2.0.0.10 false Derivatives 0208 - Disclosure - Derivatives true false false false 1 usd $ false false Shares Standard http://www.xbrl.org/2003/instance shares xbrli 0 USD Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 USDEPS Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 2 Derivatives [Abstract] 0 us-gaap_DerivativeInstrumentsAndHedgesAbstract us-gaap true na duration string No definition available. false false false false false true false false false false false false 1 false false false false 0 0 false false false No definition available. false 3 DERIVATIVES 1 us-gaap_DerivativeInstrumentsAndHedgingActivitiesDisclosureTextBlock us-gaap true na duration string No definition available. false false false false false false false false false false false verboselabel false 1 false false false false 0 0   <div style="font-family: 'Times New Roman',Times,serif"> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left">(H)</td> <td width="1%"> </td> <td>DERIVATIVES</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>Southern Company, the traditional operating companies, and Southern Power are exposed to market risks, primarily commodity price risk and interest rate risk. To manage the volatility attributable to these exposures, each company nets its exposures, where possible, to take advantage of natural offsets and enters into various derivative transactions for the remaining exposures pursuant to each company’s policies in areas such as counterparty exposure and risk management practices. Each company’s policy is that derivatives are to be used primarily for hedging purposes and mandates strict adherence to all applicable risk management policies. Derivative positions are monitored using techniques including, but not limited to, market valuation, value at risk, stress testing, and sensitivity analysis. Derivative instruments are recognized at fair value in the balance sheets as either assets or liabilities.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b> </b></td> <td width="1%"><b> </b></td> <td><b>Energy-Related Derivatives</b></td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>The traditional operating companies and Southern Power enter into energy-related derivatives to hedge exposures to electricity, gas, and other fuel price changes. However, due to cost-based rate regulations, the traditional operating companies have limited exposure to market volatility in commodity fuel prices and prices of electricity. Each of the traditional operating companies manages fuel-hedging programs, implemented per the guidelines of their respective state PSCs, through the use of financial derivative contracts. Southern Power has limited exposure to market volatility in commodity fuel prices and prices of electricity because its long-term sales contracts shift substantially all fuel cost responsibility to the purchaser. However, Southern Power has been and may continue to be exposed to market volatility in energy-related commodity prices as a result of sales of uncontracted generating capacity.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>To mitigate residual risks relative to movements in electricity prices, the traditional operating companies and Southern Power may enter into physical fixed-price or heat rate contracts for the purchase and sale of electricity through the wholesale electricity market. To mitigate residual risks relative to movements in gas prices, the traditional operating companies and Southern Power may enter into fixed-price contracts for natural gas purchases; however, a significant portion of contracts are priced at market.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>Energy-related derivative contracts are accounted for in one of three methods:</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td><i>Regulatory Hedges </i>– Energy-related derivative contracts which are designated as regulatory hedges relate primarily to the traditional operating companies’ 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 the respective fuel cost recovery clauses.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td><i>Cash Flow Hedges </i>– Gains and losses on energy-related derivatives designated as cash flow hedges, which are mainly used by Southern Power, to hedge anticipated purchases and sales are initially deferred in OCI before being recognized in the statements of income in the same period as the hedged transactions are reflected in earnings.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="6%" style="background: transparent"> </td> <td width="3%" nowrap="nowrap" align="left"><b>•</b></td> <td width="1%"> </td> <td><i>Not Designated </i>– 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.</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="4%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>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 industry. 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.</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>At March 31, 2010, the net volume of energy-related derivative contracts for power and natural gas positions for the registrants, 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 date for derivatives not designated as hedges, were as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="11" style="border-bottom: 1px solid #000000"><b>Gas</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Longest</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Net Sold</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Purchased</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Non-Hedge</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>As of</b> <b>March 31, 2010:</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>MWH</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Date</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Date</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>mmBtu</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Date</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Date</b></td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Company </div></td> <td> </td> <td> </td> <td align="right">1.8</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">141</td> <td nowrap="nowrap">*</td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Alabama Power </div></td> <td> </td> <td> </td> <td align="right">0.2</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">32</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Georgia Power </div></td> <td> </td> <td> </td> <td align="right">0.3</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">68</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Gulf Power </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">10</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Mississippi Power </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">23</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Power </div></td> <td> </td> <td> </td> <td align="right">1.3</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td> </td> <td align="right">2010</td> <td> </td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">8</td> <td nowrap="nowrap">*</td> <td> </td> <td> </td> <td align="right">2012</td> <td> </td> <td> </td> <td> </td> <td align="right">2014</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div style="margin-top: 3pt" align="right"> <table width="95%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">*</td> <td> </td> <td>Includes location basis of 1.2 million British thermal units (mmBtu).