc., Gulf Power has continued participating in the Southern Company power pool; however, the parties currently expect this participation to end during the third quarter 2022.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Gulf Power is continuing to participate in the Southern Company power pool for a defined transition period that, subject to certain potential adjustments, is scheduled to end on January 1, 2024.
Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. If collateral is required, fair value amounts recognized for the right to reclaim cash collateral or the obligation to return cash collateral are not offset against fair value amounts recognized for derivatives executed with the same counterparty.
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 June 30, 2021,March 31, 2022, cash collateral posted in these accounts was immaterial. 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 June 30, 2021,March 31, 2022, cash collateral held on deposit in broker margin accounts was $41$36 million.
The Registrants are exposed to losses related to financial instruments in the event of counterparties' nonperformance. The Registrants only enter into agreements and material transactions with counterparties that have investment grade credit ratings by Moody's and S&P 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.
Southern Company Gas utilizes netting agreements whenever possible to mitigate exposure to counterparty credit risk. Netting agreements enable Southern Company Gas to net certain assets and liabilities by counterparty across product lines and against cash collateral, provided the netting and cash collateral agreements include such provisions. While the amounts due from, or owed to, counterparties are settled net, they are recorded on a gross basis on the balance sheet as energy marketing receivables and energy marketing payables.
The Registrants do not anticipate a material adverse effect on their respective financial statements as a result of counterparty nonperformance.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
(K) ACQUISITIONS AND DISPOSITIONS
See Note 15 to the financial statements in Item 8 of the Form 10-K for additional information.
Southern Power
Asset Acquisition
During the six months ended June 30, 2021, Southern Power acquired a controlling membership interest in the wind facility listed below. Acquisition-related costs were expensed as incurred and were not material.
Project FacilityResourceSeller
Approximate Nameplate Capacity (MW)
LocationSouthern Power Ownership PercentageCODPPA Contract Period
Deuel Harvest(*)
WindInvenergy Renewables, LLC300Deuel County, SD
100% of
Class B
February 2021
25 years
and
15 years
(*)On March 26, 2021, Southern Power acquired a controlling interest in the facility and consolidates the project's operating results in its financial statements. On March 30, 2021, Southern Power completed a tax equity transaction whereby it received $220 million. The tax equity partner, which is the Class A member, and Invenergy Renewables, LLC each own a noncontrolling interest.
Construction Projects
During the sixthree months ended June 30, 2021,March 31, 2022, Southern Power continuedcompleted construction of and placed in service the Garland andremaining 40 MWs of the Tranquillity battery energy storage facilitiesfacility and the Glass Sands windremaining 15 MWs of the Garland battery energy storage facility. Total aggregate construction costs, excluding acquisition costs, are expected to be between $390 million and $460 million for the facilities under construction. At June 30, 2021, total costs of construction incurred for these projects were $208 million and are included in CWIP. The ultimate outcome of these matters cannot be determined at this time.
Project FacilityResource
Approximate Nameplate Capacity (MW)
LocationActual/Expected CODPPA Contract Period
Projects Under Construction at June 30, 2021Completed During the Three Months Ended March 31, 2022
Garland Solar Storage(a)
Battery energy storage system88Kern County, CA
September 2021
August 2021through February 2022(b)
20 years
Tranquillity Solar Storage(a)
Battery energy storage system72Fresno County, CAFourth quarter
November 2021
20 years
Glass Sandsthrough March 2022(b)(c)
Wind118Murray County, OKFourth quarter 20211220 years
(a)Subsequent to June 30, 2021, Southern Power further restructuredconsolidates each project's operating results in its ownership infinancial statements and the Garland battery energy storage project and completed a tax equity transaction whereby it received initial proceeds of $11 million, while retaining the controllingpartner and two other partners each own a noncontrolling interest. Prior to commercial operation, Southern Power expects to further restructure its ownership in the Tranquillity battery energy storage project and complete a tax equity transaction, but expects to retain the controlling interest. The ultimate outcome of this matter cannot be determined at this time.
(b)In December 2020, Southern Power purchased 100% of the membership interests of the Glass Sands facility.
Development Projects
Southern Power continues to evaluate and refine the deployment of the remaining wind turbine equipment purchased in 2016 and 2017 to development and construction projects. During the six months ended June 30, 2021, gains on wind turbine equipment contributed to various equity method investments totaled approximately $37 million.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas
Sale of Sequent
On July 1, 2021, Southern Company Gas affiliates completed the sale of Sequent to Williams Field Services Group forThe facility has a total cash purchase pricecapacity of $150 million, including estimated working capital adjustments. The preliminary gain associated with the transaction is approximately $90 million,88 MWs, of which will be recorded73 MWs were placed in the third quarter 2021.
Prior to the sale, Southern Company Gas had existing agreementsservice in place in which it guaranteed the payment performance of Sequent. Southern Company Gas will continue to guarantee Sequent's payment performance for a period of time as Williams Field Services Group obtains releases from these obligations. At June 30, 2021, the obligations subject to the payment performance guarantee totaled $268 million. Changes in the price of natural gas, market conditions, and the number of open contracts may change the amount that Southern Company Gas is required to guarantee for Sequent each month. The maximum potential exposure over the period of the payment performance guarantee generally is capped at $1 billion. At closing, Williams Field Services Group issued a payment performance guarantee to Southern Company Gas, equal to the outstanding guarantee obligation throughout this period.
The assets and liabilities of Sequent were classified as held for sale on the balance sheets of Southern Company and Southern Company Gas at June 30, 2021. See "Assets and Liabilities Held for Sale" herein for additional information.
Sale of Pivotal LNG
In connection with its March 2020 sale of Pivotal LNG, Southern Company Gas was entitled to 2 $5 million payments contingent upon Dominion Modular LNG Holdings, Inc. meeting certain milestones related to Pivotal LNG. Southern Company Gas received the first payment on April 22, 2021 and expects to receive the second payment15 MWs were placed in service in February 2022.
Assets and Liabilities Held for Sale
The following table provides the major classes of assets and liabilities classified as held for sale by Southern Company and Southern Company Gas at June 30, 2021 and/or December 31, 2020:
Southern CompanySouthern Company Gas
At June 30,At December 31,At June 30,
202120202021
(in millions)
Assets Held for Sale:
Receivables – energy marketing$486 $0 $486 
Natural gas for sale90 0 90 
Other current assets76 0 76 
Total property, plant, and equipment11 8 5 
Leveraged leases45 52 0 
Accumulated deferred income taxes30 0 30 
Other non-current assets49 0 49 
Total Assets Held for Sale$787 $60 $736 
Liabilities Held for Sale:
Energy marketing trade payables$491 $0 $491 
Other current liabilities148 0 148 
Other non-current liabilities38 0 38 
Total Liabilities Held for Sale$677 $0 $677 
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(c)
NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas' assets and liabilities held for sale at June 30, 2021The facility has a total capacity of 72 MWs, of which 32 MWs were recorded based on their carrying value as the net carrying value of Sequent was lower than the agreed upon priceplaced in the sale agreement. See Note (I) for information regarding Sequent's energy-related derivatives held for sale that are recorded at fair value on a recurring basis. Southern Company's other assets held for sale at June 30,service in 2021 and December 31, 202040 MWs were recorded at fair value on a nonrecurring basis, based primarily on unobservable inputs (Level 3).
See Note 3 to the financial statements under "Other Matters – Southern Company"placed in Item 8 of the Form 10-K for additional information regarding the leveraged lease investment held for sale.
Southern Company's and Southern Company Gas' asset sales, both individually and combined, do not represent a strategic shiftservice in operations that has, or is expected to have, a major effect on operations and financial results; therefore, none of the assets have been classified as discontinued operations for any of the periods presented.March 2022.
(L) SEGMENT AND RELATED INFORMATION
Southern Company
The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. The traditional electric operating companies – Alabama Power, Georgia Power, and Mississippi Power – are vertically integrated utilities providing electric service in 3 Southeastern states. Southern Power develops, constructs, acquires, owns, and manages power generation assets, including renewable energy and battery energy storage projects, and sells electricity at market-based rates in the wholesale market. Southern Company Gas distributes natural gas through its natural gas distribution utilities and is involved in several other complementary businesses including gas pipeline investments wholesale gas services (through June 30, 2021), and gas marketing services. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' other businesses also included wholesale gas services.
Southern Company's reportable business segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas. Revenues from sales by Southern Power to the traditional electric operating companies were $112$105 million and $193$81 million for the three and six months ended June 30,March 31, 2022 and 2021, respectively, and $92 million and $178 million for the three and six months ended June 30, 2020, respectively. Revenues from sales of natural gas from Southern Company Gas to the traditional electric operating companies were immaterial for allboth periods presented. Revenues from sales of natural gas from Southern Company Gas to Southern Power were $6 million and $18$12 million for the three and six months ended June 30,March 31, 2021, respectively, and $3 million and $13 million for the three and six months ended June 30, 2020, respectively.which represented sales from Sequent prior to its sale. The "All Other" column includes the Southern Company parent entity, which does not allocate operating expenses to business segments. Also, this category includes segments below the quantitative threshold for separate disclosure. These segments include providing distributed energy and resilience solutions to electric utilities and theirdeploying microgrids for commercial, industrial, governmental, and utility customers, in the areas of distributed generation, energy storage and renewables, and energy efficiency, as well as investments in telecommunications and, for the three months ended March 31, 2021, leveraged lease projects. All other inter-segment revenues are not material.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Financial data for business segments and products and services for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 was as follows:
Electric Utilities
Traditional
Electric Operating
Companies		Southern
Power		EliminationsTotalSouthern Company GasAll
Other		EliminationsConsolidated
(in millions)
Three Months Ended June 30, 2021
Operating revenues$4,031 $490 $(114)$4,407 $677 $154 $(40)$5,198 
Segment net income (loss)(a)(b)(c)(d)
511 36 0 547 (65)(108)(2)372 
Six Months Ended June 30, 2021
Operating revenues$7,795 $930 $(201)$8,524 $2,371 $288 $(75)$11,108 
Segment net income (loss)(a)(b)(c)(d)(e)
1,267 133 0 1,400 333 (216)(9)1,508 
At June 30, 2021
Goodwill$0 $2 $0 $2 $5,015 $263 $0 $5,280 
Assets held for sale2 0 0 2 736 49 0 787 
Total assets87,330 13,708 (693)100,345 23,235 3,063 (736)125,907 
Three Months Ended June 30, 2020
Operating revenues$3,539 $439 $(94)$3,884 $636 $135 $(35)$4,620 
Segment net income (loss)(a)(b)(d)
645 63 0 708 71 (177)10 612 
Six Months Ended June 30, 2020
Operating revenues$6,946 $814 $(181)$7,579 $1,885 $248 $(74)$9,638 
Segment net income (loss)(a)(b)(d)(f)
1,287 138 0 1,425 346 (299)8 1,480 
At December 31, 2020
Goodwill$0 $2 $0 $2 $5,015 $263 $0 $5,280 
Assets held for sale5 0 0 5 0 55 0 60 
Total assets85,486 13,235 (680)98,041 22,630 3,168 (904)122,935 
Electric Utilities
Traditional
Electric Operating
Companies		Southern
Power		EliminationsTotalSouthern Company GasAll
Other		EliminationsConsolidated
(in millions)
Three Months Ended March 31, 2022
Operating revenues$4,191 $539 $(221)$4,509 $2,058 $123 $(42)$6,648 
Segment net income (loss)(a)
774 72 — 846 319 (125)(8)1,032 
At March 31, 2022
Goodwill$— $2 $— $2 $5,015 $263 $— $5,280 
Total assets90,460 13,766 (627)103,599 23,377 4,236 (2,573)128,639 
Three Months Ended March 31, 2021
Operating revenues$3,764 $440 $(87)$4,117 $1,694 $134 $(35)$5,910 
Segment net income (loss)(a)(b)(c)
756 97 — 853 398 (108)(8)1,135 
At December 31, 2021
Goodwill$— $2 $— $2 $5,015 $263 $— $5,280 
Total assets89,051 13,390 (667)101,774 23,560 2,975 (775)127,534 
(a)Attributable to Southern Company.
(b)For the traditional electric operating companies, includes a pre-tax chargescharge of $48 million ($36 million after tax) at Georgia Power for estimated losses associated with the construction of Plant Vogtle Units 3 and 4 of $460 million ($343 million after tax) and $508 million ($379 million after tax) for the three and six months ended June 30, 2021, respectively, and $149 million ($111 million after tax) for the three and six months ended June 30, 2020.4. See Note (B) and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.
(c)For Southern Company Gas, includes a pre-tax impairment charge of $82 million ($58 million after tax) related to its equity method investment in the PennEast Pipeline project. See Notes (C) and (E) under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.
(d)For the "All Other" column, includes pre-tax impairment charges related to leveraged lease investments of $7 million ($6 million after tax) for the three and six months ended June 30, 2021 and $154 million ($74 million after tax) for the three and six months ended June 30, 2020. See Note 3 to the financial statements in Item 8 of the Form 10-K under "Other Matters – Southern Company" for additional information.
(e)For Southern Power, includes gains on wind turbine equipment contributed to various equity method investments totaling approximately $37 million pre-tax ($28 million after tax). See Notes (E) and (K) under "Southern Power" for additional information.
(f)For Southern Power, includes a $39 million pre-tax gain ($23 million gain after tax) on the sale of Plant Mankato. See Note 15 to the financial statements under "Southern Power – Development Projects" in Item 8 of the Form 10-K under "Southern Power" for additional information.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Products and Services
 Electric Utilities' Revenues
RetailWholesaleOtherTotal
(in millions)
Three Months Ended June 30, 2021$3,599 $546 $262 $4,407 
Three Months Ended June 30, 20203,182 472 230 3,884 
Six Months Ended June 30, 2021$6,941 $1,091 $492 $8,524 
Six Months Ended June 30, 20206,260 889 430 7,579 
 Electric Utilities' Revenues
RetailWholesaleOtherTotal
(in millions)
Three Months Ended March 31, 2022$3,613 $664 $232 $4,509 
Three Months Ended March 31, 20213,342 545 230 4,117 
 Southern Company Gas' Revenues
Gas
Distribution
Operations
Wholesale
Gas
Services(*)
Gas
Marketing
Services		OtherTotal
(in millions)
Three Months Ended June 30, 2021$706 $(110)$64 $17 $677 
Three Months Ended June 30, 2020583 (19)56 16 636 
Six Months Ended June 30, 2021$1,898 $188 $259 $26 $2,371 
Six Months Ended June 30, 20201,596 32 233 24 1,885 
 Southern Company Gas' Revenues
Gas
Distribution
Operations
Wholesale
Gas
Services(*)
Gas
Marketing
Services		OtherTotal
(in millions)
Three Months Ended March 31, 2022$1,791 $— $243 $24 $2,058 
Three Months Ended March 31, 20211,192 298 195 9 1,694 
(*)ThePrior to the sale of Sequent, the revenues for wholesale gas services arewere netted with costs associated with its energy and risk management activities. See "Southern Company Gas" herein and Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Southern Company Gas
Southern Company Gas manages its business through 43 reportable segments – gas distribution operations, gas pipeline investments, wholesale gas services, and gas marketing services. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' reportable segments also included wholesale gas services. The non-reportable segments are combined and presented as all other. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K under "Southern Company Gas" for additional information on the disposition activities described herein.sale of Sequent.
Gas distribution operations is the largest component of Southern Company Gas' business and includes natural gas local distribution utilities that construct, manage, and maintain intrastate natural gas pipelines and gas distribution facilities in 4 states.
Gas pipeline investments consists of joint ventures in natural gas pipeline investments including a 50% interest in SNG a 20% ownership interest in the PennEast Pipeline project, and a 50% joint ownership interest in the Dalton Pipeline. These natural gas pipelines enable the provision of diverse sources of natural gas supplies to the customers of Southern Company Gas. Gas pipeline investments also includedincludes a 5%20% ownership interest in the Atlantic CoastPennEast Pipeline construction project, priorwhich was cancelled in September 2021. See Note 7 to its sale on March 24, 2020.the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
Wholesale gas services (until the sale of Sequent onThrough July 1, 2021)2021, wholesale gas services provided natural gas asset management and/or related logistics services for each of Southern Company Gas' utilities except Nicor Gas as well as for non-affiliated companies. The Virginia Natural Gas asset management agreement ended on March 31, 2021 and was not extended. Additionally, wholesale gas services engaged in natural gas storage and gas pipeline arbitrage and related activities. See Note (K) under "Southern Company Gas" for information regarding the sale of Sequent on July 1, 2021.
Gas marketing services provides natural gas marketing to end-use customers primarily in Georgia and Illinois through SouthStar.
The all other column includes segments and subsidiaries that fall below the quantitative threshold for separate disclosure, including storage and fuels operations. The all other column included Jefferson Island through its sale on December 1, 2020 and Pivotal LNG through its sale on March 24, 2020.
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NOTES TO THE CONDENSED FINANCIAL STATEMENTS (Continued)
(UNAUDITED)
Business segment financial data for the three and six months ended June 30,March 31, 2022 and 2021 and 2020 was as follows:
Gas Distribution OperationsGas Pipeline Investments
Wholesale Gas Services(a)
Gas Marketing ServicesTotalAll OtherEliminationsConsolidatedGas Distribution OperationsGas Pipeline Investments
Wholesale Gas Services(*)
Gas Marketing ServicesTotalAll OtherEliminationsConsolidated
(in millions)(in millions)
Three Months Ended June 30, 2021
Three Months Ended March 31, 2022Three Months Ended March 31, 2022
Operating revenuesOperating revenues$710 $8 $(110)$64 $672 $11 $(6)$677 Operating revenues$1,803 $8 $— $243 $2,054 $16 $(12)$2,058 
Segment net income (loss)(b)
Segment net income (loss)(b)
80 (36)(112)6 (62)(3)0 (65)
Segment net income (loss)(b)
214 29 — 66 309 10 — 319 
Six Months Ended June 30, 2021
Operating revenues$1,910 $16 $188 $259 $2,373 $18 $(20)$2,371 
Segment net income (loss)(b)
263 (7)14 62 332 1 0 333 
Total assets at June 30, 202120,245 1,492 807 1,486 24,030 11,300 (12,095)23,235 
Three Months Ended June 30, 2020
Total assets at
March 31, 2022
Total assets at
March 31, 2022
21,034 1,473 — 1,640 24,147 12,017 (12,787)23,377 
Three Months Ended March 31, 2021Three Months Ended March 31, 2021
Operating revenuesOperating revenues$587 $8 $(19)$56 $632 $8 $(4)$636 Operating revenues$1,200 $8 $298 $195 $1,701 $7 $(14)$1,694 
Segment net income (loss)Segment net income (loss)74 21 (23)5 77 (6)0 71 Segment net income (loss)183 29 126 56 394 4 — 398 
Six Months Ended June 30, 2020
Operating revenues$1,607 $16 $32 $233 $1,888 $16 $(19)$1,885 
Segment net income (loss)238 51 0 62 351 (5)0 346 
Total assets at December 31, 202019,090 1,597 850 1,503 23,040 11,336 (11,746)22,630 
Total assets at
December 31, 2021
Total assets at
December 31, 2021
20,917 1,467 31 1,556 23,971 12,114 (12,525)23,560 
(a)(*)TheAs a result of the sale of Sequent, wholesale gas services is no longer a reportable segment for the three months ended March 31, 2022. Prior to the sale of Sequent, the revenues for wholesale gas services arewere netted with costs associated with its energy and risk management activities. A reconciliation of operating revenues and intercompany revenues is shown in the following table.
Third Party Gross RevenuesIntercompany RevenuesTotal Gross RevenuesLess Gross Gas CostsOperating Revenues
(in millions)
Three Months Ended June 30, 2021$1,292 $27 $1,319 $1,429 $(110)
Three Months Ended June 30, 2020854 18 872 891 (19)
Six Months Ended June 30, 2021$3,881 $90 $3,971 $3,783 $188 
Six Months Ended June 30, 20202,039 47 2,086 2,054 32 
(b)For gas pipeline investments, includes a pre-tax impairment charge of $82 million ($58 million after tax) related to the equity method investment in the PennEast Pipeline project. See Notes (C) and (E) under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.
Third Party Gross RevenuesIntercompany RevenuesTotal Gross RevenuesLess Gross Gas CostsOperating Revenues
(in millions)
Three Months Ended March 31, 2021$2,588 $63 $2,651 $2,353 $298 
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Page
Combined Management's Discussion and Analysis of Financial Condition and Results of Operations
Overview
9887
Results of Operations
10188
Southern Company
10188
Alabama Power
11095
Georgia Power
11599
Mississippi Power
121103
Southern Power
125106
Southern Company Gas
129109
Future Earnings Potential
138115
Accounting Policies
142117
Financial Condition and Liquidity
143118
The following Management's Discussion and Analysis of Financial Condition and Results of Operations is a combined presentation; however, information contained herein relating to any individual Registrant is filed by such Registrant on its own behalf and each Registrant makes no representation as to information related to the other Registrants.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Southern Company is a holding company that owns all of the common stock of three traditional electric operating companies (Alabama Power, Georgia Power, and Mississippi Power), as well as Southern Power, and Southern Company Gas and owns other direct and indirect subsidiaries. The primary businesses of the Southern Company system are electricity sales by the traditional electric operating companies and Southern Power and the distribution of natural gas by Southern Company Gas. Southern Company's reportable segments are the sale of electricity by the traditional electric operating companies, the sale of electricity in the competitive wholesale market by Southern Power, and the sale of natural gas and other complementary products and services by Southern Company Gas. Southern Company Gas' reportable segments are gas distribution operations, gas pipeline investments, wholesale gas services (through June 30, 2021), and gas marketing services. Prior to the sale of Sequent on July 1, 2021, Southern Company Gas' reportable segments also included wholesale gas services. See Notes (K) andNote (L) to the Condensed Financial Statements herein for additional information on the sale of Sequent and segment reporting, respectively.reporting. For additional information on the Registrants' primary business activities and the sale of Sequent, see BUSINESS – "The Southern Company System" in Item 1 of the Form 10-K.10-K and Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K, respectively.
The Registrants continue to focus on several key performance indicators. For the traditional electric operating companies and Southern Company Gas, these indicators include, but are not limited to, customer satisfaction, plant availability, electric and natural gas system reliability, and execution of major construction projects. For Southern Power, these indicators include, but are not limited to, the equivalent forced outage rate and contract availability to evaluate operating results and help ensure its ability to meet its contractual commitments to customers. In addition, Southern Company and the Subsidiary Registrants focus on earnings per share and net income, respectively, as a key performance indicator.
Recent Developments
Georgia Power
Plant Vogtle Unit 3 and Common Facilities Rate Proceeding
On June 15, 2021, Georgia Power filed an application with the Georgia PSC to adjust retail base rates to include a portion of costs related to its investment in Plant Vogtle Unit 3 and common facilities shared between Plant Vogtle Units 3 and 4, as well as the related costs of operation. The request includes an annual rate increase totaling approximately $370 million to be effective the month after Unit 3 is placed in service, which will be partially offset by a decrease in the NCCR tariff of approximately $116 million expected to be effective January 1, 2022. In addition, an estimated $45 million of fuel cost savings related to Unit 3 is already incorporated in Georgia Power's current fuel cost recovery rates. The Georgia PSC is scheduled to issue a final order in this proceeding on November 2, 2021. The ultimate outcome of this matter cannot be determined at this time. See Note (B) to the Condensed Financial Statements under "Georgia Power – Plant Vogtle Unit 3 and Common Facilities Rate Proceeding" herein for additional information.
Plant Vogtle Units 3 and 4 Construction and Start-Up Status
Construction continues on Plant Vogtle Units 3 and 4 (with electric generating capacity of approximately 1,100 MWs each), in which Georgia Power currently holds a 45.7% ownership interest. Georgia Power's share of the total project capital cost forecast to complete Plant Vogtle Units 3 and 4, including contingency, through June 2022the end of the first quarter 2023 and Marchthe fourth quarter 2023, respectively, is $9.22$10.4 billion.
Fuel load for Unit 3 is projected during the third quarter or the fourth quarter 2022 with an in-service date projected during the fourth quarter 2022 or the first quarter 2023. Unit 3's projected schedule primarily depends on improvements in overall construction productivity and production levels, the volume and completion of construction remediation work, completion of work packages, including inspection records, and other documentation necessary to submit the remaining ITAACs and begin fuel load, the pace of system and area turnovers, and the progression of startup and other testing. An in-service date during the third quarter or the fourth quarter 2023 for Unit 4 is projected. Unit 4's projected schedule primarily depends on overall construction productivity and production levels improving as well as appropriate levels of craft laborers, particularly electricians and pipefitters, being added and maintained. Any further delays could result in later in-service dates.
Georgia Power estimatesand the productivity impactsother Vogtle Owners do not agree on the starting dollar amount for the determination of cost increases subject to the cost-sharing and tender provisions of the COVID-19 pandemic have consumed approximately three to four months of schedule margin previously embedded in the site work plan for Unit 3 and Unit 4. In addition, throughout 2020, the project continued to face challenges as describedGlobal Amendments (as defined in Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein. AsConstruction – Joint Owner Contracts" herein). The other Vogtle Owners have notified Georgia Power that they believe the current project capital cost forecast exceeds the cost-sharing thresholds and triggers the tender provisions under the Global Amendments. In October 2021, Georgia Power and the other Vogtle Owners entered into an agreement to clarify the process for the tender provisions of the Global Amendments to provide for a result of these factors, in January 2021, Southern Nuclear further extended certain milestone dates, includingdecision between 120 and 180 days after the start of hot functional testing and fuel load for Unit 3, from those established in October 2020.tender option is triggered, which the other Vogtle Owners assert occurred on February 14, 2022.
