XML 43 R32.htm IDEA: XBRL DOCUMENT v3.8.0.1
Derivative Instruments and Hedging (Tables)
 9 Months Ended
Sep. 30, 2017
Derivative Instruments And Hedging Activities Disclosure [Abstract]  
Summary of Unrealized Gains and Losses from Fair Value Adjustments

The unrealized gains and losses from fair value adjustments to these derivatives, which are recorded in regulatory assets or regulatory liabilities, for the three and nine months ended September 30, 2017 and 2016, respectively, were as follows:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

(2

)

 

$

(2

)

 

$

(6

)

 

$

(7

)

Derivative liabilities

 

$

4

 

 

$

5

 

 

$

10

 

 

$

(11

)

 
Schedule of Notional Volumes of Outstanding Derivative Positions

The net notional volumes of the outstanding derivative instruments associated with Networks activities as of September 30, 2017 and December 31, 2016, respectively, consisted of:

 

 

 

September 30,

 

 

December 31,

As of

 

2017

 

 

2016

(Millions)

 

 

 

 

 

 

Wholesale electricity purchase contracts (MWh)

 

 

3.5

 

 

5.6

Natural gas purchase contracts (Dth)

 

 

6.9

 

 

5.8

Fleet fuel purchase contracts (Gallons)

 

 

2.1

 

 

2.3

The net notional volumes of outstanding derivative instruments associated with Renewables and Gas activities as of September 30, 2017 and December 31, 2016, respectively, consisted of:

 

 

 

September 30,

 

 

December 31,

 

As of

 

2017

 

 

2016

 

(MWh/Dth in millions)

 

 

 

 

 

 

 

 

Wholesale electricity purchase contracts

 

 

3

 

 

 

3

 

Wholesale electricity sales contracts

 

 

6

 

 

 

7

 

Natural gas and other fuel purchase contracts

 

 

299

 

 

 

329

 

Financial power contracts

 

 

11

 

 

 

8

 

Basis swaps – purchases

 

 

69

 

 

 

49

 

Basis swaps – sales

 

 

54

 

 

 

45

 

 
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location in Condensed Consolidated Balance Sheet and Amounts

The offsetting of derivatives, location in the condensed consolidated balance sheet and amounts of derivatives associated with Networks activities as of September 30, 2017 and December 31, 2016, respectively, consisted of:

 

As of September 30, 2017

 

Current

Assets

 

 

Noncurrent

Assets

 

 

Current

Liabilities

 

 

Noncurrent

Liabilities

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

10

 

 

$

6

 

 

$

3

 

 

$

—

 

Derivative liabilities

 

 

(2

)

 

 

—

 

 

 

(35

)

 

 

(70

)

 

 

 

8

 

 

 

6

 

 

 

(32

)

 

 

(70

)

Designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Derivative liabilities

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

 

 

 

—

 

 

 

—

 

 

 

(1

)

 

 

—

 

Total derivatives before offset of cash collateral

 

 

8

 

 

 

6

 

 

 

(33

)

 

 

(70

)

Cash collateral receivable

 

 

—

 

 

 

—

 

 

 

15

 

 

 

4

 

Total derivatives as presented in the balance sheet

 

$

8

 

 

$

6

 

 

$

(18

)

 

$

(66

)

 

As of December 31, 2016

 

Current

Assets

 

 

Noncurrent

Assets

 

 

Current

Liabilities

 

 

Noncurrent

Liabilities

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

19

 

 

$

16

 

 

$

7

 

 

$

5

 

Derivative liabilities

 

 

(7

)

 

 

(5

)

 

 

(40

)

 

 

(79

)

 

 

 

12

 

 

 

11

 

 

 

(33

)

 

 

(74

)

Designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Derivative liabilities

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

 

—

 

 

 

—

 

 

 

—

 

 

 

—

 

Total derivatives before offset of cash collateral

 

 

12

 

 

 

11

 

 

 

(33

)

 

 

(74

)

Cash collateral receivable

 

 

—

 

 

 

—

 

 

 

10

 

 

 

2

 

Total derivatives as presented in the balance sheet

 

$

12

 

 

$

11

 

 

$

(23

)

 

$

(72

)