</td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>In addition to the volumes discussed in the above table, the traditional operating companies and Southern Power enter into physical natural gas supply contracts that provide the option to sell back excess gas due to operational constraints. The maximum expected volume of natural gas subject to such a feature is 8 million mmbtu for Southern Company and 6 million mmbtu for Georgia Power and less than 1 million mmbtu for each of the other companies.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>For the next 12-month period ending March 31, 2011, Southern Company and Southern Power expect to reclassify $11 million in gains from OCI to revenue and $8 million in losses from OCI to fuel expense with respect to cash flow hedges. Such amounts are immaterial for all other registrants.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b><i> </i></b></td> <td width="1%"><b><i> </i></b></td> <td><b><i>Interest Rate Derivatives</i></b></td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>Southern Company and certain subsidiaries also enter into interest rate derivatives, which include forward-starting interest rate swaps, to hedge exposure to changes in interest rates. Derivatives related to existing variable rate securities or forecasted transactions are accounted for as cash flow hedges. Derivatives related to existing fixed rate securities are accounted for as fair value hedges. The derivatives employed as hedging instruments are structured to minimize ineffectiveness.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>For cash flow hedges, the derivatives’ fair value gains or losses are recorded in OCI and are reclassified into earnings at the same time the hedged transactions affect earnings. For fair value hedges, the derivatives’ fair value gains or losses and hedged items’ fair value gains or losses are both recorded in earnings at the same time, providing an offset with any difference representing ineffectiveness.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>At March 31, 2010, the following interest rate derivatives were outstanding:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Fair Value</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center"><b>Hedge</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gain (Loss)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Notional</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Interest Rate</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Interest Rate</b></td> <td> </td> <td nowrap="nowrap" align="center"><b>Maturity</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>March 31,</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Amount</b></td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #ffffff"><b>Received</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Paid</b></td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #ffffff"><b>Date</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> </tr> <tr style="font-size: 1px"> <td colspan="17" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td colspan="5" align="left"><b><i>Cash flow hedges of existing debt</i></b></td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="top"> <td valign="top"> <div style="margin-left:15px; text-indent:-15px">Southern Company </div></td> <td> </td> <td align="right">$</td> <td align="right">300</td> <td> </td> <td> </td> <td align="left" valign="bottom" nowrap="nowrap">3-month LIBOR +<br /> 0.40% spread</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">1.24</td> <td nowrap="nowrap">%*</td> <td> </td> <td align="left" valign="top" nowrap="nowrap">October 2011</td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="top" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Georgia Power </div></td> <td> </td> <td> </td> <td align="right">300</td> <td> </td> <td> </td> <td align="left" valign="top">1-month LIBOR</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">2.43</td> <td nowrap="nowrap">%*</td> <td> </td> <td align="right" valign="top">April 2010</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr valign="top"> <td colspan="5" align="left"><b><i>Cash flow hedges on forecasted debt</i></b></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="top" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Gulf Power </div></td> <td> </td> <td> </td> <td align="right">100</td> <td> </td> <td> </td> <td align="left" valign="top">3-month LIBOR</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">3.79</td> <td nowrap="nowrap">%*</td> <td> </td> <td align="right" valign="top">April 2020</td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="top"> <td colspan="5" align="left"><b><i>Fair value hedges of existing debt</i></b></td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="top" style="background: #cceeff"> <td align="left" valign="top"> <div style="margin-left:15px; text-indent:-15px">Southern Company </div></td> <td> </td> <td> </td> <td align="right">350</td> <td> </td> <td> </td> <td align="left" valign="top">4.15%</td> <td> </td> <td colspan="3" align="center" nowrap="nowrap">3-month LIBOR +<br /> 1.96%* spread</td> <td> </td> <td align="right" valign="top">May 2014</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 1px solid #000000"> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td colspan="3" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="top"> <td> <div style="margin-left:15px; text-indent:-15px">Total </div></td> <td> </td> <td align="right">$</td> <td align="right">1,050</td> <td> </td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="top"> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(2</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="5" align="left" style="border-top: 3px double #000000"> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td align="right" colspan="3" style="border-top: 3px double #000000; border-top: 3px double #000000"> </td> </tr>  </table> </div> <div style="margin-top: 3pt" align="right"> <table width="95%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">*</td> <td> </td> <td>Weighted Average</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>Subsequent to March 31, 2010, Gulf Power settled $100 million of interest rate hedges related to the Series 2010A Senior Note issuance at a gain of approximately $1.5 million. The gain will be amortized to interest expense over 10 years.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>The following table reflects the estimated pre-tax gains (losses) that will be reclassified from OCI to interest expense for the next 12-month period ending March 31, 2011, together with the longest date that total deferred gains and losses are expected to be amortized into earnings.