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Following the January 2021 milestone extensions, Southern Nuclear has been performing additional construction remediation work necessary to ensure quality and design standards are met as system turnovers are completed to support hot functional testing and fuel load for Unit 3. Hot functional testing for Unit 3 was completed in July 2021. As a result of challenges including, but not limited to, construction productivity, construction remediation work, the pace of system turnovers, spent fuel pool repairs, and the timeframe and duration for hot functional and other testing, at the end of the second quarter 2021, Southern Nuclear further extended certain milestone dates, including the fuel load for Unit 3, from those established in January 2021. The site work plan currently targets fuel load for Unit 3 in the fourth quarter 2021 and an in-service date of March 2022. As the site work plan includes minimal margin to these milestone dates, an in-service date in the second quarter 2022 for Unit 3 is projected, although any further delays could result in a later in-service date.
As the result of productivity challenges, at the end of the second quarter 2021, Southern Nuclear also further extended milestone dates for Unit 4 from those established in January 2021. The site work plan targets an in-service date of November 2022 and primarily depends on overall construction productivity and production levels significantly improving as well as appropriate levels of craft laborers, particularly electricians and pipefitters, being added and maintained. As the site work plan includes minimal margin to the milestone dates, an in-service date inDuring the first quarter 2023 for Unit 4 is projected, although any further delays could result in a later in-service date.
As of March 31, 2021, approximately $84 million of the2022, established construction contingency established in the fourth quarter 2020 was assigned to the base capital cost forecast for costs primarily associated with the schedule extension for Unit 3 to December 2021, construction productivity, support resources, and construction remediation work. Georgia Power increased its total capital cost forecast as of March 31, 2021 by adding $48 million to the remaining construction contingency. Considering the factors above, during the second quarter 2021, all of the remaining construction contingency previously established and an additional $341totaling $43 million was assigned to the base capital cost forecast for costs primarily associated with the schedule extensions for Units 3 and 4 described above, construction remediation work for Unit 3, and construction productivity, the pace of system turnovers, and support resources for Units 3 and 4. Georgia Power also increased its total capital cost forecast as of June 30, 2021 by adding $119 million to replenish construction contingency.
After considering the significant level of uncertainty that exists regarding the future recoverability of these costs since the ultimate outcome of these matters is subject to the outcome of future assessments by management, as well as Georgia PSC decisions in future regulatory proceedings, Georgia Power recorded pre-tax charges to income in the first quarter 2021 and the second quarter 2021 of $48 million ($36 million after tax) and $460 million ($343 million after tax), respectively, for the increases in the total project capital cost forecast. As and when these amounts are spent, Georgia Power may request the Georgia PSC to evaluate those expenditures for rate recovery.
The ultimate impact of the COVID-19 pandemic and other factorsthese matters on the construction schedule and budgetproject capital cost forecast for Plant Vogtle Units 3 and 4 cannot be determined at this time. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information.
Rate Plan
Georgia Power is required to file its next general base rate case by June 24, 2022. See Note 2 to the financial statements under "Georgia Power – Rate Plans" in Item 8 of the Form 10-K for additional information.
Mississippi Power
On AprilMarch 15, 2021,2022, Mississippi Power filedsubmitted its 2021 IRPannual retail PEP filing for 2022 to the Mississippi PSC, which requested a 1.9%, or approximately $18 million, annual increase in revenues. In accordance with the Mississippi PSC.PEP rate schedule, the rate increase became effective with the first billing cycle of April 2022, subject to refund. The filing includes a schedulerelated proceedings are expected to retire Plant Watson Unit 4 (268 MWs) and Mississippi Power's 40% ownership interestconclude in Plant Greene County Units 1 and 2 (103 MWs each) in December 2023, 2025, and 2026, respectively, consistent with each unit's remaining useful life insummer 2022; however, the most recent approved depreciation studies. In addition, the schedule reflects the early retirement of Mississippi Power's 50% undivided ownership interest in Plant Daniel Units 1 and 2 (502 MWs) by the end of 2027. If no deficiencies are noted that would require re-evaluation or resubmission of the IRP, the
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Mississippi PSC's review period will conclude on August 13, 2021. The ultimate outcome of this matter cannot be determined at this time.
During the first half of 2021, the Mississippi PSC approved the following rate changes related to Mississippi Power's annual rate filings for 2021:
•an annual increase in revenues related to the ad valorem tax adjustment factor of approximately $28 million, which became effective with the first billing cycle of May 2021,
•an annual increase in revenues related to PEP of approximately $16 million, or 1.8%, which became effective with the first billing cycle of April 2021 in accordance with the PEP rate schedule, and
•an annual decrease in revenues related to the ECO Plan of approximately $9 million, which became effective with the first billing cycle of July 2021.
See Note (B) to the Condensed Financial Statements under "Mississippi Power" herein for additional information.
Southern Power
During the sixthree months ended June 30, 2021,March 31, 2022, Southern Power continuedcompleted construction of and placed in service the 88-MW Garland and 72-MWremaining 40 MWs of the Tranquillity battery energy storage facilitiesfacility and the 118-MW Glass Sands windremaining 15 MWs of the Garland battery energy storage facility. On March 26, 2021, Southern Power purchased a controlling membership interest in the approximately 300-MW Deuel Harvest wind facility located in Deuel County, South Dakota from Invenergy Renewables, LLC. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.
At June 30, 2021,March 31, 2022, Southern Power's average investment coverage ratio for its generating assets, including those owned with various partners, based on the ratio of investment under contract to total investment using the respective generation facilities' net book value (or expected in-service value for facilities under construction) as the investment amount was 93%95% through 20252026 and 91%92% through 2030,2031, with an average remaining contract duration of approximately 1413 years.
Southern Company Gas
On April 28, 2021, Atlanta Gas Light filed its first Integrated Capacity and Delivery Plan (i-CDP) with the Georgia PSC, which includes a series of ongoing and proposed pipeline safety, reliability, and growth programs for the next 10 years, as well as the required capital investments and related costs to implement the programs. The Georgia PSC is scheduled to vote on this matter in November 2021.
On May 10, 2021,7, 2022, Virginia Natural Gas notified the Virginia State Corporation Commission staff, and other intervenors entered intoof its intent to file a stipulation agreement related to Virginia Natural Gas' June 2020 generalbase rate case filing, which allows for a $43 million increase in annual base rate revenues, including $14 million related to the recovery of investments under the SAVE program, based on a ROE of 9.5% and an equity ratio of 51.9%. On July 8, 2021, the hearing examiner issued a report recommending adoption of the stipulation agreement. The Virginia Commission is expected to rule on this matter by September 2021. Interim rate adjustments became effective as of November 1, 2020, subject to refund, based on Virginia Natural Gas' original request for an increase of approximately $50 million.
On July 21, 2021, Atlanta Gas Light filed its annual GRAM filing with the Georgia PSC requesting an annual base rate increase of $49 million. Resolution of the GRAM filing is expected by December 31, 2021, with the new rates to become effective January 1,third quarter 2022.
See Note (B) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information. The ultimate outcome of these mattersthis matter cannot be determined at this time.
During the second quarter 2021, Southern Company Gas recorded a pre-tax impairment charge of $82 million ($58 million after tax) related to its equity method investment in the PennEast Pipeline project. See Notes (C) and (E) to
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the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.
On July 1, 2021, Southern Company Gas affiliates completed the sale of Sequent to Williams Field Services Group for a total cash purchase price of $150 million, including estimated working capital adjustments. The preliminary gain associated with the transaction is approximately $90 million, which will be recorded in the third quarter 2021. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information.
RESULTS OF OPERATIONS
Southern Company
Net Income
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(240)(39.2)$281.9
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(103)(9.1)
Consolidated net income attributable to Southern Company was $372 million$1.0 billion ($0.350.97 per share) for the secondfirst quarter 20212022 compared to $612 million$1.1 billion ($0.581.07 per share) for the corresponding period in 2020.2021. The decrease was primarily due to a $232the first quarter 2021 net income of $126 million at Sequent, which was sold on July 1, 2021, and higher non-fuel operations and maintenance costs, partially offset by an increase in natural gas revenues from base rate increases and continued infrastructure replacement, an increase in retail electric revenues primarily from base tariff increases in accordance with Georgia Power's 2019 ARP, and a $36 million after-tax chargescharge in the first quarter 2021 related to the construction of Plant Vogtle Units 3 and 4 at Georgia Power and an after-tax impairment charge related to the PennEast Pipeline project at Southern Company Gas, partially offset by a decrease in after-tax leveraged lease impairment charges. The decrease was also due to higher non-fuel operations and maintenance costs, partially offset by higher retail electric revenues associated with rates and pricing and sales growth.
Consolidated net income attributable to Southern Company was $1.51 billion ($1.42 per share) for year-to-date 2021 compared to $1.48 billion ($1.40 per share) for the corresponding period in 2020. The increase was primarily due to increases in both natural gas revenues and retail electric revenues associated with colder weather in the first quarter 2021 as compared to the corresponding period in 2020, higher retail electric revenues associated with rates and pricing and sales growth, and higher wholesale electric capacity revenues, largely offset by higher non-fuel operations and maintenance costs and the net impact of the charges in the second quarter 2021 and 2020, as described previously.
Retail Electric Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$41713.1$68110.9
In the second quarter 2021, retail electric revenues were $3.6 billion compared to $3.2 billion for the corresponding period in 2020. For year-to-date 2021, retail electric revenues were $6.9 billion compared to $6.3 billion for the corresponding period in 2020.4.
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Retail Electric Revenues
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$2718.1
In the first quarter 2022, retail electric revenues were $3.6 billion compared to $3.3 billion for the corresponding period in 2021.
Details of the changes in retail electric revenues were as follows:
Second Quarter 2021Year-To-Date 2021 First Quarter 2022
(in millions)(% change)(in millions)(% change)(in millions)(% change)
Retail electric – prior yearRetail electric – prior year$3,182 $6,260 Retail electric – prior year$3,342 
Estimated change resulting from –Estimated change resulting from –Estimated change resulting from –
Rates and pricingRates and pricing112 3.5 %137 2.2 %Rates and pricing56 1.7 %
Sales growthSales growth86 2.7 72 1.2 Sales growth20 0.6 
WeatherWeather18 0.6 106 1.7 Weather16 0.5 
Fuel and other cost recoveryFuel and other cost recovery201 6.3 366 5.8 Fuel and other cost recovery179 5.3 
Retail electric – current yearRetail electric – current year$3,599 13.1 %$6,941 10.9 %Retail electric – current year$3,613 8.1 %
Revenues associated with changes in rates and pricing increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 20202021. The increase was primarily due to an increasebase tariff increases in Alabamaaccordance with Georgia Power's Rate RSE effective January 1, 2021 and increases at Georgia Power resulting from higher contributions by commercial and industrial customers with variable demand-driven pricing, higher pricing effects associated with decreased residential customer usage, and increased ECCR tariff revenues associated with higher KWH sales, partially offset by decreases in the NCCR tariff effective January 1, 2021.2019 ARP. See Note 2 to the financial statements under "Alabama"Georgia Power – Rate RSE"Plans" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction – Regulatory Matters" herein for additional information.
Revenues attributable to changes in sales increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 2020.2021. Weather-adjusted residential KWH sales decreased 2.0%1.1% and 0.4%weather-adjusted commercial KWH sales increased 1.9% in the secondfirst quarter and year-to-date 2021, respectively,2022 when compared to the corresponding periodsperiod in 2020 as customer usage decreased,2021 primarily due to shelter-in-place orders in effect during 2020,impacts on customer usage from increased activity outside the home following the expiration of COVID-19 restrictions. Increased customer growth partially offset by customer growth. Weather-adjustedthe decrease in residential KWH sales and contributed to the increase in commercial KWH sales. Industrial KWH sales increased 8.7% and 2.7%1.7% in the secondfirst quarter and year-to-date 2021, respectively, and industrial KWH sales increased 11.7% and 4.0% in the second quarter and year-to-date 2021, respectively,2022 when compared to the corresponding periodsperiod in 2020,2021 primarily due to strength in the negative impact of the COVID-19 pandemic on energy demand in 2020.pipeline segment.
Fuel and other cost recovery revenues increased $201 million and $366$179 million in the secondfirst quarter and year-to-date 2021, respectively,2022 compared to the corresponding periodsperiod in 20202021 primarily due to higher fuel and purchased power costs. Electric rates for the traditional electric operating companies include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of PPA costs, and do not affect net income. The traditional electric operating companies each have one or more regulatory mechanisms to recover other costs such as environmental and other compliance costs, storm damage, new plants, and PPA capacity costs.
Wholesale Electric Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$7415.7$20222.7
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$11921.8
In the first quarter 2022, wholesale electric revenues were $664 million compared to $545 million for the corresponding period in 2021. The increase was primarily due to a $117 million increase in energy revenues in the first quarter 2022 as a result of higher natural gas prices when compared to the corresponding period in 2021 and an increase in the volume of KWHs sold at Southern Power primarily associated with natural gas PPAs.
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Wholesale electric revenues consist of revenues from PPAs and short-term opportunity sales. Wholesale electric revenues from PPAs (other than solar and wind PPAs) have both capacity and energy components. Capacity revenues generally represent the greatest contribution to net income and are designed to provide recovery of fixed costs plus a return on investment. Energy revenues will vary depending on fuel prices, the market prices of wholesale energy compared to the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or
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decrease in fuel costs and do not have a significant impact on net income. Energy sales from solar and wind PPAs do not have a capacity charge and customers either purchase the energy output of a dedicated renewable facility through an energy charge or through a fixed price related to the energy. As a result, the ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors. Wholesale electric revenues at Mississippi Power include FERC-regulated municipal and rural association sales under cost-based tariffs as well as market-based sales. Short-term opportunity sales are made at market-based rates that generally provide a margin above the Southern Company system's variable cost to produce the energy.
Natural Gas Revenues
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$36421.5
In the secondfirst quarter 2021, wholesale electric2022, natural gas revenues were $546 million compared to $472 million for the corresponding period in 2020. For year-to-date 2021, wholesale electric revenues were $1.1$2.1 billion compared to $0.9$1.7 billion for the corresponding period in 2020. Increases in energy revenues of $51 million and $153 million for the second quarter and year-to-date 2021, respectively, reflect higher natural gas prices when compared to the corresponding periods in 2020. In addition, increases in capacity revenues of $23 million and $49 million for the second quarter and year-to-date 2021, respectively, primarily resulted from a power sales agreement at Alabama Power that began in September 2020 and new natural gas PPAs at Southern Power that began subsequent to the second quarter 2020.
Other Electric Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$74.2$268.1
For year-to-date 2021, other electric revenues were $346 million compared to $320 million for the corresponding period in 2020. The increase was primarily due to increases of $16 million in customer fees largely resulting from the COVID-19 pandemic-related temporary suspensions of disconnections and late fees in 2020 for the traditional electric operating companies, $5 million related to outdoor lighting sales at Georgia Power, and $3 million in transmission services.
Natural Gas Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$416.4$48625.8
In the second quarter 2021, natural gas revenues were $677 million compared to $636 million for the corresponding period in 2020. For year-to-date 2021, natural gas revenues were $2.4 billion compared to $1.9 billion for the corresponding period in 2020.2021.
Details of the changes in natural gas revenues were as follows:
Second Quarter 2021Year-To-Date 2021
(in millions)(% change)(in millions)(% change)
Natural gas revenues – prior year$636 $1,885 
Estimated change resulting from –
Infrastructure replacement programs and base rate changes41 6.4 %81 4.3 %
Gas costs and other cost recovery88 13.8 240 12.7 
Wholesale gas services(91)(14.3)156 8.3 
Other3 0.5 9 0.5 
Natural gas revenues – current year$677 6.4 %$2,371 25.8 %
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First Quarter 2022
(in millions)(% change)
Natural gas revenues – prior year$1,694 
Estimated change resulting from –
Infrastructure replacement programs and base rate changes86 5.1 %
Gas costs and other cost recovery544 32.1 
Gas marketing services18 1.1 
Wholesale gas services(297)(17.5)
Other13 0.7 
Natural gas revenues – current year$2,058 21.5 %
Revenues from infrastructure replacement programs and base rate changes at the natural gas distribution utilities increased in the secondfirst quarter and year-to-date 20212022 compared to the corresponding periodsperiod in 20202021 primarily due to rate increases at Atlanta Gas Light Virginia Natural Gas, and Chattanooga Gas and continued investment in infrastructure replacement. See Note 2 to the financial statements under "Southern Company Gas – Rate Proceedings" in Item 8 of the Form 10-K for additional information.
Revenues associated with gas costs and other cost recovery increased in the secondfirst quarter and year-to-date 20212022 compared to the corresponding periodsperiod in 20202021 primarily due to higher volumes of natural gas sold and higher natural gas cost recovery. Natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas and do not affect net income from the natural gas distribution utilities.
Revenues from gas marketing services increased in the first quarter 2022 compared to the corresponding period in 2021 primarily due to higher commodity prices and higher sales to commercial customers.
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The change in revenues related to Southern Company Gas' wholesale gas services business decreased in the second quarter 2021 compared to the corresponding period in 2020was due to derivative losses, partially offset by higher commercial activities. Revenues from wholesale gas services increased for year-to-date 2021 compared to the corresponding period in 2020 due to higher volumes sold and higher commercial activities as a result of Winter Storm Uri, partially offset by derivative losses. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for information regarding the sale of Sequent on July 1, 2021. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
Other Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$3924.1$7526.4
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(23)(14.5)
In the secondfirst quarter 2021,2022, other revenues were $201$136 million compared to $162$159 million for the corresponding period in 2020. For year-to-date 2021, other revenues were $359 million compared to $284 million for the corresponding period in 2020.2021. The increases for the second quarter and year-to-date 2021 weredecrease was primarily due to increases of $28a $14 million decrease at PowerSecure primarily related to distributed infrastructure and $38energy efficiency projects and a $6 million respectively,decrease in unregulated sales of productsassociated with power delivery construction and services at Alabama Power and Georgia Power and increases of $15 million and $32 million, respectively, in distributed infrastructuremaintenance projects at PowerSecure.Georgia Power.
Fuel and Purchased Power Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020 First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)(change in millions)(% change) (change in millions)(% change)
FuelFuel$227 36.6$439 34.9Fuel$263 31.0
Purchased powerPurchased power17 8.543 11.3Purchased power25 12.1
Total fuel and purchased power expensesTotal fuel and purchased power expenses$244 $482 Total fuel and purchased power expenses$288 
In the secondfirst quarter 2021,2022, total fuel and purchased power expenses were $1.1$1.3 billion compared to $0.8$1.1 billion for the corresponding period in 2020.2021. The increase was primarily the result of a $163 million increase in the average cost of fuel and purchased power and an $81 million net increase in the volume of KWHs generated and purchased.
For year-to-date 2021, total fuel and purchased power expenses were $2.1 billion compared to $1.6 billion for the corresponding period in 2020. The increase was primarily the result of a $322$247 million increase in the average cost of fuel and purchased power and a $160$41 million net increase in the volume of KWHs generated and purchased.
Fuel and purchased power energy transactions at the traditional electric operating companies are generally offset by fuel revenues and do not have a significant impact on net income. See Note 2 to the financial statements in Item 8 of the Form 10-K for additional information. Fuel expenses incurred under Southern Power's PPAs are generally the responsibility of the counterparties and do not significantly impact net income.
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Details of the Southern Company system's generation and purchased power were as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020First Quarter 2022First Quarter 2021
Total generation (in billions of KWHs)(a)
Total generation (in billions of KWHs)(a)
43418682
Total generation (in billions of KWHs)(a)
4643
Total purchased power (in billions of KWHs)
Total purchased power (in billions of KWHs)
4489
Total purchased power (in billions of KWHs)
44
Sources of generation (percent)(a) —
Sources of generation (percent)(a) —
Sources of generation (percent)(a) —
GasGas47554654Gas4646
CoalCoal22192319Coal2324
NuclearNuclear18121813Nuclear1717
HydroHydro4546Hydro65
Wind, Solar, and OtherWind, Solar, and Other9998Wind, Solar, and Other88
Cost of fuel, generated (in cents per net KWH)—
Cost of fuel, generated (in cents per net KWH)—
Cost of fuel, generated (in cents per net KWH)—
Gas(a)
Gas(a)
2.581.892.561.92
Gas(a)
3.532.55
CoalCoal2.872.962.852.92Coal3.112.82
NuclearNuclear0.750.780.750.78Nuclear0.720.75
Average cost of fuel, generated (in cents per net KWH)(a)
Average cost of fuel, generated (in cents per net KWH)(a)
2.281.792.271.82
Average cost of fuel, generated (in cents per net KWH)(a)
2.862.26
Average cost of purchased power (in cents per net KWH)(b)
Average cost of purchased power (in cents per net KWH)(b)
5.654.745.374.30
Average cost of purchased power (in cents per net KWH)(b)
5.585.10
(a)Second quarter and year-to-date 2021 excludesExcludes Central Alabama Generating Station KWHs and associated cost of fuel as its fuel is provided by the purchaser under a power sales agreement. See Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
(b)Average cost of purchased power includes fuel purchased by the Southern Company system for tolling agreements where power is generated by the provider.
Fuel
In the secondfirst quarter 2021,2022, fuel expense was $848 million$1.1 billion compared to $621 million$0.8 billion for the corresponding period in 2020.2021. The increase was primarily due to an 84.8% increase in the volume of KWHs generated by coal and a 36.5%38.4% increase in the average cost of natural gas per KWH generated, partially offset by an 8.6% decreasea 10.3% increase in the average cost of coal per KWH generated, and a 4.6% increase in the volume of KWHs generated by natural gas.
For year-to-date 2021, fuel expense was $1.7 billion compared to $1.3 billion for the corresponding period in 2020. The increase was primarily due to an 81.8%gas, partially offset by a 41.2% increase in the volume of KWHs generated by coal, a 27.6% decrease in the volume of KWHs generated by hydro, and a 33.3% increase in the average cost of natural gas per KWH generated, partially offset by an 8.9% decrease in the volume of KWHs generated by natural gas.hydro.
Purchased Power
In the secondfirst quarter 2021,2022, purchased power expense was $217$232 million compared to $200$207 million for the corresponding period in 2020.2021. The increase was primarily due to a 19.2%9.4% increase in the average cost per KWH purchased primarily due to higher natural gas prices partially offset byand a 4.5% decrease in the volume of KWHs purchased.
For year-to-date 2021, purchased power expense was $424 million compared to $381 million for the corresponding period in 2020. The4.6% increase was primarily due to a 24.9% increase in the average cost per KWH purchased primarily due to higher natural gas prices, partially offset by a 6.6% decrease in the volume of KWHs purchased.
Energy purchases will vary depending on demand for energy within the Southern Company system's electric service territory, the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, and the availability of the Southern Company system's generation.
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Cost of Natural Gas
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$8760.4$23139.6
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$51287.8
Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas and do not affect net income from
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the natural gas distribution utilities. Cost of natural gas at the natural gas distribution utilities represented 87%90% of total cost of natural gas for both the secondfirst quarter and year-to-date 2021.2022.
In the secondfirst quarter 2021,2022, cost of natural gas was $231 million$1.1 billion compared to $144 million$0.6 billion for the corresponding period in 2020.2021. The increase reflects higher gas cost recovery andas a 65.0%result of an 83.9% increase in natural gas prices in the secondfirst quarter 20212022 compared to the corresponding period in 2020.2021.
For year-to-date 2021, cost of natural gas was $814 million compared to $583 million for the corresponding period in 2020. The increase reflects higher volumes sold due to colder weather and higher gas cost recovery for year-to-date 2021 compared to the corresponding period in 2020. The increase also reflects a 50.6% increase in natural gas prices for year-to-date 2021 compared to the corresponding period in 2020.
Cost of Other Sales
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$2939.2$5643.4
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(13)(15.9)
In the secondfirst quarter 2021,2022, cost of other sales was $103$69 million compared to $74$82 million for the corresponding period in 2020. For year-to-date 2021, cost2021. The decrease was primarily due to decreases of other sales was $185$9 million compared to $129 million for the corresponding period in 2020. The increases for second quarter and year-to-date 2021at Georgia Power primarily relate to increases of $16 million and $23 million, respectively, inassociated with unregulated power delivery construction and maintenance projects at Georgia Power and $12$4 million and $22 million, respectively, inrelated to distributed infrastructure and energy efficiency projects at PowerSecure.
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$23519.5$31212.5
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$14410.5
In the secondfirst quarter 2022, other operations and maintenance expenses were $1.5 billion compared to $1.4 billion for the corresponding period in 2021. Excluding $48 million of expenses related to Sequent in 2021, other operations and maintenance expenses were $1.4 billion compared to $1.2 billion for the corresponding period in 2020.increased $192 million. The increase reflectswas primarily due to increases of $68 million in scheduled generation outage and maintenance expenses, $44$66 million in transmission and distribution expenses including $11primarily related to line maintenance, $58 million of reliability NDR credits at Alabama Power,in generation expenses primarily related to scheduled outage and maintenance, and $16 million in compliance and environmental expenses at Southern Company Gas passed through directly to customers, primarily related to bad debt.
Depreciation and Amortization
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$212.4
In the traditional electric operating companies. These increases reflect the impacts of cost containment activities implemented for 2020 during the COVID-19 pandemic. Also contributing to the increasefirst quarter 2022, depreciation and amortization was an increase of $46$892 million in compensation and benefit expenses.
For year-to-date 2021, other operations and maintenance expenses were $2.8 billion compared to $2.5 billion$871 million for the corresponding period in 2020.2021. The increase was primarily due to additional plant in service.
