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Derivative Instruments and Hedging Activities (Tables)
 12 Months Ended
Dec. 31, 2015
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Offsetting Liabilities
The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at December 31, 2015 and 2014 were:
(Millions of Dollars)
2015
 
2014
 
Balance Sheet Location
Gross
Amounts of
Recognized
Assets/
(Liabilities)
Gross
Amounts
Offset
Net Amounts of Assets/(Liabilities) (a)
 
Gross
Amounts of
Recognized
Assets/
(Liabilities)
Gross
Amounts
Offset
Net Amounts of Assets/(Liabilities) (a)
 
Con Edison
 
 
 
 
 
 
 
 
Fair value of derivative assets
 
 
 
 
 
 
 
 
Current
$59
$(41)
$18
(b)
$111
$(67)
$44
(b)
Current - assets held for sale (c)
51
(50)
1
 
—

—

—

 
Noncurrent
57
(54)
3
 
34
(23)
11
 
Noncurrent - assets held for sale (c)
15
(15)
—

 
—

—

—

 
Total fair value of derivative assets
$182
$(160)
$22
 
$145
$(90)
$55
 
Fair value of derivative liabilities
 
 
 
 
 
 
 
 
Current
$(144)
$78
$(66)
 
$(242)
$139
$(103)
 
Current - liabilities held for sale (c)
(115)
50
(65)
 
—

—

—

 
Noncurrent
(102)
63
(39)
 
(66)
91
25
 
Noncurrent - liabilities held for sale (c)
(28)
15
(13)
 
—

—

—

 
Total fair value of derivative liabilities
$(389)
$206
$(183)
 
$(308)
$230
$(78)
 
Net fair value derivative assets/(liabilities)
$(207)
$46
$(161)
(b)
$(163)
$140
$(23)
(b)
CECONY
 
 
 
 
 
 
 
 
Fair value of derivative assets
 
 
 
 
 
 
 
 
Current
$40
$(32)
$8
(b)
$26
$(15)
$11
(b)
Noncurrent
48
(47)
1
 
22
(20)
2
 
Total fair value of derivative assets
$88
$(79)
$9
 
$48
$(35)
$13
 
Fair value of derivative liabilities


 
 
 
 
 
 
Current
$(121)
$71
$(50)
 
$(96)
$48
$(48)
 
Noncurrent
(92)
56
(36)
 
(42)
32
(10)
 
Total fair value of derivative liabilities
$(213)
$127
$(86)
 
$(138)
$80
$(58)
 
Net fair value derivative assets/(liabilities)
$(125)
$48
$(77)
(b)
$(90)
$45
$(45)
(b)
 
(a)
Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.
(b)
At December 31, 2015 and 2014, margin deposits for Con Edison ($26 million and $27 million, respectively) and CECONY ($26 million and $25 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.
(c)
Amounts represent derivative assets and liabilities included in assets and liabilities held for sale on the consolidated balance sheet (see Note U).
Offsetting Assets
The fair values of the Companies’ commodity derivatives including the offsetting of assets and liabilities on the consolidated balance sheet at December 31, 2015 and 2014 were:
(Millions of Dollars)
2015
 
2014
 
Balance Sheet Location
Gross
Amounts of
Recognized
Assets/
(Liabilities)
Gross
Amounts
Offset
Net Amounts of Assets/(Liabilities) (a)
 
Gross
Amounts of
Recognized
Assets/
(Liabilities)
Gross
Amounts
Offset
Net Amounts of Assets/(Liabilities) (a)
 
Con Edison
 
 
 
 
 
 
 
 
Fair value of derivative assets
 
 
 
 
 
 
 
 
Current
$59
$(41)
$18
(b)
$111
$(67)
$44
(b)
Current - assets held for sale (c)
51
(50)
1
 
—

—

—

 
Noncurrent
57
(54)
3
 
34
(23)
11
 
Noncurrent - assets held for sale (c)
15
(15)
—

 
—

—

—

 
Total fair value of derivative assets
$182
$(160)
$22
 
$145
$(90)
$55
 
Fair value of derivative liabilities
 
 
 
 
 
 
 
 
Current
$(144)
$78
$(66)
 
$(242)
$139
$(103)
 
Current - liabilities held for sale (c)
(115)
50
(65)
 
—

—

—

 
Noncurrent
(102)
63
(39)
 
(66)
91
25
 
Noncurrent - liabilities held for sale (c)
(28)
15
(13)
 
—

—

—

 
Total fair value of derivative liabilities
$(389)
$206
$(183)
 
$(308)
$230
$(78)
 
Net fair value derivative assets/(liabilities)
$(207)
$46
$(161)
(b)
$(163)
$140
$(23)
(b)
CECONY
 
 
 
 
 
 
 
 
Fair value of derivative assets
 
 
 
 
 
 
 
 
Current
$40
$(32)
$8
(b)
$26
$(15)
$11
(b)
Noncurrent
48
(47)
1
 
22
(20)
2
 
Total fair value of derivative assets
$88
$(79)
$9
 
$48
$(35)
$13
 
Fair value of derivative liabilities


 
 
 
 
 
 
Current
$(121)
$71
$(50)
 
$(96)
$48
$(48)
 
Noncurrent
(92)
56
(36)
 
(42)
32
(10)
 
Total fair value of derivative liabilities
$(213)
$127
$(86)
 
$(138)
$80
$(58)
 
Net fair value derivative assets/(liabilities)
$(125)
$48
$(77)
(b)
$(90)
$45
$(45)
(b)
 
