Derivative Instruments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2015

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Commodity Price Risk (Non-trading) - Economic Activity - Pre-tax Gains (Losses) Associated with Economic Activity

The unrealized gains (losses) for economic activity for the periods ended September 30 were as follows.

	Three Months						Nine Months
	2015			2014			2015			2014
Operating Revenues
Wholesale energy (a)	$	(77	)	$	299		$	(234	)	$	(581	)
Retail energy	(3		)	2			(25		)	(20		)
Operating Expenses
Fuel	(3		)	(9		)	13			(3		)
Energy purchases (a)	130			(217		)	370			402

(a) In the third quarter of 2015, Talen Energy refined an input used in its valuation technique for certain PJM basis curves as observable inputs became available. This change resulted in the recording of a $30 million net unrealized gain, primarily reflected in "Wholesale energy" revenue on the Statement of Income.

Commodity Volumes - Volumes of Derivative (Sales) Purchase Contracts

At September 30, 2015, the net volumes of derivative (sales)/purchase contracts used in support of the various strategies discussed above were as follows.

		Volumes (a)
Commodity	Unit of Measure	2015 (b)		2016		2017		Thereafter
Power	MWh	(13,407,010	)	(29,872,806	)	(1,202,348	)	(795,983	)
Capacity	MW-Month	(538	)	(878	)	6		3
Gas	MMBtu	61,373,321		98,156,219		15,586,507		19,636,898
FTRs	MW-Month	2,023		2,889		—		—
Oil	Barrels	29,795		60,000		—		—
CRRs	MWh	475,320		1,393,430		538,584		—
Emission Allowances	Tons	2,253,123		—		—		—

(a) Volumes for option contracts factor in the probability of an option being exercised and may be less than the notional amount of the option.   

(b) Represents balance of the current year.

Fair Value and Balance Sheet Location of Derivative Instruments

The following table presents the fair value and location of commodity derivative instruments not designated as hedging instruments recorded on the Balance Sheets. 

	September 30, 2015				December 31, 2014
	Assets		Liabilities		Assets		Liabilities
Current:
Price Risk Management Assets/Liabilities:	$	576	$	506	$	1,079	$	1,024
Noncurrent:
Price Risk Management Assets/Liabilities:	226		178		239		193
Total derivatives	$	802	$	684	$	1,318	$	1,217

Pre-tax Gain (Loss) on Derivative Instruments Recognized in Income or on the Balance Sheet

The following tables present the pre-tax effect of derivative instruments recognized in income for the periods ended September 30, 2015.

		Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Derivative Relationships	Location of Gain (Loss) Recognized in Income on Derivative	Three Months			Nine Months
Cash Flow Hedges:
Commodity contracts	Wholesale energy	$	(3	)	$	(3	)
	Energy purchases	9			25
	Depreciation	—			1
Total		$	6		$	23

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Three Months			Nine Months
Commodity contracts	Wholesale energy	$	298		$	328
	Retail energy	15			(16		)
	Fuel	(6		)	(5		)
	Energy purchases	(183		)	(169		)
	Total	$	124		$	138

The following tables present the pre-tax effect of derivative instruments recognized in income for the periods ended September 30, 2014.      

		Gain (Loss) Reclassified from AOCI into Income (Effective Portion)
Derivative Relationships	Location of Gain (Loss) Recognized in Income on Derivative	Three Months			Nine Months
Cash Flow Hedges:
Commodity contracts	Wholesale energy	$	(2	)	$	(1	)
	Energy purchases	8			23
	Depreciation	—			1
	Discontinued operations	1			6
Total		$	7		$	29

Derivatives Not Designated as Hedging Instruments	Location of Gain (Loss) Recognized in Income on Derivative	Three Months			Nine Months
Commodity contracts	Wholesale energy (a)	$	617		$	(2,520	)
	Retail energy	18			(34		)
	Fuel	(8		)	(1		)
	Energy purchases (b)	(505		)	1,937
	Discontinued operations	2			4
	Total	$	124		$	(614	)

(a) The nine month period ended September 30, 2014 includes significant realized and unrealized losses on physical and financial commodity sales contracts due to unusual market and weather volatility.

(b) The nine month period ended September 30, 2014 includes significant realized and unrealized gains on physical and financial commodity purchase contracts due to unusual market and weather volatility.   

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the energy commodities derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.             

	Assets								Liabilities
			Eligible for Offset								Eligible for Offset
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
September 30, 2015	$	802	$	567	$	81	$	154	$	684	$	567	$	16	$	101
December 31, 2014	$	1,318	$	1,060	$	10	$	248	$	1,217	$	1,060	$	58	$	99

Derivative Positions Eligible for Offset with Related Cash Collateral

The table below summarizes the energy commodities derivative positions presented in the balance sheets where a right of setoff exists under these arrangements and related cash collateral received or pledged.             

	Assets								Liabilities
			Eligible for Offset								Eligible for Offset
	Gross		Derivative Instruments		Cash Collateral Received		Net		Gross		Derivative Instruments		Cash Collateral Pledged		Net
September 30, 2015	$	802	$	567	$	81	$	154	$	684	$	567	$	16	$	101
December 31, 2014	$	1,318	$	1,060	$	10	$	248	$	1,217	$	1,060	$	58	$	99