The offsetting of derivatives, location in the condensed consolidated balance sheet and amounts of derivatives associated with Renewables and Gas activities as of September 30, 2017 and December 31, 2016, respectively, consisted of:

 

As of September 30, 2017

 

Current

Assets

 

 

Noncurrent

Assets

 

 

Current

Liabilities

 

 

Noncurrent

Liabilities

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

104

 

 

$

105

 

 

$

21

 

 

$

16

 

Derivative liabilities

 

 

(62

)

 

 

(1

)

 

 

(40

)

 

 

(19

)

 

 

 

42

 

 

 

104

 

 

 

(19

)

 

 

(3

)

Designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

10

 

 

 

6

 

 

 

—

 

 

 

3

 

Derivative liabilities

 

 

—

 

 

 

(1

)

 

 

(3

)

 

 

(3

)

 

 

 

10

 

 

 

5

 

 

 

(3

)

 

 

—

 

Total derivatives before offset of cash collateral

 

 

52

 

 

 

109

 

 

 

(22

)

 

 

(3

)

Cash collateral receivable (payable)

 

 

(12

)

 

 

(42

)

 

 

1

 

 

 

1

 

Total derivatives as presented in the balance sheet

 

$

40

 

 

$

67

 

 

$

(21

)

 

$

(2

)

 

As of December 31, 2016

 

Current

Assets

 

 

Noncurrent

Assets

 

 

Current

Liabilities

 

 

Noncurrent

Liabilities

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Not designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

$

198

 

 

$

108

 

 

$

78

 

 

$

7

 

Derivative liabilities

 

 

(118

)

 

 

(4

)

 

 

(132

)

 

 

(16

)

 

 

 

80

 

 

 

104

 

 

 

(54

)

 

 

(9

)

Designated as hedging instruments

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets

 

 

25

 

 

 

4

 

 

 

—

 

 

 

—

 

Derivative liabilities

 

 

(1

)

 

 

—

 

 

 

(39

)

 

 

(21

)

 

 

 

24

 

 

 

4

 

 

 

(39

)

 

 

(21

)

Total derivatives before offset of cash collateral

 

 

104

 

 

 

108

 

 

 

(93

)

 

 

(30

)

Cash collateral receivable (payable)

 

 

(17

)

 

 

(46

)

 

 

41

 

 

 

24

 

Total derivatives as presented in the balance sheet

 

$

87

 

 

$

62

 

 

$

(52

)

 

$

(6

)

 
Schedule of Derivative Instruments, Effect of Cash flow Hedging on Other Comprehensive Income and Income

The effect of derivatives in cash flow hedging relationships on Other Comprehensive Income (OCI) and income for the three and nine months ended September 30, 2017 and 2016, respectively, consisted of:

 

Three Months Ended  September 30,

 

(Loss) Recognized

in OCI on Derivatives

 

 

Location of

Loss Reclassified

from Accumulated

OCI into Income

 

Loss

Reclassified

from Accumulated

OCI into Income

 

(Millions)

 

Effective Portion (a)

 

 

Effective Portion (a)

 

2017

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

—

 

 

Interest expense

 

$

2

 

Commodity contracts

 

 

—

 

 

Operating expenses

 

 

1

 

Total

 

$

—

 

 

 

 

$

3

 

2016

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

—

 

 

Interest expense

 

$

2

 

Commodity contracts

 

 

—

 

 

Operating expenses

 

 

1

 

Total

 

$

—

 

 

 

 

$

3

 

 

 

Nine Months Ended September 30,

 

(Loss) Recognized

in OCI on Derivatives

 

 

Location of

Loss Reclassified

from Accumulated

OCI into Income

 

Loss

Reclassified

from Accumulated

OCI into Income

 

(Millions)

 

Effective Portion (a)

 

 

Effective Portion (a)

 

2017

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

—

 

 

Interest expense

 

$

6

 

Commodity contracts

 

 

(1

)

 

Operating expenses

 

 

1

 

Total

 

$

(1

)

 

 

 

$

7

 

2016

 

 

 

 

 

 

 

 

 

 

Interest rate contracts

 

$

—

 

 

Interest expense

 

$

6

 

Commodity contracts

 

 

—

 

 

Operating expenses

 

 

2

 

Total

 

$

—

 

 

 

 

$

8

 

 

(a)Changes in OCI are reported on a pre-tax basis. The reclassified amounts of commodity contracts are included within “Purchase power, natural gas and fuel used” line item within operating expenses in the condensed consolidated statements of income.