Taxes Other Than Income Taxes
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$277.8
In the first quarter 2022, taxes other than income taxes were $372 million compared to $345 million for the corresponding period in 2021. The increase primarily reflects increasesan increase in revenue tax expenses as a result of $58 millionhigher natural gas revenues at Nicor Gas and an increase in scheduled generation outage and maintenance expenses, $52 million in transmission and distribution expenses, including $22 million of reliability NDR creditsmunicipal franchise fees related to higher retail revenues at Alabama Power, and $15 million in compliance and environmental expenses at the traditional electric operating companies. These increases reflect the impacts of cost containment activities implemented forGeorgia Power.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
2020 during the COVID-19 pandemic. Also contributing to the increase was an increase of $101 million in compensation and benefit expenses and an $18 million decrease in nuclear property insurance refunds.
Depreciation and Amortization
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$182.1$321.8
In the second quarter 2021, depreciation and amortization was $891 million compared to $873 million for the corresponding period in 2020. For year-to-date 2021, depreciation and amortization was $1.8 billion compared to $1.7 billion for the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 primarily reflect increases of $42 million and $79 million, respectively, in depreciation associated with additional plant in service, partially offset by decreased amortization of regulatory assets related to CCR AROs of $22 million and $44 million, respectively, under the terms of Georgia Power's 2019 ARP. See Note (B) to the Condensed Financial Statements under "Georgia Power – Rate Plan" herein and Note 2 to the financial statements under "Georgia Power – Rate Plans – 2019 ARP" in Item 8 of the Form 10-K for additional information regarding Georgia Power's recovery of costs associated with CCR AROs.
Taxes Other Than Income Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$155.0$284.5
In the second quarter 2021, taxes other than income taxes were $313 million compared to $298 million for the corresponding period in 2020. The increase primarily reflects increases at Georgia Power of $9 million in property taxes primarily from higher assessed values, including the impact of Plant Vogtle Units 3 and 4 construction, and $7 million in municipal franchise fees largely related to higher retail revenues.
For year-to-date 2021, taxes other than income taxes were $657 million compared to $629 million for the corresponding period in 2020. The increase primarily reflects increases of $18 million in property taxes primarily from higher assessed values, including the impact of Plant Vogtle Units 3 and 4 construction, and $10 million in revenue tax expenses as a result of higher natural gas revenues at Southern Company Gas.
Estimated Loss on Plant Vogtle Units 3 and 4
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$311208.7$359240.9
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(48)N/M
N/M - Not meaningful
In the secondfirst quarter 2021, and 2020,a $48 million estimated probable lossesloss on Plant Vogtle Units 3 and 4 of $460 million and $149 million, respectively, werewas recorded at Georgia Power. For year-to-date 2021 and 2020, estimated probable losses on Plant Vogtle Units 3 and 4 of $508 million and $149 million, respectively, were recorded at Georgia Power. These losses reflectThe loss reflects revisions to the total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.
Gain on Dispositions, Net
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(21)(47.7)
In the first quarter 2022, gain on dispositions, net was $23 million compared to $44 million for the corresponding period in 2021. The first quarter 2022 amount includes $17 million in gains from sales of integrated transmission system assets at Georgia Power. The first quarter 2021 amount includes $39 million in gains at Southern Power primarily from contributions of wind turbine equipment to various equity method investments. See Note 15 to the financial statements under "Southern Power – Development Projects" in Item 8 of the Form 10-K for additional information.
Interest Expense, Net of Amounts Capitalized
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$122.7
In the first quarter 2022, interest expense, net of amounts capitalized was $462 million compared to $450 million for the corresponding period in 2021. The increase was primarily due to higher average outstanding borrowings, partially offset by lower interest rates on newly issued debt relative to the debt that was retired since the first quarter 2021.
Other Income (Expense), Net
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$87150.0
In the first quarter 2022, other income (expense), net was $145 million compared to $58 million for the corresponding period in 2021. The increase was primarily due to $75 million in charitable contributions at Southern Company Gas in the first quarter 2021 and a $13 million increase in non-service cost-related retirement benefits income. See Note (H) to the Condensed Financial Statements herein for additional information.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
(Gain) Loss on Dispositions, NetIncome Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$11N/M$1538.5
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(17)(8.9)
N/M - Not meaningful
In the secondfirst quarter 2021, gain on dispositions, net was $112022, income taxes were $173 million compared to an immaterial loss for the corresponding period in 2020. The increase primarily reflects $6 million in gains at Alabama Power primarily from property sales and a $5 million gain on the sale of Pivotal LNG at Southern Company Gas.
For year-to-date 2021, gain on dispositions, net was $54 million compared to $39$190 million for the corresponding period in 2020.2021. The increasedecrease was primarily reflects $39due to a decrease of $40 million in gains at Southern Power, primarily from contributionsCompany Gas' wholesale gas services business as a result of wind turbine equipment to various equity method investments, $10 million in gains at Alabama Power primarily from property sales, and a $6 million gain on the sale of Pivotal LNG at Southern Company Gas,Sequent on July 1, 2021, partially offset by a $39by $16 million gain at Southern Power related to the sale of Plant Mankatotax benefits in the first quarter 2020.
2021 resulting from new legislation that changed Southern Power's state apportionment methodology. See Note (E)(G) to the Condensed Financial Statements under "Southern Power" herein Note (K) to the Condensed Financial Statements under "Southern Power" and "Southern Company Gas" herein, and Note 15 to the financial statements under "Southern Power – Sales of Natural Gas and Biomass Plants" and "Southern Company Gas – Sale of Pivotal LNG and Atlantic Coast Pipeline" in Item 8 of the Form 10-K for additional information.
Allowance for Equity Funds Used During ConstructionNet Loss Attributable to Noncontrolling Interests
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1028.6$2232.4
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$1340.6
Substantially all noncontrolling interests relate to renewable projects at Southern Power. In the secondfirst quarter 2021, allowance for equity funds used during construction2022, net loss attributable to noncontrolling interests was $45 million compared to $35$32 million for the corresponding period in 2020. For year-to-date 2021, allowance for2021. The increased loss was primarily due to loss allocations to Southern Power's partners in the Garland and Tranquillity battery energy storage facilities and higher HLBV loss allocations to Southern Power's wind tax equity funds usedpartners, including new partnerships entered into during construction2021. The increased loss allocations were partially offset by higher income allocations to Southern Power's solar equity partners.
Alabama Power
Net Income
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(12)(3.3)
Alabama Power's net income after dividends on preferred stock in the first quarter 2022 was $90$347 million compared to $68$359 million for the corresponding period in 2020.2021. The increases weredecrease was primarily due to increases at Georgia Power, primarily associated withan increase in non-fuel operations and maintenance expenses, partially offset by an increase in retail revenues resulting from sales growth in the construction of Plant Vogtle Units 3 and 4. See Note (B)first quarter 2022 compared to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information regarding Plant Vogtle Units 3 and 4.corresponding period in 2021.
Earnings (Loss) from Equity Method InvestmentsRetail Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(70)N/M$(67)N/M
N/M - Not meaningful
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$272.0
In the secondfirst quarter 2021, loss from equity method investments was $40 million2022, retail revenues were $1.38 billion compared to earnings of $30 million$1.35 billion for the corresponding period in 2020. For year-to-date 2021, earnings from equity method investments were $5 million compared to $72 million for the corresponding period in 2020. The decreases were primarily due to a pre-tax impairment charge of $82 million in the second quarter 2021 related to the PennEast Pipeline project at Southern Company Gas. The decreases were partially offset by increases in investment income at Southern Holdings of $12 million and $17 million for the second quarter and year-to-date 2021, respectively. See Notes (C) and (E) to the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.2021.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Impairment of Leveraged Leases
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(147)N/M$(147)N/M
N/M - Not meaningful
In the second quarter 2021 and 2020, impairment charges of $7 million and $154 million, respectively, were recorded related to leveraged lease investments at Southern Holdings. See Note (K) to the Condensed Financial Statements under "Assets and Liabilities Held for Sale" herein and Note 3 to the financial statements under "Other Matters – Southern Company" in Item 8 of the Form 10-K for additional information.
Other Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$76.9$(37)(18.1)
In the second quarter 2021, other income (expense), net was $108 million compared to $101 million for the corresponding period in 2020. The increase was primarily due to a $36 million increase in non-service cost-related retirement benefits income, partially offset by $26 million in charitable contributions in the second quarter 2021 at Southern Company Gas.
For year-to-date 2021, other income (expense), net was $167 million compared to $204 million for the corresponding period in 2020. The decrease was primarily due to $101 million in charitable contributions at Southern Company Gas, partially offset by a $71 million increase in non-service cost-related retirement benefits income.
See Note (H) to the Condensed Financial Statements herein for additional information.
Income Taxes (Benefit)
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(17)N/M$2818.7
N/M - Not meaningful
In the second quarter 2021, income tax benefit was $12 million compared to income tax expense of $5 million for the corresponding period in 2020. The change was primarily due to lower pre-tax earnings, partially offset by the tax impact of the second quarter 2020 charge to earnings associated with a leveraged lease investment.
For year-to-date 2021, income taxes were $178 million compared to $150 million for the corresponding period in 2020. The increase was primarily due to the tax impact of the second quarter 2020 charge to earnings associated with a leveraged lease investment.
See Note (G) to the Condensed Financial Statements herein and Note 3 to the financial statements under "Other Matters – Southern Company" in Item 8 of the Form 10-K for additional information.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Alabama Power
Net Income
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$3311.1$11219.4
Alabama Power's net income after dividends on preferred stock for the second quarter 2021 was $331 million compared to $298 million for the corresponding period in 2020. Alabama Power's net income after dividends on preferred stock for year-to-date 2021 was $690 million compared to $578 million for the corresponding period in 2020. The increases were primarily due to an increase in retail revenues associated with a Rate RSE adjustment effective in January 2021 and higher customer usage, as well as additional wholesale capacity revenues related to a power sales agreement that began in September 2020. Also contributing to the year-to-date 2021 increase was colder weather in Alabama Power's service territory in the first quarter 2021 compared to the corresponding period in 2020. The second quarter and year-to-date 2021 increases were partially offset by an increase in operations and maintenance expenses and depreciation.
Retail Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$13110.7$27911.5
In the second quarter 2021, retail revenues were $1.35 billion compared to $1.22 billion for the corresponding period in 2020. For year-to-date 2021, retail revenues were $2.71 billion compared to $2.43 billion for the corresponding period in 2020.
Details of the changes in retail revenues were as follows:
Second Quarter 2021Year-To-Date 2021 First Quarter 2022
(in millions)(% change)(in millions)(% change)(in millions)(% change)
Retail – prior yearRetail – prior year$1,223 $2,427 Retail – prior year$1,352 
Estimated change resulting from –Estimated change resulting from –Estimated change resulting from –
Rates and pricingRates and pricing66 5.4 %116 4.8 %Rates and pricing— — %
Sales growthSales growth16 1.3 13 0.5 Sales growth14 1.0 
WeatherWeather3 0.2 42 1.7 Weather1 0.1 
Fuel and other cost recoveryFuel and other cost recovery46 3.8 108 4.5 Fuel and other cost recovery12 0.9 
Retail – current yearRetail – current year$1,354 10.7 %$2,706 11.5 %Retail – current year$1,379 2.0 %
Revenues associated withattributable to changes in rates and pricingsales increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 2020 primarily due to a Rate RSE increase effective January 1, 2021. See Note 2 to the financial statements under "Alabama Power – Rate RSE" in Item 8 of the Form 10-K for additional information.
Revenues attributable to changes inWeather-adjusted residential and commercial KWH sales increased 0.6% and 1.0%, respectively, in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 2020. Weather-adjusted residential2021 primarily due to customer growth. Industrial KWH sales decreased 3.9% and 2.0%increased 0.1% in the secondfirst quarter and year-to-date 2021, respectively,2022 when compared to the corresponding periodsperiod in 20202021 primarily due to safer-at-home guidelinesa recovering industrial class that continues to experience disruptions in effect during 2020. Weather-adjusted commercial KWH sales increased 7.8%supply chain and 2.8% in the second quarter and year-to-date 2021, respectively, and industrial KWH sales increased 10.0% and 1.8% in the second quarter and year-to-date 2021, respectively, when compared to the corresponding periods in 2020, primarily due to the negative impact of the COVID-19 pandemic on energy demand in 2020.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Fuel and other cost recovery revenues increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 20202021 primarily due to increases in generationthe volume of KWHs generated and the average cost of fuel.
Electric rates include provisions to recognize the recovery of fuel costs, purchased power costs, PPAs certificated by the Alabama PSC, and costs associated with the NDR. Under these provisions, fuel and other cost recovery revenues generally equal fuel and other cost recovery expenses and do not affect net income. See Note 2 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
Wholesale Revenues – Non-Affiliates
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$3157.4$6760.4
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$2223.9
In the first quarter 2022, wholesale revenues from sales to non-affiliates were $114 million compared to $92 million for the corresponding period in 2021. The increase was primarily due to a 16.2% increase in KWH sales as a result of cooler weather in the first quarter 2022 compared to the corresponding period in 2021, as well as a 6.0% increase in the price of energy due to higher natural gas prices.
Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Alabama Power's and the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are accompanied by an increase or decrease in fuel costs and do not affect net income. Short-term opportunity energy sales are also included in wholesale energy sales to non-affiliates. These opportunity sales are made at market-based rates that generally provide a margin above Alabama Power's variable cost to produce the energy.
In the second quarter 2021, wholesale revenues from sales
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Table of ContentsIndex to non-affiliates were $85 million compared to $54 million for the corresponding period in 2020. For year-to-date 2021, wholesale revenues from sales to non-affiliates were $178 million compared to $111 million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases consisted of increases in capacity revenues of $18 million and $35 million, respectively, primarily related to a power sales agreement that began in September 2020 and increases in energy revenues of $13 million and $32 million, respectively, primarily due to higher natural gas prices.Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Wholesale Revenues – Affiliates
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$17242.9$29111.5
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$33103.1
In the first quarter 2022, wholesale revenues from sales to affiliates were $65 million compared to $32 million for the corresponding period in 2021. The increase was primarily due to a 47.1% increase in the price of energy due to higher natural gas prices and a 40.3% increase in KWH sales as a result of increased generation demand as a result of cooler weather in the first quarter 2022 compared to the corresponding period in 2021.
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost and energy purchases are generally offset by energy revenues through Alabama Power's energy cost recovery clause.
In the second quarter 2021, wholesale revenues from sales to affiliates were $24 million compared to $7 million for the corresponding period in 2020. For year-to-date 2021, wholesale revenues from sales to affiliates were $55 million compared to $26 million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases were primarily due to increases of 133.8% and 50.1%, respectively, in the price of energy as a result of higher natural gas prices and increases of 51.9% and 43.5%, respectively, in KWH sales due to increased demand for Alabama Power's available lower cost generation compared to the corresponding periods in 2020.
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AND RESULTS OF OPERATIONS (Continued)
Other Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1214.8$2415.8
In the second quarter 2021, other revenues were $93 million compared to $81 million for the corresponding period in 2020. For year-to-date 2021, other revenues were $176 million compared to $152 million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases were primarily due to increases of $12 million and $15 million, respectively, in unregulated sales of products and services. In addition, the year-to-date 2021 increase included a $6 million increase in customer fees largely resulting from the COVID-19 pandemic-related temporary suspensions of disconnections and late fees in 2020.
Fuel and Purchased Power Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
First Quarter 2022 vs.
First Quarter 2021
(change in millions)(% change)(change in millions)(% change)(change in millions)(% change)
FuelFuel$64 32.2 $139 33.5 Fuel$42 14.4 
Purchased power – non-affiliatesPurchased power – non-affiliates(1)(2.0)8 9.0 Purchased power – non-affiliates17 34.0 
Purchased power – affiliatesPurchased power – affiliates9 30.0 20 40.8 Purchased power – affiliates(4)(13.3)
Total fuel and purchased power expensesTotal fuel and purchased power expenses$72 $167 Total fuel and purchased power expenses$55 
In the secondfirst quarter 2021,2022, total fuel and purchased power expenses were $350$426 million compared to $278$371 million for the corresponding period in 2020.2021. The increase was primarily due to a $42 million net increase related to the volume of KWHs generated and purchased and a $30$39 million increase in the average cost of fuel and purchased power.
For year-to-date 2021, total fuelpower and purchased power expenses were $720 million compared to $553 million for the corresponding period in 2020. The increase was primarily due to a $98$16 million increase related to the volume of KWHs generated and purchased and a $69 million increase in the average cost of fuel and purchased power.purchased.
Fuel and purchased power energy transactions do not have a significant impact on earnings, since energy expenses are generally offset by energy revenues through Alabama Power's energy cost recovery clause. See Note 2 to the financial statements under "Alabama Power – Rate ECR" in Item 8 of the Form 10-K for additional information.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Details of Alabama Power's generation and purchased power were as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020First Quarter 2022First Quarter 2021
Total generation (in billions of KWHs)(a)
Total generation (in billions of KWHs)(a)
13122826
Total generation (in billions of KWHs)(a)
1515
Total purchased power (in billions of KWHs)
Total purchased power (in billions of KWHs)
2233
Total purchased power (in billions of KWHs)
21
Sources of generation (percent)(a) —
Sources of generation (percent)(a) —
Sources of generation (percent)(a) —
CoalCoal43334533Coal4246
NuclearNuclear25322530Nuclear2525
GasGas22242022Gas1919
HydroHydro10111015Hydro1410
Cost of fuel, generated (in cents per net KWH) —
Cost of fuel, generated (in cents per net KWH) —
Cost of fuel, generated (in cents per net KWH) —
CoalCoal2.732.822.742.72Coal2.902.75
NuclearNuclear0.690.750.710.75Nuclear0.670.72
Gas(a)
Gas(a)
2.471.952.492.07
Gas(a)
3.452.51
Average cost of fuel, generated (in cents per net KWH)(a)
Average cost of fuel, generated (in cents per net KWH)(a)
2.101.852.121.86
Average cost of fuel, generated (in cents per net KWH)(a)
2.362.14
Average cost of purchased power (in cents per net KWH)(b)
Average cost of purchased power (in cents per net KWH)(b)
5.574.295.994.51
Average cost of purchased power (in cents per net KWH)(b)
6.826.52
(a)Second quarter and year-to-date 2021 excludesExcludes Central Alabama Generating Station KWHs and associated cost of fuel as its fuel is provided by the purchaser under a power sales agreement. See Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
(b)Average cost of purchased power includes fuel, energy, and transmission purchased by Alabama Power for tolling agreements where power is generated by the provider.
Fuel
In the secondfirst quarter 2021,2022, fuel expense was $263$333 million compared to $199$291 million for the corresponding period in 2020.2021. The increase was primarily due to a 44.6%37.5% increase in the average cost of natural gas per KWH generated, which excludes tolling agreements, and a 6.3% increase in the volume of KWHs generated by coal and a 26.7% increase in the average cost of KWHs generated by natural gas, which excludes tolling agreements.
For year-to-date 2021, fuel expense was $554 million compared to $415 million for the corresponding period in 2020. The increase was primarily due topartially offset by a 44.6%49.0% increase in the volume of KWHs generated by coal,hydro.
Purchased Power – Non-Affiliates
In the first quarter 2022, purchased power expense from non-affiliates was $67 million compared to $50 million for the corresponding period in 2021. The increase was primarily due to a 26.9% decrease29.9% increase in the volume of KWHs generated by hydro, andpurchased as a 20.3%result of cooler weather in 2022 compared to the corresponding period in 2021, as well as a 9.8% increase in the average cost of KWHs generated byper KWH purchased due to higher natural gas which excludes tolling agreements.prices.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.
Purchased Power – Affiliates
In the secondFor first quarter 2021,2022, purchased power expense from affiliates was $39$26 million compared to $30 million for the corresponding period in 2020. For year-to-date 2021, purchased power expense from affiliates2021. The decrease was $69 million compared to $49 million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases were primarily due to increases of 74.2% and 70.7%, respectively, in the average cost per KWH purchased as a result of higher natural gas prices, partially offset by decreases of 27.0% and 17.2%, respectively,17.7% decrease in the volume of KWHKWHs purchased as a result of increased generation compared to the corresponding periodsperiod in 2020.2021, partially offset by a 5.6% increase in the average cost per KWH purchased due to higher natural gas prices.
Energy purchases from affiliates will vary depending on demand for energy and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, as approved by the FERC.
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AND RESULTS OF OPERATIONS (Continued)
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$7120.8$8512.3
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$4813.3
In the secondfirst quarter 2021,2022, other operations and maintenance expenses were $413 $409 million compared to $342$361 million for the corresponding period in 2020.2021. The increase was primarily due to an increaseincreases of $36$26 million in generation expenses associated with scheduled outages and Rate CNP Compliance-related expenses primarily related to the addition of new environmental systems in 2021. These increases reflect the impacts of cost containment activities implemented for 2020 during the COVID-19 pandemic. Also contributing to the increase were increases of $17 million in compensation and benefit expenses and $5 million related to unregulated services, as well as $11 million of reliability NDR credits applied in 2020.
For year-to-date 2021, other operations and maintenance expenses were $775 million compared to $690 million for the corresponding period in 2020. The increase was primarily due to an increase of $34 million in generation expenses associated with scheduled outages and Rate CNP Compliance-related expenses primarily related to the addition of new environmental systems in 2021. These increases reflect the impacts of cost containment activities implemented for 2020 during the COVID-19 pandemic. Also contributing to the increase were increases of $17and $12 million in compensationtransmission and benefitdistribution expenses and $7 million related to unregulated services, as well as $22 million of reliability NDR credits applied in 2020 and a $10 million decrease in nuclear property insurance refunds. These increases were partially offset by gains of $10 million primarily related to property sales and an $8 million decrease in bad debt expense.
associated with line maintenance. See Note 2 to the financial statements under "Alabama Power – Rate NDR" and " – Rate CNP Compliance" in Item 8 of the Form 10-K for additional information.
Depreciation and Amortization
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$125.9$235.7
In the second quarter 2021, depreciation and amortization was $214 million compared to $202 million in the corresponding period in 2020. For year-to-date 2021, depreciation and amortization was $425 million compared to $402 million for the corresponding period in 2020. These increases were primarily due to additional plant in service, including the purchase of the Central Alabama Generating Station in August 2020. See Note 15 to the financial statements under "Alabama Power" in Item 8 of the Form 10-K for additional information.
Other Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$726.9$1429.2
In the second quarter 2021, other income (expense), net was $33 million compared to $26 million for the corresponding period in 2020. For year-to-date 2021, other income (expense), net was $62 million compared to $48 million for the corresponding period in 2020. These increases were primarily due to an increase in non-service cost-related retirement benefits income. The year-to-date 2021 increase was partially offset by a decrease in interest income associated with lower interest rates. See Note (H) to the Condensed Financial Statements herein for additional information.
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Income Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1111.8$3620.3
In the second quarter 2021, income taxes were $104 million compared to $93 million for the corresponding period in 2020. For year-to-date 2021, income taxes were $213 million compared to $177 million for the corresponding period in 2020. The increases were primarily due to higher pre-tax earnings.
Georgia Power
Net Income
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(165)(53.6)$(144)(22.6)
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$349.7
Georgia Power's net income forin the secondfirst quarter 20212022 was $143$385 million compared to $308$351 million for the corresponding period in 2020.2021. The decreaseincrease was primarily due to higher retail revenues primarily from base tariff increases in accordance with the 2019 ARP and a $232$36 million increaseafter-tax charge in after-tax chargesthe first quarter 2021 related to the construction of Plant Vogtle Units 3 and 4. Also contributing to the decrease was4, partially offset by higher non-fuel operations and maintenance costs, partially offset by higher retail revenues associated with sales growth and rates and pricing.
For year-to-date 2021, net income was $494 million compared to $638 million for the corresponding period in 2020. The decrease was primarily due to a $268 million increase in after-tax charges related to the construction of Plant Vogtle Units 3 and 4. Also contributing to the decrease was higher non-fuel operations and maintenance costs, partially offset by higher retail revenues associated with colder weather in the first quarter 2021 as compared to the corresponding period in 2020 and sales growth.
costs. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information regarding Plant Vogtle Units 3 and 4.
Retail Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$26615.1$37811.0
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$23012.9
In the secondfirst quarter 2021,2022, retail revenues were $2.03$2.02 billion compared to $1.76$1.79 billion for the corresponding period in 2020. For year-to-date 2021,2021.
Details of the changes in retail revenues were $3.81 billion compared to $3.44 billion for the corresponding period in 2020.as follows:
 First Quarter 2022
(in millions)(% change)
Retail – prior year$1,787 
Estimated change resulting from –
Rates and pricing53 3.0 %
Sales growth2 0.1 
Weather18 1.0 
Fuel cost recovery157 8.8 
Retail – current year$2,017 12.9 %
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Details of the changes in retail revenues were as follows:
 Second Quarter 2021Year-To-Date 2021
(in millions)(% change)(in millions)(% change)
Retail – prior year$1,760 $3,435 
Estimated change resulting from –
Rates and pricing38 2.2 %20 0.6 %
Sales growth64 3.6 59 1.7 
Weather18 1.0 59 1.7 
Fuel cost recovery146 8.3 240 7.0 
Retail – current year$2,026 15.1 %$3,813 11.0 %
Revenues associated with changes in rates and pricing increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 2020. These increases were2021. The increase was primarily due to higher contributions from commercial and industrial customersbase tariff increases in accordance with variable demand-driven pricing, pricing effects associated with decreased residential customer usage, and increased ECCR tariff revenues associated with higher KWH sales. The increases were partially offset by a decrease in the NCCR tariff effective January 1, 2021.2019 ARP. See Note (B)2 to the Condensed Financial Statementsfinancial statements under "Georgia Power – Nuclear Construction – Regulatory Matters" hereinRate Plans" in Item 8 of the Form 10-K for additional information.
