Derivatives and Hedging (Tables)

9 Months Ended

Sep. 30, 2011

Derivatives and Hedging (Tables) [Abstract]

Notional Volume of Derivative Instruments

Notional Volume of Derivative Instruments
		Volume
		September 30,		December 31,		Unit of
		2011		2010		Measure
		(in millions)
Commodity:
	Power		730		652	MWHs
	Coal		35		63	Tons
	Natural Gas		92		94	MMBtus
	Heating Oil and Gasoline		7		6	Gallons
	Interest Rate	$	232	$	171	USD
Interest Rate and Foreign Currency		$	614	$	907	USD

Fair Value of Derivative Instruments

Fair Value of Derivative Instruments
September 30, 2011
		Risk Management
		Contracts		Hedging Contracts
						Interest Rate
						and Foreign
Balance Sheet Location		Commodity (a)		Commodity (a)		Currency (a)		Other (b)		Total
		(in millions)
Current Risk Management Assets		$	557	$	20	$	-	$	(413)	$	164
Long-term Risk Management Assets			460		16		-		(160)		316
Total Assets			1,017		36		-		(573)		480
Current Risk Management Liabilities			528		12		17		(444)		113
Long-term Risk Management Liabilities			304		5		17		(193)		133
Total Liabilities			832		17		34		(637)		246
Total MTM Derivative Contract Net Assets
	(Liabilities)	$	185	$	19	$	(34)	$	64	$	234
Fair Value of Derivative Instruments
December 31, 2010
		Risk Management
		Contracts		Hedging Contracts
						Interest Rate
						and Foreign
Balance Sheet Location		Commodity (a)		Commodity (a)		Currency (a)		Other (b)		Total
		(in millions)
Current Risk Management Assets		$	1,023	$	18	$	30	$	(839)	$	232
Long-term Risk Management Assets			546		12		2		(150)		410
Total Assets			1,569		30		32		(989)		642
Current Risk Management Liabilities			995		13		2		(881)		129
Long-term Risk Management Liabilities			387		6		3		(255)		141
Total Liabilities			1,382		19		5		(1,136)		270
Total MTM Derivative Contract Net Assets
	(Liabilities)	$	187	$	11	$	27	$	147	$	372

(a)       Derivative instruments within these categories are reported gross. These instruments are subject to master netting agreements and are presented on the condensed balance sheets on a net basis in accordance with the accounting guidance for "Derivatives and Hedging."

(b)       Amounts include counterparty netting of risk management and hedging contracts and associated cash collateral in accordance with the accounting guidance for "Derivatives and Hedging."Amounts also include de-designated risk management contracts.

Amount of Gain Loss Recognized on Risk Management Contracts

Amount of Gain (Loss) Recognized on
Risk Management Contracts
For the Three Months Ended September 30, 2011 and 2010
Location of Gain (Loss)	2011		2010
	(in millions)
Utility Operations Revenue	$	8	$	24
Other Revenue		6		(4)
Regulatory Assets (a)		(3)		(6)
Regulatory Liabilities (a)		(2)		7
Total Gain (Loss) on Risk Management Contracts	$	9	$	21
Amount of Gain (Loss) Recognized on
Risk Management Contracts
For the Nine Months Ended September 30, 2011 and 2010
Location of Gain (Loss)	2011		2010
	(in millions)
Utility Operations Revenue	$	46	$	69
Other Revenue		21		5
Regulatory Assets (a)		(3)		(9)
Regulatory Liabilities (a)		8		34
Total Gain (Loss) on Risk Management Contracts	$	72	$	99

(a)Represents realized and unrealized gains and losses subject to regulatory accounting treatment

recorded as either current or noncurrent on the condensed balance sheets.

Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges

Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
For the Three Months Ended September 30, 2011
					Interest Rate
					and Foreign
			Commodity		Currency		Total
			(in millions)
Balance in AOCI as of June 30, 2011			$	12	$	5	$	17
Changes in Fair Value Recognized in AOCI				2		(21)		(19)
Amount of (Gain) or Loss Reclassified from AOCI
	to Income Statement/within Balance Sheet:
		Utility Operations Revenue		1		-		1
		Other Revenue		(1)		-		(1)
		Purchased Electricity for Resale		(2)		-		(2)
		Interest Expense		-		1		1
		Regulatory Assets (a)		-		-		-
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of September 30, 2011			$	12	$	(15)	$	(3)
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
For the Three Months Ended September 30, 2010
					Interest Rate
					and Foreign
			Commodity		Currency		Total
			(in millions)
Balance in AOCI as of June 30, 2010			$	2	$	(15)	$	(13)
Changes in Fair Value Recognized in AOCI				(2)		(1)		(3)
Amount of (Gain) or Loss Reclassified from AOCI
	to Income Statement/within Balance Sheet:
		Utility Operations Revenue		1		-		1
		Other Revenue		(1)		-		(1)
		Purchased Electricity for Resale		1		-		1
		Interest Expense		-		1		1
		Regulatory Assets (a)		1		-		1
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of September 30, 2010			$	2	$	(15)	$	(13)

Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
For the Nine Months Ended September 30, 2011
					Interest Rate
					and Foreign
			Commodity		Currency		Total
			(in millions)
Balance in AOCI as of December 31, 2010			$	7	$	4	$	11
Changes in Fair Value Recognized in AOCI				7		(22)		(15)
Amount of (Gain) or Loss Reclassified from AOCI
	to Income Statement/within Balance Sheet:
		Utility Operations Revenue		3		-		3
		Other Revenue		(3)		-		(3)
		Purchased Electricity for Resale		(3)		-		(3)
		Interest Expense		-		3		3
		Regulatory Assets (a)		1		-		1
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of September 30, 2011			$	12	$	(15)	$	(3)
Total Accumulated Other Comprehensive Income (Loss) Activity for Cash Flow Hedges
For the Nine Months Ended September 30, 2010
					Interest Rate
					and Foreign
			Commodity		Currency		Total
			(in millions)
Balance in AOCI as of December 31, 2009			$	(2)	$	(13)	$	(15)
Changes in Fair Value Recognized in AOCI				2		(5)		(3)
Amount of (Gain) or Loss Reclassified from AOCI
	to Income Statement/within Balance Sheet:
		Utility Operations Revenue		1		-		1
		Other Revenue		(4)		-		(4)
		Purchased Electricity for Resale		3		-		3
		Interest Expense		-		3		3
		Regulatory Assets (a)		2		-		2
		Regulatory Liabilities (a)		-		-		-
Balance in AOCI as of September 30, 2010			$	2	$	(15)	$	(13)
(a)		Represents realized and unrealized gains and losses subject to regulatory accounting treatment recorded as either
		current or noncurrent on the condensed balance sheets.

Impact of Cash Flow Hedges on the Balance Sheet

Impact of Cash Flow Hedges on the Condensed Balance Sheet
September 30, 2011
				Interest Rate
				and Foreign
		Commodity		Currency		Total
		(in millions)
Hedging Assets (a)		$	23	$	-	$	23
Hedging Liabilities (a)			4		34		38
AOCI Gain (Loss) Net of Tax			12		(15)		(3)
Portion Expected to be Reclassified to Net
	Income During the Next Twelve Months		5		(2)		3
Impact of Cash Flow Hedges on the Condensed Balance Sheet
December 31, 2010
				Interest Rate
				and Foreign
		Commodity		Currency		Total
		(in millions)
Hedging Assets (a)		$	13	$	25	$	38
Hedging Liabilities (a)			2		4		6
AOCI Gain (Loss) Net of Tax			7		4		11
Portion Expected to be Reclassified to Net
	Income During the Next Twelve Months		3		(2)		1

(a)       Hedging Assets and Hedging Liabilities are included in Risk Management Assets and Liabilities on thecondensed balance sheets.

Collateral Required Under Various Triggering Events

		September 30,		December 31,
		2011		2010
		(in millions)
Liabilities for Derivative Contracts with Credit Downgrade Triggers		$	31	$	20
Amount of Collateral AEP Subsidiaries Would Have Been
	Required to Post		59		45
Amount Attributable to RTO and ISO Activities			55		44

Liabilities Subject to Cross Default Provisions

	September 30,		December 31,
	2011		2010
	(in millions)
Liabilities for Contracts with Cross Default Provisions Prior to Contractual
Netting Arrangements	$	339	$	401
Amount of Cash Collateral Posted		21		81
Additional Settlement Liability if Cross Default Provision is Triggered		202		213