Fair Value (Tables)

9 Months Ended

Sep. 30, 2020

Schedule of Carrying Value and Estimated Fair Value of Financial Instruments

The following table sets forth the carrying value and estimated fair value of the Company’s financial instruments not reported at estimated fair value on the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 (dollars in thousands):

	September 30, 2020				December 31, 2019
	Carrying Value		Estimated Fair Value		Carrying Value		Estimated Fair Value
Long-term debt (Level 2)	$	963,500	$	1,177,454	$	963,500	$	1,124,649
Long-term debt (Level 3)		1,112,000		1,265,095		947,000		1,048,440
Snettisham finance lease obligation (Level 3)		52,450		60,500		54,550		58,000
Long-term debt to affiliated trusts (Level 3)		51,547		41,238		51,547		41,238

Schedule of Fair Value of Assets and Liabilities Measured on Recurring Basis

The following table discloses by level within the fair value hierarchy the Company’s assets and liabilities measured and reported on the Condensed Consolidated Balance Sheets as of September 30, 2020 and December 31, 2019 at fair value on a recurring basis (dollars in thousands):

	Level 1		Level 2		Level 3		Counterparty and Cash Collateral Netting (1)			Total
September 30, 2020
Assets:
Energy commodity derivatives	$	—	$	35,662	$	—	$	(31,923	)	$	3,739
Foreign currency exchange derivatives		—		7		—		(7	)		—
Deferred compensation assets:
Mutual Funds:
Fixed income securities (2)		2,498		—		—		—			2,498
Equity securities (2)		5,824		—		—		—			5,824
Total	$	8,322	$	35,669	$	—	$	(31,930	)	$	12,061
Liabilities:
Energy commodity derivatives	$	—	$	27,024	$	—	$	(26,300	)	$	724
Level 3 energy commodity derivatives:
Natural gas exchange agreement		—		—		3,674		—			3,674
Foreign currency exchange derivatives		—		52		—		(7	)		45
Interest rate swap derivatives		—		66,598		—		(10,100	)		56,498
Total	$	—	$	93,674	$	3,674	$	(36,407	)	$	60,941
December 31, 2019
Assets:
Energy commodity derivatives	$	—	$	41,546	$	—	$	(40,452	)	$	1,094
Level 3 energy commodity derivatives:
Natural gas exchange agreement		—		—		27		(27	)		—
Foreign currency exchange derivatives		—		97		—		—			97
Interest rate swap derivatives		—		1,552		—		(963	)		589
Deferred compensation assets:
Mutual Funds:
Fixed income securities (2)		2,232		—		—		—			2,232
Equity securities (2)		6,271		—		—		—			6,271
Total	$	8,503	$	43,195	$	27	$	(41,442	)	$	10,283
Liabilities:
Energy commodity derivatives	$	—	$	45,144	$	—	$	(43,830	)	$	1,314
Level 3 energy commodity derivatives:
Natural gas exchange agreement		—		—		3,003		(27	)		2,976
Interest rate swap derivatives		—		34,056		—		(7,733	)		26,323
Total	$	—	$	79,200	$	3,003	$	(51,590	)	$	30,613

(1)

The Company is permitted to net derivative assets and derivative liabilities with the same counterparty when a legally enforceable master netting agreement exists. In addition, the Company nets derivative assets and derivative liabilities against any payables and receivables for cash collateral held or placed with these same counterparties.

(2)	These assets are included in other property and investments-net and other non-current assets on the Condensed Consolidated Balance Sheets.

Schedule of Quantitative Information

The following table presents the quantitative information which was used to estimate the fair values of the Level 3 assets and liabilities above as of September 30, 2020 (dollars in thousands):

	Fair Value (Net) at			Valuation	Unobservable	Range and Weighted
	September 30, 2020			Technique	Input	Average Price
Natural gas exchange agreement	$	(3,674	)	Internally derived weighted average cost of gas	Forward sales prices	$2.51 - $4.77/mmBTU $3.97 Weighted Average
					Sales volumes	140,000 - 310,000 mmBTUs

Schedule of Activity For Energy Commodity Derivative Assets (Liabilities) Measured At Fair Value Using Significant Unobservable Inputs (Level 3)

The following table presents activity for energy commodity derivative assets (liabilities) measured at fair value using significant unobservable inputs (Level 3) for the nine months ended September 30 (dollars in thousands):

	Natural Gas Exchange Agreement			Power Exchange Agreement			Total
Three months ended September 30, 2020:
Balance as of July 1, 2020	$	(2,628	)	$	—		$	(2,628	)
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities (1)		(1,046	)		—			(1,046	)
Settlements		—			—			—
Ending balance as of September 30, 2020 (2)	$	(3,674	)	$	—		$	(3,674	)
Three months ended September 30, 2019:
Balance as of July 1, 2019	$	(2,992	)	$	—		$	(2,992	)
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities (1)		(133	)		—			(133	)
Settlements		(9	)		—			(9	)
Ending balance as of September 30, 2019 (2)	$	(3,134	)	$	—		$	(3,134	)
Nine months ended September 30, 2020:
Balance as of January 1, 2020	$	(2,976	)	$	—		$	(2,976	)
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities (1)		(952	)		—			(952	)
Settlements		254			—			254
Ending balance as of September 30, 2020 (2)	$	(3,674	)	$	—		$	(3,674	)
Nine months ended September 30, 2019:
Balance as of January 1, 2019	$	(2,774	)	$	(2,488	)	$	(5,262	)
Total gains or (losses) (realized/unrealized):
Included in regulatory assets/liabilities (1)		8,015		436				8,451
Settlements		(8,375	)		2,052			(6,323	)
Ending balance as of September 30, 2019 (2)	$	(3,134	)	$	—		$	(3,134	)

(1)	All gains and losses are included in other regulatory assets and liabilities. There were no gains and losses included in either net income or other comprehensive income during any of the periods presented in the table above.

(2)	There were no purchases, issuances or transfers from other categories of any derivatives instruments during the periods presented in the table above.