Revenues attributable to changes in sales increased in the secondfirst quarter and year-to-date 2021 when compared to the corresponding periods in 2020. Weather-adjusted residential KWH sales decreased 0.8% in the second quarter 20212022 when compared to the corresponding period in 2020 as customer usage decreased, primarily due to shelter-in-place orders in effect during the second quarter 2020.2021. Weather-adjusted residential KWH sales decreased 2.3% and weather-adjusted commercial KWH sales increased 0.7% for year-to-date 20212.2% in the first quarter 2022 when compared to the corresponding period in 20202021 primarily due to the impacts on customer usage from increased activity outside the home following the expiration of COVID-19 restrictions. Increased customer growth partially offset by decreased customer usage, primarily duethe decrease in residential KWH sales and contributed to shelter-in-place ordersthe increase in effect during 2020. Weather-adjusted commercial KWH sales increased 9.0% and 2.6% in the second quarter and year-to-date 2021, respectively, and weather-adjustedsales. Weather-adjusted industrial KWH sales increased 14.0% and 7.3%3.6% in the secondfirst quarter and year-to-date 2021, respectively,2022 when compared to the corresponding periodsperiod in 2020,2021 primarily due to strength in the negative impact of the COVID-19 pandemic on energy demand in 2020.pipeline segment.
Fuel revenues and costs are allocated between retail and wholesale jurisdictions. Retail fuel cost recovery revenues increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 20202021 due to higher fuel and purchased power costs. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these fuel cost recovery provisions, fuel revenues generally equal fuel expenses and do not affect net income. See Note 2 to the financial statements under "Georgia Power – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.
Wholesale Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1144.0$2956.9
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$2353.5
In the first quarter 2022, wholesale revenues were $66 million compared to $43 million for the corresponding period in 2021. The increase was primarily due to increases of $18 million related to the average cost of fuel primarily due to higher natural gas and coal prices and $7 million in KWH sales associated with higher market demand as a result of cooler weather in the first quarter 2022 compared to the corresponding period in 2021, partially offset by a decrease of $4 million in capacity revenues from shared Southern Company power pool sales in accordance with the IIC.
Wholesale revenues from sales to non-affiliates consist of PPAs and short-term opportunity sales. Wholesale revenues from PPAs have both capacity and energy components. Wholesale capacity revenues from PPAs are recognized in amounts billable under the contract terms and provide for recovery of fixed costs and a return on investment. Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Georgia Power's and the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are
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accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. Short-term opportunity sales are made at market-based rates that generally provide a margin above Georgia Power's variable cost of energy.
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost.
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Other Revenues
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(15)(10.7)
In the secondfirst quarter 2021, wholesale2022, other revenues were $36$125 million compared to $25$140 million for the corresponding period in 2020. For year-to-date 2021, wholesale revenues were $80 million compared to $51 million for the corresponding period in 2020.2021. The increases for the second quarter and year-to-date 2021 weredecrease was primarily due to increasesdecreases of 4.3%$8 million resulting from the termination of a transmission service contract and 8.9%, respectively, in KWH sales as a result of higher market demand and higher natural gas prices.
Other Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$2014.0$3412.7
In the second quarter 2021, other revenues were $163$6 million compared to $143 million for the corresponding period in 2020. For year-to-date 2021, other revenues were $302 million compared to $268 million for the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 were primarily due to increases of $20 million and $30 million, respectively, in unregulated sales associated with power delivery construction and maintenance projects and $7 million and $8 million, respectively, in customer fees largely resulting from the COVID-19 pandemic-related temporary suspension of disconnections and late fees in 2020. These increases were partially offset by decreases of $5 million and $7 million in the second quarter and year-to-date 2021, respectively, associated with the timing of certain unregulated energy conservation projects.
Fuel and Purchased Power Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
First Quarter 2022 vs.
First Quarter 2021
(change in millions)(% change)(change in millions)(% change)(change in millions)(% change)
FuelFuel$117 51.8 $198 43.2 Fuel$106 33.9 
Purchased power – non-affiliatesPurchased power – non-affiliates11 8.3 26 9.9 Purchased power – non-affiliates6 4.2 
Purchased power – affiliatesPurchased power – affiliates27 22.1 34 13.5 Purchased power – affiliates70 51.5 
Total fuel and purchased power expensesTotal fuel and purchased power expenses$155 $258 Total fuel and purchased power expenses$182 
In the secondfirst quarter 2021,2022, total fuel and purchased power expenses were $636$775 million compared to $481$593 million for the corresponding period in 2020. For year-to-date 2021, total fuel and purchased power expenses were $1.23 billion compared to $0.97 billion for the corresponding period in 2020.2021. The increases for the second quarter and year-to-date 2021 wereincrease was due to increasesan increase of $108$133 million and $184 million, respectively, related to the average cost of fuel and purchased power and net increasesan increase of $47$49 million and $74 million, respectively, related to the volume of KWHs generated and purchased.
Fuel and purchased power energy transactions do not have a significant impact on earnings since these fuel expenses are generally offset by fuel revenues through Georgia Power's fuel cost recovery mechanism. See Note 2 to the financial statements under "Georgia Power – Fuel Cost Recovery" in Item 8 of the Form 10-K for additional information.
Details of Georgia Power's generation and purchased power were as follows:
First Quarter 2022First Quarter 2021
Total generation (in billions of KWHs)
1514
Total purchased power (in billions of KWHs)
87
Sources of generation (percent) —
Gas4647
Coal2522
Nuclear2427
Hydro and other54
Cost of fuel, generated (in cents per net KWH) —
Gas3.582.58
Coal3.412.91
Nuclear0.770.78
Average cost of fuel, generated (in cents per net KWH)
2.832.15
Average cost of purchased power (in cents per net KWH)(*)
4.814.22
(*)Average cost of purchased power includes fuel purchased by Georgia Power for tolling agreements where power is generated by the provider.
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Details of Georgia Power's generation and purchased power were as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
Total generation (in billions of KWHs)
15133025
Total purchased power (in billions of KWHs)
781416
Sources of generation (percent) —
Gas46564757
Nuclear28322730
Coal227227
Hydro and solar4546
Cost of fuel, generated (in cents per net KWH) —
Gas2.652.112.622.11
Nuclear0.800.810.790.80
Coal3.093.373.013.60
Average cost of fuel, generated (in cents per net KWH)
2.211.762.181.82
Average cost of purchased power (in cents per net KWH)(*)
4.773.584.493.36
(*)Average cost of purchased power includes fuel purchased by Georgia Power for tolling agreements where power is generated by the provider.
Fuel
In the secondfirst quarter 2021,2022, fuel expense was $343$419 million compared to $226$313 million for the corresponding period in 2020. For year-to-date 2021, fuel expense2021. The increase was $656 million compared to $458 million for the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 were primarily due to increases of 261.8%38.8% and 247.1%,17.2% in the average cost per KWH generated by natural gas and coal, respectively, and a 19.5% increase in the volume of KWHs generated by coal and increases of 25.6% and 24.2%, respectively, in the average cost of natural gas per KWH generated. The increase for year-to-date 2021 was partially offset by a 16.4% decrease in the average cost of coal per KWH generated.coal.
Purchased Power – Non-AffiliatesAffiliates
In the secondfirst quarter 2021,2022, purchased power expense from non-affiliatesaffiliates was $144$206 million compared to $133$136 million infor the corresponding period in 2020. For year-to-date 2021, purchased power expense from non-affiliates2021. The increase was $288 million compared to $262 million in the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 were primarily due to increasesan increase of 19.4% and 21.6%, respectively,25.7% in the average cost per KWH purchased primarily due to higher natural gas and coal prices partially offset by decreasesand an increase of 7.9% and 8.9%, respectively,18.3% in the volume of KWHs purchased as Georgia Power units generally dispatched at a lower cost than available market resources.
Energy purchases from non-affiliates will vary depending on the market prices of wholesale energy as compared to the cost of the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation.
Purchased Power – Affiliates
In the second quarter 2021, purchased power expense from affiliates was $149 million compared to $122 million in the corresponding period in 2020. For year-to-date 2021, purchased power expense from affiliates was $285 million compared to $251 million in the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 were primarily due to increases of 44.7% and 41.3%, respectively, in the average cost per KWH purchased primarily due to higher natural gas prices, partially offset by decreases of 15.2% and 19.1%, respectively, in the
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volume of KWHs purchased due to higherlower cost Southern Company system resources as compared to available Georgia Power-owned generation.
Energy purchases from affiliates will vary depending on the demand and the availability and cost of generating resources at each company within the Southern Company system. These purchases are made in accordance with the IIC or other contractual agreements, all as approved by the FERC.
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$7917.1$879.4
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$439.1
In the secondfirst quarter 2021,2022, other operations and maintenance expenses were $542$517 million compared to $463$474 million for the corresponding period in 2020.2021. The increase was primarily due to increases of $45 million in transmission and distribution expenses primarily associated with increases of $27 million related to distributionline maintenance activities, $14and $19 million in generation expenses associated withprimarily related to non-outage maintenance costs, and environmental projects, and $8 million in transmission overhead line costs. These increases reflect the impacts of cost containment activities implemented for 2020 during the COVID-19 pandemic. Also contributing to the increase were increases of $16 million related to unregulated power delivery construction and maintenance projects and $7 million in benefit expenses.
For year-to-date 2021, other operations and maintenance expenses were $1.02 billion compared to $0.93 billion for the corresponding period in 2020. The increase was primarily associated with increases of $27 million related to distribution maintenance activities, $9 million in transmission overhead line costs, and $8 million in generation environmental projects. These increases reflect the impacts of cost containment activities implemented for 2020 during the COVID-19 pandemic. Also contributing to the increase were increases of $23 million related to unregulated power delivery construction and maintenance projects and $10 million in benefit expenses, as well as an $8 million decrease in nuclear property insurance refunds, partially offset by $17 million in gains from sales of integrated transmission system assets and a decrease of $9 million reduction in expenses associatedbilling adjustments with the timing of certain unregulated energy conservation projects.integrated transmission system owners largely resulting from a terminated transmission service agreement.
Depreciation and Amortization
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(12)(3.4)$(27)(3.8)
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$133.8
In the secondfirst quarter 2021,2022, depreciation and amortization was $342$351 million compared to $354$338 million for the corresponding period in 2020. For year-to-date 2021, depreciation and amortization2021. The increase was $680primarily due to additional plant in service.
Taxes Other Than Income Taxes
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$97.8
In the first quarter 2022, taxes other than income taxes was $125 million compared to $707$116 million for the corresponding period in 2020.2021. The decreases for the second quarter and year-to-date 2021increase was primarily reflect decreased amortization of regulatory assetsdue to an increase in municipal franchise fees largely related to CCR AROs of $22 million and $44 million, respectively, under the terms of the 2019 ARP, partially offset by increases of $10 million and $20 million, respectively, in depreciation associated with additional plant in service. See Note (B) to the Condensed Financial Statements under "Georgia Power – Rate Plan" herein and Note 2 to the financial statements under "Georgia Power – Rate Plans – 2019 ARP" in Item 8 of the Form 10-K for additional information regarding recovery of costs associated with CCR AROs.higher retail revenues.
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Taxes Other Than Income Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$109.3$146.3
In the second quarter 2021, taxes other than income taxes was $118 million compared to $108 million for the corresponding period in 2020. For year-to-date 2021, taxes other than income taxes was $235 million compared to $221 million for the corresponding period in 2020. The increases for the second quarter and year-to-date 2021 were primarily due to increases of $7 million and $9 million, respectively, in municipal franchise fees largely related to higher retail revenues and increases of $3 million and $7 million, respectively, in property taxes primarily associated with the construction of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.
Estimated Loss on Plant Vogtle Units 3 and 4
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$311208.7$359240.9
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(48)N/M
N/M - Not meaningful
In the secondfirst quarter 2021, and 2020, Georgia Power recordeda $48 million estimated probable lossesloss on Plant Vogtle Units 3 and 4 of $460 million and $149 million, respectively. For year-to-date 2021 and 2020,was recorded at Georgia Power recorded estimated probable losses on Plant Vogtle Units 3 and 4 of $508 million and $149 million, respectively. These losses reflectPower. The loss reflects revisions to the total project capital cost forecast to complete construction and start-up of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" for additional information.
Allowance for Equity Funds Used During ConstructionOther Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1050.0$2152.5
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$922.0
In the secondfirst quarter 2021, allowance for equity funds used during construction2022, other income (expense), net was $30$50 million compared to $20$41 million for the corresponding period in 2020. For year-to-date 2021, allowance for equity funds used during construction2021. The increase was $61 million compared to $40 million for the corresponding period in 2020. The increases were primarily associated with the construction of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information regarding Plant Vogtle Units 3 and 4.
Other Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$1135.5$2031.7
In the second quarter 2021, other income (expense), net was $42 million compared to $31 million for the corresponding period in 2020. For year-to-date 2021, other income (expense), net was $83 million compared to $63 million for the corresponding period in 2020. The increases were primarily due to increases of $12$3 million in customer charges related to contributions in aid of construction and $25$3 million respectively, in non-service cost-related retirement benefits income. The increase for year-to-date 2021 was
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partially offset by a $5 million decrease in interest income due to lower short-term cash investments. See Note (H) to the Condensed Financial Statements herein for additional information on retirement benefits.
Income Taxes (Benefit)
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(61)N/M$(59)N/M
N/M - Not meaningful
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$1266.7
In the secondfirst quarter 2021,2022, income tax benefit was $50taxes were $30 million compared to income tax expense of $11$18 million for the corresponding period in 2020. For year-to-date 2021, income tax benefit2021. The increase was $32 million compared to income tax expense of $27 million for the corresponding period in 2020. The changes were primarily due to lowerthe reduction in pre-tax earnings in the first quarter 2021 resulting from higher charges in 2021 compared to the corresponding periods in 2020a charge associated with the construction of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements herein and Note 2 to the financial statements in Item 8 of the Form 10-K under "Georgia Power – Nuclear Construction" and Note (G) to the Condensed Financial Statements herein for additional information.
Mississippi Power
Net Income
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(1)(2.6)$1216.9
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(3)(6.7)
In the second quarter 2021,Mississippi Power's net income in the first quarter 2022 was $38$42 million compared to $39$45 million for the corresponding period in 2020.2021. The decrease was primarily due to an increase in operations and maintenance expenses, and income taxes, largely offset by an increase in revenues. base rates that became effective for the first billing cycle of April 2021 and higher customer usage in the second quarter 2021 when compared to the corresponding period in 2020.
For year-to-date 2021, net income was $83 million compared to $71 million for the corresponding period in 2020. The increase was primarily due to an increase in base revenues primarily due to colder weather in the first quarter 2021 as compared to the corresponding period in 2020, as well as an increase in other income.
Retail Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$2010.1$246.0
In the second quarter 2021, retail revenues were $219 million compared to $199 million for the corresponding period in 2020. For year-to-date 2021, retail revenues were $422 million compared to $398 million for the corresponding period in 2020.
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Retail Revenues
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$136.4
In the first quarter 2022, retail revenues were $217 million compared to $204 million for the corresponding period in 2021.
Details of the changes in retail revenues were as follows:
Second Quarter 2021Year-To-Date 2021 First Quarter 2022
(in millions)(% change)(in millions)(% change) (in millions)(% change)
Retail – prior yearRetail – prior year$199 $398 Retail – prior year$204 
Estimated change resulting from –Estimated change resulting from –Estimated change resulting from –
Rates and pricingRates and pricing8 4.0 %1 0.3 %Rates and pricing3 1.5 %
Sales growthSales growth6 3.0 — — Sales growth1 0.5 
WeatherWeather(3)(1.5)5 1.3 Weather(2)(1.0)
Fuel and other cost recoveryFuel and other cost recovery9 4.5 18 4.5 Fuel and other cost recovery11 5.4 
Retail – current yearRetail – current year$219 10.0 %$422 6.1 %Retail – current year$217 6.4 %
Revenues associated with changes in rates and pricing increased in the secondfirst quarter 20212022 when compared to the corresponding period in 20202021 primarily due to an increase in revenues in accordance with new PEP rates that became effective for the first billing cycle of April 2021. See Note (B)2 to the Condensed Financial Statementsfinancial statements under "Mississippi Power – Performance Evaluation Plan" hereinin Item 8 of the Form 10-K for additional information.
Revenues attributable to changes in sales increased in the secondfirst quarter 20212022 when compared to the corresponding period in 2020.2021. Weather-adjusted residential KWH sales decreased 1.9% and 1.3% in the second quarter and year-to-date 2021, respectively, when compared to the corresponding periods in 2020 as customer usage decreased, primarily due to shelter-in-place orders in effect during 2020. Weather-adjusted commercial KWH sales increased 9.0%0.8% and 2.4% in2.9%, respectively, in the secondfirst quarter and year-to-date 2021, respectively, and industrial KWH sales increased 7.2% in the second quarter 2021 when compared to the corresponding periods in 2020, primarily due to the negative impact of the COVID-19 pandemic on energy demand in 2020. Industrial KWH sales decreased 2.1% for year-to-date 20212022 when compared to the corresponding period in 2020 as a result of decreased2021 due to increased customer usage dueand customer growth. Industrial KWH sales decreased 0.1% in the first quarter 2022 when compared to continued disruptions of supply chain and business operations driven by the COVID-19 pandemic, as well as non-pandemic related customer outages.corresponding period in 2021.
Fuel and other cost recovery revenuesrevenues increased in the secondfirst quarter and year-to-date 20212022 when compared to the corresponding periodsperiod in 20202021 primarily as a result of higher recoverable fuel costs.costs. Recoverable fuel costs include fuel and purchased power expenses reduced by the fuel portion of wholesale revenues from energy sold to customers outside Mississippi Power's service territory. Electric rates include provisions to adjust billings for fluctuations in fuel costs, including the energy component of purchased power costs. Under these provisions, fuel revenues generally equal fuel expenses, including the energy component of purchased power costs, and do not affect net income.
Wholesale Revenues – Non-Affiliates
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$23.8$1413.6
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$57.9
In the first quarter 2022, wholesale revenues from sales to non-affiliates were $68 million compared to $63 million for the corresponding period in 2021. The increase was primarily due to higher fuel costs and customer usage.
Wholesale revenues from sales to non-affiliates will vary depending on fuel prices, the market prices of wholesale energy compared to the cost of Mississippi Power's and the Southern Company system's generation, demand for energy within the Southern Company system's electric service territory, and the availability of the Southern Company system's generation. Increases and decreases in energy revenues that are driven by fuel prices are
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accompanied by an increase or decrease in fuel costs and do not have a significant impact on net income. In addition, Mississippi Power provides service under long-term contracts with rural electric cooperative associations and municipalities located in southeastern Mississippi under cost-based electric tariffs which are subject to regulation by the FERC. See Note 2 to the financial statements under "Mississippi Power" in Item 8 of the Form 10-K for additional information.
Wholesale Revenues – Affiliates
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First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$927.3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
For year-to-date 2021,In the first quarter 2022, wholesale revenues from sales to non-affiliatesaffiliates were $117$42 million compared to $103$33 million for the corresponding period in 2020.2021. The increase was primarily due to higher fuel costs and an increase in revenue from MRA customers and opportunity sales asof $14 million associated with higher natural gas prices, partially offset by a resultdecrease of colder weather in the first quarter 2021.
Wholesale Revenues – Affiliates
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$——$1021.3
$4 million associated with lower KWH sales.
Wholesale revenues from sales to affiliated companies will vary depending on demand and the availability and cost of generating resources at each company. These affiliate sales are made in accordance with the IIC, as approved by the FERC. These transactions do not have a significant impact on earnings since this energy is generally sold at marginal cost.
In both the second quarter 2021 and 2020, wholesale revenues from sales to affiliates were $25 million. Wholesale revenues from sales to affiliates in the second quarter 2021 reflected a decrease of $11 million associated with lower KWH sales offset by an $11 million increase associated with higher natural gas prices when compared to the corresponding period in 2020.
For year-to-date 2021, wholesale revenues from sales to affiliates were $57 million compared to $47 million for the corresponding period in 2020. The increase was primarily due to a $20 million increase related to higher natural gas prices, partially offset by a $10 million decrease related to lower KWH sales.
Fuel and Purchased Power Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
First Quarter 2022 vs.
First Quarter 2021
(change in millions)(% change)(change in millions)(% change)(change in millions)(% change)
FuelFuel$8 9.6$30 18.5Fuel$26 24.5
Purchased powerPurchased power4 57.14 33.3Purchased power— —
Total fuel and purchased power expensesTotal fuel and purchased power expenses$12 $34 Total fuel and purchased power expenses$26 
In the secondfirst quarter 2021,2022, total fuel and purchased power expenses were $102$132 million compared to $90$106 million for the corresponding period in 2020.2021. The increase was primarily due to a $17$33 million increase in the average cost of fuel, partially offset by a $5$7 million decrease associated with the volume of KWHs generated and purchased.
For year-to-date 2021, total fuel and purchased power expenses were $208 million compared to $174 million for the corresponding period in 2020. The increase was primarily due to an increase in the average cost of fuel.
Fuel and purchased power energy transactions do not have a significant impact on earnings since energy expenses are generally offset by energy revenues through Mississippi Power's fuel cost recovery clause.
Details of Mississippi Power's generation and purchased power were as follows:
First Quarter 2022First Quarter 2021
Total generation (in millions of KWHs)
4,0744,324
Total purchased power (in millions of KWHs)
120121
Sources of generation (percent) –
Gas9291
Coal89
Cost of fuel, generated (in cents per net KWH) –
Gas3.302.41
Coal3.743.17
Average cost of fuel, generated (in cents per net KWH)
3.342.49
Average cost of purchased power (in cents per net KWH)
4.544.08
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
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Details of Mississippi Power's generation and purchased power were as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
Total generation (in millions of KWHs)
3,8134,4848,1378,651
Total purchased power (in millions of KWHs)
317208438396
Sources of generation (percent) –
Gas91969196
Coal9494
Cost of fuel, generated (in cents per net KWH) –
Gas2.501.882.451.92
Coal3.063.823.124.02
Average cost of fuel, generated (in cents per net KWH)
2.561.972.522.00
Average cost of purchased power (in cents per net KWH)
3.383.273.572.97
Fuel
In the secondfirst quarter 2021,2022, fuel expense was $91$132 million compared to $83$106 million for the corresponding period in 2020.2021. The increase was primarily due to a 93.4% increase in the volume of KWHs generated by coal and a 33.0%36.9% increase in the average cost of natural gas per KWH generated partially offset by a 21.0% decrease in the volume of KWHs generated by natural gas and a 19.9% decreasean 18.0% increase in the average cost of coal per KWH generated.
For year-to-date 2021, fuel expense was $192 million compared to $162 million for the corresponding period in 2020. The increase was due toKWHs generated, partially offset by a 146.5% increase16.9% decrease in the volume of KWHs generated by coal and a 27.6% increase in the average cost of natural gas per KWH generated, partially offset by a 22.4% decrease in the average cost of coal per KWH generated and a 12.5%6.1% decrease in the volume of KWHs generated by natural gas.
Purchased PowerOther Operations and Maintenance Expenses
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$811.8
In the secondfirst quarter 2021, purchased power expense was $112022, other operations and maintenance expenses were $76 million compared to $7$68 million for the corresponding period in 2020. For year-to-date 2021, purchased power expense was $16 million compared to $12 million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases reflect increases of 52.4% and 10.6%, respectively, in the volume of KWHs purchased and increases of 3.4% and 20.2%, respectively, in the average cost per KWH purchased primarily due to higher natural gas prices.
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$913.4$21.4
In the second quarter 2021, other operations and maintenance expenses were2021. $76 millionThe compared to $67 million for the corresponding period in 2020. The increase was primarily due to increases of $7$4 million associated with the Kemper County energy facility (primarily related to planned generation outage and baseline costsadditional dismantlement activities and $2 million related to compensation and benefit costs.
Other Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$583.3$642.9
In the second quarter 2021, other income (expense), net was $11 millionlower salvage proceeds in 2022 as compared to $6 million for the corresponding period in 2020. For year-to-date 2021, other income (expense), net was $20 million compared to $14
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million for the corresponding period in 2020. The second quarter and year-to-date 2021 increases were primarily related to increases of $3 million and $2 million, respectively, in contributions in aid of construction and $2 million2021) and $3 million respectively, in non-service cost-related retirement benefits income. See Note (H) to the Condensed Financial Statements herein for additional information.
Income Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$6N/M$450.0
N/M - Not meaningful
In the second quarter 2021, income taxes were $8 million compared to $2 million for the corresponding period in 2020. The increase was primarily due to a $4 million increase associated with the flowback of excess deferred income taxes as a result of the Mississippi Power Rate Case Settlementdistribution and a $1 million increase due to higher pre-tax earnings.
For year-to-date 2021, income taxes were $12 million compared to $8 million for the corresponding period in 2020. The increase was primarily due to higher pre-tax earnings.transmission operations and maintenance activities.
Southern Power
Net Income Attributable to Southern Power
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(27)(42.9)$(5)(3.6)
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(25)(25.8)
Net income attributable to Southern Power forin the secondfirst quarter 20212022 was $36$72 million compared to $63$97 million for the corresponding period in 2020. Net income attributable to Southern Power for year-to-date 20212021. The decrease was $133 million compared to $138 million for the corresponding period in 2020. The decreases were primarily due to an increasegains from the contributions of wind turbine equipment to various equity method investments in other operations and maintenance expenses associated with scheduled outages and maintenance. Partially offsetting the year-to-date 2021 decrease was a $16 million tax benefit due to changes in state apportionment methodology resulting from tax legislation enacted by the State of Alabama in Februaryfirst quarter 2021.
Operating Revenues
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$5111.6$11614.3
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$9922.5
Total operating revenues include PPA capacity revenues, which are derived primarily from long-term contracts involving natural gas facilities, and PPA energy revenues from Southern Power's generation facilities. To the extent Southern Power has capacity not contracted under a PPA, it may sell power into an accessible wholesale market, or, to the extent those generation assets are part of the FERC-approved IIC, it may sell power into the Southern Company power pool.
