Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 2643

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 3
Chunk 2643
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 the Heating Season when natural gas is used for heating purposes. Southern Company Gas has various mechanisms, such as weather and revenue normalization mechanisms and weather derivative instruments, that limit exposure to weather changes within typical ranges in these utilities' respective service territories.In addition to natural gas cost recovery mechanisms, other cost recovery mechanisms and regulatory riders, which vary by utility, allow recovery of certain costs, such as those related to infrastructure replacement programs as well as environmental remediation, energy efficiency plans, and bad debts. In traditional rate designs, utilities recover a significant portion of the fixed customer service and pipeline infrastructure costs based on assumed natural gas volumes used by customers. With the exception of Chattanooga Gas, the natural gas distribution utilities have decoupled regulatory mechanisms that Southern Company Gas believes encourage conservation by separating the recoverable amount of these fixed costs from the amounts of natural gas used by customers. See "Rate Proceedings" herein for additional information. Also see "Infrastructure Replacement Programs and Capital Projects" herein for additional information regarding infrastructure replacement programs at certain of the natural gas distribution utilities.The following table provides regulatory information for Southern Company Gas' natural gas distribution utilities:NicorGasAtlanta GasLightVirginiaNatural GasChattanoogaGasAuthorized ROE at December 31, 20249.51%10.25%9.70%9.80%Weather normalization mechanisms(a)üüDecoupled, including straight-fixed-variable rates(b)üüüRegulatory infrastructure program rate(c)üüüBad debt rider(d)üüüEnergy efficiency plan(e)üüAnnual base rate adjustment mechanism(f)üüYear of last base rate case decision2023201920232018(a)Designed to help stabilize operating results by allowing recovery of costs in the event of unseasonal weather, but are not direct offsets to the potential impacts on earnings of weather and customer consumption.(b)Allows for recovery of fixed residential customer service costs separately from assumed natural gas volumes used by customers and provides a benchmark level of revenue for recovery.(c)See "Infrastructure Replacement Programs and Capital Projects" herein for additional information. Chattanooga Gas' pipeline replacement program costs are recovered through its annual base rate review mechanism.(d)The recovery (refund) of bad debt expense over (under) an established benchmark expense. The gas portion of bad debt expense is recovered through purchased gas adjustment mechanisms. Nicor Gas also has a rider to recover the non-gas portion of bad debt expense.(e)Recovery of costs associated with plans to achieve specified energy savings goals.(f)Regulatory mechanism allowing annual adjustments to