Income Taxes |
6 Months Ended |
|---|---|
Jun. 30, 2026 | |
| Income Tax Disclosure [Abstract] | |
| Income Taxes | INCOME TAXES See Note 10 to the financial statements in Item 8 of the Form 10-K for additional tax information. Cash Paid for Income Taxes Alabama Power, Georgia Power, and Southern Power have entered into transferability agreements with non-affiliated parties to sell ITCs and PTCs at a discount to the generated credit value in 2024, 2025, and 2026. The discount is recorded as a reduction in tax credits recognized in the financial statements and does not have a material impact on results of operations. During the first six months of 2026, Alabama Power, Georgia Power, and Southern Power received cash of $39 million, $91 million, and $49 million, respectively, from credits transferred. The Southern Company system continues to explore the ability to efficiently monetize its tax credits through third-party transfer agreements. During the first six months of 2026, pursuant to certain joint ownership agreements, Georgia Power paid $83 million to the other Vogtle Owners for advanced nuclear PTCs for Plant Vogtle Units 3 and 4. The gain was recognized as an income tax benefit and was immaterial. Effective Tax Rate Southern Company's effective tax rate is typically lower than the statutory rate due to employee stock plans' dividend deduction, non-taxable AFUDC equity at the traditional electric operating companies, flowback of excess deferred income taxes at the regulated utilities, and federal income tax benefits from ITCs and PTCs. Details of significant changes in the effective tax rate for the applicable Registrants are provided herein. Southern Company Southern Company's effective tax rate was 14.1% for the six months ended June 30, 2026 compared to 21.1% for the corresponding period in 2025. The effective tax rate decrease was primarily due to a decrease in charges to a valuation allowance on certain state tax credit carryforwards at Georgia Power, an increase in federal PTCs at Southern Power, and an increase in amortization of federal PTCs at Georgia Power, partially offset by a decrease in the flowback of excess state deferred income taxes at Georgia Power. Georgia Power Georgia Power's effective tax rate was 14.3% for the six months ended June 30, 2026 compared to 21.7% for the corresponding period in 2025. The effective tax rate decrease was primarily due to a decrease in charges to a valuation allowance on certain state tax credit carryforwards and an increase in amortization of federal PTCs and ITCs, partially offset by a decrease in the flowback of excess state deferred income taxes. Southern Power Southern Power's effective tax benefit rate was (85.1)% for the six months ended June 30, 2026 compared to (7.0)% for the corresponding period in 2025. The effective tax benefit rate increase was primarily due to an increase in federal PTCs resulting from Southern Power's purchase of the noncontrolling membership interests in the SP Wind tax equity partnership, as well as a change in pre-tax earnings attributable to Southern Power, including the impact of accelerated depreciation related to wind repowering projects. See Note (K) under "Southern Power – Wind Repowering Projects" and Notes 5 and 15 to the financial statements under "Depreciation and Amortization – Southern Power" and "Southern Power – Purchase of Renewable Facility Interests," respectively, in Item 8 of the Form 10-K for additional information. Southern Company Gas Southern Company Gas' effective tax rate was 23.5% for the six months ended June 30, 2026 compared to 23.7% for the corresponding period in 2025. The effective tax rate decrease was primarily due to an increase in tax benefits related to certain state tax filing positions, offset by a decrease in the flowback of excess state deferred income taxes.
|