Natural Gas Capacity and Energy Revenue
Capacity revenues generally represent the greatest contribution to operating income and are designed to provide recovery of fixed costs plus a return on investment.
Energy is generally sold at variable cost or is indexed to published natural gas indices. Energy revenues will vary depending on the energy demand of Southern Power's customers and their generation capacity, as well as the market
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prices of wholesale energy compared to the cost of Southern Power's energy. Energy revenues also include fees for support services, fuel storage, and unit start charges. Increases and decreases in energy revenues under PPAs that are driven by fuel or purchased power prices are accompanied by an increase or decrease in fuel and purchased power costs and do not have a significant impact on net income.
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Solar and Wind Energy Revenue
Southern Power's energy sales from solar and wind generating facilities are predominantly through long-term PPAs that do not have capacity revenue. Customers either purchase the energy output of a dedicated renewable facility through an energy charge or pay a fixed price related to the energy generated from the respective facility and sold to the grid. As a result, Southern Power's ability to recover fixed and variable operations and maintenance expenses is dependent upon the level of energy generated from these facilities, which can be impacted by weather conditions, equipment performance, transmission constraints, and other factors.
See FUTURE EARNINGS POTENTIAL – "Southern Power's Power Sales Agreements" in Item 7 of the Form 10-K for additional information regarding Southern Power's PPAs.
Operating Revenues Details
Details of Southern Power's operating revenues were as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020First Quarter 2022First Quarter 2021
(in millions)(in millions)
PPA capacity revenuesPPA capacity revenues$96 $92 $192 $181 PPA capacity revenues$102 $96 
PPA energy revenuesPPA energy revenues296 270 541 475 PPA energy revenues345 245 
Total PPA revenuesTotal PPA revenues392 362 733 656 Total PPA revenues447 341 
Non-PPA revenuesNon-PPA revenues93 73 188 151 Non-PPA revenues84 95 
Other revenuesOther revenues5 4 9 7 Other revenues8 4 
Total operating revenuesTotal operating revenues$490 $439 $930 $814 Total operating revenues$539 $440 
In the secondfirst quarter 2021,2022, total operating revenues were $490$539 million, reflecting a $51$99 million, or 12%23%, increase from the corresponding period in 2020.2021. The increase in operating revenues was primarily due to the following:
•PPA capacity revenues increased $4$6 million, or 4%6%, primarily due to new natural gas PPAs which began subsequent to the second quarter 2020, and increased capacity onsales under existing contracts,natural gas PPAs, partially offset by the contractual expiration of natural gas PPAs.
•PPA energy revenues increased $26$100 million, or 10%41%, primarily due to a $31$59 million increase in sales fromunder existing natural gas facilitiesPPAs resulting from a $39$37 million increase in the price of fuel and purchased power partially offset by an $8and a $22 million decreaseincrease in the volume of KWHs sold. Also contributing to the increase was a $47 million increase in sales associated with new natural gas PPAs, partially offset by a $13 million decrease due to the contractual expiration of natural gas PPAs.
•Non-PPA revenues increased $20decreased $11 million, or 27%12%, primarily due to a $31 million increase in the market price of energy, partially offset by an $11$12 million decrease in the volume of KWHs sold through short-term sales.
Fuel and Purchased Power Expenses
Details of Southern Power's generation and purchased power were as follows:
 First Quarter 2022First Quarter 2021
(in billions of KWHs)
Generation11.09.4
Purchased power0.50.6
Total generation and purchased power11.510.0
Total generation and purchased power
(excluding solar, wind, fuel cells, and tolling agreements)
6.96.1
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For year-to-date 2021, total operating revenues were $930 million, reflecting a $116 million, or 14%, increase from the corresponding period in 2020. The increase in operating revenues was primarily due to the following:
•PPA capacity revenues increased $11 million, or 6%, primarily due to new natural gas PPAs, which began subsequent to the second quarter 2020, and increased capacity on existing contracts, partially offset by the disposition of Plant Mankato in the first quarter 2020 and the contractual expiration of natural gas PPAs.
•PPA energy revenues increased $66 million, or 14%, due to a $66 million increase in sales from natural gas facilities resulting from an $82 million increase in the price of fuel and purchased power, partially offset by a $16 million decrease in the volume of KWHs sold.
•Non-PPA revenues increased $37 million, or 25%, due to a $69 million increase in the market price of energy, partially offset by a $32 million decrease in the volume of KWHs sold through short-term sales.
Fuel and Purchased Power Expenses
Details of Southern Power's generation and purchased power were as follows:
 Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
(in billions of KWHs)
Generation10.311.319.722.0
Purchased power0.70.91.31.5
Total generation and purchased power11.012.221.023.5
Total generation and purchased power, excluding solar, wind, and tolling agreements6.37.412.414.5
Southern Power's PPAs for natural gas generation generally provide that the purchasers are responsible for either procuring the fuel (tolling agreements) or reimbursing Southern Power for substantially all of the cost of fuel relating to the energy delivered under such PPAs. Consequently, changes in such fuel costs are generally accompanied by a corresponding change in related fuel revenues and do not have a significant impact on net income. Southern Power is responsible for the cost of fuel for generating units that are not covered under PPAs. Power from these generating units is sold into the wholesale market or into the Southern Company power pool for capacity owned directly by Southern Power.
Purchased power expenses will vary depending on demand, availability, and the cost of generating resources throughout the Southern Company system and other contract resources. Load requirements are submitted to the Southern Company power pool on an hourly basis and are fulfilled with the lowest cost alternative, whether that is generation owned by Southern Power, an affiliate company, or external parties. Such purchased power costs are generally recovered through PPA revenues.
Details of Southern Power's fuel and purchased power expenses were as follows:
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
First Quarter 2022 vs.
First Quarter 2021
(change in millions)(% change)(change in millions)(% change) (change in millions)(% change)
FuelFuel$38 37.3$72 34.4Fuel$91 64.5
Purchased powerPurchased power7 38.914 43.8Purchased power1 5.0
Total fuel and purchased power expensesTotal fuel and purchased power expenses$45 $86 Total fuel and purchased power expenses$92 
In the secondfirst quarter 2021,2022, total fuel and purchased power expenses increased $45$92 million, or 38%57%, compared to the corresponding period in 2020. Fuel expense increased $38 million2021 primarily due to a $52$68 million increase in the average cost of fuel per KWH generated partially offset byand a $14$23 million decreaseincrease associated with the volume of KWHs generated.
Gain on Dispositions, Net
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(37)(94.9)
In the first quarter 2022, gain on dispositions, net was $2 million compared to $39 million for the corresponding period in 2021. The decrease primarily resulted from gains associated with contributions of wind turbine equipment to various equity method investments in the first quarter 2021. See Note 15 to the financial statements under "Southern Power – Development Projects" in Item 8 of the Form 10-K and Note (E) to the Condensed Financial Statements under "Southern Power" herein for additional information.
Net Loss Attributable to Noncontrolling Interests
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$1340.6
In the first quarter 2022, net loss attributable to noncontrolling interests was $45 million compared to $32 million for the corresponding period in 2021. The increased loss was primarily due to loss allocations to the partners in the Garland and Tranquillity battery energy storage facilities and higher HLBV loss allocations to wind tax equity partners, including new partnerships entered into during 2021. The increased loss allocations were partially offset by higher income allocations to solar equity partners.
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generated. Purchased power expense increased $7 million due to a $10 million increase associated with the average cost of purchased power, partially offset by a $3 million decrease associated with the volume of KWHs purchased.
For year-to-date 2021, total fuel and purchased power expenses increased $86 million, or 36%, compared to the corresponding period in 2020. Fuel expense increased $72 million due to a $102 million increase in the average cost of fuel per KWH generated, partially offset by a $30 million decrease associated with the volume of KWHs generated. Purchased power expense increased $14 million due to a $19 million increase associated with the average cost of purchased power, partially offset by a $5 million decrease associated with the volume of KWHs purchased.
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$3444.2$5535.3
In the second quarter 2021, other operations and maintenance expenses were $111 million compared to $77 million for the corresponding period in 2020. The increase was primarily due to increases of $20 million in scheduled outage and maintenance expenses and $4 million in expenses associated with new wind facilities placed in service in 2020 and 2021.
For year-to-date 2021, other operations and maintenance expenses were $211 million compared to $156 million for the corresponding period in 2020. The increase was primarily due to increases of $27 million in scheduled outage and maintenance expenses, $6 million in expenses associated with new wind facilities placed in service in 2020 and 2021, and $6 million related to the allocation of uncollected settlements by the Energy Reliability Council of Texas market as a result of Winter Storm Uri.
Depreciation and Amortization
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$119.1$125.0
In the second quarter 2021, depreciation and amortization was $132 million compared to $121 million for the corresponding period in 2020. For year-to-date 2021, depreciation and amortization was $251 million compared to $239 million for the corresponding period in 2020. The increases were primarily associated with new wind facilities placed in service in 2020 and 2021.
(Gain) Loss on Dispositions, Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$——$——
For year-to-date 2021, gains on dispositions totaled $39 million primarily from contributions of wind turbine equipment to various equity method investments in the first quarter 2021. A $39 million gain was also recorded in the first quarter 2020 related to the sale of Plant Mankato. See Notes (E) and (K) to the Condensed Financial
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Statements under "Southern Power" herein and Note 15 to the financial statements under "Southern Power – Sales of Natural Gas and Biomass Plants" in Item 8 of the Form 10-K for additional information.
Income Taxes (Benefit)
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(8)(133.3)$(24)(184.6)
In the second quarter 2021, income tax benefit was $2 million compared to income tax expense of $6 million for the corresponding period in 2020. The change was primarily due to lower pre-tax earnings.
For year-to-date 2021, income tax benefit was $11 million compared to income tax expense of $13 million for the corresponding period in 2020. The change was primarily due to changes in state apportionment methodology resulting from tax legislation enacted by the State of Alabama in February 2021 and the tax impact from the sale of Plant Mankato in January 2020.
See Note (G) to the Condensed Financial Statements herein, MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Income Tax Matters – Alabama State Tax Reform Legislation" in Item 7 of the Form 10-K, and Note 15 to the financial statements under "Southern Power" in Item 8 of the Form 10-K for additional information.
Southern Company Gas
Operating Metrics
Southern Company Gas continues to focus on several operating metrics, including Heating Degree Days, customer count, and volumes of natural gas sold.
Southern Company Gas measures weather and the effect on its business using Heating Degree Days. Generally, increased Heating Degree Days result in higher demand for natural gas on Southern Company Gas' distribution system. Southern Company Gas has various regulatory mechanisms, such as weather and revenue normalization and straight-fixed-variable rate design, which limit its exposure to weather changes within typical ranges in each of its utility's respective service territory. Southern Company Gas also utilizes weather hedges to limit the negative income impacts in the event of warmer-than-normal weather.
The number of customers served by gas distribution operations and gas marketing services can be impacted by natural gas prices, economic conditions, and competition from alternative fuels. Gas distribution operations and gas marketing services' customers are primarily located in Georgia and Illinois.
Southern Company Gas' natural gas volume metrics for gas distribution operations and gas marketing services illustrate the effects of weather and customer demand for natural gas. Wholesale gas services' physical sales volumes represent the daily average natural gas volumes sold to its customers.
Seasonality of Results
During the Heating Season, natural gas usage and operating revenues are generally higher as more customers are connected to the gas distribution systems and natural gas usage is higher in periods of colder weather. Prior to the sale of Sequent on July 1, 2021, wholesale gas services' operating revenues occasionally were impacted due to peak usage by power generators in response to summer energy demands. Southern Company Gas' base operating expenses, excluding cost of natural gas, bad debt expense, and certain incentive compensation costs, are incurred relatively evenly throughout the year. Seasonality also affects the comparison of certain balance sheet items across quarters, including receivables, unbilled revenues, natural gas for sale, and notes payable. However, these items are comparable when reviewing Southern Company Gas' annual results. Thus, Southern Company Gas' operating results for the interim periods presented are not necessarily indicative of annual results and can vary significantly from quarter to quarter.
Net Income
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(79)(19.8)
In the first quarter 2022, net income was $319 million compared to $398 million for the corresponding period in 2021. The first quarter 2021 results include $126 million of net income from Sequent, which was sold on July 1, 2021. Net income increased $31 million at gas distribution operations primarily due to base rate increases and continued investment in infrastructure replacement and $10 million at gas marketing services primarily related to higher commodity prices and higher sales to commercial customers. See Notes 2 and 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
Natural Gas Revenues, including Alternative Revenue Programs
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$36421.5
In the first quarter 2022, natural gas revenues, including alternative revenue programs, were $2.1 billion compared to $1.7 billion for the corresponding period in 2021.
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Net Income (Loss)
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(136)(191.5)$(13)(3.8)
In the second quarter 2021, net loss was $65 million compared to income of $71 million for the corresponding period in 2020. The decrease was primarily due to an $89 million decrease at wholesale gas services primarily due to an increase in derivative losses, partially offset by higher commercial activities, and an after-tax impairment charge of $58 million at gas pipeline investments related to the PennEast Pipeline project. These decreases were partially offset by a $6 million increase at gas distribution operations primarily due to base rate increases and continued investment in infrastructure replacement.
For year-to-date 2021, net income was $333 million compared to $346 million for the corresponding period in 2020. The decrease was primarily due to an after-tax impairment charge of $58 million at gas pipeline investments related to the PennEast Pipeline project, partially offset by a $25 million increase at gas distribution operations primarily due to base rate increases and continued investment in infrastructure replacement and a $14 million increase at wholesale gas services primarily due to higher commercial activities as a result of Winter Storm Uri, partially offset by derivative losses.
See Notes (C) and (E) to the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, as well as Note 2 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
Natural Gas Revenues, including Alternative Revenue Programs
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$416.4$48625.8
In the second quarter 2021, natural gas revenues, including alternative revenue programs, were $677 million compared to $636 million for the corresponding period in 2020. For year-to-date 2021, natural gas revenues, including alternative revenue programs, were $2.4 billion compared to $1.9 billion for the corresponding period in 2020.
Details of the changes in natural gas revenues, including alternative revenue programs, were as follows:
Second Quarter 2021Year-To-Date 2021First Quarter 2022
(in millions)(% change)(in millions)(% change)(in millions)(% change)
Natural gas revenues – prior yearNatural gas revenues – prior year$636 $1,885 Natural gas revenues – prior year$1,694 
Estimated change resulting from –Estimated change resulting from –Estimated change resulting from –
Infrastructure replacement programs and base rate changesInfrastructure replacement programs and base rate changes41 6.4 %81 4.3 %Infrastructure replacement programs and base rate changes86 5.1 %
Gas costs and other cost recoveryGas costs and other cost recovery88 13.8 240 12.7 Gas costs and other cost recovery544 32.1 
Gas marketing servicesGas marketing services18 1.1 
Wholesale gas servicesWholesale gas services(91)(14.3)156 8.3 Wholesale gas services(297)(17.5)
OtherOther3 0.5 9 0.5 Other13 0.7 
Natural gas revenues – current yearNatural gas revenues – current year$677 6.4 %$2,371 25.8 %Natural gas revenues – current year$2,058 21.5 %
Revenues from infrastructure replacement programs and base rate changeschanges increased in the secondfirst quarter and year-to-date 20212022 compared to the corresponding periodsperiod in 20202021 primarily due to rate increases at Atlanta Gas Light Virginia Natural Gas, and Chattanooga Gas and continued investment in infrastructure replacement. See Note 2 to the financial statements under "Southern Company Gas – Rate Proceedings" in Item 8 of the Form 10-K for additional information.
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Revenues associated with gas costs and other cost recovery increased in the secondfirst quarter and year-to-date 20212022 compared to the corresponding periodsperiod in 20202021 primarily due to higher volumes of natural gas sold and higher natural gas cost recovery. See "Cost of Natural Gas" herein for additional information. Revenue impacts from weather and customer growth are described further below.
Revenues from wholesale gas marketing services decreasedincreased in the secondfirst quarter 20212022 compared to the corresponding period in 20202021 primarily due to derivative losses, partially offset by higher commodity prices and higher sales to commercial activities. Revenues fromcustomers.
The change in revenues related to wholesale gas services increased for year-to-date 2021 compared to the corresponding period in 2020was due to higher volumes sold and higher commercial activities as a result of Winter Storm Uri, partially offset by derivative losses. See "Segment Information – Wholesale Gas Services" herein for additional information. Also see Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for information regarding the sale of Sequent on July 1, 2021. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
Southern Company Gas' natural gas distribution utilities have various regulatory mechanisms that limit their exposure to weather changes. Southern Company Gas also uses hedges for any remaining exposure to warmer-than-normal weather in Illinois for gas distribution operations and in Illinois and Georgia for gas marketing services; therefore, weather typically does not have a significant net income impact. The following table presents Heating Degree Days information for Illinois and Georgia, the primary locations where Southern Company Gas' operations are impacted by weather.
Second Quarter
2021
vs.
normal
2021
vs.
2020
Year-to-Date
2021
vs.
normal
2021
vs.
2020
First Quarter2022 vs. normal2022 vs. 2021
Normal(*)
20212020colder (warmer)(warmer)
Normal(*)
20212020(warmer)colder
Normal(*)
20222021colder (warmer)
(in thousands)(in thousands)(in thousands)
IllinoisIllinois657 634 736 (3.5)%(13.9)%3,681 3,580 3,495 (2.7)%2.4 %Illinois2,999 3,007 2,947 0.3 %2.0 %
GeorgiaGeorgia125 142 188 13.6 %(24.5)%1,451 1,396 1,279 (3.8)%9.1 %Georgia1,302 1,251 1,254 (3.9)%(0.2)%
(*)Normal represents the 10-year averageaverage from January 1, 20112012 through June 30, 2020March 31, 2021 for Illinois at Chicago Midway International Airport and for Georgia at Atlanta Hartsfield-Jackson International Airport, based on information obtained from the National Oceanic and Atmospheric Administration, National Climatic Data Center.
The following table provides the number of customers served by Southern Company Gas at June 30, 2021 and 2020:
June 30,
202120202021 vs. 2020
(in thousands, except market share %)(% change)
Gas distribution operations4,300 4,275 0.6 %
Gas marketing services
Energy customers(*)
612 671 (8.8)%
Market share of energy customers in Georgia29.1 %29.0 %0.3 %
(*)Gas marketing services' customers are primarily located in Georgia and Illinois. June 30, 2020 also includes approximately 50,000 customers in Ohio contracted through an annual auction process to serve for 12 months beginning April 1, 2020.
Southern Company Gas anticipates continued customer growth as it expects continued low natural gas prices. Southern Company Gas uses a variety of targeted marketing programs to attract new customers and to retain existing customers.
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The following table provides the number of customers served by Southern Company Gas at March 31, 2022 and 2021:
March 31,
202220212022 vs. 2021
(in thousands, except market share %)(% change)
Gas distribution operations4,358 4,335 0.5 %
Gas marketing services
Energy customers(*)
598 667 (10.3)%
Market share of energy customers in Georgia28.7 %28.9 %
(*)Gas marketing services' customers are primarily located in Georgia and Illinois. March 31, 2021 also includes approximately 50,000 customers in Ohio contracted through an annual auction process to serve for 12 months beginning April 1, 2020.
Southern Company Gas anticipates customer growth and uses a variety of targeted marketing programs to attract new customers and to retain existing customers.
Cost of Natural Gas
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$8760.4$23139.6
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$51287.8
Excluding Atlanta Gas Light, which does not sell natural gas to end-use customers, natural gas distribution rates include provisions to adjust billings for fluctuations in natural gas costs. Therefore, gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas and do not affect net income from gas distribution operations. Cost of natural gas at gas distribution operations represented 87% represented 90%of the total cost of natural gas for bothin the secondfirst quarter and year-to-date 2021.2022. See MANAGEMENT'S DISCUSSION AND ANALYSIS – RESULTS OF OPERATIONS – "Southern Company Gas – Cost of Natural Gas" in Item 7 of the Form 10-K and "Natural Gas Revenues, including Alternative Revenue Programs" herein for additional information.
In the secondfirst quarter 2021,2022, cost of natural gas was $231 million compared to $144 million for the corresponding period in 2020. The increase reflects higher gas cost recovery and a 65.0% increase in natural gas prices in the second quarter 2021 compared to the corresponding period in 2020.
For year-to-date 2021, cost of natural gas was $814 million$1.1 billion compared to $583 million for the corresponding period in 2020. 2021. The increase reflects higher volumes sold due to colder weather and higher gas cost recovery for year-to-date 2021as a result of an 83.9% increase in natural gas prices in the first quarter 2022 compared to the corresponding period in 2020. The increase also reflects a 50.6% increase in natural gas prices for year-to-date 2021 compared to the corresponding period in 2020.
The following table details the volumes of natural gas sold during all periods presented.
Second Quarter2021 vs. 2020Year-to-Date2021 vs. 2020
2021202020212020
Gas distribution operations (mmBtu in millions)
Firm103 100 3.0 %391 357 9.5 %
Interruptible23 21 9.5 50 45 11.1 
Total126 121 4.1 %441 402 9.7 %
Wholesale gas services (mmBtu in millions/day)
Daily physical sales6.1 6.4 (4.7)%6.6 6.6 — %
Gas marketing services (mmBtu in millions)
Firm:
Georgia4 4 — %23 18 27.8 %
Illinois1 1 — 5 6 (16.7)
Other2 3 (33.3)8 7 14.3 
Interruptible large commercial and industrial3 3 — 7 7 — 
Total10 11 (9.1)%43 38 13.2 %
Other Operations and Maintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$135.9$5311.1
In the second quarter 2021, other operations and maintenance expenses were $233 million compared to $220 million for the corresponding period in 2020. For year-to-date 2021, other operations and maintenance expenses were $532 million compared to $479 million for the corresponding period in 2020. The increases were primarily2021.
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due to higher compensation expenses, primarily related to an increase in variable compensation atThe following table details the volumes of natural gas sold during all periods presented.
First Quarter2022 vs. 2021
20222021
Gas distribution operations (mmBtu in millions)
Firm304 288 5.6 %
Interruptible25 26 (3.8)
Total329 314 4.8 %
Wholesale gas services (mmBtu in millions/day)
Daily physical sales(*)
— 7.1 (100.0)%
Gas marketing services (mmBtu in millions)
Firm:
Georgia16 19 (15.8)%
Illinois3 4 (25.0)
Other4 6 (33.3)
Interruptible large commercial and industrial4 4 — 
Total27 33 (18.2)%
(*)As a result of the sale of Sequent, wholesale gas services.services had no sales in the first quarter 2022. See Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
DepreciationOther Operations and AmortizationMaintenance Expenses
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$108.1$208.2
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$62.0
In the second first quarter 2021, depreciation2022, other operations and amortization was $133maintenance expenses were $305 million compared to $123$299 million for the corresponding period in 2020. For year-to-date2021.Excluding $48 million of expenses related to Sequent in 2021, other operations and maintenance expenses increased approximately $54 million. The increase was primarily due to increases of $18 million in compensation and benefit expenses, $16 million in expenses passed through directly to customers primarily related to bad debt at distribution operations, and $6 million in customer account expenses.
Depreciation and Amortization
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$75.4
In the first quarter 2022, depreciation and amortization was $263$137 million compared to $243$130 million for the corresponding period in 2020.2021. The increases wereincrease was primarily due to continued infrastructure investments at the natural gas distribution utilities.
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Taxes Other Than Income Taxes
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$24.3$1210.2
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$1923.5
In the secondfirst quarter 2021,2022, taxes other than income taxes were $49$100 million compared to $47$81 million for the corresponding period in 2020. For year-to-date 2021, taxes other than income taxes were $130 million compared to $118 million for the corresponding period in 2020.2021. The increasesincrease primarily reflectreflects an increase in revenue tax expenses as a result of higher natural gas revenues at Nicor Gas. These revenue tax expenses are passed directly to customers and have no impact on net income.
Earnings (Loss) from Equity Method Investments
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(82)(273.3)$(83)(115.3)
In the second quarter 2021, loss from equity method investments was $52 million compared to earnings of $30 million for the corresponding period in 2020. For year-to-date 2021, loss from equity method investments was $11 million compared to earnings of $72 million for the corresponding period in 2020. The decreases were primarily due to a pre-tax impairment charge of $82 million recorded in the second quarter 2021 related to the PennEast Pipeline project. See Notes (C) and (E) to the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.
Other Income (Expense), Net
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(26)(216.7)$(99)(471.4)
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$79125.4
In the secondfirst quarter 2021,2022, other income (expense), net was $1416 million of income compared to $63 million of expense compared to $12 million of income for the correspondingcorresponding period in 2020. For year-to-date 2021, other income (expense), net2021. The change was $78 million of expense compared to $21 million of income for the corresponding period in 2020. The increases in other expense were primarilylargely due to charitable contributions of $26 million and $101$75 million in the secondfirst quarter and year-to-date 2021, respectively.2021.
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Income Taxes (Benefit)
Second Quarter 2021 vs. Second Quarter 2020Year-To-Date 2021 vs. Year-To-Date 2020
(change in millions)(% change)(change in millions)(% change)
$(45)(281.3)$(3)(3.2)
First Quarter 2022 vs. First Quarter 2021
(change in millions)(% change)
$(24)(19.8)
In the second first quarter 2021,2022, income tax benefit wastaxe $29s were $97 million compared to income tax expense of $16$121 million for the corresponding period in 2020.2021. The changedecrease was primarily the resultprimarily due to a decrease of a pre-tax impairment charge at gas pipeline investments related to the PennEast Pipeline project and a pre-tax loss$40 million at wholesale gas services in the second quarterincluding Sequent, which was sold on July 1, 2021,. For year-to-date 2021, income taxes were $92 million compared to $95 million for the corresponding period in 2020. The pre-tax impairment charge at gas pipeline investments was largely partially offset by higher pre-tax earnings at wholesale gas services and gas distribution operations. See Notes (C) and (E) tofrom the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.other segments.