</td> </tr> </table> </div> <div align="center"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="75%">  <tr valign="bottom"> <td width="76%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Estimated Gain (Loss) to</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>be Reclassified for the</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Total Deferred</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>12 Months Ending</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gains (Losses)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>Registrant</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>March 31, 2011</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Amortized Through</b></td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Company </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(23</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2037</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Alabama Power </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">2035</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Georgia Power </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(11</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2037</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Gulf Power </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2020</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Southern Power </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(11</td> <td nowrap="nowrap">)</td> <td> </td> <td> </td> <td align="right">2016</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="9" align="left" style="border-top: 1px solid #000000"> </td> </tr>  </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b> </b></td> <td width="1%"><b> </b></td> <td><b>Derivative Financial Statement Presentation and Amounts</b></td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>At March 31, 2010, the fair value of energy-related derivatives and interest rate derivatives was reflected in the balance sheets as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="center" colspan="25" style="border-bottom: 1px solid #000000"><b>Asset Derivatives at March 31, 2010</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative Category and Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Alabama</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Georgia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gulf</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Mississippi</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Company</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives designated as hedging instruments in cash flow and fair value hedges</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other current assets* </div></td> <td> </td> <td align="right">$</td> <td align="right">12</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Assets from risk management activities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">12</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Other current assets </div></td> <td> </td> <td> </td> <td align="right">5</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other deferred charges and assets </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Total derivatives designated as hedging instruments in cash flow and fair value hedges</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">18</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">12</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives not designated as hedging instruments</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other current assets* </div></td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Assets from risk management activities </div></td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">4</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Total derivatives not designated as hedging instruments</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Total asset derivatives</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">22</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div style="margin-top: 3pt" align="right"> <table width="95%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr> <td width="3%"></td> <td width="1%"></td> <td width="96"></td> </tr> <tr valign="top"> <td nowrap="nowrap" align="left">*</td> <td> </td> <td>Southern Company includes “Assets from risk management activities” in “Other current assets” where applicable.</td> </tr> </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="center" colspan="25" style="border-bottom: 1px solid #000000"><b>Liability Derivatives at March 31, 2010</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23" style="border-bottom: 1px solid #000000"><b>Fair Value</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative Category and Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Alabama</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Georgia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gulf</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Mississippi</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Company</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="23"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives designated as hedging instruments for regulatory purposes</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Liabilities from risk management activities </div></td> <td> </td> <td align="right">$</td> <td align="right">164</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">49</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">71</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">14</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">30</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Other deferred credits and liabilities </div></td> <td> </td> <td> </td> <td align="right">108</td> <td> </td> <td> </td> <td> </td> <td align="right">18</td> <td> </td> <td> </td> <td> </td> <td align="right">54</td> <td> </td> <td> </td> <td> </td> <td align="right">7</td> <td> </td> <td> </td> <td> </td> <td align="right">29</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Total derivatives designated as hedging instruments for regulatory purposes</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">272</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">67</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">125</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">21</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">59</td> <td> </td> <td> </td> <td> </td> <td align="right">N/A</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives designated as hedging instruments in cash flow and fair value hedges</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Liabilities from risk management activities </div></td> <td> </td> <td align="right">$</td> <td align="right">9</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">9</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Other deferred charges and assets </div></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:45px; text-indent:-15px">Liabilities from risk management activities </div></td> <td> </td> <td> </td> <td align="right">2</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Other deferred charges and assets </div></td> <td> </td> <td> </td> <td align="right">6</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Total derivatives designated as hedging instruments in cash flow and fair value hedges</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">18</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">10</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:0px; text-indent:-0px"><b>Derivatives not designated as hedging instruments</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:45px; text-indent:-15px">Liabilities from risk management activities </div></td> <td> </td> <td align="right">$</td> <td