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 |
|
|