Performance and Non-GAAP Measures
Adjusted operating margin is a non-GAAP measure that is calculated as operating revenues less cost of natural gas, cost of other sales, and revenue tax expense. Adjusted operating margin excludes other operations and maintenance expenses, depreciation and amortization, and taxes other than income taxes, which are included in the calculation of operating income as calculated in accordance with GAAP and reflected in the statements of income. The presentation of adjusted operating margin is believed to provide useful information regarding the contribution resulting from base rate changes, infrastructure replacement programs and capital projects, and customer growth at gas distribution operations since the cost of natural gas and revenue tax expense can vary significantly and are generally billed directly to customers. Southern Company Gas further believes that utilizing adjusted operating margin at gas pipeline investments, wholesale gas services, and gas marketing services allows it to focus on a direct measure of performance before overhead costs. The applicable reconciliation of operating income to adjusted operating margin is provided herein.
Adjusted operating margin should not be considered an alternative to, or a more meaningful indicator of, Southern Company Gas' operating performance than operating income as determined in accordance with GAAP. In addition, Southern Company Gas' adjusted operating margin may not be comparable to similarly titled measures of other companies.
Detailed variance explanations of Southern Company Gas' financial performance are provided herein.
Reconciliations of operating income to adjusted operating margin are as follows:
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
(in millions)
Operating Income$31 $102 $632 $462 
Other operating expenses(a)
415 390 925 840 
Revenue taxes(b)
(22)(22)(75)(67)
Adjusted Operating Margin$424 $470 $1,482 $1,235 
(a)Includes other operations and maintenance, depreciation and amortization, and taxes other than income taxes.
(b)Nicor Gas' revenue tax expenses, which are passed through directly to customers.
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Segment Information
Adjusted operating margin,Operating revenues, operating expenses, and net income (loss) for each segment are provided in the table below. See Note (L) to the Condensed Financial Statements under "Southern Company Gas" herein for additional information.
Second Quarter 2021Second Quarter 2020 First Quarter 2022First Quarter 2021
 Adjusted Operating Margin(*)
Operating Expenses(*)
Net Income (Loss)
Adjusted Operating Margin(*)
Operating Expenses(*)
Net Income (Loss) Operating RevenuesOperating ExpensesNet Income (Loss)Operating RevenuesOperating ExpensesNet Income (Loss)
(in millions)(in millions)(in millions)(in millions)
Gas distribution operationsGas distribution operations$486 $340 $80 $441 $314 $74 Gas distribution operations$1,803 $1,475 $214 $1,200 $913 $183 
Gas pipeline investmentsGas pipeline investments8 3 (36)8 3 21 Gas pipeline investments8 3 29 8 3 29 
Wholesale gas services(110)11 (112)(19)11 (23)
Wholesale gas services(*)
Wholesale gas services(*)
— — — 298 56 126 
Gas marketing servicesGas marketing services35 25 6 35 28 5 Gas marketing services243 150 66 195 120 56 
All otherAll other6 15 (3)7 14 (6)All other16 21 10 7 15 4 
Intercompany eliminationsIntercompany eliminations(1)(1)— (2)(2)— Intercompany eliminations(12)(12)— (14)(14)— 
ConsolidatedConsolidated$424 $393 $(65)$470 $368 $71 Consolidated$2,058 $1,637 $319 $1,694 $1,093 $398 
(*)Adjusted operating margin and operating expenses are adjustedAs a result of the sale of Sequent, wholesale gas services is no longer a reportable segment for Nicor Gas' revenue tax expenses, which are passed through directlythe first quarter 2022. See Note 15 to customers.the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
 Year-To-Date 2021Year-To-Date 2020
 Adjusted Operating Margin(*)
Operating Expenses(*)
Net Income (Loss)
Adjusted Operating Margin(*)
Operating Expenses(*)
Net Income (Loss)
(in millions)(in millions)
Gas distribution operations$1,130 $697 $263 $1,036 $654 $238 
Gas pipeline investments16 6 (7)16 6 51 
Wholesale gas services187 66 14 31 28 — 
Gas marketing services139 54 62 142 58 62 
All other13 30 1 13 30 (5)
Intercompany eliminations(3)(3)— (3)(3)— 
Consolidated$1,482 $850 $333 $1,235 $773 $346 
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(*)
Adjusted operating margin and operating expenses are adjusted for Nicor Gas' revenue tax expenses, which are passed through directly to customers.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Gas Distribution Operations
Gas distribution operations is the largest component of Southern Company Gas' business and is subject to regulation and oversight by regulatory agencies in each of the states it serves. These agencies approve natural gas rates designed to provide Southern Company Gas with the opportunity to generate revenues to recover the cost of natural gas delivered to its customers and its fixed and variable costs, including depreciation, interest expense, operations and maintenance, taxes, and overhead costs, and to earn a reasonable return on its investments.
With the exception of Atlanta Gas Light, Southern Company Gas' second largest utility that operates in a deregulated natural gas market and has a straight-fixed-variable rate design that minimizes the variability of its revenues based on consumption, the earnings of the natural gas distribution utilities can be affected by customer consumption patterns that are a function of weather conditions, price levels for natural gas, and general economic conditions that may impact customers' ability to pay for natural gas consumed. Southern Company Gas has various regulatory and other mechanisms, such as weather and revenue normalization mechanisms and weather derivative
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instruments, that limit its exposure to changes in customer consumption, including weather changes within typical ranges in its natural gas distributiondistribution utilities' service territories.
In the second quarter and year-to-date 2021, net income increased $6 million, or 8.1%, and $25 million, or 10.5%, respectively, when compared to the corresponding periods in 2020. In the second quarter and year-to-date 2021, adjusted operating margin increased $45 million and $94 million, respectively, when compared to the corresponding periods in 2020 primarily due to rate increases for Atlanta Gas Light, Virginia Natural Gas, and Chattanooga Gas and continued investment in infrastructure replacement. In the second quarter and year-to-date 2021, operating expenses increased $26 million and $43 million, respectively, when compared to the corresponding periods in 2020 primarily due to higher depreciation resulting from additional assets placed in service, as well as higher compensation expenses. In the second quarter and year-to-date 2021, interest expense, net of amounts capitalized increased $5 million and $10 million, respectively, when compared to the corresponding periods in 2020 primarily due to additional debt issued to finance continued investments. In the second quarter and year-to-date 2021, income taxes increased $6 million and $12 million, respectively, when compared to the corresponding periods in 2020 primarily due to higher pre-tax earnings.
See Note 2 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
In the first quarter 2022, net income increased $31 million, or 16.9%, when compared to the corresponding period in 2021, as described further below:
•Operating revenues increased $603 million primarily due to higher gas cost recovery, rate increases, and continued investment in infrastructure replacement. Gas costs recovered through natural gas revenues generally equal the amount expensed in cost of natural gas.
•Operating expenses increased $562 million primarily due to a $479 million increase in the cost of gas as a result of higher natural gas prices and higher volumes sold compared to 2021, as well as higher compensation expenses and depreciation resulting from additional assets placed in service. The increase in operating expenses also includes higher costs passed through directly to customers, primarily related to bad debt expenses and revenue taxes.
•Income taxes increased $12 million primarily due to higher pre-tax earnings.
Gas Pipeline Investments
Gas pipeline investments consists primarily of joint ventures in natural gas pipeline investments including SNG, PennEast Pipeline, Dalton Pipeline, and Atlantic Coast Pipeline (until its sale on March 24, 2020).PennEast Pipeline. See Note (E) to the Condensed Financial Statements under "Southern Company Gas" herein and Note 15 to the financial statements under "Southern Company Gas" in Item 8 of the Form 10-K for additional information.
For the second quarter and year-to-date 2021, net income decreased $57 million and $58 million, respectively, when compared to the corresponding periods in 2020. The decreases were due to a pre-tax impairment charge of $82 million ($58 million after tax) related to the equity method investment in the PennEast Pipeline project. See Notes (C) and (E) to the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" and "Southern Company Gas," respectively, for additional information.
Wholesale Gas Services
Prior to the sale of Sequent on July 1, 2021, wholesale gas services was involved in asset management and optimization, storage, transportation, producer and peaking services, natural gas supply, natural gas services, and wholesale gas marketing. Southern Company Gas positioned the business to generate positive economic earnings on an annual basis even under low volatility market conditions that can result from a number of factors. When market price volatility increased, wholesale gas services was positioned to capture significant value and generate stronger results. Operating expenses primarily reflect employee compensation and benefits. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for information regarding the sale of Sequent on July 1, 2021.
In the second quarter 2021, net income decreased $89 million when compared to the corresponding period in 2020. The decrease primarily relates to a $91 million decrease in adjusted operating margin and a $26 million decrease in other income and (expense) related to higher charitable contributions, partially offset by a $27 million decrease in income tax expense due to lower pre-tax earnings.
For year-to-date 2021, net income increased $14 million when compared to the corresponding period in 2020. The increase primarily relates to a $156 million increase in adjusted operating margin, partially offset by a $38 million increase in operating expenses primarily related to an increase in variable compensation. The increase was also partially offset by a $101 million decrease in other income and (expense) related to higher charitable contributions and a $4 million increase in income tax expense due to higher pre-tax earnings.
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Details of the changes in adjusted operating margin are provided in the table below.
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
(in millions)
Commercial activity recognized$(6)$(33)$309 $(42)
Gain (loss) on storage derivatives(24)(5)(26)(11)
Gain (loss) on transportation and forward commodity derivatives(80)19 (96)85 
Purchase accounting adjustments to fair value inventory and contracts— — — (1)
Adjusted operating margin$(110)$(19)$187 $31 
Change in Commercial Activity
The commercial activity at wholesale gas services includes recognition of storage and transportation values that were generated in prior periods, which reflect the impact of prior period hedge gains and losses as associated physical transactions occur. The increase in commercial activity in the second quarter 2021 compared to the corresponding period in 2020 was primarily due to large losses in the second quarter 2020 driven by mild weather and tight transportation spreads. The increase in commercial activity for year-to-date 2021 compared to the corresponding period in 2020 was primarily due to natural gas price volatility that was generated by cold weather, particularly in the Midwest and Texas, resulting in wider transportation spreads.
Change in Storage and Transportation Derivatives
Volatility in the natural gas market arises from a number of factors, such as weather fluctuations or changes in supply or demand for natural gas in different regions of the U.S. The volatility of natural gas commodity prices has a significant impact on Southern Company Gas' customer rates, long-term competitive position against other energy sources, and the ability of wholesale gas services to capture value from locational and seasonal spreads. Forward storage or time spreads applicable to the locations of wholesale gas services' specific storage positions in 2021 resulted in storage derivative losses. Transportation and forward commodity derivative losses in 2021 were a result of widening transportation spreads.
Gas Marketing Services
Gas marketing services provides energy-related products and services to natural gas markets and participants in customer choice programs that were approved in various states to increase competition. These programs allow customers to choose their natural gas supplier while the local distribution utility continues to provide distribution and transportation services. Gas marketing services is weather sensitive and uses a variety of hedging strategies, such as weather derivative instruments and other risk management tools, to partially mitigate potential weather impacts.
In the first quarter 2022, net income increased $10 million, or 17.9%, when compared to the corresponding period in 2021. The increase was primarily due to a $48 million increase in operating revenues as a result of higher commodity prices and higher sales to commercial customers, partially offset by a $30 million increase in operating expenses primarily due to higher cost of natural gas and an increase of $8 million in income taxes as a result of higher pre-tax earnings.
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All Other
All other includes natural gas storage businesses, including Jefferson Island through its sale on December 1, 2020, fuels operations through the sale of Southern Company Gas' interest in Pivotal LNG on March 24, 2020,a renewable natural gas business, AGL Services Company, and Southern Company Gas Capital, as well as various corporate operating expenses that are not allocated to the reportable segments and interest income (expense) associated with affiliate financing arrangements. See Note 15
In the first quarter 2022, net income increased $6 million, or 150%, when compared to the financial statements under "Southern Company Gas"corresponding period in Item 82021. Operating revenues increased $9 million primarily related to higher demand fees and favorable hedge gains at the natural gas storage businesses and higher sales from the renewable natural gas business, partially offset by a $6 million increase in operating expenses primarily due to higher cost of the Form 10-K for additional information on the sale of its interest in Pivotal LNG and the sale of Jefferson Island.
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Segment Reconciliations
Reconciliations of operating income to adjusted operating margin for the second quarter and year-to-date 2021 and 2020 are reflected in the following tables. See Note (L) to the Condensed Financial Statements herein for additional information.
Gas Distribution OperationsGas Pipeline InvestmentsWholesale Gas ServicesGas Marketing ServicesAll OtherIntercompany EliminationConsolidated
(in millions)
Second Quarter 2021
Operating Income (Loss)$146 $5 $(121)$10 $(9)$— $31 
Other operating expenses(a)
362 3 11 25 15 (1)415 
Revenue tax expense(b)
(22)— — — — — (22)
Adjusted Operating Margin$486 $8 $(110)$35 $6 $(1)$424 
Second Quarter 2020
Operating Income (Loss)$127 $5 $(30)$7 $(7)$— $102 
Other operating expenses(a)
336 3 11 28 14 (2)390 
Revenue tax expense(b)
(22)— — — — — (22)
Adjusted Operating Margin$441 $8 $(19)$35 $7 $(2)$470 
Year-To-Date 2021
Operating Income (Loss)$433 $10 $121 $85 $(17)$— $632 
Other operating expenses(a)
772 6 66 54 30 (3)925 
Revenue tax expense(b)
(75)— — — — — (75)
Adjusted Operating Margin$1,130 $16 $187 $139 $13 $(3)$1,482 
Year-To-Date 2020
Operating Income (Loss)$382 $10 $3 $84 $(17)$— $462 
Other operating expenses(a)
721 6 28 58 30 (3)840 
Revenue tax expense(b)
(67)— — — — — (67)
Adjusted Operating Margin$1,036 $16 $31 $142 $13 $(3)$1,235 
(a)Includes other operations and maintenance, depreciation and amortization, and taxes other than income taxes.
(b)Nicor Gas' revenue tax expenses, which are passed through directly to customers.natural gas.
FUTURE EARNINGS POTENTIAL
Each Registrant's results of operations are not necessarily indicative of its future earnings potential. The level of the Registrants' future earnings depends on numerous factors that affect the opportunities, challenges, and risks of the Registrants' primary businesses of selling electricity and/or distributing natural gas, as described further herein.
For the traditional electric operating companies, these factors include the ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs during a time of increasing costs, including those related to projected long-term demand growth, stringent environmental standards, including CCR rules, safety, system reliability and resiliency, fuel, restoration following major storms, and capital expenditures, including constructing new electric generating plants and expanding and improving the transmission and distribution systems; continued customer growth,growth; and the trend of reduced electricity usage per customer, especially in residential and
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commercial markets. For Georgia Power, completing construction of Plant Vogtle Units 3 and 4 and the related cost recovery proceedings is another major factor.
Earnings in the electricity business will also depend upon maintaining and growing sales, considering, among other things, the adoption and/or penetration rates of increasingly energy-efficient technologies and increasing volumes of electronic commerce transactions, which could contribute to a net reduction in customer usage.
Global and U.S. economic conditions have been significantly affected by a series of demand and supply shocks that caused a global and national economic recession in 2020. Most prominently, the COVID-19 pandemic has negatively impacted global supply chains and business operations as suppliers continue to experience difficulties keeping up with strong demand for factory goods, which is being driven by low business inventories. In addition, rising inflation in 2021 and 2022 has resulted in increasing costs for many goods and services. As a result of persistently high inflation, interest rates have been on the rise and are expected to continue rising in the near term. The combination of rising inoculation rates in the U.S. population and the recent federal COVID-19 relief package is expectedcontributed to help boostincreased economic recovery in 2021.2021 and has sustained the current economic expansion through the first quarter 2022; however, fiscal support of business and personal incomes is declining. Russia's invasion of Ukraine has intensified supply chain disruptions and heightened uncertainty surrounding the near-term outlook for the broader economy and the economy within the Southern Company system's service territory. The drivers, speed, and depth of the 2020 economic contraction were unprecedented and have reduced energy demand across the Southern Company system's service territory, primarily in the commercial and industrial classes. The negative impacts, which started in late-March 2020, of the COVID-19 pandemic and related recession on the Southern Company system's retail electric sales began to improve in the middle of May 2020. Retail electric revenues attributable to changes in sales increased in the first half of 2021quarter 2022 when compared to the corresponding period in 20202021 primarily due to the normalization of economic activity; however, retail electric sales continued to be negatively impacted by the COVID-19 pandemic when compared to pre-pandemic trends. Recovery is expected to continue in the second halfThe impacts of 2021, butnew COVID-19 variants, responses to the COVID-19 pandemic by both customers and governments, inflation, rising interest rates, and the unresolved geopolitical tensions relating to Russia's invasion of Ukraine could significantly affect the pacesustainability of recovery. The ultimate extent of the negative impact on revenues depends on the depth and duration of thecurrent economic contraction in the Southern Company system's service territory and cannot be determined at this time.growth. See RESULTS OF OPERATIONS herein for information on COVID-19-related impacts on energy demand in the Southern Company system's service territory during the first half of 2021.quarter 2022.
The level of future earnings for Southern Power's competitive wholesale electric business depends on numerous factors including the parameters of the wholesale market and the efficient operation of its wholesale generating assets; Southern Power's ability to execute its growth strategy through the development or acquisition of renewable
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facilities and other energy projects while containing costs, as well ascosts; regulatory matters, creditworthiness of customers,matters; customer creditworthiness; total electric generating capacity available in Southern Power's market areas, andareas; Southern Power's ability to successfully remarket capacity as current contracts expire. In addition,expire; renewable portfolio standards,standards; availability of federal and state ITCs and PTCs, which could be impacted by future tax credits,legislation; transmission constraints,constraints; cost of generation from units within the Southern Company power pool,pool; and operational limitations could influence Southern Power's future earnings.limitations.
The level of future earnings for Southern Company Gas' primary business of distributing natural gas and its complementary businesses in the gas pipeline investments and gas marketing services sectors depends on numerous factors. These factors include the natural gas distribution utilities' ability to maintain constructive regulatory environments that allow for the timely recovery of prudently-incurred costs, including those related to projected long-term demand growth, safety, system reliability and resiliency, natural gas, and capital expenditures, including expanding and improving the natural gas distribution systems; the completion and subsequent operation of ongoing infrastructure and other construction projects, creditworthinessprojects; customer creditworthiness; certain policies to limit the use of customers,natural gas, such as the potential across certain parts of the U.S. for state or municipal bans on the use of natural gas; and Southern Company Gas' ability to optimize its transportation and storage positions and to re-contract storage rates at favorable prices. The volatility of natural gas prices has an impact on Southern Company Gas' customer rates, its long-term competitive position against other energy sources, and the ability of Southern Company Gas' gas marketing services business to capture value from locational and seasonal spreads. Additionally, changes in commodity prices, primarily driven by tight gas supplies, geopolitical events, and diminished gas production, subject a portion of Southern Company Gas' operations to earnings variability. Over the longer term, volatility is expected to be low to moderatevariability and locational and/or transportation spreads are expected to decrease as new pipelines are built to reduce the existing supply constraintshave recently resulted in the shale areas of the Northeast U.S. To the extent these pipelines are delayed or not built, volatility could increase. See Note 3 to the financial statements in Item 8 of the Form 10-K and Note (C) to the Condensed Financial Statements herein under "Other Matters – Southern Company Gas" for additional information on challenges experienced by the PennEast Pipeline project.higher natural gas prices. Additional economic factors may contribute to this environment, includingenvironment. If current economic conditions continue to improve, the demand for natural gas may increase, which may cause natural gas prices to rise and drive higher volatility in the natural gas markets on a longer-term basis. Alternatively, a significant drop in oil and natural gas prices which could lead to a consolidation of natural gas producers or reduced levels of natural gas production. In addition, if the COVID-19 pandemic results in continued economic uncertainty for a sustained
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period, demand for natural gas may decrease, resulting in further downward pressure on natural gas prices and lower volatility in the natural gas markets on a longer-term basis.
Earnings for both the electricity and natural gas businesses are subject to a variety of other factors. These factors include weather, competition, developing new and maintaining existing energy contracts and associated load requirements with wholesale customers, energy conservation practiced by customers, the use of alternative energy sources by customers, government incentives to reduce overall energy usage, the prices of electricity and natural gas, costs and availability of labor and materials in a time of rising costs and supply chain disruptions, and the price elasticity of demand. Demand for electricity and natural gas in the Registrants' service territories is primarily driven by the pace of economic growth or decline that may be affected by changes in regional and global economic conditions, which may impact future earnings.
As part of its ongoing effort to adapt to changing market conditions, Southern Company continues to evaluate and consider a wide array of potential business strategies. These strategies may include business combinations, partnerships, and acquisitions involving other utility or non-utility businesses or properties, disposition of, or the sale of interests in, certain assets or businesses, internal restructuring, or some combination thereof. Furthermore, Southern Company may engage in new business ventures that arise from competitive and regulatory changes in the utility industry. Pursuit of any of the above strategies, or any combination thereof, may significantly affect the business operations, risks, and financial condition of Southern Company. In addition, Southern Power and Southern Company Gas regularly consider and evaluate joint development arrangements as well as acquisitions and dispositions of businesses and assets as part of their business strategies. See Note 15 to the financial statements in Item 8 of the Form 10-K and Note (K) to the Condensed Financial Statements herein for additional information.
For additional information relating to these issues, see RISK FACTORS in Item 1A and MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL in Item 7 of the Form 10-K.
Environmental Matters
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FUTURE EARNINGS POTENTIAL – "Environmental Matters" in Item 7 and Note 3 to the financial statements under "Environmental Remediation" in Item 8 of the Form 10-K, as well as Note (C) to the Condensed Financial Statements under "Environmental Remediation" herein, for additional information.
Environmental Laws and Regulations
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Water Quality
On July 26, 2021, the EPA announced its intent to further revise the ELG Rules, with a proposed rule expected in the fall of 2022. The ultimate outcome of this matter cannot be determined at this time; however, any revisions could require changes in the traditional electric operating companies' compliance strategies.
Alabama Power is assessing the viability of complying with the ELG Rules for certain of its coal units (totaling approximately 2,000 MWs) due to the timing and anticipated cost to comply with the ELG Rules. The results of the assessment could accelerate a determination to discontinue or modify operation of the units. Alabama Power will review all of the facts and circumstances and evaluate all alternatives prior to reaching a final determination. The units under evaluation have net book values totaling approximately $2.3 billion at June 30, 2021. Additionally, net capitalized asset retirement costs associated with these facilities totaled approximately $900 million at June 30, 2021.
Based on an Alabama PSC order, Alabama Power is authorized to establish a regulatory asset to record the unrecovered investment costs, including the plant asset balance and the costs associated with site removal and closure, associated with future unit retirements caused by environmental regulations (Environmental Accounting Order). Under the Environmental Accounting Order, the regulatory asset would be amortized and recovered over an affected unit's remaining useful life, as established prior to the decision regarding early retirement, through Rate CNP Compliance. See Note 2 to the financial statements under "Alabama Power – Rate CNP Compliance" and " –
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Environmental Accounting Order" in Item 8 of the Form 10-K for additional information. The ultimate outcome of this matter cannot be determined at this time.
Regulatory Matters
See OVERVIEW – "Recent Developments" and Note 2 to the financial statements in Item 8 of the Form 10-K, OVERVIEW – "Recent Developments" herein, and Note (B) to the Condensed Financial Statements herein for a discussion of regulatory matters related to Alabama Power, Georgia Power, Mississippi Power, and Southern Company Gas, including items that could impact the applicable registrants'Registrants' future earnings, cash flows, and/or financial condition.
Alabama Power
On July 16, 2021, Alabama Power filed a petition with the Alabama PSC to extend its Renewable Generation Certificate (RGC) expiration from September 16, 2021 to September 16, 2027. The RGC currently in place authorizes Alabama Power to procure up to 500 MWs of capacity and energy from renewable energy resources and to separately market the related energy and environmental attributes to customers and other third parties. Alabama Power has four solar projects under the RGC totaling approximately 170 MWs. The ultimate outcome of this matter cannot be determined at this time.
Georgia Power
In 2021, as authorized in its 2019 IRP, Georgia Power requested and received certification from the Georgia PSC for 970 MWs of utility-scale PPAs for solar generation resources, which are expected to be in operation by the end of 2023. The ultimate outcome of this matter cannot be determined at this time.
Construction Programs
The Subsidiary Registrants are engaged in continuous construction programs to accommodate existing and estimated future loads on their respective systems. The Southern Company system intendsstrategy continues to continue its strategy ofinclude developing and constructing new electric generating facilities, expanding and improving the electric transmission and electric and natural gas distribution systems, and undertaking projects to comply with environmental laws and regulations.
For the traditional electric operating companies, major generation construction projects are subject to state PSC approval in order to be included in retail rates. The largest construction project currently underway in the Southern Company system is Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information. Also see Note 2 to the financial statements under "Alabama Power – Certificates of Convenience and Necessity" in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements herein under "Alabama Power" for information regarding Alabama Power's construction of Plant Barry Unit 8.
See Note 15 to the financial statements in Item 8 of the Form 10-K and Note (K) to the Condensed Financial Statements herein under "Southern Power" for additional information about costs relating to Southern Power's acquisitions that involve construction of renewable energy facilities.
Southern Company Gas is engaged in various infrastructure improvement programs designed to update or expand the natural gas distribution systems of the natural gas distribution utilities to improve reliability and meet operational flexibility and growth. The natural gas distribution utilities recover their investment and a return associated with these infrastructure programs through their regulated rates. See NotesNote 2 and 3 to the financial statements in Item 8 of the Form 10-K and NotesNote (B) and (C) to the Condensed Financial Statements herein under "Southern Company Gas" and "Other Matters – Southern Company Gas – PennEast Pipeline Project," respectively, for additional information on Southern Company Gas' construction program.
See FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" herein for additional information regarding the Registrants' capital requirements for their construction programs.
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General Litigation and Other Matters
The Registrants are involved in various matters being litigated and/or regulatory and other matters that could affect future earnings, cash flows, and/or financial condition. The ultimate outcome of such pending or potential litigation against each Registrant and any subsidiaries or regulatory and other matters cannot be determined at this time; however, for current proceedings and/or matters not specifically reported herein or in Notes (B) and (C) to the Condensed Financial Statements herein, management does not anticipate that the ultimate liabilities, if any, arising from such current proceedings and/or matters would have a material effect on such Registrant's financial statements. See Notes (B) and (C) to the Condensed Financial Statements for a discussion of various contingencies, including matters being litigated, regulatory matters, and other matters which may affect future earnings potential.
Alabama Power
On March 10, 2021, Alabama Power executed a coordinated planning and operations agreement with PowerSouth, with a minimum term of 10 years. The agreement, which includes combined operations (including joint commitment and dispatch), is expected to create energy cost savings and enhanced system reliability for both parties. Projected revenues are expected to offset any increased administrative costs incurred by Alabama Power; therefore, no material impact to net income is expected. Alabama Power has the right to participate in a portion of PowerSouth's future incremental load growth. Implementation of the agreement is subject to certain regulatory approvals, including approvals of the Rural Utilities Service, the SERC Reliability Corporation, and the FERC, and is expected to be completed by March 2022. The ultimate outcome of this matter cannot be determined at this time.
ACCOUNTING POLICIES
See MANAGEMENT'S DISCUSSION AND ANALYSIS – ACCOUNTING POLICIES in Item 7 of the Form 10-K for a complete discussion of the Registrants' critical accounting policies and estimates, as well as recently issued accounting standards.
Application
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The Registrants prepare their financial statements in accordance with GAAP. Significant accounting policies are described in the notes to the financial statements in Item 8 of the Form 10-K. In the application of these policies, certain estimates are made that may have a material impact on the Registrants' results of operations and related disclosures. Different assumptions and measurements could produce estimates that are significantly different from those recorded in the financial statements.
Estimated Cost, Schedule, and Rate Recovery for the Construction of Plant Vogtle Units 3 and 4
(Southern Company and Georgia Power)
Following milestone extensions in January 2021, Southern Nuclear has been performing additional construction remediation work necessary to ensure quality and design standards are met as system turnovers are completed to support hot functional testing and fuel load for Unit 3. Hot functional testing for Unit 3 was completed in July 2021. As a result of challenges including, but not limited to, construction productivity, construction remediation work, the pace of system turnovers, spent fuel pool repairs, and the timeframe and duration for hot functional and other testing, at the end of the second quarter 2021, Southern Nuclear further extended certain milestone dates, including the fuel load for Unit 3, from those established in January 2021. The site work plan currently targets fuel load for Unit 3 in the fourth quarter 2021 and an in-service date of March 2022. As the site work plan includes minimal margin to these milestone dates, an in-service date in the second quarter 2022 for Unit 3 is projected, although any further delays could result in a later in-service date.
As the result of productivity challenges, at the end of the second quarter 2021, Southern Nuclear also further extended milestone dates for Unit 4 from those established in January 2021. The site work plan targets an in-service date of November 2022 and primarily depends on overall construction productivity and production levels significantly improving as well as appropriate levels of craft laborers, particularly electricians and pipefitters, being
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added and maintained. As the site work plan includes minimal margin to the milestone dates, an in-service date in the first quarter 2023 for Unit 4 is projected, although any further delays could result in a later in-service date.
As of March 31, 2021, approximately $84 million of the construction contingency established in the fourth quarter 2020 was assigned to the base capital cost forecast for costs primarily associated with the schedule extension for Unit 3 to December 2021, construction productivity, support resources, and construction remediation work. Georgia Power increased its total capital cost forecast as of March 31, 2021 by adding $48 million to the remaining construction contingency. Considering the factors above, during the second quarter 2021, all of the remaining construction contingency previously established and an additional $341 million was assigned to the base capital cost forecast for costs primarily associated with the schedule extensions for Units 3 and 4 described above, construction remediation work for Unit 3, and construction productivity and support resources for Units 3 and 4. Georgia Power also increased its total capital cost forecast as of June 30, 2021 by adding $119 million to replenish construction contingency. Georgia Power's revised base capital cost forecast and contingency to complete construction and start-up of Plant Vogtle Units 3 and 4 is $9.10 billion and $0.12 billion, respectively, for a total capital cost forecast of $9.22 billion (net of $1.7 billion received under the Guarantee Settlement Agreement and approximately $188 million in related customer refunds).
After considering the significant level of uncertainty that exists regarding the future recoverability of these costs since the ultimate outcome of these matters is subject to the outcome of future assessments by management, as well as Georgia PSC decisions in future regulatory proceedings, Georgia Power recorded pre-tax charges to income in the first quarter 2021 and the second quarter 2021 of $48 million ($36 million after tax) and $460 million ($343 million after tax), respectively, for the increases in the total project capital cost forecast. As and when these amounts are spent, Georgia Power may request the Georgia PSC to evaluate those expenditures for rate recovery.
The ultimate impact of these matters on the construction schedule and budget for Plant Vogtle Units 3 and 4 cannot be determined at this time. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information.
FINANCIAL CONDITION AND LIQUIDITY
Overview
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Overview" in Item 7 of the Form 10-K for additional information. The financial condition of each Registrant remained stable at June 30, 2021.March 31, 2022. The Registrants intend to continue to monitor their access to short-term and long-term capital markets as well as their bank credit arrangements to meet future capital and liquidity needs. See "Cash Requirements," "Sources of Capital," and "Financing Activities" herein and Note (K) to the Condensed Financial Statements herein for additional information.
At the end of the secondfirst quarter 2021,2022, the market price of Southern Company's common stock was $60.51$72.51 per share (based on the closing price as reported on the NYSE) and the book value was $26.63 per share, representing a market-to-book ratio of 227%272%, compared to $61.43, $26.48,$68.58, $26.30, and 232%261%, respectively, at the end of 2020.2021. Southern Company's common stock dividend for the secondfirst quarter 20212022 was $0.66 per share compared to $0.64 per share in the secondfirst quarter 2020.2021.
Cash Requirements
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Cash Requirements" in Item 7 of the Form 10-K for a description of the Registrants' significant cash requirements.
The Registrants' significant cash requirements include estimated capital expenditures associated with their construction programs. The construction programs are subject to periodic review and revision, and actual construction costs may vary from these estimates because of numerous factors. These factors include: changes in business conditions; changes in load projections; changes in environmental laws and regulations; the outcome of any legal challenges to environmental rules; changes in electric generating plants, including unit retirements and
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replacements and adding or changing fuel sources at existing electric generating units, to meet regulatory requirements; changes in FERC rules and regulations; state regulatory agency approvals; changes in the expected environmental compliance program; changes in legislation;legislation and/or regulation; the cost, availability, and efficiency of construction labor, equipment, and materials; project scope and design changes; abnormal weather; delays in construction due to judicial or regulatory action; storm impacts; and the cost of capital. The continued impacts of the COVID-19 pandemic could also impair the ability to develop, construct, and operate facilities, as discussed further in Item 1A of the Form 10-K. In addition, there can be no assurance that costs related to capital expenditures and AROs will be fully recovered. Additionally, expenditures associated with Southern Power's planned acquisitions may vary due to market opportunities and the execution of its growth strategy. See Note 15 to the financial statements in Item 8 of the Form 10-K and Note (K) to the Condensed Financial Statements herein under "Southern Power" for additional information regarding Southern Power's plant acquisitions and construction projects.
The construction program of Georgia Power includes Plant Vogtle Units 3 and 4, which includes components based on new technology that only within the last few years began initial operation in the global nuclear industry at this scale and which may be subject to additional revised cost estimates during construction. See Note 2 to the financial statements in Item 8 of the Form 10-K and Note (B) to the Condensed Financial Statements herein under "Georgia Power – Nuclear Construction" for information regarding Plant Vogtle Units 3 and 4 and additional factors that may impact construction expenditures.
Long-term debt maturities and the interest payable on long-term debt each represent a significant cash requirement for the Registrants. See "Financing Activities" herein for information on changes in the Registrants' long-term debt balances since December 31, 2020.2021.
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Sources of Capital
See MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Sources"Sources of Capital" in Item 7 of the Form 10-K for additional information. Southern Company intends to meet its future capital needs through operating cash flows, borrowings from financial institutions, and debt and equity issuances. Equity capital can be provided from any combination of Southern Company's stock plans, private placements, or public offerings. With the exception of the settlement later in 2022 of stock purchase contracts associated with its equity units, Southern Company does not expect to issue any equity in the capital markets through 20252026, but may issue equity through its stock plans during this time. See Note 8 to the financial statements under "Equity Units" in Item 8 of the Form 10-K for information on stock purchase contracts associated with Southern Company's equity units.additional information.
The Subsidiary Registrants plan to obtain the funds to meet their future capital needs from sources similar to those they used in the past, which were primarily from operating cash flows, external securities issuances, borrowings from financial institutions, and equity contributions from Southern Company. In addition, Georgia Power plans to utilize borrowings from the FFB (as discussed further in Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K) and Southern Power plans to utilize tax equity partnership contributions (as discussed further herein).
The amount, type, and timing of any financings in 2021,2022, as well as in subsequent years, will be contingent on investment opportunities and the Registrants' capital requirements and will depend upon prevailing market conditions, regulatory approvals (for certain of the Subsidiary Registrants), and other factors. See "Cash Requirements" and "Financing Activities" herein for additional information.
Southern Power utilizes tax equity partnerships as one of its financing sources, where the tax partner takes significantly all of the federal tax benefits. These tax equity partnerships are consolidated in Southern Power's financial statements and are accounted for using HLBV methodology to allocate partnership gains and losses. In March 2021,During the first quarter 2022, Southern Power obtained tax equity funding for the Deuel Harvest wind facility and received proceeds of $220 million. In addition, during the first six months of 2021, Southern Power receivedexisting tax equity fundingpartnerships totaling $17 million from existing partnerships. Subsequent to June 30, 2021, Southern Power obtained tax equity funding for the Garland battery energy storage facility and received initial proceeds of $11$51 million. See Note 1 to
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the financial statements under "General" in Item 8 of the Form 10-K and Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.
By regulation, Nicor Gas is restricted, to the extent of its retained earnings balance, in the amount it can dividend or loan to affiliates and is not permitted to make money pool loans to affiliates. At June 30, 2021,March 31, 2022, the amount of subsidiary retained earnings restricted to dividend totaled $1.1$1.4 billion. This restriction did not impact Southern Company Gas' ability to meet its cash obligations, nor does management expect such restriction to materially impact Southern Company Gas' ability to meet its currently anticipated cash obligations.
Certain Registrants' current liabilities frequently exceed their current assets because of long-term debt maturities and the periodic use of short-term debt as a funding source, as well as significant seasonal fluctuations in cash needs. The Registrants generally plan to refinance long-term debt as it matures. The following table shows the amount by which current liabilities exceeded current assets at June 30, 2021March 31, 2022 for the applicable Registrants:
At June 30, 2021Southern CompanyGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
At March 31, 2022At March 31, 2022Southern CompanyGeorgia
Power		Southern PowerSouthern Company Gas
(in millions)(in millions)
Current liabilities in excess of current assetsCurrent liabilities in excess of current assets$2,109 $1,438 $20 $720 $477 Current liabilities in excess of current assets$1,137 $1,764 $235 $186 
The Registrants believe the need for working capital can be adequately met by utilizing operating cash flows, as well as commercial paper, lines of credit, and short-term bank notes, as market conditions permit. In addition, under certain circumstances, the Subsidiary Registrants may utilize equity contributions and/or loans from Southern Company.
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Bank Credit Arrangements
At June 30, 2021,March 31, 2022, the Registrants' unused committed credit arrangements with banks were as follows:
At June 30, 2021Southern
Company
parent		Alabama PowerGeorgia
Power		Mississippi Power
Southern
 Power(a)
Southern Company Gas(b)
SEGCOSouthern
Company
At March 31, 2022At March 31, 2022Southern
Company
parent		Alabama PowerGeorgia
Power		Mississippi Power
Southern
 Power(a)
Southern Company Gas(b)
SEGCOSouthern
Company
(in millions)(in millions)
Unused committed creditUnused committed credit$1,999 $1,228 $1,728 $250 $568 $1,747 $30 $7,550 Unused committed credit$1,998 $1,250 $1,726 $255 $568 $1,747 $30 $7,574 
(a)At June 30, 2021,March 31, 2022, Southern Power also had two continuing letters of credit facilities for standby letters of credit, of which $24$30 million was unused. Southern Power's subsidiaries are not parties to its bank credit arrangements or letter of credit facilities.
(b)Includes $1.047 billion and $700 million at Southern Company Gas Capital and Nicor Gas, respectively.
Subject to applicable market conditions, the Registrants, Nicor Gas, and SEGCO expect to renew or replace their bank credit arrangements as needed, prior to expiration. In connection therewith, the Registrants, Nicor Gas, and SEGCO may extend the maturity dates and/or increase or decrease the lending commitments thereunder.
A portion of the unused credit with banks is allocated to provide liquidity support to the revenue bonds of the traditional electric operating companies and the commercial paper programs of the Registrants, Nicor Gas, and SEGCO. The amount of variable rate revenue bonds of the traditional electric operating companies outstanding requiring liquidity support at June 30, 2021March 31, 2022 was approximately $1.4$1.5 billion (comprised of approximately $854$789 million at Alabama Power, $550$672 million at Georgia Power, and $34 million at Mississippi Power). In addition, at June 30, 2021,March 31, 2022, Georgia Power and Mississippi Power had approximately $105$330 million and $50 million, respectively, of fixed rate revenue bonds outstanding that are required to be remarketed within the next 12 months.
See Note 8 to the financial statements in Item 8 of the Form 10-K and Note (F) to the Condensed Financial Statements herein under "Bank Credit Arrangements" for additional information.
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AND RESULTS OF OPERATIONS (Continued)
Short-term Borrowings
The Registrants, Nicor Gas, and SEGCO make short-term borrowings primarily through commercial paper programs that have the liquidity support of the committed bank credit arrangements described above. Southern Power's subsidiaries are not issuers or obligors under its commercial paper program. Commercial paper and short-term bank term loans are included in notes payable in the balance sheets. Details of the Registrants' short-term borrowings were as follows:
Short-term Debt at
June 30, 2021
Short-term Debt During the Period(*)
Short-term Debt at
March 31, 2022
Short-term Debt During the Period(*)
Amount
Outstanding		Weighted
Average
Interest
Rate		Average
Amount
Outstanding		Weighted
Average
Interest
Rate		Maximum
Amount
Outstanding		 Amount
Outstanding		Weighted
Average
Interest
Rate		Average
Amount
Outstanding		Weighted
Average
Interest
Rate		Maximum
Amount
Outstanding
(in millions)(in millions)(in millions) (in millions)(in millions)(in millions)
Southern CompanySouthern Company$1,402 0.3 %$990 0.3 %$1,621 Southern Company$2,330 0.9 %$1,878 0.5 %$2,894 
Alabama PowerAlabama Power— — 50 0.1 200 Alabama Power— — 4 0.6 100 
Georgia PowerGeorgia Power310 0.2 183 0.2 407 Georgia Power860 0.9 290 0.7 900 
Mississippi PowerMississippi Power— — 39 0.2 81 Mississippi Power25 1.5 10 0.8 71 
Southern PowerSouthern Power119 0.2 152 0.2 315 Southern Power208 0.9 164 0.4 220 
Southern Company Gas:Southern Company Gas:Southern Company Gas:
Southern Company Gas CapitalSouthern Company Gas Capital$444 0.2 %$85 0.2 %$485 Southern Company Gas Capital$259 0.9 %$312 0.4 %$379 
Nicor GasNicor Gas390 0.5 396 0.5 512 Nicor Gas273 0.8 551 0.5 830 
Southern Company Gas TotalSouthern Company Gas Total$834 0.3 %$481 0.5 %Southern Company Gas Total$532 0.8 %$863 0.5 %
(*)Average and maximum amounts are based upon daily balances during the three-month period ended June 30, 2021.March 31, 2022.
Analysis of Cash Flows
Net cash flows provided from (used for) operating, investing, and financing activities for the sixthree months ended June 30,March 31, 2022 and 2021 and 2020 are presented in the following table:
Net cash provided from
(used for):		Net cash provided from
(used for):		Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company GasNet cash provided from
(used for):		Southern CompanyAlabama PowerGeorgia
Power		Mississippi PowerSouthern PowerSouthern Company Gas
(in millions)(in millions)
Six Months Ended June 30, 2021
Three Months Ended
March 31, 2022
Three Months Ended
March 31, 2022
Operating activitiesOperating activities$2,904 $584 $1,313 $41 $411 $722 Operating activities$1,592 $154 $361 $(16)$117 $1,024 
Investing activitiesInvesting activities(4,026)(893)(1,730)(117)(601)(668)Investing activities(1,555)(365)(809)(68)(37)(271)
Financing activitiesFinancing activities1,671 506 457 515 196 (25)Financing activities(193)504 441 32 (76)(768)
Six Months Ended June 30, 2020
Three Months Ended
March 31, 2021
Three Months Ended
March 31, 2021
Operating activitiesOperating activities$2,847 $674 $1,124 $71 $195 $1,046 Operating activities$1,242 $214 $489 $(38)$187 $550 
Investing activitiesInvesting activities(2,655)(783)(1,659)(145)490 (570)Investing activities(2,243)(466)(913)(67)(504)(308)
Financing activitiesFinancing activities(285)116 869 (178)(808)(401)Financing activities1,734 341 444 90 478 50 
Fluctuations in cash flows from financing activities vary from year to year based on capital needs and the maturity or redemption of securities.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Southern Company
Net cash provided from operating activities increased $0.1 billion$350 million for the sixthree months ended June 30, 2021March 31, 2022 as compared to the corresponding period in 20202021 primarily due to increased natural gas cost recovery at the natural gas distribution utilities and the timing of vendor payments, and customer bill credits issued in 2020 at Georgia Power, partially offset by under recovered natural gas costs at Southern Company Gas resulting from Winter Storm Uri and decreased fuel cost recovery at the traditional electric operating companies resulting from an increase in the costtiming of fuel.customer receivable collections.
The net cash used for investing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to the Subsidiary Registrants' construction programs.
The net cash provided fromused for financing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to common stock dividend payments and net issuancesredemptions of long-term debt, commercial paper, and short-term bank loans, partiallylargely offset by common stock dividend payments.an increase in short-term debt.
Alabama Power
Net cash provided from operating activities decreased $90$60 million for the sixthree months ended June 30, 2021March 31, 2022 as compared to the corresponding period in 20202021 primarily due to the timing of income tax payments andcustomer receivable collections, decreased fuel cost recovery, and the timing of fuel stock purchases, partially offset by an increase in retail revenues associated with an increase in Rate RSE effective in January 2021 and colder weather in Alabama Power's service territory in the first quarter 2021 compared to the corresponding period in 2020, as well as the timing of fossil fuel stock purchases.vendor payments.
The net cash used for investing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to gross property additions.
The net cash provided from financing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to a capital contributioncontributions from Southern Company and the net issuance of senior notes,long-term debt, partially offset by common stock dividend payments.
Georgia Power
Net cash provided from operating activities increased $189decreased $128 million for the sixthree months ended June 30, 2021March 31, 2022 as compared to the corresponding period in 20202021 primarily due to customer bill credits issued in 2020 associated with Tax Reform and 2018 earnings in excess of the allowed retail ROE range and the timing of fossilcustomer receivable collections and decreased fuel stock purchases and vendor payments,cost recovery, partially offset by decreased fuel cost recovery.the timing of vendor payments.
The net cash used for investing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to gross property additions, including a total of approximately $640$240 million related to the construction of Plant Vogtle Units 3 and 4. See Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information on construction of Plant Vogtle Units 3 and 4.
The net cash provided from financing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to net issuances of senior notes,an increase in short-term borrowings from the FFB for construction of Plant Vogtle Units 3 and 4, capital contributions from Southern Company, and an increase in notes payable, partially offset by common stock dividend payments.payments and the redemption of senior notes.
Mississippi Power
Net cash provided fromused for operating activities decreased $30$22 million for the sixthree months ended June 30, 2021March 31, 2022 as compared to the corresponding period in 20202021 primarily due to decreased fuel cost recovery and the timing of vendor payments.
The net cash used for investing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to gross property additions.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
The net cash provided from financing activities for the sixthree months ended June 30, 2021March 31, 2022 was primarily related to the issuance of senior notes and capital contributions from Southern Company and an increase in short-term borrowings, partially offset by common stock dividend payments and a decrease in commercial paper borrowings.
Southern Power
Net cash provided from operating activities increased $216 million for the six months ended June 30, 2021 as compared to the corresponding period in 2020 primarily due to an increase in the utilization of tax credits in 2021.
The net cash used for investing activities for the six months ended June 30, 2021 was primarily related to the acquisition of the Deuel Harvest wind facility and ongoing construction activities. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.
The net cash provided from financing activities for the six months ended June 30, 2021 was primarily related to the issuance of senior notes and net capital contributions from noncontrolling interests, partially offset by a return of capital to Southern Company and common stock dividend payments.
Southern Company Gas
Net cash provided from operating activities decreased $324 million for the six months ended June 30, 2021 as compared to the corresponding period in 2020 primarily due to natural gas cost under recovery, reflecting an increase in the cost of gas purchased during Winter Storm Uri, and the timing of customer receivable collections, partially offset by the timing of vendor payments.
The net cash used for investing activities for the six months ended June 30, 2021 was primarily related to construction of transportation and distribution assets recovered through base rates and infrastructure investment recovered through replacement programs at gas distribution operations.
The net cash used for financing activities for the six months ended June 30, 2021 was primarily related to the repayment of long-term debt and common stock dividend payments, largely offset by the issuance of short-term debt, an increase in commercial paper borrowings, and capital contributions from Southern Company.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Southern Power
Net cash provided from operating activities decreased $70 million for the three months ended March 31, 2022 as compared to the corresponding period in 2021 primarily due to the timing of vendor payments and customer receivable collections.
The net cash used for investing activities for the three months ended March 31, 2022 was primarily related to construction payments. See Note (K) to the Condensed Financial Statements under "Southern Power" herein for additional information.
The net cash used for financing activities for the three months ended March 31, 2022 was primarily related to common stock dividend payments and a net capital distribution to noncontrolling interests.
Southern Company Gas
Net cash provided from operating activities increased $474 million for the three months ended March 31, 2022 as compared to the corresponding period in 2021 primarily due to increased natural gas cost recovery, partially offset by the timing of customer receivable collections.
The net cash used for investing activities for the three months ended March 31, 2022 was primarily related to construction of transportation and distribution assets recovered through base rates and infrastructure investment recovered through replacement programs at gas distribution operations.
The net cash used for financing activities for the three months ended March 31, 2022 was primarily related to net repayments of short-term debt and common stock dividend payments, partially offset by capital contributions from Southern Company.
Significant Balance Sheet Changes
Southern Company
Significant balance sheet changes for the sixthree months ended June 30, 2021March 31, 2022 included:
•an increase of $2.1 billion in long-term debt (including securities due within one year) related to new issuances;
•an increase of $2.0 billion in total property, plant, and equipment (net of pre-tax charges totaling $508 million recorded in the first half of 2021 for estimated probable losses associated with the construction of Plant Vogtle Units 3 and 4) primarily related to the Subsidiary Registrants' construction programs, as well as Southern Power's acquisition of the Deuel Harvest wind facility;
•an increase of $0.8$0.9 billion in notes payable relateddue to net issuances ofan increase in short-term bank debt and commercial paper;paper borrowings;
•an increase of $0.7 billion in both assets and liabilities held for sale, due to the reclassification of assets and liabilities associated with Southern Company Gas' sale of Sequent, including $0.5 billion of energy marketing receivables and $0.5 billion of energy marketing trade payables;
•an increase of $0.5 billion in accumulated deferred income taxes primarily related to the utilization and expected further utilization of tax credits in 2021;
•an increase of $0.5 billion in cash and cash equivalents, as discussed further under "Analysis of Cash Flows – Southern Company" herein;
•an increase of $0.5 billion in natural gas cost under recovery, which was impacted by an increase in Southern Company Gas' cost of gas purchased during Winter Storm Uri; and
•an increase of $0.5 billion in total stockholders' equity primarily related to net income, partially offset by common stock dividend payments.
See "Financing Activities" herein and Notes (B), (G), and (K) to the Condensed Financial Statements herein for additional information.
Alabama Power
Significant balance sheet changes for the six months ended June 30, 2021 included:
•an increase of $827 million in common stockholder's equity primarily due to capital contributions from Southern Company;
•an increase of $450 million in total property, plant, and equipment primarily related to the Subsidiary Registrants' construction programs;
•increases of Plant Barry Unit 8$0.6 billion in accumulated deferred income taxes and distribution and transmission facilities, as well as$0.4 billion in prepaid expenses primarily related to the installationexpected utilization of equipmentITCs in 2022;
•a decrease of $0.5 billion in accrued compensation due to comply with environmental standards;the timing of payments; and
•an increasea decrease of $396 million$0.5 billion in long-term debt (including securities due within one year) primarily due to a net increase in outstandingthe redemption of senior notes.