align="right">6</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Total liability derivatives</b> </div></td> <td> </td> <td align="right">$</td> <td align="right">296</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">67</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">126</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">22</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">59</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">16</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td> All derivative instruments are measured at fair value. See Note (C) herein for additional information. </td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td> At March 31, 2010, the pre-tax effect of unrealized derivative gains (losses) arising from energy-related derivative instruments designated as regulatory hedging instruments and deferred on the balance sheet were as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="center" colspan="21" style="border-bottom: 1px solid #000000"><b>Regulatory Hedge Unrealized Gain (Loss) Recognized on the Balance Sheet</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivative Category and Balance Sheet</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Alabama</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Georgia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gulf</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Mississippi</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Company</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>Power</b></td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="19"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">Energy-related derivatives: </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Other regulatory assets, current </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(164</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(49</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(71</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(14</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(30</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Other regulatory assets, deferred </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(108</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(18</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(54</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(7</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(29</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Total energy-related derivative gains (losses)</b> </div></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(272</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(67</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(125</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(21</td> <td nowrap="nowrap">)</td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(59</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="21" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>For the three months ended March 31, 2010, the pre-tax effect of interest rate derivatives designated as fair value hedging instruments on Southern Company’s statements of income were immaterial.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>For the three months ended March 31, 2010 and March 31, 2009, the pre-tax effect of energy-related derivatives and interest rate derivatives designated as cash flow hedging instruments on the statements of income were as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="40%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Gain (Loss)</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="9"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>Recognized in OCI</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="9"><b>Gain (Loss) Reclassified from Accumulated OCI</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivatives in Cash Flow</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><b>on Derivative</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="9" style="border-bottom: 1px solid #000000"><b>into Income (Effective Portion)</b></td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>Hedging Relationships</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #ffffff"><b>(Effective Portion)</b></td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #ffffff"><b>Statements of Income Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #ffffff"><b>Amount</b></td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff">2009</td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3" style="border-bottom: 1px solid #ffffff">2009</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="7"><i>(in millions)</i></td> </tr>   <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Southern Company</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>5</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="left" valign="bottom">Fuel</td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td> </td> <td align="right">1</td> <td> </td> <td> </td> <td align="left" valign="bottom">Interest expense</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(9</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(10</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>2</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">2</td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(9</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(10</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Alabama Power</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(2</td> <td nowrap="nowrap">)</td> <td> </td> <td align="left" valign="bottom">Interest expense</td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(3</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Georgia Power</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">3</td> <td> </td> <td> </td> <td align="left" valign="bottom">Interest expense</td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(5</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(5</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Gulf Power</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(2</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> <td> </td> <td align="left" valign="bottom">Interest expense</td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Southern Power</b> </div></td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="left" valign="bottom">Fuel</td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">—</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Interest rate derivatives </div></td> <td> </td> <td> </td> <td align="right"><b>—</b></td> <td> </td> <td> </td> <td> </td> <td align="right">—</td> <td> </td> <td> </td> <td align="left" valign="bottom">Interest expense</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(2</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>4</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(3</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(2</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="19" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>There was no material ineffectiveness recorded in earnings for any registrant for any period presented.