Company: SOJE
Filing Date: 2025-02-20
Form Type: 10-K
Source: 0000092122-25-000018
Chunk: 2647

Company: SOUTHERN CO
Filing Date: 2025-02-20
Form: 10-K
Item: Item 3
Chunk 2647
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 December 24, 2024, Nicor Gas filed a petition for leave to appeal $14 million of the 2019 QIP disallowance with the Illinois Supreme Court. Nicor Gas defends these investments in infrastructure as prudently incurred.The following table provides a summary of QIP capital investments during the nine-year program:Year Status of QIP Annual Review ProceedingCapital InvestmentsDisallowedMonth of Disallowance(in millions)2015 – 2018Complete$1,246 $— 2019Complete(a)415 32 June 20232020Filed March 2021402 (b)2021Filed March 2022392 (b)2022Filed March 2023408 (b)6 (c)(d)November 20232023Filed March 2024 365 (b)25 (c)(d)November 2023$3,228 $63 (a)Petition for leave to appeal filed to the Illinois Supreme Court for $14 million.(b)Capital investments are subject to the required QIP annual review proceeding; years 2020 through 2023 are pending with the Illinois Commission.(c)Appealed to the Illinois Appellate Court.(d)Disallowed in Nicor Gas' 2023 general base rate case proceeding. See "Rate Proceedings – Nicor Gas" herein for additional information regarding the Illinois Commission's disallowance of certain capital investments.Any further cost disallowances by the Illinois Commission in the pending cases could be material to the financial statements of Southern Company Gas. The ultimate outcome of these matters cannot be determined at this time.Natural Gas Cost RecoveryWith the exception of Atlanta Gas Light, the natural gas distribution utilities are authorized by the relevant regulatory agencies in the states in which they serve to use natural gas cost recovery mechanisms that adjust rates to reflect changes in the wholesale cost of natural gas and ensure recovery of all costs prudently incurred in purchasing natural gas for customers. The natural gas distribution utilities defer or accrue the difference between the actual cost of natural gas and the amount of commodity revenue 

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earned in a given period. The deferred or accrued amount is either billed or refunded to customers prospectively through adjustments to the commodity rate. Deferred natural gas costs are reflected as regulatory assets and accrued natural gas costs are reflected as regulatory liabilities. Natural gas costs generally do not have a significant effect on