(a)
Derivative instruments and collateral were offset on the consolidated balance sheet as applicable under the accounting rules. The Companies enter into master agreements for their commodity derivatives. These agreements typically provide offset in the event of contract termination. In such case, generally the non-defaulting party’s payable will be offset by the defaulting party’s payable. The non-defaulting party will customarily notify the defaulting party within a specific time period and come to an agreement on the early termination amount.
(b)
At December 31, 2015 and 2014, margin deposits for Con Edison ($26 million and $27 million, respectively) and CECONY ($26 million and $25 million, respectively) were classified as derivative assets on the consolidated balance sheet, but not included in the table. Margin is collateral, typically cash, that the holder of a derivative instrument is required to deposit in order to transact on an exchange and to cover its potential losses with its broker or the exchange.
(c)
Amounts represent derivative assets and liabilities included in assets and liabilities held for sale on the consolidated balance sheet (see Note U).
Realized and Unrealized Gains or Losses on Commodity Derivatives
The following table presents the realized and unrealized gains or losses on commodity derivatives that have been deferred or recognized in earnings for the years ended December 31, 2015 and 2014:
 
 
              Con Edison
 
              CECONY
(Millions of Dollars)
Balance Sheet Location
2015
 
2014

 
2015

 
2014

Pre-tax gains/(losses) deferred in accordance with accounting rules for regulated operations:
 
 
 
 
Current
Deferred derivative gains
$1
 
$(10)
 
$2
 
$(7)
Noncurrent
Deferred derivative gains
1
 
1
 
—

 
1
Total deferred gains/(losses)
$2
 
$(9)
 
$2
 
$(6)
Current
Deferred derivative losses
$(16)
 
$(75)
 
$(11)
 
$(70)
Current
Recoverable energy costs
(136)
 
36
 
(127)
 
26
Noncurrent
Deferred derivative losses
(25)
 
(17)
 
(23)
 
(17)
Total deferred gains/(losses)
$(177)
 
$(56)
 
$(161)
 
$(61)
Net deferred gains/(losses)
$(175)
 
$(65)
 
$(159)
 
$(67)
 
Income Statement Location
 
 
 
 
 
 
 
Pre-tax gain/(loss) recognized in income
 
 
 
 
 
 
 
 
Purchased power expense
$(109)
(a)
$(37)
(b)

$—

 

$—

 
Gas purchased for resale
(106)
 
(115)
 
—

 
—

 
Non-utility revenue
30
(a)
29
(b)
—

 
—

 
Other operations and maintenance expense
(1)
(c)
—

 
(1)
(c)
—

Total pre-tax gain/(loss) recognized in income
$(186)
 
$(123)
 
$(1)
 

$—

 
(a)
For the year ended December 31, 2015, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($1 million gain) and purchased power expense ($1 million loss).
(b)
For the year ended December 31, 2014, Con Edison recorded unrealized pre-tax gains and losses in non-utility operating revenue ($4 million gain) and purchased power expense ($132 million loss).
(c)
For the year ended December 31, 2015, Con Edison and CECONY recorded an unrealized loss in other operations and maintenance expense ($1 million).
Hedged Volume of Derivative Transactions
The following table presents the hedged volume of Con Edison’s and CECONY’s derivative transactions at December 31, 2015:
 
Electric Energy (MWh) (a)(b)
Capacity (MW) (a)
Natural Gas (Dt) (a)(b)
Refined Fuels (gallons)
Con Edison (c)
37,036,264
21,174
50,052,794
3,696,000
CECONY
18,742,050
12,000
47,540,000
3,696,000
 
(a)
Volumes are reported net of long and short positions, except natural gas collars where the volumes of long positions are reported.
(b)
Excludes electric congestion and gas basis swap contracts which are associated with electric and gas contracts and hedged volumes.
(c)
Includes 16,381,544 MWh for electric energy, 7,262 MW for capacity and 580,362 Dt for natural gas derivative transactions that are held for sale.
Aggregate Fair Value of Companies' Derivative Instruments with Credit-Risk-Related Contingent Features
The following table presents the aggregate fair value of the Companies’ derivative instruments with credit-risk-related contingent features that are in a net liability position, the collateral posted for such positions and the additional collateral that would have been required to be posted had the lowest applicable credit rating been reduced one level and to below investment grade at December 31, 2015:
(Millions of Dollars)
Con Edison (a)
CECONY (a)
Aggregate fair value – net liabilities
$106
$81
Collateral posted
18
17
Additional collateral (b) (downgrade one level from current ratings)
9
6
Additional collateral (b)(c) (downgrade to below investment grade from current ratings)
142
104
 
(a)
Non-derivative transactions for the purchase and sale of electricity and gas and qualifying derivative instruments, which have been designated as normal purchases or normal sales, are excluded from the table. These transactions primarily include purchases of electricity from independent system operators. In the event the Utilities and the competitive energy businesses were no longer extended unsecured credit for such purchases, the Companies would be required to post additional collateral of $16 million at December 31, 2015. For certain other such non-derivative transactions, the Companies could be required to post collateral under certain circumstances, including in the event counterparties had reasonable grounds for insecurity.
(b)
The Companies measure the collateral requirements by taking into consideration the fair value amounts of derivative instruments that contain credit-risk-related contingent features that are in a net liabilities position plus amounts owed to counterparties for settled transactions and amounts required by counterparties for minimum financial security. The fair value amounts represent unrealized losses, net of any unrealized gains where the Companies have a legally enforceable right to offset.
(c)
Derivative instruments that are net assets have been excluded from the table. At December 31, 2015, if Con Edison had been downgraded to below investment grade, it would have been required to post additional collateral for such derivative instruments of $6 million.