The effect of derivatives in cash flow hedging relationships on OCI and income for the three and nine months ended September 30, 2017 and 2016, respectively, consisted of:

 

Three Months Ended  September 30,

 

Gain Recognized

in OCI on Derivatives

 

 

Location of Loss

(Gain) Reclassified

from Accumulated

OCI into Income

 

Loss

Reclassified

from Accumulated

OCI into Income

 

(Millions)

 

Effective Portion (a)

 

 

Effective Portion (a)

 

2017

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

8

 

 

Revenues

 

$

1

 

Total

 

$

8

 

 

 

 

$

1

 

2016

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

13

 

 

Revenues

 

$

1

 

Total

 

$

13

 

 

 

 

$

1

 

 

Nine Months Ended September 30,

 

Gain (Loss) Recognized

in OCI on Derivatives

 

 

Location of Loss

(Gain) Reclassified

from Accumulated

OCI into Income

 

Loss (Gain)

Reclassified

from Accumulated

OCI into Income

 

(Millions)

 

Effective Portion (a)

 

 

Effective Portion (a)

 

2017

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

12

 

 

Revenues

 

$

31

 

Total

 

$

12

 

 

 

 

$

31

 

2016

 

 

 

 

 

 

 

 

 

 

Commodity contracts

 

$

(22

)

 

Revenues

 

$

(47

)

Total

 

$

(22

)

 

 

 

$

(47

)

 

(a)

Changes in OCI are reported on a pre-tax basis.
Schedule of Fair Value, Net Derivative Contracts

The fair values of derivative contracts associated with Renewables and Gas activities as of September 30, 2017 and December 31, 2016, respectively, consisted of:

 

 

 

September 30,

 

 

December 31,

 

As of

 

2017

 

 

2016

 

(Millions)

 

 

 

 

 

 

 

 

Wholesale electricity purchase contracts

 

$

(5

)

 

$

(2

)

Wholesale electricity sales contracts

 

 

13

 

 

 

6

 

Natural gas and other fuel purchase contracts

 

 

13

 

 

 

30

 

Financial power contracts

 

 

66

 

 

 

56

 

Basis swaps – purchases

 

 

(8

)

 

 

3

 

Basis swaps – sales

 

 

5

 

 

 

(2

)

Total

 

$

84

 

 

$

91

 

 
Effect of Derivatives Associated with Renewables and Gas Activities

The effect of trading derivatives associated with Renewables and Gas activities for the three and nine months ended September 30, 2017 and 2016, respectively, consisted of:

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale electricity purchase contracts

 

$

—

 

 

$

(2

)

 

$

(2

)

 

$

3

 

Wholesale electricity sales contracts

 

 

1

 

 

 

3

 

 

 

4

 

 

 

(4

)

Financial power contracts

 

 

(2

)

 

 

(1

)

 

 

(2

)

 

 

1

 

Financial and natural gas contracts

 

 

—

 

 

 

7

 

 

 

4

 

 

 

(24

)

Total (Loss) Gain

 

$

(1

)

 

$

7

 

 

$

4

 

 

$

(24

)

 

The effect of non-trading derivatives associated with Renewables and Gas activities for the three and nine months ended September 30, 2017 and 2016, respectively, consisted of:

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

(Millions)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Wholesale electricity purchase contracts

 

$

—

 

 

$

(2

)

 

$

(2

)

 

$

6

 

Wholesale electricity sales contracts

 

 

(4

)

 

 

2

 

 

 

2

 

 

 

(12

)

Financial power contracts

 

 

2

 

 

 

11

 

 

 

8

 

 

 

(5

)

Financial and natural gas contracts

 

 

(1

)

 

 

6

 

 

 

(6

)

 

 

32

 

Total (Loss) Gain

 

$

(3

)

 

$

17

 

 

$

2

 

 

$

21