See "Financing Activities – Alabama Power"Activities" herein and Note (G) to the Condensed Financial Statements herein for additional information.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Alabama Power
Significant balance sheet changes for the three months ended March 31, 2022 included:
•an increase of $719 million in common stockholder's equity primarily due to capital contributions from Southern Company;
•an increase of $293 million in cash and cash equivalents, as discussed further under "Analysis of Cash Flows – Alabama Power" herein;
•an increase of $161 million in total property, plant, and equipment primarily related to construction of distribution and transmission facilities, construction of Plant Barry Unit 8, and the installation of equipment to comply with environmental standards; and
•an increase of $145 million in long-term debt (including securities due within one year) primarily due to a net increase in outstanding senior notes.
See "Financing Activities – Alabama Power" herein for additional information.
Georgia Power
Significant balance sheet changes for the sixthree months ended June 30, 2021March 31, 2022 included:
•an increase of $656$860 million in notes payable due to an increase in short-term bank debt and commercial paper borrowings;
•an increase of $499 million in total property, plant, and equipment primarily related to the construction of generation, transmission, and distribution facilities, including $151$303 million for Plant Vogtle Units 3 and 4 (net of pre-tax charges totaling $508 million recorded in the first half of 2021 for estimated probable losses);4;
•an increasea decrease of $680$421 million in long-term debt (including securities due within one year) primarily due to a net increase in outstandingthe redemption of senior notes and borrowings from the FFB for construction of Plant Vogtle Units 3 and 4;notes; and
•an increase of $250$415 million in notes payable relatedcommon stockholder's equity primarily due to net issuances of commercial paper.capital contributions from Southern Company.
See "Financing Activities – Georgia Power" herein and Note (B) to the Condensed Financial Statements under "Georgia Power – Nuclear Construction" herein for additional information.
Mississippi Power
Significant balance sheet changes for the sixthree months ended June 30, 2021March 31, 2022 included:
•an increaseincreases of $439$66 million in cashassets from risk management activities and cash equivalents and an increase of $514$61 million in long-term debt (including securities due within one year)other regulatory liabilities, current primarily due to the issuance of senior notes;unrealized gains on short-term energy-related derivatives;
•an increasea decrease of $107$64 million in common stockholder's equity primarily from capital contributions from Southern Company;accrued taxes primarily due to the payment of ad valorem taxes; and
•a decrease of $51$52 million in accrued taxes primarily duecash and cash equivalents, as discussed further under "Analysis of Cash Flows – Mississippi Power" herein.
See Note (J) to the payment of ad valorem taxes.
See "Financing Activities – Mississippi Power"Condensed Financial Statements herein for additional information.
Southern Power
Significant balance sheet changes for the sixthree months ended June 30, 2021 included:
•an increaseMarch 31, 2022 included increases of $468 million in property, plant, and equipment in service primarily due to the acquisition of the Deuel Harvest wind facility;
•an increase of $356 million in long-term debt (including securities due within one year) primarily related to the issuance of senior notes; and
•an increase of $142$441 million in prepaid income taxes a decrease of $262and $446 million in accumulated deferred income tax assets, and a $98 million increase in accumulated deferred income tax liabilities primarily related to the utilization and expected further utilization of ITCs in 2021.
2022. See "Financing Activities – Southern Power" herein and NotesNote (G) and (K) to the Condensed Financial Statements herein for additional information.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Southern Company Gas
Significant balance sheet changes for the sixthree months ended June 30, 2021March 31, 2022 included:
•increasesa decrease of $736 million and $677 million in assets and liabilities held for sale, respectively,notes payable due to the reclassificationrepayments of assetsshort-term debt and liabilities associated with the sale of Sequent, including $516 million of energy marketing receivables and $494 million of energy marketing trade payables;commercial paper borrowings;
•an increase of $510$259 million in notes payable duecommon stockholder's equity related to issuances of short-term debtnet income and an increase in commercial paper borrowings;capital contributions from Southern Company, partially offset by dividends paid to Southern Company;
•increasesa decrease of $485$241 million in natural gas cost under recovery, $82for sale primarily due to higher volumes of natural gas sold;
•an increase of $209 million in temporary LIFO liquidation due to use of stored natural gas;
•a decrease of $181 million in other regulatory assets, deferred and $148primarily due to a $163 million reduction in accumulated deferred income taxes, all primarily related to natural gas cost under recovery, reflecting an increase in the cost of gas purchased during Winter Storm Uri;recovery;
•an increase of $461$147 million in total property, plant, and equipment primarily related to the construction of transportation and distribution assets recovered through base rates and infrastructure investment recovered through replacement programs;
•a decrease of $344 million in long-term debt (including securities due within one year) primarily due to the redemption of senior notes;
•a decrease of $282 million in natural gas for sale primarily due to higher volumes of natural gas sold; and
•an increase of $182$141 million in temporary LIFO liquidation due to higher natural gas prices during Winter Storm Uri;
•an increase of $162 million in common stockholder's equity primarily related to net income and capital contributions from Southern Company, partially offset by dividends paid to Southern Company;
•an increase of $114 million in prepaid expenses primarilycustomer accounts receivable due to the prepaymenttiming of income taxes; and
•collectionsa decrease of $101 million in equity investments in unconsolidated subsidiaries primarily due to an $82 million impairment charge related to the PennEast Pipeline project..
See "Financing Activities – Southern Company Gas" herein Notesand Note (B), (E), and (K) to the Condensed Financial Statements under "Southern Company Gas" herein, and Note (C) to the Condensed Financial Statements under "Other Matters – Southern Company Gas" herein for additional information.
Financing Activities
The following table outlines the Registrants' long-term debt financing activities for the first sixthree months of 2021:2022:
IssuancesMaturities, Redemptions, and RepurchasesMaturities and Redemptions
CompanyCompanySenior NotesOther Long-Term DebtSenior NotesRevenue Bonds
Other Long-Term Debt(*)
CompanySenior Note IssuancesSenior
Notes
Other Long-Term Debt(*)
(in millions)(in millions)
Southern Company parent$1,000 $1,000 $1,500 $— $— 
Alabama PowerAlabama Power600 — 200 — — Alabama Power$700 $550 $— 
Georgia PowerGeorgia Power750 371 325 69 46 Georgia Power— 400 24 
Mississippi Power525 — — — — 
Southern Power400 — — — — 
Southern Company Gas— — 300 — 30 
OtherOther— — — — 7 Other— — 3 
Southern CompanySouthern Company$3,275 $1,371 $2,325 $69 $83 Southern Company$700 $950 $27 
(*)Includes reductions in finance lease obligations resulting from cash payments under finance leases and, for Georgia Power, principal amortization payments totaling $24 million for FFB borrowings.
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Table See Note 8 to the financial statements under "Long-term Debt – DOE Loan Guarantee Borrowings" in Item 8 of Contentsthe Form 10-K for additional information.Index to Financial Statements

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Except as otherwise described herein, the Registrants used the proceeds of debt issuances for their redemptions and maturities shown in the table above, to repay short-term indebtedness, and for general corporate purposes, including working capital. The Subsidiary Registrants also used the proceeds for their construction programs.
In addition to any financings that may be necessary to meet capital requirements and contractual obligations, the Registrants plan to continue, when economically feasible, a program to retire higher-cost securities and replace these obligations with lower-cost capital if market conditions permit.
Southern Company
During the first six months of 2021,quarter 2022, Southern Company issued approximately 2.42.6 million shares of common stock primarily through employee equity compensation plans and received proceeds of approximately $24$38 million.
In January 2021,March 2022, Southern Company borrowed $25 million pursuant toentered into a short-term uncommitted bank credit arrangement, which it repaid in March 2021.
In February 2021, Southern Company issued $600 million aggregate principal amount of Series 2021A 0.60% Senior Notes due February 26, 2024 and $400 million aggregate principal amount of Series 2021B 1.75% Senior Notes due March 15, 2028.
In May 2021, Southern Company issued $1.0 billion aggregate principal amount of Series 2021A 3.75% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due September 15, 2051.
Also in May 2021, Southern Company redeemed all of its $1.5 billion aggregate principal amount of 2.35% Senior Notes due July 1, 2021.
Alabama Power
In March 2021, Alabama Power extended the maturity dates from March 2021 to March 2026 on its threeshort-term floating rate bank term loan agreements with an aggregate principal amount of $45 million, bearing interest based on three-month LIBOR.
In June 2021, Alabama Power repaid at maturity $200 million aggregate principal amount of its Series 2011B 3.950% Senior Notes.
Also in June 2021, Alabama Power issued $600 million aggregate principal amount of Series 2021A 3.125% Senior Notes due July 15, 2051.
Subsequent to June 30, 2021, Alabama Power redeemed all of its approximately $206 million aggregate principal amount of Series E Junior Subordinated Notes due October 1, 2042. The Series E Junior Subordinated Notes were held by an affiliated trust, Alabama Power Capital Trust V, which applied the redemption proceeds to the simultaneous redemption of (i) its Flexible Trust Preferred Securities totaling approximately $200 million, which were guaranteed by Alabama Power, and (ii) shares of its common securities totaling approximately $6 million that were held by Alabama Power.
Georgia Power
In February 2021, Georgia Power issued $750 million aggregate principal amount of Series 2021A 3.25% Senior Notes due March 15, 2051. An amount equal to the net proceeds of the senior notes is being allocated to finance or refinance, in whole or in part, one or more renewable energy projects and/or expenditures and programs related to enabling opportunities for diverse and small businesses/suppliers.
In March 2021, Georgia Power redeemed all $325 million aggregate principal amount of its Series 2016B 2.40% Senior Notes due April 1, 2021.
Also in March 2021, Georgia Power extended the maturity date of its $125 million term loan from June 2021 to June 2022.SOFR.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
Alabama Power
In June 2021, GeorgiaFebruary 2022, Alabama Power purchased and held approximately $69redeemed all $550 million aggregate principal amount of Development Authority of Burke County (Georgia) Pollution Control Revenue Bonds (Georgia Power Company Plant Vogtle Project), Firstits Series 2008, which may be remarketed to the public at a later date.
Also in June 2021, Georgia Power made additional borrowings under the FFB Credit Facilities in an aggregate principal amount of $371 million at an interest rate of 2.434% through the final maturity date of February 20, 2044. The proceeds were used to reimburse Georgia Power for Eligible Project Costs relating to the construction of Plant Vogtle Units 3 and 4. During the six months ended June2017A 2.45% Senior Notes due March 30, 2021, Georgia Power made principal amortization payments of $45 million under the FFB Credit Facilities. At June 30, 2021, the outstanding principal balance under the FFB Credit Facilities was $4.9 billion. See Note 8 to the financial statements under "Long-Term Debt – DOE Loan Guarantee Borrowings" in Item 8 of the Form 10-K for additional information.
Mississippi Power2022.
In June 2021, MississippiMarch 2022, Alabama Power issued $200$700 million aggregate principal amount of Series 2021A Floating Rate2022A 3.05% Senior Notes due June 28, 2024 and $325 million aggregate principal amount of Series 2021B 3.10% Senior Notes due July 30, 2051. An amount equal to the net proceeds of the Series 2021B Senior Notes is being allocated to finance or refinance, in whole or in part, one or more renewable energy projects and/or expenditures and programs related to enabling opportunities for diverse and small businesses/suppliers.March 15, 2032.
Also in June 2021, Mississippi
Georgia Power announced the redemption in July 2021 of
In January 2022, Georgia Power redeemed all $270$400 million aggregate principal amount of its Mississippi Business Finance Corporation Taxable Revenue Bonds, 7.13% Series 1999A2012B 2.85% Senior Notes due October 20, 2021May 15, 2022.
In February 2022, Georgia Power borrowed $250 million pursuant to a short-term uncommitted bank credit arrangement bearing interest at par plus accrued interesta rate agreed upon by Georgia Power and the bank from time to time and payable on demand, following specified notice by the bank.
In March 2022, Georgia Power entered into a make-whole premium.
Subsequent to June 30, 2021, Mississippi Power repaid its $60$200 million and $15 millionshort-term floating rate bank term loans, with maturity dates in December 2021 and January 2022, respectively, eachloan bearing interest based on one-month LIBOR.term SOFR.
Subsequent to March 31, 2022, Georgia Power entered into an additional $200 million short-term floating rate bank loan bearing interest based on term SOFR.
SouthernMississippi Power
In January 2021, SouthernMarch 2022, Mississippi Power issued $400borrowed $20 million aggregate principal amount of Series 2021A 0.90% Senior Notes due January 15, 2026. An amount equal(short term) pursuant to the net proceeds of the senior notes was allocated to finance or refinance, in whole or in part, one or more renewable energy projects.its $125 million revolving credit arrangement bearing interest based on term SOFR.
Southern Company Gas
During the first quarter 2022, Nicor Gas repaid one of its three $100 million short-term floating rate bank loans entered into in March 2021. Nicor Gas repaid $50 million of one of the other loans and increased the borrowing amount under the other loan to $150 million. In February 2021,addition, both loans were renewed and amended to extend the maturity dates and change the interest rate provisions so the loans bear interest based on term SOFR.
Subsequent to March 31, 2022, Atlanta Gas Light repaid at maturity $30$36 million aggregate principal amount of 9.1% medium-term notes.
In March 2021, Nicor Gas entered into three short-term floatingnotes with a weighted average interest rate bank loans in an aggregate principal amount of $300 million, each bearing interest based on one-month LIBOR.
In June 2021, Southern Company Gas Capital redeemed all $300 million aggregate principal amount of its 3.50% Senior Notes due September 15, 2021.8.65%.
Credit Rating Risk
At June 30, 2021,March 31, 2022, the Registrants did 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 contracts that could require collateral, but not accelerated payment, in the event of a credit rating change of certain Registrants to BBB and/or Baa2 or below. These contracts are primarily for physical electricity and natural gas purchases and sales, fuel purchases, fuel transportation and storage, energy price risk management, transmission, interest rate management, and, for Georgia Power, construction of new generation at Plant Vogtle Units 3 and 4.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
The maximum potential collateral requirements under these contracts at June 30, 2021March 31, 2022 were as follows:
Credit RatingsCredit Ratings
Southern Company(*)
Alabama PowerGeorgia PowerMississippi Power
Southern
Power(*)
Southern Company GasCredit Ratings
Southern Company(*)
Alabama PowerGeorgia PowerMississippi Power
Southern
Power(*)
Southern Company Gas
(in millions)(in millions)
At BBB and/or Baa2At BBB and/or Baa2$40 $1 $— $— $39 $— At BBB and/or Baa2$37 $1 $— $— $36 $— 
At BBB- and/or Baa3At BBB- and/or Baa3431 2 61 1 369 — At BBB- and/or Baa3427 2 61 1 365 — 
At BB+ and/or Ba1 or belowAt BB+ and/or Ba1 or below1,942 370 968 310 1,216 5 At BB+ and/or Ba1 or below1,946 405 924 305 1,202 5 
(*)Southern Power has PPAs that could require collateral, but not accelerated payment, in the event of a downgrade of Southern Power's credit. The PPAs require credit assurances without stating a specific credit rating. The amount of collateral required would depend upon actual losses resulting from a credit downgrade. Southern Power had $105 million of cash collateral posted related to PPA requirements at June 30, 2021.March 31, 2022.
The amounts in the previous table for the traditional electric operating companies and Southern Power include certain agreements that could require collateral if either Alabama Power or Georgia Power has a credit rating change to below investment grade. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. Additionally, a credit rating downgrade could impact the ability of the Registrants to access capital markets and would be likely to impact the cost at which they do so.
On February 22, 2022, Fitch downgraded the senior unsecured long-term debt rating of Georgia Power to BBB+ from A- with a stable outlook.
Market Price Risk
Other thanAlso on February 22, 2022, Fitch revised the Southern Company Gas items discussed below, there were no material changes to the Registrants' disclosures about market price risk during the second quarter 2021. For an in-depth discussionratings outlook of Southern Company, Gas' market price risks, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" in Item 7 of the Form 10-K. Also see Notes (I)Alabama Power, Southern Power, Nicor Gas, and (J)SEGCO to the Condensed Financial Statements herein for information relating to derivative instruments. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for information regarding Southern Company Gas' sale of Sequent on July 1, 2021.
Southern Company Gas is exposed to market risks, including commodity price risk, interest rate risk, and weather risk. Due to various cost recovery mechanisms, the natural gas distribution utilities that sell natural gas directly to end-use customers continue to have limited exposure to market volatility of natural gas prices. Certain of the natural gas distribution utilities manage fuel-hedging programs implemented per the guidelines of their respective state regulatory agencies to hedge the impact of market fluctuations in natural gas prices for customers. In addition, certain of Southern Company Gas' non-regulated operations (primarily Sequent until its sale on July 1, 2021) routinely utilize various types of derivative instruments to economically hedge certain commodity price and weather risks inherent in the natural gas industry. These instruments include a variety of exchange-traded and over-the-counter energy contracts, such as forward contracts, futures contracts, options contracts, and swap agreements. Some of these economic hedge activities may not qualify, or may not be designated, for hedge accounting treatment.negative from stable.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (Continued)
The changes in net fair value of Southern Company Gas' energy-related derivative contracts for the periods presented are provided in the table below. Contracts outstanding at the end of the period for Sequent's energy-related derivatives are included in the preliminary gain associated with the transaction, which will be recorded in the third quarter 2021, as discussed further in Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein.
Second Quarter 2021Second Quarter 2020Year-To-Date 2021Year-To-Date 2020
(in millions)
Contracts outstanding at beginning of period, assets (liabilities), net$40 $38 $101 $70 
Contracts realized or otherwise settled(9)(8)(58)(99)
Current period changes(a)
(75)19 (87)78 
Contracts outstanding at the end of period, assets (liabilities), net$(44)$49 $(44)$49 
Netting of cash collateral41 114 41 114 
Cash collateral and net fair value of contracts outstanding at end of period(b)
$(3)$163 $(3)$163 
(a)Current period changes also include the fair value of new contracts entered into during the period, if any.
(b)Includes $(22) million of energy-related derivatives related to Sequent, which are classified as held for sale at June 30, 2021. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" and "Assets and Liabilities Held for Sale" herein for additional information.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk.
During the sixthree months ended June 30, 2021,March 31, 2022, there were no material changes to Southern Company's, Alabama Power's, Georgia Power's, Mississippi Power's, and Southern Power's, or Southern Company Gas' disclosures about market risk. See Note (K) to the Condensed Financial Statements under "Southern Company Gas" herein for information regarding Southern Company Gas' sale of Sequent on July 1, 2021. For additional market risk disclosures relating to Southern Company Gas, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" herein. For an in-depth discussion of each Registrant's market risks, see MANAGEMENT'S DISCUSSION AND ANALYSIS – FINANCIAL CONDITION AND LIQUIDITY – "Market Price Risk" in Item 7 of the Form 10-K and Note 1 to the financial statements under "Financial Instruments" and Notes 13 and 14 to the financial statements in Item 8 of the Form 10-K, as well as Notes (I) and (J) to the Condensed Financial Statements herein.
Item 4. Controls and Procedures.
(a)Evaluation of disclosure controls and procedures.
As of the end of the period covered by this Quarterly Report on Form 10-Q, Southern Company, Alabama Power, Georgia Power, Mississippi Power, Southern Power, and Southern Company Gas conducted separate evaluations under the supervision and with the participation of each company's management, including the Chief Executive Officer and the Chief Financial Officer, of the effectiveness of the design and operation of the disclosure controls and procedures (as defined in Sections 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended). Based upon these evaluations, the Chief Executive Officer and the Chief Financial Officer, in each case, concluded that the disclosure controls and procedures are effective.
(b)    Changes in internal controls over financial reporting.
There have been no changes in Southern Company's, Alabama Power's, Georgia Power's, Mississippi Power's, Southern Power's or Southern Company Gas' internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended) during the secondfirst quarter 20212022 that have materially affected or are reasonably likely to materially affect Southern Company's, Alabama Power's, Georgia Power's, Mississippi Power's, Southern Power's or Southern Company Gas' internal control over financial reporting.
In January 2022, Southern Company, Alabama Power, Georgia Power, and Mississippi Power implemented new financial accounting and reporting applications. As a result, there were certain changes to processes and procedures, which resulted in changes to Southern Company's, Alabama Power's, Georgia Power's, and Mississippi Power's internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934, as amended). These changes include automation of certain previously manual controls. These changes in internal controls were not made in response to any identified internal control deficiency.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
See the Notes to the Condensed Financial Statements herein for information regarding certain legal and administrative proceedings in which the Registrants are involved. The Registrants' threshold for disclosing material environmental legal proceedings involving a governmental authority where potential monetary sanctions are involved is $1 million.
Item 1A. Risk Factors.
See RISK FACTORS in Item 1A of the Form 10-K for a discussion of the risk factors of the Registrants. There have been no material changes to these risk factors from those previously disclosed in the Form 10-K.
Item 6. Exhibits.
The exhibits below with an asterisk (*) preceding the exhibit number are filed herewith. The remaining exhibits have previously been filed with the SEC and are incorporated herein by reference. The exhibits marked with a pound sign (#) are management contracts or compensatory plans or arrangements.
(4) Instruments Describing Rights of Security Holders, Including Indentures
Southern Company
(a)-
Eleventh Supplemental Indenture to Subordinated Note Indenture dated as of May 6, 2021, providing for amendments to the Subordinated Note Indenture and the issuance of the Series 2021A 3.75% Fixed-to-Fixed Reset Rate Junior Subordinated Notes due September 15, 2051. (Designated in Form 8-K dated May 3, 2021, File No. 1-3526, as Exhibit 4.4)
Alabama Power
(b)-
Sixty-FirstSixty-Third Supplemental Indenture to Senior Note Indenture dated as of June 11, 2021,March 7, 2022, providing for amendments to the Senior Note Indenture and the issuance of the Series 2021A 3.125%2022A 3.05% Senior Notes due JulyMarch 15, 2051.2032. (Designated in Form 8-K dated June 7March 2, 2022, 2021, File No. 1-3164, as Exhibit 4.6)
Mississippi Power
(c)1-
Sixteenth Supplemental Indenture to Senior Note Indenture dated as of June 29, 2021, providing for amendments to the Senior Note Indenture and the issuance of the Series 2021A Floating Rate Senior Notes due June 28, 2024. (Designated in Form 8-K dated June 24, 2021, File No. 001-11229, as Exhibit 4.2(a))
(c)2-
Seventeenth Supplemental Indenture to Senior Note Indenture dated as of June 29, 2021, providing for the issuance of the Series 2021B 3.10% Senior Notes due July 30, 2051. (Designated in Form 8-K dated June 24, 2021, File No. 001-11229, as Exhibit 4.2(b))
(10) Material Contracts
Southern Company
#*(a)1-
*(a)2-
)*(a)3-
#*(a)24-
#*(a)5-
Alabama Power
#(b)1-Form of Terms for Named Executive Officer Equity Awards Granted under The Southern Company 2021 Equity and Incentive Compensation Plan, effective May 26, 2021.Plan. See Exhibit 10(a)1 herein.
(b)2-Fifth Amendment to The Southern Company Employee Savings Plan. See Exhibit 10(a)2 herein.
(b)3-Sixth Amendment to The Southern Company Employee Savings Plan. See Exhibit 10(a)3 herein.
#*(b)24-
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#(b)5-Eighth Amendment to The Southern Company Supplemental Benefit Plan. See Exhibit 10(a)5 herein.
(24) Power of Attorney and Resolutions
Southern Company
(a)-
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Alabama Power
(b)-
Georgia Power
(c)1-
(c)2-
Mississippi Power
(d)1-
Southern Power
(e)1-
Southern Company Gas
(f)1-
(f)2-
(31) Section 302 Certifications
Southern Company
*(a)1-
*(a)2-
Alabama Power
*(b)1-
*(b)2-
Georgia Power
*(c)1-
*(c)2-
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Mississippi Power
*(d)1-
*(d)2-
Southern Power
*(e)1-
*(e)2-
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Southern Company Gas
*(f)1-
*(f)2-
(32) Section 906 Certifications
Southern Company
*(a)-
Alabama Power
*(b)-
Georgia Power
*(c)-
Mississippi Power
*(d)-
Southern Power
*(e)-
Southern Company Gas
*(f)-
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(101) Interactive Data Files
*INS-XBRL Instance Document – The instance document does not appear in the interactive data file because its XBRL tags are embedded within the inline XBRL document.
*SCH-XBRL Taxonomy Extension Schema Document
*CAL-XBRL Taxonomy Calculation Linkbase Document
*DEF-XBRL Definition Linkbase Document
*LAB-XBRL Taxonomy Label Linkbase Document
*PRE-XBRL Taxonomy Presentation Linkbase Document
(104) Cover Page Interactive Data File
*Formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101.
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THE SOUTHERN COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
THE SOUTHERN COMPANY
ByThomas A. Fanning
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
ByAndrew W. EvansDaniel S. Tucker
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022
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ALABAMA POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
ALABAMA POWER COMPANY
ByMark A. Crosswhite
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
ByPhilip C. Raymond
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022
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GEORGIA POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
GEORGIA POWER COMPANY
ByChristopher C. Womack
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
ByDaniel S. TuckerAaron P. Abramovitz
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022
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MISSISSIPPI POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
MISSISSIPPI POWER COMPANY
ByAnthony L. Wilson
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
ByMoses H. Feagin
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022
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SOUTHERN POWER COMPANY
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
SOUTHERN POWER COMPANY
ByChristopher Cummiskey
Chairman and Chief Executive Officer
(Principal Executive Officer)
ByElliott L. Spencer
Senior Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022
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SOUTHERN COMPANY GAS
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The signature of the undersigned company shall be deemed to relate only to matters having reference to such company and any subsidiaries thereof included in such company's report.
 
SOUTHERN COMPANY GAS
ByKimberly S. Greene
Chairman, President, and Chief Executive Officer
(Principal Executive Officer)
ByDavid P. Poroch
Executive Vice President, Chief Financial Officer, and Treasurer
(Principal Financial Officer)
By/s/ Melissa K. Caen
(Melissa K. Caen, Attorney-in-fact)
Date: July 28, 2021April 27, 2022

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