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>For the three months ended March 31, 2010 and March 31, 2009, the pre-tax effect of energy-related derivatives not designated as hedging instruments on the statements of income were as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="64%"> </td> <td width="5%"> </td> <td width="7%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left"><b>Derivatives not Designated</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="9"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td nowrap="nowrap" align="left" style="border-bottom: 1px solid #ffffff"><b>as Hedging Instruments</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="9" style="border-bottom: 1px solid #ffffff"><b>Unrealized Gain (Loss) Recognized in Income</b></td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" style="border-bottom: 1px solid #ffffff"><b>Statements of</b> <b>Income Location</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="7" style="border-bottom: 1px solid #ffffff"><b>Amount</b></td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>2010</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3">2009</td> </tr>   <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td colspan="5" valign="bottom" align="center"><i>(in millions)</i><br /></td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Southern Company</b> </div></td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="left" valign="bottom">Wholesale revenues</td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="bottom">Fuel</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(4</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="bottom">Purchased power</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 3px double #000000"> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px"><b>Southern Power</b> </div></td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:30px; text-indent:-15px">Energy-related derivatives </div></td> <td> </td> <td align="left" valign="bottom">Wholesale revenues</td> <td> </td> <td align="right"><b>$</b></td> <td align="right"><b>1</b></td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">4</td> <td> </td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="bottom">Fuel</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(4</td> <td nowrap="nowrap">)</td> </tr> <tr valign="bottom" style="background: #cceeff"> <td> <div style="margin-left:15px; text-indent:-15px">  </div></td> <td> </td> <td align="left" valign="bottom">Purchased power</td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right"> </td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 1px solid #000000"> </td> </tr> <tr valign="bottom" > <td> <div style="margin-left:30px; text-indent:-15px">Total </div></td> <td> </td> <td align="left" valign="bottom"> </td> <td> </td> <td nowrap="nowrap" align="right"><b>$</b></td> <td align="right"><b>(1</b></td> <td nowrap="nowrap"><b>)</b></td> <td> </td> <td nowrap="nowrap" align="right">$</td> <td align="right">(1</td> <td nowrap="nowrap">)</td> </tr> <tr style="font-size: 1px"> <td colspan="11" align="left" style="border-top: 3px double #000000"> </td> </tr>  </table> </div>   </div>  <div style="font-family: 'Times New Roman',Times,serif"> <div align="left" style="font-size: 10pt; margin-top: 0pt"> <b> </b> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"><b> </b></td> <td width="1%"><b> </b></td> <td><b>Contingent Features</b></td> </tr> </table> </div> <div style="margin-top: 6pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>The registrants do not have any credit arrangements that would require material changes in payment schedules or terminations as a result of a credit rating downgrade. There are certain derivatives that could require collateral, but not accelerated payment, in the event of various credit rating changes of certain Southern Company subsidiaries. At March 31, 2010, the fair value of derivative liabilities with contingent features, by registrant, is as follows:</td> </tr> </table> </div> <div align="right"> <table style="font-size: 10pt; text-align: left" cellspacing="0" border="0" cellpadding="0" width="95%">  <tr valign="bottom"> <td width="28%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> <td width="5%"> </td> <td width="3%"> </td> <td width="1%"> </td> <td width="3%"> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Alabama</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Georgia</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Gulf</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Mississippi</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Southern</b></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr style="font-size: 10pt" valign="bottom"> <td> </td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Company</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Power</b></td> <td> </td> <td nowrap="nowrap" align="center" colspan="3"><b>Power</b></td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>   <tr style="font-size: 1px"> <td colspan="25" align="left" style="border-top: 1px solid #000000"> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr> <tr valign="bottom"> <td> </td> <td> </td> <td colspan="27" align="center"><i>(in millions)</i><br /></td> </tr> <tr valign="bottom"> <td> <div style="margin-left:15px; text-indent:-15px">Derivative liabilities </div></td> <td> </td> <td align="right">$</td> <td align="right">55</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">9</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">34</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">5</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">6</td> <td> </td> <td> </td> <td align="right">$</td> <td align="right">1</td> <td> </td> <td> </td> <td> </td> <td> </td> <td> </td> </tr>  </table> </div> <div style="margin-top: 15pt"> <table width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt; text-align: left"> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>At March 31, 2010, the registrants had no collateral posted with their derivative counterparties; however, because of the joint and several liability features underlying these derivatives, the maximum potential collateral requirements arising from the credit-risk-related contingent features, at a rating below BBB- and/or Baa3, is $55 million for each registrant.</td> </tr> <tr> <td style="font-size: 6pt"> </td> </tr> <tr valign="top" style="font-size: 10pt; color: #000000; background: transparent"> <td width="2%" style="background: transparent"> </td> <td width="2%" nowrap="nowrap" align="left"> </td> <td width="1%"> </td> <td>Currently, each of the registrants has investment grade credit ratings from the major rating agencies with respect to debt, preferred securities, preferred stock, and/or preference stock. Generally, collateral may be provided by a Southern Company guaranty, letter of credit, or cash. For the traditional operating companies and Southern Power, included in these amounts are certain agreements that could require collateral in the event that one or more Power Pool participants has a credit rating change to below investment grade.</td> </tr> </table> </div> </div>  <!-- Begin Block Tagged Note false false false This element can be used to disclose the entity's entire derivative instruments and hedging activities disclosure as a single block of text. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising there from, and the amounts of and methodologies and assumptions used in determining the amounts of such items. 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